Targetsmart Holdings, LLC v. Ghp Advisors, LLC

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
TARGETSMART HOLDINGS, LLC, )
and TARGETSMART COMMUNICATIONS, )
LLC, )
)
Plaintiffs, ) CIVIL ACTION NO.
) 18-11365-DPW
v. )
)
GHP ADVISORS, LLC, d/b/a GOOD )
HARBOR PARTNERS, and CATALIST LLC, )
)
Defendants. )
MEMORANDUM AND ORDER
February 6, 2019
This case arises out of an agreement between the
Plaintiffs, TargetSmart Holdings, LLC and TargetSmart
Communications, LLC (together, “TargetSmart”), and the
Defendant, GHP Advisors, LLC, doing business as Good Harbor
Partners (“GHP”), to explore opportunities for TargetSmart to
partner or merge with other companies engaged in similar
business. The arrangement with GHP, TargetSmart alleges, was a
scheme to induce TargetSmart to disclose confidential and
proprietary information to benefit its competitor, the
Defendant, Catalist, LLC (“Catalist”).
TargetSmart brought this action against GHP and Catalist
under both federal and state law for misappropriation of trade
secrets, unjust enrichment, and breach of contract.
Remaining before me following the filing of an amended
complaint is the motion [Dkt. No. 38] by Catalist to dismiss the
complaint for lack of personal jurisdiction, or in the
alternative, to transfer the case to the District of Columbia,
and to dismiss for failure to state a claim.
I. BACKGROUND
A. The Parties.
TargetSmart Holdings, LLC is a technology and consulting
company that specializes in providing campaigns, candidates, and
organizations with data and software to expand their audience
base. [Dkt. No. 36 at ¶ 11]. It is a Delaware Limited
Liability Company with its principle place of business in
Washington, DC. [Id. at ¶ 1]. TargetSmart Communications, LLC,
is a wholly owned subsidiary of TargetSmart Holdings and is also
a Delaware Limited Liability Company with its headquarters in
Washington, DC. [Id. at ¶ 2].
GHP is a Massachusetts Limited Liability Company
headquartered in Boston. [Id. at ¶ 3].
Catalist, LLC is a Delaware Limited Liability Company
headquartered in Washington, DC. [Id. at ¶ 4]. Like
TargetSmart, Catalist specializes in helping Democratic and
progressive candidates reach wider audiences. [See id. at 1,
Introduction Statement, ¶¶ 18, 35].
2
This case can be said to have been brought pursuant to this
court’s federal question jurisdiction, 28 U.S.C. § 1331, because
TargetSmart’s claim of violation of the Federal Defend Trade
Secrets Act appears to predominate. [Dkt. No. 36 at ¶ 82].
Since the state law claims arise out of the same set of factual
circumstances, I may exercise supplemental jurisdiction to hear
those claims, even in the absence of complete diversity of the
parties. See generally 28 U.S.C. § 1367.
B. Factual Background
As reflected in the operative pleading, the Second Amended
Complaint, the facts are as follows.
1. The Agreement Between GHP and Catalist
On November 3, 2017, GHP entered into an agreement with
Catalist to advise the company “in connection with the potential
acquisition of a specified, pre-identified target company.”
[Dkt. No. 36 at ¶ 13; Dkt. No. 39-1, Exhibit 1, GHP Engagement
Letter (hereinafter “Letter Agreement”), at 2]. The “target
company” was TargetSmart, [Dkt. No. 36 at ¶ 14], and the
agreement provided that GHP would conduct due diligence of the
target company as “mutually determined to be appropriate.”
[Dkt. No. 39-1, Letter Agreement at 2, § 2(a)]. It also
required GHP to keep Catalist “informed of the activities
undertaken by GHP . . . and all performances of Services
required of GHP” under the terms of the Agreement. [Id. at 4,
3
§ 6].
The Letter Agreement stated that GHP was not an employee or
agent of Catalist, and instead was working as an “independent
contractor.” [Id. at 4, § 6]. TargetSmart alleges that
Catalist entered into the agreement with GHP in order to acquire
its confidential business information, [Dkt. No. 36 at ¶ 18],
and that it directed, ratified, or otherwise had a right to
control GHP’s interactions with TargetSmart. [Id. at ¶ 20].
2. GHP Approaches TargetSmart
In December 2017, GHP approached TargetSmart about a
potential “business opportunity.” [Id. at ¶¶ 21-24]. During
the initial call on December 13, 2017, GHP represented to
TargetSmart that it had been retained by individual political
donors who wanted to combine TargetSmart and other companies to
improve and streamline the data infrastructure available to
Democratic and progressive candidates. [Id. at ¶ 24]. As a
result of the conversation, TargetSmart and GHP entered into a
Mutual Nondisclosure Agreement (“Mutual NDA”) to allow the
parties to exchange non-public, confidential, and proprietary
information. [Id. at ¶¶ 27-28; see also Dkt. No. 39-2, Exhibit
2, Form Nondisclosure Agreement from TargetSmart]. The Mutual
NDA prevented both parties from using or disclosing confidential
information without the other’s prior written consent. [Id. at
¶¶ 29-30]. In its amended motion to dismiss, Catalist provided
4
this court with a copy of a form Nondisclosure agreement listing
TargetSmart as one of the parties. [Dkt. No. 39-2, Exhibit 2].
However, I observe this copy of the NDA does not include the
name or signature of the other party to the agreement.
At GHP’s request, and in anticipation of a meeting on
December 21, 2017 in Boston, TargetSmart sent GHP a memorandum
which included confidential and proprietary information about
its data, products, services, platforms, and software, as well
as information about its finances and possible growth
opportunities. [Dkt. No. 36 at ¶¶ 31-32]. The memorandum
stated that the information was protected by the Mutual NDA.
[Id. at ¶ 32].
At the December 21st meeting, GHP again told TargetSmart
that it represented wealthy donors, and indicated that its
clients were interested in combining TargetSmart and Catalist,
its competitor. [Id. at ¶¶ 33-35]. TargetSmart informed GHP
that it would only consider a merger if the funders acquired
both companies, if TargetSmart remained in control, and if the
Catalist leadership team was not part of the management of the
combined entity. [Id. at ¶ 35]. GHP then indicated that it
would like to proceed with the necessary due diligence for such
a transaction and sought more information from TargetSmart about
its book of business, its relationships with third parties, its
vendor agreements, and its financial information. [Id. at 36].
5
On January 3, 2018, TargetSmart told GHP that it was
uncomfortable with the request and asked for GHP to provide a
rough approximation of the proposed purchase price for its
“political business” in exchange for access to TargetSmart’s
financials. [Id. at ¶¶ 37-39]. For its part, TargetSmart
ultimately provided further information to GHP, including
information about its financials. [Id. at ¶ 40].
3. Information Is Acquired by Third Parties
On February 8, 2018, TargetSmart learned that a writer with
ties to the CEO of Catalist was contacting TargetSmart’s
employees and asking for information about its relationships
with particular clients. [Dkt. No. 36 at ¶ 41]. TargetSmart
contacted GHP about the inquiries, and GHP represented that the
inquires were not part of its due diligence and that “they would
be ‘shocked’ if Catalist was behind the writer’s inquiries.”
[Id. at ¶ 44]. TargetSmart also contacted a member of the Board
of Directors for Catalist, who promised that the inquiries would
stop. [Id. at ¶ 45].
On February 21, 2018, TargetSmart discovered that a third-
party source had told its client that “Catalist was in the
process of buying TargetSmart.” [Id. at ¶ 46]. It reported the
leak to GHP, which reassured TargetSmart that it took the
confidentiality of its clients very seriously. [Id. at ¶ 47].
6
4. The Transaction Falls Through
On March 14, 2018, TargetSmart met with GHP and Catalist
in the District of Columbia to discuss the proposed transaction.
[Dkt. No. 36 at ¶¶ 49-51]. During the meeting, Catalist
indicated that it was not under an NDA and offered to leave the
room while TargetSmart discussed the NDA with GHP. [Id. at
¶ 51]. At that meeting, GHP told TargetSmart that it had not
raised enough money to fund the acquisition, but also indicated
that GHP had shared information about TargetSmart with at least
two representatives of Catalist and that one of Catalist’s
funders had broken the Mutual NDA. [Id. at ¶¶ 52-56].
On April 10, 2018, TargetSmart, taking the position that
GHP had violated the Mutual NDA, sought several assurances from
GHP. [Id. at ¶ 59]. GHP responded on April 13, denying that it
had breached the NDA but admitting that it had shared
information with two individuals at Catalist. [Id. at ¶ 60].
GHP also attached a letter that purported to show that Catalist
was under an NDA with TargetSmart. [Id. at ¶ 61].
TargetSmart alleges that GHP altered the Mutual NDA by
including signatures from individuals at Catalist, though
Catalist itself never signed or received copies of the NDA.
[Id. at ¶ 61]. TargetSmart further alleges ”Catalist knew or
should have known that TargetSmart did not request that Catalist
or any of its representatives sign an NDA.” [Dkt. No. 28; Dkt.
7
No. 36 at ¶ 61].
On April 13, 2018, TargetSmart contacted Catalist to assert
that Catalist was using TargetSmart’s proprietary information
without consent. [Id. at ¶ 65]. Catalist responded on April
19, 2018, certifying that it received proprietary information
from GHP, that GHP never shared or distributed the information
to other investors, and that it had destroyed the information.
[Id. at ¶ 67-71]. It did not make the same representations
about its CEO. [Id. at ¶ 68]. Despite this denial, TargetSmart
alleges that Catalist continues to use TargetSmart’s proprietary
information to take clients away from it. [Id. at ¶¶ 79-81].
C. Procedural Background
TargetSmart filed suit against both GHP and Catalist on
June 28, 2018. [Dkt. No. 1]. In its original complaint,
TargetSmart alleged that the agreement between GHP and Catalist,
and their subsequent negotiations with TargetSmart, violated the
Federal Defend Trade Secrets Act, 18 U.S.C. § 1836. [Dkt. No. 1
at ¶ 67]. It also alleged that the Defendants had
misappropriated trade secrets, violating both the Massachusetts
Trade Secrets Act, the Massachusetts Unfair and Deceptive
Practices Act, and Massachusetts common law, [Id. at ¶¶ 77-91,
128-133], and were liable for damages for unjust enrichment
under Massachusetts common law. [Id. at ¶¶ 115-121].
TargetSmart raised claims for breach of contract, breach of the
8
covenant of good faith and fair dealing, and fraudulent
misrepresentation by GHP, [Id. at ¶¶ 92-107, 122-27], and for
tortious interference with contract by Catalist. [Id. at
¶¶ 108-114].
On September 11, 2018, GHP filed an Answer, [Dkt. No. 12],
and Catalist filed its motion to dismiss for lack of
jurisdiction for failure to state a claim and on forum non
conveniens grounds. [Dkt. No. 15]. The same day, Catalist
filed a motion asking this court to admit its counsel, Attorneys
Adam S. Caldwell and Patrick J. Curran of Davis Wright Tremaine
LLP, pro hac vice. [Dkt. No. 14]. On September 17, 2018,
TargetSmart filed an opposition to the admission of Attorneys
Caldwell and Curran pro hac vice on the grounds that the law
firm had a conflict of interest and could not represent Catalist
consistent with its obligations under the Massachusetts Rules of
Professional Conduct. [Dkt. No. 19]. After a hearing, I
rejected TargetSmart’s opposition to the proposed Catalist
counsel, and admitted Attorneys Caldwell and Curran pro hac vice
on December 10, 2018. [Dkt. No. 34].
Meanwhile, on October 2, 2018, TargetSmart filed its First
Amended Complaint. [Dkt. No. 22]. Though the factual
allegations in the two complaints were substantially identical,
in the First Amended Complaint, TargetSmart dropped its claim
for tortious interference of contract against Catalist and
9
instead added a claim for defamation. [Dkt. No. 22 at
¶¶ 142-147].
On October 16, 2018, GHP again submitted an Answer to the
First Amended Complaint, [Dkt. No. 26], and Catalist again
submitted a motion to dismiss for lack of jurisdiction and
failure to state a claim and a memorandum in support thereof.
[Dkt. No. 24; Dkt. No. 25]. On October 30, 2018, TargetSmart
filed its opposition to the motion to dismiss. [Dkt. No. 29].
On October 25, 2018, a few days prior to filing its
opposition, TargetSmart filed another motion to amend its
complaint, in this instance to correct what was characterized as
a scrivener’s error. [Dkt. No. 28]. The motion indicated that
Paragraph 61 of the First Amended Complaint mistakenly referred
to GHP, instead of Catalist, and sought to correct that one
word. [Id.]. Catalist filed an opposition to this motion to
amend on November 6, 2018. [Dkt. No. 31]. I granted the motion
on December 10, 2018, [Dkt. No. 34], and TargetSmart filed the
Second Amended Complaint on December 13, 2018. [Dkt. No. 36].
Catalist thereafter again responded with a motion to
dismiss or, in the alternative, to transfer, [Dkt. No. 38] on
December 20, 2018. The memorandum in support of Catalist’s
suggested transfer of the case to the District of Columbia, but
otherwise presented the same arguments regarding personal
jurisdiction and failure to state a claim as the motion filed in
10
October 2018. [See generally Dkt. No. 25; Dkt. No. 39]. On
January 4, 2019, GHP filed its opposition to Catalist’s motion
to transfer, but took no position with regard to personal
jurisdiction or failure to state a claim. [Dkt. No. 40].
TargetSmart submitted its opposition to the motion to dismiss on
January 11, 2019. [Dkt. No. 41].
On January 23, 2019, I held a hearing on the present
motion, during which GHP for the first time indicated that it
would object to personal jurisdiction in the District of
Columbia if the case were to be transferred there in its
entirety. It had not raised this objection or argued that it
would not be subject to the jurisdiction of the District of
Columbia in its original opposition to the motion to transfer.
[Dkt. No. 40]. TargetSmart indicated during the hearing that it
would not oppose a transfer of the case to the District of
Columbia if I found that personal jurisdiction over Catalist was
unavailable in the District of Massachusetts.
On January 30, 2019, GHP filed a supplemental opposition,
with leave of the court, to Catalist’s motion to dismiss. This
opposition indicated only that GHP “did not waive its defenses
under F.R.C.P. 12(b)(1), (2) and (6),” but offered nothing by
way of factual assertion or legal argument about personal
jurisdiction in the District of Columbia. [Dkt. No. 46 at 2].
On February 4, 2019, Catalist filed a letter with the court
11
indicating that its position had been adequately briefed in its
original memorandum, and that it had nothing further to add.
[Dkt. No. 48]. That same day, TargetSmart also filed a response
to GHP’s Supplemental Opposition, arguing that its case against
GHP should not be transferred to the District of Columbia
because such a transfer would further delay TargetSmart’s
ability to adjudicate the merits of its underlying claim. [Dkt.
No. 49 at 2]. Instead, TargetSmart argued that some kind of
coordination between the District of Massachusetts and the
District of Columbia should be fashioned for separate cases
against GHP (in Massachusetts) and Catalist (in the District of
Columbia).
II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
A. Specific Jurisdiction Over Catalist
Catalist seeks to dismiss TargetSmart’s complaint for lack
of personal jurisdiction over it in the District of
Massachusetts. [Dkt. No. 38]. Because Catalist is incorporated
in Delaware and has its principal place of business in the
District of Columbia, its contacts with Massachusetts are not
“so continuous and systematic as to render [it] essentially at
home in [Massachusetts],” and allow this court to exercise
general jurisdiction over it. Goodyear Dunlop Tires Operations
S.A. v. Brown, 564 U.S. 915, 919, 131 S. Ct. 2846, 2851 (2011).
Consequently, I may only exercise personal jurisdiction
12
over Catalist if its contacts with Massachusetts gave rise to
the present claims and are sufficient to say that Catalist was
“present” in the state such that “the maintained of [this] suit
does not offend traditional notions of fair play and substantial
justice.” International Shoe Co. v. Washington Office of
Unemployment Compensation, 326 U.S. 310, 316 (1945). In making
this determination, “the plaintiff has the burden of showing
that jurisdiction exists.” Ealing Corp. v. Harrods Ltd., 790
F.2d 978, 979 (1st Cir. 1986). In the absence of an evidentiary
hearing, TargetSmart must “make[ ] a prima facie showing of
jurisdiction supported by specific facts alleged in the
pleadings, affidavits, and exhibits.” Id.
To meet this burden, TargetSmart must allege specific facts
to “satisfy two conditions: first, that the forum in which the
federal district court sits has a long-arm statute that purports
to grant jurisdiction over the defendant; and second, that the
exercise of jurisdiction pursuant to that statute comports with
the structure of the Constitution.” Foster-Miller, Inc. v.
Babcock & Wilcox Canada, 46 F.3d 138, 144 (1st Cir. 1995); see
also Knox v. MetalForming, Inc., --F.3d--, 2019 WL 364021 at *3
(1st Cir. Jan. 30, 2019) (“[T]he plaintiffs’ burden is to
proffer evidence sufficient to support findings of all facts
essential to personal jurisdiction without relying on
unsupported allegations.”) (internal quotations omitted).
13
I will address each of these two requirements in turn.
1. The Massachusetts Long-Arm Statute
First, I consider whether Massachusetts state law would
permit the exercise of jurisdiction over Catalist. The
Massachusetts long-arm statute allows a court of the
Commonwealth to
exercise personal jurisdiction over a person, who acts
directly or by an agent, as to a cause of action in law or
equity arising from the person’s: (a) transacting any
business in this commonwealth . . . (c) causing tortious
injury by act or omission in this commonwealth; [or]
(d) causing tortious injury in this commonwealth by act or
omission outside this commonwealth if he regularly does or
solicits business . . . in this commonwealth.
M.G.L. c. 223A § 3.
Historically, both the First Circuit and the Supreme
Judicial Court have interpreted “the Commonwealth’s long-arm
statute as coextensive with the outer limits of the
Constitution.” A Corp. v. All American Plumbing, Inc., 812 F.3d
54, 59 (1st Cir. 2016); see also Good Hope Industries v. Ryder
Scott Co., 389 N.E.2d 76, 79 (Mass. 1979). However, recently,
both courts have moved away from this interpretation and instead
have suggested that “the Massachusetts statute does not purport
to extend jurisdiction as far as due process would allow.”
SCVNGR, Inc. v. Punchh, Inc., 85 N.E.3d 50, 55 (Mass. 2017); see
also A. Corp, 812 F.3d at 59.
Consequently, the exercise of jurisdiction is only proper
if it is consistent with one of the “enumerated eight specific
14
grounds on which a nonresident defendant may be subjected to
personal jurisdiction by a court of the Commonwealth.” SCVNGR,
Inc., 85 N.E.2d at 55. Under the statute, there are two
possible avenues through which this court may exercise
jurisdiction over Catalist. First, since GHP’s transactions
with TargetSmart took place, at least in part, in the
Commonwealth and gave rise to this cause of action, I may
exercise jurisdiction over Catalist if GHP is an agent of
Catalist under Massachusetts law. See M.G.L. c. 223A § 3(a).
Second, I may exercise jurisdiction if Catalist’s transactions
with TargetSmart fall within the scope of the “transacting any
business” prong of the long-arm statute. M.G.L. c. 223A § 3.
a. GHP as an agent of Catalist
As a preliminary matter, GHP has not objected to the
court’s exercise of personal jurisdiction, beyond a blanket
denial to TargetSmart’s assertion of jurisdiction. [Dkt. No. 26
at ¶ 6]. Because it is headquartered in Boston, GHP certainly
transacts business within the Commonwealth, [Dkt. No. 36 at
¶ 3], and at least some part of TargetSmart’s claims arise out
of its transactions and meetings with GHP in the Commonwealth.
[See e.g., id. at ¶¶ 31-40]. As a result, jurisdiction over
Catalist under the long-arm statute is proper if GHP was acting
15
as Catalist’s agent when transacting business with TargetSmart.1
Under Massachusetts law, “[a]n agency relationship is
created when there is mutual consent, express or implied, that
the agent is to act on behalf and for the benefit of the
principal, and subject to the principal’s control.” Theos &
Sons, Inc. v. Mack Trucks, Inc., 729 N.E.2d 1113, 1119 (Mass.
2000). “The essence of the principal-agent relationship is the
right of power or control by the alleged principal over the
conduct of the alleged agent.” Commonwealth Aluminum Corp. v.
Baldwin Corp., 980 F. Supp. 598, 611 (D. Mass. 1997).
Though an agency relationship may be formed by express
consent of the parties, evidenced by a writing, it need not be.
It may also be implied from “conduct by the principal which
causes a third person reasonably to believe that a particular
person has authority to enter into negotiations or to make
representations as his agent.” DeVaux v. American Home
Assurance Co., 444 N.E.2d 355, 358 (Mass. 1983)(internal
quotations and citations omitted); see also Hudson v.
Massachusetts Property Insurance Underwriting Ass’n, 436 N.E.2d
1 The Letter Agreement between GHP and Catalist forms the basis
of the relationship between these two parties. [Dkt. No. 39-1,
Exhibit 1, GHP Engagement Letter (hereinafter “Letter
Agreement”)]. This agreement specifies that it “shall be
governed by, and construed and enforced in accordance with, the
laws of the Commonwealth of Massachusetts.” [Id. at 6]. The
question of whether GHP is an agent of Catalist will therefore
also be governed by Massachusetts law.
16
155, 159 (Mass. 1982). Importantly, an implied agency
relationship can only be formed because of “some direct
intervention by the principal.” Commonwealth Aluminum Corp.,
980 F. Supp. at 611. It is not enough for the agent to make
representations to a third party in the absence of the
principal.
Here, there is no indication that the Letter Agreement
between GHP and Catalyst that formed the basis of their
contractual relationship empowered GHP to act as Catalyst’s
agent. [See Dkt. No. 39-1, Exhibit 1, GHP Engagement Letter
(hereinafter “Letter Agreement”)]. Though the agreement stated
that GHP would provide Catalist “with financial advice and
assistance” and gave Catalist the authority to determine the
objectives and strategies used to approach TargetSmart, [Id. at
p. 2, § 2], the agreement specifically characterized GHP as an
“independent contractor” and not an “employee or agent” of
Catalist. [Id. at p. 4, § 6]. It also does not subject GHP to
control by Catalist, [See id. at p. 2, § 2 (“In connection with
this engagement, GHP will provide [Catalist] with financial
advice and assistance . . . including, as mutually determined to
be appropriate . . .” (emphasis added))], even if GHP is
obligated to “keep [Catalist] informed of the activities
undertaken by GHP” in connection with the Letter Agreement.
[Id. at p. 4, § 6]. The Letter Agreement, therefore, does not
17
evidence an intent by either Catalist or GHP to form an agency
relationship.
There is also no allegation in the complaint that Catalist
made any representations to TargetSmart that GHP was acting as
its agent. Indeed, though TargetSmart knew that GHP was acting
to further the interests of another party, [Dkt. No. 36 at
¶ 24], it did not discover that GHP was, in fact, working with
Catalist until March, 2018, when the transaction fell through.
[Id. at ¶¶ 52-53]. Thus, there is nothing in the complaint to
indicate Catalist took any action to cause TargetSmart to
believe that GHP was acting on its behalf. Consequently, I
cannot imply an agency relationship between GHP and Catalist,
and Catalist is not otherwise “estopped from denying the agency
is authorized.” Hudson, 436 N.E.2d at 159.
Since the record before me does not support the proposition
GHP is an agent of Catalist under Massachusetts law, GHP’s
contacts with Massachusetts cannot form the basis for the
exercise of jurisdiction as to Catalist under the Massachusetts
long-arm statute.
b. “Transacting any business in this Commonwealth”
Catalist may alternatively be held to have submitted to
jurisdiction in this Court under the Long Arm Statute if the
cause of action arose from its “transacting business in this
commonwealth.” M.G.L. c. 223A § 3(a). “Both federal and state
18
courts have regularly construed the ‘transacting any business’
language of the statute in a generous manner.” United
Electrical, Radio, and Machine Workers of America v. 163
Pleasant Street Corp., 960 F.2d 1080, 1087 (1st Cir. 1992). The
relevant inquiry is not whether the defendant has a physical
presence in Massachusetts, but whether “the defendant attempted
to participate in the commonwealth’s economic life.” Id.; see
also Diamond Group, Inc. v. Selective Distribution Int’l Inc.,
998 N.E.2d 1018, 1022 (Mass. App. Ct. 2013) (“The section uses
the word ‘any’ before the word ‘business.’ We interpret that
term to be expansive, or to mean that the volume of business
need not be substantial but merely definite and perceptible.”).
Even mailing letters to the Commonwealth to solicit business may
be sufficient to satisfy this threshold standard. Id. (citing
Hahn v. Vermont Law School, 698 F.2d 48 (1st Cir. 1983); Nova
Biomedical Corp. v. Moller, 629 F.2d 190 (1st Cir. 1980)).
Here, at least a part of TargetSmart’s claims against
Catalist were based on, and arose as a result of, Catalist’s
relationship with GHP, embodied in the Letter Agreement. [See
generally, Dkt. No. 36 at ¶¶ 82-122; Dkt. No. 39-1, Letter
Agreement]. Since the Letter Agreement is governed by the laws
of Massachusetts, [Dkt. No. 39-1, Letter Agreement at p. 6,
§ 15] and was at least partly negotiated and signed in
Massachusetts, it evidences Catalist’s intent to “participate in
19
the commonwealth’s economic life,” United Electrical, 960 F.2d
1087, and is sufficient to constitute business transactions in
the Commonwealth within the scope of the long-arm statute. See
Carlson Corp. v. University of Vermont, 402 N.E.2d 483, 485
(Mass. 1980).
Consequently, the Massachusetts long-arm statute permits
this Court’s exercise of personal jurisdiction over Catalist.
2. Constitutional Limits on Personal Jurisdiction
Though necessary, compliance with the long-arm statute is
not sufficient in itself to render personal jurisdiction proper
in this court. TargetSmart must still show that “the exercise
of jurisdiction pursuant to that statute comports with the
structure of the Constitution.” Foster-Miller, Inc., 46 F.3d at
144. In other words, it must show that Catalist has sufficient
minimum contacts with the state to allow for the exercise of
personal jurisdiction consistent with due process.
International Shoe, 326 U.S. at 316. TargetSmart has two
avenues through which to satisfy this constitutional standard.
First, it may show that GHP has sufficient contacts with the
forum state, and that GHP’s contacts may be imputed to Catalist
by virtue of the contractual relationship between the parties.
Alternatively, it may show that Catalist itself independently
satisfies the minimum contacts test.
20
a. Imputing GHP’s Contacts
The First Circuit has consistently recognized that a
plaintiff “may rely in whole or in part on actions imputed to
[the defendant] through its agents.” Jet Wine & Spirits, Inc v.
Bacardi & Co., Ltd., 298 F.3d 1, 7 (1st Cir. 2002); see also
Weinberger v. Grand Circle Travel, LLC, 891 F. Supp. 2d 228, 240
(D. Mass. 2012) (“For purposes of personal jurisdiction, the
actions of an agent may be attributed to the principal.”).
Indeed, the First Circuit has indicated that it is generally
unconcerned with “[t]he exact type of agency relationship used
to impute contacts,” or with “technical differences between the
states’ different rules of agency.” Jet Wine, 298 F.3d at 7-8.
Instead, the touchstone has been the question of control:
the First Circuit has primarily been concerned with whether the
relationship was “sufficient” to attribute the contacts of the
agent to the principal “for the purpose of reaching the
[principal] under the Massachusetts long-arm statute as cabined
by the Due Process Clause of the Fourteenth Amendment.” Daynard
v. Ness, Motley, Loadholt, Richardson & Poole, PA, 290 F.3d 42,
53 (1st Cir. 2002). “If the plaintiff cannot show that the
association [or agency relationship] substantially influenced
the decisionmaking leading to the [defendant’s] in-forum
activities, then there can be no attribution.” Donatelli v.
National Hockey League, 893 F.2d 459, 469 (1st Cir. 1990).
21
Courts in this circuit have been willing to impute contacts
from one defendant to the other when there was a formal, written
agreement between the parties that, at most, “[fell] slightly
outside of the confines of a partnership, joint venture, or
other agency relationship,” but was similar enough “under the
Due Process Clause to permit the exercise of jurisdiction.”
Weinberg, 891 F. Supp. 2d at 241-44 (declining to impute
contacts to a foreign defendant from a domestic one, which
served as a travel agent and sold tickets on behalf of the
foreign defendant on the basis that there was not a sufficiently
close relationship for imputation to be consistent with Due
Process); see also Daynard, 290 F.3d at 53 (allowing contacts to
be imputed because the plaintiff understood the two defendants
to be involved in a joint venture, and because the defendants
consistently held themselves out as joint venturers);
Donatelli¸893 F.2d at 469 (allowing contacts to be imputed to
the nonresident defendant, an unincorporated association, from
the resident defendant, a member of the association, if the
plaintiff could show that the association had a substantial
influence on its member’s decisionmaking); Jet Wine, 298 F.3d at
8 (allowing contacts to be imputed because the non-resident
defendant assumed the contractual obligations of the resident
defendant, including all liabilities arising out of a
transferred business at issue in this case).
22
In the absence of a formal agreement establishing an agency
relationship between Catalist and GHP or some other contractual
agreement establishing a similar formal association between the
two, I conclude I cannot impute GHP’s contacts with
Massachusetts to Catalist. A review of the Letter Agreement
does not demonstrate that the two defendants contemplated
Catalist exercising the kind of formal control or influence that
would be needed to render their relationship akin to a joint
venture, partnership, or other agency relationship. See supra;
[Dkt. No. 39-1, Letter Agreement].
TargetSmart cannot, therefore, rely on GHP’s contacts with
Massachusetts to show that Massachusetts has personal
jurisdiction over Catalist.
b. Minimum Contacts
This court may only exercise personal jurisdiction over
Catalist, then, if Catalist has sufficient contacts with
Massachusetts to render the exercise of jurisdiction reasonable.
To determine whether it is, I must consider three factors:
First, the claim underlying the litigation must directly
arise out of, or relate to the defendant’s forum-state
activities. Second, the defendant’s in-state contacts must
represent a purposeful availment of the privilege of
conducting activities in the forum state, thereby invoking
the benefits and protections of that state’s laws and
making the defendant’s involuntary presence before the
state’s courts foreseeable. Third, the exercise of
jurisdiction must, in light of the Gestalt factors, be
reasonable.
23
Foster-Miller, Inc., 46 F.3d at 144; see also Knox, --F.3d--,
2019 WL 364021 at *4 (outlining the three factors of
relatedness, purposeful availment, and reasonableness).
i. Relatedness
For the exercise of jurisdiction to be consistent with Due
Process, the “claim underlying the litigation must directly
arise out of, or relate to, the defendant’s forum-state
activities.” Daynard, 290 F.3d at 61 (citing Foster-Miller,
Inc., 46 F.3d at 144). To show relatedness, the plaintiff “must
show a demonstrable nexus between the plaintiff’s claims and the
forum-based activities such that the litigation itself is
founded directly on those activities.” Weinberg, 891 F. Supp.
2d at 244.
TargetSmart’s assertion that this court has personal
jurisdiction over Catalist runs into trouble at the threshold.
It is difficult to see what actions of significance, if any,
Catalist took in the Commonwealth of Massachusetts. Its meeting
with TargetSmart and GHP took place in Washington, D.C., [Dkt.
No. 36 at ¶ 50], and any further contact with TargetSmart, as
well as its alleged misuse of confidential information, appear
also to have taken place in the District of Columbia, in light
of the fact that it is headquartered there. [Id. at ¶¶ 65-74].
It is unclear where the reporters and clients who inquired about
potential transactions were located, or where any alleged
24
misrepresentations or defamatory statements by Catalist were
made. [Id. at ¶¶ 41-48, 75-80]. Importantly, Catalist was not
present at, or involved in GHP’s initial meeting with
TargetSmart in Boston in December 2017. [Id. at ¶¶ 31-33].
The only contact that Catalist clearly had with the
Commonwealth of Massachusetts was its relationship with GHP.
[Dkt. No. 39-1, Letter Agreement]. But it is difficult to say
that this litigation is “founded directly on” that relationship
and the Letter Agreement, even if they together provide context
and explanation for how Catalist was able to access
TargetSmart’s trade secrets. See Weinberg, 891 F. Supp. 2d at
244. This is especially true since GHP is not an agent of
Catalist, and Catalist did not retain enough control over GHP
for this contractual relationship to support Catalist’s
relationship to the forum state.
The litigation is therefore not sufficiently related to
Catalist’s contacts with the Commonwealth of Massachusetts,
exercise of personal jurisdiction in this court is inappropriate
on lack of relatedness grounds.
ii. Purposeful Availment
Even if the litigation was “founded directly on” the Letter
Agreement and the relationship between Catalist and GHP, the
record does not demonstrate that Catalist purposefully availed
itself “of the privilege of doing business” in Massachusetts.
25
Jet Wines, 298 F.3d at 11. “The purposeful availment
requirement ensures that the exercise of jurisdiction [by the
forum] is essentially voluntary and foreseeable, . . . and is
not premised on a defendant’s random, fortuitous, or attenuated
contacts” with the forum state.” Knox, --F.3d--, 2019 WL 364021
at *4 (internal citations and quotations omitted). To satisfy
this aspect of minimum contacts, the defendant’s conduct must
evidence “something more” than the “regular flow [of commerce]
or regular course of sales” into the forum state. Id. at *5.
There must be some action taken by the defendant that is
specifically directed to, or establishes a direct link with, the
Commonwealth of Massachusetts. See Id. at *6.
This condition also is not met here. Catalist certainly
could reasonably foresee being hailed into court in Boston to
defend against litigation with GHP over a breach of the Letter
Agreement. [See generally, Dkt. No. 39-1, Letter Agreement].
However, Catalist’s relationship with TargetSmart was centered
in the District of Columbia. Even though it voluntarily engaged
GHP, Catalist did not engage in a “voluntary act” in the
Commonwealth of Massachusetts from which it was liable to suit
by TargetSmart in Massachusetts; nor did its conduct vis a viv
TargetSmart establish a direct link with Massachusetts. This is
especially true since GHP was not Catalist’s agent and GHP was
not involved in a joint venture, partnership, or similar
26
relationship with Catalist. See supra. It served only as an
independent advisor and consultant. [Dkt. No. 39-1, Letter
Agreement at 4, § 6].
TargetSmart does not allege any other action that would
directly tie Catalist to Massachusetts, and instead rests its
argument entirely on the fact that Catalist hired GHP as an
agent. [Dkt. No. 29 at 10]. As I have already rejected this
argument, I do not see how else Catalist has purposefully
availed itself of the laws of Massachusetts.
iii. Reasonableness
Finally, the First Circuit directs me to consider the
Gestalt factors, which include:
(1) the defendant’s burden of appearing, (2) the forum
state’s interest in adjudicating the dispute, (3) the
plaintiff’s interest in obtaining convenient and effective
relief, (4) the judicial system’s interest in obtaining the
most effective resolution of the controversy, and (5) the
common interests of all sovereigns in promoting substantive
social policies.
Foster-Miller, Inc., 46 F.3d at 150.
I consider these factors briefly. First, Catalist is based
in Washington, D.C., and though GHP is headquartered in Boston,
allowing the case to go forward in Boston as opposed to the
District of Columbia places a greater burden on Catalist and
similarly on TargetSmart, which seems indifferent to this
burden, having initially chosen the District of Massachusetts as
27
the forum for resolving this dispute. [Dkt. No. 36 at ¶¶ 3-4;
Dkt. No. 39 at 16-17].
Second, Massachusetts has an interest in adjudicating
disputes relating to its citizens, [Dkt. No. 36 at ¶ 3], and
arising under its laws. [Id. at ¶¶ 100-106, 136-141]. It does
not, however, necessarily have a strong interest in adjudicating
disputes between foreign parties, [Id. at ¶¶ 1, 2, 4]. Nor does
its interest in adjudicating disputes relating to its citizens
outweigh the fact that the majority of the events of
significance underlying the dispute took place in the District
of Columbia and outside the borders of the Commonwealth of
Massachusetts. [See generally Dkt. 22 at ¶¶ 41-80]. For the
same reason, the fifth factor counsels against exercising
personal jurisdiction in Massachusetts, especially since
Massachusetts law would not apply to TargetSmart’s pendent
state-law claims under the Commonwealth’s own choice of law
analysis.2
2 The question of which law applies to TargetSmart’s pendent
state-law claims against Catalist has three distinct dimensions
here, because TargetSmart has brought three kinds of state law
claims against Catalist – claims under the common law of torts,
claims under the common law of contracts, and claims under
Massachusetts statutory law.
Massachusetts choice-of-law principles provide that the
“[d]isposition of the substantive choice of law issues in tort
‘turns on the law of the jurisdiction which has the strongest
interest in the resolution of the particular issue presented.’”
Graham v. Malone Freight Lines, Inc., 948 F. Supp. 1124, 1131
(D. Mass. 1996) (citing Pevoski v. Pevoski, 358 N.E.2d 416
28
(Mass. 1976)). Though the law of the place where the injury
occurred presumptively applies, this presumption may be overcome
if another state has a more significant relationship to the
case. See Cosme v. Whitin Mach. Works, Inc., 632 N.E.2d 832,
835 (Mass. 1994); Dagi v. Delta Air Lines, Inc., --F. Supp. 3d--
, 2018 WL 6506074 at *7 n. 6 (D. Mass. Dec. 11, 2018). Here,
the wrong alleged likely took place in the District of Columbia,
where Catalist is headquartered. TargetSmart has not indicated
why Massachusetts would have a stronger interest than the
District of Columbia in the resolution of the dispute.
TargetSmart also has brought a claim for unjust enrichment
against Catalist, a claim which in Massachusetts sounds in
contract rather than in tort. Salamon v. Terra, 477 N.E.2d
1029, 1031 (Mass. 1985); see also Massachusetts Eye and Ear
Infirmary v. QLT Phototherapy, 552 F.3d 47, 57 (1st Cir. 2009).
Massachusetts choice-of-law principles for contract govern,
requiring a forum court to look to the “law of the place of the
making,” but also to “various choice-influencing considerations”
to determine which state has the strongest interest in the
underlying dispute. Graham, 948 F. Supp. at 1131 (citing
Bushkin Associates, Inc. v. Raytheon Co., 473 N.E.2d 662, 668-69
(Mass. 1985)). These considerations include “(a) the place of
contracting, (b) the place of negotiation of the contract,
(c) the place of performance, (d) the location of the subject
matter of the contract, and (e) the domicil[sic], residence,
nationality, place of incorporation, and place of business of
the parties.” Bushkin Associates, Inc., 473 N.E.2d at 669. All
of these considerations point to the District of Columbia,
rather than Massachusetts, as the forum with the greatest
interest in adjudicating the dispute between TargetSmart and
Catalist sounding in contract.
Finally, TargetSmart asserts two statutory claims – under
M.G.L. c. 93 §§ 42 and 42A, and under M.G.L. c. 93A §§ 2 and 11
- against Catalist under Massachusetts law. However, both
statutes are limited in scope and apply only to “any course of
conduct, pattern of activity, or activities [that] occur and
have their competitive impact primarily and predominantly within
the commonwealth.” M.G.L. c. 93 § 3; see also M.G.L. c. 93A
§ 11 (requiring that “the actions and transactions constituting
the alleged unfair method of competition or the unfair or
deceptive act or practice [that] occurred primarily and
substantially within the commonwealth.”). Since TargetSmart has
not alleged that Catalist’s violations of the two statutes took
place in Massachusetts, Massachusetts statutory law does not
appear to apply.
29
The third and fourth factors both weigh in favor of having
the claims against GHP and the claims against Catalist heard
together. Both sets of claims arise out of the same factual
circumstances and rest on the same allegations. However, these
factors do not suggest that Boston is a more appropriate place
to hear the case than Washington, D.C., and instead counsel in
favor of transferring the dispute to the District of Columbia,
if personal jurisdiction against Catalist does not otherwise lie
in Massachusetts.
c. Conclusion
The three factors set forth in Foster-Miller, Inc. v.
Babcock & Wilcox Canada, 46 F.3d 138 (1st Cir. 1995), all
indicate that the exercise of personal jurisdiction as to
Catalist by this court would be improper under the Due Process
Clause.
Lacking personal jurisdiction over the entire dispute, but
bearing in mind the need for judicial efficiency and seeking the
prompt resolution of the matter in its entirety, I turn to
consider the question whether to transfer the case to the
District of Columbia, rather than dismiss it.
B. Transfer under Section 1631 or Section 1406(a)
Even though this court does not have jurisdiction to hear
and adjudicate the claims at issue in this case against
Catalist, I may still order the case to be transferred, rather
30
than dismissed outright, if the case could properly have been
brought in the putative transferee court – here, the District of
Columbia. Because I find that the District of Columbia has both
subject matter and personal jurisdiction over the pending matter
and all the parties, I will transfer the case to the District of
Columbia, rather than dismissing it.
Federal law allows a court “that finds that there is a want
of jurisdiction . . . if it is in the interest of justice, [to]
transfer [the case] to any other such court in which the action
. . . could have been brought at the time it was filed or
noticed.” 28 U.S.C § 1631. The First Circuit has interpreted
this provision to establish a presumption in favor of transfer –
rather than dismissal – when the forum court lacks personal
jurisdiction over one of the defendants. See Federal Home Loan
Bank of Boston v. Moody’s Corp., 821 F.3d 102, 119 (1st Cir.
2016), abrogated on other grounds, Lightfoot v. Cendant Mortgage
Corp., 137 S. Ct. 553 (2017). The statutory text, the First
Circuit held, “does not further delineate whether ‘jurisdiction’
is meant to refer to subject matter jurisdiction, personal
jurisdiction, or both.” Federal Home Loan Bank, 821 F.3d at
114. There is therefore no reason to restrict the statute’s
scope only to subject matter jurisdiction, as courts in the
circuit appear, with the benefit of hindsight, erroneously to
have done in the past. See, e.g., Pedzewick v. Foe, 963 F.
31
Supp. 48, 50 (D. Mass. 1997) (“This Court agrees with the line
of cases limiting section 1631 to transfer for lack of subject
matter jurisdiction only.”).
Similarly, 28 U.S.C. § 1406(a) allows me to “transfer [a]
case to any district or division in which it could have been
brought” if it “lay[s] venue in the wrong division or district”
and transfer is “in the interest of justice.” 28 U.S.C.
§ 1406(a). Though this provision does not explicitly mention
jurisdiction, the Supreme Court has interpreted its mandate to
“authorize transfer of cases, however wrong the plaintiff may
have been in filing his case as to venue, whether the court in
which it was filed has personal jurisdiction over the defendants
or not.” Goodlawr, Inc. v. Heiman, 369 U.S. 463, 466 (1962);
see also Pedzewick, 963 F. Supp. at 50 (“Section 1406(a) applies
in cases where venue improper [sic]. It has also been
interpreted to permit transfer for lack of personal
jurisdiction.”).
Consequently, since this court lacks personal jurisdiction
over Catalist, I may transfer this case under either 28 U.S.C.
§ 1631 or under 28 U.S.C. § 1406(a) if it is in the “interest of
justice.” As a general matter, the First Circuit has held that
the phrase “in the interest of justice” establishes “a
presumption – albeit a rebuttable one – in favor of transfer.”
Britell v. United States, 318 F.3d 70, 73 (1st Cir. 2003). The
32
presumption may be rebutted if the record, taken as a whole,
indicates that “the administration of justice would be better
served by dismissal.” Id. at 74.
Based on the record before me, there is no indication that
dismissal, rather than transfer, would facilitate the speedy and
efficient resolution of this case. The core of TargetSmart’s
claims against Catalist and GHP is not “fanciful or frivolous”
such that “it is in the interest of justice to dismiss [the
entire case] rather than keep it on life support (with the
inevitable result that the transferee court will pull the
plug).” Id. at 75. A transfer to the District of Columbia
would allow the claims to move forward in a location with proper
jurisdiction over all parties. Finding nothing on the record to
rebut the presumption in favor of transfer, I am prepared to
transfer the case to the District of Columbia pursuant to my
authority under both 28 U.S.C. § 1631 and 28 U.S.C. § 1406(a).
C. TargetSmart’s Request for Limited Discovery
Finally, I will briefly address an argument made by
TargetSmart in its opposition to the Catalist motion to dismiss.
[Dkt. No. 41 at 12-13]. There, TargetSmart argues that, if
there is ambiguity regarding the relationship between Catalist
and GHP, “the Court should . . . allow TargetSmart to take
limited jurisdictional discovery.” [Id.]. This argument is
ultimately meritless.
33
The First Circuit has held that “a diligent plaintiff who
sues an out-of-state corporation and who makes out a colorable
case for the existence of in personam jurisdiction may well be
entitled to a modicum of jurisdictional discovery if the
corporation interposes a jurisdictional defense.” United States
v. Swiss American Bank, Ltd., 274 F.3d 610, 625 (1st Cir. 2001).
However, the decision to allow jurisdictional discovery requires
that the plaintiff does, in fact, “present[ ] a colorable case
for personal jurisdiction by proferring evidence that has a
strong bearing on the question of jurisdiction” and show that
“additional clarity is needed.” Mullaly v. Sunrise Senior
Living Management, Inc., 224 F. Supp. 3d 117, 123 (D. Mass.
2016). Ultimately, the decision about whether to grant
jurisdictional discovery falls within my discretion. Swiss
America Bank, Ltd., 274 F.3d at 626.
Given the state of the record, I will not allow
jurisdictional discovery here. There is no ambiguity that GHP
was not acting as an agent of Catalist; TargetSmart has not made
a colorable argument that it was. TargetSmart has also given no
clear indication of what it expects, or even hopes, to uncover
through this process that would shed further light on the claims
in its complaint.
Therefore, I will not authorize further discovery on the
question of personal jurisdiction. I note that, at this stage,
34
TargetSmart says it wants to move forward to the merits of the
case as soon as possible, [Dkt. No. 49 at 2], and seems to have
abandoned any interest in engaging in further preliminary
skirmishes such as jurisdictional discovery.
III. TRANSFER OF VENUE TO THE DISTRICT OF COLUMBIA
Catalist has in fact moved, as an alternative to dismissal,
to transfer this case, either in its entirety or simply with
respect to TargetSmart’s claims against it, to the District of
Columbia under 28 U.S.C. § 1404(a). [See Dkt. No. 38].
TargetSmart, [Dkt. No. 41 at 13-15], and GHP, [Dkt. No. 40],
both initially objected to the transfer, arguing that the
District of Massachusetts is the appropriate forum for this
case: GHP is headquartered in Boston, [Dkt. No. 36 at ¶ 6], and
its conduct largely took place in Boston. Consequently, they
have argued, the center of gravity for the case is in the
District of Massachusetts, meaning the case is properly before
this court. However, TargetSmart has also indicated that it
would consent to a transfer if I found that I lacked
jurisdiction to hear its claims against Catalist, as I have done
here.
In seeking a transfer, Catalist specifically invokes my
authority under 28 U.S.C. § 1404(a), which presumes that I have
jurisdiction to hear the case, but nevertheless allows me to
transfer the case to another district “[f]or the convenience of
35
the parties and witnesses, in the interest of justice.” 28
U.S.C. § 1404(a). Consequently, I may exercise my authority
under 28 U.S.C. § 1404(a) to transfer the case against GHP to
the District of Columbia based on a determination that
jurisdiction in the District of Columbia is appropriate and that
it is in the interest of justice to have TargetSmart’s claims
against both GHP and Catalist heard together. I will use the
obligation to address Catalist’s section 1404(a) contention to
discuss the similar approach I find appropriate to support
transfer under either § 1631 or § 1406(b).
A. Jurisdiction is Proper in the District of Columbia
As with 28 U.S.C. § 1631 and 28 U.S.C. § 1406(a), transfer
under section 1404(a) is only appropriate if the District of
Columbia has both subject matter and personal jurisdiction over
the pending matter and the parties. Both these conditions are
met here. The United States District Court for the District of
Columbia, like this court, has federal question jurisdiction
under 28 U.S.C. § 1331 over the federal claim, see 18 U.S.C.
§ 1836 (providing a private right of action for violations of
the Federal Defense of Trade Secrets Act), and can therefore
exercise supplemental jurisdiction over any pendent state-law
claims.3
3 Under 28 U.S.C. § 1367(a), a district court may exercise
“supplemental jurisdiction over all other claims that are so
36
The District of Columbia also has personal jurisdiction
over all the parties in this suit. Both TargetSmart and
Catalist are headquartered in the District of Columbia; as a
consequence, the District of Columbia may exercise general
jurisdiction over both parties. See Goodyear Dunlop, 564 U.S.
at 919; [Dkt. No. 36 at ¶¶ 1, 4].
Though headquartered in Boston, GHP is also subject to
personal jurisdiction in the District of Columbia. To be sure,
during the most recent hearing on January 23, 2019, GHP
indicated that it would contest personal jurisdiction in the
District of Columbia. However, GHP did not raise any reasoned
argument relating to personal jurisdiction in its January 30,
2019 opposition to the motion to transfer. [See generally, Dkt.
No. 40; Dkt. No. 46]. Instead, its opposition has focused on
both the location of its documentary record, [Dkt. No. 40 at 3],
and on the fitness of the federal court in the District of
Columbia to decide questions of Massachusetts state law. [Dkt.
related to claims in the action within [the district court’s]
original jurisdiction that they form part of the same case or
controversy under Article III.” 28 U.S.C. § 1367(a). In cases,
like this, where the court’s original jurisdiction is based on
28 U.S.C. § 1331, “[p]endent jurisdiction, in the sense of
judicial power, exists whenever there is a claim arising under”
the laws of the United States “and the relationship between that
claim and the state claim permits the conclusion that the entire
action before the court compromises one case.” United Mine
Workers of America v. Gibbs, 383 U.S. 715, 725 (1966); see also
Exxon Mobile Corp. v. Allapattah Services, Inc., 545 U.S. 546,
558 (2005).
37
No. 46 at 2]. Both issues are addressed below. Moreover, since
GHP has raised a bare objection, even if it has offered nothing
to substantiate it, I will briefly address the question whether
the District of Columbia has personal jurisdiction over GHP
based on the record before me.
The District of Columbia long-arm statute closely tracks
the Massachusetts long-arm statute and authorizes the exercise
of personal jurisdiction over any person “transacting any
business in the District of Columbia.” D.C. CODE § 13-423. “The
‘transacting business’ provision ‘of the long-arm statute has
been interpreted to be coextensive with the Constitution’s due
process limit.’” Pierce v. Mattis, 256 F. Supp. 3d. 7, 11 n. 3
(D.D.C. 2017) (citing First Chicago Int’l v. United Exchange
Co., Ltd, 836 F.2d 1375, 1377 (D.C. Cir. 1988)).
GHP has sufficient “minimum contacts” with the District of
Columbia for exercise of personal jurisdiction to be consistent
with “traditional notions of fair play and substantial justice.”
International Shoe, 326 U.S. at 316. GHP intentionally
initiated contact with TargetSmart, a corporation headquartered
in the District of Columbia, [Dkt. No. 36 at ¶ 24], and
participated in several conversations and meetings with both
TargetSmart and Catalist, both of which were headquartered in
Washington, D.C. [See generally, id.]. In particular, the March
14, 2018 meeting, where TargetSmart learned that one of
38
Catalist’s funders had broken the NDA, took place in Washington,
D.C. [Id. at ¶¶ 49-53]. Consequently, GHP could reasonably
foresee being called into court in the District of Columbia to
respond to claims arising out of its transactions with Catalist
and TargetSmart. Cf. World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286 (1980).
The case therefore as a matter of personal jurisdiction
could have been brought against GHP in the District of Columbia,
and I will allow a transfer if the conditions set forth by
section 1404(a) are met.
B. Transfer under Section 1404(a)
28 U.S.C. § 1404(a) permits a federal court “[f]or the
convenience of parties and witnesses, in the interest of
justice” to transfer a civil action “to any other district or
division where it might have been brought.” 28 U.S.C.
§ 1404(a). This provision gives district courts discretion to
transfer cases that are properly before them when “trial in the
chosen forum would establish oppressiveness and vexation to a
defendant out of all proportion to the plaintiff’s convenience
or when the chosen forum is inappropriate because of
considerations affecting the courts own administrative and legal
problems.” Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241
(1981). Because the statute presumes that the transferor court
is competent to hear the case, transfer under § 1404(a) does not
39
result in a change in the substantive law governing the case.
Id. at 253-54. I note, however, that Massachusetts choice-of-
law principles would appear to anticipate application of
District of Columbia substantive law. See supra note 2.
In recent years, the Court has refined its approach by
holding that § 1404(a) is designed to codify the common-law
doctrine of forum non conveniens, and so can be invoked before a
court has resolved “whether it has authority to adjudicate the
cause (subject-matter jurisdiction) or personal jurisdiction
over the defendant if [the court] determines that, in any event,
a foreign tribunal is plainly the more suitable arbiter of the
merits of the case.” Sinochem Int’l v. Malaysia Int’l Shipping,
549 U.S. 422, 425 (2007); see also Atlantic Marine Construction
Co., Inc. v. United States District Court for the Western
District of Texas, 571 U.S. 49, 60, 134 S. Ct. 568, 580 (2013).
However, the Court has not withdrawn from the approach of
treating § 1404 transfer as discretionary. Indeed, the Court
has held that, in the context of transfer under § 1404(a) – as
contrasted with dismissal for forum non conveniens - “[t]he
doctrine leaves much to the discretion of the court to which the
plaintiff resorts,” although “unless the balance is strongly in
favor of the defendant, the plaintiff’s choice of forum should
rarely be disturbed.” Gulf Oil Corp. v. Gilbert, 330 U.S. 501,
508 (1947).
40
Consequently, even with the Court’s recent doctrinal
evolution, I read 28 U.S.C. § 1404(a) to allow transfer of a
case only if the District of Massachusetts has jurisdiction over
the case in the first instance. Since it is undisputed that the
District of Massachusetts has both subject-matter and personal
jurisdiction over the case against GHP, and since transfer of
the case against Catalist is otherwise authorized, I will allow
a transfer of the entire case brought by TargetSmart to the
United States District Court for the District of Columbia.
In evaluating whether transfer is appropriate under
§ 1404(a), I consider the following factors:
(1) the convenience of the parties, (2) the convenience of
the witnesses, (3) the relative ease of access to sources
of proof, (4) the availability of process to compel
attendance of unwilling witnesses, (5) cost of obtaining
willing witnesses, and (6) any practical problems
associated with trying the case most expeditiously and
inexpensively.
F.A.I. Electronics Corp. v. Chambers, 944 F. Supp. 77, 81 (D.
Mass. 1996) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508
(1947)). Though ordinarily there is a presumption against
transfer, “[w]hen the plaintiff’s choice [of forum] is not its
home forum . . . the presumption in the plaintiff’s favor
applies with less force, for the assumption that the chosen
forum is appropriate is in such cases less reasonable.”
Sinochem Int’l, 549 U.S. at 430 (citing Piper Aircraft, 454 U.S.
at 255-56) (internal quotations omitted).
41
Here, because TargetSmart is headquartered in Washington,
D.C., and essentially conducts its business in the District of
Columbia, the presumption in favor of keeping the matter in
Boston applies with less force. GHP encourages me to find that
the other factors here counsel against transfer. [See Dkt. No.
40; Dkt. No. 41 at 13-15].4 GHP contends that it would be
inconvenienced by a transfer, since it is headquartered in
Boston, many of the relevant documents and materials are
physically present in the District of Massachusetts. [Dkt. No.
40 at 3]. GHP also adds that Massachusetts law would govern
pendent state law claims and, consequently, should be heard in
Massachusetts. GHP argues in its supplemental opposition that
4 During the January 25, 2019 hearing, TargetSmart suggested that
it would not oppose transfer of its claims against Catalist to
the District of Columbia if I found that the District of
Massachusetts lacked personal jurisdiction over Catalist. It
has since restated this position in its response to GHP’s
supplemental opposition to transfer. [Dkt. No. 49]. In that
filing, TargetSmart stated that its position “was and continues
to be that this case should move forward to the merits as soon
as possible,” even if it means that its claims against GHP and
Catalist proceed separately in two different fora. [Dkt. No. 49
at 2]. TargetSmart’s current opposition to the transfer of its
claims against GHP rests on GHP’s representation that it intends
to challenge the personal jurisdiction in the District of
Columbia, and TargetSmart’s desire to avoid further motion to
dismiss practice on the question of jurisdiction. As is
apparent, I do not find GHP’s undeveloped contention that the
District of Columbia would lack personal jurisdiction over it to
be colorable. Thus, TargetSmart’s anxious apprehensions about
further meaningful motion to dismiss practice in the District of
Columbia seem less than truly threatening to the orderly travel
of the entire case to conclusion in that District.
42
this court, because of its familiarity with the laws of the
Commonwealth, is “far better suited to preside over
TargetSmart’s claims brought specifically under Massachusetts
law” than the courts of the District of Columbia. [Dkt. No. 46
at 2].
These arguments are unpersuasive. While the District of
Massachusetts may be marginally more convenient for GHP,
wholesale transfer of the entire matter would hardly
inconvenience it. GHP may have relevant documents at its
headquarters in Boston, rather than in the District of Columbia,
but it is unclear that a transfer would materially raise the
cost of production. [Dkt. No. 40 at 3]. With the exception of
the former President of Catalist, Laura Quinn, [Dkt. No. 41 at
14], none of the parties identify witnesses who may be in one
city or another, or make any allegations regarding convenience
or cost to the witnesses or the availability of process to
compel their presence in a court in the District of Columbia.
Instead, opposition to transfer seems to center on the
background presumption in favor of a plaintiff’s choice of forum
imposed by section 1404(a). However, that presumption does not
apply with as great a force here, because TargetSmart is not a
Massachusetts citizen. See Sinochem Int’l, 549 U.S. at 430.
This fact, combined with my determination that this court lacks
personal jurisdiction over Catalist and the fact that the
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majority of interactions between the parties, at least as pled,
took place in the District of Columbia [Dkt. No. 36 at ¶¶ 24,
49-53], counsel in favor of transfer. Most fundamentally,
concern about judicial efficiency powerfully supports transfer
in order for the entire case to be adjudicated in one proceeding
in a single forum.
GHP’s opposition based on this court’s familiarity with the
laws of Massachusetts is essentially a make-weight. While this
circumstance may caution against transfer – for example, if the
case arises out of some particularly complex or intricate area
of state law or state regulatory structure – it is not, in and
of itself, a reason to deny transfer. See Island View
Residential Treatment Center, Inc. v. BlueCross BlueShield of
Mass., Inc., 2007 WL 4589335 at *8 (D. Mass. Dec. 28, 2007)
(citing, among others Salve Regina College v. Russell, 499 U.S.
225 (1991) and Lynch v. Nat’l Prescription Administrators, 2004
WL 385156 (S.D.N.Y. March 1, 2004)). Indeed, a federal judge is
presumed competent to make determinations of any state law, cf.
Salve Regina College, 499 U.S. at 238-39, and I have no reason
to question the capacity of my colleagues in the District of
Columbia to decide what are essentially garden-variety state law
claims presented here against GHP, which I again, see supra note
2, observe are likely to be resolved under the substantive law
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of the District of Columbia even when Massachusetts choice-of-
law principles are applied.
Consequently, applying the considerations governing
§ 1404(a), I will direct transfer of the entire case under 28
U.S.C. §§ 1631, 1406(a), and 1404(a) to the United States
District Court for the District of Columbia.
IV. CONCLUSION
For the foregoing reasons, I find that this court does not
have personal jurisdiction over the Defendant, Catalist. In the
interests of judicial economy, I GRANT Catalist’s motion [Dkt.
No. 38] to the extent of directing the Clerk to transfer the
entire case to the United States District Court for the District
of Columbia for adjudication. I decline to address that portion
in Catalist’s motion that seeks dismissal on grounds of failure
to state a claim, a matter which should be addressed, if
necessary, in further proceedings in the United States District
Court for the District of Columbia, which is — unlike this court
— authorized to exercise jurisdiction over all parties brought
into this litigation by TargetSmart’s operative complaint.
/s/ Douglas P. Woodlock_________
DOUGLAS P. WOODLOCK
UNITED STATES DISTRICT JUDGE
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