Private Jet Services v. Sky King, Inc.

2005 DNH 141

• Court: District Court, D. New Hampshire
• Decided: October 11, 2005
• Docket: 05-CV-098-JD
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Private Jet Services Group, Inc. v. Civil N o . 05-cv-098-JD Opinion N o . 2005 DNH 141 Sky King, Inc.

O R D E R

Private Jet Services Group, Inc., (“PJS”) alleges that Sky

King, Inc., breached four agreements to provide jet services for

PJS’s clients during March, April, and May of 2005 and that Sky

King also violated the New Hampshire Consumer Protection Act. 1

Sky King moves to dismiss the case on the grounds that this court

lacks personal jurisdiction over it and, therefore, that venue is

not proper in New Hampshire. Alternatively, Sky King moves to

transfer the case to the Eastern District of California under 28

U.S.C. § 1404(a). PJS objects to Sky King’s motion.

1 PJS moved to file an amended complaint which was granted while Sky King’s motion to dismiss was pending. The amended complaint adds three breach of contract claims that were not pleaded in the first complaint and also adds the New Hampshire Consumer Protection Act claim. Because Sky King had not yet filed a responsive pleading, PJS was entitled to file an amended complaint without first seeking leave of the court. Fed. R. Civ. P. 15(a). I. Personal Jurisdiction

The plaintiff bears the burden of showing that personal

jurisdiction exists in response to a defendant’s motion to

dismiss. Daynard v . Ness, Motley, Loadholt, Richardson & Poole

P.A., 290 F.3d 4 2 , 51 (1st Cir. 2002). When, as here, the

parties are proceeding under the prima facie method for

determining personal jurisdiction, the plaintiff “may not rely on

the mere allegations of its complaint, but must point to specific

facts in the record that support those allegations.” Jet Wine &

Spirits, Inc. v . Bacardi & Co., Ltd., 298 F.3d 1 , 8 (1st Cir.

2002). The plaintiff’s burden is not onerous, however, because

the prima facie standard “permits the district court to consider

only whether the plaintiff has proffered evidence that, if

credited, is enough to support findings of all facts essential to

personal jurisdiction.” N . Laminate Sales, Inc. v . Davis, 403

F.3d 1 4 , 22 (1st Cir. 2005) (internal quotation marks omitted). The applicable New Hampshire statute permits jurisdiction to

the extent allowed under the due process clause of the Fourteenth

Amendment. See N.H. Rev. Stat. Ann. § 293-A:15.10; Sawtelle v .

Farrell, 70 F.3d 1381, 1388 (1st Cir. 1995). Due process is

satisfied if the defendant had sufficient contacts with the forum

state, which may be demonstrated under either a general or

specific jurisdictional theory. Noonan v . Winston Co., 135 F.3d

2 8 5 , 89 (1st Cir. 1998). PJS asserts that Sky King’s contacts meet the requirements of specific jurisdiction, which is analyzed in three categories: relatedness, purposeful availment, and reasonableness.2 Daynard, 290 F.3d at 6 0 .

A. Relatedness

“To satisfy the relatedness requirement, the claim

underlying the litigation must directly arise out o f , or relate

t o , the defendant’s forum-state activities.” N . Laminate Sales,

403 F.3d at 25 (internal quotation marks omitted). A breach of

contract claim arises from or relates to the defendant’s contacts

with the forum if those contacts “were instrumental either in the

formation of the contract or its breach.” Phillips Exeter Acad.

v . Howard Phillips Fund, 196 F.3d 2 8 4 , 289 (1st Cir. 1999). The

court analyzes the defendant’s contacts by considering “the

parties’ prior negotiations and contemplated future consequences,

along with the terms of the contract and the parties’ actual

course of dealing.” Daynard, 290 F.3d at 52 (internal quotation

marks omitted).

PJS alleges that Sky King breached four agreements. The

2 PJS discusses the jurisdictional requirements in the context of its breach of contract claims, except for the reasonableness factor where it also raises the Consumer Protection Act claim.

3 first agreement, dated January 1 2 , 2005, and signed on March 9,

2005, pertained to flight services from March 1 4 , 2005, through

March 2 8 , 2005, for teams participating in the March 2005 NCAA

basketball tournament. PJS contends that Sky King breached the

NCAA agreement by failing to comply with the “Maintenance and

Repair” provision of the agreement, which caused delays and other

problems with scheduled flights. The second, third, and fourth

agreements provided for flight services on specific days in April

and May of 2005. PJS alleges that Sky King anticipatorily

repudiated the second agreement and failed to perform the third

and fourth agreements without refunding the money paid by PJS.

It is undisputed that Sky King is a California corporation

that has no offices, employees, or operations in New Hampshire.

PJS is a New Hampshire corporation. None of the flight services,

which were the subject of the four agreements, occurred in New

Hampshire. PJS asserts, however, that Sky King’s contacts with New Hampshire were instrumental in the formation of those

agreements.

Greg Raiff, president of PJS, provides his affidavit in

support of PJS’s objection to Sky King’s motion. Raiff states

that PJS was incorporated in July of 2003 and that PJS’s first

contact with Sky King was in August when Greg Lukenbill,

president and chief executive officer of Sky King, contacted him

4 seeking business from PJS. 3 The four agreements at issue in this

case were negotiated by Lukenbill in California and Raiff in New

Hampshire by telephone and fax in early 2005. 4 Claire Pollock,

the administrative operations manager for PJS, also provided her

affidavit and confirms Lukenbill’s calls to Raiff and the contact

between Sky King and PJS pertaining to the agreements.

The agreements were written on Sky King’s letterhead and

were faxed to PJS in New Hampshire. The terms were negotiated by

communications between California and New Hampshire. The series

of four agreements also shows an ongoing relationship between Sky

King and PJS in New Hampshire. Therefore, Lukenbill’s contacts

with PJS in New Hampshire, on behalf of Sky King, are

jurisdictional because they are directly related to the formation

of the four agreements at issue in this case. See, e.g.,

Workgroup Tech. Corp. v . MGM Grand Hotel, LLC, 246 F. Supp. 2d

102, 113 (D. Mass. 2003).

3 Raiff’s prior contacts with Sky King, when he worked for a different employer and before PJS began operations, are not material to the contracts at issue here. Also, to the extent Raiff contends that Lukenbill called him continuously throughout 2005 seeking business unrelated to the four agreements at issue here, those contacts are not considered. 4 Raiff states in his affidavit that Sky King authorized PJS to act as its agent in New Hampshire but then disavows the relevance of the agency relationship to the claims alleged here.

5 B. Purposeful Availment

“‘Second, the defendant’s in-state contacts must represent a

purposeful availment of the privilege of conducting activities in

the forum state, thereby invoking the benefits and protections of

that state’s laws and making the defendant’s involuntary presence

before the state’s courts foreseeable.’” Daynard, 290 F.3d at 61

(quoting Foster-Miller, Inc. v . Babcock & Wilson Canada, 46 F.3d

138, 144 (1st Cir. 1995)). “The focus in this second requirement

is on voluntariness and foreseeability.” N . Laminate Sales, 403

F.3d at 2 5 . Therefore, purposeful availment involves reaching

out “to the plaintiff’s state of residence to create a

relationship -- say, by solicitation” and depends on “whether the

defendant benefitted from those contacts in a way that made

jurisdiction foreseeable.” Phillips, 196 F.3d at 292.

Lukenbill called Raiff in New Hampshire to solicit his

business.5 The four agreements that are the basis of the claims in this suit were the result of Lukenbill’s efforts and were part

of an ongoing relationship between Sky King and PJS for flight

services. Raiff states that PJS became one of Sky King’s biggest

customers in 2005. Raiff also states that Sky King appointed PJS

5 Lukenbill states in his affidavit that Raiff called him about providing flight services for the NCAA tournament and denies seeking business in New Hampshire. Given the prima facie standard, the court credits PJS’s version of events.

6 employees as crew members on some of its flights under the NCAA

agreement. Sky King was paid under each of the four agreements.

Based on those circumstances, Sky King voluntarily contacted and

did business with a New Hampshire company and, given the extent

of the interaction with PJS and Sky King’s benefit from the

business, it was foreseeable that it might be sued in New

Hampshire.

C. Reasonableness

In addition to the elements of relatedness and purposeful

availment, the court must consider whether the exercise of

jurisdiction would be reasonable in this case. Daynard, 290 F.3d

at 6 2 . Reasonableness depends upon weighing the “Gestalt

factors,” which are “(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.” Jet Wine, 298 F.3d at 1 1 . These factors are

considered on a sliding scale depending on the strength of the

plaintiff’s showing on the first two elements. Nowak v . Tak How

Investments, Ltd., 94 F.3d 7 0 8 , 717 (1st Cir. 1996).

7 In this case, PJS’s showing of relatedness and purposeful

availment is neither particularly strong nor precariously weak.

Sky King contends that defending this suit in New Hampshire would

impose a substantial financial burden because of the expense of

flying some fifty employees, who worked under the agreements, to

New Hampshire for trial. The First Circuit recognizes “that it

is almost always inconvenient and costly for a party to litigate

in a foreign jurisdiction. Thus . . . , the defendant must

demonstrate that exercise of jurisdiction in the present

circumstances is onerous in a special, unusual, or other

constitutionally significant way." Nowak, 94 F.3d at 718.

Otherwise, defendants from geographically distant places would

always be able to defeat personal jurisdiction. Id. Sky King

reiterates in its reply that all of its witnesses, relevant

documents, and the planes themselves are in California and that

it would impose a special or unusual burden for it to pay for transporting those people and things to New Hampshire.

Sky King has not explained why the planes are necessary for

litigation of the breach of contract claims and the Consumer

Protection Act claim, nor has it explained why so many witnesses

would be necessary or why alternative means of presenting

testimony would not suffice for some witnesses. Further,

presenting witnesses and documents at trial are the usual burdens

8 of litigation. See id. Therefore, there does not appear to be

any unusual burden on Sky King to litigate in New Hampshire. The

First Circuit “has repeatedly observed that a plaintiff’s choice

of forum must be accorded a degree of deference with respect to

the issue of its own convenience.” Sawtelle, 70 F.3d at 1395.

New Hampshire has an interest in having the parties’ dispute

adjudicated here because it involves a New Hampshire business.

See, e.g., N . Laminate Sales, 403 F.3d at 2 6 . On the other hand,

none of the activities contemplated under the parties’ agreements

occurred or were intended to occur here. Therefore, this element

provides only limited support for jurisdiction in New Hampshire.

As is often the case, the interest of the judicial system in

obtaining the most effective resolution of the parties’ dispute

does not appear to favor either forum. See Jet Wine, 298 F.3d at

1 2 ; Sawtelle, 70 F.3d at 1395. The fifth and last factor

examines “the interests of affected governments in substantive social policies.” Nowak, 94 F.3d at 719. For this factor, the

court examines the interests of New Hampshire and California

implicated by the parties’ dispute and concludes that both states

have interests in protecting their respective businesses. See

id.

“The gestalt factors rarely seem to preclude jurisdiction

where relevant minimum contacts exist.” Cambridge Literary

9 Props., Ltd. v . W . Goebel Porzellanfabrik G.m.b.H. & C o . Kg.,

295 F.3d 5 9 , 66 (1st Cir. 2002). Here, although the Gestalt

factors provide little support for exercising jurisdiction, they

do not weigh against the constitutionality of jurisdiction.

Therefore, PJS has carried its burden of showing that this court

may exercise personal jurisdiction over Sky King.

II. Venue

In the event the court were to find personal jurisdiction,

Sky King requested that the case be transferred to the Eastern

District of California pursuant to § 1404(a), arguing that New

Hampshire is a forum non conveniens. PJS objects to transferring

the case.

Under § 1404(a), the court may transfer a civil case to

another district where it might have been brought initially

“[f]or the convenience of parties and witnesses, in the interest

of justice.” To succeed in having the case transferred, Sky King

must show “both that an adequate alternative forum exists and

that considerations of convenience and judicial efficiency

strongly favor litigating the claim in the alternative forum.”

Iragorri v . Int’l Elevator, Inc., 203 F.3d 8 , 12 (1st Cir. 2000).

The First Circuit has cautioned that “the doctrine of forum non

conveniens is used to avoid serious unfairness and that

10 plaintiff’s choice of a forum will be disturbed only rarely.”

Nowak, 94 F.3d at 719.

PJS does not dispute that the Eastern District of California

would provide an adequate alternative forum. In balancing the

convenience of the parties, the court may consider the “relative

ease of access to sources of proof; availability of compulsory

process for attendance of unwilling, and the cost of obtaining

attendance of willing, witnesses; possibility of view of

premises, if view would be appropriate to the action; all other

practical problems that make trial of a case easy, expeditious

and inexpensive [and] questions as to the enforceability of a

judgment if one is obtained.” Mercier v . Sheraton Int’l, Inc.,

935 F.2d 419, 424 (1st Cir. 1991) (internal quotation marks

omitted); see also Coady v . Ashcraft & Gerel, 223 F.3d 1 , 11 (1st

Cir. 2000). The court begins with a presumption in favor of the

forum chosen by the plaintiff, and the defendant bears the burden of showing that considerations of convenience and judicial

efficiency strongly favor an alternative forum. Nowak, 94 F.3d

at 719.

Sky King contends that the factual evidence in the case will

focus on its actions and aircraft and that nearly all of the

pertinent witnesses and documentary evidence for the case are in

California. PJS counters that while it would be more convenient

11 for Sky King to litigate in California, the documentary evidence

can b e , and to a large extent already has been, sent to New

Hampshire and the witnesses can travel here to the extent that

may be necessary. Sky King responds that it should not be

expected to bear the costs of flying its witnesses and evidence

to New Hampshire. However, “[t]he mere suggestion of greater

financial strain is meaningless unless and until the [protesting

party] demonstrates the nature and extent of the supposed

limitations upon [its] ability to litigate.” Iragorri 203 F.3d

at 1 7 .

With respect to judicial efficiency, Sky King contends that

the choice of law provisions in the agreements, specifying

California law, favor litigation in the Eastern District of

California. This court, however, is fully capable of applying

California contract law in this case. See Nowak, 94 F.3d at 720.

The parties have not suggested that there are other related pending cases that would implicate consolidation or other

judicial efficiency issues. See Coady, 223 F.3d at 1 1 .

PJS has chosen New Hampshire as the forum for this case, and

its choice is entitled to deference. Although litigation in New

Hampshire will not be as convenient for Sky King as California

would b e , it has not shown that the inconveniences it will face

would make litigation here unfair. See, e.g., Brian Jackson &

12 Co. v. Eximias Pharm. Corp., 248 F. Supp. 2d 31, 39 (D.R.I.

2003). Therefore, the court will not exercise its discretion to

transfer the case to the Eastern District of California.

Conclusion

For the foregoing reasons, the defendant’s motion to dismiss

(document no. 7) is denied.

SO ORDERED.

A t t f ^ Cj 3)1 (jBtvCU), fly Joseph A. DiClerico, Jr. United States District Judge

October 11, 2005

cc: Daniel P. Schwarz, Esquire William A. Staar, Esquire