UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT
No. 96-1006
RALPH M. NOWAK, ADMINISTRATOR OF THE ESTATE OF SALLY ANN NOWAK, ET AL.,
Plaintiffs - Appellees,
v.
TAK HOW INVESTMENTS, LTD., d/b/a HOLIDAY INN CROWNE PLAZA HARBOUR VIEW,
Defendant - Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
Before
Stahl, Circuit Judge,
Coffin, Senior Circuit Judge,
and Cummings,* Circuit Judge.
Alan B. Rubenstein, with whom Robert B. Foster and
Rackemann, Sawyer & Brewster were on brief for appellant.
Edward Fegreus for appellees.
August 22, 1996
* Of the Seventh Circuit, sitting by designation.
CUMMINGS, Circuit Judge.1 A Massachusetts resident who CUMMINGS, Circuit Judge.
accompanied her husband on a business trip to Hong Kong drowned
in their hotel's swimming pool. Plaintiffs later brought this
wrongful death diversity action against the Hong Kong corporation
that owns the hotel -- a corporation that has no place of
business outside of Hong Kong. Defendant moved for dismissal,
arguing that a Massachusetts court could not exercise personal
jurisdiction consistently with due process and, alternatively,
that the case should be dismissed on the grounds of forum non
conveniens. The district court denied both motions, and we now
affirm.
I.
Tak How is a Hong Kong corporation with its only place
of business in Hong Kong. Its sole asset is the Holiday Inn
Crowne Plaza Harbour View in Hong Kong ("Holiday Inn"), where the
accident in this case took place. Tak How has no assets,
shareholders, or employees in Massachusetts. Sally Ann Nowak
("Mrs. Nowak") was at all relevant times married to plaintiff
Ralph Nowak ("Mr. Nowak") and was the mother of their two
children (collectively, the plaintiffs are "the Nowaks"). The
Nowaks lived in Marblehead, Massachusetts, and Mr. Nowak was
1 Section II.A. was authored by Judge Coffin. This opinion was circulated to the active judges of the First Circuit before issuance. This informal circulation, however, is without prejudice to a petition for rehearing or suggestion of en banc reconsideration on any issue in the case. NLRB v. Hospital San
Rafael, Inc., 42 F.3d 45, 51 n.1 (1st Cir. 1994).
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employed by Kiddie Products, Inc., which has its place of
business in Avon, Massachusetts. Kiddie Products does extensive
business in Hong Kong. As a Preliminary Design Manager in the
Marketing Department, Mr. Nowak customarily made two business
trips to Hong Kong each year, accompanied by his wife on one of
those trips.
Kiddie Products employees had made trips to Hong Kong
since at least 1982, but the company's relationship with Tak How
and the Holiday Inn began only in 1992. John Colantuone, a vice-
president, was one such employee who had travelled to Hong Kong
since 1982 and had stayed at various other hotels. Colantuone
was acquainted with the Holiday Inn through advertisements on
Hong Kong radio in 1983 or 1984, but only decided to stay there
in 1992 after becoming dissatisfied with the rates at other
hotels. On his first visit, Colantuone met with the Holiday
Inn's sales manager to negotiate a corporate discount for Kiddie
Products employees. Holiday Inn agreed to the discount and wrote
a letter confirming the arrangement based on a minimum number of
room nights per year. Marie Burke, Colantuone's administrative
assistant, made all hotel reservations for the company's
employees. Although Kiddie Products regularly compared rates at
other hotels, Burke was told to book all reservations at the
Holiday Inn until instructed otherwise. Since 1992, Kiddie
Products employees have stayed exclusively at the Holiday Inn.
In June 1993, the Holiday Inn telecopied Colantuone a
message announcing new corporate rates and other promotional
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materials. Burke requested additional information, and the hotel
promptly responded. In July 1993, after a series of exchanges by
telecopier, Burke sent a reservation request to the Holiday Inn
for several employees for September and October 1993. One of the
reservations was for Mr. and Mrs. Nowak to arrive on September
16. On September 18, while the Nowaks were registered guests at
the hotel, Mrs. Nowak drowned in the hotel swimming pool. The
specific facts surrounding her death are not relevant here. It
is uncontested that in 1992 and 1993, prior to Mrs. Nowak's
death, Tak How advertised the Holiday Inn in certain national and
international publications, some of which circulated in
Massachusetts. In addition, in February 1993, Tak How sent
direct mail solicitations to approximately 15,000 of its previous
guests, including previous guests residing in Massachusetts.
The Nowaks filed this wrongful death action in
Massachusetts state court in June 1994. Tak How then removed the
case to federal district court and filed two motions to dismiss -
- one for lack of personal jurisdiction under Fed. R. Civ. P.
12(b)(2) and the other for forum non conveniens. The district
court initially denied the motion to dismiss for forum non
conveniens, and then, after allowing time for jurisdictional
discovery, issued a memorandum and order denying the Rule
12(b)(2) motion. Nowak v. Tak How Inv. Ltd., 899 F. Supp. 25 (D.
Mass. 1995). The district court granted Tak How's motion for
certification of the jurisdictional issue, but this Court denied
Tak How's request for a stay of the district court proceeding
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pending appeal. Nonetheless, believing that a resulting judgment
would not be enforceable in Hong Kong, Tak How did not answer the
Nowaks' complaint. Accordingly, the district court entered a
default judgment against Tak How for $3,128,168.33. Tak How
appeals the denial of its Rule 12(b)(2) motion and its motion to
dismiss the case for forum non conveniens.
II.
We first review the denial of Tak How's motion to
dismiss for lack of personal jurisdiction. The district court
employed a prima facie standard in making its determination
rather than adjudicating the jurisdictional facts. See Foster-
Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145-147 (1st
Cir. 1995). Both the court's decision to use the prima facie
standard and its conclusion under that standard are reviewed de
novo. Id. at 147. To begin, we find no error in the district
court's choice of the prima facie standard. A full-blown
evidentiary hearing was not necessary in this case because the
facts were, in all essential respects, undisputed. In such
circumstances, the prima facie standard is both appropriate and
preferred. Id. at 145; Boit v. Gar-Tec Prods., Inc., 967 F.2d
671, 675-676 (1st Cir. 1992).
The next question is whether the district court reached
the proper result. In diversity cases such as this, the district
court's personal jurisdiction over a nonresident defendant is
governed by the forum state's long-arm statute. Sawtelle v.
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Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). Under the
Massachusetts statute,
[a] court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's . . . transacting any business in this Commonwealth.
Mass. Gen. Laws Ann. ch. 223A, 3(a) (1985). The statute
imposes constraints on personal jurisdiction that go beyond those
imposed by the Constitution. Gray v. O'Brien, 777 F.2d 864, 866
(1st Cir. 1985). We must therefore find sufficient contacts
between the defendant and the forum state to satisfy both the
Massachusetts long-arm statute and the Constitution. Sawtelle,
70 F.3d at 1387.
To satisfy the requirements of the long-arm statute,
Section 3(a), the defendant must have transacted business in
Massachusetts and the plaintiffs' claim must have arisen from the
transaction of business by the defendant. Tatro v. Manor Care,
Inc., 625 N.E.2d 549, 551 (Mass. 1994). In Tatro, a
Massachusetts plaintiff sued a California hotel for injuries
sustained in California. The Court concluded that the hotel's
solicitation of business from Massachusetts residents satisfied
the "transacting any business" requirement of Section 3(a), id.
at 551-552, and that the "arising from" requirement was satisfied
where, but for the hotel's solicitations and acceptance of
reservations, the plaintiff would not have been injured in
California. Id. at 554. The factual scenario in the present
case is analogous in all essential respects, and we therefore
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have little difficulty concluding that sufficient contacts exist
to satisfy Section 3(a)'s requirements.
Turning to the constitutional restraints, this Court
follows a tripartite analysis for determining the existence of
specific personal jurisdiction (plaintiffs do not allege general
personal jurisdiction):
First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's forum-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 court foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.
Pritzker v. Yari, 42 F.3d 53, 60-61 (1st Cir. 1994) (quoting
United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080,
1089 (1st Cir. 1992)), cert. denied, 115 S. Ct. 1959.
A. Relatedness
What this Court calls the "relatedness" test is one
aspect of demonstrating minimum contacts pursuant to
International Shoe Co. v. Washington, 326 U.S. 310. The other
aspect, discussed below, focuses on the deliberateness of the
defendant's contacts, or purposeful availment. Tak How's
principal argument on appeal is that relatedness requires a
proximate cause relationship between its contacts with
Massachusetts and the Nowaks' cause of action.
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In arguing for a proximate cause relatedness test, Tak
How relies on a series of First Circuit cases beginning with
Marino v. Hyatt Corp., 793 F.2d 427 (1st Cir. 1986). See Crocker
v. Hilton Int'l Barbados, Ltd., 976 F.2d 797 (1st Cir. 1992);
Fournier v. Best Western Treasure Island Resort, 962 F.2d 126
(1st Cir. 1992); Pizarro v. Hoteles Concorde Int'l, C.A., 907
F.2d 1256 (1st Cir. 1990). In each of these cases, this Court
construed the language of a state long-arm statute requiring, as
does the Massachusetts statute quoted above, that the cause of
action "arise" from the forum-state contacts. Construing those
statutes, we rejected plaintiffs' arguments that the injury at
issue would not have occurred "but for" the forum-state contacts.
Instead, we held that the defendant's conduct must be the legal
or proximate cause of the injury. Pizarro, 907 F.2d at 1260.
At least for purposes of construing the Massachusetts
long-arm statute, the Supreme Judicial Court of Massachusetts
dealt our restrictive interpretation a fatal blow in Tatro,
supra. The Court decided that the "but for" test is more
consistent with the language of the long-arm statute and
explicitly rejected our interpretation of the statute in the
Marino line of cases. 625 N.E.2d at 553. Personal jurisdiction
was proper in Tatro because the California hotel had solicited
business in Massachusetts and had agreed to provide the plaintiff
with accommodations; but for those acts, the plaintiff would not
have been injured. Id. at 554.
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Tak How contends that Tatro was not fatal to Marino and
its progeny. It concedes, as it must, that Tatro is controlling
insofar as it deals with the construction of the Massachusetts
long-arm statute, but insists that the relatedness discussion in
Marino had constitutional significance as well. Its position is
not without support. In Pleasant Street, we stated that the
Massachusetts statute's relatedness requirement "mirrors a key
constitutional requirement for the exercise of specific
jurisdiction." 960 F.2d at 1087. Then, in explaining
constitutional relatedness, we set forth proximate cause
principles derived from the Marino line of cases. See id. at
1089.
The Nowaks, on the other hand, argue that these cases
have no constitutional significance. They find support from a
footnote in Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201,
207 n.8 (1st Cir. 1994):
In our view, [the Marino line of cases] -
- which interpret the term "arising from" as that term is used in the long-arm statutes of Massachusetts -- deal with state-law issues and have no real implication for the relatedness requirement specifically or for constitutional analysis generally.
(citations omitted).
Despite the apparent conflict, these cases are arguably
reconcilable. After all, Ticketmaster did not directly reject
Pleasant Street or the proximate cause test, but merely stated
the evident fact that the Marino line of cases centered on
interpretations of state law. It might follow, then, that our
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discussion in Pleasant Street should govern our course here.
Pleasant Street, however, as well as Ticketmaster, described the
relatedness concept in only the most general way. Neither case
specifically defined the precise inquiry under the relatedness
test in this circuit. Fortunately, however, these cases, and
others, articulated certain principles that guide our inquiry.
As an initial matter, "[w]e know . . . that the
[relatedness] requirement focuses on the nexus between the
defendant's contacts and the plaintiff's cause of action."
Ticketmaster, 26 F.3d at 206. The requirement serves two
purposes.
First, relatedness is the divining rod that separates specific jurisdiction cases from general jurisdiction cases. Second, it ensures that the element of causation remains in the forefront of the due process investigation.
Id. Most courts share this emphasis on causation, but differ
over the proper causative threshold. Generally, courts have
gravitated toward one of two familiar tort concepts -- "but for"
or "proximate cause."
The Ninth Circuit is the most forceful defender of the
"but for" test. In Shute v. Carnival Cruise Lines,2 the court
stated that "but for" serves the basic function of relatedness by
2 Shute was reversed by the Supreme Court on alternative
grounds. 499 U.S. 585. As reflected by subsequent cases, the Ninth Circuit still adheres to the "but for" test. See Ballard
v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995); Terracom v. Valley
Nat'l Bank, 49 F.3d 555, 561 (9th Cir. 1995). But see Omeluk v.
Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 271 (9th Cir. 1995)
(questioning Shute's authority).
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"preserv[ing] the essential distinction between general and
specific jurisdiction." 897 F.2d 377, 385 (9th Cir. 1990). A
more stringent standard, the court asserted, "would represent an
unwarranted departure from the core concepts of 'fair play and
substantial justice,'" because it would preclude jurisdiction in
cases where it would be reasonable. Id. at 386. In turn, in
those cases where "but for" might lead to an unreasonable result,
the court predicted that the third prong -- the reasonableness
inquiry -- would guard against unfairness.
Shute and its progeny represent the only explicit
adoption of the "but for" test. Nonetheless, cases from other
circuits suggest a similar approach. In Prejean v. Sonatrach,
Inc., the Fifth Circuit noted:
Logically, there is no reason why a tort cannot grow out of a contractual contact. In a case like this, a contractual contact is a "but for" causative factor for the tort since it brought the parties within tortious "striking distance" of one another. While the relationship between a tort suit and a contractual contact is certainly more tenuous than when a tort suit arises from a tort contact, that only goes to whether the contact is by itself sufficient for due process, not whether the suit arises from the contact.
652 F.2d 1260, 1270 n.21 (5th Cir. 1981). Subsequent cases,
however, have not always followed this teaching. See Luna v.
Compa a Paname a de Aviaci n, S.A., 851 F. Supp. 826, 832 (S.D.
Tex. 1994) (employing a proximate cause standard); Kervin v. Red
River Ski Area, Inc., 711 F. Supp. 1383, 1389-1390 & n.11 (E.D.
Tex. 1989) (same).
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The Sixth Circuit applies a "substantial connection"
standard. See Third Nat'l Bank v. WEDGE Group Inc., 882 F.2d
1087, 1091 (6th Cir. 1989), cert. denied, 493 U.S. 1058; Southern
Mach. Co. v. Mohasco Indus., Inc. 401 F.2d 374, 384 n.27 (6th
Cir. 1968). The court's discussion in Lanier v. American Board
of Endodontics, 843 F.2d 901, 908-911 (6th Cir. 1988), however,
suggests that a "but for" relationship survives the due process
inquiry.
Finally, the Seventh Circuit has upheld jurisdiction
under the Illinois long-arm statute, and the Due Process Clause,
for claims that "lie in the wake of the commercial activities by
which the defendant submitted to the jurisdiction of the Illinois
courts." See Deluxe Ice Cream Co. v. R.C.H. Tool Corp., 726 F.2d
1209, 1215-1216 (7th Cir. 1984) (breach of warranty); In re Oil
Spill by Amoco Cadiz, 699 F.2d 909, 915-916 (7th Cir. 1983)
(indemnity action), cert. denied, 464 U.S. 864. Whether this
indeterminate standard would encompass tortious negligence
committed outside the forum is unknown. Cf. Simpson v. Quality
Oil Co., 723 F. Supp. 382, 388 & n.4 (S.D. Ind. 1989) (suggesting
that relatedness is limited to those contacts substantively
related to the cause of action).
On the other hand, the Second and Eighth Circuits, as
well as this one, appear to approve a proximate cause standard.
See Pleasant Street, 960 F.2d at 1089; Pearrow v. National Life &
Accident Ins. Co., 703 F.2d 1067, 1069 (8th Cir. 1983); Gelfand
v. Tanner Motor Tours, Ltd., 339 F.2d 317, 321-322 (2d Cir.
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1964). The courts in Pearrow and Gelfland found that, for
purposes of the long-arm statute at issue, non-forum negligence
claims did not arise from in-forum solicitation or ticket sales.
District courts from the Third and Tenth circuits have reached
similar results. See Wims v. Beach Terrace Motor Inn, Inc., 759
F. Supp. 264, 267-268 (E.D. Pa. 1991); Dirks v. Carnival Cruise
Lines, 642 F. Supp. 971, 975 (D. Kan. 1986).
This circuit, whether accurately or not, has been
recognized as the main proponent of the proximate cause standard.
We think the attraction of proximate cause is two-fold. First,
proximate or legal cause clearly distinguishes between
foreseeable and unforeseeable risks of harm. See Peckham v.
Continental Casualty Ins. Co., 895 F.2d 830, 836 (1st Cir. 1990).
Foreseeability is a critical component in the due process
inquiry, particularly in evaluating purposeful availment, and we
think it also informs the relatedness prong. See Pleasant
Street, 960 F.2d at 1089. As the Supreme Court said in Burger
King Corp. v. Rudzewicz,
[the Due process Clause] requir[es] that individuals have "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign . . . ." [T]his "fair warning" requirement is satisfied if the defendant has "purposefully directed" his activities at residents of the forum, and the litigation results from alleged injuries that "arise out of or relate to" those activities.
471 U.S. 462, 472. Adherence to a proximate cause standard is
likely to enable defendants better to anticipate which conduct
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might subject them to a state's jurisdiction than a more tenuous
link in the chain of causation. Certainly, jurisdiction that is
premised on a contact that is a legal cause of the injury
underlying the controversy -- i.e., that "form[s] an 'important,
or [at least] material, element of proof' in the plaintiff's
case," Pleasant Street, 960 F.2d at 1089 (citation omitted) -- is
presumably reasonable, assuming, of course, purposeful availment.
As our discussion suggests, and notwithstanding any
contrary implication from the footnote in Ticketmaster, we think
the proximate cause standard better comports with the relatedness
inquiry because it so easily correlates to foreseeability, a
significant component of the jurisdictional inquiry. A "but for"
requirement, on the other hand, has in itself no limiting
principle; it literally embraces every event that hindsight can
logically identify in the causative chain. True, as the Ninth
Circuit has noted, courts can use the reasonableness prong to
keep Pandora's jar from opening too wide. But to say that the
harm that might be done by one factor can be prevented by another
is not, after all, an affirmative justification for the former.
That being said, we are persuaded that strict adherence
to a proximate cause standard in all circumstances is
unnecessarily restrictive. The concept of proximate cause is
critically important in the tort context because it defines the
scope of a defendant's liability. In contrast, the first prong
of the jurisdictional tripartite test is not as rigid: it is,
"relatively speaking, . . . a 'flexible, relaxed standard.'"
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Sawtelle, 70 F.3d at 1389 (citation omitted). We see no reason
why, in the context of a relationship between a contractual or
business association and a subsequent tort, the absence of
proximate cause per se should always render the exercise of
specific jurisdiction unconstitutional.
When a foreign corporation directly targets residents
in an ongoing effort to further a business relationship, and
achieves its purpose, it may not necessarily be unreasonable to
subject that corporation to forum jurisdiction when the efforts
lead to a tortious result. The corporation's own conduct
increases the likelihood that a specific resident will respond
favorably. If the resident is harmed while engaged in activities
integral to the relationship the corporation sought to establish,
we think the nexus between the contacts and the cause of action
is sufficiently strong to survive the due process inquiry at
least at the relatedness stage.
This concept represents a small overlay of "but for" on
"proximate cause." In a sense it is a narrower and more specific
identification of the Seventh Circuit's formulation for
jurisdiction-worthiness of claims lying "in the wake" of
commercial activities in the forum. It may be that other kinds
of fact patterns will be found to meet the basic factor of
foreseeability, but we have no occasion here to pronounce more
broadly.
This case is illustrative of our reasoning. Through
its ongoing correspondence with Kiddie Products, Tak How knew
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that Kiddie Products employees would stay at its hotel, and could
easily anticipate that they might use the pool, a featured
amenity of the hotel. The district court thoroughly described
t h i s c o n n e c t i o n . The Hotel's solicitation of Kiddie's business and the extensive back-and-forth resulting in Burke's reserving a set of rooms for Kiddie employees and their spouses set in motion a chain of reasonably foreseeable events resulting in Mrs. Nowak's death. The possibility that the solicitation would prove successful and that one or more of the guests staying at the Hotel as a result would use the pool was in no sense remote or unpredictable; in fact, the Hotel included the pool as an attraction in its promotional materials.
899 F. Supp. at 31. While the nexus between Tak How's
solicitation of Kiddie Products' business and Mrs. Nowak's death
does not constitute a proximate cause relationship, it does
represent a meaningful link between Tak How's contact and the
harm suffered. Given these circumstances, we think it would be
imprudent to reject jurisdiction at this early stage of the
By this approach, we intend to emphasize the importance
of proximate causation, but to allow a slight loosening of that
standard when circumstances dictate. We think such flexibility
is necessary in the jurisdictional inquiry: relatedness cannot
merely be reduced to one tort concept for all circumstances.
Though we are recognizing a narrow exception to the proximate
cause test, we note an additional protection for defendants'
rights: "the relatedness requirement . . . authorizes the court
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to take into account the strength (or weakness) of the
plaintiff's relatedness showing in passing upon the fundamental
fairness of allowing the suit to proceed." Ticketmaster, 26 F.3d
at 207.
We recognize it will not always be easy to apply this
flexible approach to particular circumstances, but that is a
function of the complexity of this area of the law. The
jurisdictional inquiry is often a difficult fact specific
analysis in which "[t]he greys are dominant and even among them
the shades are innumerable." Pleasant Street, 960 F.2d at 1088
(citing Estin v. Estin, 334 U.S. 541, 545).
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B. Purposeful Availment
The next issue is whether Tak How's contacts with
Massachusetts constitute purposeful availment. The purposeful
availment requirement ensures that jurisdiction is not premised
on "random, isolated, or fortuitous" contacts with the forum
state, Sawtelle, 70 F.3d at 1391 (quoting Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774), but rather guarantees that
the exercise of jurisdiction is "fair, just, or reasonable." Id.
(quoting Rush v. Savchuk, 444 U.S. 320, 329). Our two focal
points are voluntariness and foreseeability. Ticketmaster, 26
F.3d at 207. The defendant's contacts with the forum state must
be voluntary -- that is, not based on the unilateral actions of
another party or a third person. Burger King, 471 U.S. at 475;
Vencedor Mfg. Co. v. Gougler Indus., Inc., 557 F.2d 886, 891 (1st
Cir. 1977). In addition, the defendant's contacts with the forum
state must be such that he should reasonably anticipate being
haled into court there. World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 297; Escude Cruz v. Ortho Pharmaceutical Corp., 619
F.2d 902, 905 (1st Cir. 1980).
We think that Tak How's unprompted June 1993
correspondence with Kiddie Products, which led directly to the
ill-fated Hong Kong trip in September 1993, was at least
minimally sufficient to satisfy this requirement. The June 1993
correspondence contained promotional materials from the Holiday
Inn designed to further entice Kiddie Products employees to stay
at the hotel. Even if it may be said that the materials were
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sent as part of an on-going relationship between the two
companies that was originally instigated by Kiddie Products, the
continued correspondence by Tak How to Massachusetts does not
amount to the kind of unilateral action that makes the forum-
state contacts involuntary. Tak How had an obvious financial
interest in continuing business with Kiddie Products, and the
June 1993 correspondence is the best example of an unprompted
solicitation designed to facilitate that business relationship.
In order to be subject to Massachusetts' jurisdiction, a
defendant need only have one contact with the forum state, so
long as that contact is meaningful. McGee v. International Live
Ins. Co., 355 U.S. 220, 223; Burger King, 471 U.S. at 475 n.18.
Whether prompted or unprompted, Tak How's on-going
correspondence and relationship with Kiddie Products, designed to
bring Massachusetts residents into Hong Kong, rendered
foreseeable the possibility of being haled into a Massachusetts
court. That Tak How might have to defend itself in a
Massachusetts court is certainly foreseeable based on its direct
correspondence with Kiddie Products, but its other contacts with
Massachusetts reveal an even more substantial attempt by Tak How
to purposefully avail itself of the privilege of conducting
business activities in the state: Tak How advertised its hotel
in national and international publications that circulated in
Massachusetts; it solicited by direct mail some of its previous
guests residing in Massachusetts; and Tak How listed its hotel in
various hotel guides used at travel agencies in Massachusetts.
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Exercising jurisdiction is appropriate where the defendant
purposefully derives economic benefits from its forum-state
activities. Pritzker, 42 F.3d at 61-62 (citing Burger King, 471
U.S. at 476).
C. The Gestalt Factors
Our conclusion that minimum contacts exist in this case
does not end the inquiry. Personal jurisdiction may only be
exercised if it comports with traditional notions of "fair play
and substantial justice." International Shoe, 326 U.S. at 320.
Out of this requirement, courts have developed a series of
factors that bear on the fairness of subjecting a nonresident to
a foreign tribunal. Burger King, 471 U.S. at 477; Pleasant
Street, 960 F.2d at 1088. These "gestalt factors" are as
follows:
(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.
Id. (citing Burger King, 471 U.S. at 477). The purpose of the
gestalt factors is to aid the court in achieving substantial
justice, particularly where the minimum contacts question is very
close. In such cases, the gestalt factors may tip the
constitutional balance. Ticketmaster, 26 F.3d at 209. The
Supreme Court's decision in Asahi Metal Indus. Co. v. Superior
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Court, 480 U.S. 102, is one such example. In Asahi, the
question of minimum contacts divided the Court, but eight of the
Justices agreed that exercising personal jurisdiction would not
comport with notions of fair play and substantial justice. This
Court has thus adopted a sliding scale approach: "[T]he weaker
the plaintiff's showing on the first two prongs (relatedness and
purposeful availment), the less a defendant need show in terms of
unreasonableness to defeat jurisdiction." Ticketmaster, 26 F.3d
at 210. The reverse is equally true: a strong showing of
reasonableness may serve to fortify a more marginal showing of
relatedness and purposefulness. See id. (citing Donatelli v.
National Hockey League, 893 F.2 459, 465 (1st Cir. 1990)); see
also Sawtelle, 70 F.3d at 1396.
1. The Burden of Appearance. It would undoubtedly be
burdensome for Tak How to defend itself in Massachusetts: Tak
How's only place of business is in Hong Kong. This Court has
recognized, however, that it is almost always inconvenient and
costly for a party to litigate in a foreign jurisdiction.
Pritzker, 42 F.3d at 64. Thus for this particular gestalt factor
to have any significance, the defendant must demonstrate that
"exercise of jurisdiction in the present circumstances is onerous
in a special, unusual, or other constitutionally significant
way." Id. Tak How alleges nothing special or unusual about its
situation beyond the ordinary cost and inconvenience of defending
an action so far from its place of business. Under Pritzker,
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that is not enough: it simply cannot be the case that every Hong
Kong corporation is immune from suit in Massachusetts. But see
Ticketmaster, 26 F.3d at 210 (noting the importance of
considering the distance the defendant must travel in giving
weight to this factor in the analysis). We are also persuaded
that the burden on Tak How will be minimized by, for example, the
availability of transcripts from the Coroner's Court for use in
the Massachusetts proceeding.
We have also noted that the burden of appearance is an
important gestalt factor primarily because it allows a court to
guard against harassing litigation. Ticketmaster, 26 F.3d at 211
(citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508)). Were
there any indication in the record that the Nowaks brought the
present suit to harass Tak How, the burden of appearance in
Massachusetts might weigh in Tak How's favor; however, the record
does not so indicate.
2. Interest of the Forum. Although a forum state has
a significant interest in obtaining jurisdiction over a defendant
who causes tortious injury within its borders, Ticketmaster, 26
F.3d at 211, that interest is diminished where the injury
occurred outside the forum state. Sawtelle, 70 F.3d at 1395.
Nonetheless, our task is not to compare the interest of the two
sovereigns -- the place of the injury and forum state -- but to
determine whether the forum state has an interest. Id. While it
is true that the injury in this case occurred in Hong Kong, it is
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equally true (unlike Sawtelle) that significant events took place
in Massachusetts giving it an interest in this litigation. Tak
How solicited business in the state. As the district court
noted, Massachusetts has a strong interest in protecting its
citizens from out-of-state solicitations for goods or services
that prove to be unsafe, and it also has an interest in providing
its citizens with a convenient forum in which to assert their
claims. Burger King, 471 U.S. at 473. Given the forum-state
activities that took place prior to Mrs. Nowak's death, we
conclude that Massachusetts has a strong interest in exercising
jurisdiction even though the injury took place in Hong Kong.
3. The Plaintiffs' Convenience. This Court must
accord deference to the Nowaks' choice of a Massachusetts forum.
See, e.g., Foster-Miller, 46 F.3d at 151. Regardless, it is
obvious that a Massachusetts forum is more convenient for the
Nowaks than another forum, particularly a Hong Kong forum.
Further, there exists substantial doubt that the Nowaks could
adequately resolve the dispute in Hong Kong: Hong Kong's laws
regarding contingency fees and posting of security bonds with the
court make litigation economically onerous for plaintiffs, and
the future of Hong Kong's political system is also uncertain.
4. The Administration of Justice. This factor focuses
on the judicial system's interest in obtaining the most effective
resolution of the controversy. Usually this factor is a wash,
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Ticketmaster, 26 F.3d at 211; Sawtelle, 70 F.3d at 1395, but in
one case we held that preventing piecemeal litigation might favor
one jurisdiction over another. Pritzker, 42 F.3d at 64. Tak How
argues that a Massachusetts action would require the application
of Hong Kong law, the use of interpreters, and the transportation
of key witnesses from Hong Kong that are not subject to
compulsory process. On the other hand, the Nowaks point to
possible political instability in Hong Kong as the British Colony
prepares to revert to Chinese sovereignty. Interpreters and
transportation of witnesses would likely also be necessary in
Hong Kong. We conclude that the question of efficient
administration of justice favors a Massachusetts forum. Given
the likelihood that the Nowaks would face great obstacles in Hong
Kong due to possible political instability, as well as Hong Kong
laws on contingency fees and security bonds, efficiency concerns
require a Massachusetts forum. See United Elec. Workers v. 163
Pleasant St. Corp., 987 F.2d 39, 46-47 (1st Cir. 1993) (finding
that fourth gestalt factor weighed against a foreign jurisdiction
where "it is far from clear that there will be any judicial
resolution, let alone the most effective judicial resolution, of
this controversy" if the case could not proceed in
Massachusetts).
5. Pertinent Policy Arguments. The final gestalt
factor addresses the interests of the affected governments in
substantive social policies. Massachusetts has an interest in
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protecting its citizens from out-of-state providers of goods and
services as well as affording its citizens a convenient forum in
which to bring their claims. These interests are best served by
the exercise of jurisdiction in Massachusetts. On the other
hand, Hong Kong has an interest in protecting visitors to promote
and preserve its tourism industry, in protecting its businesses,
and in providing all parties with a convenient forum. Only one
of Hong Kong's interests -- protecting its businesses -- might be
compromised by a Massachusetts forum, while Massachusetts'
primary interest -- protecting its citizens -- might be
compromised by a Hong Kong forum. We thus conclude that the
final Gestalt factor tips only slightly in the Nowaks' favor.
On balance, we think the gestalt factors weigh strongly
in favor of a Massachusetts forum. When considered in
combination with the Nowaks' adequate showing on the first two
prongs of the constitutional test, we think that, on the specific
facts of this case, the exercise of jurisdiction in Massachusetts
is reasonable and does not offend the notions of fair play and
substantial justice. The district court therefore properly
denied Tak How's Rule 12(b)(2) motion to dismiss for lack of
personal jurisdiction.
III.
Tak How next appeals the denial of its motion to
dismiss for forum non conveniens. The doctrine of forum non
conveniens permits a trial court, on a discretionary basis, to
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dismiss a case where an alternative forum is a available in
another country that is fair to the parties and substantially
more convenient for them or the courts. Howe v. Goldcorp Invs.,
Ltd., 946 F.2d 944, 947 (1st Cir. 1991), cert. denied, 502 U.S.
1095. Application of the doctrine is committed to the sound
discretion of the trial court, whose decision will not be
reversed absent a clear abuse of discretion. Mercier v. Sheraton
Int'l, Inc., 981 F.2d 1345, 1349 (1st Cir. 1992) (Mercier III)
(appeal after remand of Mercier II, infra; we have previously
referred to the district court's opinion as Mercier I), cert.
denied, 508 U.S. 912. This Court finds an abuse of discretion
only where the district court (1) failed to consider a material
factor, (2) substantially relied on an immaterial factor, or (3)
assessed the appropriate factors but clearly erred in weighing
those factors. Mercier v. Sheraton Int'l, Inc., 935 F.2d 419,
423 (1st Cir. 1991) (Mercier II). Since there is a strong
presumption in favor of a plaintiff's forum choice, the defendant
must bear the burden of proving both the availability of an
adequate alternative forum and that considerations of convenience
and judicial efficiency strongly favor litigating the claim in
the alternative forum. Id. at 423-424; Mercier III, 981 F.2d at
1349.
We have emphasized that the doctrine of forum non
conveniens is used to avoid "serious unfairness" and that
plaintiff's choice of a forum will be disturbed only rarely.
Howe, 946 F.2d at 950 (citing Piper Aircraft Co. v. Reyno, 454
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U.S. 235, 259; Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507).
The Supreme Court has provided a list of relevant considerations.
"Private interest" factors include relative ease of access to
sources of proof, availability of compulsory process, comparative
trial costs, ability to enforce a judgment, "and all other
practical problems that make trial of a case easy, expeditious
and inexpensive." Gilbert, 330 U.S. at 508. "Public interest"
factors include the practical difficulties of unnecessarily
imposing upon a busy court the obligation to hear a case more
fairly adjudicated elsewhere, the imposition on jurors called to
hear a case that has no relation to their community, and the
familiarity of the court with applicable laws. Id. at 508-509.
One final principle informs our analysis in this case.
The Supreme Court has stated that,
Where there are only two parties to a dispute, there is good reason why it should be tried in the plaintiff's home forum if that has been his choice. He should not be deprived of the presumed advantages of his home jurisdiction except upon a clear showing of facts which either (1) establish such oppressiveness and vexation to a defendant as to be out of all proportion to plaintiff's convenience, which may be shown to be slight or nonexistent, or (2) make trial in the chosen forum inappropriate because of considerations affecting the court's own administrative or legal problems.
Koster v. Lumbermens Mut. Co., 330 U.S. 518, 524.
Based on these principles, we are unable to say that
the district court abused its discretion. Tak How's first
argument is that the district court failed to articulate its
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reasons for denying the motion to dismiss. It is true that the
district judge chose to rule on the motion orally rather than
issue a written opinion; however, it is apparent from the hearing
transcript that the judge considered relevant factors. Before
ruling on the motion, the judge questioned counsel about the
plaintiffs' right to have a jury trial in Hong Kong, and he
stated that granting the motion would be outcome determinative
because, as a practical matter and due to additional burdens
under Hong Kong laws, it would be very difficult for the Nowaks
to bring suit there. The hearing transcript is certainly not as
detailed as the written opinion denying the jurisdictional
motion, but the court was entitled to rule on the motion orally.
The question here is whether the district court failed
to consider a material factor or failed to correctly weigh the
factors. Given that Tak How has the burden of proving the
elements of forum non conveniens, we shall review the factors
alleged to justify dismissal that Tak How has put forth, bearing
in mind that Koster, supra, places a heavy burden on defendants
where, as here, plaintiffs brought suit in their home forum.
There is no question that Hong Kong is an available forum, as Tak
How is subject to service of process in Hong Kong. Mercier II,
935 F.2d at 424. There also appears to be no dispute that Hong
Kong would provide an adequate forum in the sense that its courts
recognize a similar cause of action. Tak How next contends that
the private interest factors of Gilbert, supra, weigh in favor of
a Hong Kong forum: it notes that it would bear the expense of
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transporting witnesses to the United States, that it might face
difficulty in joining third-party defendants in a Massachusetts
court, and that a Hong Kong court might not enforce the judgment
of a Massachusetts court. These factors do not constitute the
type of "oppressiveness and vexation" required by Koster
disproportionate to the Nowaks' inconvenience of suing in Hong
Kong. The Nowaks would also have to transport witnesses to Hong
Kong and later seek to enforce a foreign judgment in their home
state. In addition, the Nowaks point to private interest factors
that weigh in their favor: they would face financial obstacles
because Hong Kong law prohibits contingent fee agreements and
requires that they deposit an amount equal to Tak How's costs
with the court; also, possible political instability in the
region could add further difficulties to litigation in Hong Kong.
Regardless of the difficulties the Nowaks might face in Hong
Kong, it is enough that Tak How failed to demonstrate either
oppressiveness to itself or only a slight or nonexistent interest
in convenience on the Nowaks' part. Koster, 330 U.S. at 524.
Nor is Tak How able to demonstrate public interest
factors that make trial in Massachusetts inappropriate. It
points to the fact that Massachusetts choice-of-law rules require
application of Hong Kong law, and that a Hong Kong court would be
"more at home" with such laws. This concern is not sufficient to
overcome the presumption in favor of plaintiffs' chosen forum.
This Court has previously noted that "the task of deciding
foreign law [is] a chore federal courts must often perform."
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Mercier III, 981 F.2d at 1357 (quoting Manu Int'l, S.A. v. Avon
Prods., Inc., 641 F.2d 62, 68 (2d Cir. 1981)). We therefore give
this factor little weight. Id. Tak How points to no other
public interest factor that weighs against a Massachusetts forum.
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IV.
For the foregoing reasons, the district court's
decision to deny Tak How's motions to dismiss for lack of
personal jurisdiction and on the grounds of forum non conveniens
is AFFIRMED.
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