Daynard v. Ness, Motley, Loadholt, Rich. & Poole

• Decision Date: 21 December 2001
• Docket Number: No. CIV.A.01-10099-WGY.,CIV.A.01-10099-WGY.
• Citation: 184 F.Supp.2d 55
• Court: U.S. District Court — District of Massachusetts
• Parties: Richard A. DAYNARD, Plaintiff, v. NESS, MOTLEY, LOADHOLT, RICHARDSON & POOLE, P.A.; Ronald Motley; Scruggs, Milette, Bozeman & Dent, P.A.; and Richard F. Scruggs, Defendants.

Page 55

184 F.Supp.2d 55

Richard A. DAYNARD, Plaintiff, v. NESS, MOTLEY, LOADHOLT, RICHARDSON & POOLE, P.A.; Ronald Motley; Scruggs, Milette, Bozeman & Dent, P.A.; and Richard F. Scruggs, Defendants.

No. CIV.A.01-10099-WGY.

United States District Court, D. Massachusetts.

December 21, 2001.

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Edward J. Barshak, Sugarman, Rogers, Barshak & Cohen, Boston, MA, for Plaintiff.

Michael E. Mone, Esdaile, Barrett & Esdaile, Boston, MA, Mark A. Pogue, Edwards & Angell, LLP, Providence, RI, Stephen M. Prignano, Edwards & Angell, LLP, Providence, RI, for Defendants.

MEMORANDUM

YOUNG, Chief Judge.

The plaintiff, a local law professor, brought suit against two sets of defendants, one from Mississippi and the other from South Carolina. The suit has occasioned three hearings before the Court. At the first hearing, the Court held that the plaintiff failed to show why the Mississippi defendants should be subject to personal jurisdiction in Massachusetts. The Court did, however, allow the plaintiff jurisdictional discovery, which led to a second hearing on the matter of personal jurisdiction. At that hearing, the Court dismissed the Mississippi defendants for lack of personal jurisdiction and soon after entered partial judgment in their favor, thus permitting the plaintiff to appeal the ruling immediately. At the third hearing, the Court heard from the South Carolina defendants, who argued that without the Mississippi defendants the case either should be (i) dismissed for failure to join an indispensable party or (ii) transferred to Mississippi. The Court rejected both arguments. This memorandum explains these rulings.

I. INTRODUCTION

As recounted by this Court in an earlier memorandum:

The plaintiff, Professor Richard A. Daynard ("Daynard") of Northeastern University School of Law, has spent much of his academic career studying how to defeat the tobacco industry in court. Compl. ¶¶ 21-29. The defendants —the Ness law firm and one of its partners, Mr. Motley (together "the South Carolina defendants"), and the Scruggs law firm and one of its partners, Mr. Scruggs (together "the Mississippi defendants") — were among the many law firms representing state governments in the titanic battle against the tobacco industry ("the State Tobacco Litigation"). Id. ¶¶ 15-19.

Between 1993 and 1997, Daynard provided advice to the defendants. Daynard Aff. ¶¶ 1-2. No written contract detailed how Daynard would be compensated, but Daynard alleges that he and one of the Mississippi defendants shook hands in Chicago, Illinois in 1996 on an agreement whereby he would receive 5% of any attorneys' fees paid to the defendants as a result of the State Tobacco Litigation. Id. ¶ 4. In 1997 and 1998, the tobacco industry agreed to settle the State Tobacco Litigation for billions of dollars. Since then, the defendants have received millions of dollars in attorneys' fees and Daynard has received nothing. Answer ¶¶ 65-66.

Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 178 F.Supp.2d 9, 10 (2001).

Daynard filed a complaint in state court, which the defendants properly removed to this Court. 28 U.S.C. §§ 1332(a)(1), 1441(a). The South Carolina defendants consented to personal jurisdiction and answered the complaint. The Mississippi defendants, on the other hand, contested personal jurisdiction and did not answer the complaint, Fed.R.Civ.P. 12(b)(2), which led to the first hearing in this case.

II. MISSISSIPPI DEFENDANTS

A. Personal Jurisdiction

The first hearing took place on May 31, 2001. At that hearing, Daynard argued that the Court had personal jurisdiction over the Mississippi defendants by virtue of their contacts with Massachusetts. The following discussion — like all the subsequent discussions in this memorandum — is written from the Court's perspective at the time of the hearing in question, in this instance May 31, 2001.

1. Procedural Posture

Under Rule 12(b)(2), the Court may employ a range of procedures to resolve questions of personal jurisdiction. Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145-47 (1st Cir.1995) (delineating separate "prima facie," "preponderance of the evidence," and "likelihood" standards). The "prima facie" standard is the "most conventional." Id. at 145. Accordingly, absent any reason to refrain from so doing, the Court will employ it. Under the prima facie standard, Daynard ultimately bears the burden of persuading the Court that personal jurisdiction exists over the Mississippi defendants, but at this preliminary stage of the case, before any disputed jurisdictional facts have been resolved, Daynard need only make a prima facie showing of personal jurisdiction. See, e.g., Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 33-34 (1st Cir.1998). Accordingly, the Court will take the specific facts affirmatively alleged by Daynard as true (whether or not disputed) and construe them in the light most favorable to the jurisdictional claim. Next the Court will "add to the mix" those facts put forward by the Mississippi defendants "to the extent that they are uncontradicted." Id. at 34. Given this universe of facts, the Court will decide whether Daynard makes a prima facie showing of personal jurisdiction over the Mississippi defendants.

2. Facts

The Mississippi defendants present undisputed facts that they did not represent Massachusetts in the State Tobacco Litigation, they have no partners, employees, or property in Massachusetts, they never met with Daynard in Massachusetts, and their overall contact with Massachusetts in general and Daynard in particular was minimal or nonexistent. Defs.' Facts ¶¶ 7-12 [Docket No. 12].

Daynard paints a more complex picture.¹ He first got involved with the defendants in 1993, when the South Carolina defendants traveled to Massachusetts to seek his specialized knowledge in tobacco litigation. Daynard Aff. ¶ 1 [Docket No. 17]. As a result of that meeting, and many other meetings with the defendants that took place outside of Massachusetts, Daynard regularly communicated with both the South Carolina and the Mississippi defendants. Id. ¶ 2; Compl. ¶¶ 33-35. Daynard provided the defendants with extensive documentation that he had compiled over the years, introduced the defendants to experienced tobacco litigators and interested state government officials, and generally provided advice. Daynard Aff. ¶ 2; Compl. ¶¶ 36-38. Daynard performed most of these tasks from his office in Massachusetts.

After the State Tobacco Litigation began in 1994, Daynard was appointed counsel-of-record for several states, including Florida, Maryland, and Massachusetts, and worked with the defendants on issues relating to litigation in Florida and Mississippi. Compl. ¶ 41. To help the defendants, Daynard incurred communication and travel expenses, as well as payments to Northeastern University to reduce his teaching obligations. Daynard Aff. ¶ 2; Compl. ¶ 49.

Daynard and the defendants were in Chicago, Illinois for the Democratic National Convention around August 25, 1996. Compl. ¶ 55. Daynard was advised that the defendants wanted to meet with him to discuss his share of any fee awards. The South Carolina defendants apparently were unable to meet with Daynard as only the Mississippi defendants showed up. Id. ¶ 56. At the meeting, Mr. Scruggs and Daynard orally agreed that Daynard would receive 5% of any fees recovered in the State Tobacco Litigation. Daynard Aff. ¶ 4; Compl. ¶¶ 57-58. As a result of this agreement, Daynard continued to provide advice to the defendants and continued to incur expenses. Daynard Aff. ¶ 4; Compl. ¶ 60.

Following the tentative settlement of the Mississippi litigation, Daynard wrote to the Mississippi defendants in July 1997 to confirm the oral agreement reached the previous year. The Mississippi defendants never responded to the letter. Compl. ¶ 61. Following the tentative settlement of the Florida litigation, Daynard wrote to both the South Carolina and the Mississippi defendants in October 1997 to confirm the oral agreement reached the previous year. Id. ¶ 62. On November 7, 1997, the South Carolina defendants disavowed the oral agreement; on November 20, 1997, the Mississippi defendants did the same. Id. ¶ 63.

Daynard has never received any compensation from the Mississippi defendants. Id. ¶ 40.

3. Discussion

Personal jurisdiction over a distant defendant in a diversity action may be obtained by consent, e.g., Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999), or proper service of process as allowed by the forum state's long-arm statute, Fed. R.Civ.P. 4(k)(1)(A). The South Carolina defendants have consented to personal jurisdiction but the Mississippi defendants have not. Accordingly, the Court cannot assert personal jurisdiction over the Mississippi defendants until Daynard demonstrates that the Mississippi defendants lie within the reach of the Massachusetts long-arm statute as cabined by the Due Process Clause of the Fourteenth Amendment. E.g., Lyle Richards Int'l, Ltd. v. Ashworth, Inc., 132 F.3d 111, 112 (1st Cir. 1997).

Before turning to the law, a few observations about the facts ought be highlighted. Daynard alleges that he communicated with the Mississippi defendants while he was in Massachusetts, but he is less clear with respect to how the Mississippi defendants made contact with Massachusetts; the communications into Massachusetts, according to Daynard, were from the South Carolina defendants. Although Massachusetts courts construe their long-arm statute broadly, neither the long-arm statute nor Due Process allows the unilateral actions of the plaintiff to confer jurisdiction. The focus is on the actions of the defendant, and in this case the facts portray the Mississippi defendants as the passive recipients of information, no different than a person in Mississippi watching the Boston Red...