F I L E D
United States Court of Appeals
Tenth Circuit
JUL 23 2004
PUBLISH
PATRICK FISHER
Clerk
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
OREN L. BENTON,
Appellant-Plaintiff,
v. No. 02-1548
CAMECO CORPORATION,
a Canadian corporation,
Appellee-Defendant.
Appeal from the United States District Court
for the District of Colorado
(D.C. No. 00-S-2336)
G. Stephen Long (Jennifer A. Schaffner with him on the briefs), of Shughart
Thomson & Kilroy, P.C., Denver, Colorado, and William E. Quirk of Shughart
Thomson & Kilroy, P.C., Kansas City, Missouri, for Appellant-Plaintiff.
Daniel F. Wake (Jay S. Horowitz with him on the briefs), of Horowitz & Wake,
Denver, Colorado, for Appellee-Defendant.
Before HENRY, HOLLOWAY, and ANDERSON, Circuit Judges.
HENRY, Circuit Judge.
This case arises from a contract dispute between a Colorado resident, the
plaintiff Oren L. Benton, and a Canadian company, the defendant Cameco
Corporation. Mr. Benton and Cameco entered into a Memorandum of
Understanding in which Mr. Benton agreed to purchase uranium from Cameco for
resale. The agreement also set forth the key terms of a planned joint venture to
conduct uranium trading activities. When Cameco’s board did not approve the
transactions contemplated by the Memorandum of Understanding, Mr. Benton
sued Cameco in federal district court in Colorado, asserting claims for breach of
contract and tortious interference with existing and prospective business
relationships. The district court granted Cameco’s motion to dismiss on the
grounds that Cameco did not have sufficient contacts with Colorado to allow the
court to exercise personal jurisdiction over Cameco. Mr. Benton appealed.
Because we agree with the district court that personal jurisdiction is inappropriate
in this case, we AFFIRM.
I. BACKGROUND
Mr. Benton is a Colorado resident who has been engaged in the business of
mining, milling, brokering, and trading uranium for many years. Cameco is a
Saskatchewan company organized under the Canada Business Corporations Act
with its principal offices in Saskatchewan.
2
Between 1988 and 1996, Mr. Benton’s NUEXCO Trading Company
(“NTC”) and Cameco entered into a series of approximately two dozen
transactions concerning the sale of uranium. These transactions typically
consisted of Cameco selling uranium to NTC, buying uranium from NTC, or
swapping its uranium for a like amount of NTC’s uranium. The transactions were
“spot market” transactions, meaning that “each transaction involved separate,
independent contractual negotiations, as opposed to a series of sales or trades
pursuant to a single, longer term contract.” Aplt’s Br. at 5-6 n.2. Such
transactions were made in the ordinary course of business and did not require the
approval of Cameco’s Board of Directors.
In November 1994, Mr. Benton and Cameco entered into the Memorandum
of Understanding (“MOU”), the document at issue in this case. The MOU
describes two separate transactions between Mr. Benton and Cameco. First,
Cameco would provide Mr. Benton’s affiliates with quantities of uranium to
satisfy Mr. Benton’s sales commitments to eighteen different utility companies
around the world. Second, the MOU provided for the creation of a joint venture
pursuant to which the parties, under Cameco’s control, would conduct future
uranium trading activities.
The MOU conditioned the agreement to pursue these transactions upon
several factors, including (a) a satisfactory due diligence review by Cameco of
3
Mr. Benton’s eighteen purported uranium sales contracts and (b) the approval of
Cameco’s Board of Directors. See Aplt’s App. at 133-134 (MOU).
After the MOU was signed, members of Cameco’s staff spent two days in
Colorado conducting the due diligence review of Mr. Benton’s eighteen supply
contracts. In December 1994, Cameco’s Board of Directors met and declined to
approve any of the transactions listed in the MOU.
In November 2000, Mr. Benton filed this case against Cameco in federal
district court in Colorado, alleging breach of contract and tortious interference
with existing and prospective business relationships. Cameco filed a motion to
dismiss, arguing, inter alia, that the district court lacked personal jurisdiction
over Cameco. The district court agreed, reasoning that Cameco had not
established minimum contacts with Colorado because (1) Cameco’s contract
negotiations with Mr. Benton, a Colorado resident, were insufficient to create
minimum contacts with Colorado; (2) under 16 proposed sales contracts, delivery
of uranium products would not take place in Colorado, as there are no uranium
processing facilities there; (3) Cameco’s staff’s brief visit to Colorado was
insufficient to establish minimum contacts with Colorado; (4) the existence of a
Colorado subsidiary of Cameco did not establish the necessary minimum contacts
as the subsidiary was not an alter-ego of Cameco; and (5) it would be unfair to
require a foreign corporation to defend this case in Colorado.
4
In addition, the district court stated that “[a]lthough it is technically
unnecessary and possibly inappropriate for the Court to consider the merits of the
claims where it has found that it lacks jurisdiction . . . it [felt] compelled to do
so.” Aplt’s App. at 191-92 (Dist. Ct. Order, filed Nov. 15, 2002). On the merits,
the court concluded that Mr. Benton had failed to state either a breach of contract
or a tort claim. On the contract claim, the district court found that because
“Benton’s complaint concede[d] that the MOU expressly condition[ed] the
existence of [the] potential transactions upon certain occurrences or performance”
and because Mr. Benton affirmatively alleged that one of these conditions, the
approval of the Cameco board of directors, did not occur, “there could be no
contract to breach.” Id. at 192-93. As to the tort claim, the district court found
that “Cameco’s directors were entitled if not mandated to exercise their discretion
in their review of the proposed transactions,” and “the fact that the board of
directors did not approve the agreement cannot constitute a lack of bona fide
honesty or good faith simply because it was not consistent with the feeling of
security” that Mr. Benton obtained from Cameco. Id. at 194.
Mr. Benton now appeals the rulings of the district court. We disagree with
the district court’s conclusion that Cameco lacked minimum contacts with
Colorado; however, we hold that “traditional notions of fair play and substantial
justice,” Asahi Metal Indus. Co. v. Superior Court of Calif., 480 U.S. 102, 113
5
(1987), counsel against an exercise of personal jurisdiction over Cameco.
Therefore, we conclude that the district court properly dismissed Mr. Benton’s
claims because it lacked personal jurisdiction over Cameco. 1
II. DISCUSSION
“We review de novo the district court’s dismissal for lack of personal
jurisdiction.” Soma Med. Int’l v. Standard Chartered Bank, 196 F.3d 1292, 1295
(10th Cir. 1999). “[W]hen the court’s jurisdiction is contested, the plaintiff has
the burden of proving jurisdiction exists.” Wenz v. Memery Crystal, 55 F.3d
1503, 1505 (10th Cir. 1995). “When, as in this case, a district court grants a
motion to dismiss for lack of personal jurisdiction without conducting an
evidentiary hearing, the plaintiff need only make a prima facie showing of
personal jurisdiction to defeat the motion.” Soma, 196 F.3d at 1295. “We resolve
all factual disputes in favor of the plaintiff in determining whether plaintiff has
made a prima facie showing.” Far West Capital, Inc. v. Towne, 46 F.3d 1071,
1075 (10th Cir. 1995). Mr. Benton contends he has made a prima facie showing
of the court’s jurisdiction over Cameco.
“To obtain personal jurisdiction over a nonresident defendant in a diversity
1
Because we dismiss the case for lack of personal jurisdiction, we do not
address the district court’s dismissal for failure to state a claim.
6
action, a plaintiff must show that jurisdiction is legitimate under the laws of the
forum state and that the exercise of jurisdiction does not offend the due process
clause of the Fourteenth Amendment.” Soma, 196 F.3d at 1295 (internal
quotation marks omitted). “Colorado’s long arm statute is coextensive with
constitutional limitations imposed by the due process clause. Therefore, if
jurisdiction is consistent with the due process clause, Colorado’s long arm statute
authorizes jurisdiction over a nonresident defendant.” Day v. Snowmass Stables,
Inc., 810 F.Supp. 289, 291 (D. Colo. 1993) (citing Mr. Steak, Inc. v . District
Court, 574 P.2d 95, 96 (Colo. 1978)).
Our opinion in OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d
1086 (10th Cir. 1998), carefully and succinctly lays out the well-established
constitutional analysis for personal jurisdiction:
“The Due Process Clause protects an individual’s liberty interest in not
being subject to the binding judgments of a forum with which he has
established no meaningful ‘contacts ties, or relations.’” Burger King
Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985). Therefore, a “court
may exercise personal jurisdiction over a nonresident defendant only so
long as there exist ‘minimum contacts’ between the defendant and the
forum state.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
291 (1980). The requirement that “minimum contacts” be present
protects a defendant, who has no meaningful contact with a state, from
the burdens of defending a lawsuit far from home in a forum where the
substantive and procedural laws may be quite different from those with
which the litigant is familiar. See id. at 292. . . .
The “minimum contacts” standard may be met in two ways. First,
a court may, consistent with due process, assert specific jurisdiction
over a nonresident defendant “if the defendant has ‘purposefully
directed’ his activities at residents of the forum, and the litigation
7
results from alleged injuries that ‘arise out of or relate to’ those
activities.” Burger King, 471 U.S. at 472 (internal quotations omitted).
Where a court’s exercise of jurisdiction does not directly arise from a
defendant’s forum-related activities, the court may nonetheless maintain
general personal jurisdiction over the defendant based on the
defendant’s general business contacts with the forum state.
Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415
(1984).
Id. at 1090-91.
Mr. Benton asserts that Cameco is subject to both specific and general
jurisdiction. We examine each below.
A. Specific Jurisdiction
A specific jurisdiction analysis involves a two-step inquiry. First we must
consider whether “the defendant’s conduct and connection with the forum State
are such that he should reasonably anticipate being haled into court there.”
World-Wide Volkswagen, 444 U.S. at 297. “Second if the defendant’s actions
create sufficient minimum contacts, we must then consider whether the exercise
of personal jurisdiction over the defendant offends ‘traditional notions of fair play
and substantial justice.’” OMI, 149 F.3d at 1091 (quoting Asahi, 480 U.S. at
113).
1. Minimum Contacts
In determining whether a defendant has established minimum contacts with
the forum state, we examine whether the defendant “purposefully avail[ed] itself
of the privilege of conducting activities within the forum State.” Hanson v.
8
Denckla, 357 U.S. 235, 253 (1958). A defendant’s contacts are sufficient if “the
defendant purposefully directed its activities at residents of the forum, and . . . the
plaintiff’s claim arises out of or results from ‘actions by the defendant himself
that create a substantial connection with the forum state.’” OMI, 149 F.3d at 1091
(quoting Asahi, 480 U.S. at 109) (internal citations omitted).
Mr. Benton asserts that Cameco purposefully directed it activities at
Colorado because:
[1] Cameco entered into [the MOU] with a Colorado resident that set forth
the key terms of a joint venture;
[2] Cameco would have partially performed the transactions contemplated
by the MOU in Colorado in that it would have made payments to Benton in
Colorado;
[3] Cameco sent employees to Colorado to conduct a due diligence review
of Benton’s business in connection with the MOU;
[4] Cameco sent significant correspondence to Benton in Colorado; and
[5] Cameco committed a tortious act by interfering with Benton’s business
relationships, the effects of which were suffered in Colorado.
Aplt’s Br. at 13. Mr. Benton also asserts that the MOU created a current and
binding relationship for the purchase and sale of uranium to satisfy Mr. Benton’s
eighteen utilities contracts, creating an additional contact between Cameco and
Colorado resident Mr. Benton. Aplt’s Reply Br. at 2.
Cameco, on the other hand, contends that it has not established minimum
contacts with the state of Colorado. It points out that it “has no bank accounts in
Colorado, has no office or property in Colorado, is not licensed to do business in
Colorado, has no employees in Colorado, does not advertise or solicit business in
9
Colorado[,] and does not pay taxes in Colorado.” Aple’s Br. at 4. Furthermore,
Cameco argues that personal jurisdiction is improper because (1) the proposed
transactions of uranium with Mr. Benton would not take place in Colorado, as
none of the eighteen utilities Mr. Benton had contracted to supply are in Colorado
and there are no uranium processing facilities in Colorado; (2) it was Mr. Benton,
not Cameco, who solicited the transactions; (3) neither the communications
between the two companies, nor the execution of the MOU, nor the brief due
diligence review were sufficient to establish minimum contacts; (4) Cameco never
made any payments to Mr. Benton in Colorado; (5) Mr. Benton’s residence in
Colorado is a mere coincidence that had no role in the parties’ dealings; and (6)
the economic impact of Cameco’s alleged breach of contract and tortious activity
on Mr. Benton’s Colorado business is not sufficient to establish jurisdiction.
We note at the outset that this is a very close case. We emphasize that the
question of “[w]hether a non-resident defendant has the requisite minimum
contacts with the forum state to establish in personam jurisdiction must be
decided on the particular facts of each case.” Kuenzle v. HTM Sport-Und
Freizeitgerate AG, 102 F.3d 453, 456 (10th Cir. 1996) (internal quotation marks
omitted). The facts of this case place it in the grey area of personal jurisdiction
analysis. However, we hold that there are enough contacts between Cameco and
Colorado to establish what may be accurately termed “minimum” contacts.
10
A contract between an out-of-state party and a resident of the forum state
cannot, standing alone, establish sufficient minimum contacts with the forum.
Burger King, 471 U.S. at 473. However, “with respect to interstate contractual
obligations . . . parties who reach out beyond one state and create continuing
relationships and obligations with citizens of another state are subject to
regulation and sanctions in the other State for the consequences of their
activities.” Burger King, 471 U.S. at 473 (internal quotation marks omitted). In a
contract case, relevant factors for assessing minimum contacts include “prior
negotiations and contemplated future consequences, along with the terms of the
contract and the parties’ actual course of dealing.” Id. at 479.
In this case, the parties entered into a “Memorandum of Understanding”
that proposed the terms of several uranium transactions and a joint venture to
pursue uranium trading activities. The “prior negotiations” and the “contemplated
future consequences” of the MOU centered around the continuing business
relationship between Cameco and Mr. Benton. Although the uranium transactions
themselves would occur in places other than the state of Colorado, the business
end of the transactions – the brokering of the deals, the coordination of the
parties, the exchange of money and information between the parties, and the
decision-making behind the joint venture – would take place partially in Canada,
where Cameco has its principal place of business, and partially in Colorado,
11
where Mr. Benton has his principal place of business. Indeed, the instant dispute
does not concern the uranium transactions, but the conduct of the parties in
redefining their business relationship. By engaging in a business relationship
with Mr. Benton, who operates his business from Colorado, Cameco
“‘purposefully avail[ed] itself of the privilege of conducting activities within the
forum State, thus invoking the benefits and protections of its laws.’” Burger
King, 471 U.S. at 475 (quoting Hanson, 357 U.S. at 253).
Although “phone calls and letters are not necessarily sufficient in
themselves to establish minimum contacts,” Far West, 46 F.3d at 1077, the
correspondence exchanged between Cameco and Mr. Benton during the
negotiation of the MOU provides additional evidence that Cameco pursued a
business relationship with a Colorado business. Even more significant to our
minimum contacts analysis, Cameco sent several of its employees to Mr. Benton’s
office in Colorado to conduct the due diligence review required by the MOU.
Cameco not only established a business relationship with Mr. Benton’s Colorado-
based company on paper, but it also sent representatives to Colorado, the forum
state, in order to maintain and further that business relationship. Although the
due diligence review would have not been enough, in isolation, to establish
minimum contacts, it represents an additional instance in which Cameco
purposefully and knowingly availed itself of a business opportunity in Colorado.
12
Cameco argues that Mr. Benton’s presence in Colorado is a mere
coincidence that is inadequate to confer specific jurisdiction over Cameco.
However, we do not agree that “[t]he quality and nature” of Cameco’s contact
with Colorado was “so . . . random, fortuitous, [and] attenuated that it cannot
fairly be said that [Cameco] should reasonably anticipate being haled into court”
in Colorado. Burger King, 471 U.S. at 486 (citations and quotation marks
omitted). This is not a case in which the defendant’s only contacts with the forum
resulted from “the mere unilateral activity”of the plaintiff. See World-Wide
Volkswagen, 444 U.S. at 298 (holding that personal jurisdiction over defendant
car manufacturer was inappropriate when defendant’s only contacts with the
forum resulted from plaintiff’s unilateral activity of driving defendant’s product
into another state); Hanson, 357 U.S. 235 (holding that personal jurisdiction over
defendant trustee was inappropriate when defendant’s only contacts with the
forum resulted from plaintiff-settlor’s unilateral activity of moving to Florida).
Rather, Cameco voluntarily conducted business with Mr. Benton, whom Cameco
knew to be located in Colorado for many years prior to and at the time of the
events at issue. Again, Cameco’s sending employees to conduct the due diligence
review at Mr. Benton’s place of business demonstrates Cameco’s willingness to
engage in bilateral business activity taking place in Colorado.
The touchstone of a minimum contacts analysis is whether “the defendant’s
13
conduct and connection with the forum State are such that he should reasonably
anticipate being haled into court there.” World-Wide Volkswagen, 444 U.S. at
297. Cameco has transacted business with Mr. Benton since at least 1988, and at
all times Mr. Benton has been located in Colorado. When Cameco negotiated and
entered into the MOU in 1994, it voluntarily and knowingly entered into a
relationship with a Colorado resident. Thus, Cameco “purposefully directed his
activities at residents of the forum, and the litigation result[ed] from alleged
injuries that arise out of or relate to those activities.” Burger King, 471 U.S. at
472 (internal quotation marks omitted). Over the course of Cameco’s
negotiations with Mr. Benton, Cameco established several minor contacts with the
state of Colorado. Although none of these contacts individually could support a
finding of minimum contacts, we find that in the aggregate, Cameco’s “conduct
and connection with the forum State [were] such that he should reasonably
anticipate being haled into court there.” World-Wide Volkswagen, 444 U.S. at
297. Thus, we hold that Cameco had sufficient minimum contacts to support an
exercise of personal jurisdiction.
2. Traditional Notions of Fair Play and Substantial Justice
Although we have found that there are sufficient minimum contacts
between Cameco and Colorado, we are also required to “consider whether the
exercise of personal jurisdiction over the defendant offends traditional notions of
14
fair play and substantial justice.” OMI, 149 F.3d at 1091. Therefore, we inquire
“whether a district court’s exercise of personal jurisdiction over a defendant with
minimum contacts is ‘reasonable’ in light of the circumstances surrounding the
case.” Id.
In assessing whether an exercise of jurisdiction is reasonable, we
consider [a] the burden on the defendant, [b] the forum state’s interest
in resolving the dispute, [c] the plaintiff’s interest in receiving
convenient and effective relief, [d] the interstate judicial system’s
interest in obtaining the most efficient resolution of controversies, and
[e] the shared interest of the several states in furthering fundamental
social policies.
Id. at 1095. The analyses of minimum contacts and reasonableness are
complementary, such that
“[T]he reasonableness prong of the due process inquiry evokes a sliding
scale: the weaker the plaintiff’s showing on [minimum contacts], the less a
defendant need show in terms of unreasonableness to defeat jurisdiction.
The reverse is equally true: an especially strong showing of reasonableness
may serve to fortify a borderline showing of [minimum contacts].”
Id. at 1092 (quoting Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 210 (1st
Cir.1994)). Applying this framework, we conclude that an exercise of personal
jurisdiction over Cameco in the District of Colorado would be inconsistent with
traditional notions of fair play and substantial justice.
(a) Burden on Defendant of Litigating in the Forum
“[T]he burden on the defendant of litigating the case in a foreign forum is
of primary concern in determining the reasonableness of personal jurisdiction. . . .
15
When the defendant is from another country, this concern is heightened and ‘great
care and reserve should be exercised’ before personal jurisdiction is exercised
over the defendant.” Id. at 1096 (quoting Asahi, 480 U.S. at 114).
In this case, the burden on the defendant is significant. Cameco is a
Canadian corporation with principal offices in Saskatchewan, and it has no office
or property in Colorado, is not licensed to do business in Colorado, and has no
employees in Colorado. See id. (finding burden on defendants significant when
Canadian corporation had no license to conduct business in Kansas, maintained no
offices in Kansas, and employed no agents in Kansas). Cameco’s officers and
employees “will not only have to travel outside their home country, they will also
be forced to litigate the dispute in a foreign forum unfamiliar with the Canadian
law governing the dispute.” Id. Therefore, this factor weighs against an exercise
of personal jurisdiction over Cameco.
(b) Forum State’s Interest in Adjudicating the Dispute
“States have an important interest in providing a forum in which their
residents can seek redress for injuries caused by out-of-state actors.” Id. “The
state’s interest is also implicated where resolution of the dispute requires a
general application of the forum state’s laws.” Id. In this case, this factor favors
both Mr. Benton and Cameco. Mr. Benton is a Colorado resident, and the state
has an interest in providing him a forum for his suit against Cameco. However,
16
the parties agree that Canadian law will govern the dispute. Therefore, this factor
does not weigh heavily in favor of either party.
(c) Plaintiff’s Interest in Convenient and Effective Relief
This factor
hinges on whether the Plaintiff may receive convenient and effective
relief in another forum. This factor may weigh heavily in cases where
a plaintiff’s chances of recovery will be greatly diminished by forcing
him to litigate in another forum because of that forum’s laws or because
the burden may be so overwhelming as to practically foreclose pursuit
of the lawsuit.
Id. at 1097. Because Canadian law governs the suit and because Mr. Benton has
not established that litigating the matter in Canada would cause undue hardship to
him, we find that Mr. Benton would be able to receive convenient and effective
relief by bringing suit in Canada. Therefore, this factor weighs in Cameco’s
favor, against an exercise of jurisdiction.
(d) Interstate Judicial System’s Interest in Obtaining Efficient
Resolution
This factor asks “whether the forum state is the most efficient place to
litigate the dispute.” Id. “Key to the inquiry are the location of witnesses, where
the wrong underlying the lawsuit occurred, what forum’s substantive law governs
the case, and whether jurisdiction is necessary to prevent piecemeal litigation.”
Id. (citations omitted). Based on the nature of Mr. Benton’s claims against
Cameco, many of the witnesses in the dispute would be directors, officers, and
17
employees of Cameco, all of whom are located in Canada. Likewise, the alleged
wrong, Cameco’s failure to approve the transactions in the MOU, occurred in
Canada, and Canadian law will govern the dispute. Moreover, Mr. Benton need
not litigate the action in Colorado to avoid piecemeal litigation. Id. Therefore, we
find that litigating the dispute in Colorado would not be more efficient than in
Canada.
(e) States’ Interest in Furthering Fundamental Substantive Social
Policies
The fifth factor of the reasonableness inquiry “focuses on whether the
exercise of personal jurisdiction by [the forum] affects the substantive social
policy interests of other states or foreign nations.” Id. “The Supreme Court has
cautioned that ‘great care and reserve should be exercised when extending our
notions of personal jurisdiction into the international field.’” Id. at 1097-98
(quoting Asahi, 480 U.S. at 115). Therefore, we must look closely at the extent to
which an exercise of personal jurisdiction by Colorado over Cameco interferes
with Canada’s sovereignty. Id. Relevant facts include “whether one of the
parties is a citizen of the foreign nation, whether the foreign nation’s law governs
the dispute, and whether the foreign nation’s citizen chose to conduct business
with a forum resident.” Id. at 1098 (citations omitted). Cameco did chose to
conduct business with Mr. Benton, a resident of Colorado. However, Cameco is a
Canadian corporation, Canadian law will govern the dispute, and we are required
18
to give deference to the international nature of this case. Therefore, we find that
an exercise of personal jurisdiction would affect Canada’s policy interests.
We have already concluded that Cameco’s contacts with Colorado were
quite limited, barely satisfying the minimum contacts standard. As a result,
Cameco need not make a particularly strong showing in order to defeat
jurisdiction under this reasonableness inquiry. OMI, 149 F.3d at 1092. Because
the majority of the five reasonableness factors weigh in Cameco’s favor, we hold
that an exercise of personal jurisdiction over Cameco would offend traditional
notions of fair play and substantial justice.
B. General Jurisdiction
Although we have found that the Colorado district court lacks specific
jurisdiction over Cameco, we must further inquire whether general jurisdiction
exists. “Because general jurisdiction is not related to the events giving rise to the
suit, courts impose a more stringent minimum contacts test, requiring the plaintiff
to demonstrate the defendant’s continuous and systematic general business
contacts.” OMI, 149 F.3d at 1091 (internal quotation marks omitted).
Mr. Benton asserts that Cameco has such contacts with Colorado because
(1) in addition to the dealings at issue in this case, Cameco and Mr. Benton
engaged in two dozen “spot market” transactions between 1988 and 1996, and (2)
Cameco has a wholly-owned U.S. subsidiary, Cameco, Inc., that is licensed to do
19
business in Colorado. We disagree. First, the occurrence of two dozen
transactions taking place over a period of eight years, with the last taking place at
least four years before suit was filed in November 2000, is not sufficient to meet
the high burden of demonstrating that Cameco had “continuous and systematic
general business contacts.” Second, as the district court observed, Mr. Benton
has not alleged nor produced evidence to show that Cameco, Inc., is the general
agent or alter ego of Cameco. His allegation that “there is an overlap of current
and former officers and directors of Cameco and Cameco, Inc.,” Aplt’s Br. at 21 –
an overlap that actually consists of one common officer – is insufficient proof.
“[A] holding or parent company has a separate corporate existence and is treated
separately from the subsidiary in the absence of circumstances justifying
disregard of the corporate entity.” Quarles v. Fuqua Indus., Inc., 504 F.2d 1358,
1362 (10th Cir. 1974). Therefore, the activities of Cameco, Inc., in Colorado
cannot be imputed to Cameco for the purpose of assessing Cameco’s general
business contacts with Colorado. Because Cameco has not established
“continuous and systematic general business contacts” with Colorado, an exercise
of personal jurisdiction over Cameco is improper.
C. Failure to State a Claim
Because we have concluded that the court lacks personal jurisdiction over
Cameco, we need not address the district court’s determination that Mr. Benton
20
failed to state a claim.
III. CONCLUSION
Although we hold that there are minimum contacts in this case, those
contacts are so weak that our evaluation of “whether a district court’s exercise of
personal jurisdiction over a defendant with minimum contacts is ‘reasonable’ in
light of the circumstances surrounding the case,” OMI, 149 F.3d at 1091, takes
on more importance. Because a majority of the reasonableness factors weigh
against an exercise of personal jurisdiction, we find that an exercise of specific
personal jurisdiction by the Colorado district court would be inappropriate under
the facts of this case. Additionally, the requirements of general jurisdiction are
not met. Therefore, we AFFIRM the district court’s dismissal for lack of personal
jurisdiction.
21
HOLLOWAY, Circuit Judge, concurring in part and dissenting in part:
The majority opinion concedes that minimum contacts are sufficiently
shown for specific jurisdiction and I agree. I am, however, unable to agree that
Cameco has established this exercise of such specific jurisdiction here is so
unreasonable as to be a violation of due process by offending traditional notions
of fair play and substantial justice. Accordingly, I must respectfully dissent from
the majority’s holding of a due process violation in that respect and its
disposition.
The majority found that Cameco had “purposely directed [its] activities” at
a resident of Colorado and that Benton’s claims are premised upon “injuries that
arise out of or relate to those activities.” Nonetheless, the majority concludes that
the exercise of personal jurisdiction in this case by Colorado would violate Due
Process because hailing Cameco into a Colorado court would “offend traditional
notions of fair play and substantial justice.” I disagree for two principal reasons:
Cameco’s contacts with Colorado were not “quite limited” and Cameco failed to
proffer the requisite “compelling case” that the exercise of personal jurisdiction
in this case is unreasonable. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477
(1985).
1
A
More than limited contacts
The majority concludes that Cameco had only by a very slim margin
established minimum contacts with Colorado in respect to the instant litigation.
In so concluding, the majority noted that Cameco’s contacts with Colorado were
“minor” and supported a finding of minimum contacts only in the aggregate.
While this reasoning may be correct insofar as it is necessary to look at a
defendant’s contacts in the aggregate, it fails to recognize that the whole is
greater than the sum of its parts.
In determining whether a defendant’s contacts with the forum state are
sufficient for a valid exercise of jurisdiction, the focus is not on the form or
duration or number of those contacts but rather on whether those contacts
“represent an effort by the defendant to purposefully avail itself of the privilege
of conducting activities within the forum State.” Rambo v. American Southern
Ins. Co., 839 F.2d 1415, 1418 (10th Cir. 1988) (internal quotation marks omitted).
In other words, “the mere quantum of contacts between the forum and the
defendant is not determinative of this issue.” Continental Am. Corp. v. Camera
Controls Corp., 692 F.2d 1309, 1314 (10th Cir. 1982). Accordingly, “So long as
it creates a substantial connection with the forum, even a single act can support
2
jurisdiction.” Burger King Corp., 471 U.S. at 475 n.18.
Here, Cameco’s contacts with Colorado were made as part of a deliberate
effort by Cameco to enter into a contract with a known resident of Colorado. As
the majority noted, the instant lawsuit arose from an alleged breach of a
Memorandum of Understanding (MOU) between Cameco and Benton. 1 The acts
contemplated by the MOU, future purchases of uranium and a joint venture, were
to be partly performed in Colorado. Id. at 103. In addition, the formation of the
MOU involved Cameco negotiating over the telephone and by mail with Colorado
residents and Cameco sending two of its employees to Colorado to conduct a due
diligence review. 2 Id.
These contacts, alone and in the aggregate, are clear manifestations of
Cameco’s desire to enter into a business relationship with a Colorado resident.
And, when Cameco allegedly interrupted this relationship, the resulting damages
accrued exactly where expected, in Colorado and borne by Colorado citizens. Id.
at 17, 19. Under these circumstances, even if Cameco’s contacts with Colorado
were not numerous, this is a case where upon executing its agreement with
1
The MOU was dated November 1, 1994, and executed for Cameco by
Gerald Grandy, then Vice President of Fiances and Business Development and
Oren L. Benton. Appellant App. at 134.
2
Since corporations are legal fictions, a corporation’s contacts with a forum
state are created through the acts of its employees and agents. International Shoe
Co. v. Washington, 326 U.S. 310, 316-17 (1945).
3
Benton, Cameco should “reasonably anticipate being haled into court” in
Colorado. World-Wide Volkswagon, 444 U.S. 286, 297 (1980).
B
Traditional notions of fair play and substantial justice
As the majority correctly notes, “the reasonableness prong of the due
process inquiry evokes a sliding scale . . . .” OMI Holdings v. Royal Ins. Co. of
Canada, 149 F.3d 1086, 1092 (10th Cir. 1998). Thus, “depending on the strength
of the defendant's contacts with the forum state, the reasonableness component of
the constitutional test may have a greater or lesser effect on the outcome of the
due process inquiry.” Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84
F.3d 560, 568 (10th Cir. 1996). I believe the strength of Cameco’s contacts with
Colorado to be substantially stronger than the majority and would therefore
require a greater showing of unreasonableness by Cameco. In any event,
however, we are in agreement that Cameco has “purposefully directed [its]
activities” at Colorado.
“[W]here a defendant who purposefully has directed his activities at forum
residents seeks to defeat jurisdiction, he must present a compelling case that the
presence of some other considerations would render jurisdiction unreasonable.”
4
Burger King, 471 U.S. at 477 (emphasis added). In this case, that means Cameco
must demonstrate that litigating this dispute in Colorado would be “so gravely
difficult and inconvenient,” that it would be at a “severe disadvantage in
comparison to [Benton].” Id. I believe the majority errs in concluding Cameco
has satisfied this burden by overestimating the difficulties Cameco would face
were it to litigate these claims in Colorado, by underestimating the interest
Colorado has to resolve this dispute, and by concluding, without support from the
record, that Canada would be the most efficient venue.
i
The Burden on Cameco
The majority’s conclusion that the exercise of personal jurisdiction in this
case would be unreasonable rests primarily upon what I believe to be an
exaggeration of the burden on Cameco to litigate in Colorado. In particular, the
majority is concerned that litigation in Colorado will require Cameco employees
to “travel outside their home country” and litigate the dispute “in a forum
unfamiliar with the Canadian law governing the dispute.” Both of these concerns
are overwrought.
As the majority noted, where a foreign defendant is forced to litigate in the
5
United States, “great care and reserve should be exercised before personal
jurisdiction is exercised” because of the heightened burden on the defendant.
OMI, 149 F.3d at 1096. However, as the Supreme Court noted nearly a half
century ago, “modern transportation and communication have made it much less
burdensome for a party sued to defend himself in a State where he engages in
economic activity.” McGee v. International Life Ins. Co., 255 U.S. 220, 223
(1957). Since that time, transportation has become even more convenient. See
Sculptchair, Inc. v. Century Arts, 94 F.3d 623, 632 (11th Cir. 1996) (holding the
burden of forcing a Canadian defendant to litigate in Florida was
“uncompelling”); Aristech Chem. Int’l Ltd. v. Acrylic Fabricators Ltd., 138 F.3d
624, 629 (6th Cir. 1998) (holding that it was reasonable to require a defendant
from Ontario to litigate in Kentucky because Ontario was “only a short plane
flight” away). In this case, Cameco’s headquarters in Saskatchewan is only a
reasonable journey from Colorado and Cameco has already demonstrated its
ability to make that trip by sending its employees to Colorado to conduct the due
diligence review for the MOU. Appellant App. at 103.
In addition, even though Canadian and United States law are not completely
congruent, both are “rooted in the same common law traditions.” Aristech Chem.,
138 F.3d at 629. That commality is especially acute in this case. Here, Benton’s
primary claim is that Cameco breached the implied duty of good faith and fair
6
dealing. This duty of good faith is similar in both United States and Canadian
law. See David Stack, The Two Standards of Good Faith in Canadian Contract
Law, 62 Sask. L. Rev. 201, 202-03 (1999) (commenting that in Canadian contract
law, the doctrine of good faith has been described and applied in similar fashions
as in United States law). Moreover, any differences may be easily discovered and
dealt with as Canadian law is readily available electronically on both Westlaw and
LexisNexis. Thus, “The unfairness of forcing a foreign party to litigate in an
unfamiliar legal system is alleviated here by the fact that the Canadian legal
system is similar in many respects to the legal system in the United States.”
Ensign-Bickford Co. v. ICI Explosives USA, Inc., 817 F. Supp. 1018, 1031 (D.
Conn. 1993); see also Southern Sys., Inc. v. Torrid Oven Ltd., 58 F. Supp. 2d 843,
852 (W.D. Tenn. 1999).
In addition, Cameco cannot credibly claim that forcing it to travel to and
litigate within the United States is akin to forcing it to retrieve golden apples of
the Hesperides. In addition to owning a subsidiary based in Nevada, Appellant
App. at 75, Cameco operates major uranium mines in both Wyoming and
Nebraska, Cameco 2003 Annual Report 18 (2003), available at
http://www.cameco.com/investor_relations/annual/2003/common/pdfs/2003_ar_fu
ll-72dpi.pdf. Thus, Cameco employees regularly operate in and travel to the
United States to conduct economic activity. Accordingly, I am satisfied that
7
forcing Cameco to litigate this dispute in Colorado is not “gravely difficult and
inconvenient.” Burger King, 471 U.S. at 477.
ii
The Forum’s interest
Another factor to be considered in determining whether the exercise of
personal jurisdiction is reasonable in this case is Colorado’s interest in providing
a forum. The majority concedes that Colorado has an interest but concludes that
this interest is attenuated by the fact Canadian rather the Colorado law applies. I
disagree.
“States have an important interest in providing a forum in which their
residents can seek redress for injuries caused by out-of-state actors.” OMI, 149
F.3d 1092. This interest is separate from and in addition to the interest a state
may have “where resolution of the dispute requires a general application of the
forum state's law.” Id.; See Asahi Metal Indus. Co. v. Superior Court of Cal., 480
U.S. 102, 115 (1987) (discussing the interest of various states to effectuate its
“substantive policy” separate from the interest of the forum state in providing a
forum for its own resident). Thus, the fact that the plaintiff is a resident of the
forum state supports the finding that the exercise of personal jurisdiction is
8
reasonable irrespective of what state’s law may apply.
In this case, Benton is a resident of the forum state. In addition, he alleges
that the injuries inflicted upon him by Cameco exceed 100 million dollars. Thus,
Colorado has an “important interest” in providing a forum in which Benton can
seek redress.
That Benton is a resident of the forum state also distinguishes the instant
case from OMI holdings, a case heavily relied upon by the majority. In OMI,
none of the parties were residents of the forum state and we noted specifically
that no party was claiming the defendants “committed a tortious act against or
breached a contract with a [forum] resident.” 149 F.3d at 1096. Were this
otherwise, we observed that the forum’s “interest in litigating the suit would
undoubtedly be much higher.” Id.
The importance that the plaintiff be a resident of the forum state was also
emphasized in Asahi. There, both parties to the litigation were not only alien to
the forum state, but alien to the country as well. Asahi, 480 U.S. at 114. Based
upon that fact, Justice O’Connor’s plurality portion of the opinion noted that
“[b]ecause the plaintiff is not a [forum state] resident, [the forum state’s]
legitimate interest in the dispute have considerably diminished.” Id. This case
does not involve a non-forum plaintiff as Cameco is alleged to have both
breached a contract with and committed a tortious act against a forum resident.
9
Appellant App. at 13-14.
iii
The Interstate Judicial System's Interest in Obtaining Efficient Resolution
This factor in the reasonableness inquiry is “whether the forum state is the
most efficient place to litigate the dispute.” OMI, 149 F.3d at 1097. Factors to
be considered in determining efficiency include the location of witnesses, the
situs of the injury, the controlling law, and the prevention of piecemeal litigation.
Based upon these factors, the majority was convinced Canada would clearly be
the more efficient venue. I do not believe the case to be so clear.
While several factors do not favor Colorado as a forum, the location of
potential witnesses is ambiguous. Cameco asserts that the majority of the
employees involved in the MOU reside in Canada. However, Cameco also admits
that some live in Minnesota. Moreover, Benton asserts that there are
“approximately one dozen potential witnesses with pertinent relevant knowledge
that reside in Colorado.” Appellant App. at 103. Thus, no matter which forum is
selected, Colorado or Canada, a substantial number of witnesses may need to
travel. And, given the demonstrated ability of Cameco employees to travel to and
from the United States, I do not believe Colorado is materially more inefficient
10
than Canada.
C
Conclusion
Given the substantial and deliberate contacts Cameco engaged in with the
State of Colorado through one of its residents and the less than compelling case of
unfairness by litigating there, I conclude that due process is not offended by the
exercise of personal jurisdiction over Cameco in this case. Accordingly, I
respectfully dissent from the holding that litigation in Colorado would violate
traditional notions of fair play and substantial justice.
11