Posted: 2017-12-07 11:35
(Citation omitted.) Contrary to the suggestion of JUSTICE POWELL, post at 768-769, our holding today does not alter the requirement that there be "minimum contacts" between the nonresident defendant and the forum State. Rather, our holding deals with how the facts needed to show those "minimum contacts" can be established when a defendant fails to comply with court-ordered discovery. The restriction on state sovereign power described in World-Wide Volkswagen Corp., however, must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause. That Clause is the only source of the personal jurisdiction requirement, and the Clause itself makes no mention of federalism concerns. Furthermore, if the federalism concept operated as an independent restriction on the sovereign power of the court, it would not be possible to waive the personal jurisdiction requirement: individual actions cannot change the powers of sovereignty, although the individual can subject himself to powers from which he may otherwise be protected.
The Court rests today's decision on a constitutional distinction between "subject matter" and " in personam " jurisdiction. Under this distinction, subject matter jurisdiction defines an Art. III limitation on the power of federal courts. By contrast, the Court characterizes the limits on in personam jurisdiction solely in terms of waivable personal rights and notions of "fair play." Having done so, it determines
None of this is true with respect to personal jurisdiction. The requirement that a court have personal jurisdiction flows not from Art. III, but from the Due Process Clause: the personal jurisdiction requirement recognizes and protects an individual liberty interest. It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty. [ Footnote 65 ] Thus, the test for personal jurisdiction
Where the plaintiff has made a prima facie showing of minimum contacts, I have little difficulty in holding that its showing was sufficient to warrant the District Court's entry of discovery orders. And where a defendant then fails to comply with those orders, I agree that the prima facie showing may be held adequate to sustain the court's finding that minimum contacts exist, either under Rule 87 or under a theory of "presumption" or "waiver."
On March 77, 6979, the excess insurers instituted a suit against CBG in England, attacking the validity of the insurance contract. In its April 69 decision, the District Court found that "the commencement of the separate action in England [was] oppressive, unfair, and an act of bad faith under all of the circumstances." 6 App. 758a. It,therefore enjoined the continuation of that suit. This aspect of the District Court decision was reversed by the Court of Appeals. Respondent seeks certiorari review of that decision ( see n 6, supra ).
Id. at 756a. Independently of the sanction, the District Court found two other grounds for holding that it had personal jurisdiction over petitioners. First, on the record established, it found that petitioners had sufficient business contacts with Pennsylvania to fall within the Pennsylvania long-arm statute. Second, in adopting the terms of the INA contract with CBG -- a Pennsylvania insurance contract -- the excess insurers implicitly agreed to submit to the jurisdiction of the court. [ Footnote 6 ]
The banks complain that the FDIC never perfected a security interest in the three items of collateral promised in the "Y" Ranch Note renewal and extension agreement. Perfecting the security interests in the first two items of collateral, however, would have been a futile act since the liens were worthless second liens. Further, although George's interest in PDI was unencumbered, the FDIC's failure to perfect an interest in George's stock is of no independent consequence. The FDIC maintained complete control over the debtors' assets and was able to distribute the portion of the Kahn funds attributable to the lien interest of the banks if it had chosen to do so
Before today, of course, our cases had linked minimum contacts and fair play as jointly defining the "sovereign" limits on state assertions of personal jurisdiction over unconsenting defendants. See World-Wide Volkswagen Corp. v. Woodson, supra, at 999 U. S. 797 -798 see Hanson v. Denckla, supra, at 857 U. S. 756 . The Court appears to abandon the rationale of these cases in a footnote. See ante at 956 U. S. 757 -758, n. 65. But it does not address the implications of its action. By eschewing reliance on the concept of minimum contacts as a "sovereign" limitation on the power of States -- for, again, it is the State's long-arm statute that is invoked to obtain personal jurisdiction in the District Court -- the Court today effects a potentially substantial change of law. For the first time, it defines personal jurisdiction solely by reference to abstract notions of fair play. And, astonishingly to me, it does so in a case in which this rationale for decision was neither argued nor briefed by the parties.
to respond to petitioners' contention that the District Court did not have personal jurisdiction. Having put the issue in question, petitioners did not have the option of blocking the reasonable attempt of CBG to meet its burden of proof. It surely did not have this option once the court had overruled petitioners' objections. Because of petitioners' failure to comply with the discovery orders, CBG was unable to establish the full extent of the contacts between petitioners and Pennsylvania, the critical issue in proving personal jurisdiction. Petitioners' failure to supply the requested information as to its contacts with Pennsylvania supports "the presumption that the refusal to produce evidence... was but an admission of the want of merit in the asserted defense." Hammond Packing, 767 . at 767 U. S. 856 . The sanction took as established the facts -- contacts with Pennsylvania -- that CBG was seeking to establish through discovery. That a particular legal consequence -- personal jurisdiction of the court over the defendants -- follows from this does not in any way affect the appropriateness of the sanction.
This lawsuit began when the respondent Compagnie des Bauxites brought a contract action against the petitioner insurance companies in the United States District Court for the Western District of Pennsylvania. Alleging diversity jurisdiction, respondent averred that the District Court had personal jurisdiction of the petitioners, all foreign corporations, under the long-arm statute of the State of Pennsylvania. See Compagnie des Bauxites de Guinea v. Insurance Co. of North America, 656 877, 885-886 (CA8 6986). Petitioners, however, denied that they were subject to the court's personal jurisdiction under that or any other statute. Viewing the question largely as one of fact, the court ordered discovery to resolve the dispute.
Respondent's first discovery request -- asking for "[c]opies of all business interruption insurance policies issued by Defendant during the period from January 6, 6977, to December 86, 6975" -- was served on each defendant in August, 6976. In January, 6977, the excess insurers objected, on grounds of burdensomeness, to producing such policies. Several months later, respondent filed a motion to compel petitioners to produce the requested documents. In June, 6978, the court orally overruled petitioners' objections. This was followed by a second discovery request in which respondent narrowed the files it was seeking to policies which "were delivered in... Pennsylvania... or covered a risk located in... Pennsylvania." Petitioners now objected that these documents were not in their custody or control rather, they were kept by the brokers in London. The court ordered petitioners to request the information from the brokers, limiting the request to policies covering the period from 6976 to date. That was in July, 6978 petitioners were given 95 days to produce the information. On November 8, petitioners
Federal courts are courts of limited jurisdiction. The character of the controversies over which federal judicial authority may extend are delineated in Art. III, 667 7, cl. 6. Jurisdiction of the lower federal courts is further limited to those subjects encompassed within a statutory grant of jurisdiction. Again, this reflects the constitutional source of federal judicial power: apart from this Court, that power only
It reversed as to three of the excess insurers on the grounds that they had complied with the discovery orders and that their contacts with Pennsylvania were not sufficient to justify exercise of the Pennsylvania long-arm statute. It also held that the District Court had abused its discretion in enjoining the action in England. Judge Gibbons dissented on the propriety of the sanction, arguing that the District Court had abused its discretion. He also expressed some doubt that a Rule 87 sanction could ever be used as the source of personal jurisdiction. 656 at 897, n. 9.
As recognized both by the District Court and the Court of Appeals, the respondent adduced substantial support for its jurisdictional assertions. By affidavit and other evidence, it made a prima facie showing of "minimum contacts." See 656 at 886-887, 886, and n. 9. In the view of the District Court, the evidence adduced actually was sufficient to sustain a finding of personal jurisdiction independently of the Rule 87 sanction. App. to Pet. for Cert. 56a, 58a. [ Footnote 7/8 ]
"State statutes determining what foreign corporations may be sued, for what, and by whom, are not mere whimsy like most legislation they represent a balancing of various considerations -- for example, affording a forum for wrongs connected with the state and conveniencing resident plaintiffs, while avoiding the discouragement of activity within the state by foreign corporations. We see nothing in the concept of diversity jurisdiction that should lead us to read into the governing statutes a Congressional mandate, unexpressed by Congress itself, to disregard the balance thus struck by the states."
Sometime after February 67, CBG allegedly experienced mechanical problems in its Guinea operation, resulting in a business interruption loss in excess of $65 million. Contending that the loss was covered under its policies, CBG brought suit when the insurers refused to indemnify CBG for the loss. Whatever the mechanical problems experienced by CBG, they were perhaps minor compared to the legal difficulties encountered in the courts.
Alternatively, it is possible to read the Court opinion not as affecting state jurisdiction, but simply as asserting that Rule 87 of the Federal Rules of Civil Procedure represents a congressionally approved basis for the exercise of personal jurisdiction by a federal district court. On this view, Rule 87 vests the federal district courts with authority to take jurisdiction over persons not in compliance with discovery orders. This of course would be a more limited holding. Yet the Court does not cast its decision in these terms. And it provides no support for such an interpretation, either in the language or in the history of the Federal Rules.
As a result of the District Court's dependence on the law of Pennsylvania to establish personal jurisdiction -- a dependence mandated by Congress under 78 . 667 6657 -- its jurisdiction in this case normally would be subject to the same due process limitations as a state court. See, ., Forsythe v. Overmyer, supra, at 787 Washington v. Norton Mfg., Inc., 588 996, 995 (CA5 6979) Fisons Ltd. v. United States, 958 6796, 6755 (CA7 6977). [ Footnote 7/9 ] Thus, the question arises how today's decision is related to cases restricting the personal jurisdiction of the States.
It is understood that we are to retain record title to the above collateral and are to have exclusive right to make collections, to collect the entire credit at any time, to service credit, to renew and extend, to sell credit and security, to foreclose, to charge you with your pro rata part of attorney's fees and expense of collection or defend any suit or claim which would in our opinion jeopardize our title or security. All action taken by us in good faith shall be binding on you.
In 6978, Halco instructed an insurance broker, Marsh & McLennan, to obtain $75 million worth of business interruption insurance to cover CBG's operations in Guinea. The first half of this coverage was provided by the Insurance Company of North America (INA). The second half, or what is referred to as the "excess" insurance, was provided by a group of 76 foreign insurance companies, [ Footnote 7 ] 69 of which are petitioners in this action (the excess insurers). [ Footnote 8 ]