Turi v. Main St. Adoption Serv.

• Decision Date: 04 March 2011
• Docket Number: No. 09–2229.,09–2229.
• Citation: 633 F.3d 496
• Parties: Guy TURI; Melissa Balistreri–Turi; Shaun Nugent; Christine Denton; Lisa Wells; Sam Wells; Linda Wood; George Wood; Alice Buffington; Daniel McCoy; Kelleen Urbon; Todd Urbon, Plaintiffs–Appellees,v.MAIN STREET ADOPTION SERVICES, LLP; Nina Heller; Bob McClenaghan, Defendants–Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

633 F.3d 496

Guy TURI; Melissa Balistreri–Turi; Shaun Nugent; Christine Denton; Lisa Wells; Sam Wells; Linda Wood; George Wood; Alice Buffington; Daniel McCoy; Kelleen Urbon; Todd Urbon, Plaintiffs–Appellees,

v.MAIN STREET ADOPTION SERVICES, LLP; Nina Heller; Bob McClenaghan, Defendants–Appellants.

No. 09–2229.

United States Court of Appeals, Sixth Circuit.

March 4, 2011.

ON BRIEF: Mark R. Fox, Fraser Trebilcock Davis & Dunlap, P.C., Lansing, Michigan, for Appellants. Joni M. Fixel, Fixel Law Offices, PLLC, Okemos, Michigan, for Appellees.Before: DAUGHTREY, GILMAN, and McKEAGUE, Circuit Judges.

OPINION

RONALD LEE GILMAN, Circuit Judge.

Main Street Adoption Services, LLP and two of its officers (collectively, Main Street), none of whom are residents of Michigan, have filed this interlocutory appeal challenging the district court's conclusions that (1) it has personal jurisdiction over Main Street regarding the various claims of the Michigan plaintiffs, (2) venue is proper in the Eastern District of Michigan, and (3) the parties' arbitration clause in their adoption agreements does not foreclose litigating the present case in federal court. For the reasons set forth below, we DISMISS AS PREMATURE Main Street's challenge to the rulings of the district court regarding personal jurisdiction and venue, REVERSE the judgment of the district court retaining subject-matter jurisdiction over the plaintiffs' fee-related claims (for unjust enrichment and for conversion), AFFIRM its judgment retaining subject-matter jurisdiction over the plaintiffs' remaining claims, and REMAND the case for further proceedings consistent with this opinion.

I. BACKGROUND

The plaintiffs (the appellees here) are 12 individuals who contacted Main Street for the purpose of adopting a child from Guatemala. Main Street is a Pennsylvania entity that facilitates the adoption of foreign children. In addition to Main Street, the other appellants in the present case are Main Street's Chief Executive Officer, President, and Director Nina Heller, a California resident, and its Director Bob McClenaghan, a Pennsylvania resident.

All 12 of the plaintiffs signed adoption agreements with Main Street to accomplish the adoptions in question. None of the plaintiffs, however, ended up successfully completing an adoption through Main Street. At the time the complaint was filed in the United States District Court for the Eastern District of Michigan, 10 of the 12 plaintiffs resided in states other than Michigan (the non-Michigan plaintiffs). Only Daniel McCoy and Alice Buffington (the Michigan plaintiffs) were residents of Michigan. The Michigan plaintiffs had numerous communications with Main Street regarding their respective adoption agreements. Most of these communications were initiated by the Michigan plaintiffs, but some were initiated by Main Street. These communications concerned logistical issues related to the adoption process and various concerns that the Michigan plaintiffs had over the course of their attempted adoptions. All of the plaintiffs claim that they “were induced into an adoption that never took place due to [Main Street's] incompetence ... [,] assurances, unethical behavior, lack of monitoring and misrepresentations.” They assert that Main Street's various factual representations regarding the adoption process were dishonest and form the basis for Main Street's alleged fraud.

The plaintiffs argue that personal jurisdiction over Main Street is proper in Michigan because of the communications between the Michigan plaintiffs and Main Street. Although the plaintiffs concede in their brief that the non-Michigan plaintiffs “had no contact with [the Eastern District of Michigan], and [Main Street] committed no acts that independently justify the exercise of limited personal jurisdiction in Michigan with respect to th[e] claims” of the non-Michigan plaintiffs, they contend that the contacts between the Michigan plaintiffs and Main Street justify the exercise of personal jurisdiction over Main Street in Michigan for all of the plaintiffs' claims. The plaintiffs also argue that venue is proper in the Eastern District of Michigan because that venue has a substantial connection to their claims.

All 12 plaintiffs collectively filed a complaint in the Eastern District of Michigan, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) (18 U.S.C. §§ 1962(c) and 1962(d)), as well as state-law claims for unjust enrichment, conversion, civil conspiracy, fraudulent misrepresentation, innocent misrepresentation, intentional infliction of emotional distress, and negligent infliction of emotional distress. Main Street responded by filing a motion to dismiss the complaint, arguing that the district court lacked personal jurisdiction over the defendants, that the venue was improper, and that all of the claims should be referred to an arbitrator pursuant to the arbitration clause in the parties' adoption agreements. The district court granted in part and denied in part Main Street's motion to dismiss, finding that: (1) the record supported personal jurisdiction over the Main Street defendants regarding the claims raised by the Michigan plaintiffs; (2) there was no personal jurisdiction over the Main Street defendants regarding the claims raised by the non-Michigan plaintiffs; (3) venue was proper in the Eastern District of Michigan; and (4) the claims in the complaint did not fall within the scope of the arbitration clause in the parties' adoption agreements. This timely interlocutory appeal by Main Street followed.

II. JURISDICTION

“Although the parties did not raise the issue of appellate jurisdiction in their briefs, we are under an independent obligation to police our own jurisdiction, and thus we can raise the issue of jurisdiction sua sponte.” See Bonner v. Perry, 564 F.3d 424, 426 (6th Cir.2009) (internal quotation marks omitted). “With certain limited exceptions not applicable here, we have jurisdiction only over appeals from final decisions of a district court.” Id. at 426–27 (citing 28 U.S.C. § 1291). “Ordinarily, appellate jurisdiction is lacking to hear an appeal from an order denying a Rule 12(b)(6) motion to dismiss since such an order is interlocutory in nature.” Mich. Bell Tel. Co. v. Climax Tel. Co., 202 F.3d 862, 866 (6th Cir.2000) (internal quotation marks omitted).

A. Appellate jurisdiction over the denial of Main Street's arbitration claim

The district court's denial of Main Street's motion to dismiss, which was based on the parties' arbitration clause, is independently reviewable under the Federal Arbitration Act (FAA), 9 U.S.C. § 16, and Rule 4 of the Federal Rules of Appellate Procedure. See Simon v. Pfizer Inc., 398 F.3d 765, 772–73 (6th Cir.2005) (holding that there was jurisdiction under the FAA to hear the defendant's interlocutory appeal of the district court's denial of the defendant's motion to dismiss). Such interlocutory appellate jurisdiction comports with the principle that we generally have jurisdiction only over final orders because “the FAA's provision for interlocutory appeals from refusals to stay an action or compel arbitration was intended precisely to” support a party's “contractual right to resolve [certain] questions through arbitration and avoid [court] proceeding[s] altogether.” Stein v. KPMG, LLP, 486 F.3d 753, 762 (2d Cir.2007). We thus have jurisdiction to review the district court's denial of Main Street's claim that this action should be decided by arbitration.

B. Appellate jurisdiction over Main Street's personal-jurisdiction and venue defenses

Whether we have interlocutory jurisdiction over the district court's denial of Main Street's personal-jurisdiction and venue defenses is another matter. Interlocutory appeals may be heard where the issue being raised falls under the collateral-order doctrine or if the issue is “inextricably intertwined” with another issue that the appellate court has the independent jurisdiction to consider. Lowe v. Hamilton Cnty. Dep't of Job & Family Servs., 610 F.3d 321, 323 (6th Cir.2010) (holding that the court lacked jurisdiction over the defendant's appeal from the district court's denial of various defenses raised in the defendant's motion for summary judgment because the issues on appeal “do not fall under the collateral order doctrine nor are they inextricably intertwined with the [immediately appealable] issue of sovereign immunity”). As discussed below, neither of these principles is applicable to the facts in the present case. Nor are the statutory provisions setting out the narrow scope of interlocutory appellate jurisdiction in the federal courts applicable. See 28 U.S.C. § 1292(a) (granting interlocutory appellate jurisdiction over certain decisions regarding injunctions, receivers, and admiralty cases).

1. The collateral-order doctrine

“The collateral order doctrine is best understood not as an exception to the ‘final decision’ rule laid down by Congress in § 1291, but as a ‘practical construction’ of it.” Digital Equip. Corp. v. Desktop Direct, Inc., 511 U.S. 863, 867, 114 S.Ct. 1992, 128 L.Ed.2d 842 (1994). Under this doctrine, appeals are permitted “not only from a final decision by which a district court disassociates itself from a case, but also from a small category of decisions that, although they do not end the litigation, must nonetheless be considered ‘final.’ ” Swint v. Chambers Cnty. Comm'n, 514 U.S. 35, 42, 115 S.Ct. 1203, 131 L.Ed.2d 60 (1995). “That small category includes only decisions that are conclusive, that resolve important questions separate from the merits, and that are effectively unreviewable on appeal from the final judgment in the underlying action.” Id.

A claim that the trial court lacks personal jurisdiction over the defendant can be vindicated on appeal after trial, and thus does not satisfy the third prong of the collateral-order doctrine. Lauro Lines s.r.l. v. Chasser, 490 U.S. 495, 501, 109...