Ast Sports Science, Inc. v. Clf Distribution Ltd.

• Decision Date: 28 January 2008
• Docket Number: No. 06-4157.,06-4157.
• Citation: 514 F.3d 1054
• Parties: AST SPORTS SCIENCE, INC., Plaintiff-Appellant, v. CLF DISTRIBUTION LIMITED, a British corporation; and Robin Holiday, a foreign citizen of the Country of Great Britain, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

514 F.3d 1054

AST SPORTS SCIENCE, INC., Plaintiff-Appellant, v. CLF DISTRIBUTION LIMITED, a British corporation; and Robin Holiday, a foreign citizen of the Country of Great Britain, Defendants-Appellees.

No. 06-4157.

United States Court of Appeals, Tenth Circuit.

January 28, 2008.

David M. Miller of Kutner Miller P.C., Denver, CO, for Plaintiff-Appellant.

Kent E. Eichstadt of McCurdy & Eichstadt, P.C., Denver, CO, for Defendants-Appellees.

Before BRISCOE, SEYMOUR, and MURPHY, Circuit Judges.

SEYMOUR, Circuit Judge.

Plaintiff, AST Sports Science, Inc. (AST) sued defendants, CLF Distribution Limited (CLF) and Robin Holiday, claiming they failed to pay for products received from AST. AST alleged breach of contract, breach of implied contract, unjust enrichment, and fraud in the inducement. Defendants moved to dismiss for lack of personal jurisdiction. The district court granted the motion, and AST appeals. We reverse and remand for further proceedings.

I

AST and CLF are in the business of selling health, nutrition, and vitamin products. AST is a Colorado corporation with its principal place of business in Golden, Colorado. Paul Delia is its president. CLF is a corporation established under the laws of Great Britain, with its principal place of business in Wiltshire, Great Britain. Robin Holiday is the president of CLF.

According to Mr. Delia's affidavit, he and Mr. Holiday first became acquainted in 1993, when they both resided in Colorado. They were both interested in motorcycle racing and frequented a track in Loveland, Colorado. The two became friends and saw each other often at motorcycle racing events. In 1996, Mr. Delia purchased a motorcycle from Mr. Holiday. In 1997, Mr. Holiday informed Mr. Delia that he was exporting motorcycles to England. Mr. Delia asserts that Mr. Holiday suggested that he could also export AST products to England and that Mr. Delia should enter into a business relationship with him to facilitate such exportation. Mr. Delia subsequently directed AST employees to assemble an order for Mr. Holiday and to ship it to him in Loveland, Colorado, his place of residence at the time. Thereafter, Mr. Delia and AST began doing business with Mr. Holiday and his company, AST Sports Science Europe, which later changed its name to CLF Distribution Limited.

Mr. Holiday moved to England, allegedly in part to commence the CLF business. Mr. Delia assisted Mr. Holiday with his move, helping him ship his belongings to England. Among the items shipped to Mr. Holiday was a vehicle titled through the state of Colorado. Through at least the year 2000, Mr. Holiday returned to Colorado every few months. While in the state, he would meet with Mr. Delia, and the two would discuss business. For example, during one such meeting in 1999, Mr. Holiday advised Mr. Delia that CLF was having trouble processing credit card orders because of the newness of his business, and he requested AST's assistance in the matter. Mr. Delia and AST thereafter opened a bank account in Denver, Colorado for the use and benefit of Mr. Holiday and CLF. The account was used to process credit card orders and to pay for products which were being purchased from AST. The account was closed in 1999 by Holiday and CLF after they had established sufficient business to support an account in England.

AST and Mr. Delia claim that they entered into an Exclusive Right to Distribute Agreement ("Agreement") with CLF in 1999, executed by Mr. Holiday. The Agreement gave CLF the exclusive right to distribute AST products in Europe, and stated that Colorado law was to govern its terms. Mr. Delia produced only an unsigned copy of the Agreement, maintaining he cannot locate the signed copy.

Orders from AST were placed by Mr. Holiday and CLF telephonically, as well as by email and facsimile. The orders were then shipped by AST directly to CLF. Payment was made by CLF to AST via check or wire transfer. On one occasion in 1999, Mr. Holiday personally picked up goods from AST in Golden. On another occasion, an agent of CLF did so.

From 1999 through 2005, AST sold products to CLF on a monthly basis. CLF placed $449,699.20 worth of orders in 1999, $988,400.25 in 2000, $996,320.87 in 2001, $818,101.51 in 2002, $742,715.08 in 2003, $561,294.38 in 2004, and $10,803.44 in 2005. The complaint alleges CLF is indebted to AST for the principal amount of $194,259.27 for nonpayment of orders placed in 2002, 2004, and 2005.

II

"We review de novo the district court's dismissal for lack of personal jurisdiction." Benton v. Cameco Corp., 375 F.3d 1070, 1074 (10th Cir.2004) (quoting Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1295 (10th Cir.1999)). Where the court's jurisdiction is contested, the plaintiff has the burden of proving jurisdiction exists. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995). However, in the preliminary stages of litigation, the plaintiff's burden is light. Doe v. Nat'l Medical Servs., 974 F.2d 143, 145 (10th Cir.1992). Where a district court considers a pre-trial motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir.1998); Wenz, 55 F.3d at 1505. "The plaintiff may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant." OMI, 149 F.3d at 1091. When evaluating the prima facie case, the court is bound to resolve all factual disputes in favor of the plaintiff in determining whether he has made the requisite showing. Wenz, 55 F.3d at 1505. Accordingly, we have stated the facts in that light.¹

The Colorado Supreme Court has interpreted Colorado's long-arm statute to extend jurisdiction to the fullest extent permitted by the Due Process Clause of the Fourteenth Amendment. Benton, 375 F.3d at 1075 (referencing Mr. Steak, Inc. v. District Court, 194 Colo. 519, 574 P.2d 95, 96 (1978)). "`This interpretation obviates the need for [a long-arm] statutory analysis separate from the due process inquiry required by International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny.'" Keefe v. Kirschenbaum & Kirschenbaum, P.C., 40 P.3d 1267, 1270 (Colo.2002) (quoting C.F.H. Enters., Inc. Heatcool, 538 F.Supp. 774, 775 (D.Colo.1982)). Thus, we ask whether the exercise of personal jurisdiction over Mr. Holiday and CLF comports with due process.

Our personal jurisdiction analysis involves a two-step inquiry. First, we ask whether the nonresident defendant has "minimum contacts" with the forum state such "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). "[I]f the defendant's actions create sufficient minimum contacts, we must then consider whether the exercise of personal jurisdiction over the defendant offends `traditional notions of fair play and substantial justice.'" OMI, 149 F.3d at 1091 (quoting Asahi Metal Indus. Co. v.Super. Ct., 480 U.S. 102, 113, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987)).

A. Minimum Contacts

Establishment of minimum contacts with the forum state requires a showing that the defendant "purposefully avail[ed] itself of the privilege of conducting activities within the forum State ...." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). Purposeful establishment of minimum contacts assures a reasonable expectation in the out-of-state defendant that he might be brought into court in the state where he sought to do business, see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), and invokes the benefits and protections of the forum state's laws, Benally v. Amon Carter Museum of Western Art, 858 F.2d 618, 625 (10th Cir.1988). In turn, the purposeful availment requirement also ensures that a defendant will not be subject to the laws of a jurisdiction "solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person." Id. (internal citations and quotation marks omitted).

The "minimum contacts" standard can be met in two ways:

First, a court may, consistent with due process, assert specific jurisdiction over a nonresident defendant "if the defendant has `purposefully directed' his activities at residents of the forum, and the litigation results from alleged injuries that `arise out of' or relate to' those activities." Burger King 471 U.S. at 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (internal quotations omitted). Where a court's exercise of jurisdiction does not directly arise from a defendant's forumrelated activities, the court may nonetheless maintain general personal jurisdiction over the defendant based on the defendant's general business contacts with the forum state. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

Benton, 375 F.3d at 1075. Because we disagree with the district court's conclusions regarding the absence of specific jurisdiction, our analysis focuses there.

1. Contract Claim

In order to assess whether minimum contacts occurred in a contract case, we look at "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing." Burger King, 471 U.S. at 479, 105 S.Ct. 2174. AST argues the district court erred in failing to construe the asserted Agreement in its favor for purposes of both evidence of a contract and the minimum contacts analysis. We agree. While we are aware that Mr. Holiday claims he has never seen the Agreement, much less signed it, at this stage of the litigation we are bound to construe all contested evidence in favor of AST. Wenz, 55 F.3d at 1505. Citing Pytlik...