Stan Garner resides in Illinois and promotes boxing matches

Stan Garner resides in Illinois and promotes boxing matches for SuperSports, Inc., an Illinois corporation. Garner created the concept of “Ages” promotion—a three-fight series of boxing matches pitting an older fighter (George Foreman) against a younger fighter, such as John Ruiz or Riddick Bowe. The concept included titles for each of the three fights (“Challenge of the Ages,” “Battle of the Ages,” and “Fight of the Ages”), as well as promotional epithets to characterize the two fighters (“the Foreman Factor”). Garner contacted George Foreman and his manager, who both reside in Texas, to sell the idea, and they arranged a meeting at Caesar’s Palace in Las Vegas, Nevada. At some point in the negotiations, Foreman’s manager signed a nondisclosure agreement prohibiting him from disclosing Garner’s promotional concepts unless the parties signed a contract. Nevertheless, after negotiations between Garner and Foreman fell through, Foreman used Garner’s “Battle of the Ages” concept to promote a subsequent fight. Garner filed suit against Foreman and his manager in a federal district court located in Illinois, alleging breach of contract. Using the information presented in the chapter, answer the following questions. 1. On what basis might the federal district court in Illinois exercise jurisdiction in this case? 2. Does the federal district court have original or appellate jurisdiction? 3. Suppose that Garner had filed his action in an Illinois state court. Could an Illinois state court exercise personal jurisdiction over Foreman or his manager? Why or why not? 4. Assume that Garner had filed his action in a Nevada state court. Would that court have personal jurisdiction over Foreman or his manager? Explain.

Solution

On what basis might the federal district court in Illinois exercise jurisdiction in this case?

The basis that the federal district court in Illinois can exercise jurisdiction in this case is the in rem jurisdiction, because a court can exercise jurisdiction over property that is located within its boundaries.

Does the federal district court have original or appellate jurisdiction?

District courts have original jurisdiction. This is the first time that the case is being heard and that is why it is an original jurisdiction.

Suppose that Garner had filed his action in an Illinois state court. Could an Illinois state court exercise personal jurisdiction over Forman or his manager? Why or why not?

Yes, they could exercise diversity of citizenship. In order to do that, the plaintiff and the defendant must be residents of different states, and the dollar amount in controversy must exceed $75,000.

Assume that Garner had filed his actions in a Nevada state court. Would that court have personal jurisdiction over Foreman or his manager? Explain.

Under the long arm statute, a court can exercise personal jurisdiction over certain out-of-state defendants based on activities that took place within the state. The defendant must have enough of a connection to the state for the judge to conclude that it is fair for the state to exercise power over the defendant. Also, which is more important, a state may exercise personal jurisdiction over a nonresident defendant who is sued for breaching a contract that was formed within the state, even when that contract was negotiated over the phone or through correspondence. Personal jurisdiction would be over Foreman since he is the one who technically breached the contract.