Walden v. Fiore: The Supreme Court Turns to Personal Jurisdiction Issues

Posted in: Constitutional Law

Under Chief Justice John Roberts, the Supreme Court has revived its interest in procedural issues, in particular those pertaining to jurisdiction. Already this Term, the Court has heard oral argument in two cases involving personal jurisdiction. This column will discuss one of those cases, Walden v. Fiore, which was argued in early November.

Personal jurisdiction refers to the authority or power of a court to proceed against the defendant in a case and may be contested when the plaintiff sues the defendant in a State where the defendant is not domiciled. For example, in Walden, the plaintiffs resided in Nevada and brought suit against Drug Enforcement Administration (“DEA”) agents located in Atlanta, Georgia. When the plaintiffs sued the agents in Nevada, the defendants moved to dismiss the lawsuit on the grounds that the Nevada court did not have personal jurisdiction over them.

Walden involves what is known as “specific jurisdiction.” Justice Ruth Bader Ginsburg has explained that a court’s “[a]djudicatory authority is ‘specific’ when the suit arises out of or relates to the defendant’s contacts”—that is, activities—in the forum State. (It is contrasted with “general jurisdiction,” which is broader and exists essentially when the defendant is sued in his or her—or, for a corporation, its—home forum.)

Specific jurisdiction cases often are very fact-specific. This often presents a dilemma for the Supreme Court. In deciding whether to grant a certiorari petition, the Court typically seeks to do more than merely correct an erroneous decision by a lower court; it looks for cases in which it can establish or articulate a general rule of law. However, because specific jurisdiction cases are so fact-specific, the Court often is unable to agree on the more general rule to be discerned from its decision.

For example, from 1977 through 1991, the Supreme Court decided a number of personal jurisdiction cases but failed to develop a fully coherent approach to specific personal jurisdiction. More recently, in 2011, the Supreme Court issued a splintered decision in J. McIntyre Machinery, Ltd. v. Nicastro; the Court granted certiorari in that case in order to provide clear guidance on where a manufacturer may be sued after selling its products through the stream of commerce—a question that had been left open after a 1987 Supreme Court decision. The Court’s splintered decision in J. McIntyre Machinery made the law in this area more uncertain.

In the rest of this column, I will explore how the dilemma posed by specific jurisdiction cases informed the oral argument in Walden. It will briefly summarize the case, discuss the oral argument, and explain how the fact-specific nature of personal jurisdiction doctrine should lead the Court to decide Walden narrowly. Regardless of whether the Court takes a narrow approach to Walden and limits its decision to the facts of the case or attempts to articulate a more general rule, it seems likely that the Court will decide the case in favor of the defendant, DEA agent Anthony Walden.

The Facts of the Case

Gina Fiore and Keith Gipson, the plaintiffs in Walden, are professional gamblers. In the summer of 2006, they traveled from their residences in Las Vegas, Nevada to casinos in New Jersey and Puerto Rico. On August 8, 2006, they flew home from San Juan, taking a connecting flight through Atlanta, Georgia. They had about $97,000 in their possession.

This cash was discovered during a security screening in San Juan, and Fiore was questioned by DEA agents before boarding the plane. After taking the initial flight and arriving in Atlanta, Fiore was questioned by Agent Walden and another DEA agent. According to Judge Marsha Berzon of the United States Court of Appeals for the Ninth Circuit:

After about ten minutes of questioning, another DEA agent arrived . . . with a drug-detecting dog. The dog did not react to Fiore’s carry-on bag but pawed Gipson’s bag once. The agents informed Fiore and Gipson that the dog’s reaction sufficiently signaled contraband to indicate that their money was involved in drug transactions and then seized all of the funds . . . .

Gipson and Fiore then flew home to Las Vegas, albeit without their funds. Subsequently, they sent documents to Agent Walden showing that the monies were legitimate gambling proceeds but the funds nevertheless were not returned to them. Instead, according to Judge Berzon, “the matter was forwarded to DEA headquarters in Virginia for additional investigation.” Ultimately, a federal prosecutor in Georgia decided that there was no probable cause for the government to retain the funds and therefore instructed the DEA to return the $97,000 to Fiore and Gipson.

The Decisions in the Lower Federal Courts

Even though their funds were returned to them, Fiore and Gipson decided to sue Walden and three other unnamed government officials for violating their Fourth Amendment rights. The principal contention in their Fourth Amendment claim was that the defendants’ seizure of their money on August 8 at the airport was without probable cause. In addition, they asserted that the defendants’ misconduct after the seizure—essentially acting to hold on to the money for nearly six months, despite being provided with conclusive evidence that the money was not contraband—violated the Fourth Amendment as well.

The plaintiffs filed their lawsuit in United States District Court in Nevada, where they resided. Walden, the only named defendant in the suit, filed a motion to dismiss for lack of personal jurisdiction (and also for improper venue). Walden argued that because the seizure occurred in Georgia and was “expressly aimed at Georgia,” the federal district court in Nevada did not have personal jurisdiction over him and thus should dismiss the lawsuit. If the plaintiffs wished to sue him, Walden maintained, they could do so in Georgia.

The district court granted the motion to dismiss. Fiore and Gipson did not pursue Walden in Georgia. Instead, they appealed and the United States Court of Appeals reversed the district court. In her decision for the panel, Judge Berzon emphasized that the plaintiffs’ claim encompassed more than the initial seizure in Georgia. Significantly, she wrote, the plaintiffs were Nevada residents and alleged that “after [they] forwarded all of their documentation, Walden likely knew . . . that Fiore and Gipson were professional gamblers and that seizing and attempting to keep their [money] would disrupt their business activities.”

Under the Ninth Circuit panel’s reading of the applicable law, the plaintiffs could continue with their lawsuit in Nevada because Walden’s actions in Georgia “individually targeted Fiore and Walden in Nevada, and thus were expressly aimed at Nevada,” and caused them foreseeable harm in Nevada. The panel’s decision drew a strong dissent from Judge Sandra Segal Ikuta. Walden asked the entire Ninth Circuit to consider the panel’s decision but this request was denied, over the objection of a number of judges, including Judge Ikuta.

The critical difference between the district court’s reasoning and the Ninth Circuit’s reasoning was that the court of appeals took a broader view of the plaintiffs’ Fourth Amendment claim, so that Walden’s conduct after the seizure of the cash enlarged the occurrence giving rise to the plaintiffs’ claim—to the extent that the defendant could be said to have intentionally caused the plaintiffs to experience harm in Nevada. The Ninth Circuit panel clearly read the plaintiffs’ complaint carefully but its holding seems unduly expansive; the tail of the case—the consequences of Walden’s actions subsequent to the seizure, which occurred in Georgia—provides the only basis for holding that Nevada has personal jurisdiction over Walden.

Oral Argument in the Supreme Court

After failing to persuade the entire Ninth Circuit to revisit the panel decision, Walden filed a petition for certiorari in the Supreme Court. The Court’s order granting the petition stated that the parties should address the issue of “[w]hether due process permits a court to exercise personal jurisdiction over a defendant whose sole ‘contact’ with the forum State is his knowledge that the plaintiff has connections to that State.”

At oral argument, the Court heard arguments on behalf of Walden from both his counsel, Jeffrey Bucholtz, and the United States Department of Justice, as an amicus curiae (“friend of the court”). Melissa Arbus Sherry, an assistant to the Solicitor General, argued on behalf of the Justice Department and did an excellent job of focusing the Court on the fact that the misconduct complained of by the plaintiffs occurred in Georgia and that the case was centered in that State; any effects of the defendant’s actions that were felt by the plaintiffs in Nevada were too attenuated to support personal jurisdiction over Walden in that State.

In his argument on behalf of the plaintiffs, Thomas Goldstein began not by emphasizing the facts of his case, but instead with the consequences of the Court’s decision for other cases. What Fiore and Gipson’s case was about, Goldstein suggested, was Internet commerce. If the Court ruled that Nevada did not have personal jurisdiction over Walden, Goldstein argued, then anyone who was the victim of a fraudulent scheme that was conducted over the Internet would not be able to sue the perpetrator of the fraud in their home State, but instead would have to sue the perpetrator in that person’s State.

At oral argument on November 4, the Justices seemed more receptive to the arguments on behalf of Walden, the defendant, suggesting that the Court will reverse the Ninth Circuit. Perhaps most tellingly, Justice Ruth Bader Ginsburg, the Court’s foremost authority on civil procedure, consistently expressed skepticism in response to the plaintiffs’ arguments.

The more interesting question, though, is how the Court will write its decision. As the contrasting approaches of Sherry and Goldstein suggest, it may be difficult for the Court to articulate a general rule in deciding the case. Bucholtz, Walden’s attorney, acknowledged as much in an exchange with Justice Elena Kagan, saying “It would be very difficult to come up with the single . . . sort of comprehensive unitary answer . . . that would govern all types of cases.”

Nearly 50 years ago, Professor Geoffrey Hazard wrote that the determination of whether the exercise of personal jurisdiction in a particular case was authorized amounts to an exercise in “arbitrary particularization.” That continues to be true today. If, as seems likely, the Court reverses the Ninth Circuit, it should do so based upon the facts of the case before it—and address the Internet cases raised by Goldstein at a later date.

One response to “Walden v. Fiore: The Supreme Court Turns to Personal Jurisdiction Issues”

  1. boda says:

    great read