825 F.3d 28 (1st Cir. 2016), 15-2190, Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc.

Docket Nº:15-2190
Citation:825 F.3d 28
Opinion Judge:SELYA, Circuit Judge.
Party Name:BASKIN-ROBBINS FRANCHISING LLC, Plaintiff, Appellant, v. ALPENROSE DAIRY, INC., Defendant, Appellee
Attorney:Peter J. Klarfeld, with whom Eric L. Yaffe, Julia C. Colarusso, and Gray, Plant, Mooty, Mooty & Bennett, P.A. were on brief, for appellant. Eric H. Karp, with whom Ari N. Stern and Witmer, Karp, Warner & Ryan LLP were on brief, for appellee.
Judge Panel:Before Howard, Chief Judge, Selya and Lipez, Circuit Judges.
Case Date:June 06, 2016
Court:United States Courts of Appeals, Court of Appeals for the First Circuit

Baskin-Robbins, a Delaware LLC, franchises ice cream stores. Alpenrose, a dairy products manufacturer incorporated in Oregon, is headquartered in Portland. In 1965, the two executed a territorial franchise agreement. Baskin-Robbins then had its principal place of business in California. Negotiations occurred in California. Between 1973 and 1985, the parties amended the Agreement three times;... (see full summary)


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825 F.3d 28 (1st Cir. 2016)



ALPENROSE DAIRY, INC., Defendant, Appellee

No. 15-2190

United States Court of Appeals, First Circuit

June 6, 2016

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         Peter J. Klarfeld, with whom Eric L. Yaffe, Julia C. Colarusso, and Gray, Plant, Mooty, Mooty & Bennett, P.A. were on brief, for appellant.

         Eric H. Karp, with whom Ari N. Stern and Witmer, Karp, Warner & Ryan LLP were on brief, for appellee.

         Before Howard, Chief Judge, Selya and Lipez, Circuit Judges.


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          SELYA, Circuit Judge.

          This bi-coastal commercial dispute requires us to test the outer limits of a court's in personam jurisdiction, consistent with the constraints of the Due Process Clause. See U.S. Const. amend. XIV, § 1. The district court concluded that the defendant lacked sufficient contacts with the forum state (Massachusetts) to permit the exercise of jurisdiction and, accordingly, dismissed the action. See Baskin-Robbins Franchising, LLC v. Alpenrose Dairy, Inc., No. 14-13771, 2015 WL 5680332, at *2 (D. Mass. Sept. 25, 2015). Concluding, as we do, that the district court miscalibrated the jurisdictional scales, we reverse.

         I. BACKGROUND

         Baskin-Robbins Franchising LLC (Baskin-Robbins) is a Delaware special purpose limited liability company, which maintains its principal place of business in Canton, Massachusetts. It franchises independent persons and entities to operate ice cream stores. Alpenrose Dairy, Inc. (Alpenrose) is a dairy products manufacturer incorporated in Oregon and headquartered in Portland.

         In 1965, Baskin-Robbins' predecessor in interest, Baskin-Robbins Inc. entered into a territorial franchise agreement (the Agreement) with Alpenrose. At the time, Baskin-Robbins Inc. had its principal place of business in Glendale, California. The negotiations surrounding the formation of the Agreement took place in California. When consummated, the Agreement gave Alpenrose the right to operate Baskin-Robbins franchises in Washington and Oregon for a six-year term, commencing on December 9, 1965. Subject to other conditions not relevant here, the Agreement gave Alpenrose an option to renew the franchise for successive six-year terms as long as it also furnished written notice to Baskin-Robbins at least one year prior to the expiration of the current term.

         The Agreement obligated Alpenrose to comply with Baskin-Robbins' ever-changing specifications, recipes, and processes for the manufacture of ice cream products. It likewise bound Alpenrose to a set of specific procedures for operating Baskin-Robbins stores. These obligations required Alpenrose to have a certain amount of ongoing communication and coordination with Baskin-Robbins.

         As might be expected, the Agreement controlled the financial relationship between the parties. It required Alpenrose to pay royalties to Baskin-Robbins based on monthly sales. The money stream flowed in both directions: Alpenrose recruited other franchisees for Baskin-Robbins, and the Agreement obligated Baskin-Robbins to make monthly remittances to Alpenrose based on royalties received by Baskin-Robbins from those franchisees.

         Between 1973 and 1985, the parties amended the Agreement three times. These amendments expanded Alpenrose's franchise territory to include Montana and parts of Idaho. At the time of each amendment, Baskin-Robbins remained headquartered in California. All material discussions and negotiations concerning the amendments took place in Oregon (Alpenrose's home state).

         Alpenrose exercised its renewal options without incident on five occasions. Throughout this decades-long period, Baskin-Robbins

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underwent several ownership changes. Around 1998 -- some thirty-three years after Baskin-Robbins and Alpenrose first executed the Agreement -- the current owners moved Baskin-Robbins' headquarters from California to Massachusetts.

         In 2001 (as it had done every six years since 1965), Alpenrose sent Baskin-Robbins formal notice of its election to renew the Agreement. Alpenrose directed this notice to Baskin-Robbins' newly relocated headquarters in Massachusetts. The Agreement was thus extended for yet another six-year term.

         In 2006, the ownership of Baskin-Robbins' parent company again changed hands.1 Baskin-Robbins' headquarters remained in Massachusetts and, in November of 2007, Alpenrose renewed the Agreement for another six-year term (running from December 9, 2008 to December 8, 2014). This renewal notice -- like the immediately preceding renewal notice -- was sent to Baskin-Robbins in Massachusetts.

         Under the provisions of the Agreement, Alpenrose had until December 8, 2013 to notify Baskin-Robbins of its intent to renew for a further six-year term. On December 2, 2013, Alpenrose informed Baskin-Robbins that it did not intend to renew the Agreement, stating: " [P]lease consider this our one year notice of intent to not renew. . . . [M]aybe it's time to take a slightly different direction." Baskin-Robbins did not formally acknowledge that the Agreement would lapse, but the parties began negotiating the terms of Alpenrose's transition out of the franchise arrangement. The negotiations stalled and, on July 22, 2014, Alpenrose wrote to Baskin-Robbins, stating that it wished to " revoke" its decision not to renew. Instead, it requested another six-year extension of the Agreement, to begin when the current term expired (that is, on December 8, 2014). Alpenrose later warned that it would otherwise be entitled to fair compensation under the Washington Franchise Investment Protection Act, see Wash. Rev. Code § 19.100.180(2)(i).

         Baskin-Robbins responded that Alpenrose had waited too long and was no longer entitled to renew the Agreement. At the same time, it rejected Alpenrose's suggestion that any compensation was due in consequence of the non-renewal of the franchise. Then -- with an impasse in the offing -- Baskin-Robbins raced to the United States District Court for the District of Massachusetts and sued for a judicial declaration that " the [Agreement] and all of Alpenrose's rights associated therewith will expire on December 8, 2014," and that " Alpenrose is not entitled to any compensation in connection with the expiration of the [Agreement]." The record sheds no light on the current status of the parties' commercial relationship.

         Alpenrose moved to dismiss for lack of personal jurisdiction and improper venue, see Fed.R.Civ.P. 12(b)(2), (3), or in the alternative to transfer venue to the United States District Court for the Western District of Washington, see 28 U.S.C. § 1404(a). Baskin-Robbins opposed both motions. After considering the parties' arguments, the district court dismissed the case for want of in personam jurisdiction. See Baskin-Robbins Franchising, 2015 WL 5680332, at *2. The court concluded that " nothing in [the parties'] history . . . suggests that Alpenrose intended to purposefully avail itself of the privilege of conducting business within Massachusetts." Id.

         This timely appeal followed.

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         II. ANALYSIS

          " Where, as here, a district court dismisses a case for lack of personal jurisdiction based on the prima facie record, rather than after an evidentiary hearing or factual findings, our review is de novo." C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014). In conducting this de novo review, we are not bound by the district court's reasoning but, rather, may affirm the judgment for any reason made evident by the record. See Phillips Exeter Acad. v. Howard Phillips Fund, Inc., 196 F.3d 284, 288 (1st Cir. 1999).

          The plaintiff has the burden of establishing that jurisdiction over the defendant lies in the forum state. See Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir. 2007). " Faced 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.'" Id. (alteration in original) (quoting Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50-51 (1st Cir. 2002)). Here, the district court employed the prima facie method, which requires no differential factfinding; rather, this method requires only that a plaintiff proffer evidence which, taken at face value, suffices to show all facts essential to personal jurisdiction. See id.; Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145 (1st Cir. 1995).

          For the purpose of examining the merits of such a jurisdictional proffer, we -- like the district court -- take the facts from the...

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