Mahler v. Startari

142 F. App'x 839
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 2, 2005
Docket04-3213
StatusUnpublished

This text of 142 F. App'x 839 (Mahler v. Startari) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mahler v. Startari, 142 F. App'x 839 (6th Cir. 2005).

Opinion

SILER, Circuit Judge.

Plaintiffs Dr. Marjorie H. Mahler; Edmund L. de Rothchild, CBE TD; Jack Bentley; and Lee F. Robinson appeal the district court’s dismissal of their misappropriation action for lack of personal jurisdiction against Defendants Nigel Nicholson; Clubb Capital Limited (“Clubb Capital”); Biotechna Environmental International Limited (“BEIL”); and Montreal Trust Company of Canada (“Montreal Trust”). We AFFIRM.

BACKGROUND

Mahler is a Texas resident, while the remaining Plaintiffs reside in the United Kingdom (“U.K.”). All are former shareholders of Biotechna Environmental Corporation (“Biotechna”), an Anguilla, British West Indies corporation. Nigel Nicholson is a citizen of the U.K., Biotechna director, and Clubb Capital employee. Clubb Capital, an investment/brokerage firm located in the U.K., is a Biotechna shareholder. BEIL is an Anguilla, British West Indies corporation and Biotechna subsidiary, while Montreal Trust is a Canadian bank with its principal place of business in Canada.

In 1994, Plaintiffs entered into two agreements with Montreal Trust to restrict the distribution of millions of Biotechna shares. Both agreements were negotiated from Canada and none of the parties to this appeal was an Ohio citizen. In 1995, Startari was hired as Biotechna’s president and chief executive officer, appointed its chairman in 1996, and was a director. He was also president and a director of Biotechna USA, a Biotechna subsidiary and Delaware corporation with its principal place of business in Florida. Startari occupied these roles until his resignation in 2001.

When Biotechna hired Startari, he was a Florida resident. During Startari’s time in Florida, Biotechna and Montreal Trust entered into the two agreements and Biotechna moved from Canada to Anguilla. Startari moved to Ohio in 1999 and administered Biotechna’s day-to-day affairs from his residence there. He discussed Biotechna’s financing with Nicholson, who acted as a representative of Clubb Capital.

Once Startari moved to Ohio, he opened a bank account at Key Bank for Biotechna USA’s funds. Funds from Biotechna’s Anguilla account were transferred to Biotechna USA’s Key Bank account. While in *841 Ohio, Startari received correspondence relating to BEIL’s patents via facsimile and prepared correspondence on BEIL’s letterhead. Biotechna USA transferred funds from its Key Bank account to others for payment of BEIL expenses. In an agreement dated July 11, 2001 (the “Agreement”), Biotechna repaid its outstanding debt to the Loan Note Holders. 1 Startari, Nicholson, Clubb Capital, and others collaborated on the Agreement through e-mail and/or facsimile communication while Startari was in Ohio. The only parties to the Agreement were Startari, Biotechna, and the Loan Note Holders. Pursuant to the Agreement, Biotechna assigned 90% of its share capital in BEIL to the Loan Note Holders and the remaining 10% to Startari. The Agreement was “subject to the laws of Anguilla and subject to the non-exclusive jurisdiction of the Anguillan courts.”

Plaintiffs sued Defendants in 2002 for misappropriation of their Biotechna shares. The district court dismissed all claims against Nicholson, Clubb Capital, BEIL, and Montreal Trust for lack of personal jurisdiction. The other Defendants, Startari and Biotechna USA, stipulated to a dismissal without prejudice of the claims against them and are not parties to this appeal.

DISCUSSION

This court looks to Ohio’s long-arm statute, Ohio Revised Code § 2307.382, and Ohio law to determine whether personal jurisdiction exists over any Defendant. See Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir.2000). We have established a familiar three-part test for determining whether specific jurisdiction exists over a nonresident defendant:

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. Finally, 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.

S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir.1968). “[Ojur central inquiry is whether minimum contacts are satisfied so as not to offend ‘traditional notions of fair play and substantial justice.’ ” Calphalon Corp., 228 F.3d at 721 (citations omitted). We review de novo the district court’s dismissal of Plaintiffs’ complaint for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2). See Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003).

1. Nigel Nicholson

Nicholson neither transacted business in Ohio nor purposefully availed himself of the benefits and privileges of its laws; rather, he merely served as a director of Biotechna (an Anguillan company) and communicated with an individual who happened to be in Ohio. See Int’l Techs. Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 395 (6th Cir.1997); Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1119 (6th Cir.1994). Nicholson was unaware of Startari’s location; it was purely fortuitous that Startari had an Ohio address, see Int’l Techs. Consultants, Inc., 107 F.3d at 395; and Startari’s unilateral activity is an inappropriate consideration for deciding if Nicholson’s contacts justify in personam jurisdiction. See Helicópteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 417, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Moreover, Nicholson did not purposefully avail himself of the benefits and privileges of Ohio law, see *842 Calphalon Corp., 228 F.3d at 722-23; Plaintiffs’ claims did not arise from Nicholson’s attenuated contacts with Ohio, see id. at 724; and, as a foreign defendant, Nicholson could not reasonably expect to be haled into an Ohio court to defend this action. See Int’l Techs. Consultants, Inc., 107 F.3d at 396 (negotiation of a contract that was to be governed by Swiss law and executed in Switzerland had no relation to forum state).

2. Clubb Capital

Ohio’s long-arm statute does not reach Clubb Capital since it never transacted any business in Ohio.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
142 F. App'x 839, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mahler-v-startari-ca6-2005.