Walden v. Fiore

Facts

Respondents Gina Fiore and Keith Gipson arrived at the San Juan airport with $97,000 in cash gambling winnings in their carry-on bags. Fiore and Gipson are professional gamblers and were returning from San Juan to their home in Las Vegas. TSA agents in San Juan allowed Fiore and Gipson to board their plane with their winnings but warned them that they might be questioned later. Upon arrival in the Atlanta airport, DEA agent Anthony Walden approached Fiore and Gipson as they were heading to their connecting gate. Fiore and Gipson explained that they were traveling to Las Vegas, showed Walden their California driver’s licenses, and referenced their residences in California and Nevada. During their conversation, a drug-detection dog was alerted to Gipson’s bag, and Walden seized the $97,000 on suspicion of illicit drug activity. Walden explained that the money would be returned to them if they could show that they had obtained it legitimately.

Upon returning to Las Vegas, Fiore and Gipson sent Walden documents proving that their money was legitimately obtained. Fiore and Gipson allege that, despite this proof, Walden and another agent prepared and submitted a false probable cause affidavit to the U.S. Attorney for the Northern District of Georgia to initiate a forfeiture action. Approximately seven months after the initial seizure, an Assistant U.S. Attorney determined that the government lacked probable cause to forfeit the cash, and the money was returned to Fiore and Gipson.

Fiore and Gipson sued Walden in Nevada under the Bivens doctrine, alleging that Walden violated their Fourth Amendment rights when he confiscated the $97,000 in Georgia. The district court dismissed the complaint for lack of personal jurisdiction, noting that Fiore and Gipson did not allege that Walden knew of their relevant Nevada connections or that Walden directed his conduct at Nevada when he seized the money. The court found that Walden’s conduct was “expressly aimed” at Georgia and had no relevant contacts with Nevada.

A divided panel of the Court of Appeals for the Ninth Circuit reversed, accepting that the cash seizure was “expressly aimed” at Georgia, but holding that “the false probable cause affidavit aspect of the case” supported jurisdiction in Nevada. In denying rehearing en banc—despite eight dissenting judges—the Ninth Circuit upheld the panel’s decision but issued a new opinion, finding that Walden expressly aimed his actions at Nevada.

Walden petitioned for a writ of certiorari, which the Supreme Court granted on March 4, 2013, to determine whether a court can exercise personal jurisdiction over a defendant whose only contact with the forum state is his knowledge that the plaintiffs reside there.

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Discussion

This case presents the Court with the opportunity to decide whether a court can exercise personal jurisdiction over a defendant whose only contact with the forum state is his knowledge that the plaintiffs had contacts with the state. The Court will also consider whether the district where the plaintiff suffered injury is the proper venue when all of the events giving rise to the claim occurred in another district.

Along with DaimlerChrysler AG v. Bauman, another personal-jurisdiction case from the Ninth Circuit, this case gives the Supreme Court the opportunity to either broaden or rein in the Ninth Circuit’s recent expansive precedent regarding personal jurisdiction.

FAIRNESS CONCERNS AND PRACTICAL EFFECTS ON DEFENDANTS

Supporters of Walden assert that the Ninth Circuit’s decision promotes unfair jurisdictional practices. According to amici, such as the New England Legal Foundation and Associated Industries of Massachusetts, the Ninth Circuit’s decision eliminates the minimum-contacts requirement of the Due Process Clause and relies heavily on the plaintiff’s forum connections when determining personal jurisdiction. Amici claim that the result of this decision is that anyone who commits an intentional tort will be subject to jurisdiction wherever the plaintiff lives, despite their never having established minimum contacts there. Such an outcome is unfair, according to amici, because a defendant would be subjected to personal jurisdiction in the plaintiff’s home state if the defendant knew of the forum connection. Amici argue that only targeted conduct at the forum state where the forum state was the intended center of the harm merits personal jurisdiction. Mere foreseeability that the plaintiff may suffer some of the effects of the defendant’s action in a particular state does not merit personal jurisdiction because, according to supporters of Walden, such a system would be wildly unfair to defendants.

Supporters of Walden also suggest several groups that would be heavily burdened by a ruling in favor of Fiore and Gipson, particularly groups that interact with citizens from a wide variety of jurisdictions. The United States, which submitted a brief in support of Walden, contends that under the Ninth Circuit’s standard, federal law-enforcement officers and other federal employees that frequently interact with people from all over the country would be at risk of being sued in the resident State of anyone they come into contact with while at work. The government warns that Federal law-enforcement officers would be subject to personal jurisdiction in any State a plaintiff chose to travel to when the officer was aware of the plaintiff’s destination and where the plaintiff felt the effects of the alleged injury at the destination. Supporters of Walden claim that such a standard would impede federal law-enforcement officers from appropriately performing their jobs.

Additionally, the Chamber of Commerce argues that upholding the Ninth Circuit’s decision will negatively affect businesses. The Chamber of Commerce contends that commercial conduct never “expressly aimed” at the forum state may expose businesses to personal jurisdiction under this ruling. In the Chamber’s view, because business products easily travel from state to state, this ruling could potentially expose even the smallest, local businesses to personal jurisdiction in foreign states.

PLAINTIFFS’ ABILITY TO SEEK REDRESS IN THEIR HOME STATES

Fiore and Gipson respond that there is nothing unfair about subjecting a defendant to personal jurisdiction when a defendant intentionally targets an individual to suffer in another State. Pointing to examples of harm occurring over the internet or through other remote means, Fiore and Gipson argue that personal jurisdiction has evolved to hinge on where the plaintiff felt the actual harm rather than the location of the defendant’s conduct.

Additionally, Fiore and Gipson argue that, in order to respect states’ sovereignty, states must be allowed to assert jurisdiction over defendants who caused an injury inside of the state’s borders. Fiore and Gipson assert that in a mobile world, if defendants know that the plaintiffs will feel the effects of their actions in a different jurisdiction, states’ sovereignty requires that the state where the plaintiff feels the injury be able to assert personal jurisdiction over the defendant.

In support of Fiore and Gipson, The Workers’ Injury Law & Advocacy Group argues that overturning the Ninth Circuit’s decision will put workers at risk. According to amici, workers—especially those who relocate to perform work in jurisdictions outside their state—often travel through airline hubs, deal with TSA agents, DEA agents, and immigration agents, and face significant risk of tortious injury. Amici argue that those workers should be able to obtain justice in their forum state, because not allowing them to do so threatens their ability to seek remedy from the various torts they may encounter while on the job.

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Analysis

In this case, the Supreme Court will decide whether a district court can exercise personal jurisdiction over a defendant whose only contact with the forum state was his knowledge that the plaintiff had contacts with the state. If personal jurisdiction is proper, the Court must then decide if venue is proper based on the defendant’s alleged series of acts and omissions.

Personal jurisdiction is determined by the contacts an individual has with the forum state. In Calder v. Jones, the Supreme Court articulated the test used to determine whether sufficient contacts exist, looking to whether the defendant has purposefully directed his conduct at the forum state. Walden argues that he never directed his conduct at Nevada because Fiore’s and Gipson’s connections to Nevada were irrelevant to his actions. Fiore and Gipson respond that Walden intentionally filed a false affidavit of probable cause in order to retain their seized cash when he knew that the Respondents were residents of Nevada. Therefore, according to Fiore and Gipson, the harm caused by the false affidavit occurred in Nevada, thereby granting Nevada personal jurisdiction. Walden counters that this exercise of jurisdiction would be unfair to defendants, to which Fiore and Gipson respond that jurisdiction should extend to defendants who act from afar. But even if Nevada can exercise personal jurisdiction, it must also be a proper venue. Walden argues that Nevada is not the proper venue for this action because all the events that gave rise to the claim occurred in Atlanta. Fiore and Gipson argue that the act of submitting the affidavit of probable cause was a substantial act involved in this claim and because this act was aimed at Nevada residences, venue is proper.

CAN NEVADA EXERCISE PERSONAL JURISDICTION OVER WALDEN?

In response to economic and technological changes, the Supreme Court has expanded personal jurisdiction to allow states to exercise jurisdiction over people and property that are outside of the state’s territory. Therefore, in the absence of physical presence, a defendant’s sufficient minimum contacts with the forum state will subject him to personal jurisdiction within the state, so long as the exercise of jurisdiction also serves the interests of fairness and substantial justice. In determining whether sufficient minimum contacts exist, the Court has looked to whether the defendant “purposefully directed” his conduct at the forum.

Fiore and Gipson allege that Walden committed an intentional tort against them by seizing their gambling winnings without cause.Walden filed an affidavit of probable cause after the seizure, but the Assistant U.S. Attorney who reviewed the affidavit determined that there was no probable cause and allowed the cash to be returned to Respondents. Both Petitioner and Respondents agree that the Calder test should be used to evaluate whether Nevada may exercise personal jurisdiction over Walden. Under Calder, minimum contacts may be established where the defendants’ intentional acts were expressly aimed or purposefully directed at the forum state.

Walden asserts that, under Calder, a defendant’s conduct must be expressly aimed at the forum state. He draws a distinction between assessing a defendant’s contacts with a state and a defendant’s contacts with a plaintiff, arguing that he has no ties with Nevada, merely a tie to Nevada residents, Fiore and Gipson. In Calder, an article written by Florida defendants formed the basis of personal jurisdiction in California because California was “the focal point both of the story and of the harm suffered.” Walden argues that harm alone does not suffice—the forum must also be the “focal point” of the tortious activity. According to Walden, Nevada was not the focal point of his allegedly tortious activity; therefore, he does not have minimum contacts with the state.

Fiore and Gipson respond that while negligent acts must be aimed at a state to satisfy the minimum-contacts requirement, intentional acts aimed at residents of a state satisfy the minimum contacts requirement. Fiore and Gipson first note that it is unclear what types of acts would be considered aimed at a state. Accordingly, they interpret Calder as testing whether a defendant knows that he is targeting a state resident, not simply the state. Fiore and Gipson analogize to other forms of remote tortious activity, such as hacking into a bank account or cyber-stalking. They claim that such tortious activity is aimed at residents of states—residents who can exercise personal jurisdiction over the hackers in the residents’ states, even where the injury occurred in a different forum from the acts committed by the defendant.

Walden argues that fairness and justice must also be taken into account when determining sufficient minimum contacts and that subjecting a defendant to a forum where the plaintiff suffered an injury is unfair. He argues that the requirement of personal jurisdiction exists to protect defendants from being swept into forums that are inconvenient and unfair to them. In particular, Walden claims that this type of jurisdiction will affect law-enforcement officers, journalists, internet users, and businessmen unfairly, because these individuals could be subject to jurisdictions that they have never visited and with which they have no contacts—other than contact with a plaintiff from that forum. Walden further argues that justice prevents Nevada from exercising personal jurisdiction in this case because principles of federalism indicate that Nevada does not have authority over defendants who have not literally or figuratively entered the state.

Fiore and Gipson do not contest the importance of fairness and respond that it is not unfair for a state to exercise jurisdiction over a defendant who has intentionally harmed its residents from afar. The internet and electronic communications have enhanced the power of individuals to act remotely; accordingly, Fiore and Gipson contend that it is unfair that a plaintiff must go to the forum in which a defendant acted when the plaintiff was harmed in his state of residence. Fiore and Gipson argue that foreseeability of harm in Nevada is not sufficient to tie Walden to Nevada, but that his intentional conduct toward residents of Nevada is what allows Nevada to exercise personal jurisdiction over him. Fiore and Gipson also assert that basic principles of justice allow a state to exercise its sovereignty over a defendant who has targeted individuals who reside in that state. According to Fiore and Gipson, the Court no longer relies on presence or figurative presence in a state, but instead allows a state to exercise personal jurisdiction over a defendant who has minimum contacts with a state—contacts such as a tortious act directed against residents.

IS NEVADA A PROPER VENUE?

If the Court finds that Nevada may exercise personal jurisdiction over Walden, it must determine whether venue is proper in Nevada. Walden argues that the place where a plaintiff feels the effects of a tort is not the proper venue if the defendant’s acts occurred elsewhere. He argues that Congress did not intend 28 U.S.C. § 1391(b)(2) to allow plaintiffs to choose any forum they wish. Rather, according to Walden, the statute permits venue only in districts where events or omissions that gave rise to the claim occurred. Walden contends that because the alleged conduct occurred in Georgia—and economic effects felt from that conduct do not fall into the categories of events or omissions—Nevada is not the proper venue.

Fiore and Gipson respond that proper venue is not limited to the forum where wrongful conduct occurs; rather, any venue in which a “substantial part” of the events or omissions that give rise to the claim occur can be proper. Fiore and Gipson assert that Walden’s filing of the false probable-cause affidavit and the prolonged detainment of their winnings gave rise to their injury, and these actions were aimed at them while they were in Nevada, not in Georgia. They further argue that the location of the injury is a relevant factor in determining venue because proving an injury is an element of a tort claim. Therefore, Respondents state that venue is proper in Nevada because a substantial portion of the events that gave rise to the claim—the filing of the affidavit and the economic injury suffered—occurred in or were directed at Nevada.

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Conclusion

In this case, the United States Supreme Court will consider whether a state can exercise personal jurisdiction over a defendant whose sole contact with the state is his knowledge that the plaintiff had connections to the state. If the Court holds that Nevada may exercise personal jurisdiction over Walden, it must then decide whether Nevada is a proper venue. Walden argues that Nevada cannot exercise personal jurisdiction over him because he has no minimum contacts with Nevada. He also asserts that venue is improper because his alleged acts occurred in Georgia. Fiore and Gipson respond that Walden’s tortious acts directed at residents of Nevada are sufficient minimum contacts, and that venue is proper because a substantial portion of the events that gave rise to the claim occurred in or were directed at Nevada. The Court’s ruling may define the reach of the Calder jurisdiction test, impacting where plaintiffs can seek redress for torts that are committed outside their home states. The ruling may also have broader implications for victims of remote tortious activity in the digital age.

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