Griffiths v. Aviva London Assignment Corporation et al
Filing
44
Judge Nathaniel M. Gorton: ENDORSED MEMORANDUM & ORDER entered denying 29 Motion to Dismiss for Lack of Jurisdiction (Caruso, Stephanie)
United States District Court
District of Massachusetts
JOHN GRIFFITHS,
Plaintiff,
v.
AVIVA LONDON ASSIGNMENT
CORPORATION, AVIVA LIFE
INSURANCE COMPANY,CGU
INTERNATIONAL INSURANCE, PLC,
ATHENE HOLDING, LTD, ATHENE
LONDON ASSIGNMENT CORPORATION
AND ATHENE ANNUITY AND LIFE
COMPANY,
Defendants.
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Civil Action No.
15-13022-NMG
MEMORANDUM & ORDER
GORTON, J.
I.
Introduction
Griffiths is a representative of a putative class of
annuity holders.
He brings claims against Aviva International
Insurance Limited (formerly known as CGU International
Insurance, hereinafter “CGU”), as well as several other
defendants, for breach of contract, breach of fiduciary duty,
promissory estoppel and unjust enrichment.
At issue now is
defendant’s motion to dismiss all claims against CGU for want of
personal jurisdiction.
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II.
Background
A. Factual Background
In 2001, Griffiths resolved a personal injury suit against
the City of Honolulu.
Instead of receiving a lump sum
settlement, he opted to purchase a structured settlement annuity
to ensure a steady income for the rest of his life.
Griffiths bought the annuity from Aviva Life Insurance
Company and Aviva London Assignment Corporation (collectively
“Aviva”).
Part of the appeal of the annuity was that Aviva had
entered into a capital maintenance agreement (“CMA”) with
defendant, CGU, by which CGU guaranteed all annuities sold by
Aviva.
Plaintiff alleges that the guarantee added value,
stability and confidence to the annuity.
According to
plaintiff, the guarantee was represented as being “absolute,
unconditional, present and continuing.”
In October, 2013, Aviva divested its ownership of
Griffiths’ annuity and the obligation was transferred to a
company known as Athene London Assignment Corporation.
As a
result of that transfer, the CMA between Aviva and CGU was
terminated and the annuity was no longer guaranteed by CGU.
CGU is a London-based corporation and is a wholly-owned
subsidiary of Aviva PLC, a holding company organized under the
laws of England and Wales.
CGU has no offices or employees in
Massachusetts, pays no Massachusetts taxes and maintains no bank
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accounts in Massachusetts.
CGU had no involvement in the
marketing, selling, paying or setting of rates of the annuities
at issue and its involvement in this case and in Massachusetts
is confined to its role as guarantor of structured settlement
annuities sold by Aviva.
B. Procedural Background
In July, 2015, Griffiths filed a complaint against CGU and
five other defendants.
With respect to all defendants,
plaintiff alleges breach of contract, breach of a fiduciary
duty, promissory estoppel and unjust enrichment.
Each claim
stems from the termination of the CMA between Aviva and CGU.
CGU seeks to dismiss all claims against it for lack of personal
jurisdiction.
III. Analysis
A. Personal Jurisdiction
In order for a Court’s orders to bind a party, the Court
must exercise personal jurisdiction over that party.
On a
motion to dismiss for want of personal jurisdiction, plaintiff
bears the burden of showing that such jurisdiction exists.
Massachusetts Sch. of Law v. ABA, 142 F.3d 26, 34 (1st Cir.
1998); see Fed. R. Civ. P. 12(b)(2).
In conducting this
inquiry, the Court accepts the facts put forth by plaintiff and
those facts are construed in the light most favorable to
plaintiff’s jurisdictional claim. Massachusetts Sch. of Law, 142
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F.3d at 34.
Additionally, the Court considers as true the facts
put forth by defendant to the extent that they are not
contradicted. Id.
Plaintiff must make two showings: that jurisdiction is
statutorily authorized, and that the exercise of jurisdiction is
consistent with the Due Process Clause of the United States
Constitution. Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591
F.3d 1, 8 (1st Cir. 2009).
Because the Court has jurisdiction
over this case based on a diversity of citizenship, 28 U.S.C. §
1332, the Court “is the functional equivalent of a state court
sitting in the forum state.” Ticketmaster-New York v. Alioto, 26
F.3d 201, 204 (1st Cir. 1994).
In other words, in diversity
cases “the district court’s personal jurisdiction over a
nonresident defendant is governed by the forum’s long-arm
statute.” Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.
1995) (quoting Goldman, Antonetti, Ferraiuoli, Axtmayer &
Hertell v. Medfit Int’l, Inc., 982 F.2d 686, 690 (1st Cir.
1993)).
Defendant has not argued that its actions fall outside
the reach of the Massachusetts long-arm statute, M.G.L. c. 223A,
and thus, the Court will proceed directly to the constitutional
analysis.
Plaintiffs are provided two alternative methods of
demonstrating how the Court may constitutionally exercise
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personal jurisdiction over CGU.
personal jurisdiction.
The first is through general
General personal jurisdiction
exists when the litigation is not directly founded on
the defendant's forum-based contacts, but the defendant
has nevertheless engaged in continuous and systematic
activity, unrelated to the suit, in the forum state.
United Elec., Radio & Mach. Workers v. 163 Pleasant St. Corp.,
960 F.2d 1080, 1088 (1st Cir. 1992).
The second method relies on specific personal
jurisdiction.
Specific personal jurisdiction “exists when there
is a demonstrable nexus between a plaintiff’s claims and a
defendant’s forum-based activities.”
Massachusetts Sch. of Law,
142 F.3d at 34.
1. General Personal Jurisdiction
The Court’s analysis of general personal jurisdiction need
only be brief.
Personal jurisdiction over an entity that is
neither incorporated, nor has a principle place of business, in
the forum state exists only in exceptional cases. Daimler AG v.
Bauman, 134 S. Ct. 746, 761 n. 19 (2014).
Specifically, general
personal jurisdiction exists when a corporation’s operations are
“so substantial and of such a nature as to render the
corporation at home in that State.” Id.
Plaintiff has not put
forth such a theory, and therefore the Court will not find such
an exception here.
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2. Specific Personal Jurisdiction
Griffiths’ assertion that the Court may exercise specific
personal jurisdiction over CGU requires more analysis.
The Due
Process Clause of the Fourteenth Amendment requires that a
defendant have “minimum contacts” with the forum state such that
the “maintenance of the suit does not offend traditional notions
of fair play and substantial justice.” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945).
That analysis requires a
tripartite inquiry:
1) Whether the plaintiffs’ claim arises out of, or
relates to, defendants’ in-forum activities;
2) Whether defendant’s contacts with the forum state
represent a purposeful availment by defendants of
the privilege of conducting business in that State;
and
3) Whether the exercise of jurisdiction is reasonable
under the circumstances.
Sawtelle, 70 F.3d at 1389, 1391.
a. Relatedness
The first prong questions whether “the claim underlying the
litigation . . . directly arise[s] out of, or relate[s] to, the
defendant's forum-state activities.”
Astro-Med, Inc., 591 F.3d
at 9 (internal quotation marks omitted).
An exercise of
personal jurisdiction over defendant will not be proper if
defendant’s “forum-state contacts seem[] attenuated and
indirect.” Harlow v. Children’s Hosp., 432 F.3d 50, 61 (1st Cir.
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2005).
This is a “flexible, relaxed standard,” but nevertheless
serves the important function of focusing on “the nexus between
a plaintiff’s claim and the defendant’s contacts with the
forum.” Sawtelle, 70 F.3d at 1389.
Plaintiff has alleged only one interaction between
defendant and the forum state: the CMA.
The CMA’s connection to
Massachusetts, however, is neither “attenuated” nor “indirect.”
Harlow, 432 F.3d at 61.
In the CMA, CGU agreed to guarantee all
of Aviva’s annuities, which were sold from, and in,
Massachusetts.
The CMA, and specifically its termination, is at
the heart of plaintiff’s claim.
The CMA is the “very document
that represents [defendant’s] forum-related activity” and is,
therefore, undoubtedly related.
Pritzker v. Yari, 42 F.3d 53,
61 (1st Cir. 1994).
This single, meaningful contact with Massachusetts is
sufficient to meet the diminutive burden of showing relatedness.
b. Purposeful Availment
The second prong of the tripartite inquiry questions
whether defendant’s contacts with the forum state represent a
“purposeful availment by defendants of the privilege of
conducting business in that State.” Sawtelle, 70 F.3d at 1389.
The focus here is on voluntariness and foreseeability, as it
would be unfair to subject a party to the Court’s jurisdiction
if it were solely based upon a defendant’s “random, isolated, or
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fortuitous” contacts with the forum state. Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774 (1984); Astro-Med, Inc., 591
F.3d at 10.
Entering into a single contract with a Massachusetts
resident “is not necessarily sufficient to meet the
constitutional minimum for jurisdiction.” Bond Leather Co. v.
Q.T. Shoe Mfg. Co., 764 F.2d 928, 933 (1st Cir. 1985).
The
Court does not engage in a “numbers game” and instead focuses on
“the nature of the contact.” Pritzker, 42 F.3d at 61.
The question is whether CGU’s contact with the Commonwealth
constitutes a purposeful decision to participate in the local
economy and avail itself of those benefits. Id.
The First
Circuit Court of Appeals has rejected the argument that solely
by guaranteeing payment, and thereby inducing a party to sell a
certain product, did a non-resident guarantor make “a purposeful
decision which is independently sufficient to support
jurisdiction.” Id. at 934 (emphasis in original).
There is, however, an important distinction between CGU’s
contacts with Massachusetts and the contacts alleged in Bond
Leather Co.
CGU does not guarantee just one debt but instead
guarantees all of the annuities sold by Aviva in Massachusetts.
Those guarantees form a “nexus between a plaintiff’s claims and
a defendant’s forum-based activities.”
Law, 142 F.3d at 34.
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Massachusetts Sch. of
Further, CGU’s guarantee created a right that was
enforceable.
That enforceable right, packaged with an annuity,
was sold throughout the United States and Massachusetts by a
Massachusetts company.
The annuities were sold based on the
quality and consistency of CGU’s guarantee, and that guarantee
doubtlessly added to the annuity’s value.
This relationship to
Massachusetts is not “random, isolated, or fortuitous.” Keeton,
465 U.S. at 774.
To the contrary, it is enough to show that CGU
has availed itself of doing business in Massachusetts and has
done so purposefully.
c. Reasonableness
The final prong is to assay the reasonableness of imposing
jurisdiction on a party.
The Supreme Court has provided a
number of “Gestalt factors” to be considered.
Those factors
include 1) defendant's burden of appearing, 2) the forum state's
interest in adjudicating the dispute, 3) plaintiff's interest in
obtaining convenient and effective relief, 4) the judicial
system's interest in obtaining the most effective resolution of
the controversy and 5) the common interests of all sovereigns in
promoting substantive social policies. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 477 (1985).
This prong is not
considered in isolation but instead operates on a sliding scale,
such that in very close cases, it “may tip the constitutional
balance.” Pritzker, 42 F.3d at 64.
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Turning to the first factor, CGU argues that because it is
a London corporation with no ties to Massachusetts, subjecting
it to the Court’s jurisdiction would be an onerous burden.
It
is safe to assume, however, that appearing in a foreign
jurisdiction will always be burdensome and costly.
Instead, the
first Gestalt factor weighs in favor of dismissal only when “a
party can demonstrate some kind of special or unusual burden.”
Pritzker, 42 F.3d at 64.
It cannot be said that business travel
between London and Boston comprises such a special or unusual
burden in the modern age. See id. (finding no special or unusual
burden in traveling between New York and Puerto Rico).
Furthermore, the case will go forward regardless of CGU’s
involvement as a party.
CGU will be called upon to produce
documents either way, reducing the incremental burden of its
participation as a defendant in this jurisdiction.
Accordingly,
this factor weighs in favor of plaintiff who chose this forum.
The second Gestalt factor considers the Commonwealth’s
interest in the dispute.
Massachusetts certainly has an
interest in deciding suits involving its corporations but its
interest in resolving a suit between a citizen of Hawaii and a
London corporation is markedly less compelling.
Next, the Court turns to plaintiff’s interest in obtaining
convenient relief.
As the First Circuit Court of Appeals has
stated with monotonous consistency, a plaintiff’s choice of
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forum must be accorded a level of deference with respect to its
own convenience. Ticketmaster, 26 F.3d at 211.
Further, if CGU
were to be dismissed, the case would still proceed in
Massachusetts.
Accordingly, to obtain full relief from all
parties involved, plaintiff would be compelled to bring an
additional action in London.
This factor weighs in favor of the
plaintiff.
The penultimate Gestalt factor takes into account the
judicial system’s interest in an effective resolution.
As is
common in these kinds of cases the "interest of the judicial
system in the effective administration of justice does not
appear to cut in either direction." Id.
Finally, the Court must consider any pertinent policy
arguments.
Generally, the policy of most concern “is the
ability of a state to provide a convenient forum for its
residents to redress injuries inflicted by out-of-forum actors.”
Sawtelle, 70 F.3d at 1395.
Because plaintiff is a resident of
Hawaii and defendant is a United Kingdom corporation, such a
policy is not implicated here.
The reasonableness inquiry operates in such a way that it
may tip the constitutional balance.
Here, the Gestalt factors,
outlined above, do not point so clearly in one direction or the
other as to merit placing the thumb on that scale for either
party.
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3. Conclusion
Plaintiff has met the burden of showing that defendant has
“minimum contacts” with Massachusetts such that the “maintenance
of the suit does not offend traditional notions of fair play and
substantial justice.” Int’l Shoe Co., 326 U.S. at 316.
ORDER
For the forgoing reasons, defendant’s motion to dismiss for
lack of personal jurisdiction (Docket No. 29) is DENIED.
So ordered.
/s/ Nathaniel M. Gorton_____
Nathaniel M. Gorton
United States District Judge
Dated May 20, 2016
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