World-Wide Volkswagen Corp. V. Woodson - Supreme Court Decision

Supreme Court Decision

The United States Supreme Court reversed the decision of the federal appeals court and agreed with World-Wide and Seaway that Oklahoma did not have jurisdiction over them.

The Due Process Clause of the 14th Amendment limits the power of a state court to exercise personal or in personam jurisdiction against a nonresident defendant. Due process requires that the defendant be given adequate notice of the suit. A state court may exercise personal jurisdiction over a nonresident only so long as there exist "minimum contacts" between the defendant and the forum state.

The court stated that the concept of minimum contacts can be seen to perform two related but distinguishable functions. It protects the defendant against the burdens of litigating in a distant or inconvenient forum and it acts to ensure that the States, through their courts, do not reach out beyond the limits imposed on them by their status as coequal sovereigns in a federal system.

The 14th Amendment provides protection against inconvenient litigation, typically described in terms of “reasonableness” or “fairness”: “Does not offend ‘traditional notions of fair play and substantial justice.” The relationship between the defendant and forum must be “reasonable.” The burden on the defendant is to be balanced against other factors, including the plaintiff’s interest in obtaining convenient and effective relief.

The due process clause “does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties or relations.” Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another state, even if the forum state has a strong interest in applying its law to the controversy, and even if the forum state is the most convenient location for litigation, the Due Process Clause may sometimes act to divest the state of its power to render a valid judgment.

The petitioners' contentions were deemed correct by the Supreme Court, which agreed that the two corporations did not have minimum contacts in Oklahoma, did not avail themselves of any of the privileges or benefits of Oklahoma law; Oklahoma therefore had no jurisdiction over the two companies.

The Robinson's counterclaim and Justice Brennan's dissenting opinion were based on foreseeability – a car sold in New York is mobile, and therefore it was foreseeable by World-Wide and Seaway that a car sold by them could subsequently lead to an injury in Oklahoma. The majority opinion of the Supreme Court rejected this argument, saying that foreseeability alone could not provide the basis for personal jurisdiction over a defendant and the two petitioning companies had no other contacts with Oklahoma.