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INDIANA CASE REVIEW: Personal Jurisdiction, the Modified Impact Rule, and Preferred Venue

June 1, 2007 //  by Stephen Arthur

Indiana Case Review

Personal Jurisdiction, the Modified Impact Rule, and Preferred Venue

Stephen E. Arthur

 

Personal Jurisdiction

 

Indiana’s long-arm statute, Trial Rule 4.4(A), was amended in 2003 and adopted a constitutional catch-all that provides “a court of this state may exercise jurisdiction on any basis not inconsistent with the Constitutions of this state or the United States.” Unfortunately, without explanation, the 2003 amendment also retained the 8 enumerated acts which Indiana courts, prior to 2003, had used to assert personal jurisdiction over a non-resident defendant. See, Anthem Ins. Co. v. Tenet Healthcare Corp., 730 N.E.2d 1227 (Ind. 2000) (court affirmed that the “enumerated acts” were not co-extensive with the limits of personal jurisdiction under the Due Process Clause). Cases decided after the 2003 amendment had difficulty explaining why the Supreme Court retained the eight enumerated acts as part of the Indiana long-arm statute if the court was willing to expressly adopt the “any constitutional basis” standard and thereby expand personal jurisdiction to the limits of Due Process.

 

The Indiana Supreme Court recently eliminated this confusion in LinkAmerica Corp. v. Albert, 857 N.E.2d 961 (Ind. 2006). The court held that the 2003 amendment to Trial Rule 4.4(A) was intended to, and does, reduce analysis of personal jurisdiction to the issue of whether the exercise of personal jurisdiction is consistent with the Federal Due Process Clause. Retention of the enumerated acts found in Trial Rule 4.4(A) has now officially been relegated to the status of a “handy checklist of activities that usually support personal jurisdiction but does not serve as a limitation on the exercise of personal jurisdiction by a court of this state.” The LinkAmerica opinion is a much awaited and very significant statement of personal jurisdiction law in Indiana.

 

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The Modified Impact Rule

 

Indiana’s modified impact rule, in the context of claims for negligent infliction of emotional distress, requires that a party demonstrate a direct physical impact resulting from the negligence of another. If the physical impact is slight, or the evidence of the impact tenuous, the court must evaluate the claimed emotional distress to determine whether it is speculative, exaggerated, fictitious, or unforeseeable. If so, the claim must fail. The Indiana Supreme Court addressed these principles in Atlantic Coast Airlines v. Cook, 857 N.E.2d 989 (Ind. 2006).

 

In Cook, shortly after the events of September 11, 2001, the plaintiffs were passengers on a plane when a French national became disruptive on a flight operated by Atlantic Coast Airlines. The flight was diverted and the French national was arrested. Claiming that they had “never been so scared in their entire lives”, the plaintiffs commenced an action alleging, among other theories, negligent infliction of emotional distress. The defendants moved for summary judgment on the emotional distress claim. The trial court determined that Indiana’s modified impact rule did not preempt the plaintiffs’ claim for emotional distress against Atlantic and the Indiana Court of Appeals affirmed

 

On transfer, the Indiana Supreme Court determined that the plaintiffs’ claim for negligent infliction of emotional distress had failed to satisfy Indiana’s modified impact rule. The court questioned the plaintiffs’ argument that a physical impact had occurred because the plaintiffs had breathed the French national’s cigarette smoke and had felt vibrations from stomping feet. In rejecting the claim, the court noted the actual physical impact claimed by the plaintiffs was slight and, therefore, analyzed whether the claimed emotional distress was speculative, exaggerated, fictitious or unforeseeable. Noting that the plaintiffs had asserted feelings of being “bothered, concerned and nervous,” the court stated “these feelings about the world around us in general and air travel in particular is the plight of many citizens in this country, living as we do in a post-September 11 environment.” Accordingly, the circumstances did not satisfy the modified impact rule.

 

Preferred Venue

 

Preferred venue is governed by Trial Rule 75(A). Where an action is filed in a county of preferred venue, the defendant may not transfer the action to another county of preferred venue. In the context of claims arising from an automobile accident, Subsection (A)(3) provides that preferred venue will lie in the county in which the accident occurred. However, Subsection (A)(2) recognizes that preferred venue may lie in any county “where the land or some part thereof is located or the chattels or some part thereof are regularly located or kept, if the complaint includes a claim for injuries thereto or relating to such land or such chattels….” In order to establish preferred venue in a plaintiff’s home county, personal injury plaintiffs at times, in addition to asserting a personal injury claim arising from the automobile accident, also add a claim for damage to personal property located in the automobile at the time of the accident. Because the automobile and personal property typically are “regularly located or kept” at the plaintiff’s home, the plaintiff argues that his county of residence is a preferred venue under Subsection (A)(2). Plaintiffs have used damage to anything from compact discs and clothing to golf clubs to establish preferred venue under this subsection. However, this practice was recently addressed and rejected by the Indiana Supreme Court in R&D Transport, Inc. v. A.H., 2006 WL 3804397 (Ind. 2006).

 

In R&D Transport, plaintiff was involved in a car accident in Dearborn County. Personal property owned by the plaintiff was destroyed in the accident and plaintiff alleged the property was regularly located in Porter County. The defendant’s principal place of business was located in Hendricks County. The plaintiff brought suit in Porter County and the defendant moved to transfer the matter to Dearborn or Hendricks. The defendant argued that incidental damage to chattel in a motor vehicle accident should be insufficient to create preferred venue under Subsection (A)(2). On transfer, the Indiana Supreme Court agreed with the defendant and held Porter County was not a county of preferred venue. The Supreme Court noted: “The location where [plaintiff] usually kept her [personal property] played no role in the accident itself or in the claims of the lawsuit she filed. Rather, her claim involved a motor vehicle accident; the location that played the important role was that of the actual collision.” The court further stated a concern that plaintiff’s attempt to establish preferred venue under Subsection (A)(2), if successful, would undermine the intended application of Subsection (A)(10) which generally establishes preferred venue in the plaintiff’s home county only as a last resort. In reaching its decision, the court expressly disapproved the holdings in Swift v. Pirnat, 828 N.E.2d 444 and Halsey v. Smeltzer, 722 N.E.2d 871.

 

2007 Amendments to Indiana Rules of Trial Procedure

 

By a Rules Amendments Order of August 15, 2006, the Supreme Court amended Trial Rules 12, 53.1, 63, 76 and 81. These amendments became effective January 1, 2007, and may be reviewed at the Supreme Court’s website,

http://www.in.gov/judiciary/orders/r…nts/index.html

.

 

—————————————————————————————-

 

Stephen Arthur (sarthur@h-mlaw.com) is a partner with Harrison & Moberly, LLP, in Indianapolis, concentrating his practice in federal and state complex commercial litigation. The opinions and analysis expressed in this column are those of the author.

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