A NEW PARADIGM: DOMICILE AS THE EXCLUSIVE BASIS FOR THE EXERCISE OF GENERAL JURISDICTION OVER INDIVIDUAL DEFENDANTS

Transcription

1 A NEW PARADIGM: DOMICILE AS THE EXCLUSIVE BASIS FOR THE EXERCISE OF GENERAL JURISDICTION OVER INDIVIDUAL DEFENDANTS Emily Eng TABLE OF CONTENTS INTRODUCTION I. GENERAL JURISDICTION JURISPRUDENCE A. What Is General Jurisdiction? B. General Jurisdiction Based on Domicile, Presence, and Consent Domicile Presence Consent C. General Jurisdiction Based on Continuous and Systematic Contacts D. The Application of General Jurisdiction to Individual Defendants II. JUSTIFYING GENERAL JURISDICTION OVER INDIVIDUAL DEFENDANTS A. Tradition and Fairness Historical Pedigree (Tradition) Vindication of Substantive Fairness B. Reciprocal Benefits III. A PROPOSAL FOR APPLYING GENERAL JURISDICTION TO INDIVIDUALS CONCLUSION Articles Editor, Cardozo Law Review. J.D. Candidate (May 2013), Benjamin N. Cardozo School of Law; A.B., Brown University, I would especially like to thank Professor Charles Yablon for suggesting this topic and for his invaluable guidance and support. I am also immensely grateful to Nick Landsman-Roos, Elizabeth Langston, Ben Zegarelli, Stephanie Cerino, and the Cardozo Law Review staff for their incisive edits and insights. All errors and omissions are, of course, my own. 845

2 846 CARDOZO LAW REVIEW [Vol. 32:845 INTRODUCTION In 2000, Craig Jones, Mike Tyson s friend and aide, sued the troubled prize fighter. 1 The suit was a breach of contract dispute regarding $800,000 in commissions earned from Tyson s appearance in Wrestlemania XIV, a 1998 event sponsored by the World Wrestling Federation. 2 Jones brought the suit in the Southern District of New York, claiming that he was entitled to half of the commissions. 3 Tyson, a Las Vegas resident, moved to dismiss for lack of personal jurisdiction. 4 Notably, the conduct giving rise to Jones s breach of contract claim did not take place in New York, and therefore there was no basis for exercising specific jurisdiction over Tyson that is, jurisdiction based on a defendant s activities in the forum state from which the claim arises. 5 Instead, Jones attempted to establish jurisdiction based on a theory of general jurisdiction: that while the allegations against Tyson were unrelated to Tyson s connection to New York, his contacts with the state were so numerous or substantial that jurisdiction could fairly be maintained against him. 6 Jones made two arguments for the assertion of general jurisdiction over Tyson. Jones first alleged Tyson was a citizen of the State and County of New York. 7 Jones argued Tyson grew up and learned his craft in New York, stayed at the same apartment at the Trump Towers when in New York, and is an international celebrity who has been present in New York over many years for both business and personal reasons. 8 Jones second basis for exercising general jurisdiction over Tyson was that Tyson regularly did business in New York. 9 In this regard, Jones asserted Tyson conducted activities by and through his promoter, Don King. King had offices in New York City, retained tax counsel in New York, and maintained two recording companies in Brooklyn Jones v. Tyson, No. 00 Civ. 7382(CM)(MDF), 2001 WL (S.D.N.Y. Apr. 18, 2001). Barry Meier & Timothy W. Smith, Big Money, Big Fallout For Tyson: The Ex-Champion Blames the Promoter for Financial Problems, N.Y. TIMES, May 24, 1998, at section 8, page 1 (describing Craig Jones as a friend and aide of the boxer ); Tyson Manager Dodges Legal Punch; Ex- Champ to Go Another Round, 13 ANDREWS ENT. INDUS. LITIG. REP., no. 1, 2001, at 4; see also, Tyson, 2001 WL , at *1 (referring to Mr. Jones as Tyson s alleged personal assistant). 2 Tyson, 2001 WL , at *1. 3 Id. at *2. Jones initially sued Tyson in New York state court, but in October 2000, Tyson (and his co-defendant Simms) removed the case to federal court on diversity grounds. Id. at *1. 4 Personal jurisdiction is divided into two categories: specific jurisdiction and general jurisdiction. See infra Part I.A. 5 For a more detailed comparison of specific jurisdiction and general jurisdiction, see infra notes and accompanying text. 6 Tyson, 2001 WL , at *1. 7 Id. 8 Id. at *3. 9 Id. at *1. 10 Id. at *3.

3 2012] DOMICILE AS BASIS FOR JURISDICTION 847 The court skeptically noted that many international celebrities come to New York several times a year and stay in hotel suites or corporate apartments for which they have some affinity, and the fact that Tyson like many wealthy people has multiple homes does not mean he is a citizen of every state where he has a place to hang his hat. 11 On the other hand, the court also observed that many of Tyson s worldwide business activities appear to touch, if not be centered on, the State of New York. 12 Although the presiding judge sent the case to a magistrate judge to determine whether Tyson regularly does or solicits business in the state, 13 the complaint was ultimately dismissed without a final decision on whether general jurisdiction could be exercised over Tyson. 14 Nonetheless, the legal squabbles of Mike Tyson s inner circle highlight some key arguments made in support of and against general jurisdiction. In an increasingly mobile and interconnected world in which the day-to-day lives of individual defendants frequently transcend territorial borders, a critical understanding of the law of personal jurisdiction is now more relevant than ever. Thus, this Note seeks to answer a single, unresolved question: whether general jurisdiction based on continuous and systematic contacts may be exercised over individual as distinguished from corporate defendants, or whether general jurisdiction over an individual should instead be founded solely on the defendant s place of domicile. Justice Scalia posed this question in a footnote in his opinion in Burnham v. Superior Court, wherein he suggested that [i]t may be that whatever special rule exists permitting continuous and systematic contacts... to support jurisdiction with respect to matters unrelated to activity in the forum applies only to corporations. 15 This question was 11 Id. The court additionally noted Jones did not allege that 1)Tyson owned or rented the apartment, 2) the apartment was furnished with Tyson s personal belongings, 3) Tyson spent any appreciable amount of time in the apartment, or 4) the apartment would in any way qualify as Tyson s residence. Id. 12 Id. at *4. 13 Id. 14 The docket for this case indicates that on November 6, 2002, the case was closed and the first amended complaint against Tyson dismissed. The order dismissing the case, however, is not published. Docket for Jones v. Tyson, No. 7:00cv07385 (S.D.N.Y. Sep. 29, 2000) (Entry #36 Nov. 6, 2002) U.S. 604, 610 n.1 (1990); see also Patrick J. Borchers, J. McIntyre Machinery, Goodyear, and the Incoherence of the Minimum Contacts Test, 44 CREIGHTON L. REV. 1245, 1268 (2011) ( The first [question] is whether contacts-based general jurisdiction applies at all to individuals. In a footnote to his plurality opinion in Burnham v. Superior Court of California, Justice Scalia suggested that the answer to this question is no. ); Stephen B. Burbank, Jurisdictional Conflict and Jurisdictional Equilibration: Paths to a Via Media?, 26 HOUS. J. INT L L. 385, (2004) ( There is an argument to be made that, with the adoption of grounds of activity-based or specific jurisdiction that International Shoe invited, and given the continued acceptance of domicile... as a basis of general jurisdiction, doing business jurisdiction should

4 848 CARDOZO LAW REVIEW [Vol. 32:845 more recently reframed in the 2011 case of Goodyear Dunlop Tires Operations, S.A. v. Brown, 16 the latest in the Supreme Court s sparse treatment of general jurisdiction. Although Goodyear primarily concerned the application of the stream of commerce theory to general jurisdiction, 17 the Court also noted in its opinion that [f]or an individual, the paradigm forum for the exercise of general jurisdiction is the individual s domicile. 18 This statement invites a renewed discussion of the longstanding, yet unresolved, issue that this Note seeks to address. 19 not be permitted, or should be substantially scaled back, in litigation involving domestic (U.S.) defendants. ) (citing Burnham, 495 U.S. at 610 n.1); Charles W. Rocky Rhodes, Clarifying General Jurisdiction, 34 SETON HALL L. REV. 807, 823 n.87 (2004) (suggesting that cases subject[ing] individuals to general jurisdiction based on continuous and systematic business activities are dubious (citing Burnham, 495 U.S. at 610 n.1)); Linda Silberman, Comparative Jurisdiction in the International Context: Will the Proposed Hague Judgments Convention Be Stalled?, 52 DEPAUL L. REV. 319, 344 n.128 (2002) ( There is some suggestion that the Supreme Court may view the doing business jurisdiction as applicable only to corporations and not to individuals. In [Burnham], where the Supreme Court upheld the constitutionality of tag jurisdiction, Justice Scalia s opinion, joined by three other Justices, dropped the following footnote: It may be that whatever special rule exists permitting continuous and systematic contacts, to support jurisdiction with respect to matters unrelated to activity in the forum applies only to corporations, which have never fitted comfortably in a jurisdictional regime based primarily upon de facto power over the defendant s person. (quoting Burnham, 495 U.S. at 610 n.1)) S. Ct (2011). 17 Stream of commerce refers to the movement of goods from manufacturers through distributors to consumers. J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2788 (2011). The Supreme Court held in the past [t]he forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, (1980) (citing Gray v. Am. Radiator & Standard Sanitary Corp., 176 N.E.2d 761 (Sup. Ct. Ill. 1961)). Nonetheless, the exact contours of the stream of commerce theory are still in dispute, and the meaning of stream of commerce is far from exact. J. McIntyre, 131 S. Ct. at In Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), Justice Brennan and Justice O Connor each wrote plurality opinions diverging on whether the exercise of specific jurisdiction premised on the placement of goods into the stream of commerce required a mere awareness the goods would be swept into the forum state through the stream of commerce or an additional action purposely targeting the forum state. In 2011, the Supreme Court issued McIntyre and held, in yet another plurality decision with opinions authored by Justices Kennedy, Breyer, and Ginsburg, that specific jurisdiction based on the injection of goods into the stream of commerce requires purposeful targeting of the forum state. J. McIntyre, 131 S. Ct. at Given, however, the fractured nature of the decision, the steam-of-commerce landscape remains unclear. See Borchers, supra note 15, at 1265 (noting that Justice Kennedy s plurality decision in McIntyre is not the law, and while lower courts will most likely follow Justice Breyer s concurrence, the narrowest of the McIntyre opinions, [Breyer s concurrence] gives no hint as to whether it favors the Brennan or the O Connor view of the stream of commerce, leaving lower courts marooned as before. ). 18 Goodyear, 131 S. Ct. at See Borchers, supra note 15, at 1268 ( The Goodyear opinion referred repeatedly to corporate defendants, which seems to be a hint that contacts-based general jurisdiction is limited to corporations and presumably other sorts of business entities. Individual defendants are subject to general jurisdiction at their domicile and probably their residence as well if it

5 2012] DOMICILE AS BASIS FOR JURISDICTION 849 This Note argues that general jurisdiction over an individual should not be based on continuous and systematic contacts and proposes that domicile should instead be the exclusive basis for general jurisdiction. Part I of this Note describes the current state of the law on general jurisdiction and outlines the limited existing Supreme Court case law on general jurisdiction. Part II argues that historical pedigree and substantive fairness favor a theory of reciprocal benefits and burdens as the most satisfactory justification for the assertion of general jurisdiction. Part III advocates for a narrow general jurisdiction framework in which domicile is the exclusive basis for asserting general jurisdiction over individual defendants. I. GENERAL JURISDICTION JURISPRUDENCE A. What Is General Jurisdiction? Personal jurisdiction is divided into two categories: specific jurisdiction and general jurisdiction. 20 Specific jurisdiction confers authority over a defendant for claims that arise from or are related to the defendant s activities in the forum state. 21 While personal differs from their domicile but is a substantial residence. Concededly, successful exercises of general jurisdiction over individuals without in-state personal service of process in forum states that are not their domicile or residence are rare, but not unheard-of. However, if Goodyear s at home language is taken to apply to individuals, general jurisdiction may be so limited. (footnotes omitted)); Michael H. Hoffheimer, General Personal Jurisdiction After Goodyear Dunlop Tires Operations, S.A. v. Brown, 60 U. KAN. L. REV. 549, 601 (2012) ( By treating general jurisdiction over corporations based on continuous and systematic contacts as analogous to jurisdiction at an individual s domicile, the Court may be signaling that such contacts will not separately establish a basis for general jurisdiction over an individual outside the individual s domicile or residence. (footnote omitted)). 20 Professors Arthur von Mehren and Donald Trautman coined these terms in the following analysis: In American thinking, affiliations between the forum and the underlying controversy normally support only the power to adjudicate with respect to issues deriving from, or connected with, the very controversy that establishes jurisdiction to adjudicate. This we call specific jurisdiction. On the other hand, American practice for the most part is to exercise power to adjudicate any kind of controversy when jurisdiction is based on relationships, direct or indirect, between the forum and the person or persons whose legal rights are to be affected. This we call general jurisdiction. Arthur T. von Mehren & Donald T. Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 HARV. L. REV. 1121, 1136 (1966). 21 Goodyear, 131 S. Ct. at 2851 ( In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction. (citing von Mehren & Trautman, supra note 20, at 1136)); J. McIntyre, 131 S. Ct. at ( Where a defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws, it submits to the judicial power of an otherwise foreign sovereign to the

6 850 CARDOZO LAW REVIEW [Vol. 32:845 jurisdiction was traditionally founded on bases such as domicile, physical presence, or consent, 22 the seminal 1945 case of International Shoe Co. v. Washington held that a court may exercise specific jurisdiction where a defendant has minimum contacts such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. 23 Under International Shoe s two-part framework of minimum contacts and fair play and substantial justice, a single contact with the forum state may suffice to subject the defendant to the court s authority over claims related to that contact. 24 Furthermore, International Shoe established that exercising specific jurisdiction is consistent with traditional notions of fair play and substantial justice when the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws. 25 In contrast, general jurisdiction is exercised in a particular forum over claims that are unrelated to the defendant s activities in that forum. 26 In other words, general jurisdiction is based on a direct relationship between the defendant and the forum and does not distinguish between the various causes of action that the plaintiff may bring against the defendant. 27 Because general jurisdiction is independent of the subject matter of the suit, 28 some refer to general jurisdiction as dispute-blind jurisdiction. 29 Courts base the exercise of general jurisdiction on activities of a defendant in a forum that rise to the level of continuous and systematic general business contacts, 30 or extent that power is exercised in connection with the defendant s activities touching on the State. (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 22 See infra Part I.C U.S. 310, 316 (1945). 24 See id. at 318 (citing Hess v. Pawloski, 274 U.S. 352 (1927), for the proposition that the quality and nature of some single or occasional acts may be sufficient to confer specific jurisdiction); see also Lea Brilmayer et al., A General Look at General Jurisdiction, 66 TEX. L. REV. 721, 735 (1988); Walter W. Heiser, Toward Reasonable Limitations on the Exercise of General Jurisdiction, 41 SAN DIEGO L. REV. 1035, 1036 (2004). 25 See J. McIntyre, 131 S. Ct. at 2787 (citing Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 26 Brilmayer, supra note 24, at Id. at Borchers, supra note 15, at See Mary Twitchell, The Myth of General Jurisdiction, 101 HARV. L. REV. 610, 613 (1988) (coining the term dispute-blind in reference to general jurisdiction); see also Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 339 (5th Cir. 1999) ( Unlike the specific jurisdiction analysis, which focuses on the cause of action, the defendant and the forum, a general jurisdiction inquiry is dispute blind, the sole focus being on whether there are continuous and systematic contacts between the defendant and the forum. (citing Twitchell, supra)). 30 See Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416 (1984) (citing Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952)); see also Int l Shoe Co. v. Wash., 326 U.S. 310, 318 (1945) ( While it has been held... that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity, there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit

7 2012] DOMICILE AS BASIS FOR JURISDICTION 851 on more traditional bases such as consent, physical presence, and domicile. 31 General jurisdiction is now a well-established doctrine and an indispensible part of any first-year civil procedure course. 32 Not only does general jurisdiction provide a safety valve that allows access to a rational forum when specific jurisdiction fails, 33 but even those who criticize general jurisdiction concurrently acknowledge that general jurisdiction is not likely to disappear in the near future. 34 Nonetheless, general jurisdiction based on continuous and systematic contacts is highly controversial and frequently criticized. 35 against it on causes of action arising from dealings entirely distinct from those activities. (citations omitted)). 31 J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780, 2787 (2011); see also infra Part I.C. 32 See Brilmayer, supra note 24, at ( Although these circumstances suggest the kind of tortuous hypothetical that first-year law students confront on civil procedure exams, they actually represent a typical scenario in litigation. In this scenario, a plaintiff seeks jurisdiction to a forum court over a claim unrelated to activities in the forum. ); Linda J. Silberman, Judicial Jurisdiction in the Conflict of Laws Course: Adding a Comparative Dimension, 28 VAND. J. TRANSNAT L L. 389, 391 (1995) ( [J]udicial jurisdiction... is often taken up extensively in the first-year civil procedure course. ); Twitchell, supra note 29, at 661 n.225 (noting first-year student reactions to the theories of general and specific jurisdiction). 33 Patrick J. Borchers, The Problem with General Jurisdiction, 2001 U. CHI. LEGAL F. 119, 131, See id. at 139 ( Abandoning general jurisdiction is not the answer. ); Linda Silberman, Reflections on Burnham v. Superior Court: Toward Presumptive Rules of Jurisdiction and Implications for Choice of Law, 22 RUTGERS L.J. 569, 576 (1991) ( [R]etaining a standard of general jurisdiction where a defendant may be sued for any claim is necessary, and although residence or domicile may be a better basis than physical presence, there may be some cases where these alternatives are unavailable. ); Mary Twitchell, Why We Keep Doing Business with Doing-Business Jurisdiction, 2001 U. CHI. LEGAL F. 171, 172 ( [W]e are not ready to give [general jurisdiction] up entirely and probably should not do so even if we could. ). 35 See Borchers, supra note 33 (arguing general jurisdiction is problematic in its scope, application, and fairness, and suggesting only general jurisdiction founded on the modest bases of domicile, consent, principal place of business, or place of incorporation should be retained); Meir Feder, Goodyear, Home, and the Uncertain Future of Doing Business Jurisdiction, 63 S.C. L. REV. 671 (2012) (challenging the validity of doing business in the forum state as a basis for general jurisdiction over even corporate defendants); Harold G. Maier & Thomas R. McCoy, A Unifying Theory for Judicial Jurisdiction and Choice of Law, 39 AM. J. COMP. L. 249, 280 (1991) (asserting that general jurisdiction based on contacts unrelated to the cause of action has outlived its usefulness and violates the Due Process Clause); Twitchell, supra note 29 (arguing the courts have distorted the meaning of general jurisdiction by using it to analyze cases more appropriately within the scope of the specific jurisdiction framework, and proposing states should limit general jurisdiction to the defendant s home base ); von Mehren & Trautman, supra note 20, at 1179 (suggesting general jurisdiction should be abandoned, and arguing that [f]or an individual, the sole community where it is fair to require him to litigate any cause of action is his habitual residence; for a corporation, it is the corporate headquarters presumably both the place of incorporation and the principal place of business, where these differ ). But see Heiser, supra note 24, at 1038 (suggesting concerns about general jurisdiction are overstated because assessments of reasonableness and the doctrine of forum non conveniens both exist as potential limitations to the exercise of general jurisdiction); Twitchell, supra note 34 (describing Professor Twitchell s change of heart with regard to abolishing general jurisdiction and arguing general doing business jurisdiction should not be abandoned, but instead restricted

8 852 CARDOZO LAW REVIEW [Vol. 32:845 Commentators often highlight the potential for unfairness to the defendant in the form of unfettered forum shopping and lack of predictability. 36 For instance, under general jurisdiction, a defendant who does business in all fifty states can theoretically be sued in any one of those states regardless of the relationship between the cause of action and the forum state, thus enabling plaintiffs to engage freely in forum shopping. 37 In addition, since nearly every country in the world does not allow general doing-business jurisdiction, citizens of foreign states who do business in the U.S. may not anticipate the exercise of activitiesbased general jurisdiction and will perceive it as unfair. 38 Limited Supreme Court guidance on the proper application of general jurisdiction based on continuous and systematic contacts leaves many of these issues unresolved. 39 B. General Jurisdiction Based on Domicile, Presence, and Consent In the Supreme Court s earliest personal jurisdiction cases, the jurisdictional inquiry focused on states judicial power over a defendant. 40 This power primarily depended on the physical presence of as applied to non-u.s. defendants). 36 Borchers, supra note 33, at (noting the radical indeterminacy of American jurisdictional principles is a major problem because the lack of predictable consequences will hinder commercial development); Heiser, supra note 24, at ( In domestic litigation, general jurisdiction may permit a plaintiff to engage in unfettered forum shopping designed to capture the most favorable substantive law or statute of limitations, or both. ); Twitchell, supra note 29, at 671 ( If general jurisdiction is permitted to extend beyond the defendant s home base, plaintiffs may forum-shop among the various states where general jurisdiction is available, looking for the most favorable choice-of-law rule. ). 37 Heiser, supra note 24, at ; see also Brilmayer, supra note 24, at 725 (identifying forum shopping as a persistent problem in general jurisdiction cases and citing as an example Cowan v. Ford Motor Co., 694 F.2d 104 (5th Cir.), question certified on reh g, 713 F.2d 100 (5th Cir. 1982), rev d & remanded, 719 F.2d 785 (5th Cir. 1983)). 38 Twitchell, supra note 34, at The state of the case law on general jurisdiction is not inaccurately described by Professor Friedrich Juenger: American jurisdictional law is a mess. Split opinions, loaded footnotes, and convoluted opinions larded with a fanciful vocabulary that attempts to give halfbaked concepts an aura of reality by dressing them up as political science or presenting them in the garb of folksy similes, signal the Justices inability to devise a satisfactory approach to the simple question of where a civil action may be brought. Friedrich K. Juenger, A Shoe Unfit for Globetrotting, 28 U.C. DAVIS L. REV. 1027, 1027 (1995) (footnotes omitted). 40 Charles W. Rocky Rhodes, The Predictability Principle in Personal Jurisdiction Doctrine: A Case Study on the Effects of a Generally Too Broad, but Specifically Too Narrow Approach to Minimum Contacts, 57 BAYLOR L. REV. 135, 143 (2005) ( Pre-twentieth century jurisdictional theory primarily focused on power. (citing McDonald v. Mabee, 243 U.S. 90, 91 (1917) ( The foundation of jurisdiction is physical power.... ))).

9 2012] DOMICILE AS BASIS FOR JURISDICTION 853 a defendant or the attachment of his property in the state, 41 the consent to the exercise of jurisdiction, 42 or the defendant s domicile in the forum. 43 These early opinions largely utilized categorical schemes of classification in assessing jurisdiction that did not depend on the type and substantiality of a defendant s contact with a forum. 44 Assertions of personal jurisdiction premised on the traditional bases of domicile, presence, and consent fall under the umbrella of general jurisdiction because they apply without regard to the nature of the dispute Domicile Domicile is a place, usually a person s home, to which a person has a settled connection or to which the law has attached determinative significance. 46 Under the law, every person has a domicile 47 and no person has more than one domicile at the same time. 48 Many different 41 See Pennoyer v. Neff, 95 U.S. 714, 722 (1877) (holding that every State possesses exclusive jurisdiction and sovereignty over persons and property within its territory but no State can exercise direct jurisdiction and authority over persons or property without its territory ). 42 See, e.g., Hess v. Pawloski, 274 U.S. 352, (1927) (holding that a state may provide by statute that when a nonresident uses the state s highways, the nonresident effectively appoints a state official as an agent on whom process may be served and thus impliedly consents to suit for actions growing out of highway accidents in which the nonresident may be involved, so long as the nonresident receives notice); Lafayette Ins. Co. v. French, 59 U.S. 404, (1855) (holding a foreign corporation consented to jurisdiction by sending an agent into Ohio to conduct business when an Ohio statute designated the agent as an in-state agent for service of process); see also Brilmayer, supra note 24, at 755 ( Consent traditionally has been a basis for exercising personal jurisdiction because, unlike for subject matter jurisdiction, the parties may waive personal jurisdiction. A party expressly may submit to a court s jurisdiction by contractual consent in advance of the dispute or may submit inadvertently by making a general appearance. (footnotes omitted)). 43 See Milliken v. Meyer, 311 U.S. 457, 462 (1940) (holding that defendant, who is a domiciliary of Wyoming but now resides in Colorado, is subject to jurisdiction in Wyoming state court because [d]omicile in the state is alone sufficient to bring an absent defendant within the reach of the state s jurisdiction for purposes of a personal judgment by means of appropriate substituted service ). 44 Rhodes, supra note 40, at 143 ( These early decisions usually did not consider the nature of the dispute in the jurisdictional calculus. A forum court typically had power to adjudicate any kind of controversy as long as the requisite relationship either presence of person or attached property, domicile or incorporation, or actual consent existed between the defendant and the forum. (citing von Mehran & Trautman, supra note 20, at )). 45 Borchers, supra note 33, at See RESTATEMENT (SECOND) OF CONFLICT OF LAWS 11(1) (1971); Brilmayer, supra note 24, at 728; see also Hoffheimer, supra note 19, at 583 n.197 ( Domicile is a Latin cognate of home. Definitions for domicile in turn sometimes invoke references to home or place of abode. ). 47 RESTATEMENT (SECOND) OF CONFLICT OF LAWS 11(2) (1971). 48 Id.; Wit v. Berman, 306 F.3d 1256, 1260 (2d Cir. 2002) ( Although one may be legally domiciled in different places for different purposes, a person is deemed to have only a single domicile for the particular legal purpose for which the concept is then being used. ).

10 854 CARDOZO LAW REVIEW [Vol. 32:845 legal functions, including taxation, probate, divorce, and adoption, require factual findings of domicile for an exercise of jurisdiction over the party. 49 The three major types of domicile include domicile of origin, of choice, and by operation of law. 50 Domicile of choice is the most significant of the three because most adults choose their domicile. 51 To choose a particular place as one s domicile, a person must be physically present there and simultaneously possess an intent to make that place his home. 52 Domicile in the forum state is broadly accepted as sufficient to confer general jurisdiction over an absent defendant, 53 as exemplified by Milliken v. Meyer, 54 the central pre International Shoe case considering the exercise of jurisdiction based on domicile. In a dispute concerning profits derived from certain Colorado oil properties, Milliken sued Meyer, a resident of Wyoming, in Wyoming state court. Although Meyer was personally served in Colorado, pursuant to Wyoming statute permitting substituted service, 55 he made no appearance in the Wyoming suit. 56 The Wyoming state court ultimately entered judgment against him, withholding profits from Meyer and granting them to Milliken. 57 Meyer subsequently sued Milliken in Colorado to recover the profits, claiming that the Wyoming judgment was invalid because Meyer was no longer a resident of Wyoming and thus Wyoming lacked jurisdiction over him. 58 The Colorado court held that Wyoming had jurisdiction over Meyer, the Wyoming judgment was valid because Meyer was domiciled in Wyoming when the Wyoming suit commenced, and the Wyoming statutes for substituted service were constitutional. 59 Meyer appealed the Colorado decision, but the U.S. Supreme Court ultimately upheld the use of substituted service on an individual s domicile, 60 even if the individual is absent from the state, so long as the substituted service is reasonably calculated to give the 49 Brilmayer, supra note 24, at AM. JUR. 2D Domicil 4 (2012). 51 Brilmayer, supra note 24, at RESTATEMENT (SECOND) OF CONFLICT OF LAWS 15, 16, 18 (1971). 53 Brilmayer, supra note 24, at 729 ( Indeed, most courts treat as self-evident the state s right to subject domiciliaries to the jurisdiction of its courts. ); von Mehren & Trautman, supra note 20, at 1137 ( [Domicile] is clearly a proper basis for general jurisdiction.... ) U.S. 457 (1940). 55 Substituted service, also known as constructive service, refers to [a]ny method of service allowed by law in place of personal service, such as service by mail. BLACK S LAW DICTIONARY 1491 (9th ed. 2009). 56 Milliken, 311 U.S. at Id. at Id. at Id. at Id. at

11 2012] DOMICILE AS BASIS FOR JURISDICTION 855 individual actual notice and an opportunity to be heard. 61 In holding that domicile in the forum state is sufficient to subject an absent defendant to personal jurisdiction in the forum, the Supreme Court observed that because the state affords the domiciliary defendant certain privileges and protections, the state may also exact reciprocal duties that are not dependent on a continuous presence in the state Presence Courts also exercise general jurisdiction on the basis of physical presence coupled with service of process. A presence-based, or territorial, theory of jurisdiction is represented in Pennoyer v. Neff, which held that a state has authority over any person or property within its territory but not over persons or property outside of its boundaries. 63 In this classic case, Mitchell, an Oregon attorney, sued Neff, a former client, in order to recover unpaid attorneys fees. 64 Neff, who was in California at the time, failed to appear in the Oregon suit, and Mitchell won a default judgment of approximately $ Since Neff was absent from the state of Oregon, Mitchell seized Neff s Oregon property to satisfy the judgment. 66 Mitchell sold Neff s land to Pennoyer, but Neff later reappeared in Oregon and sued to eject Pennoyer and recover possession of the property. Neff argued that default judgment against him was invalid because Oregon lacked personal jurisdiction over him. The U.S. Supreme Court held that a court has personal jurisdiction over a person only if the person, or the person s property, is present within the forum state. 67 Thus, general jurisdiction based on presence requires no special relationship to the forum. The Supreme Court reaffirmed this type of general jurisdiction, sometimes called transient jurisdiction or transient presence, over a 61 Id. 62 Id. at Pennoyer v. Neff, 95 U.S. 714, 722 (1877); see also, Brilmayer, supra note 24, at ( [T]he Supreme Court in Pennoyer v. Neff enshrined the principle that a state has the power to assert jurisdiction over individuals solely because they were served while in the state. Pennoyer s rationale was simple: a state has complete authority over persons and things within its borders. ). Pennoyer did, however, carve out an exception to this general rule of physical presence when it suggested that its holding would not preclude a state from exercising jurisdiction over a divorce action brought by a state citizen against a nonresident. Pennoyer, 95 U.S. at ; see also Rhodes, supra note 40, at Pennoyer, 95 U.S. at Id. at Id. 67 In this case, Neff s property was located in the forum state, but this fact was insufficient to establish jurisdiction because Neff s property was not attached before Mitchell initiated litigation. Id. at 720.

12 856 CARDOZO LAW REVIEW [Vol. 32:845 century later in Burnham v. Superior Court. 68 Although the Court agreed that it could properly exercise general jurisdiction based on transient presence combined with in-state service of process, the rationale for transient jurisdiction remains highly contested. 69 Two primary justifications for the exercise of transient jurisdiction were stated in Burnham: one was advanced by Justice Scalia in his plurality opinion, and the other was articulated in Justice Brennan s concurrence. Justice Scalia contended that transient presence is justified by the Pennoyer tradition from which International Shoe and its progeny were hewn. That is, general jurisdiction based on physical presence alone constitutes due process because the due process standard of traditional notions of fair play and substantial justice was developed by analogy to physical presence, and physical presence remains the touchstone of jurisdiction. 70 Scalia emphasized that the International Shoe standard incorporates traditional notions of fair play and substantial justice, and thus no independent inquiry into fairness is required. 71 Thus, a state statute allowing jurisdiction based on physical presence and in-state service can be upheld solely because of its historical pedigree. 72 Justice Brennan, on the other hand, argued that the proper justification for the in-state service rule is substantive fairness. 73 Justice Brennan raised an alternative justification for transient presence, which is sometimes derided as tag jurisdiction, 74 and instead emphasized that the International Shoe framework should inform the analysis. 75 For this point he turned to Shaffer v. Heitner, 76 a shareholder derivatives lawsuit in which Heitner, a shareholder of the Greyhound Corporation 68 Burnham v. Superior Court of Cal., 495 U.S. 604 (1990). 69 Brilmayer, supra note 24, at 755 ( On balance, transient jurisdiction has outlived its theoretical justifications. ); Bruce Posnak, A Uniform Approach to Judicial Jurisdiction After World-Wide and the Abolition of the Gotcha Theory, 30 EMORY L.J. 729, 744 (1981) ( There is virtual unanimity among commentators that jurisdiction should not necessarily flow from service on the defendant in the forum. These commentators reached this conclusion primarily because of the unfairness to the defendant that such assertions of jurisdiction might entail. ); Mary Twitchell, Burnham and Constitutionally Permissible Levels of Harm, 22 RUTGERS L.J. 659, 662 (1991) ( After Burnham, every trip that an American citizen takes carries with it the risk that he will have to defend litigation in a distant state involving a claim that may have no relationship to that forum, or to defend a claim closer to home governed by substantive law that otherwise would not have been applied to the case. While a state must certainly have some adjudicative power over a defendant within its territory, such plenary power over travelers seems excessive. ). 70 Burnham, 495 U.S. at Id. at Id. 73 Id. at 629 (Brennan, J., concurring) ( Unlike Justice Scalia, I would undertake an independent inquiry into the... fairness of the prevailing in-state service rule. (citation omitted)). 74 Id. 75 Id. at Id. at (citing Shaffer v. Heitner, 433 U.S. 186 (1977)).

13 2012] DOMICILE AS BASIS FOR JURISDICTION 857 (Greyhound), sued Greyhound and twenty-eight of its officers and directors. 77 Although Greyhound was incorporated in Delaware, the corporation s principal place of business was Arizona, and neither Heitner nor any of the defendant officers and directors were Delaware residents. 78 To establish jurisdiction, Heitner relied on a Delaware statute allowing Delaware courts to compel the appearance of a defendant by merely attaching the defendant s in-state property. 79 That is, the Delaware statute permitted the assertion of jurisdiction based solely on the physical presence of property in the forum state. In considering the constitutionality of this Delaware statute, the Court shifted away from the Pennoyer tradition of territorial jurisdiction and held that all assertions of state-court jurisdiction must be analyzed under the framework established in International Shoe and its progeny. 80 In other words, the Court suggested that mere presence of the defendant s property in the forum state is insufficient to establish personal jurisdiction because assertions of jurisdiction must additionally satisfy the due process requirements of minimum contacts and fair play and substantial justice. 81 Thus, Justice Brennan reasoned, International Shoe with its focus on substantive fairness, and not Pennoyer with its foundational emphasis on presence, should be the guiding decision in a general jurisdiction analysis Consent Consent is also an important traditional basis for the exercise of general jurisdiction. 83 Personal jurisdiction may be established by a defendant s express or implied consent. 84 In the oft-cited case of Hess v. 77 Shaffer, 433 U.S. at (1977). 78 Id. at 189, Id. at In this case, the property attached was the stock owned by the nonresident officers and directors of Greyhound. Id. at Id. at Id. ( [T]raditional notions of fair play and substantial justice can be as readily offended by the perpetuation of ancient forms that are no longer justified as by the adoption of new procedures that are inconsistent with the basic values of our constitutional heritage. ). 82 Burnham v. Super. Ct. of Cal., 495 U.S. 604, 630 (1990). 83 See, e.g., J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2787 (2011) (explaining that explicit consent is one way a person may submit to a State s authority (citing Ins. Corp. of Ir. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703 (1982))); Nat l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, (1964) (holding that out-of-state defendants, by agreeing to a contract authorizing an agent to receive service of process, had consented to personal jurisdiction). 84 See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 n.14 (1985) ( We have noted that, because the personal jurisdiction requirement is a waivable right, there are a variety of legal arrangements by which a litigant may give express or implied consent to the personal jurisdiction of the court. (quoting Ins. Corp. of Ir., 456 U.S. at 703)); Gen. Contracting & Trading Co. v. Interpole, Inc., 940 F.2d 20, 22 (1st Cir. 1991) ( A defendant may manifest

14 858 CARDOZO LAW REVIEW [Vol. 32:845 Pawloski, the Supreme Court upheld a state statute providing that nonresident drivers using the state s roads give implied consent to the state s judicial authority over causes of action related to their driving. 85 The Court stated that the difference between formal and implied consent is not substantial, as far as the Due Process Clause of the Fourteenth Amendment is concerned. 86 As suggested by Professors von Mehren and Trautman, the rationale for using consent as a basis of jurisdiction is that the consent analysis is easily administered and relatively precise, and usually overlaps with other relationships to the forum supporting the exercise of jurisdiction. 87 C. General Jurisdiction Based on Continuous and Systematic Contacts The Supreme Court first endorsed activities-based general jurisdiction in the 1952 case of Perkins v. Benguet Consolidated Mining Co., in which a nonresident of Ohio sued a Philippine mining company in Ohio state court for claims that were unrelated to the company s activities in Ohio. 88 The defendant mining company owned gold and silver mines in the Philippine Islands, 89 and during World War II, the corporation had halted its operations due to the Japanese occupation of the Philippines. 90 The mining company s president subsequently moved back to a town in Ohio, 91 and the Philippine company s activities in the forum state thus included the president s maintaining his home in Ohio, keeping business files in Ohio, handling corporate correspondence from Ohio, paying employees salaries from Ohio bank accounts, and holding directors meetings in Ohio. 92 The Supreme Court held that Ohio would not violate federal due process by exercising general jurisdiction over the defendant. 93 The Court reasoned that the essential consideration is consent to a court s in personam jurisdiction in any number of ways, from failure seasonably to interpose a jurisdictional defense, to express acquiescence in the prosecution of a cause in a given forum, to submission implied from conduct. ); Heller Fin., Inc. v. Midwhey Powder Co., 883 F.2d 1286, 1290 (7th Cir. 1989) ( Challenges to personal jurisdiction may be waived by either express or implied consent. ). 85 Hess v. Pawloski, 274 U.S. 352, 356 (1927). 86 Id. at von Mehren & Trautman, supra note 20, at Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952). 89 Id. at Id. at Id. 92 Id. at ; see also Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1224 (9th Cir. 2011) (summarizing the nature and extent of the contacts in Perkins). 93 Perkins, 342 U.S. at 448.

15 2012] DOMICILE AS BASIS FOR JURISDICTION 859 general fairness to the defendant, and the defendant must conduct in the forum state the amount and kind of activities so as to make the exercise of jurisdiction reasonable and just. 94 The standards set in Perkins were later adopted and applied by the Court in Helicopteros Nacionales de Columbia S.A. v. Hall. 95 In Helicopteros, four American citizens died when a helicopter owned by a Colombian helicopter transportation company, Helicopteros Nacionales de Colombia S.A. (Helicol), crashed in Peru. 96 Plaintiffs, representing the four decedents, brought a wrongful death action and sought to establish that Helicol possessed contacts with Texas sufficient to support general jurisdiction in Texas state court. 97 Helicol s contacts in Texas included sending its CEO to Houston to negotiate a contract; accepting checks drawn on a Houston bank into a New York bank account; purchasing helicopters, equipment, and training services from a company in Fort Worth; and sending personnel to Fort Worth for training. 98 Although the Supreme Court ultimately held that these contacts were insufficient to subject Helicol to general jurisdiction in Texas, 99 the Helicopteros decision effectively affirmed the Perkins requirement of continuous and systematic contacts. 100 The Court held that mere purchases and related trips, even if conducted on a regular basis, are not enough to establish personal jurisdiction in a cause of action unrelated to those purchase transactions. 101 Until last year, the Supreme Court had not provided any additional guidance on general jurisdiction. In June 2011, however, the Supreme Court issued Goodyear Dunlop Tires Operations, S.A. v. Brown, 102 the first Supreme Court general jurisdiction decision in almost three decades. 94 Id. at Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, (1984). 96 Id. at The plaintiffs argued only under a theory of general jurisdiction, conceding that the wrongful death claim was unrelated to Helicol s contacts in Texas and thus specific jurisdiction could not be exercised. Id. at 415 & n.10. This concession might ultimately have been a tactical error on the part of the plaintiffs. Given Helicol s not unsubstantial contacts in the forum state, there was a plausible argument that the wrongful death claim arose from the training of Helicol s personnel in Fort Worth, thus conferring specific jurisdiction. See id. at (Brennan, J., dissenting) (suggesting that the wrongful death suit arose from Helicol s contacts in Texas and that there should be specific jurisdiction). 98 Id. at Id. at See id. at ( All parties to the present case concede that respondents claims against Helicol did not arise out of, and are not related to, [defendant s] activities within Texas. We thus must explore the nature of [defendant s] contacts with the State of Texas to determine whether they constitute the kind of continuous and systematic general business contacts the Court found to exist in Perkins. (footnote omitted)). 101 Id. at Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct (2011).

16 860 CARDOZO LAW REVIEW [Vol. 32:845 In Goodyear, the parents of two thirteen year-old North Carolina boys who died in a car accident in France brought a wrongful death action in North Carolina state court against Goodyear USA, which is an Ohio corporation, and three foreign subsidiaries of Goodyear USA. The complaint alleged that a faulty tire manufactured by Goodyear in Turkey caused the boys deaths. 103 Although Goodyear USA did not contest the suit on personal jurisdiction grounds, the foreign subsidiaries, operating in Luxembourg, Turkey, and France, moved to dismiss for lack of personal jurisdiction, arguing they had no ties to North Carolina sufficient to establish either specific or general jurisdiction. 104 A small percentage of the Goodyear subsidiaries tires were distributed within North Carolina by other Goodyear affiliates, but the foreign subsidiaries were not registered to do business in the forum state; did not maintain any place of business, employees, or bank accounts in the forum state; did not design, manufacture, or advertise their products in the forum state; did not solicit business in the forum state; and did not sell or ship tires to North Carolina customers. 105 The North Carolina Superior Court denied the motion to dismiss, 106 and the North Carolina Court of Appeals affirmed, 107 holding that the foreign subsidiaries could be sued in North Carolina because the subsidiaries inserted their tires into the stream of interstate commerce and did not attempt to limit the extent to which those tires could be sold in the North Carolina market. 108 The U.S. Supreme Court reversed, unanimously holding that general jurisdiction cannot be based on a stream of commerce theory 109 and analogizing the defendant s forum contacts in Goodyear to the insufficient contacts in Helicopteros. 110 The Court reasoned that the stream of commerce analysis is relevant to specific jurisdiction, but not general jurisdiction, 111 and merely conducting some continuous activity within the forum state 103 Id. at Id. 105 Id. at Brown v. Meter, No. 05 CVS 1922, 2008 WL (N.C. Super. Ct. Apr. 25, 2008). 107 Brown v. Meter, 681 S.E.2d 382 (N.C. Ct. App. 2009). 108 Goodyear, 131 S. Ct. at Id. at 2855 ( Flow of a manufacturer s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction, but ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant. (citations omitted)). For an explanatory discussion of the stream of commerce theory, see supra note Goodyear, 131 S. Ct. at 2856 ( We see no reason to differentiate from the ties to Texas held insufficient in Helicopteros, the sales of petitioners tires sporadically made in North Carolina through intermediaries. ). 111 Id. at 2855 ( Flow of a manufacturer s products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction. But ties serving to bolster the exercise of specific jurisdiction do not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant. ) (citations omitted).