Of the Sixth Circuit, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 08-1403

NORTH AMERICAN CATHOLIC EDUCATIONAL

PROGRAMMING FOUNDATION, INC.,

Plaintiff, Appellant,

v.

GERRY CARDINALE, ROB GHEEWALLA, JACK DALY;

GOLDMAN SACHS GROUP, INC.; GS CAPITAL PARTNERS III, L.P.;

GS CAPITAL PARTNERS III OFFSHORE, L.P.; 

GOLDMAN SACHS & CO. VERWALTUNGS GmbH,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF RHODE ISLAND

[Hon. William E. Smith, U.S. District Judge]

Before

 Boudin, Siler, and Howard, *

Circuit Judges.

Matthew T. Oliverio with whom Christine M. Curley and Oliverio

& Marcaccio LLP were on brief for appellant.

Douglas H. Flaum with whom Shahzeb Lari, Fried, Frank, Harris,

Shriver & Jacobson LLP, Wayne F. Dennison, Brian J. Lamoureux and

Brown Rudnick LLP were on brief for appellees.

May 19, 2009
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BOUDIN, Circuit Judge. North American Catholic

Educational Programming Foundation, Inc. ("North American") appeals

from the district court's judgment; the judgment dismissed its

lawsuit--the fourth stemming from its failed business relationship

with Clearwire Holdings, Inc. ("Clearwire")--for lack of personal

jurisdiction. North American is a nonprofit organization,

incorporated and having its principal place of business in Rhode

Island, whose mission is to provide educational and religious

programming.

We take the facts primarily from the complaint.

Clearwire was formed in the 1990s as a for-profit company aiming to

develop a national wireless data network providing internet access.

It was principally financed by the investment bank Goldman Sachs,

which initially controlled most of its voting stock. Clearwire in

turn controlled a number of other entities that were expected to

manage and operate the wireless data network that Clearwire aimed

to develop starting in or around the year 2000.

At that time, the cellular telephone network could not

handle the data transmitted by internet users. For this purpose,

carriers like Sprint and WorldCom were seeking to use spectrum,

thought to be especially suitable, already allocated for use in the

Instruction Television Fixed Service ("ITFS"); licenses for ITFS

spectrum were held predominantly by educational entities, including

North American. In March 2000, North American joined with two
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other holders of ITFS spectrum licenses to form the ITFS Spectrum

Development Alliance ("the Alliance") to develop this opportunity.

As existing short term leases already granted by Alliance

members to third parties expired, the Alliance members proposed to

license their spectrum for use in a wireless data network; but they

also aimed to own an equity interest in the new network. The

Alliance began negotiations with Goldman Sachs, represented by

Gerry Cardinale and Rob Gheewalla, later joined by Jack Daly. All

three men were employed by affiliates of Goldman Sachs & Co.,

reside in New York and later served as directors of Clearwire.

On June 7, 2000, Cardinale sent a memorandum, addressed

to the Alliance and the heads of its three members, on behalf of

what he termed the "Goldman Sachs Team," setting out a proposal to

use Alliance spectrum, allow the Alliance to retain an equity

interest in the network and provide an up-front cash payment.

Later in the year, Goldman's affiliate GS Capital Partners III sent

a term sheet to the Alliance members outlining the terms of an

agreement in principle, and a master agreement was signed by the

Alliance members and Clearwire in March 2001.

Under the master agreement, Alliance members would, as

their existing leases expired, lease their spectrum to Clearwire

and the Goldman Sachs entities agreed to invest $47 million in

Clearwire. In addition, Cardinale, Daly and Gheewalla were

appointed to Clearwire's board where, under the agreement, Goldman
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Sachs representatives could cast a tie-breaking vote. The Alliance

members obtained in turn an initial small stake in Clearwire.

In June 2002, WorldCom collapsed, which threatened to

free up a large amount of WorldCom-owned spectrum. Soon after,

Clearwire began to negotiate with members of the Alliance, seeking

to be relieved of its obligations to use Alliance spectrum. The

negotiations initially proved fruitless, and on September 11, 2002,

Clearwire's board passed a resolution saying that it would breach

the master agreement by failing to make promised payments to

Alliance members.

On February 12, 2003, Clearwire's board discussed a

reorganization plan which, North American alleges, would have

eradicated Alliance members' claims against Clearwire. The other

two Alliance partners then settled their claims against Clearwire

in exchange for reduced payments. North American says that during

this time, Daly, apparently acting on behalf of Clearwire, met with

North American's President to discuss a possible settlement, but

that North American refused.

All the while, Clearwire's financial position was growing

more perilous as it spent money developing its network but lacked

any meaningful source of revenue. In May 2003, Clearwire told its

shareholders that it was running out of capital and, during the

summer, it made an offer of preferred stock to its shareholders to

obtain "bridge" financing, saying that it was negotiating either
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for more financing or a sale of the company. North American did

not acquire more stock. In November 2003, Clearwire effectively

sold itself to another company, headed by noted telecom investor

Craig McCaw, on terms benefitting those shareholders who had bought

additional preferred stock to supply bridge financing.

Since that time, North American has brought a succession

of law suits against the various parties involved in its

relationship with Clearwire. First, North American sued Clearwire

itself in Delaware Superior Court, claiming breaches of the master

agreement, but North American withdrew the action early in 2004.

N. Am. Catholic Educ. Programming Found., Inc., v. Clearwire

Holdings, Inc., C.A. No. 03C-11-172 (RRC) (Del. Super. Ct.).

Then, North American brought another suit in Delaware

Superior Court against Cardinale, Gheewalla and Daly, asserting

various counts of fraud and breach of fiduciary duty; after being

withdrawn and then re-filed in Delaware Chancery Court, the

complaint was dismissed, the fiduciary duty claim on substantive

grounds and the others for lack of personal jurisdiction; and the

dismissal was affirmed on appeal. N. Am. Catholic Educ.

Programming Found., Inc. v. Gheewalla, 930 A.2d 92 (Del. 2007).

Finally, on November 15, 2006, North American filed the

present action in the federal district court in Rhode Island, again

asserting wrongful conduct related to the master agreement and the

bridge financing. The individual defendants were again Cardinale,
GS Capital Partners III, L.P. ("GS Capital Partners"), 1

registered in Delaware, and GS Capital Partners III Offshore, L.P.

("GS Offshore"), which has its home in the Cayman Islands, are

affiliates of GS Group; as is defendant Goldman Sachs & Co.

Verwaltungs GmbH ("GS Verwaltungs"), registered in Germany.

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Gheewalla and Daly; also named as defendants were Goldman Sachs

Group, Inc. ("GS Group"), a Delaware corporation with its principal

place of business in New York, and various affiliated entities.1

Defendants moved to dismiss the suit under Rule 12(b)(2)

for lack of personal jurisdiction, under Rule 12(b)(5) on statute

of limitations grounds and under Rule 12(b)(6) for failure to state

a claim. The district court dismissed the case on the first ground

and North American has now appealed. The appellees defend the

district court judgment but urge, in the alternative, other defects

with the suit including failure to state a claim. The issues

raised on appeal are primarily questions of law which we review de

novo. 

The central basis urged by North American for personal

jurisdiction rests, as explained more fully below, upon specific

rather than general jurisdiction. Thus, to affirm on the ground

adopted by the district court, we would have to determine

separately potential jurisdiction not only as to each defendant but

also separately for each such entity under each count of the

complaint. Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d

284, 289 (1st Cir. 1999).
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 However, “where an appeal presents a difficult

jurisdictional issue, yet the substantive merits underlying the

issue are facilely resolved in favor of the party challenging

jurisdiction, the jurisdictional inquiry may be avoided.” Kotler

v. Am. Tobacco Co., 926 F.2d 1217, 1221 (1st Cir.1990), vacated on

other grounds, 505 U.S. 1215 (1992). Here, we first sweep away the

hopeless claims and then focus on personal jurisdiction only as to

what remains. So examined, the complaint is fatally insufficient

save as to one pair of related allegations that form only part of

the final four counts.

The sufficiency of the claims stated is properly before

us. The defendants' brief in this court argued that the dismissal

should, in the alternative, be upheld under Rule 12(b)(6). North

American has declined to respond to this alternative argument in

its reply brief, saying that the district court did not resolve the

issue under Rule 12(b)(6); instead, North American refers us to its

opposition to the Rule 12(b)(6) motion below and asks to file a

further brief if we propose to address the issue.

An appellee may defend "the judgment" below on any valid

ground, McGuire v. Reilly, 260 F.3d 36, 50 (1st Cir. 2001), cert.

denied, 544 U.S. 974 (2005), so it does not matter that the

district court did not need to decide the Rule 12(b)(6) objection.

Nor is a cross reference to a brief filed below an adequate

response and forfeiture by North American could be urged. Mass.
North American's contingent request to file a supplemental 2

brief comes too late; and, in any event, North American had ample

incentive to put forth in the district court its best opposition to

the Rule 12(b)(6) motion.

-8-

Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 43 (1st

Cir. 1998). Yet, North American's district court opposition is

readily available, and we address its position on the merits.2

North American might have argued (but has not) that the

Rule 12(b)(6) objection, if sustained, is not exactly an

alternative ground because a dismissal for lack of personal

jurisdiction is ordinarily without prejudice. But no practical

difference may be present here: if the personal jurisdiction

dismissal were upheld, the statute of limitations would arguably

preclude a new filing in New York--seemingly the sole venue where

personal jurisdiction could readily be secured over defendants.

Turning then to count I, it purportedly asserts a claim

for fraudulent inducement, allowable under Rhode Island law, Guzman

v. Jan-Pro Cleaning Sys., Inc., 839 A.2d 504, 507 (R.I. 2003), but

it fails on its face to meet the requirement that "[i]n all

averments of fraud or mistake, the circumstances constituting fraud

or mistake shall be stated with particularity." Fed. R. Civ. P.

9(b). Rule 9(b)'s heightened pleading standard applies to state

law fraud claims asserted in federal court. Universal Commc'n

Sys., Inc. v. Lycos, Inc., 478 F.3d 413, 427 (1st Cir. 2007). 
-9-

Rule 9(b) requires not only specifying the false

statements and by whom they were made but also identifying the

basis for inferring scienter. Although the rule itself is not

pellucid, precedent in this circuit, as in a number of others, is

clear:

The courts have uniformly held inadequate a

complaint's general averment of the

defendant's 'knowledge' of material falsity,

unless the complaint also sets forth specific

facts that make it reasonable to believe that

defendant knew that a statement was materially

false or misleading.

Greenstone v. Cambex Corp., 975 F.2d 22, 25 (1st Cir. 1992)

(Breyer, J.) (citations omitted), superseded by statute on other

grounds, Private Securities Litigation Reform Act of 1995, Pub. L.

No. 104-67, 109 Stat. 737; see also Romani v. Shearson Lehman

Hutton, 929 F.2d 875, 878 (1st Cir. 1991), similarly superceded by

statute on other grounds.

North American provides no information in the complaint

to suggest that the defendants feigned their original expressed

intention to use the Alliance's spectrum. The complaint says that

Goldman Sachs never intended to follow its business plan but the

assertion is not itself supported with particulars that suggest

scienter and so just pushes the pleading deficiency back one stage;

no particulars are pleaded which would suggest the elements of

fraud in the inducement. 
-10-

Count II is also a fraud claim, and so also subject to

Rule 9(b)'s particularity requirement, but is a jumble of different

claims: the count says that the defendants fraudulently induced

North American "to continue" its business; that they misused

Clearwire assets; and that they engaged in self dealing. Nothing

in the count remotely describes facts from which an inference of

fraudulent intent may be drawn. A search of the rest of the

complaint, cross referenced generally by the count, similarly fails

to fill the deficiency.

Counts III and IV of the complaint allege that the

defendants tortiously interfered with prospective business

opportunities of North American. Rhode Island law recognizes a

roughly similar tort, Mesolella v. Providence, 508 A.2d 661, 669 &

n.9 (R.I. 1986), and arguably Rule 9(b) does not apply except so

far as fraud is specifically alleged as an ingredient of the claim.

But each of the elements of the claim still has to be adequately

alleged. Glassman v. Computervision Corp., 90 F.3d 617, 628 (1st

Cir. 1996). They are:

(1) the existence of a business relationship

or expectancy, (2) knowledge by the interferor

of the relationship or expectancy, (3) an

intentional act of interference, (4) proof

that the interference caused the harm

sustained, and (5) damages to the plaintiff.

Mesolella, 508 A.2d at 669-70.

Count III claims that Clearwire asserted rights to use

North American's spectrum during a period when it could have been
-11-

offered by North American to others and so interfered with North

American's prospective business opportunities. Even assuming that

Clearwire's assertion of rights was unjustified, there are no facts

asserted--or even specific allegations--to show that defendants

were aware of North American's desire at that time to dispose of

the rights to third parties or possessed the scienter needed to

establish intentionality under Mesolella.

Count IV is also framed as an interference count but

explicitly asserts "fraudulent conduct and misrepresentations." It

says that the defendants falsely represented to North American's

two Alliance partners that Clearwire faced imminent bankruptcy,

thereby "fragmenting the Alliance" by forcing the other two members

to settle. The count alleges that this reduced the Alliance's

leverage in the market and interfered with North American's ability

to acquire additional spectrum in the market, which it was "ready,

willing and able" to do.

This looks primarily like a claim suitable, if at all, to

the other two members. In all events, given that fraudulent

misrepresentation is the lynchpin, this claim too triggers Rule

9(b). Rodi v. S. New. Eng. Sch. of Law, 389 F.3d 5, 15 (1st Cir.

2004). No basis is suggested for believing that if made, the

predictions of imminent collapse were knowingly false when made.

Nor is it alleged that the defendants were aware of any effort or

of any desire by North American to acquire additional spectrum.
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North American says that Rhode Island "does not require

proof of a prospective business opportunity at the pleading stage

of a tortious interference claim . . . ." But federal law governs

the specificity requirements for pleadings in federal courts even

in diversity actions. Universal Commc'n Sys., Inc., 478 F.3d at

427. The defects in this instance are not ones of proof but of

pleading facts that, if true, would satisfy the specific elements

of a claim as defined by state law. Thus count IV also fails.

The remaining counts--V through VIII--appear to focus

upon Clearwire's offer in 2003 to let existing shareholders acquire

preferred shares in aid of bridge financing. North American did

not take up the opportunity, and it says (so far as we can tell)

that this was because defendants failed to reveal that Clearwire

was well along in negotiating a sale of assets to McCaw. Further,

it is suggested that some defendants or those connected to them did

acquire such shares.

We say "appear" and "so far as we can tell" because

several of the last four counts are vague and each purports to

incorporate all prior 58 paragraphs of description. However, each

count concerns the bridge financing, and the use of four counts

reflects the different legal theories offered to create liability

based on the underlying events: breach of a fiduciary duty of
We do not separately discuss unjust enrichment since an 3

element of such a claim, at least in the present context, would be

some wrong that makes the enrichment culpable, Steamfitters Local

Union No. 420 Welfare Fund v. Philip Morris, Inc., 171 F.3d 912,

936 (3d Cir. 1999), cert. denied, 528 U.S. 1105 (2000); and only

fraud or breach of fiduciary duty are offered to fill that role.

Hayduk v. Lanna, 775 F.2d 441, 443 (1st Cir. 1985); Benchmark 4

Elecs., Inc. v. J.M. Huber Corp., 343 F.3d 719, 723 (5th Cir.),

modified, 355 F.3d 356 (5th Cir. 2003); Frota v. Prudential-Bache

Sec., Inc., 639 F. Supp. 1186, 1193 (S.D.N.Y. 1986).

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loyalty and care (count V) and of disclosure (VI), unjust

enrichment (VII) and fraud and misrepresentation (VIII).3

Rule 9(b) pertains to most--possibly all--of these

allegations. Rule 9(b) applies most clearly to the claim of fraud

in count VIII and its use in count VII so far as the tort

underpinning the claim is fraud; one might think that negligent

misrepresentation and fiduciary duty were not on their face subject

to Rule 9(b), but the case law here and in other circuits reads

Rule 9(b) expansively to cover associated claims where the core

allegations effectively charge fraud. 

4

The ascertainable core of the four counts, we think, is

the prospect of a sale to the McCaw group. The complaint itself

alleges that by spring 2003 Clearwire was hemorrhaging cash and

trying hard to raise new funds. So, if Clearwire were on the edge

of completing a deal with McCaw, then one might argue that there

was a duty to disclose or--perhaps more plausibly--at least a duty

of management insiders not to increase their own stake in Clearwire

based on knowledge not shared with other stockholders. 
See, e.g., Flamm v. Eberstadt, 814 F.2d 1169, 1174-75 (7th 5

Cir.), cert. denied, 484 U.S. 853 (1987); Reiss v. Pan Am. World

Airways, Inc., 711 F.2d 11, 14 (2d Cir. 1983). Yet there is some

precedent, perhaps outdated, that looks more favorably upon such

claims. Holmes v. Bateson, 583 F.2d 542 (1st Cir. 1978). 

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The latter claim--effectively one of dilution--is more

plausible because both case law and common sense cabin a company's

obligation to disclose ongoing negotiations that have not yet led

to an agreement and might easily fail. Bershad v. Curtiss-Wright

Corp., 535 A.2d 840, 847 (Del. 1987) (citing cases). Apart from

the risks of prejudicing negotiations, disclosure could itself be

the basis for securities-law claims by stock purchasers if the

trumpeted negotiations eventually failed; some cases even purport

to establish per se rules against such disclosure claims based

merely on negotiations.5

North American does not allege that in August 2003

Clearwire had reached an agreement with McCaw, and it appears that

no such agreement was reached until November. So there is no

obvious inference that in August a deal with McCaw was on the edge

of completion. Further, the August 20 letter offering rights in

preferred shares did disclose that Clearwire was in discussion with

unnamed others about the possible sale of the company or its

assets, and the letter offered to supply more information on

request.

Admittedly, North American may not know even how far

discussions with McCaw had gone; and the defendants' brief sheds no
-15-

light on the matter. But Rule 9(b) is intended to set a higher

than normal threshold of specificity in factual allegations before

the discovery machinery can be set in motion. E.g., Doyle v.

Hasbro, Inc., 103 F.3d 186, 194 (1st Cir. 1996) (citing McGinty v.

Beranger Volkswagen, Inc., 633 F.2d 226, 228-29 & n.2 (1st Cir.

1980), superseded by statute on other grounds, Private Securities

Litigation Reform Act of 1995, Pub. L. No. 104-67, 109 Stat. 737).

North American does allege that some of those connected with

Clearwire purchased preferred shares; but it would be tricky to

infer that they knew of an imminent deal, since the McCaw purchase

occurred several months later.

However, for two reasons we are unwilling to assume that

no amendment could rescue certain of the claims based on the bridge

financing. For one thing, counts I-IV, apart from their formal

deficiencies, are implausible; by contrast, the possibility that

facts were wrongly withheld as to the bridge financing is more

specific and gains a bit of color from the related charge of

insider purchases. For deficiencies under Rule 9(b), leave to

amend is often given, at least for plausible claims. E.g., New

Eng. Data Servs., Inc. v. Becher, 829 F.2d 286, 292 (1st Cir.

1987).

The other consideration is that the lack of disclosure

claim seems to be twinned with a theory that depends less on

failure to disclose than on improper dilution based on management
North American does argue that jurisdiction may be exercised 6

over GS Group under a theory of general jurisdiction because it has

designated an agent of process in Rhode Island. See Helicopteros

Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984).

But, courts have consistently held that the appointment of an agent

of process alone does not suffice to allow for the exercise of

general jurisdiction. See, e.g., Wenche Siemer v. Learjet

Acquisition Corp., 966 F.2d 179, 182 (5th Cir. 1992). 

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use of inside information. How far this could be supported by

fiduciary duty concepts--explicitly invoked by plaintiffs--is

uncertain; nor is it clear how far Rule 9(b) would apply to such a

claim. Neither issue has been seriously briefed by either side.

Thus, while we think that more must be shown by North American, we

are not certain that two narrowed versions of counts V-VIII are

wholly beyond rescue.

This takes us to the question of whether either version

could come within the district court's personal jurisdiction. Such

jurisdiction, if it exists in this case, rests not on the presence

of the defendants in Rhode Island--the classic basis for general

jurisdiction--but on the "reasonableness" jurisprudence stemming

from International Shoe Co. v. Washington, 326 U.S. 310 (1945).6

Rhode Island's long arm statute is designed to extend jurisdiction

to the full constitutional reach. Donatelli v. Nat'l Hockey

League, 893 F.2d 459, 461 (1st Cir. 1990).

In a nutshell, personal jurisdiction under International

Shoe, allowing jurisdiction to be asserted as to a specific claim,

can be established where the defendants availed themselves of the
E.g., Phillips v. Prairie Eye Ctr., 530 F.3d 22, 27 (1st Cir. 7

2008), cert. denied, 129 S. Ct. 999 (2009); Adelson v. Hananel, 510

F.3d 43, 49 (1st Cir. 2007); Harlow v. Children's Hosp., 432 F.3d

50, 57 (1st Cir. 2005); James, Hazard & Leubsdorf, Civil Procedure

§ 2.6 (5th ed. 2001).

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opportunity to do business in the state, the claim in question is

related to that access and the so-called gestalt factors are

consistent with requiring an out-of-state defendant to defend

within the state. Here, the argument for relatedness and 7

availment is that the bridge financing offer, and attendant

information, were directed in part to North American by information

sent to it in Rhode Island.

The extent of Clearwire communications to Rhode Island

are not certain, but (allegedly) North American was a holder of

shares, received information sent by Clearwire to North American in

Rhode Island describing Clearwire's financial travails, and

received two offers from Clearwire in Rhode Island--the latter

supplanting the former--to participate in bridge financing. If

North American was wrongfully duped into inaction, it was duped in

Rhode Island by materials directed to it in Rhode Island.

How far individual defendants could be held responsible

for Clearwire's actions is a different question, but the complaint

effectively charges that the defendants were in control of

Clearwire during the period in question. Responsibility for

another's actions is not a matter as to which particularity in

pleading is required, Miss. Public Employees' Retirement Sys. v.
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Boston Sci. Corp., 523 F.3d 75, 93 (1st Cir. 2008), and North

American has had no discovery as to the precise connections between

the defendants and Clearwire. 

The case law is less than definitive where, as here,

defendants out of state engage in transactions with in-state

residents, and some outcomes may depend on exact circumstances; but

several of our decisions uphold personal jurisdiction when an offer

is specifically directed from outside of the state to a resident

within it, the information conveyed is culpably false or

incomplete, and the offeree suffers damage as a result of the

conduct by its action or inaction within the state. 

Thus, in Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664

(1st Cir. 1972), we said: "Where a defendant knowingly sends into

a state a false statement, intending that it should there be relied

upon to the injury of a resident of that state, he has, for

jurisdictional purposes, acted within that state." Another example

is The Ealing Corp. v. Harrods Ltd., 790 F.2d 978, 983 (1st Cir.

1986) (sending a single fraudulent misrepresentation into a state

supports personal jurisdiction in the receiving state). The

Restatement suggests a similar outcome. See Restatement (Second)

of Conflict of Laws § 148 & cmt. j (1971).

Even so, jurisdiction would still require a decision by

the district court that it satisfied the gestalt factors. E.g.,

Adelson, 510 F.3d at 49. But such an outcome is not patently
-19-

implausible, at least as to the claim of inadequate disclosure; it

might be a close question as to a breach of fiduciary duty leading

to dilution but not directly connected with anything done in Rhode

Island. Again the issue has not been adequately briefed.

Of course, the fraud version of the claim will depend on

the willingness of the district court to allow an amended pleading

to comply with Rule 9(b) and, probably more relevant, the ability

of the plaintiff to supply additional facts to satisfy the rule.

Rule 9(b) might or might not apply to the dilution version of the

claim based on fiduciary duty but it is not clear that this version

of the claim would support personal jurisdiction.

Whereas the fraud version rests on supposedly inadequate

communications sent to North American in Rhode Island, the dilution

version depends on what the defendants did outside of Rhode Island.

"A breach of fiduciary duty occurs where the fiduciary acts

disloyally." Exeter Acad., 196 F.3d at 291. But the district

court did not address the adequacy of the dilution claim nor did it

directly consider personal jurisdiction as to such a claim or the

possibility of pendant jurisdiction if the fraud version survived.

The fraud and dilution versions are closely related; and

the open issues--especially adequacy as to the former and personal

jurisdiction as to the latter--are not straightforward. So as to

this pair of embedded claims, we will vacate the district court's

dismissal and remand for further proceedings. The first four
See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 480 n.22 8

(1985); Daynard v. Ness, Motley, Loadholt, Richardson & Poole,

P.A., 290 F.3d 42, 55 n.8 (1st Cir.) (citing cases), cert. denied

sub nom., Scruggs v. Daynard, 537 U.S. 1029 (2002).

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counts in their entirety and the final four (save as they embody

the two claims whose dismissal we vacate) need not be considered

further. 

There is one loose end. Assuming arguendo that on remand

North American can state a claim against, and also establish

personal jurisdiction with respect to, a defendant responsible for

sending fraudulent material into Rhode Island, or responsible for

dilution of North American's ownership interest in violation of

fiduciary duty, it is unclear whether jurisdiction would be

satisfied as to other defendants. Conceivably, arguments for

jurisdiction could be based on agency or joint venture theories,8

but the issues have not been briefed.

On remand the district court may find it easier to

proceed by focusing on the most vulnerable defendant as to each of

the two claims. If no claim is stated or personal jurisdiction is

lacking against that defendant, then any question of reaching the

other defendants will hardly matter; if the contrary proves true,

further briefing and even jurisdictional discovery may be required

to decide if other defendants can be reached; but how to proceed on

remand is for the district court to decide.
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We have made clear our doubts whether this case is likely

to go beyond the pleading stage: most of the supposed claims fail

at the outset; the fraud claim based on bridge financing faces the

Rule 9(b) hurdle; the dilution claim, even if it can be

resuscitated by amendment, may be beyond the court's personal

jurisdiction. But indulging the plaintiff's allegations as the law

requires at this stage, e.g., Prairie Eye Ctr., 530 F.3d at 26,

these two versions do require further consideration on remand

within the framework set forth above.

The dismissal of counts I-IV is affirmed but on grounds

of inadequacy; the dismissal of counts V-VIII is vacated insofar as

they assert fraud and breach of fiduciary duty with respect to the

bridge financing but otherwise affirmed on grounds of inadequacy;

and the case is remanded to the district court for further

proceedings not inconsistent with this decision. Each side shall

bear its own costs on this appeal.

It is so ordered.