Metcalfe v. Renaissance Marine I

Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
5-21-2009
Metcalfe v. Renaissance Marine I
Precedential or Non-Precedential: Precedential
Docket No. 08-1720
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 08-1720
RICHARD METCALFE;
CYNTHIA METCALFE,
Appellants
v.
RENAISSANCE MARINE, INC.
On Appeal from the District Court of the Virgin Islands
Division of St. Thomas
(D.C. No. 07-cv-00131)
District Judge: Honorable Curtis V. Gomez
Argued December 10, 2008
Before: FISHER, JORDAN
and STAPLETON, Circuit Judges.
(Filed: May 21, 2009)
Ashlee M. Gray (Argued)
Gregory H. Hodges
Dudley, Topper & Feuerzeig
1000 Frederiksberg Gade
St. Thomas, VI 00802
Attorneys for Appellants
Alan R. Feuerstein (Argued)
Feuerstein & Smith
17 St. Louis Place
Buffalo, NY 14202-1502
Attorney for Appellee
OPINION OF THE COURT
FISHER, Circuit Judge.
This appeal involves a dispute as to whether the District
Court of the Virgin Islands erred in dismissing the plaintiffs’
complaint for lack of personal jurisdiction after determining that
the Virgin Islands Long-Arm Statute did not reach the defendant
and that constitutional due process was not satisfied. Because
the District Court failed to construe disputed facts in favor of the
plaintiffs, as it was required to do at the motion to dismiss stage,
we conclude that it erred in ruling that the plaintiffs were unable
to demonstrate a prima facie case in support of the exercise of
personal jurisdiction over the defendant. Therefore, we will
reverse and remand to the District Court with instructions that
2
it allow the plaintiffs an opportunity to conduct jurisdictional
discovery.
I.
A. Factual History
Richard and Cynthia Metcalfe are residents of the United
States Virgin Islands. In April 2006, the Metcalfes purchased a
Renaissance Prowler 246 powerboat, two engines, and other
equipment from Renaissance Marine, Inc. (Renaissance) for
approximately $85,000. Renaissance is a corporation organized
under the laws of Florida with its principal place of business in
Miami, Florida.
Beyond the aforementioned facts, the parties offer
materially different versions of the events that led to this current
lawsuit. The Metcalfes allege that they became familiar with
Renaissance boats by renting them from See & Ski, a powerboat
rental company located on St. Thomas. They aver that See &
Ski has at least four boats in its rental fleet that it purchased
from Renaissance within a period of six years. Additionally,
they contend that Renaissance advertises on its website that its
boats can be rented from See & Ski in the Virgin Islands.
According to the Metcalfes, Renaissance has sold at least seven
boats to Virgin Islands residents in the past few years. The
Metcalfes state that while they were in St. John, they negotiated
the sale of the Prowler 246 with Renaissance by telephone, fax,
and the internet. They assert that Renaissance was fully aware
that the ultimate destination of the Prowler 246 was the Virgin
3
Islands and that Renaissance shrink-wrapped the boat for
shipping and took it to the shipper for the Metcalfes.
In contrast, Renaissance contends that the Metcalfes
traveled to Miami where they purchased the Prowler 246.
Renaissance also states that all of its sales, including this one,
are governed by a ten-year limited warranty and a purchase
agreement with additional terms and conditions. Renaissance
specifically notes that the warranty contains a forum selection
clause which provides that the interpretation and enforcement of
the warranty is governed by Florida law and that any action shall
be brought in Miami-Dade County.1
Concerning the warranty, the Metcalfes assert that
Renaissance contacted them in the Virgin Islands one month
after they received delivery of the Prowler 246 in an effort to
have them sign the warranty, which they refused to do. The
Metcalfes state that the warranty was never presented to them
1
The pertinent part of the warranty states:
“Venue and Jurisdiction. The laws of the State of
Florida shall govern the interpretation and
enforcement of this Hull Warranty. Any action
under this Hull Warranty shall be brought in the
courts of the state of Florida, situated in Miami-
Dade County, Florida. Purchaser and
Renaissance Marine, Inc. agree and admit that
each is engaged in and conducts business in the
State of Florida and therefore each is subject to
jurisdiction in Florida.”
4
until after the sale was complete and that one reason why they
did not sign it is because they did not agree with the forum
selection clause.
On December 25, 2006, the Metcalfes discovered that the
Prowler 246 had partially sunk. They had a marine surveyor
assess the defects in the Prowler 246 and the likely cause of the
sinking. The Metcalfes shared the findings in the surveyor’s
report with Renaissance, and although the company initially
proposed to cure the problems with the Prowler 246 in the
Virgin Islands and subsequently offered to transport it to Florida
to make the necessary repairs, no remedy was ultimately
provided.
B. Procedural History
On October 15, 2007, the Metcalfes brought suit in the
District Court of the Virgin Islands alleging breach of express
warranty, breach of implied warranties, breach of the covenant
of good faith and fair dealing, misrepresentation, and liability
under the Magnuson-Moss Warranty–Federal Trade
Commission Improvement Act. On November 29, 2007,
Renaissance moved to dismiss the matter for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure
12(b)(2). On December 13, 2007, the parties stipulated to an
extension of time for the Metcalfes to oppose the motion to
dismiss, giving them until December 21, 2007, to do so. The
parties orally stipulated to an additional extension of time on
December 20, 2007, allowing the Metcalfes until January 9,
2008, to file an opposition to the motion to dismiss, but counsel
for the Metcalfes neglected to file this stipulation with the
5
District Court. Consequently, on January 2, 2008, the District
Court issued an order dismissing the matter because of the
Metcalfes’ failure to meet their burden of establishing the
District Court’s jurisdiction over Renaissance.
Notwithstanding the District Court’s order, on January 9,
2008, the Metcalfes filed an opposition to Renaissance’s motion
to dismiss and also filed a motion for reconsideration arguing
that the order should be vacated to correct clear error and
prevent manifest injustice. Renaissance subsequently filed a
reply to the opposition to the motion to dismiss and an
opposition to the motion to reconsider. Renaissance also filed
a motion to supplement its original motion to dismiss.
In an effort to prevent further overlapping and conflicting
pleadings, the District Court held a status conference on
February 6, 2008. The District Court determined that it would
consider the Metcalfes’ opposition to Renaissance’s motion to
dismiss because, despite the oversight by the Metcalfes’
counsel, ignoring their opposition would prejudice them. Thus,
the District Court decided to reopen the case to determine
whether dismissal of the complaint was appropriate; however,
the District Court concluded that it would not consider any
filings submitted after the status conference and instead would
rule directly on the motion to dismiss, giving consideration to
the Metcalfes’ opposition to the motion.2
2
The Metcalfes assert that the District Court did not
communicate this decision to them at the status conference.
6
Following the status conference, the Metcalfes and
Renaissance nonetheless both continued to submit filings to the
District Court. Specifically, the Metcalfes filed a reply to
Renaissance’s opposition to the motion for reconsideration and
a document entitled a “Notice of Filing of Supplemental
Declaration of Richard Metcalfe with Previously Omitted
Exhibits.” Renaissance filed a motion to amend its opposition
to the motion for reconsideration.
On February 15, 2008, the District Court ruled on
Renaissance’s motion to dismiss, and indicated in a footnote in
its memorandum opinion that it did not consider these additional
filings. The District Court determined that the Metcalfes failed
to meet their burden of showing that jurisdiction over
Renaissance was appropriate under the Virgin Islands Long-
Arm Statute and, even if the statute was somehow satisfied,
failed to show that the exercise of jurisdiction over Renaissance
would comport with constitutional due process. Because the
District Court concluded that it did not have personal
jurisdiction over Renaissance, it did not reach the other grounds
for dismissal that Renaissance asserted in its motion. The
Metcalfes filed a timely notice of appeal.
II.
As an initial matter, Renaissance argues that the District
Court lacks subject matter jurisdiction over this entire action
because the Metcalfes’ complaint does not meet the threshold
amount of $75,000 required in a diversity action under 28
7
U.S.C. § 1332.3 Renaissance argues that an appraisal of the
Metcalfes’ damages reveals that their losses only amount to
$16,533.39. We reject this argument because, in addition to the
itemized “out of pocket expenditures” which the $16,000 figure
represents, the Metcalfes also seek rescission of the contract for
the sale of the Prowler 246, and thus make a claim for more than
$85,000 in damages. Accordingly, the District Court has subject
matter jurisdiction over this action pursuant to 28 U.S.C. § 1332because the Metcalfes are domiciled in the Virgin Islands,
Renaissance is domiciled in Florida, and the Metcalfes’
complaint sets forth a good faith claim in excess of $75,000.
See St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283,
288-89 (1938). There is also an independent basis for subject
matter jurisdiction over the Metcalfes’ Magnuson-Moss
Warranty Act claim pursuant to 15 U.S.C. § 2310(d)(1)(B).
We have jurisdiction over this appeal from the District
Court’s final order pursuant to 28 U.S.C. § 1291. “Whether
personal jurisdiction may be exercised over an out-of-state
defendant is a question of law,” Mellon Bank (East) PSFS, N.A.
v. DiVeronica Bros., Inc., 983 F.2d 551, 554 (3d Cir. 1993), and
therefore we will exercise plenary review over the District
Court’s determination that it lacked personal jurisdiction in the
present case. See Pinker v. Roche Holdings Ltd., 292 F.3d 361,
368 (3d Cir. 2002).
III.
3
Under 48 U.S.C. § 1612(a), the District Court of the
Virgin Islands has diversity jurisdiction to the full extent as
provided for in 28 U.S.C. § 1332.
8
The central issue in this appeal is whether the District
Court erred when it determined that it could not exercise
personal jurisdiction over Renaissance, a nonresident defendant.
However, Renaissance argues that we need not reach this issue
because the Metcalfes are contractually prohibited from bringing
their claims in any jurisdiction other than Florida as a result of
a valid, binding forum selection clause contained in its warranty.
The problem with this argument is that Renaissance failed to
establish that the Metcalfes ever agreed to this warranty. The
Metcalfes claim that Renaissance contacted them one month
after they received delivery of the Prowler 246 and, at that point
in time, solicited their signature in order to execute the warranty.
Although Renaissance attached a copy of the warranty to an
affidavit, it does not bear the signature of either Richard or
Cynthia Metcalfe and Renaissance makes no attempt to explain
why a signature is not present. Consequently, it appears that the
warranty was not incorporated into the sales contract but was a
separate agreement to which the Metcalfes did not assent.
We recognize that some tension exists between the
Metcalfes’ assertion that they were not bound by the warranty
because they never signed it and allegations in their complaint
with respect to “Renaissance’s product support, service and
warranty programs,” but, in light of the current posture of this
case, it is best for the District Court to resolve the factual dispute
as to whether the warranty applied to the sale between
Renaissance and the Metcalfes. The District Court did not
address this issue at the time it granted the motion to dismiss,
and therefore we will not reach it either. Instead, we will focus
our analysis on the question of whether the District Court may
exercise personal jurisdiction over Renaissance.
9
A. Assessing a Motion to Dismiss
for Lack of Personal Jurisdiction
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. See, e.g., Time Share Vacation
Club v. Atl. Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984).
Establishing personal jurisdiction in the Virgin Islands involves
a two-part analysis.4 First, there must be a statutory basis for
exercising jurisdiction over the nonresident defendant in
accordance with the Virgin Islands Long-Arm Statute, V.I. Code
Ann. tit. 5, § 4903, and second, the nonresident defendant must
have minimum contacts with the Virgin Islands sufficient to
satisfy constitutional due process.5 See In re Kelvin Manbodh
Asbestos Litig. Series, 47 V.I. 267, 279 (Super. Ct. 2005)
4
As our dissenting colleague points out, there is caselaw
which states that the reach of the Virgin Islands Long-Arm
Statute is coextensive with the maximum parameters of the Due
Process Clause and therefore concludes that only constitutional
due process considerations are relevant to determine whether
personal jurisdiction can be exercised over a nonresident
defendant, see Urgent v. Tech. Assistance Bureau, Inc., 255 F.
Supp. 2d 532, 535-36 (D.V.I. 2003), but we think it best to
consider the statutory bases for exercising long-arm jurisdiction
in addition to the constitutional requirements in order to ensure
that we are honoring “the law of the forum state.”
5
Section 3 of the Revised Organic Act of 1954, 48 U.S.C.
§ 1561, makes the Due Process Clause applicable to the Virgin
Islands.
10
(“[T]he Court’s in personam jurisdiction is limited first by the
terms of the [long-arm] statute and then by the Due Process
Clause of the Fourteenth Amendment to the Constitution.”);
Godfrey v. Int’l Moving Consultants, Inc., 18 V.I. 60, 66 (D.V.I.
1980) (“The proper method of testing jurisdiction over a
nonresident defendant is to first determine whether the long-arm
statute authorizes the Court to exercise its adjudicatory powers,
and then secondly, to decide if such an exercise is
constitutionally permissible.”). The District Court determined
that the Metcalfes failed to meet their burden of showing that the
exercise of jurisdiction over Renaissance was permissible
because they relied on their own “self-serving declaration”
which was “simply insufficient.” However, the District Court
reached this determination without applying the proper standard
for evaluating a motion to dismiss for lack of personal
jurisdiction.
“[T]he burden of demonstrating the facts that establish
personal jurisdiction,” falls on the plaintiff, Pinker, 292 F.3d at
368, and “once a defendant has raised a jurisdictional defense,”
the plaintiff must “prov[e] by affidavits or other competent
evidence that jurisdiction is proper.” Dayhoff Inc. v. H.J. Heinz
Co., 86 F.3d 1287, 1302 (3d Cir. 1996). If the district court does
not hold an evidentiary hearing, “the plaintiff[s] need only
establish a prima facie case of personal jurisdiction.” O’Connor
v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007)
(alterations in original) (internal quotation marks omitted).
Moreover, “[i]t is well established that in deciding a motion to
dismiss for lack of jurisdiction, a court is required to accept the
plaintiff’s allegations as true, and is to construe disputed facts in
favor of the plaintiff.” Toys “R” Us, Inc. v. Step Two, S.A., 318
11
F.3d 446, 457 (3d Cir. 2003); accord O’Connor, 496 F.3d at 316(explaining that prior to an evidentiary hearing or trial, “the
plaintiff[s] [are] entitled to have [their] allegations taken as true
and all factual disputes drawn in [their] favor” (alterations in
original) (internal quotation marks omitted)). “Of course, by
accepting a plaintiff’s facts as true when a motion to dismiss is
originally made, a court is not precluded from revisiting the
issue if it appears that the facts alleged to support jurisdiction
are in dispute.” Carteret Sav. Bank, FA v. Shushan, 954 F.2d
141, 142 n.1 (3d Cir. 1992).
Here, the Metcalfes did not merely rest on their pleadings
but rather submitted a sworn affidavit and other documentary
evidence in support of a finding of personal jurisdiction over
Renaissance. Nonetheless, without holding an evidentiary
hearing, the District Court discredited this evidence when it
stated:
“[S]ave for the contract for the [Prowler 246], the
Metcalfes have not come forward with any
competent evidence that Renaissance deliberately
targeted Virgin Islands residents. The Court is
left with the fact that the Metcalfes contacted a
Florida corporation regarding the purchase of a
product from that corporation in Florida.”
The District Court also construed disputed facts against the
Metcalfes, which is reflected in the following statement:
“To the extent the Metcalfes again rely on the
declaration attached to their opposition, the
12
Metcalfes still fail to meet their burden. That
declaration contains several statements that
purport to show that Renaissance ‘reached out’ to
the Virgin Islands. . . . Here, again, the Metcalfes’
exclusive reliance on bald assertions set forth in a
declaration is misplaced for the purpose of
establishing personal jurisdiction.”
These excerpts demonstrate that the District Court did not
apply the proper standard for evaluating the motion to dismiss
for lack of personal jurisdiction. Although the Metcalfes needed
to make a threshold showing in support of jurisdiction, they
were entitled to have their allegations viewed as true and have
disputed facts construed in their favor. See O’Connor, 496 F.3d
at 316; Toys “R” Us, 318 F.3d at 457. Instead, the District
Court credited Renaissance’s factual allegations and construed
disputed facts in its favor, as if Renaissance were the nonmoving
party. In doing so, the District Court committed error by failing
to apply the correct standard for evaluating personal jurisdiction
at this stage of the litigation.
Our task, therefore, is to determine whether the Metcalfes
have established a prima facie case that the exercise of
jurisdiction over Renaissance is consistent with the Virgin
Islands Long-Arm Statute and constitutional due process,
assuming the sworn allegations that appear in the Metcalfes’
affidavit and the other documentary evidence on record are true
and construing factual disputes in their favor.
13
B. Interpreting the Virgin Islands Long-Arm Statute
Turning to the statutory bases for exercising jurisdiction
over a nonresident defendant, the Metcalfes argue that
subsection (a)(1) and subsection (a)(2) of the Virgin Islands
Long-Arm Statute apply to the facts of this case. The relevant
portions of the statute state:
“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
(1) transacting any business in this
territory;
(2) contracting to supply services or
things in this territory[.]”
V.I. Code Ann. tit. 5, § 4903(a).
“Under subsection (a)(1), the term ‘transacting any
business’ can be satisfied by only a single act which in fact
amounts to the transaction of business within the state or
territory.” Fin. Trust Co. v. Citigroup, 268 F. Supp. 2d 561, 567
(D.V.I. 2003) (internal quotation marks omitted) (finding it
sufficient under subsection (a)(1) that the defendant entered into
a contract with a Virgin Islands resident and solicited the
plaintiffs while they were in the Virgin Islands). “[T]ransacting
business is a term that connotes activity that is less than doing
business, but more than an inconsequential act.” In re Kelvin
Manbodh Asbestos Litig. Series, 47 V.I. at 283; see also
14
Paradise Motors, Inc. v. Toyota de Puerto Rico, Corp., 314 F.
Supp. 2d 495, 498 & n.4 (D.V.I. 2004) (finding participation in
some business activity in the Virgin Islands coupled with the
receipt of substantial revenue from the activity sufficed to
establish the application of subsection (a)(1) of the long-arm
statute).
The District Court concluded that subsection (a)(1) could
not be applied to reach Renaissance, finding it significant that
the Metcalfes did “not claim that they signed the
contract in the Virgin Islands, that Renaissance delivered the
[Prowler 246] to them in the Virgin Islands, or that Renaissance
performed any part of the contract in the Virgin Islands.”
However, the District Court’s exclusive focus on the contract
was misplaced because the proper focus of the subsection (a)(1)
analysis should be on whether Renaissance engaged in any act
that might constitute “transacting business” in the Virgin
Islands.
The evidence submitted by the Metcalfes, if true,
supports the application of subsection (a)(1). In particular, the
Metcalfes assert that Renaissance exchanged phone calls, faxes,
and emails with the Metcalfes while they were in the Virgin
Islands during the process of negotiating the sale of the Prowler
246. In a footnote, the District Court dismissed the evidence
regarding these negotiations as “too sparse . . . to make any
determination about their substantiality.” However, under
Virgin Islands law, “a single act which in fact amounts to the
transaction of business” satisfies subsection (a)(1). Fin. Trust
Co., 268 F. Supp. 2d at 567 (internal quotation marks omitted).
15
Because one single act can constitute “transacting business,”
surely repeated, reciprocal communications between a buyer in
the Virgin Islands and a seller located elsewhere which
culminate in an agreement for the sale of an item at a cost of
nearly $85,000 also satisfies the standard under subsection
(a)(1). Therefore, accepting the Metcalfes’ evidence as true and
construing disputed facts in their favor, we conclude that they
have met their burden, at this stage, of establishing that
subsection (a)(1) applies by showing that Renaissance transacted
business in the Virgin Islands and that their claims arise out of
this transaction.
In the alternative, subsection (a)(2) may provide an even
stronger statutory basis for exercising long-arm jurisdiction over
Renaissance. The only requirement of subsection (a)(2) “is that
the contract be performed, at least in part, in the Virgin Islands
and that the cause of action arise out of the contract.”
Buccaneer Hotel Corp. v. Reliance Int’l Sales Corp., 17 V.I.
249, 255 (Terr. Ct. 1981). When a defendant is aware that the
Virgin Islands is the ultimate destination of the goods it is
supplying, the contract is said to be performed (at least in part)
in the Virgin Islands. See id. at 256 (concluding, in an action
brought by a resident buyer against a nonresident seller, that
subsection (a)(2) reached the nonresident defendant because
“the defendant made the arrangements for shipment and knew
the goods were being shipped directly to [the] plaintiff in the
Virgin Islands. There is no question that the contract was
performed, at least in part, in the Virgin Islands.”); Four Winds
Plaza Corp. v. Caribbean Fire & Assocs., 48 V.I. 899, 910
(D.V.I. 2007) (finding the defendant “was fully aware that the
ultimate destination for the equipment was the Virgin Islands”
16
because of indications in a sales proposal and payment check
that the goods would be delivered in St. Thomas). Focusing on
the precise language of the statute, the Buccaneer court
emphasized that “the subsection . . . bases jurisdiction on a
contract ‘to supply’ services or things,” noting that “the verb
‘supply,’ rather than ‘deliver’ or ‘ship,’ was selected as a basis
for jurisdiction by the drafters of the statute.” 17 V.I. at 256.
In an affidavit, Richard Metcalfe stated: “When
purchasing the [Prowler 246], I informed Renaissance that it
would be kept in the Virgin Islands, so Renaissance was fully
aware that the ultimate destination of the [Prowler 246] was the
Virgin Islands. Renaissance even wrapped the [Prowler 246] for
shipping and took it to the shipper.” However, the District
Court determined that this declaration was not competent
evidence and therefore could not be relied on to find that
subsection (a)(2) applied. The District Court stated:
“Renaissance asserts in its reply that the
Metcalfes, not Renaissance, arranged for
shipping. That assertion appears to conflict with
the Metcalfes’ version of events. Thus, there
appears to be a factual dispute over whether
Renaissance in fact knew that the Virgin Islands
was the ultimate destination for the [Prowler 246].
Where there is a factual dispute, the burden is on
the plaintiff to prove that jurisdiction is
permissible. . . . Here, the Metcalfes have
adduced no competent evidence to refute
Renaissance’s claim that the Metcalfes handled
shipping.”
17
Contrary to what the District Court stated, it was not the
Metcalfes’ burden to resolve factual disputes at this phase of the
litigation. As previously discussed, although the Metcalfes had
the burden of making a prima facie showing that jurisdiction
was proper, they were entitled to have their allegations viewed
as true and have disputed facts construed in their favor.6
Accepting the Metcalfes’ evidence as true and construing
disputed facts in their favor, we conclude that Renaissance was
aware that the ultimate destination of the Prowler 246 was the
Virgin Islands and therefore the contract was performed, at least
in part, in the Virgin Islands. See Buccaneer, 17 V.I. at 255-56.
Because this action arises out of the contract for the sale of the
Prowler 246, the Metcalfes have met their burden at this stage
of the litigation of showing that subsection (a)(2) applies. Thus,
when we consider the evidence set forth by the Metcalfes under
the proper standard for evaluating a motion to dismiss for lack
6
Moreover, there was additional evidence that the District
Court did not consider because the Metcalfes submitted it after
the February 6, 2008 status conference. Although we do not
rely on this evidence in reaching our conclusion, we note that it
further evinces Renaissance’s knowledge that the Prowler 246
was destined for the Virgin Islands and thereby supports finding
the application of subsection (a)(2). For example, the Metcalfes
state that Renaissance did not withhold Florida sales tax on the
sale of the Prowler 246 based on its understanding that the boat
was purchased for export to the Virgin Islands, and that both an
invoice and a “Manufacturer’s Statement of Origin” from
Renaissance listed the Metcalfes’ address as St. John, Virgin
Islands.
18
of personal jurisdiction, we conclude that both subsection (a)(1)
and subsection (a)(2) provide a statutory basis for exercising
long-arm jurisdiction over Renaissance.7
C. Satisfying Constitutional Due
Process Through Minimum Contacts
In addition to demonstrating the applicability of the
Virgin Islands Long-Arm Statute, the Metcalfes also must show
that the exercise of personal jurisdiction over Renaissance
satisfies constitutional due process. The due process inquiry
involves an assessment as to “whether ‘the quality and nature of
the defendant’s activity is such that it is reasonable and fair to
require [that it] conduct [its] defense in that state.’” Time Share
Vacation Club, 735 F.2d at 63 (alterations in original) (quoting
Kulko v. Super. Court of Cal., 436 U.S. 84, 92 (1978)). As a
threshold matter, the defendant must have taken “action . . .
purposefully directed toward the forum State.” Pinker, 292 F.3d
7We recognize that in order to satisfy constitutional due
process, a contract, “without more, is insufficient to establish
minimum contacts,” as are “informational communications” in
furtherance of a contract. See Sunbelt Corp. v. Noble, Denton
& Assocs., Inc., 5 F.3d 28, 32 (3d Cir. 1993). For this reason,
we consider additional evidence of Renaissance’s contacts with
the Virgin Islands in order to evaluate whether the exercise of
personal jurisdiction over Renaissance comports with due
process. At this point in the analysis, our dissenting colleague’s
views diverge from our own with respect to whether the
Metcalfes have alleged more than just the existence of a contract
alone to demonstrate the necessary minimum contacts.
19
at 370 (quoting Asahi Metal Indus. Co. v. Super. Court of Cal.,
480 U.S. 102, 112 (1987) (plurality opinion)). Accordingly, the
due process analysis focuses on the nonresident defendant’s
“minimum contacts” with the forum. Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 474 (1985).
Minimum contacts can be analyzed in the context of
general jurisdiction or specific jurisdiction. A court may
exercise general jurisdiction over a defendant where he or she
has “continuous and systematic” contacts with the forum,
whether or not those contacts are related to the plaintiff’s cause
of action. Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 416 (1984); BP Chems. Ltd. v. Formosa Chem. &
Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000). Specific
jurisdiction exists if the defendant has “‘purposefully directed’
his activities at residents of the forum and the litigation results
from alleged injuries that ‘arise out of or relate to’ those
activities.” Burger King Corp., 471 U.S. at 472 (internal
citation omitted). “If the defendant ‘maintain[s] continuous and
substantial forum affiliations,’ then general jurisdiction exists.
If the defendant’s contacts fall short of that standard, then at
least one contact must give rise or relate to the plaintiff’s claim.”
O’Connor, 496 F.3d at 321 (internal citation omitted). Because
general and specific jurisdiction are “analytically distinct
categories,” id., we consider the facts relevant to each category
separately.
The Metcalfes argue that the District Court may exercise
either general or specific jurisdiction over Renaissance. The
District Court reasoned that “[t]he facts of this case do not
support a general jurisdiction analysis” because “the Metcalfes’
20
claims are directly related to Renaissance’s sale of a boat to
Virgin Islands’ residents.” While it is true the Metcalfes’ claims
are directly related to Renaissance’s sale of the Prowler 246 to
them, general jurisdiction can be exercised regardless of whether
the contacts relate to the plaintiff’s cause of action and,
consequently, persuasive evidence that the Metcalfes introduced
of the general business contacts that Renaissance has with the
Virgin Islands was overlooked. See Helicopteros, 466 U.S. at
416; BP Chems. Ltd., 229 F.3d at 259.
Specifically, the Metcalfes alleged that Renaissance sold
at least four powerboats to a Virgin Islands rental company and
advertised on its website that its boats could be rented from this
local company, and also alleged that Renaissance sold at least
seven powerboats to Virgin Islands residents in recent years.
Moreover, the Metcalfes argued in the District Court that
“Renaissance has created continuing obligations by offering a
10 year warranty program,” which is consistent with
Renaissance’s own assertion that “all purchase agreements
entered into by and between Renaissance and its customers are
subject to a Ten Year Limited Hull Warranty.” As a result,
Renaissance has obligated itself to its customers in the Virgin
Islands for many years to come. Renaissance’s sales and
advertising demonstrate a pattern of contacts with the Virgin
Islands and, when coupled with the ten-year warranty that
Renaissance purports to offer with every sale, tend to suggest
ongoing business relationships between Renaissance and Virgin
Islands residents. Thus, when these contacts are viewed
21
cumulatively, as opposed to in isolation, they tend to support the
exercise of general personal jurisdiction over Renaissance.8
Although this evidence, if true, does not signal that
Renaissance has an overwhelming presence in the Virgin
Islands, it does suggest that Renaissance has maintained the type
of “continuous and systematic” contacts needed to find general
jurisdiction. See Hendrickson v. Reg O Co., 657 F.2d 9, 15 (3d
Cir. 1981) (“The fact that the sales and other contacts are not
expansive is simply a reflection of the reality that the
jurisdiction itself is a small one, and market demands may not
be great. The continuing conduct of the defendant is purposeful
activity intended to preserve and enlarge an active, though
small, market in the Virgin Islands.”); Samad v. High Soc’y
8
We consider these contacts to be the most relevant to our
general jurisdiction analysis and note that some of the
allegations discussed by our dissenting colleague relate to either
the applicability of the long-arm statute or to establishing
specific jurisdiction and therefore do not detract from our
conclusion. Furthermore, in light of the standard for reviewing
a motion to dismiss for lack of personal jurisdiction, we do not
think it is appropriate to infer that these recurring contacts are
solely the product of unilateral activity on the part of Virgin
Islands residents. To the contrary, this pattern of contacts can
fairly be viewed as a deliberate targeting or purposeful
availment of the Virgin Islands as a market for Renaissance’s
powerboats rather than as a mere coincidence. Consequently,
Renaissance was on notice that it could be haled into court in the
Virgin Islands and requiring it to defend suit there should not
come as a surprise.
22
Magazine, 20 V.I. 554, 557 (D.V.I. 1984) (“To deny jurisdiction
over such a defendant merely because its local sales constitute
a small percentage of its total sales would be to deny a resident
plaintiff the protection of the laws and courts of this Territory
merely because the population of this Territory is limited. This
the Due Process Clause does not require.”). Therefore, in the
context of assessing the sufficiency of a nonresident defendant’s
contacts with a small jurisdiction such as the Virgin Islands, we
conclude that, at this stage in the litigation, the Metcalfes have
made at least a prima facie showing that general jurisdiction
may be exercised over Renaissance.
Because we conclude that the Metcalfes have made this
threshold showing, we will not consider whether the facts, when
construed in favor of the Metcalfes, also support a finding of
specific jurisdiction.
D. Conducting Jurisdictional Discovery
The Metcalfes also contend that the District Court erred
by failing to grant discovery on the question of personal
jurisdiction. Although we conclude that the Metcalfes have
successfully demonstrated a prima facie case of personal
jurisdiction over Renaissance sufficient to survive the Rule
12(b)(2) motion to dismiss, it remains within the District Court’s
province to weigh the evidence in support of jurisdiction and,
after doing so, revisit the jurisdictional issue. See Carteret Sav.
Bank, FA, 954 F.2d at 142 n.1 (“Of course, by accepting a
plaintiff’s facts as true when a motion to dismiss is originally
made, a court is not precluded from revisiting the issue if it
appears that the facts alleged to support jurisdiction are in
23
dispute.”). Because the Metcalfes will eventually need to
establish jurisdiction by a preponderance of the evidence, see id.
at 146, the opportunity to conduct jurisdictional discovery is
likely to benefit them in this pursuit.
The Supreme Court instructs that “where issues arise as
to jurisdiction or venue, discovery is available to ascertain the
facts bearing on such issues.” Oppenheimer Fund, Inc. v.
Sanders, 437 U.S. 340, 351 n.13 (1978). We have explained
that if “the plaintiff’s claim is not clearly frivolous [as to the
basis for personal jurisdiction], the district court should
ordinarily allow discovery on jurisdiction in order to aid the
plaintiff in discharging that burden.” Compagnie Des Bauxites
de Guinee v. L’Union Atlantique S.A. D’Assurances, 723 F.2d
357, 362 (3d Cir 1983). Furthermore, we have found
jurisdictional discovery particularly appropriate where the
defendant is a corporation. See id. In Compagnie, we quoted
with approval the reasoning of the Court of Appeals for the First
Circuit, which stated:
“‘A plaintiff who is a total stranger to a
corporation should not be required, unless he has
been undiligent, to try such an issue on affidavits
without the benefit of full discovery. If the court
did not choose to hear witnesses, this may well
have been within its province, but in such event
plaintiff was certainly entitled to file such further
interrogatories as were reasonably necessary and,
if he wished, to take depositions.’”
24
Id. (quoting Surpitski v. Hughes-Keenan Corp., 362 F.2d 254,
255-56 (1st Cir. 1966)).
Based on our analysis of this case, we find that the
Metcalfes’ claim is certainly not frivolous and we recognize that
they are faced with the difficult task of trying to establish
personal jurisdiction over a corporation. Accordingly, we
conclude that the Metcalfes ought to have the opportunity to
conduct jurisdictional discovery before the District Court makes
a final determination with respect to whether it may exercise
jurisdiction over Renaissance.9 We assign no error to the
District Court with respect to the lack of discovery on the
question of jurisdiction, but on remand, we instruct the District
Court to allow discovery to help facilitate the resolution of the
jurisdictional issue.
The Metcalfes also argue that the District Court erred
when it declined to consider any of the documents filed after the
status conference. They contend that the District Court should
have considered their additional filings and affidavits because
these submissions were timely and provided additional evidence
that the exercise of jurisdiction over Renaissance is permissible.
9
Although the Metcalfes never formally moved for
jurisdictional discovery, they did mention the possibility of
conducting such discovery in their opposition to the motion to
dismiss when they stated: “[S]hould this Court want additional
evidence regarding Renaissance’s contacts with the Virgin
Islands, the Metcalfes should be allowed to engage in discovery
limited to the issue of personal jurisdiction.” This document
was among the parties’ filings that the District Court considered.
25
Because the District Court has considerable discretion in this
realm and “in light of the procedural jumble in which this matter
found itself,” we cannot conclude that the District Court abused
its discretion when it explained that its decision was motivated
by an attempt to prevent further confusion as a result of the
parties’ conflicting and overlapping filings. See Kiser v. Gen.
Elec. Corp., 831 F.2d 423, 426 (3d Cir. 1987) (“The decision of
a district court to grant or deny leave to amend is reviewed only
for an abuse of discretion.”). The Metcalfes’ argument is even
less convincing when we consider the fact that they never
actually moved to amend their previous filings. Under the
circumstances, the District Court was within its discretion when
it declined to consider both the Metcalfes’ and Renaissance’s
additional submissions. Nonetheless, on remand, the parties will
have an additional opportunity to present any omitted evidence
to the District Court.
IV.
We hold that the District Court erred in granting
Renaissance’s motion to dismiss for lack of personal
jurisdiction. When the evidence presented by the Metcalfes is
evaluated under the correct standard at this stage of the
litigation, we conclude that they are able to make a prima facie
showing that the Virgin Islands Long-Arm Statute applies to
Renaissance and that the exercise of jurisdiction over
Renaissance is consistent with the Due Process Clause.
Therefore, we will reverse and remand to the District Court to
allow the Metcalfes to conduct jurisdictional discovery before
the District Court conclusively decides whether exercising
jurisdiction over Renaissance is permissible.
26
METCALFE v. RENAISSANCE MARINE, INC. – No. 08-1720
STAPLETON, Circuit Judge, dissenting:
I agree with my colleagues that the District Court
possessed subject matter jurisdiction and that, given the absence
of an evidentiary hearing, it erred in failing to accept as true the
facts alleged by the Metcalfes. In my view, however, even
accepting those facts, the District Court’s conclusion that it
lacked personal jurisdiction was correct.
A district court sitting in diversity applies the law of the
forum state in determining whether personal jurisdiction is
proper. Fed. R. Civ. P. 4(c). The reach of the long arm statute
of the Virgin Islands was intended by its legislature to be
coextensive with the maximum parameters of the Due Process
Clause. Urgent v. Tech. Assistance Bureau, 255 F. Supp. 2d 532(D.V.I. 2003). We therefore look to federal Due Process law to
determine Renaissance’s susceptibility to personal jurisdiction
in the Virgin Islands. Vetrotex Certainteed Corp. v. Consol.
Fiber Glass Prods. Co., 75 F.3d 147 (3d Cir. 1996). We
summarized that law in Vetrotex, 75 F.3d at 150-51:
The due process limit to the exercise of
personal jurisdiction is defined by a two-prong
test. First, the defendant must have made
constitutionally sufficient “minimum contacts”
with the forum, Burger King Corp. v. Rudzewicz,
471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85
27
L.Ed.2d 528 (1985) (the “constitutional
touchstone” of personal jurisdiction is “whether
the defendant purposefully established ‘minimum
contacts’ in the forum State”). The determination
of whether minimum contacts exist requires an
examination of “the relationship among the
forum, the defendant and the litigation,” Shaffer
v. Heitner, 433 U.S. 186, 204, 97 S. Ct. 2569,
2580, 53 L.Ed.2d 683 (1977), in order to
determine whether the defendant has
“‘purposefully directed’” its activities toward
residents of the forum. Burger King, 471 U.S. at
472, 105 S. Ct. at 2182 (quoting Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774, 104 S. Ct.
1473, 1478, 70 L.Ed.2d 790 (1984)). There must
be “some act by which the defendant purposefully
avails itself of the privilege of conducting
activities within the forum State, thus invoking
the benefits and protections of its laws.” Hanson
v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228,
1240, 2 L.Ed.2d 1283 (1958). Second, if
“minimum contacts” are shown, jurisdiction may
be exercised where the court determines, in its
discretion, that to do so would comport with
“traditional notions of fair play and substantial
justice.” International Shoe Co. v. Washington,
326 U.S. 310, 66 S. Ct. 154, 90 L.Ed.2d 95(1945); Farino, 960 F.2d at 1222.
My analysis begins with an indisputable proposition. In
applying these principles, it “is well established . . . that a
28
nonresident’s contracting with a forum resident, without more,
is insufficient to establish the ‘minimum contacts’ required for
an exercise of personal jurisdiction over the nonresident.”
Sunbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d 28, 32 (3d
Cir. 1993) (emphasis supplied). See also Vetrotex, 75 F.3d at
151.
It is also important in the current context to stress at the
outset that it is the defendant who must be shown to have
engaged in some affirmative act by which he “purposefully
avails [himself] of the privilege of conducting activities in the
forum state, thus invoking the benefit and protection of its
laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). As the
Supreme Court explained in Hanson, 357 U.S. at 253 (emphasis
supplied):
The unilateral activity of those who claim some
relationship with a nonresident defendant cannot
satisfy the requirement of contact with the forum
State . . . . it is essential in each case that there be
some act by which the defendant purposefully
avails itself of the privilege of conducting
activities within the forum State, thus invoking
the benefits and protection of its laws.
The facts usually found to constitute “the more”
necessary to subject a nonresident who contracted with a forum
resident to the jurisdiction of the forum court are notably absent
here. Renaissance is not alleged to have ever had an office,
29
employee or other representative in the Virgin Islands for any
purpose. Nor is it alleged to have engaged in sales to
distributors or other third parties who sell Renaissance vessels
in the Virgin Islands. Further, it is not alleged to have
advertised its vessels in the Virgin Islands media or to have in
any other way solicited from the Metcalfes or anyone else in the
Virgin Islands an offer to purchase a vessel. Finally,
Renaissance is not alleged to have shipped any product into the
Virgin Islands for sale or, indeed, for any other purpose. The
most that is alleged is that it “shrink wrapped” a vessel in its
home state of Florida and delivered it to the Metcalfes’ shipper
at a port in Florida.
As a substitute for the customary allegations, the
Metcalfes insist that they have made five allegations that must
be accepted as true and that provide the required “more” than
the existence of a contract with a forum resident. I am
unpersuaded.
The Metcalfes’ first and primary argument is based on
their allegation that, while Renaissance did not ship the vessel
into the Virgin Islands, it “was fully aware that the ultimate
destination of the Vessel was the Virgin Islands.” App. at 86.
The only relevant issue, however, is what Renaissance did in the
Virgin Islands. Accordingly, I would hold that its knowledge of
what the vessel’s purchasers intended to do with it after the
purchase is irrelevant.10 It is difficult to imagine a contract of
10
To the extent that Four Winds Plaza Corp. v. Caribbean
Fire & Assoc., 48 V.I. 899 (D.V.I. 2007), and Buccaneer Hotel
Corp. v. Reliance Int’l Sales Corp., 17 V.I. 249 (Terr. Ct.
30
sale between a forum nonresident and a forum resident where
the nonresident seller does not have reason to believe that the
ultimate destination of the goods will be the forum. Yet, we
know that such a contract is not alone enough to subject the
seller to the personal jurisdiction of the forum court.
Second, the Metcalfes rely upon their allegation that they
first became familiar with the type of vessel they ultimately
bought when they rented one in the Virgin Islands from See &
Ski, a boat rental firm. They do not claim any relationship
between Renaissance and See & Ski, however, other than that
the latter from time to time purchases vessels from the former
for use in the latter’s rental business. The leasing by a Virgin
Islands boat rental firm of a Renaissance built vessel owned by
the rental firm can hardly be viewed as an act by Renaissance
“invoking the benefits and protections of” Virgin Islands law.
Next, the Metcalfes emphasize that they “negotiated the
sale from St. John, primarily via the telephone, telefax and the
internet.” App. at 86. Once again, however, they focus on the
wrong party. The Metcalfes make no allegation that
Renaissance dispatched anything to the Virgin Islands in
whatever discourse led up to the one-time purchase contract. To
be sure, it is reasonable to infer from the Metcalfes’ alleged use
of interstate communication facilities and the alleged existence
of a contract that Renaissance’s acceptance of the Metcalfes’
offer may have been communicated through such facilities to
them in the Virgin Islands. But not every telephone call into the
1981), can be read to suggest the contrary, I would overrule
those cases.
31
forum state constitutes the kind of “reaching out” to the forum
state that subjects a nonresident to its jurisdiction. Burger King,
471 U.S. at 479. In Budget Blinds, Inc. v. White, 536 F.3d 244(3d Cir. 2008), for example, we determined that the fact that the
parties negotiated an agreement by telephone and mail with the
plaintiff remaining in the forum state did not support a finding
of minimum contacts with that state. We noted “an important
distinction between the negotiations in Burger King and those
in [Budget Blinds in] that the Burger King defendant actively
sought contract negotiations with a company based in the forum
state,” whereas in Budget Blinds, there was no indication that
the non-forum resident had reached out to anyone in the forum.
Budget Blinds, 536 F.3d at 261. Likewise, in the present case,
the fact that reciprocal communications may have occurred
between Renaissance and the Metcalfes is not sufficient to
establish that Renaissance purposely “reached out” to the Virgin
Islands where Renaissance is not alleged to have actively sought
contract negotiations with the Metcalfes there.
Fourth, the Metcalfes point to the Renaissance website,
attaching as Exhibit A a “copy of link entitled ‘Contact Other
Owners.’” App. at 88 (emphasis supplied). As the title of the
link suggests, however, Exhibit A cannot accurately be viewed
as supporting the Metcalfes’ contention that “Renaissance
advertises the rental of its vessels on St. Thomas on its website.”
Id. Exhibit A consists of a list of the names of people who have
previously purchased vessels from Renaissance along with their
email addresses. On the first page, fifteen such vessel owners
are listed along with a suggestion that anyone who currently
owns a Renaissance vessel and who wants to talk to “other
owners” contact them through the addresses provided. Only one
32
listed owner, See & Ski, appears to be from the Virgin Islands.
App. at 89.
We articulated the controlling principle here in Toys “R”
Us, Inc. v. Step Two, S.A., 318 F.3d 446, 454 (3d Cir 2003), as
follows:
As Zippo and the Courts of Appeals
decisions indicate, the mere operation of a
commercially interactive web site should not
subject the operator to jurisdiction anywhere in
the world. Rather, there must be evidence that the
defendant “purposefully availed” itself of
conducting activity in the forum state, by directly
targeting its web site to the state, knowingly
interacting with residents of the forum state via its
web site, or through sufficient other related
contacts.
Exhibit A is not targeted at the Virgin Islands. If it be
regarded as targeted at all, it is targeted at anyone anywhere in
the world who owns a Renaissance vessel and has an interest in
communicating with “other” Renaissance vessel owners. If that
targeting is sufficient, Renaissance’s website has subjected it to
personal jurisdiction anywhere in the world that a Renaissance
vessel owner resides, a result that seems inconsistent with Toys
“R” Us.
Finally, the Metcalfes rely upon their allegation that
during some past period of unspecified duration “Renaissance
has sold approximately 7 vessels to Virgin Islands residents.”
33
App. at 87. At least three are said to have been sold to See &
Ski. This is, of course, not relevant to whether the District Court
can exercise specific personal jurisdiction over Renaissance
given that the Metcalfes’ claim does not arise from those
transactions. Conceivably, however, these seven sales might
provide a foundation upon which to build a prima facie case of
general personal jurisdiction (i.e., the presence of currently
existing, “continuous and systematic” contacts with the forum,
Remick v. Manfredy, 238 F.3d 248, 255 (3d Cir. 2001)).
Nevertheless, in the absence of any indication as to when the
seven sales were made and whether, unlike the sale to the
Metcalfes, they involved some Renaissance activity in the
forum, I conclude that the Metcalfes have not come close to
alleging a prima facie case of general personal jurisdiction.11
11
While the Metcalfes do not so allege, my colleagues
note that “Renaissance avers that ‘all purchase agreements
entered into by and between Renaissance and its customers are
subject to a Ten Year Limited Hull Warranty.’” Op. at 19. That
warranty provides that (1) Renaissance will repair defects in
workmanship and/or materials without cost to the purchaser, (2)
“[a]ny expense for delivery of the boat to the manufacturer for
repair will be paid for by the Purchaser,” (3) the “laws of the
State of Florida shall govern the interpretation and enforcement
of this Hull Warranty,” (4) “[a]ny action under this Hull
Warranty shall be brought in the courts of the state of Florida,”
and (5) the “remedies contained in the warranty constitute the
sole recourse of Purchaser against Seller for breach of any of
Seller’s obligations under [the] warranty agreement.” App. at
43. Thus, while it may be true that Renaissance has entered into
warranty contracts with residents of the Virgin Islands, the
34
The only remaining issue is whether we should remand
to provide the Metcalfes with an opportunity for jurisdictional
discovery. Toys “R” Us provides the controlling test:
If a plaintiff presents factual allegations that
suggest “with reasonable particularity” the
possible existence of the requisite “contacts
between [the party] and the forum state,” Mellon
Bank (East) PSFS, Nat’l Ass’n v. Farino, 960
F.2d 1217, 1223 (3d Cir. 1992), the plaintiff’s
right to conduct jurisdictional discovery should be
sustained.
Toys “R” Us, 318 F.3d at 456. I read “with reasonable
particularity” to mean that if a plaintiff suggests a realistic basis
for believing that personal jurisdiction exists, he or she should
be allowed to pursue discovery before having to prove that such
jurisdiction does exist. In my judgment, the Metcalfes have not
met this threshold. But it is not necessary to so hold. The
Metcalfes have never requested jurisdictional discovery in the
District Court, and it would clearly be unfair to Renaissance to
allow them to successfully insist upon it in the course of this
appeal.
I would affirm the judgment of the District Court.
warranty obligations are to be performed in Florida and hardly
can be said to provide the “more” necessary to subject
Renaissance to the personal jurisdiction of the District Court.
35