The U.S. Supreme Court established the concept of modern personal jurisdiction in International Shoe. Over the last several years the court has shifted gears on what are referred to as “general” and “specific jurisdiction”. General jurisdiction means that a court may have jurisdiction over a defendant simply because it is qualified to do business in that jurisdiction or otherwise has a presence there even though the claim does not arise from those contacts. Specific personal jurisdiction is based upon the minimum contacts being the basis for the lawsuit.
Personal Injury Jurisdiction-Daimler
In Daimler AG v. Bauman, 571 U.S. 117, 139 (2014) the court held that the exercise of general jurisdiction over a corporation is limited to states where it is at home. “At home” means the corporation’s principal place of business and the state of incorporation. Daimler essentially brought an end to the concept of general jurisdiction based on a defendant’s business places, products put into the stream of commerce, volume of sales or other such contacts.
In BNSF Railway Co. v. Tyrrell, 137 S.Ct. 1549 (2017) the court held that the Montana courts could not exercise general jurisdiction over the defendant because it was not at home in that state. In this instance BNSF had more than 2,000 employees and over 2,000 miles of track in the state. The court held that the defendant’s contacts were not so continuous and systematic as to make BNSF at home in Montana.
In Walden v. Fiore, 571 U.S. 277 (2014), the court held that for a state to exercise specific jurisdiction, the defendant’s suit-related conduct must create a substantial connection with the forum state.
In Mallory v. Norfolk Southern Railway Co., 143 S.Ct. 2028 (2023), the Supreme Court dealt with a FELA case where the plaintiff filed suit in Pennsylvania. That is where the defendant was qualified as a foreign corporation. Under Pennsylvania law, qualification as a foreign corporation allows state courts to exercise general personal jurisdiction over that corporation just as they could over a domestic corporation. The Supreme Court said that did not violate the Constitution.
Personal Injury Jurisdiction-Further Retreat
In Bristol Myers Squibb Co. v. Superior Court of California, 137 S.Ct. 1773 (2017), the court dealt with a situation where the defendant engaged in business in California including selling a product there. However it did not develop, manufacture or seek approval for the drug in that state. In addition the non-resident plaintiffs did not allege that they obtained the product in that state or were injured there. The court found there was no specific jurisdiction based on those facts.
The concept of general jurisdiction comes down to where a defendant’s main headquarters is located or where the defendant is incorporated. Bristol Myers could not be sued by non-California residents in California because the defendant did not develop the drug in that state, manufacture it there, label it there or seek regulatory approval there. Rather what must be looked at is whether the defendant has an “affiliation” with that state. Affiliation means whether the action arose out of conduct within the state.
Aside from showing that affiliation, there may be other ways to obtain jurisdiction over an out-of-state defendant:
- Is the defendant registered to do business in that state?
- The long-arm statute of that jurisdiction.
- The defendant may have an interest in streamlining litigation by agreeing to jurisdiction in that state.
Specific Jurisdiction
For there to exist specific jurisdiction, the court must find that the suit arises from the defendant’s contacts with the state. In a March 2023 decision from the Court of Appeals in Virginia in a case styled, Carter v. Wake Forest, the Court noted that although the 4th Circuit is not binding on this Court, that latter court has organized due process requirements for specific jurisdiction into three elements. The first element is the extent to which the defendant availed itself of conducting activities in Virginia. The second element is whether the claim arose out of those activities that are directed at the state. Finally the court will look at whether the exercise of personal jurisdiction would be constitutionally reasonable.
In that particular case, Wake Forest maintained no offices in Virginia, had no property in Virginia, did not solicit business in Virginia and did not deliberately engage in long-term business activities in Virginia.
In addition a plaintiff may have to be prepared to prove personal jurisdiction at trial. The mere preliminary showing of personal jurisdiction does not mean that the defendant cannot later on challenge it. Also the plaintiff may actually have to prove personal jurisdiction by a preponderance of the evidence.
In March of 2021 the Supreme Court further refined specific personal jurisdiction in Ford Motor Co. v. Montana 8th Judicial District Court, 141 S.Ct. 1017, 1022 (2021). The court held there that when a company like Ford serves a market for a product in a state and that product causes injury in the state to one of its residents, the state’s courts may assert personal jurisdiction over Ford.
Since that time the Ford case has been applied in many state and federal decisions, further refining the concept of specific jurisdiction.
The 4th Circuit
The 4th Circuit in UMG Recordings, Inc. v. Kurbanov, 963 F.3d 344 (4th Cir. 2020) laid out a three-part test for jurisdiction. First of all is the extent to which the defendant purposely availed itself of the privilege of conducting activities in Virginia. The second element is whether the plaintiff’s claims arose out of those activities. Third is whether the exercise of personal jurisdiction is constitutionally reasonable.
In a recent trial court decision from Norfolk, the trial court found that there was a lack of personal jurisdiction where a Korean-based manufacturer was sued. The defendant manufactured an E-cigarette battery. It exploded in the plaintiff’s pocket. The battery caused severe burns to the plaintiff. The court dismissed due to lack of jurisdiction.
Subject Matter Jurisdiction
Subject matter jurisdiction of state and federal courts is well defined in the respective Codes.
However within the concept of subject matter jurisdiction, there are what may be called “potential jurisdiction” and “active jurisdiction”.
Potential jurisdiction is the authority of the court over a specified class of cases or controversies. However that jurisdiction then becomes active when the court asserts the power to adjudicate a particular case on the merits. To render a judgment on the merits, the court must have both potential and active jurisdiction. Whit v. Commonwealth, 61 Va. App. 637, 739, S.E.2d 254 (2013) An order granting a voluntary nonsuit is not a decision on the merits. As such, such a decision is evidence of the court’s potential jurisdiction.