Civil Procedure - Personal Jurisdiction
The Planning Group v. Lake Mathews Properties, Ltd., __Az. Adv. Rptr. __, 1 CA-CV 09-0224 (Ct. App., Div. I, May 6, 2010) (J. Kessler)
PERSONAL JURISIDICTION OVER FOREIGN DEFENDANT IN CONTRACT ACTION REQUIRES "PURPOSEFUL AVAILMENT" OF THE JURISIDICTION AND UNDER TORT "PURPOSEFUL DIRECTION."
Plaintiffs entered into mining contract with California defendants which they claimed defendants breached. The only contacts the defendants had with Arizona were interstate communications, money was sent from Arizona to California and a report was delivered to the Plaintiffs by an Arizona resident who was a relative of a defendant.
The Arizona Court of Appeals upheld the trial court's dismissal of the claim for lack of personal jurisdiction because these contacts did not show a "purposeful availment" of the jurisdiction by the nonresident defendants. In order to meet the specific personal jurisdiction requirements of the due process clause to the U.S. Constitution in a contract action a nonresident defendant must purposefully avail themselves of the privilege of conducting business in the forum state, the action must arise from the defendant's activities to or contact with the forum state and the exercise of jurisdiction must be reasonable.
In contrast, an action in tort requires the nonresident defendants have purposefully committed an intentional act expressly aimed at the forum state causing harm the defendant knows is likely to be suffered in the forum state to meet due process. Forseeability of an injury occurring in the forum state is not enough.