Planning Group of Scottsdale, L.L.C. v. Lake Mathews Mineral Properties, Ltd.

SUPREME COURT OF ARIZONA
En Banc

THE PLANNING GROUP OF SCOTTSDALE,
) Arizona Supreme Court
L.L.C., an Arizona limited ) No. CV-10-0189-PR
liability company; and ALTAIR, )
L.L.C., an Arizona limited ) Court of Appeals
liability company, ) Division One
) No. 1 CA-CV 09-0224
Plaintiffs/Appellants, )
) Maricopa County
v. ) Superior Court
) No. CV2007-023622
LAKE MATHEWS MINERAL PROPERTIES, )
LTD., a California limited )
partnership; JAMES D. HOLMES and )
JANE DOE HOLMES, husband and ) O P I N I O N
wife; SHIRLEY SMITH and JOHN DOE )
SMITH, wife and husband; RANDY )
EVERS and JANE DOE EVERS, )
husband and wife; INTEGRATED )
RESOURCES, INC., a California )
Corporation, )
)
Defendants/Appellees. )
)
__________________________________)

Appeal from the Superior Court in Maricopa County
The Honorable J. Kenneth Mangum, Judge

REVERSED IN PART, AFFIRMED IN PART, REMANDED
________________________________________________________________

Opinion of the Court of Appeals, Division One
224 Ariz. 306, 230 P.3d 365 (App. 2010)

VACATED
________________________________________________________________

LEWIS AND ROCA LLP Phoenix
By George L. Paul
Thomas J. Morgan
Stefan M. Palys
Attorneys for The Planning Group of Scottsdale, L.L.C.,
and Altair, L.L.C.
SHERMAN & HOWARD L.L.C. Phoenix
By Daniel P. Beeks
Attorneys for Lake Mathews Mineral Properties, Ltd.,
James D. Holmes, Jane Doe Holmes, Shirley Smith,
John Doe Smith, Randy Evers, Jane Doe Evers, and
Integrated Resources, Inc.
________________________________________________________________

H U R W I T Z, Vice Chief Justice

¶1 We confront a topic that has vexed generations of law

students and judges alike: determining whether the Due Process

Clause of the Fourteenth Amendment permits a state court to

exercise personal jurisdiction over non-resident defendants.

I.

A.

¶2 The Planning Group of Scottsdale, L.L.C., and Altair,

L.L.C. (collectively “TPG”), are Arizona limited liability

companies under common ownership.1 In 2005, Lee Subke, an

Arizona resident, met in Arizona with Jeff Clark, a TPG

employee, to discuss purchasing life insurance from TPG. Subke

learned that TPG also made investments and he told Clark about a

California limited partnership that his sister, a California

1
The superior court did not conduct an evidentiary hearing
on the defendants’ motion to dismiss for lack of personal
jurisdiction, but rather considered only the parties’
affidavits. We accordingly review the superior court’s ruling
de novo, viewing the facts in the light most favorable to the
plaintiffs but accepting as true the uncontradicted facts put
forward by the defendants. See Negrón-Torres v. Verizon
Commc’ns, Inc., 478 F.3d 19, 23 (1st Cir. 2007) (discussing
review of Fed. R. Civ. P. 12(b)(2) ruling).
2
attorney, was representing. That partnership, Lake Mathews

Mineral Properties, Ltd. (“LMMP”), was seeking investment

capital for a California mining operation. Clark indicated that

he would not reject any idea out of hand.

¶3 Subke contacted his sister, Shirley Smith, who in turn

contacted LMMP’s general partner, James Holmes, also a

California resident. Holmes authorized the mailing of a “due

diligence report” about the mining project to Subke for delivery

to TPG. Subke brought the report to Clark and suggested that

TPG’s representatives talk to Smith. For introducing TPG to

LMMP, Subke was later given a percentage of profits of the

mining venture.

¶4 After Clark reviewed the report, he and TPG’s counsel,

Thomas Morgan, communicated extensively with Smith and Holmes.

For several weeks, Smith and Holmes actively tried to sell the

project to TPG by making telephone calls, sending e-mails,

mailing letters, and transmitting faxes to Clark and Morgan in

Arizona. Smith stated that LMMP intended to actively mine Lake

Mathews for tin. Smith and Holmes predicted success and

suggested that “huge profits” could be realized from the

project.

¶5 In September 2005, Clark went to Los Angeles. He met

with Holmes, Smith, and Randall Evers, LMMP’s Project Manager

and mining expert. Evers was the President and CEO of

3
Integrated Resources, Inc., a California corporation. Clark was

told that Holmes, Smith, and Evers were stakeholders in the

venture and were contributing their work for a share of the

eventual profits.

¶6 After the Los Angeles meeting, Smith faxed a document

entitled “Agreement: Basic Propositions Sufficient for Immediate

Funding of the Holmes Project” (the “Basic Propositions”) to

Clark in Arizona. The Basic Propositions stated that TPG would

provide “immediate funding – to permit the work to begin” on the

mining project. TPG was to advance up to $370,000 in several

installments; the advances would draw interest at 9% per annum

and each entitled TPG to an increasing share of the project’s

gross proceeds.

¶7 The Basic Propositions provided that they were formed

“in advance of a complete and formalized Agreement.” After

receiving the Basic Propositions, Reid Johnson, the owner of

TPG, sent a letter to Holmes agreeing to supply the $370,000 and

anticipating that “we will sign a more definitive agreement

along the lines previously discussed that will . . . secure the

transaction from our perspective.” Holmes responded in a letter

to Johnson stating that “[t]he terms of your letter are entirely

acceptable.” TPG sent an initial $100,000 payment to LMMP the

next day, and $90,000 the following month.

4
¶8 Despite continuing discussions, the parties could not

complete the “more definitive agreement.” At some point, Morgan

learned that LMMP did not intend to mine, but instead wanted to

drill exploratory wells near the Metropolitan Water District’s

dam in an effort to extract a condemnation payment for LMMP’s

mineral interests.

B.

¶9 TPG filed a complaint in superior court against LMMP,

Holmes, Subke, Smith, Evers, and Integrated Resources. As

amended, the complaint had four counts, seeking (1) a

declaratory judgment that TPG had obtained interests in the

LMMP’s mineral deposits, but had only limited liability for the

mining venture, (2) damages for breach of contract, (3) damages

for violating Arizona securities laws, and (4) an accounting.

¶10 All defendants but Subke (the “California defendants”)

moved to dismiss the amended complaint for lack of personal

jurisdiction. The trial court granted the motion and entered

judgment pursuant to Arizona Rule of Civil Procedure 54(b).

¶11 TPG appealed, but the court of appeals affirmed.

Planning Grp. of Scottsdale, L.L.C. v. Lake Mathews Mineral

Props., Ltd., 224 Ariz. 306, 230 P.3d 365 (App. 2010). We

granted review because the jurisdiction of Arizona courts over

non-resident defendants is a recurring issue of statewide

5
importance. We have jurisdiction under Article 6, Section 5(3)

of the Arizona Constitution and A.R.S. § 12-120.24 (2003).

II.

A.

¶12 Arizona courts may exercise personal jurisdiction to

the maximum extent allowed by the United States Constitution.

Ariz. R. Civ. P. 4.2(a). Therefore, “[t]he jurisdictional issue

. . . hinges on federal law.” A. Uberti and C. v. Leonardo, 181

Ariz. 565, 569, 892 P.2d 1354, 1358 (1995).

¶13 Under the Due Process Clause of the Fourteenth

Amendment, a state may exercise general jurisdiction –

jurisdiction over a cause of action regardless of the

relationship of its subject matter to the forum - over its own

citizens, Milliken v. Meyer, 311 U.S. 457, 462 (1940), and over

non-resident corporations whose activities in the state are

“systematic and continuous,” International Shoe Co. v.

Washington, 326 U.S. 310, 320 (1945). A state may also exercise

specific jurisdiction – jurisdiction with respect to a

particular claim – over a defendant who has sufficient contacts

with the state to make the exercise of jurisdiction “reasonable

and just” with respect to that claim. See id. TPG asserts that

6
Arizona courts have specific jurisdiction over the California

defendants.2

B.

¶14 Pennoyer v. Neff, 95 U.S. 714, 723-24 (1877),

establishes that the Due Process Clause of the Fourteenth

Amendment limits the exercise of personal jurisdiction by state

courts over non-resident defendants. The seminal modern

formulation of the due process test comes from International

Shoe, which held that a state court may exercise personal

jurisdiction over a foreign corporation only if that defendant

has “sufficient contacts” with the forum state “such that the

maintenance of the suit does not offend ‘traditional notions of

fair play and substantial justice.’” 326 U.S. at 316 (quoting

Milliken, 311 U.S. at 463). This “minimum contacts” test also

applies to natural persons. Shaffer v. Heitner, 433 U.S. 186,

204 n.19 (1977). Under this test, the defendant need not ever

have been physically present in the forum state. Int’l Shoe,

326 U.S. at 316. Rather, the question is whether the

defendant’s contacts with the forum, physical or otherwise,

“make it reasonable, in the context of our federal system of

government, to require the [defendant] to defend the particular

suit which is brought there.” Id. at 317.

2
Subke, an Arizona citizen, did not file a motion to
dismiss.
7
¶15 “[T]he facts of each case must [always] be weighed in

determining whether personal jurisdiction would comport with

fair play and substantial justice.” Burger King v. Rudzewicz,

471 U.S. 462, 485-86 (1985) (alteration in original) (internal

quotation marks omitted). The need for case-by-case analysis

obviously renders previous opinions of less than definitive

guidance. But the Supreme Court has explicated the

International Shoe test in a series of decisions, most notably

Hanson v. Denckla, 357 U.S. 235 (1958), World-Wide Volkswagen

Corp. v. Woodson, 444 U.S. 286 (1980), Burger King, and Asahi

Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), which

provide the framework for specific jurisdiction analysis.

¶16 Under that jurisprudence, casual or accidental

contacts by a defendant with the forum state, particularly those

not directly related to the asserted cause of action, cannot

sustain the exercise of specific jurisdiction. See World-Wide

Volkswagen, 444 U.S. at 295; Int’l Shoe Co., 326 U.S. at 317.

Nor can the requisite contacts be established through the

unilateral activities of the plaintiff; they must instead arise

from the defendant’s “purposeful” conduct. Burger King, 471

U.S. at 475-76; World-Wide Volkswagen, 444 U.S. at 297; Hanson,

357 U.S. at 253.

¶17 In explaining the minimum contacts concept, the Court

has used various phrases. See Asahi, 480 U.S. at 112 (O’Connor,

8
J., plurality opinion) (“[M]inimum contacts must come about by

an action of the defendant purposefully directed toward the

forum State.” (emphasis omitted)); Burger King, 471 U.S. at 474

(considering “whether the defendant purposefully established

‘minimum contacts’ in the forum State”); id. at 482 (considering

“whether a defendant has purposefully invoked the benefits and

protections of a State’s laws” (internal quotation marks

omitted)); Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774

(1984) (finding defendant’s course of conduct “purposefully

directed” at the forum state); Hanson, 357 U.S. at 253

(requiring “some act by which the defendant purposefully avails

itself of the privilege of conducting activities within the

forum State, thus invoking the benefits and protections of its

laws”).

C.

¶18 In this case, the court of appeals relied primarily on

recent decisions of the United States Court of Appeals for the

Ninth Circuit. Planning Grp., 224 Ariz. at 313-14 ¶¶ 14-16, 230

P.3d at 372-73. That court has held that “purposeful availment”

and “purposeful direction” are distinct tests, the former to be

applied to contract claims and the latter to tort claims.

Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th

Cir. 2004). Schwarzenegger derived the “purposeful availment”

language from Hanson, 357 U.S. at 253, and the “purposeful

9
direction” concept from Keeton, 465 U.S. at 774-75, and Calder

v. Jones, 465 U.S. 783 (1984). Schwarzenegger, 374 F.3d at 802-

03. For contract claims, the Ninth Circuit asks whether the

defendant “perform[ed] some act by which he purposefully

avail[ed] himself of the privilege of conducting activities in

the forum, thereby invoking the benefits and protections of its

laws.” See id. at 802. For tort claims, the court considers

whether the defendant “purposefully direct[ed] his activities or

consummate[d] some transaction with the forum or resident

thereof.” See id.

¶19 Under the Ninth Circuit approach, when several claims

arise from a single set of contacts, a court first determines

whether the complaint sounds primarily in contract or in tort.

Boschetto v. Hansing, 539 F.3d 1011, 1016 (9th Cir. 2008). The

Ninth Circuit then analyzes the entire suit under the standard

applicable to the primary source of the dispute. Id. at 1016-17

(finding complaint to sound primarily in contract and employing

“purposeful availment” test for all claims).3

¶20 Relying primarily on Schwarzenegger and Boschetto, the

opinion below first analyzed whether TPG’s complaint sounded

primarily in tort or contract. Planning Grp., 224 Ariz. at 314

3
If claims arise from different sets of contacts, the Ninth
Circuit analyzes each claim separately. See Data Disc, Inc. v.
Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1289 n.8 (9th Cir.
1977).
10
¶ 19, 230 P.3d at 373. The court found that the suit sounded

primarily in contract because “Plaintiffs filed suit to collect

on interests outlined in [the] Basic Propositions” and “the very

basis of the securities fraud claim is the contract between the

parties.” Id. at 315 ¶ 21, 230 P.3d at 374. The court of

appeals accordingly applied the “purposeful availment” test to

the entire complaint. Id.

¶21 The court of appeals then analyzed four factors

described in Burger King, 471 U.S. at 478-79 – the “qualitative

facts relating to the negotiations, terms of the contract, the

parties’ actual course of dealing and contemplated future

consequences” - to determine whether the California defendants

“availed” themselves of the privilege of doing business in

Arizona. Planning Grp., 224 Ariz. at 315 ¶ 23, 230 P.3d at 374.

It found that the in-person contract negotiations took place in

California, the contract concerned a California mining

operation, the California defendants wished to conduct business

in California, and the future consequences hinged upon whether

the California mining operation was profitable. Id. at 315-18

¶¶ 24-34, 230 P.3d at 374-77. The court therefore concluded

that the California defendants had not “purposefully availed

themselves of the privilege of conducting business in Arizona,”

id. at 319 ¶ 39, 230 P.3d at 378, and affirmed the superior

11
court’s judgment dismissing the complaint, id. at 320 ¶ 44, 230

P.3d at 379.4

III.

¶22 We find the analytical framework used by the court of

appeals problematic in some respects. Although we often find

decisions of the Ninth Circuit persuasive, they are not binding

on this Court. State v. Montaño, 206 Ariz. 296, 297 n.1 ¶ 1, 77

P.3d 1246, 1247 n.1 (2003). The Schwarzenegger rubric is of

relatively recent vintage. Schwarzenegger, 374 F.3d at 802

(acknowledging that the Ninth Circuit had previously “often

use[d] the phrase ‘purposeful availment,’ in shorthand fashion,

to refer to both purposeful availment and purposeful

direction”); Peter Singleton, Note, Personal Jurisdiction in the

Ninth Circuit, 59 Hastings L.J. 911, 926 (2008) (noting that

before Schwarzenegger, the Ninth Circuit had not treated

purposeful availment and purposeful direction as separate

tests). And, although Schwarzenegger cites Calder and Keeton in

support of its conclusion that the Supreme Court has developed

two separate tests, Schwarzenegger, 374 F.3d at 802-03, no

Supreme Court case actually so holds. Indeed, in Burger King,

decided three years after Calder and one year after Keeton, the

4
The court of appeals also rejected the claim that Arizona
courts had jurisdiction because Subke was the agent of the
California defendants, finding no evidence of agency. Planning
Grp., 224 Ariz. at 319 ¶¶ 37-38, 230 P.3d at 378.
12
Court interchangeably used several constructions - “purposefully

directed,” “purposefully established,” “purposeful availment,”

and “purposefully invoked” - in evaluating a case involving tort

and contract claims. Burger King, 471 U.S. at 472, 474, 475,

482.

¶23 We do not dispute that purposeful availment analysis

is typically most useful in analyzing personal jurisdiction for

contract claims, and purposeful direction for tort claims. Tort

suits do not often involve prior negotiations or contract terms,

two of the elements examined in Burger King in determining

purposeful availment. 471 U.S. at 479. Nor do contract cases

typically turn on the location of the effects of a defendant’s

conduct, a factor upon which the Court relied in Calder in

determining purposeful direction. 465 U.S. at 789.

¶24 But we cannot agree that a court, in evaluating

personal jurisdiction, must characterize an entire complaint as

primarily sounding either in contract or tort. Under such an

approach, if TPG had brought only its tort claims and purposeful

direction were established, Arizona courts would have personal

jurisdiction over the California defendants. That jurisdiction

should not be defeated simply because the plaintiffs also assert

contract claims.

¶25 Moreover, we do not believe that if purposeful

direction is established with respect to a tort claim, a

13
contract claim arising out of precisely the same set of facts is

somehow placed beyond the constitutional purview of Arizona

courts. The issue, after all, is whether the aggregate of the

defendants’ contacts with this state makes it fair and

reasonable to hale them into court here with respect to claims

arising out of those contacts. See Burger King, 471 U.S. at 474

(“[T]he constitutional touchstone remains whether the defendant

purposefully established ‘minimum contacts’ in the forum

State.”). In our view, the Supreme Court cases embody a

holistic approach, which in the end poses a single (although

sometimes not easily answered) question: Considering all of the

contacts between the defendants and the forum state, did those

defendants engage in purposeful conduct for which they could

reasonably expect to be haled into that state’s courts with

respect to that conduct? If such minimum contacts exist, the

defendant can fairly be expected to respond to all claims

arising out of those contacts, whatever the plaintiff’s theory

of recovery.

IV.

A.

¶26 We therefore turn to the contacts between the

California defendants and this state. After Holmes learned that

the Arizona companies might be interested in the investment

opportunity, he sent a copy of the due diligence report to Subke

14
in Arizona with instructions to deliver it to TPG. Smith and

Holmes then directed a series of telephone calls, e-mails,

faxes, and letters to the Arizona plaintiffs, seeking to

persuade the plaintiffs to invest in the mining venture. After

face-to-face negotiations took place in California, Holmes sent

the Basic Propositions to TPG in Arizona. After TPG accepted

the offer in the Basic Propositions, Holmes sent a letter to

Johnson in Arizona agreeing with Johnson’s characterization of

the preliminary understanding. Although the parties were unable

to arrive at a more definitive agreement, it seems clear that

the California defendants borrowed money from investors located

in Arizona after extensive communications directed toward those

investors in this state and after sending a basic proposal to

TPG here.

¶27 It is true, as the court of appeals noted, that many

contacts between TPG and the California defendants took place

either in California or because TPG directed communications into

that state. But personal jurisdiction is not a zero-sum game; a

defendant may have the requisite minimum contacts allowing the

exercise of personal jurisdiction by the courts of more than one

state with respect to a particular claim. The analysis is not

concluded simply because contacts with one state predominate

over those with another.

15
¶28 The court of appeals minimized the import of the

telephone calls, e-mails, faxes, and letters directed by the

California defendants toward Arizona, citing Federated Rural

Electric Insurance Co. v. Inland Power and Light Co., 18 F.3d

389 (7th Cir. 1994), and Roth v. Marquez, 942 F.2d 617 (9th Cir.

1991). Planning Grp., 224 Ariz. at 315-16 ¶ 24, 230 P.3d at

374-75. But Federated Rural Electric involved a single

telephone call by the defendant’s agent to the plaintiff

inviting attendance at a meeting outside the forum state, a call

that the Seventh Circuit held not to constitute a solicitation

under Wisconsin’s long-arm statute. Federated Rural Elec. Ins.

Co., 18 F.3d at 392-93. Roth is even further afield. There,

the Ninth Circuit upheld California personal jurisdiction in a

case in which a contract for film rights was negotiated largely

by an exchange of faxes between the California plaintiff and

non-resident defendants and where the bulk, although not all, of

the face-to-face negotiations occurred outside that state. 942

F.2d at 619-25. Neither case assists our analysis today.

¶29 The court of appeals also analyzed individual contacts

to determine whether each alone sufficed to establish personal

jurisdiction. Planning Grp., 224 Ariz. at 316 ¶ 24, 230 P.3d at

375 (communications “alone are not sufficient”); id. at 317 ¶

32, 230 P.3d at 376 (“mere negotiation and execution of a

contract are insufficient”); id. at 318 ¶ 33, 230 P.3d at 377

16
(“[a]lthough Basic Propositions required Nonresident Defendants

to send royalties to Plaintiffs in Arizona, this is insufficient

to establish personal jurisdiction”); id. at 319 ¶ 37, 230 P.3d

at 378 (“Subke merely received authorization from Holmes to

deliver the [due diligence report]. . . . [t]his is

insufficient”). But jurisdictional contacts are to be analyzed

not in isolation, but rather in totality. See Burger King, 471

U.S. at 482 (contract’s choice of law provision “standing alone

would be insufficient to confer jurisdiction,” but “when

combined with the 20-year interdependent relationship . . . it

reinforced [Rudzewicz’s] deliberate affiliation with the forum

State and the reasonable foreseeability of possible litigation

there”).

1.

¶30 TPG’s securities law claim rests on the contention in

the first amended complaint that the California defendants “made

material misrepresentations of fact and omitted to state facts

which were necessary for disclosure in order to make the

transaction not misleading.” TPG’s affidavits claim that many

of those representations were made during communications by

Holmes and Smith to TPG and its representatives in Arizona.

Holmes directed Subke to deliver the due diligence report to

Clark in Arizona, and thereafter Holmes and Smith repeatedly

contacted TPG’s representatives in this state.

17
¶31 These communications were no doubt purposeful and

directed at individuals and entities that Holmes and Smith,

acting on behalf of LMMP, knew to be in Arizona. Because it

relied on Ninth Circuit precedent, the court of appeals never

evaluated these facts to determine whether they indicated

purposeful direction of activities toward this state by the

California defendants. We have little difficulty in concluding

that they show purposeful direction. The plaintiffs’ affidavits

state that these representations played an important role in the

investment decision, and their jurisdictional significance is

not obviated by the fact that later representations in

California also played a role.

2.

¶32 Because we find purposeful direction with respect to

the misrepresentation claims, we also find no constitutional

barrier to the exercise of jurisdiction over contract claims

arising from the same set of operative facts. But, even if we

were to analyze TPG’s contract claims separately under a

purposeful availment rubric, we would arrive at the same result.

¶33 This case in the end involves an alleged loan by

Arizona corporations to a California venture, with repayment to

be made in Arizona. As such, we find Mellon Bank (East) PSFS v.

Farino, 960 F.2d 1217 (3d Cir. 1992), particularly instructive.

In that case, a group of out-of-state investors obtained a loan

18
from a Pennsylvania bank. After default, the bank sued the

investors in Pennsylvania. The defendants had never dealt with

the bank in Pennsylvania or traveled to Pennsylvania during the

loan process, but rather had negotiated the loan with the bank’s

District of Columbia branch through a mortgage broker. Id. at

1219. The Third Circuit nonetheless found specific personal

jurisdiction because the defendants knew they were dealing with

a Pennsylvania company, negotiated and corresponded with that

company, and had continuing obligations to repay the loan in

Pennsylvania. Id. at 1223.

¶34 The court below distinguished Mellon Bank because the

investors there sought out the Pennsylvania bank, while LMMP

contacted TPG only after Clark expressed some interest to Subke

in hearing more about an investment opportunity. Planning Grp.,

224 Ariz. at 318 ¶ 34, 230 P.3d at 377. But here, although

Subke introduced the parties to each other, LMMP (through Holmes

and Smith) actively sought thereafter to make a deal with the

Arizona plaintiffs. As in Mellon Bank, the eventual contract

was to borrow money from entities the defendants knew were

located in another state, with the loan to be repaid with

interest in that state. As in Mellon Bank, the enterprise that

would allow the defendants to repay the loan was outside the

forum state, but the contract itself has sufficient relationship

to the forum state to support specific jurisdiction.

19
¶35 In Burger King, the Supreme Court stated that “with

respect to interstate contractual obligations, we have

emphasized that 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.” 471 U.S.

at 473 (internal quotation marks omitted). The bulk of the

negotiations in Burger King between the defendants (Michigan

residents) and the plaintiff (a Florida corporation) occurred

over the phone, by letter, or with the corporation’s Michigan

representatives. The defendants signed the contract in

Michigan, where it was to be performed. The Supreme Court

nonetheless found personal jurisdiction in Florida appropriate,

in large part because the defendants knew that they had entered

into a continuing relationship with a corporation located in

that state. Id.

¶36 A different result is not warranted here. Even if

examined separately under the purposeful availment test, the

purposeful contacts of LMMP, Holmes, and Smith with this state

are sufficient to support the exercise of personal jurisdiction

in Arizona with respect to TPG’s contract claims.

3.

¶37 In Asahi, the Supreme Court stressed that minimum

contacts with the forum state do not end the personal

20
jurisdiction constitutional analysis. Although a finding of

such contacts will most often mean that the “interests of the

plaintiff and the forum in the exercise of jurisdiction will

justify even the serious burdens placed on the alien defendant,”

480 U.S. at 114, the Court emphasized that the ultimate

“determination of the reasonableness of the exercise of

jurisdiction in each case will depend on an evaluation of

several factors,” id. at 113. These include “the burden on the

defendant, the interests of the forum State, and the plaintiff’s

interest in obtaining relief.” Id. A court “must also weigh in

its determination ‘the interstate judicial system’s interest in

obtaining the most efficient resolution of controversies; and

the shared interest of the several States in furthering

fundamental substantive social policies.’” Id. (quoting World-

Wide Volkswagen, 444 U.S. at 292).

¶38 In Asahi, the exercise of jurisdiction was found

unreasonable despite the assumed existence of the requisite

minimal contacts between the foreign defendant and the forum

state. But there, the defendant was a Japanese corporation, the

only remaining plaintiff was a Taiwanese corporation, the

relevant transaction took place in Taiwan, and the substantive

policies of other nations regarding products liability and

indemnification were implicated by the California-based

litigation. Id. at 114-15. The Supreme Court relied on the

21
“international context, the heavy burden on the alien defendant,

and the slight interests of the plaintiff and the forum State”

in finding that “the exercise of personal jurisdiction by a

California court over Asahi in this instance would be

unreasonable and unfair.” Id. at 116.

¶39 No such factors militate against Arizona jurisdiction

here. The plaintiffs are Arizona limited liability companies,

the securities claim is premised on Arizona law, and the moving

defendants are located in a neighboring state. This is thus not

the unusual case in which the exercise of personal jurisdiction

over LMMP, Holmes, and Smith would be unfair despite the

existence of minimum contacts with this state arising from those

defendants’ purposeful activities.5

4.

¶40 We reach a contrary conclusion, however, as to Evers

and Integrated Resources. TPG has identified no purposeful

conduct by Evers or his corporation that either took place in

this state or was directed at this forum. Although Evers

prepared the due diligence report, he did so before Subke’s

contact with Clark, and there is no evidence that he was aware

that the report was to be sent to Arizona. Evers directed no

communication - oral, written, or otherwise - into Arizona. At

5
We therefore need not consider TPG’s claims that Arizona
jurisdiction is also appropriate because Subke acted as an agent
of those defendants.
22
most, he was involved in the California face-to-face

negotiations and could have received profits from the mining

venture. Neither fact shows purposeful activity directed toward

this state.

¶41 TPG contends that Evers knew he was dealing with

Arizona residents at the Los Angeles negotiations. But it is

not enough that a defendant know that he is dealing with an

Arizona resident then located in another state; the requisite

activity must instead be purposefully directed at the forum.

Burger King, 471 U.S. at 474. Otherwise, a California resident

who collides on the highways of that state with a car that he

knows to have an Arizona license plate would subject himself to

personal jurisdiction here, despite the lack of any other

contact with this state. The Supreme Court’s decisions justify

no such conclusion. In Hanson, for example, the Court concluded

that personal jurisdiction in Florida was not appropriate

despite the defendant’s knowledge that he was dealing with a

party who resided there. 357 U.S. at 251.

V.

¶42 For the reasons above, we affirm the superior court’s

judgment dismissing the claims against Evers and Integrated

Resources for lack of personal jurisdiction, but reverse the

judgment insofar as it dismisses the claims against LMMP,

Holmes, and Smith. The opinion of the court of appeals is

23
vacated and this case is remanded to the superior court for

further proceedings consistent with this opinion. LMMP’s

request for attorney’s fees under A.R.S. § 12-341.01(A) is

denied.

_______________________________________
Andrew D. Hurwitz, Vice Chief Justice

CONCURRING:

_____________________________________
Rebecca White Berch, Chief Justice

_____________________________________
W. Scott Bales, Justice

_____________________________________
A. John Pelander, Justice

_____________________________________
Michael D. Ryan, Justice (Retired) 

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