State of Maine v. McGraw-Hill Companies, Inc.

Opinion

ENTERED JAN 1 4 2015

STATE OF MAINE BUSINESS AND CONSUMER COURT KENNEBEC, ss. Location: Portland Docket No.: BCD-CV-14-49

MN\M- J<fl'{_, t1-7h ~ JLf )

STATE OF MAINE )

)

Plaintiff, )

)

v. )

) ORDER ON DEFENDANTS' RULE THE MCGRAW-HILL COMPANIES ) 12(b)(2) MOTION TO DISMISS FOR INC. and STANDARD & POOR'S ) LACK OF PERSONAL JURISDICTION FINANCIAL SERVICES, LLC, )

)

Defenda11ts.

I. INTRODUCTION

Defendants, McGraw-Hill Companies, Inc., n/klnJ McGraw-Hill Financial, Inc. ("McGraw-

Hill") and Standard & Poor's Financial Services, LLC ("S&P") (collectively "Defendants") move this court to dismiss the State of Maine's ("State of Maine, or "PlaintifC') Complaint for lack of pet·sonal jurisdiction. The Defendants argue that the State of Maine has no specific j\ll'isdictlon over the. Defendants, as the State's ca\lse of action does not arise from the Defendants' conduct within the forum state.

The State alleges in its Complaint that the Defendants directed misleading statements about S&P's independence and objectivity over a period of time that began in 200 l and continued through 20 II to Maine consumel's in violation of the Maine Unfnh· Trade Practices Act. The State fmther avers that the allegations in the Complaint fulfill the State's pl'ima flicle bmden of establishing that tlus court bas personal jurisdiction over the pm1ies and asks that if this court fails to fmd personal jurisdiction, the State, in the alternalive, be allowed to conduct discovet')' relevant to the Defendants' motion and file an amended Complaint.

Il. STATEMENT OF FACTS

Plaintiff, State of Mai.ue, filed the subject Complflint on Febmary 5, 2013, in Kennebec County Superior Comt, pursuant to 5 M.R.S.A § 207 ("UTPA"). (Campi. ~ 1.) Defendant McGraw-Hill is a New York corpornlion wi(h its principal place ofbllsiness nt 122 Avenue of the Americas, New York, NY 10020. McGraw-Hill is registered with the Maine Secretary of State to conduct business within the State of Maine. (Corupl. V2.) Defendant S&P is a Delaware limited liability company aud n wholly owned subsidiary of McGraw-Hill. (Compl. ~ 3) Within the S&P business unit is Standard & Poor's Rating Services ("SPRS"). SPRS operates as a credit rating agency that assigns credit ratings onn broad range of securities. !d.

In 200 I, S&P t·ated val'ious structured finance products. (Compl. V5.) Said products included various Residelllial Mortgage Backed Secmities ("RMBS") and Collateralized Debt ObHgntions (''CDO") which comprised many mutunl funds and pension funds of Maine residents, retirees, and workers. (Compl. ~ 18.) Objectivity and independence are material to the services provided by S&P. (Compl. ~ 23.) As a result, S&P advertised its objectivity and independence aud vowed to sllch behavior in irs Code of Conduct. (Com pl. ~ 26.) Howeve1·, the Plaintiff believes that the Defendnnts' use of the "Issuer Pays Model" compromised S&P's independence IUtd integrity.' (Com pl. ~ 34.) This established a conflict of interest because the revennes eamed came fi·om banks and other entities whose securities it mted. (Campi.~ 36.) Said conflict was not disclosed to the public. (Compl. ~ 37.) The State fmther alleges that S&P knew that its analytical models cotlld not assess certain complex securities with the requisite accuracy, yet it continued to rate these products. (Campi. ~ 40.)

1 Under the Issuer Pays Model, the issuer of sccuJ'ities pays c1·edit rating Rgencies to rate the investments.

(Compl. ,135.)

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lii.STANDARD OF REVIEW

The question of jllrisdiction is always fundamental, and is a question of law. See Lindner v.

Bal'ly, 2002 WL 1974091, at *2 (Me. Super. Aug. 9, 2002) (citing 20 Am Jur. 2d Courts§ 54). "The proper exercise of personal jmisdiction in Maine hinges on the satisfaction of two req\1irements: first ... the Maine Long-Arm statute, 14 M.R.S.A. § 704-A ... [must confer] personal jurisdiction on the court; and second ... the exercise of j\ll'isdiction pmsmmt to the long- arm statute [must comply] with constitutional due process req\tirements." Jackson v. Wectver, 678 A.2d l 036, 1038 (Me. 1996).

"Maine's jurisdictiomllreach is coextensive with the Due Process Clause of the Constitution." Mw1Jhy v. Keenan, 667 A.2d 591, 593 (Me. 1995) (citing U.S. Const. amend. XIV, § I; Interstate Food Processing Corp. v. Pellerito Foods, Inc., 622 A.2d 1189, 1191 (Me. 1993); Frazier v. Bankamerlca fll/ 1/, 593 A.2d 661, 662 (lvfe. 1991 ); Cal uri v. Rypkema, 570 A.2d 830, 831 (Me. 1990), cert, denie(/, 498 U.S. 818 ( 1990); Tyson v. Whitaker & Son, Inc., 407 A.2d I, 2-3 (Me. 1979)). Due process ln the exercise of jul'isdiction ove1· m1 out-of-state defendant requires the satisfaction of the following three-pronged test: (I) Does the forum stnte have n legitimate interest in the subject mntter of the action? (2) Should the defendant by his conduct rensouably have anticipated litigation in the forum state? Hnd (3) Would the exercise of jurisdiction comport with "traditional notions of fnir play and subshmtial justice[?]" J'vlurphy, 667 A.2d at 593 (citations omitted); see also Foreside Common Dev. C01p. v. Bleisch, 463 A.2d 767, 769 (Me. 1983). "The bmdcn of establishing that jmisdiction is proper under the ftrst two prongs falls on the plaintiff; once the plaintiff has met that bmden, it is up to the defendant to show that jmisdiction is ;mproper undet· the third prong." Elec. Medi(l/nt'l v. Pioneer commc 'ns ofAm., 586 A.2d 1256, 1258-59 ( 1991) (citing Rypkema, 570 A.2d nt 831 n.2) (emphasis in ot·iginal).

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"Facts regarding jurisdictional questions may be determined by reference to affidavits, by a pretrial evidentiary hearing, or nt trial when the j\ll'isdictional issue is dependent upon a decision on the merits." DOJfv. Complastik C01p., 1999 ME 133, ~ 6, 735 A.2d 984 (citing Federal Deposit Ins. Co!]J. v. Oak/awn Apartments, 959 F.2d 170, 174 (1Oth Cir.l992)). The Method chosen by the trinl cou1·t in determining said motion dictates the evidentiary showing necessnry for the a plaintiff to survive a defendant's Motion to Dismiss. !d. (citing Bolt v. Ga!'-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir.l992)). When the court determines a motion to dismiss for lack ofpersonnljurisdiction prior to trial, without holding nn evidentiary henl'ing, "[t]he plainti.frs showing in opposition to the motion 'must be mnde on specific facts set forth in the record .... "' !d. ~ 13 (citing Sullie v. Sloan Sales, Inc.. 1998 'NIB 121, ~ 5, 711 A.2d at 1286). This means the Plaintiff'must go beyond the pleadings and make affirmative proof."' United Elec. Ra(/lo and JVfach. Workers ofAm. v. 163 Pleasant St. Corp., 987 F.2d 39,44 (1st Cir.l993) (quoting Boil, 967 F.2d at 675). This showing mny be made by affidavit or otherwise. See Serl'(ls v. First Tennessee Bank Nat'/ Assoc., 875 F.2d 1212, 1214 (6th Ch-.1989).

Howevet·, when:

The court proceeds onJy upon the pleadings nnd affidavits of the parties, the plaintiff 'need only make o prima facie showing that jmisdictlon exists,' and the plaintifrs written nllegations of j\1risdictional facts shouJd be constmecl in its favo1·."

Determining personal jmisdiction based on in.ilial11ffidavits alone, without additional evidence, is a "useful means of screening out cases in which pel'sonal jurisdiction is obviously lacking, and those in which the jmisdictionnl challenge is patently bogus."

Moreovet·, it prevents defendants from defeating personal jurisdiction merely by filing a written affidavit opposing the j\ll'isdictional facts alleged by the plf1intiff.

D01j'v. Cnmplastlk Cm'lJ., 1999 ME 133, ~~ 14-16, 735 A.2d 984 (citations omitted). In this case, the hearing is non-testimonial, meaning the court proceeds only upon the pleadings and affidavits of the parties, and the plaintiff"ueed only make a prima facie showing that jurisdiction exists ... " Rypkema, 570 A.2d at 832 (quoting Kowalski v. Doherty, Wallace. Pillsbury & Murphy, 787 F.2d 7, 8 (I st Cir. 1986)).

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IV. DISCUSSION

The Parties make no claim that general jurisdiction exists in this case, thus the court has rcse1·ved its analysis for detel'lnining whether specific jmisdiction exists in order to subject the Dcfeudmlls to suit in this Court.

Specific Jurisdiction ami Due Process Requirements

Maine's long-ann statute, l 4 M.R.S. § 704-A, applies to the fi.1llcst extent permitted by the Due Process Clause of the United States Constih.1tion. As mentioned above, due process is satisfied when: ( l) Maine has n legitimate interest in the subject matter of the litigation; (2) the defendant, by his m· her cond\lcf, reasonably could anticipate litigation in Maine; ~md (3) the exe,·cise of jurisdiction would not offend traditional notions of fair play and substantial justice. Fore, LLC v.

Benoit, 2012 ME 1, ~ 7, 34 A.2d 1125. The court analyzes each prong ofthe test below.

a. T!te Stale's Legitimate lulerestln the Subject Mnller of Tills Lltlgatlou

The question the Com·t nn1st answer here is whether "Maine has 'n minimal governmental intet·est in the litigation and consequent power to decide if it is fair to assert it.'" Ty.wn v. Whitaker & Son, Inc., 407 A.2d I, 4 (Me. 1979) (citing Woods, Pennoyer 's Demise: Personal Jurisdiction a.fler Shq[{er and Kulko and a Modest Prediction Regarding World-Wide Volkswagen Corp. v. Woodson, 20 Ariz. L. Rev. 861, 881-82 ( 1978)). "To demonstrate that Maine has a legitimate interest in the subject matter of the litigation, a plaintiffmtlSt assert more than a mere interest 'in providing a Maine resident with a fonun fo1· redress agau1st n nomesident. '" 2 Grimm v. Allen, 2006 WL 3707895, nt *2 (Me. Sllper. Oct. 16, 2006) (citing Mw1Jhy v. Keenan, 667 A.2d 591, 594 (Me.

2 Courts in Maine have held thnt Maine's interest in the litigation "must be beyond mere citizenry ... such as ... the location of witnesses nnd creditors within its border." Fore, 2012 ME I,~ 7, 34 A.3d 1125 (citing Connelly v. Doucelle, 2006 ME 124, ~ 8, 909 A.2d 221 (nlterntions in originnl) (quotation marks omitted).

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1995)), The State lu1s "an interest in regulating and/or sanctioning parties who reach out beyond one state and create conlinuing relationships and obligations with Maine citizens for the consequences of their activities." /d. (citing Elec. Medialnt'l, 586 A.2d at 1259 (citations omitted)).

The State argues that this action WfiS brought by the Maine Attorney General's office iuthe interest of the public to protect Maine citizens from the Defendants' unfah· and misleading business practices. (Pl.'s Opp, Mot 5.) Specifically, the State aUeges that S&P misrepresented that its business models were independent, objective, and free from influence from those paying for the ratings. (Compl. ~ 46(A).) Further, S&P misrepresented its competence to provide expet1 analysis of stntctmed finance products. (Compl. ~ 46(B).) In this case, unone of the representations made by S&P are [Maine-specific]. Rnthe1·, they exist on the intemet and in other public sources accessible to anyone." State ofAriz. v. McGraw-Hill Companies, Inc, CV -2013-001188 (Ariz. Super. Ct., Mar. Cnty., Sepl. 29, 2014). 3 Howevet·, the State of Maine alleges that S&P has provided credit ratings to asset bncked secmities that were used within the Stnte of Maine. (Compl. ~ 44.) By engaging in said acts and practices, S&P made or caused to be made representations to Maine consumers which nrc material and likely to mislead in violation of 5 M.R.S. § 207.'1 (Compl. 45.)

J In Stare of Arizona v. McGrm1•·Hfll, the State of Arizona filed a complaint alleging that the Defendants committed consume1· fmud by falsely representing that S&P's ratings were objective and independent. The superio1· court determined thnt the "Defendant (S&P) is in the business of nssigning credit ratings to cer1ain securllics, with the expccllllion that Investors will rely on its ralings .... (While] the comploined-of statements were not directed at Arizona, [they) ore publicly available on the intemet and elsewher·e."/d. Further, the State of Al'lzona alleged that S&P's public statements concerning its independence and objectivity we1·e made in connection with tnmsactions with Arizonn residents, companies, and governmenta~ entities. The court determined that the State had personal jurisdiction over the Defendants. !d. 4 The Law Court has held:

Maine has n legitimate interest in allowing its residents a forutn in which to seek redress when out-

of-state creditors refuse to correct cnoneous credit reports. Credit reports substantially influence the ability of'individ\uds to obtnin financing for purclmses that nrc vital to their lives and livelihoods. If a credilor actively refuses to correct the false credit report of a Maine resident, Maine has a legitimate

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Thus, reviewing the facts in light most favorable to the Plaintiff, the Comt finds that the State of Maine has a legitimate interest in the subject matter due to the Defendants intentionally entering into business relationships with consumers and entities in the State of Mnine.

b. Auticlpatlou of Litlgrtflou /11 Mai11e

Maine requires an assessment of whethet· a foreign corporation bas sufficient contacts with the ton1m State to "make it reasonable ... to require the corpomtion to defend the pat·ticular suit which is brought there." Harriman, 518 A.2d 1035, 1037 (1986) (quoting lntemational Shoe Co. v.

Washington, 326 U.S. 310, 317 ( 1945)). "[T)he dettmdant nntst 'pmposefully avail itself ofthe privilege or conducting activities within the fonun State, thus invoking the benefits nnd protections of its laws."s lvfwphy v. Keenan, 667 A.2d 591, 594 (Me. 1995). The requisite minimum contacts are present when "(I) the activities of the defendnnt have been directed at the forum•s residents; (2) the defendant deliberately engnges in significant activities in the forum; or (3) the defendant creates continuing obligations between itself and residents of the tbnun." Cavers v. Houston McLane Co., Inc., 2008 ME 164, ~ 24, 958 A.2d 905.

In Maine, the level of minimum contacts necessMy to support jurisdiction is relatively low.

For ex.Hmple, as the State has noted, the Law Court has found such minimum contacts for the mere preparation of lax scrvices,6 out-of-stnte fraudulent credit reporting, 7 and single conlmctual

interest in protecting !he r·esidenl, whether or· not the credirot· is located outside of Maine's boundnries.

lJickford v. Onslow lvlem'l J-I0.\1J. Found. Inc., 2004 ME Ill, ~ 11, 855 A.2d 1150. Similarly, credit ratings also intluence the ability of individui\lto obtain fimmcing and carry on business. 5 "The r·coson for the pmposcful ovailment r·equiremenr is to gtuwd against a nonresident defendant being holed into n forum based on 'mndom, isolated or fortuitous' contacts with that jurisdiction." Camelot Power LIJC v. Prospect Energy Co11), 2007 WL 4698273 (Me. Super. Aug. 9, 2007) (citing Unicomp v. Harcros Pigments Inc., 994 P.Supp. 24, 28 (D. Me. 1998)). 6 In Fore, rhe Law Court utilized Maine's long-nnn statute to conclude that tax services provided by ll MnssRchusc!ts accountant for a New Hampshire compnny rhnt owned 11 golf-co\lfse in Westbrook, Maine

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transactions. In this case, McGraw-Hill is a New York based corporation and is registered as a foreign business entity with !he Maine Secretary of State to conduct business within the State of Maine. McGraw-Hill has employees working in the State ofMaine. 9 (Hallett Aff. ~~ 2-4.) In 20 I2, the most recent year for which final revenue data is available, McGraw-Hill generated $6,305,078 in revenue from the State ofMaine. (Sacks Aff. ~ 3.) S&P genet·ated $1,059,140. (Sacks Aft~ ~ 4.) Fmther, S&P contacted the State on nwnerous occasions via email to provide the State Tt·easmer with reports and publications as weU as promotional and contact information about S&P. 10 (Carlow Aff. ~ 7.) Finally, while S&P has no employees in Maine, in May of201 I, S&P persoJmcl met with employees of the Maine Bureau oflnsunmce in Gardiner, Maine. In said meeting, S&P prepared a presentation as to how S&P's mting setvices co\Jld be used to evaluate insurnnce companies within the State. (Coates Aff. ,13.)

consliluted a h·ansaclion of business in Maine. The accountant had never resided In Maine, and had nevet· been to the golf course in Westbrook. However, the co\11'1 noted "[the accountant] intentionally directed fraudulent conduct toward (the Plaintiff] in Mnine and therefore had demonstmted that the cnuse of action is related to both the preparation of the tax returns for the golf course and his telephone call with the Plaintiff. 2012MB I,~ II, 34 A.3d 1125 (citations omilled). 7 In Bickford, the Lnw Court found that personal jurisdiction over nn out-of-state creditot· even though said creditor did not conduct business in Maine, but who l'ef\tsed to remedy an nlleged defect in a credit report affecting n Maine debtor. The Law Com'f founclthal the defendant hospital intentionally directed its conduct toward n Maine resident, nnd on thnt basis held thn! the cmnt could exercise personal jurisdiction consistent with due process. Bickford v. Onslow Mem'l Hosp. Found., Inc., 2004 ME I I I, ~~ 14-16, 855 A.2d I I50. 8 In Cavers,

[A] single trnnsaction between n scouting director for a minor league baseball club and n player to negotiate IHld sign the player's contmcl was sufficient to establish personnl jm·isdlction over the club inn workers' compensation clnhn by the Maine-based player. Benoit's involvement in the single transaction here and his nlleged stAtement rcgnrding the tax returns are likewise sufficient to establish personal jurisdiction ovet· him with regard to the trnnsRctionand the statement.

Fore, 2012 ME I,~ liJ, 34 A. 3d 1125 (citing Cavers v. Housran lvlcLane Co., 2008 ME 164, ~~ 25, 311-35, 958 A.2d 905). 9 ln20 13, McGmw-Hill employed seven (7) active employees within the slate of Maine. S&P emt>loys zero employees in Maine. (Hallet! Aff.·~V 2-tl.) 10 S&P's Client Business Mnnoger, Anthony lvanovich and Executive Managing Director Paul Coughlin were responsible for much of the correspondence. (Pl.'s Ex. D, E). The State contends that the em ails were an attempt encourage the Maine Treasury to patronize S&P for its services and f\lrlhet· avers thai the misrepresentation of S&P objectivity and independence were present in some of the communications.

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The court finds that the Defendants' cont&cts in Maine are not merely fort11itous ot· incidental. Rather, the Defendants have purposefully availed themselves of the benefits and protections of Maine law. Based on the totality of the contacts the Defendants have with the State, it is foreseeable tllat the Defendnnts may have to defend themselves in Maine. The Defendants t·outinely conduct business in Mnine and advertise and pt·omote S&P by targeting Maine Businesses and govemmental offices. 11 Thus, viewing the facts in the record in the light most favorable to the plnintiff for the pmposes of the pending motion to dismiss, the court finds that there is a sufficient basis to conclude that the detendants nvailed themselves of Maine's jmisdiction through their actions.

c. Trntlillounluotious of Fnlr Play ami substantial justice

The third part of the test concerns whether it is t'easonable to l'equire the defendant to litigate in Maine. See CaveJ•s, 2008 ME 164, ~~ 36-40, 958 A.2d 905. The comt looks to the resomces of the defendant to make this determination. !d. ~ 39. Because the court has found the first two prongs of the jurisdictional chte process test to be satisfied u[t]he burden ... shifts to the defendant to show thnt jul'isdiction is impropet' .. ."Interstate Food Processing Corp. v. Pellerito Foods, Inc., 622 A.2d 1189, 1191 (Me. 1993).

11 In Harl'iman v. Dem11/as Supermarkets,

The defendrmt supermarket b\lsincss mailed checks to Maine, h11cl phone calls with the Maine plrtintifrs employer, advertised in Maine, and permitted the use of its private labels In Moine, but there is no indication that any t'epresentative of the defendant actually entered the state. The co use of nction in tlt!lt cnse did not arise from these contacts themselves, but t·athet· from an accident·thnt the plaintiff employee of a Maine supplier had while delivering goods to the defendant in Massachusetts.

We held thatlhe defendant's contacts were sufficient to convey personal jurisdiction. Here, Benoit hnd sufficient contact with Maine to satisfY d\IC process requirements.

Fore, LLC v. Benoit, 2012 ME I, 34 A.3d 1125, I 130 (citing Harriman v. Demulas Supermarkets, 518 A.2d I 035 (Me. 1986)) (citntion omitted).

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In detcnni.tting fairness, "the court considers the mnubet·, nature nnd purpose of the defendant's contacts with Maine, the cotmection between those contacts and the cause of action, the interest of Maine in the controversy, and the convenience to both parties." Harriman v. Demoulas Supermarkets, Inc., 518 A.2d 1035, 1038 (Me. 1986) (citing Labbe v. Nissen COIJJ., 404 A.2d 564, 570 (Me. 1979)). 11 [I]n most instances it is less unfair to require a non-resident defendant to try a case in a state in which he hns vohtntarily chosen to engage in business than to require a plaintiff to travel out of state and try his case in a jurisdiction which has no nexus whatsoever with the event wltich gave rise to the action." Labbe, 404 A.2d nt573.

In this case, the Defendants have not demonstrated that litigation iu Maine would be "so gravely difficult and inconvenient" that the Defendants are at a "severe disadvantage in comparison to the [Plnintift]." Burger King Co11J. v. Rudzewicz, 471 U.S. 462,477 (1985). The natme alld purpose of the Defen<lnnts' contacts were not so "random, fortuitous, or attenuated" thatjmisdiction is unreasonable. Finnlly, while the extent ofS&P's activity is small compared to its activity in other parts of the United States, 11 [l)ess extensive nctivity is required where the cause ofaction at'ises out of ot· in connection with the defendant's forum-related activity." Calw·i v. Rypkema, 570 A.2d 830, 833 (Me. 1990). The court believes that litigation in this action is consistent with the traditional notions of fnir play nnd substantial justice.

r/. Recent Supreme Court C(fse Lnw

Tbe Defendants argue that the Supreme Court's l'ecent decision in I·Valden v. Fiore, prevents the Court's exercise of per·sonal jmisdiction. However, Wc11den is distlng~lishable from the cnse at hand. Unlike the defendnnt in Walden, nothing nbout S&P's contacts with the State of Maine was "nmdom, fortuitous, or attenuated." 134 S. Ct. 1115, 1123 (20 14). In Walden a deputized DBA

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agent seized a large arno\mt of cash held by two individuals travelling from San J\tau to Las Vegas through the Atlanta airJlort. !d. at 1119. The agent allegedly flied a false ot· misleading affidavit in support of the forfeiture of the cash. Jd at 1120-21. Ultimately, the legitimacy of the cash was proven and the couple brm1ght nn action against the agent in Nevada where one of the two resided.

!d.

The Comireasoned that the Federal Distdct Court in Nevada lacked personal jmisdictiou over the defendant police officer, concluding that the officer did not share the requisite "minimal contacts" with Nevada. ld. at 1124-25. In particular, the Com! noted "[w)e have consistently rejected attempts to satisfy the defendant-focused 'mini.tmm1 contacts' inquiry by demonstrating contacts between the plaintiff(or third parti~s) and the forum state." 12 !d. at 1122. In making such determination, the Comt relied on weiJ-cstablished principles of personal j\n·isdiction to decide the case and held, "[f]o1· a Stflte to exercise jurisdiction consistent wilh due process, the defendant's suit-related conduct must create a substantial connection with the forum State." kl In establishing such cotmection, the Comt reviewed the well-established jmlsdictionnl principles and noted:

First, the relationsb.ip must arise out of contacts that the "defendant himself" creates with the fomm State. Burger King Corp. v. Rudzewfcz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 ( 1985). Due process limils on the State's adjudicative authority ptincipally pmtect the liberty of the nomesident defendant-not the convenience of t>laintiffs or third parties. See World-Wide Volkswagen Corp., supra, at 291-292, 100 S.Ct. 559 .... Put simply, however significant the plaintiffs contacts with the fomm may be, those contacts cannot be 11 decisive in determining whether the defendant's due process l'ights m·e violated."

Rush 444 U.S., at 332, 100 S.Ct. 571.

Second, our "minimum contacts" analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there. See, e.g., lntemallonal Shoe, supra, at 319, 66 S.Ct. 154 (Due pmcess "does not contemplate that a stole may make binding n judgment in personam against an individual ... with which I he 12 In Walden, the agent did not purposefully target Nevada o1· any Nevada citizen. The agent did 1101 intend for any of his actions tn haven consequence in Nevadn. The Supreme Court determined that such contact with Nevada WIIS random nnd attemllllcd to the defendnnt officer's action in Georgia.

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state has no contacts, ties, o1· relations"); Hanson, supra, at 251, 78 S.Ct. 1228 (''However mini.tnEJI the burden of defending iu a foreign tribunnl, a defendant may not be called upon to do so unless he has had the 'minimal contacts' with tbat State that are a prerequisite to its exercise of power over him"). Accordingly, we have upheld the assertion of jurisdiction over defendants who have purposefully "reach[edJ out beyond" their State and into another by, for example, entering a contmchtHI relationship that "envisioned continuing and wide· reaching contacts" in the fonun Stale, Burger King, supra, at 479-480, IOS S.Ct. 2174, m· by circulating magazines to 11deliberately exploi[tr a market in the fonnn State, Keeton, supra, at 781, I 04 S.Ct. 1473. And although physical presence in the fomm is not a prerequisite to jmisdiclion, Burger King, supra, nt 4 76, 105 S.Ct. 2174, )Jhysical entry into the State-either by the defendant in person or through an agent, goods, mail, or some other means-is certainly a relevant contact. See, e.g., Keeton, supm, at 773-774, 104 S,Ct. 1473.

Wet/den v. Flore, 134 S. Ct. at 1122 (20 14). Tlms, Walden does not altct· the well-established due process analysis necessary for establishing personal jmisdictiou. Rather, the Comi reiterates that the plaintiff cmutot be the only link between the defendm1t and the forum. The defendant's conduct must form the necessary connection \Vith the fbntm State thot is the bnsis for its jurisdiction over him. 13 The Comt disagrees with Defendants' contention thnt Walden dictates the result in this case.

S&P directed its activity to Maine consumers through cmt1il correspondence and targeted presentations advertising rating services. The Defendants' relationship with the Slate of Maine is fundamentally different fi·om the agent's connection to Nevada in T·Valden.

V, CONCLUSION

The entry shall be: Defendants' Motion to Dismiss is DENIED.

Pursuant to M.R. Civ. P. 79, the clerk is hereby directed to incorporate this ordc1· iuto the docket by J'eference.

l.l "To be sure, 11 defendant's contacts with the forum State may be inler!wincd with his transactions or interactions with the plaintiff or other pnr!ies. Dut n defendant's relationship with n plaintiff or third party, standing alone, is an insufficient basis for jurisdiction." Walden, 134 S. Ct. Rl 1123.

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Dnted ~~~

M. Michnela Murphy,<Jt stlce B~1silless & Consumer Docket

Entered on the Docket: II· :l t, ·1'-/ Copies sent via Maii_EiectronicallyJL

State Of Maine v. The McGraw-Hill Companies Inc. and Standard & Poor's Financial Services, LLC. BCD-CV-14-49

State Of Maine Plaintiff

Counsel: Linda Conti, AAG 6 State House Station

Augusta, ME 04333-0006

The McGraw-Hill Companies Inc. and Standard & Poor's Financial Services, LLC Defendants

Counsel: Sigmund D. Schutz, Esq.

One City Center

PO Box 9546

Portland, ME 04112-9546