Court Opinion

ID: 2965986
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Date Created: 2015-09-21 21:47:20.766345+00
Date Added: 2024-06-11T11:43:08.337303
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<pre>                 United States Court of Appeals <br>                     For the First Circuit <br> <br> <br> <br> <br>No. 99-1012 <br> <br>                    UNITED STATES OF AMERICA, <br>                      Plaintiff, Appellant, <br> <br>                                v. <br> <br>                SWISS AMERICAN BANK, LTD., ET AL., <br>                      Defendants, Appellees. <br> <br> <br> <br>           APPEAL FROM THE UNITED STATES DISTRICT COURT <br> <br>                FOR THE DISTRICT OF MASSACHUSETTS <br> <br>           [Hon. William G. Young, U.S. District Judge] <br> <br> <br> <br>                              Before <br> <br>                    Selya, Boudin and Lipez, <br>                                 <br>                        Circuit Judges. <br>                                 <br>                                 <br>                                 <br>     Stephen R. Heifetz, Trial Attorney, with whom Gerald E. <br>McDowell, Chief, Asset Forfeiture and Money Laundering Section, <br>Criminal Division, U.S. Dep't of Justice, Stefan D. Cassella, <br>Assistant Chief, and Richard L. Hoffman, Assistant United States <br>Attorney, were on brief, for appellant. <br>     Howard Wilson, with whom Howard Fischer, Rosenman & Colin LLP, <br>Michael B. Keating, Sarah Cooleybeck, and Foley, Hoag & Eliot LLP <br>were on brief, for appellees Swiss American Bank, Ltd. and Swiss <br>American National Bank. <br>     William Shaw McDermott, with whom Irene C. Freidel, Edward S. <br>Horton, and Kirkpatrick & Lockhart LLP were on brief, for appellee <br>Bank of New York   Intermaritime Bank (Geneva). <br> <br> <br> <br> <br> <br>September 8, 1999 <br> <br> <br> <br>

  SELYA, Circuit Judge.  This appeal raises issues of first <br>impression, requiring us to delineate the circumstances under which <br>foreign corporations may be brought before the federal courts <br>through the medium of a recently enacted provision of the Civil <br>Rules.  In the underlying case, the government brought suit in the <br>United States District Court for the District of Massachusetts <br>against several foreign banking concerns in an effort to recover <br>assets accumulated by a convicted felon and later forfeited to the <br>government as part of a plea bargain.  The district court accepted <br>the defendants' argument that they were not within its <br>jurisdictional reach and thus were not amenable to suit.  At the <br>same time, the court denied the government's request for <br>jurisdictional discovery.  The United States has appealed both <br>rulings.  We vacate these orders and remand for further proceedings <br>consistent with this opinion. <br>I.  BACKGROUND <br>  We start by introducing the appellees and then turn to <br>the forfeiture proceedings and what transpired below. <br>  In its suit, the United States named four corporations as <br>defendants.  Two of these entities, Swiss American Bank, Limited, <br>and Swiss American National Bank (collectively, "Swiss American" or <br>"the Swiss American banks"), are institutions organized under the <br>law of Antigua and Barbuda ("Antigua"), and headquartered there.  <br>A third defendant, Bank of New York-InterMaritime Bank ("IMB"), is <br>organized under Swiss law and based in Geneva.  Prior to December <br>28, 1987, IMB owned all the shares of the fourth defendant, Swiss <br>American Holding Company ("SAHC"), a Panamanian corporation, and it <br>owned at least some of SAHC's stock until December 15, 1988.  <br>Throughout that period, the Swiss American banks were wholly-owned <br>subsidiaries of SAHC. <br>  In mid-1993, the government entered into a plea agreement <br>with John E. Fitzgerald.  As part of this bargain, Fitzgerald pled <br>guilty to manifold charges of engaging in a racketeering conspiracy <br>and attempted money laundering.  He simultaneously conceded that <br>the monies on deposit in various accounts that he had opened were <br>fruits of his criminal activity.  These funds included <br>approximately $7,000,000 that Fitzgerald had laundered through <br>several shell corporations and eventually deposited with Swiss <br>American between 1985 and 1987. <br>  Notice of the impending forfeiture was published in <br>newspapers of general circulation in both Massachusetts and <br>Antigua.  No competing claims to the funds were filed, although <br>Swiss American informed the district court that the Antiguan <br>government had frozen the accounts in question.  The court <br>subsequently entered a final order of forfeiture,  see 18 U.S.C.  <br>1963, which decreed, inter alia, that "any and all interest of John <br>E. Fitzgerald in the principal and accrued interest in the <br>[subject] bank accounts" be "condemned, forfeited and vested in the <br>United States."  United States v. Fitzgerald, No. 93-10149-RWZ (D. <br>Mass. May 4, 1994). <br>  Despite the district court's ukase, Swiss American <br>apparently disbursed some $5,000,000 from the subject accounts to <br>the Antiguan authorities and confiscated the rest.  The government <br>of Antigua then took the position that, although it had not <br>demanded that any part of Fitzgerald's assets be transferred to it, <br>the monies it had received were no longer available to the United <br>States.  The United States responded by filing the instant action <br>against the four defendants whom we have identified, asserting <br>claims of conversion, unjust enrichment, and breach of contract.  <br>The defendants moved to dismiss for want of personal jurisdiction.  <br>See Fed. R. Civ. P. 12(b)(2).  The lower court agreed with the <br>central premise of the defendants' motions, overrode the <br>government's request for jurisdictional discovery, and dismissed <br>the action.  See United States v. Swiss American Bank, Ltd., 23 F. <br>Supp. 2d 130 (D. Mass. 1998).  This appeal followed. <br>II.  ANALYSIS <br>  We divide our substantive discussion into four parts.  We <br>begin with the anatomy of the personal jurisdiction inquiry, in <br>hope of providing a template for the more specific analyses that <br>follow.  We then proceed to address the government's two main <br>jurisdictional arguments.  Finally, we comment upon a separate <br>point advanced exclusively by IMB. <br>             A.  Personal Jurisdiction:  An Overview. <br>  It is common ground that, for a court to render a binding <br>decision consonant with due process, it must have personal <br>jurisdiction over the parties, that is, the power to require the <br>parties to obey its decrees.  See Burnham v. Superior Court, 495 <br>U.S. 604, 608-09 (1990).  Because a plaintiff ordinarily consents <br>to a court's jurisdiction by filing suit, disputes over personal <br>jurisdiction typically feature the forum court's relationship to <br>one or more defendants.  Here, the jurisdictional analysis depends <br>upon whether any statute or rule authorizes the forum court to <br>exercise its dominion over the defendants, and if so, whether the <br>court's exercise of that jurisdiction would comport with due <br>process. <br>  The constitutional inquiry proceeds in three steps:  <br>relatedness, purposeful availment, and reasonableness.  See <br>Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 144 <br>(1st Cir. 1995).  At the first stage, the court must ask whether <br>the claim at issue arises out of or is related to the defendant's <br>conduct within the forum state.  See id.; see also Ticketmaster-New <br>York, Inc. v. Alioto, 26 F.3d 201, 206-07 (1st Cir. 1994).  At the <br>second step, the court must scrutinize the defendant's contacts <br>with the forum state to determine whether those contacts constitute <br>purposeful activity, such that being haled into court there would <br>be foreseeable.  See Foster-Miller, 46 F.3d at 144; Ticketmaster, <br>26 F.3d at 207.  Lastly, the Constitution imposes an overall <br>reasonableness restraint on the exercise of personal jurisdiction.  <br>See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 <br>(1980); United Elec., Radio and Mach. Workers v. 163 Pleasant St. <br>Corp., 960 F.2d 1080, 1088 (1st Cir. 1992).  An exercise of <br>personal jurisdiction thus complies with constitutional imperatives <br>only if the defendant's contacts with the forum relate sufficiently <br>to his claim, are minimally adequate to constitute purposeful <br>availment, and render resolution of the dispute in the forum state <br>reasonable. <br>  These constitutional requirements comprise a final hurdle <br>for an aspiring plaintiff.  A court need not even consider them <br>unless it possesses statutory authorization to exercise specific <br>personal jurisdiction over defendants of the type that the <br>plaintiff targets.  This authorization may derive from a federal <br>statute, see, e.g., 15 U.S.C.  22 (providing for worldwide service <br>of process on certain corporate antitrust defendants), or from a <br>state statute of general application, see, e.g., Mass. Gen. Laws <br>ch. 223A,  3 (providing "long-arm" jurisdiction).  A state long- <br>arm statute furnishes a mechanism for obtaining personal <br>jurisdiction in federal as well as state courts.  See Fed. R. Civ. <br>P. 4(k)(1)(A). <br>  In limited circumstances, the requisite authorization can <br>be provided by Rule 4(k)(2), quoted infra Part II(C), which <br>functions as a sort of federal long-arm statute.  When a plaintiff <br>depends upon this recently adopted rule to serve as the necessary <br>statutory authorization for the exercise of specific personal <br>jurisdiction, the constitutional requirements are the same as those <br>limned above, but the analytic exercises are performed with <br>reference to the United States as a whole, rather than with <br>reference to a particular state.  The defendant's national contacts <br>take center stage because the rule applies only to situations in <br>which federal courts draw jurisdictional authority from the federal <br>sovereign (unreinforced by "borrowed" state statutes), and, thus, <br>the applicable constitutional requirements devolve from the Fifth <br>rather than the Fourteenth Amendment.  See Fed. R. Civ. P. 4 <br>advisory committee note; 4 Charles Alan Wright & Arthur R. Miller, <br>Federal Practice and Procedure  1067.1 (1999 Supp.); Gary B. Born <br>& Andrew N. Vollmer, The Effect of the Revised Federal Rules of <br>Civil Procedure on Personal Jurisdiction, Service, and Discovery in <br>International Cases, 150 F.R.D. 221, 225 (1993). <br>  With this general schematic in place, we proceed to <br>consider the government's two suggested bases for the assertion of <br>personal jurisdiction over the defendants in the District of <br>Massachusetts:  the Massachusetts long-arm statute, Mass. Gen. Laws <br>ch. 223A,  3(a) & (d), and Rule 4(k)(2).  Our review of the <br>district court's ruling in this respect is plenary.  See Foster- <br>Miller, 46 F.3d at 147-48; Boit v. Gar-Tec Prods., Inc., 967 F.2d <br>671, 675 (1st Cir. 1992); see also Swiss American, 23 F. Supp. 2d <br>at 133 (accepting as true the government's properly documented <br>factual averments and evidentiary proffers). <br>             B.  Massachusetts Long-Arm Jurisdiction. <br>  Somewhat paradoxically, we begin our inquiry into the <br>reach of the Massachusetts long-arm statute by citing the federal <br>procedural rule that imbues it with relevance for present purposes.  <br>The rule states that: <br>    Service of a summons . . . is effective to <br>  establish jurisdiction over the person of a <br>  defendant who could be subjected to the <br>  jurisdiction of a court of general <br>  jurisdiction in the state in which the <br>  district court is located. <br> <br>Fed. R. Civ. P. 4(k)(1)(A).  Because the United States sued in the <br>District of Massachusetts, Rule 4(k)(1)(A) permits recourse to the <br>Massachusetts long-arm statute.  The government directs our <br>attention to two subsections of that law.  We mull each in turn.  <br>  1.  Section 3(a).  Section 3(a) of the Massachusetts <br>long-arm statute permits courts to exercise personal jurisdiction <br>"over a person, who acts directly or by an agent, as to a cause of <br>action in law or equity arising from the person's . . . transacting <br>any business in this commonwealth."  Mass. Gen. Laws ch. 223A,  <br>3(a).  We need not linger long over this proviso.  For present <br>purposes, it suffices to say that the United States did not argue <br>section 3(a)'s applicability below.  Consequently, we may reject <br>the government's belated claim of statutory authorization out of <br>hand.  See Pleasant St., 960 F.2d at 1096 (holding that a plaintiff <br>had waived an argument by which it attempted to salvage personal <br>jurisdiction on appeal because it had not raised the point in the <br>lower court); Teamsters, Etc., Local No. 59 v. Superline Transp. <br>Co., 953 F.2d 17, 21 (1st Cir. 1992) (holding that legal theories <br>not advanced in the trial court ordinarily are deemed waived on <br>appeal). <br>  2.  Section 3(d).  Section 3(d) of the Massachusetts <br>long-arm statute authorizes personal jurisdiction over one who <br>causes "tortious injury in this commonwealth by an act or omission <br>outside this commonwealth if he regularly does or solicits <br>business, or engages in any other persistent course of conduct, or <br>derives substantial revenue from goods used or consumed or services <br>rendered, in this commonwealth."  Mass. Gen. Laws ch. 223,  3(d).  <br>Although the government properly preserved its claim of <br>jurisdiction premised on this statutory ground, the claim lacks <br>merit for two reasons. <br>  First and foremost, there is no showing here that the <br>United States suffered tortious injury in Massachusetts.  The legal <br>injury occasioned by the tort of conversion is deemed to occur <br>where the actual conversion takes place.  See Cycles, Ltd. v. W.J. <br>Digby, Inc., 889 F.2d 612, 619 (5th Cir. 1989).  In this instance, <br>the bank accounts were depleted and the forfeited assets redirected <br>in Antigua, and, thus, the claimed injury occurred there.  See Wenz <br>v. Memery Crystal, 55 F.3d 1503, 1507-1508 (10th Cir. 1995) <br>(holding that, under a similar long-arm provision, the tortious <br>injury underlying an action for conversion of funds from London <br>accounts by London-based tortfeasors occurred in London).  By like <br>token, since the government's claim of unjust enrichment is <br>essentially a claim for restitution based on the alleged <br>conversion, see Restatement of the Law on Restitution, Quasi <br>Contracts, and Constructive Trusts  128 (1937), the legal injury <br>stemming from it also must be presumed to have taken place in <br>Antigua. <br>  To blunt the force of this reality, the government <br>replies that the forfeiture order was issued in Massachusetts.  <br>Fair enough   but this fact at most demonstrates that, upon the <br>occurrence of the alleged conversion and the consequent unjust <br>enrichment, the United States felt the effects of a tortious injury <br>in the forum state.  See Carty v. Beech Aircraft Corp., 679 F.2d <br>1051, 1064-65 (3d Cir. 1982) (collecting cases that distinguish <br>tortious injury from the resulting economic harms).  And since <br>section 3(d) requires that the injury itself occur in <br>Massachusetts, and does not apply merely because the plaintiff <br>feels the effects of a tortious injury there, see Crocker v. Hilton <br>Int'l Barbados, Ltd., 976 F.2d 797, 799-800 (1st Cir. 1992); <br>Cunningham v. Ardrox, Inc., 40 Mass. App. Ct. 279, 282-83 (1996); <br>see also Friedr. Zoellner (N.Y.) Corp. v. Tex Metals Co., 396 F.2d <br>300, 302-03 (2d Cir. 1968) (holding that a similar jurisdictional <br>statute "is not satisfied by remote or consequential injuries <br>[flowing from a conversion] which occurred in [the forum state]," <br>notwithstanding that "the plaintiff is domiciled, incorporated or <br>doing business in th[at] state"), these observations effectively <br>end the matter. <br>  The second reason why the government's invocation of <br>section 3(d) misfires, involves the statutory requirement that the <br>plaintiff must show that the defendant derived substantial revenue <br>from services rendered in Massachusetts.  In this instance, <br>Fitzgerald (the money launderer who generated the cash) journeyed <br>to Antigua to open the subject accounts and transferred the funds <br>to the Swiss American banks from other foreign locations.  On these <br>facts, the government's plea reduces to an assertion that the <br>defendants derived substantial revenue from within the commonwealth <br>because the deposits originated with a Massachusetts resident.  The <br>statute specifies that substantial revenue must be derived from <br>services which are "rendered . . . in" Massachusetts, Mass. Gen. <br>Laws ch. 223(A),  3(d), and the residency connection, standing <br>alone, is simply too attenuated to satisfy this benchmark.  For <br>aught that appears, any services rendered by the defendants in the <br>instant case were rendered in Antigua. <br>  Inasmuch as the government has not met either of the <br>dispositive criteria for authorization of personal jurisdiction <br>under section 3(d), we uphold the district court's ruling that <br>personal jurisdiction cannot be premised on the Massachusetts long- <br>arm statute.  See Swiss American, 23 F. Supp. 2d at 134. <br>               C.  Jurisdiction Under Rule 4(k)(2). <br>  The government claims, in the alternative, that the <br>district court possessed in personam jurisdiction under Rule <br>4(k)(2).  The rule, first enacted in December 1993, provides: <br>    If the exercise of jurisdiction is consistent <br>  with the Constitution and laws of the United <br>  States, serving a summons or filing a waiver <br>  of service is also effective, with respect to <br>  claims arising under federal law, to establish <br>  personal jurisdiction over the person of any <br>  defendant who is not subject to the <br>  jurisdiction of the courts of general <br>  jurisdiction of any state. <br> <br>Fed. R. Civ. P. 4(k)(2).  The rule's fabric contains three strands:  <br>(1) the plaintiff's claim must be one arising under federal law; <br>(2) the putative defendant must be beyond the jurisdictional reach <br>of any state court of general jurisdiction; and (3) the federal <br>courts' exercise of personal jurisdiction over the defendant must <br>not offend the Constitution or other federal law.  Despite a <br>suggestion that the government had waived the right to rely on Rule <br>4(k)(2), the district court reached the merits of the government's <br>claim and found it wanting on the second of these grounds.  See <br>Swiss American, 23 F. Supp. 2d at 136.  Taking our cue from the <br>district court, we begin with this element. <br>  1.  The Negation Requirement.  By its terms, Rule 4(k)(2) <br>requires that the putative defendant not be subject to jurisdiction <br>in any state court of general jurisdiction.  The government argues <br>that this requirement encompasses both subject matter and personal <br>jurisdiction, and that, therefore, it can satisfy the negation <br>requirement simply by showing that the state courts have no subject <br>matter jurisdiction over a particular cause of action.  Building on <br>this porous foundation, the government then argues that 28 U.S.C. <br> 1345   the statute under which it brought this suit   grants  <br>exclusive subject matter jurisdiction to the federal courts. <br>  We find this reasoning unconvincing.  Whether or not <br>section 1345 provides an exclusive grant of subject matter <br>jurisdiction   a matter on which we take no view   we nonetheless <br>consider it pellucid that Rule 4(k)(2)'s reference to defendants <br>who are "not subject to the jurisdiction . . ." refers to the <br>absence of personal jurisdiction.  We explain briefly. <br>  Service is the traditional means by which a court <br>establishes personal jurisdiction over a defendant.  See Burnham, <br>495 U.S. at 610-11.  Section (k) of Rule 4 governs the <br>circumstances in which service (or waiver of service) will suffice <br>to confer personal jurisdiction.  The rule's two subsections both <br>speak of the means by which "jurisdiction over the person" of a <br>defendant can be established.  See Fed. R. Civ. P. 4(k)(1)-(2).  In <br>this setting, it strains credulity to  suggest that the mention of <br>the unmodified word "jurisdiction" should be construed as anything <br>other than a reference to "personal jurisdiction," when that <br>understanding of the term makes reasonable sense in application (as <br>it does here).  It is, therefore, unsurprising that courts and <br>commentators consistently have construed Rule 4(k)(2)'s allusion to <br>the "jurisdiction" of the state courts to relate to personal <br>jurisdiction.  See, e.g., World Tanker Carriers Corp. v. MV Ya <br>Mawlaya, 99 F.3d 717, 720 (5th Cir. 1996); CFMT Inc. v. Steag <br>Microtech, Inc., Civ.A. No. 95-442-LON, 1997 WL 313161, at *7 (D. <br>Del. Jan. 9, 1997); see also Born & Vollmer, supra, 150 F.R.D. at <br>226-27; Leslie M. Kelleher, The December 1993 Amendments to the <br>Federal Rules of Civil Procedure   A Critical Analysis, 12 Touro L. <br>Rev. 7, 35 (1995). <br>  The case law under Rule 4(k)(1) bolsters this <br>interpretation.  Under that rule, federal courts routinely have <br>determined whether state courts would have personal jurisdiction <br>over a defendant, even in cases of exclusive federal jurisdiction.  <br>See, e.g., Janmark, Inc. v. Reidy, 132 F.3d 1200, 1201 (7th Cir. <br>1997) (commenting on the paradox of asking whether a state court <br>would have personal jurisdiction in a federal copyright case).  If <br>the term "jurisdiction" in the text of Rule 4(k)(1) entailed <br>subject matter as well as personal jurisdiction, the rule would <br>never provide a means for federal courts to obtain jurisdiction <br>over matters under exclusive federal jurisdiction.  Because the two <br>subparts of Rule 4(k) must be read in pari materia, this logical <br>extension of the government's argument demonstrates its fatuity. <br>  The advisory committee's explanation of the rationale <br>behind the adoption of Rule 4(k)(2) cinches matters.  The drafters <br>created this proviso to deal with a gap in personal jurisdiction <br>noted by the Supreme Court in Omni Capital Int'l, Ltd. v. Rudolf <br>Wolff & Co., 484 U.S. 97, 111 (1987).  Before Rule 4(k)(2) was <br>conceived, federal courts "borrowed" from state law when a federal <br>statute did not otherwise provide a mechanism for service of <br>process (regardless of the state courts' subject matter <br>jurisdiction).  Accordingly, foreign defendants who lacked single- <br>state contacts sufficient to bring them within the reach of a given <br>state's long-arm statute (whether by reason of the paucity of the <br>contacts or of limitations built into the statute itself), but who <br>had enough contacts with the United States as a whole to make <br>personal jurisdiction over them in a United States court <br>constitutional, could evade responsibility for civil violations of <br>federal laws that did not provide specifically for service of <br>process.  See id.; see also former Fed. R. Civ. P. 4(e) (superseded <br>by the 1993 Amendments), quoted in Omni Capital, 484 U.S. at 105 <br>n.8. <br>  To close this loophole, the drafters designed the new <br>Rule 4(k)(2) to function as a species of federal long-arm statute.  <br>See Fed. R. Civ. P. 4 advisory committee note.  The rule's final <br>clause, restricting its application to those cases in which the <br>putative defendant "is not subject to the jurisdiction of the <br>courts of general jurisdiction of any state" works to cabin the <br>rule's sweep and ensure its application only in the relatively <br>narrow range of cases identified by the Omni Court (in which the <br>states' personal jurisdiction rules prove impuissant).  The <br>government's self-serving interpretation of the term <br>"jurisdiction," as used here, would extend the rule's scope well <br>beyond its intended purpose and, in the bargain, would allow <br>plaintiffs with claims falling within exclusive federal <br>jurisdiction statutes complete discretion to forum-shop without any <br>regard for concentrated contacts.  Apart from a linguistic fortuity <br>  the word "jurisdiction" is protean and has a wide variety of <br>meanings, depending on the context in which it is used   there is <br>nothing to endorse so expansive a construction of Rule 4(k)(2).  We <br>hold, therefore, that the absence of state court subject matter <br>jurisdiction does not enter into the negation equation. <br>  The government's better argument is that its case falls <br>within the limits of Rule 4(k)(2) even when the rule is interpreted <br>  as it must be   to require negation of personal jurisdiction over <br>the defendant in any state court.  The defendants' rejoinder is <br>that, while the government alleged in its complaint that Rule <br>4(k)(2) supplied the necessary means for obtaining personal <br>jurisdiction, it failed to plead or prove facts demonstrating the <br>absence of personal jurisdiction over the defendants throughout the <br>fifty states.  This thrust and parry raises an issue of first <br>impression concerning the order and allocation of proof in respect <br>to Rule 4(k)(2)'s negation requirement, for no appellate court has <br>offered a clear resolution of that problem.  In a world of <br>exponential growth in international transactions, the practical <br>importance of this issue looms large. <br>  The defendants (and the district court) certainly are <br>correct in their insistence that a plaintiff ordinarily must <br>shoulder the burden of proving personal jurisdiction over the <br>defendant.  See Foster-Miller, 46 F.3d at 145; 5A Wright & Miller, <br>supra,  1351.  Some district courts, relying on this shibboleth, <br>have assigned outright to plaintiffs the burden of proving the Rule <br>4(k)(2) negation requirement.  See, e.g., United States v. Offshore <br>Marine Ltd., 179 F.R.D. 156, 160 (D.V.I. 1998); Dorian v. Harich <br>Tahoe Dev., No. C-94-3387, 1997 WL 626109, at *2, *5 (N.D. Cal. <br>Oct. 11, 1997); CFMT, 1997 WL 313161, at *7-*8.  This paradigm in <br>effect requires a plaintiff to prove a negative fifty times over   <br>an epistemological quandary which is compounded by the fact that <br>the defendant typically controls much of the information needed to <br>determine the existence and/or magnitude of its contacts with any <br>given jurisdiction.  There is a corresponding problem with <br>assigning the burden of proof on the Rule 4(k)(2) negation <br>requirement to defendants:  doing so threatens to place a defendant <br>in a "Catch-22" situation, forcing it to choose between conceding <br>its potential amenability to suit in federal court (by denying that <br>any state court has jurisdiction over it) or conceding its <br>potential amenability to suit in some identified state court.  See <br>Dora A. Corby, Comment, Putting Personal Jurisdiction Within Reach:  <br>Just What Has Rule 4(k)(2) Done for the Personal Jurisdiction of <br>Federal Courts?, 30 McGeorge L. Rev. 167, 196 (1998). <br>  Faced with such dilemmas, courts historically have <br>tailored special burden-of-proof regimes for specific classes of <br>cases in order to strike an equitable balance.  Cf., e.g., <br>McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-05 (1973).  We <br>believe that Rule 4(k)(2) is fertile territory for such an <br>innovation.  The architects of the rule   and Congress, by adopting <br>it   clearly intended to close the gap identified by the Omni Court <br>and to ensure that persons whose contacts with this country <br>exceeded the constitutional minimum could not easily evade civil <br>liability in the American justice system.  At the same time, <br>however, the drafters also wrote the rule to preserve the <br>established modalities for obtaining personal jurisdiction <br>previously available under Rule 4(k)(1)(A) as the primary avenue to <br>service on foreign defendants.  The desire to achieve this <br>secondary purpose led the authors of the rule to restrict its reach <br>to those defendants with sufficient nationwide contacts to subject <br>them to federal jurisdiction, but whose contacts were too exiguous <br>to permit any state court to exercise personal jurisdiction over <br>them.  Viewed in this light, the application of traditional burden- <br>of-proof principles to Rule 4(k)(2) cases not only would be <br>inequitable, but also would shield foreign defendants who were <br>constitutionally within the reach of federal courts from the <br>exercise of personal jurisdiction, and, thus, thwart the core <br>purpose that underlies the rule. <br>  In our view, this core purpose can be achieved much more <br>salubriously by crafting a special burden-shifting framework.  To <br>accomplish the desired end without placing the judicial thumb too <br>heavily on the scale, we will not assign the burden of proof on the <br>negation issue to either party in a monolithic fashion.  We prefer <br>instead to draw upon the burden-shifting arrangement devised by the <br>Court to cope with somewhat analogous problems of proof in the <br>discrimination context.  See, e.g., St. Mary's Honor Ctr. v. Hicks, <br>509 U.S. 502, 506 (1993); Texas Dep't of Community Affairs v. <br>Burdine, 450 U.S. 248, 252-56 (1981); McDonnell Douglas, 411 U.S. <br>at 802-05.  We etch the contours of this proposed standard in <br>detail below. <br>  We hold that a plaintiff who seeks to invoke Rule 4(k)(2) <br>must make a prima facie case for the applicability of the rule.  <br>This includes a tripartite showing (1) that the claim asserted <br>arises under federal law, (2) that personal jurisdiction is not <br>available under any situation-specific federal statute, and (3) <br>that the putative defendant's contacts with the nation as a whole <br>suffice to satisfy the applicable constitutional requirements.  The <br>plaintiff, moreover, must certify that, based on the information <br>that is readily available to the plaintiff and his counsel, the <br>defendant is not subject to suit in the courts of general <br>jurisdiction of any state.  If the plaintiff makes out his prima <br>facie case, the burden shifts to the defendant to produce evidence <br>which, if credited, would show either that one or more specific <br>states exist in which it would be subject to suit or that its <br>contacts with the United States are constitutionally insufficient.  <br>See generally Stephen B. Burbank, The United States' Approach to <br>International Civil Litigation:  Recent Developments in Forum <br>Selection, 19 U. Pa. J. Int'l Econ. L. 1, 13 (1998) (suggesting a <br>broad outline for a similar burden-shifting regime vis--vis the <br>Rule 4(k)(2) negation requirement).  Should the defendant default <br>on its burden of production, the trier may infer that personal <br>jurisdiction over the defendant is not available in any state court <br>of general jurisdiction.  If, however, the defendant satisfies its <br>second-stage burden of production, then the aforementioned <br>inference drops from the case. <br>  What happens next depends on how the defendant satisfies <br>its burden.  If the defendant produces evidence indicating that it <br>is subject to jurisdiction in a particular state, the plaintiff has <br>three choices:  he may move for a transfer to a district within <br>that state, or he may discontinue his action (preliminary, perhaps, <br>to the initiation of a suit in the courts of the identified state), <br>or he may contest the defendant's proffer.  If the plaintiff elects <br>the last-mentioned course, the defendant will be deemed to have <br>waived any claim that it is subject to personal jurisdiction in the <br>courts of general jurisdiction of any state other than the state or <br>states which it has identified, and the plaintiff, to fulfill the <br>negation requirement, must prove that the defendant is not subject <br>to suit in the identified forum(s). <br>  Of course, the defendant may satisfy its burden of <br>production by maintaining that it cannot constitutionally be <br>subjected to jurisdiction in any state court.  In that event, the <br>defendant will be deemed to have conceded the negation issue, and <br>the plaintiff, to succeed in his Rule 4(k)(2) initiative, need only <br>prove that his claim arises under federal law and that the <br>defendant has contacts with the United States as a whole sufficient <br>to permit a federal court constitutionally to exercise personal <br>jurisdiction over it. <br>  We think that this schematic fairly balances the equities <br>and comports with congressional intent, particularly since we <br>envision the defendant's burden as a burden of production only.  <br>The plaintiff at all times retains the devoir of persuasion on the <br>ultimate issue.  Cf. St. Mary's Honor Ctr., 509 U.S. at 507.  And <br>while the burden-shifting framework puts defendants in an <br>admittedly uncomfortable litigating position, that is to some <br>degree the object of Rule 4(k)(2). <br>  We return at this point to the proceedings below.  <br>Following the traditional rule, the trial court assigned the burden <br>of proving negation to the plaintiff outright, see Swiss American, <br>23 F. Supp. 2d at 133, 135, and dismissed the complaint when the <br>government failed to plead or proffer evidence anent the <br>defendants' lack of jurisdictionally meaningful contacts throughout <br>the fifty states, see id. at 135-36.  Given our holding that the <br>Rule 4(k)(2) negation requirement evokes a modified burden-of-proof <br>regime, that order of dismissal cannot stand unless dismissal is <br>justified on some ground apart from negation.  See Hachikian  v. <br>FDIC, 96 F.3d 502, 504 (1st Cir. 1996) (holding that the court of <br>appeals is not constrained by the trial court's reasoning, but may <br>affirm a judgment on any independent ground made manifest by the <br>record). <br>  In this posture of the case, we look first to the other <br>two strands of Rule 4(k)(2).  One of these proves too recondite to <br>consider at this juncture:  the record in this case is not <br>sufficiently developed to permit reasoned consideration of whether <br>the federal courts' exercise of personal jurisdiction over these <br>defendants would offend the Constitution.  See infra Part II(C)(3).  <br>By default, then, we focus on the defendants' argument that the <br>government's claim does not arise under federal law. <br>  2.  "Arising Under" Federal Law.  We begin with bedrock:  <br>a case in which the rule of decision must be drawn from federal <br>common law presents a uniquely federal question, and, thus, comes <br>within the original subject matter jurisdiction of the federal <br>courts.  See National Farmers Union Ins. Cos. v. Crow Tribe of <br>Indians, 471 U.S. 845, 850 (1985); Illinois v. City of Milwaukee, <br>406 U.S. 91, 100 (1972); see also 19 Wright & Miller, supra,  <br>4514.  Here, the United States seizes upon this principle in an <br>effort to fulfill Rule 4(k)(2)'s "arising under" requirement.  It <br>argues vigorously that its case is founded on, and should be <br>decided according to, federal common law.  The defendants demur.  <br>They contend that this is a garden-variety tort and/or breach of <br>contract case, governed by state law. <br>  There are good arguments on both sides.  On the one hand, <br>it is beyond cavil that federal common law sometimes may be <br>fashioned by federal courts to protect the proprietary interest of <br>the federal sovereign.  See Erwin Chemerinsky, Federal Jurisdiction <br>336, 340-44 (2d ed. 1994).  On the other hand, it is equally true <br>that the power to create federal common law should be used <br>sparingly, so as not to intrude upon areas like tort and contract <br>that are traditionally within the states' bailiwick.  To decide <br>which tenet predominates here, we must go behind these <br>generalities. <br>  The seminal case in this arcane corner of the law is <br>Clearfield Trust Co. v. United States, 318 U.S. 363 (1943).  <br>Clearfield involved a check issued by the United States and <br>fraudulently cashed by someone other than the payee.  See id. at <br>364-65.  When the fraud was discovered, the United States sued the <br>bank that had successfully presented the check to the Federal <br>Reserve for payment.  The district court found that, under state <br>law, the United States had delayed too long in notifying the bank <br>of the forgery and held that its claim was barred.  See id. at 366.  <br>The court of appeals,  applying federal common law, reversed.  See <br>id.  The Supreme Court agreed, declaring: <br>    The rights and duties of the United States on <br>  commercial paper which it issues are governed <br>  by federal rather than local law.  When the <br>  United States disburses its funds or pays its <br>  debts, it is exercising a constitutional <br>  function or power . . . .  The authority to <br>  issue the check had its origin in the <br>  Constitution and the statutes of the United <br>  States and was in no way dependent on the laws <br>  of [the state at issue] or of any other state.  <br>  The duties imposed upon the United States and <br>  the rights acquired by it as a result of the <br>  issuance find their roots in the same federal <br>  sources. <br> <br>Id. at 366 (citations and footnote omitted).  Since Clearfield, <br>courts often have looked to federal common law to protect various <br>proprietary interests of the United States.  Thus, in United States <br>v. Standard Oil Co., 332 U.S. 301, 305 (1947), the Justices held <br>that the existence of a cause of action for the government's loss <br>of a soldier's services due to tortious injury was a matter of <br>federal, not state, law.  Echoing Clearfield, 318 U.S. at 367, the <br>Court emphasized the desirability of a uniform rule of federal law, <br>in lieu of the patchwork that would result from a piecemeal <br>adoption of state law.  See Standard Oil, 332 U.S. at 310-11. <br>  Later cases and many commentators indicate that the <br>proper mode of analysis for questions of this kind is binary.  See, <br>e.g., United States v. Kimbell Foods, Inc., 440 U.S. 715, 726-29 <br>(1979); United States v. Little Lake Misere Land Co., 412 U.S. 580, <br>592-95 (1973); Chemerinsky, supra, at 337-40; Wright & Miller, <br>supra,  4514.  This two-part approach involves what may be <br>characterized as the source question and the substance question.  <br>The former asks:  should the source of the controlling law be <br>federal or state?  The latter (which comes into play only if the <br>source question is answered in favor of a federal solution) asks:  <br>should the court, in defining the substance of the rule to be <br>applied in the particular situation, adopt state law as a proxy for <br>an independent federal common law rule, or alternatively, fashion <br>a uniform federal rule? <br>  In the vast majority of cases that raise the possibility <br>of creating federal common law, the bone of contention is whether <br>a particular rule drawn from state law will be applied to affect a <br>federal interest, directly or indirectly.  In such cases, courts <br>that would resolve the substance question in favor of adopting <br>state law typically find it unnecessary to resolve the source <br>question explicitly.  See, e.g., O'Melveny & Myers v. FDIC, 512 <br>U.S. 79, 85 (1994); United States v. Yazell, 382 U.S. 341, 357 <br>(1966).  Here, however, the path of least resistance is not open to <br>us.  This appeal turns on the resolution of the source question.  <br>Unless we find that the appropriate source of law is federal, the <br>case is not one in which Rule 4(k)(2) can authorize the exercise of <br>personal jurisdiction over the defendants.  Conversely, if the <br>appropriate legal source is federal, that ends our inquiry for Rule <br>4(k)(2) purposes, and the answer to the substance question can be <br>deferred. <br>  There is remarkably little law that illumines the reasons <br>for deciding the source question one way or the other.  We believe <br>it is inevitable, however, that the key determinant must be the <br>strength of the relevant federal interest.  See Standard Oil, 332 <br>U.S. at 305-06.  The government touts the federal interest here as <br>having multiple dimensions, e.g., protecting its property interest <br>in funds forfeited in consequence of a federal criminal <br>prosecution, validating an order of a federal court, and <br>safeguarding federal hegemony in foreign affairs.  The most <br>commonplace of these is the government's property interest.  That <br>type of federal interest formed the basis for the invocation of a <br>federal source in cases such as Kimbell Foods, 440 U.S. at 726-27, <br>and Clearfield, 318 U.S. at 366-67.  This type of interest also led <br>the Court to designate a federal source of law for construing <br>government contracts.  See United States v. Seckinger, 397 U.S. <br>203, 209-10 & n.13 (1970).  The other interests that the government <br>cites, though less prevalent in the "source question" context, lend <br>added weight.  See generally Gompers v. Bucks Stove & Range Co., <br>221 U.S. 418, 450 (1911) (discussing the importance of <br>"vindicat[ing] the jurisdiction and authority of courts to enforce <br>[their] orders"); Banco Nacional de Cuba v. Sabbatino, 376 U.S. <br>398, 425 (1964) (discussing federal government's exclusive power to <br>control the foreign relations of the United States). <br>  The defendants assert that these interests, singly or in <br>combination, do not justify the designation of a federal source <br>here.  They note that the use of federal common law has been <br>rejected in civil forfeiture actions.  See United States v. 2525 <br>Leroy Lane, 910 F.2d 343, 347-49 (6th Cir. 1990); United States v. <br>15621 S.W. 209th Ave., 894 F.2d 1511, 1517-20 (11th Cir. 1990).  <br>Assuming that this assertion is accurate as far as it goes, but see <br>United States v. 1500 Lincoln Ave., 949 F.2d 73 (3d Cir. 1991), it <br>nevertheless does not go very far.  Generally speaking, the cases <br>cited by the defendants stand for the proposition that, in a civil <br>forfeiture proceeding, the property interest that the federal <br>government may obtain will be defined and circumscribed by state <br>property law.  See, e.g., 2525 Leroy Lane,  910 F.2d at 349.  Thus <br>for example, when spouses hold property as tenants by the entirety, <br>the forfeiture of one spouse's interest in that property is subject <br>to the usual restrictions imposed by state law on such tenancies.  <br>See id. at 350-51.  The resolution of such issues has little, if <br>any, bearing on the source question in this case. <br>  Next, the defendants posit that state law is perfectly <br>adequate to protect the federal sovereign in this sort of <br>situation.  To fortify this thesis, they observe that the <br>government itself occasionally has turned to state law to protect <br>property obtained by forfeiture.  See, e.g., United States v. <br>Moffitt, Zwerling & Kemler, P.C., 83 F.3d 660, 664 (4th Cir. 1996).  <br>This thrust also misses the mark.  Arguments about the ability of <br>state law to protect federal interests are relevant to the <br>substance question, not the source question.  It is the substance <br>question   and only this substance question   that requires <br>consideration of the need for a uniform federal rule versus the <br>efficiency and predictability gains furthered by applying state <br>law.  See, e.g., Kimbell Foods, 440 U.S. at 728-29.  Consequently, <br>the defendants' importunings about the suitability and ready <br>availability of state law do not inform a proper resolution of the <br>source question.  With regard to that question, the salient <br>consideration is not whether state law has the capacity adequately <br>to protect the federal interest, but, rather, whether the <br>ascertained federal interest necessitates a federal source for the <br>rule of decision. <br>  In this respect, we find that Clearfield constitutes an <br>instructive parallel.  Here, as in Clearfield, 318 U.S. at 365, the <br>United States seeks to recoup its funds from an alleged converter.  <br>In Clearfield the authority of the United States to issue the check <br>originated in federal law, uninfluenced by the laws of the state in <br>which the forgery occurred.  See id. at 366.  Here, similarly, the <br>authority of the United States to gain title to the disputed funds <br>flows from its federal-law power to punish criminals, including its <br>right to require forfeiture of racketeering proceeds, see 18 U.S.C. <br> 1963, and state law has no direct bearing on this authority.  <br>Pondering such considerations, the Clearfield Court concluded that <br>the rights acquired by the United States should be determined by <br>reference to a federal source.  See Clearfield, 318 U.S. at 366-67.  <br>We follow this lead and hold that, when the United States sues to <br>assert its rights against an alleged converter to recoup assets (or <br>obtain the value of assets) forfeited to it, the rights that it has <br>acquired find their roots in, and must be adjudicated in accordance <br>with, a federal source.  On this basis, we answer the source <br>question in favor of federal law. <br>  Having resolved the source question, we need not pursue <br>this inquiry further.  As long as the source of the rule to be <br>applied is federal, the government has demonstrated that its case <br>is one "arising under" federal law, and that element of the Rule <br>4(k)(2) calculus has been fulfilled.  For present purposes, <br>therefore, the answer to the source question suffices, regardless <br>of what the answer to the substance question eventually may prove <br>to be.   <br>  3.  Adequacy of Contacts.  In addition to satisfying the <br>negation and "arising under" requirements, the government must make <br>one additional showing to gain access to Rule 4(k)(2):  that the <br>defendants have adequate contacts with the United States as a whole <br>to support personal jurisdiction and that an assertion of <br>jurisdiction over them would be reasonable.  The government tried <br>to make this showing below, but requested jurisdictional discovery <br>to permit it to marshal the necessary proof.  A timely and properly <br>supported request for jurisdictional discovery merits solicitous <br>attention.  See Sunview Condo. Ass'n v. Flexel Int'l, Ltd., 116 <br>F.3d 962, 964 (1st Cir. 1997) (explaining that "a diligent <br>plaintiff who sues an out-of-state corporation and who makes out a <br>colorable case for the existence of in personam jurisdiction may <br>well be entitled to a modicum of jurisdictional discovery if the <br>corporation interposes a jurisdictional defense"); see also Boit, <br>967 F.2d at 680-81; Surpitski v. Hughes-Keenan Corp., 362 F.2d 254, <br>255-56 (1st Cir. 1966) (per curiam).  The government claims that it <br>fits within the Sunview rule.  The defendants disagree.  They <br>asseverate that, especially in light of the government's lengthy <br>pre-litigation investigation of them, its weak case for personal <br>jurisdiction fails to clear even this relatively low barrier. <br>  The district court denied the motion for limited <br>discovery on the ground that the government had failed to negate <br>state court jurisdiction.  Our holding today, see supra Part <br>II(C)(1), undermines the rationale for the district court's <br>decision.  We therefore vacate the denial of the government's <br>motion for jurisdictional discovery.  On remand, the court must <br>reevaluate the government's request. <br>                     D.  Alter Ego Theory.   <br>  In addition to moving for dismissal for lack of personal <br>jurisdiction, Fed. R. Civ. P. 12(b)(2), IMB moved for dismissal <br>(or, alternatively for summary judgment) on the merits, see Fed. R. <br>Civ. P. 12(b)(6), 56.  It asserts that, if the district court's <br>jurisdictional assessment went awry, we should affirm the order of <br>dismissal on the merits.  Since IMB's alternative motion rests on <br>affidavits and other material outside the pleadings, we need <br>consider only its entitlement vel non to summary judgment.  See <br>Collier v. City of Chicopee, 158 F.3d 601, 603 (1st Cir. 1998); see <br>also Fed. R. Civ. P. 12(b). <br>  The substance of IMB's argument is that it cannot be held <br>liable for Swiss American's misconduct because, contrary to the <br>government's allegations, it is not Swiss American's alter ego.  In <br>IMB's view, alter ego liability cannot attach under Massachusetts <br>law without a showing that (1) IMB pervasively controlled SAHC, <br>which in turn pervasively controlled the Swiss American banks (or <br>that the activities of the corporations were confusingly <br>intermingled with substantial disregard for corporate <br>separateness), and (2) that it is necessary to pierce the corporate <br>veil in order to forestall a miscarriage of justice or other gross <br>inequity.  See, e.g., Birbara v. Locke, 99 F.3d 1233, 1238-39 (1st <br>Cir. 1996); My Bread Baking Co. v. Cumberland Farms, Inc., 353 <br>Mass. 614, 620 (1968).  In support of this plea, IMB emphasizes <br>that such a state of affairs could not be shown to exist because it <br>transferred its stock in SAHC to an unrelated entity in 1988, while <br>the allegedly wrongful acts did not take place until 1993 (at the <br>earliest). <br>  This argument is premature.  The Supreme Court's recent <br>exhortations to decide issues of jurisdiction   both personal and <br>subject matter   before reaching the merits of a case suggest to us <br>that consideration of IMB's summary judgment motion should await a <br>determination of the district court's jurisdiction over IMB.  See <br>generally  Steel Co. v. Citizens for a Better Env't, 118 S. Ct. <br>1003, 1012, 1016 (1998) (holding that issues of subject matter <br>jurisdiction ordinarily should be decided before the merits); id. <br>at 1020 (O'Connor, J. concurring) (similar); cf. Ruhrgas AG v. <br>Marathon Oil Co., 119 S. Ct. 1563, 1567 (1999) (holding that there <br>is no hierarchy in the order of decision of issues of personal and <br>subject matter jurisdiction).  The lack of a developed record and <br>the fact that the district court has not yet expressed its views on <br>this motion are added considerations that point us in the same <br>direction.  Consequently, we decline to rule on IMB's motion for <br>summary judgment at the present time. <br>III.  CONCLUSION <br>  We need go no further.  We agree with the district court <br>that the government made an insufficient showing of personal <br>jurisdiction over the defendants to engage the gears of the <br>Massachusetts long-arm statute as incorporated by Rule 4(k)(1)(A), <br>and to that extent we affirm the court's rulings.  We disagree, <br>however, with the court's approach to Rule 4(k)(2)'s negation <br>requirement and view the question of whether Rule 4(k)(2) can be <br>used here as open.   Accordingly, we vacate the order of dismissal <br>and remand for further proceedings consistent with this opinion.  <br>We also vacate the order denying jurisdictional discovery and <br>remand for reconsideration of that matter.  We intimate no view as <br>to the eventual outcome of the resumed proceedings below. <br> <br>  Affirmed in part; vacated in part; and remanded.  All <br>parties will bear their own costs.</pre>

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