Waste Management, Inc. v. Admiral Insurance

O’HERN, J.,

concurring.

I concur in the judgment of the Court. The exercise of jurisdiction in this case would offend the traditional notions of fair play *132and substantial justice that infuse the Due Process Clause of the Fourteenth Amendment of the United States Constitution. I disagree, however, that a territory-of-eoverage clause in an insurance policy is insufficient to establish the minimum contacts that make up the first prong of the two-part test for determining when jurisdiction may be exercised over a non-resident defendant.

I need not set forth the principles recently restated in cases such as Lebel v. Everglades Marina, Inc., 115 N.J. 317, 558 A.2d 1252 (1989). Suffice it to stay with the basics:

[D]ue process requires only that in order to subject a defendant to a judgment in personam, if [the defendant] be not present within the territory of the forum, [the defendant] have certain minimum contacts with it such that the maintenance of the suit does not offend “traditional notions of fair play and substantial justice.”
[International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278, 283 (1940)).]

In the context of specific jurisdiction (a lawsuit related to the contacts), the minimum-contacts requirement must result from the defendant’s purposeful conduct, not from the unilateral activities of the plaintiff. Lebel, supra, 115 N.J. at 323, 558 A.2d 1252. A territory-of-coverage clause can establish the minimum contacts sufficient to sustain jurisdiction. The Texas Supreme Court has held:

[W]hen the nonresident defendant is an insurance company, the following factors, when appropriate, should be considered when determining whether the nonresident defendant has purposely established “minimum contacts” with the forum state: (a) the insurer’s awareness that it was responsible to cover losses arising from a substantial subject of insurance regularly present in the forum state; and (b) the nature of the particular insurance contract and its coverage.
[Guardian Royal Exch. Assurance Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 227 (1991).]

Applying the Guardian decision in Malaysia British Assurance v. El Paso Reyco, Inc., 830 S.W.2d 919 (Tex.1992), the court explained that a policy that would reinsure a primary insurance company for claims, including those of some Texas residents, established a “twice-removed contact with Texas” and as such was not sufficient for in personam jurisdiction. Id. at 921; see also Domtar, Inc. v. Niagara Fire Ins. Co., 518 N.W.2d 58, 62 (Minn. *133Ct.App.1994), review granted (holding that non-resident insurer “should have expected coverage disputes [in the Minnesota territory of coverage] to be resolved in the same forum as the underlying action.”). Under those principles, a territory-of-coverage clause would establish the minimum contacts sufficient to sustain jurisdiction in New Jersey.

In this multi-faceted litigation, however, the New Jersey coverage issues now appear minor, at best. At the time of the Law Division decision in this ease, a thesis of insurance-coverage disputes was that policies could contain a global declaration of coverage. See Westinghouse Elec. Corp. v. Liberty Mut. Ins. Co., 233 N.J.Super. 463, 476, 559 A.2d 435 (App.Div.1989). However, Gilbert Spruance Co. v. Pennsylvania Manufacturers’ Ass’n Insurance Co., 134 N.J. 96, 629 A.2d 885 (1993), effectively douses that pursuit by emphasizing that coverage issues are generally to be resolved on the basis of the location of the insured risk.

Thus, a New Jersey Court adjudicating the issues in controversy in this case would be required, under the principles of Gilbert Spruance, to address questions of Michigan and Canadian law because at least two of the insured risks in controversy are located in those jurisdictions.

Under those circumstances, the limited nature of the contacts with New Jersey serves more properly to assess the second prong of the jurisdictional test — whether to entertain jurisdiction would offend traditional notions of fair play and substantial justice. That determination requires an evaluation of such factors as “the burden on the defendant, the interests of the forum State, * * * the plaintiffs interest in obtaining relief[,] * * * ‘the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.’ ” Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113, 107 S.Ct. 1026, 1034, 94 L.Ed.2d 92, 105 (1987) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 562, 62 L.Ed.2d 490, 498 (1980)).

*134In this case, what renders jurisdiction unreasonable is the limited interest of New Jersey as the forum state in resolving these controversies. The fact that New Jersey courts would have to decide foreign law, balanced against the shared interests of involved territories pursuing their substantive social policies, illustrates that point. The environmental concerns of the other jurisdictions make adjudication in those territories more desirable. See Gilbert Spruance, supra, 134 N.J. at 98, 629 A.2d 885. Those jurisdictions have the “dominant significant relationship” to the insured risk. Id. at 112, 629 A.2d 885. Therefore, New Jersey does not have jurisdiction over defendants.

Justice O’HERN, concurring in result.

For Vacation and Remandment — Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK, O’HERN, GARIBALDI and STEIN — 7.

Opposed — None.