Reynolds v. International Amateur Athletic Federation
841 F. Supp. 1444, 1992 U.S. Dist. LEXIS 8625, 1992 WL 558847 (1992)
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Rule of Law:
A foreign defendant who fails to appear and timely object to a court's personal jurisdiction waives their right to contest it, particularly when their absence prevents the plaintiff from conducting discovery to establish jurisdictional facts. A court may exercise personal jurisdiction over a foreign entity that purposefully avails itself of the forum state by controlling the activities of resident athletes, causing tortious injury within the state, and acting through a local agent.
Facts:
- Harry L. Reynolds, Jr., a world-class track athlete and resident of Ohio, competed in the Herculis ’90 track and field meet in Monte Carlo, Monaco on August 12, 1990.
- Following the competition, Reynolds was randomly selected to provide a urine sample for drug testing.
- On October 18, 1990, the International Amateur Athletic Federation (IAAF) notified Reynolds that his sample had tested positive for the anabolic steroid nandrolone.
- The IAAF immediately suspended Reynolds from competition.
- An American Arbitration Association proceeding and a subsequent hearing panel by Reynolds' national governing body, The Athletics Congress (TAC), both exonerated Reynolds, finding substantial doubt about the validity of the drug test.
- The IAAF refused to accept the decisions of the American arbitrator and the TAC panel, and its own arbitration panel upheld the suspension, finding 'no doubt' as to Reynolds' guilt.
- As a result of the IAAF's suspension, Reynolds lost substantial revenue when companies, including NIKE and some Ohio-based companies, terminated or declined endorsement contracts.
Procedural Posture:
- Harry Reynolds, Jr. first sued The Athletics Congress (TAC) and the IAAF in the U.S. District Court for the Southern District of Ohio ('Reynolds I').
- The district court stayed the action, ruling that Reynolds had failed to exhaust his administrative remedies.
- On appeal by Reynolds, the U.S. Court of Appeals for the Sixth Circuit vacated the district court's judgment and ordered the entire case dismissed.
- Reynolds filed a new Verified Complaint in the U.S. District Court for the Southern District of Ohio, this time naming only the IAAF as a defendant.
- Reynolds applied for a Temporary Restraining Order (TRO) against the IAAF.
- The district court issued a TRO on May 28, 1992, and extended it on June 8, 1992.
- The IAAF informed Reynolds by letter that it would not participate in the action based on its belief that the court lacked personal jurisdiction over it.
- The court conducted an evidentiary hearing on June 17, 1992, to determine whether to convert the TRO into a preliminary injunction, at which point TAC and three other athletes were permitted to intervene as defendants.
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Issue:
Does a U.S. District Court have personal jurisdiction over a foreign amateur athletic federation that, despite having significant control over U.S. athletes and business interests in the forum state, refuses to appear in the lawsuit?
Opinions:
Majority - Kinneary, District Judge
Yes. A U.S. District Court has personal jurisdiction over the IAAF because the federation is amenable to suit under the state's long-arm statute, the exercise of jurisdiction comports with due process, and the IAAF waived its right to object to jurisdiction. The IAAF's activities satisfy Ohio's long-arm statute by 'transacting business' in the state through its control over Ohio athletes like Reynolds and by causing 'tortious injury' (defamation and interference with business relationships) that resulted in financial harm within Ohio. The exercise of jurisdiction meets constitutional due process requirements under the Sixth Circuit's three-part test because the IAAF purposefully availed itself of the forum by controlling athletes and events in the U.S., the lawsuit arises from these activities, and it is reasonable to subject an organization with such extensive influence and financial interests to the court's jurisdiction. Most significantly, by refusing to appear and timely object, the IAAF waived its right to contest personal jurisdiction, as this right is an individual protection that can be forfeited through procedural failures.
Analysis:
This decision strongly asserts the authority of U.S. courts over international governing bodies that wield significant power over the careers of American citizens. It establishes that such organizations cannot benefit from U.S. markets and athletes while claiming immunity from its legal system. The court's holding on waiver is particularly significant; it serves as a stern warning to foreign defendants that ignoring a U.S. lawsuit is a perilous strategy that can result in forfeiting the fundamental defense of lack of personal jurisdiction. This precedent reinforces that jurisdiction can be established through an agency theory (IAAF acting via TAC) and solidifies the principle that causing foreseeable economic harm within a state can be a sufficient basis for jurisdiction.
