Consulting Engineers Corp. v. Geometric Ltd.

• Decision Date: 23 March 2009
• Docket Number: No. 07-1453.,07-1453.
• Citation: 561 F.3d 273
• Parties: CONSULTING ENGINEERS CORPORATION, Plaintiff-Appellant, v. GEOMETRIC LIMITED; Structure Works, LLC, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

561 F.3d 273

CONSULTING ENGINEERS CORPORATION, Plaintiff-Appellant, v. GEOMETRIC LIMITED; Structure Works, LLC, Defendants-Appellees.

No. 07-1453.

United States Court of Appeals, Fourth Circuit.

Argued: January 28, 2009.

Decided: March 23, 2009.

ARGUED:

Mindy Gae Farber, Farber Legal, L.L.C., Rockville, Maryland, for Appellant. Kenneth Scott Leonetti, Foley & Hoag, L.L.P., Boston, Massachusetts; Bill C. Berger, Stettner & Miller, P.C., Denver, Colorado, for Appellees.

ON BRIEF:

John J. Rigby, McInroy & Rigby, L.L.P., Arlington, Virginia, for Appellant. Catherine H. Wicker, Foley & Hoag, L.L.P., Boston, Massachusetts, for Appellee Geometric Limited; Berina Ibrisagic, Stettner & Miller, P.C., Denver, Colorado, for Appellee Structure Works, LLC.

Before TRAXLER, DUNCAN, and AGEE, Circuit Judges.

Affirmed by published opinion. Judge DUNCAN wrote the opinion, in which Judge TRAXLER and Judge AGEE joined.

OPINION

DUNCAN, Circuit Judge:

Consulting Engineers Corp. ("CEC") sued Structure Works, LLC ("Structure Works") and Geometric Software Solutions ("Geometric") in Virginia, asserting various tort and contract claims. Structure Works and Geometric moved to dismiss for lack of personal jurisdiction. The district court granted the motions, and CEC appealed. For the reasons that follow, we affirm.

I.

This dispute arose from a series of interactions among three companies involving a software and structural design project to be undertaken in India. Structure Works, a Colorado corporation, hired Geometric, an Indian corporation, to work on the project. CEC is a Virginia corporation with two branch offices in India. Structure Works, believing that CEC might be able to assist Geometric in India with one aspect of this project, arranged a conference call in early 2004 in which it introduced the two.

In early February 2004, CEC and Geometric entered into a non-disclosure agreement ("NDA I") in which each party agreed, among other things, not to recruit certain named employees from the other. The parties also agreed that Virginia law (except Virginia choice of law rules) would govern the agreement. J.A. 257. NDA I did not contain a forum selection clause. Geometric negotiated NDA I from India, and CEC negotiated from Virginia. The negotiations leading to the agreement consisted of four email exchanges and several phone calls. Geometric signed the agreement in India.

CEC entered into a separate non-disclosure agreement ("NDA II") with Structure Works. NDA II specified that Colorado law would govern and that Colorado would be the forum for any litigation over the agreement. J.A. 178-79. These negotiations, as well as discussions regarding the potential project, consisted of twenty-four emails (eight from Structure Works and sixteen from CEC) and several telephone calls. CEC and Structure Works each negotiated from their respective home offices in Virginia and Colorado.

In mid-February 2004, representatives from Structure Works, Geometric, and CEC held their first and only face-to-face meeting at Geometric's office in India. The negotiations concerning the potential assistance lasted from February until May 2004. In May 2004, Geometric hired CEC employee Manoj Kumar, one of the employees named in NDA I.¹ CEC had employed Kumar in one of its Indian offices. Geometric hired Kumar in India for work to be performed in India. J.A. 450. Thereafter, Structure Works elected not to pursue the software and structural design project with CEC.

Nearly two years later, in March 2006, CEC filed suit against Structure Works and Geometric in state court in Fairfax, Virginia. See J.A. 442. CEC alleged various tort claims against Structure Works and tort and contractual claims against Geometric.² All the claims stemmed from Geometric's hiring of Kumar. Id. Structure Works and Geometric removed the action to the federal district court in the Eastern District of Virginia based on the diversity of the parties. Structure Works and Geometric then each moved to dismiss for, among other reasons, lack of personal jurisdiction. The district court granted the motions, holding that it lacked general and specific personal jurisdiction over Structure Works and Geometrics.³ CEC timely appealed only the district court's holding that it lacked specific jurisdiction over the defendants.

II.

We review de novo a district court's dismissal for lack of personal jurisdiction, although we review for clear error any underlying factual findings. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc. ("Carefirst"), 334 F.3d 390, 396 (4th Cir.2003). Where, as here, the district court addresses the question of personal jurisdiction on the basis of motion papers, supporting legal memoranda, and the allegations in the complaint, the plaintiff bears the burden making a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989).

III.

In considering CEC's assertion of personal jurisdiction, we first set forth the applicable law. A federal district court may only exercise personal jurisdiction over a foreign corporation if such jurisdiction is authorized by the long-arm statute of the state in which it sits and application of the long-arm statute is consistent with the due process clause of the Fourteenth Amendment, U.S. Const. amend. XIV § 1. Carefirst, 334 F.3d at 396; see also Stover v. O'Connell Assoc., Inc., 84 F.3d 132, 136 (4th Cir.1996). We turn first to state law.

The relevant portion of Virginia's long-arm statute provides, "A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's ... [t]ransacting any business in this Commonwealth." Va.Code Ann. § 8.01-328.1(A)(1). The exercise of personal jurisdiction is proper, then, only if the asserted cause of action "aris[es] from" the non-resident defendant's "[t]ransacting business" in Virginia. § 8.01-328.1(A)(1); see also DeSantis v. Hafner Creations, Inc., 949 F.Supp. 419, 423-24 (E.D.Va. 1996); Chedid v. Boardwalk Regency Corp., 756 F.Supp. 941, 943-44 (E.D.Va. 1991). Because Virginia's long-arm statute is intended to extend personal jurisdiction to the extent permissible under the due process clause, the statutory inquiry merges with the constitutional inquiry. Young v. New Haven Advocate, 315 F.3d 256, 261 (4th Cir.2002) (citing Stover, 84 F.3d at 135-36); see also English & Smith v. Metzger, 901 F.2d 36, 38 (4th Cir.1990); Peninsula Cruise, Inc. v. New River Yacht Sales, Inc., 257 Va. 315, 512 S.E.2d 560, 562 (1999).

We turn next to the constitutional analysis.⁴ To satisfy the constitutional due process requirement, a defendant must have sufficient "minimum contacts" with the forum state such that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quotation and citation omitted). The minimum contacts test requires the plaintiff to show that the defendant "purposefully directed his activities at the residents of the forum" and that the plaintiff's cause of action "arise[s] out of" those activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citation and quotation omitted). This test is designed to ensure that the defendant is not "haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts." Burger King, 471 U.S. at 475, 105 S.Ct. 2174 (quotations and citations omitted). It protects a defendant from having to defend himself in a forum where he should not have anticipated being sued. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Because a sovereign's jurisdiction remains territorial, to justify the exercise of personal jurisdiction over a non-resident defendant, the defendant's contacts with the forum state must have been so substantial that "they amount to a surrogate for presence and thus render the exercise of sovereignty just." ESAB Group, Inc. v. Centricut, Inc., 126 F.3d 617, 623 (4th Cir.1997).

This court has synthesized the due process requirements for asserting specific personal jurisdiction in a three part test in which "we consider (1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiffs' claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable." ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir.2002) (quotations and citations omitted).

The first prong articulates the minimum contacts requirement of constitutional due process that the defendant purposefully avail himself of the privilege of conducting business under the laws of the forum state. While this requirement is not susceptible of mechanical application, see Int'l Shoe, 326 U.S. at 319, 66 S.Ct. 154; Kulko v. Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978), courts have considered various nonexclusive factors in seeking to resolve whether a defendant has engaged in such purposeful availment. In the business context, these factors include, but are not limited to:

• whether the defendant maintains offices or agents in the forum state, see McGee v. Int'l Life Ins. Co., 355 U.S. 220, 221, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957);

• whether the defendant owns property in the forum state, see Base Metal Trading, Ltd. v. OJSC, 283 F.3d 208, 213 (4th Cir.2002);

• whether the defendant reached into the forum state to solicit or initiate business, see McGee, 355 U.S. at 221, 78 S.Ct. 199; Burger King, 471 U.S. at 475-76, 105 S.Ct. 2174;

• whether the defendant deliberately engaged in significant or long-term business activities in the forum state, see Burger King, 471 U.S. at 475-76,...