Innovative Clinical & Consulting Services, LLC v. First National Bank of Ames
279 Ga. 672, 620 S.E.2d 352, 2005 Ga. LEXIS 649 (2005)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Georgia's long-arm statute, specifically the 'transacts any business' provision under OCGA § 9-10-91(1), must be interpreted literally to confer personal jurisdiction to the maximum extent permitted by the Due Process Clause of the Fourteenth Amendment. This interpretation eliminates previous judicially-created requirements, such as a defendant's physical presence in the state.
Facts:
- Innovative Clinical & Consulting Services, LLC (ICCS) is a Georgia-based entity.
- First National Bank of Ames is a bank located and operating in Iowa.
- The Iowa bank entered into a business relationship with ICCS.
- The Iowa bank's contacts with the state of Georgia were limited to postal and telephonic communications.
- The Iowa bank did not maintain any physical presence, such as offices or agents, within Georgia.
- The Iowa bank did not regularly solicit business, engage in a persistent course of conduct, or derive substantial revenue from Georgia.
Procedural Posture:
- Innovative Clinical & Consulting Services, LLC (ICCS) sued First National Bank of Ames, Iowa, in a Georgia trial court.
- The Iowa bank filed a motion to dismiss for lack of personal jurisdiction.
- The case was appealed to the Georgia Court of Appeals, which affirmed the dismissal, finding that Georgia courts lacked personal jurisdiction over the Iowa bank under any provision of the long-arm statute.
- The Supreme Court of Georgia granted a writ of certiorari to review the Court of Appeals' decision and clarify the scope of the long-arm statute.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does the 'transacts any business' clause of Georgia's long-arm statute, OCGA § 9-10-91(1), extend personal jurisdiction to the maximum extent permitted by constitutional due process, thereby reaching a nonresident defendant who lacks a physical presence in the state?
Opinions:
Majority - Hunstein, Presiding Justice
Yes. The 'transacts any business' clause of Georgia's long-arm statute, OCGA § 9-10-91(1), must be construed literally to reach to the maximum extent permitted by procedural due process. The court's prior holding in Gust v. Flint required a 'literal construction' of subsections (2) and (3) of the statute, which re-established strict statutory limits on jurisdiction for torts committed outside the state that cause injury inside the state. To be consistent, the court must also apply a literal construction to subsection (1), which broadly covers anyone who 'transacts any business.' Nothing in the statute's text limits its application to contract cases or requires the physical presence of the nonresident. Because a literal interpretation grants Georgia courts broad statutory authority, the exercise of that jurisdiction must still be constrained by the minimum contacts analysis required by constitutional due process. All prior cases imposing non-statutory limitations, like a physical presence requirement, on subsection (1) are hereby overruled.
Analysis:
This decision significantly broadens the potential for personal jurisdiction over non-resident defendants in Georgia. By removing the judicially-created 'physical presence' requirement for the 'transacts any business' prong, the court adapted the state's jurisdictional reach to modern commercial realities where business is often conducted remotely. The ruling simplifies the jurisdictional analysis under subsection (1), shifting the focus from narrow statutory interpretations to the well-established constitutional 'minimum contacts' test. This change makes it easier for Georgia plaintiffs to sue out-of-state entities that purposefully direct activities toward the state, even without setting foot in it, while also harmonizing the interpretation of the entire long-arm statute.
