Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc. ( 2016 )

United States Court of Appeals
For the First Circuit
No. 15-2190
BASKIN-ROBBINS FRANCHISING LLC,
Plaintiff, Appellant,
v.
ALPENROSE DAIRY, INC.,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. George A. O'Toole, Jr., U.S. District Judge]
Before
Howard, Chief Judge,
Selya and Lipez, Circuit Judges.
Peter J. Klarfeld, with whom Eric L. Yaffe, Julia C.
Colarusso, and Gray, Plant, Mooty, Mooty & Bennett, P.A. were on
brief, for appellant.
Eric H. Karp, with whom Ari N. Stern and Witmer, Karp, Warner
& Ryan LLP were on brief, for appellee.
June 6, 2016
SELYA, Circuit Judge. This bi-coastal commercial
dispute requires us to test the outer limits of a court's in
personam jurisdiction, consistent with the constraints of the Due
Process Clause. See U.S. Const. amend. XIV, § 1. The district
court concluded that the defendant lacked sufficient contacts with
the forum state (Massachusetts) to permit the exercise of
jurisdiction and, accordingly, dismissed the action. See Baskin-
Robbins Franchising, LLC v. Alpenrose Dairy, Inc., No. 14-13771,
2015 WL 5680332, at *2 (D. Mass. Sept. 25, 2015). Concluding, as
we do, that the district court miscalibrated the jurisdictional
scales, we reverse.
I. BACKGROUND
Baskin-Robbins Franchising LLC (Baskin-Robbins) is a
Delaware special purpose limited liability company, which
maintains its principal place of business in Canton,
Massachusetts. It franchises independent persons and entities to
operate ice cream stores. Alpenrose Dairy, Inc. (Alpenrose) is a
dairy products manufacturer incorporated in Oregon and
headquartered in Portland.
In 1965, Baskin-Robbins' predecessor in interest,
Baskin-Robbins Inc. entered into a territorial franchise agreement
(the Agreement) with Alpenrose. At the time, Baskin-Robbins Inc.
had its principal place of business in Glendale, California. The
negotiations surrounding the formation of the Agreement took place
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in California. When consummated, the Agreement gave Alpenrose the
right to operate Baskin-Robbins franchises in Washington and
Oregon for a six-year term, commencing on December 9, 1965.
Subject to other conditions not relevant here, the Agreement gave
Alpenrose an option to renew the franchise for successive six-year
terms as long as it also furnished written notice to Baskin-Robbins
at least one year prior to the expiration of the current term.
The Agreement obligated Alpenrose to comply with Baskin-
Robbins' ever-changing specifications, recipes, and processes for
the manufacture of ice cream products. It likewise bound Alpenrose
to a set of specific procedures for operating Baskin-Robbins
stores. These obligations required Alpenrose to have a certain
amount of ongoing communication and coordination with Baskin-
Robbins.
As might be expected, the Agreement controlled the
financial relationship between the parties. It required Alpenrose
to pay royalties to Baskin-Robbins based on monthly sales. The
money stream flowed in both directions: Alpenrose recruited other
franchisees for Baskin-Robbins, and the Agreement obligated
Baskin-Robbins to make monthly remittances to Alpenrose based on
royalties received by Baskin-Robbins from those franchisees.
Between 1973 and 1985, the parties amended the Agreement
three times. These amendments expanded Alpenrose's franchise
territory to include Montana and parts of Idaho. At the time of
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each amendment, Baskin-Robbins remained headquartered in
California. All material discussions and negotiations concerning
the amendments took place in Oregon (Alpenrose's home state).
Alpenrose exercised its renewal options without incident
on five occasions. Throughout this decades-long period, Baskin-
Robbins underwent several ownership changes. Around 1998 — some
thirty-three years after Baskin-Robbins and Alpenrose first
executed the Agreement — the current owners moved Baskin-Robbins'
headquarters from California to Massachusetts.
In 2001 (as it had done every six years since 1965),
Alpenrose sent Baskin-Robbins formal notice of its election to
renew the Agreement. Alpenrose directed this notice to Baskin-
Robbins' newly relocated headquarters in Massachusetts. The
Agreement was thus extended for yet another six-year term.
In 2006, the ownership of Baskin-Robbins' parent company
again changed hands.1 Baskin-Robbins' headquarters remained in
Massachusetts and, in November of 2007, Alpenrose renewed the
Agreement for another six-year term (running from December 9, 2008
to December 8, 2014). This renewal notice — like the immediately
preceding renewal notice — was sent to Baskin-Robbins in
Massachusetts.
1
It was at this point that Baskin-Robbins Franchising LLC was
formed. That entity thus became the successor in interest to
Baskin-Robbins Inc.
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Under the provisions of the Agreement, Alpenrose had
until December 8, 2013 to notify Baskin-Robbins of its intent to
renew for a further six-year term. On December 2, 2013, Alpenrose
informed Baskin-Robbins that it did not intend to renew the
Agreement, stating: "[P]lease consider this our one year notice of
intent to not renew. . . . [M]aybe it's time to take a slightly
different direction." Baskin-Robbins did not formally acknowledge
that the Agreement would lapse, but the parties began negotiating
the terms of Alpenrose's transition out of the franchise
arrangement. The negotiations stalled and, on July 22, 2014,
Alpenrose wrote to Baskin-Robbins, stating that it wished to
"revoke" its decision not to renew. Instead, it requested another
six-year extension of the Agreement, to begin when the current
term expired (that is, on December 8, 2014). Alpenrose later
warned that it would otherwise be entitled to fair compensation
under the Washington Franchise Investment Protection Act, see
Wash. Rev. Code § 19.100.180(2)(i).
Baskin-Robbins responded that Alpenrose had waited too
long and was no longer entitled to renew the Agreement. At the
same time, it rejected Alpenrose's suggestion that any
compensation was due in consequence of the non-renewal of the
franchise. Then — with an impasse in the offing — Baskin-Robbins
raced to the United States District Court for the District of
Massachusetts and sued for a judicial declaration that "the
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[Agreement] and all of Alpenrose's rights associated therewith
will expire on December 8, 2014," and that "Alpenrose is not
entitled to any compensation in connection with the expiration of
the [Agreement]." The record sheds no light on the current status
of the parties' commercial relationship.
Alpenrose moved to dismiss for lack of personal
jurisdiction and improper venue, see Fed. R. Civ. P. 12(b)(2),
(3), or in the alternative to transfer venue to the United States
District Court for the Western District of Washington, see 28
U.S.C. § 1404(a). Baskin-Robbins opposed both motions. After
considering the parties' arguments, the district court dismissed
the case for want of in personam jurisdiction. See Baskin-Robbins
Franchising, 2015 WL 5680332, at *2. The court concluded that
"nothing in [the parties'] history . . . suggests that Alpenrose
intended to purposefully avail itself of the privilege of
conducting business within Massachusetts." Id.This timely appeal followed.
II. ANALYSIS
"Where, as here, a district court dismisses a case for
lack of personal jurisdiction based on the prima facie record,
rather than after an evidentiary hearing or factual findings, our
review is de novo." C.W. Downer & Co. v. Bioriginal Food & Sci.
Corp., 771 F.3d 59, 65 (1st Cir. 2014). In conducting this de
novo review, we are not bound by the district court's reasoning
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but, rather, may affirm the judgment for any reason made evident
by the record. See Phillips Exeter Acad. v. Howard Phillips Fund,
Inc., 196 F.3d 284, 288 (1st Cir. 1999).
The plaintiff has the burden of establishing that
jurisdiction over the defendant lies in the forum state. See
Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir. 2007). "Faced with
a motion to dismiss for lack of personal jurisdiction, a district
court 'may choose from among several methods for determining
whether the plaintiff has met [its] burden.'" Id. (alteration in
original) (quoting Daynard v. Ness, Motley, Loadholt, Richardson
& Poole, P.A., 290 F.3d 42, 50-51 (1st Cir. 2002)). Here, the
district court employed the prima facie method, which requires no
differential factfinding; rather, this method requires only that
a plaintiff proffer evidence which, taken at face value, suffices
to show all facts essential to personal jurisdiction. See id.;
Foster-Miller, Inc. v. Babcock & Wilcox Can., 46 F.3d 138, 145
(1st Cir. 1995).
For the purpose of examining the merits of such a
jurisdictional proffer, we — like the district court — take the
facts from the pleadings and whatever supplemental filings (such
as affidavits) are contained in the record, giving credence to the
plaintiff's version of genuinely contested facts. See Sawtelle v.
Farrell, 70 F.3d 1381, 1385 (1st Cir. 1995). We may, of course,
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take into account undisputed facts put forth by the defendant.
See C.W. Downer, 771 F.3d at 65.
The case before us is a diversity case. See 28 U.S.C.
§ 1332(a). "In determining whether a non-resident defendant is
subject to its jurisdiction, a federal court exercising diversity
jurisdiction 'is the functional equivalent of a state court sitting
in the forum state.'" Sawtelle, 70 F.3d at 1387 (quoting
Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 204 (1st Cir.
1994)).2 It follows that Baskin-Robbins must show that the
district court's assertion of personal jurisdiction over Alpenrose
would satisfy the requirements of both the Due Process Clause of
the federal Constitution and the Massachusetts long-arm statute,
Mass. Gen. Laws ch. 223A, § 3.
The jurisdictional requirements imposed by the
Massachusetts long-arm statute are quite similar to, though not
completely congruent with, the jurisdictional requirements imposed
by the Due Process Clause. See Cossart v. United Excel Corp., 804
F.3d 13, 18 (1st Cir. 2015). Because the modest difference between
2Indeed, the federal court's role is the same in a federal
question case. See Fed. R. Civ. P. 4(k)(1)(A); see also 4 Charles
Alan Wright et al., Federal Practice & Procedure § 1068.1, at 691
(4th ed. 2015) ("[W]ith one exception the Rule 4(k) framework does
not treat federal question cases differently than cases where a
federal court adjudicates state-created rights based on diversity
of citizenship jurisdiction.").
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these requirements is not material here, we move directly to the
constitutional analysis.3
The Due Process Clause of the Fourteenth Amendment
requires that a defendant "have certain minimum contacts with [the
forum state] such that the maintenance of the suit does not offend
'traditional notions of fair play and substantial justice.'" Int'l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken
v. Meyer, 311 U.S. 457, 463 (1940)). This due process test is
flexible and fact-specific, "written more in shades of grey than
in black and white." Phillips Exeter, 196 F.3d at 288.
Consistent with the demands of due process, a federal
district court may exercise either general or specific
jurisdiction over a defendant. See Cossart, 804 F.3d at 20.
Baskin-Robbins has not proffered a claim of general jurisdiction
but, rather, has asserted only a claim of specific jurisdiction as
the basis for the district court's jurisdiction. We limit our
appraisal accordingly.
3 For jurisdiction to exist under section 3(a) of the
Massachusetts statute, "the facts must satisfy two requirements —
the defendant must have transacted business in Massachusetts, and
the plaintiff's claim must have arisen from the transaction of
business by the defendant." Tatro v. Manor Care, Inc., 625 N.E.2d
549, 551 (Mass. 1994); see Mass. Gen. Laws ch. 223A, § 3(a). This
standard is not especially rigorous: "an isolated and transitory
contact with the forum . . . is all the statute requires." Nova
Biomed. Corp. v. Moller, 629 F.2d 190, 195 (1st Cir. 1980).
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Specific jurisdiction allows a court to hear a
particular case as long as "that case relates sufficiently to, or
arises from, a significant subset of contacts between the defendant
and the forum." Phillips Exeter, 196 F.3d at 288. The existence
vel non of specific jurisdiction depends on the results of a
tripartite inquiry. We evaluate: "(1) whether the claim 'directly
arise[s] out of, or relate[s] to, the defendant's forum state
activities;' (2) whether the defendant's in-state contacts
'represent a purposeful availment of the privilege of conducting
activities in the forum state, thereby invoking the benefits and
protections of that state's laws and making the defendant's
involuntary presence before the state's courts foreseeable;' and
(3) whether the exercise of jurisdiction is reasonable." C.W.
Downer, 771 F.3d at 65 (quoting Daynard, 290 F.3d at 60). All
three of these elements must be present for specific jurisdiction
to attach. See Phillips Exeter, 196 F.3d at 288.
Under this framework, the first element is relatedness.
Relatedness requires that "the action . . . directly arise out of
the specific contacts between the defendant and the forum state."
Sawtelle, 70 F.3d at 1389. This requirement "serves the important
function of focusing the court's attention on the nexus between a
plaintiff's claim and the defendant's contact with the forum."
Id. Relatively speaking, the relatedness inquiry is to be resolved
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under "a flexible, relaxed standard." Pritzker v. Yari, 42 F.3d
53, 61 (1st Cir. 1994).
Baskin-Robbins argues that its claims arise from
Alpenrose's letters to Baskin-Robbins in 2013 and 2014, both of
which were sent to Baskin-Robbins' offices in Massachusetts. The
first letter communicated Alpenrose's decision not to renew the
Agreement; the second letter constituted Alpenrose's attempt to
reverse direction by revoking that decision and exercising its
option to renew the Agreement for another six years.
In its complaint, Baskin-Robbins seeks declarations both
that Alpenrose's second letter did not effectively renew the
Agreement (with the result that the Agreement expired on December
8, 2014) and that Alpenrose is not entitled to any compensation in
connection with the expiration of the Agreement. We agree with
Baskin-Robbins that these claims arise directly out of Alpenrose's
in-forum contacts. See Sawtelle, 70 F.3d at 1389.
Our conclusion is not altered by Alpenrose's
asseveration that "the question of expiration arises first out of
the [Agreement] itself" and "[i]t is only in the context of the
[Agreement] itself that the two letters relating to expiration can
be analyzed." Although it is transparently clear that the
Agreement itself ultimately determines the effect of Alpenrose's
two letters (that is, whether those letters collectively resulted
in renewal of the Agreement), it is the letters that set the
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present controversy in motion. That creates a sufficient nexus
between Alpenrose's letters and Baskin-Robbins' claims to satisfy
the flexible and relaxed standard for relatedness.4
This brings us to the next element of the jurisdictional
analysis: purposeful availment. The purposeful availment inquiry
asks whether a defendant has "deliberately target[ed] its behavior
toward the society or economy of a particular forum [such that]
the forum should have the power to subject the defendant to
judgment regarding that behavior." Carreras v. PMG Collins, LLC,
660 F.3d 549, 555 (1st Cir. 2011). Such a requirement guarantees
that a defendant will not be subjected to the exercise of
jurisdiction based solely on "'random, isolated or fortuitous'
contacts with the forum state." Adelson, 510 F.3d at 50 (quoting
Sawtelle, 70 F.3d at 1391). It also ensures that a defendant will
not be swept within a state's jurisdictional reach due solely to
the "unilateral activity of another party or a third person."
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
417 (1984)).
4
If more were needed — and we doubt that it is — Alpenrose's
2001 and 2007 renewal notices, both of which were forwarded to
Baskin-Robbins in Massachusetts, created a nexus between the
Agreement itself and the forum state. As we explain infra,
Alpenrose "had an ongoing connection with Massachusetts in the
performance under the contract," C.W. Downer, 771 F.3d at 66, which
is sufficient to establish relatedness.
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The main ingredients of purposeful availment are
voluntariness and foreseeability. See C.W. Downer, 771 F.3d at
66. Voluntariness requires that "the defendant's contacts with
the forum state 'proximately result from actions by the defendant
himself.'" Phillips v. Prairie Eye Ctr., 530 F.3d 22, 28 (1st
Cir. 2008) (emphasis in original) (quoting Burger King Corp., 471
U.S. at 475). Foreseeability requires that a defendant's contacts
with the forum state are "such that [the defendant] could
'reasonably anticipate being haled into court there.'" Adelson,
510 F.3d at 50 (quoting World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 297 (1980)).
It is apodictic that "the mere existence of a contractual
relationship between an out-of-state defendant and an in-state
plaintiff does not suffice, in and of itself, to establish
jurisdiction in the plaintiff's home state." Phillips Exeter, 196
F.3d at 290; see Bond Leather Co. v. Q.T. Shoe Mfg. Co., 764 F.2d
928, 933 (1st Cir. 1985). Here, Baskin-Robbins relies chiefly on
two kinds of contacts in endeavoring to demonstrate Alpenrose's
purposeful availment of the privilege of conducting business in
Massachusetts. One set of contacts comprises the renewal notices
sent by Alpenrose to Baskin-Robbins in Massachusetts (one in 2001
and another in 2007). The other set of contacts consists, in
Baskin-Robbins' words, of Alpenrose's actions in "carr[ying] on a
highly interactive business relationship with [Baskin-Robbins] in
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Massachusetts for twelve years." Arguing the latter point, Baskin-
Robbins explains that "Alpenrose exchanged communications,
information, products, and payments with [Baskin-Robbins] at its
headquarters in Massachusetts," knowing and intending that Baskin-
Robbins would perform various support and oversight functions
there.
Given the parties' franchisor-franchisee relationship,
the logical starting point is the Supreme Court's seminal decision
in Burger King. We first query whether this decision controls and
conclude that it does not. There, the Court upheld the Florida
courts' exercise of jurisdiction over a Michigan franchisee of a
Florida franchisor. The Court placed its primary emphasis on the
parties' "prior negotiations and contemplated future consequences,
along with the terms of the contract and the parties' actual course
of dealing." Burger King, 471 U.S. at 479. It concluded that
these matters were Florida-centric: after all, the franchisee had
"entered into a carefully structured 20-year relationship that
envisioned continuing and wide-reaching contacts with Burger King
in Florida." Id. at 480. In that way, he had voluntarily accepted
"long-term and exacting regulation of his business from Burger
King's Miami headquarters." Id.In finding that Florida could constitutionally exercise
in personam jurisdiction over the franchisee, the Court relied
heavily on the contractual documents, which specified "that Burger
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King's operations are conducted and supervised from the Miami
headquarters, that all relevant notices and payments must be sent
there, and that the agreements were made in and enforced from
Miami." Id. Consistent with this contractual format, the parties'
course of dealing made manifest "that decisionmaking authority was
vested in the Miami headquarters and that the [Burger King]
district office served largely as an intermediate link between the
headquarters and the franchisees." Id. at 480-81. To cinch
matters, the Court gave weight to the fact that many of the
franchise documents provided for all disputes to be governed by
Florida law. See id. at 481.
To be sure, the case at hand also involves a suit by a
franchisor that is trying to hail a franchisee into a court in its
home state. But the similarity to Burger King stops there: the
contract documents in this case evince no ties to Massachusetts.
They do not specify that any services are to be performed in or
from Massachusetts, that the nerve center of the franchisor's
operations is to be in Massachusetts, or that Massachusetts law
will control any aspect of the parties' dealings.5 This is a
critically important distinction. While the Burger King Court
5 Here — unlike in Burger King — the contract documents are
devoid of any choice-of-law provision or similar clause that might
have alerted the franchisee to the possibility that disputes would
be governed by the laws of the state in which the franchisor might
from time to time choose to be headquartered.
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found that the franchisee should have "envisioned continuing and
wide-reaching contacts with Burger King in Florida" from and after
the time that the franchise agreement was signed, id. at 480, the
record here does not permit a similar finding.
We add, moreover, that the franchisee's contacts with
Burger King in Florida were foreseeable precisely because Burger
King was located in Florida when the franchise agreement
materialized. Not so here: when Alpenrose and Baskin-Robbins
joined forces in 1965, Baskin-Robbins was headquartered in
California and that state had been the locus of the negotiations
that led up to the franchise agreement. Baskin-Robbins remained
in California while the Agreement was thrice amended, and those
amendments were negotiated in Oregon. Massachusetts was in no way
involved and, at least up to that point, neither the contract
documents nor the parties' course of dealing contemplated any
relationship between Alpenrose and Baskin-Robbins in
Massachusetts. The upshot, then, is that while Burger King informs
our determination, it does not dictate the result.
We turn next to the 2001 and 2007 renewal notices, both
of which were sent by Alpenrose to Baskin-Robbins in Massachusetts.
It must be recalled, however, that these notices were mailed into
Massachusetts only because Baskin-Robbins chose to relocate there
some thirty-three years into the parties' contractual
relationship. The right to renew was embedded in the Agreement
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from its inception, and the record contains no evidence that
Alpenrose reached out to Massachusetts to solicit that right. The
mere fact that Alpenrose exercised a previously granted right by
mailing a notice into Massachusetts is insufficient, in itself, to
ground a claim that a party has deliberately targeted its behavior
toward the economy of Massachusetts. See Copia Commc'ns, LLC v.
AMResorts, L.P., 812 F.3d 1, 5-6 (1st Cir. 2016) (explaining that
defendant's mailing of contract nonrenewal notice to plaintiff's
"registered office" in Massachusetts was insufficient to confer
jurisdiction); Prairie Eye, 530 F.3d at 29 (observing that similar
ministerial acts — such as the act of mailing a completed contract
to Massachusetts for signature and sending three follow-up e-mails
— were insufficient to confer jurisdiction). For this purpose, we
regard Baskin-Robbins' move to Massachusetts as "unilateral
activity" of the sort that, standing alone, cannot subject another
party to jurisdiction. Burger King, 471 U.S. at 475 (quoting
Helicopteros Nacionales de Colombia, 466 U.S. at 417).
Here, however, Baskin-Robbins' unilateral decision to
move to Massachusetts does not stand alone. Baskin-Robbins'
position is bolstered by a set of physical contacts between
Alpenrose and Massachusetts. In 2006, Alpenrose's co-president,
Rod Birkland, journeyed to Massachusetts and paid a courtesy visit
to Baskin-Robbins' new owners. Even though such a single, isolated
trip by a defendant to the forum state ordinarily would carry
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little or no weight in the minimum contacts calculus, see id. at
479 & n.22, other contacts occurred here. We explain briefly.
While in Massachusetts, Baskin-Robbins has maintained a
Brand Advisory Council (BAC), which is comprised of approximately
eight representatives from the franchisee community. The BAC meets
quarterly. Between 2011 and 2014, Kim Birkland, Alpenrose's
director of franchise relations, traveled to Baskin-Robbins'
Massachusetts headquarters at least twice to attend these
meetings. Moreover, Baskin-Robbins has identified three
additional sets of contacts: royalty payments sent by Alpenrose
each month to Baskin-Robbins in Massachusetts; remittance payments
sent each month by Baskin-Robbins to Alpenrose from its
Massachusetts headquarters; and Baskin-Robbins' performance of a
compendium of services in Massachusetts to Alpenrose's behoof.
These services include product testing, processing of customer
complaints, and product supply planning.
Viewed in isolation, the payment flows between Alpenrose
and Baskin-Robbins are suggestive, though perhaps inconclusive.
Although courts have found the sending of occasional payments into
the forum state to lack any "decretory significance" in the
jurisdictional calculus, Phillips Exeter, 196 F.3d at 291, this
case involves a constant stream of payments between Baskin-Robbins
and Alpenrose. Over a period of nearly 14 years, Alpenrose mailed
180 royalty checks to Baskin-Robbins' Massachusetts headquarters.
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Meanwhile, Baskin-Robbins — from that headquarters — sent 176
checks to Alpenrose. This pattern of repetitive interactions
involving Massachusetts is jurisdictionally significant,
especially since the reciprocal flow of payments unquestionably
facilitated the continuous transaction of business between the
parties.
The sockdolager, in this instance, is Baskin-Robbins'
performance of services in Massachusetts on Alpenrose's behalf.
Baskin-Robbins persuasively asserts that its performance of such
services places this case squarely within the rubric of in-forum
service contract cases, in which a finding of purposeful availment
is typically based, in part, on the defendant's anticipation that
the plaintiff will provide in-forum services and the plaintiff's
provision of those in-forum services. See Copia, 812 F.3d at 6.
We agree.
By twice renewing its Agreement with Baskin-Robbins,
Alpenrose knowingly caused Baskin-Robbins to undertake in
Massachusetts a plethora of activities on its behalf. To
illustrate, as part of Baskin-Robbins' quality assurance process,
Alpenrose delivered samples of its various ice cream flavors to
Baskin-Robbins' Massachusetts headquarters four times each year,
commencing in 2003. Once Baskin-Robbins finished testing the
samples in Massachusetts, a Baskin-Robbins manager would
communicate the results to Alpenrose. More extensive
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conversations ensued whenever any of the samples required
improvement. Given the steady stream of samples sent by Alpenrose
to Baskin-Robbins' Massachusetts redoubt, Alpenrose can hardly
claim that it was unforeseeable that Baskin-Robbins was
continually performing product testing on its behalf in
Massachusetts. See C.W. Downer, 771 F.3d at 67.
Baskin-Robbins' performance under the Agreement
encompassed a range of other Massachusetts activities as well. It
maintained a customer service department at its Massachusetts
headquarters, where customers across the country could report
complaints about any Baskin-Robbins store (including those stores
operated, directly or indirectly, under the aegis of Alpenrose).
A Baskin-Robbins representative would then liaise with her
Alpenrose counterpart regarding any complaints that originated in
Alpenrose's territory.
So, too, Baskin-Robbins — from its Massachusetts
headquarters — coordinated with Alpenrose on a wide variety of
operational issues. Such issues included franchisee openings, the
shuttering of particular stores, franchise transfers, and supply
planning for the wide assortment of ice cream flavors sold by the
stores. These communications occurred regularly (at a minimum,
monthly), and the record reveals that on many occasions the
communications regarding such operational functions were either
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carried out or facilitated by Baskin-Robbins employees situated in
Massachusetts.
The short of it is that Baskin-Robbins' performance of
these manifold activities — most of which Alpenrose irrefutably
knew were taking place in Massachusetts — was vital to the
continuation of the franchisor-franchisee relationship. To this
extent, Alpenrose deliberately targeted the Massachusetts economy
and reasonably should have foreseen that, if a controversy
developed, it might be haled into a Massachusetts court. Thus, we
conclude that Alpenrose's contacts with Massachusetts crossed the
purposeful availment threshold. Put another way, Alpenrose's
contacts were scarcely so "random, fortuitous, or attenuated" that
it would offend due process to subject Alpenrose to suit in
Massachusetts. Id. at 66.
There is one last leg to our journey. We must assess
the extent to which the exercise of jurisdiction over Alpenrose is
fair and reasonable. This analysis implicates five factors, which
we have dubbed the Gestalt factors. See Ticketmaster, 26 F.3d at
209. They comprise "(1) the defendant's burden of appearing [in
the forum state], (2) the forum state's interest in adjudicating
the dispute, (3) the plaintiff's interest in obtaining convenient
and effective relief, (4) the judicial system's interest in
obtaining the most effective resolution of the controversy, and
(5) the common interests of all sovereigns in promoting substantive
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social policies." C.W. Downer, 771 F.3d at 69 (alterations in
original) (quoting Ticketmaster, 26 F.3d at 209). Our appraisal
of these factors operates on a sliding scale: "the weaker the
plaintiff's showing on the first two prongs (relatedness and
purposeful availment), the less a defendant need show in terms of
unreasonableness to defeat jurisdiction." Ticketmaster, 26 F.3d
at 210.
To begin, Alpenrose insists that it would be burdensome
to defend itself in Massachusetts. But we are not dealing here
with relative convenience: our case law makes pellucid that "this
factor is only meaningful where a party can demonstrate some kind
of special or unusual burden." Hannon v. Beard, 524 F.3d 275, 285
(1st Cir. 2008) (quoting Pritzker, 42 F.3d at 64). Where, as here,
parties of substantial means are involved, cross-country travel
ordinarily does not qualify as a special or unusual burden. See
C.W. Downer, 771 F.3d at 70; BlueTarp Fin., Inc. v. Matrix Constr.
Co., 709 F.3d 72, 83 (1st Cir. 2013); see also Pritzker, 42 F.3d
at 64 (noting that modern travel "creates no especially ponderous
burden for business travelers"). Thus, Alpenrose's burden of
appearing in the forum state weighs only modestly in its favor.6
6 Citing Ticketmaster, Alpenrose suggests that mere
inconvenience to the defendant should "weigh[] heavily in the
jurisdictional balance" because such weighting "provides a
mechanism through which courts may guard against harassment." 26
F.3d at 211. Here, however, the record is devoid of any indication
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The second factor — Massachusetts' interest in
adjudicating this dispute — cuts in favor of Baskin-Robbins. As
the Supreme Court has explained, "[a] State generally has a
'manifest interest' in providing its resident with a convenient
forum for redressing injuries inflicted by out-of-state actors."
Burger King, 471 U.S. at 473 (quoting McGee v. Int'l Life Ins.
Co., 355 U.S. 220, 223 (1957)). That concern obtains here — and
to support jurisdiction, Massachusetts' interest need not be
exclusive, nor even greater than the interest of other
jurisdictions. See Foster-Miller, 46 F.3d at 151 (explaining that
"[t]he purpose of the inquiry is not to compare the forum's
interest to that of some other jurisdiction, but to determine the
extent to which the forum has an interest" (emphasis in original)).
On this point, we reject Alpenrose's argument that
Massachusetts has only a "mild" interest because "the dispute
concerns [an Agreement] negotiated and executed in California,
calling for performance in Washington, Oregon, Idaho, and Montana,
and looking to Washington law." This argument fails because it
conveniently overlooks the fact that the nature of the franchisor-
franchisee relationship necessitated Baskin-Robbins' performance
of substantial services on Alpenrose's behalf in Massachusetts.
that Baskin-Robbins brought this suit in Massachusetts for the
purpose of harassing Alpenrose.
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The third Gestalt factor implicates the plaintiff's
convenience. Courts regularly cede some deference to the
plaintiff's choice of forum, see Sawtelle, 70 F.3d at 1395, and
here, Alpenrose concedes that the third factor favors Baskin-
Robbins.
The fourth Gestalt factor (the interest of the judicial
system in the effective administration of justice) and the fifth
Gestalt factor (the interests of the affected sovereigns in
promoting substantive social policies) are both neutral. The
former is self-evidently a wash. See id.; Ticketmaster, 26 F.3d
at 211. Even though Massachusetts courts can effectively
administer justice in this dispute, they have no corner on the
market.
With respect to the fifth factor, Alpenrose concedes
that Massachusetts has a legitimate stake in providing its citizens
with a convenient forum for adjudicating disputes. It contends,
however, that Washington also has an interest because (on
Alpenrose's theory of the case) a Washington statute will determine
the compensation owed to it in connection with the expiration of
the Agreement. That is true as far as it goes, but it does not
take Alpenrose very far. A federal court sitting in Massachusetts
is fully capable of applying Washington law. See Atl. Marine
Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S. Ct.
568, 584 (2013). Equally as important, Washington's interest in
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the matter does not trump Massachusetts' interest. Cf. Burger
King, 471 U.S. at 483 (explaining that "although [the defendant]
has argued at some length that Michigan's Franchise Investment Law
. . . governs many aspects of the franchise relationship, he has
not demonstrated how Michigan's acknowledged interest might
possibly render jurisdiction in Florida unconstitutional"
(emphasis in original)).
That ends this aspect of the matter. Taken in their
entirety, the Gestalt factors are in rough equipoise. Certainly,
they do not show that the exercise of jurisdiction over Alpenrose
in Massachusetts would be so unfair or unreasonable as to raise
constitutional concerns.
III. CONCLUSION
We need go no further. For the reasons elucidated above,
we conclude that Baskin-Robbins' attempted exercise of
jurisdiction over Alpenrose in Massachusetts is consistent with
due process: the assertion of jurisdiction satisfies both the
relatedness and purposeful availment criteria, and the Gestalt
factors do not counsel otherwise. Consequently, we reverse the
district court's order of dismissal and remand the case for further
proceedings consistent with this opinion.7
7
We note that the court below has yet to rule on Alpenrose's
alternative motion to transfer venue under 28 U.S.C. § 1404(a).
That motion raises a different set of issues and is addressed to
the district court's sound discretion. See Iragorri v. Int'l
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Reversed and Remanded.
Elevator, Inc., 203 F.3d 8, 12 (1st Cir. 2000). Hence, we take no
view as to its proper resolution.
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