Court Opinion

ID: 194571
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:20:17+00
Date Added: 2024-06-11T13:04:15.014832
License: Public Domain

March 3, 1993
                United States Court of Appeals
                    For the First Circuit
                                         

No. 92-1865

         UNITED ELECTRICAL RADIO AND MACHINE WORKERS
                  OF AMERICA (UE)., ET AL.,

                   Plaintiffs, Appellants,

                              v.

           163 PLEASANT STREET CORPORATION, ET AL.,

                    Defendants, Appellees.

                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. A. David Mazzone, U.S. District Judge]
                                                    

                                         

                            Before

                   Torruella, Circuit Judge,
                                           
                Bownes, Senior Circuit Judge,
                                            
                    Stahl, Circuit Judge.
                                        
                                         

Mark  D. Stern with whom  Brian W. Mellor, Mary  Leary, and Edward
                                                                  
J. Dailey were on brief for appellants.
     
David D.  Cole on brief for Barney Frank, Gerry E. Studds, Chester
              
G. Atkins,  Joseph D. Early, Joseph P.  Kennedy, II, Edward J. Markey,
Nicholas  Mavroules,  John Joseph  Moakley, Richard  E. Neal,  John W.
Oliver,  and Senators  Edward  M. Kennedy  and  John F.  Kerry,  amici
curiae.
Charles  L. Janes  with whom James  C. Stokes and  Bingham, Dana &
                                                                  
Gould were on brief for appellees.
 
                                         

                        March 3, 1993
                                         

          STAHL, Circuit  Judge.  This appeal  requires us to
                               

decide  for  a  second  time1  whether  plaintiffs-appellants

("plaintiffs")  have  sufficiently   demonstrated  that   the

district court  has personal  jurisdiction  over the  primary

defendants-appellees ("defendants") to this action  to pursue

their claims  under the  Employee Retirement  Income Security

Act ("ERISA"), 29  U.S.C.A.    1001-1461  (West 1985 &  Supp.

1992),  the  Labor-Management  Relations  Act   ("LMRA"),  29

U.S.C.A.       141-187   (West  1973   &  Supp.   1992),  and

Massachusetts common  law.  Finding  that plaintiffs' showing

at  this  stage of  the litigation  is  adequate to  meet the

relevant legal standard, we vacate the district court's order

of dismissal and remand this action for further proceedings.

                              I.
                                

                    PROCEDURAL BACKGROUND
                                         

          We  begin our  analysis  with a  recounting of  the

already  eventful  procedural  history  of  this  litigation.

Plaintiffs are  the  United  Electrical,  Radio  and  Machine

Workers  of  America ("the  Union")  and  certain retired  or

disabled employees  of the  defendant corporations or  one of

these  corporations' predecessor-in-interest.2   On  July 19,

                    

1.  See generally  United Elec.,  Radio and Mach.  Workers of
                                                             
America v. 163 Pleasant Street Corp., 960 F.2d 1080 (1st Cir.
                                    
1992) (hereinafter referred to as "163 Pleasant Street I").
                                                        

2.  One  plaintiff  is the  surviving  spouse  of a  deceased
retired employee of the defendant corporations.

                             -2-
                              2

1991,  plaintiffs  initiated   these  proceedings  by   suing

defendants   International   Twist  Drill   (Holdings),  Ltd.

("ITDH"),   163  Pleasant   Street  Corporation   ("PSC"),  a

Massachusetts   subsidiary  of  ITDH,3  and  Blue  Cross/Blue

Shield  of  Massachusetts ("BCBS").    At  issue was  whether

defendants  were contractually  bound  to provide  plaintiffs

with  medical  and  life  insurance.4   In  their  complaint,

plaintiffs sought both damages and equitable relief.  As part

of the  equitable   relief sought, plaintiffs  requested that

the district  court enter a  preliminary injunction directing

defendants to continue paying plaintiffs'  insurance premiums

pendente lite.
             

          On July 24, 1991, the district court, after hearing

oral argument,  granted plaintiffs'  request for  a temporary

restraining order  preserving the status quo  until a hearing

on plaintiffs' request for  a preliminary injunction could be

arranged.   On August 13, 1991, the district court heard oral

                    

3.  Prior to 1991, PSC was known as Morse Tool, Inc.  Because
this fact is  not relevant to  this appeal, and  in order  to
identify the parties in a consistent fashion, we refer to the
company  as PSC  even  when describing  events that  occurred
while the company was still Morse Tool, Inc.

4.  Specifically,  plaintiffs alleged  that they  were either
signatories to  or beneficiaries  of agreements,  including a
collective  bargaining agreement  between PSC and  the Union,
under  which   PSC  contracted  to  provide   them  with  the
aforementioned insurance  "for life."  They further contended
that,  for  a  variety  of  reasons, ITDH,  which  owned  and
controlled  the  now  defunct   PSC,  was  liable  for  these
contractual obligations  despite the  fact that its  name did
not appear upon these agreements.

                             -3-
                              3

argument on plaintiffs' request for  a preliminary injunction

and  on a motion to dismiss for lack of personal jurisdiction

filed by ITDH on August 6.  That same day, the district court

granted  plaintiffs'  request for  a  preliminary injunction5

and denied ITDH's  motion.  On August 22, 1991, PSC filed for

bankruptcy without paying the  disputed premiums.  After ITDH

also  refused to pay the  premiums, the district court issued

an  order  holding  ITDH  in contempt.    Subsequently,  ITDH

appealed the preliminary injunction and the contempt orders.

          During  the  pendency of  ITDH's  appeals, however,

discovery was proceeding in the underlying case.  As a result

of  information obtained  in  the course  of this  discovery,

plaintiffs moved to  amend their complaint  in order to  join

International  Twist  Drill ("ITD")  as  a  defendant and  to

include additional  (at least  insofar as ITDH  is concerned)

allegations  against the ITD  companies.6  Plaintiffs' motion

was  allowed  on  January  23, 1992.    Meanwhile,  each side

continued  to  supplement  the  record  by  filing  with  the

district  court   further  documentation   in  the  form   of

                    

5.  Specifically,  the  district court  ordered  that "[PSC],
initially,  and  [ITDH], secondarily,  .  .  . make  whatever
payments  are necessary  to  continue  the medical  insurance
coverage of these plaintiffs  until final judgment is entered
in this case."

6.  ITD, a subsidiary of ITDH, was not a party when ITDH took
its appeal of the preliminary injunction and contempt orders.
Therefore, all uses of the acronym "ITD" made in 163 Pleasant
                                                             
Street I should be construed as being references to ITDH.
        

                             -4-
                              4

affidavits and otherwise.   Because  of the  timing of  these

filings, this material was  not part of the record  in ITDH's

initial appeal.

          On  March  30, 1992,  this  court  handed down  163
                                                             

Pleasant  Street   I,  which  vacated  the  district  court's
                    

injunction  and contempt  orders.   In so  doing, we  did not

reach  the merits of the lower court's decisions.  Rather, we

found that plaintiffs had not established that  the court had

personal  jurisdiction over ITDH.   Accordingly,  we directed

that  the  preliminary  injunction  and  contempt  orders  be

vacated and  remanded the  case "for further  proceedings not

inconsistent [with our opinion]."  Id. at 1099.
                                      

          After publication  of 163  Pleasant Street  I, ITDH
                                                       

and ITD filed a joint motion  to dismiss for lack of personal

jurisdiction, incorporating by reference our opinion of March

30,  1992.    Plaintiffs  opposed the  motion,  relying  upon

allegations  in their  recently  amended complaint  and  upon

materials  not part of the  record in 163  Pleasant Street I.
                                                            

On  May  8,  1992,  the  district  court  issued  a  two-page

memorandum  and order granting ITDH's and ITD's motion.7  The

memorandum and order  stated:  "[Each] issue  and theory upon

which plaintiffs' claims  rest has  been thoroughly  analyzed

and addressed in the decision of the Court of Appeals.  There

                    

7.  Although entered on May 8, 1992, the memorandum and order
was dated May 4, 1992.

                             -5-
                              5

is nothing to be  gained from prolonging this  case further."

Plaintiffs moved for reconsideration of the  district court's

order,  again directing  the  court's attention  to materials

made  part of  the record  after ITDH  had taken  its initial

appeal  and other  materials filed  by plaintiffs  on May  8,

1992.   By margin order  entered June 24,  1992, the district

court denied plaintiffs' motion.8   Plaintiffs now appeal the

district  court's  order of  dismissal  and  denial of  their

motion for reconsideration.

                             II.
                                

                          DISCUSSION
                                    

          Because   163   Pleasant   Street  I   exhaustively
                                              

delineated both  the facts underpinning this  dispute and the

law  implicated by its resolution, we do not engage in rehash

here. Suffice it to say that the question of whether, at this

stage of  the litigation,  plaintiffs have made  a sufficient

showing that  ITDH and  ITD, both Scottish  corporations, are

subject to  the personal  jurisdiction of the  district court

hinges upon  whether there  is adequate record  evidence that

the  two   entities  (1)  "transact[ed].  .   .  business  in

                    

8.  Although resolution of plaintiffs' motion by margin order
contravened the separate document requirement of Fed. R. Civ.
P. 58, see Fiore v. Washington County Community Mental Health
                                                             
Ctr.,  960  F.2d  229,  234-36   (1st  Cir.  1992),  we  deem
    
plaintiffs' appeal,  which is timely when  viewed against the
date  the  order  was   entered,  to  be  a  waiver   of  the
requirement.   See Bankers Trust Co. v. Mallis, 435 U.S. 381,
                                              
387-88 (1978); Fiore, 960 F.2d at 236 n.10.
                    

                             -6-
                              6

[Massachusetts],"  thus subjecting them to the Commonwealth's

long-arm statute, see Mass.  Gen. Laws Ann. ch. 223A,    3(a)
                     

(West 1985 & Supp. 1992), and (2) have acted in such a manner

that the district court's  exercise of jurisdiction over them

would  not  offend  the  constitutionally  anchored  "minimum

contacts" rule.   See  International Shoe Co.  v. Washington,
                                                            

326 U.S. 310, 316 (1945).9

                    

9.  In  163 Pleasant Street  I, though we  observed that "the
                              
lower court's ruling  that ITD[H] was `transacting  business'
in  Massachusetts is  likely sustainable,"  see  163 Pleasant
                                                             
Street I, 960 F.2d at 1087, we did not determine whether ITDH
        
was  subject to  the  Commonwealth's long-arm  statute as  we
found that the minimum  contacts rule was not satisfied.   In
so  doing,  we began  by  noting  that  ITDH's contacts  with
Massachusetts were "manifestly insufficient to ground a claim
of  general jurisdiction.  . .  ."   Id. at  1088.   Next, we
                                        
distilled  the jurisprudence  governing the  ascertainment of
specific    jurisdiction    (which,   along    with   general
jurisdiction,   is  one   of  the   two  types   of  personal
jurisdiction   we  have   recognized  in   analyzing  minimum
contacts) into the following tripartite test:   (1) the claim
underlying  the litigation  must  directly arise  out of,  or
relate to, the  defendant's forum-state  activities, (2)  the
defendant's  in-state  contacts must  represent  a purposeful
availment of  the privilege  of conducting activities  in the
forum state, thereby invoking the benefits and protections of
that  state's laws  and  making the  defendant's  involuntary
presence before  the state's courts foreseeable,  and (3) the
exercise  of jurisdiction  must, in  light of  five specified
criteria  for  evaluating   the  fairness  of  subjecting   a
nonresident   to  the   authority  of   a   foreign  tribunal
(collectively  dubbed the "Gestalt  factors"), be reasonable.
See id. at 1088-89.
       
     In  applying the  specific  jurisdiction test,  we first
found that,  of the  forum-related contacts between  ITDH and
the  Commonwealth  mentioned by  the  district  court in  the
August  13,  1991,  hearing,  only the  involvement  of  John
Lindsay,  an ITDH  principal, in  negotiating  the collective
bargaining agreement at the heart of this litigation could be
thought of  as giving rise to, or  relating to, this cause of
action.   Id. at 1089.  Limiting our inquiry to this contact,
             
we then  determined that  the evidence  surrounding Lindsay's

                             -7-
                              7

          In  arguing  that  the  above  question  should  be

answered in  the  affirmative, plaintiffs  contend  that  our

analysis in 163 Pleasant Street  I has been rendered obsolete
                                  

by  additions to  the record which  occurred while  the first

appeal  was pending.   As  a result,  plaintiffs assert,  the

district  court's  uncritical   reliance  upon  our  previous

opinion  was   in  error.10     We  agree   with  plaintiffs'

position.

                    

involvement  was  insufficient  for  us  to  determine  "that
ITD[H], through  its  own affirmative  conduct,  purposefully
availed itself  of the privilege of  conducting activities in
Massachusetts.  . .  ."   Id. at  1090-91.   Central to  this
                             
determination was the lack of record evidence suggesting that
the  negotiations  over the  collective  bargaining agreement
and, a  fortiori, Lindsay's participation therein  took place
                
in  Massachusetts.  Id. at  1090.  Accordingly,  we held that
                       
the constitutionally required  minimum contacts between  ITDH
and Massachusetts  were not  present and declined  to address
the  question  of  reasonableness  in light  of  the  Gestalt
factors.  See id. at 1090 n.11.             
                 

10.  In response  to plaintiffs' argument, defendants  do not
attempt   to  demonstrate   that   the  current   record   is
insufficient to support an  exercise of personal jurisdiction
over  them.   Rather, defendants  essentially argue  (1) that
ITDH and ITD  should not  be held  liable, through  corporate
veil  piercing, for  PSC's contractual  obligations,  and (2)
that  the materials submitted to the district court on May 8,
1992,  were  submitted  after  the  order  of  dismissal  and
therefore should not be considered by us in this appeal.
     Though  defendants' first argument  ultimately may prove
meritorious,  it has no bearing on the question raised in the
instant  appeal.     Accordingly,  we  do   not  discuss  it.
Moreover, because, as will be  more fully explained infra, we
                                                         
find that the record was sufficient for the court to exercise
personal  jurisdiction  over ITDH  and  ITD  even before  the
documents submitted on May 8, 1992, were made a part thereof,
we need notreach the merits of defendants' second argument.  

                             -8-
                              8

          Where, as here, a  district court elects to dispose

of a Fed. R. Civ.  P. 12(b)(2) motion to dismiss for  lack of

personal   jurisdiction   without   holding  an   evidentiary

hearing,11 the  "prima  facie"  standard  should  govern  the

court's  review.   See  Boit, 967  F.2d  at 675;  Kowalski v.
                                                          

Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir.
                                    

1986).   Under  this standard,  it is  plaintiff's  burden to

demonstrate the existence of  "every fact required to satisfy

`both the  forum's long-arm  statute and the  [D]ue [P]rocess

[C]lause  of  the  Constitution.'"   Boit,  967  F.2d at  675
                                         

(quoting  U.S.S. Yachts, Inc. v. Ocean Yachts, Inc., 894 F.2d
                                                   

9, 11 (1st Cir. 1990)).  

          The prima facie showing must be based upon evidence

of specific facts set forth in the record.  Boit, 967 F.2d at
                                                

                    

11.  During the  course of oral  argument at  the August  13,
1991,  hearing on  ITDH's initial  Rule 12(b)(2)  motion, the
district court did make reference to certain affidavits which
had  been introduced  into the  record at  that time  and did
allow  counsel for  ITDH to  speak on  the issue  of personal
jurisdiction.  (Plaintiffs' counsel did not address the court
on this issue because the court found in plaintiffs' favor at
the conclusion of ITDH's presentation.)  Also, in determining
that  it  had  personal  jurisdiction over  ITDH,  the  court
indicated  that   it  so  found  by   "clear  and  convincing
evidence."  Therefore,  it appears that the August  13, 1991,
hearing  was a limited evidentiary hearing.  See Boit v. Gar-
                                                             
Tec  Products,  Inc.,  967  F.2d 671,  676  (1st  Cir.  1992)
                    
(evidentiary hearings need not  involve evidence taken orally
in  open court,  but  may  proceed  with all  evidence  being
introduced by  means of affidavits,  authenticated documents,
answers to  interrogatories or  requests for admissions,  and
depositions,  and   with   findings  being   made   under   a
preponderance-of-the-evidence-standard).     However,  it  is
apparent from the record that no evidentiary hearing was held
on the joint motion to dismiss filed by ITDH and ITD.   

                             -9-
                              9

675;  Kowalski, 787  F.2d at  9.   This means  that plaintiff
              

"`must go beyond the  pleadings and make affirmative proof.'"

Boit, 967 F.2d at 675 (quoting Chlebda v. H.E. Fortna & Bro.,
                                                             

Inc.,  609 F.2d  1022, 1024  (1st Cir.  1979)).   However, in
    

determining whether  the prima  facie demonstration has  been

made,  the district  court  is not  acting  as a  factfinder;

rather, it accepts properly supported proffers of evidence by

a plaintiff  as true and makes its ruling as a matter of law.

See Boit, 967 F.2d at 675;  see also Kowalski, 787 F.2d at 9.
                                             

Therefore,   appellate   review   of   such   a   ruling   is

nondeferential and plenary.  See Boit, 967 F.2d at 675.
                                     

          Leaving aside  the material which was  filed on May

8, 1992, see supra note 10, we believe that the effect of two
                  

additions to  the record made  by plaintiffs while  the first

appeal was  pending is such  that, applying  the prima  facie

standard,  the district  court should  have denied  the joint

motion to dismiss  filed by ITDH  and ITD.   First, in  their

amended  complaint,  plaintiffs had  made  the following  new

allegations:

          3. .  . .  [T]he  plaintiff retirees were
          employed  at the  defendant corporations'
          plant in New Bedford,  Massachusetts, the
          obligations  to  provide  insurance  were
          incurred   in   Massachusetts,  and   the
          termination of the insurance  giving rise
          to this claim occurred in this District.

          14.  The defendant [ITDH] of Scotland  is
          incorporated  in  Great  Britain and  was
          doing business as Morse Tool, Inc. in the
          Commonwealth  of  Massachusetts prior  to

                             -10-
                              10

          and up to the time of  the closure of its
          New Bedford facility  in January[]  1990.
          It   is  the  sole   shareholder  in  the
          defendant [PSC].

          15.   The defendant [ITD] of  Scotland is
          incorporated  in  Great  Britain and  was
          doing business as Morse Tool, Inc. in the
          Commonwealth  of  Massachusetts prior  to
          and up to the time of  the closure of its
          New Bedford Facility in January 1990.  It
          is owned and controlled by  the defendant
          ITDH.

          17.  At all relevant times the defendants
          constituted   an   integrated  enterprise
          and/or single employer doing  business in
          the Commonwealth of Massachusetts.

          18.  At all relevant times the defendants
          ITDH and/or ITD constituted the alter ego
          of the defendant [PSC].

          19.  At all relevant times the defendants
          ITDH  and/or  ITD  jointly  employed  the
          plaintiffs   along  with   the  defendant
          [PSC].

          20.  .  . .  The  most  recent collective
          bargaining  agreement between  plaintiffs
          and  defendant  corporations  covers  the
          period from May 1987  through May 1990. .
          . . [The collective bargaining agreement]
          was negotiated for  the defendants by  an
          agent  of the  defendant ITD,  acting for
          and on behalf of the defendant ITDH.

Moreover,  on April  16, 1992,  plaintiffs had  introduced an

affidavit  of Dennis Brady, a Union officer and member of the

Union   negotiating  team,  which   contained  the  following

assertions:

          3.    All the  negotiations  between [the
          Union] and [ITDH and ITD] occurred in New
          Bedford, Massachusetts. . . .

                             -11-
                              11

          5.  Raymond  Zemon [sic] was the  primary
          negotiator  of the  collective bargaining
          agreement.   He acted  on behalf of [ITDH
          and ITD]. . . .

          6.  During the negotiations Raymond Zemon
          [sic] would often make telephonic contact
          from  Massachusetts  with individuals  in
          Scotland    before   agreeing    to   any
          proposals. . . .12

          Simply put, we believe  that the combination of the

complaint amendments and the Brady affidavit is sufficient to

cure the  deficiency --  i.e., that  ITDH  had not  purposely

availed itself  of the privilege of  conducting activities in

Massachusetts  -- on which our holding in 163 Pleasant Street
                                                             

I was premised.   As noted above, see supra  note 9, the only
                                           

record  evidence before us in 163 Pleasant Street I which was
                                                   

even remotely  relevant to  the purposeful  availment inquiry

was  the fact that John Lindsay had some "involvement in" the

negotiation of the collective  bargaining agreement.  See 163
                                                             

Pleasant Street I,  960 F.2d  at 1090.   The  record did  not
                 

reveal  where Lindsay  was located  during the period  of his

involvement   Id.  Indeed,  the record did  not even indicate
                 

where the negotiations had taken place.  Id.
                                            

                    

12.  Further support  for the allegation  that the collective
bargaining agreement  between the Union and  PSC actually was
negotiated  by Raymond Zeman acting on behalf of ITDH and ITD
can be found in the agreement itself.  The first paragraph of
the  agreement  contains  the  following  provision:    "This
Agreement is  contingent upon  and will not  become effective
until  [PSC] is  purchased  by  Scottish interests  presently
represented by  Zeman International."  The  agreement then is
signed by Raymond Zeman on behalf of Zeman International. 

                             -12-
                              12

          After   remand,  however,  the  record  before  the

district court  was  significantly less  enigmatic than  that

before us  in 163  Pleasant Street  I.   It now  contained an
                                     

affirmative   allegation   that  the   collective  bargaining

agreement was negotiated  "for the defendants by  an agent of

ITD, acting for  and on  behalf of defendant  ITDH."13   More

significantly, the record also contained "affirmative proof,"

see Boit, 967 F.2d at 675, tending to support this allegation
        

and  plaintiffs' claim  that the  aforementioned negotiations

took place in the Commonwealth of Massachusetts.   

          We  think  that  this  is  sufficient.    If  true,

plaintiffs'  evidence tends  to show  that, at  the time  the

collective bargaining agreement between PSC and the Union was

being negotiated, (1)  ITDH and ITD were  actively engaged in

the process of  purchasing PSC, a Massachusetts  corporation,

(2) ITD, acting on behalf of  ITDH, had retained an agent  to

negotiate  the  agreement, the  efficacy  of  which was  made

contingent upon ITDH's and  ITD's subsequent purchase of PSC,

(3) the negotiations took place in Massachusetts, and (4) the

agent   often   called   "individuals   in   Scotland"   from

Massachusetts before agreeing to any proposals.  In our view,

such  activity  within  Massachusetts  cannot  be  viewed  as

                    

13.  As  our  earlier  opinion   noted,  the  contacts  of  a
corporation's agent obviously can  subject the corporation to
the  personal  jurisdiction  of  the  forum  in  which  those
contacts occur.  See id.
                        

                             -13-
                              13

"random, fortuitous,  or attenuated."  Cf.  Burger King Corp.
                                                             

v.  Rudzewicz, 471  U.S. 462,  475 (1985)  ("Th[e] purposeful
             

availment requirement  ensures that  a defendant will  not be

haled  into  a jurisdiction  solely  as a  result  of random,

fortuitous, or  attenuated contacts. . .  .") (quoting Keeton
                                                             

v.  Hustler Magazine,  Inc.,  465 U.S.  770,  774 (1984)  and
                           

World-Wide  Volkswagen Corp.  v. Woodson,  444 U.S.  286, 299
                                        

(1980))  (internal  quotation  marks  omitted).   Rather,  we

believe  that  it  is  more  accurately  characterized  as  a

deliberate  engagement  in   significant  activities   within

Massachusetts,   and  thus  a  purposeful  availment  of  the

privilege of  conducting activities within  the Commonwealth,

making involuntary  presence before  a Massachusetts  court a

reasonably foreseeable event.   See Burger King,  471 U.S. at
                                               

474-76.  Accordingly, we hold that plaintiffs have  met their

prima   facie  burden  of   demonstrating  the  existence  of

sufficient facts to meet the  second prong of the  tripartite

specific jurisdiction test announced in our previous opinion.

See 163 Pleasant Street I, 960 F.2d at 1089.14
                         

          This  conclusion  does not  end  our  inquiry.   As

previously  noted,  see  supra   note  9,  because  we  found
                              

                    

14.  Obviously,  the evidence  that Raymond  Zeman negotiated
the  agreement as an agent of ITD,  acting on behalf of ITDH,
is  also  sufficient,  under  the prima  facie  standard,  to
satisfy part  one  of the  tripartite  specific  jurisdiction
test: that the claim underlying the litigation arise  out of,
or relate to, ITDH's  and ITD's forum state activities.   See
                                                             
163 Pleasant Street I, 960 F.2d at 1089.
                     

                             -14-
                              14

insufficient proof of minimum contacts in 163 Pleasant Street
                                                             

I, we did not address whether subjecting ITDH to the personal
 

jurisdiction of Massachusetts would be reasonable in light of

the Gestalt  factors.  Nor did we  formally determine whether

ITDH  was  within the  reach  of  the Massachusetts  long-arm

statute.  Extending our query also to include ITD, we discuss

each question in turn.

          Once a  court has  determined that a  defendant has

purposefully  established minimum  contacts within  the forum

state, these contacts may  be considered in light  of certain

factors  to  determine  whether  the  assertion  of  personal

jurisdiction would  comport with  "fair play and  substantial

justice."     Burger   King,   471  U.S.   at  476   (quoting
                           

International Shoe, 326 U.S. at  320).  These Gestalt factors
                  

include:   (1) the defendant's  burden of appearing,  (2) the

forum state's  interest in adjudicating the  dispute, (3) the

plaintiff's  interest in  obtaining convenient  and effective

relief, (4)  the judicial system's interest  in obtaining the

most  effective resolution  of the  controversy, and  (5) the

common interests  of all sovereigns in  promoting substantive

social policies.   163 Pleasant  Street I, 960  F.2d at  1088
                                         

(citing Burger King, 471 U.S. at 477).
                   

          Application of  these  five factors  to  the  facts

before  us easily  yields  the conclusion  that the  district

court's exercise  of personal jurisdiction over  ITDH and ITD

                             -15-
                              15

would meet International  Shoe's "fair  play and  substantial
                              

justice" requirement.   While we do not doubt  that traveling

to Massachusetts  for purposes of defending  this action will

place a significant burden upon ITDH and ITD, we believe that

this burden  is  substantially outweighed  by  Massachusetts'

interest  in   adjudicating  this  dispute   and  plaintiffs'

interest in  obtaining convenient and effective  relief.  Cf.
                                                             

Asahi Metal Indus. Co.  v. Superior Court, 480 U.S.  102, 114
                                         

(1987) ("[O]ften the interests of the plaintiff and the forum

in the exercise of jurisdiction will justify even the serious

burdens  placed upon [an] alien defendant.").  In this era of

ever burgeoning  health care costs, Massachusetts clearly has

a  vital interest  in seeing  bargained-for health  insurance

benefits  provided  to  its  residents.    If  this  case  is

dismissed, many plaintiffs may be forced to rely  upon public

funds  to help defray health  care costs, which  fact in turn

will   place  an   increased   financial  burden   upon   the

Commonwealth.15  Moreover, in  light of the obvious costs  of

and obstacles to obtaining  insurance elsewhere, the  effects

upon plaintiffs  of  losing the  benefits  at issue  in  this

lawsuit are manifest and can hardly be overstated.

                    

15.  We note  that the cogent  and persuasive brief  filed on
behalf  of   plaintiffs   by  the   individual   members   of
Massachusetts'  congressional  delegation  as   amici  curiae
                                                             
speaks  volumes about  the  interest of  the Commonwealth  in
seeing this matter adjudicated before the district court.

                             -16-
                              16

          The fourth Gestalt criterion, the judicial system's

interest in  obtaining the  most effective resolution  of the

controversy, also  favors the retention  of jurisdiction over

this  dispute.   If this case  is dismissed,  it is  far from

clear that there  will be any judicial  resolution, let alone

the most effective judicial  resolution, of this controversy.

Even  if we  assume  that this  action  could be  brought  in

Scotland,  the  fact  remains  that  all  of  the  individual

plaintiffs,  many of  whom  are disabled  and/or of  advanced

years,  reside in  Massachusetts.   Moreover, it  is apparent

that most  of the  potential witnesses reside  nearer to  the

seat of the district court than to wherever the case might be

tried  in  Scotland.   Given  these facts,  the  logistics of

bringing suit in Scotland might prove insurmountable.  At any

rate,  whether  or not  the significant  logistical obstacles

could   be   overcome,   it   is   obvious  that   efficiency

considerations weigh heavily in favor of litigating this case

in Massachusetts.

          The final Gestalt factor,  the common interests  of

all sovereigns in promoting substantive social policies, does

not  support a contrary conclusion.  As an initial matter, we

note that defendants have not identified, nor can we discern,

any  substantive Scottish social  policy which  might counsel

against  an exercise of jurisdiction on  the facts before us.

More  importantly,  however,  while  we are  mindful  of  the

                             -17-
                              17

Supreme Court's admonition that courts should be "unwilling[]

to  find the serious burdens on an alien defendant outweighed

by  minimal interests  on the  part of  the plaintiff  or the

forum State[,]" Asahi Metal Industry, 480 U.S. at 115, we are
                                    

confident  that plaintiffs'  and Massachusetts'  interests in

litigating this  dispute before the district  court, far from

being minimal, are serious enough to outweigh any such social

policy.    Therefore,  we   conclude  that  the  exercise  of

jurisdiction  over ITDH and ITD is reasonable in light of the

Gestalt factors.

          Having  determined  that,  under  the  prima  facie

standard, plaintiffs  have made a sufficient  showing to pass

constitutional muster, we need  now only formally assert that

which we indicated was "likely" before:  plaintiffs have also

made a prima facie showing that ITDH and ITD are  amenable to

suit in  Massachusetts.   Without question, ITDH's  and ITD's

activities  during   the   negotiation  of   the   collective

bargaining agreement, see supra page 13, must, even under the
                               

narrowest possible construction of  the term, be construed as

a "transaction of business"  within Massachusetts.  Moreover,

plaintiffs'  cause   of  action   clearly  arose   from  this

transaction  of business.  Thus, ITDH and ITD fall within the

reach of the Commonwealth's long-arm statute.  See Mass. Gen.
                                                  

Laws. Ann. ch. 223A,   3(a).

                             -18-
                              18

          Before   concluding,  we  elaborate  upon  why  the

district court should not  have construed 163 Pleasant Street
                                                             

I   as  a  mandate  to  dismiss  ITDH  and  ITD  on  personal
 

jurisdiction grounds.16  We begin by reiterating that, at the

August  13,  1991,  hearing,  the  district  court's  initial

personal   jurisdiction  determination   was   made  at   the

conclusion   of  ITDH's   oral   presentation   and   without

plaintiffs' input.    See supra  note  11.   Therefore,  with
                               

regard  to the question  of personal jurisdiction, plaintiffs

never had a full opportunity (1) to address the court, either

orally or on  paper,17 (2) to introduce further  evidence, or

(3) to request discovery.  As a result, the  record before us

in 163 Pleasant Street I was incomplete.
                        

          Under the facts of this case, the incomplete nature

of the record prevented  any sort of conclusive determination

on  the personal jurisdiction issue  at the time 163 Pleasant
                                                             

                    

16.  In  so stating,  we  clarify  that  our comment  in  163
                                                             
Pleasant Street I that "[i]t follows inexorably that ITD[H]'s
                 
motion  to   quash  the   complaint  for  want   of  personal
jurisdiction should have been  granted,"  163 Pleasant Street
                                                             
I, 960 F.2d  at 1099, was not intended as  a directive to the
 
district  court, but  as an  assessment of  the record  as it
                                                             
stood when the original motion to  dismiss was filed.
                                                    

17.  We  note that ITDH  first moved  to dismiss  on personal
jurisdiction  grounds on  August 6, 1991,  a mere  seven days
before  the August 13, 1991, hearing.   We also note that the
fourteen day  period for  submitting an opposition  to ITDH's
motion  provided for by Rule 7.1(a)(2) of the Local Rules for
the  United  States  District   Court  for  the  District  of
Massachusetts  had  not yet  expired  when  the court  denied
ITDH's motion.

                             -19-
                              19

Street  I was  handed  down.   The jurisdictional  deficiency
         

which  informed the holding  in our previous  opinion did not

stem  from  either a  settled  factual  predicate or  legally

insufficient allegations,  but from  perceived  voids in  the

evidentiary landscape.   See 163 Pleasant Street  I, 960 F.2d
                                                   

at  1090.  As noted,  no discovery directed  at filling these

voids took  place.   Accordingly, 163  Pleasant Street I  can
                                                        

only    be   interpreted   as    holding   that   plaintiffs'

jurisdictional showing was insufficient to support  the entry

of the injunction  and contempt orders  against ITDH.18   See
                                                             

7-Pt. 2 James  W. Moore  et al., Moore's  Federal Practice   
                               

65.03[3],  at  65-28 (2d  ed. 1989)  ("A  court must  have in

personam  jurisdiction  over  the   party  against  whom  the

                    

18.  To  reinforce this point, we note that if, on the record
before  it,  the  district  court had  decided  the  personal
jurisdiction issue adversely  to plaintiffs without at  least
                            
affording them the opportunity  to respond to ITDH's argument
and/or to  request discovery, we almost  certainly would have
declined to affirm the district court's judgment and held the
ruling to be  an abuse of the court's discretion.   Cf. Boit,
                                                            
967 F.2d at  681 (refusal  to defer ruling  on Rule  12(b)(2)
motion  until  after there  has  been  discovery on  personal
jurisdiction issue can be  an abuse of discretion); Surpitsky
                                                             
v. Hughes-Keenan Corp., 362 F.2d 254, 255-56 (1st  Cir. 1966)
                      
(district  court  erred  in  refusing  to  allow  a  diligent
plaintiff  who  was a  stranger  to  a defendant  corporation
discovery on question of  personal jurisdiction); see also 5A
                                                          
Charles  A. Wright &  Arthur R. Miller,  Federal Practice and
Procedure   1351  at 256-59 (2d  ed. 1990) ("In  particularly
complex cases, . . . it  may be desirable to hold in abeyance
a  decision on  a  motion to  dismiss  for lack  of  personal
jurisdiction.  Doing  so will  enable the  parties to  employ
discovery on the jurisdictional issue, which might lead  to a
more accurate judgment than  one made solely on the  basis of
affidavits.").

                             -20-
                              20

injunction runs."); see also 163 Pleasant  Street I, 960 F.2d
                                                   

at  1084 ("`Given that  civil contempt is  designed to coerce

compliance with  the court's decree,  it is logical  that the

contempt  order itself  should fall with  a showing  that the

court  was   without  authority   to  enter  the   underlying

decree.'") (quoting Willy v. Coastal Corp., 112 S.  Ct. 1076,
                                          

1081 (1992)).  

          In  sum,  the   district  court  should  not   have

summarily  granted  ITDH's  and  ITD's  motion   to  dismiss.

Instead,  after remand,  it  should have  determined, on  the

record  then before it, whether it had jurisdiction over ITDH

and ITD.  In so doing, it should have proceeded in accordance

with one of the approaches  outlined in Boit.  See  Boit, 967
                                                        

F.2d at 675-78.

                             III.
                                 

                          CONCLUSION
                                    

          Because   plaintiffs  have   made  a   prima  facie

demonstration  of  every   fact  required  to   satisfy  both

Massachusetts' long-arm statute and the Due Process Clause of

the United  States Constitution, the district  court erred in

granting  the second motion to dismiss filed by ITDH and ITD.

Accordingly, we vacate the judgment of the district court and

remand this case for further proceedings.19

                    

19.  Having  found that  plaintiffs have  made a  prima facie
showing  that the  district  court had  personal jurisdiction
over  the  ITD companies,  we need  not  reach the  merits of

                             -21-
                              21

     Vacated and remanded.
                          

                    

plaintiffs' argument that alternative bases for the assertion
of jurisdiction over defendants exist in this matter.

                             -22-
                              22