February 19, 2016

Insurance Corp. of Ireland, Ltd. v. Compagnie Des Bauxite DeGuinee - 456 U.S. 694, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982) - Supreme Court of the United States

FACTS: CBG is a DW corporation 49% of which is owned by the Republic of Guinea dn 51% by Halco.  Halco operates in PA and does administrative services for CBG.  Halco purchased regular insurance from INA and then "excess" insurance was purchased from 21 other foreign companies.  At some point CBG had mechanical problems which resulted in a halt to business where they lost $10 million. 

HISTORY: CBG filed a suit in Western district Court of PA claiming diversity of citizenship with the 1st count against INA and the second against the foreign companies.  The excess insurers raised the issue of lack of in personam jurisdiction which went on to become the basis for a motion for summary judgment. 

ISSUE: Was it appropriate for the court to use discovery in order to demonstrate the court's personal jurisdiction over the excess insurers?


RATIONALE: The actions of the D may amount to legal submission to the jurisdiction of the court whether voluntary or not.

- failure to enter a timely objection to personal jurisdiction waives the objection (Rule 12h1)

- Rule 37(b)(2)(A) has the same effect and is embodied in Hammond Packing v. Arkansa where a default judgement was entered against the defendant who failed to comply with a pretrial discovery order

- the insurers argue that there exists no need to comply with the discovery order until it is established that the court has personal jurisdiction in the first place

- this means that any assertion of judicial power before the establishment of personal jurisdiction violates due process

- but by submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction the defendant agrees to abide by that court's determination on the issue of jurisdiction (355)

- in this case the defendants had ample warning that failing to comply with the discovery order would lead to the imposition of the sanction

- the court went on to say that submitting the documents could lead to the finding of no personal jurisdiction so in essence all they were doing was placing the burden of proof on the petitioners


- the controlling law should be the PA long-arm statute regarding and not rule 37(b)

- therefore they needed to rely on the proving jurisdiction by the due process limitations relating to state long-arm statutes. 

- but again under the traditional notions of minimum contacts and traditional notions of fairness the jurisdiction is established

- it could be read the Rule 37 simply allows jurisdiction to be exercised b/c of failure to comply w/ discovery orders

- bottom line is the concurring opinion would take a more narrow interpretation of the events

DISPOSITION: facts demonstrate the "justice of the trial court's order