The World in U.S. Courts: Fall 2015 - Personal Jurisdiction/Forum Non Conveniens
July.16.2015
A group of seven soccer players brought a putative class action against five national and state-based soccer organizations, and the Federation Internationale de Football Association ("FIFA"), a Switzerland-based entity, for their alleged failure to provide adequate concussion management to youth soccer players. In moving to dismiss the complaint, FIFA contended that it was not subject to either general or specific jurisdiction in California.
Plaintiffs initially argued that the Court had general personal jurisdiction over FIFA because of its numerous contacts with California. The Court stated, however, that general jurisdiction could only be asserted if FIFA's contact with California were so substantial that the organization could be found to be "at home" in the State, and that the facts presented showed only commercial or quasi-commercial activities that were no more numerous in California than in any other U.S. state or region in the world. Conversely, FIFA provided undisputed evidence that it had no facilities, offices, agents, employees, or subsidiaries in California, was not registered to do business in California, and had no financial assets or obligations in California.
In determining whether it could exercise specific jurisdiction over FIFA, the Court considered whether (i) FIFA "purposefully directed" its activities or consummated a transaction with California or a California resident, or "purposefully availed" itself of the privileges of conducting activities in California; (ii) plaintiffs' claim arose out of or related to FIFA's activities in California; and (iii) the Court's exercise of jurisdiction over FIFA would be reasonable. With respect to the first prong, the Court observed that courts in the Ninth Circuit generally apply the "purposeful availment" standard in claims sounding in contract and apply the "purposeful direction" standard in claims sounding in tort.
FIFA contended that the Court should apply the "purposeful direction" standard, and conclude that plaintiffs could not show that the organization purposefully directed its activities to California or a California resident. Plaintiffs, however, claimed that the "purposeful availment" test should be applied, and that they sufficiently alleged that FIFA availed itself of the privilege of conducting activities in California. They specifically argued that FIFA exerted significant influence and regulation over the sport of soccer in the U.S. and California, had various commercial activities in the U.S. and California that reinforced its brand and influence, and received significant sums of money from the U.S. and California.
While the Court agreed with plaintiffs that the "purposeful availment" test was the proper standard (as their claims sounded in tort), it found that plaintiffs made a "weak" showing. It noted that FIFA's regulation of its U.S. and California members and its ability to influence individuals in the U.S. and California did not establish that it had purposefully availed itself of the benefits of conducting activities in California to such an extent that it should have reasonably anticipated being sued into California courts—an alternative test that the U.S. Supreme Court has endorsed. The Court held that FIFA's commercial activities "arguably" supported a finding of purposeful availment, but observed that the plaintiffs' claims neither arose out of nor were related to such commercial arrangements. The Court, therefore, held that it could not exercise specific jurisdiction over FIFA.