Richard Morris v. Francois Harley

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 6 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT

RICHARD WILLIAM MORRIS, on behalf No. 16-16064
of Oregon Cascade Corporation and
CLAUDINE MORRIS, Assignee on behalf D.C. No.
of Oregon Cascade Corporation, 2:15-cv-00226-JAD-GWF

Plaintiffs-Appellants,
MEMORANDUM*
v.

FRANCOIS ROBERT HARLEY, AKA
Francois Robert Haussauer; et al.,

Defendants-Appellees.

Appeal from the United States District Court
for the District of Nevada
Jennifer A. Dorsey, District Judge, Presiding

Submitted November 13, 2017**
San Francisco, California

Before: GOULD and MURGUIA, Circuit Judges, and GRITZNER,*** District
Judge.

*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable James E. Gritzner, United States District Judge for the
Southern District of Iowa, sitting by designation.
 The issue in this case is whether the district court correctly ordered dismissal

for lack of personal jurisdiction over Defendants Francois Harley and his company,

Cambium E.I.R.L. Richard and Claudine Morris and Harley signed a lease

agreement in the Dominican Republic on August 29, 2012. This agreement gave

the Morrises a 99-year lease for the lot “Mango 12” in Cambium, a subdivision

located entirely within the Dominican Republic. On May 31, 2013, while Harley

was in Las Vegas, Nevada, the Morrises and Harley amended their 2012 lease

agreement, substituting the Cambium lot “Cana 17” for Mango 12.

In 2015, the Morrises brought claims against Defendants for violations of

the Interstate Land Sales Full Disclosure Act (ILSA), as well as state tort and

contract law. The district court granted Defendants’ motion to dismiss, finding

that Defendants were not subject to personal jurisdiction in Nevada or, by way of

the federal long-arm statute, in the United States as a whole. On appeal, the

Morrises argue that Defendants waived their personal jurisdiction defenses; that

they are subject to personal jurisdiction in both Nevada and under the federal long-

arm statute; and that personal jurisdiction is automatic under the ILSA.

Defendants raised the defense of lack of personal jurisdiction in their first

responsive pleading and moved to dismiss all claims on that basis. Defendants did

not waive their personal jurisdiction defenses. See Fed. R. Civ. P. 12(h).

Because the Morrises brought suit in the District of Nevada, this court

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assesses whether the exercise of personal jurisdiction over Defendants in Nevada is

proper. See Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014). The Morrises allege

that Harley promoted and solicited purchases on behalf of Cambium at a two-day

convention in Las Vegas, Nevada. Such a discrete act does not render Defendants

essentially at home in Nevada. See CollegeSource, Inc. v. AcademyOne, Inc., 653

F.3d 1066, 1074 (9th Cir. 2011). Nevada lacks general personal jurisdiction over

Defendants.

The Morrises’ lease agreement was signed in the Dominican Republic and

predated Harley’s visit to Nevada. Though the parties amended the agreement at

the Las Vegas convention, this amendment only substituted one plot of land for

another; the remaining terms from the 2012 lease were unaffected. The Morrises

failed to show their ILSA claim would not have arisen but for Defendants’ Nevada

contacts and thus failed to establish specific jurisdiction. See Menken v. Emm, 503

F.3d 1050, 1058 (9th Cir. 2007).

Moreover, adjudicating this dispute in Nevada would not be reasonable.

Defendants did not purposefully direct their conduct toward Nevada beyond

Harley attending the Las Vegas convention. Cambium is incorporated in, and has

its principal place of business in, the Dominican Republic. The entire Cambium

subdivision is located in the Dominican Republic. The 2012 lease agreement was

signed in the Dominican Republic and notarized by a Dominican notary public.

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The agreement contains a dispute-resolution clause requiring mandatory mediation

and arbitration in the Dominican Republic. An alternative forum (arbitration in the

Dominican Republic) exists. See CollegeSource, 653 F.3d at 1079 (setting forth

factors relevant to reasonable exercise of specific jurisdiction). Nevada lacks

specific personal jurisdiction over Defendants.

Because the Morrises assert a federal law claim under the ILSA and

Defendants are not subject to personal jurisdiction in any individual state, the court

can assess Defendants’ contacts under the federal long-arm statute. See Fed. R.

Civ. P. 4(k)(2); Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1159 (9th Cir. 2006).

The same due process analysis for specific and general personal jurisdiction

applies, except that the relevant forum is the United States as a whole. Pebble

Beach, 453 F.3d at 1159.

The Morrises allege that Harley visited the United States in 2013 and

promoted Cambium lots in California, Florida, Nevada, and Pennsylvania. The

Morrises have presented evidence suggesting that Harley advertised Cambium in

brochures and publications distributed in the United States. A few discrete acts

promoting Cambium, however, do not render Defendants essentially at home in the

United States. See CollegeSource, 653 F.3d at 1074. The United States lacks

general personal jurisdiction over Defendants.

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 The Morrises have failed to show their ILSA claim would not have arisen

but for these U.S. activities. See Menken, 503 F.3d at 1058. The August 29, 2012

lease agreement predated Harley’s 2013 U.S. marketing tour. The May 31, 2013

amendment to the 2012 lease agreement only changed the Morrises’ lot without

altering any other terms. And, as with the analysis of specific contacts with

Nevada, the reasonableness factors weigh against adjudication in the United States.

See CollegeSource, 653 F.3d at 1079. The United States lacks specific personal

jurisdiction over Defendants.

The Morrises’ final argument, that jurisdiction is automatic under the ILSA,

is contrary to longstanding precedent holding that the exercise of judicial authority

over a defendant not located in the forum must satisfy constitutional due process

standards. See Int’l Shoe, 326 U.S. at 319 (holding due process “does not

contemplate that a state may make binding a judgment in personam against an

individual or corporate defendant with which the state has no contacts, ties, or

relations”). The district court committed no error in concluding it lacked personal

jurisdiction over Defendants.

AFFIRMED.

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