The un de r l y i ng f a c t s a r e di s c us s e d i n g r e a t e rde t a i l i n H a rd ca stle v. H

a rris , 17 0 S
. W
. 3d 67 1 (T e n n . C t. A p p . 2 0 0 4 ).

N OT R E C OMM E N D E D F OR F U L L - T E X T P U B L I C A T I ON

Fi l e Nam e : 0 8a03 49n . 06 Fi l e d: J une 18 , 20 08 No. 07 - 5661 UNI TED S TATES COURT OF AP P EALS FO R T H E SIX T H C IR C U IT F R A N K H A R R I S ,

Pl ai nt i f f - Appe l l ant C ross-A pp el l ee, ON A P P E A L F R OM T HE v. UNI TED S TATES DI S TRI CT COURT FOR THE M I DDLE LLOYDS TS P BANK, P LC, DI S TRI CT OF TENNES S EE

D efend an t - A pp el l ee, C ro ss-A p p ellan t.

___________________________________/ B E FO R E : SU H R H E IN R IC H , C L A Y , an d C O O K , C i rcuitJu dg es. S U H R H E I N R I C H , C ir c u it J u d g e . F r ank H arr i s sued L l oy ds T SB B ank PL C ( “L l oy ds”) af ter alleg ed lyb eco m ing a v icti m o f a f rau d u len t Po n zi sch em e w h o se p erp etrators w ere cu sto m ers of L l oy ds
. T he di s t r i c tcou rtg r a nt e d su mmaryj udg men tt o L l oy ds
. Harr i s app e a l s t ha tdec i s i on a nd L l oy ds cross- app eal s the d i str i ctcou rt ’ s de n ial of i t s m oti on t o d i sm i ss f or l ack o f

personal j uri sdict i on . W e co nclud e that the distr i ctco urtlacked person al juri sdict i on . W e there f ore r everse the judgm ent of

the d i str i ctcou rtand r em and w i th inst ructi on t o d i sm i ss w i tho ut pre j ud i ce. I . Bac kgr oun d A . Fa cts 1

### -2-

H arr i s, a Ten nessee r esi den t , aspir ed t o develop a them e park in Ten nessee, atan est i m at ed
c os tof $5 0 b i l l i on, bu tne e de d st a rt - up f unds f ort he pr oj e c t . Ar ound 19 97, Ha rr i s me tRon Hog s e d,
a ls o a T e n n e s s e e res id e n t, an d p re s id e n t o f M e rit Q u e s t, w h o to ld H a rris o f a m e th o d f

o r rais in g large
su m s o f m o n eyb yr ep eated lyb u y ing a n d s elli n g U n it ed States Trea su ryB il ls ( “T -bills”) th rou gh its “A ssetEn han cem ent Pr ogr am . ” A ccording t o the progra m m a te rial s, a part i ci pan tw ou l d tr ansf er f u n d s to the “P rogram A tt o rne yC li en t Tru s t A c c o u n t; ” w h ich the “P rogram A tt o rne y ” w o u ld
e xc ha ng e f

or T- bi l l s , whi c h woul d t he n be “ he l d i n a M a s t e rCus t odi a l Numbe r e d Ac c ountf orthe ben ef i tof the C orpo r at e P art i ci pan t . ” H arr i s un derst oo d thatan i nd i vidu al nam ed M on i ca B on d w as the “Progr am A t t orney . ” H arr i s al so u nd er st oo d the do cum ent’ s r ef er ence t o the “Prog r am A t t orney C l i ent Trust Acco un t ” t o m ean an a c c o u n t w i th a com pan ycal l ed M er i tQ uest, accoun tnu m ber 18 00 45 46
. Harr i s cl ai m ed t hat H ogsed told him that the ban k accou nt w as atL l oy ds an d w as a “trust
a c c o u n t,” “ in s u re d ” b yLlo y d s , b u t H a rris n e v e r atte m p te d to co n f irm th is in f

o rm a tio n . O n M ar ch 9 , 19 99 , M on i ca B on d, a U nit ed K i ngdo m cit i zen, i nstructed L l oy ds B ank , w hich i s i nco rpo r at ed in En g l and and W al es w i th it s headq uart er s i n L on do n, En g l and , t o o pen a U
. S. do l l ar
acc o u n t in th e n am e o f “T h e B o n d P artne rsh ip C li en t A cco u n t R e: H ercu les H o ldin gs” f o r h er cli en t, Her c ul e s Holdings
. L l oy ds Ba nk ope ne d the a c c ounta nd a s s i g ne d i ta c c ountnu mbe r11 2873 03. Thi s a c c ountwa s no ta trus ta c c ountf orM e r i tQue s ta nd di d n otha ve the a c c ountnum ber18 00 4546 , a nd none wa s e ve rc r e a t e d. H arr i s becam e an ag ent of M er i tQ uest an d enter ed int o an ag r eem ent with H ogsed byw hich H arr i s w ou l d ea rn a t en per cent c om m i ssi on on al l f un ds w i r ed to M er i tQ uest a ccou nts, as w el l as 50 % of the m on t hlyearnings af t er t hese f

un ds were i nv est ed. Th e A g r eem ent pr ov i ded i n p artthat

“ [ a ] l l moni e s tha tha ve a nd wi l l be wi r e d t o M e r i tQ ue s t ’ s a c c ount s i n E rwi n, Te nne s s e e a nd L ondo n, Eng l a nd, ( f

r om the c l i e nt s i ntr oduc e d b yFr a nk Harr i s / I mpa c t ) w i l l be he l d i n trus ta nd s e c ur e d b y

### -3-

Ron Hog s e d/ M e r i tQue s ton be ha l f of a l l pa rt i e s , whi c h i nc l ude i nve s t or s , br oke r s , a nd Fr a nk H arr i s/ I m pact. ” H arr i s r ecruit ed several other s and t ogether theycon vinced 11 8 ind i vidu al s t o i nv est in M eritQ u est. B etw een A p ri l and O cto b er 19 9 9 , H o gsed tr an sf erred o v er $ 9 9 0 ,0 0 0 in “com m i ssi on s” and “earnings” t o H arr i s’ s b ank acco un tf r om the M er i tQ uest s chem e. Ho g sed la t er
c onf i rmed tha tthe s e pa ymen t s t o Harr i s di d not de r i ve f r om a nye a rni ng s of

the pr og r a m, bu tf

r om th e m o n e yd e p o s ite d b ylate r in v e s to rs , in th e n a tu re o f a P o n z i sc h e m e . H arri s also inv ested p erso n al f u n d s. O n J u n e 2 3 , 1 9 9 9 , H arri s in v ested $ 1 0 , 0 0 0 in th e M erit Q uest Pr ogr am byw i r i ng t he f un d t o Ho g sed’s Fir st Ten nessee B ank accou nt i n E rw i n, Ten nessee f or M er i tQ uest. On Sep t em ber 17, 19 99 , H arr i s i nstructed his bank , Th e B ank of G oo dlet t svil l e, b ytel ep h o n e, to w ir e an o the r $ 2 0 0 , 0 0 0 to L loy d s B an k in L o n d o n . H arri s o b taine d the w ir e i ns truc t i ons f

r om Hog s e d. On a f

orm e nt i t l e d “ I ns truc t i ons f or Ban k W i r e , ” Ha rr i s i ndi c a t e d tha tthe

“ Ben e f i c i a ry ” wa s “ The Bond Pa rt ne r s hi p Cl i e ntAc c ount , Re f He r c ul e s Hol di ng s ” wi th a n a c c ount numbe rof

“ 11 28 73 03. ” Harr i s l i s t e d the “ Rec e i vi ng Ban k” a s be i ng “ L l oy ds Ban k pl c ” i n L ondo n, E n gl an d
. Th is f

o rm also h as a se ction en titled “F u rth er R ef
. ” In this sec ti o n , H arri s li sted “M erit Q u est M an agem en t I n terna ti o n al L td, A cct # 1 8 0 0 4 5 4 6
. ” Th e B an k u sed this d o cu m en t t o co m p lete the “ W i r e Tr a ns f

e rRe que s tFo rm. ” Th e W i r e Tr a ns f e rRe que s tFo rm l i s t s the “ Or i g i na t or ” of the
w ir e as “F ran k A
. H arri s.” T h e “R ece ivin g B an k ” w as li sted a s “Ll o y d s B an k PLC , B erk eleySq u are Hous e . ” T he “ Ben e f

i c i a ry ” of

the wi r e wa s “T he B on d Pa rtne r s hi p Cl i e ntAc c ount . ” T he

“ Ben ef i c i a ry ’ s Addr e s s ” wa s pr ovi de d, a s we l l a s the “ Ben e f i c i a ryAc c ountNumbe r , ” whi c h the ban k stat ed as “11 2 8 73 0 3.” U nd er“S pecial I nstructi on s” T he B ank o f G oo dlet t svil l e l i st ed “R ef H ercu le s H o ldin gs/ F /C M eritQ u est M an agem en t In t’ l L td A cct # 1 8 0 0 4 5 4 6
. ” Th is w as th e o n ly ti m e H arri s w ir ed m o n ey to an acc o u n t at L loy d s. H arri s u n d ersto o d that the m o n eyw as p laced intoSW I FT i s ut i l i z e d b ythous a nds of ba nks thr oug houtthe wor l d a nd pr ovi de s a method f or 2 s e c u re , sta n d a rd iz e d ele c tro n ic b a n k in g. 

### -4- the B on d P art nership A ccou nt, and t hat this accou nt w as contr oll ed b yB on d an d an other i nd i vidu al
n a m e d B ill C o o k
. H arri s’s m o n e y w a s e le c tr o n ic a ll y w ir e d f ro m h is b a n k in G o o d le tt s v il le , T e n n e sse e, to H arri s B ank Internati on al i n N ew Y ork v i a the F edw i r e f un ds tr ansf

ersy st em , and then t o Llo y d s v ia an i nt e rna t i ona l e l e c t r oni c f unds tr a ns f

e rs y s t e m known a s “ SW I FT” ( Soc i e tyf orW or l dwi de Int e rba nk Finan ci al Tel ecom m un i cat i on s)
. On Sep t em ber 20, 19 99 , these f un ds w er e cr edit ed to a U.S. D oll ar 2
acc o u n t ( A cco u n t N o . 1 1 2 8 7 3 0 3 ). U p o n tr an sf er o f the se f

u n d s, L loy d s issu ed a cred itad v ice to its custom er , Th e B on d P art nership, no t i f y i ng of the cr edit t o accou nt 11 28 73 03
. In this cr editadv i ce L l oy ds als o n oti f

i ed the B on d P art nership of the ad dit i on al instructi on s f or the B on d P artnership, i
. e.

“ REF HERCUL ES HO L DING S F UR THER C REDI T M ERI T QUEST M AN AG EM ENT INT L TD A C C 18 00 45 46
. ” I

d. On Oct obe r 25, 1999 , the Te nne s s e e Se c ur i t i e s Di vi s i on of the De pa rt men tof

Commer c e a nd I nsu r ance i ssued a cease and desis torderdir ect i ng H arr i s t o ref r ai n f r om viola t i ng the sta t e sec uri t i es l aw s byact i ng as an u nreg i st er ed b r ok er - dealerand sel l i ng un r eg i st er ed securi t i es. Harr i s r ecei ved the or der on N ov em ber 1, 19 99 , and cl ai m s that he s hu t do w n the M er i tQ uest Enh ancem ent Pr ogr am th a td a y. I n M ar ch 2 00 0, Llo y d s f r oze the H er cules H olding s acc ou nts, w hich atthe ti m e con t ai ned j ust un der $1,38 5,00 0.00
. O n J uly1 3, 20 00 , H arr i s, throu g h T he B ank i n G oo dlet t svil l e, att em pted to reca ll the $ 2 0 5 , 0 0 0 w ir e tr an sf er to th e B o n d P artne rsh ip C li en t A cco u n t atL loy d s’ B an k
. O n J u ly 14 , 2 00 0, L l oy ds i s s ue d a r e s po ns e thr ou g h the S W I F T s y s t e m s t a t i ng : “ W E RE GRE T T HAT OUR

### -5-

BRANCH ARE [ s i c ] UNABL E T O OBT AIN BE N[ E F I CI ARY] ’ S AU TH O RI T Y T O RE T URN PA Y M EN T. W E S U G G ES T R EM I TT ER C O N TA C T[] B EN EF I C I A R Y D I R EC T.” O n Fe brua ry 2, 2001 , f ol l owi ng a he a r i ng , a Te nne s s e e a dmi ni s tr a t i ve l a w j udg e hel d that Harr i s ha d v i ol a t e d the Te nne s s e e Se c ur i t i e s Ac t of 1980 bys e l l i ng un r e g i s t e r e d s e c ur i t i e s wi thout
a lice n s e . H

a rd ca stle , 17 0 S
. W
. 3d a t80
. F ol l owi ng a c i vi l tr i a l i n Cha nc e ryC ourt , H a rr i s wa s f ound l i able t o f

ou rof the investors he int r od uced t o the M er i tQ uest Pr ogr am f or sel l i ng them un r eg i st er ed in v e s tm e n t co n tra c ts w ith o u t a lic e n s e . I d. B . Proced ura l H i st ory Harr i s s ue d L l oy ds i n f e de r a l c ourt i n Te nne s s e e on the ba s i s of di ve r s i tyj ur i s di c t i on. Th e
e s s e nc e of Ha rr i s ’ s c l a i m i s t ha t t he “ f urthe rr e f

e r e nc e ” p ort i on o f

the W i r e T r a ns f

e rRe qu e s tF orm,
w hich l i st ed M er i tQ uest a nd a 18 00 45 46 accoun tnu m ber, sho uld h ave ale rt ed L l oy ds w hen processi ng the w i r e tr ansf erthat the f

un ds sh ou l d h ave b een p l aced i n a trust ac cou nt. Harr i s asse rt ed the f o ll o w ing state l aw cau ses o f action : ( 1 ) f

ailure to v erif

yan d f o ll o w w ir e ins tru ction s, (2) f ailure t o f ol l ow ba nk pr oc e dur e a nd pr ot oc ol , ( 3) f a i l ur e t o know i t s c us t ome r s , ( 4) f a i l ur e t o f

ol l ow ba nk
w ir e recalls , (5 ) m isap p rop ri ation o f f u n d s, (6) b reach o f

im p li ed co n tr act, (7) b reach o f f idu ciary d u tyo w e d to P la in tif

f , an d (8 ) ac c o u n tin g an d co n s tru c tiv e tru s t. L loy d s f il ed a m o ti o n to d ism iss f o r lack o f p erso n al jurisd icti o n an d a m o ti o n f o r su m m ary jud gm ent . The di str i ct court deni ed t he mo t i on t o di smi ss and g r ant ed the mo t i on f orsu m m ary j udg men t . Ha rr i s appe a l s the g r a ntof s ummary j udg men t t o L l oy ds , a nd L l oy ds c r os s - a ppe a l s the de ni a l of i t s m ot i on t o di s mi s s . As not e d be l ow, bec a us e w e f i nd t he i s s ue of

per s ona l j ur i s di c t i on d is p o s itiv e , w e b e gin an d en d o u r d is c u s s io n th e re . II. An alysisTe nne s s e e ’ s l ong - a rm s t a tut e pr ovi de d f orper s ona l j ur i s di c t i on ove rnonr e s i de nt s on “ [ a ] ny 3 ba s i s no ti nc ons i s t e ntwi t h t he c ons t i tut i on of thi s s t a t e or of the Uni t e d St a t e s . ” Te nn. Code Ann. § 2 0 -2-2 1 4 (a)( 6 ). Fu rth erm o re, jurisd icti o n is also p rop er as to “[a]nytorti o u s act o r o m issio n w ith in this st at e. ” I

d. ( a)(4). Th u s, “‘if

a to rt iou s act is co m m itted o u tside the s tate an d the resu lt ing inju ry is s u stain ed w ith in the s tate, th e tortiou s act an d th e inju rya re in sep arab le, a n d jurisd icti o n li es in Ten nessee. ’ ” N

eal v. Jan ssen , 270 F. 3d 328, 331 ( 6th Ci r . 2001 ) ( quot i ng Te nn. Code Ann. § 20- 2- 2 1 4 (6 )). 

### -6- Th i s C o u rt re view s the d i str i ctcou rt ’ s den i al of i t s m oti on t o d i sm i ss f or l ack o f

personal ju ris d ic tio n d e n o v o . C a lph a lon C o rp . v. Ro w lett e , 22 8 F
. 3d 718, 721 ( 6th Ci r . 2000 )
. Be c a us e the d istr ict co u rtd id n o t con d u ct a n e v ide n ti aryh earin g, w e m u st v iew th e p lead ings an d af f ida v it s “in the li g ht mo stf

avo r able to [H arr i s] an d n ot consider the co ntr ov ert i ng assert i on s of [ L l oy ds]
. ” I

d. A ls o , th e p la in tif

f n e e d o n lyp re s e n t a p rim a f a c ie ca s e f

o r ju ris d ic tio n . T

he un is s e n v . Mat the ws , 93 5 F.2d 1 45 4, 14 58 ( 6th C i r . 1 99 1). H arr i s b ear s the bu r den o f establ i shing person al j uri sdict i on ov er Llo y d s . I

nt e r a Cor

p. v . He nde rs on , 4 2 8 F .3 d 6 0 5 , 6 1 5 (6 th C ir. 2 0 0 5 ). I n o r der f

or a f ederal distr i ct cou rt si t t i ng i n diver si ty t o exer ci se per son al j uri sdict i on ov er
a de f e nda nt , the l a w of

the f orum s t a t e mus ta uthor i z e j ur i s di c t i on, a nd tha t e xe r c i s e of j ur i s di c t i on
m u s t c o m p o rt w ith th e D u e P ro c e s s C la u s e . Br unne rv . Hamps on , 4 4 1 F
. 3 d 4 5 7 , 4 6 3 ( 6 th C ir
. 2 0 0 6 ). Thi s Courta nd t he Te nne s s e e c ourt s ha ve hel d tha tthe Te nne s s e e l ong - a rm s t a tut e i s c oe xt e ns i ve
w ith th e lim its o f f

e d e ra l co n s titu tio n a l d u e p ro c e s s . I ntera , 4 2 8 F.3 d at 61 6 ; Rice v. Karsch , 15 4 F
. A p p ’x 4 5 4 , 4 5 9 ( 6 th C ir
. 2 0 0 5 ). 3 A. G e ne r al Pe r s ona l Ju r i s di c t i on “Ge ne r a l j ur i s di c t i on e xi s t s w he n a de f e nda nt ’ s con t a c t s w i th t he f orum s t a t e a r e of

s uc h a
c ont i nuou s a nd s y s t e mat i c na tur e tha tthe s t a t e ma ye xe r c i s e pe r s ona l j ur i s di c t i on ove rthe de f e nda nt
even i f the act i on i s u n re la te d to th e def end ant’ s con t act s w i th the st at e. ” I ntera , 42 8 F
. 3d a t61 5 (i n terna l qu o tati o n m ark s an d cit ation o m itted ).

### -7-

L l oy ds c l a i ms t ha tthe di s t r i c tc ourte rr e d i n c onc l udi ng tha tthe r e wa s g e ne r a l j ur i s di c t i on b eca u se Ll o y d s d o es n o t m ain tain an yo f f ice to tran sac t bu sin ess in T en n ess ee, i s n o t r egist ered to d o b u sin ess in T en n ess ee, ha s n o e m p loy ees in T en n ess ee, o w n s n o p rop ertyin Te n n ess ee, an d d id
no tsoli ci tanybu si ness i n T enn essee. I n h ol di ng tha tHa rr i s me thi s bu r de n o f e s t a bl i s hi ng a pr i ma f

a c i e c a s e of

g e ne r a l j ur i s di c t i on, the d i str i ctcou rtr el i ed o n the f oll ow i ng c o n ta c ts : ( 1) L l oy ds h ad 1 08 custom er s w i th T enn essee
a ddr e s s e s be t wee n 1 964 a nd 2002 ; ( 2) L l oy ds had a c orr e s pond e ntr e l a t i ons hi p wi th AmSouth Ba nk of Ten nessee f

or the pu rpo se o f

sen ding and r ecei ving w i r e tr ansf er s atthe d i r ect i on of

i t s cust om er s, whi c h i nc l ude d thr e e SW I FT wi r e tr a ns f e r s r e l a t e d t o t hi s ca s e t ha tw e r e se nta tc us t ome r s ’ di r e c t i ons thr oug h AmSouth; ( 3) L l oy ds ’ r e pr e s e nt a t i ve s vi s i t e d the Te nne s s e e of f i c e s of thr e e s ubs i di a r i e s of
n ati onal c orpor at i ons on e i g h t occ asio n s, b etw een N o v em b er 19 9 9 an d J u n e 2 0 0 4 , in co n n ectio n w ith l i ne o f cr edit/ l oan synd i cat es, w herebyL l oy ds rel eased f un ds th ro u gh N e w Y ork b ank s act i ng as ag ents f or var i ou s corporat i on s; and ( 4) a L l oy ds’ emp l oy ee vis i t ed thr ee Tenn essee ban ks in an
u n s u c c e s s f

u l atte m p t to gen e ra te b u s in e s s f o r Llo y d s . Th ese c on t act s ar e no tsuf f i ci ent t o es t abli sh g eneral j uri sdict i on ov erL l oy ds. Fi r st , L l oy ds’
accou nts with Tenn essee add r esses do no tsup po rtthe co urt ’ s ruli ng. L l oy ds p oints ou tthat these 108 custom er s r e pr e s e nt e d ame r e 0. 0006 75% of L l oy ds 16 mi l l i on a c c ountho l de r s , a nd none of tho se ac cou nts were open ed af t er2 00 2. T he f

actthat 10 8 accou nt h olders hav e Tenn essee add r esses i s m er el y f

ortuit ou s–Ll oy ds markets and sel l s i t s accou nts i n the U nit ed K i ngdo m , no ti n T enn essee. Fu rther, no t hing i n the r ecord sup po rt s the d i str i ctcou rt ’ s assum pti on that, m e re lyb ecause these
accou nt s ha d T e nne s s e e a ddr e s s e s on r e c or d, L l oy ds “ r e pe a t e dl ytr a ns f e rr e d the Te nne ssee custom er s’ f

un ds as dir ect ed, prov i ded custom er s w i th b ank st at em ents of accoun t , and l i kelyof

f er ed other i nciden t al ban king services. ” A s L l oy ds p o in ts o u t, an yban k stat em ents s ent t o T enn essee

### -8-

woul d h a ve be e n s e ntthe r e be c a us e the c us t ome r s l i s t e d the a c c ounta ddr e s s a s Te nnes s e e , no t be c a us e L l oy ds c hos e t o c r e a t e c ont i nuou s a nd s ubs t a nt i a l c ons e que nc e s i n T e nne s s e e . T he
r e l a t i ons hi p o f

the s e a c c ountho l de r s i s be s tc ha r a c t e r i z e d a s “ uni l a t er al , ” b ecaus e L l oy ds di d n ot d ire c t c o n ta c ts a t T e n n e s s e e . C f. H elico p tero s N a cio n a les d e C o lom b ia, S.A
. v. H a ll , 46 6 U. S. 40 8, 417 ( 1994 ) ( hol di ng t ha t t he nonr e s i de nt de f e nda nt ’ s a c c e pt a nc e of c he c ks dr a wn f r om a Te xa s ba nk
a c c o u n t, p u rc h a s e s o f

h e lic o p te rs an d rela te d train in g trip s d id n o t c r e a t e ge n e ra l ju ris d ic tio n ).

Nordo the wi r e tr a ns f

e r s be t wee n L l oy ds a nd s ome Te nne s s e e ba nks j us t i f ythe e xe r c i s e of gen eral j u ri sd icti o n o v er L loy d s. “A s f ed eral co u rt s h av e h eld o n m an yo c c a s io n s, [] custom er - i nit i at ed b ank
- t o-ban k w i r e tran s f e rs do no test abli sh the ‘ con t i nu ou s and sy st em at i c’ pu rpo sef ul pre sence necessaryt o establi sh p er son al j uri sdict i on ov era f orei g n b ank
. ” D t ex, LL Cv. BBV A B anc ome r, S. A. , 4 0 5 F . S u p p . 2 d 6 3 9 , 6 4 5 (D .S .C . 2 0 0 5 ) (an d ca s e s cite d th e re in ), af f’ d 21 4 F. A pp ’ x 2 86 ( 4th C i r . 2 00 7) (af f i rm i ng on basis of

distr i ctcou rt ’ s “com prehen si ve an d ex hau st i ve”
o p in io n ). The s por a di c vi s i t s by L l oy ds ’ e mpl oy e e s t o T e nne s s e e a l s o d o n ots uppo rtthe e xe r c i s e of jurisd icti o n . A gain, this i s n o t the typ e o f “co n ti n u o u s an d sy stem atic co n d u ct” req u ir ed to su p p o rt gen e ra l ju ris d ic tio n o v e r a d e f e n d a n t. Se e Nat i onwi de M ut . I ns . Co. v . Tryg I

nt ’ lI ns . Co. Ltd. , 91 F.3d 7 90 , 79 3-94 ( 6th C i r . 19 96 ) ( ho l ding that a f orei g n d ef

end ant’ s part i ci pati on i n a r ei nsu r ance p o o l a s w ell as se v eral prio r reins u ran ce agreem en ts w ith tw o loca l com p an ies w as in su f f icien t t o estab li sh g en eral j u ri sd icti o n ); La nd oilRes. C orp . v. A l exan der & Alexan der S ervs. , I nc. , 91 8 F
. 2d 10 39 , 10 45
- 46 (2 d C ir. 19 91 ) ( ho l ding that thirt een b usiness tr i ps o f sho rtdu r at i on ov erei g hteen
m on ths w as n o t c o n t i nu ou s and sy st em at i c soli ci t at i on of bu si ness i n the st at e t o just i f yg eneral jurisd icti o n ).

### -9-

Th e f oreg oing con tact s amo un tt o n othing m ore than r and om , f ortuit ou s, and att enu at ed
c o n ta c ts th a t f

a il to es ta b lis h th a t Llo y d s p u rp o s e f u llyd ire c te d its c o n d u c t at T e n n e s s e e . Se e , e . g, G regu rek v
. Sw op e M

otors, I nc. , 1 3 8 S.W
. 3 d 8 8 2 ( T en n . C t. A p p . 2 0 0 3 ) (h o ldin g tha t auto r ep air sh o p w as no t su bject to g en eral jurisd icti o n w h ere it s em p loy ees atten d ed o cca sio n a l a u to m o b il e
au ction s in Te n n ess ee an d 1 7 o u t of it s 2 9 , 5 0 0 cu sto m ers h ad Te n n ess ee ad d resse s); O cci den tal Fi re & Cas
. Co. of

N. Car ol i na v . Cont i ne ntalI l l i nois Nat ’ lBa nk

& Tr us tCo. of

Chi c ago , 68 9 F
. Su pp. 56 4, 56 7-68 ( E.D.N.C. 19 88 ) ( ho l ding that No rth C ar oli na c ou rtl acked personal j uri sdict i on ov er I ll ino is b an k ev en tho u gh so m e o f it s cu sto m ers resid ed in N o rth C aro li n a an d loa n p roc eed s w ere
u sed in N o rth C aro li n a); see g en era ll y Th i rd N

at’ lBa nk in N

ash vi l l e v. W

ED GE G rou

p, I nc. , 88 2 F
. 2 d 1 0 8 7 , 1 0 8 9 -90 ( 6 th C ir
. 1 9 8 9 ) (no ti n g tha t th e d ef en d an t’ s co n tacts w ere n o t su f f icien t t o
m ain tain gen eral j u ri sd icti o n sin ce th e d ef en d an t nev er directlyc o n d u c te d b u sin ess , h eld ti tl e to p ro p e rty , o r reta in e d em p lo y e e s in th e f o ru m sta te ). In s hort , the d i str i ctcou rterr ed in con cl ud i ng that the ex er ci se of g eneral personal j uri sdi c t i on
w a s p ro p e r. B. Sp e c i f i c Pe r s ona l Ju r i s di c t i on T h e ex ercise o f

sp ecif ic ju ri sd icti o n is pro p er w h ere the claim s in the ca se arise f rom o r are
re la te d to th e d e f

e n d a n t’s co n ta c ts w ith th e f o ru m sta te . I

ntera , 42 8 F. 3d at61 5. B oth the Tenn essee Sup r e me Courta nd t hi s Courtus e the s a me thr e e - pa rt t e s t t o de t e rmi ne whe the rs pe c i f i c j ur i s di c t i on exist s. Fi r s t , t he de f

e nda nt mus t purpos e f

ul l y a va i l hi mse l f of the pr i vi l e g e of a c t i ng i n the f orum s t a t e or c a us i ng a c ons e que nc e i n the f orum s t a t e . Se c ond, the c a us e of a c t i on mus tar i s e f

r om the de f

e nda nt ’ s a c t i vi t i e s the r e . F i na l l y , the a c t s of the de f e nda ntor c ons e que nc e s c a us e d by t he de f e nda nt mus t ha ve a s ubs t a nt i a l e noug h co nn e c t i on wi th the f

orum s t a t e t o ma ke the e xe r ci se o f j ur i s di c t i on ove rthe de f e nda nt re a s o n a b le
.

### -10-

I ntera , 4 2 8 F .3 d a t 6 1 5 (q u o tin g S. M ach
. C o. v. M

oh asco I nd us., I nc. , 4 0 1 F
. 2 d 3 7 4 , 3 8 1 ( 6 th C ir
. 1 9 6 8 )) ; see also M

asa da I nvestm ent Co rp. v. Allen , 6 9 7 S.W
. 2 d 3 3 2 , 3 3 4 ( T en n . 1 9 8 5 ) (sam e). I n f i ndi ng spe c i f

i c j ur i s di c t i on, the di s tr i c tc ourtr e l i e d o n the f ol l owi ng f

a c t s : ( 1) L l oy ds s e nt thr e e wi r e tr a ns f

e r s f r om He r c ul e s Hol di ng s t o the a c c ountof Sp a c e Ag e Indus tr i e s i n E rwi n, Ten nessee ( H ogsed’ s acc ou nt) ; ( 2) Tenn essee r esi den t s w i r ed f un ds to Th e B o n d P a rtn e r ship at L loy d s; ( 3 ) L loy d s an d its a tt o rne yr esp o n d ed to lett ers f rom H arri s an d o the r ind ivid u als in Te nne s s e e abo utt hi s l i t i g a t i on; and ( 4) L l oy ds f a xe d a two- pa g e ban k st a t e men tt o Hog s e d d e t a i l i ng
nume r ous tr a ns a c t i ons i nvol vi ng t he t r a ns f e rof sub s t a nt i a l f

unds f r om Te nne s s e e cus t ome r s t o the
accou nts of

H er cules H olding s atL l oy ds. Th e distr i ctcou rtheld that these f act s dem on str at ed that L l oy ds “p urpo sef

ull yavail ed” i t sel f of the pr i vil eg e of act i ng i n Tenn essee, the c ause of act i on ar ose f r om L l oy ds’ ac t i vit i es w i t hin the st at e, and the act s had a sub st anti al con necti on w i th T enn essee.

1. Pu r pos e f

ul Avai l m e nt P u rp o s e f u l av a ilm e n t is e s s e n tia l to a f in d in g o f p e rs o n a l ju ris d ic tio n . Cal phalon , 22 8 F
. 3d at 72 1
. Pu rpo seful av ailm en t exists w h ere the d ef en d an t’ s co n tacts w i th the f o rum state “p rox im ately
resu ltf rom action s b ythe d ef

en d an t h im self

tha tc r e a t e a ‘ s ubs t a nt i a l c onne c t i on’ wi th the f orum st at e. ” Bu rger K i ng C orp . v. R u d z ew i cz , 47 1 U. S. 46 2, 47 5 ( 1985 )
. I tpr ot e c t s a de f e nda ntf r om b e in g h a le d in to a ju ris d ic tio n fo r ra n d o m , fo rtu ito u s , o r a tte n u a te d c o n ta c ts . I d. ; I ntera , 42 8 F
. 3d at 61 6 ; Cal

phalon , 2 2 8 F .3 d at 7 2 1 -2 2
. The di s t r i c tc ourte rr e d i n hol di ng tha t L l oy ds purpos e f ul l y a va i l e d i t s e l f of the pr i vi l e g e of
a c t i ng i n T e nne s s e e . Th e wi r e tr a ns f e r s a c c e pt e d o rc onf

i rmed by Ll oy ds f

r om Te nne s s e e a nd a ny
w ir e tr an sf

ers o ri gi n ated b y H o gsed in th e U n it ed K ingd o m an d sen t to Te n n ess ee ca n n o t con stitu te p u rp o s e f u l av a ilm e n t, b e c a u s e n o n e o f th o s e tran s f

e rs w e re in itia te d b y Llo y d s . Se e Cal phalon , 22 8

### -11-

F.3d at 72 3 (f

i nd i ng no pu rpo sef

ul avail m ent based on the d ef end ant’ s com m un i cat i on s and ph y si cal
v isit s to O h io on the b asis th at be cau se th e p laintif f co rpo rati o n ch o se to b e h ead q u artered in O h io
w h ere the d ef

en d an t did n o t seek to f u rth er i ts b u sin ess there); I nt ’ l Te c hnologi e s Con sult an ts v. Eur oglas , 10 7 F
. 3d 386, 39 5 ( 6th Ci r . 19 97) ( hol di ng tha tthe f or e i g n- de f

e nda nts e l l e rwa s no t subj ectt o p er son al j uri sdict i on i n M i chig an since the o nlyr eason i thad con t actw i th the st at e w as b eca u se th e p laintif

f ch o se to r esid e the re); c

f
. CompuSe r v e , I

nc . v . Pa t t e rs on , 89 F. 3d 1257 , 12 65- 66 ( 6th Ci r . 19 96 ) (ho l di ng tha tthe de f e nda nt ’ s c ont a c t s wi th Ohi o we r e s uf f i c i e ntt o s uppo rtthe
e xe r c i s e of j ur i s di c t i on whe r e de f e nda ntc ons c i ous l yr e a c he d o utf r om Te xa s t o Ohi o t o s ubs c r i be to C o m p u S erv e an d so ld h is so f tw are o v er C o m p u S erv e’s O h io-b ase d sy stem ). Furthe r , all o f

L l oy ds ’ c ommuni c a t i ons we r e i n r e s pons e t o c ommuni c a t i ons i ni t i a t e d b y H a rris an d o th e rs in T e n n e s s e e . C f
. Ric e v. Karsch , 1 5 4 Fe d
. A p p ’x , 454, 46 0 ( 6th Ci r . 20 05) ( hol di ng tha tde f

e nda nt ’ s c ommuni c a t i ons s e nti nt o T e nne s s e e di d n otc ons t i tut e pu rpos e f ul
a v a ilm e n t b e c a u s e all w e re in res p o n s e to co m m u n ic a tio n s in itia t e d b yth e p la in tif f ). See a lso Nat i onwi de M

ut . I ns . Co. , 91 F. 3d a t79 6 ( hol di ng tha tthe de f e nda ntc ompa ny ’ s a c t i on i n s e ndi ng
a r epresent at i ve to O hio to neg oti at e a r esoluti o n o f a pri or dis pu t e did no tcon f erpersonal jurisd icti o n ); W

iscon si n E l ec. M

f g. C o. v . P e n n a n t P rods. I nc. , 6 1 9 F.2 d 6 7 6 , 6 7 8 n . 1 0 ( 7 th C ir
. 19 80 ) ( no t i ng t hat court s hav e decl i ned t o f i nd speci f

i c j uri sdict i on w he n th e def end ant’ s con t act
w ith the f

o rum state i s li m it ed to an att em p t t o r eso lve the p arti es’ d isp u te); cf. N eal v. Jan ssen , 27 0 F.3d 3 28 , 33 2 ( 6th C i r . 20 01 ) ( ho l ding that purpo sef ul avai l m ent mayexistw hen a def end ant mak es phon e c a l l s a nd s e nds f a c s i mi l e s i nt o the f

orum s t a t e a nd s uc h c ommuni c a t i ons “ f orm the ba s e s f

or the action ” o f

an inten ti o n al t o rt ); Ame r i c an Gre e t i ngs C or p. v. Cohn , 8 3 9 F.2 d 1 1 6 4 , 1 1 7 0 ( 6 th C ir
. 1 9 8 8 ) (f ind ing p u rpo seful av ailm en t bas ed o n the d ef en d an t’ s lett ers an d tel ep h o n e call t o O h io, i n
w h ic h h e th re a te n e d su it an d h a d so u gh t m o n e yto rele a s e h is cla im ).

### -12- 2. Ar i s i ng Fr om T h e “arisin g f

rom ” p ron g is m et w h en the o p erative f acts ari se f

rom the d ef

en d an t’ s co n tacts
w ith th e sta te . I

ntera , 42 8 F
. 3d at61 7. P hy si cal p r esence is n ot requ i r ed; p er son al juri sdict i on m ay existov era def

end ant i f

he “pu rpo sef

ull ydir ect s com m un i cat i on s i nto th e f orum , and tho se
com m un i cat i on s f

orm the heart of t he c ause of act i on . ” Id
. a t61 7- 18 ( i nt e rna l qu ot a t i on marks a nd
c ita tio n o m itte d ). W ith o u t ex cep ti o n , all o f H arri s’s claim s in th is cas e are b ase d o n it s p roc ess ing o f H arri s’s i nco m i ng w i r e tr ansf

eri n S eptem ber 199 9 in the U nit ed K i ngdo m . A s such , the c l ai m s do no t“ar i se f r om ” anyact i on s byL l oy ds w i t hin Ten nessee 3. R easo na bleness Th e r e a s onabl e ne s s t e s tof s pe c i f i c j ur i s di c t i on r e qui r es that “the a c t s of the de f e nda ntor
c ons e quen ces caus e d b ythe de f e nda ntmus tha ve a s ubs t a nt i a l e noug h c onne c t i on wi th the f orum st at e t o m ake t he exerci se o f juri sdict i on o ver the def end ant r eason able. ” I

ntera , 42 8 F
. 3d a t61 8. F acto rs t o c o n sid er i n clu d e: ( 1 ) the b u rde n o n the n o n resid en t defen d an t; ( 2 ) the f o rum state’s i nt e r e s t ; ( 3) the pl a i nt i f f’ s i nt e r e s ti n o bt a i ni ng r e l i e f ; an d ( 4) othe rs t a t e s ’ i nt e r e s ti n s e c ur i ng the
m o s t eff ic ie n t res o lu tio n o f

th e co n tro v e rs y . I

d. Cons i de r a t i on of

t he s e f a c t or s compe l s a c onc l us i on th a t th e e x e rc is e o f s p e c ific j u ri s d ic ti o n w a s i m p ro p e r. A lt h o u gh th e p la in ti ff h a s a n in te re s t in re li e f, the b urden on L l oy ds o f def end i ng a l aw suiti n T enn essee w ou l d b e si g n if ic a nt. No ne o f

L l oy ds’ al l eg ed w r on g do i ngs occu rr ed w i t hin Ten nessee, an d the U nit ed K i ngdo m has a si g nif i cant i nter est i n r e g ul a t i ng the f

i na nc i a l i ns t i tut i ons op e r a t i ng w i t hin i t s bo r de r s , e s pe c i a l l ys i nc e the l a w of the Uni t e d Ki ng dom appl i e s . Fi na l l y , as t he Su pr e me Courtob s e rve d i n Asa hi M etal I nd us. C o. v. Su perior C ou rt , 48 0 U. S. 10 2, 11 4 ( 1987 ) , “[ t ] he uni que bur de ns pl a c e d upon one w ho mus tde f e nd
one s e l f i n af or e i g n l e g a l s y s t e m s houl d h a ve s i g ni f i c a nt wei g hti n a s s e s s i ng the r e a s onabl e ne s s of

### -13-

s tr e t c hi ng the l ong a rm of pe r s on al j ur i s di c t i on ove rna t i ona l bo r de r s . ” In s um, the e xe r c i s e of
s p e c if ic ju ris d ic tio n w a s als o im p ro p e r. I I I . Conc l us i on Fo rthe f oreg oing r eason s, the j ud g m ent o f the distr i ctcou rti s REV ERS ED , and the m at t er REM ANDED w ith in s tru c tio n s to d is m is s w ith o u t p re ju d ic e .