UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
PMH RESEARCH ASSOCIATES, LLC
v. Civil N o . 04-251-PB
LIFE EXTENSION FOUNDATION BUYERS CLUB, INC. et a l .
MEMORANDUM AND ORDER
PMH Research Associates, LLC (“PMH”) brings this action
against Life Extension Buyer’s Club, Inc. (“LEBC”), and Life
Extension Foundation, Inc. (“LEF”) claiming that LEBC and LEF
misappropriated PMH’s trade secrets. Invoking Federal Rule of
Civil Procedure 12(b)(2), defendants move to dismiss this action
for lack of personal jurisdiction.
I. STANDARD OF REVIEW
When a defendant contests personal jurisdiction, the
plaintiff bears the burden of demonstrating that a basis for
jurisdiction exists. See Mass. Sch. of Law at Andover, Inc. v .
Am. Bar Ass’n, 142 F.3d 2 6 , 34 (1st Cir. 1998); Rodriguez v . Fullerton Tires Corp., 115 F.3d 8 1 , 83 (1st Cir. 1997).
Because no evidentiary hearing has been held in the present case,
I hold PMH to a prima facie standard. See Sawtelle v . Farrell,
70 F.3d 1381, 1386 n.1 (1st Cir. 1995) (citing United Elec. Radio
and Mach. Workers of Am. (UE) v . 163 Pleasant S t . Corp., 987 F.2d
3 9 , 43 (1st Cir. 1993) [hereinafter Pleasant S t . I I ] ) .
To make a prima facie showing of jurisdiction, PMH may not
rest on its pleadings. Rather, it must “adduce evidence of
specific facts” that support jurisdiction. Foster-Miller, Inc.
v . Babcock & Wilcox Canada, 46 F.3d 1 3 8 , 145 (1st Cir. 1995);
Pleasant S t . I I , 987 F.2d at 4 4 . In conducting my analysis, I
take the facts proffered by PMH as true and construe them in the
light most favorable to its jurisdictional claim. See Mass. Sch.
of Law, 142 F.3d at 3 4 ; Foster-Miller, 46 F.3d at 145. I do not
act as a fact-finder; rather, I determine “whether the facts duly
proffered, [when] fully credited, support the exercise of
personal jurisdiction.” Rodriguez, 115 F.3d at 84 (citing Boit
v . Gar-Tec Prods., Inc., 967 F.2d 6 7 1 , 675 (1st Cir. 1992)).
While the prima facie standard is liberal, I need not
“credit conclusory allegations or draw farfetched inferences.”
-2- Mass. Sch. of Law, 142 F.3d at 34 (quoting Ticketmaster-New York,
Inc. v . Alioto, 26 F.3d 2 0 1 , 203 (1st Cir. 1994)). Finally, I
will consider facts offered by defendants, but only to the extent
that they are uncontradicted. See id.
I I . FACTS
A. The Parties
PMH is a limited liability company formed under Nevada law.
PMH develops and distributes ingredients that are used in
nutritional supplements. One of PMH’s two members, Philip
Hekimian, maintains PMH’s principal office at his home in
Windham, New Hampshire. PMH’s other member, Michael Halpern,
maintains an office in Pennsylvania.
LEF is a non-profit corporation that seeks to extend the
human life span through the promotion of scientific research.
LEF funds its research primarily by charging membership fees and
distributing nutritional supplements through LEBC, a for-profit
corporation that shares common ownership with LEF. LEF is a
Florida corporation and LEBC is a Nevada corporation. Both
companies operate from the same F t . Lauderdale, Florida office.
-3- LEF has members throughout the United States. It maintains
a website and distributes Life Extension Magazine, a nationwide
periodical published by a subsidiary of LEBC. LEBC maintains a
retail store in F t . Lauderdale and distribution centers in
Florida and New York. It advertises supplements on LEF’s site
and in Life Extension Magazine. It has also marketed LEF’s
supplements through mass mailings directed to a national
audience.
Neither LEF nor LEBC has ever had offices in New Hampshire.
While labels on some of the products that LEBC distributed in
1998 and 1999 referred to a Nashua, New Hampshire location, the
only presence that it maintained in the state was a leased
mailbox that it claims it has rarely used.
Since 1997, LEF and LEBC have relied on PMH and its
principals, Hekimian and Halpern, to perform a variety of tasks.
Among other things, LEBC depended on PMH and its principals to
conduct research and perform studies concerning various chemical
ingredients that were being considered for use in nutritional
supplements to be sold by LEBC. During this period, LEBC entered
into numerous written and oral contracts with PMH or its
-4- principals. Between 1997 and 2003, more than 100 telephone calls
per year and faxes were exchanged between LEBC and PMH’s New
Hampshire office. PMH also developed between 50 and 100 purchase
orders per year for LEBC at its New Hampshire office. At no
point, however, did any LEBC employee ever travel to New
Hampshire to conduct business with PMH.
B. The Current Dispute
The current dispute concerns a protocol that PMH developed
to study the efficacy of certain drugs and other substances in
treating pancreatic cancer. In exchange for a share of any
resulting profits, LEF agreed to fund a study that used the
protocol. PMH developed the protocol in New Hampshire and
negotiated its agreement with LEF over the telephone from PMH’s
New Hampshire office. PMH ultimately disclosed the protocol to
LEF pursuant to this agreement.
After reaching its agreement with PMH, LEF negotiated an
additional agreement (“Funding Agreement”) with the University of
Nebraska to fund a study using the protocol. LEBC subsequently
entered into a non-disclosure agreement (“Non-disclosure
Agreement”) with the study’s lead investigator, D r . Parviz Pour.
-5- Both agreements treat the protocol as if it were the property of
LEF and LEBC rather than PMH. The Funding Agreement and the Non-
disclosure Agreement were both negotiated in Florida and
Nebraska.
PMH claims that the pancreatic cancer protocol is a trade
secret and that LEF and LEBC are guilty of trade secret
misappropriation because they have entered into contracts with
the University of Nebraska and D r . Pour that treat the protocol
as their property rather than the property of PMH.
III. DISCUSSION
For purposes of assessing personal jurisdiction over a
nonresident defendant, “a federal court exercising diversity
jurisdiction ‘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 ) . Accordingly, I must determine
whether jurisdiction is proper under both the New Hampshire long-
arm statute and the due process requirements of the federal
constitution. See id.; Foster-Miller, 46 F.3d at 144. The
statute that applies to foreign corporate entities, see N.H. Rev.
Stat. Ann. § 293-A:15.10 (Supp. 2004), has been interpreted to be
-6- coextensive with federal constitutional limits on jurisdiction.
See Sawtelle, 70 F.3d at 1388 (citing McClary v . Erie Engine &
Mfg. Co., 856 F. Supp. 5 2 , 55 (D.N.H. 1994)). As a result, “the
traditional two-part personal jurisdiction inquiry collapses into
the single question of whether the constitutional requirements of
due process have been met.” McClary, 856 F. Supp. at 5 5 . I
therefore proceed directly to the due process analysis.
The 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. 4 6 2 , 474
(1985) (citing Int’l Shoe C o . v . Washington, 326 U.S. 3 1 0 , 316
(1945)); see also Sawtelle, 70 F.3d at 1388. 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
-7- F.3d 5 3 , 60 (1st Cir. 1994). A defendant cannot be subjected to
a forum state’s jurisdiction based solely on “random,”
“fortuitous,” or “attenuated” contacts. Burger King, 471 U.S. at
475 (quoting Keeton v . Hustler Magazine, Inc., 465 U.S. 7 7 0 , 774
(1984); World-Wide Volkswagen, 444 U.S. at 299) (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 assert authority over a defendant by means of
either general or specific jurisdiction. See Mass. Sch. of Law,
142 F.3d at 34 (citing Donatelli v . Nat’l Hockey League, 893 F.2d
459, 462-63 (1st Cir. 1990)); Foster-Miller, 46 F.3d at 144. A
defendant who has engaged in “continuous and systematic” activity
in a forum state is subject to general jurisdiction in that forum
with respect to all causes of action, even those unrelated to the
defendant’s forum-based activities. See Phillips Exeter Acad. v .
Howard Phillips Fund, Inc., 196 F.3d 2 8 4 , 288 (1st Cir. 1999)
(citing Helicopteros Nacionales de Colombia, S.A. v . Hall, 466
U.S. 4 0 8 , 414 (1984); Donatelli, 893 F.2d at 462-63). A court
-8- may exercise specific jurisdiction, by contrast, only when the
cause of action arises from, or relates t o , the defendant’s
contacts with the forum. See id.; Pritzker, 42 F.3d at 6 0 .
Here, PMH contends that defendants are subject to both
general and specific jurisdiction in New Hampshire. I consider
each claim separately. To ease the analysis, however, I treat
defendants as one entity with shared contacts. Doing so does not
affect my ruling. Even after combining their contacts, PMH still
fails to allege facts that would justify imposing personal
jurisdiction over either defendant.
A. General Jurisdiction
As stated, a court may assert general jurisdiction over a
defendant, even when the plaintiff’s claim is not related to the
defendant’s forum-based conduct, only if the defendant has
engaged in “the ‘continuous and systematic’ pursuit of general
business activities in the forum state.” Glater v . Eli Lilly &
Co., 744 F.2d 213, 216 (1st Cir. 1984) (citing Perkins v . Benguet
Consol. Mining Co., 342 U.S. 4 3 7 , 448 (1952)); see also
Helicopteros, 466 U.S. at 415-16; Mass. Sch. of Law, 142 F.3d at
3 4 ; Mary Twitchell, The Myth of General Jurisdiction, 101 Harv.
-9- L . Rev. 6 1 0 , 612 (referring to the general jurisdiction inquiry
as “dispute blind”). In other words, although an exercise of
general jurisdiction does not require relatedness, it does
require that defendants’ contacts with the forum state be much
more extensive than the “minimum contacts” necessary to establish
specific jurisdiction. See Donatelli, 893 F.2d at 463 (noting
that “‘[a]lthough minimum contacts suffice in and of themselves
for specific jurisdiction . . . , the standard for general
jurisdiction is considerably more stringent’”) (quoting Glater,
744 F.2d at 216) (alteration in original).
PMH argues that there are two separate contact categories
that establish that defendants’ relationship with New Hampshire
is “continuous and systematic.” The first encompasses PMH’s work
in New Hampshire for defendants. The second encompasses
defendants’ separate marketing and distribution presence in New
Hampshire. Having examined the facts that pertain to each
category, I conclude that PMH is unable to prove that defendants
had a “continuous and systemantic” relationship with this state.
1. PMH’s In-State Status as a Jurisdictional Contact
PMH’s primary argument is that general jurisdiction exists
because it has performed the bulk of the contractual obligations
-10- it owed defendants from PMH’s New Hampshire office. The first
issue, then, is whether it is proper to impute PMH’s activities
in New Hampshire to defendants. I hold that it is not.
I held in a prior case that if the “the forum plaintiff’s
decision to perform [his] contractual obligations within [his]
own forum state is totally unilateral,” see Elliott v . Armour
Holdings, Inc., 2000 DNH 1 2 , 29 (January 1 2 , 2000) (citing
Command-Aire Corp. v . Ontario Mech. Sales and Serv. Inc., 963
F.2d 9 0 , 94 (5th Cir. 1992)), then defendant’s relationship with
the plaintiff while it performed those obligations ordinarily
will not be sufficient to establish general jurisdiction.
Elliott 2000 DNH 12 at 3 6 ; see also Skillsoft Corp. v . Harcourt
Gen., Inc., 146 N.H. 305 (2001) (holding that it is “axiomatic
. . . that the plaintiff’s business practices cannot contribute
to the defendants’ contacts with New Hampshire toward
establishing personal jurisdiction”).
In Elliott, a resident plaintiff sought to prove that work
he performed for a nonresident defendant in a New Hampshire home
office should be counted as part of the contact calculus for the
purpose of determining jurisdiction. 2000 DNH 12 at 3 6 . I
disagreed. I held that the plaintiff’s work was “a unilateral
-11- action that does not constitute a purposeful ‘minimum contact’
with New Hampshire.” I therefore concluded that the plaintiff’s
performance “cannot be considered in the calculation of general
jurisdiction.” Id.
This case presents a similar fact pattern. PMH and its
principals have had a close, continuous, contractual relationship
with defendants since 1997. PMH has done research for
defendants, has communicated extensively with defendants, and has
even sold products on defendants’ behalf. Much, if not most of
these activities have taken place in New Hampshire. The problem
for PMH, however, is that the decision to perform in New
Hampshire was PMH’s alone. Defendants did not send PMH to New
Hampshire to set up shop, nor did they insist that PMH perform
any activities there. Indeed, all of the facts suggest that the
locus of performance was unilaterally determined by PMH. In this
respect, then, PMH is no different from the plaintiff in Elliott.
Accordingly, PMH must rely on a separate set of contacts to
establish general jurisdiction.
2. Defendants’ Marketing and Distribution Activities as Jurisdiction Contacts
PMH next argues that defendants did enough business in New
-12- Hampshire to support a finding of general jurisdiction. In
Seymour v . Parke, Davis & Co., 423 F.2d 584 (1st Cir. 1970), a
plaintiff claimed that New Hampshire courts had general
jurisdiction over a corporate defendant because the defendant
employed six New Hampshire salesmen who visited physicians,
hospitals, and retail pharmacies to disseminate product
information and take orders. Id. at 585. The court concluded
that when “defendants’ only activities consist of advertising and
employing salesmen to solicit orders, we think that fairness will
not permit a state to assume jurisdiction.” Id. at 587.
The court reached a similar conclusion in Glater v . Eli
Lilly & Co., 744 F.2d 213 (1st Cir. 1984). There, the court
held that there was no general jurisdiction over the defendant
despite the fact that it employed New Hampshire sales
representatives and advertised its pharmaceutical products in
trade journals that circulated in New Hampshire. Id. at 215-217.
The court specifically ruled that in-state magazine circulation,
by itself, was not a strong enough contact to justify imposing
personal jurisdiction upon the defendant. Id. at 216.
If general jurisdiction could not be imposed in Seymour and
Glater, it would be inappropriate to impose it here. Unlike in
-13- those cases, defendants have not employed sales people to enter
the state in order to market their goods and services. Rather,
defendants’ activities in New Hampshire are limited to the
distribution of an undetermined quantity of nutritional products,
the sale of an undetermined number of memberships, and the
distribution of Life Extension Magazine within the state. These
activities do not qualify as “continuous and systematic” behavior
within the jurisdiction. Seymour, 423 F.2d at 587.
Other than those contacts addressed in the prior sections,
defendants are alleged to have no other contacts with New
Hampshire. They own no property here, they are not organized or
incorporated here, they have not (until now) litigated claims
here, nor are they registered to do business here. Under these
circumstances, it would violate notions of fairness incorporated
into the due process clause to force them into court on a theory
of general jurisdiction.
B. Specific Jurisdiction
PMH alternatively argues that defendants should be subject
to this court’s specific jurisdiction. The First Circuit has
developed a tripartite test for determining whether an exercise
-14- of specific jurisdiction comports with due process. The analysis
consists of an inquiry into (1) relatedness, (2) purposeful
availment, and (3) reasonableness. See Mass. Sch. of Law, 142
F.3d at 3 5 ; Nowak v . Tak How Invs., Ltd., 94 F.3d 7 0 8 , 712-13
(1st Cir. 1996). An affirmative finding on each of these
elements is required to support an assertion of specific
jurisdiction. See Phillips Exeter, 196 F.3d at 288.
Because I conclude that plaintiff cannot satisfy either the
relatedness or purposeful availment components of the specific
jurisdiction test, I analyze only these two requirements.
1. Relatedness
Questions of specific jurisdiction are always tied to the
particular claims asserted. Phillips Exeter, 196 F.3d at 289.
In this case, the cause of action asserted is trade secret
infringement. Though trade secrets are protected by an
independent body of law, that body is most closely analogous to
the law of torts. See ROBERT P . MERGES, PETER S . MENELL, & MARK A .
LEMLEY, INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 29-30 (2003)
(describing how trade secret law developed out of tort l a w ) .
When determining whether specific jurisdiction exists, then,
I impose the same test as would be applied were this a tort case.
-15- This test requires that I “probe the causal nexus between the
defendant’s contacts and the plaintiff’s cause of action.”
Phillips Exeter, 196 F.3d at 289. In other words, I must look at
the particular facts that caused the trade secret infringement
and ask whether those facts are related to the State of New
Hampshire.
PMH alleges that infringement occurred during defendants’
contract negotiations with the University of Nebraska and D r .
Pour. It is undisputed, however, that these negotiations took
place in Nebraska and Florida. PMH nevertheless presents two
arguments in an effort to demonstrate relatedness. First, it
points to the fact that the protocol was produced by PMH in New
Hampshire. See Plaintiff’s Memorandum of Law Opposing
Defendants’ Motion to Dismiss (Doc. N o . 9 ) at 8 (“Plaintiff’s
Opposition Brief”). This fact, PMH argues, supplies the
connection to New Hampshire necessary to satisfy the First
Circuit’s jurisdictional test. Id. It is not the creation of a
trade secret, however, that determines where jurisdiction is
properly imposed. Instead, it is the site or sites where
activity that caused the breach occurred. United States v . Swiss
-16- American Bank, Ltd., 274 F.3d 6 1 0 , 622 (1st Cir. 2002)
(discussing tort claim); Phillips Exeter, 196 F.3d at 289
(discussing jurisdiction over a breach of contract claim). PMH’s
claim that New Hampshire was the state in which the protocol was
developed therefore does not bear on the question at hand.
PMH next argues that it is enough that it suffered injury in
New Hampshire. See Plaintiff’s Opposition Brief at 9. The First
Circuit, however, has rejected this argument as a basis for
establishing jurisdiction. In Phillips Exeter, the court
considered whether a trust, formed and located in Florida, that
failed to pay trust funds to a New Hampshire school, could be
sued in this district for breach of fiduciary duty. 196 F.3d at
291. Despite the fact that the plaintiff school felt the effects
of the breach in New Hampshire, the court held that defendant
could not be tried here. Id. According to the court, the injury
that resulted from the withholding of payment was “merely an in-
forum effect of an extra-forum breach, and therefore, inadequate
to support a finding of relatedness.” Id.
The same can be said of PMH’s claim in this case. For
jurisdictional purposes, the in-forum harm it suffered as a
-17- result of defendants’ alleged trade secret violation is no
different from the in-forum harm suffered by Phillips Exeter. I
cannot, therefore, consider it a contact for the purposes of
determining whether this court has specific jurisdiction.
PMH has otherwise alleged no facts that establish a causal
nexus between New Hampshire and PMH’s cause of action. I
therefore hold that the first element of the tripartite test has
not been met.
2. Purposeful Availment
The second prong of the tripartite test requires that I
determine whether defendants have purposefully availed themselves
of the privilege of conducting activities in New Hampshire. See
Burger King, 471 U.S. at 475; Phillips Exeter, 196 F.3d at 288;
Nowak, 94 F.3d at 712-13. This element focuses on “whether a
defendant ‘has engaged in any purposeful activity related to the
forum that would make the exercise of jurisdiction fair, just, or
reasonable.’” Sawtelle, 70 F.3d at 1391 (quoting Rush v .
Savchuk, 444 U.S. 3 2 0 , 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, 465 U.S. at 7 7 4 ) .
-18- Voluntariness and foreseeability are the cornerstones of the
purposeful availment requirement. See id.; Ticketmaster, 26 F.3d
at 207. The first question, then, is whether defendants have
voluntarily availed themselves of New Hampshire’s forum-based
benefits. The answer, again, is n o .
As I stated earlier, if “the forum plaintiff’s decision to
perform [his] contractual obligations within [his] own forum
state is totally unilateral it cannot be viewed as purposeful on
the part of the nonresident . . . .” See Elliott, 2000 DNH at
29. Again, defendants’ relationship with New Hampshire is
primarily driven by PMH’s decision to perform here, a decision
defendants did not dictate. Thus, defendants have not
voluntarily taken advantage of New Hampshire’s privileges for
jurisdictional purposes simply by claiming to do business with a
company that is located within this jurisdiction.
Likewise, defendants could not have foreseen that this case
would be tried in New Hampshire. They have few contacts with the
state, and next-to-none that can be appropriately attributed to
the cause of action at issue. I therefore conclude that
defendants have not purposefully availed themselves of New
-19- Hampshire’s forum-based privileges. PMH has thus failed to meet
the requirements of the second prong of the First Circuit’s test.
III. CONCLUSION
Based on the foregoing discussion, I conclude that this
court lacks personal jurisdiction over the defendants.
Accordingly, I grant defendants’ motion to dismiss for lack of
personal jurisdiction (Doc. No. 5 ) . The clerk shall enter
judgment in accordance with this order and close the case.
SO ORDERED.
/s/ Paul Barbadoro Paul Barbadoro United States District Judge
December 2 2 , 2004
cc: Richard B . McNamara, Esq. Alexander J. Walker, Esq.
-20-