Fiore v. Walden

Order; Dissent to Order by Judge O’SCANNLAIN; Dissent to Order by Judge McKEOWN; Opinion by Judge BERZON; Dissent by Judge IKUTA.

ORDER

The opinion, filed on September 12, 2011, is withdrawn and replaced by the amended opinion attached to this order.

With this amendment, the majority of the panel has voted to deny appellee’s petition for rehearing. Judge Berzon has voted to deny the petition for rehearing en banc and Judge Goodwin so recommends. Judge Ikuta has voted to grant the petition for rehearing and petition for rehearing en banc.

The full court has been advised of the petition for rehearing en banc. A judge of the court requested a vote on en banc rehearing. The majority of the active judges have voted to deny rehearing the matter en banc. Fed. R.App. P. 35(f).

The petition for rehearing and the petition for rehearing en banc are DENIED. Judge O’Scannlain’s and Judge McKeown’s dissents from denial of en banc rehearing are filed concurrently herewith.

O’SCANNLAIN, Circuit Judge, joined by TALLMAN, CALLAHAN, BEA, and IKUTA, Circuit Judges, dissenting from the order denying rehearing en banc:

Due process allows a court to exercise personal jurisdiction over a defendant only if “the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (emphasis added; internal quotation marks omitted). To meet this requirement in a tort case, a plaintiff generally must show that the defendant “expressly aimed” his tortious conduct at the forum state. Calder v. Jones, 465 U.S. 783, 789, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984).

In this case, the panel majority disregarded that fundamental requirement of due process. It held that a Nevada court could exercise personal jurisdiction over a defendant for his allegedly tortious conduct in Georgia even though: (1) all of the actions forming the basis of the plaintiffs’ sole legal claim were taken in and directed at Georgia, and (2) when the defendant took those actions he did not know that the plaintiffs had any relevant connection to Nevada.

This ruling clashes with Supreme Court case law, exacerbates a conflict in our circuit law, begets a second intra-circuit conflict, and creates or deepens two lopsided conflicts with other circuits. The panel majority embraced the wrong side of each conflict. As Judge Ikuta recognized in dissent, the panel’s holding “threatens a substantial expansion of the scope of personal jurisdiction.” 657 F.3d 838, 864. We should have reheard this matter en banc to restore our circuit law and to harmonize it with that of the Supreme Court. I respectfully dissent from the regrettable failure to rehear this case en banc.

I

A gambling trip in San Juan, Puerto Rico, left Gina Fiore and Keith Gipson with some $97,000 in cash. In August 2006 they took their cash to the San Juan airport to fly to Atlanta and then to Las Vegas. 657 F.3d at 842-43.

At the San Juan airport, TSA agents searched Fiore, Gipson, and their carry-on bags. After discovering their $97,000, the TSA agents summoned three DEA agents. Fiore told DEA agent Michael Cuento that she and Gipson had been gambling in San Juan. Fiore and Gipson showed Cuento their California driver’s licenses, told Cuento that they had California and Nevada residences, and said that they were returning to the Nevada residences. Cuento let them board the plane but told them they might be questioned later in their trip. 657 F.3d at 843.

When Fiore and Gipson arrived in Atlanta and headed to their connecting gate to Las Vegas, DEA agent Anthony Walden approached them. Fiore and Gipson said they were going to Las Vegas and showed him California driver’s licenses. After a drug-detection dog alerted at Gipson’s bag, Walden seized all of Fiore and Gipson’s cash because he suspected that it was connected to illicit drug activity. Walden told them that their money would be returned if they could show that they had obtained it legitimately. 657 F.3d at 843, 850.

Fiore and Gipson then flew to Las Vegas. They forwarded to Walden documents substantiating that their money was legitimately obtained. They allege that, despite this documentation, Walden helped prepare a false probable cause affidavit to facilitate an action to forfeit their cash to the government. Walden allegedly submitted the affidavit to the U.S. Attorney for the Northern District of Georgia. 657 F.3d at 843-44.

The Assistant U.S. Attorney in charge of the case ultimately concluded that the government lacked probable cause to forfeit Fiore and Gipson’s cash. The cash was returned about seven months after Walden seized it. 657 F.3d at 844.

II

A

Fiore and Gipson sued Walden in Nevada under Bivens, alleging that Walden violated their Fourth Amendment rights when he seized their cash in Georgia. Fiore and Gipson did not allege that Walden knew that they had relevant Nevada connections or that Walden directed his conduct at Nevada when he seized the money. They did not allege, for example, that they told Walden that they had Las Vegas residences, that Cuento spoke with Walden, that Cuento told Walden of Fiore and Gipson’s connection to Las Vegas, that Fiore and Gipson showed Walden any Nevada-issued identification, or even that Walden later learned of their Nevada residences. See 657 F.3d at 861 (Ikuta, J., dissenting). Because Walden’s search- and-seizure conduct was “expressly aimed” at Georgia — and Walden thus had no contacts with Nevada that are relevant to Fiore and Gipson’s one claim — the district court dismissed the complaint for lack of personal jurisdiction.

B

A divided panel of our court reversed. The panel majority accepted that Walden’s seizure of the cash was “expressly aimed” at Georgia and thus could not independently support personal jurisdiction over him in Nevada. 657 F.3d at 849. But the majority believed that “the false probable cause affidavit aspect of the case” supported jurisdiction in Nevada. Id. (emphasis added). When Walden prepared the allegedly false affidavit, the majority contended, he knew that Fiore and Gipson had “significant connections” to Nevada. Id. at 851. The majority hypothesized that Walden by then knew of these “significant connections” because the plaintiffs told him that they were going to Las Vegas, the plaintiffs’ funds were allegedly identifiable as originating from and returning to Las Vegas, Walden or someone else ran background checks on the plaintiffs after they returned to Nevada, and Fiore and Gipson sent Walden documents from Nevada. Id. at 850-51.

Based on these connections, the majority concluded that Walden “expressly aimed” his conduct at Nevada when he prepared the affidavit. 657 F.3d at 854; see id. at 850-51. Although this affidavit-related conduct did not form the basis of Fiore and Gipson’s one and only claim — a Fourth Amendment claim based on the seizure at the Atlanta airport — the majority held that such conduct could support the exercise of pendent personal jurisdiction in Nevada over that claim. Id. at 858. The panel remanded to the district court to decide whether to exercise pendent jurisdiction over the seizure claim. Id.

Judge Ikuta dissented. “As a matter of simple logic,” she explained, “a defendant cannot ‘expressly aim’ an intentional act at a victim’s home state if the defendant committing the action does not even know that the victim has any connection with that state.” 657 F.3d at 862. Because Walden did not know of the plaintiffs’ ties to Nevada when he seized their cash — and because the seizure forms the basis for the plaintiffs’ only claim — he could not have expressly aimed his relevant conduct at Nevada. Id. at 862-63.

Noting that this should have been “the end of the matter,” Judge Ikuta faulted the majority for allowing jurisdiction based on the false affidavit “aspect” of the case. 657 F.3d at 862, 863. The false affidavit was not used to seize the plaintiffs’ cash; it was prepared after the seizure, to facilitate a forfeiture action. See id. at 861, 863. Thus, Judge Ikuta explained, any affidavit conduct could not support the exercise of personal jurisdiction over the seizure claim because the court could not say, as required by due process, that the seizure claim arose out of or related to Walden’s later conduct in preparing the affidavit. Id. at 864.

Ill

The panel decision conflicts with Supreme Court case law, with decisions of other circuits, and with decisions of our court. We should have taken this case en banc to eliminate those conflicts.

A

The panel decision conflicts with Calder v. Jones, which holds that a court may exercise personal jurisdiction over a tort defendant only if the defendant “expressly aimed” his tortious conduct at the forum state. 465 U.S. at 789, 104 S.Ct. 1482.

For a court to have specific personal jurisdiction over a non-resident tort defendant, (1) the defendant must have purposefully directed specific activities toward the state forum, (2) the plaintiffs claim must arise out of or relate to those specific forum-related activities, and (3) the exercise of jurisdiction must be reasonable. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir.2004). In this case, for example, Fiore and Gipson would have needed to establish “that Walden purposefully directed the actions that form the basis of [their] claim to Nevada.” 657 F.3d at 862 (Ikuta, J., dissenting). To establish such “purposeful direction,” a plaintiff must show that the defendant committed an intentional act, expressly aimed that act at the forum state, and thereby caused harm that the defendant knew would likely be suffered in the forum state. See Calder, 465 U.S. at 788-90, 104 S.Ct. 1482.

The panel decision stumbles in addressing Calder’s express-aiming requirement. In Calder the defendants wrote and edited an article that allegedly libeled actress Shirley Jones, who lived and worked in California. Though the article was largely prepared in Florida (where the defendants resided), it was circulated broadly in California. In holding that a California court had personal jurisdiction over the defendants, the Supreme Court emphasized that the defendants had “expressly aimed” their allegedly tortious conduct “at California.” 465 U.S. at 789, 104 S.Ct. 1482. The defendants had done so by making California “the focal point both of the story and of the harm suffered”: the defendants’ article “was drawn from California sources” and “impugned the professionalism of an entertainer whose television career was centered in California.” Id. at 788-89, 104 S.Ct. 1482. The defendants’ conduct was, in short, “calculated to cause injury to [Jones] in California.” Id. at 791, 104 S.Ct. 1482.

Fiore disregards Calder’s express-aiming requirement, holding that a Nevada court could exercise personal jurisdiction over Walden even though Nevada is not “the focal point” of the plaintiffs’ only tort claim. Indeed, the majority took matters a step further, allowing personal jurisdiction even though Walden did not know of Fiore and Gipson’s connections to Nevada when he seized their cash. “[W]hen Walden seized the cash, he knew only that the plaintiffs had California driver’s licenses and were headed to Las Vegas.” 657 F.3d at 862 (Ikuta, J., dissenting). Walden did not learn of Fiore and Gipson’s ties to Nevada until after the seizure was complete. Id. Walden simply could not have “expressly aimed” his relevant conduct— the seizure conduct that forms the basis of Fiore and Gipson’s one claim — at Nevada. His “conduct and connection with the forum State” are therefore not “such that he should reasonably anticipate being haled into court there.” Burger King Corp,, 471 U.S. at 474, 105 S.Ct. 2174 (internal quotation marks omitted).¹

B

The panel decision also conflicts with cases in other circuits over how to interpret and to apply Calder’s express-aiming requirement. The majority of circuits have held that, under Calder, a defendant must expressly aim the conduct forming the basis of the claim at the forum state— not just at a known forum resident — before the courts of that state may exercise jurisdiction over the defendant. The Third and Fourth Circuits, for example, have held that a defendant “must ‘manifest behavior intentionally targeted at and focused on’ the forum for Calder to be satisfied.” IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 265 (3d Cir.1998) (quoting ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 625 (4th Cir.1997)). The Tenth Circuit has aligned itself with the Third Circuit in concluding that Calder requires “that the forum state itself’ — not just “a known forum resident” — “must be the focal point of the tort.” Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1074 n. 9 (10th Cir.2008) (internal quotation marks omitted). The Seventh Circuit has agreed with these courts, noting that Calder “made clear” that a defendant must “expressly aim[ ] its actions at the state with the knowledge that they would cause harm to the plaintiff there.” Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston Metroplex, P.A., 623 F.3d 440, 445 (7th Cir.2010). The law of other circuits is in accord. See, e.g., Johnson v. Arden, 614 F.3d 785, 796 (8th Cir.2010); Stroman Realty, Inc. v. Wercinski 513 F.3d 476, 485-86 (5th Cir. 2008); Noonan v. Winston Co., 135 F.3d 85, 90 (1st Cir.1998); United States v. Ferrara, 54 F.3d 825, 830 (D.C.Cir.1995); see also Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1120 (6th Cir.1994).

The panel majority divided our circuit from these courts by deeming the express-aiming requirement satisfied when (1) all of the defendant’s relevant conduct was aimed at Georgia, and (2) the defendant had no knowledge of the Nevada-based effects of his relevant conduct. The panel made the requirements of due process mean something wholly different in our circuit than they do in other circuits. We should have corrected this by taking this case en banc.

C

The panel decision also deepens a conflict in our own circuit over how to interpret and to apply Calder’s express-aiming requirement.

Even before the panel decision here, our circuit had not always been precise when developing our jurisprudence under Calder. Some of our decisions have emphasized that under Calder a defendant must expressly aim his conduct at the forum, not just at a forum resident. See, e.g., Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1158 (9th Cir.2006) (defendant’s conduct must be “directed at” forum state); Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 807 (9th Cir.2004) (personal jurisdiction lacking in California because Ohio defendant’s “express aim was local,” not at California). But other decisions have suggested that a defendant may satisfy the express-aiming requirement just by targeting a known forum resident. See, e.g., Myers v. Bennett Law Offices, 238 F.3d 1068, 1073 (9th Cir.2001) (personal jurisdiction in Nevada proper because defendant’s allegedly tortious conduct “individually targeted” plaintiffs, who defendant “knew were Nevada residents” (internal quotation marks omitted)); Bancroft & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1087 (9th Cir.2000) (express-aiming requirement satisfied when “the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state”).

This tension in our circuit law was cemented into a square conflict in Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124 (9th Cir.2010), which upheld the exercise of personal jurisdiction because the defendant’s allegedly tortious conduct individually targeted the plaintiff (a resident of the forum), even though the defendant did not expressly aim his conduct at the forum. See id. at 1129-30. This holding prompted a dissent calling out the majority for “disregarding] controlling circuit authority” requiring “conduct directly targeting the actual forum in question.” Id. at 1132, 1133 (Reinhardt, J., dissenting) (internal quotation marks omitted). As the dissent explained, “Pebble Beach and Schwarzenegger establish that knowledge of the plaintiffs residence and a foreseeable harm to the plaintiff are, standing alone, insufficient to establish express aiming.” Id. at 1134.

In this case the panel majority went even further than did the panel majority in Brayton Purcell. Until now, our cases at least recognized that a defendant must know about the plaintiffs forum connections when he took the actions forming the basis of the plaintiffs claims. See, e.g., Myers, 238 F.3d at 1073 (defendant “knew [the plaintiffs] were Nevada residents”); Bancroft & Masters, Inc., 223 F.3d at 1087-88. This was still clear after Bray-ton Purcell, where the defendant’s sole forum connection was his knowledge of the plaintiffs residence. 606 F.3d at 1135 (Reinhardt, J., dissenting).

But the panel majority here abandoned even this requirement. By allowing personal jurisdiction when a defendant did not even know that the plaintiff was connected to the forum, the panel took circuit law even further from Supreme Court case law than it was before. This should have been corrected en banc.

IV

The panel majority seemed to recognize that if it just applied Calder, it would have had to affirm. Instead it waded into pendent personal jurisdiction law, with regrettable results.

Under the doctrine of pendent personal jurisdiction, a defendant may be required to defend against “a claim for which there is no independent basis of personal jurisdiction so long as it arises out of a common nucleus of operative facts with a claim in the same suit over which the court does have personal jurisdiction.” Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir.2004). The doctrine rests on considerations of “judicial economy, avoidance of piecemeal litigation, and overall convenience of the parties.” Id. at 1181.

But the doctrine does not jettison the requirements of due process. To exercise the doctrine, a court must actually possess jurisdiction over at least one claim. This requirement satisfies the fundamental fairness concerns that counsel against haling a defendant into court in a foreign forum. Once that connection to the forum is made and “a defendant must appear in a forum to defend against one claim, it is often reasonable to compel that defendant to answer other claims in the same suit arising out of a common nucleus of operative facts.” Action Embroidery, 368 F.3d at 1181. But it is not reasonable — it violates due process — to make a defendant answer to a “pendent” claim when the court does not have jurisdiction over a single claim at all. We have therefore authorized application of this doctrine only when the district court has personal jurisdiction over at least one claim. See CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1076 (9th Cir.2011); CE Distrib., LLC v. New Sensor Corp., 380 F.3d 1107, 1113 (9th Cir.2004); Action Embroidery, 368 F.3d at 1181. Fiore breaks from this authority and creates a conflict in our circuit law.

Because personal jurisdiction is analyzed by claim, other circuits have authorized pendent personal jurisdiction when the plaintiff has alleged at least one actual claim giving rise to personal jurisdiction. By failing to respect those bounds of pendent personal jurisdiction — and relying instead on a non-claim “aspect” of the case— the panel’s ruling divides us from at least seven other circuits. See United States v. Botefuhr, 309 F.3d 1263, 1272 (10th Cir. 2002) (“Pendent personal jurisdiction ... exists when a court possesses personal jurisdiction over a defendant for one claim, lacks an independent basis for personal jurisdiction over the defendant for another claim that arises out of the same nucleus of operative fact, and then, because it possesses personal jurisdiction over the first claim, asserts personal jurisdiction over the second claim.”); Inamed Corp. v. Kuzmak, 249 F.3d 1356, 1362 (Fed.Cir.2001); Robinson Eng’g Co., Ltd. Pension Plan & Trust v. George, 223 F.3d 445, 449 (7th Cir.2000); ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 628-29 (4th Cir.1997); IUEAFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056-57 (2d Cir.1993); Oetiker v. Jurid Werke, G.m.b.H., 556 F.2d 1, 4-5 & n. 10 (D.C.Cir.1977); Robinson v. Penn Cent. Co., 484 F.2d 553, 555-56 (3d Cir.1973).

We should have reheard this case en banc to restore our circuit law on pendent personal jurisdiction and to bring it back in line with the decisions of other circuits.

V

It is rare that a panel of this court departs as substantially from controlling law and generates as many conflicts as the panel did in this case. The panel’s holding breaks from binding authority, substantially broadens personal jurisdiction, and creates needless uncertainty in cases involving conduct that may have effects in places that defendants cannot reasonably predict. We should have set the law right.

I respectfully dissent.

1 . Judge Ikuta has explained, in a compact and cogent way, that the panel decision "threatens a substantial expansion of the scope of personal jurisdiction” and departs from still other Supreme Court decisions affirming that personal jurisdiction "remains a vital part of due process and fair play.” See 657 F.3d at 864 (Ikuta, J., dissenting). I endorse her analysis without attempting to replicate it.