456 U.S. 694, 702 n.9 (1982)
Respondent Compagnie des Bauxites de Guinée is a Delaware corporation.1 Its principal place of business is in the Republic of Guinea, where it operates bauxite mines and processing facilities.2 Forty-nine percent of its stock is owned by the Republic of Guinea.3 The remaining fifty-one percent is owned by Halco (Mining) Inc., a Pennsylvania company that contracted to procure insurance for CBG.4
In 1973, Halco instructed broker Marsh & McLennan to obtain $20 million in business interruption coverage.5 The first $10 million was placed with Insurance Company of North America.6 The excess $10 million was placed through Bland Payne in the London market with 21 foreign insurers.7 Fourteen of those insurers are petitioners here.8 The placing slip was initialed effective February 12, 1974.9 The excess insurers adopted the INA policy terms.10
After CBG allegedly suffered mechanical problems causing more than $10 million in losses, it filed a two-count diversity action in the Western District of Pennsylvania in December 1975.11 CBG named INA on the first count and the excess insurers on the second count.12 The excess insurers answered by asserting lack of in personam jurisdiction.13 They later moved for summary judgment on that ground.14
CBG served its first document request in August 1976.15 The request sought copies of all business interruption policies issued between 1972 and 1975.16 After objections and motions to compel, the district court overruled the objections in June 1978.17 The court later narrowed the request to policies delivered in or covering risks in Pennsylvania.18 Petitioners stated the documents were held by London brokers.19 The court ordered them to request the files and gave successive extensions through November 1978.20
On December 21, 1978, after petitioners offered only to make four million files available in London, the district court warned that failure to produce the information within 60 days would result in an order under Rule 37(b)(2)(A) assuming jurisdiction.21 On April 19, 1979, the court found the material had not been produced and entered the sanction.22 It also made independent findings of jurisdiction under the Pennsylvania long-arm statute and by implicit consent through adoption of the INA contract.23
The Court of Appeals for the Third Circuit affirmed the jurisdictional holding as to all but three excess insurers.24 It relied solely on the validity of the Rule 37 sanction.25 The Supreme Court granted certiorari because the decision conflicted with Familia de Boom v. Arosa Mercantil, S.A., 629 F.2d 1134 (CA5 1980).26
Whether Rule 37(b) of the Federal Rules of Civil Procedure may be applied to establish facts forming the basis for personal jurisdiction over a defendant as a sanction for failure to comply with discovery orders directed at jurisdictional facts?27
Rule 37(b)(2)(A) authorizes a district court to sanction noncompliance with discovery orders by ordering that designated facts be taken as established.28 This authority extends to facts bearing on personal jurisdiction.29 Personal jurisdiction protects an individual liberty interest that may be waived or subjected to procedural presumptions.30 By contrast, subject-matter jurisdiction involves nonwaivable Art. III and statutory limits.31
Yes. The district court directed discovery at petitioners' insurance policies delivered in or covering risks in Pennsylvania.32 Petitioners had answered by asserting lack of in personam jurisdiction and had moved for summary judgment.33 Petitioners repeatedly failed to comply despite successive extensions and explicit warnings that jurisdiction would be assumed under Rule 37(b)(2)(A).34 The court therefore took as established that petitioners had sufficient business contacts with Pennsylvania for personal jurisdiction.35
Rule 37(b) may be applied to establish personal jurisdiction over a recalcitrant defendant.36
Related opinions on this issue
Justice Powell concurred in the judgment.37 He stressed that federal district courts in diversity cases must apply state long-arm statutes for personal jurisdiction under the Rules of Decision Act.38 Respondent had made a prima facie showing of minimum contacts by affidavit and other evidence.39
This showing justified the discovery orders and permitted the court to sustain jurisdiction upon petitioners' failure to comply.40 Powell declined to endorse the majority's broad constitutional distinction between subject-matter and personal jurisdiction or its potential implications for state jurisdictional limits.41
Whether such a Rule 37(b) sanction violates due process when imposed after a defendant has submitted to the court for the limited purpose of challenging jurisdiction?42
A Rule 37(b)(2)(A) sanction finding personal jurisdiction does not violate due process.43 It operates as a permissible presumption of the sort upheld in Hammond Packing Co. v. Arkansas.44 The refusal to produce evidence material to jurisdiction admits the want of merit in the asserted defense.45 This holds provided the sanction is just and specifically related to the claim at issue.46 The defendant has submitted to the court for the limited purpose of litigating jurisdiction.47
No. Petitioners submitted to the district court by answering, moving for summary judgment on personal jurisdiction grounds, and litigating the discovery orders.48 After they failed to produce the requested policy information despite multiple court orders and warnings, the sanction took as established the contacts with Pennsylvania that respondent sought to prove.49 This created no more of a due process problem than the Rule 12(h) waiver of the personal-jurisdiction defense.50
The Rule 37(b) sanction does not violate due process.51
Related opinions on this issue
Justice Powell concurred in the judgment but wrote separately to emphasize that the district court's personal jurisdiction in this diversity case rested on the Pennsylvania long-arm statute under the Rules of Decision Act.52 He noted that respondent had made a prima facie showing of minimum contacts through affidavit and other evidence, which justified the discovery orders.53 Upon petitioners' noncompliance, that showing supported the finding of jurisdiction via the Rule 37 sanction or a presumption of waiver.54
Powell declined to join the majority's broad theoretical distinction between subject-matter and personal jurisdiction, warning that it could affect established limits on state court jurisdiction.55 He stressed that Rule 37 does not independently confer personal jurisdiction and that serious constitutional questions would arise from using it for fishing expeditions without minimum contacts.56