Tuesday, December 16, 2008

Avocent v. Aten: no personal jurisdiction

A Taiwanese company escaped a DJ action through absence of personal jurisdiction.

The CAFC recited the standard pronouncements: “Determining whether personal jurisdiction exists over an out-of-state defendant
involves two inquiries: whether a forum state’s long-arm statute permits service of
process, and whether the assertion of personal jurisdiction would violate due process.”
Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1359 (Fed. Cir. 2001). Alabama’s long-arm
statute permits service of process “as broad as the permissible limits of due process.”
Ala. Power Co. v. VSL Corp., 448 So. 2d 327, 328 (Ala. 1984). Thus, our jurisdictional
analysis collapses into a single determination of whether the exercise of personal
jurisdiction comports with due process.

“[D]ue process requires only that in order to subject a defendant to a judgment in
personam, if he be not present within the territory of the forum, he have certain
minimum contacts with it such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945) (internal quotation marks omitted). While the application of this
description of due process has evolved along with the increasing national and
international scope of business transactions affecting citizens of this country, the
Supreme Court has repeatedly cautioned that “it is essential in each case that there be
some act by which the defendant purposefully avails itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and protections of its laws.”
Hanson v. Denckla, 357 U.S. 235, 253 (1958). “This purposeful availment requirement
ensures that a defendant will not be haled into a jurisdiction solely as a result of
random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or
a third person.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (internal
citations and quotation marks omitted).

One does have an interesting line: While we are bound by our precedent, it is not without controversy.

One has the usual defense: Aten International does not dispute that products it manufactures may be purchased in Alabama but contends that it has never conducted any business in Alabama.

An important point: Nowhere in these documents does Avocent identify activities
purposefully directed at the forum and related in any material way to the enforcement or defense of the validity of the patents at issue. This critically undermines its assertion of specific personal jurisdiction. (...) Accordingly, Avocent’s allegation that Aten International products may be
purchased in Alabama fails to establish either that Aten International “purposefully
directed its activities at residents of the forum” or that this action “arises out of or relates
to those activities.” Breckenridge, 444 F.3d at 1363.

Judge Newman dissented.


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