Their Beef Is with Burger King
June 8, 2023
One reason I am nervous about the Supreme Court’s delay in deciding this Term’s personal jurisdiction case, Mallory v. Suffolk Northern Railway, is because of the risk that the delay portends a major reworking of personal jurisdiction doctrine. A few of the Justices have already signaled an interest in reconsidering the paradigm of International Shoe Co. v. Washington (1945) and reverting to older conceptions of personal jurisdiction based on physical presence. The presence paradigm did not work in the early twentieth century, and it would be an absolute disaster in today’s transnational economy. In a forthcoming festschrift essay in honor of Professor Linda Silberman, I argue that the Justices have not yet given us good reasons to give up on International Shoe. Instead, their complaints are really about the doctrinal scaffolding that the Burger and Rehnquist Courts built on top of International Shoe in the 1980s.
Three Key Cases
International Shoe announced that, “in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he [must] have certain minimum contacts with it such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” It then illustrated that idea through a series of examples in which a corporate defendant had more or fewer contacts with a forum and in which the dispute was more or less directly connected to those contacts. Although International Shoe specifically addressed in personam jurisdiction over a physically absent corporation, the Supreme Court in Shaffer v. Heitner (1977) declared that “all assertions of state court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.”
In three cases decided between 1984 and 1987, the Supreme Court tried to distill International Shoe’s fairness-based standard into a more structured analysis. First, in Helicopteros Nacionales de Colombia, S. A. v. Hall (1984), the Court adopted the distinction between general vs. specific jurisdiction that was first articulated by Professors Arthur von Mehren and Donald Trautman in 1966. Second, in Burger King v. Rudzewicz (1985), the Court formalized a three-part test for specific jurisdiction: (1) the defendant must purposefully avail itself of the forum, (2) the controversy must “arise out of or relate to” those purposeful contacts, and (3) the exercise of jurisdiction must not be unreasonable. Third, the Court resolved the specific jurisdiction question in Asahi Metal Industries Co. v. Superior Court (1987) based solely on reasonableness grounds, indicating that reasonableness is indeed a distinct and independent requirement.
While these three decisions form the black letter doctrine for specific jurisdiction that we still teach first-year law students today, their doctrinal guides should not be confused with International Shoe itself. If these doctrinal guides have proved imperfect, we can correct course by refining or unwinding them—without throwing out International Shoe with the bathwater.
“Arise out of or relate to”
The Supreme Court’s most recent personal jurisdiction decisions, Ford Motor Co. v. Montana Eighth Judicial District Court (2021) and Bristol-Myers Squibb v. Superior Court (2017), both struggled with what it means for a dispute to “arise out of or relate to” the defendant’s contacts with the forum, with the Justices debating whether the “or” is disjunctive and whether the phrase implies a causal connection. This parsing of the phrase “as though we were dealing with language of a statute” (as the Ford concurrences complained) seems particularly silly when that precise phrase doesn’t even come from International Shoe. (International Shoe used the similar phrase “arise out of or connected with.”) The “arise out of or relate to” formulation was first used in Helicopteros and then reified by Burger King as part of its three-part test for specific jurisdiction. That formulation was then not used again until the Roberts Court incorporated it into its standard recitation of specific jurisdiction in five decisions (including Ford Motor and Bristol-Myers Squibb).
By my count, slightly more of the Court’s personal jurisdiction decisions have used a different formulation: “the relationship between the defendant, the forum, and the litigation.” This alternative language is more intuitive to apply, and it dispels the debate over whether International Shoe requires a causal connection for the exercise of specific jurisdiction (it doesn’t). Notably, the Court’s decision in Ford Motor used both formulations, “arise out of or relate to” and “the relationship between the defendant, the forum, and the litigation,” when describing and applying the specific jurisdiction framework.
In short, the difficulty of parsing “arise out of or relate to” is not the fault of International Shoe, nor is it an indelible part of the International Shoe framework. Recentering the “relationship” formulation might help refocus analysis away from what type of relationship is required (e.g., causal or otherwise) to how much of a relationship is sufficient.
Another repeated concern from the Justices is that the specific jurisdiction analysis doesn’t adequately protect little guys, like Justice Breyer’s hypothetical Appalachian potter who sells one mug to someone in Hawaii, or Chief Justice Robert’s hypothetical duck decoy maker living in Maine who advertises his wares on the Internet. As I’ve pointed out with others, this recurrent complaint of the Justices is odd because Burger King’s three-part test already has a way to protect small-time defendants: the reasonableness factors. But the Roberts Court has simply stopped referencing the reasonableness factors. At all. The reasonableness factors have gone missing.
I have some sympathy for the Justices on this point: I don’t like Burger King’s reasonableness factors, either. The last two factors in particular—“the interstate judicial system’s interest in obtaining the most efficient resolution of controversies” and the “shared interest of the several states in furthering fundamental substantive social policies” —are not easy to apply in most cases. Perhaps the Court simply needs to refine the list of reasonableness factors to be simpler and more direct.
Or perhaps there was a deeper doctrinal misstep, as Professor Silberman once argued, when the Court in Burger King and Asahi split the reasonableness factors off from the minimum contacts analysis. The inquiries might instead be inextricably intertwined, with the necessary quantity and quality of the defendant’s contacts with the forum varying depending on other considerations like the scale of the defendant’s business.
The problem, then, is not that the International Shoe standard can’t differentiate between national corporations like Ford and individuals like the Maine decoy maker. It’s that the Court, by breaking fairness off as a separate inquiry and then saddling it with an awkwardly worded set of factors, set the reasonableness inquiry up for eventual obsolescence.
As with the “relationship” framing, Ford may have started the process of doctrinal refinement for reasonableness as well. While the Court in Ford again made no mention of Burger King’s reasonableness factors, it did assert that the minimum contacts analysis “derive[s] from and reflect[s] two sets of values—treating defendants fairly and protecting ‘interstate federalism.’” It described fairness in turn as entailing reciprocity (meaning that the defendant’s benefitting from a state justifies the state’s power to “hold the [defendant] to account for related misconduct”) and “fair warning” (meaning that jurisdiction must attach with enough predictability such that the defendant can structure its primary conduct “to avoid exposure to a given State’s courts” if it so desires). The federalism aspect of personal jurisdiction, the Court further explained, requires ensuring that “States with ‘little legitimate interest’ in a suit do not encroach on States more affected by the controversy.” The Court then applied these considerations of fairness and federalism when evaluating Ford’s minimum contacts in the relevant states.
This may be the new “reasonableness” inquiry, and it may no longer be fully distinct from the minimum contacts analysis. However the Court wants to rephrase the reasonableness analysis, and however it wants to fit it into the specific jurisdiction framework, the critical point is that fairness is baked into International Shoe itself. The problem of the little guy is one of the problems that the International Shoe paradigm is designed to address.
Specific vs. General Jurisdiction
Finally, though this is a more controversial position, I wonder if the Court’s bifurcation of general and specific jurisdiction in Helicopteros has ultimately done more harm than good. When von Mehren and Trautman formulated the distinction, it was not to divide the world in two, but to explain why International Shoe was an improvement on and would come to displace the general jurisdiction paradigm that preceded it. They saw the future under International Shoe as an era of broad and flexible specific jurisdiction, where the exercise of a state’s authority turned not on physical presence of people or property, but on the relationship between the dispute and the forum.
Instead, the Roberts Court has used the binary distinction between specific and general jurisdiction to reduce the overall scope of personal jurisdiction, first with the rigid general jurisdiction test of Daimler v. Bauman (2014) and then with the rigid specific jurisdiction test of Bristol-Myers Squibb. That narrowing of each category risks leaving on the cutting room floor disputes that fall somewhere in between (as Ford then tried to argue in its favor). Even if the Court is unwilling to consider specific jurisdiction as a more fluid continuum, might Ford Motor represent a third category, like a specific jurisdiction form of “doing business” jurisdiction? Registration statutes, like the one at issue in Mallory, might also fall into this in-between bucket: perhaps when a state legislature has articulated its special interests in asserting jurisdiction over a category of disputes, the specific jurisdiction analysis should be slightly easier to satisfy. Regardless, it is worth remembering that International Shoe itself did not speak of two discrete and limited buckets of jurisdiction.
In truth, this might be the root of the current Court’s discomfort with International Shoe: It’s not that International Shoe is proving unworkable (even if the doctrinal scaffolding of the 1980s might be). It’s that International Shoe recognizes that dispute-linked jurisdiction must be a flexible standard in order to be adequately precise yet fair in borderline cases. In contrast, the binary distinction between specific and general jurisdiction suggests a formalist approach to personal jurisdiction, a sense that Daimler reinforced by articulating a simple rule for general jurisdiction. The binary framing of specific vs. general jurisdiction encourages a hunt for more formal distinctions and rule-like constructs, which is what has led the Roberts Court to struggle increasingly with defining the limits of specific jurisdiction.
Setting the Record Straight
The most direct critique of International Shoe so far is Justice Gorsuch’s concurrence in Ford Motor, which Justice Thomas also joined. But as the forgoing discussion makes clear, Justice Gorsuch’s critiques of International Shoe are really critiques of the Court’s efforts to rulify International Shoe’s standard starting in the 1980s.
Justice Gorsuch’s concurrence begins by asserting that “[s]ince International Shoe, this Court’s cases have sought to divide the world of personal jurisdiction in two,” meaning the division between specific and general jurisdiction. But as explained above, that division was only adopted in 1984.
When it comes to general jurisdiction, the concurrence continues, “[i]f it made sense to speak of a corporation having one or two ‘homes’ in 1945, it seems almost quaint in 2021 when corporations with global reach often have massive operations spread across multiple states.” The limitation of general jurisdiction to a corporation’s “home”—and the clarification that its “home” will typically be just one or two places—came in 2011 and 2014, respectively. Before 2011, corporations engaged in such “massive operations spread across multiple states” would indeed have been subject to general jurisdiction in all of those states.
As for specific jurisdiction, the concurrence complains that “[w]hen a company ‘purposefully availed’ itself of the benefits of another State’s market in the 1940s,” that purposeful availment involved physical presence in the state, but “[a] test once aimed at keeping corporations honest about their out-of-state operations now seemingly risks hauling individuals to jurisdictions where they have never set foot.” Again, the concurrence anachronistically assigns to International Shoe doctrinal concepts that evolved later—in this instance, the idea of “purposeful availment” that was first introduced in Hanson v. Denckla (1958). But the concurrence also seems confused about the facts of International Shoe itself. The whole point of International Shoe was that International Shoe had very carefully avoided setting physical foot (or shoe) in the forum state. International Shoe’s entire raison d’etre was to enable states to assert personal jurisdiction over defendants who have never physically entered the state when their out-of-state conduct cause predictable effects within the state. That is a feature, not a bug.
I would not be surprised if Justices Gorsuch and Thomas and perhaps Barrett (who did not participate in Ford Motor) are interested in reconsidering personal jurisdiction doctrine from an originalist lens. But they should not justify that doctrinal revolution with misdirected critiques of International Shoe. Their beef is with Burger King and the inevitable problems that flowed from imposing a formalist structure on top of International Shoe’s fairness-based standard. Unfortunately, their solution is likely to be more formalism.