That does answer the question in the narrow, but more broadly: what are the practical implications for a company with no other presence in Chicago if they don't pay?
They can be sued in a Chicago court, and if they don't defend themselves, a default judgment will be rendered, and then the fees will be collected directly out of the company's bank account, wherever it happens to be.
The United States is a pretty monolithic entity as far as laws and enforcement goes. You don't get away with, e.g., assault by fleeing to a different state; you'll simply be caught by that other state and turned over to the first state to face charges. Similarly, you don't get away with tax evasion any more easily. Now if your company is based in another country, then you might have a better chance.
This sounds like a good argument to use a local bank that only operates in your state, rather than a national bank.
That way, if someone gets an out of state default judgement from a court that does not have personal jurisdiction over you, they will have to bring that judgement to your state and file it with a court in your state in order to get something enforceable in your state. That should give you an opportunity to challenge the validity of the judgement on jurisdiction grounds.
States are required to recognize the judgements of the courts of other states, but only if the court rendering that judgement had jurisdiction.
My Civil Procedure recollection is rather hazy. Suppose Chicago sued, in Chicago courts, a small entertainment company that clearly does not have sufficient contacts with Chicago to meet the Constitutional requirements for giving Chicago courts personal jurisdiction.
I believe that as part of its pleadings, Chicago would have to tell the Court why it believes that Court is the proper place for the suit, and part of that is explaining to the Court how it has personal jurisdiction.
Here's what I do not remember. If the defendant did not appear to dispute that, would the Court simply accept plaintiff's theory of jurisdiction, or does the Court review on its own whether or not it does indeed have jurisdiction?
I have a vague recollection that it is the latter, because the issue of whether or not the court has jurisdiction is not an issue between the parties, but rather determines whether the court even has authority to adjudicate the case, but I could easily be confusing this with something else.
That way, if someone gets an out of state default judgement from a court that does not have personal jurisdiction over you, they will have to bring that judgement to your state and file it with a court in your state in order to get something enforceable in your state. That should give you an opportunity to challenge the validity of the judgement on jurisdiction grounds.
Judgements of one state's courts are valid in all other states, and can be enforced in other states' courts under the Full Faith and Credit clause of the Constitution, even if the laws in other states are different, unless the judgement is contrary to the public policy of the other state. An example would be trying to enforce an AL non-compete clause in a California court after a non-executive employee has moved from an AL employer to a competitor in CA. Non-competes for non-executives are contrary to public policy in CA on the grounds that they inhibit an employee's rights to earn a living, and so will not be enforced by a CA court.
States are required to recognize the judgements of the courts of other states, but only if the court rendering that judgement had jurisdiction.
No, states are required to enforce the judgements of other state's courts unless the judgement is contrary to the public policy of the state in which enforcement is sought. The defendant is not allowed to challenge the jurisdiction of the original court in an enforcement proceeding--they were supposed to do that in the original trial (or in their appeal to the original ruling). However, if the defendant has challenged jurisdiction (or other issues) in its appeal to the original judgement (in the proper court for making such an appeal), enforcement proceedings (in other states) must be stayed until the appeal is resolved, since the judgment may be overturned.
> No, states are required to enforce the judgements of other state's courts unless the judgement is contrary to the public policy of the state in which enforcement is sought. The defendant is not allowed to challenge the jurisdiction of the original court in an enforcement proceeding--they were supposed to do that in the original trial (or in their appeal to the original ruling).
I think you may have overlooked that we are talking about a default judgement. If it were not a default judgement, then yes, the defendant cannot subsequently challenge the jurisdiction of the original court when the plaintiff comes around to his state to enforce the judgement.
If it was a default judgement, however, the defendant can raise a collateral attack on personal jurisdiction (and only on personal jurisdiction), at least in some states, such as California [1], New York [2], Connecticut [3], Florida [4], and Texas [6].
(That Connecticut case is a good illustration of how NOT to raise a collateral attack on personal jurisdiction. Boy, did that defendant blow it).
Massachusetts has a really interesting law on recognition of judgements from other states [5]. They enumerate the conditions under which a foreign judgement will NOT be refused recognition for lack of personal jurisdiction:
A foreign judgment shall not be refused recognition
for lack of personal jurisdiction if (1) the
defendant was served personally in the foreign
state; (2) the defendant voluntarily appeared in the
proceedings, other than for the purpose of
protecting property seized or threatened with
seizure in the proceedings or of contesting the
jurisdiction of the court over him; (3) the
defendant prior to the commencement of the
proceedings had agreed to submit to the jurisdiction
of the foreign court with respect to the subject
matter involved; (4) the defendant was domiciled in
the foreign state when the proceedings were
instituted, or, being a body corporate had its
principal place of business, was incorporated, or
had otherwise acquired corporate status, in the
foreign state; (5) the defendant had a business
office in the foreign state and the proceedings in
the foreign court involved a cause of action arising
out of business done by the defendant through that
office in the foreign state; or (6) the defendant
operated a motor vehicle or airplane in the foreign
state and the proceedings involved a cause of action
arising out of such operation.
Aren't all of these things that would constitute sufficient contacts with the foreign state to grant it personal jurisdiction? If so, what is the purpose of explicitly listing them?
I wonder if the idea is that these are common things that people who want to raise a collateral attack on personal jurisdiction run afoul of, and so by listing them they hope that such defendants will realize they will not be successful and hopefully avoid wasting the time of Massachusetts courts?
The phrase that the Supreme Court seems to like when it talks about Full Faith and Credit and challenging judgements on jurisdiction is "fully and fairly litigated". Once the jurisdiction issues is "fully and fairly" litigated (such as in the original court in the case where the defendant does participate), it cannot be subsequently challenged in a collateral attack. If the defendant does not participate, and so the jurisdiction issue is not dealt with, then a collateral attack is possible without violating Full Faith and Credit.
