In Picot v. Weston, (filed 3/19/15, No. 12-17098), Plaintiff sought a declaration that there was no oral agreement between plaintiff and defendant concerning the sale of proprietary technology and alleged that defendant had tortiously interfered with the sale of the proprietary technology to a third party.
Specific Jurisdiction in Contract Claims
With respect to plaintiff’s declaratory relief cause of action concerning the alleged oral agreement, the court analyzed whether defendant, a Michigan resident, had purposefully availed himself to jurisdiction in California. Starting with the premise that “a contract alone does not automatically establish minimum contacts in the plaintiff’s home forum,” the court focused on “prior negotiations and contemplated future consequences [of the contract], along with the terms of the contract and the parties’ actual course of dealing.” Plaintiff argued that, because he was a California resident and he fulfilled his obligations under the alleged contract in California, the oral agreement established a substantial connection between defendant and the forum. The court rejected this argument, stating that “the fact that a contract envisions one party discharging his obligations in the forum state cannot, standing alone, justify the exercise of [personal jurisdiction].”
Plaintiff next argued that defendant was subject to personal jurisdiction in light of the parties’ course of dealings and the fact that defendant traveled to California on two occasions to participate in sales presentations relating to the technology that was the subject of the oral contract. The court held that these instances of “transitory presence” in California were not enough because the contract had been negotiated and entered into in Michigan, defendant also traveled to Mexico and spoke over the internet with potential customers in China, and defendant performed most of his duties under the contract at his offices in Michigan. Accordingly, the court held that there was not sufficient contact with California to establish personal jurisdiction.
Specific Jurisdiction in Tort Claims
Next, the court evaluated whether there was personal jurisdiction over defendant with respect to plaintiff’s claim for tortious interference with contract. In evaluating specific personal jurisdiction in a tort claim, the court analyzed whether defendant purposefully directed his activities to the forum state by: 1) committing an intentional act, 2) expressly aimed at the forum state, 3) causing harm that defendant knew was likely to be suffered in the forum state.
The first element was easily satisfied because defendant had conversations with the prospective buyer of the proprietary technology allegedly leading to the end of negotiations. However, the court held that defendant had not “expressly aimed” his activities at the forum state. Relying on Supreme Court precedent, the court reasoned that its “personal jurisdiction analysis must focus on the defendant’s contacts with the forum state, not the defendant’s contacts with a resident of the forum.” Defendant’s acts in this instance were not directed at the forum state itself. Instead, his limited contact with California was directed at plaintiff, while the remainder of his allegedly tortious conduct was directed to the prospective purchaser, an Ohio resident, concerning the failure to make payments into two trusts in Wyoming and Australia. Accordingly, the court held that none of the allegedly tortious conduct had anything to do with California itself. Plaintiff’s injury was “personal to him and would follow him wherever he chose to live or travel.” Accordingly, the court held that plaintiff had not made out a prima facie case establishing jurisdiction.
Picot v. Weston makes clear that when challenging specific personal jurisdiction, it is important to distinguish acts directed to a forum resident and acts directed to the forum itself. Where defendant’s acts solely relate to a forum resident, whose injury is “personal to him and would follow him wherever he chose to live or travel,” defendants have a strong argument against the exercise of specific personal jurisdiction. Furthermore, where an action sounds in contract, the fact that a party’s obligations are to be discharged in the forum state, is simply not enough for the exercise of jurisdiction.
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