Opinion ID: 202048
Heading Depth: 6
Heading Rank: 1

Heading: Specific Jurisdiction over Contract Claims

Text: 85 Plaintiffs' primary theory of specific jurisdiction is that their breach of contract claim arises from HG Limited's assumption of the Partnership's obligations under the Agreement, which one of the plaintiffs entered into in Massachusetts. Specifically, plaintiffs contend that there is sufficient evidence in the record to support the propositions that the Partnership solicited Platten to become a partner in Massachusetts, that the Agreement was executed in Massachusetts, and that Platten's performance under the Agreement occurred primarily in Massachusetts. 86 HG Limited, in turn, counters that it has its principal place of business in Bermuda; maintains its books, records, and accounts in Bermuda; and pays taxes in Bermuda. Moreover, it maintains that it has never attempted to solicit or service customers in Massachusetts or to derive substantial revenue from services rendered in the state. As a holding company, it exercises only limited control over HGI, a fourth-tier subsidiary, which has an office in, among other places, Massachusetts. 87 We assume for present purposes that HG Limited fully assumed the Partnership's obligations under the Agreement. Nonetheless, we hold, as did the district court, that the record lacks support for plaintiffs' allegations that the Partnership established sufficient minimum contacts in Massachusetts to be subject to suit by plaintiffs in this state. Our inquiry begins and ends with the first prong of the constitutional inquiry, that of relatedness. 88 In support of specific jurisdiction over their contract claims, plaintiffs rely almost solely on the affidavits of Paul Platten. The first of those affidavits, and the only Platten affidavit admitted into the record, makes the following relevant allegations: 89 2. In February, 1989, I was hired by the defendant [HGI] with the Boston Office. . . . 90 7. As a condition of employment with the Hay Group, I was required to become a partner in the Partnership and, in or about 1992, in Massachusetts, I entered into an Agreement . . . with the Partnership. . . . 91 Aside from these allegations, plaintiffs provide no additional details about the place and circumstances of contracting. Flannery and Pfau's affidavits are silent with respect to the place of contracting, and neither of the two has ever claimed that their agreements with the Partnership were signed or executed in Massachusetts. 92 The Supreme Court has held 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 [s]tate for the consequences of their activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Travelers Health Ass'n v. Virginia, 339 U.S. 643, 647, 70 S.Ct. 927, 94 L.Ed. 1154 (1950)). Evidence of a defendant's entry into a contractual relationship with a plaintiff in another state is relevant to whether the defendant reached out to that state. But the mere fact that a plaintiff entered into a contract with a defendant in the forum state is not in and of itself dispositive of the personal jurisdiction question. The [Supreme] Court long ago rejected the notion that personal jurisdiction might turn on `mechanical' tests or on `conceptualistic. . . theories of the place of contracting or of performance.' Burger King, 471 U.S. at 478, 105 S.Ct. 2174 (omission in original) (quoting Int'l Shoe, 326 U.S. at 319, 66 S.Ct. 154; Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316, 63 S.Ct. 602, 87 L.Ed. 777 (1943)). Instead, [the Court has] emphasized the need for a `highly realistic' approach that recognizes that a `contract' is `ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction.' Id. at 479, 105 S.Ct. 2174 (quoting Hoopeston, 318 U.S. at 316-17, 63 S.Ct. 602). 93 As the district court points out, plaintiffs' affidavits are silent as to details regarding where negotiations took place, where the agreement was presented for signatures, where it was signed, where it was to be performed, and who represented the Partnership at the time of the negotiations. Aside from Platten's conclusory allegations that he performed Partnership business in Massachusetts, none of the plaintiffs offer additional information on whether the Partnership or HG Limited directed an out-of-state activity at the forum state, see Phillips Exeter Acad., 196 F.3d at 289, whether the parties' Agreement contemplated ongoing interaction between Platten in Massachusetts and the Partnership or HG Limited in Bermuda, see Daynard, 290 F.3d at 61, or whether the two other plaintiffs' claims are at all related to the Partnership's and HG Limited's contacts in Massachusetts. Plaintiffs fail to make out a prima facie case for specific jurisdiction on the contract theory.