Opinion ID: 71727
Heading Depth: 2
Heading Rank: 1

Heading: The Corporate Defendant

Text: 21 Appellant contends that Bosque Puerto Carrillo, the corporate defendant, engaged in sufficient minimum contacts with the United States primarily by (i) placing advertisements and arranging for articles concerning its securities in two airlines' in-flight magazines, (ii) mailing offering materials and application forms directly to United States investors, (iii) maintaining bank accounts in Miami to receive payments from investors, and (iv) mailing at least one stock certificate to a United States investor. 5 Bosque essentially admits that these contacts occurred, but disputes their legal significance.
22 Under the first prong of the minimum contacts inquiry, we find that the alleged contacts are related to, or gave rise to, the causes of action because each of the contacts was a step by which the allegedly fraudulent scheme was carried out. Bosque contends that the SEC has failed to show that the advertisements actually caused any United States investor to purchase Bosque's securities. 6 See Brief of Corporate Appellee at 18, 24. This argument fails with respect to the claim under 15 U.S.C. § 77e(c), which forbids making an offer to sell unregistered securities regardless of whether the securities are actually purchased, and the claim under 15 U.S.C. § 77q(a)(1), which forbids use of any scheme to defraud in the offer or sale of securities. 23 Bosque's argument on this point also misconstrues our test. Under our case law, the contacts must be related to the plaintiff's cause of action or have given rise to it. See, e.g., Francosteel, 19 F.3d at 627; Vermeulen, 985 F.2d at 1546 (emphasis added). In this case, it is clear that the advertisements were related to the causes of action because the advertisements were a means by which Bosque offered and sought to sell its unregistered securities to potential American investors. 7 24 As to the mailed offerings, Bosque contends that they were simply notifications of further stock offerings that were required by Costa Rican law. However, the status of the offerings under Costa Rican law is irrelevant for our purposes. The fact is the offerings included information and application forms pertaining to Bosque's unregistered securities that were mailed directly to United States investors. Additionally, the money for purchases of these securities was sent to Bosque's Miami bank accounts, which it admittedly maintained for the convenience of these investors. See Brief of Corporate Appellee at 22. Thus, these offerings and bank accounts were related to, and gave rise to, the causes of action for fraudulent offer and sale of unregistered securities because they were the means by which the alleged offers and sales were carried out. 25 Bosque argues that these bank accounts, by themselves, were not fraudulent and thus did not give rise to the causes of action. This argument overlooks the exact nature of the SEC's allegations. It is not the existence of the bank accounts that is alleged to have given rise to the causes of action but rather the use of the bank accounts to carry out the sale of unregistered securities to United States investors. The use of these bank accounts was manifestly related to, and gave rise to, the causes of action for fraudulent sale of unregistered securities in the United States. See Chase & Sanborn, 835 F.2d at 1346 n. 10 (use of bank accounts in Miami, New York, Chicago, and San Francisco to conduct transactions out of which cause of action arose as well as other transactions constituted sufficient minimum contacts with entire United States and with Florida). When these bank accounts are considered together with the other contacts, it is even clearer that the contacts gave rise to the instant causes of action in the sense that by advertising, offering shares, and accepting payment in this country, Bosque did everything necessary to complete the offer and sales of the unregistered securities here.
26 Under the second prong of the minimum contacts test, we find that Bosque purposefully availed itself of the privileges and benefits of conducting its activities in the forum because the airline advertisements and articles were reasonably calculated to reach the forum. It is well settled that advertising that is reasonably calculated to reach the forum may constitute purposeful availment of the privileges of doing business in the forum. See, e.g., World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295, 100 S.Ct. 559, 566, 62 L.Ed.2d 490 (1980); Vermeulen, 985 F.2d at 1549 (citing Asahi Metal Industry, 480 U.S. at 112, 107 S.Ct. at 1032); Morris v. SSE, Inc., 843 F.2d 489, 494 (11th Cir.1988); Runnels v. TMSI Contractors, Inc., 764 F.2d 417, 421 (5th Cir.1985); see also Sculptchair, 94 F.3d at 631 (marketing products in the forum constitutes purposeful availment). It is clear that the advertisements placed by Bosque in the complimentary magazine of American Airlines were reasonably calculated to reach readers in the American forum. 8 We also find that the advertisements and favorable articles in Lacsa's World were reasonably calculated to be read in the forum, in light of the fact that the ads and articles were in English and that the airline has numerous flights to and from the United States. It is also relevant to the purposeful availment inquiry that the advertisements were published on sixteen occasions in two separate magazines over a span of two years. 9 See Growden v. Ed Bowlin and Associates, Inc., 733 F.2d 1149, 1151-52 (5th Cir.1984) (noting that how widely and frequently the publications were circulated was relevant to inquiry as to whether advertising subjected defendants to personal jurisdiction). Thus, construing all reasonable inferences in favor of the plaintiff, we conclude that these advertisements and articles constituted purposeful availment. 27 It has also long been held that direct mailings of solicitation materials to the forum may provide a basis for personal jurisdiction. See, e.g., McGee v. International Life Insurance Co., 355 U.S. 220, 221-24, 78 S.Ct. 199, 200-01, 2 L.Ed.2d 223 (1957) (holding that California court had jurisdiction over out-of-state insurance company based on company's mailing to California resident of reinsurance certificate offering to insure him on same terms as an existing policy he had with another company). Bosque argues that its solicitation activities did not constitute purposeful availment where no continuing relationship with the investors was contemplated, 10 relying on Sea Lift, Inc. v. Refinadora Costarricense de Petroleo, 792 F.2d 989, 994 (11th Cir.1986). However, in Sea Lift we emphasized that there was no personal jurisdiction because the solicitation was part of a one-shot operation. Id. at 994. By contrast, in this case the district court found that Bosque sent solicitation materials to previously established investors, and Bosque emphasizes that it sent offering materials to existing investors. See Brief of Corporate Appellee at 14, 25. Thus, by its own admission, Bosque contemplated a continuing relationship with the American investors. Accordingly, we find that the mailings of solicitation materials constituted purposeful availment. 28 Moreover, Bosque intentionally availed itself of the benefits of United States law by setting up bank accounts to facilitate purchases of the unregistered securities. The applicable case law unequivocally establishes that maintaining bank accounts in the forum for purposes of carrying out the subject transactions constitutes purposeful availment and invocation of the benefits of the forum's laws. See, e.g., Chase & Sanborn, 835 F.2d at 1345-47 & n. 10 (conducting transactions that give rise to claims through bank accounts in the forum); see also Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 448, 72 S.Ct. 413, 419-20, 96 L.Ed. 485 (1952) (maintaining bank accounts in the forum); Knowles, 87 F.3d at 419 (maintaining brokerage account through which subject transactions were carried out). 29 Bosque argues that maintaining the bank accounts cannot be considered to be purposeful availment under the Supreme Court's decision in Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416-17, 104 S.Ct. 1868, 1872-74, 80 L.Ed.2d 404 (1984). In that case the Court found that acceptance by an out-of-forum defendant of checks drawn by another party on a bank account in the forum did not count as a contact of the defendant with the forum because another party's use of a particular bank account is its own unilateral activity and is not attributable to the defendant. Id. Helicopteros is distinguishable because here Bosque itself maintained the bank accounts in the forum in furtherance of the alleged fraudulent scheme, so that its ties through the bank accounts stem from its own objectives rather than another party's unilateral action. 30
31 Under the third element of the inquiry, we find that Bosque could reasonably have expected to be haled into court in this country because it deliberately set about to sell its unregistered securities to United States residents. The Supreme Court has previously held that defendants whose intentional ... actions were expressly aimed at California could reasonably anticipate being haled into court there. See Calder v. Jones, 465 U.S. 783, 789-90, 104 S.Ct. 1482, 1486-88, 79 L.Ed.2d 804 (1984); accord Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 259 (11th Cir.1996) (defendants could reasonably anticipate being haled into court in Florida where they were fully aware that their actions or omissions would have a substantial effect in Florida). 32 Bosque offers only the bare assertion that it could not possibly have anticipated being haled into court in the United States based on the advertisements, the mailed offerings, and the bank account. Brief of Corporate Appellee at 29. Bosque's argument is supported by no case law and is contrary to [c]ommon sense and everyday experience. See Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1872-73. Surely Bosque could reasonably expect to be called to account in the United States when it took every necessary step to carry out the sale of unregistered and allegedly fraudulent securities in this country.
33 Having found that there were sufficient minimum contacts, the question that remains is whether this is one of those rare cases in which minimum requirements inherent in the concept of fair play and substantial justice ... defeat the reasonableness of jurisdiction.... Asahi, 480 U.S. at 116, 107 S.Ct. at 1034 (Brennan, J., concurring) (internal quotation marks omitted). To make this determination, we examine the burden on the defendant, the interests of the forum ..., and the plaintiff's interest in obtaining relief. Vermeulen, 985 F.2d at 1551 (citation and quotation marks omitted). Bosque alleges that it would be burdened as a foreign national having to litigate in the United States. However, we have previously found that modern methods of transportation and communication have ameliorated this sort of burden. Sculptchair, 94 F.3d at 632. We have also recognized a forum's obvious interest in stamping out the type of nefarious economic chicanery alleged. Id. Additionally, the plaintiff SEC has a strong interest in litigating this case in this forum because it has no other means of obtaining relief. Thus, we hold that the district court properly had personal jurisdiction over corporate defendant Bosque.