What Happens Outside of Vegas?

The United States Supreme Court recently granted writs in a case that could affect the minimum contacts test used to find jurisdiction were a similar case brought in Louisiana. See Walden v. Fiore, 688 F. 3d 558 (2011). In Walden, the United States Supreme Court will decide whether to uphold the Ninth Circuit’s ruling that a court may exercise personal jurisdiction over a defendant whose primary contact with the forum state was his knowledge that the plaintiffs had connections to that state.

In Walden, airline passengers sued a DEA agent who allegedly violated their Fourth Amendment rights in seizing $97,000.00 in cash. At least some of the cash was won on a gambling trip to San Juan, Puerto Rico. The plaintiffs boarded the plane in San Juan with a planned stop in Atlanta in route to Las Vegas.

Once in Atlanta, a drug-detection dog “alerted” to one of the plaintiff’s bags. The bags were searched and the $97,000.00 was seized under suspicion of a connection to drug activity. Nevertheless, the plaintiffs were allowed to board their flight to Las Vegas and were promised return of the cash if they could establish its legitimacy.

It was alleged that one of the officers prepared and/or helped to prepare an allegedly false probable cause affidavit to facilitate the forfeiture of the cash to the government. Ultimately, the cash was returned.

The suit was filed in Nevada and was dismissed for lack of personal jurisdiction. In refusing jurisdiction, the District Court cited to the fact that the agent’s conduct was “expressly aimed” at Georgia.

On appeal, the Ninth Circuit Court of Appeals, using a three-part test derived from Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802(9th Cir. 2004), held that the allegations were sufficient to satisfy the “forum-related conduct” prong of the test for specific jurisdiction. Therefore, Nevada jurisdiction was reasonable.

The Ninth Circuit agreed that the officer’s seizure of the cash was “expressly aimed” at Georgia and did not support jurisdiction. However, the Ninth Circuit believed that the false probable cause affidavit aspect of the case supported jurisdiction in Nevada.

The Court reasoned that the officer was aware of the plaintiffs’ significant connections with Nevada because: the plaintiffs had told the officer that they were going to Las Vegas; some of the funds originated from Las Vegas; and, background checks were run on the plaintiffs after they returned to Nevada. Under these facts, the Court concluded that the officer expressly aimed his conduct at Nevada when he prepared the affidavit and thus subjected himself to the jurisdiction of a Nevada Court.

The facts of Fiore set the stage for an important jurisdictional ruling.