In: Accounting
Two of the most important Supreme Court cases dealing with long arm jurisdiction are the International Shoe case (in the text) and the Worldwide Volkswagen v. Woodson (Supreme Court website or other source) case.
What is the minimum contacts standard? How does it work, and when is it applied?
World- Wide Volkswagen provided the United States Supreme Court with another opportunity to clarify the type of contacts necessary for a state court to assert jurisdiction over a nonresident defendant. The Court stated that the minimum contacts test performs two related, but distinguishable functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to assure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.54 While this statement seems to indicate that any jurisdictional question involves distinct due process and federalism considerations, the Court's opinion tends to ignore this distinction. Despite this confusion, the opinion sheds some light on what factors are necessary to support a finding of minimum contacts.
Minimum contacts between the defendant and the forum state must exist to support personal jurisdiction. Rather than the mere possibility that a product will go into the forum state, foreseeability consists of finding that the defendant's conduct and interactions with the forum state should lead to a reasonable anticipation of being brought into court there. Due process requires that defendants have the opportunity to engage in a course of conduct with some advance knowledge of where they may be brought into litigation. Purposeful availment of the privilege of conducting business in the forum state does create clear notice that a defendant may be sued there. It then may decide to buy insurance, pass costs to consumers, or cease doing business on that state.
Since the two defendants do not purposefully avail themselves of the privilege of doing business in the forum state, nor do they engage in any business in that state or seek to target that market, personal jurisdiction is improper.
So,The concept of minimum contacts, in turn, can be seen to perform two related, but distinguishable, functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.