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Civil Procedure Fall 2014

Pennoyer to International Shoe

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This note helps explain the Supreme Court's treatment of the Traditional Bases in the post-Pennoyer but Pre-International Shoe era.

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Traditional Bases: Domicile (in the Absence of Presence)

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The Supreme Court explained the extent of U.S. courts’ personal jurisdiction over citizens both abroad and in other states of the union, and relatedly, the ability of such courts to render binding decisions in the absence of such citizens when duly served in Blackmer v. U.S. (for U.S. citizens abroad) and Milliken v. Meyer (for U.S. citizens in a U.S. state other than their state of domicile). 

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In Blackmer v. U.S., 284 U.S. 421 (1932), the Supreme Court unequivocally asserted the jurisdiction of U.S courts over U.S. citizens duly served abroad and the validity of judgments rendered in their absence if they failed to appear. In Blackmer, the Court found that the service of process on an American citizen in France by a means consistent with U.S. legislation is no imposition or encroachment on foreign sovereign. The duty of such a citizen duly served was framed as a matter that arises “solely … between the United States and the citizen.” The Court explained that “the jurisdiction of the United States over its absent citizen, so far as the binding effect of its legislation is concerned, is a jurisdiction in personam, and he is personally bound to take notice of the laws that are applicable to him and to obey them.”

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Milliken v. Meyer, 311 U.S. 457 (1940) confirmed that the same principle applied to the power of a state court over absent citizens who are found in other U.S. states. Meyer, a Wyoming resident, was served in Colorado for a claim brought before a Wyoming state court. Meyer refused to appear, and a default judgment was rendered against him. When Milliken subsequently tried to enforce the order against Meyer in Colorado, Meyer resisted, but the Supreme Court held that the Wyoming judgment was valid and entitled to full faith and credit. The Court found that “[d]omicile alone is sufficient to bring an absent defendant within the reach of the state’s jurisdiction for purposes of a personal judgment by means of appropriate substituted service … [T]he authority of a state over one of its citizens is not terminated by the mere fact of his absence from the state. The state which accords him privileges and affords protection to him and his property by virtue of domicile may also expect reciprocal duties.”

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Traditional Bases: Agency and Consent (and Automobiles)

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As interstate mobility increased and interstate movement of citizens became more commonplace in the early twentieth century as a result of the popularity and availability of automobiles, states began to enact new laws to ensure that they would be able to exercise jurisdiction over out-of-state drivers (even after they had left the forum state) for acts that had occurred while in the forum state.

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New Jersey, for example, enacted a law requiring out-of-state drivers to formally consent to New Jersey state court jurisdiction by filing an instrument appointing a New Jersey agent to receive process on their behalf before being able to use the state’s highways. When challenged, the requirement was upheld by the Supreme Court in Kane v. New Jersey, 242 U.S. 160 (1916).

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However, the burden of obtaining express consent from all out-of-state motorists soon proved to be unworkable, and states moved towards modes of establishing implied consent to jurisdiction. 

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Massachusetts, for example, enacted a law which equated the fact of a nonresident’s “operat[ion] … of a motor vehicle on a public way in the commonwealth” with “an appointment by such nonresident of the registrar or his successor in office, to be his true and lawful attorney upon whom may be served all lawful processes in any action or proceeding against him, growing out of any accident or collision in which the said nonresident may be involved while operating a motor vehicle on such a way, and said acceptance or operation shall be a signification of his agreement that any process against him which is so served shall be of the same legal force and validity as if served on him personally.” The law outlined the procedures for such process requiring that “[s]ervice of such process shall be made by leaving a copy of the process with a fee of two dollars in the hands of the registrar, or in his office, and such service shall be sufficient service upon the said nonresident: Provided, that notice of such service and a copy of the process are forthwith sent by registered mail by the plaintiff to the defendant, and the defendant’s return receipt and the plaintiff’s affidavit of compliance herewith are appended to the writ and entered with the declaration.”

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Unlike the New Jersey law which required an out-of-state driver to explicitly file paperwork appointing an agent in the state, the Massachusetts law imputed (implied) consent to jurisdiction to the act of driving on Massachusetts roads by appointing the state registrar an agent for process purposes.

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The compliance of the Massachusetts law with the due process clause of the Fourteenth Amendment was challenged by a Pennsylvania motorist who was served in accordance with the law after allegedly “negligently and wantonly dr[iving] a motor vehicle on a public highway in Massachusetts” that struck and injured the defendant in Hess v. Pawloski, 274 U.S. 352 (1927).

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Although the Court recognized that “[n]otice sent outside the state to a nonresident is unavailing to give jurisdiction in an action against him personally for money recovery. … There must be actual service within the state of notice upon him or upon some one authorized to accept service for him” and that “[t]he mere transaction of business in a state by nonresident natural persons does not imply consent to be bound by the process of its courts,” the Court nonetheless upheld the Massachusetts law and the validity of the service of process it authorized.

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In reaching this conclusion, the Court first noted that “[m]otor vehicles are dangerous machines, and, even when skillfully and carefully operated, their use is attended by serious dangers to persons and property. In the public interest the state may make and enforce regulations reasonably calculated to promote care on the part of all, residents and nonresidents alike, who use its highways.” Importantly, the statute limited implied consent to “proceedings growing out of accidents or collisions on a highway in which the nonresident may be involved” and did not authorize general, all-purpose jurisdiction over such nonresident. Furthermore, the statute required actual receipt of such notice and provided measures to ensure that reasonable time and opportunity for defense were available.

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Ultimately, the Court concluded that “[t]he difference between the formal and implied appointment [of an in-state agent for service of process] is not substantial, so far as concerns application of the due process clause of the Fourteenth Amendment.”

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Traditional Bases: Corporations?

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The limits of the traditional bases were also tested as corporations became more and more significant interstate actors.

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Similar to the case of automobiles, many states began developing theories of either explicit or implied consent for corporations conducting business within their borders to deal with this issue. Under the “consent” theory – which assumed a foreign corporation could only transact business in a state with such state’s consent – states began to make the explicit appointment of in-state agents to receive service of process a precondition of doing business in the state. Eventually, as with automobiles, states started moving toward an implied consent model in which, even if no agent was formally appointed, the corporation was deemed to have granted implied consent to jurisdiction by the mere act of transacting business in a state.

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 The shortcomings of this model led many states to move from an implied “consent” basis for exercising jurisdiction to more of a corporate “presence” basis.  However, establishing a corporation’s “presence” in a state for the purpose was often conclusory as the test was framed as: “A foreign corporation is amenable to process … if it is doing business within the State in such a manner and to such an extent as to warrant the inference that it is present there” (Philadelphia & Reading Ry. Co. v. McKibbin, 243 U.S. 264 (1917)). Additionally, under this modified “presence” test, a state court lost all authority over a corporation once it ceased to do business in the forum state.

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With both these tests, courts were left to make case-by-case determinations with little clear, over-arching guidance on whether a corporation was “doing business” within in a state, and the case law became muddled and confusing. In 1945, the Supreme Court would finally address the issue more definitively in International Shoe Co. v. Washington, 326 U.S. 310.