Litigation: Jurisdiction by association: Defining the limits of due process
Jurisdictions have taken three distinct approaches to protect due process rights that require more than conclusory allegations that the nonresident defendant was involved in a conspiracy.
September 12, 2013 at 05:00 AM
7 minute read
The original version of this story was published on Law.com
To determine whether a nonresident defendant is subject to personal jurisdiction within the limits of the constitution, a two-part analysis is used that considers whether the defendant has minimum contacts with the forum state and whether these contacts comport with due process, such that the nonresident defendant should “reasonably anticipate being hailed into court” in the forum, decided in Burger King Corp. v. Rudzewicz (1985) and World-Wide Volkswagen Corp. v. Woodson (1980). Although this test traditionally considers the nonresident defendant's direct contacts with the forum, plaintiffs continue to contend that jurisdiction can be created through allegations of a conspiracy — that a non-resident defendant is subjected to jurisdiction based solely on the acts of his alleged co-conspirator over whom jurisdiction does exist.
The “conspiracy theory of personal jurisdiction” has been criticized, and rejected, by courts for myriad reasons. Many courts maintain that the theory vitiates the rigorous requirements of due process by subjecting a defendant to jurisdiction in a forum to which he has no relationship based on mere allegations that the defendant conspired with someone who has sufficient contacts, such as Silver Valley Partners LLC v. De Motte and Paolino v. Argyll Equities, L.L.C. Courts have also reasoned that a nonresident defendant's contacts with the jurisdiction must be analyzed separately and an alleged participation in a conspiracy cannot be a substitute for his sufficient minimum contacts with the forum, found in Brown v. Kerkhoff.
Moreover, courts have rejected the conspiracy theory of jurisdiction because it conflates the jurisdictional issues with the merits of the case, and could potentially be burdensome to the plaintiff by requiring an extensive evidentiary hearing akin to a trial on the merits to resolve the jurisdictional question.
The forums that have adopted conspiracy jurisdiction are mindful of the criticism above and have each tailored their tests to try to protect the nonresident defendant's due process rights. Generally, jurisdictions have taken three distinct approaches to protect these rights – significantly, all of these approaches require a showing of more than mere conclusory allegations that the nonresident defendant was involved in a conspiracy.
The first approach focuses on the relationship between the nonresident defendant and his co-conspirator. Under this approach, the acts of one co-conspirator taken in furtherance of the conspiracy are not unilateral and, because they benefit all conspirators, they may be able to subject the nonresident defendant to jurisdiction.
The second approach is akin to the effects test laid out in Calder v. Jones (1984) and requires that the nonresident defendant could have reasonably foreseen that the conspiracy would have an effect in the forum. This test is met, for example, if the conspiracy targeted a resident or corporation in the forum.
The third approach is to require the plaintiff to make a prima facie showing of conspiracy by alleging specific acts that demonstrate the existence of the conspiracy. While this approach has been criticized as burdensome, it ensures that flimsy allegations of conspiracy will not allow a non-resident defendant to be hauled into court.
Conspiracy jurisdiction thus remains a somewhat novel and controversial theory of jurisdiction. Depending on the jurisdiction and the strength of the allegations, plaintiffs may succeed in convincing a court that jurisdiction should lie based purely on the acts of another. The battle will continue to play out until the Supreme Court speaks to the limits of a defendant's due process rights in the conspiracy context.
To determine whether a nonresident defendant is subject to personal jurisdiction within the limits of the constitution, a two-part analysis is used that considers whether the defendant has minimum contacts with the forum state and whether these contacts comport with due process, such that the nonresident defendant should “reasonably anticipate being hailed into court” in the forum, decided in
The “conspiracy theory of personal jurisdiction” has been criticized, and rejected, by courts for myriad reasons. Many courts maintain that the theory vitiates the rigorous requirements of due process by subjecting a defendant to jurisdiction in a forum to which he has no relationship based on mere allegations that the defendant conspired with someone who has sufficient contacts, such as Silver Valley Partners LLC v. De Motte and Paolino v. Argyll Equities, L.L.C. Courts have also reasoned that a nonresident defendant's contacts with the jurisdiction must be analyzed separately and an alleged participation in a conspiracy cannot be a substitute for his sufficient minimum contacts with the forum, found in Brown v. Kerkhoff.
Moreover, courts have rejected the conspiracy theory of jurisdiction because it conflates the jurisdictional issues with the merits of the case, and could potentially be burdensome to the plaintiff by requiring an extensive evidentiary hearing akin to a trial on the merits to resolve the jurisdictional question.
The forums that have adopted conspiracy jurisdiction are mindful of the criticism above and have each tailored their tests to try to protect the nonresident defendant's due process rights. Generally, jurisdictions have taken three distinct approaches to protect these rights – significantly, all of these approaches require a showing of more than mere conclusory allegations that the nonresident defendant was involved in a conspiracy.
The first approach focuses on the relationship between the nonresident defendant and his co-conspirator. Under this approach, the acts of one co-conspirator taken in furtherance of the conspiracy are not unilateral and, because they benefit all conspirators, they may be able to subject the nonresident defendant to jurisdiction.
The second approach is akin to the effects test laid out in Calder v. Jones (1984) and requires that the nonresident defendant could have reasonably foreseen that the conspiracy would have an effect in the forum. This test is met, for example, if the conspiracy targeted a resident or corporation in the forum.
The third approach is to require the plaintiff to make a prima facie showing of conspiracy by alleging specific acts that demonstrate the existence of the conspiracy. While this approach has been criticized as burdensome, it ensures that flimsy allegations of conspiracy will not allow a non-resident defendant to be hauled into court.
Conspiracy jurisdiction thus remains a somewhat novel and controversial theory of jurisdiction. Depending on the jurisdiction and the strength of the allegations, plaintiffs may succeed in convincing a court that jurisdiction should lie based purely on the acts of another. The battle will continue to play out until the Supreme Court speaks to the limits of a defendant's due process rights in the conspiracy context.
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