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Tests for Personal Jurisdiction

To determine whether the courts have personal jurisdiction to entertain a matter before it, state courts have adopted various factors and tests.  These tests vary from state to state and have also changed within individual states over time.  The various factors and tests include:

  1. Territoriality
  2. Contacts Test
  3. General/Specific Jurisdiction
  4. “Stream of Commerce” idea
  5. Overall Reasonableness Factor

Territoriality Test- At the basic level personal jurisdiction is founded on the concept of territoriality.  The strict view of territoriality is that personal jurisdiction can be exercised only if –

  • The defendant or property in dispute is located in the state where the suit is filed.
  • The defendant is served with process in the state or property is seized by the state authorities.

Contact Test- This test measures the amount of contact a particular defendant has with a state.

The contact test is used in the United States law of civil procedure to determine when it is appropriate for a court in one state to assert personal jurisdiction over a defendant from another state.  The United States Supreme Court has decided a number of cases that have established and refined the principle that it is unfair for a court to assert jurisdiction over a party unless that party’s contacts with the state in which that court sits are such that the party “could reasonably expect to be haled into court” in that state. This jurisdiction must “not offend traditional notions of fair play and substantial justice.”

The Supreme Court in the 1945 case of International Shoe Company v. Washington[i] decision departed from the strict territorial view of personal jurisdiction and placed more focus on “fairness of a particular state court’s exercise of jurisdiction over the defendant in the light of the defendant’s connection with the state”.

General Jurisdiction- This follows the principle that a person can be sued on any claim, even on claims unrelated to the defendant’s contact with the state.  For individuals general jurisdiction exists if the individual is domiciled in the state or was served with process in the state.  For corporations general jurisdiction exists if the corporation has its principal place of business in the state, is incorporated there or carries on “continuous and systematic” business in the state.

Specific Jurisdiction- Here, the defendant’s contacts with the forum state are more limited. It requires that the claim must arise out of the contacts.  In Specific Jurisdiction cases, the contact must be directed towards the forum state by the defendant.  There must be “some act by which the defendant purposefully avails itself of the privilege of conducted activities within the forum state, thus invoking the benefits and protection of its laws”.

“Stream of Commerce” Idea- In Product Liability Cases, personal jurisdiction can be asserted if a corporation delivers its products into the stream of commerce with the expectation that it will be purchased by consumers in the forum state.  In such cases, the defendant’s actions must be “voluntary and purposefully directed” towards the forum state.

Worldwide Volkswagen Corporation v. Woodson[ii] the Supreme Court held that if the product is in the state forum only because the consumer- plaintiff brought it there, the contact with the state cannot be considered as “voluntary or purposefully directed” by the defendant  towards the forum state.

In Asahi Metal Industry Co. Ltd v. Superior Court,[iii] there was a 4/4 split of justices on the point of jurisdiction.  While four justices were of the opinion that if a corporation is aware that final product is being marketed in the forum state, the possibility of a lawsuit there cannot come as a surprise, the other four justices opined that placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed towards the forum state. There must be an “intent or purpose to serve the market in the forum state”.

Overall Reasonableness Factor- This factor demands that in cases of personal jurisdiction, apart from requisite contact, “traditional notions of fair play and substantial justice” should also be considered along with additional factors like –

  1. Actual burden of the defendant defending the forum.
  2. Interest of the forum state in the case.
  3. Plaintiff’s interest in getting relief
  4. Systemic interest in “efficient resolution of controversies and fundamental substantive social policies”

[i] 326 U.S. 310 (U.S. 1945)

[ii] 444 U.S. 286 (1980)

[iii] 480 U.S. 102 (1987)

Inside Tests for Personal Jurisdiction