Sample Answer: (Both Sections)
The court should grant Defendant’s Motion to Dismiss for Improper Venue.
Venue refers to the “geographic specification of the proper court”—the proper judicial district—for civil actions in federal district court. § 1390(a). A party can challenge venue as improper. FRCP 12(b)(3). Where a case is filed in the wrong district, the court “shall dismiss,” unless in the interest of justice it transfers to a proper district in which it could have been brought § 1406(a).
Section § 1391 governs venue generally. § 1391(a)(1).
§ 1391(b)(2)
A civil action may be brought in a judicial district in which a “substantial part of the events or omissions giving rise to the claim occurred.” § 1391(b)(2).A substantial part of events does not mean “all” or “majority” events. But it does require a substantial amount.
The Eastern District of Kentucky is not the locus of a substantial part of the events giving rise to Tobien’s claims. Two events occurred in this district—Tobien submitted insurance claims and received denials of those claims at his home. All other events—including the key events—occurred in the Southern District of Ohio. Nationwideprovided insurance coverage to a property there and Tobien suffered his injuries at that home. The letters notifying him of the coverage denials were sent on letterhead reflecting Nationwide’s headquarters in the Southern District of Ohio.
§ 1391(b)(1)
A civil action may be brought in a judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located. § 1391(b)(1). Nationwide is the sole defendant, therefore if it resides in this district, all defendants reside in the state in which the district is located. An entity—incorporated or otherwise—that is a defendant resides in any judicial district in which it is subject to the court’s personal jurisdiction with respect to that civil action. § 1391(c)(2). In a state with multiple districts, the defendant entity resides in any district with which its minimum contacts would be sufficient to establish personal jurisdiction if that district were a separate state. § 1391(d). The court performs a personal jurisdiction analysis targeting the district rather than the state as a whole.
Nationwide is not subject to personal jurisdiction on this action in the Eastern District of Kentucky.
A court exercises specific jurisdiction when the defendant’s contacts with the forum give rise or relate to the claim; it exercises general jurisdiction when a defendant is subject to suit in a forum on all claims, regardless of connection between in-state activities and the claim. Daimler. Courts exercise general jurisdiction where a defendant is “essentially at home” in the forum—a corporation’s principal place of business and state of incorporation and an unincorporated association’s principal place of business. Daimler. Nationwide is incorporated in Ohio and has its principal place of business in Columbus, in the Southern District of Ohio. It is not “essentially at home” in the Eastern District of Kentucky.
Courts exercise specific jurisdiction over an out-of-state defendant where the defendant has certain minimum contacts with the forum, those contacts give rise or relate to the claim, and maintenance of the suit does not offend traditional notions of fair play and substantial justice. Ford; Shoe.
Minimum Contacts
A defendant must, through her conduct, purposefully avails itself of the privileges of conducting activities in the state and receiving benefits and protections of the laws of the forum state, such that the defendant can reasonably anticipate being haled into court in that state. Nicastro; World Wide. The defendant’s contacts with the state must be intentional, not random or fortuitous, World Wide, and they must be the result of its conduct, not the conduct of the plaintiff or a third party. Walden.
A party purposefully avails by serving or seeking to serve the forum through sales, service, having sales people and employees, maintaining offices, and conducting other business activity in the forum. Nationwide does serve the Eastern District of Kentucky by providing insurance to persons and property in that district. It is registered to do business in Kentucky and thus in the Eastern District.
Give Rise or Relate to
Contacts give rise to a claim (or the claim arises from the contacts) when there is a causal relationship between the contacts and the claim—the contacts constitute the proximate cause of the claim or are part of the transaction giving rise to the claim. Ford. Contacts relate to the claim where there is a more attenuated relationship lacking that causal connection. Ford. This may include a longer, but-for chain between the contacts and the events giving rise to the action.
Nationwide’s business activities do not give rise to Tobien’s claims. Nationwide denied coverage under a policy it issued to a property outside the Eastern District of Kentucky for an incident arising outside the Eastern District of Kentucky.
While “relate to” allows a broader connection, it cannot extend to this case. Nationwide would have denied coverage on the Ohio incident even if it did not provide policies in this district. Unlike Ford, the relevant conduct (the issuance of the policy and the incident on which coverage was sought) did not occur in this district. Extending “relate to” to this case would resurrect the “doing business” theory of personal jurisdiction—that because Nationwide does substantial business in the Eastern District of Kentucky, it can be sued there on events occurring outside the district. Daimler and Good Year reject that theory.
Traditional notions of fair play and substantial justice
It must be reasonable, in a federal system, to make the defendant litigate in a foreign forum. Shoe. The court balances five factors. Burger King; World Wide. Where the plaintiff has purposefully availed, the defendant bears the burden of making a “compelling” case that jurisdiction is unreasonable and jurisdiction will be found unreasonable only in extraordinary cases. BK.
Given its activities in the Eastern District, Nationwide recognizes that it cannot make the necessary compelling case of unreasonableness. But because its contacts with the state do not give rise or relate to, it cannot be subject to specific jurisdiction. This district therefore is not a proper venue.
Because venue is not proper under § 1391(b)(1) or (b)(2) and because justice does not otherwise require, the court should dismiss the action for improper venue.
