General and Rule 4(k)2 Jurisdiction

by Richard M. Martin, Jr.

Most of the time, thankfully, our Jones Act clients work in the Gulf of Mexico aboard locally-owned vessels. But that’s not always the case. Sometimes, your American client has a Jones Act employer which claims to be, e.g., from the Cayman Islands, while its corporate cousin “vessel owner” is incorporated somewhere elsewhere in the Third World. This creates intentional corporate confusion over who is Plaintiff’s employer, who is the vessel owner, and most importantly, obtaining jurisdiction over the defendant.

Defendants that play the overseas shell game usually seek dismissal under Fed. R. Civ. P. 12(b), asserting a lack of personal jurisdiction under subsections (b)(1) and (b)(2), and a failure to state a claim under subsection (b)(6). Your task, to defeat that motion, is showing that the court either has general jurisdiction over the defendant, or jurisdiction pursuant to Fed. R. Civ. P. 4(k)(2).

A. Due Process and “Minimum Contacts.”

The Due Process Clause of the Fourteenth Amendment guarantees that no federal court may assume jurisdiction in personam over a non-resident defendant unless the defendant has meaningful “contacts, ties, or relations” with the forum state.1 Jurisdiction may be general or specific. Where a defendant has “continuous and systematic general business contacts” with the forum state, the court may exercise “general” jurisdiction over any action brought against that defendant.2 Where contacts are less pervasive, the court may still exercise “specific” jurisdiction “in a suit arising out of or related to the defendant’s contacts with the forum.”3

A federal court may satisfy the constitutional requirements for specific jurisdiction by showing that the defendant has “minimum contacts” with the forum state such that imposing a judgment would not “offend traditional notions of fair play and substantial justice.”4 The Fifth Circuit has consolidated the personal jurisdiction inquiry into a convenient three-step analysis:

(1) Whether the defendant … purposely directed its activities toward the forum state or purposely availed itself of the privileges of conducting activities there;

(2) Whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and

(3) Whether the exercise of personal jurisdiction is fair and reasonable.”5

While a forum state may create additional jurisdictional restrictions, which federal courts would be bound to apply,6 Louisiana’s “long-arm” statute7 extends jurisdiction to the constitutional limit.8

B. Plaintiff’s Burden of Proof on Motion to Dismiss.

The Fifth Circuit has stated the legal standard for a motion to dismiss for lack of personal jurisdiction:

Where a defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists. Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir.1982). The plaintiff need not, however, establish jurisdiction by a preponderance of the evidence; a prima facie showing suffices. Id. This court must resolve all undisputed facts submitted by the plaintiff, as well as all facts contested in the affidavits, in favor of jurisdiction. Id.

C. General Jurisdiction.

In order for a court to exercise general jurisdiction over a defendant, the defendant must have “continuous and systematic general business contacts” with the forum state.9 “Contacts between a defendant and the forum state must be ‘extensive’ to satisfy the “systematic and continuous” test.10 The continuous and systematic test for establishing personal jurisdiction is a difficult test to meet.11 In fact, “the Supreme Court has upheld an exercise of personal jurisdiction when the suit was unrelated to the defendant’s contacts with a forum only once.”12

D. Federal Rule of Civil Procedure 4(k)(2).

In the alternative, a Court may exercise jurisdiction under Fed. R. Civ. P. 4(k)(2), which provides:

For a claim that arises under federal law, serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant if:

(1) The defendant is not subject to jurisdiction in any state’s courts of general jurisdiction; and

(2) Exercising jurisdiction is consistent with the United States Constitution and laws.

In the Fifth Circuit, claims falling under the federal courts’ admiralty jurisdiction are considered to be claims arising under federal law for the purposes of Rule 4(k)(2).13 In order to show that Rule 4(k)(2) applies, Plaintiff must demonstrate that:

(1) The defendant in question is not subject to the general jurisdiction of any other state, and

(2) That exercising jurisdiction is consistent with the due process clause of the Fifth Amendment, meaning that the defendant has sufficient minimum contacts with the United States as a whole.14

The Fifth Circuit has stated “that a piecemeal analysis of the existence vel non of jurisdiction in all fifty states is not necessary” to prove part one of the test.15 Rather, the court may confer jurisdiction where the “defendant does not concede to jurisdiction in another state.”16 Under this framework, the Plaintiff must make a prima facie case that the rule applies by showing:

(1) That the claim asserted arises under federal law;

(2) That personal jurisdiction is not available under any situation-specific federal statute; and

(3) That the putative defendant’s contacts with the nation as a whole suffice to satisfy the applicable constitutional requirements.”17

Additionally, the plaintiff “must certify that, based on the information that is readily available to the plaintiff and his counsel, the defendant is not subject to suit in the courts of general jurisdiction of any state.”18 Once plaintiff has made a prima facie case, then the burden shifts to the defendant to produce evidence that demonstrates that it is subject to jurisdiction in another state and/or that it has insufficient contacts with the United States as a whole.19

Rule 4(k)(2) is a valuable jurisdictional tool for obtaining jurisdiction over the “overseas-based” tortfeasor. It solves the problems created by the defendant which used a series of foreign companies to dodge jurisdiction while at the same time employing U.S. citizens. Its purpose was explained succinctly by Judge Carl Barbier of the Eastern District of Louisiana, who wrote:

While the Court admits that the question of general jurisdiction is a close call in this case, it finds that GSF cannot have it both ways. GSF cannot effectively run its payroll operations out of Houston, hold itself out to the recipients of its paychecks as having an office in Houston, and only employ United States citizens who work abroad, while at the same time avoiding being brought into court in the United States. In making this determination, the Court looks at the purpose of Rule 4(k)(2) jurisdiction. The Fifth Circuit has explained that Rule 4(k)(2) “was enacted to fill an important gap in the jurisdiction of federal courts in cases arising under federal law.” Adams, 364 F.3d at 651. “ ‘While a defendant may have sufficient contacts with the United States as a whole to satisfy due process concerns, if she had insufficient contacts with any single state, she would not be amenable to service by a federal court sitting in that state….’ ” Id. (quoting World Tanker Carriers Corp. v. MV Ya Mawlaya, 99 F.3d 717, 721–22 (5th Cir.1996)). Thus, “ ‘Rule 4(k)(2) was adopted in response to this problem of a gap in the courts’ jurisdiction….’ ” Id. GSF’s corporate operations clearly speak to this gap, and this Court finds that this is exactly the type of situation for which the rule was designed. Accordingly, the Court finds that by virtue of Rule 4(k)(2) it has personal jurisdiction over GSF in the instant matter.20

1 Int’l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
2 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct.1868, 80 L.Ed.2d 404 (1984)
3 Id.
4 Int’l Shoe, 326 U.S. at 316, 66 S.Ct. 154.
5 Nuovo Pignone v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir.2002), citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
6 Adams v. Unione Mediterranea Di Sicurta, 220 F.3d 659, 667 (5th Cir. 2000).
7 La. R.S. 13:3201(B).
8 Luv N’ Care, Ltd. v. Insta–Mix, Inc., 438 F.3d 465, 469 (5th Cir.2006).
9 Helicopteros, 466 U.S. at 415, 104 S.Ct. 1868.
10 DNH, LLC v. In–N–Out Burgers, 381 F.Supp.2d 559, 563 (E.D. La.2005), citing Submersible Systems, Inc. v. Perforadora Central, S.A. de C.V., 249 F.3d 413, 419 (5th Cir. 2001).
11 Submersible Systems, Inc., 249 F.3d at 419.
12 Id.
13 World Tanker Carriers Corp. v. M/V Ya Mawlaya, 99 F.3d 717, 723 (5th Cir.1996).
14 Adams v. Unione Mediterranea Di Sicurta, 364 F.3d 646, 651 (5th Cir.2004).
15 Id.
16 Id.
17 Swiss American Bank, Ltd., 191 F.3d at 41.
18 Id.
19 Id.
20 Johnson v. PPI Technology Services, L.P. et al., 926 F.Supp.2d 873, 885-86 (E.D. La.2013).

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