CIVIL PROCEDURE CLASS 37
Professor Fischer
Columbus School of Law
The Catholic University of America
November 20, 2002
WRAP-UP OF LAST CLASS
We discussed two more aspects of
personal jurisdiction:
1. General jurisdiction (Helicopteros
case)
2. Jurisdiction through consent
especially via forum selection clauses
(Carnival Cruise Lines v. Shute)
WHAT WILL WE DO TODAY
Continue with personal jurisdiction unit.
We will consider the due process
guarantee of notice and the opportunity
to be heard by studying the Mullane
case.
GENERAL JURISDICTION
What is the difference between general
and specific jurisdiction?
Did the Shutes Have Notice of
the Forum Selection Clause?
Did the Shutes Have Notice of
the Forum Selection Clause?
Supreme Court doesn’t address this
issue because it is conceded in the
respondents’ brief.
What if they had not had notice?
Arguments the Forum Selection
Clause Unenforceable
What are the Shutes’ arguments in
support of their contention that the
forum selection clause is
unenforceable?
Did any of them convince Justice
Blackmun, who wrote the Supreme
Court’s majority opinion? If so, which
arguments?
Arguments the Forum Selection
Clause Unenforceable
Based on The Bremen, clause not the product
of business negotiation. In the Bremen, the
Supreme Court held that a freely negotiated
forum selection clause between international
parties should be enforced as long as it is not
the product of fraud, undue influence, and
overweening bargaining power. Also, it is an
inconvenient forum and
Clause violates The Limitation of Vessel
Owner’s Liabilitty Act, 46 U.S.C. App. 183c.
Justice Blackmun’s Reasoning
Blackmun: some nonnegotiated forumselection clauses can be enforceable
Cruise ships have special interest in limiting
for a where they can be sued
Such a clause spares expense of pretrial
motions to determine correct forum and
conserving judicial resources
Passengers benefit in light of reduced fares
that reflect savings cruise line enjoys by
limiting forum where it can be sued.
Do you buy any of these?
More of Blackmun’s Reasoning
Shutes have not satisfied the heavy burden of
proof required to set aside the clause on
grounds of inconvenience (they had notice
and Florida is not a remote alien forum
especially given where accident took place)
NO evidence of bad faith or overreaching
Since Shutes had notice of contract, they
could have rejected it.
Dissent
Who wrote the dissent?
Who joined in it?
Describe the reasoning in the dissent.
Do you agree with it? Why or why not?
Dissent
Inadequate notice
Unenforceable under under traditional
principles of federal admiralty law, and is "null
and void" under the terms of Limited Liability
Act, 49 Stat. 1480, as amended, 46 U.S.C.
App. 183c, which was enacted in 1936 to
invalidate expressly stipulations limiting
shipowners' liability for negligence.
Forum Selection Clauses:
Jurisdiction By Express Consent
Remember that it is possible to consent
to jurisdiction
Consequently, lack of personal
jurisdiction is one of the waivable
defenses under Rules 12(g) and
12(h)(1)
Contrast this with lack of subject matter
jurisdiction, which can never be waived.
Forum Selection Clauses After
Carnival
Prior to Carnival, some courts refused to
enforce forum selection clauses that barred
jurisdiction in other courts. Now, forumselection clauses generally have a strong
presumption of enforceability, especially
where there is equal bargaining power
between the parties and they are represented
by counsel.
The burden is on the person challenging the
enforcement of the clause to show it was
unreasonable or unfair in the circumstances.
This is a difficult burden, even where the
clause is in a standard-form contract.
Notice and the Opportunity to
Be Heard
Federal and state courts judgments can only
bind if they satisfy the Due Process clause of
the V and XIV Amendments of the
Constitution respectively
The Due Process clause limits courts’ personal
jurisdiction over defendants.
It also requires that D be given prior notice
and an opportunity to be heard.
Mullane is the leading Supreme Court case
that sets the modern standard for notice that
satisfies due process.
Mullane Facts
Mullane involved a judicial settlement in the
NY Surrogates Court of a common trust fund
established by a NY bank under a NY banking
statute.
Who was the common trustee of this fund?
What is the purpose of a common trust fund?
Who were the beneficiaries?
Beneficiaries
Many
Not all residents of New York
Some could not be identified/located
with reasonable effort
Some could be identified/located but
had conjectural or future interests so it
would cost a lot to identify/locate them
Some were known present beneficiaries
Judicial Settlement of Trust
Account
Why would the common fund trustee
want to have an accounting approved?
Parties
Who is Mullane?
Parties
Who is Mullane? Mullane is the special
guardian/attorney appointed by the court for
all beneficiaries known or unknown not
otherwise appearing with a present or future
interest in the income of the common trust
fund.
Why was Mullane appointed?
Because the Surrogates Court knew that the
beneficiaries would not have been notified.
Why not?
Constructive Notice
Because the law allowed constructive
notice by publication
The only notice of the proceeding for
judicial settlement of accounts was in
the legal columns of NY newspapers.
Mullane appears specially. What does
he object to?
Mullane’s Special Appearance
Mullane objects to the NY Banking
Law’s constructive notice provisions as
violating due process. Argues that this
lack of notice has the result that the
Surrogates Court lacks jurisdiction to
render a final, binding adjudication on
the judicial settlement of the common
trust accounts.
Procedural History
Surrogates Court finds notice was sufficient
and enters final decree accepting accounts
NY Court of Appeals (highest NY court) finds
notice was sufficient
Supreme Court must decide whether
Surrogates Court has power to adjudicate the
judicial settlement of the accounts.
How do they decide?
Supreme Court’s Ruling
Reverses NY Court of Appeals finding that
notice was insufficient in certain respects
Why did the NY legislators think they could
enact such ineffective notice provisions?
Statute views trust as a res; under Pennoyer
constructive notice appeared acceptable for in
rem proceedings
3 categories of beneficiary:
was notice acceptable?
Some could not be identified/located
with reasonable effort
Some could be identified/located but
had conjectural or future interests so it
would cost a lot to identify/locate them
Some were known present beneficiaries
General Notice Requirement
“An elementary and fundamental
requirement of due process in any
proceeding which is to be accorded
finality is notice reasonably calculated,
under all the circumstances, to apprise
interested parties of the pendency of
the action and afford them an
opportunity to present their
objections…”
Standard for Notice in Mullane
“…The notice must be of such nature as
reasonably to convey the required
information . . . And it must afford a
reasonable time for those interested to make
their appearance . . .But if with due regard to
the practicalities and peculiarities of the case
these conditions are reasonably met, the
constitutional requirements are satisfied.”
Published Notice
Can published notice ever be adequate
under the Mullane standard?
Mullane Changes Historical
Notice Requirement
Notice by publication is greatly cut back
Publication will not be sufficient notice if
it would be reasonably practicable to
provide individual notice
But Mullane makes clear that oficial
notice does not always have to be
personal service
Importance of Mailings
Would this case have come out
differently if the bank had not been
sending regular mailings to the
beneficiaries?
After Mullane
Court decisions after Mullane have
found that notice by mail is the
constitutional minimum for D who can
be found by reasonably diligent efforts.
Mullane paves the way for reforms to
service in R. 4
Don’t Forget R. 4: Service
Rule
R. 4(e)
R.4(h)
Hypo
State K has service of process rules
under which notice of eviction
proceedings can be left at the homes of
Ds. It is very possible that the notice
might be removed before the Ds ever
saw it.
Does this satisfy Mullane?