Court Opinion

ID: 9483534
Source: CourtListenerOpinion
Date Created: 2023-08-05 09:23:24.882273+00
Date Added: 2024-06-11T17:49:40.703422
License: Public Domain

RONEY, Senior Circuit Judge.
This is an appeal from an order dismissing a diversity jurisdiction complaint, in which the plaintiff asserted long arm jurisdiction, because of lack of personal jurisdiction over the defendants. Agreeing that the defendants had insufficient contacts with the plaintiff in Ohio to subject them to the court’s jurisdiction in this case, we affirm.
The suit involves allegations of false representation by Defendants in connection with the recruitment of Plaintiff, a Ohio resident, for a high-level administrative position at the company’s office in Florida.
The recitation of facts is taken largely from the district court’s opinion. See James T. Conti v. Pneumatic Products Corp., No. C-1-91-081 (S.D.Ohio, Aug. 27, 1991). Defendant Pneumatic Products (Pneumatic) is a Delaware corporation, a manufacturer and seller of pneumatic air drying systems, with its principal place of business in Ocala, Florida. Defendant H. Michael McCurry, the president and chief executive officer of Pneumatic during 1990, is a resident of Florida. Plaintiff James T. Conti is a resident of Ohio.
In late 1989 or early 1990, Conti, while in Ohio, responded to a Wall Street Journal advertisement for a directory of executive recruiting firms. The directory included a listing for Management Recruiters of Lake County, Inc. (Management Recruiters), an executive recruiting firm headquartered in Mount Dora, Florida. In early March 1990, Conti mailed a letter and resume to Management Recruiters, which were placed in a file maintained for unsolicited resumes.
*980Late in March 1990, McCurry asked Management Recruiters to perform an executive search for the position of vice-president of engineering at Pneumatic’s facility in Ocala, Florida. Management Recruiters contacted Conti and later forwarded his resume to Pneumatic. Acting on behalf of Pneumatic, Management Recruiters made several phone calls to Conti in Ohio and sent Pneumatic literature to him in Ohio. Conti alleges that during these telephone conversations Management Recruiters acted as agent for Pneumatic and made fraudulent misrepresentations regarding Pneumatic’s financial condition.
Management Recruiters arranged for Conti to travel to Florida to meet with McCurry and other Pneumatic officials on two occasions. Shortly following Conti’s second trip to Florida, Pneumatic offered him the position, and he accepted in May 1990.
Although Pneumatic apparently did not want Conti to start work before mid-June, Conti asked to be placed on the payroll in May because he was unemployed. Thus his employment with Pneumatic began May 21, 1990, and for the first month he was in Ohio doing work preparatory to his move to Florida. Pneumatic paid Conti a salary for that month. Conti began work in Pneumatic’s facility in Ocala, Florida, on June 18, 1990. On October 5, 1990, the position of vice-president of engineering was eliminated and Conti was terminated.
Conti filed a complaint in Ohio against Pneumatic and McCurry for fraudulent misrepresentation, promissory estoppel, breach of fiduciary duty, and breach of contract. He alleged that the defendants made fraudulent misrepresentations to him regarding Pneumatic’s financial condition, both directly during his visits to Florida and indirectly during telephone calls to him in Ohio by Pneumatic’s agent, Management Recruiters. He asserted that he detrimentally relied on these misrepresentations in deciding to accept Pneumatic’s offer, leave his employment in Ohio, and reject another job offer.
In response to Defendants’ motion to dismiss for lack of personal jurisdiction, the district court allowed the parties to conduct some discovery, but did not conduct an evidentiary hearing. In a detailed order granting Defendants’ motion to dismiss, the district court stated that Ohio’s long arm statute, Ohio Rev.Code § 2307.-382(A)(4) and (A)(6), provides for personal jurisdiction over both Pneumatic and McCurry, but determined that the exercise of personal jurisdiction over the defendants would offend the traditional concepts of fair play and substantial justice embodied in the due process clause of the Fourteenth Amendment.
Conti appeals, urging that the Ohio court’s exercise of personal jurisdiction over Defendants is constitutional. We need not resolve the initial dispute of the parties over the burden Conti must carry to establish jurisdiction. Conti urges that he bears only the burden of demonstrating facts which support a 'prima facie case for jurisdiction, because there was no eviden-tiary hearing. See American Greetings Corp. v. Cohn, 839 F.2d 1164, 1168-69 (6th Cir.1988). Defendants argue that Conti must demonstrate Ohio’s jurisdiction by a preponderance of the evidence rather than by simply making a prima facie showing, because the district court permitted discovery and did not rely solely on affidavits. See Market/Media Research v. Union Tribune Pub., 951 F.2d 102, 104 (6th Cir.1991), cert. denied, — U.S.-, 113 S.Ct. 79, 121 L.Ed.2d 43 (1992); Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991); Serras v. First Tennessee Bank, N.A., 875 F.2d 1212, 1214 (6th Cir.1989).
Even under the lesser prima facie showing, however, considering the evidence in the light most favorable to the plaintiff, Conti has not demonstrated facts supporting jurisdiction. The essential facts are not really disputed. The only real dispute is in the significance of these facts. Therefore, the district court did not err in deciding the jurisdiction issue relatively early in this case without conducting an evidentiary hearing. See Market/Media, 951 F.2d at 106.
We need not determine the correctness of the district court’s statutory decision. *981The controlling issue on this appeal is the constitutional standard. To subject a defendant to the personal jurisdiction of a court, the defendant must “have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342-43, 85 L.Ed. 278 (1940)). “In analyzing the due process limits of personal jurisdiction, a distinction is made between ‘general’ jurisdiction and ‘specific’ jurisdiction.” Third Nat’l. Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir.1989) (citations omitted), cert. denied, 493 U.S. 1058, 110 S.Ct. 870, 107 L.Ed.2d 953 (1990).
A proper exercise of general jurisdiction requires the “defendant’s contacts with the forum state [to be] of such a ‘continuous and systematic' nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant’s contacts with the state.” Third Nat’l. Bank, 882 F.2d at 1087. Plaintiff does not even argue for general jurisdiction over MeCurry. Although Plaintiff argues that the district court had general jurisdiction over Pneumatic, the facts do not support the argument.
Pneumatic is not licensed to do business in Ohio, does not maintain an office or employees in Ohio, and does not own any property in Ohio. Pneumatic sells its products all over the United States. Sales are made either to distributors for resale or directly by Pneumatic to the end user. Pneumatic sells its products in Ohio through two distributors. These distributors act as Pneumatic’s agents in connection with Pneumatic’s direct sales to end users; and, they regularly purchase Pneumatic products for resale in Ohio. The annual sales of one of these distributors to Ohio customers total approximately $900,-000. The distributors themselves usually service the products they sell. On occasion, they are visited and telephoned by Pneumatic employees for technical support. Conti has not established a prima facie case that Pneumatic’s contacts with Ohio are of a “continuous and systematic” nature such that Ohio could constitutionally maintain general jurisdiction over Pneumatic or MeCurry in an action unrelated to its Ohio contacts. Cf. Third Nat’l. Bank, 882 F.2d at 1088-89. But cf. Michigan Nat’l. Bank v. Quality Dinette, Inc., 888 F.2d 462, 465-67 (6th Cir.1989).
Specific jurisdiction is exercised over a defendant in a suit arising out of or related to the defendant’s contacts with the forum. See Third Nat’l. Bank, 882 F.2d at 1089. The district court correctly focused on specific jurisdiction, rather than general jurisdiction.
The Sixth Circuit has utilized a three part test for determining whether specific jurisdiction may be exercised in compliance with the requirements of due process.
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state.
Second, the cause of action must arise from the defendant’s activities there. Third, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.
See Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir.1968).
The district court found that Defendants do not meet the first part of this test. Conti alleges that Management Recruiters had authority to act on behalf of Pneumatic; and, therefore, Pneumatic is liable for the fraudulent representations made by Management Recruiters in Ohio to Conti. American Bankers Life v. Tri City Bank, 677 F.2d 28, 30 (6th Cir.1982). The question before us on this appeal is not, however, whether the acts of Management Recruiters will ultimately result in Pneumatic’s liability to Conti. The question is *982whether the alleged actions of Management Recruiters, McCurry, or Pneumatic demonstrate that Defendants purposefully availed themselves of the privilege of acting in Ohio or causing a consequence in the forum state such that Ohio may exercise personal jurisdiction over Defendants in connection with those actions.
The record fully supports the district court’s finding that Defendants’ contacts with Ohio were random, fortuitous, and attenuated, and therefore do not meet the first part of the Mohasco test. Defendants did not purposefully recruit an Ohio resident to fill the position of vice-president of engineering at Pneumatic’s facility in Oca-la, Florida. Instead Defendants contacted a local executive recruiting firm headquartered in Mount Dora, Florida. Conti ordered a directory of executive recruiting firms and sent an unsolicited resume to Management Recruiters. Defendants learned of an Ohio resident’s interest in the position of vice-president of engineering in its Florida office due to this unilateral activity of Plaintiff.
Conti argues the district court wrongfully applied a mechanical “but for” test for jurisdiction, citing Lanier v. American Bd. of Endodontics, 843 F.2d 901, 910 (6th Cir.), cert. denied, 488 U.S. 926, 109 S.Ct. 310, 102 L.Ed.2d 329 (1988), which states that “the question of which party solicited the business interface is irrelevant, so long as defendant then directed its activities to the forum resident.” A full reading of the district court’s opinion discloses, however, that the court did not apply a mechanical test, such as was rejected in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528 (1985), but rather considered all the facts to determine the “purposeful availment” requirement as set forth in Burger King.
The “purposeful availment” requirement
ensures that a defendant will not be haled into a jurisdiction solely as a result of “random,” “fortuitous,” or “attenuated” contacts, or of the “unilateral activity of another party or a third person.” Jurisdiction is proper, however, where the contacts proximately result from the actions by the defendant himself that create a “substantial connection” with the forum State.
Burger King, 471 U.S. at 475, 105 S.Ct. at 2183-84 (citations and footnote omitted) (emphasis in original). A forum resident’s contract with an out-of-state defendant alone is insufficient to automatically establish jurisdiction over the defendant. Burger King, 471 U.S. at 478, 105 S.Ct. at 2185; see Lanier, 843 F.2d at 910. The district court thus properly considered all relevant matters as set forth by this Court in Lanier. “[Pjrior negotiations, contemplated future consequences, the terms of the contract, and the actual course of dealing need to be addressed to evaluate, in a ‘highly realistic’ way, the intended future consequences that are ‘the real object of the business transaction.’ ” Lanier, 843 F.2d at 910 (apparently quoting Burger King, 471 U.S. at 479, 105 S.Ct. at 2185).
Although there may have been an isolated phone conversation between McCurry and Conti while Conti was in Ohio, the record supports the district court’s statement that Defendant never directly contacted Conti in Ohio prior to hiring him. Substantially all contact between Conti and McCurry occurred when both McCurry and Conti were in Florida. Although Conti alleges that Defendants paid for and mailed airline tickets to Conti in Ohio, mailed other materials directly to Conti in Ohio, conducted extensive contract negotiations with Conti in Ohio through Management Recruiters, and mailed an employment contract offer letter to Conti in Ohio, these alleged contacts are insufficient to establish personal jurisdiction over Defendants in Ohio.
In Serras v. First Tennessee Bank, N.A., 875 F.2d 1212, 1217 (6th Cir.1989), although the Court reversed the district court’s grant of the defendant’s motion to dismiss, the Court stated that personal jurisdiction would not have been established if the only contact was that the defendant made an out-of-state telephone call to the plaintiff in the forum state to solicit plaintiff to engage in an out-of-state transac*983tion. In Serras the defendant traveled to the forum state to solicit the plaintiffs business and allegedly made fraudulent representations while in the state. 875 F.2d at 1217. The Court distinguished the facts of Serras in Market/Media Research v. Union Tribune Pub., 951 F.2d 102, 106 (6th Cir.1991), petition for cert. denied, — U.S. -, 113 S.Ct. 79, 121 L.Ed.2d 43 (1992), and stated that “[e]ven though Defendants made telephone calls and sent mail to [Plaintiff] in Ohio, the quality and nature of their contacts with Ohio fall short of the requirements of due process.” 951 F.2d at 105. A similar holding was made by the Court in LAK, Inc. v. Deer Creek Enterprises, 885 F.2d 1293 (6th Cir.1989), cert. denied, 494 U.S. 1056, 110 S.Ct. 1525, 108 L.Ed.2d 764 (1990), where the Court held that contract negotiations which began in Florida continued with telephone calls from the defendant to the plaintiff in the forum state, and culminated in plaintiffs signing the contract in the forum state were “random,” “fortuitous,” and “attenuated” contacts and an insufficient basis for haling non-resident defendants into the foreign jurisdiction. 885 F.2d at 1300-01.
This case is unlike Lanier v. American Bd. of Endodontics, 843 F.2d 901, 907-11 (6th Cir.1988), where contacts between the plaintiff and the defendant Board were by mail and telephone. In that case the Board was a nationwide organization, depended on having members in every state, availed itself of the opportunity to gain members in forum state, and had a substantial impact on the forum state through its certification of members who practiced in the forum state. 843 F.2d at 911. No such facts are present here.
Furthermore as to jurisdiction over McCurry, “[i]f such suits against officers of national corporations were ever permitted, the individuals could be sued in every state of the union whenever they make telephone calls or write letters to” a job applicant who later “claims that they constitute misrepresentations.” Weller v. Cromwell Oil Co., 504 F.2d 927, 931 (6th Cir.1974).
“[E]ach [Mohasco ] criterion represents an independent requirement, and failure to meet any one of the three means that personal jurisdiction may not be invoked.” LAK, 885 F.2d at 1303. Conti’s failure to demonstrate the “purposeful availment” requirement of Mohasco means that the Ohio court may not exercise personal jurisdiction over Defendants.
In view of our decision, then, we need not decide the correctness of the district court’s holding that Defendants do not meet the second Mohasco requirement. The district court held that Plaintiff’s cause of action does not arise from Defendants’ contacts with the forum. The court stated that Plaintiff’s action is primarily related to alleged fraudulent misrepresentations made by Defendants during Plaintiff’s trips to Florida. The court doubted whether Plaintiff could reasonably rely on any representations made by Management Recruiters. The court held, therefore, that Plaintiff’s action lacks a substantial connection to activities of Defendants in Ohio. See Mohasco, 401 F.2d at 384 n. 27; see also Third Nat’l. Bank, 882 F.2d at 1091 n. 2.
The exercise of jurisdiction in this case would not comport with the traditional notions of fair play and substantial justice. Here, a Florida based company utilized a Florida based recruiter to bring in viable executive candidates for consideration. To hold under these facts that the state of residence of any such candidate could exercise jurisdiction over the Florida company would be unfair. Such a burden placed on a company could unnecessarily restrict nationwide searches for candidates. Having considered the “burden on the defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief” and having weighed “the interstate judicial system’s interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in furthering substantive social policies,” we hold the district court correctly ruled that Ohio may not properly exercise jurisdiction over Defendants in this case. Asahi Metal Industry Co. v. Superior Court, 480 U.S. *984102, 113, 107 S.Ct. 1026, 1032, 94 L.Ed.2d 92 (1987) (quotation omitted).
AFFIRMED.