Opinion ID: 784086
Heading Depth: 3
Heading Rank: 1

Heading: Business Contacts

Text: 12 First, from December 1998 to June 2001, Prudential Savings maintained home-equity loans and lines of credit to persons in Missouri. These contacts are continuous. Home-equity loans and lines of credit are not single point-of-sale transactions. Rather, the terms of these loans are typically measured in months and years-creating continuous long-term contacts with the State of Missouri. 13 Appellants also argue that these business contacts are substantial because they total approximately $10 million. Prudential Securities counters that the home-equity loans and lines of credit only makes up one percent of their total loan portfolio. They therefore reason that the contacts should be considered insubstantial to establish general jurisdiction. 6 While Missouri courts have not commented on whether percentages of a non-resident corporation's total business in a forum state should be given special consideration in this determination, at least one of our sister circuits has directly addressed this issue. Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Assoc., 819 F.2d 434, 437-38 (3d Cir.1987) (dealing with this issue in a very similar factual scenario). 7 14 In Provident, Pennsylvania-based plaintiff Provident sued defendant California Federal in Pennsylvania. Id. at 435. California Federal, a federally-chartered bank, whose headquarters were located in California, had 138 branch offices in California, thirty-seven in Florida, thirteen in Georgia, and six in Nevada, but no branches in Pennsylvania. Id. at 436. Moreover, it maintained no Pennsylvania office, employees, agents, mailing address, or telephone number. It had not applied to do business in Pennsylvania, did no advertising in Pennsylvania, and paid no taxes there. Id. During the relevant period, California Federal had about $10 million in outstanding loans with Pennsylvania residents. Id. This, however, only amounted to .083% of California Federal's total loan portfolio of $12 billion. Id. California Federal also had Pennsylvania depositors, whose total deposits amounted to around $10 million, or .071% of its total deposits. 15 California Federal argued that the action should be dismissed for lack of general personal jurisdiction. It further argued that if a company does a small percentage of its business in a state, then such percentage should create a presumption for a lack of jurisdiction. The Court of Appeals disagreed, noting that the size of the percentage of California Federal's total business represented by its Pennsylvania contacts is in general irrelevant.... Id. at 438; see also Gehling v. St. George's School of Medicine, Ltd., 773 F.2d 539, 543 (3d Cir.1985) (stating the same, but finding no jurisdiction). Likewise, it did not find the absolute amount of dollars completely persuasive. Instead, it found more convincing the nature of the deposits and the fact that the loans and deposits were central to the conduct of its business. Id. Finally, the court found significant the fact that California Federal can become the owner of a loan secured by property in Pennsylvania.... Provident, 819 F.2d at 438 (citation omitted). 16 We agree. Percentage of a company's sales in a given state are generally irrelevant. Instead, our focus is on whether a defendant's activity in the forum state is continuous and systematic. Helicopteros, 466 U.S. at 414, 104 S.Ct. 1868. Many companies conduct millions of dollars in sales worldwide yet only do a small percentage of their sales in any one state. E.g., L.L. Bean, Inc., 341 F.3d at 1074 (sales in California for L.L. Bean, Inc. only accounted for six percent of its total sales). However, our relevant inquiry is not whether the percentage of a company's contacts is substantial for that company; rather, our inquiry focuses on whether the company's contacts are substantial for the forum. 17 As the record stands, Prudential Securities' contacts are substantial. Prudential Securities has nearly $10 million in its Missouri loan portfolio. Because home-equity loans and lines of credit can represent indebtedness of as little as a few thousand dollars, 8 $10 million in such loans can represent the establishment of lending relationships with hundreds, if not thousands of Missouri residents. Moreover, it is noteworthy that home-equity loans and lines of credit are central to the conduct of [Prudential Securities'] business. Provident, 819 F.2d at 438. While it is true that the loans were made in Georgia, it is likely that such loans are secured with Missouri residents' property, which was used as collateral for the loan. See Mo. Rev.Stat. § 443 et seq. If this is true, then Prudential Security will have liens on hundreds to thousands of pieces of real property in Missouri and the power to use Missouri courts to enforce them. See Mo. Rev.Stat. §§ 443.190, 443.290. However, it is unclear from the record if this is the case. Appellants must be permitted to have the opportunity to establish these facts through jurisdictional discovery.