Phillips v. Anchor Hocking Glass Corp.

• Decision Date: 28 April 1966
• Docket Number: No. 7839,7839
• Citation: 19 A.L.R.3d 1,100 Ariz. 251,413 P.2d 732
• Parties: , 19 A.L.R.3d 1 Vivian PHILLIPS, Appellant, v. ANCHOR HOCKING GLASS CORPORATION, an Ohio corporation, Appellee. PR.
• Court: Arizona Supreme Court

Page 732

413 P.2d 732

100 Ariz. 251, 19 A.L.R.3d 1

Vivian PHILLIPS, Appellant, v. ANCHOR HOCKING GLASS CORPORATION, an Ohio corporation, Appellee.

No. 7839 PR.

Supreme Court of Arizona, In Banc.

April 28, 1966.

McKesson, Renaud & Cook, A. S. Johnston, III, and Sidney S. Pearce, Jr., Phoenix, for appellant.

Shimmel, Hill, Kleindienst & Bishop and Richard A. Black, Phoenix, for appellee.

BERNSTEIN, Vice Chief Justice.

Pursuant to 17 A.R.S. Rule 47(b), Rules of the Supreme Court and A.R.S. § 12-- 120.24, we granted a petition to review the decision of the Court of Appeals reported in 2 Ariz.App. 267, 407 P.2d 948. The Court of Appeals, Division I, affirmed the judgment of the Maricopa County Superior Court which dismissed the complaint of the appellant, hereinafter called plaintiff, upon the motion of the appellee, hereinafter called defendant.

The plaintiff's complaint, filed December 13, 1961, alleges that plaintiff is a resident of Arizona and defendant is an Ohio corporation doing business in Ohio where it manufactures baking dishes. Plaintiff purchased a baking dish and when she used it on February 14, 1960 at her home in Phoenix she claimed 'that said dish did then and there break apart in Plaintiff's left hand and the broken edge of said dish did slice, slash and cut the fingers of the Plaintiff's left hand.' Plaintiff has failed to allege in the complaint that she purchased the baking dish in Arizona or that the defendant was doing business in Arizona at the time of the purchase, the time of the injury or when the complaint was filed. Service of summons was made upon the defendant by registered mail pursuant to Rule 4(e)(2)(a), Rules of Civil Procedure, 16 A.R.S.

On June 8, 1962, the defendant entered an appearance by filing a motion to dismiss under Rule 12(b) for lack of jurisdiction. An affidavit of defense counsel attached to the motion to dismiss alleged that the defendant had no agent in Arizona nor any property of any nature and manufactured all of its products outside the state. On August 29, 1962 plaintiff's counsel submitted a counter-affidavit stating:

'* * * that he has personally made investigations in the City of Phoenix, Maricopa County, State of Arizona relative to the glassware products bearing the name of Anchor Hocking Glass Corporation as the manufacturer of said items of glassware; that he has found an extremely large number of said items of Anchor Hocking glassware offered for sale in the City of Phoenix, State of Arizona; that upon information and belief and your affiant does verily believe, the defendant Anchor Hocking Glass Corporation is one of the largest manufacturers and producers of glasswares and that said glassware is available for sale in all of the State of the Union, including the State of Arizona.'

The affidavit does not state when the investigation was conducted or whether defendant directly shipped its glassware into the state. Therefore, we have a situation where the defendant's only contract with our state up to and including the time of plaintiff's injury is the presence of a single allegedly defective product which it manufactured and which we assume was sold to plaintiff outside the state. After the injury, defendant's only contact was the presence of its products for sale in the state.

The question presented is whether these facts will allow our trial court to exercise in personam jurisdiction over the defendant. Rule 4(e)(2) allows Arizona courts to acquire personal jurisdiction over a nonresident defendant who 'has caused an event to occur in this state out of which the claim which is the subject of the complaint arose.' The constitutionality of the rule has been upheld in Heat Pump Equipment Co. v. Glen Alden Corp., 93 Ariz. 361, 380 P.2d 1016. The choice of the general language quoted above is intended to give Arizona residents the maximum privileges permitted by the Constitution of the United States. State Bar Committee Note Following Rule 4(e)(1). Hence, we must discover the limits of personal jurisdiction constitutionally allowed, then decide whether the case before us falls within those limits.

The united States Supreme Court has established the principle that a state court may acquire personal jurisdiction over a nonresident defendant if he has 'minimum contacts' with the state so that maintenance of the suit will not offend 'traditional notions of fair play and substantial justice'. International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95; McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223. In McGee the court approved Smyth v. Twin State Improvement Corp., 116 Vt. 569, 80 A.2d 664, 25 A.L.R.2d 1193 where it was held that a single tortious act committed by a defendant intentionally in the forum satisfied the 'minimum contacts' test. See also Porter, Citations and Appearances--Jurisdiction of Foreign Corporations--Single Tortious Act, 36 Tul.L.R. 336. Furthermore, in Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 the court said personal jurisdiction may be exercised over a nonresident defendant if he has substantial contacts with the forum though the plaintiff's cause of action does not arise out of those contacts. In Perkins the defendant's contacts with the forum existed at the time the cause of action arose. In the case before us, it can be argued on the theory of the Gray case discussed below that the defendant committed a tortious act within this state and is subject to personal jurisdiction as in the Smyth case. Alternatively, it seems fair on the authority of the Perkins case to exercise jurisdiction over the defendant because he now has substantial contacts with Arizona though there may not have been when the cause of action arose. We must, however, discuss recent development of the law of in personam jurisdiction.

The traditional notions of fair play and substantial justice which must be satisfied before a nonresident defendant is amenable to jurisdiction have not and perhaps cannot be clearly defined. One approach has been to collect cases where the fairness test was satisfied. Professor Scott, in compiling United States decisions, said:

'The Supreme Court, however, has held that a state may exercise jurisdiction through its courts over a foreign corporation doing business within the state, even though the cause of action arose elsewhere; over an individual doing business within the state, at least as to causes of action arising out of business done in the state; over a corporation or individual doing acts within the state, such as operating an automobile or committing a tort; over a corporation or individual making contracts within the state or otherwise closely connected with the state.' Scott, Hanson v. Denckla, 72 Harv.L.R. 695, 702.

Moore's Federal Practice has summarized the Supreme Court decisions as follows:

'If there are substantial contacts with the state, for example a substantial and continuing business, and if the cause of action arises (out) of the business done in the state, jurisdiction will be sustained. If there are substantial contacts with the state, but the cause of action does not arise out of these contacts, jurisdiction may be sustained. If there is a minimum of contacts, and the cause of action arises out of the contacts, it will normally be fair and reasonable to sustain jurisdiction.' 2 Moore's Federal Practice, § 4.25(5), p. 1173.

The important trend in our notions of fairness has been a shift from emphasizing what is fair to the defendant to a consideration of what is fair to both parties. It has been said that fair play and substantial justice are satisfied if (1) the cause of action involves local contacts which make it reasonably desirable from plaintiff's point of view that the case be tried at the selected forum, (2) the defendant has sufficient causal responsibility for the presence of the local contacts in the forum state to permit us to conclude that he has by his own volition subjected himself to answering for them there, and (3) relevant public interests are served, or not disserved, by allowing the cause to be determined at that forum. Leflar, The Converging Limits of State Jurisdictional Powers, 9 Journal of Public Law 282.

It has been held that fair play includes a consideration of the quality, nature and extent of defendant's activity in the forum state, relative convenience of the parties in relation to the place of trial, the benefits and protections of the laws of the forum state afforded the parties, and the basic equities existing between the parties. Tyee Const. Co. v. Dulien Steel Products, Inc., 62 Wash.2d 106, 381 P.2d 245.

From International Shoe until immediately prior to Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 the Supreme Court evolved a doctrine of non-interference with the exercise of jurisdiction over nonresidents by state courts. The 'fairness' test calls for an independent determination by the court upon the merits of each case. Kurland, The Supreme Court, The Due Process Clause and the In Personam Jurisdiction of State Courts, 25 Univ. of Chi.L.R. 569.

It has been nearly a decade since the United States Supreme Court handed down Hanson v. Denckla, supra. That case was an unusual situation in which the court achieved substantial justice, but it is of questionable value as a precedent regarding the problem of personal jurisdiction over nonresident defendants. In that opinion, the majority reaffirmed the McGee principle that a defendant renders himself amenable to jurisdiction by committing a single act within the forum state. The majority went on to say:

'* * * it is essential in each case that there be some act by which the defendant Purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws.' 357 U.S. at 253, 78 S.Ct. at 1240 (Emphasis added)

The...