91 F.3d 790 (6th Cir. 1996), 95-3436, Nationwide Mut. Ins. Co. v. Tryg Intern. Ins. Co., Ltd.

Docket Nº:95-3436.
Citation:91 F.3d 790
Case Date:July 26, 1996
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit

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91 F.3d 790 (6th Cir. 1996)




No. 95-3436.

United States Court of Appeals, Sixth Circuit

July 26, 1996

Argued April 29, 1996.

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Irene C. Keyse-Walker (argued), Arter & Hadden, Cleveland, OH, Michael L. Cohen (briefed), Preston Gates Ellis & Rouvelas Meeds, Washington, DC, for Plaintiff-Appellant.

Joseph D. Lonardo (argued and briefed), Vorys, Sater, Seymour & Pease, Columbus, OH, for Defendant-Appellee.

Before: MARTIN and SILER, Circuit Judges; HEYBURN, District Judge. [*]

BOYCE F. MARTIN, Jr., Circuit Judge.

Nationwide Mutual Insurance Company appeals the district court's dismissal of its breach of contract action against Tryg International Insurance Company, claiming that the district court erred in granting Tryg International's motion to dismiss for lack of personal jurisdiction. For the reasons set forth below, we AFFIRM.

Nationwide is an Ohio corporation engaged in the business of insurance and reinsurance. Tryg International is a Danish company, organized under Danish law, with its principal place of business in Lyngby, Denmark. Tryg International is an international insurer, reinsurer, and risk underwriter and does not own any subsidiaries in the United States, nor does it own any property here. It was, however, a member of a reinsurance pool operated by Nationwide. Specifically, Tryg International agreed to a three percent participation in Property Pool 920. Pool 920 had a proposed cap limit of $6,600,000.00. Pool participants provided reinsurance on underlying policies of catastrophe coverage for risks located throughout the United States, Canada, and the Caribbean Islands.

The relationship at issue in this case began when both parties attended a "Reinsurance Rendezvous" in Monte Carlo, Monaco, at which Nationwide invited Tryg International to participate in Pool 920. Eventually, Tryg

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agreed to participate, and became one member of a group of international reinsurance companies who purchased participation in Pool 920. From its corporate headquarters in Ohio, Nationwide purchased reinsurance risks for the pool, collected premiums on those risks, deposited the collected premiums, adjusted pool losses, and paid claims made against the pool. Nationwide provided Tryg International with a quarterly accounting statement detailing the premiums collected and claims paid on Tryg International's behalf as a member of Pool 920. After offsetting claims paid from premiums collected, Nationwide submitted any surplus balances to Tryg International in Denmark. When this offset resulted in a net loss balance, Tryg International was contractually obligated to remit funds to Nationwide to cover the deficit.

In January of 1993, Tryg International discontinued its obligations pertaining to Pool 920. On January 24, 1994, Nationwide filed this breach of contract and declaratory judgment action, alleging that Tryg International failed to make payments due and owing in the amount of $610,047.92, and that it also failed to maintain a statutorily required collateral deposit in the amount of $725,233.21. Soon thereafter, Tryg International filed a motion to dismiss under Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. The parties then conducted limited jurisdictional discovery, after which Nationwide filed its opposition to Tryg International's motion.

On March 8, 1995, the district court granted the motion to dismiss, holding that Nationwide had not established the required prima facie case that the district court had either general or specific personal jurisdiction over Tryg International. Nationwide timely filed the instant appeal.

The parties initially dispute--as they did in the district court--the burden of proof that Nationwide must carry to survive Tryg's 12(b)(2) motion to dismiss. In response to Tryg International's 12(b)(2) motion, the district court allowed some discovery, but did not hold an evidentiary hearing on the matter. As a result of this truncated procedure, Nationwide claims that it is required to establish only a prima facie case that personal jurisdiction exists. See Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991) (holding that plaintiff need only make a prima facie showing of personal jurisdiction where the district court allowed no discovery and decided the motion on the basis of factually conflicting affidavits). Relying on Serras v. First Tennessee Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989), Tryg International claims that Nationwide must establish personal jurisdiction by a preponderance of the evidence, in light of the fact that the district court allowed discovery prior to ruling on Tryg International's 12(b)(2) motion. In Serras, we held that a plaintiff's burden is to establish jurisdiction by a preponderance of the evidence where the district court holds an evidentiary hearing on the matter. Id.

Arguably, this Circuit has not expressly determined the appropriate burden of proof for cases in which the district court permits at least some discovery but does not conduct an evidentiary hearing before ruling on a 12(b)(2) motion to dismiss. In Conti v. Pneumatic Prods. Corp., 977 F.2d 978 (6th Cir.1992), this Court confronted precisely the same issue on the same procedural facts, and apparently viewed the question as an open one in this Circuit. However, because we believed that the plaintiff in Conti had not established even a prima facie case in favor of personal jurisdiction, we stated that we need not resolve the matter at that time. Id. at 980. In his dissenting opinion, Judge Boggs stated his view that this Circuit's precedent clearly requires a plaintiff to make only a prima facie showing that personal jurisdiction exists where the district court decides the issue without the benefit of an evidentiary hearing. Id. at 987 (Boggs, J., dissenting).

In this Circuit, where a court relies solely on the parties' affidavits to reach its decision, the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal. Theunissen, 935 F.2d at 1458. Further, the pleadings are to be considered in a light most favorable to the plaintiff. Id. at 1459. However, in sharp contrast to the summary judgment procedure, the court does not weigh the controverting assertions of

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the party seeking dismissal by 12(b)(2) motion.... [A] showing by a preponderance of the evidence is not necessary unless the trial court conducts an evidentiary hearing. [American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988) ].

Were it necessary to decide this question, we would be inclined to agree that the plaintiff need only establish a prima facie case that personal jurisdiction exists over the defendant in a case such as this. See American Greetings, 839 F.2d at 1169 (stating that the burden on the plaintiff is "relatively slight" where the district court finds no need for an evidentiary hearing); Welsh v. Gibbs, 631 F.2d 436, 438-39 (6th Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1517, 67 L.Ed.2d 816 (1981) (stating that where the jurisdictional issue is decided pursuant to a 12(b)(2) motion solely on the basis of written materials "the plaintiff should be required only to make a prima facie case of jurisdiction"). However, because we conclude that Nationwide has failed to carry even this lesser burden, we need not decide this issue.

Turning to the merits, we review the district court's dismissal for lack of personal jurisdiction de novo. Tobin v. Astra Pharmaceutical Prods., 993 F.2d 528, 542 (6th Cir.), cert. denied, 510 U.S. 914, 114 S.Ct. 304, 126 L.Ed.2d 252 (1993). In the absence of an evidentiary hearing, we view the facts in a light most favorable to the nonmoving party when confronted with a 12(b)(2) motion to dismiss. Market/Media Research, Inc. v. Union-Tribune Publishing Co., 951 F.2d 102, 104 (6th Cir.1991), cert. denied, 506 U.S. 824, 113 S.Ct. 79, 121 L.Ed.2d 43 (1992). In diversity cases, federal courts apply the law of the forum state to determine whether personal jurisdiction exists. LAK, Inc. v. Deer Creek Enterprises, 885 F.2d 1293, 1298 (6th Cir.1989) (citing Southern Machine Co. v. Mohasco Indus., 401 F.2d 374, 376 n. 2 (6th Cir.1968)), cert. denied, 494 U.S. 1056, 110 S.Ct. 1525, 108 L.Ed.2d 764 (1990). Jurisdiction may be found to exist either generally, in cases in which a defendant's "continuous and systematic" conduct within the forum state renders that defendant amenable to suit in any lawsuit brought against it in the forum state, Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 445-47, 72 S.Ct. 413, 418-19, 96 L.Ed. 485 (1952), or specifically, in cases in which the subject matter of the lawsuit arises out of or is related to the defendant's contacts with the forum. Conti, 977 F.2d at 981. A valid assertion of personal jurisdiction must satisfy both the state long-arm statute, and constitutional due process. Reynolds v. International Amateur Athletic Fed'n, 23 F.3d 1110, 1115 (6th Cir.), cert. denied, 513 U.S. 962, 115 S.Ct. 423, 130 L.Ed.2d 338 (1994).

The Ohio long-arm statute's reach, see Ohio Rev.Code § 2307.382, extends to the constitutional limits of the Due Process Clause. American Greetings, 839 F.2d at 1167. Therefore, the two inquiries are merged, and we need only determine whether the assertion of personal jurisdiction over Tryg International violates constitutional due process. See Third Nat'l Bank v. WEDGE Group Inc., 882 F.2d 1087, 1089 (6th Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 870, 107 L.Ed.2d 953 (1990).

The Due Process Clause requires that the exercise of personal jurisdiction in each case comport with "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95...

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