An important foundational issue in the law is the question of jurisdiction
Jurisdiction is about a court’s power to hear a case.
Questions and doctrines related to jurisdiction are especially developed in the United States where there are a host of rules in this respect. This will therefore be the focus of this lesson.
Subject Matter Jurisdiction
There are three basic aspects to jurisdiction, or three basic types of jurisdiction.
The first is whether a court has jurisdiction over the subject matter of a case – that’s called subject matter jurisdiction.
The question here is whether a court is the right court for the type of dispute.
For instance, the US Patent Court has jurisdiction over patent disputes, but it has obviously no jurisdiction over divorce proceedings.
Or, a criminal law court can hear criminal law cases but doesn’t have jurisdiction over civil matters like tort or contractual disputes.
The second type of jurisdiction is personal jurisdiction. In order to be allowed to hear a case, a court needs to have both subject matter jurisdiction and personal jurisdiction.
Personal jurisdiction asks whether a court has jurisdiction over a specific person or organization as the defendant in a case.
Normally, a court in the state where a defendant resides has jurisdiction over that person, but courts in other states don’t.
For example, a court in the State of California does not necessarily have jurisdiction over a person who resides in New York.
Generally, the doctrine of personal jurisdiction is grounded on two main principles: -Courts should protect defendants from the burden of facing litigation in an unlimited number of possibly remote jurisdictions; and -Courts should prevent states from infringing on the sovereignty of other states by limiting the circumstances under which defendants can be “hauled” into court.
One exception to these guiding principles is the concept of implied consent.
There are various instances where someone’s consent to jurisdiction in a place other than a person’s residence can be implied.
Among others, examples of implied consent include:
- Driving on the roads of another state: This may count as implied consent to be subject to that state’s jurisdiction
- Committing a tort in another state can also result in implied jurisdiction in that state
- Furthermore, a non-resident can be served with a summons while personally present in a state, and is then subject to jurisdiction in that state
But, it is also possible to explicitly consent to jurisdiction. For instance, someone who resides in New York could agree to be sued in California. If so, then there is explicit consent to submit to the jurisdiction of the courts in California.
Minimum Contacts Test and Long-Arm Statutes
Businesses can also be subject to jurisdictions outside the state where they are headquartered if they conduct business in other states
This falls under the “minimum contact test”, which has been codified in several states’ so-called “long-arm statutes”.
Doing business in a state can consists of maintaining an office, manufacturing goods, soliciting business, providing services, etc.
The leading case on business and minimum contacts is International Shoe Co. v. State of Washington et al., a Supreme Court decision from 1945.
The plaintiff in that case, the State of Washington, established a tax on business employers, which consisted of a mandatory contribution to a fund for unemployed workers in the state of Washington.
The defendant, International Shoe Co., was incorporated in Delaware with its principal place of business in Missouri. The company did not have an office in Washington state. The corporation had maintained for some time a staff of several salesmen in the State of Washington, working on commission. The salesmen were residents of that state and they met with prospective customers in motels and hotels, and occasionally rented space to put up displays.
International Shoe Co. did not pay the tax at issue in this case, so the state tried to enforce collection. But International Shoe Company disputed the state’s jurisdiction over it as a corporate “person“. The lower courts held that Washington had personal jurisdiction over the company and
International Shoe appealed to the U.S. Supreme Court.
The issue involved a determination of the level of connection that must exist between a non-resident corporation and a state in order for that corporation to be sued within that state. The Supreme Court held that the activities by its salesmen on behalf of the corporation established sufficient contacts between the State and the corporation to make it reasonable and just for the State to enforce against the corporation an obligation arising out of such activities. The key reasons was that there had been “continuous and systematic” business operations in the state.
Case law on minimum contacts is still evolving, more recently in particular in the context of e-commerce . For instance, some courts have held that a passive web page is insufficient to establish personal jurisdiction, but an interactive website through which a defendant conducts business can be enough to establish personal jurisdiction in the locations from where the website’s users accessed the site.
In Rem Jurisdiction
The third and final type of jurisdiction is in rem jurisdiction. Rem refers to the Latin term for “thing” or “property”.
In rem jurisdiction asks whether a court has the power to decide cases concerning a specific property.
For example, a court in New York may not have the power to decide cases involving a house that is located in California. Conversely, the California court will likely have in rem jurisdiction over that property based on its location.
Let’s try and apply these principles to an example.
Let’s say that a Tenant rents an apartment in New York from a Landlord, who resides in Connecticut. The Tenant has a slip and fall in his apartment due to a puddle of water in the lobby and breaks his leg. Where can Tenant sue Landlord?
There are actually a few options here:
- Tenant may sue in Connecticut because Landlord resides there – that’s personal jurisdiction
- Tenant may also sue in New York because Landlord is doing business there by renting out the apartment – that’s “long arm” jurisdiction under the minimum contacts test established in the International Shoe case
- Tenant could also sue in New York because the apartment is located there and the dispute arises out of this property – that’s in rem jurisdiction
- Finally, Tenant may also sue in New York because Landlord may have committed a tort there, which established implied consent
Federal VS State Jurisdiction
Given its dual court system – state and federal – an important jurisdiction question in the US is whether the state or federal courts have jurisdiction.
Federal courts have generally jurisdiction over the following cases:
- Cases in which the United States is a party
- Cases involving diversity of citizenship – that is the parties are resident of two different states – and where the value of the dispute exceeds $75,000
- Issues allocated to the federal courts implicitly or explicitly by the US Constitution or Federal Law, including the question of whether state laws violate federal laws or the US Constitution
- Issues involving the US Constitutions and Federal laws. This includes federal crimes such as those involving using the mail for fraudulent purposes or offenses that cross state lines, such as smuggling drugs from one state to another.
- Finally, federal courts have jurisdiction in cases involving bankruptcy, copyright, patent, and maritime cases.
State courts, on the other hand, have jurisdiction over the following cases:
- First, those that involve state constitutions
- Second, any other cases concerning issues that are not reserved for the federal system
In practice, this means that State jurisdiction is quite broad. It includes, among others, jurisdiction over traffic violations, many criminal offenses, contractual issues, tort cases, family law, and others.
Note, however, that it is also possible that both state and federal courts have partial jurisdiction. An example of that are questions concerning securities laws, which are in part subject to federal jurisdiction and part to state jurisdiction.