Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_12-cv-00438/USCOURTS-azd-2_12-cv-00438-0/pdf.json

Nature of Suit Code: 140
Nature of Suit: Negotiable Instruments
Cause of Action: 28:1441 Petition for Removal- Breach of Contract

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Concord Servicing Corporation, 

Plaintiff, 

vs.

JPMorgan Chase Bank, N.A.; Whitney

National Bank; Standard Chartered Bank,

Defendants. 

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No. CV 12-0438-PHX-JAT

ORDER

Pending before the Court is Defendant Whitney National Bank’s (“Whitney”) Motion

to Dismiss. (Doc. 28). The Court now rules on the Motion.

I. BACKGROUND

Plaintiff is an Arizona corporation. (Doc. 1-1 at 2). Whitney is a regional banking

institution based in Louisiana. (Doc. 24 at 2). Plaintiff alleges that between 2009 and 2011,

Victor Aguilar fraudulently indorsed 221 checks (“Checks”) that had been intended for the

customers of Plaintiff’s clients. (Doc. 1-1 at 3-6). Plaintiff further alleges that Whitney

accepted some portion of the Checks for processing. Id. at 6. Plaintiff argues that accepting

the Checks for processing, and presenting them to Defendant JPMorgan Chase Bank for

payment, was negligent. Id. at 9.

Whitney now moves to dismiss Plaintiff’s claim against it, arguing that this Court

lacks personal jurisdiction over Whitney. (Doc. 28 at 1-2).

Case 2:12-cv-00438-JAT Document 38 Filed 07/16/12 Page 1 of 7
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1

 A defendant may also choose to waive his due process rights and consent to personal

jurisdiction. See Burger King, 471 U.S. at 472 n.14.

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II. LEGAL STANDARD

A. BURDEN OF PROOF

When a defendant moves prior to trial to dismiss a complaint for lack of personal

jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the district court

determines the method of resolving the jurisdictional issue. Data Disc, Inc. v. Sys. Tech.

Assocs., 557 F.2d 1280, 1285 (9th Cir. 1977). If the parties have submitted only written

materials, the plaintiff “must make only a prima facie showing of jurisdictional facts through

the submitted materials in order to avoid a defendant’s motion to dismiss.” Id.

B. PERSONAL JURISDICTION

In the absence of a federal statute governing the existence of personal jurisdiction, a

federal court applies the personal jurisdiction law of the state in which the court sits.

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004); Terracom v.

Valley Nat’l Bank, 49 F.3d 555, 559 (9th Cir. 1995). Arizona’s long-arm statute provides that

an Arizona court may exercise personal jurisdiction over a nonresident defendant to the

maximum extent permitted under the Due Process Clause of the United States Constitution.

Ariz. R. Civ. P. 4.2(a); Uberti v. Leonardo, 892 P.2d 1354, 1358 (Ariz. 1995).

The Due Process Clause requires that a nonresident defendant have certain minimum

contacts with the forum state such that the exercise of personal jurisdiction “does not offend

traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326

U.S. 310, 316 (1945) (internal quotation omitted). Due process protects a defendant’s “liberty

interest in not being subject to the binding judgments of a forum with which he has

established no meaningful contacts, ties, or relations.” Omeluk v. Langsten Slip &

Batbyggeri, 52 F.3d 267, 270-71 (9th Cir. 1995) (quoting Burger King Corp. v. Rudzewicz,

471 U.S. 462, 471-72 (1985)).1

Personal jurisdiction may be either general or specific. See Helicopteros Nacionales

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de Columbia v. Hall, 466 U.S. 408, 414-15 nn.8-9 (1984) (citations omitted). General

jurisdiction exists when a defendant has “continuous and systematic” contacts with the forum

state. Id. at 415 (quoting Perkins v. Benquet Consol. Mining Co., 342 U.S. 437, 445 (1952));

see also Data Disc, 577 F.2d at 1287. A state may exercise specific jurisdiction over a

defendant lacking continuous and systematic contacts if the controversy is related to or arises

out of the defendant’s contacts with a forum state. See Helicopteros Nacionales, 466 U.S. at

414 (internal quotation omitted). In evaluating whether an exercise of specific jurisdiction

is proper, courts focus on the “relationship among the defendant, the forum, and the

litigation.” Id. (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). The inquiry evaluates

the “nature and quality of the defendant’s contacts in relation to the cause of action.” Data

Disc, 577 F.2d at 1287.

The Ninth Circuit applies a three-prong test to determine whether a defendant’s

contacts with the forum state are sufficient enough that an exercise of personal jurisdiction

comports with due process. See Schwarzenegger, 374 F.3d at 802.

(1) The non-resident defendant must purposefully direct his activities or

consummate some transaction with the forum or resident thereof; or perform

some act by which he purposefully avails himself of the privilege of

conducting activities in the forum, thereby invoking the benefits and

protections of its laws; (2) the claim must be one which arises out of or relates

to the defendant’s forum-related activities; and (3) the exercise of jurisdiction

must comport with fair play and substantial justice, i.e. it must be reasonable.

Id. (citing Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987)); see also Bancroft & Masters,

Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1086 (9th Cir. 2000). The plaintiff bears the burden

of satisfying the first two prongs of this test, Schwarzenegger, 374 F.3d at 802, and is

“obligated to come forward with facts, by affidavit or otherwise, supporting personal

jurisdiction.” Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986) (quoting Amba Mktg. Sys.,

Inc. v. Jobar Int’l, Inc., 551 F.2d 784, 787 (9th Cir. 1977)). Once the plaintiff has made this

showing, “the burden then shifts to the defendant to ‘present a compelling case’ that the

exercise of jurisdiction would not be reasonable.” Schwarzenegger, 374 F.3d at 802 (citing

Burger King, 471 U.S. at 476-78).

The first prong of the three-part specific jurisdiction test requires the plaintiff to

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establish either that the defendant purposefully availed himself of the privilege of conducting

activities within the forum state or that he purposefully directed his activities toward the

forum state. Id. Availment and direction are distinct concepts, with availment being the

standard for suits based in contract and direction the standard for suits based in tort. Id. Here,

Plaintiff’s claim against Whitney is for negligence, so the Court will apply the purposeful

direction standard.

The second prong of the Ninth Circuit’s test for specific jurisdiction, whether the

claim arises out of or relates to the defendant’s forum-related activities, is a “but for” test.

Doe v. Unocal Corp., 248 F.3d 915, 924 (9th Cir. 2001); see also Ballard v. Savage, 65 F.3d

1495, 1500 (9th Cir. 1995). The claim arises out of the defendant’s forum-related activities

if, but for the contacts between the defendant and the forum state, the cause of action would

not have arisen. Id. at 924.

Once a plaintiff has shown that the first two prongs of the test are satisfied, a court

presumes that the exercise of personal jurisdiction is reasonable. Ballard, 65 F.3d at 1500

(citing Sher v. Johnson, 911 F.2d 1357, 1364 (9th Cir. 1990)). The burden then shifts to the

defendant to show a compelling case that the exercise of jurisdiction would be unreasonable.

Id.; Schwarzenegger, 374 F.3d at 802 (citing Burger King, 471 U.S. at 476-78).

III. DISCUSSION

A. SPECIFIC JURISDICTION

Plaintiff asserts that Whitney’s actions in processing the Checks give this Court

specific jurisdiction over Whitney. Applying the first part of the Ninth Circuit test for

specific jurisdiction, Plaintiff does not meet its burden of demonstrating that Whitney

purposely directed its actions toward Arizona. The three-part Calder effects test, taken from

the Supreme Court’s decision in Calder v. Jones, 465 U.S. 783 (1984), is used to evaluate

purposeful direction. Under this test, “the defendant allegedly must have (1) committed an

intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant

knows is likely to be suffered in the forum state.” Yahoo! Inc. v. La Ligue Contre Le

Racisme Et L’Antisemitisme, 433 F.3d 1199, 1206 (9th Cir. 2006).

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To satisfy the first requirement of the effects test, it is enough that a defendant

performed “an actual, physical act in the real world.” Schwarzenegger, 374 F.3d at 806. The

defendant need not have intended “to accomplish a result or consequence of that act.” Id.

Here, Whitney’s acceptance and presentment of the Checks to Defendant Chase constitutes

an intentional act. Thus, the first prong of the Calder test is satisfied.

“The second part of the Calder-effects test requires that the defendant’s conduct be

expressly aimed at the forum.” Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d

1124, 1129 (9th Cir. 2010). As a general principle, express aiming requires more than

“‘untargeted negligence’ that merely happened to cause harm to [a plaintiff].”

Schwarzenegger, 374 F.3d at 807 (quoting Calder, 465 U.S. at 789). The “requirement is

satisfied ‘when the defendant is alleged to have engaged in wrongful conduct targeted at a

plaintiff whom the defendant knows to be a resident of the forum state.’” Menken v. Emm,

503 F.3d 1050, 1059 (9th Cir. 2007) (quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104,

1111 (9th Cir. 2002)); see also Bancroft, 223 F.3d at 1087 (concluding that “‘express aiming’

encompasses wrongful conduct individually targeting a known forum resident”).

Here, Plaintiff fails to show that Whitney’s alleged wrongdoing was expressly aimed

at Plaintiff. Whitney’s alleged negligence arose in the normal course of banking. (Doc. 28

at 4). Plaintiff does not allege that Whitney’s allegedly wrongful conduct individually

targeted Plaintiff or that Whitney was even aware that Plaintiff was an Arizona resident when

it processed the Checks. Moreover, Courts generally have rejected the idea that a nonresident

bank’s processing of a check connected to the forum state gives rise to specific jurisdiction.

See Resolution Trust Corp. v. First of Am. Bank, 796 F. Supp. 1333, 1337 n.3 (C.D. Cal.

1992) (collecting cases). Plaintiff thus has failed to make a prima facie showing of purposeful

direction, the first prong of the three-part test for specific personal jurisdiction. This Court

therefore need not proceed to the remaining two prongs. Plaintiff has not shown that

Defendants have sufficient minimum contacts with Arizona such that this Court’s exercise

of specific personal jurisdiction would comport with Defendants’ due process rights.

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B. GENERAL JURISDICTION

Plaintiff also asserts that this Court may have general jurisdiction over Whitney.

Plaintiff argues that it be allowed to conduct jurisdictional discovery in order to show that

Whitney has continuous and systematic contacts with Arizona in the form of depositors or

borrowers. The Third Circuit Court of Appeals, as Plaintiff argues, has confirmed general

jurisdiction over an out-of-state bank based partly on the presence of depositors and

outstanding loans within the forum state. See Provident Nat’l Bank v. California Fed. Sav.

& Loan, 819 F.2d 434 (3d Cir. 1987) (cited in Ballard, 65 F.3d at 1499). There, however, the

out-of-state bank maintained a zero balance account with a bank within the forum. Id. at 438.

That account involved daily communication and transactions between the banks, and was “a

continuous and central part of [the out-of-state bank’s] business.” Id.

Here, Whitney has affirmed that it had no such relationship with an Arizona bank, nor

any offices or direct operations in Arizona. (Doc. 28-2). Plaintiff merely alleges that a portion

of Whitney’s activities is traceable to Arizona. Perhaps general jurisdiction would exist if

that portion were sufficiently large. See Lakin v. Prudential Sec., 348 F.3d 704 (8th Cir.

2003) (Jurisdictional discovery allowed where a ten million dollar loan portfolio in the state

implied multi-year lending relationships with “hundreds, if not thousands of [forum]

residents”). But there is no evidence of any business between Whitney and Arizona. Plaintiff

essentially requests the Court allow it to conduct a fishing expedition in the hope of

discovering some fact upon which general jurisdiction might be based. Without some

foundation for this request, the Court will not grant it. See Terracom, 49 F.3d at 562 (“Where

a plaintiff’s claim of personal jurisdiction appears to be both attenuated and based on bare

allegations in the face of specific denials made by defendants, the Court need not permit even

limited discovery.”) (quoting Rich v. KIS Cal., Inc., 121 F.R.D. 254, 259 (M.D.N.C. 1988)).

IV. CONCLUSION

The Court thus finds that it has neither specific nor general personal jurisdiction over

Whitney. The Court also finds that Plaintiff has failed to articulate a sufficient basis for

allowing jurisdictional discovery.

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Accordingly,

IT IS ORDERED granting Whitney’s Motion to Dismiss. (Doc. 28).

DATED this 16th day of July, 2012.

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