Jurisdiction
Michael I. Shamos, Ph.D., J.D.
Institute for Software Research
School of Computer Science
Carnegie Mellon University
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Outline
• Jurisdiction: how does a court acquire the power to
hear and decide a case?
• Subject matter jurisdiction
– Can the court hear this type of case?
• Personal jurisdiction
– Does the court have power over the parties?
• In rem jurisdiction: suing things
– Does the court have power over particular things?
• The court in which a case is heard is called the
forum, from Latin for “town square.” Plural: fora
LAW OF COMPUTER TECHNOLOGY
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Subject-Matter Jurisdiction
• Does the court have the power to decide this type of
case?
• Examples:
– patent and copyright cases are federal only
– state criminal prosecutions are heard only in state
court
– contract cases between citizens of the same state
cannot be heard in federal court
– Iowa can’t try crimes under the Pennsylvania
Crimes Code
– A state can’t sue another state in any state court
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
Subject-Matter Jurisdiction
• Who decides whether a court has jurisdiction?
– The court determines its own jurisdiction
• This seems circular, but how else to do it?
– Can’t have one master court deciding jurisdiction
for every case
– Saving grace: jurisdiction can be appealed, and if
it violates the Constitution can go all the way to the
U.S. Supreme Court
• Lack of subject matter jurisdiction can be asserted at
any time, even after trial or appeal
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
Personal Jurisdiction
• Even if a court has subject mater jurisdiction, it may
not have power over the particular parties to the case
• Such power is called “personal jurisdiction”
• A court always has jurisdiction over the person who
brought the case because he did so voluntarily
• A court always has jurisdiction over residents of the
state in which it sits
• A court may not have jurisdiction over non-residents
• For example, Pennsylvania courts do not
automatically have jurisdiction over residents of
California
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Personal Jurisdiction
• Can a French citizen sue an American in a French
court?
– Why or why not and when?
– Does it matter what type of claim it is?
• Can a California citizen sue a Pennsylvania citizen in
a Pennsylvania court?
– Why or why not and when?
– Does it matter what type of claim it is?
• Can a California citizen sue a Pennsylvania citizen in
a California court?
– Why or why not and when?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Bases for Personal Jurisdiction
• Historically, courts have based personal jurisdiction
on four pillars (any one is sufficient)
• Physical presence: defendant is present in the
forum and personally served – gotcha!
• Residence: defendant is habitually resident in the
forum (but not necessarily present when the case is
filed or heard)
• Consent: defendant consents to jurisdiction, either in
advance or by not contesting jurisdiction
• Long-arm Statute: defendant commits acts bringing
him within the forum’s long-arm statute
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Jurisdiction By Consent
• Parties cannot confer subject matter jurisdiction on a
court that does not have it
• Parties can both confer and waive personal
jurisdiction by consent
• Example: Google’s “Terms of Service” (as of 9/1/14)
– “The laws of California, U.S.A., excluding California’s conflict
of laws rules, will apply to any disputes arising out of or
relating to these terms or the Services. All claims arising out
of or relating to these terms or the Services will be litigated
exclusively in the federal or state courts of Santa Clara
County, California, USA, and you and Google consent to
personal jurisdiction in those courts.”
• There is a Federal court in Santa Clara county (San
Jose, Northern District of California)
Santa Clara County
UNITED STATES
Google is in
Mountain View
CALIFORNIA
There is a Federal
Court in San Jose
Santa Clara County
San
Francisco
Long-Arm Statutes
• Laws that define the circumstances under which
courts located in the state can exercise jurisdiction
over out-of-state Defendants
• Each state defines its own long-arm provisions
– This seems self-serving. What are its limits?
• Long-arm statutes cannot exceed the “due process”
boundaries of the U.S. Constitution
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Pennsylvania Long-Arm Statute
• A Pa. court may exercise jurisdiction over a person who
acts directly or by an agent, by:
• Transacting any business in this Commonwealth:
– doing by any person in this Commonwealth of a series
of similar acts for the purpose of realizing pecuniary
benefit
– doing of a single act in this Commonwealth for the
purpose of thereby realizing pecuniary benefit with the
intention of initiating a series of such acts.
– shipping merchandise directly or indirectly into or
through Pa.
– engaging in any business or profession within Pa.
• Contracting to supply services or things in Pa.
• Causing harm or injury by act or omission in or out of Pa.
42 Pa. C.S. §5322
What’s a Commonwealth?
• Commonwealth means “free state,” not controlled by a
king (Oliver Cromwell, 1649)
– in the U.S., synonymous with “state.”
• Among the U.S. “states,” 4 are called Commonwealths:
– Pennsylvania, Massachusetts, Virginia
– Kentucky
• The first three were among the original 13 colonies when
the U.S. was formed
• Kentucky was part of VA but split in 1792 as the 15th state
• Also, “a political unit having local autonomy but voluntarily
united with the U.S.,”
– e.g. Puerto Rico, Northern Marianas Islands
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
Special v. General Jurisdiction
• General jurisdiction means the court has power to
decide ANY dispute between the parties within its
subject matter jurisdiction
• Special jurisdiction means the case arose out of
contacts with the state (court can only decide that
case)
• The standards for special jurisdiction are lighter than
for general jurisdiction
• Example: Smith travels from Arizona to Ohio to enter
into a contract, then returns. He can be sued in Ohio
on that contract, but generally not on other causes of
action
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Personal Jurisdiction
• Constitutional limitations
– 5th Amendment: “No person shall be “deprived of
life, liberty, or property, without due process of
law.” (Applies to federal government)
– 14th Amendment: “nor shall any State deprive any
person of life, liberty, or property, without due
process of law.”
• What is a “person”?
– A natural person
– A “juristic person.” A partnership, corporation,
limited liability company, trust, etc. An entity that
can sue and be sued.
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
Due Process
• What is “due process”?
– ‘due process’ means fundamental fairness and
substantial justice. Vaughn v. State, 3 Tenn. Crim.
App. 54, 456 S.W.2d 879, 883 (1970)
– "An orderly proceeding wherein a person is served
with notice, … and has an opportunity to be heard
and to enforce and protect his rights before a court
having power to hear and determine the case.
Kazubowski v. Kazubowski, 45 Ill.2d 405, 259,
N.E.2d 282, 290 (1970), cert. den. 400 U.S. 926
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
International Shoe Co. v. Washington,
326 U.S. 310 (1945)
• International Shoe Co.
– Incorporated in Delaware
– Main place of business in Missouri
– 12 employees in Washington
WASHINGTON
DELAWARE
MISSOURI
Jurisdiction Over Non-Residents
• Washington tried to collect unemployment
compensation contributions based on the salaries of
International Shoe’s employees in Washington
• International Shoe refused to pay, saying the tax
“interfered with interstate commerce” and was
unconstitutional
• Washington Supreme Court ruled payment was
required
• U.S. Supreme Court: the “minimum contacts” rule:
– Does the party have sufficient “contacts” with the state
that exercising jurisdiction will not “offend traditional
notions of fair play and substantial justice”?
• In International Shoe’s case, “yes,” contacts were
sufficient for SPECIAL JURISDICTION
Daimler AG v. Bauman et al.
(Sp. Ct. 2014)
• Daimler AG
– AG = aktiengesellschaft, German for pubic limited company
– German company, owns Mercedes-Benz
• Barbara Bauman et al.
– 22 residents of Argentina
• Bauman alleges that during a war in Argentina in 1976-1983
Mercedes-Benz Argentina helped security forces kidnap, torture
and kill employees of Mercedes-Benz Argentina
• Daimler sells cars in California
• No human rights violations took place in California
• Bauman sued in U.S. District Court in the Northern District of
California (San Francisco) for human rights violations
• Does California have general personal jurisdiction over Daimler?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Daimler AG v. Bauman (2014)
• Daimler AG has multiple Mercedes-Benz subsidiaries around
the world.
• Relevant ones are in Germany, U.S. and Argentina
MERCEDES-BENZ USA, LLC
PRINCIPAL PLACE OF BUSINESS:
NEW JERSEY
MERCEDES-BENZ
USA, LLC HAS
INDEPENDENT CAR
DEALERS IN
CALIFORNIA
DAIMLER AG
HEADQUARTERS:
STUTTGART, GERMANY
●
●
●
●
MERCEDES-BENZ
ARGENTINA
HEADQUARTERS:
BUENOS AIRES
22 RESIDENTS
OF ARGENTINA
MERCEDES-BENZ USA, LLC
HEADQUARTERS: DELAWARE
●
●
Daimler AG v. Bauman (2014)
• The Alien Tort Statute, 28 U.S.C. §1350 states:
“The district courts shall have original jurisdiction of any civil action by an alien
for a tort only, committed in violation of the law of nations or a treaty of the
United States.” (“tort only” means no criminal jurisdiction)
• Bauman said that California had jurisdiction because of
Daimler’s contacts with California through its subsidiaries
• Mercedes-Benz has facilities in California
• 2.4% of Mercedes sales worldwide occur in California
• The District Court dismissed the case, finding insufficient
contacts between Daimler and California
• The Ninth Circuit Court of Appeals reversed, finding sufficient
contacts based on prior Supreme Court cases
• Daimler appealed to the U.S. Supreme Court
LAW OF COMPUTER TECHNOLOGY
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© 2015 MICHAEL I. SHAMOS
Daimler AG v. Bauman (2014)
• The Supreme Court wrote: “This case concerns the authority of
a court in the United States to entertain a claim brought by
foreign plaintiffs against a foreign defendant based on events
occurring entirely outside the United States.”
• “The canonical opinion in this area remains International Shoe,
in which we held that a State may authorize its courts to
exercise personal jurisdiction over an out-of-state defendant if
the defendant has ‘certain minimum contacts with [the State]
such that the maintenance of the suit does not offend “traditional
notions of fair play and substantial justice.”
• “court may assert general jurisdiction over foreign (sister-state or
foreign-country) corporations to hear any and all claims against
them when their affiliations with the State are so ‘continuous and
systematic’ as to render them essentially at home in the forum
State.”
• Case dismissed.
Flowchart of Jurisdiction If Defendant
Is Outside the Forum and Has Not Consented
NEW
CASE
DOES THE
COURT HAVE
SUBJECT MATTER
JURISDICTION?
YES
DOES A
LONG-ARM
STATUTE
APPLY?
NO
NO
COURT DOES
NOT HAVE
JURISDICTION.
CASE
DISMISSED
YES
DID THE
CASE ARISE
OUT OF CONTACTS
WITH THE
FORUM?
YES, SPECIAL
PERSONAL
JURISDICTION
NEEDED
NO, GENERAL
PERSONAL
JURISDICTION
NEEDED
NO
IS
INTERNATIONAL
SHOE SATISFIED?
(FAIR PLAY AND
SUBSTANTIAL
JUSTICE)
YES
ARE
CONTACTS
SYSTEMATIC AND
CONTINUOUS?
(DAIMLER)
NO
COURT DOES
NOT HAVE
JURISDICTION.
CASE
DISMISSED
YES
COURT HAS
JURISDICTION -CASE PROCEEDS
IF DEFENDANT IS INSIDE THE FORUM, PERSONAL JURISDICTION IS AUTOMATIC; SUBJECT MATTER JURISDICTION IS STILL NEEDED
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Other Jurisdictional Considerations
• Foreseeability: Would the party expect to be sued
there?
• Did the party “purposefully avail himself” of the
privilege of conducting activities in the forum?
• Transacting business with the forum
• Visiting the forum in connection with the transaction
• Acts causing injury in the forum
• Contacts “numerous, purposeful, and continuous”
• Not “random, isolated, or fortuitous”
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Snowney v. Harrah’s Entertainment, Inc.
35 Cal. 4th 1054, 112 P.2d 28 (2005)
• Frank Snowney, a California resident, reserved a
hotel room at Harrah’s in Las Vegas, Nevada from
his home in California
• He was told the room would cost $50 per night
• When he checked out, a $3 per night “energy
surcharge” had been added. He was not previously
told of the surcharge
• Snowney sued Harrah’s in California for deceptive
business practices for himself and on behalf of
“persons who were charged an energy surcharge as
an overnight hotel guest in one of the defendant's
hotels, yet were never given notice that there was an
energy surcharge and/or what such charge would
be.” – a class action
Snowney v. Harrah’s Entertainment, Inc.
• Harrahs’ claimed the court had no personal
jurisdiction
• Harrah’s maintained a website that could be used to
reserve rooms. Snowney did not use it.
• The trial court dismissed the case
• The appeals court reversed
• The California Supreme Court found that Harrah’s
targeted California residents on its website and thus
“purposefully availed” itself of doing business in
California
• U.S. Supreme Court declined review
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Response Reward Systems v. Meijer Inc.
189 F.Supp. 2d 1332 (M.D. Fla. 2002)
• Response Reward, a Florida company, owns patents
on issuing electronic coupons
• Meijer, Inc. is a Michigan corporation that operates
supermarkets
• Meijer operated a website that offered electronic
coupons
• Response Reward alleged that Meijer was infringing
its patents
• Response Reward could have sued in Michigan,
where Meijer was located. Instead, it sued in Florida
(more convenient, maybe friendlier)
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Response Reward Systems v. Meijer Inc.
• The Florida long-arm statute permits jurisdiction over
a defendant who is “engaged in substantial and not
isolated activity” within Florida
• Meijer’s website was accessible from anywhere, but
Meijer
– was not licensed in Florida
– had no offices, stores, employees or property in
Florida
– did not advertise in Florida
– issued coupons which could not be used in Florida
– BUT, some stores owned by others accepted the
coupons in Florida
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
Response Reward Systems v. Meijer Inc.
• The Florida long-arm statute, as interpreted by the
Florida courts, permits jurisdiction over a defendant
who commits an act outside Florida that causes
damage within Florida, e.g. patent infringement
• Is it constitutional for Florida to exercise jurisdiction
over Meijer?
• No. Meijer did not have minimum contacts with
Florida.
• Think about it. Should there be jurisdiction just
because the patent owner happens to be in Florida?
LAW OF COMPUTER TECHNOLOGY
FALL 2015
© 2015 MICHAEL I. SHAMOS
In Rem Jurisdiction
• Jurisdiction over things. “In rem” = “against a thing”
From Latin, in (“against”) + accusative of res,
meaning “thing”
• A state has power over physical items located inside
its borders
• The items themselves can be sued in a proceeding to
determine rights
• Often used in
law of the sea (reward for salvaged property),
seizure cases (ownership of seized goods)
computer law (rights to domain names)
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Anticybersquatting Consumer
Protection Act
“The owner of a [trade]mark may file an in rem civil
action against a domain name in the judicial district in
which the domain name registrar, domain name
registry, or other domain name authority that registered
or assigned the domain name is located if … the
domain name violates any right of the owner of a mark
registered in the Patent and Trademark Office …”
15 U.S.C. §1125(d)(2)
LAW OF COMPUTER TECHNOLOGY
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Factors Affecting Jurisdiction
When more than one state has jurisdiction, we look at:
(1) burden on the defendant
(2) forum state's interest in resolving the dispute
(3) the plaintiff's interest in receiving convenient and
effective relief
(4) interstate judicial system's interest in obtaining the
most efficient resolution of controversies, and
(5) shared interest of the several states in furthering
fundamental substantive social policies.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)
LAW OF COMPUTER TECHNOLOGY
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Major Ideas
• A court must have both subject matter and personal
jurisdiction to hear a case
• Subject matter jurisdiction cannot be waived
• “Things” can be sued in rem
• Personal jurisdiction is limited by the U.S. Constitution.
It requires “minimum contacts” with the state seeking to
exercise jurisdiction.
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© 2015 MICHAEL I. SHAMOS
Q&A
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© 2015 MICHAEL I. SHAMOS