Court Opinion

ID: 6336024
Source: CourtListenerOpinion
Date Created: 2022-04-28 17:00:35.718677+00
Date Added: 2024-06-11T09:24:05.852167
License: Public Domain

NOT PRECEDENTIAL

               UNITED STATES COURT OF APPEALS
                    FOR THE THIRD CIRCUIT

                      _______________________

                    Nos. 19-2405, 19-2406, 19-2583
                     _______________________

ANDREW L. SCHLAFLY, on behalf of himself individually and on behalf
of all other members of Eagle Forum, a non-profit membership corporation,
                           Appellant in No. 19-2405

                                   v.

EAGLE FORUM; EDWARD R. MARTIN, JR., MO; JOHN F. SCHLAFLY;
   ESTATE OF PHYLLIS M. SCHLAFLY; EAGLE TRUST FUND;
    EAGLE FORUM EDUCATION & LEGAL DEFENSE FUND

       EDWARD R. MARTIN, JR., MO; JOHN F. SCHLAFLY;
    ESTATE OF PHYLLIS M. SCHLAFLY; EAGLE TRUST FUND;
     EAGLE FORUM EDUCATION & LEGAL DEFENSE FUND,
               Appellants in Nos. 19-2406, 19-2583

                      _______________________

             On Appeal from the United States District Court
                     for the District of New Jersey
                  (District Court No. 2-17-cv-02522)
                 District Judge: Honorable Esther Salas
                    __________________________

              Submitted Under Third Circuit L.A.R. 34.1 (a)
                            March 3, 2022

         Before: McKEE, AMBRO, and SMITH, Circuit Judges

                         (Filed: April 28, 2022)
                               __________________________

                                        OPINION*
                               __________________________

SMITH, Circuit Judge

          Andrew Schlafly and Eagle Trust Fund1 appeal various aspects of the District

Court’s judgment dismissing their claims. Because the District Court did not err, we will

affirm.

                                                   I.

          This case involves the proceeds from two keyman insurance policies on the life of

the late Phyllis Schlafly. One of the policies was issued by Lincoln National Life Insurance

Company, which is incorporated in Indiana and headquartered in Pennsylvania. The other

was issued by John Hancock Life Insurance Company, which is headquartered and

incorporated in Massachusetts. The policies were not executed in New Jersey.

          Both policies identify “Eagle Forum” as the beneficiary. The address given to

identify Eagle Forum, however, has never been used by it. In one of the policies, Phyllis

also identified Eagle Forum by its Employer Identification Number (“EIN”).

*
 This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
1
  For purposes of this opinion “Eagle Trust Fund” encompasses the “Eagle Trust
Appellants”: Eagle Trust Fund, Eagle Forum Education and Legal Defense Fund, Edward
R. Martin, Jr., Mo, John F. Schlafly, and the Estate of Phyllis Schlafly.
                                              2
       As a result of disputes arising during the course of the 2016 Republican presidential

primary, the Eagle Forum Board of Directors split into factions. Andrew Schlafly, the

decedent’s son, alleges that since that time, Eagle Forum has been without a functioning

Board. Litigation related to Eagle Forum’s Board is ongoing in Illinois, where Eagle

Forum is incorporated and has its principal place of business.

       Andrew sued the insurance companies in the Superior Court of New Jersey seeking

the proceeds from the policies. In response, the insurance companies removed the case to

the District Court for the District of New Jersey, submitted the funds to that court, and

invoked statutory interpleader. Andrew then filed an amended complaint against Eagle

Forum and Eagle Trust. Counts I and VI—which the District Court called “Interpleader

Claims”—sought the funds from the life insurance policies by arguing that the members of

Eagle Forum, not Eagle Forum itself, were the intended beneficiaries of the policies.

Counts II through V—which the District Court labeled as “New Claims”—alleged various

misdeeds by Eagle Forum’s Board of Directors.2 Eagle Forum answered and asserted

claims against Andrew and Eagle Trust seeking a declaratory judgment as to whether they

were entitled to the life insurance proceeds and for attorneys’ fees.

2
  Count II alleged that there was a civil conspiracy to dissipate funds from Eagle Forum.
Count III asserted a claim for “conversion” as Andrew averred that Eagle Forum had
“intentionally and wrongfully interfered with the rights of membership.” Count IV
presented a “breach of contract” claim based on Eagle Forum allegedly violating its
bylaws. And Count V, entitled “unjust enrichment,” sought damages, which “include[],
but [are] not limited to the demand for proceeds on the policies.”

                                             3
         Eagle Trust also filed five crossclaims against Eagle Forum. Eagle Trust now

admits that it is not a beneficiary of the policies. It brought two breach-of-contract claims,

a claim for reimbursement of payments made on a separate life insurance policy,3 and two

claims for misappropriation of Eagle Trust’s intellectual property.

         When considering the cross-motions to dismiss, the District Court held that the life

insurance contracts unambiguously identified Eagle Forum, not its members, as the

beneficiary. The Court then held that it lacked personal jurisdiction over Eagle Forum as

to Andrew’s New Claims. It also concluded that Eagle Trust’s crossclaims did not “arise

out of the same transaction or occurrence” as the Interpleader Claims, and, as such, it

dismissed Eagle Trust’s claims for lack of personal jurisdiction.4 The Court then ordered

the interpleaded funds to be disbursed to Eagle Forum.

                                                   II.5

         The Court correctly determined that the policies unambiguously identify Eagle

Forum as the beneficiary. Andrew argues that Eagle Forum is not the proper beneficiary

3
    This policy insured the life of Helen Marie Taylor.
4
 The parties dispute whether the District Court dismissed Eagle Trust’s claims for lack of
personal jurisdiction. We view the Court as dismissing Eagle Trust’s claims on this basis.
Moreover, even if these claims were dismissed on other grounds “[w]e may affirm on any
basis supported by the record, even if it departs from the District Court’s rationale.” TD
Bank N.S. v. Hill, 928 F.3d 259, 270 (3d Cir. 2019).
5
  The District Court had subject-matter jurisdiction pursuant to 28 U.S.C. §§ 1332 and
1335. We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review
over a district court’s decision to dismiss for lack of personal jurisdiction and for failure to
state a claim. Danziger & De Llano, LLP v. Morgan Verkamp LLC, 948 F.3d 124, 129 (3d
                                               4
because its Board does not truly represent the members. But that is an internal dispute

between Eagle Forum’s members and its Board; it does not change the contracts’ plain

language. Although the street address used in the policies was not used by Eagle Forum,

the fact remains that the policies unambiguously identify “Eagle Forum”—not some

amorphous mass of its members—as their beneficiary.             This conclusion is further

confirmed by the use of Eagle Forum’s EIN. Thus, the Court correctly decided that Eagle

Forum was entitled to the funds. See United States v. Pantelidis, 335 F.3d 226, 235 (3d

Cir. 2003) (holding that the determination of whether a contract is ambiguous is a matter

of law).

       The Court also correctly held that it lacked personal jurisdiction over the New

Claims.6 Personal jurisdiction can be either specific or general. Ford Motor Co. v. Mont.

Eighth Jud. Dist. Ct., 141 S. Ct. 1017, 1024 (2021). The District Court lacked general

jurisdiction over Eagle Forum because it is not “essentially at home” in New Jersey. Id.

(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)).

Only in an “exceptional case” may general jurisdiction extend beyond a corporation’s

principal place of business and its state of incorporation. See Miller Yacht Sales, Inc. v.

Cir. 2020) (personal jurisdiction); Watters v. Bd. of Sch. Dirs. of City of Scranton, 975 F.3d
406, 412 (3d Cir. 2020) (failure to state a claim).
6
  “New Jersey’s long-arm statute provides for jurisdiction coextensive with the due process
requirements of the United States Constitution.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d
93, 96 (3d Cir. 2004) (citing N.J. Ct. R. 4:4-4(c)). Therefore, when determining if personal
jurisdiction existed over Eagle Forum, we analyze only if exercising jurisdiction over it is
consistent with the Constitution.

                                              5
Smith, 384 F.3d 93, 96 (3d Cir. 2004). This case is far from exceptional, so Andrew’s

argument that general jurisdiction over Eagle Forum existed in New Jersey must fail.

       Additionally, the Court lacked specific or pendent personal jurisdiction over the

New Claims. For specific personal jurisdiction to exist, the claims “must arise out of or

relate to the defendant’s contacts with the forum.” Ford Motor Co., 141 S. Ct. at 1025

(quoting Bristol-Myers Squibb Co. v. Super. Ct. of Cal., 137 S. Ct. 1773, 1780 (2017))

(quotation marks omitted). Here, all of the alleged misdeeds of the Board occurred outside

of New Jersey. In fact, the only connection these claims seem to have to New Jersey is the

fact that Andrew happens to live there. That fact is simply insufficient to establish specific

jurisdiction over Eagle Forum. Moreover, even if we assume that pendant personal

jurisdiction applies to statutory interpleader, it cannot apply here because the New Claims

are unrelated to the Interpleader Claims.7 See Laurel Gardens, LLC v. McKenna, 948 F.3d

105, 119 (3d Cir. 2020); IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1056 (2d

Cir. 1993).

       Furthermore, Andrew was not entitled to jurisdictional discovery. Before a plaintiff

is entitled to jurisdictional discovery, he must allege facts that, when taken as true, establish

7
  Additionally, Andrew’s argument that Eagle Forum voluntarily appeared in New Jersey
to claim their entitlement to the proceeds is incorrect. Eagle Forum was haled into court
as a defendant. Regardless, as some courts have noted, merely claiming entitlement to
funds in an interpleader action does not open the floodgates to any claim that any party
may have. See, e.g., Carolina Cas. Ins. Co. v. Mares, 826 F. Supp. 149, 153–54 (E.D. Va.
1993).

                                               6
jurisdiction. Toys “R” Us, Inc. v. Step Two, S.A., 232 F.3d 376, 380 (3d Cir. 2000).

Andrew failed to do so.

       Nor did the District Court err in dismissing Eagle Trust’s crossclaims. Because

Eagle Trust admits that it is not a beneficiary of the policies, its claims are unrelated to the

Interpleader Claims. Further, none of the claims “arise out of or relate to” Eagle Forum’s

contacts with New Jersey, so the Court lacked specific personal jurisdiction. Ford Motor

Co., 141 S. Ct. at 1025 (quoting Bristol-Myers Squibb, 137 S. Ct. at 1780). Eagle Trust

also argues that the Court erred because its claims were dismissed with prejudice. But the

Court could dismiss Eagle Trust’s claims with prejudice for lack of personal jurisdiction.

Because this was not an adjudication on the merits, however, “with prejudice” means only

that Eagle Trust cannot relitigate whether personal jurisdiction exists over Eagle Forum for

these claims in New Jersey. Danziger & De Llano, LLP v. Morgan Verkamp LLC, 948

F.3d 124, 132–33 (3d Cir. 2020).

                                                   III.

       For the reasons stated above, we will affirm.

                                               7