Monkton Ins. Servs., Ltd. v. Ritter

• Decision Date: 26 September 2014
• Docket Number: No. 13–50941.,13–50941.
• Citation: 768 F.3d 429
• Parties: MONKTON INSURANCE SERVICES, LIMITED, Acting by its Joint Official Liquidators, Gordon I. MacRae and Gwyn Hopkins, Plaintiff v. William G. RITTER, Defendant–Third Party Plaintiff–Appellant v. Butterfield Bank (Cayman) Limited, Third Party Defendant–Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

768 F.3d 429

MONKTON INSURANCE SERVICES, LIMITED, Acting by its Joint Official Liquidators, Gordon I. MacRae and Gwyn Hopkins, Plaintiff

v.William G. RITTER, Defendant–Third Party Plaintiff–Appellant

v.Butterfield Bank (Cayman) Limited, Third Party Defendant–Appellee.

No. 13–50941.

United States Court of Appeals, Fifth Circuit.

Sept. 26, 2014.

Randall Lyle Rouse, Lisa Kaye Hooper, Esq., Lynch, Chappell & Alsup, P.C., Midland, TX, for Defendant–Third Party Plaintiff–Appellant.

Debra Janece McComas, Esq., Richard D. Anigian, Esq., Andrew W. Guthrie, Haynes & Boone, L.L.P., Dallas, TX, for Third Party Defendant–Appellee.

Appeal from the United States District Court for the Western District of Texas.

Before REAVLEY, ELROD, and SOUTHWICK, Circuit Judges.

Opinion

JENNIFER WALKER ELROD, Circuit Judge:

William G. Ritter appeals the district court's order denying his motion for jurisdictional discovery and granting Butterfield Bank (Cayman) Limited's motion to dismiss for lack of personal jurisdiction. For the following reasons, we AFFIRM the judgment of the district court.

I

Defendant–Third Party Plaintiff–Appellant, William G. Ritter, is a resident of Odessa, Texas, and owns Geneva Insurance SPC Ltd. (Geneva). Geneva is incorporated and does business in the Cayman Islands. Monkton Insurance Services, Ltd. (Monkton) is an insurance manager incorporated and doing business in the Cayman Islands and, at all relevant times, managed Geneva. David Keith Self was the sole director and manager of Monkton.

In March 2008, Self opened a Cayman bank account on behalf of Geneva with Third Party Defendant–Appellee, Butterfield Bank (Cayman) Limited (Butterfield), which is a Cayman bank organized and regulated under Cayman law and located on the island of Grand Cayman. Pursuant to this transaction, Self faxed several documents to Ritter, in Texas, for his signature (“the Contracts”). In the Contracts, Self and Ritter are both identified as “Director” of Geneva. The Contracts expressly provide that “[p]erformance [under the account] shall be at George Town, in the island of Grand Cayman, one of the said Cayman Islands.” They further provide that “legal relations and place of jurisdiction between Bank and customer [Geneva] shall be governed by the laws of the Cayman Islands.”

For the next three years, Geneva conducted business in the Cayman Islands, including withdrawing and depositing money in the Butterfield account. According to Ritter, Geneva sometimes received checks and wire transfers from its customers in Texas for deposit in the Butterfield account, and it sometimes transferred funds from its account at Butterfield to those same clients. These transactions occurred twenty times over a three and one-half year period. In each instance, it was Geneva—not Butterfield—that requested the transaction. Ritter also placed eight phone calls while in Texas, to Butterfield, to arrange wire transfers or take other actions related to Geneva's account. These calls were made over a total of four days during a three and one-half year timeframe and totaled collectively about forty-five minutes. They were all initiated by Ritter.

During his management of Geneva, Self allegedly withdrew $435,000 from Geneva's account with Butterfield without Ritter's consent. When Ritter found out, he demanded that Self repay him personally. Soon after, Monkton officials discovered that Self had transferred money from various client accounts to Ritter. As a result, Monkton sued Ritter in Odessa, Texas. Ritter then filed a third-party complaint against Butterfield alleging that Butterfield breached the Contracts with Geneva by failing to detect Self's forged signatures on withdrawals from Geneva's bank account. Butterfield moved to dismiss Ritter's claims for lack of personal jurisdiction. Ritter then requested a continuance in order to conduct jurisdictional discovery. The district court denied Ritter's request for discovery and granted Butterfield's motion to dismiss for lack of personal jurisdiction. This appeal followed.

II

Ritter appeals the district court's dismissal of his claims against Butterfield for lack of personal jurisdiction. He argues that Butterfield established sufficient minimum contacts with Texas for the district court to exercise both general and specific jurisdiction over it. We review the district court's dismissal for lack of personal jurisdiction de novo. ITL Int'l Inc. v. Constenla S.A., 669 F.3d 493, 496 (5th Cir.2012). The plaintiff has the burden to make a prima facie showing that personal jurisdiction is proper. Luv N' Care, Ltd. v. Insta–Mix, Inc., 438 F.3d 465, 469 (5th Cir.2006). “We must accept the plaintiff's uncontroverted allegations, and resolve in [his] favor all conflicts between the facts contained in the parties' affidavits and other documentation.” Revell v. Lidov, 317 F.3d 467, 469 (5th Cir.2002) (internal quotation marks and citation omitted) (alterations in original). To establish that personal jurisdiction is proper, the plaintiff must show that the nonresident defendant “purposefully availed [itself] of the benefits and protections of the forum state by establishing ‘minimum contacts' with the forum state.” Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir.1999) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) ). “Sufficient minimum contacts will give rise to either specific or general jurisdiction.” Revell, 317 F.3d at 470.

Ritter argues that Butterfield's contacts with Texas through its website,¹ telephone conversations with Ritter, and wire transfers to Texas banks are “continuous and systematic” enough to justify the exercise of general jurisdiction. We disagree.

The Supreme Court recently considered the requirements to establish general jurisdiction in Daimler AG v. Bauman, ––– U.S. ––––, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014). The Court observed that the proper consideration when determining general jurisdiction is whether the defendant's “ ‘affiliations with the State are so continuous and systematic as to render [it] essentially at home in the forum State.’ ” Id. at 761 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, ––– U.S. ––––, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011) ) (alteration in original). The Court held that for a corporation, “the place of incorporation and principal place of business” are where it is “at home” and are thus paradigm bases for jurisdiction. Id. at 760. It is, therefore, incredibly difficult to establish general jurisdiction in a forum other than the place of incorporation or principal place of business. See id.; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 411–12, 418, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

Here, Butterfield is a Cayman bank incorporated in the Cayman Islands with its principal place of business in George Town, Grand Cayman. Butterfield is therefore “at home” in the Cayman Islands. Daimler, 134 S.Ct. at 760. Ritter's attempts to show otherwise are unavailing. First, the communications between Butterfield and Ritter and the wire transfers Butterfield made to Texas banks were initiated by Ritter and Geneva, and thus cannot be said to render Butterfield “at home” in Texas. See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958) (“The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State.”). In addition, Ritter does not dispute that “performance” under the Contracts, including the wire transfers, occurred in Cayman.

Ritter points to Butterfield's interactive website as a “continuous and systematic” contact. However, Butterfield's website is insufficient to establish general jurisdiction in this case. We have used the Zippo sliding scale when a plaintiff argues that personal jurisdiction exists due to a defendant's website. Revell, 317 F.3d at 470 (citing Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1124 (W.D.Pa.1997) ). However, the sliding scale

[I]s not well adapted to the general jurisdiction inquiry, because even repeated contacts with forum residents by a foreign defendant may not constitute the requisite substantial, continuous and systematic contacts required for a finding of general jurisdiction—in other words, while it may be doing business with Texas, it is not doing business in Texas.

Id. at 471. In this case, at most, Butterfield's website shows that Butterfield conducts business with Texas, not in Texas. Id. Because Butterfield is neither incorporated nor has its principal place of business in Texas, and because Ritter has not pleaded facts showing that Butterfield's contacts with Texas are “continuous and systematic” enough to render it “at home” in Texas, general jurisdiction is improper. See Daimler, 134 S.Ct. at 761.

Likewise, this court does not have specific jurisdiction over Butterfield. Specific jurisdiction “focuses on the relationship among the defendant, the forum, and the litigation.” Walden v. Fiore, ––– U.S. ––––, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014) (quotation marks and citations omitted). “For a State to exercise jurisdiction consistent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State.” Id. This circuit applies a three-step analysis for the specific jurisdiction inquiry:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir.2006) (citation omitted). If Ritter can successfully establish the first two prongs, then the burden shifts to Butterfield to show that exercising...