Fiore v. Walden: The Ninth Circuit’s Apparent Expansion of Personal Jurisdiction’s Minimum Contacts Requirement

Airport security searches are a hassle to all travelers. While most passengers make it through a checkpoint with all of their belongings intact, others are not so lucky. Often, personal items such as lighters, face razors, and hand lotion are seized and discarded, much to the dismay of the items’ owners. While losing one’s favorite brand of shampoo to a security search can easily be written off as a necessary inconvenience of modern-day air travel, losing a personal item worth nearly $100,000 is much harder to stomach. But this is exactly what happened to professional gamblers Gina Fiore and Keith Gipson when Atlanta DEA agents confiscated the couple’s hand luggage containing roughly $97,000 in legally obtained winnings. 1 Upset-to say the least-the couple filed suit against the confiscating officers in a Nevada district court.2 The case eventually made its way to the Ninth Circuit Court of Appeals whose decision on the matter has brought into question a number of longstanding notions regarding a state’s ability to exercise personal jurisdiction over foreign residents. 3

The facts of the case are as follows. Returning to Las Vegas after a gambling excursion in San Juan, Puerto Rico, Fiore and Gipson had a layover in Atlanta, during which local DEA Agents-obviously concerned that the exorbitant amount of money was somehow drug related-stopped the couple to inquire into the nature of the funds.4 Fiore explained to Anthony Walden, one of the questioning officers, that she and Gipson were professional gamblers and that the money in their possession was their “gambling bank” and winnings. Additionally, Fiore showed Walden her trip record, listing all the casinos the couple had recently visited as well as gaming results.5 Although the couple was residents of both California and Nevada, the couple only showed officer Walden their California drivers’ licenses. Unconvinced by the couple’s story, officer Walden confiscated the money but told the couple it would be returned to them if they showed proper proof of its validity. After returning to Nevada, Fiore was able to gather this proof, and upon presenting it to officer Walden, the money was returned (seven months after it was confiscated). 6

Fiore and Gipson eventually filed suit in a Nevada district court, claiming that officer Walden’s confiscation was an unlawful search and seizure in violation of the couple’s Fourth Amendment rights.7 Walden objected that the Nevada court lacked personal jurisdiction.8 The district court agreed and held that officer Walden lacked the sufficient minimum contacts with the State of Nevada such that subjecting him to suit in that State would violate his due process rights. Fiore and Gipson appealed to the Ninth Circuit. The Ninth Circuit overturned the district court’s ruling and held that, under the “effects test” set forth in Calder v. Jones9 officer Walden’s wrongful actions were sufficiently aimed at the State of Nevada such that officer Walden should have reasonably expected to be sued in that State, i.e., Nevada had personal jurisdiction over Walden. 10

For personal jurisdiction to be proper under the Calder-effects test, the defendant allegedly must have (a) committed an intentional act, (b) expressly aimed at the forum state, (c) causing harm that the defendant knows is likely to be suffered in the forum state. 11 The Ninth Circuit found the first and second prongs of the Calder-effects test readily satisfied. Officer Walden committed an intentional act­-seizure of the money and an alleged falsification of a probable cause affidavit. Furthermore, officer Walden knew that the money was bound for Las Vegas, and therefore, the foreseeable harm of his confiscation would be suffered in Nevada. The court, however, had more difficulty explaining how officer Walden’s actions satisfied the second-“express aiming”-prong of the Calder-effects test. 12

In finding that Walden satisfied the express aiming prong of the Calder-effects test, the court focused on officer Walden’s alleged filing of a false probable cause affidavit that occurred in the interim between the confiscation of the funds and the return of the funds. 13 At the time this act occurred, Walden, according to the court, knew very well of Fiore and Gipson’s as well as the funds’ strong contacts with the State of Nevada. At the time the allegedly false affidavit was written, Walden knew: 1) that the couple gambled extensively in Las Vegas; 2) that the couple were not from Georgia but were merely in Atlanta to board a flight bound for Las Vegas; and 3) that the funds had originated in and were returning to Las Vegas. Therefore, despite the fact that all of Walden’s actions took place in the State of Georgia, the court found his actions to be “expressly aimed” at residents and property with strong connections to the State of Nevada. Thus, officer Walden’s actions satisfied the second prong of the Calder-effects test.14

Upon petition for rehearing of the Fiore case, numerous Ninth Circuit judges repudiated the majority’s rendition of the Calder-effects test as misguided and watered down.15 Perhaps the most poignant of all dissents in the Ninth Circuit’s opinion on denial for rehearing was that of Judge McKeown, with whom six other judges joined in dissent. Judge McKeown succinctly stated:

With the stroke of a pen, our circuit returns to a discredited era of specific personal jurisdiction, where foreseeability reigns supreme and purposeful direction is irrelevant. That approach was, of course, rejected in Burger King Corp. v. Rudzewicz; the Supreme Court was unequivocal that “foreseeability is not a sufficient benchmark for exercising personal jurisdiction.” 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). Instead, the Due Process Clause requires that before a distant state exercises specific jurisdiction over a defendant, the defendant must purposefully direct activities at forum residents resulting in injuries arising out of or relating to those activities. Under the majority’s construct, mere knowledge of the potential out-of-state plaintiff’s residence, along with a wrongful act, confers specific personal jurisdiction. This virtually limitless expansion of personal jurisdiction runs afoul of both due process guarantees and Supreme Court precedent.16

The dissent’s position is not without merit.

Essentially, the Fiore majority held that for a defendant to satisfy the “express aiming” prong of the Calder-effects test, the defendant need only know that the plaintiff (a) has contacts with the forum state and (b) that the defendant’s actions will have an effect in the forum state. Upon scrutiny, this two-fold inquiry collapses on itself. If the defendant knows of the plaintiff’s contacts with forum state, then-by no inordinate leap of logic-the defendant would also know that the foreseeable effects of his actions would likely be suffered in the forum state. Judge McKeown was correct in stating that this expansion of the bounds of specific personal jurisdiction is virtually limitless. To escape personal jurisdiction in the forum state, the defendant would have to have practically zero knowledge of the plaintiff’s personal history, including that plaintiff’s connections with the forum state-a proposition that is quite unlikely. While logically unsound, the majority’s interpretation of the “express aiming” prong of the Calder-effects test is also entirely inconsistent with the Calder v. Jones opinion itself.

In Calder the defendants wrote and edited an article that allegedly libeled actress Shirley Jones, who lived and worked in California. Though the article was primarily prepared in Florida where the defendants resided, it was widely circulated throughout California. In holding that a California court had personal jurisdiction over the defendants, the Supreme Court stressed that the defendants had “expressly aimed” their allegedly tortious conduct ” at California.”17 The defendants had done so by making California “the focal point both of the story and of the harm suffered.” In short, the defendants’ article was both drawn from California sources and “impugned the professionalism of an entertainer whose television career was centered in California.”18 Therefore, according to the Court, The defendants’ conduct was “calculated to cause injury to [Jones] in California.”19

The actions of officer Walden (and the other questioning officers) in the Fiore case are very different from those of the defendants in the Calder case. All of officer Walden’s alleged tortious actions took place in Georgia. He never contacted anyone in Nevada and never intended his actions to have their primary effect in Nevada. If anything, he was intending his actions to have a local effect. Unlike the Calder defendants, who intended to “impugn the professionalism of an entertainer whose television career was centered in California,” officer Walden was simply seizing funds in the course and scope of his employment as a DEA agent stationed in Atlanta, Georgia. Officer Walden in no way “expressly aimed” his conduct at Nevada.

The defendants in the Fiore case have filed a petition for certiorari to the Supreme Court of the United States, and the Supreme Court should hear this case for a number of reasons.20 As Judge McKeown noted, the Ninth Circuit has abandoned decades of precedent regarding personal jurisdiction. As such, the Ninth Circuit has eroded well-settled notions regarding the limits of due process protection. This needless expansion of a state’s power to exercise personal jurisdiction over citizens of foreign states has opened the floodgates to litigation in which the defendant’s contacts with the forum state could hardly justify that defendant being “haled into court” in the forum state. Furthermore, the Fiore case has created a split among the circuit courts. As Judge O’Scannlain of the Ninth Circuit stated in his dissent:

The majority of circuits have held that, under Calder, a defendant must expressly aim the conduct forming the basis of the claim at the forum state-not just at a known forum resident-before the courts of that state may exercise jurisdiction over the defendant. The Third and Fourth Circuits, for example, have held that a defendant “must ‘manifest behavior intentionally targeted at and focused on’ the forum for Calder to be satisfied.”21

Quite clearly, officer Walden’s actions were not “intentionally targeted at and focused on” the forum state of Nevada. And by allowing Nevada to exercise personal jurisdiction over officer Walden, the Fiore court has created uncertainty regarding the due process protections that lie at the heart of specific personal jurisdiction cases. The Supreme Court would be wise to hear this case and clear the air.

1 Fiore v. Walden, 688 F.3d 558, 56263 (9th Cir. 2012).
2 Id.
3 Id.
4 The couple had already been questioned and released by Puerto Rico DEA who tipped off the Atlanta DEA agents as to the couple’s arrival.
5 Trip records are often kept by professional gamblers for tax purposes.
6 Id. at 56263. In the interim between confiscation and return of the money, Fiore and Gipson claimed that officer Walden provided his superior officers with a false probable cause affidavit.
7 Id. The couple also filed suit against two other, unnamed confiscating officers.
8 Id.
9 465 U.S. 783 (1984).
10 Fiore, 688 F.3d at 56364.
11 Fiore, 688 F.3d at 564.
12 Fiore v. Walden, 657 F.3d 838, 84853 (9th Cir. 2011), withdrawn and superseded on denial of reh’g en banc, 688 F.3d 558 (9th Cir. 2012).
13 Id.
14 Id.
15 See generally, Fiore v. Walden, 688 F.3d 558 (9th Cir. 2012).
16 Id. at 568.
17 Id. 688 F.3d 558, 564-65 (9th Cir. 2012) (quotingCalder v. Jones, 465 U.S. at 789) (O’Scannlain, J., dissenting opinion) (emphasis added).
18 Id. at 565 (quoting Calder, 465 U.S. at 788-89).
19 Id. (quoting Calder, 465 U.S. at 791).
20 Brief for Petitioner Walden v. Fiore, (No. 12-574), 2012 WL 5451439.
21 Fiore,688 F.3dat 565 (quoting IMO Indus., Inc. v Kiekert AG, 155 F.3d 254, 265 (3d Cir. 1998) (quoting ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 625 (4th Cir. 1997)).