The Law School Authority

Insurance Corp of Ireland v. Compagnie des Bauxites de Guinee Case Brief

Summary of Insurance Corp of Ireland v. Compagnie des Bauxites de Guinee
456 U S 694 [1982]

Relevant Facts: Pl/Res CBG (incorp in DE, but from Guinea) arranged to obtain insurance against business interruption.  When an interruption occurred, the insurers refused to pay.  CBG brought suit in Fed ct. Penn.  The insurers are a group of foreign companies who challenged personal jurisdiction.  In order the respond to the challenge Pl made discovery requests.  The insurers refused to comply on the grounds that the requests were too burdensome.  CBG sought an order to comply which was granted.  This failed to produce the material.  The ct warned Dfs that it would assume jurisdiction, as a sanction under FRCP 37, unless there was compliance.  There was no compliance and the ct entered an order finding personal jurisdiction.  Meanwhile the insurers filed a suit in England to rescind the policies.  The Fed ct enjoined that suit.

Legal Issue(s): Whether a ct as a sanction, under FRCP 37, for failure to comply with a discovery order directed at establishing jurisdictional facts,can proceed on the basis that personal jurisdiction over the recalcitrant party has been established?

Court’s Holding: Yes, it is not an abuse of discretion to impose the sanction.

Procedure: Dfs appeal injunction; S. Ct. Affirmed.

Law or Rule(s):  Sanction of taking certain facts as established may be applied to support a finding of personal jurisdiction over the defendant without violating the due process clause.  A defense of lack of jurisdiction over the person is waived if not timely raised in the answer or any responsive pleadings.

Court Rationale: The requirement that a court have personal jurisdiction flows from the Due Process Clause and protects an individual liberty interest. Because it protects an individual interest, it may be intentionally waived, or for various reasons a defendant may be estopped from raising the issue. Due process is violated by a rule establishing legal consequences of a failure to produce evidence only if the defendant’s behavior will not support the presumption that “the refusal to produce evidence material to the administration of due process was but an admission of the want of merit in the asserted defense.” Hammond The expression of legal rights is often subject to certain procedural rules: The failure to follow those rules may well result in curtailment of the rights. A sanction under Rule 37 has that effect. By submitting to the juris of the ct for the limited purpose of challenging jurisdiction, the Df agrees to abide by that ct’s determination on the issues of jurisdiction.

Plaintiff’s Argument: Pet} There is no obligation to obey a judicial order, a sanction cannot be applied for the failure to comply, until the ct has established personal jurisdiction.

Defendant’s Argument: Res} The actions of the Df amounted to a legal submission to the jurisdiction of the court by refusing to comply with the order of the court after challenging P.J.

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