Court Opinion

ID: 9477448
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:23:38.440606+00
Date Added: 2024-06-11T17:45:52.834343
License: Public Domain

KRUPANSKY, Circuit Judge,
concurring in part, dissenting in part.
I concur with the majority’s assessment that plaintiff has waived any objection she may have had to the untimeliness of the defendants’ removal petition. However, because the majority’s decision addressing the issue of long arm jurisdiction does not comport with Michigan law or Supreme Court pronouncements, I am constrained to respectfully dissent from the disposition of that issue.
The instant dispute arose as a result of the plaintiff’s application for “Diplómate” status with the Board of Endodontics, which certification in essence constitutes an imprimatur of excellence in the field of endodontics. The defendant organizations are Illinois non-profit corporations which maintain their sole respective offices in Chicago, Illinois. Neither owns property, maintains offices, officers, agents, employees, bank accounts, books, records, or phone listings in the State of Michigan, or is licensed to or has authorized employees to conduct business in that state, although the Association has certified a number of qualified Michigan residents with “Dip-lómate” status. Defendants did not nor do they presently advertise to solicit applicants for Diplómate certification. Plaintiff voluntarily initiated the Board’s certification procedure by requesting an application through the mail. The Board responded by telephone and through correspondence. The plaintiff thereafter successfully completed the written and ease study section of the admission examination, but failed two successive oral examinations conducted in Phoenix, Arizona, and Chicago, Illinois, respectively.
The plaintiff’s cause of action was initiated in a Michigan state court and charged the Board with sex discrimination in rejecting her application for certification as a Diplómate. Plaintiff alleged that the Board’s rejection violated the Michigan Elliott-Larsen Civil Rights Act, Mich. Comp. Laws § 37.2101 et seq. Asserting diversity of citizenship, the defendants removed the case to federal district court. Plaintiff challenged the removal petition as untimely and moved for a remand to state court. The federal district court denied the plaintiff’s motion to remand and granted the defendants’ motion to dismiss for lack of in personam jurisdiction. From these rulings, plaintiff has appealed.
In determining if, in a diversity case, a federal court may exercise personal jurisdiction over a non-resident defendant, it must initially determine if personal jurisdiction existed under the law of the forum state and if the exercise of personal jurisdiction was consistent with due process. World Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945).
In the instant case, the pertinent Michigan long arm statute reads as follows:
*915The existence of any of the following relationships between a corporation or its agent and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise limited personal jurisdiction over such corporation and to enable such courts to render personal judgment against such corporation arising out of the act or acts which create any of the following relationships:
(1) The transaction of any business within the state.
Mich.Comp. Laws § 600.715(1).
Although Michigan courts have at times indicated that they intended their long arm statute to reach the outmost limits permitted by due process,1 this Circuit has concluded that the “Michigan courts are, in fact, stopping short of that boundary.” Rann v. McInnis, 789 F.2d 374, 377 (6th Cir.1986). “Our duty in this post-Nn'e diversity case is to stop where the Michigan courts have drawn the line and not push jurisdiction to the limits of due process.” Id. at 377; C. Wright, the Law of Federal Courts § 64 at 420-4121.
Although some Michigan courts have declared that the term “any business” comprehends, “the slightest business”,2 the Sixth Circuit has ruled that the “any business” requirement is not satisfied unless “obligations created by the defendant or business operations set in motion by the defendant have a realistic impact on the commerce of that state.” In-Flight Devices Corp. v. Van Dusen Air, Inc. 466 F.2d 220, 226 (6th Cir.1972).
In the instant case, the Board’s contacts within Michigan do not rise to that level. The majority urges that the Board, by furnishing applications upon request, by accepting applications with a processing fee, by corresponding and communicating and by entering into what the majority has characterized as a prospective “contractual arrangement” with the plaintiff has satisfied the condition of transacting “any business” within the meaning of Mich.Comp. Laws § 600.715(1).
Such an expansive interpretation has, at least at this writing, not been embraced by the Michigan courts which have, as noted by this Circuit, expressly avoided over-extending the reach of that state’s long arm statute. Indeed, in the latest Michigan Supreme Court ruling interpreting the scope of its long arm jurisdiction on facts strikingly similar but far more compelling than those of the instant case the court found that a dude ranch which advertised in a regional tour guide, participated in a nationwide appointment service, entertained interstate telephone conversations and mailed brochures and letters advertising its recreational facilities to prospective guests could not be subjected to in personam jurisdiction because its activities were insufficient to support an exercise of jurisdiction. “Such tenuous threads which purportedly link the defendant to Michigan are not “akin ... to a deliberate undertaking to do or cause an act or thing to be done in Michigan ...” Witbeck v. Bill Cody’s Ranch, Inc., 428 Mich. 659, 411 N.W.2d 439, 446 (1987), citing Khalaf v. Bankers & Shippers Ins. Co., 404 Mich. 134, 153, 273 N.W.2d 811 (1978). Witbeck is not meaningfully distinguishable from the instant case. The Witbeck court has cautioned that over-reliance on telephone calls and correspondence to establish jurisdiction would unduly “burden businesses in Michigan as well as in other states.” Id. at 446. See also, Rann v. McInnis, 789 F.2d 374 (6th Cir.1986) (exercise of personal jurisdiction improper under Michigan law despite defendant’s “solicitation” of plaintiffs by telephone).3
*916Plaintiff has also charged in this appeal that the Board’s act of “entering into a contract with Dr. Lanier” satisfied the term “transaction of any business.” Clearly, the Witbeck court has rejected that argument. In Witbeck, the Michigan plaintiff confirmed a reservation with the defendant ranch in Wyoming and entered into a “contract” for services. In considering the facts supporting the acceptance of the plaintiff’s reservation, the Witbeck court correctly noted that the contract was one which caused a Michigan resident to “leave the state and to go to Wyoming.” 411 N.W.2d at 446. This type of an agreement did not, in the opinion of the court, give rise to a “substantial connection” with Michigan, and therefore, jurisdiction could not constitutionally be exercised. Id. Similarly, in the instant case, the “contract”, if one existed, between the Board and Lanier was one which, as in Witbeck, caused the Michigan resident to “leave the state” and travel to Arizona and Chicago for her oral examinations.
The Supreme Court and the Sixth Circuit have substantially adopted the rationale of Witbeck in concluding that agreements which do not result in “continuing obligations” between the forum state plaintiff and the non-resident defendant are insufficient to support the invocation of long arm personal jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76, 105 S.Ct. 2174, 2185-86, 85 L.Ed.2d 528 (1985). The instant defendants clearly did not enter into a “continuing relationship” with the plaintiff. Indeed, the exchange of information between the plaintiff and the Board contemplated no continuing relationship between them because the Board procedurally retained the option to reject any application, which option it elected to ultimately exercise in rejecting Lanier’s professional qualifications for certification. Accordingly, upon the facts of this case the purported contract between the parties gave rise to a relationship insufficient to support the exercise of jurisdiction. Cf. Hooks v. Hooks, 771 F.2d 935, 945) (6th Cir.1985) (an individual’s contract with an out of state party insufficient to establish minimum contacts in other party’s home forum); Rann, 789 F.2d at 376 (contract consisting of receipt of Michigan Blue Cross/Blue Shield payments, combined with solicitation of plaintiffs over the telephone, did not warrant exercise of Michigan’s long arm statute).4
Additionally, the Board’s broad statement of principle to “protect the public” by “raising the standards of endodontics ...” fails to support an argument to invoke Michigan long arm jurisdiction. Indeed, no court has supported the exercise of jurisdiction based upon such generalizations. Notably, the statement is not directed to the state of Michigan or identifiably to any *917other specific state. The statement of principle, unsupported by specific overt action within or directed toward residents of Michigan that would constitute a “transaction of business”, is of no consequence in considering the case at bar. To the contrary, the activities relied upon by the appellant to support the “transaction of business”, i.e., phone calls and limited correspondence, have clearly been repudiated as insufficient to invoke jurisdiction.
I also find that the appellant has failed to allege facts to support the second prong of the Michigan long arm statutory test— namely that plaintiffs tort claim must “arise out of” the “transaction of any business.” Numerous courts have held that tort claims do not “arise out of” mere solicitations, advertisements, or telephone contacts. See e.g. Singletary v. B.R.X., Inc., 828 F.2d 1135 (5th Cir.1987) (products liability claim did not “arise out of” advertisements in trade magazines); Marino v. Hyatt Corp., 793 F.2d 427, 430 (1st Cir.1986) (hotel slip and fall accident did not “arise out of” reservation contract and advertisements); Pearrows v. Nat'l Life and Accident Ins. Co., 703 F.2d 1067, 1069 (8th Cir.1983) (theme park’s supplying of brochures to forum state plaintiff not sufficiently connected to tort action at theme park; tort action did not “arise out of” supplying of brochures”). In short it cannot be said that any alleged acts of discrimination “grew directly” from the contacts at issue. In-Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 223 (6th Cir.1972). Accordingly, I must respectfully conclude that the Board’s contacts with Michigan fall short of the “transacting business” or “arising out of” requirements of the Michigan long arm statute.
Apart from the foregoing statutory analysis, the exercise of jurisdiction would also impinge upon constitutional protections. In evaluating the due process standard applicable to long-arm jurisdiction issues, this court must consider a three-part analysis:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state ... Second, the cause of action must arise from the defendant’s activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum to make the exercise of jurisdiction over the defendant reasonable.
R.L. Lipton Distributing Co. v. Dribeck Importers, Inc., 811 F.2d 967, 969 (6th Cir.1987).
The first two elements of the Sixth Circuit test are similar to the long-arm statutory analysis already discussed, supra. As demonstrated, supra, plaintiff has not shown that the defendants purposefully availed themselves of the privilege of acting in the forum state. Nor did the cause of action arise from the defendant’s activities within the forum state. However, the third prong of the Sixth Circuit test provides an independent hurdle — the acts or consequences caused by the defendant must have had a substantial connection with the forum state to make the exercise of jurisdiction over the defendant reasonable. Appellants have not alleged sufficient facts to satisfy this third requirement. “While the first two elements of the test involve a search for the specific types of contacts which have been held essential to the maintenance of jurisdiction, the third demands flexibility and an appraisal of the overall circumstances of each case.” In-Flight Devices, 466 F.2d at 226; Ag-Chem Equipment Co., 666 F.Supp. at 1013.
The Supreme Court discussed this third element in its decision in Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County, — U.S. -, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). In that case, the court unanimously found that the assertion of jurisdiction over a Japanese manufacturer would “offend traditional notions of fair play and substantial justice,” the equivalent of the third prong of the three-part test of jurisdiction enunciated by the Sixth Circuit. Ag-Chem Equipment Co., 666 F.Supp. at 1014.
Asahi, like the instant defendants, had no office, agent, employees, or property in the forum state. Neither Asahi nor the defendants in this case advertised or solic*918ited business in the forum state. Id. at 1033. Moreover, in both Asahi and in this case, plaintiffs primary argument supporting jurisdiction was that defendant was an interstate actor, “aware” that its acts would eventually affect the forum state, and “depending on out-of-state business to generate volume.” Asahi, 107 S.Ct. at 1031, 1033.
The Supreme Court unanimously rejected the plaintiffs argument in Asahi. The Supreme Court has announced that a defendant’s mere awareness that its actions may affect many states does not suffice for justifying long-arm jurisdiction in a particular state. Nor is a defendant’s indirect benefit from transactions in a forum state a “persuasive factor in the jurisdictional inquiry.” Id. at 1031, 1033. A generalized desire to serve the national market by selling products or services in the nationwide “stream of commerce” does not suffice for purposes of due process. Id. at 1033.
Accordingly, such factors as the Board’s desire to protect the public throughout the nation, its dependence on “out-of-state business to generate volume,” or its status as a “nationwide organization” do not render the exercise of jurisdiction consistent with “notions of fair play and substantial justice.” 5
Given this set of facts and given the clear authority of recent case law, the isolated phone calls and letters of the Board, unrelated to the cause of action, simply do not suffice as “minimum contacts” or constitute “transaction of business” significant enough to constitutionally trigger the long arm statute.
Accordingly, I would conclude that upon the facts of this case the defendants’ contacts within the State of Michigan did not satisfy either the “transaction of any business” element nor the “arising out of the act” requirements of Michigan’s long arm statute. To hold otherwise would offend notions of fair play and substantial justice thereby infringing upon the due process protections of the Fourteenth Amendment. I would affirm the district court’s disposition in its entirety.

. City Suburban Agency, Inc. v. Dade Helicopter Services, Inc., 141 Mich.App. 241, 366 N.W.2d 259 (1985); Chrysler Corp. v. Fedders Corp., 643 F.2d 1229, 1236 (6th Cir.), cert. denied, 454 U.S. 893, 102 S.Ct. 388, 70 L.Ed.2d 207 (1981); Ag-Chem Equipment Co., Inc. v. Avco Corp., 666 F.Supp. 1010 (W.D.Mich.1987).

. See, e.g. Sifers v. Horen, 385 Mich. 195, 188 N.W.2d 623 (1971).

. In other jurisdictions, mailings, correspondence, or phone calls do not suffice to support the exercise of personal jurisdiction under similar "transacting business" provisions. See, e.g., Institutional Food Mktg. Associates v. Golden State Strawberries, Inc., 747 F.2d 448, 456 (8th *916Cir.1984); Smith v. Piper Aircraft Corp., 425 F.2d 823, 825 (5th Cir.1970); Selman v. Harvard Medical School, 494 F.Supp. 603, 612 (S.D.N.Y), aff’d, 636 F.2d 1204 (2nd Cir.1980).

. Hahn v. Vermont Law School, 698 F.2d 48 (1st Cir.1983) is readily distinguishable on its facts from the instant case. In Hahn, the plaintiffs’ application for admission into Vermont Law School (VLS) had been duly accpeted and he had in fact attended that institution for a period of three years and had been awarded his law degree. His breach of contract cause of action against VLS stemmed from his receipt of a failing grade and his efforts to resolve the matter through administrative channels which concluded in a disposition which he considered unsatisfactory. The First Circuit decision invoking the Massachusetts Long Arm Statute described the extensive activities of VLS within Massachusetts as factually satisfying the “transacting any business" language of the Massachusetts statute:
In 1980 and 1981 VLS faculty members visited five Massachusetts colleges for the purposes of recruiting. The school at times also has placed advertisements in Boston newspapers. Under these circumstances, the assertion of jurisdiction over VLS in Massachusetts does not offend traditional notions of fair play or substantial justice.
Moreover, it is significant to note that unlike the Michigan Supreme Court’s pronouncements defining the scope of its long arm statute, the First Circuit noted that:
”... [t]he Massachusetts courts have not defined the scope of the "arising from" requirement of the long-arm statute ...”
Factually apparent in Hahn was the existence of a valid agreement evidenced by the acceptance of Hahn’s application for enrollment as a student at VLS and the intent of the parties to enter into a "continuing relationship” for the period of his attendance at the institution.

. The plaintiffs reliance upon Burger King v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) is misplaced. In upholding the Florida Long Arm Statute, the Court concluded that a Michigan franchisee who deliberately reached out beyond his state of residence, who negotiated and executed a long term franchise, who accepted the manifold benefits that would arise from affiliation with a nationwide organization, who entered into a carefully structured 20-year relationship which envisioned continuing and wide-reaching contacts within Florida, who accepted regulation of his Michigan business from the Miami headquarters of the franchisor and who was required to make monthly payments to the franchisor in Miami could constitutionally be subjected to the long-arm jurisdiction of Florida in a dispute arising out of the franchise arrangement. The court’s specific factual findings, coupled with the stipulation of the parties to the franchise agreement that the franchise contract "shall be deemed made and entered into in the state of Florida and shall be governed and construed under and in accordance with the laws of the state of Florida", supported the court’s decision that the "quality and nature” of the business relationship could not be viewed as "random", "fortuitous," or "attenuated" and contemplated a continuing long term relationship between the parties of sufficient consequence to support the invocation of Florida’s Long Arm Statute. Certainly, the extensive relationships that were contemplated and which actually existed between the parties within the State of Florida comparably overwhelm the inconsequential limited correspondence and telephone conversations between the parties that the plaintiff has relied upon to satisfy the "transacting any business” and "arising from" requirements of the Michigan statute.