Milad Allaham v. Fadi Naddaf

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 15-2575
_____________
MILAD ALLAHAM,
Appellant
v.
FADI NADDAF, ELIAS NADAF AND MAJD NADAF
_______________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 5:13-cv-03564)
District Judge: Honorable Edward G. Smith
_______________
Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
December 8, 2015
Before: FUENTES, SHWARTZ and VAN ANTWERPEN, Circuit Judges.
(Opinion Filed: December 17, 2015)
______________
OPINION*
______________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7,
does not constitute binding precedent.
VAN ANTWERPEN, Circuit Judge.
Appellant Milad Allaham has brought suit in the U.S. District Court for the
Eastern District of Pennsylvania against three foreign nationals: Fadi Naddaf, Elias
Nadaf, and Majd Nadaf. Allaham sought a default judgment, which the District Court
ultimately denied for lack of personal jurisdiction. Allaham now appeals the denial of his
Motion for Reconsideration. We will affirm the decision of the District Court.
I. Factual Background and Procedural History
A. Factual Background
At some time shortly before 2007, Raouaeh Nadaf,1 Allaham’s wife, approached
Allaham while at their home in Allentown, Pennsylvania about entering into a
partnership to open a jewelry business in the United Arab Emirates (“UAE”). (App. 16a–
17a). The partnership was to be with Raouaeh’s brothers, three of whom are Appellees.
(App. 16a–17a). A fourth brother, Pierre Nadaf, a United States citizen residing in
Scranton, Pennsylvania, was also involved in the business and traveled between the UAE
1
The transcript for the evidentiary hearing before the District Court spells
Allaham’s wife’s name as “Arawah” followed by a “(ph)” designation. (App. 51a). The
District Court used the same spelling in its opinion. (App. 16a–17a). Allaham’s brief
indicates that his wife’s name is spelled “Raouaeh.” This opinion follows the spelling in
Allaham’s brief since it appears that the District Court’s spelling is phonetic and does not
reflect the actual spelling. We also note that there is some inconsistency in the spelling of
Fadi Naddaf’s last name, which in some filings only has one “d,” yet in the majority of
filings has two “d’s.” For consistency, we follow the spelling used by the District Court
of “Naddaf.”
2
and the United States to purchase jewelry.2 (App. 17a, 69a–70a). At all times relevant to
the present action, Allaham was a United States citizen, residing in Pennsylvania.
(Appellant Br. 4). During the same time period, all three Appellees were foreign nationals
residing in the UAE. (App. 19a).
Shortly after Raouaeh introduced the partnership idea, Allaham traveled to the
UAE to meet with Appellees in person. (App. 17a). After Allaham’s visit, he believed
that he had entered into an oral agreement with Appellees to be a partner in the business
and provided investment capital and merchandise to this end. (App. 17a). From October
2007 through July 2008, Allaham wired approximately $252,000 dollars to Appellees
from Pennsylvania bank accounts. 3 During his trip to the UAE, Allaham also gave
Appellees various items of jewelry with a combined value of approximately $25,000.
(App. 56–57a); (Appellant Br. 6).
2
In order to maintain diversity of citizenship jurisdiction, Allaham did not name
Pierre as a Defendant in his complaint. (App. 68a–69a). At the December 2014
evidentiary hearing, Allaham expressed concerns about enforcing a judgment in Abu
Dhabi, UAE, where Appellees reside. Allaham indicated that he thought a federal
judgment would be more likely to be enforced. (App. 69a). This type of forum shopping
does not affect this Court’s personal jurisdiction analysis as this is not a situation where
the federal court would take the case out of the control of a state court. Telecordia Tech
Inc. v. Telkom SA Ltd., 458 F.3d 172, 180 (3d Cir. 2006). To prohibit Allaham from
bringing a claim in federal court solely because of the appearance of forum shopping
would “ignore[] the maxim that courts generally defer to a plaintiff’s choice of forum.”
Id. (citing Jumara v. State Farm Ins. Co., 55 F.3d 873, 880 (3d Cir. 1995)).
3
There was some dispute at the evidentiary hearing about the total amount wired.
Allaham’s Counsel went through each wire, reading the date, amount, and bank. The
Court tallied these to equal $252,000, while Counsel indicated that Allaham’s
calculations produced a total of $243,000. (App. 53a–56a).
3
At an unspecified date in 2009, Appellees, through an unidentified intermediary in
New York State, told Allaham they did not intend to pursue the partnership. Instead,
Appellees said they would return Allaham’s money if he travelled to the UAE in two
weeks.4 (App. 58a–59a). Appellees stated that they would return half of the money when
he arrived, and the other half at a later date. (App. 59a). Allaham travelled to the UAE at
the agreed upon time, but was unsuccessful in efforts to recover his cash or jewelry
investment. (App. 59a).
B. Procedural History
Allaham filed a complaint for conversion in the Eastern District of Pennsylvania
on June 21, 2013.5 (App. 30a–35a). Allaham filed a proof of service for each defendant,
which he claims was done by a process server on September 10, 2013.6 (App. 36a–38a).
4
While unrelated to the conversion claim, it is notable that around this same time
as the events giving rise to the instant action, Allaham and Raouaeh’s marriage began to
fall apart. (App. 58a, 62a). Either while Allaham was in the UAE attempting to retrieve
his investment, or after he returned, Raouaeh took $13,400 out of the couple’s joint bank
account and violated a custody order by taking their child to Syria. (App. 59a–60a).
There has been an ongoing custody case in a local court in Damascus. At the evidentiary
hearing, Allaham stated that the present action was partly motivated by his hope that he
could use a judgment in the instant action as part of the custody negotiations. (App. 60a,
82a).
5
Although the District Court referred to the instant action as a breach of contract
claim, Allaham’s complaint and civil cover sheet speak in terms of the tort of conversion.
(App. 9a, 31a–34a). Allaham’s brief uses the term “converted” when describing
Appellees actions, yet also states “[t]his is a contract claim” and proceeds with his
argument stating “[i]n a contract claim . . .” (Appellant Br. 3, 13). In accordance with
Allaham’s complaint, we treat the underlying claim as a conversion action.
6
Judge Edward G. Smith noted that “service probably [was] an issue” but that it
was not his “primary concern.” (App. 49a). Judge Smith stated that while having the
process server sign that he personally served Appellees is “not permitted under the
rule . . . it can be permitted if [the Judge] authorize[s] it to be permitted,” which Judge
4
On March 20, 2014, Allaham filed a Motion for Entry of Default Judgment
pursuant to Federal Rule of Civil Procedure (“Rule”) 55(b)(1), along with a request that
the clerk of court enter a default against each Defendant pursuant to Rule 55(a). (App.
39a–46a). The District Court (Smith, E.G., J.),7 denied the motion without prejudice and
the clerk instructed Allaham to separately file a request for the entry of default, and then
Smith said he was inclined to do. (App. 49a). Although not dispositive for personal
jurisdiction, it seems likely that Appellees did not receive some of the documents in this
matter. The notices of reassignment to Judge Smith mailed to the Defendants were
returned because the addresses were incomplete. (App. 2a).
Federal Rule of Civil Procedure 4(f), which governs “serving an individual in a
foreign country,” states that:
Unless federal law provides otherwise, an individual—other than a minor, an
incompetent person, or a person whose waiver has been filed—may be served
at a place not within any judicial district of the United States:
(1) by any internationally agreed means of service that is reasonably
calculated to give notice, such as those authorized by the Hague
Convention on the Service Abroad of Judicial and Extrajudicial
Documents;
(2) if there is no internationally agreed means, or if an international
agreement allows but does not specify other means, by a method that is
reasonably calculated to give notice:
(A) as prescribed by the foreign country’s law for service in that
country in an action in its courts of general jurisdiction;
(B) as the foreign authority directs in response to a letter rogatory or
letter of request; or
(C) unless prohibited by the foreign country’s law, by:
(i) delivering a copy of the summons and of the complaint to
the individual personally; or
(ii) using any form of mail that the clerk addresses and sends
to the individual and that requires a signed receipt; or
(3) by other means not prohibited by international agreement, as the court
orders.
7
This matter, which was originally assigned to Judge Joel H. Slomsky, was
reassigned to Judge Smith in April 2014. (App. 10a).
5
a Motion for Default Judgment, in the appropriate order. (App. 10a). A week later,
Allaham made a second request for the entry of default, which the clerk entered against
each Defendant. (App. 10a). The District Court ordered Allaham to file a Renewed
Motion for Default Judgment, which he did on August 29, 2014. (App. 10a). A hearing
was scheduled, prior to which Allaham was invited to provide the District Court with
briefing supporting personal jurisdiction over Appellees. (App. 27a n.1). Allaham
submitted a brief arguing that personal jurisdiction existed prior to the hearing.
(Plaintiff’s Long-Arm Statute Br.). Following the default judgment hearing on December
12, 2014, which focused almost exclusively on Appellees’ contacts with Pennsylvania,
the District Court denied Allaham’s motion and dismissed the action for lack of personal
jurisdiction. (App. 28a–29a).
Allaham filed a Motion for Reconsideration pursuant to Rule 59(e). The District
Court denied this motion in an order and memorandum opinion issued on May 28, 2015.
(App. 8a–25a). This timely appeal followed. (App. 6a–7a). As of December 8, 2015,
Appellees have not responded to any documents served or filed in this matter.
II. Discussion8
A. Standard of Review
This Court reviews the denial of a motion for reconsideration for abuse of
discretion. Max’s Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros, 176 F.3d 669, 673 (3d
Cir. 1999). This Court exercises de novo review over a district court’s dismissal for lack
8
The District Court had jurisdiction pursuant to 28 U.S.C § 1332(a)(2). We have
jurisdiction to review final orders of a district court pursuant to 28 U.S.C. § 1291.
6
of personal jurisdiction. Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623
F.3d 147, 155 (3d Cir. 2010). Factual findings made by a district court in determining
personal jurisdiction are reviewed for clear error. Control Screening LLC v. Tech.
Application & Prod. Co., 687 F.3d 163, 167 (3d Cir. 2012).
B. Analysis
As an appeal from a denial of a Motion for Reconsideration, stemming from the
denial of a Motion for Default Judgment, this Court’s role is to determine whether the
District Court erred based on the reason Allaham asserts in his Rule 59(e) motion. There
are limited grounds on which a court will grant a Rule 59(e) Motion for Reconsideration.
To succeed on a Rule 59(e) motion, the moving party must present one, or more, of the
following: “(1) an intervening change in the controlling law; (2) the availability of new
evidence that was not available when the court granted the [motion]; or (3) the need to
correct a clear error of law or fact or to prevent manifest injustice.” U.S. ex rel. Schumann
v. Astrazeneca Pharm. L.P., 769 F.3d 837, 848–49 (3d Cir. 2014) (quoting Max’s
Seafood Cafe ex rel. Lou-Ann, Inc., 176 F.3d at 677). Allaham argues that his Motion for
Reconsideration should have been granted since the District Court “failed to recognize
that the defendants engaged in certain activities directed at Pennsylvania that supported
an exercise of such jurisdiction.” (App. 11a). The entry of default judgment is not a
matter of right, but rather a matter of discretion, which “is not without limits.” Hritz v.
Woma Corp., 732 F.2d 1178, 1180–81 (3d Cir. 1984). Because the exercise of this
discretion is contingent on a district court’s determination that it can exercise personal
jurisdiction over each defendant, and as discussed infra, the District Court did not err in
7
denying Allaham’s Motion for Reconsideration. See Budget Blinds, Inc. v. White, 536
F.3d 244, 259 (3d Cir. 2008) (stating that if a court does not have personal jurisdiction,
the entry of a default judgment is “not merely erroneous; [but] never should have been
entered in the first place”); see also Stranahan Gear Co., Inc. v. NL Indus., Inc., 800 F.2d
53, 56, 59 (3d Cir. 1986) (affirming district court’s striking of default judgment entered
against party over whom the court did not have personal jurisdiction).
1. Denial of Motion for Default Judgment
Before a plaintiff can obtain a default judgment pursuant to Rule 55(b), a plaintiff
must secure an entry of default per Rule 55(a). 10A Charles Alan Wright, Arthur R.
Miller & Mary Kay Kane, Federal Practice and Procedure § 2682, at 13 (3d ed. 1998).
Once default is entered against a specific defendant, Rule 55(b) allows the plaintiff to
request that the clerk or the court enter a default judgment against that defendant,
depending on whether the claim is for a sum certain. Id. While entry of a default
judgment is largely within a district court’s discretion, three factors control this
determination: “(1) prejudice to the plaintiff if default is denied, (2) whether the
defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to
culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000).
While unlike subject matter jurisdiction, a court generally may not raise personal
jurisdiction sua sponte, when a default judgment is requested, a court is required to make
a threshold determination regarding any jurisdictional defects. See Bolden v. Se.
Pennsylvania Transp. Auth., 953 F.2d 807, 812 (3d Cir. 1991) (citing Mansfield,
Coldwater & Lake Michigan R.R. v. Swan, 111 U.S. 379, 382 (1884)) (stating that while
8
this Court does not address issues that the parties have ignored, “[w]e are always
obligated to ensure that we have jurisdiction over the cases that come before us”). If a
court lacks personal jurisdiction over a defendant, the court does not have jurisdiction to
render a default judgment, and any such judgment will deemed void. Budget Blinds, Inc.,
536 F.3d at 258 (citing Marshall v. Bd. of Educ., 575 F.2d 417, 422 (3d Cir. 1978)); see
Hanson v. Denckla, 357 U.S. 235 (1958) (citing Pennoyer v. Neff, 95 U.S. 714, 733
(1877)) (“With the adoption of [the Fourteenth] Amendment, any judgment purporting to
bind the person of a defendant over whom the court had not acquired in personam
jurisdiction was void within the State as well as without.”). In the absence of an
evidentiary hearing, a plaintiff’s complaint need only establish a prima facie case of
personal jurisdiction. Eurofins Pharma US Holdings, 623 F.3d at 155; Metcalfe v.
Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009). However, at an evidentiary
hearing before a district court, a plaintiff bears the burden of proving that the court has
personal jurisdiction over the defendant by a preponderance of the evidence. Control
Screening LLC, 687 F.3d at 167; Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 142
n.1 (3d Cir. 1992).
In the instant case, the District Court requested counsel be prepared to discuss the
basis for personal jurisdiction at the hearing precisely because of the Court’s concern that
the allegations in the complaint did not satisfy the prima facie standard.9 (App. 16a &
9
The District Court’s order scheduling the evidentiary hearing stated that
“[c]ounsel shall be prepared to address the following: 1) The basis for the court’s
personal jurisdiction over the defendants.” A footnote appended to this direction stated
“[t]he plaintiff fails to include any allegations in the complaint relating to where the
9
n.1, 27a). When determining jurisdiction in a claim for the tort of conversion, this court
“approache[s] each case individually and take[s] a ‘realistic approach’ to analyzing a
defendant’s contacts with a forum.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 99–
100 (3d Cir. 2004) (quoting Mellon Bank (East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d
1217, 1224 (3d Cir. 1992)). Until an evidentiary hearing is held, a district court “must
accept all of the plaintiff’s allegations as true and construe disputed facts in favor of the
plaintiff.” Carteret Sav. Bank, FA, 954 F.2d at 142 n.1 (citations omitted). At the
evidentiary hearing Allaham had “the burden of demonstrating the facts that establish[ed]
personal jurisdiction.” Metcalfe, 566 F.3d at 330 (alteration omitted) (quoting Pinker v.
Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002)). The evidence Allaham presented
at the hearing failed to satisfy this burden.
2. Personal Jurisdiction
We have stated that “[a] district court sitting in diversity may assert personal
jurisdiction over a nonresident defendant to the extent allowed under the law of the forum
state.” Metcalfe, 566 F.3d at 330 (citations omitted); see Fed. R. Civ. P. 4(k)(1)(A)
(authorizing the exercise of “personal jurisdiction over a defendant who is subject to the
jurisdiction of a court of general jurisdiction in the state where the district court is
located”). In a state such as Pennsylvania, where the long-arm statute 10 allows the
parties’ purported transaction occurred. The plaintiff is invited to provide this information
to the court in writing prior to the hearing.” (App. 27a).
10
Subsection (a) of Pennsylvania’s long-arm statute states in relevant part, “A
tribunal of this Commonwealth may exercise personal jurisdiction over a person . . . who
acts directly or by an agent, as to a cause of action or other matter arising from such
person.” 42 Pa. Cons. Stat. § 5322. Subsection (b) states:
10
exercise of personal jurisdiction to the full extent permitted by the Constitution, the
standard for a federal court sitting in diversity in Pennsylvania is whether a “defendant
ha[s] ‘minimum contacts,’” such “that the “exercise of jurisdiction comport with
‘traditional notions of fair play and substantial justice.’” Remick, 238 F.3d at 255
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).
There are two distinct theories under which personal jurisdiction can arise: general
and specific. Grimes v. Vitalink Commc’ns Corp., 17 F.3d 1553, 1559 (3d Cir. 1994). A
court has general jurisdiction when a defendant has “continuous and systematic” contacts
with the forum state. O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir.
2007) (internal quotation marks omitted). A court has specific jurisdiction when a
plaintiff’s claim arises from a defendant’s actions within the forum state, such that the
defendant could “reasonably anticipate being haled into [the state’s] court[s].” Vetrotex
Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 151 (3d Cir. 1996)
(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)) (internal
quotation marks omitted).
a. General Jurisdiction
The District Court correctly determined that Appellees’ contacts with
Pennsylvania, as alleged by Allaham, are insufficient to establish general jurisdiction.
In addition to the provisions of subsection (a) the jurisdiction of the
tribunals of this Commonwealth shall extend to all persons who are not
within the scope of section 5301 (relating to [bases for personal jurisdiction
over] persons) to the fullest extent allowed under the Constitution of the
United States and may be based on the most minimum contact with this
Commonwealth allowed under the Constitution of the United States.
11
(App. 18a–19a). For general jurisdiction, the plaintiff’s claim need not be related to a
defendant’s contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 414–15 (1984). As the District Court noted, the Supreme Court has
indicated that “[f]or an individual, the paradigm forum for the exercise of general
jurisdiction is the individual’s domicile.” (App. 19a) (quoting Goodyear Dunlop Tires
Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853 (2011)) (internal quotation marks
omitted). Domicile is not the exclusive means by which to establish general jurisdiction.
However, if as the District Court observed here, a defendant’s contacts “plainly [do] not
approach” the quantity required for general jurisdiction, this Court need not inquire as to
the other means by which a defendant can satisfy general jurisdiction. (App. 19a)
(quoting Daimler AG v. Bauman, 134 S. Ct. 746, 761 n.19 (2014)) (internal quotation
marks omitted).
The District Court characterized the Long-Arm Statute Brief Allaham provided
pre-hearing as having “the thrust of a general jurisdiction argument.” (App. 18a). The
brief did not attempt to demonstrate a connection between any of Appellees’ contacts
with Pennsylvania and the present matter. Rather, the brief asserted that Pierre’s trips
between the United States and UAE were a fundamental part of the partnership and
provided the quantity of contacts necessary for general jurisdiction. (Appellant Br. 14–
15). Relying solely on an unpublished secondary source,11 Allaham maintained that the
11
Paul Dubinsky, The Reach of Doing Business Jurisdiction and Transacting
Business Jurisdiction Over Non-U.S. Individuals and Entities (Hague Conference Private
Int’l Law Working Doc. Series No. 67, 1998). In his brief on the reach of Pennsylvania’s
long-arm statute Allaham argues that it is well established that once a defendant is doing
12
presence of Pierre, as an agent of Appellees in the forum state permitted the exercise of
personal jurisdiction. (App. 20a) (citing Plaintiff’s Long-Arm Statute Br. 2–4). As the
District Court correctly noted, Allaham failed to present facts that established Pierre was
a bona fide agent, whose “actions would have been imputed to the individual defendants
as opposed to the partnership, let alone whether Pierre was even in a position where his
actions could be imputed to others.” (App. 20a). Allaham indicated in his complaint, and
at the evidentiary hearing, that Appellees are all domiciled in the UAE and provided no
other evidence indicative of “continuous and systematic contacts” with Pennsylvania.
(App. 30a, 51a).
b. Specific Jurisdiction
Based on Appellees’ contacts with Pennsylvania, as alleged on the record,
Allaham has not satisfied his burden of establishing specific jurisdiction. To satisfy the
federal due process limits adopted by the Pennsylvania long-arm statute, a defendant’s
minimum contacts are examined in relation to “the nature of the interactions and type of
jurisdiction asserted.” Telecordia Tech Inc., 458 F.3d at 177. When assessing if due
process is met, “the relationship among the defendant, the forum, and the litigation” is
crucial. Shaffer v. Heitner, 433 U.S. 186, 204 (1977). For specific jurisdiction, this Court
has stated due process necessitates the plaintiff satisfy three requirements. First, the
business in a state, they are subject to suit in that state. (Plaintiff’s Long-Arm Statute
Br.). Without reaching the merits of this assertion, we note that this argument
presupposes that Allaham has established facts supporting the assertion that Appellees
were doing business in Pennsylvania. As the District Court stated, Allaham has failed to
articulate facts demonstrating that Appellees were actually doing business in
Pennsylvania, undermining Allaham’s argument. (App. 23a).
13
plaintiff must demonstrate that the defendant “purposefully directed [its] activities at the
forum.” O’Connor, 496 F.3d at 317 (alteration in original) (internal quotation marks
omitted) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)). “Second,
the litigation must ‘arise out of or relate to’ at least one of those activities.” Id. (quoting
Helicopteros, 466 U.S. at 414). Third, if the plaintiff satisfies the first two requirements,
“a court may consider whether the exercise of jurisdiction otherwise ‘comport[s] with fair
play and substantial justice.’”12 Id. (alteration in original) (quoting Burger King Corp.,
471 U.S. at 476) (internal quotation marks omitted).
While the defendant need not be physically present in the forum to establish that
the state has personal jurisdiction over a nonresident defendant, the plaintiff must
establish that the defendant “purposefully directed . . . or otherwise purposefully avail[ed]
itself of the privilege of conducting activities within the forum State.” IMO Indus., Inc. v.
Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998) (alteration in original) (citation omitted)
(quoting Hanson, 357 U.S. at 253). This Court has declined to adopt a bright-line test to
determine if a court has specific jurisdiction over a defendant in a tort claim, and instead
“approach[es] each case individually.” O’Connor, 496 F.3d at 320 (quoting Miller Yacht
Sales, Inc., 384 F.3d at 99–100) (internal quotation marks omitted). In this inquiry, “mail
and wire communications can constitute purposeful contacts when sent into the forum.”
Telecordia Tech Inc., 458 F.3d at 177 (citing Burger King Corp., 471 U.S. at 476).
12
Since Allaham has failed to establish that Appellees purposefully directed their
activities at Pennsylvania or that the present claim arises out of the purported activities, it
is not necessary for this Court address the third step and look at the so-called “fairness”
or “reasonableness” factors set forth by the Supreme Court in World-Wide Volkswagen
Corp., 444 U.S. at 292.
14
Even viewing the long-arm brief as asserting a specific jurisdiction argument, a
reading which the District Court noted “would have taken a generous interpretation,”
Allaham was unsuccessful in articulating facts that establish purposeful availment on the
part of Appellees. (App. 19a). As the District Court aptly noted, “the factual nature of the
claim was not fleshed out in any more detail” in Allaham’s long-arm brief than in the
initial complaint. (App. 16a). In contrast to his earlier general jurisdiction argument,
Allaham’s Motion for Reconsideration asserted specific jurisdiction based on Appellees’
solicitation and acceptance of money from a Pennsylvania resident. (App. 21a). However,
at the hearing, the “evidence showed that no defendant had any relevant contact with
Pennsylvania,” including the solicitation or acceptance of money. (App. 20a).
Accordingly, Allaham’s claim fails to satisfy due process since “the [Appellees’] conduct
and connection with the forum State” are not “such that [they] should reasonably
anticipate being haled into court there.” Burger King Corp., 471 U.S. at 474 (quoting
World-Wide Volkswagen Corp., 444 U.S. at 297) (internal quotation marks omitted).
The District Court’s finding that the facts adduced at the hearing do not establish
that Appellees directed their efforts at the forum state satisfies the clear error standard of
review. Allaham’s brief argues that specific jurisdiction is satisfied because Appellees
purposefully directed their activities at Pennsylvania by approaching Allaham and
entering into a contract with him while he was in the state. (Appellant Br. 10–11).
However, as the District Court noted, Allaham testified that none of the Appellees
entered the state during the negotiation or formation stages of their oral partnership
agreement. (App. 20a). While mail and communications sent by a defendant into a forum
15
state can count as minimum contacts if part of purposeful availment, Allaham does not
assert that Appellees ever sent any communications, through any means, into the forum.
(App. 20a); see O’Connor, 496 F.3d at 317.
The existence of a website that Appellees operate and the presence of
advertisements on the Internet for Appellees’ jewelry business do not alter our
conclusion. (App. 20a). At the hearing Allaham suggested that one could hypothetically
order jewelry from Appellees’ website and have the item delivered to Pennsylvania via a
common carrier. However, Allaham testified in a follow-up question, and states in his
appellate brief, that Appellees did not at the time of the alleged agreement, nor do they
presently, sell any jewelry in the United States. (App. 17a; Appellant Br. 6). The
evidence Allaham now cites from the hearing does not demonstrate that the District Court
committed clear error in its factual finding that “no defendant had any relevant contact
with Pennsylvania.” (App. 20a).
Allaham’s reliance on Segal v. Zieleniec, the single case cited to support specific
jurisdiction in the Motion for Reconsideration, 13 and which Allaham cites again on
13
As the District Court noted in a footnote to its discussion of Segal, there are
possible procedural issues with Allaham only raising the argument that solicitation and
acceptance of money from a Pennsylvania resident establishes personal jurisdiction in his
Motion for Reconsideration. (App. 23a n.3). Allaham did not previously raise a specific
jurisdiction argument based on Segal, even though it appears this was available to him at
the time he filed his initial brief. (App. 23a n.3). As this Court has stated, motions for
reconsideration “are not to be used as an opportunity to relitigate the case.” Blystone v.
Horn, 664 F.3d 397, 415 (3d Cir. 2011). A trial court does not abuse its discretion in
denying a motion for reconsideration when the motion is not based on the three proper
Rule 59 grounds. Max’s Seafood Cafe ex rel. Lou-Ann, Inc, 176 F.3d at 678–79.
16
appeal, is misplaced. (App. 21a) (citing No. 13-cv-7493, 2014 WL 2710989 (E.D. Pa.
June 16, 2014)). Allaham presents Segal, an unreported district court opinion, as
“stand[ing] for the proposition that if a person solicits money from a Pennsylvania
resident and later accepts that money in forming a contract, that person becomes
amenable to specific jurisdiction in Pennsylvania for a breach-of-contract claim.” (App.
23a). Unlike the plaintiff in Segal, Allaham has failed to provide “evidence to support the
notion that the defendants themselves actively solicited money from the plaintiff.” (App.
23a). In fact, as the District Court suggests, “[i]f anything, the evidence points in the
opposite direction.” (App. 23a). In Segal, the court’s finding that personal jurisdiction
was proper over one defendant, but not the other, was dependent on the determination
that the defendant solicited and accepted money from a Pennsylvania resident. 2014 WL
2710989, at *4. Allaham has failed to establish that comparable facts exist in the present
case. Allaham mischaracterizes the rule Segal sets forth, expanding its scope beyond the
narrower “further purpose[ful] avail[ment]” of the laws of the forum on the basis of
which the Segal court found personal jurisdiction. See id. As the District Court
articulated, Segal’s use of “further” indicated that the acceptance of money by a
Pennsylvania resident was preceded by active solicitation. (App. 23a). Without
establishing active solicitation, the present action is distinguishable from both the facts
and legal conclusion of Segal.
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Allaham’s citation to cases which state that a defendant’s initiation of a contact
establishes personal jurisdiction in a contract claim is inapposite given the absolute dearth
of facts as to how contact was initiated in the present case. (Appellant Br. 13) (citing
Vetrotex Certaineed Corp., 75 F.3d at 147); Shanks v. Wexner, No. 02-cv-7671, 2003 WL
1343018 (E.D. Pa. Mar. 18, 2003). At the hearing Allaham did not provide any details as
to how the agreement was communicated from Appellees to his wife, or his acceptance of
Appellees’ offer back to them. Allaham only stated that his wife served as an
intermediary. (App. 17a). No specific facts as to his wife’s role in the formation of the
partnership were provided at the hearing, which further calls into question Allaham’s
insistence that the “Defendants initiated the contact and then used the Plaintiff’s wife . . .
to cement the deal.” (Appellant Br. 14). Because he does not allege any facts in support
of this assertion, we are not required to accept as true Allaham’s conclusion that
Appellees initiated the agreement. Metcalfe, 566 F.3d at 330; Eurofins Pharma US
Holdings, 623 F.3d at 156.
Although Allaham testified at the hearing that two of the brothers traveled to
Pennsylvania, he failed to establish the connection between these trips and the present
action. When questioned about Appellees’ presence in Pennsylvania, Allaham told the
District Court that Elias Nadaf had visited the state more than once. (App. 20a).
However, Allaham admitted that he did not know why Elias had traveled to
Pennsylvania, and could not connect any of these trips to the contract at issue. (App.
20a). Allaham argues that Appellees were “clearly” using Pennsylvania resident Pierre
“to get substantial monies from [Allaham].” (Appellant Br. 14). In his pre-hearing brief
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and appellate brief, Allaham refers to Pierre as an “agent” of the Appellees. (Plaintiff’s
Long-Arm Statute Br. 2–4; Appellant Br. 15). At no point however, does Allaham
attempt to demonstrate how Pierre was in fact an agent. Beyond characterizing Pierre as
the Appellees’ agent, Allaham does not provide evidence as to why Pierre was acting by
operation of law in a position capable of imputing his actions to others. Allaham merely
states that Pierre was part of the business along with Appellees. (App. 68a). In light of the
Supreme Court’s statement that “a defendant’s relationship with a plaintiff or third party,
standing alone, is an insufficient basis for jurisdiction,” Allaham’s bare legal conclusion
of agency fails to establish that Pierre was in fact an agent of the Defendants. Walden v.
Fiore, 134 S. Ct. 1115, 1123 (2014). Consequently, Allaham’s assertion that Pierre’s role
as an agent of the Appellees confers specific jurisdiction over Appellees also fails.
The District Court properly denied the Motion for Reconsideration and dismissed
the case for lack of personal jurisdiction since Allaham failed to meet the applicable
burdens of proof at both the complaint and evidentiary hearing stages.
III. Conclusion
For the foregoing reasons, we will affirm the order of the District Court dated May
28, 2015.
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