Joseph Saveri Law Firm, Inc. v. Michael Criden

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUN 2 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT

JOSEPH SAVERI LAW FIRM, INC., a No. 15-15534
California corporation; JOSEPH R.
SAVERI, D.C. No. 3:14-cv-01740-EDL

Plaintiffs-counter-
defendants-Appellees, MEMORANDUM*

v.

MICHAEL E. CRIDEN, DBA Criden &
Love, P.A., P.A.,

Defendant-counter-claimant-
Appellant.

Appeal from the United States District Court
for the Northern District of California
Elizabeth D. Laporte, Magistrate Judge, Presiding

Argued and Submitted April 20, 2017
San Francisco, California

Before: PAEZ and IKUTA, Circuit Judges, and FABER,** District Judge.

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable David A. Faber, United States District Judge for the
Southern District of West Virginia, sitting by designation.
 This case concerns a referral-fee agreement dispute between two law firms.

We exercise jurisdiction under 28 U.S.C. § 1291.

Our discussion commences, and as it turns out concludes, with personal

jurisdiction. We review de novo the district court’s decision on personal jurisdiction.

See Harris Rutsky & Co. Ins. Servs., Inc. v. Bell & Clements Ltd., 328 F.3d 1122,

1128 (9th Cir. 2003). Since California’s long-arm statute enables “[state] courts” to

“exercise jurisdiction on any basis not inconsistent with the Constitution of this state

or of the United States,” Cal. Civ. Proc. Code § 410.10, the same standard applies

when federal courts within California exercise personal jurisdiction. See Fed. R.

Civ. P. 4(k). “When no federal statute specifically defines the extent of personal

jurisdiction, we look to the law of the state where the district court sits—in this case,

[California].” Menken v. Emm, 503 F.3d 1050, 1056 (9th Cir. 2007). Whether due

process allowed the district court for the Northern District of California to assert

personal jurisdiction over Michael Criden dba Criden & Love, PA, a Florida law

firm (“Appellant” or “Criden”) is the same inquiry as whether due process would

have allowed the California courts to assert personal jurisdiction over Criden.

Here, the parties do not dispute that the district court could not have “general

or all-purpose jurisdiction” over Criden, the question is whether the district court

properly exercised “specific or case-linked jurisdiction” over Criden. Goodyear

2
Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). We analyze

specific jurisdiction according to a three-prong test:

(1) The non-resident defendant must purposefully direct his activities or

consummate some transaction with the forum or resident thereof; or perform some

act by which he purposefully avails himself of the privilege of conducting

activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must arise out of or result from the defendant’s forum-related

activities; and

(3) exercise of jurisdiction must be reasonable.

Id.; see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475-76 (1985);

Menken, 503 F.3d at 1056. In contract cases, including cases arising out of the

existence of a contract, purposeful availment, as opposed to purposeful direction, is

the appropriate test. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,

802 (9th Cir. 2004); Picot v. Weston, 780 F.3d 1206, 1212 (9th Cir. 2015). “A

claim . . . as to the existence of a contract is an action sounding in contract.” Picot,

780 F.3d at 1212 (emphasis added); see also Stanford Ranch v. Md. Cas. Co., 89

F.3d 618, 625 (9th Cir. 1996) (“[A] claim dependent on the existence of an

underlying contract, sounds in contract, as opposed to tort.”). Here, the claims

asserted in the complaint concern a dispute over whether an implied contract ever

3
existed and, if it did, what obligations it imposes on the parties. As a result, this is

a contract case, where purposeful availment is the appropriate test.

Under the purposeful-availment test, “a contract alone does not

automatically establish minimum contacts in the plaintiff’s home forum.”

Boschetto v. Hansing, 539 F.3d 1011, 1017 (9th Cir. 2008). Instead, there must be

“actions by the defendant himself that create a ‘substantial connection’ with the

forum State.” Burger King, 471 U.S. at 475 (quoting McGee v. Int’l Life Ins. Co.,

355 U.S. 220, 223 (1957) (emphasis in original)). Merely “random, fortuitous, or

attenuated” contacts are inadequate. Burger King, 471 U.S. at 475 (internal

quotation marks omitted). A defendant must have “performed some type of

affirmative conduct which allows or promotes the transaction of business within

the forum state.” Sher v. Johnson, 911 F.2d 1357, 1362 (9th Cir. 1990) (citations

and internal quotation marks omitted). “[P]rior negotiations and contemplated

future consequences, along with the terms of the contract and the parties’ actual

course of dealing” could inform whether this conduct existed. Burger King, 471

U.S. at 479; see also Picot, 780 F.3d at 1212.

Joseph Saveri Law Firm, Inc. (“Appellees” or “Saveri”) argues that the

district court had personal jurisdiction over Criden because: (1) Criden sent an e-

mail to Lieff Cabraser Heimann & Bernstein, LLP (“Lieff Cabraser”) in California

to create the contract; (2) Criden also sent two e-mails to Saveri trying to confirm

4
the alleged referral arrangement; (3) Criden initiated an American Arbitration

Association (“AAA”) proceeding against Plaintiffs, both California residents, in an

effort to enforce the alleged contract; and (4) Saveri performed legal services

within California.

First, the fact that Criden sent emails that were received in California does

not establish personal jurisdiction since the “use of the mails, telephone, or other

international communications simply do not qualify as purposeful activity invoking

the benefits and protection of the [forum] state.” Peterson v. Kennedy, 771 F.2d

1244, 1262 (9th Cir. 1985) (citations and internal quotation marks omitted); see

also Sher, 911 F.2d at 1362. Nor did Criden’s emails to Saveri “promote[] the

transaction of business” within California. Sher, 911 F.2d at 1362.

Second, Criden initiated an arbitration proceeding before the AAA against

Plaintiffs, but in no material sense has Criden, in doing so, availed itself of the

benefits and protections of California’s laws. See Church of Scientology of

California v. Adams, 584 F.2d 893, 896 (9th Cir. 1978) (“If a defendant is not

present for all purposes in the forum, due process requires that jurisdiction be

based on contacts which have some nexus to the cause of action alleged.”). The

AAA is not a California court—or court of any kind. As a result, those

participating in an arbitration are not availing themselves of the benefits and

protections of the state where the arbitration is occurring. Such contacts

5
quintessentially are “random, fortuitous, or attenuated.” Burger King, 471 U.S. at

475 (internal quotation marks omitted). Moreover, this is especially true here since

the arbitration was initiated in Florida, not California.

Third, Saveri’s own activities in California cannot establish personal

jurisdiction over Criden. Otherwise, a plaintiff could establish jurisdiction over a

defendant through the plaintiff’s own contractual performance within a forum state.

“The inquiry whether a forum State may assert specific jurisdiction over a

nonresident defendant focuses on the relationship among the defendant, the forum,

and the litigation.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (citations and

internal quotation marks omitted). A plaintiff does not “satisfy the defendant-

focused minimum contacts inquiry by demonstrating contacts between the plaintiff

(or third parties) and the forum State.” Id. at 1122 (citation and internal quotation

marks omitted). In sum, since this suit fails the purposeful-availment test, the district

court lacked personal jurisdiction over Criden.

Lastly, Criden never waived its right to contest the want of personal

jurisdiction. Rule 12(h) requires “a party” to “raise any objections to personal

jurisdiction in its first motion” or first responsive pleading. Stewart v. Ragland,

934 F.2d 1033, 1036 n.5 (9th Cir. 1991). Otherwise, the defense will be deemed to

have been waived. As its first act, Criden filed its consent to adjudication by the

Magistrate Judge on April 18, 2014. See Doc. No. 11, No. 3:14-cv-01740-EDL.

6
As its next act, Criden filed its Motion to Dismiss for Lack of Jurisdiction on May

13, 2014. See Doc. No. 15, No. 3:14-cv-01740-EDL. Since consent for

adjudication is not a “motion” or a substantive answer to one within the Stewart

context, 934 F.2d at 1036 n.5, Criden’s filing its Motion to Dismiss for Lack of

Jurisdiction when it did means that Criden raised its objection. And there are no

“other factors militating in favor of a finding of waiver” in this case. See Peterson

v. Highland Music, Inc., 140 F.3d 1313, 1319 (9th Cir. 1998), as amended on

denial of reh’g and reh’g en banc (June 15, 1998).

REVERSED AND REMANDED WITH INSTRUCTIONS TO

DISMISS.

7