510 F.3d 43 (1st Cir. 2007), 06-2281, Adelson v. Hananel

Docket Nº:06-2281, 06-2282.
Citation:510 F.3d 43
Party Name:Sheldon G. ADELSON, Plaintiff-Appellant/Cross-Appellee, v. Moshe HANANEL, Defendant-Appellee/Cross-Appellant.
Case Date:December 05, 2007
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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510 F.3d 43 (1st Cir. 2007)

Sheldon G. ADELSON, Plaintiff-Appellant/Cross-Appellee,

v.

Moshe HANANEL, Defendant-Appellee/Cross-Appellant.

Nos. 06-2281, 06-2282.

United States Court of Appeals, First Circuit.

Dec. 5, 2007

Heard June 6, 2007.

Appeals from the United States District Court for the District of Massachusetts Hon. Reginald C. Lindsay, U.S. District Judge.

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[Copyrighted Material Omitted]

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Andrew H. Schapiro, with whom Philip Allen Lacovara, Christopher J. Houpt, Mayer, Brown, Rowe & Maw LLP, Franklin H. Levy, and Duane Morris LLP, were on brief, for appellant/cross-appellee.

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James A. G. Hamilton, with whom Burns & Levinson LLP was on brief, for appellee/cross-appellant.

Before TORRUELLA and LYNCH, Circuit Judges, and FUSTÉ, [*] District Judge.

TORRUELLA, Circuit Judge.

This is an appeal from the district court's dismissal of a case for forum non conveniens. Plaintiff Sheldon Adelson, a United States citizen, is an international businessman with substantial holdings around the world, including several casinos and a corporation named Interface Partners International, Ltd. ("IPI"). IPI is a Delaware corporation which was established for the purpose of making business investments in Israel, and has offices in Needham, Massachusetts, Nevada, and Israel. The defendant, Moshe Hananel, is a citizen and resident of Israel who was hired in 1995 to serve as the General Manager of IPI's operations in Israel. Adelson terminated Hananel's employment with IPI in April 2000, resulting in several lawsuits in an Israeli labor court. In February 2004, Adelson filed the instant suit in the United States District Court for the District of Massachusetts seeking a declaration of the parties' respective rights pursuant to an oral employment contract between IPI and Hananel.

After finding that it had personal jurisdiction over the defendant for the declaratory action, the district court dismissed the case for forum non conveniens. The court determined that Israel is an adequate alternative forum and that the balancing of public and private interest factors weighs in favor of the Israeli forum. Adelson v. Hananel, No. 04-10357 (D. Mass. July 18, 2006) (order dismissing the case on grounds of forum non conveniens). The plaintiff now appeals, arguing, inter alia, that the district court failed to afford heightened deference to the plaintiff, a U.S. citizen, and his choice of forum, and erred in relying on the pendency of concurrent action in Israel. The defendant cross-appeals and contends that the district court lacks personal jurisdiction over him. We affirm the district court's finding of personal jurisdiction, but reverse the dismissal for forum non conveniens.

I. Background

Adelson and Hananel enjoyed a social friendship prior to their decision to become involved in business together. In late 1995, Hananel became aware that IPI's General Manager in Israel would be vacating that position and he expressed interest in the job. According to the facts alleged in the complaint, on December 5, 1995, Adelson, Hananel, and IPI's General Counsel, Paul Roberts, met in IPI's office in Needham and formally agreed that Hananel would become a full-time employee of IPI.1 Hananel's responsibilities were to identify, recruit, and hire business analysts and portfolio managers who would help IPI search out and identify opportunities in Israel in the high technology sector. His agreed salary was $100,000 and twelve percent of the net profits realized by IPI from any high tech investments which were found, recommended, and made as a result of his efforts. Although the parties confirmed and finalized the terms of employment and all three men shook hands, nothing was ever set in writing.2

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In the course of Hananel's employment, he and Adelson stayed in constant communication via daily telephone calls to discuss IPI business. Although it is unclear whether Adelson was in Massachusetts during those phone calls, it is undisputed that the substance of the conversations was IPI-related. Hananel was also in frequent contact with other IPI officers, such as Chief Financial Officer Stephen O'Connor and IPI's Treasurer, who were based in Needham. The Needham office also managed all of the budgeting and funding for the Israel branch; Hananel submitted his annual budget to and made all requests for operating funds through that office because the funds were held in Massachusetts bank accounts. Various written communications between Hananel and O'Connor confirm that reporting structure.

On at least one occasion, Hananel went to Massachusetts to attend a meeting on behalf of an Israeli company, iMD Soft, Ltd., in which IPI had a substantial investment. As a representative of IPI, Hananel was a member of iMD's Board of Directors and participated in a meeting with officers from Agilent Technologies in Andover, Massachusetts.

Hananel's employment was terminated in April 2000, allegedly for malfeasance. Adelson claims that Hananel did little to no work for IPI and used IPI's finances and personnel for his own personal and business purposes. In 2001, Hananel sued Adelson and IPI in Tel Aviv District Labor Court for compensation which he alleges he was owed under his oral employment contract. Adelson countersued in the Israeli court, seeking the return of the allegedly misused IPI funds. In February 2002, as the parties were negotiating the severance terms, Hananel demanded twelve percent of Adelson's shares in a new multi-billion dollar real estate, casino, resort hotel, and convention project in Macau, China. Hananel claimed that he had facilitated the venture and, pursuant to his employment contract, was entitled to a percentage of the shares. Denied his request, Hananel filed a second suit in the Tel Aviv District Labor Court alleging that he was entitled to twelve percent of the stock option shares. The Israeli court soon thereafter consolidated the two cases.

Adelson filed the instant complaint in federal court on February 23, 2004, seeking a declaratory judgment regarding Hananel's alleged interest in the Macau business, injunctive relief, and damages. The complaint alleges that Hananel harassed and threatened Adelson and IPI, issuing defamatory claims in press releases in Chinese and American news media and threatening other parties involved in the business project. Adelson contends that Hananel's claims amount to extortion and that they are inhibiting his ability to deal freely in his Macau business venture.3

Following jurisdictional discovery, Hananel filed renewed motions to dismiss for lack of personal jurisdiction and forum non conveniens.4 The district court referred

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the motions to the Magistrate Judge who recommended that the motion to dismiss for lack of personal jurisdiction be denied as to Count One for declaratory judgment, but granted as to the other three counts. The Magistrate Judge also recommended that the motion to dismiss for forum non conveniens be granted. Rejecting the parties' various objections to the Magistrate Judge's report, the district court adopted and accepted both recommendations. Adelson now appeals the dismissal for forum non conveniens, and Hananel cross-appeals the denial of his motion to dismiss, for lack of personal jurisdiction, Count One of the complaint.

II. Discussion

A. Personal Jurisdiction

We first review the district court's denial of Hananel's motion to dismiss Count One for lack of personal jurisdiction.5Faced with a motion to dismiss for lack of personal jurisdiction, a district court "may choose from among several methods for determining whether the plaintiff has met [its] burden." Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50-51 (1st Cir. 2002). In this case, the district court employed the most common method, the "prima facie method" or the "prima facie evidentiary standard," rather than adjudicating the jurisdictional facts. The district court found that the amount of detailed and specific evidence provided by the plaintiff weighed in favor of applying the prima facie standard. Under this standard, the court need only "consider . . . whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Foster-Miller,...

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