Personal Jurisdiction -- Importance of Purposeful Availment & Purposeful Direction

Civil Procedure--Personal Jurisdiction
The PLanning Group of Scottsdale v. Lake Matthews Mineral Properties, __ Ariz. Adv. Rep. __ CV-10-0189-PR (January 21, 2011) (J. Hurwitz)

PURPOSEFUL AVAILMENT OF THE JURISDICTION IS THE APPROPRIATE TEST FOR PERSONAL JURISDICTION IN A CONTRACT ACTION & PURPOSEFUL DIRECTION IS MOST APPROPRIATE IN TORT CASES

The Planning Group [TPG], a group of Arizona limited liability companies sold life insurance and made investments. Lee Supke, an Arizona resident, met with a TPG employee to discuss buying insurance and investing in a California limited partnership owned by his sister. Negotiations between TPG and the California company through the sister, a California resident ensued and TPG agreed to fund a mining operation in California by the California company. It was then determined by TPG that the California company did not plan to mine as had been contemplated so TPG sued for among other things, breach of contract. The defendants moved to dismiss for lack of personal jurisdiction which was granted by the trial court and affirmed by the court of appeals.

The Arizona Supreme Court reversed in part and affirmed in part. It found that the trial court and Arizona Court of Appeals had come to the right conclusion as to some defendants but not as to others. It held that in a contract action the test should be whether or not the defendant "purposefully availed" itself of the jurisdiction while in tort cases whether the defendants' actions were "purposefully directed" to the jurisdiction should be the test.