Williams v. Lakeview Co.

• Decision Date: 09 November 2000
• Docket Number: No. CV-99-0364-PR.,CV-99-0364-PR.
• Citation: 13 P.3d 280,199 Ariz. 1
• Parties: Michelyn WILLIAMS and Kelly Williams, Plaintiffs-Appellants, v. LAKEVIEW CO., a Nevada general partnership d/b/a Gold Strike Inn & Casino; David R. Belding, partner; Michael S. Ensign, partner; William A. Richardson, partner; David R. Belding and Jane Doe Belding, husband and wife; Michael S. Ensign and Jane Doe Ensign, husband and wife; William A. Richardson and Jane Doe Richardson, husband and wife, Defendants-Appellees.
• Court: Arizona Supreme Court

13 P.3d 280

199 Ariz. 1

Michelyn WILLIAMS and Kelly Williams, Plaintiffs-Appellants, v. LAKEVIEW CO., a Nevada general partnership d/b/a Gold Strike Inn & Casino; David R. Belding, partner; Michael S. Ensign, partner; William A. Richardson, partner; David R. Belding and Jane Doe Belding, husband and wife; Michael S. Ensign and Jane Doe Ensign, husband and wife; William A. Richardson and Jane Doe Richardson, husband and wife, Defendants-Appellees.

No. CV-99-0364-PR.

Supreme Court of Arizona, En Banc.

November 9, 2000.

Law Offices of Keith S. Knochel, P.C. by Keith S. Knochel, Bullhead City, Attorneys for Michelyn and Kelly Williams.

Jennings, Strouss & Salmon by James M. Ackerman, H. Christian Bode, David B. Earl, Phoenix, Attorneys for Lakeview Co.

OPINION

McGREGOR, Justice.

¶ 1 We granted review to decide whether Arizona courts may exercise specific jurisdiction over a personal injury action brought by residents of Mohave County, Arizona, against a Nevada casino for damages caused by the casino's service of liquor in Nevada to an intoxicated patron. The casino regularly and continuously advertises in Arizona, solicits Arizona tour bus trade, and employs a number of Arizona residents. For the following reasons, we hold that absent a causal connection between the casino's Arizona contacts and the plaintiffs' claims, specific jurisdiction does not attach.

I.

¶ 2 On February 8, 1997, Michelyn Williams and Kelly Williams (the plaintiffs) traveled to Boulder City, Nevada, with Patrick Kelsey, Jr. While in Nevada, the trio visited the Gold Strike Inn & Casino, a business located just past the Arizona border and owned by a Nevada general partnership, Lakeview Company. At the casino, Mr. Kelsey consumed a large amount of alcohol. Although the plaintiffs were concerned about Mr. Kelsey's intoxication level, they allowed him to drive on the return trip to Arizona. Once over the state line, he lost control of the car, and the plaintiffs received serious injuries in the resulting single-car accident.

¶ 3 The plaintiffs filed suit in Arizona against Lakeview and its partners. On Lakeview's motion, the trial court dismissed the case for lack of personal jurisdiction. The court of appeals reversed, holding that although Lakeview had insufficient contacts with Arizona to create general jurisdiction over it and its partners, the plaintiffs' injuries were sufficiently related to the existing contacts to permit the court to exercise specific jurisdiction.

¶ 4 We exercise jurisdiction pursuant to Arizona Constitution, article VI, section 5(3), Arizona Revised Statutes Annotated (A.R.S.) § 12-120.24, and Arizona Rule of Civil Appellate Procedure 23.

II.

¶ 5 The basic principles that govern Arizona's authority to exercise personal jurisdiction over a non-resident defendant are familiar and well-established, see generally, e.g., Batton v. Tennessee Farmers Mut. Ins. Co., 153 Ariz. 268, 736 P.2d 2 (1987),

and we address them only briefly. The Due Process Clause limits state court jurisdiction over foreign defendants. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72, 105 S.Ct. 2174, 2181-82, 85 L.Ed.2d 528 (1985). Because Arizona's long-arm rule confers jurisdiction over non-resident defendants to the fullest extent permitted by the Due Process Clause, "[t]he jurisdictional issue ... hinges on federal law." Uberti v. Leonardo, 181 Ariz. 565, 569, 892 P.2d 1354, 1358 (1995).

¶ 6 The personal jurisdiction test, set out in International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945), requires that the defendant have sufficient minimum contacts with the forum state such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Personal jurisdiction may be divided into two types: (1) general jurisdiction and (2) specific jurisdiction. Under either specific or general jurisdiction, "the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum State." Burger King, 471 U.S. at 474, 105 S.Ct. at 2183. A non-resident defendant is subject to general jurisdiction when the defendant's contacts with the forum state are substantial or continuous and systematic enough that the defendant may be haled into court in the forum, even for claims unrelated to the defendant's contacts with the forum. See Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984)

. The level of contact required to show general jurisdiction is quite high.¹

¶ 7 When a defendant's activities in the forum state are not so pervasive as to subject it to general jurisdiction, the court may still find specific jurisdiction if: (1) the defendant purposefully avails himself of the privilege of conducting business in the forum; (2) the claim arises out of or relates to the defendant's contact with the forum; and (3) the exercise of jurisdiction is reasonable. See Shute v. Carnival Cruise Lines, 897 F.2d 377, 381 (9th Cir.1990),

reversed on other grounds, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622 (1991). Although specific jurisdiction may arise without the defendant ever setting foot in the forum state, and may arise incident to a single act directed to the forum, it does not arise from the plaintiff's or a third party's unilateral activity or from the non-resident defendant's mere foreseeability that a claim may arise. See World-Wide Volkswagen v. Woodson, 444 U.S. 286, 295-97, 100 S.Ct. 559, 566-67, 62 L.Ed.2d 490 (1980). Once the plaintiff establishes that minimum contacts occurred with the forum state and that the events causing the injury arose out of that contact, a rebuttable presumption arises that the forum reasonably can exercise jurisdiction. See Burger King, 471 U.S. at 476-77,

105 S.Ct. at 2184.

¶ 8 We cannot decide the issue of personal jurisdiction, however, by applying any mechanical test or "talismanic jurisdictional formulas; `the facts of each case must [always] be weighed' in determining whether personal jurisdiction would comport with `fair play and substantial justice.'" Burger King, 471 U.S. at 485-86,105 S.Ct. at 2189 (quoting Kulko v. California Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1696-97, 56 L.Ed.2d 132 (1978)) (alterations in original).

III.

A.

¶ 9 The Gold Strike Inn & Casino is located within a few miles of the Arizona/Nevada border. The Lakeview partnership conducts no business in Arizona, owns no property in Arizona, and does not list a telephone number in any Arizona directory. Furthermore, the Lakeview partners are all residents of the state of Nevada.

¶ 10 The plaintiffs claim that several activities involving Lakeview create the required minimum contacts with Arizona. First, the casino advertised its weekly dinner buffet in Arizona newspapers, including a small Mohave County paper that circulated once each month. Second, the casino sent a one-time offer to eleven tour bus companies that operated throughout Arizona, offering them incentives to stop at the casino on their way into Nevada. Third, the casino employed Arizona residents, and, at the time of the accident, approximately twenty-three percent of its overnight guests were Arizona residents. The plaintiffs also allege that Lakeview could foresee that some Arizona residents would become intoxicated at the casino and subsequently cause harm to themselves or others while driving on Arizona highways. The plaintiffs concede that their visit was not related to any of Lakeview's contacts with Arizona, and that the only contact they personally had with the casino resulted from their unilateral decision to visit it.

B.

¶ 11 The requirement that a nexus exist between a defendant's activities in the forum state and a plaintiff's cause of action provides the key to exercising specific jurisdiction. A plaintiff's claim must result from "alleged injuries that `arise out of or relate to' [the defendant's] ... activities" in the forum state. Burger King, 471 U.S. at 472, 105 S.Ct. at 2182 (quoting Helicopteros, 466 U.S. at 414, 104 S.Ct. at 1872). This test ensures that forums will not exercise jurisdiction over non-resident defendants based solely upon random, fortuitous, or attenuated contacts, or upon the unilateral activity of another person. Instead, we must focus on the relationship between the defendant, the forum, and the litigation. See Batton, 153 Ariz. at 271,

736 P.2d at 5. The nexus requirement goes to the very heart of minimum contacts and creates the distinction between specific and general jurisdiction.

¶ 12 Federal courts have disagreed about the strength of the causal relationship that must exist between a defendant's forum activities and a plaintiff's claim. Some courts have adopted a substantive test that requires that the defendant's contacts with the forum serve as the proximate cause of an injury, while others have adopted a "but for" test, under which a nexus exists if a plaintiff's injury would not have occurred but for a defendant's forum activities. Compare, e.g., Pizarro v. Hoteles Concorde Int'l, 907 F.2d 1256, 1260 (1st Cir.1990)

(holding a defendant's solicitation of tourist reservations in the forum state was not the proximate cause of injuries occurring in an Aruba hotel), with Shute, 897 F.2d at 386 (finding that when the plaintiff would not have taken a cruise but for defendant's solicitations in the forum state, nexus existed). Even under the more liberal "but for" test, however, the plaintiffs here cannot establish the required nexus.

¶ 13 Unlike the plaintiff in Shute, the plaintiffs do not assert that their visit to the casino resulted from any of Lakeview's contacts with Arizona. They did not visit the casino after seeing or in response to an advertisement, and they never traveled to Nevada on a tour bus. Their injuries did not arise out of or relate to Lakeview's employment relationship with or hotel service to Arizona residents.²...