Lebel v. Everglades Marina, Inc.

• Court: New Jersey Supreme Court
• Writing for the Court: O'HERN
• Citation: Lebel v. Everglades Marina, Inc., 115 N.J. 317, 558 A.2d 1252 (N.J. 1989)
• Decision Date: 07 June 1989
• Parties: , 1989 A.M.C. 2498, 58 USLW 2003 Richard LEBEL, Plaintiff-Appellant, v. EVERGLADES MARINA, INC., Defendant-Respondent.

Page 317

115 N.J. 317

558 A.2d 1252, 1989 A.M.C. 2498, 58

USLW 2003

Richard LEBEL, Plaintiff-Appellant, v. EVERGLADES MARINA, INC., Defendant-Respondent.

Supreme Court of New Jersey.

Argued Jan. 31, 1989.

Decided June 7, 1989.

Steven Muhlstock for plaintiff-appellant (Gittleman, Muhlstock & Meyers, Hackensack, attorneys).

Arthur D. Fialk for defendant-respondent (Ozzard, Wharton, Rizzolo, Klein, Mauro, Savo & Hogan, Somerville, attorneys).

The opinion of the Court was delivered by

O'HERN, J.

In 1877, the Supreme Court subjected the concept of jurisdiction of the person to the measure of ordered liberty under the fourteenth amendment. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877). Detached from the common law's familiar method of reifying abstract concepts (in this area, equating the jurisdiction of a forum with its physical power over the body or the object--in personam or in rem jurisdiction), courts have struggled to define the contours of the due process of law that will sustain the exercise of personal jurisdiction. See Greenstein, "The Nature of Legal Argument: The Personal Jurisdiction Paradigm," 38 Hastings L.J. 855, 855 (July 1987) ("The idea of black letter law seduces us. We crave coherence and certainty in the law as we do in many areas of our lives. We know better, of course. We know that legal doctrine is often indeterminate--that in a particular case, perfectly convincing arguments supporting one conclusion can often be countered by perfectly convincing arguments supporting the opposite conclusion. Yet we continue to search for rules, principles, tests, approaches--anything that will impose order on doctrine. Nowhere is the inherent frustration of this quest more vividly illustrated than in the debates concerning the due process limitations on the assertion of personal jurisdiction by state courts."); Leathers, "Supreme Court Voting Patterns Related to Jurisdictional Issues," 62 Wash.L.Rev. 631, 631 (1987). ("The past decade of development by the United States Supreme Court of constitutional law related to jurisdiction has been one of amazingly swift occurrences. * * * [S]ome of the justices' opinions were inconsistent, and were at odds with their votes in cases where they had not written opinions."); Perdue, "Sin, Scandal, and Substantive Due Process: Personal Jurisdiction and Pennoyer Reconsidered," 62 Wash.L.Rev. 479, 479 (1987) (" 'Confusion now hath made its masterpiece,' exclaims Macduff in Act II of Macbeth. The same might be said of the venerable case, Pennoyer v. Neff. Over 100 years after issuing Pennoyer the Supreme Court is still laboring to articulate a coherent doctrine of personal jurisdiction within the framework established by that opinion. * * * Yet despite this growing body of case law, the doctrinal underpinnings remain elusive." (footnotes omitted)); Seidelson, "A Supreme Court Conclusion and Two Rationales that Defy Comprehension: Asahi Metal Indus. Co., Ltd. v. Superior Court of California," 53 Brooklyn L.Rev. 563, 563 (1987) ("Every time I think I've learned an inch more of law, I discover a yard more about which I know nothing. * * * I felt that I understood the Court's conclusions and the reasons for those conclusions. And then came Asahi.").

One yearns for the certainty of autocracy, for one like a baseball umpire who would call the action fair or foul. It seems that little profit can be gained from an extended analysis of Supreme Court doctrine until the Court itself draws the lines as the umpire of federalism. In its last effort, the Court split four-four-one on its elucidation of a "stream-of-commerce" theory of jurisdiction. ¹ Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). In our last effort, Charles Gendler & Co. v. Telecom Equipment Corp., 102 N.J. 460, 508 A.2d 1127 (1986), we accepted the stream-of-commerce theory as a valid method of discerning the contours of due process. Rather than embark on a prediction of the future course of this stream of jurisprudence, we shall hew closely to the limited fundamentals about which there is little or no dispute or debate.

I

This case arises from a dispute over the purchase in Florida of a 1987 Cigarette SE 38-foot, high-speed, luxury racing boat. Plaintiff claims to have met a representative of the defendant, Everglades Marina, at the 1984 boat show in New York City. According to plaintiff, over the next two years "on at least twenty occasions" he received in New Jersey phone calls of solicitation from the defendant. There was discussion about price, what features were standard and what were extras on the boat, as well as plaintiff's intention to use the boat in New Jersey. Plaintiff claims that he eventually received and signed in New Jersey a Sales Agreement for the purchase of the boat. In about June of 1986, plaintiff took delivery and registered his boat in Florida.

Subsequent to the purchase, plaintiff hired a third-party shipper to bring the boat to New Jersey. The boat never made it. The carrier had an accident en route and the vessel was substantially damaged. The boat was returned to Florida and sold by the plaintiff. However, in negotiating his claims for recovery for the accidental damage, plaintiff learned that this defendant may have defrauded him in connection with the sale. This suit, demanding a return of a portion of the purchase price and other relief, followed in the New Jersey Superior Court.

The defendant made a motion to dismiss the complaint for lack of personal jurisdiction. The trial court denied the defendant's motion, relying on the fact that "[i]t is undisputed in the case at bar that defendant knew plaintiff to be a New Jersey resident." The court specifically rejected any reliance on the fact that the boat show, where plaintiff claims to have first made contact with the defendant, was advertised in New Jersey.

The Appellate Division reversed, 225 N.J.Super. 316, 318, 542 A.2d 485 (1988), holding

that insufficient minimum contacts existed between the defendant corporation and this State and that the defendant did not purposefully avail itself of New Jersey as a place to do business or intentionally put its product in the stream of commerce in this State. In fairness to the defendant and in the interest of allocative efficiency, this forum will not assert in personam jurisdiction in this case.

The panel rejected any claim to minimum contacts under a stream-of-commerce theory, noting that "there was no purposeful action in this State from which to derive benefit from New Jersey sales. Moreover, any consequence of breach of warranty did not occur in New Jersey." Id. at 322, 542 A.2d 485. The opinion also took special notice of the fact that "[t]he boat never even arrived in New Jersey." Id. at 321, 542 A.2d 485. Finally, the panel concluded that "[t]his was essentially a Florida, not a New Jersey, commercial transaction," and that

New Jersey has no sufficient minimal contacts with Everglades. Nor did Everglades purposefully place its product into the stream of commerce in New Jersey. The burden of forcing Everglades to litigate the ramifications of an essentially Florida business transaction in New Jersey's courts is too severe to withstand constitutional scrutiny. [Id. at 324, 542 A.2d 485.]

We granted certification. 111 N.J. 649, 546 A.2d 558 (1988).

II

As noted, we shall attempt to avoid any areas of unsettled jurisprudence. Hence we shall not predicate our result on the "stream-of-commerce" theory of jurisdiction. Rather, we shall stay with the basics. "[D]ue process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278, 283 (1940)). Although the Asahi, supra, Court was divided, this basic and familiar two-part test was nonetheless accepted by all of the Justices writing. We shall discuss the two aspects of the test, "minimum contacts" and "fair play and substantial justice."

A.

Does the Everglades Marina have certain minimum contacts

with New Jersey?

At this point, we must digress slightly to note that the Supreme Court varies the measure of minimum contacts depending on the nature of the case. If the cause of action relates directly to the contacts, as here, it is one of "specific jurisdiction." "When a State exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum, the State has been said to be exercising 'general jurisdiction' over the defendant." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 1872 n. 9, 80 L.Ed.2d 404, 411 n. 9 (1984). Commentators have questioned the application of these distinctions between "dispute-blind and dispute-specific" jurisdiction concepts. Twitchell, "The Myth of General Jurisdiction," 101 Harvard L.Rev. 610, 614 (1988) ("encourag[ing] courts to think seriously about the meaning of the general/specific jurisdiction typology that they have so eagerly embraced before they commit themselves to an unnecessarily constrained view of the scope of their adjudicatory power."). Nevertheless our Court in Gendler implicitly endorsed the Supreme Court's "specific"/"general" jurisdiction dichotomy. See Gendler, supra, 102 N.J. at 471-72, 508 A.2d 1127.

General jurisdiction subjects the defendant to suit on virtually any claim, even if unrelated to the defendant's contacts with the forum, but is unavailable unless the defendant's activities in the forum state can be characterized as "continuous and systematic" contacts. Helicopteros Nacionales, supra, 466 U.S....