Opinion ID: 777651
Heading Depth: 3
Heading Rank: 1

Heading: Applicability of Donatelli's substantial influence test.

Text: 46 First, there is the threshold question of whether the district court properly applied Donatelli, 893 F.2d 459, as the governing test. The parties devote the majority of their attention to this issue, but it is not dispositive of the personal jurisdiction question. The district court concluded that even if the Motley defendants acted as the Scruggs defendants' agents, there was no substantial influence as required by Due Process. Daynard, 184 F.Supp.2d at 76. The district court derived this substantial influence requirement from Donatelli, 893 F.2d at 469, a general jurisdiction case. The district court was in error. It read Donatelli as applying an exclusive test and as applying in the present, very different context. This over-reads Donatelli. 47 The question before us is whether Daynard must meet the substantial influence test in order to comply with jurisdictional Due Process requirements. Although Donatelli aids our inquiry, we conclude that its substantial influence test is not the exclusive test for attribution of conduct. It does not control the matter before us here, where the questions are whether the Scruggs defendants were in an actual or apparent agency relationship, or at least held themselves out to be in a joint venture or other agency relationship with the Motley defendants, and whether the Scruggs defendants ratified the Motley defendants' conduct. In Donatelli, this court held that 48 an unincorporated association which does not itself conduct significant activities in, or enjoy affiliating circumstances with, a state cannot be subject to the general personal jurisdiction of the state's courts on the basis of a member's contacts within the state unless the member carries on the in-forum activities under the association's substantial influence. 49 Id. at 472. Donatelli sued the National Hockey League (NHL) in Rhode Island, challenging the NHL's draft and its failure to declare him a free agent. Jurisdiction in Rhode Island over the NHL was premised on the fact that a member team of the NHL had contacts with Rhode Island. His suit was unrelated to either the NHL's contacts with Rhode Island or its member's contacts with Rhode Island. Id. at 462. The Donatelli court rejected the theory that the NHL could be subject to general personal jurisdiction in Rhode Island simply because one of its members was subject to general jurisdiction in that state. Id. at 472. It concluded that, in these circumstances, a showing of substantial influence was necessary in order to attribute one's contacts to the other consistent with the requirement of purposeful availment. Id. at 469. 50 Donatelli 's substantial influence test does not control the entire universe of cases in which one party's contacts might be attributed to another. By its terms, Donatelli applies in the world of unincorporated associations. Id. at 468. Indeed, as Donatelli itself observed, the substantial influence test does not control where one seeks to attribute contacts from partner to partnership or from subsidiary to corporate parent. Id. at 465-67. In the partnership context, the activities of the partner are generally attributed to the partnership and jurisdiction over the partnership follows from the partner's contacts, if sufficient, regardless of the absence of independent contacts between the partnership qua entity and the forum. Id. at 466. Donatelli 's substantial influence test does not apply here, where the question is whether an actual or implied agency relationship, sufficient to attribute contacts, existed between the parties. We conclude that, similar to some cases involving actual partnerships, the relationship between the defendants here invokes certain principles of the law of agency, partnership, and joint venture and that these principles permit imputing contacts without the need to show substantial influence. 51 In addition, although we do not decide whether Donatelli 's approach to attribution is necessarily limited to general jurisdiction cases, we note, as stated several times in the Donatelli opinion, including in the above quoted passage, that Donatelli focus[ed] ... upon ... general as opposed to specific jurisdiction. Id. at 463; see also id. at 461 (stating the issue on appeal as whether an unincorporated association is subject to the general personal jurisdiction of every court having jurisdiction over one of its members) (internal quotation marks omitted). This is important because, as Donatelli states clearly, the standard for general jurisdiction is more strict than the standard for specific jurisdiction. Id. at 463. General jurisdiction requires that the defendant's activities in the forum be continuous and systematic, United Elec., Radio & Mach. Workers, 960 F.2d at 1088, whereas specific jurisdiction requires a lesser showing. 52 The problem Donatelli addresses is, in some ways, more likely to occur in general jurisdiction cases. In general jurisdiction cases, the suit does not arise out of or relate to the defendant's forum contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Donatelli addresses the potentially unjust scenario in which an association, with no direct contacts with a forum, is haled into a forum based on one of its members' continuous and systematic activities in the forum, to answer a lawsuit unrelated to either the member's or the association's in-forum activities. 893 F.2d at 469. Something more is needed to say that the association has purposefully availed itself of the benefits of in-forum activity. Otherwise, the association is subject to a suit in that forum, unrelated to anything the association has done in the forum, by merely engaging in a limited relationship with a member, that through its own activities engages in continuous and systematic activities in a forum. 53 Donatelli resolves this problem by holding that, in general jurisdiction cases, the association must exercise[ ] substantial influence over the member's decision to carry on the in-forum activities which constitute the relevant `minimum contacts.' Id. This requirement ensures that the association purposefully availed itself of the benefits of the forum, because it links the member's in-forum activity with the association's relationship with that member. 54 This problem, however, is less likely to arise in specific jurisdiction cases such as this one. Here a direct connection is alleged between the in-forum activities of the agent (the Motley defendants) and the agent's relationship with the principal (the Scruggs defendants). When the cause of action relates to both the association's activities giving rise to the suit and to the member's in-forum activities, the same risk of unfairness is not necessarily present. In the present case, Daynard's suit relates to the Scruggs defendants' alleged promise to pay him a share of the fees and to the Motley defendants' activities in Massachusetts, claimed to have been ratified by Scruggs. Donatelli is not controlling in this context. It addresses a question different from the inquiry here, which is whether there was an agency relationship between the defendants and whether the Scruggs defendants ratified the Motley defendants' activities in Massachusetts giving rise to Daynard's suit. 55 But that does not end the matter. We must still determine whether the relationship between the defendants permits imputing a sufficient quantum of the Motley defendants' connections to the Scruggs defendants. 56