Norment Security Group, Inc. v. Granger Northern, Inc. et al
MEMORANDUM OPINION AND ORDER granting 13 MOTION to Dismiss, filed by the five named Defendants, for lack of personal jurisdiction. Signed by Honorable William Keith Watkins on 2/23/2009. (cc, )
IN THE UNITED STATES DISTRICT COURT F O R THE MIDDLE DISTRICT OF ALABAMA N O R T H E R N DIVISION N O R M E N T SECURITY GROUP, INC., P l a in tif f , v. GRANGER NORTHERN, INC., et al., D e f e n d a n ts . ) ) ) ) ) CASE NO. 2:08-CV-533-WKW[WO] ) ) ) )
M E M O R A N D U M OPINION AND ORDER B e f o re the court is a Motion to Dismiss (Doc. # 13), filed by the five named D e f en d a n ts . In their motion, which is accompanied by a brief and evidence (Docs. # 13 & 14), Defendants seek dismissal for lack of personal jurisdiction pursuant to Rule 12(b)(2) o f the Federal Rules of Civil Procedure. Plaintiff filed a Brief in Opposition, which is a c co m p a n ie d by evidence (Doc. # 18), and Defendants replied (Doc. # 19). After careful c o n sid e ra tio n of the arguments of counsel, the applicable law and the record as a whole, the c o u rt finds that the motion is due to be granted. I . SUBJECT MATTER JURISDICTION AND VENUE T h e court exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1332 and § 1441. The amount in controversy exceeds $75,000, and there is complete diversity of c itiz e n sh ip between Plaintiff and Defendants. The parties do not dispute subject matter ju ris d ic tio n or venue, and there is an adequate basis for both.
I I . STANDARD OF REVIEW A Rule 12(b)(2) motion tests the court's exercise of personal jurisdiction over a d e f e n d a n t. See Fed. R. Civ. P. 12(b)(2). "A plaintiff seeking the exercise of personal ju ris d ic tio n over a nonresident defendant bears the initial burden of alleging in the complaint s u f f ic ie n t facts to make out a prima facie case of jurisdiction." United Techs. Corp. v. M a z e r, ___ F.3d ___, 2009 WL 263329, at *8 (11th Cir. 2009); see also Posner v. Essex Ins. C o ., 178 F.3d 1209, 1214 (11th Cir. 1999) ("A plaintiff seeking to obtain jurisdiction over a nonresident defendant initially need only allege sufficient facts to make out a prima facie c a se of jurisdiction."). If the plaintiff satisfies his initial burden and the defendant then c h a lle n g e s personal jurisdiction "by submitting affidavit evidence in support of its position," U n ite d Techs. Corp., ___ F.3d at ___, 2009 WL 263329, at *8, "`the burden traditionally s h if ts back to the plaintiff to produce evidence supporting jurisdiction,'" id. (quoting Meier e x rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1268 (11th Cir. 2002)); see also P o s n e r, 178 F.3d at 1214 ("The plaintiff bears the burden of proving `by affidavit the basis u p o n which jurisdiction may be obtained' only if the defendant challenging jurisdiction files `a f f id a v its in support of his position.'" (citation omitted)). When the issue of personal ju ris d ic tio n is decided on the evidence, but without a discretionary hearing, a plaintiff d e m o n s tra te s a "prima facie case of personal jurisdiction" by submitting evidence sufficient to defeat a motion made pursuant to Rule 50(a) of the Federal Rules of Civil Procedure. See S n o w v. DirecTV, Inc., 450 F.3d 1314, 1317 (11th Cir. 2006). At this evidentiary juncture,
th e court construes the complaint's allegations as true if they are uncontroverted by affidavits o r deposition testimony, id. at 1317, and where there are conflicts, the court "construe[s] all re a so n a b le inferences in favor of the plaintiff," Whitney Info. Network, Inc. v. Xcentric V e n tu re s , LLC, 199 F. App'x 738, 741 (11th Cir. 2006) (quoting Meier, 288 F.3d at 1269). I I I . FACTS T h e following facts are presented in accordance with the standard of review set out a b o v e . Plaintiff Norment Security Group, Inc. ("Norment") is an Alabama corporation with its principal place of business in Alabama. (Compl. ¶ 1 (Ex. (unnumbered) to Doc. # 1).) I t is a contractor that provides security products and services for correctional institutions, c o u rth o u s e s, and other government and commercial facilities. (Stanley W. Sasser ("Sasser") A f f . ¶ 3 (Ex. B to Opp'n to Mot. Dismiss (Doc. # 18)).)1 Norment maintains regional offices o u tsid e of the state of Alabama, including at all times pertinent to this lawsuit, an office in H a n o v e r, Maryland. (Sasser Aff. ¶ 4.) T h e re are five Defendants, and all are citizens of states other than Alabama. (Compl. ¶¶ 2-6.) Defendant Granger Northern, Inc. ("Northern") and Defendant R. W. Granger & S o n s , Inc. ("Granger") both are "in the business of general contracting." (Robert W. Granger J r. Aff. ¶¶ 3-4 (Ex. A to Mot. Dismiss (Doc. # 13)); Compl. ¶¶ 2-3.) Northern is incorporated in Maine with its principal place of business also in Maine. (Compl. ¶ 2; Robert W. Granger J r . Aff. ¶ 3.) Granger is a citizen of Massachusetts, where it is incorporated and has its
Mr. Sasser is Norment's vice president for finance and administration. (Sasser Aff. ¶ 1.)
p rin c ip a l place of business. (Compl. ¶ 3; Robert W. Granger Jr. Aff. 4.) The individual G ra n g e r Defendants Robert W. Granger Jr. and Stephen J. Granger were "at all times m aterial to this action" officers and/or directors of Northern and Granger.2 (Compl. ¶¶ 4-5 & 53; see also Exs. 1 & 2 to Michael C. Griffin ("Griffin") Aff. (Ex. A to Opp'n to Mot. D is m is s ) (annual reports and corporate filings listing individual Granger Defendants as o ff icers and/or directors of Northern and Granger).) The individual Granger Defendants are c itiz e n s of Massachusetts. (Robert W. Granger Jr. Aff. ¶ 2; Stephen J. Granger Aff. ¶ 2 (Ex. B to Mot. Dismiss).) Defendant Consigli Northern, Inc. ("Consigli") is a general contractor. (C o m p l. ¶ 6; Ex. 4 to Griffin Aff.) According to its vice president, J. Scott Lerner ("Mr. L e rn e r" ), Consigli was incorporated in Maine in May, 2004, for the purpose of assuming the rig h ts and obligations of Northern under three contracts, not directly related to this litigation, f o r construction projects in the state of Maine. (Lerner Aff. ¶ 2 (Ex. C to Mot. Dismiss); see a l so Compl. ¶¶ 47-48.) T h is lawsuit arises from subcontracts pertaining to three public works construction p ro je c ts located in Vermont, Massachusetts, and New Hampshire. (Compl. ¶¶ 9-11.) On A p ril 8, 2002, Norment and Northern entered into a subcontract ("Vermont Subcontract") p u rs u a n t to which Norment agreed to provide labor, equipment and materials in connection w ith the construction and commissioning of certain security systems to be installed at the
To avoid confusion, Robert W. Granger Jr. and Stephen J. Granger are referred to individually by their full names and collectively as the "individual Granger Defendants." References to "Defendants" are to all named Defendants.
S o u th e rn State Correctional Facility in Springfield, Vermont ("Vermont Project"). (Compl. ¶ 9.) On June 18, 2002, Norment and Granger entered into a subcontract ("Massachusetts S u b c o n tra c t") pursuant to which Norment agreed to provide labor, equipment and materials in connection with the construction and installation of certain detention equipment and se c u rity systems at the Barnstable County Jail & House Correction in Bourne, Massachusetts (th e Massachusetts Project). (Compl. ¶ 10.) On September 3, 2003, Norment and Northern e n te re d into a subcontract ("New Hampshire Subcontract") pursuant to which Norment a g re e d to provide labor, equipment and materials in connection with construction and in sta llatio n of certain detention equipment and security systems at the Merrimack County H o u s e of Corrections in Boscawen, New Hampshire ("New Hampshire Project"). The owner o f each project is the respective state in which the facility is located. In June 2005, a dispute arose between Norment and Northern concerning the New H a m p s h ire Project. (Compl. ¶ 12; Sasser Aff. ¶ 16.) Northern asserted that it was entitled to recover certain liquidated damages from Norment pursuant to the New Hampshire S u b c o n tra c t. (Compl. ¶ 12.) Norment, however, disputed Northern's liquidated damages asse ssm en t and maintained that it was entitled to recover all amounts due from Northern u n d e r the New Hampshire Subcontract, without any deductions for liquidated damages or o th e r charges. (Compl. ¶ 12.) As a result of this dispute, Northern and Granger withheld all p a ym e n ts owed to Norment under all three subcontracts the New Hampshire Subcontract, th e Vermont Subcontract and the Massachusetts Subcontract. (Compl. ¶ 13; Sasser Aff.
While payment was being withheld, it is alleged that the individual Granger
D e f en d a n ts , "exercising their total control over . . . Northern, caused Northern to sell" three o f Northern's contracts to Consigli "at far less than fair market value," (Compl. ¶ 14), s p e c if ica lly, for less than one percent of the face amount of the contracts (Opp'n to Mot. D ism iss 4 (citing Ex. 6 to Griffin Aff.)). It is undisputed that the three contracts Northern so ld to Consigli are not the subcontracts at issue in this litigation, (Lerner Aff. ¶ 2; Compl. ¶ 14), but Norment alleges that Northern's sale of these three (unrelated) contracts to C o n sig li "further threaten[ed] Northern's ability to continue in business and pay its legitimate cre d ito rs, including [Norment]" (Compl. ¶ 14). S e e k in g legal recourse, Norment filed this lawsuit against Defendants in the Circuit C o u rt of Montgomery County, Alabama, on June 6, 2008. (Compl.) The case was removed to federal court, timely and with all Defendants consenting, on the basis of diversity ju ris d ic tio n , see 28 U.S.C. §§ 1332(a), 1441(b). (Not. Removal (Doc. # 1).) Norment's co m p lain t alleges breach of contract claims against Northern and Granger (Counts 1 and 2), a n alter ego claim against the individual Granger Defendants (Count 3), a claim for in te n tio n a l interference with contractual relations against Northern and the individual G ra n g e r Defendants (Count 4), a conversion claim against Northern, Granger, and the in d iv id u a l Granger Defendants (Count 5), a fraudulent transfer claim against Northern, C o n s ig li, and the individual Granger Defendants (Count 6) and a claim for deceptive trade
p rac tice s against Northern and the individual Granger Defendants (Count 7).3 (See generally C o m p l. ¶¶ 17-59.) Defendants responded by filing the instant motion to dismiss, pursuant to Rule 1 2 (b )(2 ) of the Federal Rules of Civil Procedure, alleging that their contacts with Alabama are insufficient to subject them to personal jurisdiction in an Alabama federal court. In s u p p o rt of their motion, Defendants submitted affidavits from the individual Granger D e f en d a n ts and Mr. Lerner, as well as certificates from the secretary of state for the state of A la b a m a . (See Robert W. Granger Jr. Aff.; Stephen J. Granger Aff.; Lerner Aff.; Certificates ( E x . D to Mot. Dismiss).) As detailed in Defendants' evidence, the individual Granger D e f en d a n ts , citizens of Massachusetts, never have conducted any business in the state of A laba m a or been licensed or authorized to do business in Alabama. (Robert W. Granger Jr. A f f . ¶ 2; Stephen J. Granger Aff. ¶¶ 2-3.) Nor have they ever owned property in Alabama, p aid taxes in Alabama, or maintained an Alabama mailing address or bank account. (Robert W . Granger Jr. Aff. ¶ 2; Stephen J. Granger Aff. ¶ 3.) Robert W. Granger Jr. did not " a ctiv e [ ly] participat[e]" in the bidding of the subcontracts at issue or in the awarding of
Prior to the removal, Norment filed a motion to stay pending arbitration. (Mot. Stay (Ex. A to Not. Removal).) As grounds for the motion to stay, Norment argues that the breach of contract claims in Counts 1 and 2 must be arbitrated in accordance with the terms of the arbitration provisions contained in each of the three subcontracts at issue. (Mot. Stay ¶¶ 2, 4 & 6.) Norment contends that Northern and Granger "have refused to participate in any manner in the arbitration proceedings" (Mot. Stay ¶ 12), and given that refusal, "Norment was forced to file the present action . . . in order to adequately protect its interests" (Mot. Stay ¶ 15). This opinion addresses only the motion to dismiss for lack of personal jurisdiction, not the motion to stay. See Posner, 178 F.3d at 1214 n.6 ("A court without personal jurisdiction is powerless to take further action.").
th o s e subcontracts to Northern, (Robert W. Granger Jr. Aff ¶ 6), nor did Stephen J. Granger (S te p h e n J. Granger Aff. ¶ 6). Neither Northern nor Granger has performed any general contracting in the state of A laba m a or been licensed or authorized to do business in Alabama. (Robert W. Granger Jr. A f f . ¶¶ 3-4.) Northern and Granger never have owned property in Alabama, had a mailing ad d ress in Alabama, opened a bank account in Alabama, or paid taxes in Alabama. (Robert W . Granger Jr. Aff. ¶¶ 3-4.) Northern and Granger also never have advertised in Alabama o r had any employees or agents who are citizens of the state of Alabama. (Robert W. G ran g er Jr. Aff. ¶¶ 3-4.) Consigli, a citizen of Maine,4 "had absolutely no involvement" with the Vermont P r o je c t, the New Hampshire Project or the Massachusetts Project. (Lerner Aff. ¶ 4.) It has n o t had any business dealings with Norment in Alabama. (Lerner Aff. ¶ 5.) It also never has p ro v id e d any construction-related services in the state of Alabama or been licensed or a u th o riz e d to do business in Alabama. (Lerner Aff. ¶ 3.) Consigli does not own and has not o w n e d property in Alabama. (Lerner Aff. ¶ 3.) It has never had a mailing address in A la b a m a , had a bank account in Alabama, paid taxes in Alabama, advertised in Alabama, or e m p lo ye d an Alabama worker. (Lerner Aff. ¶ 3.) N o rm e n t also has submitted evidence in opposition to the motion. (Griffin Aff.; S a s s e r Aff.) That evidence establishes that each of the three subcontracts was "executed"
Consigli was incorporated in Maine and maintains its principal place of business in that state. (Lerner Aff. ¶ 2.)
b y Norment at its headquarters in Montgomery, Alabama. (Sasser Aff. ¶ 8.) Moreover, the p a ym e n ts owed by Granger and Northern, pursuant to the three subcontracts, were to be paid in to a single account controlled by Norment at its corporate headquarters in Alabama. (S a s s e r Aff. ¶ 17.) P a rtic u la r to the Massachusetts Subcontract, on different occasions during an a p p ro x im a te two-year period, Granger "transmitted" five documents pertaining to the s u b c o n tra c t to Norment in Montgomery, Alabama, and there were "several telephone c o n v e rs a tio n s " between Granger and personnel with Norment's sales and estimating d e p a rtm e n t in Montgomery, Alabama, related to the Massachusetts Project. (Sasser Aff. ¶ 10.) Moreover, Norment "completed" more than one-third of the "total scope [of] work r e l a t e d to security electronics for the Massachusetts Project at its headquarters in M o n t g o m e r y, Alabama." (Sasser Aff. ¶ 12 (brackets added).) That work included "the c o n d u it and integration of the programmable logical controller (PLC) closed circuit television s ys te m , locking control, paging system, and personnel duress system." (Sasser Aff. ¶ 12.) A lso , three invoices submitted by Norment requested that payments be sent to its M o n tg o m e ry, Alabama address. (Sasser Aff. ¶ 10.) As to the New Hampshire Subcontract, in April 2004, Northern transmitted "drawings" and "other correspondence" to Norment in A lab a m a . (Sasser Aff. ¶ 13.) Between February 2003 and January 2004, three documents p e rta in in g to the Vermont Subcontract were transmitted from Northern to Norment in
A la b a m a , and two of Norment's invoices to Northern requested that payments be remitted to Norment's Montgomery, Alabama address (Sasser Aff. ¶ 14). IV. DISCUSSION In a diversity action, the court "undertakes a two-step inquiry in determining whether p e rs o n a l jurisdiction exists: the exercise of jurisdiction must (1) be appropriate under the sta te long-arm statute, and (2) not violate the Due Process Clause of the Fourteenth A m e n d m e n t to the United States Constitution." United Techs. Corp., ___ F.3d at ___, 2009 W L 263329, at *8. Because Alabama's long-arm provision, Rule 4.2(a) of the Alabama R u les of Civil Procedure, is coextensive with due process requirements, see Ala. W a te rp r o o fin g Co. v. Hanby, 431 So. 2d 141, 145 (Ala. 1983), the court need only consider w h e th e r the exercise of jurisdiction satisfies the requirements of due process, Olivier v. M e rr itt Dredging Co., 979 F.2d 827, 830 (11th Cir. 1992). Due process requires: (1) that the d e f en d a n t have "certain minimum contacts" with the forum state, and (2) if such minimum c o n ta c ts exist, that the exercise of jurisdiction over the defendant "`does not offend tra d itio n a l notions of fair play and substantial justice.'" Burnham v. Superior Court of Calif., 4 9 5 U.S. 604, 618 (1990) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). " T h is two-part test embodies the controlling due process principle that a defendant must have `f a ir warning' that a particular activity may subject it to the jurisdiction of a foreign s o v e re ig n ." Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1545 (11th Cir. 1993).
D e f en d a n ts assert that the allegations of the complaint, taken as true, do not satisfy N o rm e n t's burden to "establish that  [D]efendants have sufficient minimum contacts with A la b a m a to support the exercise of personal jurisdiction." 5 (Br. in Supp. Mot. Dismiss 5 (D o c . # 14); see also Br. in Supp. Mot. Dismiss 4 n.3 & 9.) Alternatively, they submit " [ a ]d d itio n a l facts," principally in the form of affidavits, which Defendants say support their
Norment has not addressed Defendants' arguments challenging the sufficiency of the complaint's allegations, notwithstanding that in this circuit a plaintiff bears "the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction." United Techs. Corp., ___ F.3d at ___, 2009 WL 263329, at *8; see id. (concluding that the complaint's "allegations appear to be sufficient to establish a prima facie case for the exercise of personal jurisdiction over [the non-resident defendants]" and proceeding to an analysis of the evidence). Rather, Norment relies on its evidence to defeat the motion to dismiss, but it is dubious whether the complaint's allegations are sufficient to satisfy Norment's initial pleading burden. The jurisdictional section of the complaint alleges only that the "court has jurisdiction over the subject matter and the parties to this action." (Compl. ¶ 7 (emphasis added).) This allegation is wholly conclusory, see Snow, 450 F.3d at 1317 (observing that plaintiff "relies solely on vague and conclusory allegations presented in his complaint, which are insufficient to establish a prima facie case of personal jurisdiction over [the non-resident defendant]" (brackets added) (internal footnote omitted)), and, thus, adds nothing of substance to the personal jurisdiction analysis. The fact that an out-of-forum defendant entered into a contract with a citizen of the forum state, a fact revealed in the complaint, is not a constitutionally significant contact in and of itself. The Supreme Court of the United States has answered the question "whether an individual's contract with an out-of-state party alone can automatically establish sufficient minimum contacts in the other party's home forum." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985). It said, "[W]e believe the answer clearly is that it cannot." Id. There simply are no other facts in the complaint which shed light on the jurisdictional question at hand. See, e.g., id. at 479 (providing that factors relating to the contract formation that are salient to the personal jurisdiction analysis include "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing"). The court, however, need not decide whether the complaint's allegations alone are sufficient to establish a prima facie case of jurisdiction over each Defendant under the "contracts-oriented `minimum contacts' test," Licciardello v. Lovelady, 544 F.3d 1280, 1286 (11th Cir. 2008), because even assuming that Norment satisfies its initial pleading burden, the evidence, when considered in conjunction with the uncontroverted allegations, falls short of bringing any defendant within the personal jurisdiction of the court. Moreover, whether one looks solely to the complaint's allegations or to the evidence, as discussed infra, Norment's reliance on the "effects test" set out in Calder v. Jones, 465 U.S. 783 (1984), for the proposition that Defendants' "intentional" actions "were expressly aimed at Alabama based on [Defendants'] knowledge that the `brunt of the injury' would be felt by Norment in Alabama," (Opp'n to Mot. Dismiss 10), also fails to sustain Norment's burden of proving personal jurisdiction over each Defendant.
m o tio n and "negat[e] the required minimum contacts with Alabama." (Br. in Supp. Mot. D is m is s 2.) In response, Norment contends that it has submitted evidence which
d e m o n s tra te s sufficient minimum contacts to justify the court's exercise of specific personal ju ris d ic tio n over each Defendant. (See generally Opp'n to Mot. Dismiss 1-16.) A. M in im u m Contacts
T w o types of contacts can form the basis for personal jurisdiction: general and s p e c if ic . See Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1 3 6 0 n.3 (11th Cir. 2006). Norment predicates its arguments only upon the theory of specific p e rs o n a l jurisdiction. (Opp'n to Mot. Dismiss 1.) "Specific jurisdiction arises out of a p a rty's activities in the forum that are related to the cause of action alleged in the complaint." C o n s o l. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000) (citation omitted); s e e Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-75 (1985). The Eleventh Circuit has h eld that, for purposes of assessing specific personal jurisdiction, minimum contacts are c o n stitu tio n a lly sufficient when three criteria are met: "First, the contacts must be related to th e plaintiff's cause of action or have given rise to it." Vermeulen, 985 F.2d at 1546 (citing B u r g e r King, 471 U.S. at 472). "Second, the contacts must involve `some act by which the d e f en d a n t purposefully avails itself of the privilege of conducting activities within the forum . . . , thus invoking the benefits and protections of its laws.'" Id. (quoting Hanson v. Denckla, 3 5 7 U.S. 235, 253 (1958)). "Third, the defendant's contacts with the forum must be `such th a t [the defendant] should reasonably anticipate being haled into court there.'" Id. (quoting
W o r ld -W id e Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). Moreover, "it is im p o rta n t to remember that the conduct at issue is that of the defendants. No plaintiff can e sta b lis h jurisdiction over a defendant through his own actions." Ruiz de Molina v. Merritt & Furman Ins. Agency, Inc., 207 F.3d 1351, 1356 (11th Cir. 2000). Here, the parties focus mainly on the second Vermeulen factor, i.e., the requirement th a t the contacts involve "some act by which the defendant purposefully avails itself of the p riv ile g e of conducting activities within the forum," 985 F.2d at 1546. Norment argues that t h e purposeful availment requirement is met under two theories. First, as to Granger, N o rm e n t contends that the purposeful availment requirement is satisfied under the " c o n tra c ts -o rie n te d . . . test," Licciardello v. Lovelady, 544 F.3d 1280, 1286 (11th Cir. 2008). (O p p 'n to Mot. Dismiss 7-8.) Second, as to Granger and the rest of the Defendants, Norment a rg u e s that, pursuant to the "effects test" set out in Calder v. Jones, 465 U.S. 783 (1984), p e rs o n a l jurisdiction attaches to all Defendants, given that Norment's claims involve in te n tio n a l torts. (Opp'n to Mot. Dismiss at 9-15.) Replying, Defendants argue that N o rm e n t's arguments "rest entirely on [a] misplaced theory that personal jurisdiction may b e exercised on the basis of an alleged injury to an Alabama resident and on sporadic and a tten u a ted communications." (Reply 1-2.) Defendants contend that there simply are no facts d e m o n s tra tin g that any Defendant "purposefully directed [its or his] activities to Alabama." (R e p ly 2.) Defendants further emphasize that they are citizens of states other than Alabama, c o n d u c t no business in Alabama, and have no offices, agents, employees or property in
A la b a m a . (Br. in Supp. Mot. Dismiss 9; Reply 2.) Defendants have the more compelling s id e of the argument. 1. P u r p o s e fu l Availment through the Contractual Relationship: Granger
N o rm e n t argues that its contacts with Granger pertaining "to the Massachusetts S u b c o n tra c t constitute sufficient minimum contacts with Alabama such that Granger could re a s o n a b ly anticipate being haled into an Alabama court." (Opp'n to Mot. Dismiss 7.) E x t ra p o la te d from the evidence, those contacts upon which Norment relies are as follows: (1 ) The Massachusetts Subcontract was "executed" by Norment in Alabama (Sasser Aff. ¶ 8); (2) during the performance of the subcontracts, representatives and employees of G ra n g e r "conducted numerous communications" with representatives and employees from N o rm e n t in Alabama (Sasser Aff. ¶ 9); (3) payments owed by Granger were to be paid into a single account controlled by Norment at its corporate headquarters in Alabama (Sasser Aff. ¶ 17); (4) Granger "transmitted" five documents pertaining to the subcontract to Norment in M o n tg o m e r y, Alabama (Sasser Aff. ¶ 10); (5) there were "several telephone conversations" b e tw e e n Granger and personnel with Norment's sales and estimating department in M o n tg o m e ry, Alabama, related to the Massachusetts Project (Sasser Aff. ¶ 10); (6) Norment " c o m p le te d " more than one-third of the "total scope [of] work related to security electronics f o r the Massachusetts Project at its headquarters in Montgomery, Alabama" (Sasser Aff. ¶ 12 (b ra c k ets added)); and (7) three invoices submitted by Norment requested that payments be
s e n t to its Montgomery, Alabama address. (Sasser Aff. ¶ 10). (See generally Opp'n to Mot. D ism iss 7-8.) As stated, Defendants focus on Vermeulen's purposeful availment requirement.6 They d is a g re e that the evidence upon which Norment relies is sufficient to demonstrate purposeful a v a ilm e n t. They argue generally that "[b]usiness entities routinely enter into construction c o n tra c ts with parties from a state different from the one in which the entity is located and o ften those contracts involve construction projects located in yet another state," and that "[i]f sim p ly entering a contract established personal jurisdiction in the plaintiff contracting party's f o ru m , forcing the contracting parties to be haled into distant forums, surely interstate co n trac tin g would be stifled" (Reply 2-3), thus, the requirement of "`purposeful availment'" in the forum state (Reply 3 (citation omitted)). D e f en d a n ts do not cite any precedential opinions, but do cite a number of cases from o th e r jurisdictions for the proposition that "courts have found no personal jurisdiction under
Defendants do not challenge the first prong of the Vermeulen test, i.e., whether these contacts are related to or gave rise to Norment's breach of contract action against Granger, see Vermeulen, 985 F.2d at 1546, but at least one circuit has interpreted this hurdle as relatively low. See Ziegler v. Indian River County, 64 F.3d 470, 474 (9th Cir. 1995) (assessing the "arising from" issue in terms of "but for" causation); Gen. Cigar Holdings, Inc. v. Altadis, S.A., 205 F. Supp. 2d 1335, 1346 (S.D. Fla. 2002) (finding that, "even if the contacts were non-essential to the cause of action, they still may show a sufficient nexus with the litigation to satisfy [Vermeulen's] first step).
sim ilar construction contract circumstances." 7 (Reply 3-4.) In one such case, Ellicott M a c h in e Corp. v. John Holland Party Limited, 995 F.2d 474 (4th Cir. 1993), the Fourth C irc u it held that a Maryland federal district court did not have specific personal jurisdiction o v e r an Australian company sued for breach of contract by a Maryland manufacturer of m in in g dredges. Id. at 476. The court recognized that the Australian company "purposefully in i ti a te d " contact with the Maryland manufacturer, requesting the opportunity to bid on a su b c o n tra c t for the assembly of a mining dredge (manufactured in Maryland) at a mining site in Australia, and that the contract was formed after back-and-forth negotiations by telephone a n d fax between the companies from their respective jurisdictions. Id. at 478. The Fourth Circuit reiterated initially "that a contract in and of itself does not a u to m a tic a lly constitute sufficient minimum contacts to support personal jurisdiction," id. a t 478 (citing Burger King, 471 U.S. at 478), and held that the contacts directed toward the
Norment does not cite any cases on the proposition, nor does Norment attempt to distinguish the cases cited by Defendants. (Opp'n to Mot. Dismiss 7-8.) One case relied upon by Defendants, however, is distinguishable because the personal jurisdiction analysis was based upon general, not specific, jurisdiction. See Builder's Res., Inc. v. Coreslab Structures (Conn), Inc., 538 F. Supp. 2d 324, 328 (D. Mass. 2008). Another case focused principally upon general personal jurisdiction based upon the plaintiff's reliance on an internet website as demonstrating continuous and systematic contact in the forum state; the analysis of specific personal jurisdiction justifiedly was rejected in short fashion, but at the same time the limited facts restrict that case's utility. See Veliz v. Americorp Builders, Inc., No. 06-4363, 2007 WL 1746248, at *3 (D.N.J. June 15, 2007). In yet another case, the specific personal jurisdiction issue was presented in the context of a declaratory judgment action, and "the declaratory judgment action d[id] not arise out of the [out-of-state corporation's] [forum] contacts." Transcon. Ins. Co. v. E. Steel Constructors, Inc., No. CCB 07-2243, 2008 WL 2466558, at *3 (D. Md. June 10, 2008). It was the "contacts surrounding the insurance policy, not contacts involving the [underlying] construction project or the subcontract agreement," which were relevant to the issue of specific personal jurisdiction. Id. at *4 (brackets added). The conclusions reached in other cases cited by Defendants flow from application of state jurisdictional statutes and arguably are distinguishable from federal constitutional analysis notwithstanding the conceptual similarity.
f o ru m state by the Australian company did not have a "`substantial connection' with M a ryla n d ," id. at 478 (quoting Burger King, 471 U.S. at 479), so as to warrant the conclusion th a t the Australian company "purposefully `availed [itself] of the privilege of conducting b u sine ss [in Maryland],'" 8 id. at 477 (quoting Burger King, 471 U.S. at 476). The
" s ig n if ic a n c e of these contacts" was "mitigated" by other facts. Id. at 478. Namely, the c o n tra c t, which called for the assembly of the Maryland-manufactured mining dredge in A u s tra lia , was performed in Australia, not Maryland. Id. The contract was not the product o f a "longstanding business relationship" between the companies, id.; to the contrary, the A u stra lian 's company's "contacts with [the Maryland company] in Maryland" constituted its " so le venture into the [forum] state." Id. The contract, which took four months to complete, " d id not contemplate a long-term relationship" between the two entities. Id. There was no c h o ic e -o f -la w provision, requiring the application of Maryland law to any dispute, and the A u s tra lia n company did not conduct any business or advertise in Maryland or have an office o r property in Maryland, and it had no employees or agents in that state. Id. Ellicott Machine relied on Burger King, a landmark decision on specific personal ju ris d ic tio n in contract cases. See Ellicott Mach., 995 F.2d at 478 (citing Burger King, 471 U .S . at 478). In Burger King, the franchisor (Burger King), a Florida citizen, brought a b re a c h -o f -c o n tra c t suit in a federal district court in Florida. See 471 U.S. at 464 & 468. The f ra n c h is e e s were Michigan citizens, who operated a Burger King franchise in Michigan. See
Maryland's long-arm statute, like Alabama's, "extend[s] personal jurisdiction to the limits allowed by federal due process[.]" Ellicott Mach., 995 F.2d at 477.
id . at 466-67 & 469. The issue before the Supreme Court was whether the Florida federal d is tric t court's assertion of specific personal jurisdiction over one of the Michigan f ra n c h is e e s "for the alleged breach of his franchise agreement . . . offend[ed] due process." Id . at 478. The Supreme Court discussed the "purposeful availment" component of the specific ju ris d ic tio n , minimum contacts analysis, beginning with a quotation from Hanson v. Denckla, 3 5 7 U.S. 235 (1958): "The unilateral activity of those who claim some relationship with a n o n re sid e n t defendant cannot satisfy the requirement of contact with the forum S ta te . The application of that rule will vary with the quality and nature of the d e f en d a n t's activity, but it is essential in each case that there be some act by w h ic h the defendant purposefully avails itself of the privilege of conducting a c tiv itie s within the forum State, thus invoking the benefits and protections of its laws." B u r g e r King, 471 U.S. at 475 (quoting Hanson, 357 U.S. at 253). The Burger King Court c o n tin u e d : T h is "purposeful availment" requirement ensures that a defendant will not be h a le d into a jurisdiction solely as a result of "random," "fortuitous," or "a tten u ated " contacts, or of the "unilateral activity of another party or a third p e rso n . . . . Jurisdiction is proper, however, where the contacts proximately re su lt from actions by the defendant himself that create a "substantial c o n n e c tio n " with the forum State. Thus where the defendant "deliberately" h a s engaged in significant activities within a State, or has created "continuing o b lig a tio n s " between himself and residents of the forum, he manifestly has a v a iled himself of the privilege of conducting business there, and because his a c tiv itie s are shielded by "the benefits and protections" of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litig a tio n in that forum as well.
Id . at 475-76 (internal citations and footnotes omitted). Applying these principles, the Court n o te d "[a]t the outset" that "an individual's contract with an out-of-state party alone can[not] a u to m a tic a lly establish sufficient minimum contacts in the other party's home forum." Id. a t 478. The Court, however, recognized that a contract is generally preceded by past n e g o tia tio n s and future relationships, and that "[i]t is these factors prior negotiations and c o n te m p l a te d future consequences, along with the terms of the contract and the parties' a c t u a l course of dealing that must be evaluated in determining whether the defendant p u rp o s e f u lly established minimum contacts within the forum," id. at 479. The Court concluded that, notwithstanding that the franchisee had "no physical ties to Florida," id., the "franchise dispute grew directly out of a `contract which had a substantial c o n n e ctio n with that State,'" id. The franchisee "deliberately `reach[ed] out beyond' M ic h i g a n and negotiated with a Florida corporation for the purchase of a long-term franchise a n d the manifold benefits that would derive from affiliation with a nationwide organization." Id . at 479-80. The franchise agreement, which covered a twenty-year period, contemplated " c o n tin u in g and wide-reaching contacts with Burger King in Florida." Id. at 480. "In light o f [the franchisee's] voluntary acceptance of the long-term and exacting regulation of his b u sin e ss from Burger King's Miami headquarters, the `quality and nature' of his relationship to the company in Florida can in no sense be viewed as `random,' `fortuitous,' or `a tte n u a te d .'" Id.
M o re o v e r, in Burger King, the Court considered the fact that the contract provided th a t "Burger King's operations are conducted and supervised from the Miami headquarters, th a t all relevant notices and payments must be sent there, and that the agreements were made in and enforced from Miami." Id. Also relevant, albeit not dispositive, was the fact that the f ra n c h ise agreement contained a choice-of-law provision "providing that all disputes would b e governed by Florida law." Id. at 481; see also id. at 482 (The franchisee "`purposefully a v a iled himself of the benefits and protections of Florida's laws' by entering into contracts ex p ressly providing that those laws would govern franchise disputes." (citation omitted)). In light of the foregoing principles, it is clear that Granger's formation of a contract w ith Norment is not sufficient, standing alone, to subject Granger to personal jurisdiction in a n Alabama federal district court. Id. at 478. Also, Granger has no physical connection with A la b a m a ; it does not conduct business in Alabama, nor does it have an office, agents, e m p lo ye e s, or property in Alabama. It does not advertise in Alabama. In addition, as in E llic o tt Machine, there is no evidence that the Massachusetts Subcontract was formed as a re su lt of a "longstanding business relationship" between Norment and Granger. 995 F.2d a t 478. There is, however, evidence that Granger "has never done any general contracting in the [s]tate of Alabama" or "been licensed or authorized to do business in Alabama." (R o b e rt W. Granger Jr. Aff. ¶ 3.) There also is no evidence that the contract "contemplate[d] a long-term relationship" between Norment and Granger, Ellicott Mach., 995 F.2d at 478,
m u c h less a twenty-year contractual relationship as contemplated between the parties in B u r g e r King, see 471 U.S. at 480. Norment also has not presented evidence of any foreseeable contract-related future c o n se q u e n ce s in Alabama. Unlike in Burger King, the Massachussets Subcontract does not c o n ta in a choice-of-law provision, see id. at 481; there is no requirement that the parties a p p ly Alabama law to any dispute. a rb itratio n . There is no contractually-designated forum for
In fact, in Defendants' favor, the mediation clause in the Massachussets
S u b c o n tra c t provides that mediation "shall be held in the place where the Project is located [ i.e ., Massachusetts], unless another location is mutually agreed upon." (Massachusetts S u b c o n tra c t at 7 (brackets added).) N o rm e n t is correct that the physical absence of a defendant in the forum state does not n ec essa rily insulate it from the personal jurisdiction of the forum court. See Burger King, 4 7 1 U.S. at 476. "[I]t is an inescapable fact of modern commercial life that a substantial a m o u n t of business is transacted solely by mail and wire communications across state lines, th u s obviating the need for physical presence within a State in which business is conducted." Id . Norment, thus, argues that other contacts demonstrate a substantial connection between G ran g er and Alabama. (Opp'n to Mot. Dismiss 7-8.) Norment points to the fact that the Massachusetts Subcontract was "executed" by N o rm e n t in Alabama. (Sasser Aff. ¶ 8.) Initially, it cannot reasonably be inferred from N o rm e n t's lone use of the word "execute" and Norment has not defined "execute" that
G r a n g e r's agents also signed the contract in Alabama; the evidence establishes, without c o n tra d ictio n , that Granger's representatives did not physically set foot in Alabama in c o n n e c tio n with the Massachusetts Subcontract or otherwise conduct any business in A laba m a (Robert W. Granger Jr. Aff. ¶ 2; Stephen J. Granger Aff. ¶¶ 2-3). Norment's s ig n in g of the contract in Alabama is an act by the plaintiff, not by the defendant, but, in the p e rs o n a l jurisdiction analysis, "the conduct at issue is that of the defendants. No plaintiff can e sta b lis h jurisdiction over a defendant through his own actions." Ruiz de Molina, 207 F.3d a t 1356; see also Burger King, 471 U.S. at 474 ("`The unilateral activity of those who claim so m e relationship with a nonresident defendant cannot satisfy the requirement of contact with th e forum State.'" (quoting Hanson, 357 U.S. at 253)). Moreover, Norment has not provided any facts about what acts preceded the signing o f the Massachussets Subcontract or who initiated those acts, acts which the Burger King C o u rt deemed highly relevant to the specific personal jurisdiction analysis, see 471 U.S. at 4 7 9 . By comparison, there was evidence in Burger King that the franchisee actively sought c o n tra c t negotiations with Burger King in Florida. See id. Also, even in Ellicot Machine, w h e re the contacts were constitutionally inadequate, there was evidence that the out-of-state d e f e n d a n t initiated certain pre-contract contacts with the forum plaintiff. See 995 F.2d at 478. N o rm e n t also says that it "completed" more than one-third of the "total scope [of] w o rk related to security electronics for the Massachusetts Project at its headquarters in
M o n tg o m e ry, Alabama." (Sasser Aff. ¶ 12 (brackets added).) Again, Norment relies on its u n ila te ra l act in the forum state as the basis for subjecting Granger to personal jurisdiction in Alabama. The Massachusetts Subcontract, however, contains no terms as to where N o rm e n t was to complete the "scope [of] work" for the "security electronics." The contract in s te a d provides that Norment will "furnish" the equipment and "install" it in a M a s s a c h u s e tts facility. (See Massachussets Subcontract (Ex. 2 to Opp'n to Mot. Dismiss 4).) In other words, the Massachussets Subcontract contemplated that Norment would conduct b u sin e ss in Massachussets by furnishing and installing specified equipment at the Barnstable C o u n t y Jail & House Correction in Bourne, Massachusetts. F u rth e r m o re , Norment points out that, during the performance of the subcontract, re p re se n ta tiv e s and employees of Granger "conducted numerous communications" 9 with rep rese n tativ es and employees from Norment in Alabama, (Sasser Aff. ¶ 9), and that there w e re "several telephone conversations" between Granger and personnel with Norment's sales a n d estimating department in Montgomery, Alabama, related to the Massachusetts Project (S a ss e r Aff. ¶ 10). Norment, however, omits a salient fact: It has not indicated which party Norment or Granger initiated the communications. Hence, it cannot be determined w h e th e r Granger "purposefully directed" its actions toward Norment in Alabama by initiating t h e s e communications. Burger King, 471 U.S. at 472; see also id. at 475 (Personal
" [ j]u ris d ic tio n is proper . . . where the contacts proximately result from actions by the
Because the evidence establishes that Granger, through its agents, was never physically present in the state of Alabama, these communications were not face-to-face.
d e f e n d a n t himself that create a `substantial connection' with the forum State." (citation o m itte d )). In addition to failing to say who initiated the contract communications, Norment d o e s not explain why these contacts were made. The lack of factual detail substantially d e p le te s the value of this affidavit testimony in the personal jurisdiction analysis. Finally, Norment says that Granger "transmitted" five contract-related documents to N o rm e n t in Montgomery, Alabama. It also points out that the payments owed by Granger w e re to be paid into a single account controlled by Norment at its corporate headquarters in A la b a m a (Sasser Aff. ¶ 17), and similarly, that three contract-related invoices submitted by N o r m e n t to Granger requested that payments be sent to its Montgomery, Alabama address. (S a s s e r Aff. ¶ 10.) While these contacts are not to be ignored, see Burger King, 471 U.S. a t 480, the court finds that they are not enough to tip the scale in Norment's favor on the q u e s tio n of purposeful availment. Cf. Borg-Warner Acceptance Corp. v. Lovett & Tharpe, In c ., 786 F.2d 1055, 1059 (11th Cir. 1986) (recognizing that, in the buyer-seller scenario, " `th e making of payments in the forum state'" is a "`secondary or ancillary factor'" in the p e rs o n a l jurisdiction equation (quoting Scullin Steel Co. v. Nat'l Ry. Utilization Corp., 676 F .2 d 309, 314 (8th Cir. 1982)); Aeropower, Ltd. v. Matherly, 511 F. Supp. 2d 1139, 1156 (M .D . Ala. 2007) (finding that "telephone, fax, mail and wire communications" between the n o n -re sid e n t defendant and the forum plaintiff did not satisfy the second Vermeulen prong). O n this record, having balanced the factors for and against a finding of purposeful av ailm en t, the court is not persuaded that Norment's evidence which comprises Norment's
u n ila te ra l acts, some long-distance communications between the parties (unaccompanied by e v id e n c e of which party initiated the contact), Granger's transmission of five documents to N o rm e n t in Alabama, and notice to Granger that contractual payments would be received by N o rm e n t in Alabama is sufficient to meet Norment's burden of establishing purposeful a v a ilm e n t. Considering the quality, nature, and extent of Granger's contacts with Alabama, a s well as the relationship between those contacts and the instant litigation, Granger's limited c o n tac ts with Alabama cannot support a finding of purposeful activity invoking the benefits a n d protections of Alabama under the "contracts-oriented . . . test," Licciardello, 544 F.3d a t 1286. Rather, the court finds that the "nature and quality and the circumstances" of G ra n g e r's purposeful contacts with Alabama "create only an `attenuated' affiliation with the f o ru m ." Burger King, 471 U.S. at 476 n.18 (citations omitted). 2. P u rp o se fu l Availment through Intentional Torts: Calder's Effects Test
N o rm e n t argues that, as to the causes of action alleging intentional torts, personal jurisd iction over each Defendant is proper under Calder, see 465 U.S. at 783. Norment cites C a ld e r for the proposition that "[a] tortious act performed in a non-forum state that results in injury in Alabama makes the exercise of jurisdiction over the actor in Alabama proper." (O p p 'n to Mot. Dismiss 9.) In Calder, a libel action was brought in a California court against tw o Florida defendants, a writer and the editor of the National Enquirer Magazine. See 465 U .S . at 784-85. The alleged libelous article was written and edited in Florida and published in the Florida-based national tabloid magazine. See id. at 784-86. Holding that the
C alifo rnia court could exercise personal jurisdiction over the Florida defendants, the Court e x p la in e d that the "focal point" of the article "concerned the California activities of a C a lif o rn ia resident," id. at 788-89, that the magazine's largest circulation was in California, id . at 790, and that the "brunt of the harm, in terms both of [the plaintiff's] emotional distress a n d the injury to her professional reputation," was endured by the plaintiff in California, id. a t 789. Jurisdiction, thus, was proper in California based on the "`effects'" of the
d e f e n d a n ts ' Florida conduct in California. Id. at 790 (quoting World-Wide Volkswagen C o r p ., 444 U.S. at 297-98). T h e Eleventh Circuit has not had the occasion to apply the Calder effects test in a c o n te x t factually similar to the one presented here. In Licciardello, recognizing that "[m]any c o u rts have employed the Calder `effects' test when the plaintiff's claim involves an in ten tio n a l tort," 544 F.3d at 1286 (collecting cases), the Eleventh Circuit applied the effects te st to determine personal jurisdiction over a non-resident defendant alleged to have c o m m itte d trademark infringement,1 0 id. at 1287-88. Norment recognizes (Opp'n to Mot.
The Eleventh Circuit found the Calder effects test satisfied. See Licciardello, 544 F.3d at 1287-88. Licciardello, however, is distinguishable. A dispositive fact present in that case, which is not present here, was the use of the internet as the vehicle through which the intentional tort was accomplished. Id. The Eleventh Circuit explained, We hold only that where the internet is used as a vehicle for the deliberate, intentional misappropriation of a specific individual's trademarked name or likeness and that use is aimed at the victim's state of residence, the victim may hale the infringer into that state to obtain redress for the injury. The victim need not travel to the state where the website was created or the infringer resides to obtain relief. Id. at 1288 n.8.
D is m is s 10), as the Licciardello court did, that "the Ninth Circuit [has] explained that `som ethin g more' is required under Calder than the mere `foreseeability' that an act may h a v e effects in the forum, and [has] concluded that Calder requires that the defendant `e x p re s s ly aim' his wrongful conduct, individually targeting a known forum resident," L icc ia rd e llo , 544 F.3d at 1287 (quoting Bancroft & Masters, Inc. v. Augusta Nat'l, Inc., 223 F .3 d 1082, 1088 (9th Cir. 2000)); see also Rhodes v. Unisys Corp., 170 F. App'x 681, 684 & 685 (11th Cir. 2006) ("The Calder effects test is a lens through which the connectivity b e tw e e n defendant, cause of action, and forum state may be viewed[,] and "[a] single email c o n ta c t with a forum, especially when the email is unrelated to the causes of action, will not p ro v id e a basis for personal jurisdiction."). In addition to its recognition that connectivity under Calder requires "something m o re " than foreseeability of injury in the forum state, Norment concedes that application of th e Calder effects test is fact intensive and that "each cause of action [must be reviewed] to a sc e rta in whether any claim `sufficiently connect[s]' the out-of-state defendant to the forum sta te for [specific] personal jurisdiction purposes." (Opp'n to Mot. Dismiss 10 (brackets a d d e d ) (quoting Rhodes, 170 F. App'x at 684).) It is true that each Defendant is alleged to have committed at least one intentional to rt.1 1 Norment has presented its arguments in support of the application of the Calder
A claim for intentional interference with contractual relations is brought against Northern and the individual Granger Defendants based on allegations that, although not parties to the Massachusetts Subcontract, they were aware of it (Compl. ¶ 35), and that they "intentionally interfered with the Massachusetts Subcontract between Norment and Granger by withholding payment on the Massachusetts
e f f e c ts test on a claim-by-claim basis (Opp'n to Mot. Dismiss 10-15), and the court has co n side red carefully those arguments. The crux of Norment's position is that each Defendant k n e w that intentional actions which resulted in the "withholding of funds" under the su b c o n tra c ts at issue (Opp'n to Mot. Dismiss 11) or "threaten[ed] Northern's ability to c o n tin u e in business and pay its legitimate creditors, including Norment," would financially im p a c t "an Alabama resident [i.e., Norment] in the [s]tate of Alabama," (Opp'n to Mot. D is m is s 14 (brackets added); see also Opp'n to Mot. Dismiss 12), and that this financial im p ac t would "result in injury to an Alabama resident in the [s]tate of Alabama" (Opp'n to Mot. Dismiss 14). Norment cites various evidence which it submitted in opposition to D e f e n d a n ts' motion to show that each Defendant knew that Norment was located in A la b a m a . (See generally Opp'n to Mot. Dismiss 11-14). Defendants, however, argue that " N o r m e n t 's status as a plaintiff Alabama corporation does not correspondingly establish p e r s o n a l jurisdiction over  [D]efendants. If injury to the plaintiff were enough to establish
Subcontract purportedly due to a dispute in the New Hampshire Subcontract." (Compl. ¶ 36; see generally Compl. ¶¶ 34-37.) There also is a conversion claim, alleging that the withholding of funds by Northern, Granger and the individual Granger Defendants under all three subcontracts at issue constitutes a wrongful taking and an appropriation of payment lawfully owed to Norment. (Compl. ¶¶ 40-44.) A fraudulent transfer claim lies against Consigli, Northern and the individual Granger Defendants. (Compl. ¶¶ 47-53.) That claim alleges that the individual Granger Defendants "caused" Northern to sell to Consigli three "valuable" contracts "at far less than their fair market value" (Compl. ¶¶ 47-48), thereby hindering Northern's ability to pay Norment under the "subcontracts" (Compl. ¶ 49). Northern and the individual Granger Defendants also are the subject of a deceptive trade practice claim. (Compl. ¶¶ 56-58.) That claim alleges that the transfer to Consigli of three "valuable contracts . . . for less than their fair market value" (Compl. ¶ 56) was fraudulent and "constitute[d] a misleading and/or deceptive practice in the conduct of trade or commerce," which "damaged" Norment (Compl. ¶¶ 56-58). Finally, the individual Granger Defendants are sued on the basis that they are the alter egos of Northern and Granger (Compl. ¶¶ 26-32) and that they "used their control over . . . Northern and Granger to cause" these corporate entities "to commit . . . wrongful [tortious] acts against [Norment]" (Compl. ¶ 30).
p e rs o n a l jurisdiction, it is difficult to imagine any circumstance that would allow a defendant to challenge its exercise." (Reply 2.) Assuming that Norment's evidence demonstrates that Defendants knew that Norment w o u ld suffer an adverse economic impact in Alabama if payments ceased on the subcontracts a t issue, that knowledge may well equate "foreseeability" of a forum effect, but at the same tim e begs the question of whether there is "`something more.'" Licciardello, 544 F.3d a t 1287 (quoting Bancroft & Masters, Inc., 223 F.3d at 1088); Burger King, 471 U.S. at 474 ( " A lth o u g h it has been argued that foreseeability of causing injury in another State should b e sufficient to establish such contacts there when policy considerations so require, the Court h a s consistently held that this kind of foreseeability is not a `sufficient benchmark' for e x e rc is in g personal jurisdiction." (internal footnote omitted) (quoting World-Wide V o lk sw a g e n Corp., 444 U.S. at 295). Indeed, Norment recognizes that "something more" re q u ire s conduct by a defendant that is "`expressly aimed' at the forum state" (Opp'n to Mot. D is m is s 10 (citation omitted)), but Norment's argument meets itself coming back because it relies solely upon Defendants' knowledge of Norment's state of citizenship. Namely, N o rm e n t says that Defendants' "intentional actions were expressly aimed at Alabama based o n their knowledge that the "`brunt of the injury' would be felt by Norment in Alabama." (O p p 'n to Mot. Dismiss 10 (emphasis added).) Norment points to nothing more to
d e m o n s tra te that Defendants expressly aimed their allegedly tortious acts at Alabama.
T h e obviousness of the absence of "something more" as to Consigli is stark. In ESAB G r o u p , Inc. v. Centricut, Inc., 126 F.3d 617 (4th Cir. 1997), which is instructive as to the C a ld e r effects test's inapplicability to Consigli, a South Carolina citizen, commenced a law su it in a South Carolina federal district court, alleging that an out-of-state corporate d e f en d a n t participated in an intentional tort to appropriate the plaintiff's trade secrets and c u s to m e r lists. See id. at 620. The only South Carolina "contact" was the defendant's k n o w le d g e that its acquisition of the plaintiff's trade secrets could result in lowered sales for th e plaintiff.1 2 Id. at 625. The Fourth Circuit concluded that the defendant's knowledge was " to o attenuated to constitute a `substantial connection' with South Carolina." Id. Standing a lo n e , that knowledge also did not "manifest behavior intentionally targeted at and focused o n South Carolina," as required under Calder. Id. The Fourth Circuit further reasoned that, w h ile admittedly a corporation "feels" lost sales at its headquarters, permitting Calder to be s a tis f ie d on this basis would mean that in intentional tort cases "jurisdiction would depend o n a plaintiff's decision about where to establish residence," id. at 626, thereby "always m a k [ in g ] jurisdiction appropriate in a plaintiff's home state, for the plaintiff always feels the im p a c t of the harm there, id. H e re , Consigli, a Maine citizen, entered into a contractual relationship with Northern, a lso a Maine citizen, for the purchase of Northern's rights under three contracts contracts
The out-of-state corporate defendant had "no offices or sales representatives in South Carolina; it ha[d] no property in South Carolina; it ha[d] no phone listings there; . . . it ha[d] never paid South Carolina taxes"[;] no employee ha[d] ever traveled to South Carolina"; and "it had never targeted formal advertising at South Carolina." ESAB Group, 126 F.3d at 621.
w h ic h had nothing to do with the Massachusetts Subcontract, the Vermont Subcontract or th e New Hampshire Subcontract at issue in this case. There is no evidence that any relations b e tw e e n Consigli and Northern were carried out in Alabama. Similar to the out-of-state c o rp o ra te defendant in ESAB Group, the only potential Alabama contact related to this suit is that Consigli allegedly knew that, if it purchased certain contracts from Northern "at far les s than fair market value," (Compl. ¶ 14), that these purchases may affect Northern's ability to meet its financial obligations under contracts with third parties, which would include N o rth ern 's ability to pay Norment under the Vermont Subcontract and the New Hampshire S u b c o n tra c t. Other than Consigli's arguable knowledge of potential economic harm to N o rm e n t in Alabama, there is no other "connectivity between [Consigli], cause of action, and f o ru m state," Rhodes, 170 F. App'x at 685. To reiterate, the evidence establishes that C o n s ig li had no relationship with the state of Alabama or with Norment. Consigli was not in v o lv e d with either the Vermont Project, the New Hampshire Project, or the Massachusetts P ro jec t. (Lerner Aff. ¶ 4.) Rather, as stated, Consigli's contractual relationship was with N o rth e rn (Lerner Aff. ¶ 2), and the contracts that Consigli assumed from Northern did not in v o lv e Norment or have any connection with the state of Alabama. (Lerner Aff. ¶ 2.) The e v id e n c e also establishes, without dispute, that Consigli had no business dealings with N o rm e n t in Alabama (Lerner Aff. ¶ 5), and was not licensed to do business in Alabama (L ern er Aff. ¶ 3). It also never has owned property in Alabama, had a mailing address or a
b a n k account in Alabama, paid taxes or advertised in Alabama, or employed an Alabama w o rke r. (Lerner Aff. ¶ 3.) Furthermore, as relates to Granger's, Northern's and the individual Granger D e f e n d a n ts ' potential tort liability, which finds its genesis in the contractual relationships b e tw e e n these Defendants and Norment, the three construction projects at issue were located in Vermont, Massachusetts and New Hampshire, not in Alabama, and the alleged tort w ro n g d o in g by these Defendants was wrought by them in states other than Alabama. On this re c o rd , the court finds that Defendants have the more persuasive argument when they say that th e "focal point," for purposes of the Calder inquiry, is "not Alabama," but instead "the three p u b lic works construction projects in Vermont, Massachusetts, and New Hampshire[.]" (R ep ly 5); see also Gen. Elec. Capital Corp. v. Grossman, 991 F.2d 1376, 1387 & 1388 (8th C ir. 1993) (concluding that Calder's effects test is of "little help" when the "`focal point' of th e alleged wrongdoing" occurred outside of the forum even where the "effects of the harm" o c c u rre d in that state). Stated differently, in the words of Rhodes, Norment has not argued o r presented evidence that the limited Alabama contacts that Northern, Granger and the in d iv id u a l Granger Defendants had with Alabama were "focused on causing injury in A la b a m a ," 170 F App'x at 684, or were intended to inflict economic injury upon Norment in Alabama. To the contrary, the Alabama contacts appear to be routine contacts made for th e purpose of furthering, not severing, the parties' contractual relationship, and occurred
m o re than a year prior to June, 2005, when payments ceased to Norment under the three su b co n trac ts at issue.13 (Sasser Aff. ¶ 16.) Moreover, at least one circuit court of appeals has distinguished the facts of Calder o n a ground salient to this case. Calder involved a libel claim, and, thus, "the actual tort or in ju ry, not just its consequences, occurred within the forum." United States v. Swiss Am. B a n k , Ltd., 274 F.3d 610, 624 (1st Cir. 2001). In Swiss American Bank, as here, the acts p ro v id in g the predicate for the alleged tortious conversion and breach of contract happened in the foreign jurisdiction, not in the forum state. Id. at 624-25; see also Ashton v. Florala M e m 'l Hosp., No. 2:06cv226, 2006 WL 2864413, at *10 n.7 (M.D. Ala. Oct. 5, 2006) (noting th a t the First Circuit "has concluded that the case for applying the [Calder] `effects' theory is not as strong where the tort did not occur in the forum state" (quoting Swiss Am. Bank, 274 F .3 d at 624-25)). In sum, on this record, the court finds that as to each Defendant, Norment has offered o n ly allegations and evidence of an in-forum adverse effect felt by Norment as a result of the alleg ed intentional conduct of Defendants. Accordingly, the court rejects Norment's
a r g u m e n t that constitutionally sufficient contacts are satisfied based on the Calder effects tes t.
For instance, pertaining to the New Hampshire Subcontract, Northern's Alabama contacts occurred in April, 2004, and consisted of Northern's transmittal of "drawings" and "other correspondence." (Sasser Aff. ¶ 13.) Also, as to the Vermont Subcontract, Northern's Alabama contacts transpired prior to January, 2004, and consisted of Northern's transmittal to Norment of contract-related documents. (Sasser Aff. ¶ 14.)
H a v in g found no purposeful availment, the court notes, but pretermits analysis of, the th ird prong of the Vermeulen analysis. See 985 F.2d at 1546 (requiring that "the defendant's c o n ta c ts with the forum must be `such that [the defendant] should reasonably anticipate being h a le d into court there'"). Because Defendants did not purposefully direct their activities at th e forum state, their contacts are not "such that [they] could reasonably anticipate being h a le d into court [in Alabama]." Id. B. F a ir Play and Substantial Justice
W h e re minimum contacts exist between the defendant and the forum state, the second p a rt of the due process analysis requires consideration of whether the exercise of jurisdiction o v er the defendant "`offend[s] traditional notions of fair play and substantial justice.'" B u r n h a m , 495 U.S. at 618 (brackets added) (quoting Int'l Shoe Co., 326 U.S. at 316). B e c a u se the court finds that Defendants do not have the requisite minimum contacts with A la b a m a necessary to support the exercise of personal jurisdiction over them, the court need n o t address the fairness tier of the due process inquiry. C. C o n c lu s io n
B e c a u s e personal jurisdiction over Defendants is lacking, the court finds that N o rm e n t's claims against Defendants must be dismissed pursuant to Rule 12(b)(2) of the F e d e ra l Rules of Civil Procedure.
V. ORDER A c c o r d in g ly, based on the foregoing, it is ORDERED that the Motion to Dismiss (D o c . # 13), filed by the five named Defendants, for lack of personal jurisdiction is GRANTED. An appropriate judgment shall be entered. D O N E this 23rd day of February 2009. /s/ W. Keith Watkins UNITED STATES DISTRICT JUDGE
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