26. What is the toy manufacturer's strongest argument for dismissing the case?

A federal court must have both subject-matter and personal jurisdiction to hear a lawsuit.

Subject-matter jurisdiction based on diversity is the court's power to hear certain causes of action where the parties are completely diverse and the amount in controversy is greater than $75,000.

Personal jurisdiction is the court's power to enforce a judgment against a party. Personal jurisdiction analysis involves two questions, including whether:

(i) the state's long-arm statute grants jurisdiction; AND

(ii) the 14th Amendment Due Process Clause of the Constitution allows the court to enforce a judgment against the defendant.

The constitutional analysis for personal jurisdiction requires not only that the defendant have sufficient minimum contacts with the forum such that it is foreseeable he may be called into court there (substantive due process), but also that he have adequate notice of the action and an opportunity to be heard (procedural due process).

For a defendant to have received adequate notice of a cause of action, the procedures must involve reasonable efforts to give notice, even if the defendant did not actually receive notice.

A federal complaint must contain both notice of the cause of action and factual allegations supporting the prayer for relief. Fed. R. Civ P. 8(a). Similar to federal cases, in most states, defendants may move to dismiss a complaint for failure to state a claim if the legal conclusions are not supported by a factual basis.

B is correct. The strongest argument for the toy manufacturer to prevail on a motion to dismiss is that State A's law does not satisfy procedural due process because it does not contain any notice requirement. Reasonable efforts must be used to notify a defendant of a pending lawsuit, even if those efforts do not result in actual notice.

Here, State A's law does not require the Secretary of State to notify companies that they have been sued. Therefore, it cannot satisfy the requirement that reasonable efforts be made to notify defendants of the pendency of the action and is unconstitutional.

A is incorrect. This answer choice confuses federal subject-matter jurisdiction with the issue presented by this question. The amount in controversy requirement (damages in excess of $75,000) is for federal cases based on diversity. This action is in state court, so the fact that the teacher's claim does not seek damages exceeding $75,000 is irrelevant.

C is incorrect. This choice implies that the toy manufacturer has not had sufficient contacts with State A to have purposefully availed itself of the privilege of doing business there. However, this is not an effective argument to support the motion to dismiss. It is true that a court may not exercise personal jurisdiction over a defendant unless he has had minimum contacts with the state. The defendant must have taken actions that were purposefully directed towards the forum state to create these contacts. However, registering to do business and selling merchandise in a particular state do qualify as purposeful availment, and therefore, this would be an ineffective argument that the toy manufacturer is not subject to personal jurisdiction in State A.

D is incorrect. This argument that the teacher failed to state a claim would be ineffective for the toy manufacturer's motion. A complaint that states the cause of action, factual basis, and prayer for relief is unlikely to be dismissed for failing to state a claim in most state courts. An argument that the manufacturer's products were safe and not defective goes to the credibility of the factual allegations and legal conclusions and would not be a proper basis for a dismissal. The toy manufacturer would likely have to argue this factual contention in the responsive pleadings and would not succeed as an argument to dismiss the case.