Thompson Hine, LLP v. Elicko Taieb

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 16, 2013 Decided November 12, 2013
No. 12-7009
THOMPSON HINE, LLP, AN OHIO LIMITED LIABILITY
PARTNERSHIP,
APPELLANT
v.
ELICKO TAIEB, AN INDIVIDUAL CITIZEN OF FLORIDA AND EC
DISTRIBUTION, INC.,
APPELLEES
Appeal from the United States District Court
for the District of Columbia
(No. 1:10-cv-01877)
Thomas L. Feher argued the cause for appellant. With
him on the briefs was C. Dennis Southard, IV.
Levi S. Zaslow argued the cause for appellee. With him
on the brief was Steven B. Vinick.
Before: ROGERS and TATEL, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
2
TATEL, Circuit Judge: A Florida resident retained lawyers
in an Ohio law firm’s District of Columbia office to represent
him in a matter pending in Oregon. When the client refused to
pay for services rendered, the firm sued in the United States
District Court for the District of Columbia, and the court
dismissed the case for lack of personal jurisdiction. Because
neither the retainer itself nor anything about the client’s
dealings with the law firm demonstrates that the client
“purposefully avail[ed] [him]self of the privilege of
conducting activities within the [District],” Hanson v.
Denckla, 357 U.S. 235, 253 (1958), we affirm.
I.
Appellant Thompson Hine LLP, an Ohio-based law firm,
has an office in the District of Columbia. Appellee Elicko
Taieb, a Florida resident, was, at the time of the events leading
up to this case, the majority owner, president, and CEO of
Smoking Everywhere, Inc. (SEI), a Florida corporation with its
principal place of business in Florida. Prior to its bankruptcy,
SEI imported and distributed electronic cigarettes.
In March 2009, SEI retained Thompson Hine to handle a
matter pending before the Food and Drug Administration
(FDA). Thompson Hine LLP v. Smoking Everywhere, Inc., 840
F. Supp. 2d 138, 140 (D.D.C. 2012). Written on Atlanta office
letterhead, the retainer was signed by Walt Linscott, an
attorney in the firm’s Atlanta office, and provided Linscott’s
billing rate. Taieb was not a party to the retainer. Under
Linscott’s supervision, two attorneys in the firm’s D.C. office,
Kip Schwartz and Eric Heyer, performed most of the work on
the FDA matter. Taieb met with Schwartz, Heyer, and Linscott
in the D.C. office to discuss the matter prior to attending a
court hearing. In the end, Thompson Hine’s work was
apparently successful, as it obtained a preliminary injunction
against the FDA. Id. at 146.
 3
Later that year, the firm entered into a second retainer—
“the Oregon retainer”—this time with both SEI and Taieb,
pertaining to an action brought against them by the Attorney
General of Oregon alleging violations of the state’s Unlawful
Trade Practices Act. Taieb signed this retainer in his individual
capacity. Addressed to Ray Story, SEI’s vice president, the
Oregon retainer, though written by Schwartz on the firm’s
D.C. office letterhead, was faxed from Atlanta. The retainer
included contact information for Linscott, provided billing
rates for Schwartz, Heyer, and another D.C.-based attorney,
and specified that the firm would deposit the $10,000 retainer
in a special account designated under Ohio law. According to
their declarations, Schwartz and Heyer performed all work on
the Oregon matter in the firm’s D.C. office and “exchanged at
least ten emails related to the FDA action and the Oregon
action.” Decl. of Eric Heyer 2.
Thompson Hine billed SEI and Taieb $480,000 for the
work on both matters. After paying the firm some $100,000,
they stiffed it for the rest. The firm then filed suit in the United
States District Court for the District of Columbia against both
SEI and Taieb. Attached to the complaint was Thompson
Hine’s final bill for both the FDA and Oregon matters. Written
on Atlanta office stationary, the bill identifies Linscott as the
supervising attorney and lists nineteen outstanding invoices for
work on the two matters.
SEI and Taieb moved to dismiss for lack of personal
jurisdiction, arguing that they had “little or no contacts with the
District of Columbia.” Mem. in Supp. of Defs.’ Mot. to
Dismiss 8. The district court, finding the parties’ briefs largely
conclusory, carefully and thoroughly reviewed the record in
light of factors the courts have established for determining
whether a non-resident’s contacts with the forum are sufficient
to ensure that “the maintenance of the suit does not offend
4
traditional notions of fair play and substantial justice.”
International Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (internal quotation marks omitted). The record includes
the FDA and Oregon retainers, Thompson Hine’s final bill,
declarations by Schwartz, Heyer, and Taieb, and records from
the FDA litigation. Calling this a “close case,” and finding that
Thompson Hine “ha[d] not met its burden to prove that the
Court has personal jurisdiction over either defendant,” the
district court dismissed the complaint. Thompson Hine, 840 F.
Supp. 2d at 147–49.
Thompson Hine appeals. Because SEI is now bankrupt,
the firm presses this appeal only against Taieb. See Thompson
Hine, LLP v. Smoking Everywhere, Inc., No. 12-7009 (D.C.
Cir. July 26, 2012) (Order Dismissing Appeal). We review de
novo the district court’s dismissal for lack of personal
jurisdiction. FC Investment Group LC v. IFX Markets, Ltd.,
529 F.3d 1087, 1091 (D.C. Cir. 2008).
II.
“To establish personal jurisdiction over a non-resident, a
court must . . . first examine whether jurisdiction is applicable
under the state’s long-arm statute and then determine whether
a finding of jurisdiction satisfies the constitutional
requirements of due process.” GTE New Media Services, Inc.
v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000).
Under the District of Columbia’s long-arm statute, courts
located in the District may exercise personal jurisdiction over
any individual who “transact[s] any business in the District of
Columbia.” D.C. Code § 13-423. Because we have interpreted
these words “to provide jurisdiction to the full extent allowed
by the Due Process Clause[,] the statutory and constitutional
jurisdictional questions, which are usually distinct, merge into
a single inquiry”: would exercising personal jurisdiction
accord with the demands of due process? United States v.
5
Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995). A court’s
jurisdiction over a defendant satisfies due process when there
are “minimum contacts,” International Shoe, 326 U.S. at 316,
between the defendant and the forum “such that he should
reasonably anticipate being haled into court there,”
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297
(1980). Such minimum contacts must show that “the defendant
purposefully avail[ed] [him]self of the privilege of conducting
activities within the forum State, thus invoking the benefits and
protections of its laws.” Hanson, 357 U.S. at 253.
Two decisions guide our resolution of this case. The first,
Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985),
involved a suit by Burger King, a Florida corporation, against a
Michigan franchisee who had signed a 20-year contract with
Burger King. In considering whether the Florida court had
personal jurisdiction over the Michigan franchisee, the
Supreme Court began by making clear that an individual’s
contract with a non-resident “alone” cannot “automatically
establish sufficient minimum contacts in the other party’s
home forum.” Id. at 478 (internal citations omitted). The Court
also rejected “mechanical tests,” adopting instead a “highly
realistic” approach that examines “prior negotiations and
contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing” to determine
“whether the defendant purposefully established minimum
contacts within the forum.” Id. at 479 (internal citations and
quotation marks omitted). The contacts with the forum, the
Court explained, must “proximately result from actions by the
defendant himself that create a ‘substantial connection’ with
the forum State.” Id. at 475 (internal citations omitted). “Thus,
where the defendant ‘deliberately’ has engaged in significant
activities within a State or has created ‘continuing obligations’
between himself and residents of the forum, he manifestly has
availed himself of the privilege of conducting business there”
6
such that “it is presumptively not unreasonable to require him
to submit to the burdens of litigation in that forum as well.” Id.
at 475–76 (internal citations omitted).
Applying these principles, the Supreme Court concluded
that the franchisee had “established a substantial and
continuing relationship with Burger King’s Miami
headquarters [and] received fair notice from the contract
documents and the course of dealing that he might be subject to
suit in Florida.” Id. at 487. The franchisee had deliberately
“reached out . . . and negotiated with a Florida corporation”
and voluntarily entered into “a carefully structured 20-year
relationship that envisioned continuing and wide-reaching
contacts.” Id. at 479–480 (internal citations and quotation
marks omitted). In addition to paying Burger King a
substantial fee, the franchisee had “agree[d] to submit to
[Burger King’s] exacting regulation of virtually every
conceivable aspect of [its] operations.” Id. at 465. Specifically,
from its offices in Miami Burger King had imposed a series of
specific requirements on its franchisees relating to, among
other things, accounting and insurance practices, hours of
operation, and building layout, as well as the quality,
appearance, and taste of menu items. Id. at 465 n.4. Moreover,
“various franchise documents provid[ed] that all disputes
would be governed by Florida law.” Id. at 481. “[W]hen
combined with the 20-year interdependent relationship [the
franchisee] established with Burger King’s Miami
headquarters,” these choice-of-law provisions “reinforced his
deliberate affiliation with the forum State and the reasonable
foreseeability of possible litigation there.” Id. at 482. Finding
that “the ‘quality and nature’ of [the franchisee’s] relationship
to the company in Florida can in no sense be viewed as
‘random,’ ‘fortuitous,’ or ‘attenuated,’” id. at 480 (quoting
Hanson, 357 U.S. at 253), the Court concluded that the
7
“exercise of jurisdiction . . . did not offend due process,” id. at
487.
The second case, this Court’s decision in Health
Communications, Inc. v. Mariner Corp., 860 F.2d 460 (D.C.
Cir. 1988), involved a Texas hotel management firm that had
retained the services of a District of Columbia-based company
to provide training to its employees. Following more than eight
months of telephone conversations and correspondence, the
parties signed a contract pursuant to which the D.C. company
conducted four workshop sessions in several locations outside
the District. Id. at 462. The D.C. company also distributed
manuals, graded exams, issued certificates, and corresponded
with the Texas firm—all from its District office. Id. When the
Texas firm failed to pay for the training services, the D.C. firm
sued, and the district court dismissed the case for lack of
personal jurisdiction over the Texas firm. Id. We affirmed,
concluding that the parties’ relationship was “narrowly
specialized” and that the D.C. company’s activities in the
District “[did] not begin to approach, in either scope or
importance, those that Burger King performed in Florida on
behalf of its out-of-state franchisee.” Id. at 463–64. Thus, the
Texas firm never “‘avail[ed] itself of the privilege of
conducting activities within the forum.’” Id. at 464 (quoting
Hanson, 357 U.S. at 253).
With Burger King and Health Communications in mind,
we return to the retainers at issue in this case. As Thompson
Hine concedes, because Taieb was not a party to the FDA
retainer and because this appeal no longer concerns SEI, the
only question before us is whether personal jurisdiction is
proper over Taieb with respect to the Oregon matter.
Thompson Hine nonetheless insists that the FDA matter
remains relevant because “[d]uring the course of the FDA
action, Taieb . . . developed a relationship” with Schwartz and
8
Heyer, whom he later “reached out to and retained” for the
Oregon matter. Appellant’s Br. 15. But as the district court
found, “the only two meetings that took place in the District in
connection with [the FDA] engagement were actually
meetings with [Linscott],” and Schwartz and Heyer simply
“assist[ed] him.” Thompson Hine, 840 F. Supp. 2d at 147. Any
“relationship” that Taieb developed during the FDA matter
was therefore with Thompson Hine and Linscott, not with the
firm’s D.C.-based lawyers, whose names appear nowhere in
the FDA retainer, and nothing in this “relationship”
demonstrates that Taieb “purposefully directed his activities at
residents of the forum.” Burger King, 471 U.S. at 472 (internal
quotation marks omitted). We therefore agree with the district
court that “the showing for [personal] jurisdiction as to [Taieb]
turns almost exclusively on his execution of the second
engagement letter”—the Oregon retainer. Thompson Hine, 840
F. Supp. 2d at 148.
Taieb argues that even the Oregon retainer provides no
basis for personal jurisdiction because his signature on it was
forged. Appellee’s Br. 7 n.3. But asked at oral argument where
Taieb had made this argument in the district court, counsel
pointed only to a line in Taieb’s affidavit that says nothing at
all about forgery. See Decl. of Elicko Taieb ¶ 9 (“I did not sign
any contracts with the plaintiff in this matter within the District
of Columbia or in Atlanta, Georgia.”). The argument is
therefore forfeited. See Meijer, Inc. v. Biovail Corp., 533 F.3d
857, 867 (D.C. Cir. 2008) (“Absent a showing that ‘injustice
might otherwise result,’ and the plaintiffs offer none, we do not
entertain an argument made for the first time on appeal.”)
(internal citations omitted).
According to Thompson Hine, the Oregon retainer on its
own is enough to establish “minimum contacts” with the
District because it demonstrates that Taieb “knowingly
9
retained” D.C. lawyers whom he had “reason to know” would
work in the District. Appellant’s Br. 14–15. But as Burger
King makes clear, in evaluating whether a contract establishes
“minimum contacts” we must look beyond the mere existence
of the contract to the parties’ “prior negotiations and
contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing,” 471 U.S. at
479, paying particular attention to whether “actions by the
defendant himself,” id. at 475, demonstrate that he
“purposefully availed himself of the benefits” of conducting
business in the forum, id. at 488 (internal quotations omitted).
Viewed through that lens, Taieb’s engagement of Thompson
Hine falls short of establishing the requisite “minimum
contacts” with the District. For one thing, the retainer, which
Taieb signed outside the District, pertains to a matter in
Oregon, and nothing in the retainer itself requires that the firm
perform work or receive payment in the District. Further,
Linscott supervised the Oregon matter from Atlanta and
although we must credit Schwartz and Heyer’s statements that
they performed their work in the District, the record contains
no evidence of any meetings, phone calls, or emails between
Taieb and the firm’s D.C.-based lawyers concerning the
Oregon matter, other than Heyer’s vague statement that he
“exchanged at least ten emails [with Taieb] related to [both]
the FDA action and the Oregon action.” Decl. of Eric Heyer ¶
9. Nor does the retainer contain a choice-of-law provision or
provide for consent to suit in the District. “While such
provisions are clearly not dispositive under Burger King, their
presence can be indicative of the parties’ own perceptions of
their degree of contact with a particular forum.” Health
Communications, 860 F.2d at 464 n.2. Finally, according to the
invoice dates, Taieb’s engagement of Thompson Hine
pursuant to the Oregon retainer lasted at most seven months.
Not only is this shorter than the arrangement in Health
Communications and a small fraction of the duration of the
10
franchise agreement in Burger King, but the entire relationship
between Taieb and Thompson Hine reflects none of the
“continuing and wide-reaching” contacts that provided a basis
for personal jurisdiction in Burger King. See Burger King, 471
U.S. at 480. Quite to the contrary, the Oregon matter is far
more like the “narrowly specialized” association at issue in
Health Communications. Besides signing the Oregon retainer,
neither Taieb’s own conduct nor the retainer’s “contemplated
future consequences,” Burger King, 471 U.S. at 479, “touched
the District in any way,” Health Communications, 860 F.2d at
464. To be sure, Schwartz and Heyer worked on the Oregon
matter from their offices in the District of Columbia, but the
D.C.-based company in Health Communications also
performed work in the District. Echoing Health
Communications, we therefore “cannot say that [Taieb]
‘avail[ed] [him]self of the privilege of conducting activities
within the forum.” Id. at 464 (quoting Hanson, 357 U.S. at
253).
Thompson Hine, which did not get around to citing
Burger King until its reply brief and never even acknowledges
Health Communications, instead relies on a series of decisions
by various courts of the District of Columbia that it claims
“have universally held that personal jurisdiction exists over a
nonresident who knowingly retains District of Columbia
counsel who will perform legal services for the nonresident in
the District.” Appellant’s Br. 16. But in two of these cases,
both federal court decisions, the contacts were far more
extensive than those between Taieb and Thompson Hine. See
Koteen v. Bermuda Cablevision, Ltd., 913 F.2d 973, 975 (D.C.
Cir. 1990) (upholding exercise of personal jurisdiction over
non-resident who retained plaintiff D.C. law firm, visited firm
multiple times, and “extensively communicat[ed] with it by
telephone and by mail”); Law Offices of Jerris Leonard P.C. v.
Mideast Sys., Ltd., 630 F. Supp. 1311, 1313 (D.D.C. 1986)
11
(retaining personal jurisdiction over non-residents who had
multiple meetings with plaintiff D.C. lawyers in the District,
where alleged fraud took place).
The other decisions Thompson Hine cites all come from
the D.C. Court of Appeals. We certainly understand why
Thompson Hine relies on them, as they are highly protective of
law firms based in the District of Columbia, sustaining the
exercise of personal jurisdiction even when contacts between
the law firm and client are slim. The first case, Mouzavires v.
Baxter, 434 A.2d 988 (D.C. 1981) (en banc), involved a
Florida law firm that hired a D.C. patent attorney to assist in a
matter pending in Florida. Although the parties agreed that the
D.C. attorney would work primarily in the District, they had
few other contacts. The D.C. Court of Appeals nonetheless
found the exercise of personal jurisdiction appropriate because
the Florida law firm had “voluntarily initiated, and entered
into, a contract with one they knew to be located in the District
and engaged in a transaction which had a substantial
connection with the District and which they foresaw would
have consequences here.” Id. at 997. The contacts in Digital
Broadcast Corp. v. Rosenman & Colin, LLP, 847 A.2d 384
(D.C. 2004), were even more limited. There, a non-resident
company that retained a D.C.-based attorney specializing in
securities regulation had no additional contact with the
District. Again sustaining the exercise of personal jurisdiction
over the non-resident, the Court of Appeals considered the case
essentially indistinguishable from its previous decision in
Fisher v. Bander, 519 A.2d 162 (D.C. 1986), where it had
upheld the exercise of personal jurisdiction over a non-resident
company that had purposefully solicited and retained D.C.
counsel specializing in matters before the Federal
Communications Commission and attended just one meeting
in the District. See Digital Broadcast Corp., 847 A.2d at 391;
see also Fisher, 519 A.2d 162, 164–65 (D.C. 1986).
12
Thompson Hine argues that Mouzavires, Digital
Broadcast, and Fisher establish that personal jurisdiction over
a non-resident is proper where, as here, the non-resident
deliberately retained D.C. counsel and should therefore have
anticipated that services would be performed in the District.
But in exercising jurisdiction over defendants with such
limited relationships to the District, these cases—or at least
Thompson Hine’s characterization of them—appear to have
adopted the very kind of “mechanical test” that Burger King
expressly rejected. In essence, they allow a contract with a
non-resident to “automatically” qualify as a “minimum
contact” without examining whether contacts arising either
from the contract itself or from actual dealings between the
parties demonstrated that the non-resident “purposefully
avail[ed] [him]self of the privilege of conducting activities
within the forum State.” 471 U.S. at 475 (quoting Hanson, 357
U.S. at 253). To be clear, under some circumstances the terms
of a contract may well create such a “substantial connection”
between the non-resident and the forum that the contract
“alone” could supply the necessary “minimum contacts.” Id. at
475–76. The “wide-reaching” and “exacting” franchise
agreement in Burger King did just that. Id. at 480; see also
McGee v. International Life Insurance Co., 355 U.S. 220, 223
(1957) (holding that “Due Process Clause did not preclude the
California court from entering a judgment” against a Texas
company when “the suit was based on a contract which had
substantial connection with that State”). But this is a very
different case. As explained above, neither the Oregon retainer
nor Taieb’s dealings with Thompson Hine demonstrates that
Taieb “purposefully avail[ed] [him]self of the privilege of
conducting activities” in the District. Burger King, 471 U.S. at
475 (internal quotation marks and citations omitted). Taieb’s
mere retention of attorneys in the District of Columbia is
insufficient. As we put it in Health Communications, “a
purchaser who selects an out-of-state seller’s goods or services
13
based on their economic merit does not thereby purposefully
avail itself of the seller’s state law [or] submit to the laws of the
jurisdiction in which the seller is located.” 860 F.2d at 465;
accord Hanson, 357 U.S. at 253 (“The unilateral activity of
those who claim some relationship with a nonresident
defendant cannot satisfy the requirement of contact with the
forum State.”).
We therefore disagree with Thompson Hine that the
district court had personal jurisdiction over Taieb simply
because the firm performed work for him in the District. As the
D.C. Court of Appeals itself explained in a pre-Mouzavires
case, that position would effectively “remove any protection
which the due process clause affords a nonresident defendant.”
Environmental Research International, Inc. v. Lockwood
Greene Engineers, Inc., 355 A.2d 808, 812 (D.C. 1976) (en
banc). In language seemingly tailor-made for this case, the
court continued, “The mere fact that a nonresident has retained
the professional services of a District of Columbia firm,
thereby setting into motion the resident party’s own activities
within this jurisdiction, does not constitute an invocation by
the nonresident of the benefits and protections of the District’s
laws.” Id. Indeed, the dissent in Mouzavires
concluded—properly in our view—that this language “should
have been dispositive.” 434 A.2d at 1002 (Newman, C.J.,
dissenting).
In sum, after examining the “quality and nature of
[Taieb’s] activities,” we agree with the district court that he
never “purposefully avail[ed] [him]self of the privilege of
conducting activities” within the District. Hanson, 357 U.S. at
253. A non-resident’s mere retention of a D.C.-based service
provider, absent any other deliberate contact with the
forum—demonstrated either by the terms of the contract itself
or by the non-resident’s actual dealings with the
14
District—cannot qualify as a “minimum contact.” If Taieb’s
engagement of Thompson Hine were sufficient to subject him
to the personal jurisdiction of the courts of the District of
Columbia, “then it is hard to imagine that anyone entering into
a contract for the provision of goods or services by an
out-of-state party could avoid being haled into court in the
seller’s forum.” Health Communications, 860 F.2d at 463.
III.
For the foregoing reasons, we affirm.
So ordered.