Market/Media Research, Inc. v. Union Tribune Pub. Co.

• Decision Date: 11 February 1992
• Docket Number: No. 91-3371,UNION-TRIBUNE,91-3371
• Parties: MARKET/MEDIA RESEARCH, INC., Plaintiff-Appellant, v.PUBLISHING COMPANY and Copley Press, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 102

951 F.2d 102

MARKET/MEDIA RESEARCH, INC., Plaintiff-Appellant, v. UNION-TRIBUNE PUBLISHING COMPANY and Copley Press, Inc. Defendants-Appellees.

No. 91-3371.

United States Court of Appeals Sixth Circuit.

Argued Nov. 5, 1991.

Decided Dec. 13, 1991.

Rehearing and Rehearing En Banc

Denied Feb. 11, 1992.

Owen C. Neff (argued and briefed), Snyder, Neff & Chamberlin, Cleveland, Ohio, for plaintiff-appellant.

Beth Whitmore (argued and briefed), Arter & Hadden, Cleveland, Ohio, for defendants-appellees.

Before GUY, Circuit Judge, BROWN, Senior Circuit Judge, and CHURCHILL, Senior District Judge. ^*

BAILEY BROWN, Senior Circuit Judge.

This is a diversity action for breach of contract, fraud, conversion, and related torts. Plaintiff, Market/Media Research, Inc. ("MMR"), appeals from an order of dismissal for lack of in personam jurisdiction over Union-Tribune Publishing Co. ("Union") and Copley Press, Inc. ("Copley"). MMR also appeals the denial of its motion for reconsideration and leave to file an amended complaint. Because the Ohio district court did not err in its determination that due process requirements preclude the assertion of in personam jurisdiction over the Defendants and because the court did not abuse its discretion in denying the post-order motion, we AFFIRM.

I

Plaintiff, MMR, an Ohio corporation located in Cleveland, is a marketing and management consulting firm that performs market research for retailers and newspapers. Defendants, Copley and Union, are, respectively, an Illinois corporation and one of its unincorporated operating divisions. The principal place of business of Copley, an interstate publishing conglomerate, is in La Jolla, California. Union publishes two daily newspapers in San Diego, California.

MMR's marketing services consist of surveying local households, performing a market analysis, and, based on its findings, generating a report that informs retailers of effective marketing and advertising strategies. After discussions with Robert Rhodes, president and sole shareholder of MMR, the Newspaper Advertising Bureau ("NAB") agreed to collaborate with MMR to promote a series of demonstration projects for major retailers. The projects were to be funded by local newspaper publishers. MMR and NAB selected the J.C. Penney Company ("Penney") as the retailer for whom to develop the first project, and Penney's Western Regional Marketing Director, Larry Walker, selected San Diego, California, as the site.

Walker discussed the project with Gerry Wilson, the marketing director for Union. Rhodes then telephoned Wilson to explain the details. Approximately one year after this initial contact, and at Rhodes' request, Wilson sent to Rhodes in Ohio reports of Union's current demographic research, and Rhodes sent Wilson a ten-page proposal and a detailed description of the Penney demonstration project.

The parties exchanged a series of telephone calls and correspondence, and Union expressed some interest in financing the project. Subsequently, MMR drafted a services agreement, but neither Copley nor Union ever executed it. MMR maintains, however, that Union orally promised to pay for a research study of San Diego County if Penney accepted the proposal and the newspapers deemed the project to be potentially profitable. MMR points to twenty-two contacts between MMR and Defendants, nine of which Union or Copley executives initiated. All contacts between the Defendants and MMR, however, were by telephone or mail, and the parties agree that Union and Copley do not generally engage in activities in Ohio.

MMR alleges that it obtained from Penney an initial commitment for $300,000.00 in additional advertising with Union. Thereafter, alleges MMR, it began to perform the services as set out in the services agreement. When MMR billed Union, Union disavowed any obligation to pay for MMR's services.

Asserting that under Ohio's long-arm statute the court had personal jurisdiction over Copley and Union, MMR filed suit in the United States District Court for the Northern District of Ohio. Among other grounds for suit, MMR alleged breach of contract, fraud, conversion, unjust enrichment, and damage to MMR's business relationship with Penney. Pursuant to Federal Rule of Civil Procedure 12(b)(2), Copley and Union moved for dismissal for lack of personal jurisdiction. In the alternative, they moved to transfer the case to the Southern District of California.

Without holding an evidentiary hearing, the court determined that, on the undisputed record, the due process standards for the exercise of personal jurisdiction had not been satisfied. ¹ It, therefore, granted the 12(b)(2) motion and overruled the motion for change of venue. The court reaffirmed its ruling by denying MMR's motion for reconsideration and for leave to file an amended complaint.

The issues presented on appeal are (1) whether, because of improper weighing of the written submissions before it, the district court erred in granting the 12(b)(2) motion; (2) whether the nature of the case required the court to hold an evidentiary hearing before ruling on the motion; and (3) whether the court abused its discretion by denying the motion for reconsideration and leave to file an amended complaint.

II

A

As we explained in Serras v. First Tennessee Bank National Association, 875 F.2d 1212, 1216 (6th Cir.1989), the reach of the in personam jurisdiction of a district court is limited by the requirements of the Due Process Clause of the Fourteenth Amendment. In the instant case, the district court determined that it was without jurisdiction under the Ohio long-arm statute and, further, that Copley's and Union's contacts with Ohio were not such as would support jurisdiction under the Due Process Clause. Because we agree with the district court that assertion of jurisdiction in this case would not be consistent with due process, and because such a defect defeats jurisdiction regardless of the extent of Ohio long-arm jurisdiction, we confine our analysis to an examination of the district court's assessment that haling Copley and Union into an Ohio court would violate the concept 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 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342-43, 85 L.Ed. 278 (1940)).

As the party seeking the court's assertion of in personam jurisdiction, MMR bears the burden of showing that jurisdiction exists. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991). MMR's burden is lessened, however, because the district court ruled on the Defendants' 12(b)(2) motion without calling for depositions or holding an evidentiary hearing. In such a case, to defeat a motion to dismiss, a party need make only a prima facie showing of jurisdiction. Id. Moreover, the court is required to " 'consider the pleadings and affidavits in the light most favorable to the plaintiff.' " American Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir.1988) (quoting Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir.1980), cert. denied, 450 U.S. 981, 101 S.Ct. 1517, 67 L.Ed.2d 816 (1981)).

B

MMR does not contend that the Ohio district court has general in personam jurisdiction over Copley and Union. Rather, it submits that Copley's and Union's activities directed to the state of Ohio place the Defendants, only with respect to these claims, properly within the in personam jurisdiction of the court. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984). Therefore, as we have noted in a number of cases, the threshold issue is whether, in their dealings with MMR, the Defendants "purposefully availed" themselves of "the privilege of acting in the forum state or causing consequence in the forum state." Theunissen, 935 F.2d at 1460; LAK, Inc. v. Deer Creek Enters., 885 F.2d 1293, 1299 (6th Cir.1989), cert. denied, 494 U.S. 1056, 110 S.Ct. 1525, 108 L.Ed.2d 764 (1990); American Greetings, 839 F.2d at 1169; Southern Machine Co. v. Mohasco Indus., 401 F.2d 374, 381-82 (6th Cir.1968).

MMR contends that when the district court determined the issue of purposeful availment by Copley and Union, it disregarded MMR's pleadings and supporting affidavit and adopted a contradictory version of the jurisdictional facts as offered by Copley and Union. Copley and Union counter that, instead of making a prima facie showing of facts sufficient to establish purposeful availment, MMR's pleadings and affidavit state mere speculative inferences and erroneous conclusions of law. Comparing their 12(b)(2) motion to a motion for summary judgment, Copley and Union assert that the court, as it should have, weighed the evidence presented in the opposing documents.

As stated in Theunissen, although a motion for summary judgment and a Rule 12(b)(2) motion are similar in some respects, "[i]n sharp contrast to summary judgment procedure, ... the court disposing of a 12(b)(2) motion does not weigh the controverting assertions of the party seeking dismissal." 935 F.2d at 1459 (citing Serras, 875 F.2d at 1214). Dismissal is warranted only if all of the facts the plaintiff asserts "collectively [fail] to state a prima facie case for jurisdiction ... ." Id. Therefore, we must determine whether, basing its decision solely on the pleadings and affidavits and ignoring contrary assertions by Copley and Union, the district court in the instant case properly granted Copley and Union's 12(b)(2) motion. Serras, 875 F.2d at 1215.

Even if we take MMR's allegations as true, a review of the record reveals that Copley's and Union's contacts with Ohio are insufficient to satisfy " 'the sine qua non of in personam jurisdiction.' " Southern Machine, 401 F.2d at 381-82. That is, MMR fails to make claims sufficient to show Copley's or Union's purposeful...