Xie v. Sklover & Donath, LLC , 260 F. Supp. 3d 30 ( 2017 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
AGNES XIE,
Plaintiff,
Case No. 1:15-cv-02020 (CRC)
v.
SKLOVER & COMPANY, LLC, et al.,
Defendants.
MEMORANDUM OPINION
A Fannie Mae employee has a few heated workplace disputes with her superiors at the
company’s Washington, D.C. headquarters. Fearing termination and suspecting legal violations
on the part of her employer, she hires a two-partner, New York-based employment-law firm to
represent her in the matter. Those partners are New York residents and are licensed only in New
York and New Jersey, but their retainer contract assures the client that they litigate pro hac vice
whenever necessary. The partners never physically travel to the District of Columbia in
connection with their client’s dispute, but either individually or on behalf of the firm, they: send
numerous letters and emails to the D.C. employer, demanding a settlement and threatening
litigation; file a complaint and engage in over a dozen conference calls with the Equal
Employment Opportunity Commission (“EEOC”) in D.C.; and schedule an EEOC mediation
with the employer, to be held in D.C.—although they ultimately decline to attend the session.
Later, the client brings a malpractice action against the partners and their current law firms in a
federal district court in Washington. Does that court have personal jurisdiction over the lawyer-
defendants?
This Court answers that question—which derives not from a 1L issue spotter, but rather
from the facts of this case—in the affirmative. Because the retainer contract contemplated and
effected a “substantial connection” with this forum, Helmer v. Doletskaya, 393 F.3d 201, 205
(D.C. Cir. 2004), the Court may exercise personal jurisdiction to hear claims arising from that
contract. The Court also considers Defendants’ various other arguments for dismissal.
I. Background
A. Employment Dispute and Plaintiff’s Retention of Sklover & Donath, LLC
Plaintiff Agnes Xie began her employment as a Financial Economist at Fannie Mae’s
Washington, D.C. office in March 2010. Pl.’s Opp’n Donath Defs.’ Mot. Dismiss (“Pl.’s Opp’n
Donath MTD”), Ex. 4B (EEOC Charge Form), ECF No. 44-3.1 Apparently, as early as April
2010 and for roughly the next year, Xie noticed what she believed were defects in certain of the
company’s economic risk models, and she brought these perceived flaws to the attention of
multiple superiors. See Pl.’s Opp’n Donath MTD, Ex. 3B, ECF No. 44-1, at ¶¶ 6–15. In the
meantime, she was allegedly passed over for at least one position, id. at ¶ 9, and in July 2011 she
was issued a disciplinary memo, which in Xie’s view was grounded in false accusations, id. at
¶ 16. Soon afterwards, Xie’s health began to decline, her work attendance became sporadic, and
on November 18, 2011, she was given a notice of termination.2
In July 2011, around the time she received the disciplinary memo, Xie retained the New
1
As discussed further below, the Court must evaluate different constellations of fact
depending on the ground for dismissal. Because the Court “may receive and weigh affidavits
and other relevant matter to assist in determining jurisdictional facts,” Khatib v. All. Bankshares
Corp., 846 F. Supp. 2d 18, 26 (D.D.C. 2012) (quoting D’Onofrio v. SFX Sports Grp., Inc., 534
F. Supp. 2d 86, 89 (D.D.C. 2008)), the factual account that follows draws from materials beyond
the pleadings. However, when resolving the Sklover Defendants’ Rule 12(b)(6) motion, the
Court has considered only Xie’s factual allegations and the documents referenced in her
complaint. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007) (a court
must consider the complaint and “documents incorporated into the complaint by reference” in
resolving a Rule 12(b)(6) motion).
2
Xie was not ultimately terminated until May 4, 2012. She was approved for a six-
month medical and short-term disability leave effective November 7, 2011, which postponed her
termination date until after the expiration of the leave period. See Fourth Am. Compl. ¶ 10.
2
York employment-law firm of Sklover & Donath, LLC—headed by named partners Alan
Sklover and Sheree Donath—to represent her in connection with an anticipated legal dispute
with Fannie Mae. Fourth Am. Compl. ¶ 7, ECF No. 20. The retainer agreement set forth a fee
schedule, along with a list of “client’s rights,” which included the assurance that Xie would “be
kept informed as to the status of [her] matter” and would be given “sufficient information to
allow [her] to participate meaningfully in the development of her matter.” Pl.’s Opp’n Donath
MTD, Ex. 1, ECF No. 44, at 8.3 The contract also noted that, although the firm’s attorneys “are
admitted to practice law only in New Jersey and New York State,” they “are permitted to provide
advice on methods and strategies of negotiation to individuals worldwide, without limitation,”
and that “[w]hen we appear in courts in other states, we first gain admission on a case-by-case
(called ‘pro hac vice’ admission) basis, and work with local counsel.” Id. at 3.4
B. Sklover & Donath, LLC’s Representation of Plaintiff
Several months later, Donath sent a notice of representation letter via Federal Express
and email to Fannie Mae’s Associate General Counsel, addressed to the company’s Legal
Department at its Washington, D.C. headquarters. See Pl.’s Opp’n Donath MTD, Ex. 4A, ECF
No. 44-3, at 2. In the letter, Donath noted that the law firm represented Xie “with respect to her
employment with and [potential] termination from Fannie Mae”; that the firm had “concluded
that Ms. Xie has considerable legal claims against Fannie Mae,” including claims of retaliation
and discrimination, and violations of the Family and Medical Leave Act (“FMLA”); and that,
3
For the sake of clarity, when referring to exhibits, the Court will cite ECF page numbers
unless otherwise noted.
4
There appear to have been two versions of the retainer agreement, because two non-
identical pages numbered “3” have been included with the exhibit. One version indicates that the
firm’s attorneys are licensed only in New York. For the purposes of this motion, however, it is
irrelevant which of the two versions was operative, since no party alleges that any discrepancies
between the two versions are material.
3
whether “by discussion or by litigation/arbitration,” the claims would “by one means or another[]
be resolved.” Id. at 2–4. The following month, Donath sent a second letter to Fannie Mae Legal
on behalf of Sklover & Donath, LLC, following up on the previous communication and attaching
an affidavit signed by Xie. Id. at 5–21. The affidavit was titled “In Contemplation of
Litigation.” Id. at 7–21.
In April 2012, Donath and Sklover assisted Xie in preparing, drafting, and reviewing a
complaint to be lodged with the D.C.-based EEOC and the D.C. Office of Human Rights
(“DCOHR”). See Pl.’s Sur-Reply in Opp’n Donath MTD, Attachment 11, ECF No. 54-11. On
April 25, 2012, Donath notarized and filed that complaint with the EEOC and DCOHR. See
Pl.’s Opp’n Donath MTD, Ex. 4B, ECF No. 44-3; Fourth Am. Compl. ¶ 9.5 In mid-May, Donath
sent a third letter to Fannie Mae’s Legal Department, notifying it of the filing with EEOC and
DCOHR and providing further updates. See Pl.’s Opp’n Donath MTD, Ex. 4A, ECF No. 44-3,
at 22–24. The letter once again indicated that a resolution would be obtained “either through
settlement or arbitration and/or litigation,” with the choice being “entirely up to Fannie Mae.”
Id. at 24. At the end of the month, Fannie Mae’s Associate General Counsel responded via email
to the letter, stating the company’s position that “it did not wrong Ms. Xie in any way” and
asserting its “plans to fully defend against Ms. Xie’s EEOC charge and any claims she may bring
in arbitration.” Pl.’s Opp’n Donath MTD, Ex. 6B, ECF No. 45.
5
Donath notes that the EEOC complaint form itself contains “no indication that it was
filed and/or submitted by Ms. Donath.” Def. Donath’s Reply Supp. Mot. Dismiss (“Donath
Reply”) 2. But Defendants nowhere contest Xie’s allegation that Donath “prepared and filed”
the complaint. Accordingly, although the Court may look beyond the pleadings in resolving a
jurisdictional question, see infra section II.A, Defendants have offered nothing by way of
argument or evidence that would cause the Court to question Xie’s allegation on this point.
Given Donath’s assertion that she never appeared in the District of Columbia in connection with
Xie’s claims, see Def. Donath’s Mot. Dismiss (“Donath MTD”), Affidavit of Sheree Donath
(“Donath Aff.”) ¶ 3, the Court presumes that Donath submitted Xie’s complaint electronically.
4
From May through August of 2012, billing records reflect that Donath engaged in over a
dozen telephone conferences with the EEOC, in addition to frequent email correspondence. See
Pl.’s Sur-Reply in Opp’n Donath MTD, Attachments 12–15, ECF Nos. 54-12 to 54-15. In the
middle of June, Donath learned from the EEOC that Xie’s complaint was being considered for
possible mediation, and she passed that information along to her client. Pl.’s Opp’n Donath
MTD, Ex. 6A, ECF No. 44-4, at 2. A mediation session was confirmed for July 25, 2012 at a
Washington, D.C. EEOC office, and Skover was slated to accompany Xie to the session. Id. at
2, 5. However, Sklover later apparently “declined to attend” the session. Fourth Am. Compl.
¶ 14. It is unclear why, or even whether the mediation session actually occurred. In any event,
at some point thereafter, the matter was submitted to an EEOC investigator, and judging from
billing records, the case appears to have gone dormant. See Pl.’s Sur-Reply in Opp’n Donath
MTD, Attachments 16–19, ECF Nos. 54-16 to 54-19. On November 19, 2013, the EEOC sent
Xie a “Dismissal and Notice of Rights” form, indicating that the agency was closing her file
because its investigation had been inconclusive as to whether Fannie Mae had violated any of the
relevant statutes. Pl.’s Opp’n Donath MTD, Ex. 4C, ECF No. 44-3, at 29. The form also
included a section entitled “Notice of Suit Rights,” advising that any lawsuit arising from the
EEOC charge “must be filed within 90 days of your receipt of this notice.” Id. Copied on the
notice were Fannie Mae and Sheree Donath, at Sklover & Donath, LLC. Id.
C. Plaintiff’s Loss of Contact with the Firm and Pro Se Arbitration Proceedings
Xie alleges that, after receiving the EEOC Notice, she attempted to contact both Sklover
and Donath for advice and “recommendations” and sought to make “appointments to talk about
the issue,” but that they “ignored” her. Fourth Am. Compl. ¶¶ 21, 24. As it turned out, Donath
had taken a leave of absence from the firm beginning January 2013, and had departed
5
permanently in March of the same year. Donath Defs.’ Mot. Dismiss (“Donath MTD”),
Affidavit of Sheree Donath (“Donath Aff.”) ¶¶ 7–8. But Xie alleges that she was never given
notice of that change. See Fourth Am. Compl. ¶ 13. As for Sklover, Xie alleges that he finally
responded to her in April 2014, roughly five months after she had received the EEOC Notice and
sought the firm’s advice. Id. at ¶ 25. By then, due to the 90-day deadline for filing suit, it was
too late to pursue any of the claims set forth in her EEOC complaint.
In October 2014, now proceeding pro se, Xie brought an arbitration action against Fannie
Mae, asserting various claims of discrimination and retaliation. See Fourth Am. Compl. ¶ 26;
Pl.’s Opp’n Donath MTD, Ex. 3C, ECF No. 44-2, at 4. Later, in September 2015, Xie amended
her arbitration demand in order to bring a total of fifteen claims: She asserted violations of Title
VII, § 1981, FMLA, the D.C. Human Rights Act (“DCHRA”), the D.C. Family and Medical
Leave Act, the D.C. Wage Payment Act, and various common law causes of action. See Pl.’s
Opp’n Donath MTD, Ex. 3B, ECF No. 44-1. In opinions issued in August and November 2016,
on Fannie Mae’s motion, the arbitrator dismissed all but three of these claims as time-barred,
since they were filed after the expiration of the relevant statutory limitations period. See
generally Pl.’s Opp’n Donath MTD, Ex. 3C, ECF No. 44-2.6
D. Plaintiff’s Malpractice Suit in this Court
While the arbitration proceedings were ongoing, in November 2015, Xie brought a legal
malpractice claim in this Court. See Compl., ECF No. 1. She then filed three amended
complaints, see ECF Nos. 6, 8, 10, plus a Fourth Amended Complaint, which is operative. See
6
Xie has attached only portions of the arbitrator’s November 2016 decision, and none of
the August decision, so the reasoning underlying the dismissal of these claims is not fully
discernible.
6
Fourth Am. Compl., ECF No. 20.7 That Complaint names the following Defendants, all with
New York addresses: Alan Sklover and Sheree Donath, in their individual capacities; Sklover’s
current law firm and Sklover & Donath, LLC’s successor, Sklover & Company, LLC; and
Donath’s current law firm, Donath Law, LLC. Id. at ¶¶ 3–6. Although Xie claimed to be a
Virginia resident in her first several complaints, she now alleges District of Columbia
citizenship, Fourth Am. Compl. ¶ 1, which is corroborated by her D.C. driver’s license. See Pl.’s
Sur-Reply in Opp’n Donath MTD, Attachment 1, ECF No. 54-1. Xie brings claims of legal
malpractice, breach of contract, and breach of fiduciary duty, grounded in the above alleged
facts. In particular, Xie asserts that: Defendants failed to provide her with timely legal advice,
especially in connection with the EEOC Notice; failed to timely inform her that Donath, her
primary attorney and point of contact, had departed the firm and was no longer working on Xie’s
matter; failed to assert all viable claims before Fannie Mae, the EEOC, and D.C.’s Office of
Human Rights; and failed to preserve her rights by timely filing suit within the relevant statutory
limitations period. See Fourth Am. Compl. ¶ 39.
Defendants now move to dismiss, on various grounds. Donath moves under Federal Rule
of Civil Procedure 12(b)(2), arguing that this Court lacks both general and specific personal
jurisdiction over her. Donath emphasizes that she is a New York lawyer who resides in New
York; that Sklover & Donath, LLC—the law firm Xie retained and where Donath used to
work—was located exclusively in New York; that Donath never traveled to D.C. in connection
7
Under Federal Rule of Civil Procedure 15(a)(2), Xie was required to seek leave to file
all amended complaints after the First Amended Complaint, which was permitted as a matter of
course. See Fed. R. Civ. P. 15(a)(1). Although she failed to seek leave, following a telephone
conference held on January 30, 2017, and in light of Xie’s pro se status, the Court granted Xie
leave to file the Fourth Amended Complaint, while instructing that no further amended
complaints should be filed without permission of Court. See Minute Order, Jan. 30, 2017.
7
with representing Xie; and that all of her communications with Xie happened either remotely or
in New York. See generally Donath MTD. In their separate dismissal motion, Sklover and
Sklover & Company, LLC offer similar personal jurisdictional arguments. Sklover Defs.’ Mem.
Supp. Mot. Dismiss (“Sklover MTD”) 9–11. They also request dismissal due to insufficient
service of process and for failure to state a claim for relief. Id. at 8–9, 11–18. Donath Law, LLC
offers its own reasons for dismissal: It argues that it has no viable connection to this litigation,
being formed several months after Xie brought suit in this Court, and that consequently Xie has
not stated a plausible claim against it or established personal jurisdiction over it. See Donath
Law, LLC Defs.’ Mem. Supp. Mot. Dismiss (“Donath LLC MTD”) 6–12. The Court considers
each of these arguments in turn.
II. Legal Standard
A. Motion to Dismiss for Lack of Personal Jurisdiction
In resolving a motion to dismiss for lack of personal jurisdiction, the Court is not limited
to the four corners of the operative complaint, but rather “may receive and weigh affidavits and
other relevant matter to assist in determining jurisdictional facts.” Khatib v. All. Bankshares
Corp., 846 F. Supp. 2d 18, 26 (D.D.C. 2012) (quoting D’Onofrio v. SFX Sports Grp., Inc., 534
F. Supp. 2d 86, 89 (D.D.C. 2008)). “The plaintiff has the burden of establishing a factual basis
for the exercise of personal jurisdiction over the defendant.” Crane v. N.Y. Zoological Soc., 894
F.2d 454, 456 (D.C. Cir. 1990) (citing Reuber v. United States, 750 F.2d 1039, 1052 (D.C. Cir.
1984)). However, to the extent there are material “factual discrepancies appearing in the
record,” they “must be resolved in favor of the plaintiff.” Id.A federal court sitting in diversity may exercise personal jurisdiction over a defendant
only if a state court of general jurisdiction in the same district would have such jurisdiction. See
8
Fed. R. Civ. P. 4(k)(1). Accordingly, when a federal court’s subject-matter jurisdiction is
grounded in diversity of citizenship, state law—here, D.C. law—is applied in resolving questions
of personal jurisdiction. Crane, 894 F.2d at 455.
B. Motion to Dismiss for Insufficient Service and Insufficient Service of Process
Under Rule 12(b)(4), a defendant may move for dismissal due to “insufficient process.”
Fed. R. Civ. P. 12(b)(4). “A motion under 12(b)(4) concerns the form of the process rather than
the manner or method of its service,” and accordingly “is proper only to challenge
noncompliance with a provision . . . that deals specifically with the content of the summons.”
United States v. Levine, 2012 WL 1570811, at *1 (D. Mass. 2012) (citation omitted). Rule
12(b)(5), by contrast, allows a party to move to dismiss a complaint for “insufficient service of
process.” Fed. R. Civ. P. 12(b)(5). A “Rule 12(b)(5) motion is the proper vehicle for
challenging the mode of delivery or the lack of delivery of the summons and complaint.”
Candido v. D.C., 242 F.R.D. 151, 162 (D.D.C. 2007) (citation omitted).
When a defendant moves to dismiss under Rules 12(b)(4) or 12(b)(5), “the plaintiff has
the burden of establishing the validity of service of process.” Freedom Watch, Inc. v. Org. of
Petroleum Exporting Countries, 288 F.R.D. 230, 231 (D.D.C. 2013). However, any “objection
to insufficiency of process or its service should point out specifically in what manner the plaintiff
has failed to satisfy the requirements of the service provision that was utilized.” 5B C. Wright,
A. Miller, & M. Kane, Federal Practice and Procedure § 1353 (3d ed.) (citing O’Brien v. R. J.
O’Brien & Associates, Inc., 998 F.2d 1394 (7th Cir. 1993); Photolab Corp. v. Simplex Specialty
Co., 806 F.2d 807, 810 (8th Cir. 1986)).
C. Motion to Dismiss for Failure to State a Claim for Relief
To survive a 12(b)(6) motion, a “complaint must contain sufficient factual matter,
9
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A court
“accept[s] as true all of the allegations contained in [the] complaint,” disregarding “[t]hreadbare
recitals of the elements of a cause of action” and “mere conclusory statements.” Iqbal, 556 U.S.
at 678. Then, the Court examines the remaining “factual content [to determine if it may] draw
the reasonable inference that the defendant is liable for the misconduct alleged.” Id. A court
must also consider “documents incorporated into the complaint by reference.” Tellabs, Inc. v.
Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). “Pro se complaints are held ‘to less
stringent standards than formal pleadings drafted by lawyers.’” Henthorn v. Dep’t of Navy, 29
F.3d 682, 684 (D.C. Cir. 1994) (quoting Haines v. Kerner, 404 U.S. 519, 520 (1972)).
III. Analysis
A. Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction
Because the relevant arguments substantially overlap, the Court first considers whether it
must dismiss Xie’s claims for lack of personal jurisdiction over Donath, in her individual
capacity; Sklover, in his individual capacity; and Sklover & Company, LLC.8
There are two types of personal jurisdiction: “general or all-purpose jurisdiction, and
specific or case-linked jurisdiction.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011). General jurisdiction applies regardless of the nature of the claim, but it is
only available based on “a limited set of affiliations with a forum.” Daimler AG v. Bauman, 134
S. Ct. 746, 760 (2014). “For an individual, the paradigm forum for the exercise of general
jurisdiction is the individual’s domicile; for a corporation, it is an equivalent place, one in which
8
The Court considers Donath Law, LLC’s motion to dismiss elsewhere. See infra
section III.C.
10
the corporation is fairly regarded as at home.” Daimler, 134 S. Ct. at 760 (quoting Goodyear,
564 U.S. at 924). Under D.C. law, there is general jurisdiction over a defendant who is
“domiciled in, organized under the laws of, or maintaining his or its principal place of business
in” the District. D.C. Code § 13-422. Xie has not alleged any facts that would establish general
personal jurisdiction over any of the Defendants: All are domiciled in New York, and the
organizational Defendants have their principal places of business in New York.
1. Principles Governing Specific Jurisdiction Under D.C. Code § 13–423
The analysis is not so simple, however, for specific personal jurisdiction, which “is
confined to adjudication of issues deriving from, or connected with, the very [forum-related]
controversy that establishes jurisdiction.” Goodyear, 564 U.S. at 919. Specific personal
jurisdiction is present where “(1) jurisdiction over the defendant [is] authorized by the forum’s
long-arm statute, here D.C. Code § 13–423; and (2) the exercise of that jurisdiction [satisfies] the
federal requirement of constitutional due process.” Exponential Biotherapies, Inc. v. Houthoff
Buruma N.V., 638 F. Supp. 2d 1, 6 (D.D.C. 2009) (quoting D’Onofrio, 534 F. Supp. 2d at 89)
(alterations in original).
Under the District of Columbia’s long-arm statute, a “court may exercise personal
jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from
the person’s . . . transacting any business in the District of Columbia.” D.C. Code § 13-
423(a)(1). Section 13-423(a)(1)’s “transacting any business” clause “is ‘given an expansive
interpretation’ that is ‘coextensive with the due process clause.’” Helmer v. Doletskaya, 393
F.3d 201, 205 (D.C. Cir. 2004) (quoting Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C. 1981)).
Accordingly, where § 13-423(a)(1) is at issue, the statutory and constitutional prongs of the
personal jurisdiction inquiry merge into one overriding question: Have the defendants in
11
question “purposefully established ‘minimum contacts with [the District of Columbia] such that
the maintenance of the suit does not offend traditional notions of fair play and substantial
justice[?]’” Helmer, 393 F.3d at 205 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945)).
It has long been established that a defendant has such minimum contacts if he “enters into
a contract that has a ‘substantial connection’ with the forum.” Helmer, 393 F.3d at 205 (quoting
McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957)). In evaluating whether the contract in
question has that requisite “substantial connection,” courts are to weigh such factors as the
parties’ “prior negotiations,” the “contemplated future consequences” of the contract, the “terms
of the contract,” and “the parties’ actual course of dealing.” Burger King Corp. v. Rudzewicz,
471 U.S. 462, 479 (1985). This context-specific, fact-intensive approach derives from the
recognition that a contract is “ordinarily but an intermediate step serving to tie up prior business
negotiations with future consequences which themselves are the real object of the business
transaction.” Burger King, 471 U.S. at 479 (quoting Hoopeston Canning Co. v. Cullen, 318 U.S.
313, 317 (1943)).
2. Application of D.C. Code § 13–423(a)(1) and the “Substantial Connection” Test
to this Case
Applying these principles here, it is evident that the retainer contract Xie signed with
Sklover & Donath, LLC had a “substantial connection” with the District of Columbia.9
Beginning with the basics, Xie retained the firm, which specialized in employment law, to
9
Although, as a formal matter, Xie signed a contract with Sklover & Donath, LLC,
individual Defendants Donath and Sklover—who were firm partners at the time—do not seek to
avoid personal liability on the grounds that only the firm was liable for the alleged malpractice.
See Rothstein v. Equity Ventures, LLC, 299 A.D.2d 472, 474 (2002) (“[M]embers of limited
liability companies, such as corporate officers, may be held personally liable if they participate in
the commission of a tort in furtherance of company business.”).
12
represent her in connection with a single matter: current and anticipated legal disputes with her
D.C. employer, Fannie Mae. Although the contract included the caveat that the firm’s attorneys
were “admitted to practice law only in New Jersey and New York State,” it also suggested that
the firm could do (and regularly did) legal work beyond those jurisdictional boundaries. Pl.’s
Opp’n Donath MTD, Ex. 1, ECF No. 44, at 8. For instance, the firm assured Xie that its
attorneys could “provide advice on methods and strategies of negotiation to individuals
worldwide, without limitation,” and that “[w]hen we appear in courts in other states, we first
gain admission on a case-by-case (called ‘pro hac vice’ admission) basis, and work with local
counsel.” Id. (emphasis added). The retainer agreement, under the circumstances,
“contemplated” a broad range of “future consequences,” Burger King, 471 U.S. at 479, ranging
from negotiations with D.C.-based Fannie Mae, administrative action before a D.C. employment-
law agency (either the EEOC or DCOHR), or litigation against Fannie Mae in a D.C. court. The
common denominator, though, was location: Contract-related actions would likely either target
D.C. or occur within it.
The “parties’ actual course of dealing,” Burger King, 471 U.S. at 479, further supports
the conclusion that the retainer contract was substantially connected to the District. Donath, on
behalf of the firm, sent at least three demand letters to Fannie Mae’s Legal Department in D.C.
See Pl.’s Opp’n Donath MTD, Ex. 4A, ECF No. 44-3. The first letter stated that Sklover &
Donath represented Xie, and warned that “by one means or another[],” i.e., “by discussion or by
litigation/arbitration,” the “claims would be resolved.” Id. at 2–4. Another letter attached a
detailed affidavit entitled “In Contemplation of Litigation.” Id. at 7–21. Later, Donath and
Sklover each assisted Xie in drafting, preparing, and reviewing a complaint to be lodged with the
D.C.-based EEOC and the DCOHR, see Pl.’s Sur-Reply in Opp’n Donath MTD, Attachment 11,
13
ECF No. 54-11, and Donath went on to file that complaint with those agencies, see Pl.’s Opp’n
Donath MTD, Ex. 4B; Fourth Am. Compl. ¶ 9. In the months following that submission, Donath
communicated frequently—via telephone and email—with the EEOC. See Pl.’s Sur-Reply in
Opp’n Donath MTD, Attachments 12–15, ECF Nos. 54-12 to 54-15. Matters came to a head, or
nearly so, when the EEOC confirmed a July 25, 2012 mediation session at the EEOC’s
Washington, DC Office, which Sklover was scheduled to attend. Pl.’s Opp’n Donath MTD, Ex.
6A, ECF No. 44-4, at 2, 5.
These various mailings, telephone calls, emails, filings, and negotiation sessions directly
and purposefully targeted D.C.-based individuals and entities. In connection with the retainer
contract, they therefore constitute “transacting . . . business in the District of Columbia” under
§ 13-423(a)(1), particularly under the expansive reading D.C. courts have applied to that
provision. See Mouzavires v. Baxter, 434 A.2d 988, 992 (D.C. 1981) (“It is now well-settled
that the ‘transacting any business’ provision [of § 13-423] embraces those contractual activities
of a nonresident defendant which cause a consequence here.” (emphasis added)); see also
Overseas Partners, Inc. v. PROGEN Musavirlik, 15 F. Supp. 2d 47, 51 (D.D.C. 1998) (applying
same reading of § 13-423’s “transacting business” provision); Schwartz v. CDI Japan, Ltd., 938
F. Supp. 1, 5 (D.D.C. 1996) (same). That conclusion is also in line with the holdings of other
cases in this District, which have found personal jurisdiction over nonresident defendants based
on “the conduct of negotiating, performing, or soliciting business contracts within” the forum.
Abramson v. Wallace, 706 F. Supp. 1, 2 (D.D.C. 1989); see also Exponential Biotherapies, 638
F. Supp. 2d at 7 n.4 (collecting cases).
Donath makes much of the fact that neither she, Sklover, nor any agent of the firm
“appeared in the District of Columbia or did anything in the District . . . except to file [an
14
administrative] complaint.” Donath MTD 1; see also id. at 8 (arguing that “letters and telephone
communications [from a nonresident to] a resident [are] not sufficient for personal jurisdiction”);
Sklover MTD 10–11 (arguing Defendants had insufficient contacts with the District to warrant
establishing personal jurisdiction over them). But the Supreme Court has made clear that
physical presence is not a prerequisite for the exercise of personal jurisdiction over a defendant:
Jurisdiction . . . may not be avoided merely because the defendant did not
physically enter the forum State. Although territorial presence frequently will
enhance a potential defendant’s affiliation with a State and reinforce the reasonable
foreseeability of suit there, it is an inescapable fact of modern commercial life that
a substantial amount of business is transacted solely by mail and wire
communications across state lines, thus obviating the need for physical presence
within a State in which business is conducted. So long as a commercial actor’s
efforts are “purposefully directed” toward residents of another State, we have
consistently rejected the notion that an absence of physical contacts can defeat
personal jurisdiction there.
Burger King, 471 U.S. at 476. See also Mouzavires, 434 A.2d at 995 (“Courts have recognized
that, even though a nonresident defendant has never physically been present in the forum, his
contacts with the forum when viewed qualitatively may be quite substantial. Thus, the exercise of
personal jurisdiction has been sustained where the nonresident defendant’s only contact with the
forum has been by mail or telephone.” (emphasis added)). In light of this precedent, and given
the retainer contract’s “substantial connection” to the forum, Defendants cannot escape the reach
of D.C.’s long-arm statute merely because they never set physical foot in the District while
representing Xie.
Donath also cites cases where personal jurisdiction was found lacking over nonresident
defendant law firms, but they are distinguishable because none of the contracts at issue had a
“substantial connection” to the District of Columbia. In Exponential Biotherapies, Inc. v.
Houthoff Buruma N.V., 638 F. Supp. 2d 1 (D.D.C. 2009), a fellow court in this District held
there was no personal jurisdiction over a Dutch law firm in a malpractice suit brought by one of
15
the firm’s clients, a Delaware corporation based in Washington. Id. at 4–6. The firm had been
retained “to provide legal services for a transnational financing and corporate structuring” in the
Netherlands, although the firm did communicate frequently with the client corporation in D.C.
via email, telephone, and other means. Id. at 4, 7. The court reasoned as follows:
Neither [the firm’s] act of contracting to provide legal services to [the client
corporation], nor its representation of [the corporation] in the Netherlands, subjects
[the firm] to suit in D.C. While negotiating or performing business contracts has
qualified as “transacting business” for purposes of § 13–423(a)(1), entering into a
contract with an out-of-state party does not by itself . . . establish minimum contacts
or constitute purposeful availment. There must be a “substantial connection”
between the contract and the forum, which often exists where the contract is to be
performed, in whole or in part, in D.C. Where the contract was “neither made nor
performed in the District, and no services were provided or to be provided here,”
the contract does not justify the exercise of personal jurisdiction over the non-
resident defendant.
Id. at 7–8 (citations omitted). The court’s analysis highlights the material fact that was absent
there but present here: a contract with a “substantial connection” to D.C. The defendant firm in
Exponential Biotherapies signed a contract contemplating work in the Netherlands; the contract
here contemplated representing Xie in a D.C.-based employment dispute.
Similarly, the court in Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403 (Fed. Cir.
2009), considered whether a federal district court in the Eastern District of Virginia could
exercise personal jurisdiction over a Canadian intellectual-property-law firm in a malpractice suit
brought by the Canadian inventor of a novel pump system. Id. at 1407. The inventor hired the
firm “to file and prosecute the necessary patent applications . . . for his invention in Canada, the
United States, and various European countries.” Id. In the course of prosecuting these patents, a
partner at the firm transmitted a bundle of documents to the United States Patent and Trademark
Office (“USPTO”) in Alexandria, Virginia. Id. at 1408. The Touchcom court concluded that
this “act of filing an application for a U.S. patent at the USPTO” could not alone establish
16
personal jurisdiction over the filing attorney under Virginia’s long-arm statute, which is also
coextensive with due process. Id. at 1409.10 Again, the material distinction between the facts in
Touchcom and those here is the nature of the contract at issue: While Xie retained Sklover &
Donath solely to represent her in connection with a D.C.-based employment dispute, the inventor
in Touchcom retained a Canadian law firm to prosecute patents internationally. Furthermore,
although the Touchcom contract contemplated prosecuting U.S. patents (among numerous
others), it did not specifically implicate the relevant forum (Virginia). It therefore could not be
said that the contract at issue in Touchcom had a “‘substantial connection’ with the forum,”
Helmer, 393 F.3d at 205.11
Donath’s remaining arguments may be addressed briefly. She emphasizes the retainer
contract’s specific caveat about the firm’s attorneys being licensed only in New York and New
Jersey. See Donath Reply 2, 5. But “membership in a state Bar does not have any impact on the
jurisdictional analysis.” Beach TV Properties, Inc. v. Solomon, No. CV 15-1823 (RC), 2016 WL
6068806, at *8 (D.D.C. Oct. 14, 2016) (quoting Lans v. Adduci Mastriani & Schaumberg L.L.P.,
786 F. Supp. 2d 240, 284 (D.D.C. 2011)). Instead, what matters is the actual legal practice
contemplated and effectuated by the relevant contract, which in this case included litigation in
10
The court ultimately found personal jurisdiction under Federal Rule of Civil Procedure
4(k)(2), which applies only where a claim arises under federal law (and so does not apply here).
Touchcom, 574 F.3d at 1418.
11
Donath also cites Beach TV Properties, Inc. v. Solomon, No. CV 15-1823 (RC), 2016
WL 6068806 (D.D.C. Oct. 14, 2016), which relied on Touchcom to conclude that the “mere act
of filing with a federal agency” does not confer personal jurisdiction over the filer. Id. at *8.
The parties did not brief and the court did not analyze whether the relevant contract had a
“substantial connection” with D.C., but it placed significant weight—as did the Touchcom
court—on the fact that the defendant in question had never physically traveled to the forum in
connection with the relevant business. See Beach TV, 2016 WL 6068806, at *8; Touchcom, 574
F.3d at 1412. To the extent that analysis was dispositive in either opinion, it is at odds with the
controlling guidance outlined above. See Burger King, 471 U.S. at 476; Mouzavires, 434 A.2d
at 995.
17
D.C., through pro hac vice admission. See Pl.’s Opp’n Donath MTD, Ex. 1 at 7, ECF No. 44.
Donath also argues that Xie’s claims “do not relate to any alleged [forum-related] act or
omission that occurred as part of the administrative complaints to [the] EEOC,” but rather “to
what came after that process,” i.e., the alleged failure to timely notify her of the EEOC Notice.
Donath Reply 3. That argument is based on a misreading of Xie’s complaint. Some of her
allegations arise directly from D.C.-based actions (for example, purportedly submitting an EEOC
complaint without key, viable claims), and other of Xie’s contentions arise from alleged
omissions that should have occurred in the District (for example, supposedly failing to timely
litigate her suit with local counsel). See Fourth Am. Compl. ¶ 39. More to the point, all of Xie’s
claims arise out of the retainer contract, which—as previously discussed—has a “substantial
connection” to D.C.
3. Remaining Due Process Considerations
Finally, the Court finds that asserting personal jurisdiction over Donath would not
“offend traditional notions of fair play and substantial justice.” Helmer, 393 F.3d at 205 (quoting
Int’l Shoe, 326 U.S. at 316). Defendants “voluntarily . . . engaged in a transaction which had a
substantial connection with the District and which they foresaw would have consequences here,”
and thereby “invoked the benefits and protections of the District’s laws.” Mouzavires, 434 A.2d
at 997. Accordingly, there is no due process rationale that would preclude exercising personal
jurisdiction over them. If anything, considerations of “fair play and substantial justice” counsel
in favor of hearing Xie’s suit under these circumstances. Without indicating any view on the
merits of this case, the Court notes that a contrary holding might permit attorneys to escape suit
in a client’s home forum by resisting any in-person demands of the profession—such as
mediation or litigation—even when those activities are warranted. In other words, it would
18
permit attorneys to avoid legal malpractice litigation by committing legal malpractice. For these
reasons, where a defendant-attorney has agreed to represent a client in a matter with a substantial
connection to a particular forum, there are equitable grounds for hearing claims arising from that
representation, in that forum.
The Court therefore concludes that it may exercise specific personal jurisdiction over
Donath, Sklover, and Sklover & Company, LLC, pursuant to D.C. Code § 13-423(a)(1).12
B. Alan Sklover and Sklover & Company, LLC’s Motion to Dismiss
Defendants Alan Sklover and Sklover & Company, LLC, separately argue for dismissal
on two additional grounds: insufficient process and insufficient service of process, under Rules
12(b)(4) and (5); and failure to state a claim, under Rule 12(b)(6). See Sklover MTD 8–9, 11–
18. The Court now addresses these arguments.
1. Service of Process
As recounted above, Xie first brought suit in this court in November 2015. Roughly five
months later, in March 2016, Xie filed a “Proof of Service” form, indicating—without attaching
any verification—that a third party had served Sklover & Company, LLC via certified mail.13
See ECF No. 9. In October 2016, the Court entered a Minute Order noting that Plaintiff had
failed to properly serve any Defendants, and directing Plaintiff to properly effectuate service no
later than November 21, 2016. In response, Xie submitted various form “Affidavit[s] of
Mailing,” which stated that a copy of the summons and complaint had been submitted via
certified mail, return receipt requested, to Sklover & Company, LLC and Alan Sklover. See
12
It is therefore unnecessary to consider the (unlikely) possibility that the Court may
exercise personal jurisdiction over Defendants pursuant to other provisions of § 13-423. See
Pl.’s Opp’n Donath MTD 1–2.
13
The Court limits its discussion to Xie’s attempts to serve the Sklover Defendants, as
neither Donath nor Donath Law, LLC, contests service.
19
ECF Nos. 15, 17 & 18. One of those affidavits attached tracking information from the U.S.
Postal Service, indicating a successful delivery on November 4, 2016, with an individual at
Sklover’s Merrick, New York residence. See ECF No. 18. Later, in March 2017—after the
Sklover Defendants asserted improper service in their motion to dismiss—Xie submitted three
additional “Proof of Service” forms, all stating that a summons and complaint had been delivered
to Sklover’s Merrick, New York address—twice via certified mail, and once via Federal Express.
See ECF Nos. 56, 57 & 60. All three filings attached tracking information, and one of the filings
included a photograph of the return receipt sent along with the package. See ECF No. 60.
Sklover does not contest that he received the various mailings outlined above. Rather, he
argues that service of process was insufficient on three grounds: (1) that Xie did not effectuate
service within 90 days, the default service period under Federal Rule of Civil Procedure 4(m);
(2) that the mailings he received did not “include copies of all of the papers and pleadings that
[Xie] filed” with the Court; and (3) that proper service cannot be effectuated by certified mail.
Sklover MTD 8.
These arguments are unavailing. First, regarding the 90-day window for service, Rule
4(m) provides as follows:
If a defendant is not served within 90 days after the complaint is filed, the court—
on motion or on its own after notice to the plaintiff—must dismiss the action
without prejudice against that defendant or order that service be made within a
specified time. But if the plaintiff shows good cause for the failure, the court must
extend the time for service for an appropriate period.
Fed. R. Civ. P. 4(m) (above). In arguing for dismissal, the Sklover Defendants cite the first half
of Rule 4(m), but not the italicized portion. Here, the Court set its own deadline for service, see
Minute Order, October 5, 2016, and Sklover & Company, LLC does not argue that it did not
receive a summons and complaint by that date (November 21, 2016). Defendant Alan Sklover,
on the other hand, was not named until Xie filed her Fourth Amended Complaint, on December
20
14, 2016. And Sklover concedes in his briefing that he received that complaint via mail shortly
thereafter—i.e., within 90 days after that complaint was filed. Sklover MTD 8. True, Xie did
not have leave to file that complaint, but the Court later granted such leave. See Minute Order,
Jan. 30, 2017.
Second, the Sklover Defendants contend that proper service must “include copies of all of
the papers and pleadings” that have been filed with the Court. Sklover MTD 8. But they cite no
authority for that proposition, and the Court is aware of none. Rule 4 merely provides that “[a]
summons must be served with a copy of the complaint,” Fed. R. Civ. P. 4(c)(1), and specifies
certain contents that the summons must include, such as the names of the parties and the “time
within which the defendant must appear and defend,” id. 4(a)(1). The Sklover Defendants do not
allege that Xie failed to serve them with a proper summons and complaint. In fact, the exhibits
they attach to their motion establish definitively that they received these required documents.
See Sklover MTD, Exhibit 4, ECF No. 39-18 (Service Packages Sent By Xie to Sklover
Defendants).
Third, Sklover suggests that proper service cannot be effectuated by certified mail. See
Sklover MTD 8. That is not the case, and to the extent the Court suggested otherwise in its
October 5, 2016 Minute Order, it corrects itself now. The Federal Rules provide that service
may be effectuated upon an individual located in the U.S. by “following state law for serving a
summons in an action brought in courts of general jurisdiction in the state where the district court
is located.” Fed. R. Civ. P. 4(e)(1); see also id. 4(1)(A) (providing for service against a
corporation “in the manner prescribed by Rule 4(e)(1) for serving an individual”). The D.C.
Superior Court Rules, in turn, provide that “service also may be effected by mailing a copy of the
summons, complaint and initial order to the person to be served by registered or certified mail,
21
return receipt requested.” D.C. Super. Ct. R. Civ. P. 4(c)(3). When the Court issued its October
5, 2016 Minute Order directing proper service, Xie had provided no evidence that her mailings
had included return receipts. That deficiency was corrected by later filings. See ECF Nos. 15,
17, 18 & 60.
A separate provision of the D.C. Superior Court Rules of Civil Procedure states that when
service is rendered using certified mail, the signed return receipt shall accompany the affidavit of
mailing where “proof of service” is required. D.C. Super. Ct. R. Civ. P. 4(l)(2). However, the
Sklover Defendants have not complained of inadequate proof of service, or anywhere contested
their receipt of the relevant service documents. Indeed, they have attached those documents to
their briefing. See Sklover MTD, Exhibit 4, ECF No. 39-18. In light of their undisputed receipt
of service and knowledge of this suit, the Court finds—as an independent ground for its
decision—that Defendants have been effectively served. See, e.g., Shaw v. D.C., 2006 WL
1371681, at *6 (D.D.C. 2006) (explaining that deeming a defendant served may be appropriate
“where there [is] ample evidence that the defendant was . . . successfully served through the
mail”); Ali v. Mid-Atl. Settlement Servs., Inc., 233 F.R.D. 32, 36 (D.D.C. 2006) (“Where the
defendant receives actual notice and the plaintiff makes a good faith effort to serve the defendant
pursuant to the federal rule, service of process has been effective.”).
For the above reasons, the Court declines to dismiss Xie’s claims against the Sklover
Defendants on the grounds that they were afforded insufficient process or service of process.14
14
The Court will, however, deny Xie’s Motion for Default Judgment against the Sklover
Defendants, and grant the Sklover Defendants’ Motion to Vacate the Defaults entered on
February 9, 2017, “for good cause” shown. Fed. R. Civ. P. 55(c). The Court did not grant Xie
leave to file her various amended complaints until January 2017, making the February default
premature. The Sklover Defendants have also put forth good-faith (if ultimately unsuccessful)
arguments that process was deficient.
22
2. Failure to State a Claim
As a final basis for dismissal, the Sklover Defendants contend under Rule 12(b)(6) that
Xie’s complaint fails to state a claim for relief.15 A legal malpractice claim requires a showing
“(1) that there is an attorney-client relationship; (2) that the attorney neglected a reasonable duty;
and (3) that the attorney’s negligence resulted in and was the proximate cause of a loss to the
client.” Chase v. Gilbert, 499 A.2d 1203, 1211 (D.C. 1985). The Sklover Defendants contend
that Xie has failed to plausibly show the second and third elements of such a claim. They insist
that they never breached any reasonable duty of care to Xie because they never promised to
arbitrate or litigate any of her claims. See Sklover MTD 13. And they argue that Xie cannot
show any damage proximately caused by their negligence—even if it is assumed—since she
received the EEOC Notice herself and could have taken action on her own, or alternatively,
because her underlying employment claims were frivolous. See id. at 13–14, 16–18. The
Sklover Defendants also argue that Xie’s remaining claims rise and fall with the legal
malpractice claims, and therefore should also be dismissed. See id. at 14–15.
None of these arguments carries the day. First, as to whether Xie has plausibly alleged
that Defendants breached of a reasonable duty of professional care, the Sklover Defendants
frame the issue too narrowly. The question is not whether they broke some specific
“agree[ment] to represent [Xie] in the filing of a federal lawsuit or in the initiation of arbitration
proceedings in the District of Columbia or in any other jurisdiction.” Sklover MTD 13. The
question is whether Xie has stated a plausible claim that Defendants were negligent in failing to
15
The Sklover Defendants style their motion as being, “In the Alternative, [a] Motion for
Summary Judgment.” Sklover MTD 1. But their arguments apply the Rule 12(b)(6) standard,
assuming the truth of the facts alleged in Xie’s complaint (without necessarily conceding them).
See Sklover MTD 11 & n.2. Accordingly, the Court applies the same standard, and will not
convert the motion into one for summary judgment.
23
provide her with timely legal advice; failing to timely inform her that Donath had departed the
firm; failing to assert all viable claims in Xie’s administrative complaint; or failing to preserve
her rights by timely filing suit. See Fourth Am. Compl. ¶ 39. Furthermore, the Sklover
Defendants are incorrect in asserting that their retainer agreement with Xie specifically
disavowed litigation or arbitration in the District of Columbia: On the contrary, as previously
discussed, the agreement included a specific provision foreseeing the firm’s appearance pro hac
vice, and in communications with Fannie Mae, the firm repeatedly threatened to arbitrate or
litigate against the company. See supra section III.A.2.
The Sklover Defendants’ second line of argument is that, even assuming negligence on
their part, Xie has failed to show that such negligence proximately caused her damage. Because
Xie “could have initiated arbitration proceedings herself,” and because “[n]othing prevented
[her] from hiring a District of Columbia law firm and lawyers” to litigate her case, Defendants
essentially argue that they are not responsible for any ultimate damage that resulted. Sklover
MTD 14. These arguments, if accepted, would bar nearly every legal malpractice claim: When
sued, the defendant-lawyer could simply fault the plaintiff-client for failing to proceed pro se or
hire different counsel when faced with negligent counsel. Here, assuming the truth of Xie’s
allegations, faulting her is especially fraught, because she claims to have been abandoned by her
counsel during a critical, 90-day period. If the alleged facts are true, this was hardly sufficient
time to prepare a case, or start from ground zero with a new team of attorneys.
Next, the Sklover Defendants argue that proximate cause is also lacking because Xie’s
underlying employment claims were frivolous. Defendants are correct that to succeed on “a
legal malpractice action in the District of Columbia, [a] plaintiff must demonstrate not only that
the alleged malpractice was the proximate cause of the injury suffered, but also that the action
24
for which the plaintiff had sought the attorney’s services was a good cause of action.” Macktal
v. Garde, 111 F. Supp. 2d 18, 21 (D.D.C. 2000) (citing Niosi v. Aiello, 69 A.2d 57, 59 (D.C.
1949)). At the pleadings stage, however, the Court merely asks whether Xie has alleged facts
making it “plausible,” Iqbal, 556 U.S. at 678, that she had a “good cause of action.” In
confirming that Xie has satisfied that burden, the Court need look no further than the demand
letters Defendants submitted to Fannie Mae in connection with Xie’s representation, which Xie
referenced in her complaint and attached to briefing. See Fourth Am. Compl. ¶ 8; Pl.’s Opp’n
Donath MTD, Ex. 4A, ECF No. 44-3. The letters set forth facially plausible claims of
discrimination based on disability and national origin, plus FMLA violations.16
The Sklover Defendants cite the following evidence to argue that Xie’s claims were
“weak”: (1) Xie’s failure to obtain an arbitration award stemming from the claims; (2) the fact
that Xie has been terminated by two other employers; and (3) an internal Fannie Mae
investigation, finding that certain of Xie’s claims were unsubstantiated. Sklover MTD 17–18.
Regarding Xie’s arbitration claims, they appear to have failed not on the merits, but due to
statutes of limitation (and, allegedly, legal malpractice), see generally Pl.’s Opp’n Donath MTD,
Ex. 3C, ECF No. 44-2. And as for Xie’s supposed terminations, and Fannie Mae’s internal
investigation, such evidence is not properly considered at this stage, where the Court is limited to
Xie’s factual allegations and the documents referenced in her complaint. See Tellabs, 551 U.S.
at 322.
Last, the Sklover Defendants urge the dismissal of Xie’s remaining counts—for breach of
contract and breach of fiduciary duty—because they turn on her legal malpractice claims. See
16
Of course, the result might well be different at summary judgment, with a fuller record
and a more exacting standard.
25
Sklover MTD 14–15. Since the Court finds that Xie has plausibly made out claims of legal
malpractice, there is no basis for dismissing her other claims. The Court therefore rejects the
Sklover Defendants arguments for dismissal under Rule 12(b)(6).
C. Donath Law, LLC’s Motion to Dismiss
Finally, the Court takes up Donath Law, LLC’s dismissal motion. Recall that, after
formally leaving Sklover & Donath, LLC in March 2013, Donath took a leave of absence. See
Donath LLC MTD, Affidavit of Sheree Donath (“Donath Aff.”) ¶ 8–10. Later that year, she
joined the law practice of Cory J. Rosenbaum, P.C. Id. She practiced there until March 2016,
when she formed her own law firm—Donath Law, LLC. Id. at ¶ 3. This was several months
after Xie first brought suit in this Court. The firm is organized under New York law and located
in New York. Id. at ¶ 3. None of its members or employees has ever appeared before a D.C.
court or agency. Id. at ¶ 7. At no time has Xie been a client of Donath Law, LLC, and none of
her claims arise out of any of the firm’s acts or omissions. In light of these uncontested facts,
Donath Law argues that this Court lacks personal jurisdiction over it, and that Xie has failed to
state a cognizable claim against it. See Donath LLC MTD 6–12.
In response, Xie attempts to establish that Donath Law, LLC succeeded to the liabilities
of Sklover & Donath, LLC. She states her “reasonable belief” that Donath transferred assets first
from Sklover & Donath, then to Cory J. Rosenbaum, and finally to Donath Law. See Pl.’s Sur-
Reply in Opp’n Donath MTD 2. In support, she attaches a screenshot of Donath’s LinkedIn
profile, showing that she was a “Partner” (presumably with equity) at Cory J. Rosenbaum. Id.,
Attachment 20, ECF No. 54-20. As a general rule, however, the mere fact that a business entity
acquires assets from another does not establish successor liability. Instead, “a corporation which
acquires all or part of the assets of another corporation does not acquire the liabilities and debts
26
of the predecessor” absent one of the following four exceptions: “(1) there is an express or
implied agreement to assume the liabilities; (2) the transaction amounts to a consolidation or
merger; (3) the successor entity is a mere continuation or reincarnation of the predecessor entity;
or (4) the transaction was fraudulent, not made in good faith, or made without sufficient
consideration.” LeSane v. Hillenbrand Indus., Inc., 791 F. Supp. 871, 874 (D.D.C. 1992).17
Xie has not alleged facts making it plausible that any of these exceptions apply to Donath
Law.18 She has not suggested that Donath Law expressly assumed Sklover & Donath’s
liabilities, nor can such an agreement be reasonably inferred, given that Donath was employed
for more than two intervening years at a third, independent law firm before forming Donath Law,
LLC. There is likewise no reason to conclude that Donath Law’s formation “amount[ed] to a
consolidation or merger” with Sklover & Donath. LeSane, 791 F. Supp. at 874. The
“hallmarks” of such a “de facto merger” are “(1) continuity of ownership; (2) cessation of
ordinary business and dissolution of the acquired corporation as soon as possible; (3) assumption
by the purchaser of the liabilities ordinarily necessary for the uninterrupted continuation of the
business of the acquired corporation; and (4) continuity of management, personnel, physical
location, assets, and general business operation.” N.Y. v. Nat’l Serv. Indus., Inc., 460 F.3d 201,
209 (2d Cir. 2006); see also LeSane, 791 F. Supp. at 875 (applying same factors under D.C. law).
Of these quintessential traits, only the first is present here, and only partially—since Donath was
17
The same test applies under New York law. See Schumacher v. Richards Shear Co.,
59 N.Y.2d 239, 245 (1983). Accordingly, there is no “true conflict” between the two bodies of
law and no need to conduct further choice-of-law analysis. GEICO v. Fetisoff, 958 F.2d 1137,
1141 (D.C. Cir. 1992).
18
Sklover & Company, LLC, by contrast, is conceded to be Sklover & Donath, LLC’s
successor. See Sklover MTD, Exhibit 1, Affidavit of Alan. L. Sklover, ECF No. 39-3
(describing Sklover & Company, LLC as “a law firm formerly operated under the names
Sklover, Donath & Felber, LLC and Sklover & Donath, LLC”).
27
a common partner of both entities. But that is clearly insufficient evidence of merger. For
similar reasons, it is implausible that Donath Law is a “mere continuation or reincarnation of”
Sklover & Donath, LeSane, 791 F. Supp. at 874. See Beach TV, 2016 WL 6068806, at *11
(observing that the de facto merger and mere continuation “exceptions are quite similar”).
Finally, although Xie posits that Donath formed Donath Law, LLC in bad faith to avoid potential
liability arising from this suit, she asserts no facts in support of that claim, besides the timing of
the entity’s formation. See Pl.’s Opp’n 2–3.
In short, Xie has failed to state a claim for relief against Donath Law, LLC. None of her
claims arise from the actions or omissions of the firm, which was created after the filing of her
complaint. And she has not alleged sufficient facts making it plausible that Donath Law, LLC
has assumed any of Sklover & Donath’s liabilities.
IV. Conclusion
For the above reasons, the Court finds that Xie has failed to state a viable claim against
Donath Law, LLC, and it will grant the firm’s dismissal motion. The Court will, however,
permit the survival of Xie’s claims against the remaining Defendants.
CHRISTOPHER R. COOPER
United States District Judge
Date: May 23, 2017
28