S.D.N.Y. Discusses Split Re Meaning of “Arise out of or Relate to” in the Context of a Personal Jurisdiction Analysis
Per Del Ponte v. Universal City Development Partners, Ltd., Slip Copy, 2008 WL 169358 (S.D.N.Y. Jan. 16, 2008):
What does it mean for a cause of action to “arise out of or relate to” a given defendant's conduct in a forum? As the Second Circuit has observed, there is little consensus on this issue. See Chew v. Dietrich, 143 F.3d 24, 29 (2d Cir.1998) (“[T]here appears to be a split in the Circuits on the standard to be applied in determining if a tort claim ‘relates' to the defendant's activities within the state.”). The Supreme Court has resisted explicating the scope of the “arise out of or relate to” requirement. See Helicopteros, 466 U.S. at 415 n. 10 (“We do not address ... whether the terms ‘arising out of and ‘related to’ describe different connections .... Nor do we reach the question whether, if the two types of relationship differ, a forum's exercise of personal jurisdiction in a situation where the cause of action ‘relates to,’ but does not ‘arise out of,’ the defendant's contacts with the forum should be analyzed as an assertion of specific jurisdiction.”); Carnival Cruise Lines, Inc., v. Shute, 499 U.S. 585, 589 (1991) (holding that construction of a forum selection clause was dispositive of the case, thus permitting the Court to punt on the issue for which certiorari was granted: whether plaintiff's claim arose from or related to defendant's contacts with the forum); see also O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 318 (3d Cir.2007) (collecting Supreme Court cases commenting on the “arise from or relate to” language).
Without explicit guidance from the Supreme Court, the various Circuits have reached different conclusions on what standard should be applied in determining whether a claim “arises from or relates to” a defendant's contacts with a forum. Some circuits have held that jurisdiction over a defendant is proper only when the defendant's conduct within the forum is the “proximate cause” of the plaintiff's injury. See Chew, 143 F.3d at 29 (noting use of the “proximate cause” test by the First and Eighth Circuits). Other circuits have offered a more relaxed test, holding that minimum contacts exist when a defendant's conduct is a “but for” cause of the plaintiff's injury. See id. (noting use of the “but for” test in the Sixth, Seventh, and Ninth Circuits).
The Second Circuit, however, has eschewed commitment to either test. The court in Chew contrasted the “but for” and the “proximate cause” tests, but explicitly rejected the “dichotomy” of these two tests. Id. Instead, the Court proposed a more flexible application of minimum contacts, which would view “relatedness” as but one aspect of a “general inquiry ... designed to determine whether the exercise of personal jurisdiction in a particular case does or does not offend ‘traditional notions of fair play and substantial justice.’ “ See id. (quoting Int'l Shoe, 326 U.S. at 316). . . . Under [the Second Circuit] test, if a defendant has scant contacts with the forum, a court may demand a proximate relation between the defendant's contacts and the plaintiff's injury. If, on the other hand, the defendant has substantial contacts with the forum (even if not sufficient to establish general jurisdiction), the court may accept a more attenuated relation between the defendant's contacts with the forum and the plaintiff's cause of action.