At issue in this case, before the Supreme Court on the merits, was whether the Due Process Clause of the Fourteenth Amendment permits a court of the forum state (i.e., where the plaintiff has sued) to exercise long-arm personal jurisdiction over a nonresident defendant who has allegedly injured the plaintiff in another jurisdiction, simply because the defendant knew that the plaintiff had connections to the forum state, and the plaintiff allegedly experienced harm in the forum state. This case will also decide the related issue whether the judicial district where the plaintiff allegedly suffered injury is a district “in which a substantial part of the events or omissions giving rise to the claim occurred” for purposes of establishing venue under the general venue statute, 28 U.S.C. § 1391(b)(2), even if the defendant’s alleged misconduct occurred in another district altogether.
In the decision below, a sharply divided panel of the Ninth Circuit held that the federal court for the District of Nevada had personal jurisdiction over the defendant, a federal DEA agent acting in Atlanta, Georgia, who confiscated the $97,000 gambling earnings of plaintiffs, professional gamblers who were passing through the Atlanta airport, en route from Puerto Rico to Nevada. The agent (wrongfully) suspected that the money was connected to illicit drug activity. The agent then initiated forfeiture proceedings by preparing an allegedly false affidavit against the plaintiffs. The plaintiffs sued the DEA agent in the District of Nevada in a Bivens action (an implied right of action under the Fourth Amendment against a federal official, akin to a § 1983 claim against a state actor). The money was eventually restored in full to the plaintiffs (but without interest) approximately seven months after the DEA agent seized it. The plaintiffs allege that long-arm personal jurisdiction over the DEA agent exists in Nevada because, although the agent’s actions took place in Atlanta, the damages that resulted from those actions affected the plaintiffs in Nevada.
NELF filed an amicus brief in this case in support of petitioner, arguing that, under well-settled Supreme Court precedent, no personal jurisdiction) can lie against an out-of-state defendant accused of an intentional tort unless he has “expressly aimed” the injury at the forum state by intending to harm the plaintiff in the forum state when he committed the alleged tort. See Calder v. Jones, Calder v. Jones, 465 U.S. 783 (1984) (Hollywood entertainer Shirley Jones had personal jurisdiction to sue Florida-based National Enquirer journalist and editor in California for defamation: defendants intended to harm plaintiff in California by “expressly aiming” content of false and harmful article at that state). NELF argued that, under Calder v. Jones, it is insufficient simply to show that the defendant knew that the plaintiff had connections to the forum state at the time of the alleged misconduct (although petitioner apparently did not even know about plaintiffs’ Nevada connections when he seized their money), and that the harm may be foreseeable in the forum state. Foreseeability is not enough to create personal jurisdiction. Instead, the defendant must “expressly aim” the harm at the forum state by intending to harm the plaintiff there. The facts here fall far short of this standard of proof and, therefore, NELF argued the Ninth’s Circuit’s jurisdictional ruling is incorrect and must be reversed. (Such reversal, of course, would not, of course, preclude the plaintiffs from suing the petitioner in Georgia, the state in which the alleged tort took place.)
On February 25, 2014, in a unanimous opinion very similar to NELF and AIM’s brief, the U.S. Supreme Court in Walden v. Fiore reversed the Ninth Circuit and held that due process bars the exercise of specific personal jurisdiction in Nevada over the petitioner, a DEA agent at the Atlanta airport who had seized the respondents’ gambling-related money there and had drafted an affidavit in support of forfeiture there, based on his belief at the time that the large sums of money were drug-related. The Court’s unanimous decision is an important victory for businesses, who would otherwise have been exposed to the risk of personal jurisdiction in unanticipated and remote fora whenever they were sued for such common intentional torts as fraud, breach of fiduciary duty, misappropriation of trade secrets, unfair competition, or tortious interference with business relations. In reversing the Ninth Circuit’s decision, the Court has preserved the notice and fairness protections guaranteed under the Due Process Clause to a defendant sued for intentional torts. Due process continues to ensure that the defendant cannot be sued in a forum where s/he has established no meaningful contacts.
As NELF had argued in its brief, the Court held today that, to serve the essential notice function under the Due Process Clause, the minimum contacts requirement must focus on the defendant’s purposeful contacts with the forum State, and not on the defendant’s contacts with the plaintiff who happens to reside in the forum state. That is, the minimum contacts inquiry determines whether the defendant has established direct and meaningful contacts with the forum state. Due process does not permit the exercise of personal jurisdiction where, as here, the defendant has established contacts with the plaintiffs who happen to reside in the forum state. The Court agreed with us that the Ninth Circuit had lost sight of this key constitutional focus in effectively attributing all of the plaintiffs’ Nevada contacts to the defendant, thereby defeating the defendant’s reasonable expectations on where he might be sued for his conduct in Atlanta.
As NELF’s brief also discussed, the Court distinguished this case from its key precedent in Calder v. Jones, 465 U.S. 783 (1984) (personal jurisdiction in California over Florida-based National Enquirer journalists because defendants had “expressly aimed” their defamatory article about Hollywood star at California itself and had made it the focal point by harming actress’s reputation there). Unlike in Calder v. Jones, where the defendants deliberately targeted and harmed the plaintiff Shirley Jone’s reputation in California, the defendant’s conduct in this case occurred entirely in Atlanta—i.e., seizing the plaintiffs’ money there and drafting an allegedly false and misleading affidavit there. The defendant here did not target his alleged tortious conduct at Nevada in any way.