July 2018 Third Example Ten-point Answers to Virginia Essay Questions
July 2018 - QUESTION 4 – VIRGINIA BAR EXAMINATION
Kilauea Lava Candles, Inc. (“KLC”), is incorporated in and has its principal place of business in Hilo, Hawaii. KLC specializes in the production of outdoor “lava candles.” The lava gel, when lit, produces a gentle, bubbling, orange-red glow. In June of 2016, Pele, a resident of Fincastle, Virginia, purchased a KLC lava candle at a small surf shop in San Diego, California, where she was visiting her sister. Pele returned to Virginia and used the lava candle without incident several times. On September 5, 2016, the lava candle unexpectedly exploded and burning gel landed on Pele, causing her multiple serious burns.
On January 5, 2018, Pele filed a personal injury action in the United States District Court for the Western District of Virginia, Roanoke Division, against KLC as the designer and manufacturer of the lava candle alleging negligence, strict liability and breach of implied warranty. Pele brought the case based on diversity of citizenship, seeking $2 million in damages. In her Complaint, Pele specifically alleged personal jurisdiction over KLC by stating that “KLC designed, manufactured and sold the specific lava candle that exploded and injured the plaintiff” and that “KLC deliberately placed its products, including lava candles, into the stream of commerce and could reasonably expect its products would end up in Virginia and possibly cause harm in Virginia.”
On January 22, 2018, KLC filed an Answer to the Complaint, admitting that its principal place of business was Hilo, and denying paragraph by paragraph the allegations in the Complaint including the specific personal jurisdictional allegations listed above. KLC also included a paragraph in its Answer that stated, “KLC affirmatively denies that the Court has personal jurisdiction over KLC in this matter.” On February 2, 2018, KLC then filed a Motion to Dismiss the suit because the U.S. District Court in Virginia lacked specific and general personal jurisdiction over KLC. In support of the motion, KLC submitted the affidavit of its president and owner stating that:
1. KLC is a small company with 12 employees.
2. KLC has an informational website for those seeking information regarding its products but does not target sales in Virginia. Items cannot be purchased on the website directly.
3. Since KLC started in 2008, it has sold 5 products to Virginia residents who called and ordered products after seeing them on the website. The gross receipts for those products totaled $200.
4. 90% of KLC’s gross receipts come from its store located in Hilo, Hawaii.
On February 16, 2018, Pele filed a response to the motion. She argued that the Court should deny the motion because KLC had failed to timely assert the defense of lack of personal jurisdiction and thereby has waived any such defense.
In determining whether to grant the Motion to Dismiss, how should the U.S. District Court rule on the following:
|(a)||Pele’s claim that KLC has waived any jurisdictional defenses? Explain fully.|
|(b)||Pele’s allegation that the Court has jurisdiction over KLC? Explain fully.|
July 2018 - QUESTION 4 – EXAMPLE ANSWER #1
A. Court should Reject Pele's Claim that Personal Jurisdiction was Waived.
KLC did not waive personal jurisdiction because its objection to personal jurisdiction was timely and proper.
Under the Federal Rules of Civil Procedure, a party must object to personal jurisdiction first or it is deemed waived. However, a party may object to personal jurisdiction in the answer if the answer is filed first. Absent waiver of service of process, a responsive pleading is due within 21 days of service of process.
In this case, KLC's responsive pleading was timely. It is unclear when or how KLC was served, but its answer was filed 17 days after the case was filed.
KLC's objection to personal jurisdiction was also proper. KLC objected to personal jurisdiction in its answer, both by denying the claim and by asserting it as a separate part of the answer. And, its answer was the first responsive pleading filed. Therefore, it was proper to object to personal jurisdiction in the answer.
The court should thus reject the plaintiff's claim that personal jurisdiction was waived by KLC's actions.
B. Court lacks Jurisdiction over Pele's Claim
The court should grant KLC's motion to dismiss because while the court has subject matter jurisdiction, it lacks personal jurisdiction.
Subject Matter Jurisdiction (SMJ)
A federal court has SMJ only if the claim arises in federal law (i.e., presents a federal question on the face of the complaint), if the claim arises in diversity, or if the court can exercise supplemental jurisdiction.
Since all of the claims appear to arise under state law, there is no federal question SMJ. Further, the plaintiff brought the case under diversity SMJ.
Diversity SMJ exists when the plaintiff and defendant have diverse citizenship and the amount in controversy exceeds $75,000. Here, KLC is a Hawaii corporation and Pele is a Virginia resident. The claim is for $2 million. Therefore, the court has diversity SMJ.
Personal Jurisdiction - Constitution
The court does not have personal jurisdiction because the constitutional contact requirements are not satisfied.
Constitutionally, personal jurisdiction is permissible when the defendant has sufficient contacts with the forum state.
The requisite miniumum contacts require that the defendant purposefully avail itself of the forum state's laws that would make it foreseeable that it could be sued in the forum state.
Further, court must also assess the defendant's relatedness to the forum state. If the defendant is at home in the forum state (such as by being incorporated there), the court has general personal jurisdiction over the defendant. If not, the court can assert specific personal jurisdiction if the cause of action relates to the defendant's contact with the state.
Lastly, if the court is exercising specific personal jurisdiction, the court must find it fair to defendant to subject it to the court jurisdiction. The court will look to the plaintiff's right to choose where to file, a state's right to provide a forum for its citizens, and whether the trial would impose substantial hardship on a party or witness.
In this case, KLC lacks the requisite minumum contacts to be sued in Virginia. KLC has not purposefully availed itself of Virginia's laws. It does the bulk of its business in Hawaii and its business in Virginia amounts to 5 transactions totaling $200 in 10 years (none of which are at issue in this case). It does not target business in Virginia. The plaintiff brought the product from California to Virginia. Merely placing products into the stream of commerce does not make it foreseeable that the produce will end up in Virginia. It would not be foreseeable that a company that does de minimus business would be sued in Virginia.
Further, KLC is not a Virginia resident; thus, the court can only assert specific personal jurisdiction over KLC. But, specific personal jurisdiction is lacking because tThe cause of action is not related to KLC's contact with Virginia. The product was bought in California and the buyer transported it into Virginia. KLC was not involved with the transportation. Thus, the claim does not relate to any of KLC's contact.
Finally, it may be fair to hold the trial in Virginia, notwithstanding the other defects. While KLC is a small company and Hawaii is far from Virginia, the plaintiff has a right to sue in Virginia and the injury occured in Virginia.
However, due to the lack of KLC's minimum contacts with Virginia, the court lacks personal jurisdiction over the defendant.
Personal Jurisdiction - State Requirements
If consitutuonal requirements for personal jurisdiction were met, the court would have personal jurisdiction under Virginia law.
Claims in diversity must also find that the court has personal jurisdiction under state law. Virginia's long-arm statute permits exercising personal jurisdiction over out of state defendants in several instances, including when actions outside of Virginia cause a tort inside of Virginia.
Other grounds for jurisdiction are torts that occur within the state by actions within the state, a single transaction with a state resident, or contracts to supply products or services in-state, but none of these apply here because they do not relate to the claim at issue.
In this case, possible manufacturing or design defects cause the injury. These actions occured out of state, but resulted in a tort in state. Therefore, there jurisdiction under Virginia's long-arm statute to assert personal jurisdiction over the defendant.
However, as noted above, constitutional requirements for minumum contact are not satisfied. Therefore, the court lacks personal jurisdiction over the defendant and should dismiss the case.
July 2018 - QUESTION 4 – EXAMPLE ANSWER #2
(a) The Court should rule that KLC has not waived any personal jurisdiction defense. Under the Federal Rules of Civil Procedure, if a defendant fails to raise an objection to personal jurisdiction in either its answer or a pre-answer motion, whichever comes first, the defense is deemed waived. In this case, the facts clearly indicate that KLC specifically and affirmatively denied that the Court had personal jurisdiction over it. While they did not file a Motion to Dismiss until February 2, KLC properly preserved its objection by raising it in its first communication with the Court.
(b) The Court should rule that, while the Court does have subject matter jurisdiction of the case, it lacks personal jurisdicition over KLC in this case.
Subject Matter Jurisdiction: Subject matter jurisdicition can arise either through federal question jurisdiction or through diversity jursdiction. There is no claim arising under federal law in this case, therefore federal question jursidiction is inapplicable. In order to have subject matter jurisdiction based on diversity, there must be complete diversity of citizenship among the parties (i.e., no plaintiff or defendant may be domiciled in the same state) and the amount in controversy must exceed $75,000. For diversity purposes, corporations are domociled in all states in which they are incorporated and the state in which they have their principal place of business. In this case, KLC is domociled in Hawaii, Pele is domociled in Virginia, and the amount in controversy is $2 million. Thus, the Court would have subject matter jurisdiction over the case.
Personal Jurisdiction: In order for the Court to have personal jurisdiction over a party, it must satisfy both federal constitutional and state statutory requirements. In order for personal jurisdiction to be constitutional, the defendant must have sufficient minimum contacts with the forum state; the claim must be related to those contacts; and the exercise of jurisdiction must be fair. The sufficient minimum contacts element requires that a defendant have purposefully availed herself of the protections of the forum state. In the case of a corporation, it is not enough that the corporation have simply placed a product into the stream of commerce, as Pele asserts. The corporation must conduct enough business in the forum state so as to be considered “at home” there. In this case, KLC does not actively advertise in Virginia and has only sold 5 products to Virginia residents in the past ten years, totalling $200 in gross receipts. Additionally, items cannot be purchased on KLC’s website. This level of contact is far from sufficient to justify the Court’s exercise of personal jurisdiction. Furthermore, it would be manifestly unjust to require a small company like KLC to fly accross the country from Hawaii to Virginia based on such minimal contacts. Therefore, the Court would not have personal jurisdiction over KLC in this case.