GULF OIL CORPORATION v. GILBERT, (1947)

No. 93

Argued: Decided: March 10, 1947Mr. Justice JACKSON delivered the opinion of the Court.

The questions are whether the United States District Court has inherent power to dismiss a suit pursuant to the doctrine of forum non conveniens and, if so, whether that power was abused in this case.

The respondent-plaintiff brought this action in the Southern District of New York, but resides at Lynchburg, Virginia, where he operated a public warehouse. He alleges that the petitioner-defendant, in violation of the ordinances of Lynchburg, so carelessly handled a delivery of gasoline to his warehouse tanks and pumps as to cause [330 U.S. 501, 503] an explosion and fire which consumed the warehouse building to his damage of $41,889.10, destroyed merchandise and fixtures to his damage of $3,602. 40, caused injury to his business and profits of $20,038.27, and burned the property of customers in his custody under warehousing agreements to the extent of $300,000. He asks judgment of $365,529.77 with costs and disbursements, and interest from the date of fire. The action clearly is one in tort.

The petitioner-defendant is a corporation organized under the laws of Pennsylvania, qualified to do business in both Virginia and New York, and it has designated officials of each state as agents to receive service of process. When sued in New York, the defendant, invoking the doctrine of forum non conveniens, claimed that the appropriate place for trial is Virginia where the plaintiff lives and defendant does business, where all events in litigation took place, where most of the witnesses reside, and where both state and federal courts are available to plaintiff and are able to obtain jurisdiction of the defendant.

The case, on its merits, involves no federal question and was brought in the United States District Court solely because of diversity in citizenship of the parties. Because of the charact r of its jurisdiction and the holdings of and under Erie Railroad Co. v. Tompkins, 304 U.S. 64 , 58 S.Ct. 817, 114 A.L.R. 1487, the District Court considered that the law of New York as to forum non conveniens applied and that it required the case to be left to Virginia courts. 1 It therefore dismissed.

The Circuit Court of Appeals disagreed as to the applicability of New York law, took a restrictive view of the application of the entire doctrine in federal courts and, one judge dissenting, reversed. 2 The case is here on certiorari. 328 U.S. 830 , 66 S.Ct. 1123

[330 U.S. 501, 504] I.

It is conceded that the venue statutes of the United States permitted the plaintiff to commence his action in the Southern District of New York and empower that court to entertain it. 3 But that does not settle the question whether it must do so. Indeed the doctrine of forum non conveniens can never apply if there is absence of jurisdiction or mistake of venue.

This Court, in one form of words or another, has repeatedly recognized the existence of the power to decline jurisdiction in exceptional circumstances. As formulated by Mr. Justice Brandeis the rule is: 'Obviously, the proposition that a court having jurisdiction must exercise it, is not universally true; else the admiralty court could never decline jurisdiction on the ground that the litigation is between foreigners. Nor is it true of courts administering other systems of our law. Courts of equity and of law also occasionally decline, in the interest of justice, to exercise jurisdiction, where the suit is between aliens or nonresidents, or where for kindred reasons the litigation can more appropriately be conducted in a foreign tribunal.' Canada Malting Co., Ltd., v. Paterson Steamships, Ltd., 285 U.S. 413 422, 423, 52 S.Ct. 413, 415.

We later expressly said that a state court 'may in appropriate cases apply the doctrine of forum non conveniens.' Broderick v. Rosner, 294 U.S. 629, 643 , 55 S.Ct. 589, 592, 79 l.Ed. 1100, 100 A.L.R. 1133; Williams v. State of North Carolina, 317 U.S. 287 , 294, n. 5, 63 S.Ct. 207, 143 A.L.R. 1273. Even where federal rights binding on state courts under the Constitution are sought to be adjudged, this Court has sustained state courts in a refusal to entertain a litigation between a nonresident and a foreign corporation or between two foreign corporations. Douglas v. New York, N.H. & H.R. Co., 279 U.S. 377 , 49 S.Ct. 355; Anglo- American Provision Co. v. [330 U.S. 501, 505] Davis Provision Co. No. 1, 191 U.S. 373 , 24 S.Ct. 92. It has held the use of an inappropriate forum in one case an unconstitutional burden on interstate commerce. Davis v. Farmers' Co-operative Equity Co., 262 U.S. 312 , 43 S.Ct. 556. On substantially forum non conveniens grounds we have required federal courts to relinquish decision of cases within their jurisdiction where the court would have to participate in the administrative policy of a state. Railroad Commission of Texas v. Rowan & Nichols Oil Co., 311 U.S. 570 , 61 S.Ct. 343; Burford v. Sun Oil Co., 319 U.S. 315 , 63 S.Ct. 1098; but cf. Meredith v. Winter Haven, 320 U.S. 228 , 64 S.Ct. 7. And most recently we decided Williams v. Green Bay & Western R. Co., 326 U.S. 549 , 66 S.Ct. 284, in which the Court, without questioning the validity of the doctrine held it had been applied in that case without justification. 4

It is true that in cases under the Federal Employers' Liability Act, 45 U.S.C.A. 51 et seq., we have held that plaintiff's choice of a forum cannot be defeated on the basis of forum non conveniens. But this was because the special venue act under which those cases are brought was believed to require it. Baltimore & Ohio R. Co. v. Kepner, 314 U.S. 44 , 62 S.Ct. 6, 136 A.L.R. 1222; Miles v. Illinois Central R. Co., 315 U.S. 698 , 62 S.Ct. 827, 146 A.L.R. 1104. Those decisions do not purport to modify the doctrine as to other cases governed by the general venue statutes. [330 U.S. 501, 506] But the court below says that 'The Kepner case ... warned against refusal of jurisdiction in a particular case controlled by congressional act; here the only difference is that congressional act, plus judicial interpretation (under the Neirbo case), spells out the result.' 153 F.2d at page 885. The Federal Employers' Liability Act, however, which controlled decision in the Kepner case, specifically provides where venue may be had in any suit on a cause of action arising under that statute. What the court below refers to as 'congressional act, plus judicial interpretation,' is the general statute of venue in diversity suits, plus our decision that it gives the defendant 'a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election,' Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165, 168 , 60 S.Ct. 153, 154, 128 A.L.R. 1437. The Federal Employers' Liability Act, as interpreted by Kepner, increases the number of places where the defendant may be sued and makes him accept the plaintiff's choice. The Neirbo case is only a declaration that if the defendant, by filing consent to be sued, waives its privilege to be sued at its place of residence, it may be sued in the federal courts at the place where it has consented to be sued. But the general venue statute plus the Neirbo interpretation do not add up to a declaration that the court must respect the choice of the plaintiff, no matter what the type of suit or issues involved. The two taken together mean only that the defendant may consent to be sued, and it is proper for the federal court to take jurisdiction, not that the plaintiff's choice cannot be questioned. The defendant's consent to be sued extends only to give the court jurisdiction of the person; it assumes that the court, having the parties before it, will apply all the applicable law, including, in those cases where it is appropriate, its discretionary judgment as to whether the suit should be entertained. In all cases in which the doctrine of forum non conveniens comes into [330 U.S. 501, 507] play, it presupposes at least two forums in which the defendant is amenable to process; the doctrine furnishes criteria for choice between them.

II.

The principle of forum non conveniens is simply that a court may resist imposition upon its jurisdiction even when jurisdiction is authorized by the letter of a general venue statute. These statutes are drawn with a necessary generality and usually give a plaintiff a choice of courts, so that he may be quite sure of some place in which to pursue his remedy. But the open door may admit those who seek not simply justice but perhaps justice blended with some harassment. A plaintiff sometimes is under temptation to resort to a strategy of f rcing the trial at a most inconvenient place for an adversary, even at some inconvenience to himself.

Many of the states have met misuse of venue by investing courts with a discretion to change the place of trial on various grounds, such as the convenience of witnesses and the ends of justice. 5 The federal law contains no such express criteria to guide the district court in exercising its power. But the problem is a very old one affecting the administration of the courts as well as the rights of litigants, and both in England and in this country the common law worked out techniques and criteria for dealing with it. 6 [330 U.S. 501, 508] Wisely, it has not been attempted to catalogue the circumstances which will justify or require either grant or denial of remedy. The doctrine leaves much to the discretion of the court to which plaintiff resorts, and experience has not shown a judicial tendency to renounce one's own jurisdiction so strong as to result in many abuses. 7

If the combination and weight of factors requisite to given results are difficult to forecast or state, those to be considered are not difficult to name. An interest to be considered, and the one likely to be most pressed, is the private interest of the litigant. Important considerations are the relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. There may also be questions as to the enforcibility of a judgment if one is obtained. The court will weigh relative advantages and obstacles to fair trial. It is often said that the plaintiff may not, by choice of an inconvenient forum, 'vex,' 'harass,' or 'oppress' the defendant by inflicting upon him expense or trouble not necessary to his own right to pursue his remedy. 8 But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed.

Factors of public interest also have place in applying the doctrine. Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community [330 U.S. 501, 509] which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness, too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflict of laws, and in law foreign to itself.

The law of New York as to the discretion of a court to apply the doctrine of forum non conveniens, and as to the standards that guide discretion is, so far as here involved, the same as the federal rule. Murnan v. Wabash Ry. Co., 246 N.Y. 244, 158 N.E. 508, 54 A.L.R. 1522; Wedemann v. United States Trus Co. of New York, 258 N.Y. 315, 179 N.E. 712, 79 A.L.R. 1320; see Gregonis v. Philadelphia & Reading Coal & Iron Co ., 235 N.Y. 152, 139 N.E. 223, 32 A.L.R. 1. It would not be profitable, therefore, to pursue inquiry as to the source from which our rule must flow.

III.

Turning to the question whether this is one of those rather rare cases where the doctrine should be applied, we look first to the interests of the litigants.

The plaintiff himself is not a resident of New York, nor did any event connected with the case take place there, nor does any witness with the possible exception of experts live there. No one connected with that side of the case save counsel for the plaintiff resides there, and he has candidly told us that he was retained by insurance companies interested presumably because of subrogation. His affidavits and argument are devoted to controvering claims as to defendant's inconvenience rather than to showing that the present forum serves any convenience [330 U.S. 501, 510] of his own, with one exception. The only justification for trial in New York advanced here is one rejected by the district court and is set forth in the brief as follows: 'This Court can readily realize that an action of this type, involving as it does a claim for damages in an amount close to $ 400,000, is one which may stagger the imagination of a local jury which is surely unaccustomed to dealing with amounts of such a nature. Furthermore, removed from Lynchburg, the respondent will have an opportunity to try this case free from local influences and preconceived notions which make it difficult to procure a jury which has no previous knowledge of any of the facts herein.'

This unproven premise that jurors of New York live on terms of intimacy with $400,000 transactions is not an assumption we easily make. Nor can we assume that a jury from Lynchburg and vicinity would be 'staggered' by contemplating the value of a warehouse building that stood in their region, or of merchandise and fixtures such as were used there, nor are they likely to be staggered by the value of chattels which the people of that neighborhood put in storage. It is a strange argument on behalf of a Virginia plaintiff that the community which gave him patronage to make his business valuable is not capable of furnishing jurors who know the value of the goods they store, the building they are stored in, or the business their patronage creates. And there is no specification of any local influence, other than accurate knowledge of local conditiions, that would make a fair trial improbable. The net of this is that we cannot say the District Court was bound to entertain a provincial fear of the provincialism of a Virginia jury. That leaves the Virginia plaintiff without even a suggested reason for transporting this suit to New York. [330 U.S. 501, 511] Defendant points out that not only the plaintiff, but every person who participated in the acts charged to be negligent, resides in or near Lynchburg. It also claims a need to interplead an alleged independent contractor which made the delivery of the gasoline and which is a Virginia corporation domiciled in Lynchburg, that it cannot interplead in New York. There also are approximately 350 persons residing in and around Lynchburg who stored with plaintiff the goods for the damage to which he seeks to recover. The extent to which they have left the community since the fire and the number of them who will actually be needed is in dispute. The complaint alleges that defendant's conduct violated Lynchburg ordinances. Conditions are said to require proof by firemen and by many others. The learned and experienced trial judge was not unaware that litigants generally manage to try their cases with fewer witnesses than they predict in such motions as this. But he was justified in concluding that this trial is likely to be long and to involve calling many witnesses, and that Lynchburg, some 400 miles from New York, is the source of all proofs for either side with possible exception of e perts. Certainly to fix the place of trial at a point where litigants cannot compel personal attendance and may be forced to try their cases on deposition, is to create a condition not satisfactory to court, jury or most litigants. Nor is it necessarily cured by the statement of plaintiff's counsel that he will see to getting many of the witnesses to the trial and that some of them 'would be delighted to come to New York to testify.' There may be circumstances where such a proposal should be given weight. In others the offer may not turn out to be as generous as defendant or court might suppose it to be. Such matters are for the District Court to decide in exercise of a sound discretion.

The court likewise could well have concluded that the task of the trial court would be simplified by trial in Vir- [330 U.S. 501, 512] ginia. If trial was in a state court, it could apply its own law to events occurring there. If in federal court by reason of diversity of citizenship, the court would apply the law of its own state in which it is likely to be experienced. The course of adjudication in New York federal court might be beset with conflict of laws problems all avoided if the case is litigated in Virginia where it arose.

We are convinced that the District Court did not exceed its powers or the bounds of its discretion in dismissing plaintiff's complaint and remitting him to the courts of his own community. The Circuit Court of Appeals took too restrictive a view of the doctrine as approved by this Court. Its judgment is reversed.

REVERSED.

Mr. Justice REED and Mr. Justice BURTON dissent. They do not set out the factual reasons for their dissent since the Court's affirmance of Koster v. (American) Lumbermens Mutual casualty Co., 330 U.S. 518 , 67 S.Ct. 828, would control.

Mr. Justice BLACK (dissenting).

The defendant corporation is organized under the laws of Pennsylvania, but is qualified to do business and maintains an office in New York. Plaintiff is an individual residing and doing business in Virginia. The accident in which plaintiff alleges to have been damaged occurred in Lynchburg, Virginia. Plaintiff brought this action in the Federal District Court in New York. Section 11 of the Judiciary Act of 1789, 1 Stat. 78, carried over into the Judicial Code, 24, 28 U.S.C. 41(1), 28 U.S.C.A. 41(1), confers jurisdiction upon federal district courts of all actions at law between citizens of different states. The Court does not suggest that the federal district court in New York lacks jurisdiction under this statute or that the venue was improper in this case. 28 U.S.C. 112, 28 U. S.C.A. 112. Cf. Neirbo Co. v. [330 U.S. 501, 513] Bethlehem Shipbuilding Corp., 308 U.S. 165 , 60 S.Ct. 153, 128 A.L.R. 1437. But it holds that a district court may abdicate its jurisdiction when a defendant shows to the satisfaction of a district court that it would be more convenient and less vexatious for the defendant if the trial were held in another jurisdiction. Neither the venue statute nor the statute which has governed jurisdiction since 1789 contains any indication or implication that a federal district court, once satisfied that jurisdiction and venue requirements have been met, may decline to exercise its jurisdiction. Except in relation to the exercise of the extraordinary admiralty and equity powers of district courts, this Court has never before held contrary to the general principle that 'the courts of the United States are bound to proceed to judgment and to afford redress to suitors before them in every case to which their jurisdiction extends. They cannot abdicate their authority or duty in any case in favor of another jurisdiction.' Hyde v. Stone, 20 How. 170, 175, quoted with approval in Chicot County v. Sherwood, 148 U.S. 529, 534 , 13 S. Ct. 695, 697. See also Dennick v. Railroad Co., 103 U.S. 11 ; Baltimore & O.R. Co. v. Kepner, 314 U.S. 44 , 62 S.Ct. 6, 136 A.L.R. 1222; Evey v. Mexican Cent. R. Co., 5 Cir., 81 F. 294. 1 Never until today has this Court held, in actions for money damages for violations of common law or statutory rights, that a district court can abdicate its statutory duty to exercise its jurisdiction for the alleged convenience of the defendant to a lawsuit. Compare Slater v. Mexican National R. Co., 194 U.S. 120 , 24 S.Ct. 581.

For reasons peculiar to the special problems of admiralty and to the extraordinary remedies of equity, the courts exercising admiralty and equity powers have been per- [330 U.S. 501, 514] mitted at times to decline to exercise their jurisdiction. Canada Malting Co. v. Paterson S.S. Co., 285 U.S. 413 , 52 S.Ct. 413; Rogers v. Guaranty Trust Co., 288 U.S. 123 , 53 S.Ct. 295, 89 A.L.R. 720; cf. Williams v. Green Bay & W.R. Co., 326 U.S. 549 , 66 S.Ct. 284. This exception is rooted in the kind of relief which these courts grant and the kinds of problems which they solve. See Meredith v. Winter Haven, 320 U.S. 228, 235 , 64 S.Ct. 7, 11; Burford v. Sun Oil Co., 319 U.S. 315 , 333 n. 29, 63 S.Ct. 1098, 1107. Courts of equity developed to afford relief where a money judgment in the common law courts provided no adequate remedy for an injured person. 2 From the beginning of equitable jurisdiction up to now, the chancery courts have generally granted or withheld their special remedies at their discretion; and 'courts of admiralty ... act upon enlarged principles of equity.' O'Brien v. Miller, 168 U.S. 287, 297 , 18 S.Ct. 140, 144. But this Court has, on many occasions, severely restricted the discretion of district courts to decline to grant even the extraordinary equitable remedies. Meredith v. Winter Haven, supra, and cases there cited, 320 U.S. at pages 234, 235, 64 S.Ct. at page 11. Previously federal courts have not generally been allowed the broad and indefinite discretion to dispose even of equity cases solely on a trial court's judgment of the relative convenience of the forum for the parties themselves. For a major factor in these equity decisions has been the relative ability of the forum to shape and execute its equitable remedy. Cf. Rogers v. Guaranty Trust Co., supra. [330 U.S. 501, 515] No such discretionary authority to decline to decide a case, however, has, before today, been vested in federal courts in actions for money judgments deriving from statutes or the common law. 3 To engraft the doctrine of forum non conveniens upon the statutes fixing jurisdiction and proper venue in the district courts in such actions, seems to me to be far more than the mere filling in of the interstices of those statutes. 4

It may be that a statute should be passed authorizing the federal district courts to decline to try so-called common law cases according to the convenience of the parties. But whether there should be such a statute, and determination of its scope and the safeguards which should surround it, are, in my judgment, questions of policy which Congress should decide. There are strong arguments presented by the Court in its opinion why federal courts exercising their common law jurisdiction should have the discretionary powers which equity courts have always possessed in dispensing equitable relief. I think equally strong arguments could be advanced to show that they should not. For any individual or corporate defendant who does part of his business in states other than the one in which he [330 U.S. 501, 516] is sued will almost invariably be put to some inconvenience to defend himself. It will be a poorly represented multistate defendant who cannot produce substantial evidence and good reasons fitting the rule now adopted by this Court tending to establish that the forum of action against him is most inconvenient. The Court's new rule will thus clutter the very threshold of the federal courts with a preliminary trial of fact concerning the relative convenience of forums. The preliminary disposition of this factual question will, I believe, produce the very kind of uncertainty, confusion, and hardship which stalled and handicapped persons seeking compensation for maritime injuries following this Court's decision in Southern Pacific Co. v. Jensen, 244 U.S. 205 , 37 S.Ct. 524, L.R.A. 1918C, 451, Ann.Cas. 1917E, 900. The broad and indefinite discretion left to federal courts to decide the question of convenience from the welter of factors which are relevant to such a judgment, will inevitably produce a complex of close and indistinguishable decisions from which accurate prediction of the proper forum will become difficult, if not impossible. Yet plaintiffs will be asked 'to determine with certainty before bringing their actions that factual question over which courts regularly divide among themselves and within their own membership. As penalty for error, the injured individual may not only suffer serious financial loss through the delay and expense of litigation, but discover that his claim has been barred by the statute of limitations in the proper forum while he was erroneously pursuing it elsewhere.' Davis v. Department of Labor & Industries, 317 U.S. 249, 254 , 63 S.Ct. 225, 228.

This very case illustrates the hazards of delay. It must be begun anew in another forum after the District Court, the Circuit Court of Appeals, and now this Court, have has their time-consuming say as to the relative convenience of the forum in which the plaintiff chose to seek redress. Whether the statute of limitations has run [330 U.S. 501, 517] against the plaintiff, we do not know. The convenience which the individual defendant will enjoy from the Court's new rule of forum non conveniens in law actions may be thought to justify its inherent delays, uncertainties, administrative complications and hardships. But in any event, Congress has not yet said so; and I do not think that this Court should, 150 years after the passage of the Judiciary A t, fill in what it thinks is a deficiency in the deliberate policy which Congress adopted. 5 Whether the doctrine of forum non conveniens is good or bad, I should wait for Congress to adopt it.

TRAVELERS HEALTH ASSN. v. VIRGINIA, (1950)

No. 76

Argued: November 15, 1949 Decided: June 5, 1950

In a proceeding under 6 of the Virginia "Blue Sky Law," the State Corporation Commission ordered an Association, located in Nebraska and engaged in the mail-order health insurance business, and its treasurer (appellants here) to cease and desist from further offerings or sales of certificates of insurance to Virginia residents until the Association had complied with the Act by furnishing information as to its financial condition, consenting to suit against it by service of process on the Secretary of the Commonwealth, and obtaining a permit. Notice of the proceeding was served on appellants by registered mail, as authorized by 6 when other forms of service are unavailable. They appeared specially, challenged the jurisdiction of the State, and moved to quash the service of summons. On recommendations from Virginia members, the Association for many years had been issuing insurance certificates to residents of Virginia, and it had approximately 800 members there. It had caused claims for losses to be investigated, and the Virginia courts were open to it for the enforcement of obligations of certificate holders. Held:

1. The State has power to issue a cease and desist order to enforce at least the requirement that the Association consent to suit against it by service of process on the Secretary of the Commonwealth. Pp. 646-647.

2. The contacts and ties of appellants with Virginia residents, together with that State's interest in faithful observance of the certificate obligations, justify subjecting appellants to cease and desist proceedings under 6. Pp. 647-648.

3. Virginia's subjection of the Association to the jurisdiction of the State Commission in a 6 proceeding is consistent with fair play and substantial justice, and is not offensive to the Due Process Clause of the Fourteenth Amendment. P. 649.

4. The power of the State to subject the Association to the jurisdiction of the State Commission and to authorize a cease and [339 U.S. 643, 644] desist order under 6 is not vitiated by the fact that business activities carried on outside of the State are affected. P. 650.

5. Service of process on appellants by registered mail did not violate the requirements of due process. Pp. 650-651.

188 Va. 877, 51 S. E. 2d 263, affirmed.

An order of the Virginia Corporation Commission requiring appellants to cease and desist from offering and issuing, without a permit, certificates of insurance to residents of the State, was affirmed by the Supreme Court of Appeals. 188 Va. 877, 51 S. E. 2d 263. On appeal to this Court, affirmed, p. 651.

Moses G. Hubbard, Jr. argued the cause for appellants. With him on the brief was Thomas B. Gay.

Walter E. Rogers, Assistant Attorney General of Virginia, argued the cause for appellee. With him on the brief was J. Lindsay Almond, Jr., Attorney General.

A brief supporting appellee was filed as amici curiae by Nathaniel L. Goldstein, Attorney General, Wendell P. Brown, Solicitor General, and John C. Crary, Jr., Assistant Attorney General, for the State of New York; William L. Phinney, Attorney General, for the State of New Hampshire; and Hall Hammond, Attorney General, for the State of Maryland.

MR. JUSTICE BLACK delivered the opinion of the Court.

In an effort to protect its citizens from "unfairness, imposition or fraud" in sales of certificates of insurance and other forms of securities, the Virginia "Blue Sky Law" requires those selling or offering such securities to obtain a permit from the State Corporation Commission. 1 Applicants for permits must meet comprehensive conditions: they must, for example, provide detailed information [339 U.S. 643, 645] concerning their solvency, and must agree that suits can be filed against them in Virginia by service of process on the Secretary of the Commonwealth. 2

While violation of the Act is a misdemeanor punishable by criminal sanctions, 6 provides another method for enforcement. After notice and a hearing "on the merits," the State Corporation Commission is authorized to issue a cease and desist order restraining violations of the Act. The section also provides for service by registered mail where other types of service are unavailable "because the offering is by advertisement and/or solicitation through periodicals, mail, telephone, telegraph, radio, or other means of communication from beyond the limits of the State . . . ." The highest court of Virginia rejected contentions that this section violates constitutional requirements of due process, and the case is properly here on appeal under 28 U.S.C. 1257 (2).

In this case cease and desist proceedings under 6 were instituted by the State Corporation Commission against Travelers Health Association and against R. E. Pratt, as treasurer of the Association and in his personal capacity. Having received notice by registered mail only, they appeared "specially" for "the sole purpose of objecting to the alleged jurisdiction of the Commonwealth of Virginia and of its State Corporation Commission, and of moving to set aside and quash service of summons . . . ." The agreed stipulation of facts and certain exhibits offered by the state can be summarized as follows:

The appellant Travelers Health Association was incorporated in Nebraska as a nonprofit membership association in 1904. Since that time its only office has been located in Omaha, from which it has conducted a mailorder health insurance business. New members pay an initiation fee and obligate themselves to pay periodic [339 U.S. 643, 646] assessments at the Omaha office. The funds so collected are used for operating expenses and sick benefits to members. The Association has no paid agents; its new members are usually obtained through the unpaid activities of those already members, who are encouraged to recommend the Association to friends and submit their names to the home office. The appellant Pratt in Omaha mails solicitations to these prospects. He encloses blank applications which, if signed and returned to the home office with the required fee, usually result in election of applicants as members. Certificates are then mailed, subject to return within 10 days "if not satisfactory." Travelers has solicited Virginia members in this manner since 1904, and has caused many sick benefit claims to be investigated. When these proceedings were instituted, it had approximately 800 Virginia members.

The Commission, holding that the foregoing facts supported the state's power to act in 6 proceedings, overruled appellants' objection to jurisdiction and their motion to quash service. The Association and its treasurer were ordered to cease and desist from further solicitations or sales of certificates to Virginia residents "through medium of any advertisement from within or from without the State, and/or through the mails or otherwise, by intra- or inter-state communication, . . . unless and until" it obtained authority in accordance with the "Blue Sky Law." This order was affirmed by the Virginia Court of Appeals. 188 Va. 877, 882, 51 S. E. 2d 263, 271.

Appellants do not question the validity of the Virginia law "to the extent that it provides that individual and corporate residents of other states shall not come into the State for the purpose of doing business there without first submitting to the regulatory authority of the State." As to such state power see, e. g., Hall v. Geiger-Jones Co., 242 U.S. 539 . Their basic contention is that all their activities take place in Nebraska, and that consequently [339 U.S. 643, 647] Virginia has no power to reach them in cease and desist proceedings to enforce any part of its regulatory law. We cannot agree with this general due process objection, for we think the state has power to issue a "cease and desist order" enforcing at least that regulatory provision requiring the Association to accept service of process by Virginia claimants on the Secretary of the Commonwealth.

Appellants' chief reliance for the due process contention is on Minnesota Assn. v. Benn, 261 U.S. 140 . There a Minnesota association obtained members in Montana by the same mail solicitation process used by Travelers to get Virginia members. The certificates issued to Montana members also reserved the right to investigate claims, although the Court pointed out that Benn's claim had not been investigated. This Court held that since the contracts were "executed and to be performed" in Minnesota, the Association was not "doing business" in Montana and therefore could not be sued in Montana courts unless "consent" to Montana suits could be implied. The Court found the circumstances under which the insurance transactions took place insufficient to support such an implication.

But where business activities reach out beyond one state and create continuing relationships and obligations with citizens of another state, courts need not resort to a fictional "consent" in order to sustain the jurisdiction of regulatory agencies in the latter state. And in considering what constitutes "doing business" sufficiently to justify regulation in the state where the effects of the "business" are felt, the narrow grounds relied on by the Court in the Benn case cannot be deemed controlling.

In Osborn v. Ozlin, 310 U.S. 53, 62 , we recognized that a state has a legitimate interest in all insurance policies protecting its residents against risks, an interest which the state can protect even though the "state action may have repercussions beyond state lines . . . ." And in Hoopeston [339 U.S. 643, 648] Canning Co. v. Cullen, 318 U.S. 313, 316 , we rejected the contention, based on the Benn case among others, that a state's power to regulate must be determined by a "conceptualistic discussion of theories of the place of contracting or of performance." Instead we accorded "great weight" to the "consequences" of the contractual obligations in the state where the insured resided and the "degree of interest" that state had in seeing that those obligations were faithfully carried out. And in International Shoe Co. v. Washington, 326 U.S. 310, 316 , this Court, after reviewing past cases, concluded: "due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'"

Measured by the principles of the Osborn, Hoopeston and International Shoe cases, the contacts and ties of appellants with Virginia residents, together with that state's interest in faithful observance of the certificate obligations, justify subjecting appellants to cease and desist proceedings under 6. The Association did not engage in mere isolated or short-lived transactions. Its insurance certificates, systematically and widely delivered in Virginia following solicitation based on recommendations of Virginians, create continuing obligations between the Association and each of the many certificate holders in the state. Appellants have caused claims for losses to be investigated and the Virginia courts were available to them in seeking to enforce obligations created by the group of certificates. See International Shoe Co. v. Washington, supra, at 320.

Moreover, if Virginia is without power to require this Association to accept service of process on the Secretary of the Commonwealth, the only forum for injured certificate holders might be Nebraska. Health benefit [339 U.S. 643, 649] claims are seldom so large that Virginia policyholders could afford the expense and trouble of a Nebraska law suit. In addition, suits on alleged losses can be more conveniently tried in Virginia where witnesses would most likely live and where claims for losses would presumably be investigated. Such factors have been given great weight in applying the doctrine of forum non conveniens. See Gulf Oil Co. v. Gilbert, 330 U.S. 501, 508 . And prior decisions of this Court have referred to the unwisdom, unfairness and injustice of permitting policyholders to seek redress only in some distant state where the insurer is incorporated. 3 The Due Process Clause does not forbid a state to protect its citizens from such injustice.

There is, of course, one method by which claimants could recover from appellants in Virginia courts without the aid of substituted service of process: certificate holders in Virginia could all be garnished to the extent of their obligations to the Association. See Huron Corp. v. Lincoln Co., 312 U.S. 183, 193 . While such an indirect procedure would undeniably be more troublesome to claimants than the plan adopted by the state in its "Blue Sky Law," it would clearly be even more harassing to the Association and its Virginia members. Metaphysical concepts of "implied consent" and "presence" in a state should not be solidified into a constitutional barrier against Virginia's simple, direct and fair plan for service of process on the Secretary of the Commonwealth.

We hold that Virginia's subjection of this Association to the jurisdiction of that State's Corporation Commission in a 6 proceeding is consistent with "fair play and substantial justice," and is not offensive to the Due Process Clause. [339 U.S. 643, 650]

Appellants also contend that 6 as here applied violates due process because the Commission order attempts to "destroy or impair" their right to make contracts in Nebraska with Virginia residents. Insofar as this contention can be raised in a special appearance merely to contest jurisdiction, it is essentially the same as the due process issue discussed above. For reasons just given, Virginia has power to subject Travelers to the jurisdiction of its Corporation Commission, and its cease and desist provisions designed to accomplish this purpose "can not be attacked merely because they affect business activities which are carried on outside the state." Hoopeston Canning Co. v. Cullen, supra, 320-321. See also Osborn v. Ozlin, 310 U.S. 53, 62 . These two opinions make clear that Allgeyer v. Louisiana, 165 U.S. 578 , requires no different result.

Appellants concede that in the Osborn and Hoopeston cases we sustained state laws providing protective standards for policyholders in those states, even though compliance with those standards by the insurance companies could have repercussions on similar out-of-state contracts. It is argued, however, that those cases are distinguishable because they both involved companies which were "licensed to do business in the state of the forum and were actually doing business within the state . . . ." But while Hoopeston Canning Co. had done business in New York under an old law, it brought the case here to challenge certain provisions of a new licensing law with which it had to comply if it was to do business there in the future. Thus it was seeking the same kind of relief that appellants seek here, and for the same general purpose. What we there said as to New York's power is equally applicable to Virginia's power here.

It is also suggested that service of process on appellants by registered mail does not meet due process requirements. [339 U.S. 643, 651] What we have said answers this contention insofar as it alleges a lack of state jurisdiction because appellants were served outside Virginia. If service by mail is challenged as not providing adequate and reasonable notice, the contention has been answered by International Shoe Co. v. Washington, supra, 320-321. See also Mullane v. Central Hanover Bank, 339 U.S. 306 .

The due process questions we have already discussed are the only alleged errors relied on in appellants' brief, 4 and appellants' special appearance only challenged state jurisdiction and the service of process. We therefore have no occasion to discuss the scope of the Commission's order, or the methods by which the state might attempt to enforce it. 5

Affirmed.

WORLD-WIDE VOLKSWAGEN CORP. v. WOODSON, (1980)

No. 78-1078

Argued: October 3, 1979 Decided: January 21, 1980

A products-liability action was instituted in an Oklahoma state court by respondents husband and wife to recover for personal injuries sustained in Oklahoma in an accident involving an automobile that had been purchased by them in New York while they were New York residents and that was being driven through Oklahoma at the time of the accident. The defendants included the automobile retailer and its wholesaler (petitioners), New York corporations that did no business in Oklahoma. Petitioners entered special appearances, claiming that Oklahoma's exercise of jurisdiction over them would offend limitations on the State's jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment. The trial court rejected petitioners' claims, and they then sought, but were denied, a writ of prohibition in the Oklahoma Supreme Court to restrain respondent trial judge from exercising in personam jurisdiction over them.

Held:

Consistently with the Due Process Clause, the Oklahoma trial court may not exercise in personam jurisdiction over petitioners. Pp. 291-299.

(a) A state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, 326 U.S. 310 . The defendant's contacts with the forum State must be such that maintenance of the suit does not offend traditional notions of fair play and substantial justice, id., at 316, and the relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation to defend the particular suit which is brought there," id., at 317. 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." Id., at 319. Pp. 291-294.

(b) Here, there is a total absence in the record of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma; they close no sales and perform no services there, avail [444 U.S. 286, 287] themselves of none of the benefits of Oklahoma law, and solicit no business there either through salespersons or through advertising reasonably calculated to reach that State. Nor does the record show that they regularly sell cars to Oklahoma residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. Although it is foreseeable that automobiles sold by petitioners would travel to Oklahoma and that the automobile here might cause injury in Oklahoma, "foreseeability" alone is not a sufficient benchmark for personal jurisdiction under the Due Process Clause. The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State, but rather is that the defendant's conduct and connection with the forum are such that he should reasonably anticipate being haled into court there. Nor can jurisdiction be supported on the theory that petitioners earn substantial revenue from goods used in Oklahoma. Pp. 295-299.

585 P.2d 351, reversed.

MR. JUSTICE WHITE delivered the opinion of the Court.

The issue before us is whether, consistently with the Due Process Clause of the Fourteenth Amendment, an Oklahoma court may exercise in personam jurisdiction over a nonresident automobile retailer and its wholesale distributor in a products-liability action, when the defendants' only connection with Oklahoma is the fact that an automobile sold in New York to New York residents became involved in an accident in Oklahoma. [444 U.S. 286, 288]

I

Respondents Harry and Kay Robinson purchased a new Audi automobile from petitioner Seaway Volkswagen, Inc. (Seaway), in Massena, N. Y., in 1976. The following year the Robinson family, who resided in New York, left that State for a new home in Arizona. As they passed through the State of Oklahoma, another car struck their Audi in the rear, causing a fire which severely burned Kay Robinson and her two children. 1

The Robinsons 2 subsequently brought a products-liability action in the District Court for Creek County, Okla., claiming that their injuries resulted from defective design and placement of the Audi's gas tank and fuel system. They joined as defendants the automobile's manufacturer, Audi NSU Auto Union Aktiengesellschaft (Audi); its importer, Volkswagen of America, Inc. (Volkswagen); its regional distributor, petitioner World-Wide Volkswagen Corp. (World-Wide); and its retail dealer, petitioner Seaway. Seaway and World-Wide entered special appearances, 3 claiming that Oklahoma's exercise of jurisdiction over them would offend the limitations on the State's jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment. 4

The facts presented to the District Court showed that World-Wide is incorporated and has its business office in New [444 U.S. 286, 289] York. It distributes vehicles, parts, and accessories, under contract with Volkswagen, to retail dealers in New York, New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorporated and has its place of business in New York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as respondents' counsel conceded at oral argument, Tr. of Oral Arg. 32, there was no showing that any automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present case.

Despite the apparent paucity of contacts between petitioners and Oklahoma, the District Court rejected their constitutional claim and reaffirmed that ruling in denying petitioners' motion for reconsideration. 5 Petitioners then sought a writ of prohibition in the Supreme Court of Oklahoma to restrain the District Judge, respondent Charles S. Woodson, from exercising in personam jurisdiction over them. They renewed their contention that, because they had no "minimal contacts," App. 32, with the State of Oklahoma, the actions of the District Judge were in violation of their rights under the Due Process Clause.

The Supreme Court of Oklahoma denied the writ, 585 P.2d 351 (1978), 6 holding that personal jurisdiction over petitioners was authorized by Oklahoma's "long-arm" statute, [444 U.S. 286, 290] Okla. Stat., Tit. 12, 1701.03 (a) (4) (1971). 7 Although the court noted that the proper approach was to test jurisdiction against both statutory and constitutional standards, its analysis did not distinguish these questions, probably because 1701.03 (a) (4) has been interpreted as conferring jurisdiction to the limits permitted by the United States Constitution. 8 The court's rationale was contained in the following paragraph, 585 P.2d, at 354:

"In the case before us, the product being sold and distributed by the petitioners is by its very design and purpose so mobile that petitioners can foresee its possible use in Oklahoma. This is especially true of the distributor, who has the exclusive right to distribute such automobile in New York, New Jersey and Connecticut. The evidence presented below demonstrated that goods sold and distributed by the petitioners were used in the State of Oklahoma, and under the facts we believe it reasonable to infer, given the retail value of the automobile, that the petitioners derive substantial income from automobiles which from time to time are used in the State of Oklahoma. This being the case, we hold that under the facts presented, the trial court was justified in concluding [444 U.S. 286, 291] that the petitioners derive substantial revenue from goods used or consumed in this State."

We granted certiorari, 440 U.S. 907 (1979), to consider an important constitutional question with respect to state-court jurisdiction and to resolve a conflict between the Supreme Court of Oklahoma and the highest courts of at least four other States. 9 We reverse.

II

The Due Process Clause of the Fourteenth Amendment limits the power of a state court to render a valid personal judgment against a nonresident defendant. Kulko v. California Superior Court, 436 U.S. 84, 91 (1978). A judgment rendered in violation of due process is void in the rendering State and is not entitled to full faith and credit elsewhere. Pennoyer v. Neff, 95 U.S. 714, 732 -733 (1878). Due process requires that the defendant be given adequate notice of the suit, Mullane v. Central Hanover Trust Co., 339 U.S. 306, 313 -314 (1950), and be subject to the personal jurisdiction of the court, International Shoe Co. v. Washington, 326 U.S. 310 (1945). In the present case, it is not contended that notice was inadequate; the only question is whether these particular petitioners were subject to the jurisdiction of the Oklahoma courts.

As has long been settled, and as we reaffirm today, a state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist "minimum contacts" between the defendant and the forum State. International Shoe Co. v. Washington, supra, at 316. The concept of minimum contacts, in turn, can be seen to perform two related, but [444 U.S. 286, 292] 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 protection against inconvenient litigation is typically described in terms of "reasonableness" or "fairness." We have said that the defendant's contacts with the forum State must be such that maintenance of the suit "does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, supra, at 316, quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). The relationship between the defendant and the forum must be such that it is "reasonable . . . to require the corporation to defend the particular suit which is brought there." 326 U.S., at 317 . Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957); the plaintiff's interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, at 92, at least when that interest is not adequately protected by the plaintiff's power to choose the forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211 , n. 37 (1977); the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court, supra, at 93, 98.

The limits imposed on state jurisdiction by the Due Process Clause, in its role as a guarantor against inconvenient litigation, have been substantially relaxed over the years. As we noted in McGee v. International Life Ins. Co., supra, at 222-223 [444 U.S. 286, 293] this trend is largely attributable to a fundamental transformation in the American economy:

"Today many commercial transactions touch two or more States and may involve parties separated by the full continent. With this increasing nationalization of commerce has come a great increase in the amount of business conducted by mail across state lines. At the same time modern transportation and communication have made it much less burdensome for a party sued to defend himself in a State where he engages in economic activity."

The historical developments noted in McGee, of course, have only accelerated in the generation since that case was decided.

Nevertheless, we have never accepted the proposition that state lines are irrelevant for jurisdictional purposes, nor could we, and remain faithful to the principles of interstate federalism embodied in the Constitution. The economic interdependence of the States was foreseen and desired by the Framers. In the Commerce Clause, they provided that the Nation was to be a common market, a "free trade unit" in which the States are debarred from acting as separable economic entities. H. P. Hood & Sons, Inc. v. Du Mond, 336 U.S. 525, 538 (1949). But the Framers also intended that the States retain many essential attributes of sovereignty, including, in particular, the sovereign power to try causes in their courts. The sovereignty of each State, in turn, implied a limitation on the sovereignty of all of its sister States - a limitation express or implicit in both the original scheme of the Constitution and the Fourteenth Amendment.

Hence, even while abandoning the shibboleth that "[t]he authority of every tribunal is necessarily restricted by the territorial limits of the State in which it is established," Pennoyer v. Neff, supra, at 720, we emphasized that the reasonableness of asserting jurisdiction over the defendant must be assessed "in the context of our federal system of government," [444 U.S. 286, 294] International Shoe Co. v. Washington, 326 U.S., at 317 , and stressed that the Due Process Clause ensures not only fairness, but also the "orderly administration of the laws," id., at 319. As we noted in Hanson v. Denckla, 357 U.S. 235, 250 -251 (1958):

"As technological progress has increased the flow of commerce between the States, the need for jurisdiction over nonresidents has undergone a similar increase. At the same time, progress in communications and transportation has made the defense of a suit in a foreign tribunal less burdensome. In response to these changes, the requirements for personal jurisdiction over nonresidents have evolved from the rigid rule of Pennoyer v. Neff, 95 U.S. 714 , to the flexible standard of International Shoe Co. v. Washington, 326 U.S. 310 . But it is a mistake to assume that this trend heralds the eventual demise of all restrictions on the personal jurisdiction of state courts. [Citation omitted.] Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States."

Thus, 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." International Shoe Co. v. Washington, supra, at 319. 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; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment. Hanson v. Denckla, supra, at 251, 254. [444 U.S. 286, 295]

III

Applying these principles to the case at hand, 10 we find in the record before us a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. Petitioners carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma.

It is argued, however, that because an automobile is mobile by its very design and purpose it was "foreseeable" that the Robinsons' Audi would cause injury in Oklahoma. Yet "foreseeability" alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause. In Hanson v. Denckla, supra, it was no doubt foreseeable that the settlor of a Delaware trust would subsequently move to Florida and seek to exercise a power of appointment there; yet we held that Florida courts could not constitutionally [444 U.S. 286, 296] exercise jurisdiction over a Delaware trustee that had no other contacts with the forum State. In Kulko v. California Superior Court, 436 U.S. 84 (1978), it was surely "foreseeable" that a divorced wife would move to California from New York, the domicile of the marriage, and that a minor daughter would live with the mother. Yet we held that California could not exercise jurisdiction in a child-support action over the former husband who had remained in New York.

If foreseeability were the criterion, a local California tire retailer could be forced to defend in Pennsylvania when a blowout occurs there, see Erlanger Mills, Inc. v. Cohoes Fibre Mills, Inc., 239 F.2d 502, 507 (CA4 1956); a Wisconsin seller of a defective automobile jack could be haled before a distant court for damage caused in New Jersey, Reilly v. Phil Tolkan Pontiac, Inc., 372 F. Supp. 1205 (NJ 1974); or a Florida soft-drink concessionaire could be summoned to Alaska to account for injuries happening there, see Uppgren v. Executive Aviation Services, Inc., 304 F. Supp. 165, 170-171 (Minn. 1969). Every seller of chattels would in effect appoint the chattel his agent for service of process. His amenability to suit would travel with the chattel. We recently abandoned the outworn rule of Harris v. Balk, 198 U.S. 215 (1905), that the interest of a creditor in a debt could be extinguished or otherwise affected by any State having transitory jurisdiction over the debtor. Shaffer v. Heitner, 433 U.S. 186 (1977). Having interred the mechanical rule that a creditor's amenability to a quasi in rem action travels with his debtor, we are unwilling to endorse an analogous principle in the present case. 11 [444 U.S. 286, 297]

This is not to say, of course, that foreseeability is wholly irrelevant. But the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. See Kulko v. California Superior Court, supra, at 97-98; Shaffer v. Heitner, 433 U.S., at 216 ; and see id., at 217-219 (STEVENS, J., concurring in judgment). The Due Process Clause, by ensuring the "orderly administration of the laws," International Shoe Co. v. Washington, 326 U.S., at 319 , gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.

When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," Hanson v. Denckla, 357 U.S., at 253 , it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Hence if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not [444 U.S. 286, 298] exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State. Cf. Gray v. American Radiator & Standard Sanitary Corp., 22 Ill. 2d 432, 176 N. E. 2d 761 (1961).

But there is no such or similar basis for Oklahoma jurisdiction over World-Wide or Seaway in this case. Seaway's sales are made in Massena, N. Y. World-Wide's market, although substantially larger, is limited to dealers in New York, New Jersey, and Connecticut. There is no evidence of record that any automobiles distributed by World-Wide are sold to retail customers outside this tristate area. It is foreseeable that the purchasers of automobiles sold by World-Wide and Seaway may take them to Oklahoma. But the mere "unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla, supra, at 253.

In a variant on the previous argument, it is contended that jurisdiction can be supported by the fact that petitioners earn substantial revenue from goods used in Oklahoma. The Oklahoma Supreme Court so found, 585 P.2d, at 354-355, drawing the inference that because one automobile sold by petitioners had been used in Oklahoma, others might have been used there also. While this inference seems less than compelling on the facts of the instant case, we need not question the court's factual findings in order to reject its reasoning.

This argument seems to make the point that the purchase of automobiles in New York, from which the petitioners earn substantial revenue, would not occur but for the fact that the automobiles are capable of use in distant States like Oklahoma. Respondents observe that the very purpose of an automobile is to travel, and that travel of automobiles sold by petitioners is facilitated by an extensive chain of Volkswagen service centers throughout the country, including some in Oklahoma. 12 [444 U.S. 286, 299] However, financial benefits accruing to the defendant from a collateral relation to the forum State will not support jurisdiction if they do not stem from a constitutionally cognizable contact with that State. See Kulko v. California Superior Court, 436 U.S., at 94 -95. In our view, whatever marginal revenues petitioners may receive by virtue of the fact that their products are capable of use in Oklahoma is far too attenuated a contact to justify that State's exercise of in personam jurisdiction over them.

Because we find that petitioners have no "contacts, ties, or relations" with the State of Oklahoma, International Shoe Co. v. Washington, supra, at 319, the judgment of the Supreme Court of Oklahoma is

Reversed.

HERBERT G. SCHMIDT, A MINOR, BY HIS MOTHER AND NATURAL GUARDIAN, MATIE T. SCHMIDT, v. DRISCOLL HOTEL, INC., d.b.a. THE HOOK-EM-COW BAR AND CAFE.

April 12, 1957.

THOMAS GALLAGHER, JUSTICE.

Plaintiff, Herbert G. Schmidt, a minor, instituted this action by his mother and natural guardian, Matie T. Schmidt, against the Driscoll Hotel, Inc., doing business as The Hook-Em-Cow Bar and Cafe in South St. Paul, for damages alleged to have resulted from defendant's illegal sale of intoxicants to one John Sorrenson.

The complaint alleged that defendant illegally sold intoxicating liquors to Sorrenson to the extent of causing him to become intoxicated in defendant's establishment in South St. Paul so that shortly thereafter, as a proximate result thereof, plaintiff sustained injuries when an automobile driven by Sorrenson, in which plaintiff was a passenger, was caused to turn over near Prescott, Wisconsin.

Defendant denied the material allegations of the complaint and alleged that it failed to state a claim against it. Subsequently, it moved to dismiss the action on the ground that the pleadings failed to state a claim against the defendant and that the court lacked jurisdiction.

On April 28, 1956, the trial court made its order granting defendant's motion. In the order granting the same, the trial court determined that "No penalty by way of collecting damages arose under M.S.A. 340.95 [Civil Damage Act], unless the injury was inflicted in the state. No civil action to collect the penalty arose unless the illegal sale in the state was followed by an injury in the state. * * * M.S.A. 340.95 does not provide for extraterritorial effect, * * *."

This is an appeal from the judgment entered pursuant to the foregoing order.

*379 1. M.S.A. 340.14, subd. 1, provides: "No intoxicating liquor shall be sold * * * to any person obviously intoxicated * * *." M.S.A. 340.95, commonly known as the Civil Damage Act, provides that: "Every * * * person who is injured in person or property, * * * by any intoxicated person, or by the intoxication of any person, has a right of action, in his own name, against any person who, by illegally selling, bartering or giving intoxicating liquors, caused the intoxication of such person, for all damages, sustained; * * *." We have recently held this provision to be essentially remedial in nature although penal in its characteristics. Adamson v. Dougherty, 248 Minn. 535, 81 N.W. (2d) 110.

2. It is defendant's position that the action is governed by the law of torts and that, since the last act in the series of events for which plaintiff instituted his action occurred in Wisconsin, which has no Civil Damage Act similar to 340.95,[1] the latter can have no application in determining plaintiff's rights or defendant's liability. In support thereof defendant cites Restatement, Conflict of Laws, 377, which states:

"The place of wrong is in the state where the last event necessary to make an actor liable for an alleged tort takes place."

And 378, which states:

"The law of the place of wrong determines whether a person has sustained a legal injury."

3. The allegations of the complaint by which we are bound for the purposes of this appeal make clear that plaintiff's damages are the result of two distinct wrongs one committed by defendant in Minnesota when it sold Sorrenson intoxicating liquors in violation of M.S.A. 340.14, subd. 1; and one committed by Sorrenson in Wisconsin when his negligence caused the car in which plaintiff was riding to turn over. It cannot be disputed that, had plaintiff's action been against Sorrenson for his negligence, his rights would be governed by the law of Wisconsin applicable in tort actions of this kind. Sohm v. Sohm, 212 Minn. 316, 3 N.W. (2d) 496; Hardgrove v. Bade, *380 190 Minn. 523, 252 N.W. 334. But, even if at the time of the accident there had been in effect in Wisconsin a statute similar to 340.95, it is doubtful if it could be applied to ascertain plaintiff's rights against defendant since there is nothing here to support a claim that defendant ever consented to be bound by Wisconsin law. See, Scheer v. Rockne Motors Corp. (2 Cir.) 68 F. (2d) 942; Young v. Masci, 289 U.S. 253, 53 S. Ct. 599, 77 L. ed. 1158.

4. From the foregoing, it would follow that, if the principles expressed in Restatement, Conflict of Laws, 377 and 378, are held applicable to multistate fact situations like the present, then neither the laws of the state where the last event necessary to create tort liability took place nor the laws of the state where the liquor dealer's violations of the liquor statutes occurred would afford an injured party any remedy against the offending liquor dealer for the injuries which resulted from his statutory violations. The result would be that here both the interest of Wisconsin in affording whatever remedies it deems proper for those injured there as the result of foreign violations of liquor laws (Watson v. Employers Lia. Assur. Corp. 348 U.S. 66, 75 S. Ct. 166, 99 L. ed. 74), and the interest of Minnesota in admonishing a liquor dealer whose violation of its statutes was the cause of such injuries; and in providing for the injured party a remedy therefor under the Civil Damage Act would become ineffective. See, Levy v. Daniels' U-Drive Auto Renting Co. Inc. 108 Conn. 333, 143 A. 163, 61 A.L.R. 846; Gordon v. Parker (D. Mass.) 83 F. Supp. 40.

5. We feel that the principles in Restatement, Conflict of Laws, 377 and 378, should not be held applicable to fact situations such as the present to bring about the result described and that a determination to the opposite effect would be more in conformity with principles of equity and justice. Here all parties involved were residents of Minnesota. Defendant was licensed under its laws and required to operate its establishment in compliance therewith. Its violation of the Minnesota statutes occurred here, and its wrongful conduct was complete within Minnesota when, as a result thereof, Sorrenson became intoxicated before leaving its establishment. The *381 consequential harm to plaintiff, a Minnesota citizen, accordingly should be compensated for under M.S.A. 340.95 which furnishes him a remedy against defendant for its wrongful acts. By this construction, no greater burden is placed upon defendant than was intended by 340.95.

6. In arriving at this conclusion, we have in mind decisions of a number of jurisdictions which have reached similar results in situations, which, though not involving civil damage acts, presented factual circumstances comparable to those here. Gordon v. Parker (D. Mass.) 83 F. Supp. 40; Levy v. Daniels' U-Drive Auto Renting Co. Inc. 108 Conn. 333, 143 A. 163, 61 A.L.R. 846; Moore v. Pywell, 29 App. D.C. 312, 9 L.R.A. (N.S.) 1078; Gratz v. Claughton (2 Cir.) 187 F. (2d) 46; Caldwell v. Gore, 175 La. 501, 143 So. 387; see, Ehrenzweig, The Place of Acting in Intentional Multistate Torts: Law and Reason Versus the Restatement, 36 Minn. L. Rev. 1; Rheinstein, The Place of Wrong: A Study in the Method of Case Law, 19 Tulane L. Rev. 4; Id. 165.

In Gordon v. Parker, supra, an action for alienation of affections was instituted in Massachusetts by plaintiff, who, with his wife, was domiciled in Pennsylvania. Therein it appeared that defendant's wrongful acts had taken place in Massachusetts, and accordingly plaintiff sought the application of a Massachusetts statute relating to alienation of affections. Defendant contended that, since the matrimonial domicile of the parties was in Pennsylvania, which accordingly was the place where the ultimate wrong was done to plaintiff, only Pennsylvania law could be applied. In denying this contention and applying the Massachusetts statute, the court stated (83 F. Supp. 42):

"This is not a situation in which the interests of Pennsylvania plainly outweigh those of Massachusetts. The social order of each is implicated. As the place of matrimonial domicil, Pennsylvania has an interest in whether conduct in any part of the world is held to affect adversely the marriage relationship between its domiciliaries. But, as the place where the alleged * * * wrongdoer lives, Massachusetts also has an interest. She is concerned with conduct *382 within her borders which in her view lowers the standards of the community where they occur. She also is concerned when her citizens intermeddle with other people's marriages."

7. We recognize that the courts of Illinois (Eldridge v. Don Beachcomber, Inc. 342 Ill. App. 151, 95 N.E. [2d] 512, 22 A.L.R. [2d] 1123) and New York (Goodwin v. Young, 34 Hun 252) have reached opposite conclusions in construing civil damage acts similar to 340.95. However, we feel that the situations presented in such cases, as well as that presented here, do not compel application of Restatement, Conflict of Laws, 377 and 378, and that our determination that other principles apply will better afford Minnesota citizens the protection which the Civil Damage Act intended for them.

Reversed.

G.R. No. 122191 October 8, 1998

SAUDI ARABIAN AIRLINES,petitioner,vs.COURT OF APPEALS, MILAGROS P. MORADA and HON. RODOLFO A. ORTIZ, in his capacity as Presiding Judge of Branch 89, Regional Trial Court of Quezon City,respondents.

QUISUMBING,J.:This petition forcertioraripursuant to Rule 45 of the Rules of Court seeks to annul and set aside the Resolution1dated September 27, 1995 and the Decision2dated April 10, 1996 of the Court of Appeals3in CA-G.R. SP No. 36533,4and the Orders5dated August 29, 19946and February 2, 19957that were issued by the trial court in Civil Case No. Q-93-18394.8The pertinent antecedent facts which gave rise to the instant petition, as stated in the questioned Decision9, are as follows:

On January 21, 1988 defendant SAUDIA hired plaintiff as a Flight Attendant for its airlines based in Jeddah, Saudi Arabia. . . .

On April 27, 1990, while on a lay-over in Jakarta, Indonesia, plaintiff went to a disco dance with fellow crew members Thamer Al-Gazzawi and Allah Al-Gazzawi, both Saudi nationals. Because it was almost morning when they returned to their hotels, they agreed to have breakfast together at the room of Thamer. When they were in te (sic) room, Allah left on some pretext. Shortly after he did, Thamer attempted to rape plaintiff. Fortunately, a roomboy and several security personnel heard her cries for help and rescued her. Later, the Indonesian police came and arrested Thamer and Allah Al-Gazzawi, the latter as an accomplice.

When plaintiff returned to Jeddah a few days later, several SAUDIA officials interrogated her about the Jakarta incident. They then requested her to go back to Jakarta to help arrange the release of Thamer and Allah. In Jakarta, SAUDIA Legal Officer Sirah Akkad and base manager Baharini negotiated with the police for the immediate release of the detained crew members but did not succeed because plaintiff refused to cooperate. She was afraid that she might be tricked into something she did not want because of her inability to understand the local dialect. She also declined to sign a blank paper and a document written in the local dialect. Eventually, SAUDIA allowed plaintiff to return to Jeddah but barred her from the Jakarta flights.

Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDI (sic). In September 1990, defendant SAUDIA transferred plaintiff to Manila.

On January 14, 1992, just when plaintiff thought that the Jakarta incident was already behind her, her superiors requested her to see Mr. Ali Meniewy, Chief Legal Officer of SAUDIA, in Jeddah, Saudi Arabia. When she saw him, he brought her to the police station where the police took her passport and questioned her about the Jakarta incident. Miniewy simply stood by as the police put pressure on her to make a statement dropping the case against Thamer and Allah. Not until she agreed to do so did the police return her passport and allowed her to catch the afternoon flight out of Jeddah.

One year and a half later or on lune 16, 1993, in Riyadh, Saudi Arabia, a few minutes before the departure of her flight to Manila, plaintiff was not allowed to board the plane and instead ordered to take a later flight to Jeddah to see Mr. Miniewy, the Chief Legal Officer of SAUDIA. When she did, a certain Khalid of the SAUDIA office brought her to a Saudi court where she was asked to sign a document written in Arabic. They told her that this was necessary to close the case against Thamer and Allah. As it turned out, plaintiff signed a notice to her to appear before the court on June 27, 1993. Plaintiff then returned to Manila.

Shortly afterwards, defendant SAUDIA summoned plaintiff to report to Jeddah once again and see Miniewy on June 27, 1993 for further investigation. Plaintiff did so after receiving assurance from SAUDIA's Manila manager, Aslam Saleemi, that the investigation was routinary and that it posed no danger to her.

In Jeddah, a SAUDIA legal officer brought plaintiff to the same Saudi court on June 27, 1993. Nothing happened then but on June 28, 1993, a Saudi judge interrogated plaintiff through an interpreter about the Jakarta incident. After one hour of interrogation, they let her go. At the airport, however, just as her plane was about to take off, a SAUDIA officer told her that the airline had forbidden her to take flight. At the Inflight Service Office where she was told to go, the secretary of Mr. Yahya Saddick took away her passport and told her to remain in Jeddah, at the crew quarters, until further orders.

On July 3, 1993 a SAUDIA legal officer again escorted plaintiff to the same court where the judge, to her astonishment and shock, rendered a decision, translated to her in English, sentencing her to five months imprisonment and to 286 lashes. Only then did she realize that the Saudi court had tried her, together with Thamer and Allah, for what happened in Jakarta. The court found plaintiff guilty of (1) adultery; (2) going to a disco, dancing and listening to the music in violation of Islamic laws; and (3) socializing with the male crew, in contravention of Islamic tradition.10Facing conviction, private respondent sought the help of her employer, petitioner SAUDIA. Unfortunately, she was denied any assistance. She then asked the Philippine Embassy in Jeddah to help her while her case is on appeal. Meanwhile, to pay for her upkeep, she worked on the domestic flight of SAUDIA, while Thamer and Allah continued to serve in the internationalflights.11Because she was wrongfully convicted, the Prince of Makkah dismissed the case against her and allowed her to leave Saudi Arabia. Shortly before her return to Manila,12she was terminated from the service by SAUDIA, without her being informed of the cause.

On November 23, 1993, Morada filed a Complaint13for damages against SAUDIA, and Khaled Al-Balawi ("Al-Balawi"), its country manager.

On January 19, 1994, SAUDIA filed an Omnibus Motion To Dismiss14which raised the following grounds, to wit: (1) that the Complaint states no cause of action against Saudia; (2) that defendant Al-Balawi is not a real party in interest; (3) that the claim or demand set forth in the Complaint has been waived, abandoned or otherwise extinguished; and (4) that the trial court has no jurisdiction to try the case.

On February 10, 1994, Morada filed her Opposition (To Motion to Dismiss)15. Saudia filed a reply16thereto on March 3, 1994.

On June 23, 1994, Morada filed an Amended Complaint17wherein Al-Balawi was dropped as party defendant. On August 11, 1994, Saudia filed its Manifestation and Motion to Dismiss Amended Complaint18.

The trial court issued an Order19dated August 29, 1994 denying the Motion to Dismiss Amended Complaint filed by Saudia.

From the Order of respondent Judge20denying the Motion to Dismiss, SAUDIA filed on September 20, 1994, its Motion for Reconsideration21of the Order dated August 29, 1994. It alleged that the trial court has no jurisdiction to hear and try the case on the basis of Article 21 of the Civil Code, since the proper law applicable is the law of the Kingdom of Saudi Arabia. On October 14, 1994, Morada filed her Opposition22(To Defendant's Motion for Reconsideration).

In the Reply23filed with the trial court on October 24, 1994, SAUDIA alleged that since its Motion for Reconsideration raised lack of jurisdiction as its cause of action, the Omnibus Motion Rule does not apply, even if that ground is raised for the first time on appeal. Additionally, SAUDIA alleged that the Philippines does not have any substantial interest in the prosecution of the instant case, and hence, without jurisdiction to adjudicate the same.

Respondent Judge subsequently issued another Order24dated February 2, 1995, denying SAUDIA's Motion for Reconsideration. The pertinent portion of the assailed Order reads as follows:

Acting on the Motion for Reconsideration of defendant Saudi Arabian Airlines filed, thru counsel, on September 20, 1994, and the Opposition thereto of the plaintiff filed, thru counsel, on October 14, 1994, as well as the Reply therewith of defendant Saudi Arabian Airlines filed, thru counsel, on October 24, 1994, considering that a perusal of the plaintiffs Amended Complaint, which is one for the recovery of actual, moral and exemplary damages plus attorney's fees, upon the basis of the applicable Philippine law, Article 21 of the New Civil Code of the Philippines, is, clearly, within the jurisdiction of this Court as regards the subject matter, and there being nothing new of substance which might cause the reversal or modification of the order sought to be reconsidered, the motion for reconsideration of the defendant, is DENIED.

SO ORDERED.25Consequently, on February 20, 1995, SAUDIA filed its Petition forCertiorariand Prohibition with Prayer for Issuance of Writ of Preliminary Injunction and/or Temporary Restraining Order26with the Court of Appeals.

Respondent Court of Appeals promulgated a Resolution with Temporary Restraining Order27dated February 23, 1995, prohibiting the respondent Judge from further conducting any proceeding, unless otherwise directed, in the interim.

In another Resolution28promulgated on September 27, 1995, now assailed, the appellate court denied SAUDIA's Petition for the Issuance of a Writ of Preliminary Injunction dated February 18, 1995, to wit:

The Petition for the Issuance of a Writ of Preliminary Injunction is hereby DENIED, after considering the Answer, with Prayer to Deny Writ of Preliminary Injunction (Rollo, p. 135) the Reply and Rejoinder, it appearing that herein petitioner is not clearly entitled thereto (Unciano Paramedical College, et.Al.,v. Court of Appeals, et.Al.,100335, April 7, 1993, Second Division).

SO ORDERED.

On October 20, 1995, SAUDIA filed with this Honorable Court the instant Petition29for Review with Prayer for Temporary Restraining Order dated October 13, 1995.

However, during the pendency of the instant Petition, respondent Court of Appeals rendered the Decision30dated April 10, 1996, now also assailed. It ruled that the Philippines is an appropriate forum considering that the Amended Complaint's basis for recovery of damages is Article 21 of the Civil Code, and thus, clearly within the jurisdiction of respondent Court. It further held thatcertiorariis not the proper remedy in a denial of a Motion to Dismiss, inasmuch as the petitioner should have proceeded to trial, and in case of an adverse ruling, find recourse in an appeal.

On May 7, 1996, SAUDIA filed its Supplemental Petition for Review with Prayer for Temporary Restraining Order31dated April 30, 1996, given due course by this Court. After both parties submitted their Memoranda,32the instant case is now deemed submitted for decision.

Petitioner SAUDIA raised the following issues:

I

The trial court has no jurisdiction to hear and try Civil Case No. Q-93-18394 based on Article 21 of the New Civil Code since the proper law applicable is the law of the Kingdom of Saudi Arabia inasmuch as this case involves what is known in private international law as a "conflicts problem". Otherwise, the Republic of the Philippines will sit in judgment of the acts done by another sovereign state which is abhorred.

II

Leave of court before filing a supplemental pleading is not a jurisdictional requirement. Besides, the matter as to absence of leave of court is now moot and academic when this Honorable Court required the respondents to comment on petitioner's April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order Within Ten (10) Days From Notice Thereof. Further, the Revised Rules of Court should be construed with liberality pursuant to Section 2, Rule 1 thereof.

III

Petitioner received on April 22, 1996 the April 10, 1996 decision in CA-G.R. SP NO. 36533 entitled "Saudi Arabian Airlines v. Hon. Rodolfo A. Ortiz,et al." and filed its April 30, 1996 Supplemental Petition For Review With Prayer For A Temporary Restraining Order on May 7, 1996 at 10:29 a.m. or within the 15-day reglementary period as provided for under Section 1, Rule 45 of the Revised Rules of Court. Therefore, the decision in CA-G.R. SP NO. 36533 has not yet become final and executory and this Honorable Court can take cognizance of this case.33From the foregoing factual and procedural antecedents, the following issues emerge for our resolution:

I.

WHETHER RESPONDENT APPELLATE COURT ERRED IN HOLDING THAT THE REGIONAL TRIAL COURT OF QUEZON CITY HAS JURISDICTION TO HEAR AND TRY CIVIL CASE NO. Q-93-18394 ENTITLED "MILAGROS P. MORADA V. SAUDI ARABIAN AIRLINES".

II.

WHETHER RESPONDENT APPELLATE COURT ERRED IN RULING THAT IN THIS CASE PHILIPPINE LAW SHOULD GOVERN.

Petitioner SAUDIA claims that before us is a conflict of laws that must be settled at the outset. It maintains that private respondent's claim for alleged abuse of rights occurred in the Kingdom of Saudi Arabia. It alleges that the existence of a foreign element qualifies the instant case for the application of the law of the Kingdom of Saudi Arabia, by virtue of thelex loci delicti commissirule.34On the other hand, private respondent contends that since her Amended Complaint is based on Articles 1935and 2136of the Civil Code, then the instant case is properly a matter of domestic law.37Under the factual antecedents obtaining in this case, there is no dispute that the interplay of events occurred in two states, the Philippines and Saudi Arabia.

As stated by private respondent in her Amended Complaint38dated June 23, 1994:

2. Defendant SAUDI ARABIAN AIRLINES or SAUDIA is a foreign airlines corporation doing business in the Philippines. It may be served with summons and other court processes at Travel Wide Associated Sales (Phils.). Inc., 3rd Floor, Cougar Building, 114 Valero St., Salcedo Village, Makati, Metro Manila.

xxx xxx xxx

6. Plaintiff learned that, through the intercession of the Saudi Arabian government, the Indonesian authorities agreed to deport Thamer and Allah after two weeks of detention. Eventually, they were again put in service by defendant SAUDIA