Supreme Court Continues Restrictive View on Jurisdiction

April 14, 2014

In Walden v. Fiore, the U.S. Supreme Court again took a restrictive view towards personal jurisdiction in a case involving a Georgia resident sued in Nevada. The Walden decision marks the fourth time since 2011 where the Supreme Court has declined to find personal jurisdiction over a foreign or out-of-state defendant sued in a different forum.1 Prior to 2011, the Supreme Court did not address the issue of personal jurisdiction for nearly 25 years.

The plaintiffs in Walden were two professional gamblers from Las Vegas who were detained in the Atlanta airport on their way home from a casino in Puerto Rico. The DEA suspected the cash plaintiffs possessed, nearly $97,000, was evidence of illegal narcotics transactions and seized the money. The plaintiffs then sued the DEA agents in federal court in Nevada. The DEA agents responded to the lawsuit by filing a motion to dismiss for lack of personal jurisdiction, arguing they lacked any contacts with the state of Nevada.

In a unanimous opinion, the Supreme Court found the Nevada court lacked jurisdiction over the DEA agents. In doing so, the Court held that a defendant’s minimum contacts with the forum state “must arise out of contacts that the defendant himself creates with the forum state.” The Court specifically rejected any attempt to create minimum contacts by demonstrating contacts between the plaintiffs and the forum state. Lastly, the Court found the minimum contacts analysis looks to the defendant’s contacts with the forum state itself, not the defendant’s contacts with persons who reside there.  Because the DEA agents never traveled to, conducted activities within, or contacted anyone in Nevada, the Court found they could not be sued in Nevada.

Following Walden, it will be more difficult for a resident plaintiff to bring suit against out-of-state defendants in the plaintiff’s home state. The plaintiff will have to plead and establish the defendant’s conduct was connected to the forum state in some substantial way. If a Wisconsin resident is sued out-of-state, or if an out-of-state defendant is sued in Wisconsin, one of the very first steps should be an analysis of whether the defendant has minimum contacts with the forum state.

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1See J. McIntyre Machinery v. Nicastro 131 S.Ct. 2780 (2011); Goodyear Dunlop Tires Operations v. Brown, 131 S.Ct. 2846 (2011); Daimler AG v. Bauman, No. 11-965 (2014).