Thompson Hine, LLP v. Taieb
| Decision Date | 12 November 2013 |
| Docket Number | No. 12-7009,12-7009 |
| Parties | THOMPSON HINE, LLP, AN OHIO LIMITED LIABILITY PARTNERSHIP, APPELLANT v. ELICKO TAIEB, AN INDIVIDUAL CITIZEN OF FLORIDA AND EC DISTRIBUTION, INC., APPELLEES |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Thomas L. Feher argued the cause for appellant. With him on the briefs was C. Dennis Southard, IV.
Levi S. Zaslow argued the cause for appellee. With him on the brief was Steven B. Vinick.
Before: ROGERS and TATEL, Circuit Judges, and SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
A Florida resident retained lawyers in an Ohio law firm's District of Columbia office to represent him in a matter pending in Oregon. When the client refused to pay for services rendered, the firm sued in the United States District Court for the District of Columbia, and the court dismissed the case for lack of personal jurisdiction. Because neither the retainer itself nor anything about the client's dealings with the law firm demonstrates that the client "purposefully avail[ed] [him]self of the privilege of conducting activities within the [District]," Hanson v. Denckla, 357 U.S. 235, 253 (1958), we affirm.
Appellant Thompson Hine LLP, an Ohio-based law firm, has an office in the District of Columbia. Appellee Elicko Taieb, a Florida resident, was, at the time of the events leading up to this case, the majority owner, president, and CEO of Smoking Everywhere, Inc. (SEI), a Florida corporation with its principal place of business in Florida. Prior to its bankruptcy, SEI imported and distributed electronic cigarettes.
In March 2009, SEI retained Thompson Hine to handle a matter pending before the Food and Drug Administration (FDA). Thompson Hine LLP v. Smoking Everywhere, Inc., 840 F. Supp. 2d 138, 140 (D.D.C. 2012). Written on Atlanta office letterhead, the retainer was signed by Walt Linscott, an attorney in the firm's Atlanta office, and provided Linscott's billing rate. Taieb was not a party to the retainer. Under Linscott's supervision, two attorneys in the firm's D.C. office, Kip Schwartz and Eric Heyer, performed most of the work on the FDA matter. Taieb met with Schwartz, Heyer, and Linscott in the D.C. office to discuss the matter prior to attending a court hearing. In the end, Thompson Hine's work was apparently successful, as it obtained a preliminary injunction against the FDA. Id. at 146.
Later that year, the firm entered into a second retainer— "the Oregon retainer"—this time with both SEI and Taieb, pertaining to an action brought against them by the Attorney General of Oregon alleging violations of the state's Unlawful Trade Practices Act. Taieb signed this retainer in his individual capacity. Addressed to Ray Story, SEI's vice president, the Oregon retainer, though written by Schwartz on the firm's D.C. office letterhead, was faxed from Atlanta. The retainer included contact information for Linscott, provided billing rates for Schwartz, Heyer, and another D.C.-based attorney, and specified that the firm would deposit the $10,000 retainer in a special account designated under Ohio law. According to their declarations, Schwartz and Heyer performed all work on the Oregon matter in the firm's D.C. office and "exchanged at least ten emails related to the FDA action and the Oregon action." Decl. of Eric Heyer 2.
Thompson Hine billed SEI and Taieb $480,000 for the work on both matters. After paying the firm some $100,000, they stiffed it for the rest. The firm then filed suit in the United States District Court for the District of Columbia against both SEI and Taieb. Attached to the complaint was Thompson Hine's final bill for both the FDA and Oregon matters. Written on Atlanta office stationary, the bill identifies Linscott as the supervising attorney and lists nineteen outstanding invoices for work on the two matters.
SEI and Taieb moved to dismiss for lack of personal jurisdiction, arguing that they had "little or no contacts with the District of Columbia." Mem. in Supp. of Defs.' Mot. to Dismiss 8. The district court, finding the parties' briefs largely conclusory, carefully and thoroughly reviewed the record in light of factors the courts have established for determining whether a non-resident's contacts with the forum are sufficient to ensure that "the maintenance of the suit does not offendtraditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). The record includes the FDA and Oregon retainers, Thompson Hine's final bill, declarations by Schwartz, Heyer, and Taieb, and records from the FDA litigation. Calling this a "close case," and finding that Thompson Hine "ha[d] not met its burden to prove that the Court has personal jurisdiction over either defendant," the district court dismissed the complaint. Thompson Hine, 840 F. Supp. 2d at 147-49.
Thompson Hine appeals. Because SEI is now bankrupt, the firm presses this appeal only against Taieb. See Thompson Hine, LLP v. Smoking Everywhere, Inc., No. 12-7009 (D.C. Cir. July 26, 2012) (Order Dismissing Appeal). We review de novo the district court's dismissal for lack of personal jurisdiction. FC Investment Group LC v. IFX Markets, Ltd., 529 F.3d 1087, 1091 (D.C. Cir. 2008).
"To establish personal jurisdiction over a non-resident, a court must . . . first examine whether jurisdiction is applicable under the state's long-arm statute and then determine whether a finding of jurisdiction satisfies the constitutional requirements of due process." GTE New Media Services, Inc. v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000). Under the District of Columbia's long-arm statute, courts located in the District may exercise personal jurisdiction over any individual who "transact[s] any business in the District of Columbia." D.C. Code § 13-423. Because we have interpreted these words "to provide jurisdiction to the full extent allowed by the Due Process Clause[,] the statutory and constitutional jurisdictional questions, which are usually distinct, merge into a single inquiry": would exercising personal jurisdiction accord with the demands of due process? United States v.Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995). A court's jurisdiction over a defendant satisfies due process when there are "minimum contacts," International Shoe, 326 U.S. at 316, between the defendant and the forum "such that he should reasonably anticipate being haled into court there," World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). Such minimum contacts must show that "the defendant purposefully avail[ed] [him]self of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson, 357 U.S. at 253.
Two decisions guide our resolution of this case. The first, Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), involved a suit by Burger King, a Florida corporation, against a Michigan franchisee who had signed a 20-year contract with Burger King. In considering whether the Florida court had personal jurisdiction over the Michigan franchisee, the Supreme Court began by making clear that an individual's contract with a non-resident "alone" cannot "automatically establish sufficient minimum contacts in the other party's home forum." Id. at 478 (internal citations omitted). The Court also rejected "mechanical tests," adopting instead a "highly realistic" approach that examines "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing" to determine "whether the defendant purposefully established minimum contacts within the forum." Id. at 479 (internal citations and quotation marks omitted). The contacts with the forum, the Court explained, must "proximately result from actions by the defendant himself that create a 'substantial connection' with the forum State." Id. at 475 (internal citations omitted). "Thus, where the defendant 'deliberately' has engaged in significant activities within a State or has created 'continuing obligations' between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there"such that "it is presumptively not unreasonable to require him to submit to the burdens of litigation in that forum as well." Id. at 475-76 (internal citations omitted).
Applying these principles, the Supreme Court concluded that the franchisee had "established a substantial and continuing relationship with Burger King's Miami headquarters [and] received fair notice from the contract documents and the course of dealing that he might be subject to suit in Florida." Id. at 487. The franchisee had deliberately "reached out . . . and negotiated with a Florida corporation" and voluntarily entered into "a carefully structured 20-year relationship that envisioned continuing and wide-reaching contacts." Id. at 479-480 (internal citations and quotation marks omitted). In addition to paying Burger King a substantial fee, the franchisee had "agree[d] to submit to [Burger King's] exacting regulation of virtually every conceivable aspect of [its] operations." Id. at 465. Specifically, from its offices in Miami Burger King had imposed a series of specific requirements on its franchisees relating to, among other things, accounting and insurance practices, hours of operation, and building layout, as well as the quality, appearance, and taste of menu items. Id. at 465 n.4. Moreover, "various franchise documents provid[ed] that all disputes would be governed by Florida law." Id. at 481. "[W]hen combined with the 20-year interdependent relationship [the franchisee] established with Burger King's Miami headquarters," these choice-of-law provisions "reinforced his deliberate affiliation with...
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