Petition for Writ of Certiorari — Stroman Realty, Inc. v. Antt (No. 08-189)

Supreme Court, U.

FILED %

08-189 AUG 12 2009

INTHE OFFICE OF THE CLERK

Supreme Court of the Anited States

STROMAN REALTY, INC.,

Petitioner,

Vv.

JIM ANTT, JR., et al., Defendants,

Simone Marstiller, Secretary of the Department of

Business and Professional Regulation for the State of

Florida; JEFF DAVI, Commissioner of Department of

Real Estate for the State of California,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

LESLIE A. POWELL

Counsel of Record

DIANA M. SCHOBEL

LAW OFFICES OF LESLIE A. POWELL

115 North Market Street

Frederick, Maryland 21701

(301) 668-7575

Counsel for Petitioner

ANION ET CASTE AEH NATE! CATE SN Ae ARO AN AIA ILE RRL LE AONE TELAT A ARETE MRTG AE ENE MITE

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 ~— WASHINGTON, D. C. 20002

QUESTIONS PRESENTED

There is a substantial question regarding the stan-

dard to apply when assessing personal jurisdiction

over a public official in a claim against him in his

official capacity, particularly given that the foun-

dation of the minimum contacts test is the personal

liberty interest of the due process clause which

involves individual, not state, rights.

The questions presented for review are:

1. Whether the courts should apply a tort or

“doing business” analysis in determining

whether a federal court’s exercise of personal

jurisdiction is proper when the claim is

against a state official acting in his official

capacity.

Whether a due process analysis is appropri-

ate in a claim against a state official brought

under Ex parte Young where state jurisdic-

tional criteria are met.

TABLE OF CONTENTS

QUESTIONS PRESENTED

TABLE OF AUTHORITIES ...........c-csscccssessvceeres

OPINIONS BELOW

JURISDICTION

STATUTORY AND CONSTITUTIONAL

PROVISIONS INVOLVED

STATEMENT OF THE CASE

REASONS FOR GRANTING THE PETITION ..

J. CERTIORARI IS WARRANTED TO

CONSIDER WHETHER A “DOING

BUSINESS” ANALYSIS OR A TORT

ANALYSIS APPLIES IN DETERMIN-

ING WHETHER TO _- EXERCISE

PERSONAL JURISDICTION OVER A

PUBLIC OFFICIAL ACTING IN HIS

OFFICIAL CAPACITY

CERTIORARI IS WARRANTED TO

CONSIDER WHETHER A DUE

PROCESS TEST IS APPROPRIATE IN

AN ACTION AGAINST A_ STATE

OFFICIAL IN A CASE BROUGHT

UNDER EX PARTE YOUNG WHERE

STATE JURISDICTIONAL CRITERIA

CONCLUSION

APPENDIX:

APPENDIX A

May 14, 2008, Revised June 18, 2008,

Opinion, U.S. Court of Appeals for the Fifth

Circuit, Case No. 05-20803

(iii)

1V

TABLE OF CONTENTS—Continued

APPENDIX B

July 28, 2005, Opinion on Summary

Judgment, U.S. District Court for the

Southern District of Texas, Houston

Division, Civil Action No. H-98-283

APPENDIX C

July 28, 2005, Final Judgment of the U.S.

District Court for the Southern District of

Texas, Houston Division, Civil Action No.

H-98-283

APPENDIX D

August 28, 1998 Order and Opinion on

Denial of Motions to Dismiss, U.S. District

Court for the Southern District of Texas,

Houston Division, Civil Action No. H-98-283

APPENDIX E

Portion of Joint Stipulated Facts, page 25,

filed January 22, 1999, U.S. District Court

for the Southern District of Texas, Houston

Division, Civil Action No. H-98-283

APPENDIX F

. Excerpts from Record, U.S. Court of Appeals

for the Fifth Circuit, Case No. 05-20803

Vv

TABLE OF AUTHORITIES

CASES Page

Air Products and Controls, Inc. v. Safetech

Intl, Inc.,

503 F.3d 544 (6th Cir. 2007)

Best Van Lines, Inc. v. Walker,

490 F.3d 239 (2d Cir. 2007)

Burger King Corp. v. Rudzewicz,

471 U.S. 462 (1985)

Calder v. Jones,

465 U.S. 783 (1984)

Chew v. Dietrich,

143 F.3d 24 (2d Cir. 1998)

Coldwell Banker & Co. v. Karlock,

686 F.2d 596 (7th Cir. 1982)

Delong Equip. Co. v. Washington Mills

Abrasive Co.,

840 F.2d 843 (11th Cir. 1988)

Dial Up Services, Inc. v. Oregon,

2007 WL 4200756 (D. Az. Nov. 27, 2007)... 14-15

Dudnikov v. Chalk & Vermilion Fine

Arts, Inc.,

514 F.3d 1063 (10th Cir. 2008)

Ex parte Young,

209 U.S. 123 (1908)

Franchise Tax Bd. of California v. Hyatt,

538 U.S. 488 (2003)

Great W. United Corp. v. Kidwell,

577 F.2d 1256 (5th Cir. 1978),

reu'd on venue grounds sub nom.

Leroy v. Great W. United Corp.,

443 U.S. 173 (1979)

vi

TABLE OF AUTHORITIES—Continued

Page

Hannon v. Beard,

524 F.3d 275 (1st Cir. 2008).......... 20, 24-25, 28

In re Dairy Mart Conv. Stores, Inc.,

411 F.3d 367 (2d Cir. 2005)

In re Reserves Dev. Corp. v. Browning,

64 B.R. 694 (W.D. Mo. 1986),

rev'd on other grounds,

821 F.2d 520 (8th Cir. 1987)

Indianapolis Colts, Inc. v. Metro.

Baltimore Football Club Ltd. P’ship,

34 F.3d 410 (7th Cir. 1994)

Ins. Corp. of Ireland, Ltd. v. Compagnie

des Bauxites de Guinee,

456 U.S. 694 (1982)

James v. York County Police Dep't,

160 Fed. Appx. 126 (3d Cir. 2005)

Janmark, Inc. v. Reidy,

132 F.3d 1200 (7th Cir. 1997)

Kentucky v. Graham,

473 U.S. 159 (1985)

Kulko v. Superior Court,

436 U.S. 84 (1978)

Land v. Dollar,

330 U.S. 731 (1947)

Lee v. City of Los Angeles,

250 F.3d 668 (9th Cir. 2001)

Leroy v. Great W. United Corp.,

443 U.S. 173 (1979)

vil

TABLE OF AUTHORITIES—Continued

Page

Maney v. Ratcliff,

399 F. Supp. 760 (E.D. Wis. 1975) ........... 15, 21

Marten v. Godwin,

499 F.3d 290 (3d Cir. 2007)

McBeath v. Inter-American Citizens for

Decency Comm.,

374 F.2d 359 (5th Cir. 1967)

McCarthy v. Hawkins,

381 F.3d 407 (5th Cir. 2004)

Menken v. Emm,

503 F.3d 1050 (9th Cir. 2007)

Michigan Coalition of Radioactive

Material Users, Inc. v. Griepentrog,

954 F.2d 1174 (6th Cir 1992)

Miller Yacht Sales, Inc. v. Smith,

384 F.3d 93 (3d Cir. 2004)

Nuovo Pignone, SpA v. Storman Asia M/V,

310 F.3d 374 (5th Cir. 2002)

O’Connor v. Sandy Lane Hotel Co.,

496 F.3d 312 (3d Cir. 2007)

Omni Capital Int'l, Ltd. v. Rudolf

Wolff & Co., Ltd.,

484 U.S. 97 (1987)

Overby v. Johnson,

418 F. Supp. 471 (E.D. Mich. 1976)

Payne v. County of Kershaw, South

Carolina, 2008 WL 2876592 (N.D. Tex.

July 25, 2008)

vill

TABLE OF AUTHORITIES—Continued

Pennhurst State Sch. & Hosp. v.

Halderman,

465 U.S. 89 (1984)

Piper Aircraft Co. v. Reyno,

454 U.S. 235 (1981)

Richland Dev. Co. v. Staples,

295 F.2d 122 (5th Cir. 1961)

Sandpiper Village Condo. Ass’n, Inc. v.

Louisiana-Pacific Corp.,

428 F.3d 831 (9th Cir. 2005)

Schramm v. Oakes,

352 F.2d 143 (10th Cir. 1965)

Second Amendment Found. v.

United States Conference of Mayors,

274 F.3d 521 (D.C. Cir. 2001)

Selover, Bates & Co. v. Walsh,

226 U.S. 112 (1912)

Shelley v. Kraemer,

334 U.S. 1 (1948)

State of South Carolina v. Katzenbach,

383 U.S. 301 (1966)

Stroman Realty, Inc. v. Sam Wercinski,

513 F.3d 476 (5th Cir. 2008),

petition for cert. filed, 76 U.S.L.W. 3611

(U.S. May 5, 2008) (No. 07-1387)

Taylor v. Phelan,

912 F.2d 429 (10th Cir. 1990)

Trujillo v. Williams,

465 F.3d 1210 (10th Cir. 2006)

Page

iX

TABLE OF AUTHORITIES—Continued

U.S. v. Ferrara.

54 F.3d 825 (D.C. Cir. 1995)

U.S. v. Swiss Am. Bank; Ltd.,

274 F.3d 610 (1st Cir. 2001)

Will v. Michigan Dep't of State Police,

491 U.S. 58 (1989)

World-Wide Volkswagen Corp. v. Woodson,

444 U.S. 286 (1980)

Yahoo! Inc. v. La Ligue Contre Le Racisme

et L’Antisemitisme,

433 F.3d 1199 (9th Cir. 2006)

Ziegler v. Indian River County,

64 F.3d 470 (9th Cir. 1995)

STATUTES:

28 U.S.C. §

28 U.S.C

28 U.S.C. §

28 U.S.C. § 1391

Nee css cc cccdgutlaserevesevesessccaccscscs passim

Mich Comp. Laws § 600.705 ...............::6::066 19-20

Tex. Civ. Prac. & Rem. Code Ann.

§ 17.041

Tex. Civ. Prac. & Rem. Code Ann.

Te ccvelsuistauveysrsencecsessersesp Wy ee

x

TABLE OF AUTHORITIES—Continued

CONSTITUTIONAL PROVISIONS:

U.S. Const. art. 1, § 8

U.S. Const. amend. XIV § 1

RULES:

Fed. R. Civ. P. 25

OTHER:

Wright & Miller, 7C Fed. Prac. & Proc.

Civ.3d § 1960

IN THE

Supreme Court of the United States

STROMAN REALTY, INC.,

Petitioner,

¥

JIM ANTT, JR., et al., Defendants,

Simone Marstiller, Secretary of the Department of

Business and Professional Regulation for the State of

Florida; JEFF DAVI, Commissioner of Department of

Real Estate for the State of California,

Respondents.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Fifth Circuit

PETITION FOR WRIT OF CERTIORARI

Petitioner, Stroman Realty, Inc. (“Stroman”), re-

spectfully petitions for a writ of certiorari to review

the judgment of the United States Court of Appeals

for the Fifth Circuit.

OPINIONS BELOW

The opinion of the court of appeals is reported

at 528 F.3d 382. App.la-9a. The final judgment and

opinion of the United States District Court for the

Southern District of Texas is unreported. App. 10a-

2

25a. The district court’s opinion finding it had per-

sonal jurisdiction over the Commissioner of the

Department of Real Estate for the State of California

and the Secretary of the Department of Business and

Professional Regulation for the State of Florida is

reported at 20 F. Supp. 2d 1050. App. 36a-52a.

JURISDICTION

The district court had jurisdiction over petitioner's

claims pursuant to 28 U.S.C. § 1331. The court of

appeals had jurisdiction to review the district court's

final judgment pursuant to 28 U.S.C. § 1291. The

court of appeals filed its opinion on May 14, 2008 and

amended the opinion on June 18, 2008. The juris-

diction of this Court is invoked under 28 U.S.C.

§ 1254(1).

STATUTORY AND CONSTITUTIONAL

PROVISIONS INVOLVED

The Due Process Clause of the Fourteenth Amend-

ment provides:

nor shall any State deprive any person of life,

liberty, or property, without due process of law ....

U.S. Const. amend. XIV § 1.

Tex. Civ. Prac. & Rem. Code Ann. § 17.041 pro-

vides:

In this subchapter, “nonresident” includes:

(1) an individual who is not a resident of this

state; and

(2) a foreign corporation, joint-stock company,

association, or partnership.

3

Tex. Civ. Prac. & Rem. Code Ann. § 17.042

provides:

In addition to other acts that may constitute

doing business, a nonresident does business in

this state if the non-resident:

(2) commits a tort in whole or in part in this

state;

42 U.S.C. § 1983 provides:

Every person who, under color of any statute,

ordinance, regulation, custom, or usage, of any

State or Territory or the District of Columbia,

subjects, or causes to be subjected, any citizen of

the United States or other person within the

jurisdiction thereof to the deprivation of any

rights, privileges, or immunities secured by the

Constitution and laws, shall be liable to the

party injured in an action at law, suit in equity,

or other proper proceeding for redress ....

STATEMENT OF THE CASE

l.a. Petitioner Stroman has specialized in the sale

of timeshare interests on behalf of individual owners

since 1979. App. 12a. A timeshare is an interest in

land and is also referred to as vacation ownership.

See App. 10a. Stroman’s only office is located near

Houston, Texas. App. 12a. Stroman is a Texas

licensed real estate broker employing Texas licensed

real estate agents. Stroman’s agents perform ser-

vices only at the Texas office and do not travel to

other states to engage in brokerage activity. See App.

12a, 54a.

4

Stroman spends millions of dollars each year in its

promotional efforts. App. 13a. Stroman does not use

cold calls or pressure sales. App. 2a. Instead, it uses

direct mail, the internet, and national and local news-

papers to reach potential customers. Jd. Stroman

maintains over 160 toll free numbers to enable

interested buyers and sellers to contact it in Texas.

App. 13a. Stroman has brokered sales with buyers

and sellers from all fifty states and eighty-six

countries. App. 12a. Stroman has brokered the sale

of properties located at 1,250 different resorts in

forty-seven states and twenty-nine countries. Id.

To finance its nationwide advertising and promo-

tional efforts, Stroman charges a fee to register time-

share properties for sale in its database. App. l3a.

Stroman advertises timeshares both generically as

well as listing individual timeshares on Stroman’s

website. Jd. Upon the sale of a timeshare, Stroman

also charges a commission of ten percent or $750.00,

whichever is larger. App. 2a. Stroman advertises on

behalf of Texas residents who own California and

Florida-based timeshares. App. 54a.

1.b. In 1990, respondent, the Commissioner for the

Department of Real Estate for California (“DRE”),

issued an Order to Desist and Refrain against

Stroman because it was not licensed as a California

broker, for soliciting California residents, and for

Stroman’s failure to submit its advertising materials

for approval to the California Real Estate Commis-

sioner. App. 63a-65a. DRE served Stroman with

this order by mail in Texas. App. 4a. DRE issued

another Order to Desist and Refrain against Stroman

in 1997. App. 60a-62a. It again charged Stroman

with acting without a California broker’s license, for

soliciting California residents, for advertising in the

5

San Francisco Chronicle, and for failing to submit its

promotional materials to DRE for approval. /d.

On the same day it issued the desist and refrain

order, DRE sent the order to the Texas Real Estate

Commission advising it of the order and asserting

that it was “the latest in a number of Orders issued

against Stroman... .” App. 66a. The DRE further

advised that it intended to “notify the ERA franchise

headquarters and the postal authorities” and was

“also exploring possible injunctive action” against

Stroman. Jd. In response to DRE’s notice and order,

the Texas Commissioner undertook an investigation

into Stroman’s activities and reported back to DRE.

App. 69a-70a.

In addition to the orders and communications with

the Texas Real Estate Commission, DRE sent a letter

to Stroman’s counsel in Texas advising it that

Stroman’s interstate activity was not exempt from

California’s licensing and regulatory requirements.

App. 55a-59a. DRE further asserted that it was

entitled to regulate Stroman’s conduct even when no

California resident was involved in the transaction if

the timeshare was located in California. App. 42a.

On its website DRE advises brokers that advertis-

ing on the internet requires a California real estate

license:

Because the Internet can be read by anyone in

any location, advertising your services on the

Internet would be considered soliciting a Califor-

nia resident when read by a resident of this

state.

App. 84a.

6

l.c. In 1996, respondent, the Florida Department

of Business and Professional Regulation (“DBPR”),

contacted Stroman in Texas following DBPR’s review

of one of Stroman’s advertising brochures. App. 71la-

74a. DBPR advised Stroman that its collection of

a fee to register a Florida timeshare interest in

Stroman’s computer database constituted a violation

of Florida law. App. 71a-72a..DBPR also stated that

Stroman was obligated to use a resale purchase

agreement with specific terms mandated by Florida

law including specific language pertaining to recision

periods. App. 72a-74a. DBPR further demanded

that Stroman produce documents in Florida. App.

74a.

In March 1997, DBPR again wrote Stroman in

Texas reiterating its demand that Stroman produce

its agreements related to Florida timeshares. App.

8la-82a. DBPR claimed a right to dictate Stroman’s

business operations. App. 82a. (asserting there was

no business impediment to Stroman to including

Florida’s statutorily mandated language in Stroman’s

contracts and deferring payment for Stroman’s adver-

tising services until after transfer of property).

In May 1997, DBPR requested documents from the

Texas Attorney General’s office relating to Stroman.

App. 67a. The Texas Attorney General answered

the request and provided documents in response to

DBPR’s demand. App. 68a.

Thereafter, in November 1997, DBPR again con-

tacted Stroman demanding that it pay a fine for

violation of Florida law for collection of fees from

anyone owning a Florida-based timeshare “regardless

of the state of residence of the seller.” App. 76a.

DBPR further required that Stroman obtain a Florida

license and that all individuals who “communicate

7

with the sellers and buyers must be licensed as

brokers or salespersons” by Florida when_ the

timeshare is located in Florida “regardless of where

the sellers and buyers are located.” App. 78a-79a.

2.a. Petitioner sued the respondents pursuant to 42

U.S.C. § 1983 for violation of the dormant commerce

clause, U.S. Const. art. I, § 8, cl. 3. Petitioner sought

to enjoin respondents’ unconstitutional application of

California and Florida real estate and timeshare laws

and regulations on Stroman’s interstate timeshare

resate business.

At the outset of the case, respondents moved to

dismiss the complaint on numerous grounds, includ-

ing lack of personal jurisdiction. The district court

held that it had personal jurisdiction over the defen-

dants and rejected the respondents’ argument that

their enforcement of their statutes occurred in their

states. App. 39a. The court observed that the states

were part of the national government and that the

states sought to “regulate the business of a South-

Texas land dealer and his numerous South-Texas

customers.” App. 40a. The court noted that respon-

dents asserted nationwide authority to regulate busi-

ness and were “applying their authority against a

Texan in Texas.” Jd. In addition, the actions of the

responderits, sending orders to Stroman in Texas

and using Texas government agericies to further their

regulatory goals, subjected the defendants to specific

jurisdiction. App. 40a-41a.' In exercising jurisdic-

tion, the court found it compelling that both states

'The court also found respondents subject to general jurisdic-

tion because different agencies of both Florida and California

had state offices in the Southern District of Texas and the

officers are part of a larger administrative apparatus which has

a permanent presence in Texas. App. 41a.

8

sought to “enforce their statutes in situations that

involve only non-residents as long as the land is in

the state.” App. 42a.

2.b. Thereafter, Stroman moved for summary judg-

ment on its claim that respondents’ application of

their laws on Stroman’s timeshare resale business

violated the dormant commerce clause. The district

court found that the business of timeshare resales

and Stroman’s business in particular, constituted

interstate commerce. App. 19a. The court considered

the laws and regulations of the respondents and the

impact of those regulations on the interstate business

of timeshare resales. App. 13a-21a.

The court found that the effects of the respondents’

regulations on the market substantially impeded the

flow of goods and services among the states. “By the

states’ positions, a man in Sutter Creek cannot use

a broker in Dallas to sell a share in Telluride to a

woman in Saint Augustine without the brokers com-

plying with the regulations of California, Texas, and

Florida.” App. 2la. The court ruled that respon-

dents’ application of their laws and regulations on

out-of-state “timeshare resellers like Stroman Realty,

Inc., unconstitutionally obstructs commerce among

the states, [and] irreparably injur[es] Stroman.” App.

34a-35a. The court enjoined the respondents from

enforcing their real estate and timeshare laws against

Stroman. 7d.

3. Respondents appealed. Fifteen states and com-

monwealths joined the appeal as amici urging reversal

of the district court’s judgment. The Fifth Circuit did

not reach the merits but reversed on the grounds that

the district court had neither general nor specific

personal jurisdiction over respondents. The court

rejected the district court’s finding of jurisdiction over

9

the California and Florida officials because “they are

all members of the federal Union” finding it to be

without precedent. App. 6a. It likewise found the

presence of other state agency offices within the

district irrelevant to the personal jurisdiction analy-

sis. App. 5a-6a.

Applying a “doing business” standard, the court

found specific jurisdiction lacking relying largely on

its earlier decision in Stroman Realty, Inc. v. Sam

Wercinski, 513 F.3d 476 (5th Cir. 2008), petition for

cert. filed, 76 U.S.L.W. 3611 (U.S. May 5, 2008) (No.

07-1387). App.7a-9a. The court found the contacts

insufficient because although DRE sent its order

to the Texas Real Estate Commission, “i]t did not

request any action on the part of the [Texas]

Commission.” App. 8a. Therefore, DRE did not

“avail itself of any of Texas’s protections.” Id. Thus,

the court reasoned that because the letter did “not

evidence any . . . anticipation” of being haled into

federal court and did not put DRE “on notice that

it might be sued,” it was therefore “insufficient to

establish personal jurisdiction.” Id.

The court likewise found that DBPR’s correspon-

dence and demands sent to Stroman in Texas did

not create a basis for personal jurisdiction. App. 8a.

DBPR’s request for information from the Texas

Attorney General’s office pursuant to the Texas free-

dom of information act was held insufficient as a con-

tact for purposes of jurisdiction because Stroman’s

claim did not arise out of that specific contact. Id.

Notably, the court declined to consider the respon-

dents’ assertion of regulatory authority over Stroman

and the resulting impact on Stroman in Texas as part

of the personal jurisdiction analysis. See App. 7a-9a.

10

REASONS FOR GRANTING THE PETITION

The Court has never addressed the question of the

standard a federal court should apply when deter-

mining whether to exercise jurisdiction over a non-

resident public official in a case brought under

Ex parte Young.’ See, e.g., Leroy v. Great W. United

Corp., 443 U.S. 173, 180-81 (1979) (declining to

address the question of personal jurisdiction by a

Texas federal court over Idaho state officials in a case

alleging violations of the commerce clause and pre-

emption).

In this case and in Wercinski, 513 F.3d 476, the

Fifth Circuit held the district courts lacked personal

jurisdiction over non-resident state officials. In so

doing, the court declined to apply the personal juris-

diction analysis typically applied in tort cases, includ-

ing cases brought under 42 U.S.C. § 1983. In con-

sidering minimum contacts, the court refused to

consider the regulatory efforts by the public officials

in the forum state and the impact of those efforts on

the plaintiff in the forum state as a basis for the

exercise of personal jurisdiction. Instead, the court

looked only to the physical manifestations of the

officials’ exercise of authority and applied a “doing

business” analysis. Because it found those manifes-

tations wanting, the court held that personal jurisdic-

tion had not been established. Other jurisdictions,

however, have applied the Calder effects test° to

assess jurisdiction over public officials in both official

capacity and individual liability cases and found such

jurisdiction proper.

? Ex parte Young, 209 U.S. 123 (1908).

>The effects test refers to the jurisdictional analysis set forth

by the Court in Calder v. Jones, 465 U.S. 783 (1984). See note 5,

infra.

11

Whether any due process analysis is appropriate in

a case against a public official acting in his official

capacity is also unanswered. Because such claims

are not claims against individuals but rather a claim

against the office, it is questionable whether a due

process analysis should apply in the first instance

after service of process is achieved on the public

official pursuant to state law.

This case thus presents two critically important

questions. First, if a public official is to be treated

as a person for purposes of personal jurisdiction as

well as for purposes of the waiver of immunity under

the Eleventh Amendment, should the courts apply a

different personal jurisdiction analysis than that

applied to other defendants. The question of whether

unlawful conduct dictates application of a different

test if it is undertaken by a state official as opposed

to a private citizen is of fundamental importance.

Second, when a state official is stripped of immunity

but the action is nonetheless state action for purposes

of the Fourteenth Amendment, should a due process

analysis apply in the first instance. Due process

rights have been characterized by this Court as an

individual liberty interest but the Court has not

addressed how, if at all, this affects a personal juris-

diction analysis in an action against a public official

who is sued for acts undertaken in his official

capacity.

12

I. CERTIORARI IS WARRANTED TO

CONSIDER WHETHER A “DOING

BUSINESS” ANALYSIS OR A TORT

ANALYSIS APPLIES IN DETERMINING

WHETHER TO EXERCISE PERSONAL

JURISDICTION OVER A PUBLIC

OFFICIAL ACTING IN HIS OFFICIAL

CAPACITY.

This Court should establish the proper framework

for assessing personal jurisdiction in official capacity

actions under § 1983. Here, the court determined

that there were insufficient minimum contacts to

exert jurisdiction over respondent state officials who

had sent cease and desist letters to Texas, sent a

cease and desist order to the Texas Real Estate

Commission, which resulted in an investigation of

Stroman in Texas, and who sought information re-

garding Stroman from the Texas Attorney General.

App. 7a. The court ignored that the state agencies

engaged in these contacts in an ultra vires effort to

impose defendants’ complete regulatory schemes—

licensing, advance fee, advertising, and escrow

requirements—on a Texas broker in Texas. The

court likewise failed to consider Stroman’s allega-

tions that the agencies sought to control business

practices and contractual relations in Texas, includ-

ing those transactions that did not involve any resi-

dents of the respondents’ states. Instead, the court

relied on its earlier decision in Wercinski finding lack

of jurisdiction over the Arizona Commissioner of the

Department of Real Estate. Jd. In so doing, the court

declined to analyze Stroman’s § 1983 official capacity

claim as a tort, but asked only whether the officials

“purposefully availfed]” themselves of the privilege

13

of conducting business in Texas, a test applicable to

contract-based actions.” App. 7a-8a.

a. How such claims should be characterized is a

question of great importance. The nature of the

underlying case determines which due process frame-

work applies. See Miller Yacht Sales, Inc. v. Smith,

384 F.3d 93, 99 (3d Cir. 2004) (“[Tlhere are different

considerations in analyzing jurisdiction over contract

claims and over certain tort claims.””) (citation omitted),

Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514

F.3d 1063, 1071 (i0th Cir. 2008) (in tort context the

court examines whether defendant “purposefully

directed” its acts at forum state and in contract cases

whether defendant “purposefully availed’ itself of the

privilege of conducting activities or consummating a

transaction in the forum state.”) (citations omitted).

In contrast to the Fifth Circuit, other courts have

treated § 1983 actions as a tort for personal! jurisdic-

tion purposes in both individual and official capacity

cases and applied the “effects” test set forth in Calder

or a similar torts-based analysis to establish whether

the defendant purposefully directed his activities at

residents of the forum state.” In Ziegler v. Indian

‘The “purposeful availment” prong in tort cases differs from

that in many non-tort cases, where as part of a separate test the

defendant derives “the benefits and protections’ of the forum's

laws” or creates “continuing obligations’ between himself and

residents of the forum... .” Burger King Corp. v. Rudzewtcz,

471 U.S. 462, 476 (1985). In the case of Texas, the long-arm

statute provides for jurisdiction where the defendant “commits a

tort in whole or in part” in the state. Tex. Civ. Prac. & Rem

Code § 17.042. It does not require that the tortfeasor also do

business in the state. See id.

* In Calder, the Court held that California had personal juris

diction over a Florida editor that edited an article in Florida

because the “focal point both of the story and of the harm

14

River County, 64 F.3d 470 (9th Cir. 1995), for ex-

ample, the Ninth Circuit addressed whether the

California court had jurisdiction over Florida sheriffs

sued in their individual and official capacities who

used their authority to obtain a warrant to arrest a

California resident for grand theft, even though the

check upon which the theft charge was based was

good. In applying the jurisdictional analysis, the

court likened plaintiffs § 1983 claim to a tort.

Ziegler, 64 F.3d at 474. The court went on to hold

that, although the sheriffs had not physically entered

California, in obtaining the arrest warrant, they had

“intentionally directed their actions toward Califor-

nia, for the purpose of having [plaintiff] arrested

there and extradited.” Jd. at 475. See also Trujillo v.

Williams, 465 F.3d 1210, 1220 (10th Cir. 2006) (con-

sidering Calder’s effects test but declining to find

jurisdiction over Virginia prison officials in New

Mexico sued in their official capacity because all

relevant conduct by Virginia defendants occurred

in Virginia where prisoner was housed); Dial Up

Services, Inc. v. Oregon, 2007 WL 4200756, at *4 (D.

Az. Nov. 27, 2007) (applying the Calder effects test

suffered” was California. Calder, 465 U.S. at 789. The Court

rejected the defendants’ proffered analysis under which the

forseeability that the article would be circulated in California

and have an effect there was insufficient to establish jurisdic

tion. Instead, unlike the untargeted negligence in a products

liability case, the Court determined defendants’ “intentional,

and allegedly tortious, actions were expressly aimed at Califor-

nia.” Id. The defendants in that case wrote and edited “an

article that they knew would have a potentially devastating

impact upon respondent” and that “the brunt of that injury

would be felt by” the respondent in California. Jd. at 789-

90. Thus “(aJn individual injured in California need not go to

Florida to seek redress from persons who, though remaining in

Florida, knowingly cause the injury in California.” Jd. at 790.

15

and Ziegler to declaratory judgment claims against

state officials because these “are more akin to tort

claims than contract claims.”);° James v. York County

Police Dep't, 160 Fed. Appx. 126, 134-35 (3d Cir. 2005)

(Pennsylvania district court had jurisdiction over

California narcotics officer under effects test based

on officer’s call to Pennsylvania Attorney General's

office, sending a package to that office and testifying

against plaintiff at a preliminary hearing because

the officer’s “allegedly tortious acts were intended to

have an impact on [plaintiff) in Pennsylvania.”).’

Even Wercinski conceded that “ijt . . . seems nor-

mally accurate to describe as torts, even under the

long arm statute, § 1983 suits against public officials

for individual misconduct.” Wercinski, 513 F.3d at

483 (emphasis added).” Because the official is de-

*The court found jurisdiction lacking because the complaint

did “not allege any action by Defendants aimed at the State of

Arizona or causing harm in Arizona.” Dial Up Services, Inc.,

2007 WL 4200756, at *4.

’ See also Taylor v. Phelan, 912 F.2d 429 (10th Cir. 1990)

(finding in § 1983 action that Kansas had jurisdiction over a

Missouri police officer who gave assurances to Kansas residents

they would be safe from harm and over Missouri Police Depart-

ment where officer informed Kansas criminal suspect warrant

had been issued when officer did not have ability to arrest); Lee

uv. City of Los Angeles, 250 F.3d 668, 692-94 (9th Cir. 2001)

(holding that New York police officers were subject to Califor-

‘’"'nia’s jurisdiction in § 1983 action arising out of wrongful extradi-

tion of California resident); Overby v. Johnson, 418 F. Supp.

471, 472 (E.D. Mich. 1976) (Section 1983 claim is a tort within

Michigan long-arm statute); Maney v. Ratcliff, 399 F. Supp. 760,

766 (E.D. Wis. 1975) (stating that action under § 1983 “should

be read against a background of tort law liability.”).

*In contrast to Wercinski, in Great W. United Corp. v. Kidwell,

577 F.2d 1256 (5th Cir. 1978), rev'd on venue grounds sub nom.

Leroy v. Great W. United Corp., 443 U.S. 173 (1979), the court

observed that the Idaho official’s attempted extraterritorial

16

prived of immunity in either case, however, there is

no reason to apply a different jurisdictional analysis.

The Court should answer the question as to which

standard applies and provide needed guidance to the

courts.

b. ~* Nor is there a justifiable basis for the Fifth

Circuit’s distinction between private tort defendants

and public officials engaging in unconstitutional con-

duct, albeit based on their regulatory authority.

Given that this Court has expressly held that such

officials enjoy no immunity from suits for purposes of

injunctive relief, there is no basis for such a distinc-

tion. See Ex parte Young, 209 U.S. at 155-56; In re

Dairy Mart Conv. Stores, Inc., 411 F.3d 367, 372 (2d

Cir. 2005) (finding it proper to exercise jurisdiction

over Kentucy officials in New York under Ex parte

Young exception, noting that the state cannot author-

ize an unconstitutional act). As Justice Stevens has

noted, unconstitutional conduct by a state official

causes him to become a “tort-feasor”. Pennhurst

State Sch. & Hosp. v. Halderman, 465 U.S. 89, 106

(1984) (Stevens, J., dissenting). Once stripped of his

immunity, there is no reason to apply a more onerous

analysis simply because the claim is against a public

official.”

Courts routinely examine the effects of the conduct

alleged and apply Calder in cases involving defen-

regulation “had the direct effect of stopping a substantial com-

mercial venture based in Texas” and was analogous to tort cases

for intentional interference with commercial relationships.

Kidwell, 577 F.2d at 1268.

* Indeed, the fact that “an official’s unconstitutional conduct

constitutes state action under the Fourteenth Amendment but

not the Eleventh Amendment”, Pennhurst State Sch. & Hosp.,

465 US. at 105 (citation omitted), indicates no due process

analysis is appropriate. See part II, infra.

17

dants who are not public officials. See Janmark, Inc.

v. Reidy, 132 F.3d 1200 (7th Cir. 1997). Thus, in

Janmark, the court found jurisdiction in Illinois over

a California defendant proper where defendant called

plaintiffs customer in New Jersey, causing the cus-

tomer to cancel an order pending in Illinois. The

court observed that “[t]here is no tort without injury

.. and the state in which the injury (and therefore

the tort) occurs may require the wrongdoer to answer

for its deeds even if events were put in train outside

its borders.” Janmark, 132 F.3d at 1202. Further,

Illinois had “extended its long-arm power to the limit

allowed by the Constitution” and “[t]here can be no

serious doubt after [Calder] that the state in which

the victim of a tort suffers the injury may entertain

a suit against the accused tortfeasor.” Jd. See also

Yahoo! Inc. v. La Ligue Contre Le Racisme et

L’Antisemitisme, 433 F.3d 1199, 1211 (9th Cir. 2006)

(finding that in declaratory judgment action, Califor-

nia had personal jurisdiction over French associa-

tions that obtained orders in France purporting to

govern California-based plaintiffs conduct in Califor-

nia, even though effect sought by the French court

would be felt in France); Dudnikov, 514 F.3d at 1073

(finding personal jurisdiction over nonresident

defendant proper in Colorado where defendant sent

letter to eBay in California intended to invoke proce-

dures that would stop plaintiffs’ auction).’°

There is conflict among the circuits regarding how to apply

the Calder effects analysis. The First, Sixth, Ninth and Tenth

Circuits utilize Calder to determine whether the defendant has

met the “purposeful availment” prong of the three-part test,

making separate inquiry as to whether the plaintiffs cause of

action arose from defendant’s contacts with the forum state and

the reasonableness of exercising jurisdiction. U.S. v. Swiss

Am. Bank, Ltd., 274 F.3d 610, 624 (Ist Cir. 2001) (stating that

18

Although this Court has never held that a different

standard should apply merely because a state official

exerts unconstitutional regulatory authority versus

committing some other variety of tort, some courts

turn a blind eye to the allegations of tortious conduct

in official capacity actions and apply a heightened

standard, either by segregating the contacts with the

forum from the effects of the unconstitutional con-

duct, or by imposing additional criteria that effec-

tively preclude a finding of personal jurisdiction over

the officials. In Wercinski, for example, the Fifth

Circuit applied an economic benefit criterion to find

that the Arizona real estate commissioner was not

subject to an official capacity suit in Texas, stating:

the Commissioner was not engaged in commer-

cial transactions to obtain a commercial benefit

by acting in a governmental capacity to enforce

Arizona law. Because no such benefit accrues to

the Commissioner from her activities relating to

“Calder addressed purposeful availment, rather than related-

ness.”); Air Products and Controls, Inc. v. Safetech Int'l, Inc.,

503 F.3d 544, 552-55 (6th Cir. 2007); Menken v. Emm, 503 F.3d

1050, 1059 (9th Cir. 2007); Dudnikov, 514 F.3d at 1071-78

(applying Calder as part of purposeful availment prong). The

Second and Third Circuits, however, treat Calder as a test

separate from the three-part inquiry that can independently

establish jurisdiction. Marten v. Godwin, 499 F.3d 290, 297 (3d

Cir. 2007) (observing that if a plaintiff satisfies Ca/der’s effects

test, “the plaintiff can demonstrate a court’s jurisdiction over a

defendant even when the defendant’s ‘contacts with the forum

alone .. . are far too small to comport with the requirements of

due process’ under our traditional analysis.”) (citation omitted);

Best Van Lines, Inc. v. Walker, 490 F.3d 239, 243 (2d Cir. 2007)

(suggesting that Calder provides the means for demonstrating

minimum contacts). This case presents the opportunity to re-

solve this disagreement.

19

Texas, any jurisdiction based upon her having

caused an “effect” in Texas is likewise misplaced.

Wercinski, 513 F.3d at 485.'* The court here engaged

in similar reasoning when it examined whether the

respondents had “purposefully availed” themselves

“of the privileges of conducting business in Texas”

and examined the contacts without regard for the

effect of the officials’ attempted regulatory activity in

Texas. App. 7a-8a. See also Michigan Coalition of

Radioactive Material Users, Inc. v. Griepentrog, 954

F.2d 1174, 1177 (6th Cir. 1992)"* (finding that Michi-

gan did not have jurisdiction over state officials

from Nevada, Washington and South Carolina who

directed conduct to Michigan that denied Michigan

waste generators access to disposal facilities in part

because “[t]he defendants’ states have undertaken no

economic activity in the state of Michigan in relation

to the disposal sites.”)."°

" The Wercinski court stated that, in making this analysis, it

was relying on this Court’s decision in Kulko v. Superior Court,

436 U.S. 84 (1978). Wercinski, 513 F.3d at 485. However, the

Court in Kulko expressly noted that the domestic relations mat-

ter at issue in that case was different from commercial and tort-

based cases and observed that the dispute involved an agree-

ment negotiated and signed in New York. Kulko, 436 U.S. at

96-97. Kulko does not apply to cases where a state agency

exerts authority unconstitutionally to alter contracts and busi-

ness practices in the forum state.

* In Griepentrog, the plaintiff sought declaratory and injunc-

tive relief to enjoin defendants from barring access to waste

disposal facilities, alleging the officials had no authority to do

so. Griepentrog, 954 F.2d at 1176.

'® Neither the Texas long-arm statute nor Michigan’s includes

economic benefit as a prerequisite for jurisdiction in tort cases.

See Tex. Civ. Prac. & Rem. Code § 17.042; Mich Comp. Laws

§ 600.705(2) (providing for specific jurisdiction based on “(t]he

20

Both the Fifth and Sixth Circuits, however, rea-

soned that a different jurisdictional standard should

apply if the claim arises out of the enforcement of

state or federal law. See Wercinski, 513 F.3d at 486

(stating that the Commissioner’s intent for her activi-

ties “is to uphold and enforce the laws of Arizona.”);

Griepentrog, 954 F.2d at 1178 (stating that “defen-

dants have acted in accord with federal law and these

actions do not give rise to personal jurisdiction.”); see

also Hannon v. Beard, 524 F.3d 275, 281 (1st Cir.

2008) (rejecting defendant prison official’s Wercinski-

based argument that personal jurisdiction was lack-

ing because his activities were not “commercial”,

stating that the action in Wercinski “attacked the

validity of that law” and therefore Wercinski was

inapplicable). **

There is, however, no basis for requiring greater

forum contacts by a state agent in official capacity

actions than from other defendants merely because

the official purports to enforce his state’s regulatory

intent. This Court has rejected constitutional distinc-

tions based on whether allegedly tortious official

conduct is in furtherance of a sovereign function.

Thus, in Franchise Tax Bd. of California v. Hyatt,

538 U.S. 488 (2003), the Court declined to require

Nevada to apply California’s sovereign immunity

statute to a Nevada resident’s Nevada suit against

the California Tax Board despite California’s argu-

ment that immunity was required to “avoid interfer-

ence with California’s ‘sovereign responsibility’ of

doing or causing an act to be done, or consequences to occur, in

the state resulting in an action for tort.”) (emphasis added).

“ Hannon’s characterization of Stroman’s claim in Wercinski

is inaccurate. Stroman attacked the application of Arizona real

estate laws to Stromazr:.’s Texas-based interstate business.

21

enforcing its income tax laws.” Hyatt, 538 U.S. at

498 (citation omitted). The Court observed:

There is no principled distinction between Ne-

vada’s interests in tort claims arising out of

its university employee’s automobile accident, at

issue in [Nevada v.] Hall, [440 U.S. 410 (1979)]

and California’s interests in the tort claims here

arising out of its tax collection agency’s residency

audit. ... If we were to compare the degree to

which the allegedly tortious acts here and in Hall

are related to a core sovereignty function, we

would be left to ponder the relationship between

an automobile accident and educating, on one

hand, and the intrusions alleged here and collect-

ing taxes, on the other. We discern no con-

stitutionally significant distinction between

these relationships.

Id. at 498-99.

Whether the defendant is a state official acting

beyond his regulatory power or another tort defen-

dant directing harm to residents of another state is a

distinction without a difference; both are unlawful.

See Maney v. Ratcliff, 399 F. Supp. 760, 767 (E.D.

Wis. 1975) (rejecting Louisiana police officers’ claim

that their Wisconsin contacts “were initiated for the

purpose of enforcing Louisiana’s criminal laws rather

than for the defendants’ economic self-benefit”, stat-

ing that “nothing in the [Wisconsin] long-arm statute

makes the motive for a defendant’s activities deter-

minative of the statute’s application. If the defen-

dants’ actions fall within the language of the long-

arm statute, and if they constitute sufficient ‘mini-

mum contacts’... then personal jurisdiction may be

exercised over them.”).

22

Cc. In both this case and in Wercinski, the court

declined to consider Stroman’s allegations against

the state officials and the impact of their actions on

Stroman’s business in Texas. Rather than afford

§ 1983 defendants in official capacity cases special

consideration by virtue of their enforcement activi-

ties, courts instead should look to the plaintiffs cause

of action and the effect of the regulatory conduct on

the plaintiff in the forum state. Here, the court

did not factor Stroman’s underlying allegations —

that respondents were acting unconstitutionally to

force Stroman to change its contracts and business

practices in Texas —— into the jurisdictional analysis.

The nature of Stroman’s services underscores the

importance of examining the underlying allegations

in evaluating personal jurisdiction in cases based on

asserted regulatory authority. Stroman’s advertising

and brokerage contracts are personal service con-

tracts governed by the law of the place of perform-

ance, which is entirely in Texas. See Selover, Bates

& Co. v. Walsh, 226 U.S. 112, 123 (1912) (rejecting

claim that Colorado law applied to contract for sale of

land drafted in Minnesota because it involved Colo-

rado property because the contract was “strictly

personal” and “[i]t in no way affects the land or seeks

any remedy against it.”); Coldwell Banker & Co. v.

Karlock, 686 F.2d 596, 599 (7th Cir. 1982) (“A real

estate brokerage contract is generally characterized

as a contract for personal services rather than a

contract conveying an interest in land.”); Richland

Dev. Co. v. Staples, 295 F.2d 122, 128 (5th Cir. 1961)

(allowing unlicensed broker’s suit, court noted that if

an “Alabama citizen goes out of the state and enters

into a contract that primarily is to be performed in

a foreign state, he should expect to forego certain

protections that his own state would afford, just as he

23

becomes entitled to enjoy the protection of the foreign

state.”). Thus the respondents’ regulation does not

take place in California or Florida, but in Texas

where these contracts are established and _ per-

formed.*°

Instead of considering the nature of Stroman’s

business and the regulation by respondents, however,

the court looked narrowly at the officials’ communica-

tions and documents sent to the state.’* Likewise, in

' This case is unlike U.S. v. Ferrara, 54 F.3d 825 (D.C. Cir.

1995), where the defendant was not setting standards for or

directing the behavior of prosecutors in the District of Columbia,

but those who were licensed by New Mexico. Ferrara, 54 F.3d

at 830. Here, the respondents are directing “how [brokerage

transactions are] to be conducted” in Texas. Jd. at 828.

‘In addition to looking only at discrete contacts rather than

Stroman’s action as a whole, the court declined to count

Florida’s attempt to obtain information from the Texas Attorney

General’s Office regarding Stroman, stating that “[o]nly those

contacts out of which the claim arises count in specific jurisdic-

tion analysis” and that “[t]here is no way to construe that

contact as a basis for the suit ....” App. 8a. However, this

Court “has not yet explained the scope of . . . [the arises out of]

requirement.” O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312,

318 and n.4 (3d Cir. 2007) (noting that although the Court

granted certiorari on this question in Carnival Cruise Lines, Inc.

v. Shute, 499 U.S. 585 (1991), the Court decided the case on

other grounds); Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93,

99-100 (3d Cir. 2004) (observing that “the question of what level

of relationship is necessary under the ‘arise out of or relate to’

requirement. ... has plagued federal Courts of Appeals and has

resulted in divergent rules.”); Chew v. Dietrich, 143 F.3d 24, 29

(2d Cir. 1998) (describing conflicts among the circuits as to the

standard to apply in determining whether a contact “relates to”

a claim). Here, contrary to the court’s conclusion, the attempt to

obtain documents from Texas government offices was part of the

Florida agency’s overall efforts to impose Florida’s regulatory

scheme on Stroman in Texas, and is thus related to Stroman’s

24

Wercinski, the court also declined to consider the

nature of Stroman’s allegations, lest the court

“confuse[] fairness with the merits of the case.”

Wercinski, 513 F.3d at 489. Consideration of the

nature of the allegations, however, is appropriate.”

In contrast to the Fifth Circuit, other circuits look

to the nature of the claims alleged in addressing

motions to dismiss for lack of personal jurisdiction.

For example, in Hannon, the First Circuit considered

the underlying allegations in plaintiffs § 1983 claim

and found they were “more analogous to a tort claim

than a contract claim... .” Hannon, 524 F.3d at 283.

The court found that personal jurisdiction comported

with due process because the claims arose from the

official’s contact with Massachusetts in that the

injury would not have occurred but for the official’s

transfer arrangements, the transfer to Massachusetts

constituted purposeful availment and jurisdiction was

claim. This Court should clarify the “arises out of or relates to”

test and provide needed guidance to the lower courts.

Indeed, the district court here found that the allegations

related directly to “fairness”:

On the one hand, [the states} argue that they may regulate

Stroman even though it is from a different state, even

though it conducts its business from a different state, and

even though it has only tenuous connections with their

states. On the other hand, they argue that this court does

not have jurisdiction over them because they are from

different states, because they conduct their business from

different states, and because they have only tenuous con-

nections with this state. They cannot have it both ways. ...

It’s a two way street. ... These aphorisms about double

standards and reciprocity are not often jurisprudential, but

they articulate an aspect of fair play and substantial

justice.

App. 43a (citation omitted).

25

otherwise reasonable. Id. at 282-85. See also

Kidwell, 577 F.2d at 1267 (court determined that

Idaho officials’ attempt to regulate a Texas company

caused plaintiff to undertake reasonably foreseeable

“efforts in Texas to comply with the Idaho state law”

and that such regulation had “substantial conse-

quences on important business plans” that satisfied

the “minimum contacts requirement.”).'" Likewise, in

conspiracy cases, courts examine whether the plain-

tiff has made a prima facie showing of the underlying

civil conspiracy to establish jurisdiction. See, e.g.,

Second Amendment Found. v. United States Confer-

ence of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001)

(holding that allegation that mayors discussed legis-

'’ Reversing Kidwell on venue grounds, the Court in Leroy

found that Great Western’s claim arose only in one district and

therefore venue was proper only in Idaho. Leroy, 443 U.S. at

186. The Court found the basis for Great Western’s claim was

Idaho’s enactment of the statute, Great Western’s filing was

reviewed in Idaho, the letter was sent from Idaho, the order was

entered in Idaho, and that any future action might be taken in

Idaho. Jd. at 185-86. The Court likewise found that Idaho

judges were better suited to construe the Idaho law. Id. at 186.

While the venue analysis is similar to an evaluation of personal

jurisdiction, the facts here are considerably different. Here,

respondents are not seeking to control the acquisition of a

corporation based within their states. They seek to regulate

transactions that are personal service contracts performed in a

different jurisdiction. Many of the transactions respondents

seek to regulate do not even involve residents of the respondent

states. In addition, respondents made additional demands on

Stroman in Texas and sought information from Texas state

regulatory authorities as well as impugned Stroman’s reputa-

tion with the Texas state agency responsible for regulation of

Stroman. Further, Stroman’s case does not involve interpreta-

tion of state statutes but whether those statutes can consti-

tutionally be enforced against Stroman in its interstate business

activities, a question of federal, not state, law.

26

lative and litigation strategies was insufficient to

show conspiracy and therefore court did not have

jurisdiction); see also Indianapolis Colts, Inc. v.

Metro. Baltimore Football Club Ltd. P’ship, 34 F.3d

410, 411 (7th Cir. 1994) (finding Maryland defendant

subject to jurisdiction in Indiana in a trademark

infringement action, reasoning that “[t]he Indianapo-

lis Colts use the trademarks they seek to defend in

this suit mainly in Indiana. If the trademarks are

impaired, as the suit alleges, the injury will be felt

mainly in Indiana.”) (emphasis added).

Moreover, there is no basis for the Fifth Circuit’s

dichotomy between personal jurisdiction and the

merits, where the merits of the claim and bases for

jurisdiction are intertwined. “[WJhere the issue of

jurisdiction is dependent upon a decision on the

merits. . . . the trial court should determine

jurisdiction by proceeding to a decision on the

merits” to avoid “making a summary decision on the

merits without the ordinary incidents of a trial... .”

Schramm v. Oakes, 352 F.2d 143, 149 (10th Cir.

1965) (dismissal for lack of personal jurisdiction in

automobile tort case improper because the appellate

court was “unable to say with any degree of legal

certainty that the appellants could not make out a

valid cause of action against one or more of the

appellees.”); see also Sandpiper Village Condo. Ass'n,

Inc. v. Louisiana-Pacific Corp., 428 F.3d 831, 840

n.12 (9th Cir. 2005) (declining to address whether

sufficient minimum contacts existed to exert juris-

diction over defendant because “[a]lthough personal

jurisdiction is ordinarily determined at the outset

as a threshold matter, in this case that issue is

inexorably intertwined with the merits.”); Delong

Equip. Co. v. Washington Mills Abrasive Co., 840

F.2d 843, 849, 852 (11th Cir. 1988) (finding that the

27

district court “failed to appreciate the significance” of

an alleged meeting involving defendant corporate

officer in Georgia and that personal jurisdiction over

the officer was appropriate because “if, on the merits,

[plaintiff] establishes illegal conduct by” the corpora-

tion, the officer could be held personally liable).

Refusing to consider the merits where the officials

are alleged to have imposed their regulatory author-

ity with the intent to affect contractual relations and

alter business practices in the forum state makes

even less sense given that private defendants may

be subject to jurisdiction when they “deliver|)

products into the stream of commerce with the expec-

tation that they will be purchased by consumers in

the forum State” and injury results. World-Wide

Volkswagen Corp. v. Woodson, 444 U.S. 286, 298

(1980); see also Nuovo Pignone, SpA v. Storman Asia

M/V, 310 F.3d 374, 381 (5th Cir. 2002) (applying

stream of commerce analysis to exercise jurisdiction

in tort and contract case over defendant which con-

” Similarly, the courts readily look to the underlying claim to

establish subject matter jurisdiction or determine whether the

suit is barred by the Eleventh Amendment. See, e.g., Land v.

Dollar, 330 U.S. 731, 738 (1947) (allegations that government

officials exceeded their authority as alleged in plaintiffs’ com-

plaint, if true, would determine jurisdiction, therefore court

could proceed to the merits); McBeath v. Inter-American Citizens

for Decency Comm., 374 F.2d 359, 363 (5th Cir. 1967) (reversing

dismissal of Sherman Act claim for lack of jurisdiction, noting

“t]he question of jurisdiction here, including the existence of a

conspiracy and a boycott or secondary boycott and their signifi-

cant effect on interstate commerce, is so inextricably connected

with the merits of the case itself that it was error for the court

to determine that it lacked jurisdiction” and that “[t)he alle-

gations of the complaint expressly allege a violation of the

Sherman Act... .”).

28

tracted with third party who brought defective crane

to forum state).

The situations here and in Wercinski are readily

distinguishable from cases where courts have de-

clined to exert jurisdiction over officials who have

merely sent state documents into the forum state in

the exercise of an administrative function. In Payne

uv. County of Kershaw, South Carolina, 2008 WL

2876592 (N.D. Tex. July 25, 2008), the district court

declined to find jurisdiction over South Carolina

court clerks who sent earnings withholdings notices

to plaintiffs employers in Texas pursuant to support

orders entered in South Carolina as part of plaintiff's

South Carolina divorce. Although the court called

the case “similar to” Wercinski, Payne, 2008 WL

2876592, at *5, Wercinski (and this case) arise from

the state officials’ attempts to unconstitutionally

impose their states’ regulatory schemes on the forum

jurisdiction and residents within it including Stroman

and its Texas clients, affecting contracts and practices

in the forum state. In contrast, Payne involves mere

ministerial acts by the state officials conducted as

part of their administrative duties after entry of a

court order in their home state. See also Hannon,

524 F.3d at 280-83 (finding personal jurisdiction in

Massachusetts over Pennsylvania department of cor-

rections head who effected prisoner’s transfer, but

declining to find jurisdiction over Pennsylvania prison

librarian who merely responded to requests plaintiff

made from Massachusetts).

29

II. CERTIORARI IS WARRANTED TO CON-

SIDER WHETHER A DUE PROCESS

TEST IS APPROPRIATE IN AN ACTION

AGAINST A STATE OFFICIAL IN A CASE

BROUGHT UNDER EX PARTE YOUNG

WHERE STATE JURISDICTIONAL CRI-

TERIA ARE MET.

In a case involving a claim under Ex parte Young,

there is a substantial question as to whether a due

process analysis is appropriate if the claim is, in

reality, one against the state. While the Court has

treated such claims as against an individual for

purposes of the Eleventh Amendment, it has not held

that the official is a person within the meaning of the

Fourteenth Amendment. See Pennhurst State Sch. &

Hosp., 465 U.S. at 105. Thus, in Kentucky v. Graham,

473 U.S. 159 (1985), the Court held that “[aJs long

as the government entity receives notice and an

opportunity to respond, an official-capacity suit is, in

all respects other than name, to be treated as a suit

against the entity. ... It is not a suit against the

official personally, for the real party in interest is the

entity.” Graham, 473 U.S. at 166; see also Will v.

Michigan Dep't of State Police, 491 U.S. 58, 71 (1989)

(noting “suit against a state official in his or her

official capacity is not a suit against the official but

rather is a suit against the official’s office.”); McCarthy

v. Hawkins, 381 F.3d 407, 414 (5th Cir. 2004) (“Only

for the purposes of the Eleventh Amendment are

‘official-capacity actions for prospective relief... not

treated as actions against the State.”) (quoting

Graham, 473 U.S. at 167 n.14) (alteration in original).

Personal jurisdiction, however, is “an individual

liberty interest” derived from the due process clause.

Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites

30

de Guinee, 456 U.S. 694, 702 (1982); see also Shelley

_v. Kraemer, 334 U.S. 1, 22 (1948) (the rights created

by the due process clause of the Fourteenth Amend-

ment are guaranteed to the individual and the rights

established are personal rights). Thus, while Young

permits a suit against the state in federal court by

treating the official as a person for purposes of the

Eleventh Amendment, once service has been obtained

pursuant to state law,’ there is no underlying ration-

ale justifying the application of any due process

analysis because a state has no due process rights.

See State of South Carolina v. Katzenbach, 383 U.S.

301, 323 (1966) (“The word ‘person’ in the context of

the Due Process Clause of the Fifth Amendment

cannot, by any reasonable mode of interpretation, be

expanded to encompass the States of the Union ... .”)

(citation omitted). In re Reserves Dev. Corp. v.

Browning, 64 B.R. 694 (W.D. Mo. 1986), rev’d on

other grounds, 821 F.2d 520 (8th Cir. 1987) (holding

that no minimum contacts analysis was required

prior to the bankruptcy court’s exercise of jurisdiction

over state officials of West Virginia because “a state

is not a ‘person’ under the 5th Amendment.”) (citing

Katzenbach, 383 U.S. at 323). In Browning, the court

noted that “a suit against defendants in their official

capacity is a suit against the state, and the Supreme

Court has held that a state does not have standing ‘as

parent of its citizens to invoke these constitutional

provisions against the Federal Government, the ulti-

mate parens patriae of every American citizen.”

* In Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., Ltd., 484

U.S. 97 (1987) the Court held that where the federal statute

does not provide for service of process, the federal courts must

look to the law of the forum state to determine whether personal

jurisdiction can be asserted over a defendant. Omni, 484 U.S. at

106.

31

Browning, 64 B.R. at 697(citing Katzenbach, 383 U.S.

at 324).”"

That no due process analysis should be required

makes even more sense when one considers the ease

with which the individual state office holder may be

substituted in the litigation, without any considera-

tion as to the individual’s actual contacts with the

forum. Fed. R. Civ. P. 25(d) provides that where an

officer in an official capacity case ceases to hold that

office during the pendency of the case, “[t]he officer’s

successor is automatically substituted as a party.”

(Emphasis added.) The individual officer’s role as a

mere placeholder in the litigation is more apparent

considering failure to name the successor in the suit

has no effect on the case. Id.; see also Wright &

Miller, 7C Fed. Prac. & Proc. Civ.3d § 1960 (“If ...

the parties and the court are unaware of the change

in the office, they can continue to litigate under the

name by which the action was commenced, and the

litigation will be entirely valid .... When and ifa

question is raised, the name can be changed, no

matter how much time has elapsed.”). Because the

personal jurisdiction requirement arises from “an

individual’s liberty interest in not being subject to

the binding judgments of a forum with which he has

established no meaningful ‘contacts, ties-or rela-

tions”, Burger King Corp., 471 U.S. at 471-72

(emphasis added) (citation omitted), there is no basis

for applying a due process test to the real party

in interest when it is a state, nor for bestowing

due process rights upon an “office”. But see U.S. uv.

1 It is reasonable to infer that the district court was alluding

to these principles when it observed that the court and the

respondents were part of the same government and jurisdiction

was proper based on the respondents’ exercise of nationwide

regulatory authority. See App. 40a.

32

Ferrara, 54 F.3d 825, 831-32 (D.C. Cir. 1995)

(concluding that if the official were treated as a state,

the language of the District of Columbia long-arm

statute would not permit jurisdiction).

Courts have raised the concern that permitting

suits against non-resident officials could subject them

to litigation nationwide. See, e.g., Wercinski, 513

F.3d at 487. Even if there were no due process

limitation on the exercise of personal jurisdiction,

however, it would not result in such exposure. Other

statutes and doctrines require a connection between

the official and the forum. See Leroy, 443 U.S. at

185-86; 28 U.S.C. § 1391(b) (limiting litigation to

those districts “in which a substantial part of the

events or omissions giving rise to the claim occurred

.”). Likewise, the doctrine of forum non

conveniens permits courts to decline to hear cases

that could be better decided elsewhere. See Piper

Aircraft Co. v. Reyno, 454 U.S. 235 (1981). Requiring

a personal jurisdiction analysis in a case to limit the

districts in which an Ex parte Young action can be

brought is unnecessary in light of these limitations.

CONCLUSION

The petition for a writ of certiorari should be

granted.

Respectfully submitted,

LESLIE A. POWELL

Counsel of Record

DIANA M. SCHOBEL

LAW OFFICES OF LESLIE A. POWELL

115 North Market Street

Frederick, Maryland 21701

(301) 668-7575

August 12, 2008 Counsel for Petitioner