United Elec. Radio and Mach. Workers of America (UE) v. 163 Pleasant Street Corp.

• Decision Date: 08 December 1992
• Docket Number: No. 92-1865,92-1865
• Citation: 987 F.2d 39
• Parties: 124 Lab.Cas. P 10,568, 16 Employee Benefits Cas. 1855 UNITED ELECTRICAL RADIO AND MACHINE WORKERS OF AMERICA (UE)., et al., Plaintiffs, Appellants, v. 163 PLEASANT STREET CORPORATION, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 39

987 F.2d 39

124 Lab.Cas. P 10,568, 16 Employee Benefits

Cas. 1855

UNITED ELECTRICAL RADIO AND MACHINE WORKERS OF AMERICA

(UE)., et al., Plaintiffs, Appellants, v. 163 PLEASANT STREET CORPORATION, et al., Defendants, Appellees.

No. 92-1865.

United States Court of Appeals,

First Circuit.

Heard Dec. 8, 1992.

Decided March 3, 1993.

Mark D. Stern, Somerville, MA, with whom Brian W. Mellor, Washington, DC, Mary Leary, and Edward J. Dailey, Boston, MA, were on brief, for plaintiffs, appellants.

David D. Cole, New York City, on brief for Barney Frank, Gerry E. Studds, Chester G. Atkins, Joseph D. Early, Joseph P. Kennedy, II, Edward J. Markey, Nicholas Mavroules, John Joseph Moakley, Richard E. Neal, John W. Oliver, and Senators Edward M. Kennedy and John F. Kerry, amici curiae.

Charles L. Janes with whom James C. Stokes and Bingham, Dana & Gould, Boston, MA, were on brief, for defendants, appellees.

Before TORRUELLA, Circuit Judge, BOWNES, Senior Circuit Judge, STAHL, Circuit Judge.

STAHL, Circuit Judge.

This appeal requires us to decide for a second time ¹ whether plaintiffs-appellants ("plaintiffs") have sufficiently demonstrated that the district court has personal jurisdiction over the primary defendants-appellees ("defendants") to this action to pursue their claims under the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.A. §§ 1001-1461 (West 1985 & Supp.1992), the Labor-Management Relations Act ("LMRA"), 29 U.S.C.A. §§ 141-187 (West 1973 & Supp.1992), and Massachusetts common law. Finding that plaintiffs' showing at this stage of the litigation is adequate to meet the relevant legal standard, we vacate the district court's order of dismissal and remand this action for further proceedings.

I. PROCEDURAL BACKGROUND

We begin our analysis with a recounting of the already eventful procedural history of this litigation. Plaintiffs are the United Electrical, Radio and Machine Workers of America ("the Union") and certain retired or disabled employees of the defendant corporations or one of these corporations' predecessor-in-interest. ² On July 19, 1991, plaintiffs initiated these proceedings by suing defendants International Twist Drill (Holdings), Ltd. ("ITDH"), 163 Pleasant Street Corporation ("PSC"), a Massachusetts subsidiary of ITDH, ³ and Blue Cross/Blue Shield of Massachusetts ("BCBS"). At issue was whether defendants were contractually bound to provide plaintiffs with medical and life insurance. ⁴ In their complaint, plaintiffs sought both damages and equitable relief. As part of the equitable relief sought, plaintiffs requested that the district court enter a preliminary injunction directing defendants to continue paying plaintiffs' insurance premiums pendente lite.

On July 24, 1991, the district court, after hearing oral argument, granted plaintiffs' request for a temporary restraining order preserving the status quo until a hearing on plaintiffs' request for a preliminary injunction could be arranged. On August 13, 1991, the district court heard oral argument on plaintiffs' request for a preliminary injunction and on a motion to dismiss for lack of personal jurisdiction filed by During the pendency of ITDH's appeals, however, discovery was proceeding in the underlying case. As a result of information obtained in the course of this discovery, plaintiffs moved to amend their complaint in order to join International Twist Drill ("ITD") as a defendant and to include additional (at least insofar as ITDH is concerned) allegations against the ITD companies. ⁶ Plaintiffs' motion was allowed on January 23, 1992. Meanwhile, each side continued to supplement the record by filing with the district court further documentation in the form of affidavits and otherwise. Because of the timing of these filings, this material was not part of the record in ITDH's initial appeal.

                ITDH on August 6.   That same day, the district court granted plaintiffs' request for a preliminary injunction 5 and denied ITDH's motion.   On August 22, 1991, PSC filed for bankruptcy without paying the disputed premiums.   After ITDH also refused to pay the premiums, the district court issued an order holding ITDH in contempt.   Subsequently, ITDH appealed the preliminary injunction and the contempt orders
                

On March 30, 1992, this court handed down 163 Pleasant Street I, which vacated the district court's injunction and contempt orders. In so doing, we did not reach the merits of the lower court's decisions. Rather, we found that plaintiffs had not established that the court had personal jurisdiction over ITDH. Accordingly, we directed that the preliminary injunction and contempt orders be vacated and remanded the case "for further proceedings not inconsistent [with our opinion]." Id. at 1099.

After publication of 163 Pleasant Street I, ITDH and ITD filed a joint motion to dismiss for lack of personal jurisdiction, incorporating by reference our opinion of March 30, 1992. Plaintiffs opposed the motion, relying upon allegations in their recently amended complaint and upon materials not part of the record in 163 Pleasant Street I. On May 8, 1992, the district court issued a two-page memorandum and order granting ITDH's and ITD's motion. ⁷ The memorandum and order stated: "[Each] issue and theory upon which plaintiffs' claims rest has been thoroughly analyzed and addressed in the decision of the Court of Appeals. There is nothing to be gained from prolonging this case further." Plaintiffs moved for reconsideration of the district court's order, again directing the court's attention to materials made part of the record after ITDH had taken its initial appeal and other materials filed by plaintiffs on May 8, 1992. By margin order entered June 24, 1992, the district court denied plaintiffs' motion. ⁸ Plaintiffs now appeal the district court's order of dismissal and denial of their motion for reconsideration.

II.

DISCUSSION

Because 163 Pleasant Street I exhaustively delineated both the facts underpinning this dispute and the law implicated by its resolution, we do not engage in rehash here. Suffice it to say that the question of whether, at this stage of the litigation, plaintiffs have made a sufficient showing that ITDH and ITD, both Scottish corporations, are subject to the personal jurisdiction of the district court hinges upon In arguing that the above question should be answered in the affirmative, plaintiffs contend that our analysis in 163 Pleasant Street I has been rendered obsolete by additions to the record which occurred while the first appeal was pending. As a result, plaintiffs assert, the district court's uncritical reliance upon our previous opinion was in error. ¹⁰ We agree with plaintiffs' position.

                whether there is adequate record evidence that the two entities (1) "transact[ed] ... business in [Massachusetts]," thus subjecting them to the Commonwealth's long-arm statute, see Mass.Gen.Laws Ann. ch. 223A, § 3(a) (West 1985 & Supp.1992), and (2) have acted in such a manner that the district court's exercise of jurisdiction over them would not offend the constitutionally anchored "minimum contacts" rule.   See International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). 9
                

Where, as here, a district court elects to dispose of a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, ¹¹ the "prima facie" standard should govern the court's review. See Boit, 967 The prima facie showing must be based upon evidence of specific facts set forth in the record. Boit, 967 F.2d at 675; Kowalski, 787 F.2d at 9. This means that plaintiff " 'must go beyond the pleadings and make affirmative proof.' " Boit, 967 F.2d at 675 (quoting Chlebda v. H.E. Fortna & Bro., Inc., 609 F.2d 1022, 1024 (1st Cir.1979)). However, in determining whether the prima facie demonstration has been made, the district court is not acting as a factfinder; rather, it accepts properly supported proffers of evidence by a plaintiff as true and makes its ruling as a matter of law. See Boit, 967 F.2d at 675; see also Kowalski, 787 F.2d at 9. Therefore, appellate review of such a ruling is nondeferential and plenary. See Boit, 967 F.2d at 675.

                F.2d at 675;  Kowalski v. Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir.1986).   Under this standard, it is plaintiff's burden to demonstrate the existence of "every fact required to satisfy 'both the forum's long-arm statute and the [D]ue [P]rocess [C]lause of the Constitution.' "  Boit, 967 F.2d at 675 (quoting U.S.S. Yachts, Inc. v. Ocean Yachts, Inc., 894 F.2d 9, 11 (1st Cir.1990))
                

Leaving aside the material which was filed on May 8, 1992, see supra note 10, we believe that the effect of two additions to the record made by plaintiffs while the first appeal was pending is such that, applying the prima facie standard, the district court should have denied the joint motion to dismiss filed by ITDH and ITD. First, in their amended complaint, plaintiffs had made the following new allegations:

3. ... [T]he plaintiff retirees were employed at the defendant corporations' plant in New Bedford, Massachusetts, the obligations to provide insurance were incurred in Massachusetts, and the termination of the insurance giving rise to this claim occurred in this District.

14. The defendant [ITDH] of Scotland is incorporated in Great Britain and was doing business as Morse Tool, Inc. in the Commonwealth of Massachusetts prior to and up to the time of the closure of its New Bedford facility in January[ ] 1990. It is the sole shareholder in the defendant [PSC].

15. The defendant [ITD] of Scotland is incorporated in Great Britain and was doing business as Morse Tool, Inc. in the Commonwealth of Massachusetts prior to and up to the time of the closure of its New Bedford Facility in January 1990. It is owned and controlled by the defendant ITDH.

17. At all relevant times the defendants constituted an integrated...