Crawl Space Door Sys. v. White & Williams, LLP

• Decision Date: 22 November 2022
• Docket Number: Civil Action 2:22-CV-00199 (EWH)
• Parties: CRAWL SPACE DOOR SYSTEM, INC., d/b/a CRAWL SPACE DOOR SYSTEMS, INC. Plaintiff, v. WHITE & WILLIAMS, LLP, Defendant.
• Court: U.S. District Court — Eastern District of Virginia

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CRAWL SPACE DOOR SYSTEM, INC., d/b/a CRAWL SPACE DOOR SYSTEMS, INC. Plaintiff, v. WHITE & WILLIAMS, LLP, Defendant.

Civil Action No. 2:22-CV-00199 (EWH)

United States District Court, E.D. Virginia, Norfolk Division

November 22, 2022

MEMORANDUM ORDER

Elizabeth W. Hanes United States District Judge

This matter is before the Court on White & Williams, LLP's (“Defendant” or “White &amp Williams”) motion to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim. ECF No. 9. For the reasons stated below, the Court FINDS that it lacks personal jurisdiction over White & Williams. However, in the interest of justice, the Court DENIES Defendant's Motion to Dismiss for lack of personal jurisdiction and ORDERS this case be TRANSFERRED to the United States District Court for the Eastern District of Pennsylvania. As a result, the Court does not reach a decision on Defendant's other grounds for dismissal.

I. BACKGROUND

This is a legal malpractice action brought by a Virginia-based client, Crawl Space Door System, Inc. (“Crawl Space” or “Plaintiff”), against a Pennsylvania-based law firm, White & Williams. Am. Compl. ¶¶ 1, 9-10, ECF No. 3. The malpractice claim arises from White & Williams's representation of Crawl Space in a civil action before the United States District Court for the District of New Jersey. Am. Compl. ¶ 2. Crawl Space alleges that during White & Williams's representation of Crawl Space in the New Jersey litigation, the firm knew about facts and legal theories relied on by Crawl Space in a related action before this Court. Am. Compl. ¶ 6. Although the facts and legal theories were allegedly not actionable under the pending claims in the New Jersey litigation, Crawl Space alleges that White & Williams nevertheless presented them to the New Jersey jury. Am. Compl. ¶ 5, 56. Crawl Space asserts that White & Williams's use of the facts and theories in the New Jersey case precluded it from pursuing the same theories in the Virginia litigation. Am. Compl. ¶¶ 57. Crawl Space brings a legal malpractice claim, alleging the firm failed to exercise the knowledge and skill of attorneys of ordinary ability, and seeks $30,000,000 in damages. Am. Compl. ¶¶ 55-58.

This is not the first lawsuit between the parties since the conclusion of the New Jersey litigation. On November 23, 2021, a collection agency acting on behalf of White & Williams filed a lawsuit in Pennsylvania state court against Crawl Space to recover over $670,000 in unpaid legal fees. Phila. Pro. Collections LLC v. Crawl Space Door Sys., Inc., 2:21-cv-05476 (E.D. Pa. Dec. 16, 2021) (the “Pennsylvania action”). That action was removed to the United States District Court for the Eastern District of Pennsylvania on December 16, 2021. On January 6, 2022, Crawl Space filed a motion to transfer the Pennsylvania action to New Jersey. That motion was denied. Crawl Space then filed this malpractice action on May 11, 2022, and subsequently moved the Pennsylvania district court to transfer the Pennsylvania action to this Court. That motion was also denied. Now pending before the Court is White & Williams's motion to dismiss for lack of personal jurisdiction, improper venue, and failure to state a claim.

II. LEGAL STANDARD

A defendant may move to dismiss a case for lack of personal jurisdiction. Fed.R.Civ.P. 12(b)(2). “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff ultimately bears the burden of proving to the district court judge the existence of jurisdiction over the defendant by a preponderance of the evidence.” New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). However, if the court resolves the 12(b)(2) motion without conducting an evidentiary hearing, “the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis in order to survive the jurisdictional challenge.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). When making such a ruling, “the court must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction.” Id. If the Court finds that it lacks jurisdiction, it may dismiss the case or, “if it is in the interest of justice, transfer such action or appeal to any other such court . . . in which the action or appeal could have been brought at the time it was filed or noticed.” 28 U.S.C. § 1631.

For a federal district court to exercise personal jurisdiction over a defendant, such jurisdiction must comport with the long arm statute of the state where the district court sits and must satisfy the standards of the Fourteenth Amendment's Due Process Clause. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009). Virginia's longarm statute extends personal jurisdiction to the fullest amount permitted by the Due Process Clause. Id. (citing Young v. New Haven Advocate, 315 F.3d 256, 261 (4th Cir. 2002)). As a result, the “statutory inquiry merges with the constitutional inquiry.” Id.

To satisfy due process, 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. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). There are two types of personal jurisdiction: general and specific. ALS Scan, Inc. v. Digit. Serv. Consultants, Inc., 293 F.3d 707, 711 (4th Cir. 2002) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)). General personal jurisdiction requires that the Defendant's contacts with the state be so “continuous and systematic” that jurisdiction is established over the defendant for any conduct. Id. at 712. Establishing specific jurisdiction is less burdensome but only extends over conduct which connects the defendant to the state. Id. at 711. The Fourth Circuit has synthesized the specific personal jurisdiction inquiry to a three-part test under which the Court considers “(1) the extent to which the defendant ‘purposefully avail[ed]' 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., 293 F.3d at 712 (alterations in original) (quoting Christian Sci. Bd. of Dirs. of the First Church of Christ v. Nolan, 259 F.3d 209, 216 (4th Cir. 2001)). The first factor of this test is dispositive. Consulting Eng'rs Corp., 561 F.3d at 278. If plaintiff does not make a prima facie showing that the defendant purposefully availed itself of the state, the court need not consider the other two prongs. Id. (“If, and only if, we find that the plaintiff has satisfied this first prong of the test for specific jurisdiction need we move on to a consideration of prongs two and three.”).

III. DISCUSSION

A. Personal Jurisdiction

In determining whether the Court has personal jurisdiction over White & Williams, the Court will evaluate whether it has specific jurisdiction.^[1]As to the first factor, requiring that the defendant purposefully availed itself of the privilege of conducting business in the state, the Fourth Circuit has instructed courts to consider several nonexclusive factors:

(1) whether the defendant maintains offices or agents in the forum state; (2) whether the defendant owns property in the forum state; (3) whether the defendant reached into the forum state to solicit or initiate business; (4) whether the defendant deliberately engaged in significant or long-term business activities in the forum state; (5) whether the parties contractually agreed that the law of the forum state would govern disputes; (6) whether the defendant made in-person contact with the resident of the forum in the forum state regarding the business relationship; (7) the nature, quality and extent of the parties' communications about the business being transacted; and (8) whether the performance of contractual duties was to occur within the forum.

Hirsch v. Johnson, No. 1:14cv332, 2014 WL 2916748, at *4 (E.D. Va. June 26, 2014) (citing Consulting Eng'rs Corp., 561 F.3d at 278).

In this case, the Amended Complaint indicates that White & Williams represented Crawl Space in litigation before the United States District Court for the District of New Jersey for approximately four years. Am. Compl. ¶¶ 20, 31. Crawl Space additionally alleges that “White & Williams reached out into Virginia and created a continuing relationship” with Plaintiff-a Virginia company-and that throughout that relationship, Defendant “sen[t] and receive[ed] innumerable messages and documents electronically and otherwise.” Am. Compl. ¶ 12, ECF No. 3. While the length of the business relationship and substantial communication between the parties may be two indicia of purposeful availment, reviewing the Amended Complaint as a whole, the Court cannot conclude that White & Williams purposefully availed itself of doing business in Virginia.

Crawl Space argues that White & Williams purposefully availed itself of Virginia by contracting to provide legal services to Crawl Space, a Virginia corporation. However, numerous courts have recognized that “a contract alone does not automatically establish minimum contacts in the plaintiff's home forum.” New Venture Holdings LLC v. DeVito Verdi, Inc., 376 F.Supp.3d 683, 692 (E.D. Va. 2019) (quoting Boschetto v. Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008)); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478-79 (1985) (exp...