When initiating a lawsuit against an out-of-state defendant in a Sixth Circuit federal court, one of the key essential issues which must be considered by a plaintiff is whether the federal court has jurisdiction over the out-of-state defendant.
For a federal court to exercise jurisdiction over a defendant, such jurisdiction must be authorized by state law and permitted by the Due Process Clause of the Fourteenth Amendment (“Due Process Clause”). SFS Check, LLC v. First Bank of Delaware, 774 F.3d 351, 356 (6th Cir. 2014). Further, the burden is on the plaintiff to prove that the federal court has jurisdiction over the out-of-state defendant and that the court’s exercise of that jurisdiction would comply with the Due Process Clause. Id.
Accordingly, before a federal court exercises its jurisdiction over an out-of-state defendant, the federal court must first determine whether doing so would comply with the Due Process Clause. Id. To comply with the Due Process Clause, the out-of-state defendant must possess such “minimum contacts” with the forum state that exercising jurisdiction over the out-of-state defendant would “comport with ‘traditional notions of fair play and substantial justice.” Id. (quoting Beydoun v. Wataniya Rests. Holding, Q.S.C., 768 F.3d 499, 505 (6th Cir. 2014)).
The Sixth Circuit Court of Appeals has developed a three-part test for determining whether “minimum contacts” exist with the out-of-state defendant:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant’s activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
SFS Check, LLC, 774 F.3d at 356. “Purposeful availment” occurs “when the defendant personally takes actions that create a “substantial connection” with the forum state such that he can “reasonably anticipate being haled into court there.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 889 (6th Cir. 2002) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).
As shown from the above three-part test in SFS Check, LLC, a plaintiff must take great care in considering whether to sue an out-of-state defendant in a Sixth Circuit federal court and whether that out-of-state defendant has the “minimum contacts” required to give the federal court jurisdiction over the out-of-state defendant such that the exercise of such jurisdiction comports with the Due Process Clause.