25 CP LLC v. Firstenberg Mach. CV-09-80-PB 12/08/09 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
25 CP, LLC
v. Case N o . 09-cv-80-PB Opinion N o . 2009 DNH 185 Firstenberg Machinery Co. and Grifols USA, LLC
MEMORANDUM AND ORDER
25 C P , LLC has sued Firstenberg Machinery Company, Inc. and
Grifols USA, LLC for breach of contract. Firstenberg and Grifols
each now move to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(2), claiming that this court does not have
personal jurisdiction over them. For the reasons set forth
below, I deny Firstenberg’s motion and deny Grifols’ motion
without prejudice to its right to reinstate the motion, if
appropriate, after jurisdictional discovery has been completed.
I. BACKGROUND
A. The Parties and Other Relevant Entities
25 CP is a New Hampshire limited liability company whose
primary business purpose is the “[o]wnership and management of
real estate and related activities.” (Certification of Formation, Doc. N o . 13-4, at 4.) Firstenberg is a California
corporation that sells used and new biomedical parts and
machinery. (Firstenberg Aff., Doc. N o . 13-3, ¶¶ 2-3.) Grifols,
a biomedical research and development institute, is a Florida
limited liability company with a principal place of business in
Los Angeles, California. (Bill in Equity for Specific
Performance and Damages (hereinafter “Complaint”), Doc. N o . 1-2,
¶ 8 ; Stopher Aff., Doc. N o . 14-3, ¶ 3.)
25 CP alleges that it contracted (through its representative
Matthew Halvorsen) with Firstenberg (through Firstenberg’s
employee Victor Gonzales) to purchase a Hull Lyophilizer (“the
Hull”), a large freeze-drying unit.1 (See Mem. of Law in Supp.
1 Neither party makes any specific allegations concerning the location from which Halvorsen conducted business. It appears, however, to be undisputed that the communications Gonzales transmitted to Halvorsen were transmitted to Halvorsen in New Hampshire. (See, e.g., Mem. of Law in Supp. of Pl.’s Objection to Firstenberg’s Mot. to Dismiss, Doc. N o . 16-2, at 7 (“Firstenberg emailed an offer to sell the Hull to Mr. Halvorsen in New Hampshire.) (emphasis added).) Three additional documents suggest that Halvorsen was operating out of New Hampshire: (1) an invoice Gonzales emailed to Halvorsen, which included the line, “Attention: Matthew Halvorsen” and noted that the Hull was being sold to Lyophilization Services of New England, a company with a New Hampshire address and phone number; (2) a letter Halvorsen mailed Gonzales, whose letterhead included a New Hampshire address; and (3) a letter Halvorsen mailed to the president of Firstenberg, with the same letterhead address. (See Gonzales Aff. Doc. N o . 13-5, at 6, 8 ; Firstenberg Aff. Ex. B , Doc. N o . 13-3, at 7-8.) Thus, I assume that Halvorsen made or
-2- of Pl.’s Objection to Firstenberg’s Mot. to Dismiss, Doc. N o . 16-
2 , at 2-3; 25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex.
A , Doc. N o . 16-3, at 2 2 ; Pl.’s O b j . to Firstenberg’s Mot. to
Dismiss, Doc. N o . 16-1, at 1.) 25 CP alleges that Grifols was
the “undisclosed principal owner” of the Hull and that
Firstenberg acted as Grifols’ agent in attempting to sell the
Hull. (See Compl., Doc. N o . 1-2, ¶ 2 1 ; Pl.’s Objection to
Firstenberg’s Mot. to Dismiss, Doc. N o . 16-1, at 1.) During
Halvorson’s negotiations with Gonzales, Gonzales believed that
Halvorsen was representing a fourth company, Lyophilization
Services of New England (“LSNE”), a New Hampshire corporation
that is not a party to this suit. (See Gonzales Aff., Doc. N o .
received all the relevant communications in New Hampshire. If Firstenberg and Grifols have some basis to challenge this assumption, they can move to reconsider this order denying their motions to dismiss. 2 25 CP has provided the emails and letter I cite in this order but has not provided an affidavit that demonstrates their authenticity. (See Grifols’ Reply to 25 CP’s Objection to Mot. to Dismiss for Lack of Personal Jurisdiction, Doc. N o . 2 1 , at 2- 3.) Firstenberg has provided some, but not all, of the same documents in authenticated form. (See attachments to Firstenberg’s Mot. to Dismiss, Doc. N o . 13.) I will assume that 25 CP’s emails and letter are authentic provided that 25 CP can produce an affidavit confirming their authenticity within ten days. If a satisfactory affidavit is not timely filed, Firstenberg and Grifols may file motions to reconsider the denial of their motions to dismiss.
-3- 13-5, ¶¶ 2-5.) 3
B. The Alleged Contract and Breach
On December 3 , 2008, Halvorsen received an unsolicited email
from Gonzales that listed equipment Firstenberg was selling.
(Compl., Doc. N o . 1-2, ¶ 1 0 ; see also 25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. A , Doc. N o . 16-3, at 3-6.)
Halvorsen wrote back to Gonzales and expressed interest in two
pieces of equipment. (Compl., Doc. N o . 1-2, ¶ 1 1 ; see also
25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex. A , Doc.
No. 16-3, at 3.) Gonzales responded by providing information on
both pieces. (Compl., Doc. N o . 1-2, ¶ 1 2 ; see also 25 CP’s
Objection to Firstenberg’s Mot. to Dismiss Ex. A , Doc. N o . 16-3,
at 2.) On December 4 , Halvorsen again expressed interest in one
of the two pieces of equipment, the Hull. (Compl., Doc. N o . 1-2,
¶ 13.) In response, Gonzales emailed Halvorsen pictures of and
information about the Hull. (Id.; see also 25 CP’s Objection to
3 Although 25 CP does not explicitly deny that Halvorsen was initially acting as a representative of LSNE, 25 CP appears to contend that 25 C P , and not LSNE, eventually contracted with Firstenberg to buy the Hull. (See Firstenberg Aff. Ex. B , Doc. No. 13-3, at 7-8 (a letter Halvorsen sent to the President of Firstenberg after the alleged breach, noting that “[LSNE is] not a party to the contract [for the Hull] between 25 C P , LLC and Firstenberg Machinery, Co.”).)
-4- Firstenberg’s Mot. to Dismiss Ex. B , Doc. N o . 16-4.)
On December 5 , Gonzales and Halvorsen negotiated a price
over the telephone and Gonzales emailed an invoice to Halvorsen
to confirm the price. (See Compl., Doc. N o . 1-2, ¶¶ 15-16;
25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex. C , Doc.
No. 16-5, at 2-3.) The invoice noted that the purchaser was
“Lyophilization Services of New England,” or LSNE. (See 25 CP’s
Objection to Firstenberg’s Mot. to Dismiss Ex. C , Doc. N o . 16-5,
at 3.) On December 8 , following additional telephone
conversations, Gonzales emailed Halvorsen an updated invoice.
(Compl., Doc. N o . 1-2, ¶ 17.) The updated invoice differed from
the initial one in that it required “25% [p]ayment with order,”
with the remainder due before shipping, instead of simply
requiring the entire payment before shipping. (Compl., Doc. N o .
1-2, ¶ 1 8 ; see also 25 CP’s Objection to Firstenberg’s Mot. to
Dismiss Ex. C , Doc. N o . 16-5, at 5.) Both invoices noted that
the buyer was responsible for rigging and shipping the unit.
(See Compl., Doc. N o . 1-2, ¶ 1 8 ; 25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. C , Doc. N o , 16-5, at 3 , 5.)
On December 1 0 , Halvorsen sent Gonzales a check for $47,500
(twenty-five percent of the total purchase price), and noted in
-5- an accompanying letter that this check would “confirm the
purchase” of the Hull. (Compl., Doc. N o . 1-2, ¶ 1 9 ; 25 CP’s
Objection to Firstenberg’s Mot. to Dismiss Ex. D, Doc. N o . 16-6.)
The check was drawn on 25 CP’s account at Centrix Bank & Trust,
located in Bedford, New Hampshire, and listed a New Hampshire
address for 25 CP. (See Gonzales Aff. Ex. B., Doc. N o . 13-5, at
9.) Halvorsen requested that the unit be available for shipping
within twenty days of December 1 1 . (See Compl., Doc. N o . 1-2,
¶ 1 9 ; 25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex. D,
Doc. N o . 16-6.) According to Halvorsen’s bank, Firstenberg
cashed the check on or before December 1 2 . (See Compl., Doc. N o .
1-2, ¶ 20.)
On December 1 6 , Gonzales emailed Karl Miller, whose company
was going to rig the Hull at Halvorsen’s expense, and asked him
to contact Halvorsen, who was copied, directly regarding
shipping. (See Compl., Doc. N o . 1-2, ¶ 2 1 ; 25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. E , Doc. N o . 16-7, at 2.) In
that same email, Gonzales mentioned that he “still [had] not
received a confirmation as to when Grifols [would] have the
utilities disconnected from the machine.” (25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. E , Doc. N o . 16-7, at 2 ; see
-6- also Compl., Doc. N o . 1-2, ¶ 21.) Gonzales also mentioned that
he thought the unit would likely be shipped after January 1 ,
2009. (See 25 CP’s Objection to Firstenberg’s Mot. to Dismiss
Ex. E , Doc. N o . 16-7, at 2-3.) Halvorsen then emailed Gonzales
“expressing a desire to file a UCC notice on the Hull 140.”
(Compl., Doc. N o . 1-2, ¶ 2 3 ; see also 25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. E , Doc. N o . 16-7, at 2.)
Gonzales replied by saying, among other things, that Firstenberg
had received Halvorsen’s deposit and “[would] send out an
agreement by the end of [the] week covering the purchase of the
machine[,] including a refund of the deposit if the purchase
[could not] be concluded.” (25 CP’s Objection to Firstenberg’s
Mot. to Dismiss Ex. E , Doc. N o . 16-7, at 2 ; see also Compl., Doc.
No. 1-2, ¶ 23(a)-(b).)
Finally, on December 1 7 , Gonzales called Halvorsen to
explain that the seller was removing the Hull from the market and
that Halvorsen’s deposit would be returned. (Compl., Doc. N o . 1-
2 , ¶ 24.) 25 CP alleges that “[a]t the time of receipt of the
updated invoice [on December 8 ] , both 25 C P , LLC and Firstenberg
had entered into a valid contract for the sale of the Hull” and
that “[r]eceipt and deposit of the $47,500 deposit check by
Firstenberg made the contract binding and required performance by
-7- both parties[:] tender of the Hull . . . by Firstenberg and
final payment by 25 C P , LLC.” (Id. ¶ 25.) Thus, 25 CP alleges,
Firstenberg breached the contract when it failed to tender the
Hull.
II. STANDARD OF REVIEW
When a defendant contests personal jurisdiction under Rule
12(b)(2), the plaintiff bears the burden of demonstrating a basis
for asserting jurisdiction. Hannon v . Beard, 524 F.3d 275, 279
(1st Cir. 2008), cert. denied, 129 S . C t . 726 (2008). Because I
have not held an evidentiary hearing, 25 CP need only make a
prima facie showing that the court has personal jurisdiction over
Firstenberg and Grifols. See Sawtelle v . Farrell, 70 F.3d 1381,
1386 n.1 (1st Cir. 1995) (citing United Elec. Radio & Mach.
Workers of America v . 163 Pleasant Street Corp., 987 F.2d 3 9 , 43
(1st Cir. 1993)).
To make a prima facie showing of jurisdiction, a plaintiff
may not rest upon the pleadings. Rather, the plaintiff must
“adduce evidence of specific facts” that support its
jurisdictional claim. See Foster-Miller, Inc. v . Babcock &
Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995). I do not act as
a factfinder when considering whether a plaintiff has made a
-8- prima facie showing of personal jurisdiction. Rather, I
determine “whether the facts duly proffered, [when] fully
credited, support the exercise of personal jurisdiction.”
Rodriguez v . Fullerton Tires Corp., 115 F.3d 8 1 , 84 (1st Cir.
1997). I may also “add to the mix facts put forward by the
defendants, to the extent that they are uncontradicted.” Mass.
Sch. of Law at Andover, Inc. v . Am. Bar Ass’n, 142 F.3d 2 6 , 34
(1st Cir. 1998). While the prima facie standard is liberal, and
I construe the facts offered by the plaintiff in the light most
favorable to its claim, I need not “‘credit conclusory
allegations or draw farfetched inferences.’” Id. (quoting
Ticketmaster-New York, Inc. v . Alioto, 26 F.3d 201, 203 (1st Cir.
1994)).
III. ANALYSIS
Federal Rule of Civil Procedure 4(k)(1)(A) provides that
“[s]erving a summons or filing a waiver of service establishes
personal jurisdiction over a defendant . . . who is subject to
the jurisdiction of a court of general jurisdiction in the state
where the district court is located.” Fed. R. Civ. P.
4(k)(1)(A). Thus, when assessing personal jurisdiction over a
non-resident defendant in a diversity of citizenship case such as
-9- this one, the federal court “‘is the functional equivalent of a
state court sitting in the forum state.’” Sawtelle, 70 F.3d at
1387 (quoting Ticketmaster, 26 F.3d at 2 0 4 ) . Because New
Hampshire’s relevant long-arm statute, N.H. Rev. Stat. Ann.
§ 293-A:15.10, authorizes jurisdiction to the full extent
permitted by the Federal Constitution, the sole inquiry in this
case is “whether the exercise of personal jurisdiction comports
with federal constitutional standards.” Sawtelle, 70 F.3d at
1388.
The Fourteenth Amendment’s Due Process Clause precludes a
court from asserting jurisdiction over a defendant unless “the
defendant’s conduct and connection with the forum State are such
that [it] should reasonably anticipate being haled into court
there.” World-Wide Volkswagen Corp. v . Woodson, 444 U.S. 286,
297 (1980). The “constitutional touchstone” for personal
jurisdiction is “whether the defendant purposefully established
‘minimum contacts’ in the forum State.” Burger King Corp. v .
Rudzewicz, 471 U.S. 462, 474 (1985) (quoting Int’l Shoe C o . v .
Washington, 326 U.S. 310, 316 (1945)). The inquiry into “minimum
contacts” is necessarily fact-specific, “involving an
individualized assessment and factual analysis of the precise mix
of contacts that characterize each case.” Pritzker v . Yari, 42
-10- F.3d 5 3 , 60 (1st Cir. 1994). A defendant cannot be subjected to
the forum state’s jurisdiction based solely on “random,
fortuitous, or attenuated” contacts. Burger King, 471 U.S. at
475 (internal quotations omitted). Rather, “‘it is essential in
each case that there be some act by which the defendant
purposefully avails itself of the privilege of conducting
activities within the forum State, thus invoking the benefits and
protections of its laws.’” Id. (quoting Hanson v . Denckla, 357
U.S. 235, 253 (1958)).
A court may exercise authority over a defendant by means of
either general or specific jurisdiction. Northern Laminate
Sales, Inc. v . Davis, 403 F.3d 1 4 , 24 (1st Cir. 2005). General
jurisdiction exists over a defendant who has maintained
“continuous and systematic” activity in a forum sufficient to
establish jurisdiction in that state over all matters including
matters unrelated to the defendant’s contacts to the forum state.
Id. (citing Phillips Exeter Acad. v . Howard Phillips Fund, Inc.,
196 F.3d 284, 288 (1st Cir. 1999)). In contrast, specific
jurisdiction is narrower in scope and exists only when the cause
of action arises from or relates to the defendant’s contacts with
the forum state. Id. 25 CP argues only that this court should
-11- exercise specific jurisdiction over Firstenberg and Grifols.4 In
the First Circuit, “the constitutional analysis [regarding
specific jurisdiction] is divided into three categories:
relatedness, purposeful availment, and reasonableness.” Phillips
v . Prairie Eye Ctr., 530 F.3d 2 2 , 27 (1st Cir. 2008), cert.
denied, 129 S . C t . 999 (2008); Daynard v . Ness, Motley, Loadholt,
Richardson & Poole, P.A., 290 F.3d 4 2 , 60 (1st Cir. 2002). In
order to satisfy its burden and establish personal jurisdiction,
“[t]he plaintiff must demonstrate that each of these three
requirements is satisfied.” Prairie Eye Ctr., 530 F.3d at 2 7 .
In a contract action such as 25 CP’s, the mere existence of
a contractual relationship between an out-of-state defendant and
a forum-state plaintiff is insufficient, in itself, to establish
jurisdiction in the plaintiff’s home forum. See Burger King, 471
U.S. at 478; Phillips Exeter, 196 F.3d at 290; Ganis Corp. of
Cal. v . Jackson, 822 F.2d 194, 197 (1st Cir. 1987); Bond Leather
4 Firstenberg argues in its reply memorandum that 25 CP is essentially asking this court to exercise general jurisdiction over Firstenberg when it argues that Firstenberg’s contacts with LSNE create jurisdiction over Firstenberg in 25 CP’s suit. (See Firstenberg’s Reply to 25 CP’s Objection to Mot. to Dismiss, Doc No. 2 0 , at 2.) Firstenberg mischaracterizes the situation. 25 CP is requesting that this court exercise specific personal jurisdiction on the basis of Firstenberg’s contacts with Halvorsen, who was associated with both 25 CP and LSNE.
-12- Co., Inc. v . Q.T. Shoe Mfg. Co., Inc., 764 F.2d 928, 933-34 (1st
Cir. 1985). Under the “contract-plus” analysis adopted by the
Supreme Court in Burger King, the contract between the parties is
merely an intermediate step in an ongoing process. See United
Elec., Radio and Mach. Workers of Am. v . 163 Pleasant Street
Corp., 960 F.2d 1080, 1090 (1st Cir. 1992) [hereinafter Pleasant
St. I ] (citing Burger King, 471 U.S. at 4 7 9 ) , appeal after
remand, 987 F.2d 39 (1st Cir. 1993); Ganis, 822 F.2d at 197
(same). Accordingly, to determine whether Firstenberg and
Grifols purposefully established minimum contacts with New
Hampshire, I must evaluate the parties’ “‘prior negotiations and
contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing.’” Phillips
Exeter, 196 F.3d at 290 (quoting Burger King, 471 U.S. at 4 7 9 ) .
Moreover, I must make my assessment of Firstenberg and Grifols’
New Hampshire contacts in light of “all of the communications and
transactions between the parties, before, during and after the
consummation of the contract.” Ganis, 822 F.2d at 197. 5 With
5 Some cases apply the “contract-plus” analysis when evaluating contacts under the relatedness prong. See, e.g., GT Solar Inc. v . Goi, 2009 DNH 156, 2 7 . Others apply it when discussing the purposeful availment prong. See, e.g., Raymarine, Inc. v . Argonaut Computer, Inc., 2002 DNH 147, 14 (D.N.H. 2002). I refer to the pre-contract communications between 25 CP and
-13- these principles in mind, I apply the tripartite test for
specific jurisdiction to Firstenberg after briefly introducing
Firstenberg’s arguments against the exercise of specific
jurisdiction. I then discuss whether this court may impute
Firstenberg’s contacts to Grifols for the purpose of exercising
personal jurisdiction over Grifols.
A. Personal Jurisdiction over Firstenberg
Firstenberg essentially argues that any contacts it may have
had with New Hampshire were not “related” to 25 CP’s claims in
this case because those claims arise from a contract Firstenberg
made with LSNE, not 25 CP. Firstenberg, however, does not cite
any authority or reasoned argument in support of the proposition
that a seller is not subject to jurisdiction in a breach of
contract action brought by a buyer where the seller negotiates
with a representative in the forum state (Halvorsen), and
believes he is contracting with one company (LSNE) in the forum
state but gets paid by another company (25 CP) in the forum
state. Thus, the fact that Gonzales thought that his contacts
culminated in a contract with LSNE rather than 25 CP does not
prohibit this court from exercising personal jurisdiction.
Firstenberg in both sections, as they are relevant to both relatedness and purposeful availment.
-14- Instead, if Gonazales’ contacts with Halvorsen meet the three-
pronged First Circuit test, I may assert personal jurisdiction over Firstenberg.6
1. Relatedness
“The evidence produced to support specific jurisdiction must
show that the cause of action either arises directly out o f , or
is related t o , the defendant’s forum-based contacts.” Harlow v .
Children’s Hosp., 432 F.3d 5 0 , 60-61 (1st Cir. 2005). In a
contract case, the court must consider whether the defendant’s
forum-based activities were instrumental in the formation or
breach of the contract. Phillips Exeter, 196 F.3d at 289; see
also Mass. Sch. of Law, 142 F.3d at 35 (formation); Pleasant S t .
I , 960 F.2d at 1089 (same).
6 Firstenberg also argues that LSNE is a required party to this suit under Federal Rule of Civil Procedure 19(a) because “LSNE [was] the only entity with whom FMC was attempting to negotiate the purchase of the Hull.” (See Firstenberg’s Mem. of Law in Supp. of Its Mot. to Dismiss, Doc. N o . 13-2, at 8.) This argument is irrelevant to the question of whether personal jurisdiction exists. Firstenberg may move to add LSNE as a party, or to dismiss 25 CP’s claims, if it believes that these claims have merit. In addition, Firstenberg briefly argues that 25 CP’s claim is barred by the Statute of Frauds because Firstenberg never signed a writing “that constitutes a contract to sell the Hull Freeze Dryer to 25 CP.” (See id. at 1 , 8.) Firstenberg may assert this argument in a motion to dismiss for failure to state a claim, but the argument is irrelevant here.
-15- A determination of relatedness begins with an identification
of all of the defendant’s alleged contacts with the forum state.
United States v . Swiss Am. Bank, 274 F.3d 610, 621 (1st Cir.
2001) (reasoning that there can be “no requisite nexus between
the contacts and the cause of action if no contacts exist”).
Here, Firstenberg is a California corporation with a principal
place of business in Richmond, California. (See Firstenberg’s
Mem. of Law in Supp. of Its Mot. to Dismiss, Doc. N o . 13-2, at
2.) Firstenberg does not maintain a branch office, telephone
listing, or mailing address in New Hampshire, nor does it have
any real or personal property there. (Id.) None of
Firstenberg’s directors, officers, or employees reside, hold
meetings, or attend conferences in New Hampshire. (Id.)
Firstenberg does not advertise in publications that target New
Hampshire consumers. (Id.) Firstenberg does not employ any New
Hampshire residents to market, distribute, or service its
products. (Id.)
Firstenberg did, however, direct multiple communications, by
telephone and email, into New Hampshire through its employee,
Gonzales. Telephone calls and letters clearly constitute
contacts for jurisdictional purposes. See Sawtelle, 70 F.3d at
1389-90; Mass. Sch. of Law, 142 F.3d at 3 6 ; Swiss Am. Bank, 274
-16- F.3d at 622. Courts have considered email messages “contacts” as
well. See, e.g., GT Solar Inc., v . Goi, 2009 DNH 156, 27 (D.N.H.
2009); Trade Wings, LLC v . Technetic, Inc., 2002 DNH 182, 8-9 (D.N.H. 2002). 7
These telephone and email contacts were instrumental to the
formation of the alleged contract at issue here. On December 3 ,
Gonzales emailed Halvorsen with information about equipment for
sale. (See 25 CP’s Objection to Firstenberg’s Mot. to Dismiss
Ex. A , Doc. N o . 16-3, at 3.) Halvorsen emailed to express
interest in two units and Gonzales replied with more information
on these units. (See id. at 2-3.) The Hull was priced at
$330,000. (See id. at 2.) The next day, after Halvorsen
expressed continued interest in the Hull, Gonzales emailed
7 The First Circuit has noted that “there is a natural blurring of the relatedness and purposeful availment inquiries in cases . . . in which the alleged contacts are less tangible than physical presence,” and that “in such circumstances, an inquiring court must determine the extent to which the defendant directed an out-of-state activity at the forum state in order to ascertain whether the activity can be termed a contact at all.” Phillips Exeter, 196 F.3d at 289. Here, Gonzales called Halvorsen in New Hampshire before sending the first of the emails relevant in this case. (See 25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex. A , Doc. N o . 16-3, at 3.) I assume that Gonzales called a number with a “603" New Hampshire area code because Firstenberg has not contended otherwise. Thus, I assume that Gonzales knew that Halvorsen was located in New Hampshire when he sent the first email, and that sending the email therefore constitutes a contact.
-17- Halvorsen photographs of the machine and information about its
previous use. (See Compl., Doc. N o . 1-2, § 1 3 ; see also 25 CP’s
Objection to Firstenberg’s Mot. to Dismiss Ex. B , Doc. N o . 16-4.)
On December 5 , after several telephone conversations, Gonzales
emailed Halvorsen an invoice for the Hull, priced at $190,000.
(Compl., Doc. N o . 1-2, § 1 5 ; see also 25 CP’s Objection to
Firstenberg’s Mot. to Dismiss Ex. C , Doc. N o . 16-5, at 2-3.) On
December 8 , following additional telephone conversations,
Gonzales emailed Halvorsen an updated invoice. (Compl., Doc. N o .
1-2, ¶ 17.) The updated invoice differed from the initial one in
that it required “25% [p]ayment with order” instead of simply
requiring the entire payment before shipping. (Compl., Doc. N o .
1-2, ¶ 1 8 ; see also 25 CP’s Objection to Firstenberg’s Mot. to
Dismiss Ex. C , Doc. N o . 16-5, at 5.) On December 1 0 , Halvorsen
sent Gonzales a check for $47,500 from 25 CP that was drawn on a
New Hampshire bank and listed a New Hampshire address for 25 CP.
Clearly, if a contract resulted here, Gonzales’ telephone
calls with and emails to Halvorsen were instrumental in its
formation. Halvorsen became aware that the Hull was available
because Gonzales emailed him. Halvorsen learned the initial
price of the Hull in the same way. All negotiations between
Halvorsen and Gonzales appear to have taken place over the phone,
-18- and all prices and terms were confirmed via email.
Firstenberg correctly points out that it offered the Hull
for sale “as i s , where is,” and if it breached a contract, that
breach would have taken place in California, where it allegedly
accepted payment and then failed to perform. (See Firstenberg’s
Reply to 25 CP’s Objection to Mot. to Dismiss, Doc. N o . 2 0 , at 3-
4 ) ; Phillips Exeter, 196 F.3d at 291 (“[A] contract arguably is
breached where a promisor fails to perform.”) That Firstenberg’s
activities in California were instrumental to the alleged breach,
however, does not prevent this court from exercising personal
jurisdiction over him. See Cambridge Literary Props., Ltd. v . W .
Goebel Porzellanfabrik G.m.b.H. & C o . Kg., 295 F.3d 5 9 , 65 (1st
Cir. 2002) (“That events elsewhere also bear upon the claim . . .
does not negate the existence of minimum . . . contacts related
to the claim.”); Phillips Exeter, 196 F.3d at 291 (location of
breach not dispositive). Thus, because Firstenberg’s contacts
with New Hampshire were instrumental to the formation of the
alleged contract, those contacts are sufficiently “related” to
satisfy the first prong of the three-part test.8
8 Firstenberg’s final attack on 25 CP’s “relatedness” argument is misleading and irrelevant. 25 CP cites the Restatement (Third) of Agency § 6.02 (2006) in its discussion of “relatedness” for the proposition that when an agent makes a
-19- 2. Purposeful Availment
Under the second element of the tripartite test, I must
determine whether Firstenberg’s forum-related contacts constitute
a purposeful availment of the privilege of conducting activities
in New Hampshire, thereby invoking the benefits and protections
afforded by New Hampshire’s laws. See Burger King, 471 U.S. at
475-76; Phillips Exeter, 196 F.3d at 288; Nowak v . Tak How
Investments, Ltd., 94 F.3d 708, 712-13 (1st Cir. 1996). The
purposeful availment requirement focuses on “whether a defendant
has ‘engaged in any purposeful activity related to the forum that
contract on behalf of an unidentified principal, the principal, agent, and third party are all generally parties to the contract. (See Mem. of Law in Supp. of Pl.’s Objection to Firstenberg’s Mot. to Dismiss, Doc. N o . 16-2, at 8-9 (asserting that Firstenberg’s contacts with Halvorsen led to a contract between 25 CP (the third party), Grifols (the unidentified principal), and Firstenberg (the agent)).) Firstenberg argues that 25 CP is trying to assert that it was an unidentified principal and LSNE was its agent, and then argues that 25 CP was not “unidentified” because Firstenberg had no notice that 25 CP existed when Firstenberg was negotiating with Halvorsen. (See Firstenberg’s Reply to 25 CP’s Objection to Mot. to Dismiss, Doc. N o . 2 0 , at 4.) 25 C P , however, was not describing itself as the “unidentified principal” in the passage of its objection that Firstenberg cites; rather, it was describing Grifols as the unidentified principal. If there is a principal-agent relationship between 25 CP and LSNE, it appears that it would be one of agent and undisclosed principal because, as Firstenberg points out, Firstenberg had no notice of 25 CP’s existence. See Restatement (Third) of Agency § 1.04 (2006). In any case, the fact that 25 CP was an undisclosed principal has no bearing upon whether this court has personal jurisdiction over Firstenberg.
-20- would make the exercise of jurisdiction fair, just, or
reasonable.’” Sawtelle, 70 F.3d at 1391 (quoting Rush v .
Savchuk, 444 U.S. 320, 329 (1980)). Its function is to ensure
“that personal jurisdiction is not premised solely upon a
defendant’s ‘random, isolated, or fortuitous’ contacts with the
forum state.” Id. (quoting Keeton v . Hustler Magazine, Inc., 465
U.S. 770, 7 7 4 ) .
Purposeful availment rests on two cornerstones:
voluntariness and foreseeability. See Sawtelle, 70 F.3d at 1391-
93. First, the defendant’s contacts with the forum state must be
voluntary. See Nowak, 94 F.3d at 716. This requirement is not
satisfied when those contacts are “based on the unilateral
actions of another party or a third person.” Id. Here,
Firstenberg claims that its only contacts with 25 CP were based
on 25 CP’s unilateral act of sending Firstenberg a check for the
deposit due on the Hull. (See Firstenberg’s Mem. of Law in Supp.
of Its Mot. to Dismiss, Doc. N o . 13-2, at 7.) This argument is a
red herring. Gonzales emailed Halvorsen, a representative of
LSNE and 25 C P , on multiple occasions. These contacts were not
based on the unilateral actions of 25 CP. Although it is unclear
whether Gonzales or Halvorsen initiated the telephone calls
between the two, Firstenberg does not claim that these
-21- conversations were based on the unilateral actions of 25 CP.
In addition, “[e]ven if a defendant’s contacts with the
forum are deemed voluntary, the purposeful availment prong of the
jurisdictional test investigates whether the defendant benefitted
from those contacts in a way that made jurisdiction foreseeable.”
Phillips Exeter, 196 F.3d at 292 (citing Ticketmaster, 26 F.3d at
207). An exercise of personal jurisdiction over a nonresident
defendant is foreseeable, and therefore appropriate, “where the
defendant purposefully derives economic benefits from its forum-
state activities,” Nowak, 94 F.3d at 717, or makes “a purposeful
decision . . . to ‘participate’ in the local economy,” Bond
Leather, 764 F.2d at 933-34. Similarly, the assertion of
personal jurisdiction over a nonresident defendant is foreseeable
when that defendant has reached out to establish a continuing
relationship or obligation between itself and a resident of the
forum state. See Burger King, 471 U.S. at 473, 476; Sawtelle, 70
F.3d at 1393. Here, Firstenberg, through Gonzales, reached out
to a New Hampshire resident in order to derive economic benefit.
Gonzales called and emailed Halvorsen, in New Hampshire, to
solicit business.9 This solicitation led to negotiations and an
9 The First Circuit has noted that it may be difficult to prove “purposeful availment” when the defendant has emailed the
-22- alleged contract to sell the Hull for $190,000, no small sum.
The invoice Gonzales sent Halvorsen to reflect their agreement
included a New Hampshire address for LSNE, the listed buyer.
Thus, even if Firstenberg thought that LSNE was purchasing the
Hull, it should have foreseen that it would be subject to suit in
New Hampshire if it breached the alleged contract.
3. Reasonableness
I must consider the reasonableness of the exercise of
jurisdiction over Firstenberg in light of certain gestalt
factors. Daynard, 290 F.3d at 6 2 .
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 interstate judicial system’s interest in obtaining the most efficient resolution of the controversy; and [5] the shared interest of the several States in furthering fundamental substantive social policies.
Northern Laminate, 403 F.3d at 26 (citing Burger King, 471 U.S.
at 4 7 7 ) . “The gestalt factors rarely seem to preclude
jurisdiction where relevant minimum contacts exist,” Cambridge
forum state because, unlike a letter, an email requires no physical address. See Prairie Eye Ctr., 530 F.3d at 28 n.3. The fact that Gonzales called Halvorsen in New Hampshire before emailing him, presumably at a number with a “603" area code, shows that Gonzales knew that he was emailing an individual in New Hampshire. (See 25 CP’s Objection to Firstenberg’s Mot. to Dismiss Ex. A , Doc. N o . 16-3, at 3.)
-23- Literary Props., 295 F.3d at 6 6 , and this case is no exception.
As to the first factor, it is clearly more burdensome for
Firstenberg to appear in New Hampshire than to appear in
California. However, this factor “is only meaningful where a
party can demonstrate some kind of special or unusual burden.”
Pritzker, 42 F.3d at 6 4 . Firstenberg has demonstrated no such
burden.
The second and third factors weigh in favor of exercising
jurisdiction over Firstenberg. “The purpose of the inquiry
[regarding the second factor] is not to compare the forum’s
interest to that of some other jurisdiction, but to determine the
extent to which the forum has an interest.” Foster-Miller, 46
F.3d at 151. New Hampshire clearly has an interest in protecting
its businesses from breaches of contract. Analyzing the third
factor requires according 25 CP’s choice of forum a degree of
deference. Id. 25 CP’s interest in obtaining convenient and
effective relief is clearly better served by allowing the company
to sue in New Hampshire, where it is located.10
10 Firstenberg argues that the third factor weighs against exercising jurisdiction because 25 CP cannot “obtain convenient and effective relief” in New Hampshire because it cannot obtain effective relief anywhere. (See Firstenberg’s Mem. of Law in Supp. of Its Mot. to Dismiss, Doc. N o . 13-2, at 7-9.) Firstenberg notes that 25 CP must be seeking to enforce either a
-24- The fourth factor “usually . . . is a wash,” Nowak, 94 F.3d
at 718, and that is the case here. The interstate judicial
system’s interest in promoting an efficient administration of
justice will be equally well satisfied in California or New
Hampshire, as parties and potential witnesses are located in both
states.
The fifth factor “addresses the interests of the affected
governments in substantive social policies.” Nowak, 94 F.3d at
719. New Hampshire has an interest in protecting its businesses
from breaches of contract and in providing a convenient forum for
addressing such breaches, but California has an interest in
providing its businesses with a convenient forum for defending
themselves against potentially false allegations. Thus, this
factor favors neither party. See id. (considering both
plaintiffs’ government’s interest in protecting its citizens and
defendant’s government’s interest in protecting its
contract between itself and FMC or a contract between LSNE and FMC. (See id. at 8.) If the former, Firstenberg argues that 25 CP will be unsuccessful because Firstenberg lacks the necessary contacts with 25 CP in New Hampshire. (See id.) This argument is repetitive and unpersuasive. If the latter, Firstenberg argues that 25 CP cannot obtain effective relief because Firstenberg does not own or possess the machine 25 CP wishes to buy. (Id.) This argument may be relevant to the merits of the case, but it has no bearing on the personal jurisdiction analysis.
-25- businesses).11
Jurisdiction over Firstenberg in New Hampshire is certainly
reasonable. Accordingly, I conclude that subjecting Firstenberg
to jurisdiction of the courts in New Hampshire would not violate
the Due Process Clause of the Constitution.12
B. Personal Jurisdiction over Grifols
Grifols argues that it was not involved in the contract
between Firstenberg and either LSNE or 25 C P , and thus has no
relevant contacts with New Hampshire. 25 CP counters that
Grifols, the owner of the Hull, was a principal who used
Firstenberg as an agent to sell its used equipment. Thus, 25 CP
argues, this court may impute Firstenberg’s contacts to Grifols
for the purposes of personal jurisdiction.
“Under basic principles of agency law, forum-related
11 New Hampshire may have a stronger interest here because 25 CP is the alleged victim. See Trade Wings, 2002 DNH 182, 15 (“[The plaintiff’s] claimed injury implicates the public policy favoring the prevention of unfair or deceptive acts in business transactions. New Hampshire has the strongest interest in this public policy because its citizen is the alleged victim of [such practices here].”). Regardless, it is still reasonable to exercise personal jurisdiction over Firstenberg. 12 Firstenberg has requested an oral argument. (See Firstenberg’s Mot. to Dismiss, Doc. N o . 1 3 , at 2.) I deny this request because the facts and law are sufficiently clear and oral argument would serve no useful purpose.
-26- contacts made by an agent acting within the scope of an agency
relationship are attributable to the principal.” Dagesse v .
Plant Hotel N.V., 113 F. Supp. 2d 211, 216 n.2 (D.N.H. 2000); see
also Sawtelle, 70 F.3d at 1389 n.4; Daynard, 290 F.3d at 5 5 .
Consignees are generally considered agents. See Restatement
(Third) of Agency § 6.02, cmt. d (2006) (“A consignment of goods
creates an agency relationship between the consignor and the
consignee. The consignee has power to sell the goods on behalf
of the consignor, who retains title to them.”); see also Rogers
v . U.S. Rubber Co., 20 A.2d 626, 627 (N.H. 1941) (“The very term
[“consignment”] imports an agency.”) (internal quotation
omitted). Although it is conceivable that the consignor-
consignee relationship might be treated differently than the
general principal-agent relationship for the purposes of personal
jurisdiction, Grifols has cited no case law, and I have found none, to support that proposition.13
13 I also note that “[t]he exact type of agency relationship used to impute contacts is not crucial to [my] inquiry regarding traditional notions of fair play and substantial justice.” Jet Wine & Spirits, Inc. v . Bacardi & Co., 298 F.3d 1 , 7 (1st Cir. 2002). “‘[T]he [relevant] question . . . is whether a sufficient relationship exists under the Due Process Clause to permit the exercise of jurisdiction, not whether a partnership, joint venture, or other particular agency relationship between the two defendants exists.’”). Id. at 8 (quoting Daynard, 290 F.3d at 56-57.)
-27- 25 C P , on the other hand, cites Camar Corp. v . N.R.
Acquisition Corp., N o . 96-40095-NMG, 1997 WL 118419 (D. Mass.
Mar. 1 1 , 1997), which, although not perfectly analogous, supports
the proposition that Firstenberg’s contacts may be imputed to
Grifols. In Camar, a party that admitted to being an agent, see
id. at * 4 , dismantled an aircraft carrier for a principal and
sold the aircraft’s metal and equipment on behalf of the
principal, who held title to the items from the carrier and was
entitled to certain payments from sales, see id. at * 1 . This
relationship is similar to the relationship that 25 CP alleges
existed between Grifols and Firstenberg because Firstenberg
facilitated the sale of the Hull while Grifols (presumably)
retained title to the Hull. (See Mem. of Law in Supp. of Pl.’s
Objection to Grifols’ Mot. to Dismiss for Lack of Personal
Jurisdiction, Doc. N o . 17-2, at 7.) In Camar, the court noted
that “[t]he contacts of [the dismantler and seller of parts] are
attributable to [the principal] because ‘the contacts of a
corporation’s agent can subject the corporation to personal
jurisdiction.’” Id. at *4 n.1 (citing Pleasant S t . I , 960 F.2d
at 1090). Camar thus suggests that the type of agency
relationship that allegedly exists between Firstenberg and
-28- Grifols is one in which it is appropriate for a court to impute
contacts from the agent to the principal, as long as the agent is
acting within the scope of its agency, which Firstenberg clearly
would have been when advertising and contracting to sell the
Hull. Therefore, I assume that Firstenberg’s contacts with
Halvorsen may be imputed to Grifols, and thus that I may exercise
personal jurisdiction over Grifols, if Firstenberg is Grifols’
agent.
Even crediting all of 25 CP’s non-conclusory allegations as
true, which I must under the prima facie standard, 25 CP has not
proffered sufficient evidence regarding Grifols’ status as a
principal to support personal jurisdiction. 25 CP’s evidence
does, however, suggest that, if provided time for jurisdictional
discovery, it could proffer sufficient evidence that Grifols and
Firstenberg are in a principal-agent relationship. 25 CP has
provided evidence that Firstenberg is in the business of
“sell[ing] . . . surplus equipment on consignment.” (See Pl.’s
Jurisdiction Ex. F., Doc. N o . 17-8.) When Gonzales emailed a
shipping company about Halvorsen’s order, his email noted that he
“still [had] not received a confirmation as to when Grifols
-29- [would] have the utilities disconnected from the machine.” (See
Pl.’s Objection to Grifols’ Mot. to Dismiss for Lack of Personal
Jurisdiction Ex. E . , Doc. N o . 17-8, at 2 (emphasis added).)
Because Grifols is “a biomedical research and development
institute” (Compl., Doc. N o . 1-2, ¶ 8 ) , and not in the utilities
or moving business, this email suggests both that Grifols was the
owner of the Hull, and that it had a principal-agent relationship
with Firstenberg.
In a case like this one, where the plaintiff has “[made] out
a colorable case for the existence of in personam jurisdiction,”
Negrón-Torres v . Verizon Commc’ns, Inc., 478 F.3d 1 9 , 27 (1st
Cir. 2007), the facts supporting the existence of personal
jurisdiction are in the hands of the defendant, and the defendant
does not deny the relevant jurisdictional facts, jurisdictional
discovery is appropriate.14 Thus, I will allow 25 CP sixty days
14 Though 25 CP has not requested jurisdictional discovery, I assume that it would prefer for me to consider providing time for jurisdictional discovery rather than dismissing its claims against Grifols outright. I have the authority to order jurisdictional discovery sua sponte. See Hatfill v . Foster, 415 F. Supp. 2d 353, 356 (S.D.N.Y. 2006) (noting that the court had previously sua sponte ordered fifteen days of jurisdictional discovery where “it seemed that misrepresentations might have been made to [the] court”); Am. Color Graphics v . Brooks Pharm., Inc., N o . 8:05-CV-1512-T-27TBM, 2007 WL 3202748, *4 (M.D. Fla. Oct. 2 9 , 2007) (noting that “[t]his Court is not obliged to sua
-30- for jurisdictional discovery to adduce evidence that a principal-
agent relationship existed between Grifols and Firstenberg.15
Grifols makes two other unpersuasive arguments. First,
Grifols mischaracterizes 25 CP’s argument by implying that 25 CP
is asking this court to “subscribe to” an improper “transitive
view of minimum contacts, which would hold that a letter from A
to B that reports on C’s actions confers personal jurisdiction
over C in B’s home state.” (See Mem. of Law in Supp. of Grifols’
Mot. to Dismiss for Lack of Personal Jurisdiction, Doc. N o . 14-2,
at 9 n.7 (quoting Mass. Sch. of Law, 142 F.3d at 35).) 25 C P ,
however, is not suggesting that this court should exercise
jurisdiction over Grifols because Firstenberg wrote a letter to
25 CP regarding Grifols’ activities. Rather, 25 CP correctly
argues that this court may exercise jurisdiction over Grifols
because Firstenberg contacted 25 CP in New Hampshire on Grifols’
behalf, as Grifols’ agent.
In addition, Grifols misconstrues Daynard v . Ness, a First
sponte order discovery,” and thus implying that it may do s o ) . 15 Following jurisdictional discovery, Grifols may file a motion to reinstate its motion to dismiss. If Grifols files such a motion, this court will establish a schedule for further status conferences and briefing.
-31- Circuit case discussing imputation of contacts for the purposes
of personal of jurisdiction. There, the court explained that
“[w]hether or not an agent is initially authorized to act on
behalf of a principal, the agent’s actions may be attributed to
the principal, for purposes of personal jurisdiction, if the
principal later ratifies the agent’s conduct.” 290 F.3d at 5 5 .
Grifols argues that because there is no evidence that Grifols
ratified Firstenberg’s actions, Firstenberg’s contacts may not be
imputed to Grifols. This interpretation misreads Daynard, which
requires either proof of initial authority to act or later
ratification. Here, I need not consider ratification, because
Firstenberg, if it was a consignee for Grifols, had the authority
to communicate with customers on behalf of Grifols.
IV. CONCLUSION
For all of the foregoing reasons, I deny Firstenberg’s
motion to dismiss (Doc. N o . 1 3 ) . Grifols’ motion to dismiss
(Doc. N o . 14) is denied without prejudice to its right to seek
reinstatement after the plaintiff has had an opportunity to
conduct jurisdictional discovery. The court grants the
plaintiffs sixty days to conduct limited discovery, restricted to
-32- specific facts that bear on the issues of agency and personal
jurisdiction.
SO ORDERED.
/s/Paul Barbadoro Paul Barbadoro United States District Judge
December 8 , 2009
cc: Michael R. Callahan, Esq. Thomas H. Good, Esq. Gordon J. MacDonald, Esq. Erik Graham Moskowitz, Esq. William B . Pribis, Esq. David G. Thomas, Esq.
-33-