2009 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-21-2009

Metcalfe v. Renaissance Marine I

Precedential or Non-Precedential: Precedential

Docket No. 08-1720

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PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

 

No. 08-1720

 

RICHARD METCALFE;

CYNTHIA METCALFE,

 Appellants

v.

RENAISSANCE MARINE, INC.

 

On Appeal from the District Court of the Virgin Islands

Division of St. Thomas

(D.C. No. 07-cv-00131)

District Judge: Honorable Curtis V. Gomez

 

Argued December 10, 2008

Before: FISHER, JORDAN

and STAPLETON, Circuit Judges.

(Filed: May 21, 2009)
2

Ashlee M. Gray (Argued)

Gregory H. Hodges

Dudley, Topper & Feuerzeig

1000 Frederiksberg Gade

St. Thomas, VI 00802

Attorneys for Appellants

Alan R. Feuerstein (Argued)

Feuerstein & Smith

17 St. Louis Place

Buffalo, NY 14202-1502

Attorney for Appellee

 

OPINION OF THE COURT

 

FISHER, Circuit Judge.

This appeal involves a dispute as to whether the District

Court of the Virgin Islands erred in dismissing the plaintiffs’

complaint for lack of personal jurisdiction after determining that

the Virgin Islands Long-Arm Statute did not reach the defendant

and that constitutional due process was not satisfied. Because

the District Court failed to construe disputed facts in favor of the

plaintiffs, as it was required to do at the motion to dismiss stage,

we conclude that it erred in ruling that the plaintiffs were unable

to demonstrate a prima facie case in support of the exercise of

personal jurisdiction over the defendant. Therefore, we will

reverse and remand to the District Court with instructions that
3

it allow the plaintiffs an opportunity to conduct jurisdictional

discovery.

I.

A. Factual History

Richard and Cynthia Metcalfe are residents of the United

States Virgin Islands. In April 2006, the Metcalfes purchased a

Renaissance Prowler 246 powerboat, two engines, and other

equipment from Renaissance Marine, Inc. (Renaissance) for

approximately $85,000. Renaissance is a corporation organized

under the laws of Florida with its principal place of business in

Miami, Florida.

Beyond the aforementioned facts, the parties offer

materially different versions of the events that led to this current

lawsuit. The Metcalfes allege that they became familiar with

Renaissance boats by renting them from See & Ski, a powerboat

rental company located on St. Thomas. They aver that See &

Ski has at least four boats in its rental fleet that it purchased

from Renaissance within a period of six years. Additionally,

they contend that Renaissance advertises on its website that its

boats can be rented from See & Ski in the Virgin Islands.

According to the Metcalfes, Renaissance has sold at least seven

boats to Virgin Islands residents in the past few years. The

Metcalfes state that while they were in St. John, they negotiated

the sale of the Prowler 246 with Renaissance by telephone, fax,

and the internet. They assert that Renaissance was fully aware

that the ultimate destination of the Prowler 246 was the Virgin
1

The pertinent part of the warranty states:

“Venue and Jurisdiction. The laws of the State of

Florida shall govern the interpretation and

enforcement of this Hull Warranty. Any action

under this Hull Warranty shall be brought in the

courts of the state of Florida, situated in MiamiDade County, Florida. Purchaser and

Renaissance Marine, Inc. agree and admit that

each is engaged in and conducts business in the

State of Florida and therefore each is subject to

jurisdiction in Florida.”

4

Islands and that Renaissance shrink-wrapped the boat for

shipping and took it to the shipper for the Metcalfes.

In contrast, Renaissance contends that the Metcalfes

traveled to Miami where they purchased the Prowler 246.

Renaissance also states that all of its sales, including this one,

are governed by a ten-year limited warranty and a purchase

agreement with additional terms and conditions. Renaissance

specifically notes that the warranty contains a forum selection

clause which provides that the interpretation and enforcement of

the warranty is governed by Florida law and that any action shall

be brought in Miami-Dade County.1

Concerning the warranty, the Metcalfes assert that

Renaissance contacted them in the Virgin Islands one month

after they received delivery of the Prowler 246 in an effort to

have them sign the warranty, which they refused to do. The

Metcalfes state that the warranty was never presented to them
5

until after the sale was complete and that one reason why they

did not sign it is because they did not agree with the forum

selection clause.

On December 25, 2006, the Metcalfes discovered that the

Prowler 246 had partially sunk. They had a marine surveyor

assess the defects in the Prowler 246 and the likely cause of the

sinking. The Metcalfes shared the findings in the surveyor’s

report with Renaissance, and although the company initially

proposed to cure the problems with the Prowler 246 in the

Virgin Islands and subsequently offered to transport it to Florida

to make the necessary repairs, no remedy was ultimately

provided.

B. Procedural History

On October 15, 2007, the Metcalfes brought suit in the

District Court of the Virgin Islands alleging breach of express

warranty, breach of implied warranties, breach of the covenant

of good faith and fair dealing, misrepresentation, and liability

under the Magnuson-Moss Warranty–Federal Trade

Commission Improvement Act. On November 29, 2007,

Renaissance moved to dismiss the matter for lack of personal

jurisdiction pursuant to Federal Rule of Civil Procedure

12(b)(2). On December 13, 2007, the parties stipulated to an

extension of time for the Metcalfes to oppose the motion to

dismiss, giving them until December 21, 2007, to do so. The

parties orally stipulated to an additional extension of time on

December 20, 2007, allowing the Metcalfes until January 9,

2008, to file an opposition to the motion to dismiss, but counsel

for the Metcalfes neglected to file this stipulation with the
2

The Metcalfes assert that the District Court did not

communicate this decision to them at the status conference.

6

District Court. Consequently, on January 2, 2008, the District

Court issued an order dismissing the matter because of the

Metcalfes’ failure to meet their burden of establishing the

District Court’s jurisdiction over Renaissance.

Notwithstanding the District Court’s order, on January 9,

2008, the Metcalfes filed an opposition to Renaissance’s motion

to dismiss and also filed a motion for reconsideration arguing

that the order should be vacated to correct clear error and

prevent manifest injustice. Renaissance subsequently filed a

reply to the opposition to the motion to dismiss and an

opposition to the motion to reconsider. Renaissance also filed

a motion to supplement its original motion to dismiss.

In an effort to prevent further overlapping and conflicting

pleadings, the District Court held a status conference on

February 6, 2008. The District Court determined that it would

consider the Metcalfes’ opposition to Renaissance’s motion to

dismiss because, despite the oversight by the Metcalfes’

counsel, ignoring their opposition would prejudice them. Thus,

the District Court decided to reopen the case to determine

whether dismissal of the complaint was appropriate; however,

the District Court concluded that it would not consider any

filings submitted after the status conference and instead would

rule directly on the motion to dismiss, giving consideration to

the Metcalfes’ opposition to the motion.2
7

Following the status conference, the Metcalfes and

Renaissance nonetheless both continued to submit filings to the

District Court. Specifically, the Metcalfes filed a reply to

Renaissance’s opposition to the motion for reconsideration and

a document entitled a “Notice of Filing of Supplemental

Declaration of Richard Metcalfe with Previously Omitted

Exhibits.” Renaissance filed a motion to amend its opposition

to the motion for reconsideration.

On February 15, 2008, the District Court ruled on

Renaissance’s motion to dismiss, and indicated in a footnote in

its memorandum opinion that it did not consider these additional

filings. The District Court determined that the Metcalfes failed

to meet their burden of showing that jurisdiction over

Renaissance was appropriate under the Virgin Islands LongArm Statute and, even if the statute was somehow satisfied,

failed to show that the exercise of jurisdiction over Renaissance

would comport with constitutional due process. Because the

District Court concluded that it did not have personal

jurisdiction over Renaissance, it did not reach the other grounds

for dismissal that Renaissance asserted in its motion. The

Metcalfes filed a timely notice of appeal.

II.

As an initial matter, Renaissance argues that the District

Court lacks subject matter jurisdiction over this entire action

because the Metcalfes’ complaint does not meet the threshold

amount of $75,000 required in a diversity action under 28
3

Under 48 U.S.C. § 1612(a), the District Court of the

Virgin Islands has diversity jurisdiction to the full extent as

provided for in 28 U.S.C. § 1332.

8

U.S.C. § 1332.3

 Renaissance argues that an appraisal of the

Metcalfes’ damages reveals that their losses only amount to

$16,533.39. We reject this argument because, in addition to the

itemized “out of pocket expenditures” which the $16,000 figure

represents, the Metcalfes also seek rescission of the contract for

the sale of the Prowler 246, and thus make a claim for more than

$85,000 in damages. Accordingly, the District Court has subject

matter jurisdiction over this action pursuant to 28 U.S.C. § 1332

because the Metcalfes are domiciled in the Virgin Islands,

Renaissance is domiciled in Florida, and the Metcalfes’

complaint sets forth a good faith claim in excess of $75,000.

See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,

288-89 (1938). There is also an independent basis for subject

matter jurisdiction over the Metcalfes’ Magnuson-Moss

Warranty Act claim pursuant to 15 U.S.C. § 2310(d)(1)(B).

We have jurisdiction over this appeal from the District

Court’s final order pursuant to 28 U.S.C. § 1291. “Whether

personal jurisdiction may be exercised over an out-of-state

defendant is a question of law,” Mellon Bank (East) PSFS, N.A.

v. DiVeronica Bros., Inc., 983 F.2d 551, 554 (3d Cir. 1993), and

therefore we will exercise plenary review over the District

Court’s determination that it lacked personal jurisdiction in the

present case. See Pinker v. Roche Holdings Ltd., 292 F.3d 361,

368 (3d Cir. 2002).

III.
9

The central issue in this appeal is whether the District

Court erred when it determined that it could not exercise

personal jurisdiction over Renaissance, a nonresident defendant.

However, Renaissance argues that we need not reach this issue

because the Metcalfes are contractually prohibited from bringing

their claims in any jurisdiction other than Florida as a result of

a valid, binding forum selection clause contained in its warranty.

The problem with this argument is that Renaissance failed to

establish that the Metcalfes ever agreed to this warranty. The

Metcalfes claim that Renaissance contacted them one month

after they received delivery of the Prowler 246 and, at that point

in time, solicited their signature in order to execute the warranty.

Although Renaissance attached a copy of the warranty to an

affidavit, it does not bear the signature of either Richard or

Cynthia Metcalfe and Renaissance makes no attempt to explain

why a signature is not present. Consequently, it appears that the

warranty was not incorporated into the sales contract but was a

separate agreement to which the Metcalfes did not assent.

We recognize that some tension exists between the

Metcalfes’ assertion that they were not bound by the warranty

because they never signed it and allegations in their complaint

with respect to “Renaissance’s product support, service and

warranty programs,” but, in light of the current posture of this

case, it is best for the District Court to resolve the factual dispute

as to whether the warranty applied to the sale between

Renaissance and the Metcalfes. The District Court did not

address this issue at the time it granted the motion to dismiss,

and therefore we will not reach it either. Instead, we will focus

our analysis on the question of whether the District Court may

exercise personal jurisdiction over Renaissance.
4

As our dissenting colleague points out, there is caselaw

which states that the reach of the Virgin Islands Long-Arm

Statute is coextensive with the maximum parameters of the Due

Process Clause and therefore concludes that only constitutional

due process considerations are relevant to determine whether

personal jurisdiction can be exercised over a nonresident

defendant, see Urgent v. Tech. Assistance Bureau, Inc., 255 F.

Supp. 2d 532, 535-36 (D.V.I. 2003), but we think it best to

consider the statutory bases for exercising long-arm jurisdiction

in addition to the constitutional requirements in order to ensure

that we are honoring “the law of the forum state.”

5

Section 3 of the Revised Organic Act of 1954, 48 U.S.C.

§ 1561, makes the Due Process Clause applicable to the Virgin

Islands.

10

A. Assessing a Motion to Dismiss

for Lack of Personal Jurisdiction

A district court sitting in diversity may assert personal

jurisdiction over a nonresident defendant to the extent allowed

under the law of the forum state. See, e.g., Time Share Vacation

Club v. Atl. Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984).

Establishing personal jurisdiction in the Virgin Islands involves

a two-part analysis.4

 First, there must be a statutory basis for

exercising jurisdiction over the nonresident defendant in

accordance with the Virgin Islands Long-Arm Statute, V.I. Code

Ann. tit. 5, § 4903, and second, the nonresident defendant must

have minimum contacts with the Virgin Islands sufficient to

satisfy constitutional due process.5

 See In re Kelvin Manbodh

Asbestos Litig. Series, 47 V.I. 267, 279 (Super. Ct. 2005)
11

(“[T]he Court’s in personam jurisdiction is limited first by the

terms of the [long-arm] statute and then by the Due Process

Clause of the Fourteenth Amendment to the Constitution.”);

Godfrey v. Int’l Moving Consultants, Inc., 18 V.I. 60, 66 (D.V.I.

1980) (“The proper method of testing jurisdiction over a

nonresident defendant is to first determine whether the long-arm

statute authorizes the Court to exercise its adjudicatory powers,

and then secondly, to decide if such an exercise is

constitutionally permissible.”). The District Court determined

that the Metcalfes failed to meet their burden of showing that the

exercise of jurisdiction over Renaissance was permissible

because they relied on their own “self-serving declaration”

which was “simply insufficient.” However, the District Court

reached this determination without applying the proper standard

for evaluating a motion to dismiss for lack of personal

jurisdiction.

“[T]he burden of demonstrating the facts that establish

personal jurisdiction,” falls on the plaintiff, Pinker, 292 F.3d at

368, and “once a defendant has raised a jurisdictional defense,”

the plaintiff must “prov[e] by affidavits or other competent

evidence that jurisdiction is proper.” Dayhoff Inc. v. H.J. Heinz

Co., 86 F.3d 1287, 1302 (3d Cir. 1996). If the district court does

not hold an evidentiary hearing, “the plaintiff[s] need only

establish a prima facie case of personal jurisdiction.” O’Connor

v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007)

(alterations in original) (internal quotation marks omitted).

Moreover, “[i]t is well established that in deciding a motion to

dismiss for lack of jurisdiction, a court is required to accept the

plaintiff’s allegations as true, and is to construe disputed facts in

favor of the plaintiff.” Toys “R” Us, Inc. v. Step Two, S.A., 318
12

F.3d 446, 457 (3d Cir. 2003); accord O’Connor, 496 F.3d at 316

(explaining that prior to an evidentiary hearing or trial, “the

plaintiff[s] [are] entitled to have [their] allegations taken as true

and all factual disputes drawn in [their] favor” (alterations in

original) (internal quotation marks omitted)). “Of course, by

accepting a plaintiff’s facts as true when a motion to dismiss is

originally made, a court is not precluded from revisiting the

issue if it appears that the facts alleged to support jurisdiction

are in dispute.” Carteret Sav. Bank, FA v. Shushan, 954 F.2d

141, 142 n.1 (3d Cir. 1992).

Here, the Metcalfes did not merely rest on their pleadings

but rather submitted a sworn affidavit and other documentary

evidence in support of a finding of personal jurisdiction over

Renaissance. Nonetheless, without holding an evidentiary

hearing, the District Court discredited this evidence when it

stated:

“[S]ave for the contract for the [Prowler 246], the

Metcalfes have not come forward with any

competent evidence that Renaissance deliberately

targeted Virgin Islands residents. The Court is

left with the fact that the Metcalfes contacted a

Florida corporation regarding the purchase of a

product from that corporation in Florida.”

The District Court also construed disputed facts against the

Metcalfes, which is reflected in the following statement:

“To the extent the Metcalfes again rely on the

declaration attached to their opposition, the
13

Metcalfes still fail to meet their burden. That

declaration contains several statements that

purport to show that Renaissance ‘reached out’ to

the Virgin Islands. . . . Here, again, the Metcalfes’

exclusive reliance on bald assertions set forth in a

declaration is misplaced for the purpose of

establishing personal jurisdiction.”

These excerpts demonstrate that the District Court did not

apply the proper standard for evaluating the motion to dismiss

for lack of personal jurisdiction. Although the Metcalfes needed

to make a threshold showing in support of jurisdiction, they

were entitled to have their allegations viewed as true and have

disputed facts construed in their favor. See O’Connor, 496 F.3d

at 316; Toys “R” Us, 318 F.3d at 457. Instead, the District

Court credited Renaissance’s factual allegations and construed

disputed facts in its favor, as if Renaissance were the nonmoving

party. In doing so, the District Court committed error by failing

to apply the correct standard for evaluating personal jurisdiction

at this stage of the litigation.

Our task, therefore, is to determine whether the Metcalfes

have established a prima facie case that the exercise of

jurisdiction over Renaissance is consistent with the Virgin

Islands Long-Arm Statute and constitutional due process,

assuming the sworn allegations that appear in the Metcalfes’

affidavit and the other documentary evidence on record are true

and construing factual disputes in their favor.
14

B. Interpreting the Virgin Islands Long-Arm Statute

Turning to the statutory bases for exercising jurisdiction

over a nonresident defendant, the Metcalfes argue that

subsection (a)(1) and subsection (a)(2) of the Virgin Islands

Long-Arm Statute apply to the facts of this case. The relevant

portions of the statute state:

“A court may exercise personal jurisdiction over

a person, who acts directly or by an agent, as to a

claim for relief arising from the person’s

(1) transacting any business in this

territory;

(2) contracting to supply services or

things in this territory[.]”

V.I. Code Ann. tit. 5, § 4903(a).

“Under subsection (a)(1), the term ‘transacting any

business’ can be satisfied by only a single act which in fact

amounts to the transaction of business within the state or

territory.” Fin. Trust Co. v. Citigroup, 268 F. Supp. 2d 561, 567

(D.V.I. 2003) (internal quotation marks omitted) (finding it

sufficient under subsection (a)(1) that the defendant entered into

a contract with a Virgin Islands resident and solicited the

plaintiffs while they were in the Virgin Islands). “[T]ransacting

business is a term that connotes activity that is less than doing

business, but more than an inconsequential act.” In re Kelvin

Manbodh Asbestos Litig. Series, 47 V.I. at 283; see also
15

Paradise Motors, Inc. v. Toyota de Puerto Rico, Corp., 314 F.

Supp. 2d 495, 498 & n.4 (D.V.I. 2004) (finding participation in

some business activity in the Virgin Islands coupled with the

receipt of substantial revenue from the activity sufficed to

establish the application of subsection (a)(1) of the long-arm

statute).

The District Court concluded that subsection (a)(1) could

not be applied to reach Renaissance, finding it significant that

the Metcalfes did “not claim that they signed the

contract in the Virgin Islands, that Renaissance delivered the

[Prowler 246] to them in the Virgin Islands, or that Renaissance

performed any part of the contract in the Virgin Islands.”

However, the District Court’s exclusive focus on the contract

was misplaced because the proper focus of the subsection (a)(1)

analysis should be on whether Renaissance engaged in any act

that might constitute “transacting business” in the Virgin

Islands.

The evidence submitted by the Metcalfes, if true,

supports the application of subsection (a)(1). In particular, the

Metcalfes assert that Renaissance exchanged phone calls, faxes,

and emails with the Metcalfes while they were in the Virgin

Islands during the process of negotiating the sale of the Prowler

246. In a footnote, the District Court dismissed the evidence

regarding these negotiations as “too sparse . . . to make any

determination about their substantiality.” However, under

Virgin Islands law, “a single act which in fact amounts to the

transaction of business” satisfies subsection (a)(1). Fin. Trust

Co., 268 F. Supp. 2d at 567 (internal quotation marks omitted).
16

Because one single act can constitute “transacting business,”

surely repeated, reciprocal communications between a buyer in

the Virgin Islands and a seller located elsewhere which

culminate in an agreement for the sale of an item at a cost of

nearly $85,000 also satisfies the standard under subsection

(a)(1). Therefore, accepting the Metcalfes’ evidence as true and

construing disputed facts in their favor, we conclude that they

have met their burden, at this stage, of establishing that

subsection (a)(1) applies by showing that Renaissance transacted

business in the Virgin Islands and that their claims arise out of

this transaction.

In the alternative, subsection (a)(2) may provide an even

stronger statutory basis for exercising long-arm jurisdiction over

Renaissance. The only requirement of subsection (a)(2) “is that

the contract be performed, at least in part, in the Virgin Islands

and that the cause of action arise out of the contract.”

Buccaneer Hotel Corp. v. Reliance Int’l Sales Corp., 17 V.I.

249, 255 (Terr. Ct. 1981). When a defendant is aware that the

Virgin Islands is the ultimate destination of the goods it is

supplying, the contract is said to be performed (at least in part)

in the Virgin Islands. See id. at 256 (concluding, in an action

brought by a resident buyer against a nonresident seller, that

subsection (a)(2) reached the nonresident defendant because

“the defendant made the arrangements for shipment and knew

the goods were being shipped directly to [the] plaintiff in the

Virgin Islands. There is no question that the contract was

performed, at least in part, in the Virgin Islands.”); Four Winds

Plaza Corp. v. Caribbean Fire & Assocs., 48 V.I. 899, 910

(D.V.I. 2007) (finding the defendant “was fully aware that the

ultimate destination for the equipment was the Virgin Islands”
17

because of indications in a sales proposal and payment check

that the goods would be delivered in St. Thomas). Focusing on

the precise language of the statute, the Buccaneer court

emphasized that “the subsection . . . bases jurisdiction on a

contract ‘to supply’ services or things,” noting that “the verb

‘supply,’ rather than ‘deliver’ or ‘ship,’ was selected as a basis

for jurisdiction by the drafters of the statute.” 17 V.I. at 256.

In an affidavit, Richard Metcalfe stated: “When

purchasing the [Prowler 246], I informed Renaissance that it

would be kept in the Virgin Islands, so Renaissance was fully

aware that the ultimate destination of the [Prowler 246] was the

Virgin Islands. Renaissance even wrapped the [Prowler 246] for

shipping and took it to the shipper.” However, the District

Court determined that this declaration was not competent

evidence and therefore could not be relied on to find that

subsection (a)(2) applied. The District Court stated:

“Renaissance asserts in its reply that the

Metcalfes, not Renaissance, arranged for

shipping. That assertion appears to conflict with

the Metcalfes’ version of events. Thus, there

appears to be a factual dispute over whether

Renaissance in fact knew that the Virgin Islands

was the ultimate destination for the [Prowler 246].

Where there is a factual dispute, the burden is on

the plaintiff to prove that jurisdiction is

permissible. . . . Here, the Metcalfes have

adduced no competent evidence to refute

Renaissance’s claim that the Metcalfes handled

shipping.”
6

Moreover, there was additional evidence that the District

Court did not consider because the Metcalfes submitted it after

the February 6, 2008 status conference. Although we do not

rely on this evidence in reaching our conclusion, we note that it

further evinces Renaissance’s knowledge that the Prowler 246

was destined for the Virgin Islands and thereby supports finding

the application of subsection (a)(2). For example, the Metcalfes

state that Renaissance did not withhold Florida sales tax on the

sale of the Prowler 246 based on its understanding that the boat

was purchased for export to the Virgin Islands, and that both an

invoice and a “Manufacturer’s Statement of Origin” from

Renaissance listed the Metcalfes’ address as St. John, Virgin

Islands.

18

Contrary to what the District Court stated, it was not the

Metcalfes’ burden to resolve factual disputes at this phase of the

litigation. As previously discussed, although the Metcalfes had

the burden of making a prima facie showing that jurisdiction

was proper, they were entitled to have their allegations viewed

as true and have disputed facts construed in their favor.6

Accepting the Metcalfes’ evidence as true and construing

disputed facts in their favor, we conclude that Renaissance was

aware that the ultimate destination of the Prowler 246 was the

Virgin Islands and therefore the contract was performed, at least

in part, in the Virgin Islands. See Buccaneer, 17 V.I. at 255-56.

Because this action arises out of the contract for the sale of the

Prowler 246, the Metcalfes have met their burden at this stage

of the litigation of showing that subsection (a)(2) applies. Thus,

when we consider the evidence set forth by the Metcalfes under

the proper standard for evaluating a motion to dismiss for lack
7

We recognize that in order to satisfy constitutional due

process, a contract, “without more, is insufficient to establish

minimum contacts,” as are “informational communications” in

furtherance of a contract. See Sunbelt Corp. v. Noble, Denton

& Assocs., Inc., 5 F.3d 28, 32 (3d Cir. 1993). For this reason,

we consider additional evidence of Renaissance’s contacts with

the Virgin Islands in order to evaluate whether the exercise of

personal jurisdiction over Renaissance comports with due

process. At this point in the analysis, our dissenting colleague’s

views diverge from our own with respect to whether the

Metcalfes have alleged more than just the existence of a contract

alone to demonstrate the necessary minimum contacts.

19

of personal jurisdiction, we conclude that both subsection (a)(1)

and subsection (a)(2) provide a statutory basis for exercising

long-arm jurisdiction over Renaissance.7

C. Satisfying Constitutional Due

Process Through Minimum Contacts

In addition to demonstrating the applicability of the

Virgin Islands Long-Arm Statute, the Metcalfes also must show

that the exercise of personal jurisdiction over Renaissance

satisfies constitutional due process. The due process inquiry

involves an assessment as to “whether ‘the quality and nature of

the defendant’s activity is such that it is reasonable and fair to

require [that it] conduct [its] defense in that state.’” Time Share

Vacation Club, 735 F.2d at 63 (alterations in original) (quoting

Kulko v. Super. Court of Cal., 436 U.S. 84, 92 (1978)). As a

threshold matter, the defendant must have taken “action . . .

purposefully directed toward the forum State.” Pinker, 292 F.3d
20

at 370 (quoting Asahi Metal Indus. Co. v. Super. Court of Cal.,

480 U.S. 102, 112 (1987) (plurality opinion)). Accordingly, the

due process analysis focuses on the nonresident defendant’s

“minimum contacts” with the forum. Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 474 (1985).

Minimum contacts can be analyzed in the context of

general jurisdiction or specific jurisdiction. A court may

exercise general jurisdiction over a defendant where he or she

has “continuous and systematic” contacts with the forum,

whether or not those contacts are related to the plaintiff’s cause

of action. Helicopteros Nacionales de Colombia, S.A. v. Hall,

466 U.S. 408, 416 (1984); BP Chems. Ltd. v. Formosa Chem. &

Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000). Specific

jurisdiction exists if the defendant has “‘purposefully directed’

his activities at residents of the forum and the litigation results

from alleged injuries that ‘arise out of or relate to’ those

activities.” Burger King Corp., 471 U.S. at 472 (internal

citation omitted). “If the defendant ‘maintain[s] continuous and

substantial forum affiliations,’ then general jurisdiction exists.

If the defendant’s contacts fall short of that standard, then at

least one contact must give rise or relate to the plaintiff’s claim.”

O’Connor, 496 F.3d at 321 (internal citation omitted). Because

general and specific jurisdiction are “analytically distinct

categories,” id., we consider the facts relevant to each category

separately.

The Metcalfes argue that the District Court may exercise

either general or specific jurisdiction over Renaissance. The

District Court reasoned that “[t]he facts of this case do not

support a general jurisdiction analysis” because “the Metcalfes’
21

claims are directly related to Renaissance’s sale of a boat to

Virgin Islands’ residents.” While it is true the Metcalfes’ claims

are directly related to Renaissance’s sale of the Prowler 246 to

them, general jurisdiction can be exercised regardless of whether

the contacts relate to the plaintiff’s cause of action and,

consequently, persuasive evidence that the Metcalfes introduced

of the general business contacts that Renaissance has with the

Virgin Islands was overlooked. See Helicopteros, 466 U.S. at

416; BP Chems. Ltd., 229 F.3d at 259.

Specifically, the Metcalfes alleged that Renaissance sold

at least four powerboats to a Virgin Islands rental company and

advertised on its website that its boats could be rented from this

local company, and also alleged that Renaissance sold at least

seven powerboats to Virgin Islands residents in recent years.

Moreover, the Metcalfes argued in the District Court that

“Renaissance has created continuing obligations by offering a

10 year warranty program,” which is consistent with

Renaissance’s own assertion that “all purchase agreements

entered into by and between Renaissance and its customers are

subject to a Ten Year Limited Hull Warranty.” As a result,

Renaissance has obligated itself to its customers in the Virgin

Islands for many years to come. Renaissance’s sales and

advertising demonstrate a pattern of contacts with the Virgin

Islands and, when coupled with the ten-year warranty that

Renaissance purports to offer with every sale, tend to suggest

ongoing business relationships between Renaissance and Virgin

Islands residents. Thus, when these contacts are viewed
8

We consider these contacts to be the most relevant to our

general jurisdiction analysis and note that some of the

allegations discussed by our dissenting colleague relate to either

the applicability of the long-arm statute or to establishing

specific jurisdiction and therefore do not detract from our

conclusion. Furthermore, in light of the standard for reviewing

a motion to dismiss for lack of personal jurisdiction, we do not

think it is appropriate to infer that these recurring contacts are

solely the product of unilateral activity on the part of Virgin

Islands residents. To the contrary, this pattern of contacts can

fairly be viewed as a deliberate targeting or purposeful

availment of the Virgin Islands as a market for Renaissance’s

powerboats rather than as a mere coincidence. Consequently,

Renaissance was on notice that it could be haled into court in the

Virgin Islands and requiring it to defend suit there should not

come as a surprise.

22

cumulatively, as opposed to in isolation, they tend to support the

exercise of general personal jurisdiction over Renaissance.8

Although this evidence, if true, does not signal that

Renaissance has an overwhelming presence in the Virgin

Islands, it does suggest that Renaissance has maintained the type

of “continuous and systematic” contacts needed to find general

jurisdiction. See Hendrickson v. Reg O Co., 657 F.2d 9, 15 (3d

Cir. 1981) (“The fact that the sales and other contacts are not

expansive is simply a reflection of the reality that the

jurisdiction itself is a small one, and market demands may not

be great. The continuing conduct of the defendant is purposeful

activity intended to preserve and enlarge an active, though

small, market in the Virgin Islands.”); Samad v. High Soc’y
23

Magazine, 20 V.I. 554, 557 (D.V.I. 1984) (“To deny jurisdiction

over such a defendant merely because its local sales constitute

a small percentage of its total sales would be to deny a resident

plaintiff the protection of the laws and courts of this Territory

merely because the population of this Territory is limited. This

the Due Process Clause does not require.”). Therefore, in the

context of assessing the sufficiency of a nonresident defendant’s

contacts with a small jurisdiction such as the Virgin Islands, we

conclude that, at this stage in the litigation, the Metcalfes have

made at least a prima facie showing that general jurisdiction

may be exercised over Renaissance.

Because we conclude that the Metcalfes have made this

threshold showing, we will not consider whether the facts, when

construed in favor of the Metcalfes, also support a finding of

specific jurisdiction.

D. Conducting Jurisdictional Discovery

The Metcalfes also contend that the District Court erred

by failing to grant discovery on the question of personal

jurisdiction. Although we conclude that the Metcalfes have

successfully demonstrated a prima facie case of personal

jurisdiction over Renaissance sufficient to survive the Rule

12(b)(2) motion to dismiss, it remains within the District Court’s

province to weigh the evidence in support of jurisdiction and,

after doing so, revisit the jurisdictional issue. See Carteret Sav.

Bank, FA, 954 F.2d at 142 n.1 (“Of course, by accepting a

plaintiff’s facts as true when a motion to dismiss is originally

made, a court is not precluded from revisiting the issue if it

appears that the facts alleged to support jurisdiction are in
24

dispute.”). Because the Metcalfes will eventually need to

establish jurisdiction by a preponderance of the evidence, see id.

at 146, the opportunity to conduct jurisdictional discovery is

likely to benefit them in this pursuit.

The Supreme Court instructs that “where issues arise as

to jurisdiction or venue, discovery is available to ascertain the

facts bearing on such issues.” Oppenheimer Fund, Inc. v.

Sanders, 437 U.S. 340, 351 n.13 (1978). We have explained

that if “the plaintiff’s claim is not clearly frivolous [as to the

basis for personal jurisdiction], the district court should

ordinarily allow discovery on jurisdiction in order to aid the

plaintiff in discharging that burden.” Compagnie Des Bauxites

de Guinee v. L’Union Atlantique S.A. D’Assurances, 723 F.2d

357, 362 (3d Cir 1983). Furthermore, we have found

jurisdictional discovery particularly appropriate where the

defendant is a corporation. See id. In Compagnie, we quoted

with approval the reasoning of the Court of Appeals for the First

Circuit, which stated:

“‘A plaintiff who is a total stranger to a

corporation should not be required, unless he has

been undiligent, to try such an issue on affidavits

without the benefit of full discovery. If the court

did not choose to hear witnesses, this may well

have been within its province, but in such event

plaintiff was certainly entitled to file such further

interrogatories as were reasonably necessary and,

if he wished, to take depositions.’”
9

Although the Metcalfes never formally moved for

jurisdictional discovery, they did mention the possibility of

conducting such discovery in their opposition to the motion to

dismiss when they stated: “[S]hould this Court want additional

evidence regarding Renaissance’s contacts with the Virgin

Islands, the Metcalfes should be allowed to engage in discovery

limited to the issue of personal jurisdiction.” This document

was among the parties’ filings that the District Court considered.

25

Id. (quoting Surpitski v. Hughes-Keenan Corp., 362 F.2d 254,

255-56 (1st Cir. 1966)).

Based on our analysis of this case, we find that the

Metcalfes’ claim is certainly not frivolous and we recognize that

they are faced with the difficult task of trying to establish

personal jurisdiction over a corporation. Accordingly, we

conclude that the Metcalfes ought to have the opportunity to

conduct jurisdictional discovery before the District Court makes

a final determination with respect to whether it may exercise

jurisdiction over Renaissance.9

 We assign no error to the

District Court with respect to the lack of discovery on the

question of jurisdiction, but on remand, we instruct the District

Court to allow discovery to help facilitate the resolution of the

jurisdictional issue.

The Metcalfes also argue that the District Court erred

when it declined to consider any of the documents filed after the

status conference. They contend that the District Court should

have considered their additional filings and affidavits because

these submissions were timely and provided additional evidence

that the exercise of jurisdiction over Renaissance is permissible.
26

Because the District Court has considerable discretion in this

realm and “in light of the procedural jumble in which this matter

found itself,” we cannot conclude that the District Court abused

its discretion when it explained that its decision was motivated

by an attempt to prevent further confusion as a result of the

parties’ conflicting and overlapping filings. See Kiser v. Gen.

Elec. Corp., 831 F.2d 423, 426 (3d Cir. 1987) (“The decision of

a district court to grant or deny leave to amend is reviewed only

for an abuse of discretion.”). The Metcalfes’ argument is even

less convincing when we consider the fact that they never

actually moved to amend their previous filings. Under the

circumstances, the District Court was within its discretion when

it declined to consider both the Metcalfes’ and Renaissance’s

additional submissions. Nonetheless, on remand, the parties will

have an additional opportunity to present any omitted evidence

to the District Court.

IV.

We hold that the District Court erred in granting

Renaissance’s motion to dismiss for lack of personal

jurisdiction. When the evidence presented by the Metcalfes is

evaluated under the correct standard at this stage of the

litigation, we conclude that they are able to make a prima facie

showing that the Virgin Islands Long-Arm Statute applies to

Renaissance and that the exercise of jurisdiction over

Renaissance is consistent with the Due Process Clause.

Therefore, we will reverse and remand to the District Court to

allow the Metcalfes to conduct jurisdictional discovery before

the District Court conclusively decides whether exercising

jurisdiction over Renaissance is permissible.
27

METCALFE v. RENAISSANCE MARINE, INC. – No. 08-1720

STAPLETON, Circuit Judge, dissenting:

I agree with my colleagues that the District Court

possessed subject matter jurisdiction and that, given the absence

of an evidentiary hearing, it erred in failing to accept as true the

facts alleged by the Metcalfes. In my view, however, even

accepting those facts, the District Court’s conclusion that it

lacked personal jurisdiction was correct.

A district court sitting in diversity applies the law of the

forum state in determining whether personal jurisdiction is

proper. Fed. R. Civ. P. 4(c). The reach of the long arm statute

of the Virgin Islands was intended by its legislature to be

coextensive with the maximum parameters of the Due Process

Clause. Urgent v. Tech. Assistance Bureau, 255 F. Supp. 2d 532

(D.V.I. 2003). We therefore look to federal Due Process law to

determine Renaissance’s susceptibility to personal jurisdiction

in the Virgin Islands. Vetrotex Certainteed Corp. v. Consol.

Fiber Glass Prods. Co., 75 F.3d 147 (3d Cir. 1996). We

summarized that law in Vetrotex, 75 F.3d at 150-51:

The due process limit to the exercise of

personal jurisdiction is defined by a two-prong

test. First, the defendant must have made

constitutionally sufficient “minimum contacts”

with the forum, Burger King Corp. v. Rudzewicz,

471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85
28

L.Ed.2d 528 (1985) (the “constitutional

touchstone” of personal jurisdiction is “whether

the defendant purposefully established ‘minimum

contacts’ in the forum State”). The determination

of whether minimum contacts exist requires an

examination of “the relationship among the

forum, the defendant and the litigation,” Shaffer

v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569,

2580, 53 L.Ed.2d 683 (1977), in order to

determine whether the defendant has

“‘purposefully directed’” its activities toward

residents of the forum. Burger King, 471 U.S. at

472, 105 S. Ct. at 2182 (quoting Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct.

1473, 1478, 70 L.Ed.2d 790 (1984)). There must

be “some act by which the defendant purposefully

avails itself of the privilege of conducting

activities within the forum State, thus invoking

the benefits and protections of its laws.” Hanson

v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228,

1240, 2 L.Ed.2d 1283 (1958). Second, if

“minimum contacts” are shown, jurisdiction may

be exercised where the court determines, in its

discretion, that to do so would comport with

“traditional notions of fair play and substantial

justice.” International Shoe Co. v. Washington,

326 U.S. 310, 66 S. Ct. 154, 90 L.Ed.2d 95

(1945); Farino, 960 F.2d at 1222.

My analysis begins with an indisputable proposition. In

applying these principles, it “is well established . . . that a
29

nonresident’s contracting with a forum resident, without more,

is insufficient to establish the ‘minimum contacts’ required for

an exercise of personal jurisdiction over the nonresident.”

Sunbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d 28, 32 (3d

Cir. 1993) (emphasis supplied). See also Vetrotex, 75 F.3d at

151.

It is also important in the current context to stress at the

outset that it is the defendant who must be shown to have

engaged in some affirmative act by which he “purposefully

avails [himself] of the privilege of conducting activities in the

forum state, thus invoking the benefit and protection of its

laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). As the

Supreme Court explained in Hanson, 357 U.S. at 253 (emphasis

supplied):

The unilateral activity of those who claim some

relationship with a nonresident defendant cannot

satisfy the requirement of contact with the forum

State . . . . it is essential in each case that there be

some act by which the defendant purposefully

avails itself of the privilege of conducting

activities within the forum State, thus invoking

the benefits and protection of its laws.

The facts usually found to constitute “the more”

necessary to subject a nonresident who contracted with a forum

resident to the jurisdiction of the forum court are notably absent

here. Renaissance is not alleged to have ever had an office,
10To the extent that Four Winds Plaza Corp. v. Caribbean

Fire & Assoc., 48 V.I. 899 (D.V.I. 2007), and Buccaneer Hotel

Corp. v. Reliance Int’l Sales Corp., 17 V.I. 249 (Terr. Ct.

30

employee or other representative in the Virgin Islands for any

purpose. Nor is it alleged to have engaged in sales to

distributors or other third parties who sell Renaissance vessels

in the Virgin Islands. Further, it is not alleged to have

advertised its vessels in the Virgin Islands media or to have in

any other way solicited from the Metcalfes or anyone else in the

Virgin Islands an offer to purchase a vessel. Finally,

Renaissance is not alleged to have shipped any product into the

Virgin Islands for sale or, indeed, for any other purpose. The

most that is alleged is that it “shrink wrapped” a vessel in its

home state of Florida and delivered it to the Metcalfes’ shipper

at a port in Florida.

As a substitute for the customary allegations, the

Metcalfes insist that they have made five allegations that must

be accepted as true and that provide the required “more” than

the existence of a contract with a forum resident. I am

unpersuaded.

The Metcalfes’ first and primary argument is based on

their allegation that, while Renaissance did not ship the vessel

into the Virgin Islands, it “was fully aware that the ultimate

destination of the Vessel was the Virgin Islands.” App. at 86.

The only relevant issue, however, is what Renaissance did in the

Virgin Islands. Accordingly, I would hold that its knowledge of

what the vessel’s purchasers intended to do with it after the

purchase is irrelevant.10 It is difficult to imagine a contract of
1981), can be read to suggest the contrary, I would overrule

those cases.

31

sale between a forum nonresident and a forum resident where

the nonresident seller does not have reason to believe that the

ultimate destination of the goods will be the forum. Yet, we

know that such a contract is not alone enough to subject the

seller to the personal jurisdiction of the forum court.

Second, the Metcalfes rely upon their allegation that they

first became familiar with the type of vessel they ultimately

bought when they rented one in the Virgin Islands from See &

Ski, a boat rental firm. They do not claim any relationship

between Renaissance and See & Ski, however, other than that

the latter from time to time purchases vessels from the former

for use in the latter’s rental business. The leasing by a Virgin

Islands boat rental firm of a Renaissance built vessel owned by

the rental firm can hardly be viewed as an act by Renaissance

“invoking the benefits and protections of” Virgin Islands law.

Next, the Metcalfes emphasize that they “negotiated the

sale from St. John, primarily via the telephone, telefax and the

internet.” App. at 86. Once again, however, they focus on the

wrong party. The Metcalfes make no allegation that

Renaissance dispatched anything to the Virgin Islands in

whatever discourse led up to the one-time purchase contract. To

be sure, it is reasonable to infer from the Metcalfes’ alleged use

of interstate communication facilities and the alleged existence

of a contract that Renaissance’s acceptance of the Metcalfes’

offer may have been communicated through such facilities to

them in the Virgin Islands. But not every telephone call into the
32

forum state constitutes the kind of “reaching out” to the forum

state that subjects a nonresident to its jurisdiction. Burger King,

471 U.S. at 479. In Budget Blinds, Inc. v. White, 536 F.3d 244

(3d Cir. 2008), for example, we determined that the fact that the

parties negotiated an agreement by telephone and mail with the

plaintiff remaining in the forum state did not support a finding

of minimum contacts with that state. We noted “an important

distinction between the negotiations in Burger King and those

in [Budget Blinds in] that the Burger King defendant actively

sought contract negotiations with a company based in the forum

state,” whereas in Budget Blinds, there was no indication that

the non-forum resident had reached out to anyone in the forum.

Budget Blinds, 536 F.3d at 261. Likewise, in the present case,

the fact that reciprocal communications may have occurred

between Renaissance and the Metcalfes is not sufficient to

establish that Renaissance purposely “reached out” to the Virgin

Islands where Renaissance is not alleged to have actively sought

contract negotiations with the Metcalfes there.

Fourth, the Metcalfes point to the Renaissance website,

attaching as Exhibit A a “copy of link entitled ‘Contact Other

Owners.’” App. at 88 (emphasis supplied). As the title of the

link suggests, however, Exhibit A cannot accurately be viewed

as supporting the Metcalfes’ contention that “Renaissance

advertises the rental of its vessels on St. Thomas on its website.”

Id. Exhibit A consists of a list of the names of people who have

previously purchased vessels from Renaissance along with their

email addresses. On the first page, fifteen such vessel owners

are listed along with a suggestion that anyone who currently

owns a Renaissance vessel and who wants to talk to “other

owners” contact them through the addresses provided. Only one
33

listed owner, See & Ski, appears to be from the Virgin Islands.

App. at 89.

We articulated the controlling principle here in Toys “R”

Us, Inc. v. Step Two, S.A., 318 F.3d 446, 454 (3d Cir 2003), as

follows:

As Zippo and the Courts of Appeals

decisions indicate, the mere operation of a

commercially interactive web site should not

subject the operator to jurisdiction anywhere in

the world. Rather, there must be evidence that the

defendant “purposefully availed” itself of

conducting activity in the forum state, by directly

targeting its web site to the state, knowingly

interacting with residents of the forum state via its

web site, or through sufficient other related

contacts.

Exhibit A is not targeted at the Virgin Islands. If it be

regarded as targeted at all, it is targeted at anyone anywhere in

the world who owns a Renaissance vessel and has an interest in

communicating with “other” Renaissance vessel owners. If that

targeting is sufficient, Renaissance’s website has subjected it to

personal jurisdiction anywhere in the world that a Renaissance

vessel owner resides, a result that seems inconsistent with Toys

“R” Us.

Finally, the Metcalfes rely upon their allegation that

during some past period of unspecified duration “Renaissance

has sold approximately 7 vessels to Virgin Islands residents.”
11While the Metcalfes do not so allege, my colleagues

note that “Renaissance avers that ‘all purchase agreements

entered into by and between Renaissance and its customers are

subject to a Ten Year Limited Hull Warranty.’” Op. at 19. That

warranty provides that (1) Renaissance will repair defects in

workmanship and/or materials without cost to the purchaser, (2)

“[a]ny expense for delivery of the boat to the manufacturer for

repair will be paid for by the Purchaser,” (3) the “laws of the

State of Florida shall govern the interpretation and enforcement

of this Hull Warranty,” (4) “[a]ny action under this Hull

Warranty shall be brought in the courts of the state of Florida,”

and (5) the “remedies contained in the warranty constitute the

sole recourse of Purchaser against Seller for breach of any of

Seller’s obligations under [the] warranty agreement.” App. at

43. Thus, while it may be true that Renaissance has entered into

warranty contracts with residents of the Virgin Islands, the

34

App. at 87. At least three are said to have been sold to See &

Ski. This is, of course, not relevant to whether the District Court

can exercise specific personal jurisdiction over Renaissance

given that the Metcalfes’ claim does not arise from those

transactions. Conceivably, however, these seven sales might

provide a foundation upon which to build a prima facie case of

general personal jurisdiction (i.e., the presence of currently

existing, “continuous and systematic” contacts with the forum,

Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001)).

Nevertheless, in the absence of any indication as to when the

seven sales were made and whether, unlike the sale to the

Metcalfes, they involved some Renaissance activity in the

forum, I conclude that the Metcalfes have not come close to

alleging a prima facie case of general personal jurisdiction.11
warranty obligations are to be performed in Florida and hardly

can be said to provide the “more” necessary to subject

Renaissance to the personal jurisdiction of the District Court.

35

The only remaining issue is whether we should remand

to provide the Metcalfes with an opportunity for jurisdictional

discovery. Toys “R” Us provides the controlling test:

If a plaintiff presents factual allegations that

suggest “with reasonable particularity” the

possible existence of the requisite “contacts

between [the party] and the forum state,” Mellon

Bank (East) PSFS, Nat’l Ass’n v. Farino, 960

F.2d 1217, 1223 (3d Cir. 1992), the plaintiff’s

right to conduct jurisdictional discovery should be

sustained.

Toys “R” Us, 318 F.3d at 456. I read “with reasonable

particularity” to mean that if a plaintiff suggests a realistic basis

for believing that personal jurisdiction exists, he or she should

be allowed to pursue discovery before having to prove that such

jurisdiction does exist. In my judgment, the Metcalfes have not

met this threshold. But it is not necessary to so hold. The

Metcalfes have never requested jurisdictional discovery in the

District Court, and it would clearly be unfair to Renaissance to

allow them to successfully insist upon it in the course of this

appeal.

I would affirm the judgment of the District Court.