RUDOLPH CONTRERAS, United States District Judge
Plaintiff Brit UW, Limited (Brit) seeks declaratory relief to establish that it need not pay Defendant Manhattan Beachwear, LLC (MBW) under a professional liability insurance policy that Brit provided. MBW's involvement in this controversy began when it retained Clyde Hettrick, a partner at Dickstein Shapiro LLP (Dickstein), to represent it in an insurance matter. During the representation, Mr. Hettrick left Dickstein to form his own firm, and took MBW with him as a client. MBW later came to regret this decision, to the extent that it fired Mr. Hettrick and sued him (and his new firm) for malpractice. Brit — one of several insurers on Dickstein's professional liability policy — declined coverage of the malpractice suit.
MBW, through a variety of legal machinations, both received a judgment for $63,888,486.49 against the defendants in the malpractice action, and obtained assignment of the defendants' claims against Dickstein's insurers, including Brit. Noting that MBW was poised to sue it for millions, Brit filed this action seeking, inter alia, a declaration of non-coverage over the malpractice claims. Now before the Court is MBW's motion to dismiss this action for lack of personal jurisdiction, lack of subject matter jurisdiction, failure to join a party, lack of venue, and forum non conveniens. The Court concludes that it does not have personal jurisdiction over MBW under either specific or general jurisdiction, and thus dismisses the action in its entirety without reaching the other issues.
This case involves an insurance dispute between plaintiff Brit, an insurer, and defendant
The origins of this case began to germinate in 2007, when MBW claimed that it lost $11,459,421 due to a fire and theft in Indonesia. Soura Decl. ¶ 8, ECF No. 7-1; Compl. ¶ 17, ECF No. 1. MBW disagreed with its insurer's handling of the claim, and hired Clyde Hettrick — then a partner at Dickstein in the Los Angeles office — to represent it in the Indonesia matter. Soura Decl. ¶ 9. The retainer agreement was negotiated in California, mailed from California, and contained a California arbitration provision. Soura Decl. ¶ 9. Brit and several other London insurers provided professional liability insurance to Dickstein at the time.
Relations between Mr. Hettrick and MBW soon soured. In June of 2011, MBW replaced Mr. Hettrick with lawyers from Dickstein's Los Angeles office for the Indonesia matter, Soura Decl. ¶ 12, and in 2012 MBW sued Mr. Hettrick for malpractice in Los Angeles Superior Court, Compl. ¶ 28; see also Complaint for Legal Malpractice, Manhattan Beachwear, LLC v. Hettrick Law, P.C., No. BC497520 (Cal. Super. Ct. Dec. 14, 2012), ECF No. 1-3, Ex. C. Dickstein's insurers, including Brit, were not named in the malpractice case. See Complaint for Legal Malpractice, Manhattan Beachwear, LLC v. Hettrick
The malpractice case was ongoing when Mr. Hettrick died in 2013. Following his death, MBW took an unorthodox approach
A bench trial occurred pursuant to this agreement, and the court issued a judgment of $63,888,486.49 in MBW's favor. Compl. ¶ 34; Judgment After Court Trial, Manhattan Beachwear, LLC v. Hettrick Law, P.C., No. BC 497520 (Cal. Super. Ct., August 10, 2015), ECF No. 7-1, Ex. B. Although this judgment was entered against Hettrick's estate, the settlement agreement contemplated that MBW would bring suit against Brit and Dickstein's other insurers to enforce the judgment.
Brit filed this suit seeking declaratory judgment to protect it against MBW's
The Court begins, and ends, its analysis by considering MBW's motion to dismiss for lack of personal jurisdiction. Because the Court agrees with MBW that MBW is not subject to either specific jurisdiction on this claim or general jurisdiction in the District, the Court will grant the motion and dismiss the complaint in its entirety.
Personal jurisdiction requires that the court be able to exercise jurisdiction over a party under both "the applicable long-arm statute" and "the demands of due process." United States v. Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995); accord GTE New Media Servs. Inc. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). When a case, such as this one, Compl. ¶ 3, is brought in diversity, "the federal district court's personal jurisdiction over the defendant is coextensive with that of a District of Columbia court." Helmer v. Doletskaya, 393 F.3d 201, 205 (D.C. Cir. 2004).
The plaintiff bears the burden of establishing that the court may properly exercise personal jurisdiction over each defendant. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990). The Court will resolve factual discrepancies in favor of the plaintiff, Crane, 894 F.2d at 456, but "[b]are allegations and conclusory statements are insufficient." Johns v. Newsmax Media, Inc., 887 F.Supp.2d 90, 95 (D.D.C. 2012); see also Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001). In addition to the pleadings, the Court may consider other evidence, such as affidavits. See Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005).
Personal jurisdiction may be satisfied by either specific or general jurisdiction. D'Onofrio v. SFX Sports Grp., Inc., 534 F.Supp.2d 86, 90 (D.D.C. 2008). Specific jurisdiction requires only sufficient "`minimum contacts' with [the forum]," but requires that the plaintiff's claims arise from those contacts. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 S.Ct. 95 (1945)). General jurisdiction, on the other hand, "sets a high bar," requiring that the defendant have "continuous and systematic" contacts with the forum state — but then permits the forum to adjudicate any claims against the defendant, whether or not the claims are related to the defendant's actions in the forum. D'Onofrio, 534 F.Supp.2d at 90 (citation omitted). The Court considers the applicability of each in turn.
MBW argues that neither of its two acts arguably relating to D.C.-retaining lawyers at Dickstein, a firm headquartered in D.C., and taking assignment of the Hettrick estate's claims against Dickstein's insurers — should subject it to personal jurisdiction in D.C. See, e.g., Reply Mem. Supp. Def.'s Mot. Dismiss (Def.'s Reply), ECF No. 14 at 7-11. Brit does not seriously contend that merely hiring Hettrick, a
The District of Columbia's long-arm statute permits a court to "exercise personal jurisdiction over a person" when "a claim for relief aris[es] from the person's... transacting any business in the District of Columbia." D.C. Code § 13-423 (2012). This provision is interpreted "to provide jurisdiction to the full extent allowed by the Due Process Clause" such that "the statutory and constitutional jurisdictional questions ... merge into a single inquiry: would exercising personal jurisdiction accord with the demands of due process?" Thompson Hine, LLP v. Taieb, 734 F.3d 1187, 1189 (D.C. Cir. 2013) (internal quotation marks and citation omitted).
Due process is satisfied if the defendant has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice,'" Int'l Shoe Co. v. Washington, 326 U.S. 310,
In Burger King, the Supreme Court rejected a "mechanical test" to establish personal jurisdiction over a non-resident defendant who entered into a contract with a resident. Burger King, 471 U.S. at 478, 105 S.Ct. 2174. Although such a mechanical test is inappropriate, on some occasions entering into a contract may suffice to create personal jurisdiction — as it did in Burger King itself. "[T]he contract `alone' could supply the necessary `minimum contacts'" when the contract is so wide-reaching and exacting that its terms create a "`substantial connection' between the non-resident and the forum." Thompson Hine, 734 F.3d at 1193 (quoting Burger King, 471 U.S. at 475-76, 105 S.Ct. 2174). To determine if the contract is one that creates such a substantial connection, the Court uses a "highly realistic" lens to analyze the "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing" and determines if the defendant "purposefully established minimum contacts within the forum." Burger King, 471 U.S. at 479, 105 S.Ct. 2174 (citation omitted). The focus is on the actions of the defendant because "[t]he unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Id. at 474-75, 105 S.Ct. 2174 (quoting Hanson, 357 U.S. at 253, 78 S.Ct. 1228); see also Helmer v. Doletskaya, 393 F.3d 201, 205-06 (D.C. Cir. 2004) (finding that personal jurisdiction was proper over a defendant who entered into a contract in D.C. when that contract required sending monthly billing statements to D.C. and having bills paid from D.C. accounts).
Contrary to Brit's apparent position, the analysis of the defendant's contacts with the forum state is required when the defendant is the assignee of a contract. Brit appears to argue that if the initial contract was sufficiently connected to D.C.,
For example, in Johnson the court held that specific jurisdiction was proper over a defendant who took assignment of a mortgage on D.C. property and thereafter received a stream of income from D.C.
Johnson drew heavily on the Supreme Court's analysis in McGee, which is also helpful here. 451 F.Supp.2d at 31-33. In McGee, the Supreme Court permitted a forum to exercise personal jurisdiction over a defendant when the "suit was based on a contract which had substantial connection with that State." McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957). The contract at issue was actually the assignment of a prior life insurance policy to a new insurer. Id. at 221-22, 78 S.Ct. 199. The Court held that the assignee had a substantial connection to the forum state because the new contract was "delivered in [the forum state], the premiums were mailed from there and the insured was a resident of that State when he died." Id. at 223, 78 S.Ct. 199. As in Johnson and Farouki, this
From McGee, Johnson, and Farouki, this Court concludes that the applicable test for exercising personal jurisdiction over a non-resident assignee, when the assignee's purported connection to the forum state stems from the assignment, is whether the assignee's contacts with the forum state are sufficient to satisfy the minimum contacts requirement of the due process clause. In other words, the assignee must "purposefully establish[] minimum contacts with the forum," as determined through a "highly realistic" analysis that considers the assignee's "prior negotiations and contemplated future consequences, along with the terms of the [assignment] and the parties' actual course of dealing." Burger King, 471 U.S. at 479, 105 S.Ct. 2174. If the assignee has taken an interest in real property in the district, or if the assignment was executed in the district, or if the assignee receives an income stream from the district, or other similar connections to the forum are present, then exercising personal jurisdiction over the assignee may be appropriate.
Brit argues that MBW's contacts with D.C. resulting from the assignment of the claims against Brit suffice to create specific jurisdiction over MBW. However, there are virtually no contacts tying the assignment to the District. Brit does not argue that the assignment was negotiated or executed in the District,
In sum, the court does not find any "prior negotiations," "contemplated future consequences" or "terms of the [assignment] and the parties' actual course of dealing" that suggest that MBW "purposefully established minimum contacts" with D.C. by taking assignment of the Hettrick estate's claims against Brit under the professional liability policy.
Brit argues that MBW is subject to general jurisdiction in D.C. because it "promoted and sold its products through retailers in D.C."
D.C. law provides for general jurisdiction over "foreign corporation[s] doing business in the District" under D.C. Code § 13-334(a) (2012). Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 509 n.1 (D.C. Cir. 2002). That jurisdiction is "coextensive with the reach of constitutional due process."
A corporation is not "essentially at home" merely because it uses the stream of commerce to deliver products to the forum state. See Goodyear, 564 U.S. at 927, 131 S.Ct. 2846 ("Flow of a manufacturer's products into the forum, we have explained, may bolster an affiliation germane to specific jurisdiction ... [but] do[es] not warrant a determination that, based on those ties, the forum has general jurisdiction over a defendant."). Indeed, it would be "unacceptably grasping" to exercise "general jurisdiction in every State in which a corporation engages in a substantial, continuous, and systematic course of business." Daimler, 134 S.Ct. at 761 (internal quotation marks omitted). In Daimler, the Supreme Court held that general jurisdiction was not proper over the defendant in California, even though the defendant was substantially involved in commerce there: it had three offices with employees and was the largest seller of luxury vehicles in the state. Id. at 752. The Supreme Court concluded that:
Id. at 761-62 (quoting Burger King, 471 U.S. at 472, 105 S.Ct. 2174)).
Although Daimler and Goodyear set a high bar for asserting general jurisdiction over foreign entities, the Supreme Court left open the possibility that "in an exceptional case, a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State." Id. at 761 n.19. With these principles in mind, the Court considers whether exercising general jurisdiction over MBW is proper here.
This is clearly not the prototypical case of general jurisdiction because it is undisputed that MBW is not incorporated in D.C. and does not have its principal place of business in D.C. See Soura Decl. ¶¶ 3-4, ECF No. 7-1 (stating that "MBW is a Delaware limited liability company" with members that are residents of Delaware, Nevada, California, and Florida and that the principal place of business during manufacturing was California); see also Def.'s Mot. Dismiss at 1, 12-13, ECF No. 7 ("MBW never manufactured any products in the District, never sold or delivered any merchandise in this District, never maintained an office in this District, never had employees in the District ..."); Def.'s Reply at 4, ECF No. 14. Instead, Brit focuses its argument on the activities that MBW does perform within the District. These activities are largely those which a major nationwide manufacturer would be expected to undertake in every state. Brit claims that MBW "purposefully introduces its products into D.C. and benefits by selling its products within D.C." through "retailers and merchants." Pl.'s Opp'n at 14-15, ECF No. 13. Brit also claims that MBW "markets its clothing products through various brand names that are advertised and sold to District of Columbia residents," including in magazines that are available in the District such as "People Magazine, Allure, Glamour, and Fitness Magazine." Pl.'s Opp'n at 14-15. Accepting each of these allegations as true, MBW is far less involved in D.C. than the Daimler defendant was in California. Unlike the defendant in Daimler, MBW does not have any physical offices or employees in the District, and there is no evidence in the record as to its size of the market share in the district. Compare Soura Decl. ¶ 6, ECF No. 7-1 ("[MBW] was never registered to do business in the District and never had an agent for service of process there. It never had a customer in the District, never manufactured merchandise in the District, never sold directly or shipped products to the District, and never had any employees in the District."), with Daimler, 134 S.Ct. at 752.
This conclusion is buttressed by other decisions from this jurisdiction. In Freedman v. Suntrust Banks, Inc., the court rejected general jurisdiction over a defendant who "operate[d] numerous retail branches and ATMs, and maintain[ed] a significant `brick-and-mortar' presence" in D.C. because Daimler "explicitly foreclose[d]" subjecting such a defendant to general jurisdiction in each of multiple "primary bases of operation." 139 F.Supp.3d 271, 279 (D.D.C. 2015). Brit's comparison of this case to Marshall v. I-Flow
Brit requests that, should the Court be unconvinced of its jurisdiction over MBW, the Court should grant Brit jurisdictional discovery. Because the Court agrees with MBW that such discovery is unwarranted, it denies Brit's request.
Jurisdictional discovery is appropriate "if a party demonstrates that it can supplement its jurisdictional allegations through discovery." GTE New Media Servs. Inc., 199 F.3d at 1351. A plaintiff seeking jurisdictional discovery must provide "specific discoverable facts," Cheyenne Arapaho Tribes of Okla. v. United States, 558 F.3d 592, 596 (D.C. Cir. 2009), rather than "mere conjecture or speculation" that discovery could lead to personal jurisdiction, FC Inv. Grp. LC v. IFX Mkts., Ltd., 529 F.3d 1087, 1094 (D.C. Cir. 2008).
In this case, Brit argues that jurisdictional discovery might reveal that MBW undertook "a specific marketing campaign for the D.C. region," and that such a campaign might include "working with D.C. retailers, targeting advertising in the D.C. area, and employees who are responsible for sales in D.C." Pl.'s Opp'n at 43, ECF No. 13. According to Brit, these facts, if established, would provide for the general jurisdiction of this Court over MBW. Pl.'s Opp'n at 42-43 (citing Marshall, 856 F.Supp.2d at 108).
Even if jurisdictional discovery established the facts that Brit alleges, this Court would still conclude that exercising general jurisdiction over MBW would not be appropriate. In Daimler, the Supreme Court held that a defendant was not subject to general jurisdiction despite having offices and employees in the forum state,
For the foregoing reasons, Defendant's motion to dismiss (ECF No. 7) is
Brit's attempted reliance on Xenophon is misplaced. Pl.'s Opp'n at 12, ECF No. 13 ("This case is more analogous to Xenonphon [sic] ..." In Xenophon, the court identified personal jurisdiction when the non-resident defendant hired a resident-corporation to perform D.C.specific public relations tasks. Xenophon Strategies, Inc. v. Jernigan Copeland & Anderson, PLLC, No. 15-1774, 2016 WL 1367734, at *4-5 (D.D.C. Apr. 6, 2016). Brit does not argue here that the work Dickstein performed bore any relation to D.C. Instead, Brit's gloss is that the presence of a D.C. choice-of-law provision in Xenophon (and its absence in Thompson Hine) was the hinge on which personal jurisdiction turned. See Pl.'s Opp'n at 12. This Court disagrees. The Xenophon decision clearly holds that the choice-of-law provision is one small piece in the larger minimum contacts puzzle, and that the D.C.specific nature of the contract services was more important in finding personal jurisdiction. See generally Xenophon, No. 15-1774, 2016 WL 1367734. Even if Brit's interpretation were correct, only Dickstein's insurance policy with Brit contained a D.C. choice-of-law provision, not the retainer agreement between MBW and Dickstein (indeed, that retainer agreement actually contained a California arbitration provision). Compare Primary Professional Liability Insurance Policy, ECF No. 1-1, Ex. A, with Soura Decl. ¶ 9. The choice-of-law provision's relevance is thus highly circumscribed. Moreover, the Supreme Court has held that "such a [choice-of-law] provision standing alone [is] insufficient to confer jurisdiction." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 482, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).
Brit discusses negotiations for Dickstein's insurance policy — which involved email and phone communication with the District — and that the executed policy was sent to the District by email. See Pl.'s Opp'n at 10, ECF No. 13. But, these contacts are not very helpful in establishing personal jurisdiction. See Katopothis v. Windsor-Mount Joy Mut. Ins. Co., No. 14-380, 211 F.Supp.3d 1, 23, 2016 WL 5374081, at *16 (D.D.C. Sept. 26, 2016) ("[E]mail and telephone communications sent into the District of Columbia are not sufficient to [confer personal jurisdiction] in themselves, even if they are made pursuant to an underlying contract between a resident [plaintiff] and a nonresident [d]efendant .... After all, such communications are incidental to nearly every business relationship; they are not indicative of any desire to do business in D.C. and do not suffice to show purposeful availment or minimum contacts." (internal quotation marks and citations omitted)); Dove v. United States, No. 86-0065, 1987 WL 18739, at *3 (D.D.C. Oct. 9, 1987) (holding that "the mere delivery of documents .... does not confer jurisdiction").
Similarly, Brit's reliance upon the choice-of-law provision in the professional liability policy, see Pl.'s Opp'n at 9, is unavailing. The provision does not select D.C. as the forum for future litigation. Because courts in other jurisdictions are competent to apply D.C. law, the choice-of-law provision does not establish that either party would be haled into court in the District. In addition, the provision appears in the contract between Dickstein, not a party here, and Brit — not MBW. Furthermore, Burger King is clear that "such a provision standing alone [is] insufficient to confer jurisdiction." 471 U.S. at 482, 105 S.Ct. 2174.
