Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-07-07037/USCOURTS-caDC-07-07037-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 8, 2007 Decided June 20, 2008

No. 07-7037

FC INVESTMENT GROUP LC AND

LAWRENCE JAY EISENBERG,

APPELLANTS

v.

IFX MARKETS, LTD.,

APPELLEE

Appeal from the United States District Court

for the District of Columbia

(No. 04cv01939)

Alan B. Sternstein argued the cause for the appellant.

Courtney R. Sydnor and Gregory D. Grant entered appearances.

Kevin J. Clancy argued the cause for the appellee. Joan M.

Kubalanza was on brief. Kenneth S. Nankin entered an

appearance.

Before: HENDERSON and TATEL, Circuit Judges, and

WILLIAMS, Senior Circuit Judge.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: FC

Investment Group LC (FCIG) and Lawrence Jay Eisenberg

(Eisenberg) sued IFX Markets, Ltd. (IFX), a London-based

USCA Case #07-7037 Document #1122669 Filed: 06/20/2008 Page 1 of 23
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1

Although Titan is not a defendant in this lawsuit, FCIG has

obtained a $6.5 million judgment against Titan and its owner, Milan

Martinic, in separate litigation. See FC Inv. Group LC v. Titan Global

Strategies, LTD, No. 2004cv0312 (Wis. Cir. Ct. July 20, 2004).

2

The precise amount the plaintiffs allege they lost due to Titan’s

and IFX’s fraud is unclear. Compare Am. Comp. ¶ 6 (alleging $ 9.5

million in losses) with Am. Comp. ¶¶ 9, 12 (alleging total investment

of approximately $1 million by Eisenberg and $5 million by FCIG).

currency broker, alleging that IFX conspired with Titan Global

Strategies, Ltd. (Titan), a now-defunct investment company, to

defraud them of millions of dollars through a currency

investment scheme.1 The district court denied their motion for

jurisdictional discovery and ultimately dismissed their fourcount complaintforlack of personal jurisdiction. FC Inv. Group

LC v. IFX Markets, Ltd., 479 F. Supp. 2d 30, 44 (D.D.C. 2007).

For the reasons set forth below, we affirm the district court.

I.

FCIG, a Maryland limited liability company owned and

managed by Eisenberg and with its principal place of business

in the District ofColumbia (District), and Eisenberg, a Maryland

resident, allege that they lost several million dollars2 in a

fraudulent investment scheme brokered by IFX and run by

Titan. Am. Compl. ¶¶ 1–2, 6. The plaintiffs’ involvement with

IFX and Titan began in September 1998 when “Titan and its

officials,” via unspecified means, “contacted Eisenberg at his

offices in the District of Columbia about making an investment

in a foreign currency trading account to be managed by Titan.”

Id. ¶ 7. Titan informed Eisenberg that its currency trades were

made by IG Group, PLC (IG), a currency trader. Id. Eisenberg

was also told that his investment was “completely liquid” and

could be withdrawn at any time with notice to Titan. Id. ¶ 8.

Eisenberg subsequently received by mail an informational

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3

brochure describing Titan’srelationship with IG. Id. Eisenberg

made an initial investment of $10,000. Id. Between October

1998 and October 2003, Eisenberg continued to invest with

Titan, eventually investing approximately $1 million. Id. ¶ 9.

Eisenberg’s wife invested an additional $400,000. Id. In April

2001, Eisenberg formed FCIG to “introduc[e] certain friends

and family-member investors to Titan.” Id. ¶ 1. By October

2003, FCIG had invested approximately $5 million with Titan.

Id. ¶ 12. Through at least 2003, Titan continued to send

“accountstatements” to both Eisenberg and FCIG in the District

indicating “large earnings on FCIG’s investments.” Id. ¶ 13.

Also in early 2001, Charles Knott, a Titan employee,

became Titan’s “investment advisor and point-of-contact” for

FCIG. Id. ¶ 14. Knott met with Eisenberg “several times” in the

District between 2001 and 2002 to update Eisenberg on Titan’s

operations. Id. Sometime in 2002 Knott advised the plaintiffs

that IFX was replacing IG as Titan’s currency broker. Id. ¶ 15.

The plaintiffs allege that IFX knew, when it replaced IG, that “it

was entering into [a] fraudulent foreign currency exchange

scheme.” Id. Thereafter,Christopher Cruden of IFX’s Managed

Investment Products Department telephoned Eisenberg regularly

to provide updates on IFX’s activities and to invite Eisenberg to

visit IFX’s London office. Id. ¶ 15. Eisenberg visited the

London office in November 2002. See id. ¶ 18. During his trip,

Eisenberg met with Knott (as noted, a Titan employee) as well

as with Cruden and other IFX officers. Id. ¶ 21. While there,

Eisenberg was shown an “elaborate” PowerPoint presentation,

created jointly by IFX and Titan employees, which described

Titan’s and IFX’s business relationship. Id. ¶¶ 19–21.

Following Eisenberg’s London trip, FCIG and “investors

associated with FCIG” invested an additional $2 million with

Titan. Id. ¶ 23.

In late 2003, Eisenberg asked Titan to close his account and

refund the balance of his investment but Titan rebuffed him. Id.

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3

The $6.5 million judgment FCIG obtained from Titan and

Martinic, see supra note 1, remains unsatisfied. See Appellants’ Br.

13.

¶ 25. When FCIG demanded return of its funds, Larry

Lichtenstein and Milan Martinic, two members of Titan’s board

of directors, assured FCIG that “Titan had deposited $4.3

million in an account at US Bank” and that those funds were

available to repay FCIG. Id. ¶ 26. On January 4, 2004,

Lichtenstein sent Eisenberg a copy of a $4.3 million depositslip

falsely showing that Titan had deposited the funds in the bank.

Id. Neither Eisenberg’s nor FCIG’s investments have been

returned.3 Id. ¶ 25.

In November 2004, Eisenberg and FCIG filed suit against

IFX in district court. Their amended complaint contained four

counts: (1) fraud/fraud in the inducement, see id. ¶¶ 33–37; (2)

civil conspiracy, see id. ¶¶ 38–41; (3) civil aiding and abetting,

see id. ¶¶ 42–46; and (4) conspiracy to violate the Racketeer

Influenced and Corrupt Organizations Act (RICO), 18 U.S.C.

§§ 1961 et seq., see id. ¶¶ 47–59.

In February 2005, IFX moved to dismiss the suit for lack of

personal jurisdiction. See Appellee’s Mot. to Dismiss 2 (Feb. 7,

2005). In response, Eisenberg and FCIG asserted four bases for

personal jurisdiction: (1) the district court had general personal

jurisdiction over IFX based on its maintenance of an interactive

website accessible—and used—in the District, Appellants’

Mem. in Opp’n to Mot. to Dismiss 7–10 (Aug. 8, 2006); (2) the

court had specific personal jurisdiction over IFX based on

Cruden’s “regular” telephone calls to Eisenberg at Eisenberg’s

District office, id. at 10–11; (3) the court had personal

jurisdiction over IFX based on the actions of IFX’s coconspirator, Titan, in the District, id. at 11–14; and (4) the court

had personal jurisdiction over IFX pursuant to RICO’s nationwide service of process provisions. Id. at 16. In February 2006,

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4

They concede that “IFX apparently has no offices” in the District.

Appellants’ Mem. in Opp’n 7; see also Decl. of Steven R. Reeves ¶ 5

(IFX “does not maintain any offices, agents or employees in the

District of Columbia.”).

the district court rejected all four bases and dismissed their

amended complaint. FC Inv. Group, 479 F. Supp. 2d at 44. It

also denied the plaintiffs’ request for jurisdictional discovery.

Order Denying Mot. 1 (July 7, 2005). Eisenberg and FCIG filed

a timely appeal.

II.

We review de novo the district court’s dismissal of the

amended complaint for lack of personal jurisdiction. See

Gorman v. Ameritrade Holding Corp., 293 F.3d 506, 509 (D.C.

Cir. 2002) (citing Second Amendment Found. v. United States

Conference of Mayors, 274 F.3d 521, 523 (D.C. Cir. 2001)).

We review its denial of jurisdictional discovery for abuse of

discretion. See Tax Analysts v. IRS, 410 F.3d 715, 720 (D.C.

Cir. 2005) (citing Stewart v. Evans, 351 F.3d 1239, 1245 (D.C.

Cir. 2003)). The plaintiffs have the burden of establishing the

court’s personal jurisdiction over IFX. See Reuber v. United

States, 787 F.2d 599, 599 (D.C. Cir. 1986).

A. General Jurisdiction

1. District’s Long-Arm Statute

Eisenberg and FCIG claim that the district court has

“general” personal jurisdiction over IFX because IFX maintains

a website that allows District residents “to engage in frequent

and large value currency, precious metal and other transactions.”

Appellants’ Br. 14.4 D.C. Code § 13-334(a) “permits courts to

exercise ‘general jurisdiction’ over a foreign corporation as to

claims not arising from the corporation’s conduct in the

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5

Section 13-334(a) provides:

In an action against a foreign corporation doing business in

the District, process may be served on the agent of the

corporation or person conducting its business, or, when he is

absent and can not be found, by leaving a copy at the

principal place of businessin the District, or where there is no

such place of business, by leaving a copy at the place of

business or residence of the agent in the District, and that

service is effectual to bring the corporation before the court.

D.C. Code § 13-334(a). Although section 13-334(a) expressly

addresses service of process, the D.C. Court of Appeals has held that

section 13-334(a) also grants general personal jurisdiction over “a

foreign corporation which carries on a consistent pattern of regular

business activity” within the District. AMAF Int’l Corp. v. Ralston

Purina Co., 428 A.2d 849, 850 (D.C. 1981); see also Gorman, 293

F.3d at 510 n.1; El-Fadl v. Cent. Bank of Jordan, 75 F.3d 668, 673 n.7

(D.C. Cir. 1996).

District[] if the corporation is ‘doing business’ in the District.”5

Gorman, 293 F.3d at 509 (quoting D.C.Code § 13-334(a); citing

AMAF Int’l Corp. v. Ralston Purina Co., 428 A.2d 849, 850

(D.C. 1981)). “Under the Due Process Clause, such general

jurisdiction over a foreign corporation is only permissible if the

defendant’s business contacts with the forum are ‘continuous

and systematic.’” Id. at 510 (quoting Helicopteros Nacionales

de Columbia, S.A. v. Hall, 466 U.S. 408, 415 (1984)). The D.C.

Court of Appeals “has indicated that the reach of ‘doing

business’jurisdiction under § 13-334(a)is co-extensive with the

reach of constitutional due process.” Id. (citing Hughes v. A.H.

Robins Co., Inc., 490 A.2d 1140, 1148 (D.C. 1985)).

Under certain circumstances, a foreign corporation’s

maintenance of a website that is accessible in the District can

satisfy general jurisdiction requirements. See, e.g., id. at 513.

But “[t]he mere accessibility of [a] defendant[’s] website[] . . .

does not establish the necessaryminimumcontacts” required for

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6

Regarding the first requirement—an interactive website—the

district court held that IFX’s website was not sufficiently “active” to

support its general jurisdiction over IFX. See FC Inv. Group, 479 F.

Supp. 2d at 37. It contrasted IFX’s website with the website in

Gorman, 293 F.3d at 512. There we held that a website maintained by

Ameritrade, a Nebraska-based securities broker, was sufficiently

“interactive” to support general jurisdiction in the District because the

website allowed District residents to “[1] open Ameritrade brokerage

accounts online; [2] transmit funds to their accounts electronically; . . .

[3] use those accounts to buy and sell securities, borrow from

Ameritrade on margin, and [] pay Ameritrade brokerage commissions

and interest.” Id. at 512. Although both IFX’s and Ameritrade’s

websites allowed users to conduct financial transactions online, the

general jurisdiction. Id. at 512 (quotations and alterations

omitted). Two additional criteria must be met. First, the

website must be “interactive.” See id. at 511. An “‘essentially

passive’ website through which customers merely access

information” is insufficient. Id. at 512 (quoting GTE New

Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343, 1348

(D.C. Cir. 2000)). Moreover, District residents must use the

website in a “‘continuous and systematic’” way. Id. at 512

(quoting GTE, 199 F.3d at 1350);see id. at 513 (“[D]etermining

whether Ameritrade is actually ‘doing business’ in the District

requires an examination of the frequency and volume of the

firm’stransactions with Districtresidents.”);see also Atlantigas

Corp. v. Nisource, Inc., 290 F. Supp. 2d 34, 52 (D.D.C. 2003)

(“[T]he question is not whether District of Columbia residents

‘can’ transact business in the District with the non-resident

defendant through the defendant’s website, but if they actually

‘do’ engage in sustained business activities in a continuous and

systematic way.” (citing Gorman, 293 F.3d at 512–13)).

Although the district court found that IFX’s website failed

to meet both requirements, we focus only on the second

requirement.6 The district court noted that the plaintiffs alleged

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district court found one critical difference between the two: unlike

Ameritrade’s website, the IFX website did not allow for online

account registration. FC Inv. Group, 479 F. Supp. 2d at 37. To

become an IFX customer, one was required to download an

application form, sign it and return it “along with required

identification documents . . . certified by an attorney, . . . an embassy

authority, consulate or high commission of the country of issue.” Id.

(quotation omitted). Because of this deficiency, the district court

determined that the IFX website was not sufficiently active for general

jurisdiction. But a foreign defendant that is “doing business” with

“continuous and systematic contacts” in the District, via internet, mail

or some combination of the two, suffices for general jurisdiction. Cf.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 467 (1985) (“[I]t is an

inescapable fact of modern commercial life that a substantial amount

of business is transacted solely by mail and wire communications

across state lines, thus obviating the need for physical presence within

a State in which the business is conducted.” (emphasis added));

Blumenthal v. Drudge, 992 F. Supp. 44, 56 (D.D.C. 1998) (finding

general jurisdiction over foreign defendant based on combination of

website and email list). Because IFX made its mail-in registration

form readily available for download on its website, the district court’s

focus on IFX’s lack of an online registration feature may be

misplaced. See, e.g., Citigroup Inc., v. Citi Holding Co., 97 F. Supp.

2d 549, 565 (S.D.N.Y. 2000) (finding jurisdiction based on website’s

allowing potential customers to, inter alia, “print out an application

for submission by facsimile”); Obabueki v. Int’l Bus. Machs. Corp.,

99cv11262, 2001 WL 921172, at *3 (S.D.N.Y. Aug. 14, 2001)

(finding jurisdiction based on website’s allowing “prospective

customers [to] download an application form which can be faxed to

[defendant]”). We do not reach the merits of the district court’s

holding on this issue, however, because of our holding as to the

second requirement.

“only one District of Columbia resident has ever opened an

online account with [IFX], and it was open for just six months

in 2003.” FC Inv. Group, 479 F. Supp. 2d at 37 (citing Mem. in

Opp’n 8). Eisenberg and FCIG disagree. They claim it was IFX

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that asserted that there had been only one District user. See

Appellants’ Brief 18. In their Memorandum in Opposition to

Defendant’s Motion to Dismiss, Eisenberg and FCIG alleged

that IFX had “at least one” user in the District. Appellants’

Mem. in Opp’n 8 (emphasis added). The district court’s error is

nonetheless harmless. According to an IFX compliance officer,

hersearch ofIFX’srecordsfor customersresiding in the District

with “account[s] opened for use with the IFX online trading

system” revealed only one such customer. See Walsh Decl.

¶¶ 2, 3, 5. That account was open for approximately six months

during the latter half of 2003. Id. ¶ 5. The record thus supports

the court’s conclusion that IFX had only one customer resident

in the District.

This limited contact with a single District

customer—unrelated to the plaintiffs or their claims—does not

support the district court’s exercise of general jurisdiction. See

El-Fadl v. Cent. Bank of Jordan, 75 F.3d 668, 675 (D.C. Cir.

1996) (“isolated and sporadic contacts unrelated to the claims in

the instant case” insufficient to establish general jurisdiction); cf.

Pacas v. Showell Farms, Inc., No. 95-1011, 1996 WL 192058,

at *2 (4th Cir. Apr. 22, 1996) (unpublished) (“sales to a single

customer . . . does not constitute the requisite minimum contacts

necessary to satisfy ‘fair play and substantial justice’ and to

establish general jurisdiction for a suit not related to the sale of

that product”); Atlantigas, 290 F. Supp. 2d at 53 (exercising

general jurisdiction over foreign corporation with only three

District customers would “stretch the concept of general

jurisdiction beyond what either the [long-arm] statute or due

process permits”).

2. Jurisdictional Discovery

Eisenberg and FCIG argue that even if only one District

resident has opened an online account with IFX, the district

court should have allowed discovery to determine (1) “how

many transactions this one resident conducted, their dollar

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volume [and] their currency,” Appellants’ Br. 19, and (2)

whether IFX has any customers who reside in Virginia or

Maryland and access the IFX website while at work in the

District. See id.; Appellants’ Reply Br. 6. The district court

denied their discovery request. See Order Denying Mot. 1 (July

7, 2005).

It is well established that the “‘district court has broad

discretion in its resolution of discovery problems.’” See Naartex

Consulting Corp. v. Watt, 722 F.2d 779, 788 (D.C. Cir. 1983)

(quoting In re Multi-Piece Rim Prods. Liab. Litig., 653 F.2d

671, 679 (D.C. Cir. 1981)), cert. denied, 467 U.S. 1210 (1984).

In order to engage in jurisdictional discovery, the plaintiff “must

have at least a good faith belief that such discovery will enable

it to show that the court has personal jurisdiction over the

defendant.” Caribbean Broad. Sys., Ltd. v. Cable & Wireless

PLC, 148 F.3d 1080, 1090 (D.C. Cir. 1998). Such a request for

jurisdictional discovery cannot be based on mere conjecture or

speculation. See Bastin v. Fed. Nat’l Mortgage Ass’n, 104 F.3d

1392, 1396 (D.C. Cir. 1997).

With respect to the plaintiffs’ first claim—that the district

court should have allowed discovery to determine the number of

the transactions (and their dollar amount) of IFX’s single

District user—the district court did not abuse its discretion in

denying jurisdictional discovery. As discussed earlier, a

business contact with one online customer in the District is

insufficient to establish general jurisdiction over a foreign

corporation. Therefore, no amount of discovery regarding that

one customer’s transactions would support general jurisdiction

over IFX.

Regarding their second claim—that the district court should

have allowed discovery to determine the number of Maryland

and Virginia residents, if any, who may be IFX users at their

District job sites—we cannot say that the district court abused

its discretion in denying the plaintiffs discovery to pursue their

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theory of “commuter jurisdiction.” See Bastin, 104 F.3d at 1396

(“The district court does not abuse its discretion when it denies

a discovery request that would amount to nothing more than a

fishing expedition.”).

Eisenberg and FCIG also argue, in a footnote, that they are

entitled to discovery to determine whether IFX had any District

customers who did not log onto its website. See Appellants’ Br.

19 n.16. They describe the Walsh Declaration, discussed supra

p. 9, as “oblique[]” and “evasive” because it states that IFX had

“‘no customers residing in the District of Columbia with an

account opened for use with the IFX online trading system.’” Id.

(quoting Decl. of Katie Walsh 2) (emphasis in Appellants’ Br.).

They assert that, by discussing only the lack of IFX online

customers, the Declaration “leaves open whether there are

District of Columbia residents that transact business with IFX,

aslarge a broker asit is, on a regular and systematic basis but do

not avail themselves of IFX’s online trading capabilities.” Id.

Even assuming a “footnote” claim suffices, we reject it.

Throughout the district court proceedings the plaintiffs

consistently argued that IFX is within the court’s general

jurisdiction based on its maintenance of an interactive website.

See, e.g., Appellants’ Mot. for Disc. 6 (Jan. 13, 2005) (“It is

beyond cavil that the existence of a website business in the

District of Columbia would subject IFX to general jurisdiction

in the District of Columbia.”); Appellant’s Mem. in Opp’n 7

(“[IFX’s] interactive website business, which IFX admits is used

in the District of Columbia, subjects IFX to jurisdiction here.”);

Appellants’ Br. 17 (“IFX has maintained a website that permits

persons with accounts opened with it to do through it, in terms

of number and value of transactions, large volumes of foreign

exchange and precious metals trading. Such activity is sufficient

for the assertion of general jurisdiction.” (citations omitted)).

The fact that the Walsh Declaration discussed only the number

of IFX’s online customers in the District should have come as

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7

D.C. Code § 13-423(a), in relevant part, authorizes the court to:

exercise personal jurisdiction over a person, who acts directly

or by an agent, as to a claim for relief arising from the

person’s—

(1) transacting any business in the District of

Columbia;

(2) contracting to supply services in the District of

Columbia;

(3) causing tortiousinjury in the District of Columbia

by an act or omission in the District of Columbia;

no surprise to Eisenberg and FCIG given how they framed their

general jurisdiction argument.

B. Specific Jurisdiction

Eisenberg and FCIG next argue that the district court has

specific jurisdiction over IFX based on Cruden’s “‘regular’

phone calls to Eisenberg in the District to solicit business and

lure him to London.” Appellants’ Br. 21. A plaintiff seeking to

establish specific jurisdiction over a non-resident defendant

must establish that specific jurisdiction comports with the

forum’s long-arm statute, D.C. Code § 13-423(a), and does not

violate due process. See GTE, 199 F.3d at 1347 (citing United

States v. Ferrara, 54 F.3d 825, 828 (D.C. Cir. 2000)). In the

district court, however, the plaintiffs failed to invoke the longarm statute or any other statutory basis supporting specific

jurisdiction. Instead, they relied on precedent from other

jurisdictions. See Appellants’ Mem. in Opp’n 10 (citing Neal v.

Jansen, 270 F.3d 328, 333 (6th Cir. 2001); Wein Air Alaska v.

Brandt, 195 F.3d 208, 215 (5th Cir. 1999); Daldav Assocs., LP

v. Lebor, 2004 WL 728367, at *3 (N.D. Tex. Mar. 25, 2004);

Bahn v. Chicago Motor Club Ins., 98 Md. App. 559, 568

(1993)). The district court generously assumed that they had

properly invoked the long-arm statute.7 It then concluded that

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(4) causing tortiousinjury in the District of Columbia

by an act or omission outside the District of

Columbia if he regularly does or solicits business,

engages in any other persistent course of conduct, or

derives substantial revenue from goods used or

consumed, or services rendered, in the District of

Columbia.

D.C. Code § 13-423(a).

8

The district court determined thatsubsection (a)(1)’s “transacting

business” requirement could not be satisfied by telephone or fax

contacts alone. FC Inv. Group, 479 F. Supp. 2d. at 39 (citing Kopff v.

Battaglia, 425 F. Supp. 2d 76, 79–82 (D.D.C. 2006) (approximately

100 faxes insufficient); Gibbons & Co. v. Roskamp Inst., 06cv0720,

2006 WL 2506646, at *3 (D.D.C. Aug. 28, 2006) (50–75 telephone

calls/emails before signing contract in Florida insufficient); Brunson

v. Kalil & Co., 404 F. Supp. 2d 221, 234 (D.D.C. 2005) (“limited”

telephone/fax contact insufficient); Jung v. Ass’n of Am. Med. Colls.,

300 F. Supp. 2d 119, 131 (D.D.C. 2004) (ten contacts per year

insufficient); COMSAT Corp. v. Finshipyards S.A.M., 900 F. Supp.

515, 523 (D.D.C. 1995) (eleven faxes/telephone calls insufficient);

Rahal v. Paris Sec. Corp., 82cv1439, 1982 U.S. Dist. LEXIS 17867,

at *2, *6 (D.D.C. Oct. 27, 1982) (30 telephone calls insufficient);

Textile Museum v. F. Eberstadt & Co., 440 F. Supp. 30, 31–33

(D.D.C. 1977) (74 mailings and one personal consultation

insufficient)).

“subsection (a)(1) [was] the only subsection of the D.C. longarm statute that [was] arguably applicable to the facts as

presented by the plaintiffs.” FC Inv. Group, 479 F. Supp. 2d at

38 n.1. After reviewing subsection (a)(1), the relevant case law

and the plaintiffs’ allegations, the district court concluded that

Cruden’s “‘regular’ phone calls into the District of Columbia

from elsewhere d[id] not constitute ‘transacting business’ in the

District of Columbia.”8 FC Inv. Group, 479 F. Supp. 2d at 39.

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9

Even if their section 13-423(a)(4) argument were not waived, it

is unlikely that it would be successful. Subsection (a)(4) requires the

plaintiff to establish that the defendant “regularly does or solicits

business, engagesin any other persistent course of conduct, or derives

substantial revenue from goods used or consumed, or services

rendered, in the District.” “Regular” telephone calls from Cruden to

Eisenberg in the District do not suffice. See supra note 8.

In response, Eisenberg and FCIG argue that they intended

to argue forspecific jurisdiction undersubsection (a)(4) and that

the district court analyzed the wrong provision. See Appellants’

Br. 23 (“[T]he District Court disregarded FCIG’s argument,

choosing to assume, instead, that FCIG was basing specific

jurisdiction over IFX on IFX’s transaction of business in the

District.”). Their contention is without merit. As noted earlier,

it is the plaintiff’s burden to establish the court’s personal

jurisdiction over the defendant. Reuber, 787 F.2d at 599. If

Eisenberg and FCIG intended to rely on subsection (a)(4), it was

their responsibility to do so in a manner that gave the district

court fair notice thereof so that the court could rule on it and the

issue could be preserved for appeal. This they did not do. Cf.

Nemariam v. Fed. Democratic Republic of Ethiopia, 491 F.3d

470, 482–83 (D.C. Cir. 2007) (“[A]bsent exceptional

circumstances, the court of appeals is not a forum in which a

litigant can present legal theories that it neglected to raise in a

timely manner in proceedings below.” (quotations omitted)).9

C. Conspiracy Jurisdiction

Eisenberg and FCIG argue further that specific jurisdiction

exists “because IFX was a conspirator with Titan in wrongs that

Titan perpetrated against FCIG through acts in the District.”

Appellants’ Br. 25 (capitalization altered). In the proceedings

below, they did not cite any statutory authority for thistheory of

jurisdiction; however, the district court assumed that they

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10Eisenberg and FCIG now claim they intended to base their

“conspiracy jurisdiction” argument on subsection (a)(3). See

Appellants’ Br. 25. Subsection (a)(3) allows for personal jurisdiction

over any defendant who, either directly or through an agent, “caus[es]

tortiousinjury in the District of Columbia by an act or omission in the

District of Columbia.” D.C. Code § 13-423(a)(3). Whether their

“conspiracy” jurisdiction claim is based on subsection (a)(1), as the

district court assumed, or subsection (a)(3), as they now argue, it is

without merit. Under both subsections they are obligated to plead

with particularity facts sufficient to demonstrate the existence of a

conspiracy between Titan and IFX. See World Wide Minerals v.

Republic of Kazakhstan, 296 F.3d 1154, 1168 (D.C. Cir 2002), cert.

denied, 537 U.S. 1187 (2003). Because Eisenberg and FCIG failed to

do so, see discussion infra pp. 17-19, their assertion of conspiracy

jurisdiction fails regardless which subsection they rely upon.

intended to rely on the “agent” language of subsection (a)(1).10

See FC Inv. Group, 479 F. Supp. 2d. at 38. Section 13-423(a)(1)

authorizes the court to exercise personal jurisdiction over a

defendant who, whether “directly or by an agent” (in this case,

a co-conspirator), “transact[s] any business in the District of

Columbia.” D.C. Code § 13-423(a)(1); see also Second Amend.

Found., 274 F.3d at 523 (“Persons who enter the forum and

engage in conspiratorial acts are deemed to ‘transact business’

there ‘directly’; co-conspirators who never enter the forum are

deemed to ‘transact business’ there ‘by an agent.’” (quoting

D.C. Code § 13-423(a)(1)). For “conspiracy” jurisdiction under

subsection (a)(3), the plaintiff must allege “(1) the existence of

a civil conspiracy . . . , (2) the defendant’s participation in the

conspiracy, and (3) an overt act by a co-conspirator within the

forum, subject to the long-arm statute, and in furtherance of the

conspiracy.” Kopff v. Battaglia, 425 F. Supp. 2d. 76, 81 n.4

(D.D.C. 2006) (quotation omitted); see also Edmond v. U.S.

Postal Serv. Gen. Counsel, 949 F.2d 415, 425 (D.C. Cir. 1991).

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16

11The amended complaint also alleged that Knott met with

Eisenberg “several times” in the District “in 2001 and 2002.” See Am.

Comp. ¶ 14. Because the plaintiffs did not specify the dates of the

meetings or the date on which IFX became Titan’s business partner

other than “[i]n or about “2002,” see Am. Compl. ¶ 15, the district

court was unable to determine if the meetings took place after Titan

and IFX allegedly entered into a conspiracy. FC Inv. Group, 479 F.

Supp. 2d at 43 n.4.

12Another district judge reached a different conclusion in a related

action. In FC Inv. Group LC v. Lichtenstein, 441 F. Supp. 2d 3, 6

(D.D.C. 2006), the same plaintiffs brought suit against Lichtenstein,

The district court rejected this personal jurisdiction theory

as well because, based on the allegations of the amended

complaint, it did not appear that Titan had “committed . . . [any]

act in furtherance of the conspiracy within the District of

Columbia that was sufficient to subject [Titan] to jurisdiction

under the D.C. long-arm statute.” FC Inv. Group, 479 F. Supp.

2d at 42–43 (citing Jin v. Ministry of State Sec., 355 F. Supp. 2d

72, 83 (D.D.C. 2004)). The amended complaint alleged that the

conspiracy between Titan and IFX began on an unspecified date

“[i]n or about 2002,” Am. Comp. ¶ 15, and continued through

“late 2003” and into January 2004. See id. ¶¶ 25, 26. During

that time Titan sent account statements to Eisenberg in the

District, see id. ¶¶ 10, 13; Titan employee Knott contacted

Eisenberg at least twice, once to inform Eisenberg that Titan

was replacing IG with IFX as Titan’s currency broker and once

to invite Eisenberg to IFX’s London office, see id. ¶¶ 15, 18;

and Titan board member Lichtenstein sent a false deposit slip to

Eisenberg in the District after Eisenberg demanded that his

funds be returned.11 See id. ¶ 26. The district court concluded

that the “unspecified—but undoubtedly small—number of

mailings,” Knott’s meetings with Eisenberg and Lichtenstein’s

sending of the deposit slip were insufficient to assert personal

jurisdiction over Titan. FC Inv. Group, 479 F. Supp. 2d at 43.12

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alleging, inter alia, fraud, civil conspiracy, civil aiding and abetting

and negligent misrepresentation. Id. at 6. The district judge in that

case concluded that it had personal jurisdiction over Lichtenstein. Id.

at 11. The court acknowledged the relatively small number of

contacts between Lichtenstein and Eisenberg that occurred in the

District; however, it explained that “[m]ore important than the number

of these contacts . . . is their significance,” id. at 9 (citing Neal v.

Janssen, 270 F.3d 328, 332 (6th Cir. 2001)), emphasizing that the

contacts between Lichtenstein and Eisenberg were made for the

purpose of “systematically communicating false information about

Titan’s corporate status, the relationship between Titan and IFX, the

earnings on FCIG’s phantom investments, and the return of FCIG’s

funds. These contacts were directed toward Mr. Eisenberg in the

District of Columbia and had foreseeable effects here.” Id.

Whether or not the district court correctly found Titan’s

District contacts insufficient, its finding of no personal

jurisdiction over IFX on a conspiracy theory can be upheld on

another ground. See Amgen, Inc. v. Smith, 357 F.3d 103, 111

(D.C. Cir. 2004) (“This court may affirm the dismissal of a

complaint on different grounds than those relied upon by the

district court.” (citing Bennett v. Spear, 520 U.S. 154, 166

(1997))). In order “to establish jurisdiction under a theory of

civil conspiracy, the plaintiff must plead with particularity overt

acts within the forum taken in furtherance of the conspiracy.”

World Wide Minerals v. Republic ofKazakhstan, 296 F.3d 1154,

1168 (D.C. Cir. 2002) (quotation omitted), cert. denied, 537

U.S. 1187 (2003). “‘[B]ald speculation’ or a ‘conclusory

statement’ that individuals are co-conspirators is insufficient to

establish personal jurisdiction under a conspiracy theory.”

Jungquist v. Sheikh Sultan Bin Khalifa Al Nahyan, 115 F.3d

1020, 1031 (D.C. Cir. 1997) (quoting Nartex Consulting Corp.

v. Watt, 722 F.2d 779, 787 (D.C. Cir. 1983)). We believe that

Eisenberg and FCIG failed to plead the conspiracy with

particularity. In support of their claim that IFX “had agreements

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and/or understandings with Titan and Martinic to commit

fraud,” Am. Comp. ¶ 39, they allege the following facts:

1. Lichtenstein testified (apparently in a related case)

that IFX was Titan’s “business partner” and that his

points of contact at IFX were Charles Cruden and

senior sales executive Andy Demetriades. Id. ¶ 15.

2. Cruden sent Lichtenstein a fax inquiring when he

would be available to meet with IFX employee Carole

Napoliello. Id. ¶ 16

3. “[N]umerous electronic-mail communications . . .

between various IFX employees and Martinic,

including a December 9, 2002 email . . . confirm[] IFX

and Titan’s ‘close and effective working relationship.’”

Id.

4. Desiree Lichtman, Knott’s assistant, worked with

Cruden and Napoliello to create a PowerPoint

presentation that Eisenberg saw while visiting IFX’s

London offices. See id. ¶ 19. The PowerPoint

presentation “indicated in no uncertain termsthat Titan

and IFX had established a joint venture with respect to

foreign currency trading.” Id. ¶ 21. The PowerPoint

presentation “prominently displayed IFX’s logo.” Id.

It also discussed Titan’s trading strategies and named

several members of IFX’s “Investment Committee.”

Id.

5. “On December 10, 2002, Titan wired $100,000 to

IFX from Titan’s account at US Bank.” Id. ¶ 22.

6. “On March 10, 2003 Cruden sent a letter to

Lichtenstein outlining further ‘potential revenue

streams’ for Titan and IFX . . . .” Id. ¶ 24.

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13As with their other arguments, Eisenberg and FCIG failed to cite

the correctstatute for thistheory of jurisdiction. See Appellants’ Mot.

in Opp’n 16 (Aug. 8, 2005) (incorrectly citing 18 U.S.C. § 1962(d) as

basis for RICO jurisdiction). The district court, however, sua sponte

corrected their error and then addressed—and rejected—their

argument on the merits. FC Inv. Group, 479 F. Supp. 2d at 43–44.

Even assuming the truth of these allegations, they fall short

ofthe requirement that the plaintiff “plead with particularity ‘the

conspiracy as well as the overt acts within the forum taken in

furtherance of the conspiracy.’ ” Jungquist, 115 F.3d at 1031

(quoting Dooley v. United Techs. Corp., 786 F. Supp. 65, 78

(D.D.C. 1992)). The allegations establish only the existence of

an on-going businessrelationship between Titan and IFX. They

do not demonstrate that IFX “had agreements and/or

understandings with Titan and Martinic to commit fraud,” Am.

Comp. ¶ 39, or that IFX “acted with knowledge that it was

[participating in a] fraudulent currency exchange scheme,” id.

¶ 15, and are therefore insufficient to establish a conspiracy

theory of personal jurisdiction. See FirstChicago Int’l v. United

Exch. Co., 836 F.2d 1375, 1378–79 (D.C. Cir. 1988) (“[T]he

‘bare allegation’ of a conspiracy or agency is insufficient to

establish personal jurisdiction.” (citing McLaughlin v. McPhail,

707 F.2d 800, 806 (4th Cir. 1983); Lehigh Valley Indus. v.

Birenbaum, 527 F.2d 87, 93–94 (2d Cir. 1975)).

D. RICO Jurisdiction

In Count IV of their amended complaint, Eisenberg and

FCIG allege that IFX “violated the conspiracy section of RICO,

18 U.S.C. § 1962(d).” Appellant’s Br. 29 (citing Am. Comp.

¶¶ 47-59). They argue that under RICO “the exercise of

personal jurisdiction over IFX . . . was permissible, even in the

absence of minimum contacts by IFX with the District,”

pursuant toRICO’s “nationwide service of process provision, 18

U.S.C. § 1965(d).” Id.

13 But IFX counters that under RICO “at

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least one defendant must have minimum contacts with the

District before jurisdiction will be had over the other, nonresident defendant in the allegedRICO conspiracy.” Appellee’s

Br. 27. 18 U.S.C. § 1965, entitled “Venue and process,”

provides in relevant part:

(a) Any civil action or proceeding under this

chapter against any person may be instituted in the

district court of the United States for any district in

which such person resides, is found, has an agent, or

transacts his affairs.

(b)In any action undersection 1964 ofthis chapter

in any district court of the United States in which it is

shown that the ends of justice require that other parties

residing in any other district be brought before the

court, the court may cause such parties to be

summoned, and processforthat purpose may be served

in any judicial district of the United States by the

marshal thereof.

(c) In any civil or criminal action or proceeding

instituted by the United States under this chapter in the

district court of the United States for any judicial

district, subpenas issued by such court to compel the

attendance of witnesses may be served in any other

judicial district . . . .

(d) All other process in any action or proceeding

under this chapter may be served on any person in any

judicial district in which such person resides, is found,

has an agent, or transacts his affairs.

18 U.S.C. § 1965 (emphases added). There are differing views

among our own district judges as well as in our sister circuits

regarding the proper interpretation of this language. Compare

Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119

F.3d 935, 942–48 (11th Cir. 1997) (finding nation-wide

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21

jurisdiction under section 1965(d)), and ESAB Group, Inc. v.

Centricut, Inc., 126 F.3d 617, 626–27 (4th Cir. 1997) (same),

with PT United Can Co. Ltd. v. Crown Cork & Seal Co., 138

F.3d 65, 70 (2d Cir. 1998) (section 1965(b) provides for nationwide service of process only “where personal jurisdiction based

on minimum contacts is established as to at least one

defendant”), and Butcher’s Union Local No. 498 v. SDC Inv.

Inc., 788 F.2d 535, 538 (9th Cir. 1986) (under section 1965(b)

“the court must have personal jurisdiction over at least one of

the participants in the alleged multidistrict conspiracy and the

plaintiff must show that there is no other district in which a court

will have personal jurisdiction over all of the alleged coconspirators”); compare also Dooley v. United Techs. Corp.,

786 F. Supp. 65, 70 (D.D.C. 1992) (under section 1965(d)

“[m]inimum contacts with the forum state, as required under the

traditional long-arm jurisdiction analysis, is not necessary”),

with World Wide Minerals Ltd. v. Republic of Kazakhstan, 116

F. Supp. 2d. 98, 108 (D.D.C. 2000) (“reject[ing] the notion that

the federal RICO statute . . . provide[s] a basis for nation wide

jurisdiction”), remanded on other grounds, 296 F.3d 1154 (D.C.

Cir. 2002), cert. denied, 537 U.S. 1187 (2003), and AGS Int’l

Servs. v. Newmont USA Ltd., 346 F. Supp. 2d 64, 87 (D.D.C.

2004) (same).

Having considered the arguments of the parties, as well as

the reasoning of our sister circuits on this question, we are

persuaded to adopt the Second Circuit’s reasoning. In PT

United Can Co. Ltd. v. Crown Cork & Seal Co., 138 F.3d 65, 70

(2d Cir. 1998), the Second Circuit explained that section “1965

must be read to give effect to all its sections in a way that

renders a coherent whole.” It stated:

Reading all of the subsections of § 1965 together,

the court finds that § 1965 does not provide for

nationwide personal jurisdiction over every defendant

in every civil RICO case, no matter where the

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defendant is found. First, § 1965(a) grants personal

jurisdiction over an initial defendant in a civil RICO

case to the district court for the district in which that

person resides, has an agent, or transacts his or her

affairs. In other words, a civil RICO action can only

be brought in a district court where personal

jurisdiction based on minimum contacts is established

as to at least one defendant.

Second, § 1965(b) provides for nationwide service

and jurisdiction over “other parties” not residing in the

district, who may be additional defendants of any kind,

including co-defendants, third party defendants, or

additional counter-claim defendants. This jurisdiction

is not automatic but requires a showing that the “ends

of justice” so require. This is an unsurprising

limitation. There is no impediment to prosecution of

a civil RICO action in a court foreign to some

defendants if it is necessary, but the first preference, as

set forth in § 1965(a), is to bring the action where suits

are normally expected to be brought. Congress has

expressed a preference in § 1965 to avoid, where

possible, haling defendants into far flung fora.

Next, § 1965(c) simply refers to service of

subpoenas on witnesses. Thus, § 1965(d)’s reference

to “[a]ll other process,” means process other than a

summons of a defendant or subpoena of a witness.

This interpretation, one which gives meaning to the

word “other” by reading sequentially to understand

“other” as meaning “different from that already stated

in subsections (a)–(c),” gives coherent effect to all

sections of § 1965, and effectively provides for all

eventualities without rendering any of the sections

duplicative, without impeding RICO actions and

without unnecessarily burdening parties.

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14We need not, and therefore do not, pass on the meaning of

section 1965(b)’s “ends of justice” language.

Id. at 71–72 (emphases added) (footnote omitted).14 The Second

Circuit endorsed the Ninth Circuit’s holding in Butcher’s Union,

788 F.2d at 538, that “[f]or nationwide service to be imposed

under section 1965(b), the court must have personal jurisdiction

over at least one of the participants in the alleged multidistrict

conspiracy and the plaintiff must show that there is no other

district in which a court will have personal jurisdiction over all

of the alleged co-conspirators.” Id., as cited in PT United Can,

138 F.3d at 72 (adopting “the natural reading given to § 1965(b)

by the 9th Circuit in Butcher’s Union”). In addition, the Tenth

Circuit, the only circuit to have considered section 1965 since

PT United Can, has also followed its interpretation, finding its

reasoning “persuasive and consistent with congressional intent.”

Cory v. Aztec Steel Bldg., Inc., 468 F.3d 1226, 1231 (10th Cir.

2006). Because the district court is otherwise without personal

jurisdiction over IFX, the sole defendant, it is also without RICO

jurisdiction over IFX.

For the foregoing reasons, the judgment of the district court

is affirmed.

So ordered.

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