# United States Court of Appeals

For the First Circuit

____________________

No. 01-2595

RICHARD A. DAYNARD,

Plaintiff, Appellant,

v.

NESS, MOTLEY, LOADHOLT, RICHARDSON & POOLE, P.A.;

RONALD L. MOTLEY,

Defendants,

SCRUGGS, MILLETTE, BOZEMAN & DENT P.A.;

RICHARD F. SCRUGGS,

Defendants, Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF MASSACHUSETTS

[Hon. William G. Young, U.S. District Judge ]

____________________

Before

Lynch, Circuit Judge

, Campbell and Bownes, Senior Circuit Judges

.

____________________

Edward J. Barshak with who m Darrel C. Waugh and Sugarman, Rogers,

Barshak & Cohen, P.C. were on brief for appellant.Stephen M. Prignano with whom Mark A. Pogue and E dwards & Angell,

LLP were on brief for appellees.

____________________

May 10, 2002

____________________-2- LYNCH, Circuit Judge . The issue on appeal is whether

a federal district court sitting in Massachusetts has specific

personal jurisdiction over a suit brought by Richard A. Daynard,

a M assachusetts law professor, for fees in the tobacco

litigation, against the Mississ i ppi law firm of Scruggs,

Millette, Bozeman & Dent, and Richard Scruggs, a senior partner

("Scruggs defendants"). At the heart of Daynard's claim is the

argument that the court may reach the Scruggs defendants based

in large part on contacts imputed from t he South Carolina law

firm of Ness, Motley, Loadholt, Richardson & Poole, and Ronald

Motley ("Motley defendants"), all of whom purportedly acted on

behalf of both firms in engaging Daynard to work on litigation

against the tobacco industry. We conclude, contrary to the

district court, that the Scruggs defendants are subject to

sp ecific personal jurisdiction based on their contacts with

Massachusetts, particularly those contacts properly attributed

to them from the Motley defendants, who are also defendants in

this litigation.

Daynard is a law professor at Northeastern University

specializing in litigation against the tobacco industry. He

sued the Motley and Scruggs defendants, claiming that, pursuant-3-

to an oral agreement, he is entitled to a portion of the fees

that these firms have received or will receive from their

successful tobacco litigation.

The Motley defendants, based on their Massachusetts

contacts, concede personal jurisdiction, but, central to this

case, the Scruggs defendants do not. Daynard does not challenge

the district court's conclusion that the Scruggs defendants' own

direct contacts with Massachusetts are, by themselves,

insuff icient to permit personal jurisdiction. Instead, he

challenges the district court's ruling that pers onal

jurisdiction does not exist based on the imputation of some of

the Motley defendants' contacts, which were purportedly made on

beha lf of both law firms, to the Scruggs defendants. The

district court reasoned that the Motley defendants were not the

Scruggs defendants' agents, and, even if they were, the Scruggs

defendants did not exert "substantial influence" over the Motley

defendants' in-forum activities. The district court reasoned

that it could not, consistent with the Due Process Clause of the

Fourteenth Amendment, attribute the Motley defendants' contacts

to the Scruggs defendants for purposes of personal jurisdiction.-4- Daynard appeals this decision arguing that the district

court erred by relying on a general jurisdiction case, Donatelli

v. National Hockey League

, 893 F.2d 459 (1st Cir. 1 990), to

derive the "substantial influence" requirement. Daynard argues

that he need not show, for specific jurisdiction purposes, that

the Scruggs defendants exerted substantial influence over the

Motley defendants' in -forum activities in order to impute the

Motley defendants' contacts to the Scruggs defendants. Daynard

asserts that the defendants were engaged in a tobacco litigation

joint venture and that, on this basis, attribution is proper.

We conclude that Donatelli 's substantial influence test

is not controlling in this case, where Daynard alleges that the

defendants were in a joint venture, or at least held themselves

o ut to be in a type of agency relationship. We need not

de termine whether the defendants were actually engaged in a

joint ventu re between themselves, however. The facts, as

asserted by Daynard and construed in the light of whether he has

made a prima facie jurisdictional showing, suffic e to show a

relationship between the two defendants sufficient to impute

some of the Motley defendants' contacts to the Scruggs

defendants. These same facts show that the Scruggs defendants-5-

held themselves out to be in some form of an agency relationship

with the Motley defendants and, by accepting and encouraging

Daynard's services, and agreeing to compensate him on the basis

of a share of the fees, ratified the Motley defendants' in-forum

activities giving rise to this lawsuit.

Traditional common law concepts, embodied i n the law

of Massachusetts, Mississippi, and South Carolina, confirm the

fundamental fair ness of requiring the Scruggs defendants to

answer in Massachusetts. We conclude that the Scruggs

defendants' contacts with Massachuset ts, particularly those

contacts of the Motley defendants properly attributed to the

Scruggs defendants, suffice to permit personal jurisdiction over

the Scruggs defendants consistent with the Massachusetts longarm statute and the Fourteenth Amendment of the Constitution.

I.

In this case there are many disputed, and as of yet

unresolved, facts. We do not resolve these disputed facts

because we "must accept the plaintiff's (properly documented)

evidentiary proffers as true for the purpose of determining the

a dequacy of the prima facie jurisdictional showing." FosterMiller, Inc. v. Babcock & Wilcox Canada , 46 F.3d 138, 145 (1st-6-

Cir. 1995). We use Daynard's version of the facts (although we

provide a brief descrip t ion of the defendants' competing

version), drawn from his complaint, both sides' subsequ ent

affidavits, and the products of jurisdictional discovery,

including Daynard's deposition of Scruggs.

A. Daynard's Allegations

Daynard is a resident and citizen of the Commonwealth

of Massachusetts. He is, and has been for over thirty years, a

law professor at Northeastern University School of Law, located

in Massachusetts. For much of that time, he has focused his

professional and academic ef forts on defeating the tobacco

industry in court. Daynard is Chair of the Tobacco Product

Liability Project, President of the Tobacco Control Resources

Center, and a frequent advocate for, and consultant to, those

opposing the tobacco industry.

For many years there was a consensus that the potential

for recovery against the tobacco industry was negli gible.

Indeed, the tobacco industry, until 1997, boasted that it had

never paid a cent to a tort plaintiff. As of 2002, the

situation is drastically different. Lawyers have sued the

tobacco companies on behalf of many states and recovered-7-

astronomical sums for those states, with consequently large fees

for the mselves. During the past several years, almost every

st ate has sued the tobacco industry, seeking, among other

things, reimbursement for the medical costs incurred as a result

of smok ing-related health harms. The defendant law firms in

this case have been responsible for instituting, litigati ng, and

settling litigation against the tobacco industry on behalf of forty-six

different states. This settlement was accomplished, in part, in what

is known as the Master Settl ement Agreement. See National Association

of Attorneys General, Ma ster Settlement Agreement, a t

http://www.naag.org/tobac/cigmsa.rtf (Nov. 23, 1998); G reenles s v.

Almond

, 277 F.3d 601, 603 (1st Cir. 2002) (describing the tobacco

litigation and settlement). Daynard says this settlement will result

in a distribution of billions of dollars to the two firms.

Daynard says that his effo rts were central to many of these

titanic recoveries. He quotes reputable authorities stating that

he is the "recognized leader" in tobacco litigation on behalf of

the public health and the "foremost authority" on, and "driving

force" behind, anti-tobacco legal theory and strategy. In fact,

Daynard quotes one authority stating that witho ut Daynard's

tobacco work, the state-initiated tobacco litigation would not

even exist.-8- The parties agree that Charles Patrick, then a partner

at Ness Motley, came to Boston, Massachusetts in the fall of

1993 to meet with Daynard. Daynard says that, at the time

Patrick traveled to Boston to retain his services, Ness Motley

and Scruggs Millette were engaged in a tobacco litigation joint

venture. Indeed, throughout his dealings with Ness Motley and

Scruggs Millette, Day nard understood the two firms to be in a

joint venture that at first encompassed the Mississippi tobacco

litigation and then broadened to include tobacco litigation

nationwide. Daynard insists that Patrick was acting on behalf

of both firms and that Patri ck retained him to advance the

objectives of the firms' joint venture.

Shortly after this initial meeting in Boston, Daynard

traveled to Ness Motley's South Carolina offices, where he met

with members of the firm, including Ronald Motley . At these

meetings, Daynard identified and explained legal theories for

recovery on behalf of state governments. After these meetings,

Daynard continued to communicate re gularly, by phone and fax,

with members o f Ness Motley, providing them advice on similar

matters.1 Scruggs denies that he participated in any such meeting

in Boston for these purposes.

-9-

As a result of Ness Mot ley's retention of him,

purportedly on behalf of bo th firms, Daynard also began

"communicat[ing] regularly" with the Mississippi law firm

Scruggs Millette and providing the firm with "advice and

assista nce." Beginning in the fall of 1993, members of both

firms ca me to Boston to meet with and receive advice from

Daynard, in furtherance of his engagement by them. 1 According

to his affidavit, Daynard "had many conversations, meetings and

written communications in Boston with members of the defendant

firms, in which [he] provided advice and undertook specific

projects for their use in the tobacco litigation."

Daynard asserts that his legal theories, strategies,

evidence, and arguments "subsequently formed a central

component" of the firms' litigation brought on behalf of several

states against the tobacco industry. In addition, Daynard

introduced Ness Motley firm members to experienced toba cco

l itigators and to pleading and discovery files from other

tobacco cases.-10- Initially, Ness Motley compensated Daynard based on

hourly fees for his services rendered. As Daynard's

relationship with the two firms progressed, he had "several

conversations" with "b oth Mr. Motley and Mr. Scruggs in which

they stated that they would appropriately compensate [Daynard]

. . . and that the final form of compensation would be" in the

form of a share of the fees the firms obtained from handling the

states' tobacco litigation. Ronald Motley advised Daynard that

he would be compensated for his assistan ce as a member of the

Ness Motley "team." After this communication, Daynard says that

he recei ved no further compensation from Ness Motley. As to

p ayment by Scruggs Millette, the parties agree that Scrugg s

Millette never compensated Daynard.

W hen the state tobacco litigation commenced, Daynard

continued to work with both firms, educating their attorneys on

the relevant issues, counseling them based on his experience in

other tobacco litigation, providing them with relevant documents

and information, and introducing them to potential witnesses and

contacts. He developed litigation strategies and worked on

pleadings and other docume nts for the firms. Many of these

services were performed in Boston. S ee Daynard v. Ness, Motley,-11-

Loadholt, Richardson & Pool e, P.A. , 188 F. Supp. 2d 115, 118

(2002) (stating that "D a ynard performed his research and

writing, met with Ness Motley partners, and allegedly formed a

compensation contract in Massachusetts"); id. at 119. Daynard

also spoke at conferences of state governmental officials where

he arranged for Ness Motley and Scruggs Millette to participate,

thereby advancing their ongoing litigation and providing them

with legitimacy in the eyes of potential state clients.

Ness Motley recognized and encouraged Daynard's efforts

by assigning him specific projects, by requesting his

information and as sistance, by transporting him to selected

meetings and proceedings, and by accepting his work product. At

some point in 1996, when Daynard became concerned that some Ness

M o tley attorneys were trying to minimize his role in the

litigation, Mr. Motley assured Daynard that this was not the

case.

In July of 1996, when Daynard reported to Ness Motley

on the time he had expended to complete a research project that

Ness Motley had requested, the firm, consistent with its own and

the Scruggs defendants' past assurances, informed Daynard that

it would compensate him for his wo rk by paying him a share of-12-

the fees generated if the litigation was s uccessful, an

arrangement to whic h Daynard agreed. As a result of this

promise, Daynard ceased submitting descriptions of his hourly

work and requests for payment to Ness Motley.

Daynard says that, at a meeting in late August of 1996,

Scruggs Millette and Ness Motley "confirmed" their agreement to

compensate him in the form of a share of the fees. On August 25

through August 27, 1996, Daynard, Motley, and Scruggs were in

Chicago, Illinois, participating in meetings related to the

state tobacco litigation. Scruggs and Motley scheduled a

meeting with Daynard during that period to discuss Daynard's

specific share of any fee award. Although Motley was ultimately

not able to attend the meeting, Daynard met with Scruggs.

Daynard says he asked Scruggs "whether he was speaking for both

himself and Mr. Motley" and Scruggs stated that h e was, that

Daynard could rely on this, and that he was acting with at least

"apparent authority" for Motley. Scruggs promised Daynard 5% of

any fees ultimately recovered, in any state tobacco litigation

in which any of the defendants were counsel, as compensation for

Daynard's past and continuing assistance. Daynard says he

accepted the 5% agreement and that he and Scruggs shook hands on-13-

it. Based on the conduct of the Scruggs and Motley defendants

during the course of the tobacco litigation, Daynard says that

he reasonably believed Scruggs to be acting with apparent

authority for both firms.

Relying on this 5% figure, and "ongoing assurances and

representations," Daynard continued to work for the two firms.

For example, Scruggs requested that Daynard be available during

the trial in the Mississippi litigation and agreed to compensate

Daynard for the cost of paying a substitute teacher to cover his

Northeastern University teaching obligations. Daynard agreed by

committing $15,000 of his own personal funds to buy himself out

of his teaching obligations so that he could be present fulltime during the trial.

Almost a year after the alleged handshake on the 5%

compensation figure, and after the Mississippi state litigation

had reached a te ntative settlement, Daynard wrote a letter to

Scruggs confirming the fee arrangement and identifying certain

expenses that Daynard had incurred associated with the

Mississippi litigation. Scruggs never responded. A few months

later, Daynard wrote another letter, this time to both Scruggs

and Motley, referring to the 5% fee arrangement. At this point,-14-

both firms were expectin g to reap significant attorney's fees

from the Mississipp i settlement and also from the Florida

settlement. Joseph Rice of Ness Motley and Richard Scruggs both

responded to this seco nd letter and both disavowed the 5% fee

arrange ment. Neither firm has paid Daynard any of the legal

fees it has received to date. Daynard alleges that the firms

based their refusal to pay him the 5% on his failure to support

certain national tobacco liability legislation, a requirement he

says the defendant s never mentioned in any previous

communication.

B. State Court Proceedings, Federal District Court Proceedings,

and the Defendants' Side of the Story

On December 27, 2000, Daynard sued the Motley

defendants and the Scruggs defendants in the Superior Court for

Suffolk County, Massachusetts, seeking, a mong other things,

c ompensation in the form of what Daynard says is his righ tful

share of fees generated from settlem ents with several states,

not including M assachusetts. Daynard claims that Ness Motley

and Scruggs Millette have already received millions and will

receive over two billion dollars of the fees generated from the

settlement, 5% of which he claims is rightfully his. With the-15-

consent of the Motley defendants, the Scruggs defendants removed

the case to federal district court on January 18, 2001. S ee 28

U.S.C. § 1441 (1994).

In their answer, the Motley defendants conceded the

Massachusetts court's personal jurisdiction, but told a story on

the merits very different from Daynard's. The Motley defendants

admit that, in 1993, Patrick of Ness Motle y met Daynard in

Massachusetts, a nd that the firm continued to meet with and

communicate with Daynard. Furthermore, they agree that Daynard

provided them with documents related to the tobacco litigation,

identified some potential witnesses, and did some general work

on the state tobacco litigation. The Motley defendants admit

that the firm made specific requests of Daynard and provided him

with transportation to certain meetings and proceedings. They

say that they paid Daynard for this work.

But the Motley defendants downplay Daynard's expertise,

say that his assistance was neither invaluable nor substantial,

and claim that his theories never formed a central component of

their tobacco litigation. Furthermore, they deny that either

they or Scruggs ever met with Daynard in Chicago and agreed upon

the 5% figure. They deny that any agreement as alleged by-16-

Daynard existed. The Motley defendants' position is that they

have already paid Daynard any money they ever owed him.

On May 30, 2001, the Motley defendants moved for

summary judgment. The district court denied this motion in part

on September 13, 2001, and issued its conclusions in a written

memorandum on December 3, 2001. D aynard v. Ness, Motley,

Loadholt, Richardson & Poole, P.A. , 178 F. Supp. 2d 9 (D. Mass.

2001). The district court addressed those issues reserved in

the September 13 hearing and in the December 3 memorandum in a

second memorandum and order, in which it denie d the Motley

defendants' motion for summary judgment. Daynard

, 188 F. Supp.

2d 115.

The Scruggs defendants pursued a different legal

strategy. On April 20, 2001, they moved to dismiss Daynard's

complaint for lack of personal jurisd iction or for failure to

state a claim, and moved in the alterna tive for summary

judgement. S ee Fed. R. Civ. P. 12(b)(2), 12(b)(6), and 56.

Scruggs stated that he never agreed to share any fees with

Daynard and that

[i]t has always been my understand i ng that Professor

Daynard acted as a volunteer in all of his endeavors

wi th respect to the litigation, or was otherwise-17- compensated by Ness M otley as a consultant on a

limited bas i s, and that his activities were designed

primarily to promote his own agenda w ith respect to

tobacco control.

As to personal jurisdiction, Scruggs states that

neither he nor his firm has ever had any offices, real estate,

bank accounts, or other property in Massachusetts. Furthermore,

none of the Scruggs defendants has ever practiced law in

Massachusetts. Daynard does not deny this. In addition, Scruggs

says that he has never traveled to Massachusetts in connection

with any fee sharing arrangement with Daynard or in connection

with any of Daynard's work under the al leged arrangement. He

denies that he or his firm had any role in contacting or

retaining Daynard in Massachusetts. He further states that the

Scruggs defendants did not request, or even have knowledge of,

the Motley defendants' meetings with Dayn ard. Scruggs also

denies that the Scrugg s defendants or the Mississippi joint

venture, to the extent that it existed, ever gave the Motley

defendants any directions with respect to Daynard.

Although Scruggs concedes that "Daynard did at times

consult with me concerning the tobacco litigation in general,"

he says that "these instances were extremely infrequent and were-18-

not requested or solicited by me" and that the "'assistance'

.

. . consist ed of nothing more than information already made

available to the general public."

With respect to any relationship between Scruggs

Millette and Ness Motley, Scruggs stated, in a second affidavit,

that Scruggs Millette was part of a written joint venture

agreement in the Miss issippi litigation, but that Ness Motley

was not a party to that agreement. He says that "[p]rior to

April of 1999, there was simply no arrangement [between Scruggs

Millette and Ness Motley] with respect to the sharing of

attorney's fees in the nationwide tobacco litigation." Scruggs

also noted that there was no agreement that "either Scruggs

Millette or Ness Motley could exert control over tobacco

litigation in states where those firms were not counsel of

record."

The district court, after one hearing on May 31, 2001,

and after granting Daynard limited jurisdictional discovery on

the issue of the relationship between the defendants from 1992

to 1998, held another hearing on September 13, 2001, in which it

dismissed Daynard's complaint against the Scruggs defendants for

lack of personal jurisdiction. At that September 13 hearing,-19-

the district court state d what it labeled the "bottom line of

[its] reasoning" for finding that it la cked personal

jurisdiction over the Scruggs defendants:

[W]hile the facts are sufficient to show a joint

venture with respect to the Mississippi litigation, as

the First Circuit has defined the term substantial

influence in the Donatelli versus National Hockey

League case, there is insufficient evidence in this

case that the Mississippi law fir m or Mr. Scruggs

exercised a substantial influence over the Ness firm

such as would subject Scruggs or the Mississippi firm

to personal jurisdiction in Massachusetts.

Soon after that, the court entered final judgment in favor of

the Scruggs defendants, thus permitting an immediate appeal to

this court.

The district court supported its September 13

conclusion in a December 21, 2001, memorandum. D aynard v. Ness,

Motley, Loadholt, Richardson & Poole, P.A. , 184 F. Supp. 2d 55

(D. Mass. 2001). In that memorandum, the district court

addressed two theories on which Daynard mi ght show personal

jurisdiction over the Scruggs defendants. I d. at 60-76. First,

the district court concluded that it did not have personal

jurisdiction over the Scruggs defendants bas ed on their own

direct con tacts with Massachusetts. I d. at 68. Second, the

district court concluded that it l acked jurisdiction over the2 This conclusion is in some tension with the district

court's earlier explanation, at the September 13 hearing, that

"the facts are sufficient to show a joint venture with respect

to the Mississippi litigation."

3 Earli er in its opinion, however, the district court

noted that "the South Carolina defendants arguably acted as the

Mississippi defendants' emissary," Daynard

, 184 F. Supp. 2d at

66, an observation seemingly inconsistent with its conclusion

that no agency relationship existed.

4 Daynard focuses on the district cour t's attributed

contacts holding rather than on the district court's conclusion

that the Scruggs defendants' direct contacts are insufficient.

The Scruggs defendants emphasize this, noting that Daynard has

n ot argued that their direct contacts alone are sufficient to

permit personal juris diction. We agree that Daynard does not

advance this argument, but note that many of those facts,

insufficient to establish jurisd iction based on the Scruggs

defendants' direct contacts, are, of course, relevant to the

imputed contacts analysis as well. One cannot make a sensible

-20- Scruggs defendants based on contacts imputed from the Motley

def endants. I d. at 76. The district court reasoned that the

Scruggs defendants "likely were not in a joint venture" with the

Motley defendants

, 2 that the Motley defendants did not act as the

Scruggs defendants' agent, 3 and that the "substantial influence"

requirement articulated in Donatelli

, 893 F.2d at 469 , 472,

precluded jurisdiction under the Due Process Clause, U.S. Const.

amend. XIV. D aynard

, 184 F. Supp. 2d at 74-76. Daynard appeals

the district court's holding that it lacks personal jurisdiction

under an imputed or attributed contacts theory. 4inquiry into whether contacts imputed to the Scruggs defendants

support personal jurisdi ction without viewing those same

contacts in the context of all of the other alleged facts of the

case.

-21- II.

A. Burden of Proof and Standard of Review

To hear a case, a court must have personal jurisdiction

over the parties, "that is, the power to require the parties to

obey its decrees." United States v. Swiss Am. Bank, Ltd. , 191

F.3d 30, 35 (1st Cir. 1999). The plaintiff bears the burden of

proving the court's personal jurisdiction over the defendant.

Foster-Miller

, 46 F.3d at 145; Boit v. Gar-Tec Prods., Inc.

, 967

F.2d 671, 674-75 (1st Cir. 1992). The district court, faced

with a motion to dismiss for lack of personal jurisdiction, Fed.

R. Civ. P. 12(b)(2), may choose from among several methods for

determining whether the plaintiff has met this burden. FosterMiller

, 46 F.3d at 145 ; Boit

, 967 F.2d at 674-75. "The most

conventional of these methods," k nown as the "prima facie"

method, Foster-Miller

, 46 F.3d at 145, "permits the district

court 'to consider only whether the plaint iff has proffered

evidence that, if credited, is enough to support findings of all5 For a discussion of other potential me thods of

analysis, see Fo ster-Miller , 46 F.3d at 145-46 (describing

"prima facie," "preponderance-of-the-evidence," and "likelihood"

standards).

6 When " the assertion of jurisdiction is bound up with the

claim on the mer its," but there exists "the possibility of permitting

a dubi ous case to proceed beyond the pleading stage, and even to trial,

though the co urt eventually will be found to lack jurisdiction," we

-22- facts essential to personal jurisdiction,'" id. (quoting Boit

,

967 F.2d at 675). 5

The district court applied the prima facie method.

Daynard , 184 F. Supp. 2d at 61. We review the district court's

choice of method de novo. Foster-Miller , 46 F.3d at 147. The

parties do not object to the district court's choice of the

prima facie method. Daynard states in his brief that the

district court employed the prima facie approach and the Scruggs

defendan ts agree, making no attempt to challenge the

applicability of t his approach. Therefore, the Scruggs

defendants have waived any objection to the application of the

prima facie method. Cashmere & Camel Hair Mfrs. Inst. v. Saks

Fifth Ave. , No. 00-2341, 2002 U.S. App. LEXIS 5361, at *10 (1st

Cir. Apr. 1, 2002); Ortiz v. Gaston County Dyeing Mach. Co.

, 277

F.3d 594, 598 (1st Cir. 2002). Under these circumstances, we

accept the prima facie method. 6have noted that the "likelihood" standard may be appropriate. F osterMiller , 46 F.3d at 146; see also Boit , 967 F.2d at 677-78.

-23- Accordingly, Daynard has the burden of making a prima

facie showing of personal j urisdiction over the Scruggs

defendants. We "must accept the plaintiff's (properly

documented) evidentiary proffers as true for the purpose of

determining the ade quacy of the prima facie jurisdictional

showing." F oster-Miller

, 46 F.3d at 145. We take these facts

"as true (whether or not disputed) and construe them in the

light most congenial to the plaintiff's jurisdictional claim."

Mass. Sch. of Law at Andover, Inc. v. Am . Bar Ass'n , 142 F.3d

26, 34 (1st Cir. 19 98); s ee also Sawtelle v. Farrell

, 70 F.3d

1 381, 1385-86 (1st Cir. 1995). "We then add to the mix facts

put forwar d by the defendants, to the extent that they are

uncontradicted." Mass. Sch. of Law

, 142 F.3d at 34. We review

the district court's application of the prima facie standard de

novo. Foster-Miller , 46 F.3d at 147.

B. Background Law

"In determining whether a non-resident defendant is

subject t o its jurisdiction, a federal court exercising

diversity jurisdiction 'is the functional equivalent of a state-24-

court sitting in the forum state.'" Sawtelle , 70 F.3d at 1387

(quoting Ticketmaster-New York, Inc. v. Alioto

, 26 F.3d 201, 204

(1st Cir. (1994)). "A district court may exercise authority

over a defendant by virtue of either general or specific

[ personal] jurisdiction." M ass. Sch. of Law

, 142 F.3d at 34.

General jurisdiction exists when the defe ndant has engaged in

"continuous and systematic activity" in the forum, even if the

activity is unrelated to the suit. U nited Elec., Radio & Mach.

Workers v. 163 Pleasant St. Corp.

, 960 F.2d 1080, 1088 (1st Cir.

1992). This is not such a case and no party suggests that it

is. "In the absence of general jurisdiction, a court's power

depends upon the existence of specific jurisdiction." M ass.

Sch. of Law , 142 F.3d at 34.

To establish personal jurisdiction, Daynard must show

that the Massachusetts long-arm statute grants jurisdiction and,

if it does, that the exercise of jurisdiction under the statute

is consistent with the constitution. F oster-Miller

, 46 F.3d at

144.

Daynard's complaint pleads that personal jurisdiction

exists under subsections (a), (c), and (d) of the Massachusetts7 The statute states, in relevant part:

A Court may exercise personal jurisdiction over a person,

who acts directly or by an agent, as to a cause of action

in law or equity arising from the person's

(a) transacting any bus iness in this commonwealth;

. . .

(c) causing tortious injury by an act or omission in

this commonwealth; [or]

(d) causing tortious injury in thi s commonwealth by

an act or omission outside this commonwealth if

he regularly does or solicits business, or

engages in any other persistent course of

conduct, or derives substantial revenue . . . ,

in this commonwealth . . . .

Mass. Gen. Laws ch. 223A, § 3(a), (c)-(d).

-25- long-arm statute. Mass. Gen. Laws ch. 223A, § 3 (2000). 7 The

relevant provision is § 3(a). The question under this

subsection is whether the Scruggs defendants "act[ed] directly

or by an agent, as to a cause of action . . . arising from the

[defendants']

. . . transacting any business in" Massachusetts.

Id. § 3(a). We may sidestep the statutory inquiry and proceed

directly to the constitutional analysis, however, because the

Supreme Judicial Court of Massachusetts has interpreted the

state's long-arm statute "as an assertion of jurisdiction over

the person to the limits allowed by t he Constitution of the-26-

United States." " Automa tic" Sprinkler Corp. of Am. v. Seneca

Foods Corp. , 361 Mass. 441, 280 N.E.2d 423, 424 (1972); accord

Tatro v. Manor Care, Inc.

, 416 Mass. 763, 6 25 N.E.2d 549, 553

(1994); see also Sawte lle , 70 F.3d at 1388 ("[W]hen a state's

long-ar m statute is coextensive with the outer limits of due

process, the court's attention properly turns to the

. . .

constitutional standards.")

.

"The Due Process Clause protects an individual's

liberty interest in not being subject to the binding judgments

of a forum with which he has established no meaningful

'contacts, tie s, or relations.'" B urger King Corp. v.

Rudzewicz

, 471 U.S. 462, 471-72 (1985) (quoting Int'l Shoe Co.

v. Washington

, 326 U.S. 310, 319 (1945) ). "[D]ue process

requires only that in order to subject a defendant to a judgment

in personam

, if he be not present wit hin the territory of the

forum, he have certain minimum contacts with it such that

maintenance of the suit does not offend 'traditional notions of

fair play and substantial justice.' " I nt'l Shoe

, 326 U.S. at

316 (quoting Milliken v. Meyer , 311 U.S. 457, 463 (1940)); see

also Noonan v. Winston Co.

, 135 F.3d 85, 90 (1st Cir. 1998). In

a contract case, we evaluate the p arties' "prior negotiations-27-

and contemplated future consequences, along with the terms of

the contract an d the parties' actual course of dealing" to

de termine whether the defendants purposefully established

minimum contacts. Burger King , 471 U.S. at 479.

The more difficult question in this case is whether any

of the Motley defendants' contacts may be imputed to the Scruggs

defendants for purposes of establishing "minimum contacts." We

conclude that some of these contacts may be imputed. The next

question is whether the sum of any imputed and direct contacts

permits the court to exercise personal jurisdiction over the

Scruggs defendants consistent with the Constitut i on. We

conclude that these contacts suffice u nder Supreme Court law,

e.g.

, Burger King

, 471 U.S. at 471-87; Int'l Shoe

, 326 U.S. 310,

and the law of this circuit, e.g.

, Noonan

, 135 F.3d at 90;

Foster-Miller , 46 F.3d at 144

.

C. Imputed Contacts

Daynard alleges that the relationship between the

Motley defendants and the Scruggs defendants is such that some

of the Motley defendants' contacts with Massachusetts should be

imputed to the Scruggs defendants. As the district court

recognized, whether the defendants were in all respects joint-28-

venturers is not alone dispositive, Daynard , 184 F. Supp. 2d at

74, although the partie s focus much of their energies on

disputing this particular issue. The basic question is whether

the relationship between the Scruggs defendants and the Motley

d efendants, however one labels it, is sufficient to attribute

any of the Motley defendants' contacts to the Scruggs defendants

for the purpose of reaching the Scruggs defendants under the

Massachusetts long-arm statute as cabined by the Due Process

Clause of the Fourteenth Amendment. We conclude that the

relationship was sufficient for that purpose. Daynard has put

forth evidence that, if credited and accepted as true, is enough

to support personal jurisdiction over the Scruggs defendants.

Daynard alleges that the Motley defendants and the

Scruggs defendants were part of a formal, written joint venture

between themselves. He also says that he believed the parties

to be joint vent urers because they "consistently purported to

be" in su ch a relationship. Daynard argues that at the time

Charles Patrick of Ness Motley came to Massachusetts to retain

him, Ness Motley and Scruggs Millette were engaged in a form of

tobacco litigation joint venture. Daynard says that Patrick was

acting for both firms when Patrick retained him and that Patrick-29-

retained him to advance the objectives of the joint venture.

Throughout his dealings with Ness Motley and Scruggs Millette,

he understood the two firms to be in a joint venture that at

first encompassed the Mississippi tobacco litigation and then

broadened to include tobacco litigation nationwide.

1. Applicability of Donatelli 's "substantial

influence" test.

First, there is the threshold question of whether the

district court properly applied Donatelli

, 893 F.2d 459, as the

governing test. The parties devote the majority of their

attention to this issue, but it is not dispositive of the

personal jurisdiction question. The district court concluded

that eve n if the Motley defendants acted as the Scruggs

defendants' a gents, "there was no substantial influence as

required by Due Process." Daynard , 184 F. Supp. 2d at 76. The

district court derived this "substantial influence" requirement

from Donatelli

, 893 F.2d at 469, a g eneral jurisdiction case.

The district court was in error. It read Donatelli as applying

an exclusive test and as applying in the present, very different

context. This over-reads Donatelli

.

The question before us is whether Daynard must meet the-30-

substan tial influence test in order to comply with

jurisdictional Due Process requirements. Although D onatelli

aids our inquiry, we conclude that its substantial influence

test is not the exclusive test for attribution of conduct. It

does not control the matter before us here, where the questions

are whether the Scruggs defendants were in an actual or apparent

agency relationship, or at least held themselves out to be in a

joint venture or other a gency relationship with the Motley

defendants, and whether the Scruggs defendants ratified the

Motley defendants' conduct.

In Donatelli , this court held that

an unincorporated association which does not itself

conduct significant activities in , or enjoy

affiliating circumstances with, a state cannot be

subject to the general personal jurisdic tion of the

state's courts on the bas is of a member's contacts

within the state unless the member carries on the inforum activities under the associ ation's substantial

influence.

Id. at 472. Donatelli sued the National Hockey League ("NHL")

in Rhode Island, challenging the NHL's draft and its failure to

declare him a free agent. J urisdiction in Rhode Island over the

NHL was premised on the fact that a member team of the NHL had

contacts with Rhode Island. His suit was unrelated to either-31-

the NHL's contacts with Rhode Island or its member's contacts

wit h Rhode Island. I d. at 462. The D onatelli court rejected

the theory that the NHL could be subject to gen eral personal

jurisdiction in Rhode Island simply because one of its members

was subject to general jurisdiction in that state. I d. at 472.

It concluded that, in these circumstances, a showing of

"substantial influence" was necessa ry in order to attribute

one's contacts to the other consistent with the requirement of

purposeful availment. Id. at 469.

Donatelli 's substantial influence test does not control

the entire universe of cases in which one party's contacts might

be attributed to another. By its terms, Donatelli applies "in

the world of unincorporated associations." I d. at 468. Indeed,

as Donate lli itself observed, the substantial influence test

do es not control where one seeks to attribute contacts from

partner to partnership or from subsidiary to corporate parent.

Id. at 465-67. In the partnership context, "the activities of

the partner are generally attributed to the partnership and

jurisdiction over the partner ship follows from the partner's

contacts, if suf ficient, regardless of the absence of

independent contacts between the partnership qua entity and the-32-

forum." I d. at 466. D onat elli 's substantial influence test

does not apply here, where the question is whether an actual or

implied agency relationship, sufficient to attribute contacts,

existed between the parties. We conclude that, similar to some

c ases involving actual partnerships, the relationship between

the defendants here invokes certain principles of the law of

agency, partnership, and joint venture and that these principles

permit imputing contacts without the need to show substantial

influence.

In addition, alt hough we do not decide whether

Donatelli 's approach to attribution is necessarily limited to

general jurisdiction cases, we note, as stated several times in

the Donatelli opi nion, i ncluding in the above quoted passage,

that Donatelli "focus[ed]

. . . upon

. . . general as opposed to

specific j urisdiction." Id. at 463; s ee also id. at 461 (stating the

issue on appeal as whether "an unincorporated association is subject to

the general personal jurisdi ction of every court having jurisdiction

over one of its members") (internal quotation marks omitted). This is

important because, as Donatelli states clearly

, the standard for

general jurisdiction is more strict than the standard for

specific jurisdiction. I d. at 463. General jurisdiction-33-

requires that the defendant's activities in the forum be

"continuous and systema t ic," United Elec., Radio & Mach.

Workers , 960 F.2d at 1088, whereas specific jurisdiction

requires a lesser showing.

The problem Donatelli addresses is, in some ways, more

l ikely to occur in general jurisdiction cases. In general

jurisdiction cases, the suit does not arise out of or relate to

the defendant's forum contacts. H elicopteros Nacionales de

Colombia, S.A. v. Hall

, 466 U.S. 408, 414 n.9 (1984). Donatelli

addresses the potentially unjust scena rio in which an

association, with no direct contacts with a forum, is haled into

a forum based on one of its members' continuous and systematic

activities in the forum, to answer a lawsuit unrelated to either

the member's or the association's in-forum activities. 893 F.2d

at 469. Something more is needed to say that the association

has purposefully availed itself of the ben efits of in-forum

activity. Otherwise, the association is subject to a suit in

that forum, unrelated to anything t he association has done in

the forum, by merely engaging in a limited relationship with a

m ember, that through its own activities engages in cont inuous

and systematic activities in a forum.-34- Don atelli resolves this problem by holding that, in

general jurisdiction cases, the association must "exercise[ ]

substantial influence over the member's decision to carry on the

in-forum activities which constitute the relevant 'minimum

contacts.'" I d. This requirement ensures that the association

purposef ully availed itself of the benefits of the forum,

because it links the member's in-forum activity with the

association's relationship with that member.

This problem, however, is less likely to arise in

specific jurisdiction cases such as this one. Here a direct

connection is alleged between the in-forum activities of the

agent (the Motley defendants) and the agent's relationship with

t he principal (the Scruggs defendants). When the cause of

action relates to both the association's activities giving rise

to the suit and to the member's in-fo rum activities, the same

risk of unfairness is not necessarily present. In the present

case, Daynard's suit relates to the Scruggs defendants' alleged

promise to pay him a share of the fees and to the Motley

defendants' activities in Massachusetts, claimed to have been

ratified by Scruggs. D onatelli is not con trolling in this

context. It addresses a question different from the inquiry8 See Burger King

, 471 U.S. at 480 n.22 (stating that

commercial activities carried out on a party's behalf "may

sometimes be ascribed to the party," but declining to "resolve

the permissible bounds of such attribution"); G rand Entm't

Group, Ltd. v. Star Media Sales, Inc.

, 988 F.2d 476, 483 (3d

Ci r. 1993) (stating that "[a]ctivities of a party's agent may

count toward the minimum contacts necessary to support

jurisdiction"); Sher v. Johnson , 911 F.2d 1357, 1362 (9th Cir.

1 990) (stating that the actions of an agent are attributed to

the principal for personal jurisdiction purposes); see also

Dona t elli

, 893 F.2d at 466 (noting the general rule that

"jurisdiction over a partner confers jurisdictio n over the

p artnership"); Lewis v. Fresne

, 252 F.3d 352, 359 (5 th Cir.

2001) (same).

-35- here, which is whether there was an agency relationship between

the defendants and whether the Scruggs defendants ratified the

Motley defendants' activities in Massachusetts giving rise to

Daynard's suit.

But that does not end the matte r. We must still

determine whether the relationship between the defendants

permits imputing a sufficient quantum of the Motley defendants'

connections to the Scruggs defendants.

2. Implied agency and ratification.

For purposes of personal jurisdiction, the actions of

an agent may be attributed to the principal. 8 W hether or not an

agent is initially authorized to act on behalf of a principal,

the agent's actions may be attributed t o the principal, for-36-

purposes of personal jurisdiction, i f the principal later

ratifies the agent's conduct. M yers v. Bennett Law Offices

, 238

F.3d 1068, 1073 (9th Cir. 2001); Wessels, Arnold & Henderson v.

Nat'l Med. Waste, Inc.

, 65 F.3d 1427, 1433 (8th Cir. 1995)

(attributing contacts where principal "supported, accepted, and

followed through on the efforts initiated" by the agent,

regardless of whether the agent had authority to act on the

principal's behalf). First, we address whether the defendants

were in any sort of agency relationship. Second, we discuss

whether the Scruggs defendants initially authorized, or later

ratified, the Motley defendants' actions.

We disagree with the district court's conclusion that

"the defendants w ere not in any sort of agency relationship."

Daynard

, 184 F. Supp. 2d at 74; see also id. at 76. Traditional

co mmon law concepts support the conclusion that the Scruggs

defendants' relationship with the Motley defendants suffices to

bring the parties within the rule that permits imputation of

contacts for jurisdictional purposes.

Section 16 of the Uniform Partnership Act, which is codified

in the laws of Massachusetts, Mississippi, and South Carolina,

recognizes the common law doctrine of partnership by estoppel

---37-

or, in this case, j oint venture by estoppel. Unif. P'ship Act §

16(1), 6 U.L.A. 125, 501 (1995); Mass. Gen. Laws ch. 108A, § 16

(2000); Miss. Code Ann. § 79-12-31 (2001); S.C. Code Ann. § 33-

41-380 (2001). The Uniform Partnership Act states:

When a person

. . . represents himself, or consents to

another represen ting him to any one, as a partner . . . he

is liable to any s uch person to whom such representation has

been made, who has, on the faith of such representation,

given credit to the actual or apparent partnership, and if

he has made such representation or cons ented to its being

made in a public manner he is liable to such person, whether

the representation has or has not been made or communicated

to such person s o giving credit by or with the knowledge of

the apparent partner making the representation or consenting

to its being made.

Unif. P'ship Act, supra

, § 16(1); see also Standard Oil Co. v.

Henderson

, 265 Mass. 322, 163 N.E. 743, 745 (1928) (stating the

common law doctrine of partnership by estoppel).

Partnerships and joint ventures aside, a theory of

agency by estoppel is similarly availing to Daynard. U nder the

Restatement (Second) of Agency,

[a] person who is not otherwise liable as a party to

a transaction purported to be done on his account, is

nevertheless subject to liability to persons who have

changed their positions because of their belie f that

the transaction was entered into by or for him, if

(a) he intentionally or car e lessly caused such

belief, or

(b) knowing of such belief and that others might-38- change their positions because of it, he did

not take reasonable steps to notify them of the

facts.

Restatement (Second) of Agency § 8B (1958); a ccord H.G.

Reuschlein & W.A. Gregory, The Law of Agency and Partnership §

25, at 65-66 (2d ed. 1990) (noting that "[c]onduct which leads

a third party to believe that the agent has authority and thus

creates apparent authority t o those persons who act upon it,

frequently causes the principal to be liable to those who have

changed their position in reliance to their detriment"); L.

Lakin & M. Schiff, The Law of Agency 38 (1984) (stating an

"equitable principle of agency by estoppel" similar to that of

the Restatement (Second)).

Ev en if the defendants' relationship were to fall

slightly outside of the confines of these specific doctrines,

th e question before us is whether a sufficient relationship

exists under the Due Process Clause to permit the exercise of

jurisdiction, not whether a partnership, joint venture, or other

particular agency relationship between the two defendants

exists. We think it consistent with the Due Process Clause to

attribute to the Scruggs defendants the Mo tley defendants'

retention of, and certain interactions with, Daynard where, as-39-

Daynard alleges, they have led Daynard and the public to believe

they were joint venturers. That is a different issue from

whether, in a dispute between the two firms, a joint venture

agreement could be enforced.

We take the facts alleged and produced by Daynard in

the light most favorable to his jurisdictional assertion. Even

if the parties were n ot joint venturers, they held themselves

out to Daynard to be part of a joint venture or other agency

relationship and are subject, for personal jurisdiction

purposes, to the doctrine of estoppel. Daynard, throughout his

dealings with the defendants, understo od them to be joint

venturers. He says the parties "consistently purported to be

joint venturers" and that he reasonably relied on this

understanding. The question is whether he had a basis for this

belief grounded in the Scrug gs defendants' own conduct or

conduct undertaken with their consent.

In support of his understanding, Daynard states that

he believed the firms to be in a jo int venture based on their

statements and conduct. Daynard states that Patrick was acting

for both firms when Patrick retained him and that Patrick

retained him to advance the objectives of the joint venture. He-40-

says that during this first meeti ng, Patrick described the

tob acco litigation as stemming from a meeting between Scruggs

and the Mississippi attorney general, which then resulted in

Scruggs "br[inging] the Motley firm into their plans."

Day nard supports his claim with documentary evidence

of a joint venture that he unearthed through jurisdic tional

discovery. Around October 1994, the Scruggs defendants entered

into a "Joint Venture Agreement" with several firms to pursue

tobacco litigation on behalf of the state of Mississippi. The

Motley defendants claim to h ave abided by this agreement and

their fi rm's name was listed on the agreement, although they

never signed the agreement. In a letter from Joseph Rice of

Ness Motley to R i chard Scruggs, Rice stated: "As we have

discussed several tim es, we have not signed the Mississippi

Joint Venture A greement solely because we don't want to be

governed by Mississippi Tax Law. We are agreeable to all terms

in the agreement and, as you know, we have acted under the

agreement from the beginning." In the agreement, Ness Motley

firm members, including Mr. Motley, were listed as members of

several of the "teams" and "committees" forming the "Litigation

Management Structure" outlined in the agreement. Mr. Motley was-41-

a co-chairman of the "Public Relations Team," which also

included St eve Bozeman from Scruggs Millette. Indeed, Ness

Mo tley was counsel of record in the Mississippi case. In

addition, Daynard notes that "the two defendant firms were

parties to a 'Resolution' which recited that they had both 'made

and entered into that certain Joint Venture Agreement'

concerning the Mississippi litigation."

Scruggs says that Ness Motley did not sign the joint

venture agreement, that Ness Motley did not perform under the

agreement's terms, and that the litigation team did not function

as outlined in the agreement. He says Ness Motley did not make

the capital contributions specified in the agreement, that there

was a distinction between being counsel of record and being a

party to the joint venture agreement, and that Ness Motley's

failure to sign the agreement caused "great concern." Scruggs

says that, upon receiving the letter from Rice, stating that

Ness Motley had "acted under the agreement from the beginning,"

he called Rice and told him that "this wasn't good enough" and

that "nobody else" considered Ness Motley to have performed

under the agreement.

Scruggs concedes, howe v er, that the profits from the-42-

Mississippi litigation, outlined in thi s agreement, were

eventually divided with Ness Motley, but he says that the

division was under the terms of a 1999 agreement. Scruggs

states that his "understanding with Ness Motley was always that

at the end of the day, we would attempt to negotiate a fee and

expense sharing arrangement, each trusting the goodwill of the

other to reach a successful negotiation, but without any

guarantee that w e would." In addition, Scruggs admits that

"[t]he re was a general cooperative effort between [Scruggs

Millette and Ness Motley] to advance litigation against the

tobacco industry."

Daynard then says that after Motley hired him, he began

a course of dealing with the defendants in which he provided

both firms with legal advice, including advice to members of the

Scruggs firm physically present in Boston, as well as assistance

provided from Boston by phone and fax. Daynard also cites

several conversations with both Scruggs and Motley in which they

agreed to pay him a share of the fe es obtained by b oth firms,

Scruggs's statement that Scruggs had at least apparent authority

to promise the 5%, and Motley's statement that he would be

compensated as part of the "team."-43- Daynard cites a popular book about the tobacco

litigation, which he says describes Ness Motley and Scruggs

Millette as joint venturers beginning in 1993, as evidence that

the firms were engaged in a well publicized joint venture or at

least held themselves out to be so engaged. S ee M. Orey,

Assuming the Risk: The Mavericks, the Lawyers, and the WhistleBlowers Who Beat Big Tobacco 265 (1999) (stating that Scruggs,

Motley, and two others, were the "nucleus" of a tobacco

litigation "team," which "drafted a joint-venture agreement that

spelled out in elaborate detail the duties each of the lawyers

would pe rform"). He notes, as additional evidence of public

perception, that in the Texas tobacco litigation, other lawyers

sent the firms checks made payable to "Ness Motley/Scruggs." At

least four such checks appear in the record.

Finally, in support of his claim that the defendants

held themselves out to be joint venturers, Daynard presents a

1 998 letter to Hawaii's attorney general, from Joseph Ri ce of

Ness Motley, stating that "Ness, Motley has an arrangement with

Richard Scruggs t o work jointly on all of the state cases

against the Tobacco Industry." Noting that "[w]e have no

formal, written agreemen t," he said "Ness, Motley and Dick-44-

Scruggs have been doing business together for almost ten years

and have never had any differences. We fully anticipate sitting

down in hindsight and determining what the division of any

recoveries would be between the two law firms."

Scruggs said that he considered Rice's statement that

"Ness, Motley has an arrangement with Ric hard Scruggs to work

jointly on all of the state cases against the Tobacco Industry"

to be "a bit of an overstatement." On the other hand, Rice's

letter to Hawaii's attorney general said "I am sending a copy of

this letter to Dick so he may respond likewise, if he has any

questions or any additions." Scruggs did not write anything to

contradict R ice's characterization and stated, in his

deposition, that "[t]here was no reason to contradict it."

Scruggs conceded that "[t]here was a general cooperative effort

between [Scruggs Millette and Ness Motley] to advance litigation

against the tobacco industry." Although this letter may not go

to Daynard's understanding of the fir ms' relationship, and

although it was written by Rice of Ness Motley, not by any of

the Scruggs defendants, Scruggs's silence carries at least some

weight.9 As described in the Restatement (Second), "Ratification

is the affirmance by a person of a prior act which did not bind

him but which was done or professedly done on hi s account,

whereby the act, as to some or all persons, is given effect as

if originally authorized by hi m." Restatement (Second) of

-45- The facts as alleged by Daynard are sufficient to make

the jurisdi ctional showing that, in Boston, Patrick of Ness

Motley hired Daynard, that Daynard reasonably understood Patrick

to be acting on behalf of a joint venture or other agency

relationship between Ness Motley and Scruggs Millette, and that

Daynard relied on this understanding by providing his services

to both defendants.

Many of these same facts support the conclusion that

the Scruggs defendants subsequent ly ratified the Motley

defendants' conduct . Even if Patrick, when he hired Daynard,

was acting without actual authority from the Scruggs defendants,

Daynard says Patrick purported to act as an agent for both firms

when Patrick retained Daynard, and that Scruggs effectively

ratified that representation.

"A person may ratify a prior act done by another without

actual or apparent autho rity. . . . by . . . conduct that is

justifiable only on the assumption that the person so consents."

Restatement (Third) of Agency § 4.01 (Tentative Draft No. 2, 2001). 9Agency, supra , § 82.

-46-

"The sole requirement for ratification is a manifestation of assent or

other conduct indicative of consent by the principal. " R estatement

(Third ) of Agency, supra , § 4.01, cmt. b; s ee also Inn Foods, Inc. v.

Equitable Coop. Bank

, 45 F.3d 594, 597 (1st Ci r. 1995) (stating that

"[u]nder Massachusetts law, ratification of an agent's acts may be

express or implied"). T he Scruggs de fendants, on the facts

alleged, engaged in such conduct.

After Ness Motley retained Daynard, and as a result of

this em p loyment, Daynard asserts that he began providing

in formation directly to the Scruggs defendants. Daynard says

that he "communicated regularly" with the Scruggs defendants,

that they came to Boston to receive his advice, and that he "had

many conversations, meetings and w ritten communications in

Boston with members of the defendant firms, in which [he]

provided advice and undertook specific projects for their use in

the tobacco litigation." E ven if the Scruggs defendants did not

come to Boston, we think there is adequate other ev idence of

ratification, accepting Daynard's allegations.

Daynard says that he had "several conversations" with

"both Mr. Motley and Mr. Scruggs in which they stated that they-47-

would appropriately compensate [Daynard] . . . and that the

final form of compensation would be" in the form of a share of

the fees the firms obtained from handling the state tobacco

litigation. Daynard says Ronald Motley advised him that he

would be compensated for his assistance as a member of the Ness

Motley "team." Further evidence of ratification comes from Daynard's

version of the Chicago meeting, where Scrugg s said he acted with at

least apparent authority for both firms and reached an agreement.

Daynard says that Scruggs sh ook hands on a deal to pay him 5% of these

fe es. These assurances and reassurances that Daynard would be paid a

portion of the recovered fees were an integral part of the ongoing

relat ionship existing between Daynard, the Motley defendants, and the

Scruggs defendants.

Finally, Daynard asserts that in reliance on his arrangements

w ith the Scruggs defenda nts and at their request, he had to commit outof-pocket expenses of $15,000 to retain someone to meet his teaching

obligations. Again, there is no evidence that Scruggs disavowed any

contractual relationship a s he accepted Daynard's assistance. To be

sure, Scruggs says Daynard was a volunteer, but reasonable inferences

support Daynard's version.

The Scruggs defendants had many opportunities to disavow a

relationship with Daynard or to clarify the relationship. For example,10 It was not until November 1997, after Daynard had provided

years of services and the firms were expecting to reap significant

financial rewards from at least the Mississippi and Florida litigation,

that Scruggs responded to Daynard's second letter, after he

ignored the first letter, and disavowed the 5% fee arrangement.

Daynard asserts that, even at this point, Scruggs disputed only

the extent of Daynard's compliance with the agreement, not the

existence of the agreement.

-48- they could have rejected his assistance or accepted it only on certain

conditions. Instead, according to Daynard, they repeatedly encouraged

and accepted his assistance and during several conversations agreed to

pay him in the form of a share of the fees generated. W hen Daynard

wrote his first letter to Scruggs in July 1997 con firming the

fee arrangement, Scruggs remained silent. 10

By knowingly accepting the benefits of the transaction

initiated in Massachusetts, the Scruggs defendants ratified Patrick's

act of hiring and retaining Daynard on behalf of both firms, which

ultimately gave rise to this law suit. S ee Inn Foods

, 45 F .3d at 597

n.7 (noting that " benefits received are certainly strong evidence that

the principal acquies ced in the agent's transaction") ; Restatement

(Third) of Agency, supra

, § 4.01, cmt. d. In addition, by repeatedly

agreeing to compensate Daynard for ongoing work conducted in

Massachusetts, agreeing to pay Daynard a share of the fees and later

shaking hands on the 5% figure, and accepting his coming from Boston to

Mississippi to assist at trial, Scruggs , acting on behalf of his firm-49-

and, according to Daynard, the Ness Motley firm as well, ratified the

arrangement in which the Motley defend ants agreed to pay Daynard for

his ongoing services as a member of the team.

D. The Remaining Constitutional Analysis

The easier question in the case is the remaining

constitutional one. Given the Scruggs defendants' direct

contacts with Massachusetts and their contacts imputed from the

Motley defe ndants, do the Scruggs defendants have "minimum

contacts" with Massachusetts "such that the maintenance of the

suit does not offend 'traditional notions of fair play and

substantial justice.'"? I nt'l Shoe

, 326 U.S. a t 316 (quoting

Milliken , 311 U.S. at 463). The answer is yes.

For specific jurisdiction, this circuit divides the

constitu tional analysis into three categories: relatedness,

purposeful availment, and reasonableness:

First, the claim underlying the litigation must

directly arise out of, or relate to, the defendant's

forum-state activities. Second, the defendant's instate contacts mu st represent a purposeful availment

of the privilege of conducting activities in the forum

state , thereby invoking the benefits and protections

of that state's laws and m aking the defendant's

involuntary presence before the state's courts

foreseeable. Third, the exercise of jurisdiction

must, in light of the Gestalt factors, be reasonable.-50-

Foster-Miller

, 46 F.3d at 144 ; see also Noonan , 135 F.3d at 90.

The Supreme Court, speaking on the subject of specific personal

jurisdiction in contract cases, has "emphasized that parties who

'reach out beyond one state and create continuing relationships

and obligations with citizens of another state' are subject to

regulation and sanctions in the other State for the consequences

of their activities." B urge r King , 471 U.S. at 473 (quoting

Travelers Health Ass'n v. Virginia

, 339 U.S. 643, 647 (1950)).

1. Relatedness.

As to the first requirement, that "the claim underlying

the litigation must directly arise out of, or re late to, the

defendant's forum-state activities," Foster-Miller , 46 F.3d at

144, the district court correctly concluded, based merely on the

Scruggs defendants' direct contacts with the forum, that the

alleged

breach of contract in this case "arose" from a course

of dealing between the parties. The contract was in

the form of a working relationship

-- started in

Massachusetts

-- that called for interaction between

Massachusetts, South Carolina, and Mis sissippi.

Drawing all inferences in favor of Daynard, he

arguably meets the relatedness requirement,-51-

Daynard

, 184 F. Supp. 2d at 66. It is clear that Daynard's

breach of contract claim "arise[s] out of, or relate[s] to," the

Scruggs defendants' Massachusetts activities. F oster-Miller

, 46

F.3d at 144. Daynard's lawsuit is based on his claim that the

defendants owe him money for his work pursuant to an agreement

initiated by the defen dants while physically present in

Massachusetts and per formed, in part, in Massachusetts. This

relationship contemplated ongoing interaction between Daynard,

in Massachusetts, and the defendants, in Mississippi and South

Carolina. Daynard's suit arises out of these Massachusetts

activities, which were instrumental to the formation of the

disputed oral contract. See McGee v. Int'l Life Ins. Co.

, 355

U.S. 220, 223 (1957) (upholding jurisdiction over a suit "based

on a contract which had substantial connectio n with th[e]

St a te"); Hahn v. Vt. Law Sch.

, 698 F.2d 48, 51-52 (1st Cir.

1983).

2. Purposeful availment.

"Second, the defendant's in-state contacts must

represent a purposeful availment of the privilege of conducting

activities in the forum state, thereby invoking the benefits and

protect ions of that state's laws and making the defendant's11 "The transmission of facts o r information into

Massachusetts via telephone or mail would of course constitute

evidence of a jurisdictional contact directed into the forum

state." M ass Sch. of Law

, 142 F.3d at 36; see also Burger King

,

471 U.S. at 476 (stating that "it 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" and that defendants may not defeat jurisdiction merely by

showing that they never physically entered the forum).

-52- involuntary presence before the state's courts foreseeable."

Foster-Miller

, 46 F.3d at 144. "The cornerstones upon which the

concept of purposeful availment rest[s] are voluntariness and

foreseeability." S aw telle , 70 F.3d at 1391 (citing

Ticketmaster , 26 F.3d at 207).

The district court's reasoning on purposeful availment

considered only the Scruggs defenda nts' direct contacts and

found them insufficient. We need not address this conclusion as

Daynard has not challenged it on appeal. We note, however,

that, as the distri ct court recognized, Scruggs did have some

contacts with Massachusetts, however minimal. The Scruggs

defendants, according to Daynard, engaged in telephone and fax

communications with him in Massachusetts. 11 In addition, Daynard

says the Scruggs defendants also had conversations with him, in

which they agreed to pay him a share of the fees as compensation-53-

for work performed in Massachusetts. He also says that Scruggs

firm member s came to Boston to receive his advice, although

Scruggs denies this.

Combined with Patri ck's physical presence in

Massachusetts to negotiate the agreement which ultimately gave

rise to this litigation, and the ongoing relationship between

the Motley defendants and Daynard -- properly attributed to the

Scruggs defendants

-- we can properly say that the Scruggs

defendants "engaged in

. . . purposeful activity related to the

forum that would make the exercise of jurisdiction fair, just,

or reasonable," Rush v. Savchuk

, 444 U.S. 320, 329 (1980). See

Burger King

, 471 U.S. at 479 (holding that "prior negotiations

and contemplated future consequences, along with the terms of

the contract and the parties' actual course of dealing" must be

evaluated to determine whether the defendant purposefully

established minimum contacts). P atrick's action alone is

probably sufficient to support jurisdiction over the Motley

defendants and, when imputed, the S cruggs defendants as well.

See id. at 475 n.18 (noting that "[s]o long as it creates a

'substantial connection' with the forum, even a single act can

support jurisdiction") (quoting Mc Gee , 355 U.S. at 223); R.C.-54-

Casad & W.B. Richman, 1 Jurisdiction in Civil Actions:

Territo rial Basis and Process Limitations on Jurisdiction of

State and Federal Courts § 4-2, at 413 (3d ed. 1998) (stating

that "if the defendant or its agent was physically present in

t he state to negotiate the service contract, cases have found

that the defendant transacted business there"). Even in cases

where the defendant was not physically present in the forum,

where the defend ant initiated the transaction by mailing or

calling the plaintiff in the forum and when the defendant

contemplated that the plaintiff would render services in the

forum, all as alleged by Daynard here, many courts have found

jurisdiction. Casad & Richman, supra , § 4-2, at 414.

3. Reasonableness.

"Third, the exercise of jurisdiction must, in light of

the Gestalt factors, be reasonable." F oster-Miller

, 46 F.3d at

144; see also World-Wide Volkswagen Corp. v. Woodson , 444 U.S.

286, 292 (1980) (listing factors). The Gestalt factors support

the conclusion that jurisdiction is reasonable.

The burden on the Scruggs defendants of appearing in

Massachusetts, given that they routinely r epresent clients

outside their home state, is not by any m eans unusual. In-55-

addition, Daynard's interest i n bringing his action in this

forum, given the traditional deference accorded to a plaintiff's

choice of forum, weighs in favor of personal jurisdiction. This

is particularly true in light of Massachusetts's stake in being

able "to provide a convenient forum for its residents to redress

injuries inflicted by out-of-forum actors." Sawtelle , 70 F.3d

at 1395. Massachusetts's adjudicatory interest is likely to

weigh in favor of exercising personal jurisdiction because the

district court has already decided that, as between Daynard and

the Motley defendants, Massa chusetts law governs the dispute

over the oral fee-splitting arrangement. Daynard

, 188 F. Supp.

2 d at 118-23. Finally, efficient administration of justice

favors jurisdiction in Massachusetts, where this a ction is

already proceeding against the Motley defendants.

E. Conclusion

We conclude that the Scru ggs defendants' contacts

properly imputed from the Motley defendants, against the

backdrop of the Scruggs defendants' direct contac t s with

Massachusetts, constitute "minimum contacts" with Massachusetts

"such that the maintenance of the suit does not offend

'traditional notions of fair play and substantial justice.'"-56-

Int'l Shoe

, 326 U.S. at 316 (quoting Milliken

, 311 U.S. at 463).

Again, we e mphasize that we reach this conclusion under the

prima facie approach, taking Daynard's properly documen ted

evidentiary proffers "as true (w hether or not disputed) and

constru[ing] them in the light most congenial to [Daynard's]

j urisdictional claim." M ass. Sch. of Law

, 142 F.3d at 34.

Nothing in the opinion precludes the Scruggs defendants, in the

prospective district court proceedings, from challenging these

facts, if they wish, and renewing their jurisdictional

challenge, if appropriate.

III.

For these reasons, we r everse the dismissal of t h e

Scruggs defendants for lack of personal jurisdiction and remand

to the district court for further proceedings consistent with

this opinion.