• August 18, 2011

Update (August 17, 2011):  Minnesota Litigator gets one right.  The Eighth Circuit reversed, as predicted below.

Original Post (April 22, 2011):  K-V Pharmaceutical, a Missouri company, had a multi-year business relationship with J. Uriach & CIA., S.A., a Spanish business.  It did not end very well and K-V sued J. Uriach in Missouri, relying on their multi-year business relationship and a contract that called for application of Missouri law, among other things.   (It also called for dispute resolution to be in English.  It did not provide where “the forum” would be for dispute resolution.)

J. Uriach, in response to K-V’s complaint, pointed out that Uriach has no other ties of any kind to Missouri aside from this business with K-V, and the two companies’ relationship was very much focused on Spain, on transactions in Spain, for end-users of the pharmaceutical at issue in Spain.

U.S. Mag. Judge Thomas Mummert III, presiding by the parties’ agreement, finding no personal jurisdiction in the federal court in Missouri over Uriach, kicked K-V’s case out of the country.  Naturally, K-V is appealing that decision.The Eighth Circuit panel at oral argument, Judges Roger L. Wollman, Ronald Lee Gilman, Michael J. Melloy, were quiet for most of the oral argument last week.

One judge on the panel touched on the fact during Uriach’s argument that there is a certain circular logic or perhaps illogic in this area of the law.  U.S. courts’ jurisdiction is limited to those cases where a party could “reasonably anticipate being haled into court.”

Would it have been “unreasonable” for Uriach to anticipate the possibility that, if things went bad when dealing with K-V, that they might be “haled” into court in Missouri?  (Do the judges have to imagine themselves to be Uriach, time-travel back to the time of the transaction, and ask them selves if they would “reasonably anticipate” the risk of getting “haled” into a Missouri court?)

Then there is another aspect of the constitutional limits of personal jurisdiction that hardly seems any clearer — whether exercise of jurisdiction would conform with “traditional notions of fair play and substantial justice.”  Some would say that being haled into a U.S. court is never consistent with “fair play and substantial justice.”  Others would say it is ALWAYS consistent with these ideals…  Rare is the case where a foreign entity with absolutely no connection of any kind to the U.S.A. is sued here for obvious reasons.  At what point should one “reasonably anticipate” that its interactions with a U.S. company come with the risk of entanglement with the U.S. justice system?

It has been a while since Minnesota Litigator has gone out on a limb and predicted a decision.  I predict reversal.  Uriach suggests that the 8th Circuit’s decision in Uriach’s favor is dictated by the Sybaritic case.  I am not so sure and K-V suggests otherwise.

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