wisconsin civil procedure before trial - sample chapter€¦ · · 2011-08-18[§ 3.8] checklist...

© May 2002, State Bar of Wisconsin CLE Books Ch. 3 Pg. 1

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JurisdictionKim GrimmerJeanette Lytle

I. [§ 3.1] Scope of Chapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

II. [§ 3.2] Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5A. [§ 3.3] Jurisdiction in General . . . . . . . . . . . . . . . . . . . . . . 5B. [§ 3.4] Jurisdictional Alternatives . . . . . . . . . . . . . . . . . . . 6C. [§ 3.5] Jurisdiction Distinguished from Venue . . . . . . . . . 7D. [§ 3.6] Preliminary Strategic Considerations . . . . . . . . . . 7

1. [§ 3.7] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72. [§ 3.8] Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

III. [§ 3.9] Subject Matter Jurisdiction . . . . . . . . . . . . . . . . . . 10A. [§ 3.10] Definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10B. [§ 3.11] Wisconsin Subject Matter Jurisdiction . . . . . . . . 11

1. [§ 3.12] Legal Bases . . . . . . . . . . . . . . . . . . . . . . . . . . 11a. [§ 3.13] Constitutional Bases . . . . . . . . . . . . . . . . . 11b. [§ 3.14] Statutory Bases . . . . . . . . . . . . . . . . . . . . . 12

2. [§ 3.15] Limits on Circuit Court Jurisdiction . . . . . . . 14a. [§ 3.16] In General . . . . . . . . . . . . . . . . . . . . . . . . . 14b. [§ 3.17] Small Claims Court . . . . . . . . . . . . . . . . . 15c. [§ 3.18] Municipal Court . . . . . . . . . . . . . . . . . . . . 17d. [§ 3.19] Administrative Remedies . . . . . . . . . . . . . 18e. [§ 3.20] Time Limits . . . . . . . . . . . . . . . . . . . . . . . 19

3. [§ 3.21] Challenges to a Court’s Competency toExercise Subject Matter Jurisdiction . . . . . . . 19

a. [§ 3.22] In General . . . . . . . . . . . . . . . . . . . . . . . . . 19b. [§ 3.23] Subject Matter Jurisdiction vs.

Competency . . . . . . . . . . . . . . . . . . . . . . . 20c. [§ 3.24] When Challenge Must Be Raised;

Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 21(1) [§ 3.25] In General . . . . . . . . . . . . . . . . . . . . 21

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Ch. 3 Pg. 2 © May 2002, State Bar of Wisconsin CLE Books

(2) [§ 3.26] Counsel’s Ethical Duty . . . . . . . . . . 21(3) [§ 3.27] Statutory Requirements . . . . . . . . . . 22(4) [§ 3.28] Collateral Challenge; Issue

Preclusion . . . . . . . . . . . . . . . . . . . . . 22C. [§ 3.29] Federal Subject Matter Jurisdiction . . . . . . . . . . . 23

1. [§ 3.30] Legal Bases . . . . . . . . . . . . . . . . . . . . . . . . . . 23a. [§ 3.31] Constitutional Basis . . . . . . . . . . . . . . . . . 23b. [§ 3.32] Statutory Bases . . . . . . . . . . . . . . . . . . . . . 24

2. [§ 3.33] Federal Question Jurisdiction . . . . . . . . . . . . 25a. [§ 3.34] Statutory Basis . . . . . . . . . . . . . . . . . . . . . 25b. [§ 3.35] Tests for Federal Question

Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 25c. [§ 3.36] Types of Federal Question Cases . . . . . . . 28

3. [§ 3.37] Diversity Jurisdiction . . . . . . . . . . . . . . . . . . 29a. [§ 3.38] Statutory Basis . . . . . . . . . . . . . . . . . . . . . 29b. [§ 3.39] Complete Diversity Requirement . . . . . . . 29c. [§ 3.40] How Citizenship Is Determined . . . . . . . . 30

(1) [§ 3.41] Individuals . . . . . . . . . . . . . . . . . . . . 30(2) [§ 3.42] Corporations . . . . . . . . . . . . . . . . . . . 31

d. [§ 3.43] When Citizenship Is Determined . . . . . . . 32e. [§ 3.44] Jurisdictional Amount Requirement . . . . 33

D. [§ 3.45] Indian Tribe Jurisdiction . . . . . . . . . . . . . . . . . . . 35E. [§ 3.46] Relationship Between State and Federal

Subject Matter Jurisdiction . . . . . . . . . . . . . . . . . 361. [§ 3.47] State General Jurisdiction Compared to

Federal Limited Jurisdiction . . . . . . . . . . . . . 362. [§ 3.48] Areas of Exclusive Federal Jurisdiction . . . . 373. [§ 3.49] Federal Supplemental Jurisdiction . . . . . . . . 384. [§ 3.50] Concurrent Jurisdiction . . . . . . . . . . . . . . . . . 38

a. [§ 3.51] Concurrent Federal and StateJurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 38

b. [§ 3.52] Types of Concurrent JurisdictionCases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

5. [§ 3.53] Removal of State Actions to FederalDistrict Courts . . . . . . . . . . . . . . . . . . . . . . . . 40

IV. [§ 3.54] Personal Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . 43A. [§ 3.55] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43B. [§ 3.56] General vs. Specific Personal Jurisdiction . . . . . 44

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C. [§ 3.57] Determination of Whether Court Has PersonalJurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

1. [§ 3.58] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . 452. [§ 3.59] Service of Process . . . . . . . . . . . . . . . . . . . . . 453. [§ 3.60] Statutory Basis . . . . . . . . . . . . . . . . . . . . . . . . 464. [§ 3.61] Due Process . . . . . . . . . . . . . . . . . . . . . . . . . . 47

D. [§ 3.62] Wisconsin Long-Arm Statute . . . . . . . . . . . . . . . 501. [§ 3.63] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . 502. [§ 3.64] General Personal Jurisdiction . . . . . . . . . . . . 50

a. [§ 3.65] In General . . . . . . . . . . . . . . . . . . . . . . . . . 50b. [§ 3.66] Physical Presence Within State . . . . . . . . 51c. [§ 3.67] Wisconsin Domicile . . . . . . . . . . . . . . . . . 52d. [§ 3.68] Domestic Corporation, Limited

Liability Company, or LimitedLiability Partnership . . . . . . . . . . . . . . . . . 52

e. [§ 3.69] Substantial Activities Within State . . . . . 533. [§ 3.70] Specific Personal Jurisdiction . . . . . . . . . . . . 54

a. [§ 3.71] Local Act or Omission . . . . . . . . . . . . . . . 54b. [§ 3.72] Local Injury; Foreign Act or

Omission . . . . . . . . . . . . . . . . . . . . . . . . . 54(1) [§ 3.73] In General . . . . . . . . . . . . . . . . . . . . 54(2) [§ 3.74] Standards for Tortious Conduct . . . . 55(3) [§ 3.75] Timing . . . . . . . . . . . . . . . . . . . . . . . 56(4) [§ 3.76] Proof . . . . . . . . . . . . . . . . . . . . . . . . 56

c. [§ 3.77] Local Services, Goods, or Contracts . . . . 56d. [§ 3.78] Local Property . . . . . . . . . . . . . . . . . . . . . 58e. [§ 3.79] Deficiency Judgments in Foreclosure

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59f. [§ 3.80] Officers and Directors . . . . . . . . . . . . . . . 59g. [§ 3.81] Taxes or Assessments . . . . . . . . . . . . . . . 60h. [§ 3.82] Insurance or Insurers . . . . . . . . . . . . . . . . 60i. [§ 3.83] Certain Marital Actions . . . . . . . . . . . . . . 60j. [§ 3.84] Personal Representatives . . . . . . . . . . . . . 60k. [§ 3.85] Joinder of Claims . . . . . . . . . . . . . . . . . . . 61

4. [§ 3.86] Special Jurisdictional Statutes . . . . . . . . . . . . 62E. [§ 3.87] Consent to Personal Jurisdiction . . . . . . . . . . . . . 62

1. [§ 3.88] Consent by Individuals and Corporations . . . 622. [§ 3.89] Consent by the State; Sovereign

Immunity from Suit . . . . . . . . . . . . . . . . . . . . 63F. [§ 3.90] Waiver of Defense of Lack of Personal

Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

§ 3.1 CHAPTER 3


G. [§ 3.91] Concurrent Personal Jurisdiction . . . . . . . . . . . . . 65H. [§ 3.92] Challenges to Personal Jurisdiction:

Procedural Considerations . . . . . . . . . . . . . . . . . . 651. [§ 3.93] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . 652. [§ 3.94] Direct Challenges . . . . . . . . . . . . . . . . . . . . . 663. [§ 3.95] Collateral Challenges . . . . . . . . . . . . . . . . . . . 68

V. [§ 3.96] In Rem and Quasi in Rem Jurisdiction . . . . . . . . . 69A. [§ 3.97] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69B. [§ 3.98] In Rem Jurisdiction . . . . . . . . . . . . . . . . . . . . . . . 69C. [§ 3.99] Quasi in Rem Jurisdiction . . . . . . . . . . . . . . . . . . 69

1. [§ 3.100] In General . . . . . . . . . . . . . . . . . . . . . . . . . . . 692. [§ 3.101] Garnishment and Attachment . . . . . . . . . . . . 70

D. [§ 3.102] Minimum Contacts Requirement . . . . . . . . . . . . 71E. [§ 3.103] Strategic Considerations . . . . . . . . . . . . . . . . . . . 71

1. [§ 3.104] Plaintiff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 712. [§ 3.105] Defendant . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

I. [§ 3.1] Scope of Chapter

An attorney instituting or defending a civil action must determinewhether the court has both (1) subject matter jurisdiction and (2) eitherpersonal jurisdiction over the parties or in rem jurisdiction over the propertythat is the subject of the action. The subject matter jurisdiction of a courtis its power to hear and decide the particular kind of case pending before it.The personal jurisdiction of a court is its power to hear and adjudicate acase involving the particular defendants in the case. In rem or quasi in remjurisdiction is a court’s power to adjudicate the interests of persons in theparticular property that is the subject of the case. A court that lacks eithersubject matter jurisdiction or both personal jurisdiction and in remjurisdiction generally may not issue a valid judgment (although a defenseof lack of personal jurisdiction may be waived, see infra § 3.90).

This chapter first discusses subject matter jurisdiction. It addresses state,federal, and Indian tribe subject matter jurisdiction and the relationshipbetween them; the constitutional and statutory limits on courts’ subjectmatter jurisdiction; and the removal of actions filed in state court to federaldistrict courts. Direct and collateral challenges to a court’s subject matterjurisdiction are also reviewed.

JURISDICTION § 3.3

1 Unless otherwise indicated, all references in this chapter to the WisconsinStatutes are to the 1999–2000 Wisconsin Statutes, as affected by acts through 2001Wisconsin Act 43. Textual references to the Wisconsin Statutes are hereinafterindicated as “chapter xxx” or “section xxx.xx,” without the designation “of theWisconsin Statutes.”


The chapter then discusses the bases for establishing personal jurisdic-tion over a defendant. The Wisconsin long-arm statute, section 801.05 ofthe Wisconsin Statutes,1 which authorizes the court to exercise personaljurisdiction over out-of-state defendants, is reviewed in some detail.Constitutional due process limits on the use of the long-arm statute arediscussed as well. The need for proper service of process to obtain personaljurisdiction is discussed at length in Chapter 6, infra.

Finally, the chapter discusses in rem and quasi in rem jurisdiction. Thechapter considers the ability of a court to adjudicate rights in real orpersonal property located within Wisconsin’s borders when a defendanthaving an interest in the property is located outside those borders and haslittle substantive contact with the state.

Challenges to a court’s jurisdiction are discussed generally in sections3.21–.28 (subject matter jurisdiction) and 3.92–.95 (personal jurisdiction),infra.

Motions to dismiss based on lack of jurisdiction over the subject matteror over the person or property are discussed more particularly in sections9.16 and 9.17, infra, respectively.

II. [§ 3.2] Introduction

A. [§ 3.3] Jurisdiction in General

The jurisdiction of a court is its power to hear a particular case andrender a valid judgment. To issue a valid and binding judgment against aparty personally, the court must have (1) subject matter jurisdiction (and thecompetency to exercise that jurisdiction) and (2) either personal jurisdictionor in rem/quasi in rem jurisdiction over property in which the person has aninterest. Wis. Stat. § 801.04(1), (2). If a judgment is rendered by a courtlacking jurisdiction (or competency to exercise that jurisdiction), thejudgment may be subject to direct attack on appeal, or collateral attackseeking to have the judgment voided or otherwise declared unenforceablein a subsequent proceeding. See infra §§ 3.21–.28 (challenges to subject

§ 3.4 CHAPTER 3

2 While considerations of state sovereignty give states an independent interestin the exercise of jurisdiction over their citizens, this interest may be waived by thedefendant.


matter jurisdiction), .92–.95 (challenges to personal jurisdiction), .102(challenges to in rem jurisdiction). Questions of jurisdiction thereforeshould be given priority, since if there is no jurisdiction there is no authorityto proceed. Vermont Agency of Natural Resources v. United States, 529U.S. 765, 778 (2000). In evaluating a court’s jurisdiction, either subjectmatter jurisdiction or personal jurisdiction may be considered first; there isno particular jurisdictional hierarchy. Ruhrgas AG v. Marathon Oil Co.,526 U.S. 574, 578 (1999).

The subject matter jurisdiction of a court is conferred by constitution,statute, and, to a very limited extent, case law, and may not be expanded byagreement of the parties to the case. Wis. Stat. § 801.04(1). By contrast,personal jurisdiction is a limitation on the court’s power that is primarilyimposed to protect the personal convenience interests of a nonresidentdefendant.2 Thus, personal jurisdiction may be conferred on a court by thedefendant’s consent or by the defendant’s failure to raise lack personaljurisdiction in a timely manner as a defense. Wis. Stat. §§ 802.06(8)(a),801.06; see, e.g., Lees v. DILHR, 49 Wis. 2d 491, 499, 182 N.W.2d 245(1971).

' Note. While it is common to speak of a court’s jurisdiction, judicialpower actually rests with the state or other sovereign entity, whichapportions that power among its courts as it sees fit. A court iscompetent to exercise jurisdiction if the state has distributed power to it.

B. [§ 3.4] Jurisdictional Alternatives

Within Wisconsin, most disputes will fall under state or federaljurisdiction, or both. However, it is also possible that a dispute will besubject to Indian tribal court jurisdiction. See, e.g., Landreman v. Martin,191 Wis. 2d 787, 794–95, 530 N.W.2d 62 (Ct. App. 1995). Indian tribejurisdiction in general is discussed at section 3.45, infra.

JURISDICTION § 3.7

3 Note, however, that the Wisconsin Consumer Act treats venue as a jurisdic-tional issue in consumer credit transactions, such that failure to have proper venuerenders the judgment invalid from the time of entry. Kett v. Community CreditPlan, Inc., 228 Wis. 2d 1, 12 n.11, 596 N.W.2d 786 (1999).


C. [§ 3.5] Jurisdiction Distinguished from Venue

Jurisdiction and venue are two related but distinct topics. EnproAssessment Corp. v. Enpro Plus, Inc., 171 Wis. 2d 542, 549, 492 N.W.2d325 (Ct. App. 1992). Jurisdiction determines the power of the court todecide the matter; venue merely determines where, within the state, thematter should be tried. Id. See generally supra §§ 2.40–.54 (venue).3

The test for determining proper venue is similar to the test for appropri-ate jurisdiction. Enpro, 171 Wis. 2d at 549. However, whereas long-armstatutes are to be construed liberally in favor of jurisdiction, Schroeder v.Raich, 89 Wis. 2d 588, 593, 278 N.W.2d 871 (1979), venue statutes are notto be construed liberally in favor of proper venue. Enpro, 171 Wis. 2d at549 n.4. A defect in venue will not affect the validity of a judgment, Wis.Stat. § 801.50(1), and a court may, in its discretion, change venue to anycounty in the interest of justice or for the convenience of parties orwitnesses, Wis. Stat. § 801.52; see supra § 2.51–.54.

D. [§ 3.6] Preliminary Strategic Considerations

1. [§ 3.7] In General

The vast majority of cases filed in Wisconsin state courts do not presentany questions as to proper jurisdiction. Most cases involve claims that areunquestionably within the subject matter jurisdiction of the Wisconsincourts (e.g., collection and foreclosure actions, contract disputes, divorcecases, personal injury actions, and administrative review cases). Further-more, the defendants in the majority of such cases are clearly within thepersonal jurisdiction of the Wisconsin courts because they are individualsdomiciled within the state or corporations that are either incorporated inWisconsin or doing substantial business in the state. Nevertheless, issuesof jurisdiction must be carefully considered for tactical or strategic purposeseven when state court jurisdiction seems clear. The checklist in section 3.8,infra, sets forth considerations that may affect a plaintiff’s decision whetherto file an action in state or federal court or a defendant’s decision whether

§ 3.8 CHAPTER 3


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to seek removal of an action from state to federal court or remand fromfederal to state court.

If a plaintiff’s strategy favors federal court, the plaintiff may want toconsider whether the complaint may be pleaded to permit suit in a federaldistrict court in Wisconsin rather than a state circuit court. For example,since the Western District of Wisconsin typically hears cases faster thanother courts, the plaintiff might choose to name some, rather than all,possible defendants in order to preserve federal diversity jurisdiction. Seeinfra §§ 3.37–.44. Similarly, if the defendant believes that a federal judgewill be more likely to consider dismissing the case on some narrow groundor that the jury in a state court will more likely favor a well-known localplaintiff, the defendant might want to consider removing a state court casewith concurrent federal subject matter jurisdiction to federal court.

Federal removal jurisdiction and procedures are set out at 28 U.S.C.§§ 1441–1452 and are discussed generally in section 3.53, infra.

2. [§ 3.8] Checklist

Checklist:Some Factors to Consider in Choosing Forum

G The time that will be afforded for discovery before trial maybe shorter in one court than another.

G The time allotted to the trial of a complex case may be shorterin one court than another.

G Compulsory process to secure in-court testimony of a keywitness may be available in one court and unavailable inanother.

G Deposition discovery from out-of-state witnesses may be moreeasily obtained using federal discovery procedures.

G In federal court, the use of a discovery deposition of an out-of-state witness may be restricted to the reading of a very shortsummary of the witness’s testimony.

G The jury pool in a federal court may differ from the jury poolin a state court as regards education, experience, businesssophistication, political bent, and general empathy for plain-tiffs.

G Six-person juries are used in both federal districts in Wiscon-sin, and the verdict from such juries must be unanimous,unless the parties stipulate otherwise. See Fed. R. Civ. P. 48.

JURISDICTION § 3.8


In Wisconsin courts, a party may request a jury of more thansix persons (not to exceed 12), and a five-sixths verdictsuffices. See Wis. Stat. §§ 756.06(2)(b), 805.09(2).

' Note. At least one study has concluded that six-person juries are less favorably disposed to plaintiffs than12-person juries. See Edward N. Beiser & Rene Varrin,Six-Member Juries in the Federal Courts, 58 Judicature425 (1975).

G Judges may be more willing to accommodate schedulingconflicts in one court system than in another.

G The personal attributes of the judges may differ depending onwhether the action is filed in state or federal court.

G Certain judges may approach areas of law differently (forexample, federal courts historically reacted more favorably toclaims under the Wisconsin Fair Dealership Law than statecourts did).

G In a relatively few cases, it may be possible to obtain personaljurisdiction over an out-of-state defendant or third-partydefendant under federal personal jurisdiction rules and notunder state long-arm statutes.

G A defendant may be able to transfer a case from a federaldistrict court in one state to a federal district court in anotherstate. By contrast, state courts do not have the power totransfer actions to the trial courts of other states. The onlyrecourse in state court is to request a stay of proceedings undersection 801.63, which will require the defendant to make arather stringent showing of inconvenience. U.I.P. Corp. v.Lawyers Title Ins. Corp., 65 Wis. 2d 377, 387, 222 N.W.2d638 (1974) (trial should be permitted in another state onlyupon convincing showing that trying the case in Wisconsin islikely to result in substantial injustice); see infra § 5.72.

G One courthouse may be more accessible to witnesses andattorneys, and in closer proximity to necessary documents,than another.

G One court may be subject to more congestion than another.G The judges in one system may have demonstrated more

willingness to resolve close questions by dispositive motionsthan judges in another.

G Some key piece of evidence may be more apt to be excludedunder one system’s rules of evidence than another’s.

§ 3.9 CHAPTER 3

4 Chapter 821, entitled Uniform Certification of Questions of Law Rule, permitsfederal appeals courts and the United States Supreme Court to certify questions oflaw to the Wisconsin Supreme Court, but only if it appears to the certifying courtthat there is no controlling precedent in the decisions of the Wisconsin appellatecourts. See Wis. Stat. § 821.01.


G The judges in one court system may be more prone to exercisecontrol over the jury than those in another.

G A recent state court of appeals or supreme court decision mayhave signaled the court’s willingness to reconsider and alter alegal principle of state law that stands between the defendantand a large verdict. In such a case, the federal court system(assuming the case could be shifted to it) would likely bebound to apply applicable state court precedent as it presentlystands, without the type of reconsideration on policy groundsthat might have been available in state court.4

III. [§ 3.9] Subject Matter Jurisdiction

A. [§ 3.10] Definition

The subject matter jurisdiction of a court is its power to hear and decidethe particular type of action pending before it. The subject matterjurisdiction of a particular court is generally established by the politicalauthority or sovereign that created the court.

The legal basis of subject matter jurisdiction is in the first instance aconstitution. In the federal court system and some state and tribal courtsystems, the judicial power must then be further defined and invested bystatute. In other court systems, including Wisconsin’s, judicial statutes aresaid to merely have the effect of redistributing the constitutional grant ofpower among the courts in the judicial system. Such statutes are held to beincapable of divesting the court system as a whole from the constitutionalgrant of judicial power. In re Guardianship of Eberhardy, 102 Wis. 2d 539,550, 307 N.W.2d 881 (1981). However, those statutes can render a courtincompetent to exercise jurisdiction. See supra § 3.3 (Note).

The legal bases of Wisconsin and federal subject matter jurisdiction arediscussed in sections 3.12–.14 and 3.30–.32, infra, respectively. Tribalcourt jurisdiction is addressed briefly in section 3.45, infra.

JURISDICTION § 3.13


B. [§ 3.11] Wisconsin Subject Matter Jurisdiction

1. [§ 3.12] Legal Bases

a. [§ 3.13] Constitutional Bases

The basic grant of judicial power to the Wisconsin courts is found inarticle VII, section 2 of the Wisconsin Constitution:

The judicial power of this state shall be vested in a unified court systemconsisting of one supreme court, a court of appeals, a circuit court, such trialcourts of general uniform statewide jurisdiction as the legislature may create bylaw, and a municipal court if authorized by the legislature under section 14.

This grant of power is further defined in separate sections addressing thepowers of circuit courts, the Wisconsin Supreme Court, and courts ofappeal.

The constitutional basis of the circuit courts’ subject matter jurisdictionis found in article VII, section 8 of the Wisconsin Constitution:

Except as otherwise provided by law, the circuit court shall have originaljurisdiction in all matters civil and criminal within this state and such appellatejurisdiction in the circuit as the legislature may prescribe by law. The circuitcourt may issue all writs necessary in aid of its jurisdiction.

The constitution establishes the circuit courts as the trial-level courts oforiginal jurisdiction. The constitutional grant of judicial authority to thecircuit courts is considered extremely broad, extending to all jurisdictionthat was exercised under Anglo-American jurisprudence by courts of lawand courts of chancery. Harrigan v. Gilchrist, 121 Wis. 127, 231, 99 N.W.909 (1904). Circuit courts are referred to as courts of plenary jurisdiction,meaning complete or all-encompassing jurisdiction. In re Guardianship ofEberhardy, 102 Wis. 2d at 549–50.

' Caveat. The language with which the constitutional grant ofjudicial power to the circuit courts begins—“Except as otherwiseprovided by law”—was added to the section by the ConstitutionalAmendment of 1977. This language has been acknowledged to permitsome legislative reallocation of original jurisdiction to other levels of theunified court system. Id. at 550.

The jurisdiction of the Wisconsin Supreme Court is set out in article VII,section 3(1)–(3) of the Wisconsin Constitution. The supreme court has“superintending and administrative authority over all courts.” Wis. Const.

§ 3.14 CHAPTER 3


art. VII, § 3(1). The supreme court has appellate jurisdiction over all courtsand may also hear certain original actions and proceedings. Id. § 3(2). Thesupreme court may issue writs in aid of its jurisdiction. Id. Finally, thesupreme court has the power to (1) review judgments and orders of thecourt of appeals; (2) remove cases from the court of appeals; and (3) acceptcases on certification by the court of appeals. Id. § 3(3).

The Wisconsin Court of Appeals was created in 1977 by constitutionalamendment. State ex rel. Swan v. Elections Bd., 133 Wis. 2d 87, 92, 394N.W.2d 732 (1986). The constitutional basis of the Wisconsin Court ofAppeals’ jurisdiction differs somewhat from that of the supreme court andthe circuit courts. The jurisdiction of the supreme court and the circuitcourts has been held to be invested directly by the Wisconsin Constitution,without the need for any supplementary legislation. Id. at 92–93; Kotecki& Radtke, S.C. v. Johnson, 192 Wis. 2d 429, 442 n.9, 531 N.W.2d 606 (Ct.App. 1995). The constitutional grant of jurisdiction to the court of appeals,in contrast, does require supplementation by the Wisconsin Legislature:

The appeals court shall have such appellate jurisdiction in the district, includingjurisdiction to review administrative proceedings, as the legislature may provideby law, but shall have no original jurisdiction other than by prerogative writ.The appeals court may issue all writs necessary in aid of its jurisdiction andshall have supervisory authority over all actions and proceedings in the courtsin the district.

Wis. Const. art. VII, § 5(3) (emphasis supplied); State ex rel. Swan, 133Wis. 2d at 93.

b. [§ 3.14] Statutory Bases

As discussed in section 3.13, supra, the Wisconsin circuit courts and theWisconsin Supreme Court derive their jurisdiction directly from theWisconsin Constitution, whereas the court of appeals derives its jurisdictionfrom both the constitution and a legislative grant of authority. State ex rel.Swan, 133 Wis. 2d at 92–93. However, the legislature may constitutionallyregulate jurisdiction within each court. The legislative regulation of thesupreme court’s jurisdiction is found in sections 751.05, 751.07–.09,808.05, 808.07, and 808.10. The legislative regulation of the court ofappeals’ jurisdiction is found in sections 752.01–.02, 808.02–.03, and808.07.



The legislative articulation of the circuit courts’ subject matter jurisdic-tion is found in section 753.03. The most pertinent portion of the statutestates:

The circuit courts have the general jurisdiction prescribed for them by articleVII of the constitution and have power to issue all writs, process and commis-sions provided in article VII of the constitution or by the statutes, or which maybe necessary to the due execution of the powers vested in them. The circuitcourts have power to hear and determine, within their respective circuits, allcivil and criminal actions and proceedings unless exclusive jurisdiction is givento some other court; and they have all the powers, according to the usages ofcourts of law and equity, necessary to the full and complete jurisdiction of thecauses and parties and the full and complete administration of justice . . . .

Because this volume deals with civil procedure before trial, the focus hereis on circuit court subject matter jurisdiction. For a discussion of thejurisdiction of the Wisconsin appellate courts, see Michael S. Heffernan,Appellate Practice and Procedure in Wisconsin ch. 2 (State Bar ofWisconsin CLE Books 2d ed. 1995 & Supp.).

The original jurisdiction of the Wisconsin circuit courts has from timeto time been described by the Wisconsin Supreme Court in terms that makethat jurisdiction seem boundless. For example, in Harrigan v. Gilchrist,121 Wis. 127, 99 N.W. 909 (1904), Justice Roujet Marshall waxed eloquenton the original jurisdiction of Wisconsin’s circuit courts: “[S]tanding wherewe will and looking where we may, judicial power is present to prevent andredress wrongs . . . . [T]he jurisdiction of our circuit courts, except asspecially restricted by statute . . . or by the constitution itself . . . is found tooccupy the whole field . . . . ” Id. at 227 (quoted in In re Guardianship ofEberhardy, 102 Wis. 2d at 549). In Mueller v. Brunn, 105 Wis. 2d 171,176, 313 N.W.2d 790 (1982), the court said simply: “No circuit court iswithout subject matter jurisdiction to entertain actions of any naturewhatsoever.” Such proclamations notwithstanding, there are a number oflimits on the subject matter jurisdiction of Wisconsin circuit courts. Theselimits are discussed in sections 3.15–.20, infra.

2. [§ 3.15] Limits on Circuit Court Jurisdiction

§ 3.15 CHAPTER 3


a. [§ 3.16] In General

A number of Wisconsin appellate cases have cited the statement fromMueller v. Brunn, 105 Wis. 2d at 176, that the subject matter jurisdiction ofWisconsin circuit courts, having been vested directly by the state constitu-tion, is so expansive that “[n]o circuit court is without subject matterjurisdiction to entertain actions of any nature whatsoever.” As a quick,general formulation of the very expansive original jurisdiction granted bythe Wisconsin Constitution to the circuit courts, the statement suffices.However, it fails to take into account the significant limits imposed by thelegislature and the U.S. Constitution on the circuit courts’ competency toexercise subject matter jurisdiction.

' Comment. In fairness to the Mueller court, it should be noted thatthe court did qualify the statement quoted in the preceding paragraph.In the sentence immediately following that statement, the courtacknowledged the power of the Wisconsin Legislature to abolishspecific common law actions and to set up administrative systems foradjusting rights. See id. However, the qualifying language is seldomquoted.

Wisconsin circuit court subject matter jurisdiction is subject to manylimits, some of which are listed below. See also infra §§ 3.17–.20.

1. The sovereignty of other governing bodies, including other states, thefederal government, and Indian tribes;

2. The exclusive jurisdiction of federal courts over certain claims derivedfrom federal law, see infra § 3.48;

3. The power of the Wisconsin Supreme Court, in exercising superin-tending jurisdiction over the Wisconsin court system, to modify oreliminate competency to exercise subject matter jurisdiction over certainclaims or types of claims, see, e.g., In the Interest of Tiffany W., 192Wis. 2d 407, 424, 532 N.W.2d 135 (Ct. App. 1995);

4. The power of the Wisconsin Legislature to statutorily adjust or eliminatecommon law rights;

5. The power of the Wisconsin Legislature to create new statutory rights,with primary jurisdiction over claims vested in state administrativeagencies, see infra § 3.19;



6. The power of the Wisconsin Legislature to create or alter proceduralprerequisites to the competency of a court to exercise jurisdiction, suchas time limits, see infra § 3.20, or mediation/arbitration requirements;

7. The power of the Wisconsin Legislature to require that certain claims bebrought under the small claims procedures specified in chapter 799, seeinfra § 3.17; and

8. The power of the Wisconsin Legislature to authorize the establishmentof municipal courts to hear actions arising under municipal ordinances,see infra § 3.18.

' Note. Although many circuit courts segregate civil and criminalcases, for purposes of a court’s subject matter jurisdiction, it isimmaterial whether the petition is filed with a civil or criminal casenumber, or whether a judge currently assigned to a civil or criminalbranch hears the case. In re Pharm, 2000 WI App 167, ¶ 24, 238Wis. 2d 97, 617 N.W.2d 163.

b. [§ 3.17] Small Claims Court

Small claims “court” is actually not a separate constitutional orlegislative court. It is, rather, a procedure mandated by statute for particulartypes of claims. Many small claims are defined in terms of an upperjurisdictional limit of $5,000. Section 799.01 sets out the claims for whichsmall claims procedure is mandatory:

1. Eviction actions (whether based on residential or commercial occu-pancy, trespass, or adverse possession), Wis. Stat. § 799.01(1)(a);

' Note. Claims for back rent or damages, if joined to an evictionrequest, are not subject to the $5,000 limit found in other subsectionsof section 799.01. Id.

2. Actions for the return of earnest money tendered pursuant to a contractfor the purchase of real estate by sale, exchange, or land contract, Wis.Stat. § 799.01(1)(am);

3. Actions for civil forfeitures (unless a different procedure is spelled outin a specific statute establishing a forfeiture), Wis. Stat. § 799.01(1)(b);see also 61 Wis. Op. Att’y Gen. 88 (1989);

§ 3.17 CHAPTER 3


4. Replevin actions under sections 810.01–.13 in which the value of theproperty claimed does not exceed $5,000, Wis. Stat. § 799.01(1)(c);

' Comment. If the value of the property claimed in a replevinaction is $5,000 or less, small claims procedure would appear to bemandatory even if the sum of the property value and any damageclaims arising out of the wrongful deprivation of the propertyexceeds $5,000. See id.

5. Actions seeking to confirm, vacate, modify, or correct an arbitrationaward concerning a dispute arising out of a transaction for the purchaseof real estate, Wis. Stat. § 799.01(1)(cm);

6. Money judgments for $5,000 or less, Wis. Stat. § 799.01(1)(d)1.;

7. Attachment actions in which the amount owed the plaintiff (not thevalue of the property to be attached) is $5,000 or less, Wis. Stat.§ 799.01(1)(d)2.;

8. Garnishment actions in which the amount owed the plaintiff is $5,000or less, id.; and

9. Actions to enforce a lien on personalty when the amount of debt claimedis $5,000 or less, Wis. Stat. § 799.01(1)(d)3.

In addition, section 425.205 mandates small claims procedure for replevinactions under the Wisconsin Consumer Act, “notwithstanding [section]799.01(1)(c) [restricting small claims procedure to replevin of goods worth$5,000 or less] and the value of the collateral or leased goods sought to berecovered.”

A case that appropriately starts out under small claims procedure maylater have to be transferred to the regular circuit court docket if changes inits character render the small claims court incompetent to exercisejurisdiction. For example, the filing by a defendant of a counterclaim thathas a value greater than $5,000 and that arises out of the same transactionas the plaintiff’s claim will require transfer of the action to the regularcircuit court docket. Wis. Stat. § 799.02(1). A similar result obtains whena defendant files a transactionally related cross-claim for more than $5,000against a co-defendant. Id. If the counterclaim or cross-claim is nottransactionally related to the plaintiff’s claim and is for more than $5,000,the court must dismiss the claim without prejudice and proceed with theremaining claim under small claims procedure. Wis. Stat. § 799.02(2).



' Practice Tip. Small claims procedure may vary from one countyto another. Thus, litigants are well advised to contact the clerk of thesmall claims division of the specific county in which the case is venuedto determine the local procedural rules. For a comprehensive discussionof small claims procedure under chapter 799, see Wisconsin JudicialBenchbook—Civil ch. 42 (State Bar of Wisconsin CLE Books 2d ed.2000 & Supp.). Service of process in small claims actions is discussedin sections 6.58–.62, infra.

c. [§ 3.18] Municipal Court

Article VII, section 14 of the Wisconsin Constitution allows thelegislature to authorize each city, village, and town to establish a municipalcourt to hear actions arising under the ordinances of the municipality.Chapter 755 is the enabling legislation that sets out the procedures for amunicipality’s establishment of a municipal court.

A municipal court established under chapter 755 has exclusivejurisdiction over an action in which the municipality seeks to imposeforfeitures for violations of its municipal ordinances except as follows:

1. If the action is transferred under section 800.04(1) or 800.05(3) to acourt of record;

2. If equitable relief is demanded, in which case the plaintiff must bring theaction in a court of record; or

3. Whenever the municipal court of a first-class city in any county havinga population of 500,000 or more is not in session, in which case thecircuit court has concurrent jurisdiction to hear municipal court cases.

Wis. Stat. § 755.045(1)(a)–(c).

d. [§ 3.19] Administrative Remedies

The Wisconsin Legislature has directed that a number of types of legaldisputes, otherwise within the original subject matter jurisdiction of thecircuit courts, are to be handled through quasi-judicial proceedings beforestate agencies or boards. The matters set forth in the following checklist areamong those for which primary jurisdiction has been vested in a Wisconsinagency or board, subject to subsequent subject matter jurisdiction in thecircuit courts.

§ 3.19 CHAPTER 3


TChecklist: Legal Matters Under PrimaryJurisdiction of Administrative Agencies or Boards

G Worker’s compensation claims, Wis. Stat. ch. 102.G Unemployment compensation claims, Wis. Stat. ch. 108.G Employment discrimination claims, Wis. Stat. §§ 111.31–

.395.G State tax disputes, Wis. Stat. ch. 71.G Disputes regarding the siting of solid waste disposal facilities,

Wis. Stat. ch. 144.

' Note. It is possible for both a circuit court and an administrativeagency to have jurisdiction over a dispute. See County of Dane v. DaneCounty Union Local 65, 210 Wis. 2d 267, 275, 565 N.W.2d 540 (Ct.App. 1997). Under those circumstances, a question arises as to whichtribunal has primary jurisdiction. Id. A circuit court should retainjurisdiction when issues of law predominate and should decline toexercise jurisdiction when factual issues are significant. McEwen v.County of Pierce, 90 Wis. 2d 256, 271, 279 N.W.2d 469 (1979). Thedecision rests in the circuit court’s discretion. Id. at 268, 271; see alsoWisconsin End-User Gas Ass’n v. Public Serv. Comm’n, 218 Wis. 2d558, 569, 581 N.W.2d 556 (Ct. App. 1998).

' Comment. It could be argued that the Wisconsin Legislature, bygranting primary jurisdiction for certain legal matters to administrativeagencies and boards, has overridden the express constitutional grant oforiginal jurisdiction to the Wisconsin circuit courts. This argumentwould have particular validity as regards legal disputes that werehistorically within the jurisdiction of the courts of law or chancery.Actually, most of the claims for which administrative remedies havebeen established have their basis not in common law but in statutes (e.g.,worker’s compensation and unemployment compensation claims).Moreover, as noted by the Wisconsin Supreme Court, in all instances inwhich an agency or board exercises quasi-judicial power, the circuitcourts have ultimate subject matter jurisdiction to review and reconsiderdecisions of the agency or board. See Mueller, 105 Wis. 2d at 176.



e. [§ 3.20] Time Limits

A court’s competency to exercise jurisdiction may be affected by timelimits. Some time limits are mandatory, such as the time for conducting ahearing under section 48.30(7) or the time for filing petitions for review tothe supreme court under section 808.10. A failure to comply with such timelimits deprives the court of its competency to exercise subject matterjurisdiction. State ex rel. Schmelzer v. Murphy, 195 Wis. 2d 1, 7–8, 535N.W.2d 459 (Ct. App. 1995), rev’d on other grounds, 201 Wis. 2d 246, 548N.W.2d 45 (1996); In the Interest of David A.H., No. 95-0017, 1995 WL314571, *2 (Wis. Ct. App. May 25, 1995) (unpublished opinion not to becited as precedent or authority per section 809.23(3)).

Other time limits, such as statutes of limitation, are subject to judicialexceptions such as waiver and estoppel. See supra § 2.56. Consequently,they do not affect a court’s competency to exercise subject matter jurisdic-tion. County of Milwaukee v. LIRC, 113 Wis. 2d 199, 205, 335 N.W.2d 412(Ct. App. 1983). The question to be asked is whether the time limitcompletely divests the court of the right to proceed.

3. [§ 3.21] Challenges to a Court’s Competency toExercise Subject Matter Jurisdiction


Because the subject matter jurisdiction of Wisconsin circuit courts is soexpansive, challenges to the exercise of that jurisdiction will usually bebased on one of the following arguments:

1. Federal court jurisdiction is exclusive. See infra § 3.48.

2. The plaintiff failed to follow proper procedure in commencing the action(e.g., the plaintiff filed a claim in small claims court that was over the$5,000 limit, see supra § 3.17).

3. The plaintiff did not exhaust administrative procedures mandated for theplaintiff’s claim. See supra § 3.19.

4. The plaintiff or the court failed to observe some mandatory time limit.See supra § 3.20.

For a discussion of motions to dismiss for lack of subject matterjurisdiction, see section 9.16, infra.

§ 3.23 CHAPTER 3


' Note. Challenges to a court’s competency to exercise subject matterjurisdiction must be distinguished from challenges to the plaintiff’scomplaint for failure to state a cause of action recognized at law. Acourt must assume subject matter jurisdiction in order to determinewhether the plaintiff has failed to state a proper cause of action. Murphyv. Miller Brewing Co., 50 Wis. 2d 323, 327, 184 N.W.2d 141 (1971).

b. [§ 3.23] Subject Matter Jurisdiction vs.Competency

When discussing challenges to a court’s competency to exercise subjectmatter jurisdiction, it is helpful to keep in mind the differences betweenjurisdiction and the competency to exercise that jurisdiction. Jurisdictionis the power to adjudicate, and this power is vested in the state or othersovereign. Competency is the right to exercise the power to adjudicate; astate confers this right on its courts and often conditions the right on certainprocedural prerequisites. Cepukenas v. Cepukenas, 221 Wis. 2d 166, 584N.W.2d 227 (Ct. App. 1998).

As previously noted, the Wisconsin Supreme Court construed theconstitutional grant of subject matter jurisdiction to the Wisconsin circuitcourts very broadly in Mueller v. Brunn (“[n]o circuit court is withoutsubject matter jurisdiction to entertain actions of any nature whatsoever,”105 Wis. 2d at 176), and subsequent supreme court and court of appealsdecisions have cited this language approvingly. See supra §§ 3.14, .16.Since the Mueller decision, very few Wisconsin decisions have discussedthe court’s ability to adjudicate a particular case in terms of its subjectmatter jurisdiction. Instead of questioning a court’s power, a court morecorrectly should address its competency to exercise that power in aparticular case. See, e.g., In the Interest of B.J.N., 162 Wis. 2d 635, 656–57& n.17, 469 N.W.2d 845 (1991); In re Commitment of Beyer, 2001 WI App167, ¶ 6 n.2, 247 Wis. 2d 13, 633 N.W.2d 627; Wall v. Department ofRevenue, 157 Wis. 2d 1, 458 N.W.2d 814 (Ct. App. 1990).

A court may lose competency and be prevented from adjudicating aspecific case by failing to comply with a statutory mandate, that is, failingto follow plainly prescribed procedures that are “central” to the statutoryscheme. In re Commitment of Bollig, 222 Wis. 2d 558, 565–66, 587N.W.2d 908 (Ct. App. 1998). To determine whether a defect is “central”to the statutory scheme, the fundamental/technical dichotomy of a personaljurisdiction analysis is instructive. Id. at 568; see also infra § 3.59.



c. [§ 3.24] When Challenge Must Be Raised;Waiver

(1) [§ 3.25] In General

Historically, Wisconsin case law held that a defense of lack of subjectmatter jurisdiction could not be waived. Rather, the defense could be raisedat the pleading stage, before trial, after trial, on appeal, or even by collateralattack after final judgment. Figgs v. City of Milwaukee, 116 Wis. 2d 281,286, 342 N.W.2d 254 (Ct. App. 1983), rev’d on other grounds, 121 Wis. 2d44, 357 N.W.2d 548 (1984); Bialk v. City of Oak Creek, 98 Wis. 2d 469,473, 297 N.W.2d 43 (Ct. App. 1980).

The Wisconsin Supreme Court has held that competency cannot bewaived by the parties, despite the fact that past cases have indicated that achallenge to a court’s competency to exercise jurisdiction may be waived,see In the Interest of Nadia S., 219 Wis. 2d 296, 303, 581 N.W.2d 182(1998); Smith v. Herrling, Myse, Swain & Dyer, Ltd., 211 Wis. 2d 787,793–94, 565 N.W.2d 809 (Ct. App. 1997); Wall v. Department of Revenue,157 Wis. 2d 1, 7, 458 N.W.2d 814 (Ct. App. 1990).

(2) [§ 3.26] Counsel’s Ethical Duty

The lawyers involved in a lawsuit have an ethical duty, as officers of thecourt, to ensure that lawsuits are reasonably supported by existing law andthe facts. See, e.g., Wis. Stat. § 802.05(1)(a) (pleadings, motions, and otherpapers must be signed by attorney, and such signature certifies thatdocument is well grounded in fact and warranted by law or equity); Kellyv. Clark, 192 Wis. 2d 633, 655, 531 N.W.2d 455 (Ct. App. 1995); see alsosupra §§ 1.75–.86. Presumably, this duty includes the obligation to informthe trial court promptly if it does not have competency to adjudicate aparticular action.

(3) [§ 3.27] Statutory Requirements

The statutes governing pleadings seem to require that a challenge to thesubject matter jurisdiction of the court (or the competency of the court toexercise jurisdiction) be made promptly. Section 802.06(2) states in part:

§ 3.27 CHAPTER 3


(a) Every defense, in law or fact . . . shall be asserted in the responsivepleading thereto if one is required, except that the following defenses may at theoption of the pleader be made by motion: . . .

2. Lack of jurisdiction over the subject matter. . . .

(b) A motion making any of the defenses in par. (a)1. to 10. shall be madebefore pleading if a further pleading is permitted.

On the other hand, sections 802.06(7) and 802.06(8)(c) preserve the defenseof lack of subject matter jurisdiction, notwithstanding the mandatorylanguage of section 802.06(2).

(4) [§ 3.28] Collateral Challenge; IssuePreclusion

Under some circumstances, the failure to raise the defense of lacksubject matter jurisdiction or competency before judgment may mean thata collateral attack is barred under the principle of issue preclusion. In In theInterest of A.E.H., 161 Wis. 2d 277, 287, 468 N.W.2d 190 (1991), theWisconsin Supreme Court cited, approvingly, section 12 of the Restatementof Judgments (Second) (1982), which reads:

Section 12. Contesting Subject Matter Jurisdiction. When a court has rendereda judgment in a contested action, the judgment precludes the parties fromlitigating the question of the court’s subject matter jurisdiction in subsequentlitigation except if:(1) The subject matter of the action was so plainly beyond the court’sjurisdiction that its entertaining the action was a manifest abuse of authority; or(2) Allowing the judgment to stand would substantially infringe the authorityof another tribunal or agency of government; or(3) The judgment was rendered by a court lacking capability to make anadequately informed determination of a question concerning its own jurisdictionand as a matter of procedural fairness the party seeking to avoid the judgmentshould have opportunity belatedly to attack the court’s subject matter jurisdic-tion.

The comments to section 12 indicate that issue preclusion or collateralestoppel will only prevent later litigation of a court’s competency if thatissue was actually raised and decided. When the parties and court in thefirst action presume the trial court’s competency to exercise subject matterjurisdiction and therefore do not litigate the issue in that action, thepossibility remains that the judgment might at some later time, in a



subsequent action, be determined to be void. Thus, the restatement seeksto balance the principle of finality of actions with the principle of judicialvalidity.

C. [§ 3.29] Federal Subject Matter Jurisdiction

Without proper subject matter jurisdiction, a federal court cannotproceed at all. Instead, the court must note the jurisdictional defect anddismiss the suit. The U.S. Supreme Court has explicitly declined torecognize the “doctrine of hypothetical jurisdiction,” whereby, despitejurisdictional objections, lower courts proceeded to the merits when themerits question was more readily resolved and the party prevailing on themerits, would be the same as the party that would prevail were jurisdictiondenied. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 101–02(1998).

' Note. Contrast this approach to Wisconsin’s practice of analyzingwhether a defect in a court’s competency to exercise subject matterjurisdiction is “central” to the statutory scheme. See supra § 3.23.

1. [§ 3.30] Legal Bases

a. [§ 3.31] Constitutional Basis

The constitutional grant of judicial power to the federal courts is foundin article III, sections 1 and 2 of the United States Constitution and reads inpertinent part:

Section 1. The judicial Power of the United States, shall be vestedin one supreme Court, and in such inferior Courts as the Congress mayfrom time to time ordain and establish.

. . . . Section 2. The judicial Power shall extend to all Cases, in Law and

Equity, arising under this Constitution [and] the Laws of the UnitedStates[;] . . . —to Controversies to which the United States shall be aParty; —to Controversies between two or more States; —between aState and Citizens of another State; —between Citizens of differentStates; — . . . and between a State, or the Citizens thereof, and foreignStates, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers andConsuls, and those in which a State shall be Party, the supreme Courtshall have original Jurisdiction. In all the other Cases before mentioned,

§ 3.32 CHAPTER 3


the supreme Court shall have appellate Jurisdiction, both as to Law andFact, with such Exceptions, and under such Regulations as the Congressshall make.

' Note. The 11th Amendment provides that the judicial power of theUnited States does not extend to suits against the states. However,because a state may waive its 11th Amendment protection, the 11thAmendment creates a sovereign immunity from suit, rather than anonwaivable limit on the federal judiciary’s subject matter jurisdiction.Idaho v. Coeur d’Alene Tribe, 521 U.S. 261, 267 (1997).

' Note. Be aware that federal courts have subject matter jurisdictionover only those cases that are “ripe” for adjudication. Forseth v. Villageof Sussex, 199 F.3d 363, 368 (7th Cir. 2000).

b. [§ 3.32] Statutory Bases

As the constitutional grant of judicial power has generally beeninterpreted, Congress possesses essentially complete power to confer orwithhold jurisdiction in the federal courts, subject to a constitutionalchallenge to the scope of jurisdiction on due process or separation-of-powers grounds. Westarik Prod. Credit Ass’n v. Fidelity & Deposit Co.,100 F. Supp. 52, 53 (W.D. Ark. 1951); see, e.g., California v. Deep SeaResearch, Inc., 523 U.S. 491, 507 (1998) (11th Amendment does not barfederal court’s jurisdiction over in rem admiralty action when res not withinstate’s possession). Congress has granted the federal courts two areas ofsubject matter jurisdiction that make up the bulk of work in those courts:(1) jurisdiction over cases arising under federal law (federal questionjurisdiction), and (2) jurisdiction over cases in which the amount incontroversy exceeds $75,000 and the parties to the controversy are ofdiverse citizenship (diversity jurisdiction). The statutory bases for federalquestion jurisdiction and diversity jurisdiction are discussed in sections 3.34and 3.38, infra, respectively.

An example of Congress’s power to withhold jurisdiction in federalcourts is the Tax Injunction Act, 28 U.S.C. § 1342, which restricts thedistrict courts’ power to prevent collection or enforcement of state taxes.Arkansas v. Farm Credit Servs., 520 U.S. 821, 823–24 (1997).



2. [§ 3.33] Federal Question Jurisdiction

a. [§ 3.34] Statutory Basis

The statutory basis of federal question jurisdiction is found in 28 U.S.C.§ 1331, which reads: “The district courts shall have original jurisdiction ofall civil actions arising under the Constitution, laws, or treaties of theUnited States.”

' Note. Up until 1980, 28 U.S.C. § 1331 also stated that the amountin controversy was required to exceed “the sum or value of $10,000.00,exclusive of interest and costs.” This requirement has been repealed forfederal question cases, cf. infra § 3.44 (jurisdictional amount require-ment), with a limited exception found in the Consumer Product SafetyAct, 15 U.S.C. § 2072(a).

b. [§ 3.35] Tests for Federal Question Jurisdiction

The United States Supreme Court has generally taken what many believeto be an unduly restrictive view of the statutory grant of federal questionjurisdiction to the federal district courts in 28 U.S.C. § 1331. As interpretedby the Supreme Court, the statute requires a plaintiff, on the face of thecomplaint, to squarely base the claim at issue on a federally created rightderived from the federal Constitution or a federal statute.

' Note. An exception to the “well-pleaded complaint” rule applieswhen Congress has completely preempted an area of state law. Traynorv. O’Neil, 94 F. Supp. 2d 1016, 1020–21 (W.D. Wis. 2000). Thus, fora case to clearly “aris[e] under” federal law for purposes of 28 U.S.C.§ 1331 and thereby fall within federal question jurisdiction, it is notsufficient that the plaintiff anticipate and allege that a defendant’sdefense arises under federal law. Louisville & Nashville R.R. v. Mottley,211 U.S. 149 (1908). Nor is it sufficient that a federal law issue “islurking in the background” of the action or is necessary for its ultimateresolution. Gully v. First Nat’l Bank, 299 U.S. 109, 117 (1936); see,e.g., T.B. Harms Co. v. Eliscu, 339 F.2d 823, 825–27 (2d Cir. 1964).Rather, a federal right or immunity must be an essential element of theplaintiff’s claim in order to bring the case within federal questionjurisdiction. Gully, 299 U.S. at 112. In a declaratory judgment action,the question becomes whether a federal question would be present onthe face of a complaint by a declaratory defendant in a presumed suitagainst the declaratory plaintiff, unless the declaratory defendant is a

§ 3.35 CHAPTER 3


government entity. City of Beloit v. Local 643 of the Am. Fed’n of State,County and Mun. Employees, 248 F.3d 650, 652–53 (7th Cir. 2001).

' Note. The Seventh Circuit disagrees with the contention thatfederal question jurisdiction is restrictive. In Turner/Ozanne v. Hyman/Power, 111 F.3d 1312 (7th Cir. 1997), the Seventh Circuit held that theplaintiff’s burden of proving federal question jurisdiction is not onerous;a federal court has jurisdiction over claims “‘on the margins of reason-able possibility.’” Id. at 1317 (quoting Musson Theatrical, Inc. v.Federal Express Corp., 89 F.3d 1244, 1248 (6th Cir. 1996)). In Turner/Ozanne, the court found federal question jurisdiction despite the fact thatit believed that the plaintiff’s case ought not to prevail on the merits.

In determining the existence of federal question jurisdiction, the courtshave used two different tests, referred to here as the American Well Workstest and the Smith test. The American Well Works test, enunciated byJustice Holmes in American Well Works Co. v. Layne & Bowler Co., 241U.S. 257 (1916), looks at whether the cause of action “arises under” federallaw. As Justice Holmes stated: “A suit arises under the law that creates thecause of action.” Id. at 260. This test is widely accepted as a proper meansof determining whether a case falls within the federal question jurisdictionof the federal courts.

The Smith test, a less frequently applied test for federal questionjurisdiction, originated in Smith v. Kansas City Title & Trust Co., 255 U.S.180 (1921), a case that did not fit neatly within the American Well Workstest. In Smith, a shareholder of a corporation sued to enjoin the corporationfrom investing in Federal Land Bank bonds, which the shareholder allegedwere not validly issued under federal law. The plaintiff’s cause of actionwas clearly created under a state law that imposed a duty on corporationsto invest only in validly issued obligations. Further, state law provided theplaintiff with the rights and remedies on which the plaintiff relied.However, to state a claim under state law, the plaintiff had to allege why thebonds were illegally issued, which made the constitutionality of the federallaw under which the bonds were issued a properly pleaded element of theplaintiff’s claim. The Court upheld federal question jurisdiction in Smith,stating:

The general rule is that where it appears from the [complaint] of the plaintiffthat the right to relief depends upon the construction or application of theConstitution or laws of the United States, and that such federal claim is notmerely colorable, and rests upon a reasonable foundation, the District Court hasjurisdiction.



Id. at 199.

The Smith decision was viewed by many as an aberration, so courtscontinued to apply the American Well Works test as the exclusive test forfederal subject matter jurisdiction. However, the Supreme Court revitalizedthe Smith test in 1983, citing the case approvingly in Franchise Tax Boardv. Construction Laborers Vacation Trust, 463 U.S. 1, 9 (1983). The Courtnoted that leading commentators had suggested that an action “aris[es]under” federal law for purposes of 28 U.S.C. § 1331 “if in order for theplaintiff to secure the relief sought he will be obliged to establish both thecorrectness and the applicability to his case of a proposition of federal law.”Id.

The Court later modified and restricted the Smith test in Merrell DowPharmaceuticals, Inc. v. Thompson, 478 U.S. 804 (1986). In a 5–4decision, the Court held that the Smith test would not support federalquestion jurisdiction in the face of statutory language demonstratingCongressional intent that federal jurisdiction not be available to privateplaintiffs to seek redress for a violation of the drug labeling statute at issue.Id. at 812, 814. In a footnote, the Court appeared to acknowledge that it isthe nature of the federal interest that is determinative:

The importance of the nature of the federal issue in federal-question jurisdictionis highlighted by the fact that, despite the usual reliability of the Holmes[American Well Works] test as an inclusionary principle, this Court hassometimes found that formally federal causes of action were not properlybrought under federal-question jurisdiction because of the overwhelmingpredominance of state law issues.

Id. at 814 n.12 (citations omitted).

In summary, the American Well Works test remains clearly appropriateto establish subject matter jurisdiction. The Smith test appears to remainviable as well, unless it can be demonstrated that Congress intended toforeclose federal jurisdiction to plaintiffs in cases such as the one underconsideration. In close cases, the nature of the federal and state interestsmay be determinative.

' Note. Many cases that fall within federal question jurisdiction arealso within the jurisdiction of state courts. If a federal question case isbrought in state courts, the defendant may be able to remove it to federalcourt under the federal removal statutes. See 28 U.S.C. §§ 1441–1452;see also infra § 3.53.

§ 3.36 CHAPTER 3


T

' Note. Congress has granted the U.S. Supreme Court authority toreview federal question decisions made by state courts when the statecourt judgment is final. Jefferson v. City of Tarrant, 522 U.S. 75, 77(1997).

c. [§ 3.36] Types of Federal Question Cases

The following checklist sets forth some of the more common types offederal question cases.

Checklist:Federal Question Cases

G Civil rights claims under Title VII of the Civil Rights Act of1964, 42 U.S.C. §§ 2000e to 2000e-17.

G Claims under the Social Security Act, 42 U.S.C. §§ 401–433.G Civil claims under the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. §§ 1961–1968.G Claims under the Employee Retirement Income Security Act

(ERISA), 29 U.S.C. §§ 1001–1461.G Challenges to the constitutionality of federal or state laws

(under the U.S. Constitution).G Patent and copyright infringement claims.

3. [§ 3.37] Diversity Jurisdiction

a. [§ 3.38] Statutory Basis

The congressional grant of diversity jurisdiction is found in 28 U.S.C.§ 1332. Under that statute, the federal district courts have originaljurisdiction over actions in which

1. “the matter in controversy exceeds the sum or value of $75,000,exclusive of interest and costs”; and

2. the controversy is between (a) citizens of different states; (b) citizens ofa state and citizens or subjects of a foreign state; or (c) citizens ofdifferent states “and in which citizens or subjects of a foreign state areadditional parties.”

28 U.S.C. § 1332(a).



' Note. When a federal district court entertains an action brought onthe basis of diversity of citizenship, it is hearing a state law claim and isbound under the Erie doctrine to apply state substantive law, commonand statutory. Erie R.R. v. Tompkins, 304 U.S. 64, 78 (1938).

' Caution. Under federal common law, the federal courts will nothear family law or probate actions even if there is diversity of citizen-ship and the amount in controversy exceeds the $75,000 jurisdictionalamount. 13B Charles A. Wright & Arthur R. Miller, Federal Practiceand Procedure § 3609 (2d ed. 1984 & Supp. 2001) [hereinafter FederalPractice and Procedure].

b. [§ 3.39] Complete Diversity Requirement

Since 1806, the United States Supreme Court has required “completediversity” between the plaintiffs and defendants for federal diversityjurisdiction to exist. See Strawbridge v. Curtiss, 7 U.S. 267, 267 (1806).This requirement means that all persons on one side of the action must beof different citizenship than all persons on the opposing side.

' Caveat. Complete diversity is not constitutionally required underarticle III, section 2 of the U.S. Constitution. See State Farm Fire &Cas. Co. v. Tashire, 386 U.S. 523, 530 (1967) (interpreting federalinterpleader statute, 28 U.S.C. § 1335, to require only minimal diversity—i.e., diversity of citizenship between any two claimants).

' Note. Occasionally, a party may seek to intervene in a federaldistrict court action. Before the enactment of the current supplementaljurisdiction statute, 28 U.S.C. § 1367, courts permitted intervention asof right without an independent jurisdictional basis while permissiveintervention required an independent jurisdictional basis. Turner/Ozanne v. Hyman/Power, 111 F.3d 1312, 1319 (7th Cir. 1997). Thecurrent supplemental jurisdiction statute continues this practice withregard to permissive intervention. Id.

c. [§ 3.40] How Citizenship Is Determined

§ 3.40 CHAPTER 3


(1) [§ 3.41] Individuals

The citizenship of individual United States citizens is determined bydomicile. See, e.g., America’s Best Inns, Inc. v. Best Inns of Abilene, L.P.,980 F.2d 1072, 1074 (7th Cir. 1992). A person’s domicile is the placewhere the person maintains a true, fixed, and permanent home and principalestablishment, and to which the person intends to return whenever theperson is absent from the place. Mas v. Perry, 489 F.2d 1396, 1399 (5thCir. 1974). For purposes of determining diversity, a person may have onlyone domicile at any one time, although the person may actually have homesin two or more states. Dyer v. Robinson, 853 F. Supp. 169, 172 (D. Md.1994).

The following special rules apply:

1. A United States citizen domiciled overseas may not be a party to adiversity case. See, e.g., Cresswell v. Sullivan & Cromwell, 922 F.2d60, 68 (2d Cir. 1990).

2. An alien admitted to the United States for permanent residence isdeemed a citizen of the state in which the alien is domiciled. 28 U.S.C.§ 1332(a).

3. The legal representative of a decedent’s estate is deemed a citizen “onlyof the same State as the decedent.” 28 U.S.C. § 1332(c)(2).

4. The legal representative of “an infant or incompetent” is deemed acitizen “only of the same State as the infant or incompetent.” Id.

(2) [§ 3.42] Corporations

A corporation is deemed to be a citizen of both (1) the state by which itwas incorporated and (2) the state in which it has its principal place ofbusiness. 28 U.S.C. § 1332(c)(1). The purpose of allowing for twopossible states of citizenship for corporations is to exclude from federaljurisdiction those cases in which a corporation is essentially operating in thesame state as the other party, although it is incorporated elsewhere. Thereasoning underlying this exclusion is that such corporations are sufficiently“local” as to not require protection from possible home-state favoritism instate courts. Dimmitt & Owens Fin., Inc. v. United States, 787 F.2d 1186,1190 (7th Cir. 1986).



' Caveat. There is an exception to the general rule stated above inthe case of liability insurers. In any direct action against an insurer inwhich the insured is not joined as a party-defendant, the insurer isdeemed to be a citizen of the state in which the insured is a citizen, aswell as of the state or states in which the insurer is incorporated and thestate in which it has its principal place of business. 28 U.S.C.§ 1332(c)(1).

For purposes of the diversity jurisdiction statute, 28 U.S.C. § 1332, acorporation has only one principal place of business. The federal courtshave advanced a number of different tests for determining a corporation’sprincipal place of business:

1. The “nerve center” test, Scot Typewriter Co. v. Underwood Corp., 170F. Supp. 862, 865 (S.D.N.Y. 1959) (placing predominant emphasis onlocus of executive and administrative functions of corporation);

2. The “place-of-activity” test, Kelly v. United States Steel Corp., 284 F.2d850, 854 (3d Cir. 1960) (placing predominant emphasis on center ofproduction and service activities); and

3. The “total activity” test, J.A. Olson Co. v. City of Winona, 818 F.2d 401,404 (5th Cir. 1987) (applying hybrid of nerve center and place-of-activity test).

' Note. The Seventh Circuit, in which many Wisconsin cases aredecided, uses the nerve center test. Krueger v. Cartwright, 996 F.2d928, 931 (7th Cir. 1993); Kanzelberger v. Kanzelberger, 782 F.2d 774,777 (7th Cir. 1986).

' Caution. Determining the principal place of business is sometimesdifficult, but on occasion it can be crucial. A mistake in identifying acorporation’s principal place of business may mean that there is notcomplete diversity of citizenship between the parties, thus depriving thefederal court of subject matter jurisdiction, even after a trial has beenconcluded.

' Note. Professional or service corporations are treated the same asregular business corporations. Saecker v. Thorie, 234 F.3d 1010, 1012(7th Cir. 2000). In the case of partnerships, limited partnerships andlimited liability companies, the existence of diversity depends on thecitizenship of the partners. Id. at 1011–12.

§ 3.43 CHAPTER 3


d. [§ 3.43] When Citizenship Is Determined

Whether diversity of citizenship exists is generally determined by thecitizenship of the parties at the time the lawsuit is commenced. Freeport-McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428–29 (1991). Thus,if a party changes domicile after the action is commenced and becomesdomiciled in the same state as an opposing party, there is no effect ondiversity jurisdiction. In re “Agent Orange” Prod. Liab. Litig., 818 F.2d145, 162 (2d Cir. 1987).

' Caveat. There are two exceptions to the general rule stated above.First, if an indispensable party is joined after the lawsuit is commencedand that party is domiciled in the same state as an opposing party, thecourt must dismiss the case on the basis of lack of diversity. Moore v.Ashland Oil, Inc., 901 F.2d 1445, 1448–49 (7th Cir. 1990). Second, ifa lawsuit lacks complete diversity of citizenship at the time it iscommenced but later the dismissal of nondiverse parties createscomplete diversity, the case may be removable to federal court undercertain conditions. See infra § 3.53.

Occasionally, a person who is an indispensable party or who should bea plaintiff to an action refuses to join the action as a plaintiff. Such a personmay be joined by the plaintiff as a party defendant. Fed. R. Civ. P. 19(a).Courts will “realign” such parties according to their actual interest in thelawsuit in determining whether complete diversity is present in the case.See City of Dawson v. Columbia Ave. Saving Fund, Safe Deposit, Title &Trust Co., 197 U.S. 178, 180 (1905).

e. [§ 3.44] Jurisdictional Amount Requirement

In addition to complete diversity of citizenship, see supra § 3.39,diversity jurisdiction requires that the amount in controversy exceed “thesum or value of $75,000, exclusive of interest and costs.” 28 U.S.C.§ 1332(a). In the usual case, this requirement is met by the plaintiff’sallegation that his or her damages reach the jurisdictional amount, providedthe allegation is made in good faith. St. Paul Mercury Indem. Co. v. RedCab Co., 303 U.S. 283, 288 (1938). However, if the defendant candemonstrate to a “legal certainty” that an amount exceeding $75,000 cannotbe recovered, the court should dismiss the case for want of subject matterjurisdiction or remand the case to state court if the case was removed. Id.at 289. A court may allow discovery relating to the plaintiff’s claimeddamages under some circumstances. LaSusa v. Lake Michigan Trans-Lake



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Shortcut, Inc., 113 F. Supp. 2d 1306, 1310 (E.D. Wis. 2000). Further, aplaintiff may waive his or her right to seek more than $75,000. Jeffery v.Cross Country Bank, 131 F. Supp. 2d 1067, 1069 (E.D. Wis. 2001).

If the amount in controversy exceeds the jurisdictional amount when asuit is filed, the fact that subsequent events reduce the total amount incontroversy will not divest the court of jurisdiction. Grinnell Mut. Reins.Co. v. Shierk, 121 F.3d 1114, 1116 (7th Cir. 1997).

Litigants may prevent removal by filing a binding document stating thatthey will not seek more than the minimum jurisdictional amount, as long asthey do so prior to removal. Jeffery, 131 F. Supp. 2d at 1069. If both actualand punitive damages are recoverable under a complaint, each must beconsidered in determining the jurisdictional amount. West Bend Elevator,Inc. v. Rhone-Poulenc, S.A., 140 F. Supp. 2d 963, 966 (E.D. Wis. 2000).However, when a claim for punitive damages makes up the bulk of theamount, the claim must be scrutinized closely. Id. Further, a plaintiffcannot meet the jurisdictional amount requirement by relying on a futureaward of attorney fees. Meyers v. Bayer AG, 143 F. Supp. 2d 1044, 1050(E.D. Wis. 2001).

The rules for determining whether the amount in controversy reaches thejurisdictional amount vary depending on the number of parties and claims.The following checklist sets forth those rules.

Checklist:Rules for Calculating Amount in Controversy

G A single plaintiff alleging multiple claims against a singledefendant: All of the plaintiff’s claims may be aggregated toreach the jurisdictional amount, even if the claims are nottransactionally related. See, e.g., Jones Motor Co. v. Tele-dyne, Inc., 690 F. Supp. 310, 317 (D. Del. 1988).

G A single plaintiff alleging “separate and distinct” claimsagainst multiple defendants: The plaintiff may not aggregatethe claims to satisfy the jurisdictional amount. See Crouch v.Atlas Van Lines, Inc., 834 F. Supp. 596, 604 (N.D.N.Y. 1993).

G Two plaintiffs alleging “separate and distinct” claims againsta single defendant: The plaintiffs may not aggregate theirclaims to reach the jurisdictional threshold, no matter howtransactionally related the claims are. See, e.g., Griffith v.Sealtite Corp., 903 F.2d 495, 496 (7th Cir. 1990).

§ 3.44 CHAPTER 3


G Two plaintiffs alleging claims based on “common undividedinterests” in property against a single defendant: Theplaintiffs may aggregate their claims to reach the jurisdictionalamount. Id.

G Class action suit: In the past, each class member was requiredto have a claim that met the jurisdictional amount, see Zahn v.International Paper Co., 414 U.S. 291, 301 (1973), though aclass action would be dismissed only if it could be said, to alegal certainty, that the unnamed plaintiff could recover lessthan the jurisdictional amount. In re A.H. Robins Co., 880F.2d 709, 723 (4th Cir. 1989). Now some courts, includingthe Seventh Circuit, have held that the adoption of 28 U.S.C.§ 1367 in 1990 effectively overruled Zahn by stating thatfederal courts have supplemental jurisdiction over all claimsthat form part of the same case or controversy and that suchsupplemental jurisdiction includes claims that involve thejoinder and intervention of additional parties. See 28 U.S.C.§ 1367(a); see also In re Abbott Labs., 51 F.3d 524, 527–29(5th Cir. 1995). While acknowledging that the legislativehistory of 28 U.S.C. § 1367 indicates no intent to affect thejurisdictional requirements of diversity cases, the SeventhCircuit pointed out that the text of the statute itself is clear.Stromberg Metal Works, Inc. v. Press Mech., Inc., 77 F.3d928, 931 (7th Cir. 1996); see also H.R. Rep. No. 734, 101stCong., 2d Sess. 1 (1990), reprinted in 1990 U.S.C.C.A.N. at6860, 6875.

D. [§ 3.45] Indian Tribe Jurisdiction

A state’s jurisdiction may be limited on Indian tribal land within thestate. In assessing whether a state has jurisdiction on tribal land, a courtmust consider (1) whether federal law preempts the exercise of statejurisdiction; and (2) whether—balancing the interest of the states, tribes,and federal government—the exercise of state jurisdiction would infringeon the rights of the tribe. State v. Big John, 146 Wis. 2d 741, 749, 432N.W.2d 576, 580 (1988); Landreman v. Martin, 191 Wis. 2d 787, 794, 530N.W.2d 62 (Ct. App. 1995). The inquiry is to proceed in light of traditionalnotions of Indian sovereignty and the congressional goal of encouragingtribal self-sufficiency and economic development. Big John, 146 Wis. 2dat 748; St. Germaine v. Chapman, 178 Wis. 2d 869, 871, 505 N.W.2d 450(Ct. App. 1993). Other questions regarding the allocation of jurisdiction



between states and Indian tribes have also arisen. For example, an Indiantribe may have civil authority over the conduct of nontribal members onnontribal land within a reservation in certain limited circumstances. SeeStrate v. A-1 Contractors, 520 U.S. 438, 445 (1997). However, a tribalcourt does not have jurisdiction to adjudicate allegedly tortious conduct inexecuting a search warrant on reservation land for an off-reservation crime.Nevada v. Hicks, 533 U.S. 353, 357–65 (2001).

By statute, the judicial records, orders, and judgments of an Indian tribalcourt in Wisconsin must be given the same full faith and credit as those ofany other governmental entity if all of the following conditions are met:

1. The tribe that creates the tribal court and tribal legislative body isorganized under 25 U.S.C. §§ 461–479.

2. The tribal documents are authenticated.

3. The tribal court is a court of record.

4. The tribal court judgment offered in evidence is a valid judgment.

5. The tribal court certifies that it grants full faith and credit to the judicialrecords, orders, and judgments of the Wisconsin courts and to the actsof other governmental entities in Wisconsin.

Wis. Stat. § 806.245(1); see Teague v. Bad River Band of the Lake SuperiorTribe of Chippewa Indians, 2000 WI 79, ¶ 18, 236 Wis. 2d 384, 612N.W.2d 709. The statute does not address the validity of a tribal courtjudgment rendered while an earlier filed state court action on the samesubject matter is pending. In such a case, the doctrine of comity requiresthe courts to exercise discretion in the allocation of jurisdiction. Teague,2000 WI 79, ¶ 35, 236 Wis. 2d 384.

' Comment. In the absence of this statute, principles of tribalsovereignty would probably necessitate the same result.

Issues of Indian tribe jurisdiction are complicated and beyond the scopeof this chapter. For a comprehensive discussion of tribal sovereignty andjurisdiction, see John W. Gillingham, Pathfinder: Tribal, Federal, andState Court Subject Matter Jurisdiction Bounds: Suits Involving NativeAmerican Interests, 18 Am. Indian L. Rev. 73 (1993), and Sandra Hansen,Survey of Civil Jurisdiction in Indian Country 1990, 16 Am. Indian L. Rev.319 (1991).

§ 3.46 CHAPTER 3


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E. [§ 3.46] Relationship Between State and FederalSubject Matter Jurisdiction

1. [§ 3.47] State General Jurisdiction Compared toFederal Limited Jurisdiction

State trial courts are courts of general jurisdiction. They are presumedto have subject matter jurisdiction over a particular controversy unless somecontrary showing is made. Duel v. Ramar Baking Co., 246 Wis. 604, 608,18 N.W.2d 345 (1945). Federal district courts, on the other hand, are courtsof limited jurisdiction, with power to hear only cases that are both withinthe judicial power of the United States, as defined in the Constitution, andstatutorily entrusted to them by Congress. Sheldon v. Sill, 49 U.S. 441,448–49 (1850). Federal courts are presumed to be without subject matterjurisdiction in a particular cause, and therefore the basis for federal subjectmatter jurisdiction must be set out in a “short and plain statement of thegrounds upon which the court’s jurisdiction depends.” Fed. R. Civ. P.8(a)(1).

2. [§ 3.48] Areas of Exclusive Federal Jurisdiction

Federal law confers certain rights that are binding on state courts underthe supremacy clause of the U.S. Constitution, U.S. Const. art. VI.However, Congress may choose to limit the jurisdiction over certain federalrights to the federal courts. It may do so explicitly or implicitly. See GulfOffshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478 (1981). Federalpreemption of a matter deprives a state court of subject matter jurisdiction.Miller Brewing Co. v. DILHR, 203 Wis. 2d 380, 386, 553 N.W.2d 837 (Ct.App. 1996), aff’d, 210 Wis. 2d 26, 563 N.W.2d 460 (1997).

The following checklist sets forth some of the civil law areas over whichthe federal courts exercise exclusive jurisdiction.

Checklist:Some Areas of Exclusive Federal Jurisdiction

1. Explicit grant of exclusive jurisdiction:G Bankruptcy matters and proceedings, 28 U.S.C. § 1334.G Patent and copyright matters, 28 U.S.C. § 1338(a).G Federal Tort Claim Act cases, 28 U.S.C. § 1346(b).G Maritime prize cases, 28 U.S.C. § 1333(2).



G Actions to recover a fine, penalty, or forfeiture underfederal law, 28 U.S.C. § 1355.

G Certain ERISA violations, 29 U.S.C. § 1132(e)(1).G Certain antitrust actions, 15 U.S.C. §§ 15, 26.

2. Implicit grant of exclusive jurisdiction:G Actions in which the United States is a defendant, 28

U.S.C. § 1346.

Note that while federal courts have exclusive jurisdiction overbankruptcy matters, a state court has the jurisdiction to determine whetheran action pending before it is subject to a stay under the Bankruptcy Code.GMAC Mortgage Corp. v. Gisvold, 215 Wis. 2d 459, 471, 572 N.W.2d 466(1998).

3. [§ 3.49] Federal Supplemental Jurisdiction

Sometimes claims that are clearly within the subject matter jurisdictionof the federal district courts are joined in one lawsuit with other claims thatare clearly state law claims with no independent basis for coming withinfederal subject matter jurisdiction. 28 U.S.C. § 1367 addresses when afederal district court may exercise jurisdiction to hear and determine thestate law claims joined with claims within the federal subject matterjurisdiction. 28 U.S.C. § 1367 is a relatively recent codification of thecommon law doctrines of federal pendent and ancillary jurisdiction, nowtermed supplemental jurisdiction.

Federal pendent and ancillary jurisdiction are beyond the scope of thisvolume. For an excellent resource on these federal jurisdiction issues, see13 &13B Federal Practice and Procedure, supra § 3.38, at §§ 3523, 3567–3567.2.

4. [§ 3.50] Concurrent Jurisdiction

a. [§ 3.51] Concurrent Federal and StateJurisdiction

Under the “prior action pending” rule, when the courts of two separatesovereigns both have jurisdiction over the same litigation, the first court toassume jurisdiction is generally entitled to have the judgment receive fullfaith and credit by the other jurisdiction. Syver v. Hahn, 6 Wis. 2d 154,

§ 3.49 CHAPTER 3


159–60, 94 N.W.2d 161 (1959). But see Teague, 2000 WI 79, ¶ 2, 236 Wis.2d 384 (refusing to apply the prior action pending rule to Indian tribalcourt). Further, with limited exceptions, the “Rooker-Feldman” doctrineprohibits lower federal courts from reviewing state court judgments.Wikberg v. Moore N. Am., Inc., No. 00-2007, 2000 WL 1521768, *2 (7thCir. Oct. 6, 2000) (unpublished).

' Note. The Rooker-Feldman doctrine applies not only to claims thatwere actually raised before the state court, but also to claims that areinextricably intertwined with state court determinations. Johnson v.Collins, No. 99-2950, 2001 WL 195027, *4 (7th Cir. Feb. 23, 2001)(unpublished). The key inquiry is whether the federal court is in essencebeing called upon to review the state court decision. Id.

Most cases within the federal question jurisdiction of federal districtcourts, and all cases within the diversity jurisdiction of the federal districtcourts, are also within the subject matter jurisdiction of state trial courts.Furthermore, more than one state may have jurisdiction over a case. Whenconcurrent jurisdiction exists, there may be opportunities to “forum-shop”with respect to a particular action. See Davis v. American Family Mut. Ins.Co., 212 Wis. 2d 382, 389–90, 569 N.W.2d 64 (Ct. App. 1997).

' Example. When the state and federal courts have concurrentjurisdiction over an action, the plaintiff initially decides whether it ispreferable to have the case heard in state or federal court. If the plaintiffchooses to file the case in state court, the defendant then must decidewhether it would be advantageous to have the case removed to thefederal court system under the guidelines specified in the removalstatutes, see 28 U.S.C. §§ 1441–1452. If the defendant is successful inremoving the case to federal court, the plaintiff may challenge federalsubject matter jurisdiction and seek the remand to state court of some orall of the claims. For further discussion of removal of state actions tofederal district courts, see section 3.53, infra. For a checklist of factorsto consider in filing suit in state or federal court, or removing an actionfrom state to federal court, see section 3.8, supra.

A state court may entertain an action even though it is based entirely onfederal law unless Congress has made federal jurisdiction exclusive. Seesupra § 3.48. State courts should start with the presumption of jurisdictionconcurrent with that of the federal courts. Gulf Offshore Co., 453 U.S. at478. The presumption can be rebutted by explicit statutory directive,unmistakable implication from legislative history, or clear incompatibility



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between state court jurisdiction and federal interests. Id.; see also Lindasv. Cady, 150 Wis. 2d 421, 426, 441 N.W.2d 705 (1989).

Moreover, there is no impediment under the Wisconsin Constitution orthe Wisconsin Statutes to Wisconsin courts hearing cases arising under thelaws of other states. In fact, under the full faith and credit clause of the U.S.Constitution, U.S. Const. art. IV, § 1, a Wisconsin state court may be undera duty to hear such cases. In Hughes v. Fetter, 341 U.S. 609, 611–13(1951), the Supreme Court held that the full faith and credit clauseprecluded Wisconsin from closing its courts to suit under the Illinoiswrongful death statute in the absence of a valid Wisconsin state policyoutweighing the national interest in the availability of a Wisconsin forumfor such claims.

' Note. Hughes has not been interpreted to prevent a state fromapplying its own laws governing the conduct of litigation in its courts.Thus, a state may apply its own statute of limitation to bar a suit even ifthe suit would be timely under the law of the state under which theaction arose. See Wells v. Simonds Abrasive Co., 345 U.S. 514, 516–17(1953). Wisconsin bars actions brought in the state on a foreign causeof action if either the applicable Wisconsin period of limitation or theapplicable foreign period of limitation has expired. See Wis. Stat.§ 893.07; see also supra § 2.59. However, in certain cases Wisconsin’sprocedural requirements may be preempted by a federal right. SeeFelder v. Casey, 487 U.S. 131, 134 (1988) (42 U.S.C. § 1983 preemptedapplication of Wisconsin’s notice-of-claim statute in Wisconsin court).

b. [§ 3.52] Types of Concurrent Jurisdiction Cases

The following checklist includes some of the more significant federalrights and causes of action over which state courts have jurisdictionconcurrent with that of the federal courts.

Checklist:Actions Subject to Concurrent Jurisdiction

G Actions challenging the constitutionality of state statutes.G Civil rights actions under 42 U.S.C. § 1983.G Actions under the Securities Act of 1933, 15 U.S.C. §§ 77a–

77z.G Civil actions under the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. §§ 1961–1968.

§ 3.52 CHAPTER 3


G Actions under the Federal Employers’ Liability Act (FELA),45 U.S.C. § 56.

G Actions under the Voting Rights Act, 42 U.S.C. §§ 1973–1973p.

G Actions in which more than one state has jurisdiction over thesubject matter and the parties.

5. [§ 3.53] Removal of State Actions to FederalDistrict Courts

Certain actions initially filed in state court may be removed to federalcourt if the federal district court has concurrent jurisdiction. See supra§§ 3.50–.52. For a checklist of some of the tactical and strategic factors thatmust be considered in deciding whether to remove a case from state tofederal court, see section 3.8, supra.

The removal statutes are codified at 28 U.S.C. §§ 1441–1452. A fewbasic rules applying to federal removal jurisdiction should be noted:

1. Timing—in general. The time frame for filing a notice of removal isshort. The notice must be filed within 30 days after the defendantreceives “through service or otherwise . . . a copy of the initial pleadingsetting forth the claim for relief” that is within the original jurisdictionof the federal district courts. 28 U.S.C. § 1446(b). The contents of thenotice and the required attachments are described at 28 U.S.C.§ 1446(a).

' Caution. Some cases have held that, even in the absence ofactual service, the mailing of informal “courtesy” copies of pleadingsto an attorney who purports to represent a named or putativedefendant constitutes “receipt . . . otherwise . . . of the . . . pleading,”triggering the 30-day time limit for removal. See, e.g., North JerseySav. & Loan Ass’n v. Fidelity & Deposit Co., 125 F.R.D. 96, 100(D.N.J. 1988).

2. Timing—effect of amendment to pleadings. A state court case that wasnot removable initially may become removable because of an amend-ment to the claims or a change in the parties. For example, a federalclaim may be added that was not in the original case, or a nondiverseplaintiff or defendant may be dropped. When a case becomes removableby such an amendment or change in the parties, the 30-day time limit forfiling the notice of removal begins when the defendant receives the



amended pleading, motion, order, or other paper that first shows the casehas become removable. 28 U.S.C. § 1446(b). If the basis for removalis that the case now meets the diversity requirement, an additional timelimit is imposed: such cases may be removed after amendment only ifthe notice of removal is filed within one year of the original commence-ment of the action. Id.

3. Parties joining in removal. When an action in which removal is beingcontemplated involves multiple defendants, all the defendants must joinin the notice of removal. See, e.g., In re Amoco Petroleum AdditivesCo., 964 F.2d 706, 711 (7th Cir. 1992).

4. Federal district court venue. An action that is removed from state tofederal court will be removed to the federal district court for the federaldistrict and division encompassing the county where the state courtaction was pending. 28 U.S.C. §§ 1441(a), 1446(a).

5. Defendant citizenship. An action may not be removed from state tofederal court if any one of the defendants, properly joined as a defen-dant, is a citizen of the state in which the state action is pending and theonly basis for federal subject matter jurisdiction is diversity of citizen-ship under 28 U.S.C. § 1332. If, however, the plaintiff’s claims alsopresent a federal question, the parties’ citizenship or residence is notsignificant. 28 U.S.C. § 1441(b).

6. Remand. When a case is removed, the plaintiff has the right tochallenge whether the case was properly removed to federal court andto seek remand of the case to the state court. Furthermore, when claimswithin federal court jurisdiction are removed along with companionclaims that raise only state law issues, the federal court may, in itsdiscretion, remand the state law claims to the state court, leaving twoactions pending between the parties. 28 U.S.C. § 1441(c).

7. Supplemental claims. State law claims that derive from a commonnucleus of operative fact with federal law claims may be removed alongwith the federal claims because the federal court will have supplemen-tary jurisdiction over those claims. City of Chicago v. InternationalCollege of Surgeons, 522 U.S. 156, 164–65 (1997); see also Cardenasv. Fire & Police Comm’n, 990 F. Supp. 645, 646 (E.D. Wis. 1998).

8. Claims barred by the 11th Amendment. The 11th Amendment doctrineof sovereign immunity may bar certain claims brought in federal court.However, the presence of a claim barred by the 11th Amendment does

§ 3.53 CHAPTER 3


not prevent a federal court from hearing any other claims in the case (orfrom hearing the barred claim if the 11th Amendment is waived).Wisconsin Dep’t of Corrections v. Schacht, 524 U.S. 381, 389 (1998).

9. Collateral attack on federal subject matter jurisdiction. Generally,when a party has had an opportunity to litigate the question of subjectmatter jurisdiction, that party may not reopen the question in a collateralattack following an adverse judgment. U.S. v. Tittjung, 235 F.3d 330,335 (7th Cir. 2000), cert. denied, 121 S. Ct. 2554 (2002). However,Fed. R. Civ. P. 60(b)(4) provides an exception to the general rule whenthe jurisdictional error is “egregious.” Id. To be egregious, and thusvoid under Rule 60(b)(4), the error must involve a clear usurpation ofjudicial power, meaning that the court wrongfully extended its jurisdic-tion beyond the scope of its authority. Id.

IV. [§ 3.54] Personal Jurisdiction

A. [§ 3.55] In General

The personal jurisdiction of a court is its power to adjudicate a caseinvolving the particular defendant in the case. The plaintiff, havingvoluntarily invoked the court’s power by filing suit, has submitted to thecourt’s jurisdiction. The defendant, on the other hand, is coming to courtunder compulsion, almost always reluctantly. Whether a court has personaljurisdiction over a defendant determines the extent of the court’s power tocompel the defendant to come to that court to defend the lawsuit.

Personal jurisdiction issues originally arose out of a perceived need tolimit the judicial power of state courts. A state court’s exercise ofjurisdiction over persons or property in another state was seen as threaten-ing state sovereignty. On the other hand, the full faith and credit clause ofthe United States Constitution, U.S. Const. art. IV, § 1, required all statesto recognize a judgment rendered against a party by a state considered tohave jurisdiction over the party.

The United States Supreme Court attempted to resolve the inconsistencybetween the doctrine of state sovereignty and the dictate of the full faith andcredit clause in the landmark case of Pennoyer v. Neff, 95 U.S. 714, 727–28(1878), holding that due process required the defendant to be “present”within a state when served with process in order for the courts of that stateto exercise personal jurisdiction over the defendant. Over the years, thePennoyer presence requirement evolved into the modern day requirement



that a defendant have certain “minimum contacts” with the forum state, andthat the exercise of jurisdiction comport with traditional notions of fair playand substantial justice, in order for that state to exercise personal jurisdic-tion over the defendant. See infra § 3.61.

' Note. In the case of federal courts, in diversity cases a federal courthas personal jurisdiction over the parties only if a court in the state inwhich the federal court sits would have such jurisdiction. PKWare, Inc.v. Meade, 79 F. Supp. 2d 1007, 1011 (E.D. Wis. 2000). In federalquestion cases, whether a federal court has personal jurisdiction dependson whether defendants are amenable to process from that federal court.Id.

B. [§ 3.56] General vs. Specific Personal Jurisdiction

In analyzing issues of personal jurisdiction, it is helpful to distinguishbetween general personal jurisdiction and specific personal jurisdiction.This distinction is also important to an understanding of the Wisconsinlong-arm statute, see infra § 3.63.

A court is said to be exercising specific jurisdiction over a defendantwhen it exercises personal jurisdiction over the defendant in a suit “arisingout of or related to the defendant’s contacts with the forum.” HelicopterosNacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984). Asimple example is a suit against a nonresident motorist who causes injuryby negligent driving while traveling through the forum state. Anotherexample is an action for rescission of the purchase of a security broughtagainst a nonresident securities dealer who came into the forum state topromote only the single sale at issue.

A court is said to be exercising general jurisdiction over a defendantwhen it exercises personal jurisdiction over the defendant in a suit thatneither arises out of nor is related to the defendant’s contacts with the forumstate. Id. at 415 n.9. An example is an action in which a Minnesotaresident sues a Wisconsin resident in Wisconsin for an automobile accidentthat occurred in Minnesota, in an effort to benefit from some favorableWisconsin substantive or procedural law.

To meet the requirements for specific personal jurisdiction, theconnections or contacts between the forum state and the particulardefendant generally do not have to be as quantitatively and qualitativelysubstantial as when the cause of action is wholly unrelated to the defen-

§ 3.56 CHAPTER 3


dant’s contacts with the forum state. The justifiable exercise of generalpersonal jurisdiction, on the other hand, requires significant, systematic, andcontinuous contacts or connections between the defendant and the forumstate. See, e.g., Helicopteros Nacionales de Colombia, S.A. v. Hall, 466U.S. 408, 415–16 (1984); Perkins v. Benguet Consol. Mining Co., 342 U.S.437, 446 (1952).

C. [§ 3.57] Determination of Whether Court HasPersonal Jurisdiction


Determining whether a Wisconsin court has jurisdiction over adefendant requires three steps:

1. Determining whether the defendant was properly served with asummons, see infra § 3.59;

2. Determining whether the defendant’s contacts with Wisconsin subjectthe defendant to jurisdiction under a Wisconsin long-arm statute, seeinfra §§ 3.60, .62–.85; and

3. Determining whether the exercise of jurisdiction under the long-armstatute comports with due process, Dietrich v. Patients Comp. Fund, 169Wis. 2d 471, 478, 485 N.W.2d 614 (Ct. App. 1992); Wis. Stat.§ 801.04(2); see infra § 3.61.

' Note. A plaintiff is not required to establish personal jurisdictionon a threshold basis. The plaintiff has the burden to establish jurisdic-tion only after a defendant raises a jurisdictional objection. Mendez v.Hernandez-Mendez, 213 Wis. 2d 217, 226, 570 N.W.2d 563 (Ct. App.1997).

2. [§ 3.59] Service of Process

Proper service of process is an essential requirement for personaljurisdiction, whether general or specific. See Mendez v. Hernandez-Mendez, 213 Wis. 2d 217, 224, 570 N.W.2d 563 (Ct. App. 1997); CH2MHill, Inc. v. Black & Veatch, 206 Wis. 2d 370, 375, 557 N.W.2d 829 (Ct.App. 1996); Honeycrest Farms, Inc. v. Brave Harvestore Sys., Inc., 200Wis. 2d 256, 262, 546 N.W.2d 192 (Ct. App. 1996) (proper service relatesto personal jurisdiction rather than subject matter jurisdiction). The long-



arm statute only confers personal jurisdiction over “a person served in anaction pursuant to [section] 801.11.” Wis. Stat. § 801.05.

Some defects in service are fundamental and deprive the court ofpersonal jurisdiction regardless of actual prejudice. Burnett v. Hill, 207Wis. 2d 110, 122, 557 N.W.2d 800 (1997); Gaddis v. La Crosse Prods.,Inc., 198 Wis. 2d 396, 401–02, 542 N.W.2d 454 (1996). Other defects aremerely technical and will not deprive a court of personal jurisdiction absentprejudice. Gaddis, 198 Wis. 2d at 401–02. For example, service by an out-of-state process server is a fundamental defect that deprives the court ofpersonal jurisdiction. Bendimez v. Neidermire, 222 Wis. 2d 356, 357, 588N.W.2d 55 (Ct. App. 1998). Signing a pleading using a stamped reproduc-tion of a signature is a fundamental defect. Schaefer v. Riegelman, 2002 WI18, ¶ 33, 250 Wis. 2d 494, 639 N.W.2d 715, overruling Novak v. Phillips,2001 WI App 156, ¶ 2, 246 Wis. 2d 673, 631 N.W.2d 635. Likewise,pleadings signed by a nonattorney at the request of an attorney arefundamentally defective. Schaefer, 2002 WI 18, ¶¶ 1–3, 250 Wis. 2d 494.

' Caveat. A court with subject matter jurisdiction may exercisepersonal jurisdiction over a person without service of process (1) withrespect to any counterclaim asserted against the person in an action theperson has commenced in Wisconsin; or (2) if the person appears in anaction and waives the defense of lack of personal jurisdiction, see infra§ 3.90. Wis. Stat. § 801.06.

' Note. A person will not be subject to personal jurisdiction if he orshe is fraudulently tricked into coming into the state, then is served.Townsend v. Smith, 47 Wis. 623, 626, 3 N.W. 439 (1879). However, adefendant may be legitimately served when he or she voluntarily comesto the state for settlement negotiations. See Manitowoc W. Co. v.Montonen, 2002 WI 21, ¶ 32, 250 Wis. 2d 452, 639 N.W.2d 726.

Service of process is discussed in detail in Chapter 6, infra.

3. [§ 3.60] Statutory Basis

The exercise of personal jurisdiction by Wisconsin courts is governedby section 801.05, Wisconsin’s long-arm statute. Regal Ware, Inc. v. TSCOCorp., 207 Wis. 2d 538, 542, 558 N.W.2d 679 (Ct. App. 1996). Section801.05 sets out the grounds for a Wisconsin court to assert personaljurisdiction over a defendant, third-party defendant, or cross-claim

§ 3.46 CHAPTER 3


defendant, provided that the court also has jurisdiction over the subjectmatter.

The Wisconsin long-arm statute represents an attempt to codify theminimum contacts test for personal jurisdiction that complies with dueprocess. See infra § 3.61. Compliance with the language of section 801.05thus raises a presumption of compliance with due process. Lincoln v.Seawright, 104 Wis. 2d 4, 10, 310 N.W.2d 596 (1981). However, thedefendant may rebut this presumption by showing that, as to the particularjurisdictional facts involved in the case, personal jurisdiction over thedefendant would violate due process. Marsh v. Farm Bureau Mut. Ins. Co.,179 Wis. 2d 42, 53, 505 N.W.2d 162 (Ct. App. 1993).

The Wisconsin Supreme Court has consistently stated that the Wisconsinlong-arm statute is intended to provide for the exercise of jurisdiction overnonresident defendants “to the full extent consistent with the requisites ofdue process of law.” Flambeau Plastics Corp. v. King Bee Mfg. Co., 24Wis. 2d 459, 464, 129 N.W.2d 237 (1964); Zerbel v. H.L. Federman & Co.,48 Wis. 2d 54, 59–60, 179 N.W.2d 872 (1970). The Wisconsin long-armstatute is thus to be liberally construed in favor of exercising jurisdiction.Dietrich v. Patients Comp. Fund, 169 Wis. 2d 471, 478, 485 N.W.2d 614(Ct. App. 1992). The requirements for exercising jurisdiction underWisconsin law have been characterized as “very slight.” Thill Sec. Corp.v. New York Stock Exch., 283 F. Supp. 239, 244 (E.D. Wis. 1968), rev’d onother grounds, 433 F.2d 264 (7th Cir. 1970). For example, the court is notlimited to facts that are directly proven; it may also draw inferences fromthe facts. Stevens v. White Motor Corp., 77 Wis. 2d 64, 75, 252 N.W.2d 88(1977).

Whether a particular defendant may be reached by the long-arm statuteconsistent with due process under the 14th Amendment is an issue offederal constitutional law as to which the state courts are bound by UnitedStates Supreme Court precedent. State v. Webster, 114 Wis. 2d 418, 426n.4, 338 N.W.2d 474 (1983); McKnight v. General Motors Co., 157 Wis.2d 250, 257, 458 N.W.2d 841 (Ct. App. 1990). Due process requirementsfor the exercise of personal jurisdiction by Wisconsin courts are discussedin section 3.61, infra.



4. [§ 3.61] Due Process

As noted in section 3.58, supra, the right of a Wisconsin court toexercise personal jurisdiction over a particular defendant is subject to therequirements of due process under the 14th Amendment. Regal Ware, Inc.v. TSCO Corp., 207 Wis. 2d 538, 541–42, 558 N.W.2d 679 (Ct. App.1996). The current test for due process is known as the “minimum contactstest.”

The minimum contacts test was first articulated by the United StatesSupreme Court in International Shoe Co. v. Washington, 326 U.S. 310(1945). Under International Shoe, a court may exercise personal jurisdic-tion over a nonresident defendant only if it can establish that the nonresi-dent has “certain minimum contacts” with the state, such that “maintenanceof the suit does not offend ‘traditional notions of fair play and substantialjustice.’” Id. at 316. Following International Shoe, the increase ininterstate commerce resulted in a trend “toward expanding the permissiblescope of state jurisdiction over foreign corporations and other nonresi-dents.” McGee v. International Life Ins. Co., 355 U.S. 220, 222 (1957).

In order for a court to exercise personal jurisdiction over a nonresidentdefendant under the minimum contacts test, the defendant must have“purposefully avail[ed himself or herself] of the privilege of conductingactivities within [the forum state], thus invoking the benefits and protectionsof its laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958); see also Kulkov. Superior Court, 436 U.S. 84, 94–95 (1978) (when effects of defendant’sacts outside forum state occurred within forum state not because ofdefendant’s intentions, but because third person independently causedeffects to occur there, jurisdiction could not be upheld). If a contract existsbetween the two parties, the court must consider the impact of the contracton the question of whether a party has purposefully established minimumcontacts with the forum state. Regal Ware, Inc. v. TSCO Corp., 207Wis. 2d 538, 544, 558 N.W.2d 679 (Ct. App. 1996). All prior negotiations,contemplated future consequences of the contract, and relevant terms, aswell as the course of dealing between the parties, must be considered. Id.In addition, the defendant must have been able to “reasonably anticipatebeing haled into court” in the forum state. World-Wide Volkswagen Corp.v. Woodson, 444 U.S. 286, 297 (1980) (commercial defendant wouldreasonably foresee being haled into court in foreign state when defendantdelivered products into stream of commerce with expectation that theywould be purchased by consumers in that state); see also Asahi Metal Indus.Co. v. Superior Court, 480 U.S. 102, 112 (1987) (even when defendant

§ 3.61 CHAPTER 3


places product into stream of commerce with awareness that it may beswept into forum state, mere placement of product into stream is not an act“purposefully directed” towards forum state). A defendant may not behaled into a foreign jurisdiction solely because of random, fortuitous, orattenuated contacts, or as a result of the unilateral activity of another partyor a third person. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475(1985). Rather, the contacts between the defendant and the forum statemust have proximately resulted from actions by the defendant that createda “substantial connection” with the forum state. Id. Recent cases indicatethat minimum contacts can even be established when a defendant hascontact with the state via the Internet. See American Network, Inc. v.Access Am./Connect Atlanta, Inc., 975 F. Supp. 494, 498–500 (S.D.N.Y.1997); Hall v. LaRonde, 66 Cal. Rptr. 2d 399, 400 (Ct. App. 1997);Minnesota v. Granite Gate Resorts, Inc., 568 N.W.2d 715, 718–21 (Minn.Ct. App. 1997), aff’d, 576 N.W.2d 747 (Minn. 1998).

In determining whether the contacts between a defendant and the forumstate were sufficient, a court is to consider the following factors:

1. The burden on the defendant of having to defend in the forum state;

2. The forum state’s interest in adjudicating the dispute;

3. The plaintiff’s interest in obtaining convenient and effective relief;

4. The interstate judicial system’s interest in obtaining the most efficientresolution of controversies; and

5. The shared interest of the several states in furthering fundamentalsubstantive social policies.

Id. at 477.

' Comment. A number of the above convenience factors articulatedin Burger King Corp. were anticipated in a 1970 Wisconsin SupremeCourt case, Zerbel v. H.L. Federman & Co., 48 Wis. 2d 54, 64–65, 179N.W.2d 872 (1970).

' Note. Some states recognize a “fiduciary shield” doctrine, wherebyan individual is protected from being haled as an individual into courtwhen all of his or her activities occurred as an agent of another. HardinRoller Corp. v. Universal Printing Mach., Inc., 236 F.3d 839, 842 (7thCir. 2001). Wisconsin courts have neither applied nor rejected thedoctrine. Id.



D. [§ 3.62] Wisconsin Long-Arm Statute


Section 801.05 states the general grounds for personal jurisdiction. Itbegins: “A court of this state having jurisdiction over the subject matter hasjurisdiction over a person served in an action pursuant to [section] 801.11under any of the following circumstances: . . . .” Those circumstances areset forth in subsections (1)–(11) of the statute. These subsections can begenerally divided into those that provide for general personal jurisdictionand those that provide for specific personal jurisdiction. See supra § 3.56.

The general jurisdiction subsections are 801.05(1)(a)–(d). See infra§§ 3.64–.69. Lawsuits brought under these four subsections need not bebased on causes of action arising out of or related to the defendant’scontacts with Wisconsin. Rather, personal jurisdiction may be establishedunder (1)(a)–(d) if the defendant has substantial contacts with Wisconsin.

The specific jurisdiction subsections are 801.05(3)–(11). See infra§§ 3.70–.85. These subsections, by contrast with subsections (1)(a)–(d),contemplate that the defendant may not have substantial contacts withWisconsin, but that the cause of action itself arises out of or is related towhatever contacts with Wisconsin the defendant has.

In addition, there are several special jurisdictional statutes that specifi-cally confer jurisdiction in certain cases. Those statutes are recognized bythe general long-arm statute in subsection (2). See infra § 3.86.

2. [§ 3.64] General Personal Jurisdiction


Section 801.05(1) establishes the grounds for general personal jurisdic-tion in Wisconsin. The section reads:

A court of this state having jurisdiction of the subject matter has jurisdictionover a person served in an action pursuant to [section] 801.11 under any of thefollowing circumstances:

(1) LOCAL PRESENCE OR STATUS. In any action whether arising within orwithout this state, against a defendant who when the action is commenced:

(a) Is a natural person present within this state when served; or(b) Is a natural person domiciled within this state; or(c) Is a domestic corporation or limited liability company; or

§ 3.62 CHAPTER 3


(d) Is engaged in substantial and not isolated activities within this state,whether such activities are wholly interstate, intrastate, or otherwise.

Sections 3.66–.69, infra, discuss subsections (1)(a)–(d).

b. [§ 3.66] Physical Presence Within State

Subsection 801.05(1)(a) authorizes personal jurisdiction over “a naturalperson present within [Wisconsin] when served.” This is the most basic andtraditional ground for personal jurisdiction. See Pennoyer v. Neff, 95 U.S.714, 727–28 (1878) (recognizing constitutional adequacy of this form ofobtaining personal jurisdiction). However, a due process issue has arisenin cases under subsection (1)(a) in recent years—namely, whether atransient nonresident (someone temporarily in the forum state at the time ofpersonal service) is subject to personal jurisdiction when the person has nosubstantial contacts with the state otherwise.

The Wisconsin Supreme Court considered the issue of personaljurisdiction over transient nonresidents in Oxmans’ Erwin Meat Co. v.Blacketer, 86 Wis. 2d 683, 273 N.W.2d 285 (1979). The court noted thatit did not believe the United States Supreme Court had ever imposed aminimum contacts requirement on a state court’s exercise of personaljurisdiction over a natural person personally served within the forum state.Id. at 687–88. However, the Wisconsin court determined that it did nothave to decide whether such a requirement existed, since it concluded thatthe defendant’s activities within Wisconsin would fulfill any minimumcontacts requirement that might arguably exist. Id. at 688.

The United States Supreme Court took up the issue of personaljurisdiction over transient nonresidents in 1990. In Burnham v. SuperiorCourt, 495 U.S. 604, 619 (1990), the Court issued a plurality decisionapproving personal jurisdiction obtained over a transient nonresident bypersonal service in the forum state, without a showing of minimumcontacts.

' Caveat. Some courts have rejected personal jurisdiction over atransient nonresident defendant, even when the defendant was person-ally served in the forum state, if the defendant’s presence in the forumstate was achieved by duress or fraud perpetrated for the purpose ofobtaining the service of process. Jacobs/Kahan & Co. v. Marsh, 740F.2d 587, 592 n.7 (7th Cir. 1984). Case law and statutes have alsoprovided qualified immunity from service of process for persons coming



into a state merely to challenge the jurisdiction of the state’s courts overthem. Stewart v. Ramsay, 242 U.S. 128, 130–31 (1916).

c. [§ 3.67] Wisconsin Domicile

Subsection 801.05(1)(b) authorizes personal jurisdiction over “a naturalperson domiciled within this state.” Unlike subsection (1)(a), whichrequires the defendant’s presence within the state when served, see supra§ 3.66, subsection (1)(b) would permit a Wisconsin court to exercisepersonal jurisdiction over a person who is outside Wisconsin at the time ofservice of process if that person is domiciled in Wisconsin. See supra§ 3.41 (definition of domicile). The exercise of personal jurisdiction by astate court over domiciliaries of the state served outside the state was heldpermissible in Milliken v. Meyer, 311 U.S. 457, 462–63 (1940). Typically,the propriety of jurisdiction under subsection (1)(b) will turn on whether theperson had established a new domicile outside Wisconsin before the actionwas commenced.

' Note. If a Wisconsin domiciliary is served within Wisconsin in aWisconsin action, either subsection (1)(b) or subsection (1)(a) issufficient to establish personal jurisdiction.

d. [§ 3.68] Domestic Corporation, LimitedLiability Company, or LimitedLiability Partnership

Subsection 801.05(1)(c) establishes that a Wisconsin court may exercisejurisdiction over a domestic corporation or limited liability company (LLC).Such firms are incorporated or established voluntarily under statutoryauthority that requires maintenance of an agent within Wisconsin foracceptance of service of process, among other things. See Wis. Stat.§§ 180.0501, .0504 (corporations), 183.0105(1), (8) (LLCs); see also Wis.Stat. § 178.44 (limited liability partnerships).

e. [§ 3.69] Substantial Activities Within State

Subsection 801.05(1)(d) allows a court to exercise general personaljurisdiction over a defendant who, at the time of the commencement of theaction, is engaged “in substantial and not isolated activities within

§ 3.70 CHAPTER 3


[Wisconsin], whether such activities are wholly interstate, intrastate, orotherwise.”

This provision is Wisconsin’s codification of the minimum contacts testfor whether a nonresident defendant may be deemed “present” in the state,see supra § 3.61. The provision focuses solely on the quality and quantityof the defendant’s contacts with Wisconsin; it does not require that theplaintiff be a Wisconsin resident or that the cause of action itself arise outof or be related to the defendant’s activities in Wisconsin. Cf. Perkins v.Benguet Consol. Mining Co., 342 U.S. 437, 438 (1952) (holding that Ohiocould, consistent with due process, exercise personal jurisdiction overPhilippine corporation engaged in “systematic and continuous business” inOhio, even though plaintiff was nonresident of Ohio and cause of action didnot arise out of defendant company’s activities in Ohio). In re Paternity ofCarlin L.S., 226 Wis. 2d 79, 88, 593 N.W.2d 486 (Ct. App. 1999) (holdingthat trial court in paternity action lacked personal jurisdiction over allegedfather, whose only contacts with Wisconsin were his attendance at twofunerals for a few hours each); Gogebic-Iron Wastewater Auth. v. C.D.Smith Constr., Inc., No. 98-2988, 1999 WL 557753, *4–5 (Wis. Ct. App.July 30, 1999) (unpublished opinion not to be cited as precedent orauthority per section 809.23(3)) (holding that, while business wouldnormally have sufficient contacts with Wisconsin under section801.05(1)(d) when it has several Wisconsin clients, such contacts were notsufficient when there was no evidence that any projects for Wisconsinclients were performed in Wisconsin or involved any contact by defendantwith Wisconsin).

' Note. Section 801.05(1)(d) is not limited to activities that arebusiness or employment related. Bushelman v. Bushelman, 2001 WIApp 124, ¶ 15, 246 Wis. 2d 317, 629 N.W.2d 795.

3. [§ 3.70] Specific Personal Jurisdiction

a. [§ 3.71] Local Act or Omission

Under subsection 801.05(3), a Wisconsin court has personal jurisdictionover a defendant who is responsible for acts or omissions within Wisconsinthat cause injury to persons or property either within or without the state.The elements required for jurisdiction under this provision are (1) an act oromission within Wisconsin by the defendant; and (2) a claim of injury toperson or property alleged to arise out of the local act or omission. State v.



Advance Mktg. Consultants, Inc., 66 Wis. 2d 706, 716, 225 N.W.2d 887(1975).

For example, Wisconsin courts had jurisdiction over a Minnesotapsychiatrist who (1) was involved in a joint treatment plan being adminis-tered in Minnesota and Wisconsin, (2) allegedly negligently supervisedWisconsin therapy sessions, (3) treated her Wisconsin patient in Wisconsinat least once, and (4) provided prescriptions to a Wisconsin resident.Sawyer v. Midelfort, 217 Wis. 2d 795, 811–12, 579 N.W.2d 268 (Ct. App.1998), aff’d on other grounds, 227 Wis. 2d 124, 595 N.W.2d 423 (1999).

b. [§ 3.72] Local Injury; Foreign Act or Omission

(1) [§ 3.73] In General

Subsection 801.05(4) gives Wisconsin courts jurisdiction over adefendant who causes injury to persons or property within Wisconsin dueto the defendant’s acts or omissions outside Wisconsin if it can bedemonstrated that, at the time of the injury, the following two conditionswere satisfied:

(a) Solicitation or service activities were carried on within this state by oron behalf of the defendant; or

(b) Products, materials or things processed, serviced or manufactured by thedefendant were used or consumed within this state in the ordinary course oftrade.

This section of the Wisconsin long-arm statute deals only with tortiousconduct; it is not intended to be used as a basis for personal jurisdictionover a defendant in a breach-of-contract case. Nagel v. Crain Cutter Co.,50 Wis. 2d 638, 643, 184 N.W.2d 876 (1971); Towne Realty, Inc. v. BishopEnters., Inc., 432 F. Supp. 691, 693 (E.D. Wis. 1977).

It is not sufficient for the purpose of section 801.05(4) that a Wisconsinresident, as a shareholder of a plaintiff-corporation, indirectly suffersfinancial injury due to actions in another state. Gogebic-Iron WastewaterAuth. v. C.D. Smith Constr., Inc., No. 98-2988, 1999 WL 557753, *5 (Wis.Ct. App. July 30, 1999) (unpublished opinion not to be cited as precedentor authority per section 809.23(3)). Rather, a personal injury or propertydamage must occur, or there must be a direct financial loss, in Wisconsin.Id. It is also insufficient if the only “service activities” are connected witha single, isolated transaction. Housing Horizons, LLC v. Alexander Co.,2000 WI App 9, ¶¶ 12–14, 232 Wis. 2d 178, 606 N.W.2d 263. In enacting

§ 3.70 CHAPTER 3


section 801.05(4)(a), the legislature contemplated some type of regular,ongoing, or repetitive activities in Wisconsin as a requirement for establish-ing personal jurisdiction under that statute. Id. ¶ 14.

(2) [§ 3.74] Standards for Tortious Conduct

Some other jurisdictions have found a single instance of tortious conductoutside the forum state leading to injury within the forum state sufficient tosustain personal jurisdiction. See, e.g., Mobil Oil Corp. v. Advanced Envtl.Recycling Techs., 833 F. Supp. 437, 445 (D. Del. 1993) (citing Eudaily v.Harmon, 420 A.2d 1175 (Del. 1980)). Moreover, the requirements of dueprocess would probably be satisfied by a single instance of tortious conduct.Fields v. Peyer, 75 Wis. 2d 644, 651, 250 N.W.2d 311 (1977). However,Wisconsin’s long-arm statute has been interpreted to require more. Id.

Subsection 801.05(4)(b) has been read to require that more than oneproduct, material, or thing processed, serviced, or manufactured by thedefendant be used or consumed in Wisconsin in the ordinary course oftrade. Hasley v. Black, Sivalls & Bryson, Inc., 70 Wis. 2d 562, 579–80, 235N.W.2d 446 (1975); Davis v. Mercier-Freres, 368 F. Supp. 498, 501 (E.D.Wis. 1973). However, this requirement has been deemed satisfied in a casein which an out-of-state defendant sold component replacement and repairparts to the one purchaser of the defendant’s machine within Wisconsin.See Schmitz v. Hunter Mach. Co., 89 Wis. 2d 388, 400, 279 N.W.2d 172(1979). Similarly, subsection 801.05(4)(a) has been read to require that thedefendant’s solicitation or service activities extend beyond the activitiescarried out with respect to the product, material, or thing that caused injuryto the plaintiff. See McPhee v. Simonds Saw & Steel Co., 294 F. Supp. 779,782 (W.D. Wis. 1969).

' Note. A distributor’s purchase and resale of finished goods, whendone in the ordinary course of distribution, have been held to constitutea processing of the goods sufficient to fall within the statute’s terms.Nelson v. Park Indus., Inc., 717 F.2d 1120, 1124 (7th Cir. 1983); seealso Kopke v. A. Hartrodt S.R.L, 2001 WI 99, ¶ 17, 245 Wis. 2d 396,629 N.W.2d 662, cert. denied, 122 S. Ct. 808 (2002) (adopting a broaddefinition of “processing”). But see Lesnick v. Hollingsworth & VoseCo., 35 F.3d 939, 944 (4th Cir. 1994) (suggesting that Nelson interpretedprocessing in subsection 801.05(4)(b) too broadly).



(3) [§ 3.75] Timing

The timing of the required solicitation or service activities or use orconsumption of products is crucial under subsection 801.05(4). Suchactivities, use, or consumption must occur “at the time of the injury.” Wis.Stat. § 801.05(4). The time of the injury will usually be the time of theaccident, LaBonte v. Preyer, 300 F. Supp. 1078, 1080 (E.D. Wis. 1969), butin cases involving latent injuries, the time of the injury may instead be thetime of the discovery of the injury (by analogy to Wisconsin’s discoveryrule for determining when an action in tort accrues for statute-of-limitationpurposes, see, e.g., Doe v. American Nat’l Red Cross, 176 Wis. 2d 610, 615& n.4, 500 N.W.2d 264 (1993); see also supra § 2.63).

(4) [§ 3.76] Proof

In actions in which personal jurisdiction is sought under subsection801.05(4), it is desirable to develop direct proof that multiple products ofthe out-of-state defendant were, in the ordinary course of trade, used orconsumed in Wisconsin. See, e.g., Hasley, 70 Wis. 2d at 580–81.However, the Wisconsin Supreme Court has recognized that multiple useor consumption can, in the proper case, be established by proper inferencefrom other evidence in the record. Stevens, 77 Wis. 2d at 73.

c. [§ 3.77] Local Services, Goods, or Contracts

Subsection 801.05(5) permits Wisconsin courts to exercise personaljurisdiction over a defendant in any action that:

(a) Arises out of a promise, made anywhere to the plaintiff or to some 3rdparty for the plaintiff’s benefit, by the defendant to perform services within thisstate or to pay for services to be performed in this state by the plaintiff; or

(b) Arises out of services actually performed for the plaintiff by thedefendant within this state, or services actually performed for the defendant bythe plaintiff within this state if such performance within this state was autho-rized or ratified by the defendant; or

(c) Arises out of a promise, made anywhere to the plaintiff or to some 3rdparty for the plaintiff’s benefit, by the defendant to deliver or receive within thisstate or to ship from this state goods, documents of title, or other things ofvalue; or

(d) Relates to goods, documents of title, or other things of value shippedfrom this state by the plaintiff to the defendant on the defendant’s order ordirection; or

§ 3.78 CHAPTER 3


(e) Relates to goods, documents of title, or other things of value actuallyreceived by the plaintiff in this state from the defendant without regard to wheredelivery to carrier occurred.

This subsection of the Wisconsin long-arm statute focuses on therelationship of the particular transaction to the state of Wisconsin, ratherthan on the defendant’s relationship to the state. Afram v. Balfour,Maclaine, Inc., 63 Wis. 2d 702, 709, 218 N.W.2d 288 (1974) (decidedunder predecessor statute, Wis. Stat. § 262.05(5)).

Subsections 801.05(5)(a) and (b) deal with contracts or arrangements forthe performance of services within Wisconsin by either party for the other.The performance of the services within Wisconsin must either (1) bepromised at the time of contracting, Wis. Stat. § 801.05(5)(a), or (2) beauthorized or ratified by the defendant after contracting and after theservices have actually been performed, Wis. Stat. § 801.05(5)(b). Thelongstanding nature of a contract between the parties may be evidence ofauthorization or ratification. Regal Ware, Inc. v. TSCO Corp., 207 Wis. 2d538, 543, 558 N.W.2d 679 (Ct. App. 1996).

' Example. In a case in which the contract at issue specifically calledfor architectural services to be substantially performed in Milwaukee,the terms of the long-arm statute were met. Py-Vavra, Architects-Eng’rs, Inc. v. Gilpin, 64 F.R.D. 693, 693–94 (E.D. Wis. 1974). On theother hand, the statutory terms presumably would not be satisfied if aCalifornia defendant contracted with a national engineering firm to doa feasibility study, which the national engineering firm subcontractedout to its Milwaukee office without the defendant’s authorization orratification.

' Example. In a dispute between a Wisconsin cookware manufac-turer and a broker/distributor, section 801.05(5)(b) conferred personaljurisdiction over the broker/distributor because the manufacturer(1) manufactured and shipped cookware in Wisconsin, (2) approvedsales orders submitted by the broker/distributor to the Wisconsinmanufacturer, and (3) sent the broker/distributor commission checksdrawn on a Wisconsin bank. Regal Ware, Inc. v. TSCO Corp., 207Wis. 2d 538, 543, 558 N.W.2d 679 (Ct. App. 1996).

Subsections 801.05(5)(c), (d), and (e) deal with the shipment of goods,title, or other valuables, or promises for the shipment of such goods, title,or valuables.



d. [§ 3.78] Local Property

Subsection 801.05(6) provides that a Wisconsin court may exercisepersonal jurisdiction over a defendant in any action that arises out of:

(a) A promise, made anywhere to the plaintiff or to some 3rd party for theplaintiff’s benefit, by the defendant to create in either party an interest in, orprotect, acquire, dispose of, use, rent, own, control or possess by either partyreal property situated in this state; or

(b) A claim to recover any benefit derived by the defendant through theuse, ownership, control or possession by the defendant of tangible propertysituated within this state either at the time of the first use, ownership, control orpossession or at the time the action is commenced; or

(c) A claim that the defendant return, restore, or account to the plaintiff forany asset or thing of value which was within this state at the time the defendantacquired possession or control over it.

This subsection of the Wisconsin long-arm statute authorizes Wisconsincourts to exercise jurisdiction over the person of a defendant who promisesto give or take some interest in real property in Wisconsin. A plaintiff maysue a nonresident defendant as to the ownership, control, use, or possessionof real or personal property that either is situated in Wisconsin or wasacquired by the defendant in Wisconsin.

' Comment. Subjecting a nonresident defendant to personaljurisdiction under subsection 801.05(6) is arguably reasonable based onthe presumption that the defendant has “purposefully availed” himselfor herself of the benefits of Wisconsin laws protecting real and personalproperty rights. See supra § 3.61 (purposeful availment as element ofminimum contacts test).

e. [§ 3.79] Deficiency Judgments in ForeclosureSales

Subsection 801.05(7) provides that a court has personal jurisdiction overa defendant in any action to recover a deficiency judgment on a mortgagenote, conditional sales contract, or other security agreement on which thedefendant is obliged if the deficiency is:

(a) In an action in this state to foreclose upon real property situated in thisstate; or

(b) Following sale of real property in this state by the plaintiff under[chapter] 846; or

§ 3.81 CHAPTER 3


(c) Following resale of tangible property in this state by the plaintiff under[chapter] 409.

Subsections (a) and (b) are related to the state’s power to adjudicateinterests in real property located within the state. See infra §§ 3.96–.105.Subsection (c) relates to secured transactions in Wisconsin.

f. [§ 3.80] Officers and Directors

Subsection 801.05(8) provides for personal jurisdiction over a defendantwho is or was an officer, director, or manager of a domestic corporation orlimited liability company (LLC) if the cause of action arises out of thedefendant’s conduct as an officer, director, or manager or out of theactivities of the corporation or LLC while the defendant held office. Theexercise of jurisdiction under this subsection has been held constitutionaleven when the defendant’s contacts with Wisconsin other than as a directorof a corporation were minimal. Stearn v. Malloy, 89 F.R.D. 421, 423 (E.D.Wis. 1981). However, the subsection only applies when the corporation orLLC is domestic. See Pavlic v. Woodrum, 169 Wis. 2d 585, 594–95, 486N.W.2d 533 (Ct. App. 1992).

g. [§ 3.81] Taxes or Assessments

Subsection 801.05(9) authorizes a Wisconsin court to exercise personaljurisdiction over a defendant in any action for the collection of taxes orassessments levied, assessed, or otherwise imposed by a taxing authority ofthe state after July 1, 1960.

h. [§ 3.82] Insurance or Insurers

Subsection 801.05(10) gives Wisconsin courts personal jurisdiction overa defendant in any action arising out of the defendant’s promise to insureagainst the happening of an event if either of the following conditionsapply:

(a) The person insured was a resident of this state when the event out ofwhich the cause of action is claimed to arise occurred; or

(b) The event out of which the cause of action is claimed to arise occurredwithin this state, regardless of where the person insured resided.



i. [§ 3.83] Certain Marital Actions

Subsection 801.05(11) provides for personal jurisdiction in certainactions affecting the family (except for actions under chapter 769, theUniform Interstate Family Support Act).

j. [§ 3.84] Personal Representatives

Occasionally, a lawsuit must be brought against a decedent’s personalrepresentative. Sometimes, for example, a personal representative must besubstituted into a case because a defendant has died during the pendency ofthe action. Subsection 801.05(12) governs personal jurisdiction in suchcases.

In any action against a deceased’s personal representative to enforce aclaim against the deceased, a Wisconsin court may exercise personaljurisdiction if “one or more of the grounds stated in [subsections 801.05(2)–(11)] would have furnished a basis for jurisdiction over the deceased hadthe deceased been living.” Wis. Stat. § 801.05(12). Under subsection801.05(12), the personal representative may only challenge the adequacyof the decedent’s contacts with Wisconsin, not the adequacy of his or herown contacts with the state. It is immaterial for purposes of subsection801.05(12) whether the plaintiff commenced the lawsuit before or after thedecedent’s death.

On the substitution of parties upon a party’s death, see sections 4.70–.75,infra.

k. [§ 3.85] Joinder of Claims

It is common for a plaintiff to join a number of claims against adefendant in an action. See generally infra § 4.3. Subsection 801.05(13)governs personal jurisdiction in such circumstances. If the basis forpersonal jurisdiction over the defendant is one of those set forth insubsection 801.05(1) (local presence or status), all of the claims will comewithin the court’s general personal jurisdiction. However, if there are nogrounds for personal jurisdiction under subsection 801.05(1), the plaintiffmust assert separate grounds for personal jurisdiction over the defendant foreach claim joined against him or her. See Wis. Stat. § 801.05(13).

§ 3.86 CHAPTER 3


T

' Caveat. If subsection 801.05(1) is asserted as the basis of aplaintiff’s claims against a nonresident defendant who is served whilewithin Wisconsin on a transient basis, and the claims are unrelated toWisconsin, the defendant may still challenge the court’s personaljurisdiction over him or her pursuant to subsection 801.05(1) on dueprocess grounds. See supra § 3.66 (due process issues relating topersonal jurisdiction over transient nonresident).

' Practice Tip. A plaintiff should not be deterred by subsection801.05(13) from joining additional claims in an action that may havequestionable bases for personal jurisdiction under section 801.05. Thedefense of lack of personal jurisdiction is waived if not raised in a timelyfashion. The defendant may not think to question personal jurisdictionat all, or may not think to question personal jurisdiction as to somerather than all of plaintiff’s claims. Finally, the defendant may simplyconclude that resolving all of the plaintiff’s claims in one action ispreferable to engaging in piecemeal litigation.

4. [§ 3.86] Special Jurisdictional Statutes

Subsection 801.05(2) authorizes a court to exercise personal jurisdictionover a defendant “[i]n any action which may be brought under [Wisconsin]statutes . . . that specifically confer grounds for personal jurisdiction overthe defendant.” This provision confirms that the Wisconsin long-armstatute was not meant to supersede special personal jurisdictional statutesin existence at the time the long-arm statute was enacted.

The following checklist provides some examples of special jurisdictionalstatutes.

Checklist:Some Examples of Special Jurisdictional Statutes

G Wis. Stat. § 345.09 (nonresident motorists).G Wis. Stat. § 551.65(1), (2) (nonresident issuers of securities).G Wis. Stat. § 645.04(5) (nonresident agents, brokers, and rein-

surers obligated to domestic insurer in rehabilitation orliquidation).

G Wis. Stat. § 704.22 (nonresident landlords).G Wis. Stat. § 769.201 (nonresident individuals in actions under

the Uniform Interstate Family Support Act).



G Wis. Stat. § 801.07(5) (quasi in rem jurisdiction in certainfamily status actions).

With special jurisdictional statutes, as with the general long-arm statute,due process concerns must be addressed as well. See In re Paternity ofCarlin L.S., 226 Wis. 2d 79, 89, 593 N.W.2d 486 (Ct. App. 1999) (holdingthat Uniform Child Custody Jurisdiction Act did not satisfy due processrequirements necessary to allow personal jurisdiction over nonresidentrespondent in paternity proceeding).

E. [§ 3.87] Consent to Personal Jurisdiction

1. [§ 3.88] Consent by Individuals and Corporations

An individual or a corporation may consent to jurisdiction in Wisconsin.In commercial transactions, this consent is typically given before anycontroversy has arisen. Contracts frequently specify the state in which anysuit seeking to determine rights under the contract will be brought.Consent-to-venue clauses in contracts implicitly confer on the court theright to exercise personal jurisdiction. Kohler Co. v. Wixen, 204 Wis. 2d327, 337, 555 N.W.2d 640 (Ct. App. 1996). However, consent-to-venueclauses, like other contract provisions, must be based on free bargaining.First Fed. Fin. Serv., Inc. v. Derrington’s Chevron, Inc., 230 Wis. 2d 553,558–59, 602 N.W.2d 144 (Ct. App. 1999). Unless the defendant can showthat a contract’s forum provision was not based on free bargaining, courtswill generally enforce such provisions. Kohler Co. v. Wixen, 204 Wis. 2d327, 340, 555 N.W.2d 640 (Ct. App. 1996); see, e.g., Datronic Rental Corp.v. DeSol, Inc., 164 Wis. 2d 289, 294–95, 474 N.W.2d 780 (Ct. App. 1991);cf. Leasefirst v. Hartford Rexall Drugs, Inc., 168 Wis. 2d 83, 89–90, 483N.W.2d 585 (Ct. App. 1992) (forum selection clause in equipment leasewas product of procedural unconscionability when salesman did not pointout clause printed in very small type on back page of lease). However,when the dispute relates to a substantial right provided under Wisconsinlaw, a Wisconsin court may choose to disregard a forum provision callingfor a forum outside Wisconsin. See, e.g., Cutter v. Scott & Fetzer Co., 510F. Supp. 905, 908–09 (E.D. Wis. 1981) (forum selection clauses will not beenforced when doing so would be inconsistent with purpose of WisconsinFair Dealership Law).

Consent to personal jurisdiction is assumed when a party invokes thecourt’s jurisdiction by seeking some relief. Thus, the filing of a complaint

§ 3.90 CHAPTER 3


by a plaintiff constitutes consent to the court’s jurisdiction as to anycounterclaim filed against the plaintiff. Wis. Stat. § 801.06.

A defendant does not consent to personal jurisdiction merely by takingsome act, short of making an appearance in the action or filing a responsivepleading, that indicates participation in the controversy. See In re Paternityof Jonathan E.I., No. 98-1529-FT, 1999 WL 562223, *1 (Wis. Ct. App.Aug. 3, 1999) (unpublished opinion not to be cited as precedent or authorityper section 809.23(3)) (holding that alleged father in paternity action did notconsent to personal jurisdiction in Wisconsin by voluntarily submitting toblood test in California before filing motion to dismiss for lack of personaljurisdiction).

2. [§ 3.89] Consent by the State; Sovereign Immuni-ty from Suit

Under the doctrine of sovereign immunity, the state of Wisconsin maynot be sued without its consent. See Fiala v. Voight, 93 Wis. 2d 337, 342n.3, 286 N.W.2d 824 (1980). Sovereign immunity is a matter of personaljurisdiction. See, e.g., Manitowoc Co. v. City of Sturgeon Bay, 122 Wis. 2d406, 411, 362 N.W.2d 432 (Ct. App. 1984). When the defense of sovereignimmunity is properly raised, courts lack personal jurisdiction over the stateof Wisconsin. Fiala, 93 Wis. 2d at 341; Carlson v. Pepin County, 167 Wis.2d 345, 356, 481 N.W.2d 498 (Ct. App. 1992).

Historically, sovereign immunity was thought necessary to protectpublic funds from being depleted in the payment of damage claims, and itwas reasoned that the need of the individual victim to be made whole hadto give way to the public welfare. See Sambs v. City of Brookfield, 97 Wis.2d 356, 372, 293 N.W.2d 504 (1980). However, the wisdom of thisapproach was questioned in Holytz v. Milwaukee, 17 Wis. 2d 26, 115N.W.2d 618 (1962). In Holytz, the Wisconsin Supreme Court abrogated thecommon law doctrine of governmental immunity from tort claims againstlocal units of government based on ministerial acts. In doing so, the courtnoted that the state’s sovereign right not to be sued without its consent wasunaffected and invited the legislature to enact appropriate laws consentingto suit in certain cases. Id. at 39–40.

In response to the Holytz decision, the Wisconsin Legislature enacted acomprehensive scheme regulating how local governmental units, or theiragents and employees, may be sued in tort. See Wis. Stat. § 893.80. Asimilar scheme was enacted for suits against state employees. See Wis. Stat.



§ 893.82. Generally, these statutes impose short time limits for givingnotice of injury and filing claims. The notice of injury and the claims mustcontain information set out in the statutes. If a plaintiff complies with thesenotice requirements, the state’s defense of lack of personal jurisdictionbased on sovereign immunity is statutorily waived. See Ruh v. Samerjan,816 F. Supp. 1326, 1330 (E.D. Wis. 1993), aff’d, No. 93-1799, 1994 WL396215 (7th Cir. Aug. 1, 1994) (unpublished).

For a more detailed discussion of sovereign immunity, see sections2.18–.34, supra.

F. [§ 3.90] Waiver of Defense of Lack of PersonalJurisdiction

A defendant may waive the defense of lack of personal jurisdiction bynot raising it in a responsive pleading or motion to dismiss. Wis. Stat.§ 802.06(8); see also Artis-Wergen v. Artis-Wergen, 151 Wis. 2d 445, 452,444 N.W.2d 750 (Ct. App. 1989) (when an appearance is made and reliefis sought on other matters, the lack of personal jurisdiction objection iswaived). But see Honeycrest Farms, Inc. v. Brave Harvestore Sys., Inc.,200 Wis. 2d 256, 259, 546 N.W.2d 192 (Ct. App. 1996) (when twodifferent insurers answered on behalf of defendant, and only one raiseddefense of lack of personal jurisdiction, defense was not waived). A specialappearance to contest jurisdiction is no longer necessary, however.Honeycrest Farms, Inc. v. A.O. Smith Corp., 169 Wis. 2d 596, 603, 486N.W.2d 539 (Ct. App. 1992); see also infra § 5.67. Once a jurisdictionalobjection is properly made, a party may participate in and contest the meritsof the action without waiving his or her objection to jurisdiction. SeeDanielson v. Brody Seating Co., 71 Wis. 2d 424, 431, 238 N.W.2d 531(1976).

G. [§ 3.91] Concurrent Personal Jurisdiction

At times, a defendant’s actions may bring the defendant within thejurisdiction of two states. For example, in State v. Beck, 204 Wis. 2d 464,555 N.W.2d 145 (Ct. App. 1996), a defendant who was clamming on theMississippi River in Iowa waters was cited by the Wisconsin Departmentof Natural Resources for possession of undersized clam shells. TheWisconsin Constitution sets the western boundary of the state at the centerof the main channel of the Mississippi River, Wis. Const. art. II, § 1, butprovides for Wisconsin concurrent jurisdiction on all rivers and lakes

§ 3.90 CHAPTER 3


bordering the state so far as those rivers and lakes form a common boundaryto the state and any other state, Wis. Const. art. IX, § 1. Wisconsin ispermitted to exercise concurrent jurisdiction when the two states havesimilar laws. State v. Nelson, 92 Wis. 2d 855, 858–59, 285 N.W.2d 924(Ct. App. 1979). A Wisconsin law is “similar” to another state’s law if theact Wisconsin seeks to punish is also a punishable act in the other state.Beck, 204 Wis. 2d at 470.

H. [§ 3.92] Challenges to Personal Jurisdiction: Procedural Considerations


A defendant who wants to challenge a Wisconsin court’s exercise ofpersonal jurisdiction has to decide between a direct challenge and acollateral challenge. In a direct challenge, the defendant raises and litigatesthe issue in the lawsuit itself. In a collateral challenge, the defendant simplydoes not appear in the Wisconsin action and later attempts to have thedefault judgment declared void on due process grounds. Direct andcollateral challenges to personal jurisdiction are discussed in sections 3.94and 3.95, infra, respectively.

' Note. Failure to obtain personal jurisdiction does not amount toegregious conduct or bad faith of the sort that would lead to a dismissalwith prejudice. Haselow v. Gauthier, 212 Wis. 2d 580, 591–92, 569N.W.2d 97 (Ct. App. 1997).

2. [§ 3.94] Direct Challenges

In Wisconsin (and under the Federal Rules of Civil Procedure), unlessthe defense of lack of personal jurisdiction must be asserted in a responsivepleading, or in a motion made in lieu of a responsive pleading, it is deemedwaived. See Wis. Stat. § 802.06(8)(a); Fed. R. Civ. P. 12. The philosophybehind waiver of the defense is simple: the rules of personal jurisdictionhave primarily evolved in order to protect nonresident defendants fromhaving to defend in inconvenient locations, and such defendants are free towaive this protection. Consequently, defendants are deemed to havewaived personal jurisdiction defenses if they have not acted affirmativelyto protect them.



A motion challenging personal jurisdiction under section 802.06(2)(a)3.should be accompanied by affidavits setting forth pertinent facts relating tothe court’s lack of personal jurisdiction. See, e.g., Henderson v. MilexProds., Inc., 125 Wis. 2d 141, 143, 370 N.W.2d 291 (Ct. App. 1985); seealso infra § 9.17. Unless the court can conclude, based on the defendant’smotion and affidavit, that it has personal jurisdiction, it must set up anevidentiary hearing. The burden of proof at this point falls on the plaintiff(or party asserting that personal jurisdiction exists). InternationalPlacement & Recruiting v. Reagan Equip. Co., 592 F. Supp. 1252, 1255(E.D. Wis. 1984); Mendez v. Hernandez-Mendez, 213 Wis. 2d 217, 226,570 N.W.2d 563 (Ct. App. 1997).

At an evidentiary hearing, a plaintiff is not bound by the allegations ofthe complaint but is free to present additional facts. It is not a defense to aparty’s assertion of the court’s personal jurisdiction that the complaint itselfdoes not allege facts sufficient to support personal jurisdiction. In fact, theplaintiff may not rest on the allegations of the complaint, even one that hasbeen verified, in establishing jurisdictional facts supporting personaljurisdiction over the defendant, Pavalon v. Thomas Holmes Corp., 25 Wis.2d 540, 547, 131 N.W.2d 331 (1964), unless the defendant has admitted theallegations by answer or other pleading. State v. Advance Mktg. Consul-tants, Inc., 66 Wis. 2d 706, 714–15, 225 N.W.2d 887 (1975).

The evidentiary hearing on personal jurisdiction is conducted by thecourt without a jury and must be held before the court hears any issuesgoing to the merits of the case. Wis. Stat. § 801.08. The plaintiff has theduty to demonstrate that personal jurisdiction is (1) proper under anapplicable long-arm statute and (2) consistent with constitutional dueprocess. Afram, 63 Wis. 2d at 707–08. Factual determinations made by thecourt in deciding whether it has personal jurisdiction over the defendant arenot binding on the parties at the later trial on the merits of the action. Wis.Stat. § 801.08(2).

' Practice Tip. The party asserting that personal jurisdiction existsmay be hampered in proving that the defendant has sufficient minimumcontacts with Wisconsin if the court takes the position that it must firsthave personal jurisdiction over the defendant before it can require thedefendant to comply with discovery in the lawsuit. The WisconsinSupreme Court took this position in Stroup v. Career Academy, Inc., 38Wis. 2d 284, 290, 156 N.W.2d 358 (1968), holding that when anobjection to jurisdiction is made, the jurisdictional issue should be triedbefore the parties proceed with discovery since a court must have

§ 3.95 CHAPTER 3


jurisdiction over the parties in order to permit discovery. However, thesupreme court held otherwise in Bielefeldt v. St. Louis Fire Door Co., 90Wis. 2d 245, 279 N.W.2d 464 (1979). Without addressing Stroup, thecourt held that discovery on a jurisdictional issue was appropriate inadvance of a pretrial jurisdictional hearing. Id. at 255. The Bielefeldtholding is consistent with federal court decisions holding that courtshave jurisdiction to determine their own jurisdiction, Resolution TrustCorp. v. Lightfoot, 938 F.2d 65, 67 (7th Cir. 1991), and that a trial courthas wide discretion to allow affidavits, documents, and even a limitedevidentiary hearing to resolve disputed jurisdictional facts. Ohio Nat’lLife Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir. 1990); seealso Katz v. Princess Hotels Int’l, Inc., 839 F. Supp. 406, 410–11 (E.D.La. 1993). The better considered position would seem to be that theplaintiff should be entitled to limited discovery on the jurisdictionalissue. See Wis. Stat. § 804.01(2)(a).

For a discussion of motions to dismiss for lack of personal jurisdiction,see section 9.17, infra.

3. [§ 3.95] Collateral Challenges

A collateral challenge to personal jurisdiction occurs in a legal actionthat is separate from the action in which personal jurisdiction was originallyin question. With a collateral challenge, typically the defendant fails toappear in the Wisconsin action, which leads to a default judgment.Frequently, the plaintiff attempts to enforce the judgment in the state wherethe defendant resides. The defendant then attempts to have the defaultjudgment declared void, usually on due process grounds.

' Note. The mechanism for enforcing the judgment in the defen-dant’s state of residence is often the Uniform Enforcement of ForeignJudgments Act, codified under Wisconsin law at section 806.24. Underthe act, a foreign judgment is subject to the same procedures, defenses,and proceedings for reopening, vacating, or staying as the forum court’sjudgment. Wis. Stat. § 806.24(2).

It is also possible for the defendant to challenge Wisconsin’s jurisdictionby (1) commencing a new action in Wisconsin or (2) raising the issue insubsequent proceedings brought by the plaintiff to enforce the judgment inWisconsin. The defendant could also move after judgment to vacate theprior judgment, Wis. Stat. § 806.07, on the grounds that the court waswithout jurisdiction. However, unless an objection was made to jurisdiction



in the original action, the defense will most likely be claimed waived. Wis.Stat. § 802.06(8)(a).

' Practice Tip. The risk attendant on a collateral challenge isobvious: A collateral challenge, if unsuccessful, will have foreclosedthe possibility of a defense of the action on the merits by allowing thematter to proceed to a default judgment. The potential benefit of acollateral challenge is that the nonresident defendant may find in his orher own state a court receptive to taking a narrow view of a Wisconsincourt’s right to exercise personal jurisdiction. Such a strategy might beemployed when the defendant has no defense on the merits or when thedefendant believes his or her defense is unlikely to be successful. Insuch a case, a collateral challenge to jurisdiction might be considerablyless expensive than a defense on the merits.

V. [§ 3.96] In Rem and Quasi in Rem Jurisdiction

A. [§ 3.97] In General

In addition to exercising jurisdiction over persons having sufficientcontacts with the state of Wisconsin, Wisconsin circuit courts may have thepower to adjudicate ownership rights in or the status of real and personalproperty located within the state. See Wis. Stat. § 801.07. This power toadjudicate is known generally as in rem jurisdiction (literally, “jurisdictionagainst the thing”). In rem jurisdiction is divided into two subclasses:(1) true in rem jurisdiction, and (2) quasi in rem jurisdiction. These twosubclasses are discussed in sections 3.98 and 3.99–.101, infra, respectively.

B. [§ 3.98] In Rem Jurisdiction

When a court is being asked to determine the rights of all personseverywhere in property located in Wisconsin, the action is in rem. True inrem actions are rare. Typical of such actions are real estate quiet titleactions and eminent domain proceedings.

Frequently—for example in a mortgage foreclosure—relief is soughtboth in rem and in personam. When a plaintiff is seeking a deficiencyjudgment or damages against a defendant personally in connection with aforeclosure, an independent ground for personal jurisdiction must be foundunder section 801.05, the Wisconsin long-arm statute, see supra §§ 3.62–

§ 3.101 CHAPTER 3


.85. When the relief sought is purely in rem, the basis for jurisdiction is tobe established under section 801.07, rather than section 801.05.

C. [§ 3.99] Quasi in Rem Jurisdiction

1. [§ 3.100] In General

In quasi in rem actions, the property in which the court is determiningproperty interests is not the subject of the underlying action. Typicalexamples of this type of action are garnishments and attachments. See infra§ 3.101. Quasi in rem actions also may be used to determine statusquestions in certain actions affecting the family. See Mendez v. Hernandez-Mendez, 213 Wis. 2d 217, 223, 570 N.W.2d 563 (Ct. App. 1997).

Often, a quasi in rem action is undertaken to secure some remedy againstspecific property in support of a larger dispute between the parties. Quasiin rem actions historically have also been used to lure a defendant into astate in order to assert personal jurisdiction over that defendant. See infra§ 3.104. However, the U.S. Supreme Court has clarified that a state maynot constitutionally exercise quasi in rem jurisdiction over a defendant whohas no contacts with the forum state. Rush v. Savchuk, 444 U.S. 320, 332–33 (1980); Shaffer v. Heitner, 433 U.S. 186, 208–12 (1977); see alsoMendez v. Hernandez-Mendez, 213 Wis. 2d 217, 225–26, 570 N.W.2d 563(Ct. App. 1997); see infra § 3.102.

2. [§ 3.101] Garnishment and Attachment

Garnishment and attachment are statutory remedies available in supportof an effort to collect a debt owed to a plaintiff. Both remedies maysometimes be used prior to judgment (and historically were often used inthis manner to assert quasi in rem jurisdiction over defendants who were nototherwise subject to personal jurisdiction in the state, but see infra § 3.102).Under the attachment statutes, chapter 811, a plaintiff is entitled, upon theproper showing, to have property of a defendant seized or, in the case ofreal estate, subjected to a judicial lien, pending establishment of a judgmenton the underlying debt. Once the judgment on the underlying claim isestablished, the seized or liened property may then be disposed of and theproceeds applied to the judgment. Under the garnishment statutes, chapter812, a plaintiff likewise may seize a debtor’s earnings before obtaining ajudgment on the underlying debt.



' Note. Certain prejudgment attachment and garnishment procedureshave been challenged and found unconstitutional under the 14th Amend-ment of the United States Constitution, which forbids “any State” from“depriv[ing] any person of life, liberty, or property, without due processof law.” See Fuentes v. Shevin, 407 U.S. 67, 96–97 (1972); Sniadach v.Family Fin. Corp., 395 U.S. 337, 337–39 (1969). However, not allprejudgment attachment and garnishment procedures are unconsti-tutional. Prejudgment attachment and garnishment, without prior noticeor hearing, are constitutional in extraordinary circumstances, when theneed for a predeprivation hearing is low and the state institutes sufficientsafeguards to protect the defendant’s due process rights. Connecticut v.Doehr, 501 U.S. 1, 4 (1991); Mitchell v. W.T. Grant Co., 416 U.S. 600,607–10 (1974).

D. [§ 3.102] Minimum Contacts Requirement

Until 1977, plaintiffs in quasi in rem and in rem cases did not have to beconcerned with the extent of a named defendant’s contacts with the forumstate; it was sufficient that the real or personal property at issue had its situsin the forum state. In 1977, however, the United States Supreme Court heldin Shaffer v. Heitner, 433 U.S. 186, 208–12 (1977), that InternationalShoe’s minimum contacts test, see supra § 3.61, applied to in rem and quasiin rem decisions. Under Shaffer v. Heitner, a Wisconsin court must requirethe plaintiff to show some minimal contacts connecting the creditor’s claim,the property attached, and the defendant’s contacts with Wisconsin beforeconcluding that it has quasi in rem jurisdiction as a result of an attachment.

E. [§ 3.103] Strategic Considerations

1. [§ 3.104] Plaintiff

In the past, in rem actions—and more particularly quasi in rem actions—were sometimes used by plaintiffs to try to compel a defendant to litigatein a forum state where the defendant would not have been amenable topersonal jurisdiction. This strategy required locating property within theforum state that the defendant would consider dear enough to come anddefend. Although the in rem judgment would only determine rights in theproperty itself, the underlying dispute between the plaintiff and thenonresident defendant frequently would be adjudicated first. Further, thevalue of the nonresident defendant’s interest in the property was frequently

§ 3.105 CHAPTER 3


greater than the value of the underlying debt. Because the location of adebtor owing money to a nonresident defendant was considered to be thesitus of the debt, a garnishment or attachment action would be broughtwithin the forum where the nonresident defendants’s debtor resided, in aneffort to secure money relief against the nonresident defendant.

' Caution. Because minimum contacts are now required for in remand quasi in rem jurisdiction on due process grounds, see supra § 3.102,this strategy is not likely to succeed.

2. [§ 3.105] Defendant

When a defendant is served with proper notice that property of thedefendant located in Wisconsin has been seized in order to satisfy apurported debt, the defendant will have to decide between two strategies.First, the defendant may elect to defend the action on the merits. However,this approach risks a ruling that precludes relitigation in a later action on thesame debt. Alternatively, the defendant may simply challenge the court’sjurisdiction over the property itself by appearing and objecting to jurisdic-tion.

' Practice Tip. Under Wisconsin law, a special appearance tochallenge jurisdiction is unnecessary. A defendant who objects tojurisdiction may participate in and contest the merits of the case withoutwaiving the objection to jurisdiction. Danielson, 71 Wis. 2d at 431.

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