Opinion ID: 2966563
Heading Depth: 4
Heading Rank: 1

Heading: PW-Bahamas

Text: Young brought a professional negligence claim against PWBahamas. He claimed that he relied to his detriment on a PWBahamas audit report that erroneously represented that SAFIG had $12 million on deposit with a U.S. bank based in South Carolina. The district court held, however, that PW-Bahamas has insufficient contacts with South Carolina to support in personam jurisdiction. We review de novo a district court's dismissal for lack of personal jurisdiction. Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1198 (4th Cir. 1993). However, we review findings of fact pertaining to the dismissal for clear error. Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993). Young bears the burden of establishing that personal jurisdiction exists over the nonresident PW-Bahamas. Mylan Laboratories, Inc., 2 F.3d at 60. He must demonstrate two things. First, he must prove that PW-Bahamas's conduct meets the requirements of South Carolina's long-arm statute. Id. Second, he must prove that PW-Bahamas has sufficient contacts with South Carolina to meet the constitutional standards of due process. Id. South Carolina's long-arm statute extends to the constitutional limits that the due process clause imposes. Triplett v. R.M. Wade & Co., 200 S.E.2d 375, 379 (S.C. 1973). As a result, the state-law analysis collapses into the constitutional analysis. Under that analysis, Young must demonstrate that PW-Bahamas has sufficientminimum contacts with South Carolina such that the maintenance of the suit would `not offend traditional notions of fair play and substantial justice.' _________________________________________________________________ 5 Because we hold that Feaster acted outside the scope of his employment, we do not reach the issue of whether the D'Oench doctrine bars free-standing tort claims not based on an unrecorded agreement and not related to a specific asset of the bank. 16 World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92 (1980) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)) (internal quotation marks omitted). As the Supreme Court has noted, 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 protections of its laws. Hanson v. Denckla, 357 U.S. 235, 253 (1958). In other words, the defendant must have a `substantial connection' with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957)). PW-Bahamas is a partnership organized under the laws of the Bahamas, with its principal place of business in Nassau, Bahamas.6 PW-Bahamas conducted the audit of SAFIG, also a Bahamian company, in the Bahamas, not in South Carolina. PW-Bahamas has no offices, agents, employees, or property located in South Carolina, and it has not engaged in any business in South Carolina. Furthermore, none of its members or employees have ever traveled to South Carolina to conduct business on the partnership's behalf. _________________________________________________________________ 6 PW-Bahamas is part of a world-wide organization of separate and independent Price Waterhouse firms that practice accountancy in various countries. The members of each Price Waterhouse firm hold shares in Price Waterhouse World Firm Limited (PW-World Firm), a limited liability company incorporated under the laws of Bermuda. PW-World Firm assists the various Price Waterhouse firms in advancing their respective practices, and it facilitates the maintenance of uniform standards of practice. It does not conduct or supervise client engagements, however. Nor does it play a part in the day-to-day management of the Price Waterhouse firms. PW-World Firm's bylaws designate twenty-six separatemember firms in the Price Waterhouse organization. Those member firms include PW-US and Price Waterhouse North Caribbean (PW-North Caribbean), a Cayman Islands partnership authorized to use the Price Waterhouse name pursuant to an agreement with PW-World Firm. PWNorth Caribbean sub-licenses PW-Bahamas to use the Price Waterhouse name. 17 Young bases his personal jurisdiction argument on the Standard Bank Confirmation form that was submitted to HHB&T in South Carolina to confirm SAFIG's deposits there. No evidence suggests that PW-Bahamas itself mailed the form to the bank, but some evidence does suggest that PW-Bahamas used the information contained in the form to substantiate its audit of SAFIG's financial statement. Indeed, PW-Bahamas does not deny that it received information that verified the SAFIG deposit at HHB&T. However, the sole act of using account information from HHB&T in South Carolina does not establish a substantial connection between PW-Bahamas and South Carolina; nor does it constitute a purposeful availment of the privilege of conducting business in South Carolina. See Burger King Corp., 471 U.S. at 475 (noting that the purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts (internal quotation marks omitted)). The Supreme Court also has held that courts must consider the burden on the defendant, the interests of the forum State, and the plaintiff's interest in obtaining relief. Asahi Metal Indus. Co. v. Super. Ct. of California, 480 U.S. 102, 113 (1987). In particular, the Supreme Court has held that courts should placesignificant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders because of the unique burdens placed upon one who must defend oneself in a foreign legal system. Id. at 114. In the instant case, the balance of interests weighs against finding personal jurisdiction. PW-Bahamas likely would face a large burden if we required it to defend a claim in South Carolina. It would have to travel between Nassau and South Carolina and participate in a foreign nation's judicial system. South Carolina, the forum state, has little interest in the dispute since Young is a Texas resident and PWBahamas prepared the audit report in the Bahamas. Moreover, as a nonresident, Young's interest in obtaining relief in South Carolina is reduced. See Federal Ins. Co. v. Lake Shore, Inc., 886 F.2d 654, 661 (4th Cir. 1989). Despite these precedents, Young argues that PW-Bahamas could have foreseen that investors would rely on its audit letter. However, 18 the Supreme Court clearly has held that foreseeability alone is not a sufficient benchmark for personal jurisdiction under the Due Process Clause. World-Wide Volkswagen Corp, 444 U.S. at 295. Rather, the defendant's conduct and connection with the forum state must be such that he would reasonably anticipate being haled into court there. Id. at 297. PW-Bahamas could not reasonably anticipate defending an action in South Carolina simply because it made one informational request of a South Carolina bank. Young essentially conceded that point during oral argument. Accordingly, we hold that the district court properly dismissed the claim against PW-Bahamas for lack of personal jurisdiction.