Whose Due Process?

by Michael Richards

This is the first in a series of three posts discussing the implications of the Supreme Court’s decision last term in J. McIntyre Machinery, Ltd. v. Nicastro. This post examines the case’s confused approach to one of the fundamental elements of a well-functioning liberal democracy, due process of law.

The Supreme Court’s resolution of J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011), last term replayed a debate that has persisted in civil procedure and constitutional law for nearly 25 years: when, within the confines of due process of law, can a state require an absent, non-resident defendant to appear in its courts to answer a civil complaint? Rather than resolving the split in the plurality opinions of Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), J. McIntyre simply rehearsed the arguments on both sides without coming to any conclusion. Indeed, J. McIntyre actually worsens the state of affairs and further confuses the jurisdictional analysis not only by failing to offer a clear framework for courts to use but also by introducing substantial uncertainty about the basic nature of the due process question to be answered.

J. McIntyre was a products-liability action. Plaintiff Robert Nicastro, an employee of a New Jersey scrap metal company, lost four fingers in an accident using a metal-cutting machine manufactured by the defendant, J. McIntyre Machinery, Ltd. The defendant was based in England and manufactured the machine there. The owner of the New Jersey scrap metal company first learned about the machine from the defendant at a trade show in Las Vegas and later purchased the machine from McIntryre Machinery America, a separately incorporated Ohio-based distributor of the English manufacturer’s products. After the accident, Nicastro sued both the English manufacturer and the Ohio distributor in New Jersey state court. The trial court dismissed the English manufacturer for lack of personal jurisdiction. The New Jersey Appellate Division reversed, finding personal jurisdiction, and the New Jersey Supreme Court agreed. In Nicastro v. McIntyre Machinery American, Ltd., 987 A.2d 575 (N.J. 2010), the New Jersey Supreme Court held that the English manufacturer’s conduct satisfied both Justice Brennan’s “foreseeability” test and Justice O’Connor’s “stream of commerce-plus” test as set out in Asahi and therefore could be judged constitutional without attempting to resolve the split.

The Supreme Court of the United States reversed, finding no personal jurisdiction over J. McIntyre in New Jersey. Although six justices agreed that the New Jersey Supreme Court had erred in its ruling, no more than four could agree why.

No justice questioned the basic proposition that the Due Process Clause of the Fourteenth Amendment is the ultimate constitutional source of restrictions on a state’s power to exercise personal jurisdiction over a defendant. See slip op. at 9 (opinion of Kennedy, J.) (“Personal jurisdiction, of course, restricts judicial power not as a matter of sovereignty, but as a matter of individual liberty . . . .”) (internal quotation omitted); id. at 8 (Ginsburg, J., dissenting) (“[T]he constitutional limits on a state court’s adjudicatory power derive from considerations of due process, not state sovereignty.”) Justice Breyer’s concurrence, joined by Justice Alito, did not specifically address due process, though neither did it contradict the basic premise that due process defines the limits of personal jurisdiction. Although the entire Court agree, explicitly or by implication, that the Due Process Clause defines the outer boundary of permissible exercise of personal jurisdiction, Justices Kennedy and Ginsburg diverged sharply on nature of that limitation.

Justice Kennedy, joined by three other justices, emphasized that personal jurisdiction is a doctrine that defines the power of a court. Although due process protects individual liberty, it does so in a specific way: by protecting a defendant’s “right not to be coerced except by lawful judicial power.” Id. at 2 (opinion of Kennedy, J.). Whether a judgment is a “lawful” exercise of judicial power, in turn, depends on “whether the sovereign has authority to render it.” Id. at 9. This, Justice Kennedy argued, is the relevance of the familiar “purposeful availment” inquiry for personal jurisdiction: “The principal inquiry in case of this sort is whether the defendant’s activities manifest an intention to submit to the power of a sovereign.” Id. at 7 (emphasis added). Because Justice Kennedy did not believe that the English manufacturer had manifested such an intention toward the state of New Jersey, exercise of personal jurisdiction was prohibited by the Constitution.

Justice Ginsburg, joined by two other justices, disagreed, reading the Court’s precedents to give “prime place to reason and fairness” in the due process analysis. Id. at 11 (Ginsburg, J., dissenting). She argued that Justice Kennedy’s view of personal jurisdiction based primarily on sovereignty and consent was at odds with a number of the Court’s controlling precedents, such as Insurance Corp of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) and International Shoe Co. v. Washington, 326 U.S. 310 (1945). Id. at 8. Those cases explicitly disavowed state sovereignty as the “central concern” in determining personal jurisdiction. Id. (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). In light of those considerations, the dissenting justices believed that New Jersey was justified in “requir[ing] the international seller to defend at the place its products cause injury.” Id. at 12.

At first glance, J. McInytre may seem to be about the familiar tension between a firm rule—Justice Kennedy’s sovereignty principle—and a more flexible standard, Justice Ginsburg’s fairness inquiry. Yet in truth, neither account is particular useful. “Sovereignty” has a ring of definiteness to it, but the concept is no more concrete than “fairness.” Saying that a state does not have the power to render a judgment that it lacks the power to render is obvious tautology. And renaming the inquiry “purposeful availment” gives no greater clarity. It is not at all self-evident, for example, why J. McIntyre’s direct economic benefit from a sale of a $25,000 piece of equipment into New Jersey does not constitute “purposeful availment” of that state simply because the sale occurred through an intermediary. (I will take up the economic implications of J. McInytre in greater detail in a future post.) While neither opinion offers much guidance to lower courts, if Justice Ginsburg’s has some advantage, it may simply be this: her value judgment at least is framed as such, rather than being veiled in the language of an objective inquiry regarding the extent of the state’s sovereign power.

The semantic debate in J. McIntyre obscures the central practical question: how courts are to go about judging the sufficiency of a foreign defendant’s contacts with the forum? Worse, if courts lack any reliable measure against which to judge the constitutionality of exercising extraterritorial jurisdiction, so too do potential defendants—which is to say, nearly anyone—lack a benchmark against which to conform their conduct. In order for due process to protect individual liberty, legal rules must be sufficiently clear to permit people to conform their behavior to them. How are Internet retailers, international manufacturers, or indeed ordinary people who engage in online speech to manage their potential exposure to civil actions if they’re left to ponder the nature of state sovereignty and abstract notions of fairness? By leaving the functional question unanswered, J. McInytre does more harm than good, undermining the very due process protections is purports to advance.


Future posts will explore the implications of J. McIntyre for economic incentives and for federalism.