JONES DAY v. SCRUSHY

Filing 3

MEMORANDUM re 2 MOTION to Transfer for Lack of Jurisdiction filed by RICHARD M. SCRUSHY, by RICHARD M. SCRUSHY. (Glaser, Christopher) Modified on 6/16/2006 (lc, ).

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JONES DAY v. SCRUSHY Doc. 3 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 1 of 35 IN THE UNITED STATES DISTRICT COURT District of Columbia JONES DAY, Plaintiff, v. RICHARD M. SCRUSHY, Defendant. MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF RICHARD M. SCRUSHY'S MOTION TO TRANSFER DUE TO LACK OF PERSONAL JURISDICTION AND LACK OF PROPER VENUE Defendant Richard M. Scrushy, pursuant to Fed. R. Civ. P. 12(b)(2) and (3) and 28 U.S.C. 1391, 1404 and 1406, through his undersigned counsel, states the following in support of his Motion to Transfer: INTRODUCTION Richard M. Scrushy ("Scrushy") moves for an order transferring this matter to the United States District Counsel of the North District of Alabama because this Court lacks personal jurisdiction over Scrushy. In the alternative, Scrushy requests entry of an order transferring this case to the Northern District of Alabama because venue is not proper in this district. As set forth more fully below, Jones Day's attempt to haul Scrushy into court in the District of Columbia should not be permitted when the parties' activities relating to the negotiation, consummation and performance of the alleged contract took place in Alabama. Scrushy strongly disputes that any monies are owed Jones Day under the alleged contract and, in fact, contends that Jones Day is wrongfully holding in excess of one million dollars ($1,000,000.00) of unearned fees properly belonging to Scrushy. Case No. 1:06CV00466 Judge: James Robertson 1 Dockets.Justia.com Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 2 of 35 Any legal proceedings regarding the alleged contract should take place in the United States District Court for the Northern District of Alabama. STATEMENT OF FACTS MATERIAL TO THE ISSUE OF PERSONAL JURISDICTION AND VENUE Scrushy is the former Chief Executive Officer and Chairman of the Board of Directors of HealthSouth Corp. and its predecessor company, HealthSouth Rehabilitation Corp. (collectively, "HealthSouth"). (See, Declaration of Richard M. Scrushy, Exhibit A, 5). Beginning in March, 2003, Scrushy was made aware of various legal actions (collectively, the "Legal Actions") against him including: a. an ongoing criminal investigation by the United States Department of Justice regarding allegations of securities fraud and insider trading later resulting in an indictment unsealed in the United States District Court for the Northern District of Alabama and eventually resulting in an acquittal of all charges; b. a civil action brought by the United States Securities and Exchange Commission in the United States District Court for the Northern District of Alabama commencing with a freezing of Scrushy's assets; and, c. various state court actions filed against HealthSouth and Scrushy in various state courts in Alabama. (Exhibit A, 6.) Upon being made aware of the existence of the Legal Actions, Scrushy contacted an Alabama counsel, Donald V. Watkins, Esq. ("Watkins") to provide immediate assistance. Watkins recognized the severity of the claims being asserted against Scrushy in Alabama and immediately acted to develop a "team approach" to assist in Scrushy's 2 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 3 of 35 defense. Significantly, Watkins' initial acts in developing this "team approach" were done prior to Scrushy's retention of Watkins. (Exhibit A, 9.) Prior to Scrushy's retaining Watkins, Watkins contacted his professional friend Jonathan Rose ("Rose") of Plaintiff, Jones Day, to assist in the mounting Alabama Legal Actions. Watkins contacted Rose, in part, because local Alabama attorneys with SEC experience were not available to represent Scrushy. (Exhibit A, 9.) On April 1, 2003, Rose flew to Alabama to meet Scrushy. (Exhibit A, 11.) Prior to Rose entering Alabama, Scrushy had no prior relationship with Rose and had no knowledge of Rose's existence until being made so aware by Watkins. (Exhibit A, 12.) Scrushy first met Rose when he traveled to Alabama on April 1, 2003 and Scrushy had no conversations with Rose prior to his initial visit to Alabama. (Exhibit A, 13, 14.) All discussions regarding Rose's representation of Scrushy occurred in Alabama. (Exhibit A, 14, 37.) Upon meeting Scrushy in Alabama, Rose agreed to assist in representing Scrushy in certain aspects of the Alabama Legal Actions. (Exhibit A, 15.) In this effort, Rose sought, and was granted, pro hac vice admission to the United States District Court for the Northern District of Alabama. (Exhibit A, 15.) Watkins served as the lead counsel on Scrushy's litigation team and coordinated the efforts of the various counsel in regard to the Alabama Legal Actions. (Exhibit A, 18.) Counsel other than Rose which were retained to represent Scrushy included Thomas Sjoblom of the Washington D.C. office of Chadbourne & Park, LLP and H. Lewis Gillis of the Montgomery Alabama office of Thomas, Means, Gillis & Seay, P.C. (Exhibit A, 17.) . 3 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 4 of 35 Rose began representing Scrushy in the absence of any retainer agreement. (Exhibit A, 19.) The first attempt to reduce the parties' agreement to writing was made, not by Rose or Scrushy, but by Watkins in a letter dated April 6, 2003. (See April 6, 2003 writing, Exhibit 1 to Exhibit A.) The letter was sent from Alabama by Watkins and delivered to Scrushy in Alabama. (Exhibit A, 19.) The April 6, 2003 correspondence was not countersigned by either Scrushy or Rose. (Exhibit 1 to Exhibit A.) In subsequent correspondence dated April 28, 2003, Watkins proposed additional and amended terms to cover the representation of Scrushy by Rose. (See April 28, 2003 correspondence, Exhibit 2 to Exhibit A.) As with the April 6, 2003 correspondence, the April 28, 2003 letter was sent from Alabama by Watkins and delivered to Scrushy in Alabama. Scrushy counter-signed the April 28, 2003 letter in Alabama. (Exhibit 2 to Exhibit A; Exhibit A, 21.) On May 15, 2003, Watkins again addressed in writing the terms of Rose's representation of Scrushy. (See May 15, 2003 e-mail, Exhibit 3 to Exhibit A.) As with the April 6, 2003 and April 28, 2003 correspondence, the May 15, 2003 e-mail was sent from Alabama by Watkins and delivered to Scrushy in Alabama. (Exhibit A, 20.) The May 15, 2003 e-mail was not counter-signed by either Rose or Scrushy. (Exhibit 3 to Exhibit A.) Exhibits 1-3 of Exhibit A, all prepared by Watkins, and the negotiations between the parties that led to these documents, are at the core of the dispute between Scrushy and Jones Day. Jones day contends that Scrushy agreed to pay it a flat fee of $5.0 million solely for the portion of Jones Day's work related to unfreezing Scrushy's assets. Scrushy, on the other hand, contends that the first $5.0 million paid to Jones Day was 4 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 5 of 35 merely intended to be a retainer against which Jones Day was to bill hourly for its time. These different interpretations are critical because there is no dispute that the value of Jones Day's services dedicated to the unfreezing of assets, if measured in terms of hourly billings, is less than $600,000.00, i.e. no where near the $5.0 million flat fee sought by Jones Day. Even in the absence of any retainer agreement signed by both parties--indeed, even in the absence of any written proposal by Rose--Rose returned to Alabama on April 8, 2003 to continue his efforts on Scrushy's behalf. (Exhibit A, 23.) The first hearing in regard to the Legal Actions--the first day of the protracted asset freeze proceeding-- began on April 9, 2003. (Exhibit A, 23.) The asset freeze proceeding lasted for eleven (11) court days and concluded on April 25, 2003. (Exhibit A, 24.) Rose was present in Alabama during all stages of this proceeding. (Exhibit A, 24.) On May 7, 2003, the United States District Court for the Northern District of Alabama unfroze Scrushy's assets. (Exhibit A, 26.) Upon the unfreezing of Scrushy's assets, Scrushy was able to provide an initial retainer of $5.0 million to Jones Day. Immediately upon receipt of these monies, Jones Day took a more active role in seeking to prevent the issuance of a criminal indictment in the United States District Court for the Northern District of Alabama as well as the related representation in regard to a document request issued to Scrushy by the House of Representatives' Commerce Committee in its investigation of HealthSouth. (Exhibit A, 27.) In an effort to prevent the issuance of a criminal indictment, Jones Day rented office space in Birmingham to house and support its attorneys and the other out-of-town 5 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 6 of 35 lawyers and experts working on the Alabama Legal Actions. (Exhibit A, 28.) Additionally, Jones Day and other professionals working on Scrushy's behalf also worked out of a "war-room" set up in the carriage house on Scrushy's Alabama property. (Exhibit A, 29.) Thousands of hours were expended in Alabama by attorneys, forensic accountants and other experts retained by Scrushy to represent him in the Alabama Legal Actions. (Exhibit A, 30.) During the five (5) months subsequent to Rose's retention in Alabama, Scrushy--for the first time in connection with the Alabama Legal Actions--traveled to Washington, D.C. Scrushy's travel to the District of Columbia was necessitated because of the House Commerce Committee investigation of HealthSouth. (Exhibit A, 31.) Scrushy would not have traveled to the District of Columbia but for the requirements of the House Commerce Committee. (Exhibit A, 32.) On November 4, 2003, and despite the efforts of Jones Day in Alabama, the United States District Court for the Northern District of Alabama caused the unsealing of a criminal indictment naming Scrushy. (Exhibit A, 33.) On that same day, Scrushy reassigned the leadership role in the Alabama criminal matter from Rose and Jones Day to Chadbourne & Park, LLP. (Exhibit A, 34.) During the course of Jones Day's representation of Scrushy, virtually all of Jones Day's actions were performed in Alabama. (Exhibit A, 35.) Indeed, while certain Jones Day attorneys may be principally located in Washington, D.C., they traveled to Alabama to perform nearly each and every one of their substantive actions. (Exhibit A, 36.) All fee retainer agreements were negotiated and consummated in Alabama. (Exhibit A, 37.) 6 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 7 of 35 ARGUMENT I. STANDARD FOR ANALYZING CHALLENGES TO PERSONAL JURISDICTION AND VENUE UNDER FED. R. CIV. P. 12(b)(2) AND (3). A. JURISDICTION Resolution of personal jurisdiction challenges normally involve a two-step inquiry: first, the court must determine whether the forum state's long-arm statute authorizes personal jurisdiction over the defendant; and, second, the court must determine whether the personal jurisdiction so authorized is consistent with due process. International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945). However, the legislative history of the District of Columbia "long arm statute," D.C. Code 13-423, as well as decisions by the Maryland and Virginia courts construing their comparable statutory provisions, compels the conclusion that the "transacting any business" provision of the District of Columbia statute is coextensive with the due process clause. Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C. App. 1980). Consequently, the court's inquiry need not be bifurcated as the constitutional and statutory provisions are coextensive. Id. A plaintiff has the burden of establishing personal jurisdiction over the defendant. Diamond Chem. Co. v. AtoFina Chems. Inc. 268 F. Supp. 2d l, 5, 2003 U.S. Dist. LEXIS 10549 (D.D.C. 2003)(plaintiff must make a prima facie showing of pertinent jurisdictional facts). In considering a motion to dismiss for lack of personal jurisdiction, a court may rely upon affidavits to establish jurisdictional facts. Lynn v. Cohen, 359 F.Supp. 565, 566 (S.D.N.Y. 1973). When reliance is upon long-arm jurisdiction, the claim for relief must arise from acts enumerated within the statute. Charles F. Willis, Jr. v. Elizabeth Firestone Willis, 211 U.S. App. D.C. 103, 655 F.2d. 1333, 1336 (1981). 7 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 8 of 35 The long-arm statute does not confer jurisdiction for claims unrelated to the acts forming the basis for jurisdiction. Id.; Berywn Fuel, Inc. v. Hogan, 399 A.2d. 79, 80 (D.C. 1979) (per curium); Cohnane v. Arpeja-California, Inc., 385 A.2d. 153, 159 (D.C.), cert denied, 439 U.S. 980, 99 S. Ct. 567, 58 L.Ed. 2d. 651 (1978). A District Court may exercise jurisdiction under the long-arm statute only if there are "minimum contacts between the defendant and the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Tara Ann Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 325 U.S. App. D.C. 117, 115 F.3d 1020, 1031 (1997), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. St. 154 (1945). B. VENUE Pursuant to 28 U.S.C. 1391, a civil action founded only on diversity of citizenship may be brought "only in (1) a judicial district where any defendant resides, if all defendants reside in the same state, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated..." Under 28 U.S.C. 1406(a), the district court may dismiss, or if it be in the interest of justice, transfer a case which has been filed in the wrong district. 28 U.S.C. 1404(a) provides that even where the court has personal jurisdiction and a case has been filed in a permissible venue, the court may transfer the case to another district "for the convenience of the parties and witnesses, in the interest of justice..." In considering whether to grant a venue transfer under 28 U.S.C. 1404 (a), courts engage in a two-part test: (1) whether the action might have been brought in the proposed transferee forum, and (2) whether transfer promotes 8 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 9 of 35 convenience and justice. Excelsior Designs, Inc. v. Sheres, 291 F. Supp. 2d. 181, 185 (E.D. NY 2003). Federal courts have discretion to adjudicate motions for transfer according to individualized, case-by-case consideration of convenience and fairness. Maloon v. Schwartz, 399 F. Supp. 2d 2209 (D.C. Hawaii 2005). The discretion the court may exercise under 28 U.S.C. 1404(a) is broad but not untrammeled. Fine v. McGuire, 139 U.S. App. D.C. 341, 433 F. 2d 499, 501 (1970). II. THE DISTRICT OF COLUMBIA'S LONG-ARM STATUTE DOES NOT CONFER JURISDICTION OVER JONES DAY'S CLAIM AGAINST SCRUSHY D.C. Code 13-423(a) provides, inter alia, that a District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's "transacting business in the District of Columbia." This case involves a cause of action based in contract in which Scrushy believes it is undisputed that (i) the Defendant is a resident of Alabama; (ii) the contract was negotiated and executed in Alabama; (iii) the subject matter of the contract was located in Alabama and the contract expressly contemplated that the services to be rendered by Jones Day under the contract would be performed substantially in Alabama; (iv) the services were in fact rendered by Jones Day in Alabama; (v) the person who drafted the written documents memorializing the contract is in Alabama; (vi) Alabama substantive law will be applied by the Court resolving the competing claims under the contract. These facts resemble strikingly the facts which led the District of Columbia Court of Appeals in Environmental Research International, Inc. v. Lockwood Greene Engineers, Inc., 355 A. 2d. 808 (1976) to hold that personal jurisdiction did not exist in 9 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 10 of 35 the District of Columbia against a non-resident who merely contracted for services to be provided by a professional consultant residing in the District of Columbia. In so holding, the Court observed: [A] plaintiff cannot rely on its own activities, rather than those of a defendant, to establish the requisite minimal contacts for personal jurisdiction. The mere fact that a nonresident has retained the professional services of a District of Columbia firm, thereby setting into motion the resident party's own activities within this jurisdiction, does not constitute an invocation by the nonresident of the benefits and protections of the District's laws. Environmental Research at 812; see also, Prousalis v. Van Krevel, et al., 1982 U.S. Dist. LEXIS 10738, * 8 (1982). Faced with seemingly insurmountable criminal and legal challenges in the Alabama courts, Scrushy sought the assistance of Watkins, an Alabama lawyer and businessman. (Exhibit A, 7.) Watkins, in turn, contacted Rose, with whom he had prior professional association in the context of another Alabama proceeding. (Exhibit A, 9.) It is well established that, in order for a court to assert personal jurisdiction over a defendant, "there must be some act by which the defendant purposefully avails itself of the privilege of conducting activities with the forum State, thus invoking the benefits and protection of its laws. Hanson v. Denckla, 357 U.S. 235, 253 (1958); See also, International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. St. 154 (1945). Moreover, "proper application of the minimum contacts formula requires a consideration not only of whether a nonresident defendant has sufficient contacts with the forum, but also of whether those contacts are voluntary and deliberate, rather than fortuitous." Mouzavires supra, citing Developments in the Law--State-Court 10 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 11 of 35 Jurisdiction, 7 Harv. L. Rev. 909, 928 (1960) and World Wide Volkswagon v. Woodson, 444 U.S. 286, 287, 295 (1980). Scrushy did not purposely attempt to avail himself of the privileges and protections of the laws of the District of Columbia. The fact that the firm contacted by Watkins to assist Scrushy in Alabama happened to be a District of Columbia firm was fortuitous, not purposeful.1 The instant case is distinguishable from other cases which have found that sufficient minimal contacts existed to support the exercise of personal jurisdiction in actions by District of Columbia law firms against non-residents for alleged non-payment of attorney's fees. For example, Mouzavires, supra, involved a case in which a District of Columbia firm was hired for its expertise in federal regulatory matters; the client expressly agreed that the law firm's services would be performed primarily in the District of Columbia; and the client contacted the law firm several times in the District of Columbia. Other cases permitting District of Columbia law firms to sue non-resident clients in the District of Columbia can be similarly distinguished. See Law Offices of Jerris Leanard et al v. Mideast Systems, Ltd. Et al, 630 F. Supp. 1311(D.D.C. 1986)(involving services of a government contracts expert performed in the District of Columbia); Chase v. Pan-Pacific Broadcasting, 617 F. Supp. 1414 (D.D.C. 1985)(hiring of law firm for its specialized expertise in FCC regulations; several trips by client to District of Columbia to meet with law firm); Fischer v. Bander, 519 A.2d 162 (D.C. App. Scrushy's enlistment of Jones Day was done under exigent circumstances. Scrushy was faced with monumental legal challenges requiring the enlistment of enormous legal resources and funds under extraordinary time constraints. In short, Scrushy was fighting for his life. This fact must be taken into account when evaluating whether Scrushy purposely sought to "conduct business" in the District of Columbia and thereby avail himself of the protections of its laws. Conversely, Jones Day failed to take any steps which suggested a purpose or intent to avail itself of the protection of the District of Columbia courts with regard to its dealings with Scrushy. If Jones Day had wanted to limit uncertainty regarding the choice of law or forum governing any disputes with Scrushy, it simply could have had one of its several hundred lawyers produce a standard retainer letter or engagement agreement. Instead, it chose to rely on oral agreements which were eventually reflected in written documents produced by Watkins in Alabama. 1 11 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 12 of 35 1986)(client contacted law firm directly; hiring not done under duress; client came to the District of Columbia to attend several meetings and client met at law firm to execute closing documents related to radio station sale); Hummel v. Koehler, 458 A.2d 1187 (D.C. App. 1982)(client contacted lawyer directly; legal work performed in the District of Columbia and client traveled to District of Columbia for meetings on multiple occasions). In contrast to these other cases, as noted above, (i) the initial contact with Jones Day was made by Watkins (prior to his retention), not Scrushy; (ii) the retention of Jones Day occurred under circumstances of extreme duress; (iii) the contract provided for the law firm's services to be rendered in Alabama and such services were in fact rendered there under an arrangement in which Jones Day leased space in Birmingham for its use and for use by legal and other professionals not affiliated with Jones Day and in which Jones Day attorneys worked out of a special "war room" set up in a carriage house on Scrushy's property in Alabama; (iv) Scrushy only set foot in the District of Columbia one time, in September, 2003, in connection with a Congressional investigation. This is simply not a situation in which the minimum requirements of the long-arm statute or the minimum due process requirements of the Constitution are met. Therefore, this case should be transferred to the United States District Court for the Northern District of Alabama. III. THE PROPER VENUE FOR ANY CLAIM AGAINST SCRUSHY IS THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ALABAMA Even assuming, arguendo, that this Court can exercise personal jurisdiction over Scrushy, venue is not proper in this district because the defendant does not reside in this district and a substantial part of the events or omissions did not take place in this district. 12 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 13 of 35 28 U.S.C. 1391. Even if this Court found that the requisite minimum contacts occurred, such minimum contacts are a far cry from supporting a finding that a "substantial part of the events or omissions" took place in this district. To the contrary, as shown above, virtually all activity in this case took place in Alabama. Under these circumstances, venue is not proper in this district and this Court must transfer this case to the United States District Court for the Northern District of Alabama. See M.R. Mikkilineni v. Commonwealth of Pennsylvania, 2003 U.S. Dist. LEXIS 13669 D.D.C.(2003) (Plaintiff's conclusory and unsubstantiated assertion that most of the omissions occurred in the district held insufficient to support a finding of substantial events or omissions in the District of Columbia); Captain Sheriff Saudi v. Northrop Grumman Corp., 273 F. Supp. 2d 101 (D.D.C. 2003) (venue improper under 28 U.S.C. 1391 (a)(2) where "(speculative) facts are too far removed to allow the Court to find that a `substantial part of the events or omissions giving rise to the claim occurred' in the District of Columbia..."); Smith v. U.S. Investigations, 2004 U.S. Dist. LEXIS 23504 (2004) (case dismissed under 28 U.S.C. 1391 (b)(2) where events giving rise to litigation occurred outside the District of Columbia). Even if the Court were to conclude that venue is permissible here, the Court should exercise its discretion under 28 U.S.C. 1404 to transfer venue for this case to the United States District Court or the Northern District of Alabama. Courts are guided by nine factors when determining venue under 28 U.S.C.S. 1404: a) convenience of witnesses; b) location of relevant documents and relative ease of access to sources of proof; c) convenience of parties; d) locus of operative facts; e) availability of process to compel attendance of unwilling witnesses; f) relative means of parties; g) forum's 13 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 14 of 35 familiarity with governing law; h) weight accorded plaintiff's choice of forum; and i) trial efficiency. Excelsior Designs, Inc. v. Sheres, 291 F. Supp. 2d. 181, 185 (E.D. NY 2003). Weighing these factors leads to the inescapable conclusion that transferring the venue of this case to the Northern District of Alabama would best serve the interests of justice. As noted above, the dispute between Jones Day and Scrushy is centered on Exhibits 1-3 of Exhibit A, all of which were prepared by Watkins. Thus, Watkins will undoubtedly be the key witness in this case. Alabama is plainly the more convenient forum for Watkins since he is an Alabama resident. More importantly, as an Alabama resident, Watkins would be beyond the power of this court to compel his attendance at trial by subpoena. While the transfer of the case to Alabama would require representatives of Jones Day to travel to Alabama, it would be less burdensome than having Watkins, a non-party, Scrushy and potentially others travel to the District of Columbia. Further, because this case involves the interpretation of the above referenced alleged contract, the law of Alabama will be used for such interpretation, not the law of the District of Columbia. The alleged contract was negotiated, executed and performed in Alabama, and, therefore, Alabama has greater governmental interests in applying its law to the interpretation of the alleged contract and the most significant relationship to the dispute.2 "Generally, in determining choice of law, the District of Columbia employs a governmental interest analysis. Under this analysis, a court first looks at each jurisdiction's policy to see what interests the policy is meant to protect, and then consider which jurisdiction's policy would be most advanced by applying the law of that jurisdiction. Part of the test of determining the jurisdiction whose policy would be most advanced is determining which jurisdiction has the most significant relationship to the dispute." Vaughan v. Nationwide Mut. Ins. Co., 702 A.2d 198, 203 (D.C. App. 1997). "The `governmental interest analysis'' and the `most significant relationship' test have sometimes been treated as separate approaches to conflict of law questions. [The District of Columbia has,] however, applied a constructive blending of the two approaches. In doing so [the District of Columbia] concurs with the observation... that `the state with the 2 14 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 15 of 35 With regard to other relevant factors, the locus of operative facts are primarily in Alabama. The location of relevant documents is not a critical factor, since this narrow contractual dispute will not be a document intensive case and documents exist both in Alabama and the District of Columbia. Trial efficiency likewise is not a determining factor since this the court in the District of Columbia and the Northern District of Alabama should both be able to handle efficiently this narrow dispute. The fact that Jones Day chose this forum deserves some deference, but the other factors outweigh such deference and support a transfer of venue to the Northern District of Alabama. CONCLUSION For the foregoing reasons, this Court lacks personal jurisdiction over Scrushy and venue is not proper in this Court. WHEREFORE, Richard M. Scrushy respectfully requests that this Court grant his Motion to transfer this case to the United States District Court for the Northern District of Alabama and requests such further relief deemed just and proper by this Court. `most significant relationship' should also be the state whose policy is advanced by application of [its] law." Hercules & Co. v. Shama Restaurant Co., 566 A.2d 31, n. 18 (D.C. App. 1989). "In applying that analysis, [the District of Columbia] also consider[s] the factors enumerated in the Restatement... to assist in identifying the jurisdiction with the `most significant relationship' to the dispute. Id.at 40 41. The Restatement provides that "[t]he rights and duties of the parties with respect to an issue in contract are determined by the local law of the state which, with respect to that issue, has the most significant relationship to the transaction and the parties stated in Section 6... In the absence of an effective choice of law by the parties..., the contacts to be taken into account applying the principles of Section 6 to determine the law applicable to an issue include: (a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place of incorporation and place of business of the parties." Restatement of the Law, Second, Conflicts of Laws, Section 188 (1971). 15 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 16 of 35 Respectfully submitted, BEAN, KINNEY & KORMAN, P.C. By: /s/ James R. Schroll James R. Schroll, Esq., D.C. Bar No. 256099 Christopher A. Glaser, Esq., D.C. Bar No. 463583 Alan Bowden, Esq., D.C. Bar No. 465700 2000 North 14th Street, Suite 100 Arlington, Virginia 22201 (703) 525-4000/(703) 525-2207 (Fax) Counsel for Defendant Richard M. Scrushy 16 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 17 of 35 CERTIFICATE OF SERVICE I hereby certify that on May 8, 2006, a copy of the foregoing and annexed pleading was served by electronic case filing to: Mark W. Foster, Esq. Thomas B. Mason, Esq. Lisa L. Barclay, Esq. Zuckerman Spaeder, LLP 1800 M Street, N.W. Suite 1000 Washington, DC 20036 /s/ James R. Schroll -17- Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 18 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 19 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 20 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 21 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 22 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 23 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 24 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 25 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 26 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 27 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 28 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 29 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 30 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 31 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 32 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 33 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 34 of 35 Case 1:06-cv-00466-JR Document 3 Filed 05/08/2006 Page 35 of 35

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