STANFORD UNIVERSITY WINTER 2002 DEPT. OF MANAGEMENT SCIENCE MS&E 275AND ENGINEERING LEGAL STRATEGY & ANALYSIS MIDTERM EXAMINATIONAnswer KeyQUESTION I1. Before Katz: Fourth Amendment protected against physical trespass. Katz introducedthe concept of reasonable expectation of privacy (REP). Under the interpretationarticulated in Katz, the government is not entitled to conduct a warrantless search if itwould violate a subjective privacy expectation that society would consider reasonable.2. Pre-Katz: Technological advances enabling police to conduct searches without physicalinvasion would diminish an individual's protection against unreasonable searches andseizures. If the police could, for instance, get access to a place without physicallytrespassing, it's fair game, pre-Katz, regardless of how people feel subjectively about thereasonableness of the intrusion. Post-Katz: Now, people's feelings about the reasonableness of a search matter.Individuals would be protected from electronic searches and surveillance where they havea reasonable expectation of privacy, regardless of whether or not such surveillance isaccompanied by physical intrusion.3. There is, of course, no one exclusively correct answer to this question. Technologicaladvances appear to increase people's awareness of the power and economic benefits oftechnology, but also its dangers, including its intrusive capabilities. At the same time,empirical evidence appears to suggest that people's expectations of privacy tend todiminish with increasingly sophisticated surveillance technology. This is not necessarily acontradiction, if individuals are becoming more aware of and educated about technology,yet also more accepting of its intrusive powers. People think of electronic surveillanceand eavesdropping as a necessary adjunct of the information age. They grumble aboutand debate intrusions such as interception of e-mail, but, at the end of the day, they resignthemselves to "the death of privacy as the price we pay for progress."4. In a pre-Katz regime, people's expectations play no role in adjudicating thereasonableness of an invasion.5. In a post-Katz regime, the reasonableness of a search or seizure is evaluated in light of people's expectations. If these expectations diminish, so does the constitutional protection. QUESTION IIWhen a non-resident defendant, such as an e-business, challenges a court's jurisdictionover it, the plaintiff must prove satisfaction of both the local state's long-arm statute andthe due process clause of the U.S. Constitution.State long-arm statutes authorize the courts to claim personal jurisdiction over anon-resident defendant whose principal business is outside the state, based on: (i)transactions or torts committed within the state; (ii) the commission of a particular actoutside the forum that has consequences within it; (iii) possession of property within thestate. Eugene's company apparently does not own property in California, but, arguably,has violated a trademark with consequences in California.Long-arm statutes vary from state to state. Some state long-arm statutes assertjurisdiction over non-resident defendants who do business or commit a tort in the state.Others, including California, simply assert jurisdiction if it is consistent with theconstitutional due process clause. We therefore have to turn to a due process analysis todetermine the right to haul Eugene into court in CA.A court's jurisdictional reach is limited by the due process clause of the Fifth andFourteenth Amendments of the U.S. Constitution. It provides in part that " ... no personshall be deprived of life, liberty, or property, without due process of law." The dueprocess analysis considers the following criteria (I, II, and II, below.)2I. The nonresident D had sufficient contacts in the forum state where the case istried."Sufficient contacts" does not require a physical presence in the forum state. In BurgerKing Corp. v. Rudzewicz, the Court stated, "[i]t is an inescapable fact of moderncommercial life that a substantial amount of commercial business is transacted solely bymail and wire communications across state lines, thus obviating the need for physicalpresence within a State in which business is conducted." Hence, Eugene does not escapeCA's long-arm by virtue of his mere electronic presence in the state.The sufficient contacts criterion hinges on the following factors. 1. Defendant purposely availed itself of benefits offered by the state's economic market. Itis doubtful that Eugene's hyperlink to the Golden Wok provided him with an economicbenefit from the connection with CA. It is hard to imagine, for instance, that consumersin CA would be prompted by the link to travel to Florida to dine at the Golden Kwok.2. Defendant's action must have been purposely directed toward the forum state. A mereact of interstate commerce does not in and of itself constitute a purposely directed act. Bythe same reasoning as in (1), Eugene's link does not constitute an effort to generatebusiness for his restaurant from consumers in CA.3. The business transaction and defendant's conduct and connection with forum state mustbe such that defendant should reasonably anticipate being hauled into court there. II. The claim asserted against the defendant must arise out of the "sufficientcontacts."The plaintiff may argue that Eugene, through violating plaintiff's trademark and solicitingbusiness in CA, lured customers who normally patronize the Golden Wok, to dine at theGolden Kwok, instead, thus harming his (plaintiff's) economic interest. (I am sure youcan come up with a forceful counterargument on behalf of the defendant.)III. Allowing the court to have jurisdiction over the defendant will not offendtraditional notions of fair play and substantial justice.This criterion should be analyzed in terms of factors, such as (i) the extent of defendant'sinterjection, (ii) burden on defendant of defending in CA, (iii) CA's interest inadjudicating the dispute (for instance, has one of its citizens been harmed or its lawsviolated), (iv) would dragging the defendant into a CA court resolve the controversy3mosy efficiently, (v) is it particularly important to the plaintiff to have