Opinion ID: 777651
Heading Depth: 2
Heading Rank: 4

Heading: The Remaining Constitutional Analysis

Text: 85 The easier question in the case is the remaining constitutional one. Given the Scruggs defendants' direct contacts with Massachusetts and their contacts imputed from the Motley defendants, do the Scruggs defendants have minimum contacts with Massachusetts such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'? Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154 (quoting Milliken, 311 U.S. at 463, 61 S.Ct. 339). The answer is yes. 86 For specific jurisdiction, this circuit divides the constitutional analysis into three categories: relatedness, purposeful availment, and reasonableness: 87 First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable. 88 Foster-Miller, 46 F.3d at 144; see also Noonan, 135 F.3d at 90. The Supreme Court, speaking on the subject of specific personal jurisdiction in contract cases, has emphasized that parties who `reach out beyond one state and create continuing relationships and obligations with citizens of another state' are subject to regulation and sanctions in the other State for the consequences of their activities. Burger King, 471 U.S. at 473, 105 S.Ct. 2174 (quoting Travelers Health Ass'n v. Virginia, 339 U.S. 643, 647, 70 S.Ct. 927, 94 L.Ed. 1154 (1950)). 89
90 As to the first requirement, that the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities, Foster-Miller, 46 F.3d at 144, the district court correctly concluded, based merely on the Scruggs defendants' direct contacts with the forum, that the alleged 91 breach of contract in this case arose from a course of dealing between the parties. The contract was in the form of a working relationship — started in Massachusetts — that called for interaction between Massachusetts, South Carolina, and Mississippi. Drawing all inferences in favor of Daynard, he arguably meets the relatedness requirement, 92 Daynard, 184 F.Supp.2d at 66. It is clear that Daynard's breach of contract claim arise[s] out of, or relate[s] to, the Scruggs defendants' Massachusetts activities. Foster-Miller, 46 F.3d at 144. Daynard's lawsuit is based on his claim that the defendants owe him money for his work pursuant to an agreement initiated by the defendants while physically present in Massachusetts and performed, in part, in Massachusetts. This relationship contemplated ongoing interaction between Daynard, in Massachusetts, and the defendants, in Mississippi and South Carolina. Daynard's suit arises out of these Massachusetts activities, which were instrumental to the formation of the disputed oral contract. See McGee v. Int'l Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957) (upholding jurisdiction over a suit based on a contract which had substantial connection with th[e] State); Hahn v. Vt. Law Sch., 698 F.2d 48, 51-52 (1st Cir.1983). 93
94 Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Foster-Miller, 46 F.3d at 144. The cornerstones upon which the concept of purposeful availment rest[s] are voluntariness and foreseeability. Sawtelle, 70 F.3d at 1391 (citing Ticketmaster, 26 F.3d at 207). 95 The district court's reasoning on purposeful availment considered only the Scruggs defendants' direct contacts and found them insufficient. We need not address this conclusion as Daynard has not challenged it on appeal. We note, however, that, as the district court recognized, Scruggs did have some contacts with Massachusetts, however minimal. The Scruggs defendants, according to Daynard, engaged in telephone and fax communications with him in Massachusetts. 11 In addition, Daynard says the Scruggs defendants also had conversations with him, in which they agreed to pay him a share of the fees as compensation for work performed in Massachusetts. He also says that Scruggs firm members came to Boston to receive his advice, although Scruggs denies this. 96 Combined with Patrick's physical presence in Massachusetts to negotiate the agreement which ultimately gave rise to this litigation, and the ongoing relationship between the Motley defendants and Daynard — properly attributed to the Scruggs defendants — we can properly say that the Scruggs defendants engaged in ... purposeful activity related to the forum that would make the exercise of jurisdiction fair, just, or reasonable, Rush v. Savchuk, 444 U.S. 320, 329, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980). See Burger King, 471 U.S. at 479, 105 S.Ct. 2174 (holding that prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing must be evaluated to determine whether the defendant purposefully established minimum contacts). Patrick's action alone is probably sufficient to support jurisdiction over the Motley defendants and, when imputed, the Scruggs defendants as well. See id. at 475 n. 18, 105 S.Ct. 2174 (noting that [s]o long as it creates a `substantial connection' with the forum, even a single act can support jurisdiction) (quoting McGee, 355 U.S. at 223, 78 S.Ct. 199); R.C. Casad & W.B. Richman, 1 Jurisdiction in Civil Actions: Territorial Basis and Process Limitations on Jurisdiction of State and Federal Courts § 4-2, at 413 (3d ed.1998) (stating that if the defendant or its agent was physically present in the state to negotiate the service contract, cases have found that the defendant transacted business there). Even in cases where the defendant was not physically present in the forum, where the defendant initiated the transaction by mailing or calling the plaintiff in the forum and when the defendant contemplated that the plaintiff would render services in the forum, all as alleged by Daynard here, many courts have found jurisdiction. Casad & Richman, supra, § 4-2, at 414. 97
98 Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable. Foster-Miller, 46 F.3d at 144; see also World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (listing factors). The Gestalt factors support the conclusion that jurisdiction is reasonable. 99 The burden on the Scruggs defendants of appearing in Massachusetts, given that they routinely represent clients outside their home state, is not by any means unusual. In addition, Daynard's interest in bringing his action in this forum, given the traditional deference accorded to a plaintiff's choice of forum, weighs in favor of personal jurisdiction. This is particularly true in light of Massachusetts's stake in being able to provide a convenient forum for its residents to redress injuries inflicted by out-of-forum actors. Sawtelle, 70 F.3d at 1395. Massachusetts's adjudicatory interest is likely to weigh in favor of exercising personal jurisdiction because the district court has already decided that, as between Daynard and the Motley defendants, Massachusetts law governs the dispute over the oral fee-splitting arrangement. Daynard, 188 F.Supp.2d at 118-23. Finally, efficient administration of justice favors jurisdiction in Massachusetts, where this action is already proceeding against the Motley defendants.