Lead Opinion
The issue on appeal is whether an Alaska corporation, defendant NANA Development Corp., is subject to the personal jurisdiction of a federal district court sitting in diversity in Virginia, based upon a single sale in Alaska of reindeer antlers to plaintiff Choon Young Chung, where part of the purchase was subsequently shipped by common carrier to plaintiff in Virginia. The district court found personal jurisdiction to exist under the Virginia long-arm statute, Va.Code § 8.01-328.1(A)(2) (1984). We hold that the “minimum contacts” between NANA and Virginia required by International Shoe Co. v. Washington,
I
NANA Development Corp. is an Alaska corporation, with its principal place of business in Anchorage. It is engaged in selling frozen reindeer antlers, which after processing are sent to the Orient for medicinal purposes.
Chung, a Virginia resident, initiated dealings with NANA in May 1982, telephoning NANA’s Alaska offices to inquire about the possibility of purchasing reindeer antlers. After several conversations between Chung, NANA officials in Alaska, and NANA’s joint venturer in San Francisco, John Wang, Chung was told by John Schaeffer of NANA that he could buy 500 pounds of antlers at $35.00 per pound after the June roundup, but would have to take delivery in Nome, Alaska. Chung agreed to these terms.
On June 9, 1982 Chung travelled to Alaska, where he met with NANA officials and watched the reindeer roundup. While in Alaska, Chung purchased 500 pounds of
The parties originally contemplated that the entire order of 500 pounds of antlers would be delivered to Chung at the Nome airport. When Chung was ready to depart on June 14, however, only 120 pounds of antlers were ready for him at the airport. Chung could not wait for the delayed 380 pounds to be delivered to him personally in Nome, as his flight was leaving shortly, and Schaeffer thereupon agreed to ship the remainder of the antlers by air to Chung in Virginia within 24 hours. Chung left Alaska with the available 120 pounds of antlers. On June 15, NANA consigned to an air carrier three boxes of “frozen reindeer horns,” weighing 378 pounds, freight charges collect to Chung in Washington, D.C. The boxes and airbill were marked with the instruction “keep frozen.” No insurance was obtained or value declared on the shipment of antlers.
Chung received notice on June 18 that the shipment had arrived at National Airport in Arlington, Virginia. He promptly went to the airport, where he discovered that the boxes were leaking blood and emitting a “terrible” odor. The antlers had thawed in transit, becoming spoiled and unusable. Chung complained to the carrier, and promptly notified NANA of the loss. Because the shipment was uninsured and had no declared value, however, the carrier offered only the minimum reimbursement of $.50 per pound, or $190. Chung stopped payment on his $5,500 personal check to NANA, and brought this suit to recover the balance of his loss.
The district court, finding personal jurisdiction over NANA in Virginia, determined after a bench trial that NANA had breached its duty to insure the shipment of antlers. Damages were awarded to Chung of $8,207. NANA appeals solely on the question of personal jurisdiction.
II
The connection here presented between NANA and Virginia was not sufficiently substantial to permit the exercise of personal jurisdiction, consistent with the “traditional conception of fair play and substantial justice” embodied in due process. International Shoe,
For a defendant to be subject to suit in a forum where it is not physically present, due process demands certain “minimum contacts” with the forum such “as make it reasonable ... to require the corporation to defend the particular suit which is brought there.” International Shoe,
The significant contacts considered are those actually generated by the defendant. It is firmly established that “[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.” Id. See also World-Wide Volkswagen,
The focus on a defendant's own acts serves the underlying due process objective of fair notice, giving “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.” Id. Thus, a corporation may be subject to jurisdiction when it “delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.” Id. at 298,
The contact between NANA and Virginia in this case was hardly so purposeful that litigation in Virginia could have been reasonably foreseen. NANA’s ties with Virginia are virtually nonexistent; entirely so, apart from this single transaction. Although it is true that a single contractual relationship may furnish a basis for jurisdiction, Burger King,
The attenuated contact here distinctly contrasts with the more “substantial and continuing relationship” described in Burger King,
If Burger King and McGee demonstrate what is sufficient in the realm of minimum contacts, this case demonstrates what is inadequate. The contract for reindeer antlers between Chung and NANA was finalized in Alaska, and though its essential terms were negotiated by telephone between Alaska and Virginia, those communications were initiated by Chung. NANA made no purposeful effort of its own to develop a market for its product in Virginia. It merely responded to Chung’s unilateral inquiries. Payment for the antlers was tendered in Alaska at the time of sale. The parties entered into no agreements for a continuing business relationship beyond this single transaction in Alaska. Nothing in the parties’ contract or course of dealing put NANA on notice that it might be haled into court in Virginia. NANA appears to have done everything possible to confine its United States business to its home state of Alaska during this transaction, and never had any other dealings with Virginia whatsoever. It only shipped goods to Virginia on this isolated occasion for the convenience of Chung, who could not remain in Alaska to take delivery there as originally contemplated by the parties.
It is immaterial, in this context, that NANA knew of the ultimate destination of the shipment, since the foreseeability of injury in a distant forum is not the touchstone of minimum contacts. Burger King,
Of course, as the Court has repeatedly stressed, we do not approach the “minimum contacts” analysis with an aim to propound any talismanic or mechanical test, and we recognize that the facts and circumstances of each case are determinative. Burger King,
We are not dissuaded from this view by the district court’s determination that NANA’s failure to insure the reindeer antlers rendered it the party at fault. Personal jurisdiction is not to be determined by a peek at the merits, but established on independent grounds. While in this instance, due process may appear to protect a breaching defendant from suit in an injured plaintiff’s state, in others it will safeguard defendants from baseless litigation in remote and unrelated forums. Courts have come to seek fairness in these fact-bound situations by requiring some modicum of purposeful contact with the forum involved.
We must also decline the dissent’s invitation to chop NANA’s course of conduct into small bits and fragments in an attempt to connect some single fragment with the breach. The fairness to a party demanded by due process requires here that we view NANA’s activities in their entirety — activities which, apart from a single, chance happening in an Alaska airport, show no actual or desired connection with Virginia, the forum state.
If a party’s slightest gesture of accommodation were to impose personal jurisdiction, commercial dealings would soon turn unobliging and brusque. The dissent’s suggestions that NANA refuse to ship the horn to Virginia or insist that Chung remain in Alaska or appoint an agent in Nome to take delivery all involve inconvenience to Chung. Concepts of in personam jurisdiction should not be structured to manufacture minimum contacts from every amenable act.
Because personal jurisdiction here fails the threshold test of “minimum contacts,” we need not separately consider the convenience of any particular forum to the respective parties, although we note that it would seem equally burdensome for NANA to defend in Virginia as for Chung to sue in Alaska. Factors such as the burden on the defendant, the plaintiff’s in
Accordingly, the judgment of the district court sustaining personal jurisdiction is reversed. This case is remanded to afford Chung an opportunity to move for transfer of the case to a district court where it could have been brought. See 28 U.S.C. § 1406(a); Goldlawr, Inc. v. Heiman,
REVERSED AND REMANDED.
Notes
. NANA operates a range of two million acres in Alaska, with a herd of some 5,000 reindeer. The reindeer are rounded up annually, using helicopters, and their horns clipped. By the next year the antlers regrow. After clipping the horn is frozen, as it contains blood and is perishable, spoiling quickly if thawed.
The antlers, following processing, are sold in various Asian countries, where they are used as a tonic for "promoting strengths of body in particularly weak people,” according to plaintiff. Evidently reindeer antler is believed to have aphrodisiac properties.
. Preliminarily, in this diversity action, we must consider whether state law authorizes the exercise of jurisdiction. Wolf v. Richmond County Hospital Authority,
Plaintiff also relies upon several other provisions of the long-arm statute, not discussed by the district court. See Va.Code § 8.01-328.-1(A)(1), (4), (5). Even if these were applicable, a matter on which we need express no opinion, the limitations imposed by due process would remain unchanged.
. The dissent suggests that we have used the wrong standard in determining whether NANA’s contacts with Virginia were sufficient. The dissent says that "NANA need only have “'fair warning that a particular activity may subject [it] to the jurisdiction of a foreign sovereign,” ’ ” (post, p. 1130), and that "‘Fair warning’ exists when a defendant has ‘"purposefully directed” his activities at residents of the forum.’ ” (post, p. 1130).
We have said that "'the defendant’s conduct and connection with the forum State [must be] ... such that he should reasonably anticipate being haled into court there,”’ (supra p. 1127), and that "The contact between NANA and Virginia in this case was hardly so purposeful that litigation in Virginia could have been reasonably foreseen.” (supra, p. 1127). We see no meaningful distinction between the two formulations.
Dissenting Opinion
dissenting:
In my opinion, the contacts in this case are sufficient to establish personal jurisdiction over a cause of action that “arise[s] out of or relate[s] to” these contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall,
I.
Contacts which are insufficient to establish general jurisdiction over an out-of-state defendant may be sufficient to establish specific jurisdiction over him.
In order for specific personal jurisdiction to be constitutional, NANA’s contacts do not have to rise to the “continuous and systematic” level required for general jurisdiction. Helicopteros,
II.
In its portrayal of NANA’s contacts with Virginia as constitutionally inadequate, the majority misinterprets the situation surrounding the spoiled Virginia shipment. Chung did initially contact NANA and fly to Alaska to pick up the horn personally. If all had gone as planned, NANA would have followed its regular delivery practice and avoided its frequent problems of spoiled horn and inadequate insurance. See Deposition of John W. Schaeffer, President of NANA Corporation, Joint Appendix at 33 (Sept. 8, 1984) (delivery practice designed to limit NANA’s responsibility for spoiled shipments). Under its regular delivery scheme, NANA’s contacts with Virginia would arguably have been no more than “ ‘fortuitous’ ” and therefore insufficient to support an assertion of jurisdiction. See Majority Opinion, supra at 1128.
When Chung was preparing to leave Alaska, however, the situation changed. Chung, who had paid in full for 500 pounds of horn, expected delivery in full at the Nome Airport on June 14, 1982. NANA, however, was unable to meet its obligation and deliver on time. NANA then abandoned its regular delivery practice and voluntarily entered into a new agreement with Chung. Under this second agreement, NANA took responsibility for the safe arrival of 380 pounds of horn in Virginia.
This is not a case in which the 380 pounds of horn ended up in Virginia because of Chung’s unilateral activity. Cf. World-Wide Volkswagen,
Contrary to the majority, I also believe that this litigation meets World-Wide Volkswagen’s “foreseeability” test for minimum contacts. See World-Wide Volkswagen,
In its second agreement with Chung, NANA abandoned its usual policies and
III.
Once minimum contacts are established, this court must consider whether an assertion of personal jurisdiction comports with “ ‘fair play and substantial justice.’ ” Burger King,
One factor, the burden on NANA of defending in Virginia, does tend to undermine the assertion of jurisdiction. See Burger King,
As the foregoing discussion illustrates, NANA purposefully directed its actions toward Virginia, thereby establishing constitutionally sufficient minimum contacts with that state. No compelling circumstances make this otherwise appropriate exercise of personal jurisdiction unreasonable. The district court’s assertion of specific personal jurisdiction over NANA was, therefore, proper. Consequently, I respectfully dissent.
. “General jurisdiction" is the exercise of personal jurisdiction over a defendant in a suit not arising out of or related to the defendant’s contacts with the forum. Helicópteros,
