Workgroup Technology Corp. v. Mgm Grand Hotel, LLC

• Decision Date: 27 February 2003
• Docket Number: No. CIV.A. 02-10632-RBC.,CIV.A. 02-10632-RBC.
• Citation: 246 F.Supp.2d 102
• Parties: WORKGROUP TECHNOLOGY CORPORATION, Plaintiff, v. MGM GRAND HOTEL, LLC, Defendant.
• Court: U.S. District Court — District of Massachusetts

246 F.Supp.2d 102

WORKGROUP TECHNOLOGY CORPORATION, Plaintiff, v. MGM GRAND HOTEL, LLC, Defendant.

No. CIV.A. 02-10632-RBC¹.

United States District Court, D. Massachusetts.

February 27, 2003.

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Gary M. Feldman, Davis, Malm & D'Agostine, P.C., Boston, MA, for Workgroup Technology Corporation, Plaintiff.

Daniel H Conroy, Schnader Harrison Goldstein & Manello, Boston, MA, for MGM Grand Hotel, L.L dba MGM Grand Hotel and Casino, Defendant.

MEMORANDUM AND ORDER ON DEFENDANT'S MOTION TO DISMISS OR TRANSFER CASE (#4)

COLLINGS, United States Magistrate Judge.

I.Introduction

On February 26, 2002, the plaintiff, Workgroup Technology Corporation ("plaintiff or "WTC"), filed a complaint against the defendant, MGM Grand Hotel, LLC, ("defendant" or "MGM") in Massachusetts Superior Court. (Amended Complaint and Jury Demand (from State Court Record), # 3). The case was removed by the defendant to the United States District Court for the District of Massachusetts on April 4, 2002. (Notice of Removal, # 1). WTC is a Delaware corporation with its principal place of business in Massachusetts. (# 3, ¶ 1). MGM is a Nevada limited liability company with its principal place of business in Nevada. (Defendant's Motion to Dismiss or Transfer Case # 4, Ex. A ¶ 2). WTC and MGM entered into a contract by which the parties agreed that WTC would hold its annual conference at the MGM Grand Hotel the week of October 19-24, 2001. (# 3, ¶ 8). In light of the events of September 11th, WTC decided to cancel the conference and informed MGM of its decision on September 13, 2001. (# 3 ¶ 13). The basis of the plaintiffs case is that MGM, through its employees, led WTC to believe that its deposit, minus any out of pocket costs, would be returned and that MGM would not seek further payment in accordance with the contract. (# 3, ¶¶ 14, 16).

Following closely on the heels of the complaint filed in Massachusetts by WTC, MGM initiated a suit against WTC in Nevada on March 4, 2001. (Supplemental Memorandum of Law in Opposition to Defendant's Motion to Dismiss or Transfer Case, # 16 at 1, Ex. 1 at 2). Pursuant to the "first to file" rule, the Nevada Court ordered that MGM's action be stayed pending a resolution of the jurisdictional issues by this Court. (# 16, Ex. 1 at 6).

On April 12, 2002, MGM filed a Motion to Dismiss or Transfer Case (# 4) and a Memorandum of Law in Support of Defendant's Motion to Dismiss or Transfer Case (# 5). MGM claims that this Court lacks personal jurisdiction as the facts of this case do not satisfy either the Massachusetts long-arm statute or the Constitutional Due Process requirements. MGM argues, alternatively, that the case should be dismissed on grounds of forum non conveniens or transferred to the District of Nevada pursuant to 28 U.S.C. § 1404. (# 5, at 1).² WTC filed a Memorandum of Law in Opposition to Defendant's Motion to Dismiss or Transfer Case (# 8) on May 10, 2002, along with affidavits of Patrick Kareiva (# 9), Crissy Bardani (# 10) and Phyllis Case (# 11). In its memorandum in opposition, the plaintiff argues: that this Court has personal jurisdiction over the defendant; that there are no grounds for dismissal based on the doctrine of forum non conveniens; and, that it would not be proper to transfer the case pursuant to 28 U.S.C. § 1404(a). (# 8, at 1).

The case was reassigned to the undersigned on October 2, 2002. For the reasons discussed below, I find that this Court does have jurisdiction over the defendant and that neither dismissal based on forum non conveniens nor transfer pursuant to 28 U.S.C. § 1404(a) is appropriate.

II. Facts

In the winter of 2000, WTC began to plan its annual conference. (# 10,¶ 7). Attendees of prior conferences were asked where they would like to hold the conference in 2001 and it was determined that it should be in Las Vegas, Nevada. (Id.). A WTC representative searched for suitable venues while she was in Las Vegas and obtained information on several hotels which she brought back to Massachusetts. (Id. at ¶ 8). WTC's Director of Marketing, Crissy Bardani ("Bardani"), initiated telephone calls to several hotels, including MGM, and arranged to visit them on January 16, 2001. (Id. at ¶ 9). Several telephone calls and messages followed, some initiated by WTC in Massachusetts, others by MGM representatives in Nevada. (# 8, at 2).

Over a three month period, WTC and MGM negotiated the terms of the agreement with respect to the conference room rental fees, food and beverages. (# 8 at 3). MGM faxed a proposed contract to Bardani in Massachusetts on March 7, 2001; an emailed and faxed copy of the revised contract followed on March 15th. (#8 at 3). On March 26th, Bardani signed the contract on behalf of WTC in Massachusetts and proceeded to mail and fax the signed copies to MGM. (Id. at 3). On March 29th, MGM faxed a fully executed copy of the contract to Bardani. (Id.). Thereafter, WTC and MGM had discussions regarding a separate contract for additional catering services for the convention. (Id.). However, it appears that such a contract was never executed. (Id.).

Due to the level of fear and uncertainty following the events of September 11th, WTC decided that attendance at its conference likely would be very low and that the conference should be cancelled. (# 3, ¶ 13). WTC had made this determination by September 13th and discussed cancellation with MGM employees on that day. (# 3, ¶ 14). The plaintiff alleges that two MGM employees, Carolyne Fergesson and Mitch Klock, led WTC to believe that its deposit would be refunded after subtracting any out of pocket expenses and that no mention was made of seeking further payment under the contract. (# 8, at 5). WTC allegedly relied on these reassurances hen it announced that the conference was cancelled on September 13, 2001. (Id.). MGM now refuses to refund WTC's $21,000 deposit and is demanding $151,158.30 in liquidated damages in accordance with the unfulfilled contractual agreement. (¶ 3, ¶¶ 34-35).

III. Discussion

1. Personal Jurisdiction

A. Long-Arm Statute

This Court must first decide whether or not it has personal jurisdiction over MGM. It is WTC's burden to show that MGM purposefully conducted business in a way that makes it appropriate for this Court to assert personal jurisdiction. "On a motion to dismiss for want of in personam jurisdiction, ... the plaintiff ultimately bears the burden of persuading the court that jurisdiction exists." Massachusetts School of Law at Andover, Inc. v. American Bar Ass'n, 142 F.3d 26, 34 (1 Cir., 1998). I must consider, "specific facts affirmatively alleged by the plaintiff as true (whether or not disputed) and construe them in the light most congenial to the plaintiffs jurisdictional claim... [and] then add to the mix facts put forward by the defendants, to the extent that they are uncontradicted." Id. at 34. While this approach gives WTC the benefit of the doubt, this Court is not required to "credit conclusory allegations or draw farfetched inferences." Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 203 (1 Cir., 1994).

I must apply Massachusetts law to determine whether exercising personal jurisdiction is appropriate in this case because "federal courts look to state law to determine whether jurisdictional requirements have been met." Gray v. O'Brien, 111 F.2d 864, 866 (1 Cir., 1985). WTC, in order to establish personal jurisdiction, has to meet "a twofold burden of demonstrating that the Massachusetts Long Arm Statute, G.L. c. 223A, authorizes jurisdiction over [MGM], and that any such exercise comports with the constraints imposed by the United States Constitution."³ Noonan v. Winston Co., 902 F.Supp. 298, 302 (D.Mass., 1995), aff'd 135 F.3d 85 (1 Cir., 1998). The analysis does not end if the literal requirements of the long-arm statute are met; that is, an assertion of jurisdiction must also fall within the limits of the Constitution. Thus, meeting the conditions of the long-arm statute is a prerequisite to moving on to the constitutional due process considerations.

Therefore, I must determine first whether exercising jurisdiction over MGM satisfies the Massachusetts long-arm statute, i.e., whether the claims in this case arise from MGM's business activities in Massachusetts. WTC claims that its cause of action satisfies the first prong of the long-arm statute which states that, "[a] court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting business in this commonwealth..." Mass.Gen.Laws, c. 223A, § 3(a)⁴ (Emphasis added). In looking at the facts of this case, I find that MGM "transacted business" and that such transaction of business gave rise to WTC's claims against MGM such that the Massachusetts long-arm statute is satisfied.

In short, this case involves a dispute over the contract between WTC and MGM and alleged misrepresentations made by MGM employees when WTC cancelled the convention. To satisfy the two requirements of § 3(a), WTC must show that 1) MGM transacted business in Massachusetts, and 2) WTC's claim arose from MGM's transaction of such business. Tatro v. Manor Care, Inc., 416 Mass. 763, 767, 625 N.E.2d 549, 551 (1994). WTC claims that MGM transacted business in Massachusetts for purpose of the long-arm statute by negotiating the terms of the contract with WTC, by soliciting from WTC future convention business and information regarding other Massachusetts businesses through representatives physically present in the Commonwealth, and by advertising within the Commonwealth. (# 8 at 7).

WTC first alleges that MGM transacted business in Massachusetts for purposes of the long-arm statute by actively negotiating the terms of the contract with WTC. (# 8 at 8, Bardani Aff. at ¶¶12-25). WTC points specifically to at least four telephone calls, five emails, and three faxes...