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noting that there is no control over where a party receives an e-mail because an e-mail "could have [been] retrieved from anywhere in the world."
Summary of this case from Hydro Engineering, Inc. v. Landa, Inc.Opinion
Cause No. IP 01-0424-C-H/K
November 6, 2001
ENTRY ON DEFENDANTS' MOTION TO DISMISS
Plaintiff Staffan I. Kaempe and Dennis G. Ewald invented a new kind of hydraulic pump. Ewald sought out defendant attorney George C. Myers to represent the co-inventors in their patent application. At some point after Myers filed the application, Kaempe began to suspect that Ewald and Myers had colluded to assign Kaempe's interest in the patent to a company that Ewald and Kaempe had formed to exploit the invention, Cartridge Technology Hydraulics, LLC.
Kaempe has resolved his dispute with Ewald through separate litigation in the Northern District of Illinois. In this diversity action, Kaempe is pursuing Myers, alleging that Myers converted his rights in the patent and committed professional malpractice. Defendants Myers and his two law firms have moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2) and for failure to state a claim of conversion under Rule 12(b)(6). Because the court does not have personal jurisdiction over defendants, this action is dismissed without consideration of the Rule 12(b)(6) motion or the Rule 11 motion filed more recently by defendants.
Neither side has asked for an evidentiary hearing on the facts relevant to personal jurisdiction. Accordingly, in ruling on defendants' motion to dismiss for lack of personal jurisdiction, the court must accept Kaempe's allegations as true and resolve any conflicts in the parties' affidavits in his favor. See RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997), citing Turnock v. Cope, 816 F.2d 332, 333 (7th Cir. 1987). Factual statements in this entry are based on this standard. Cf. Szabo v. Bridgeport Machines, Inc., 249 F.3d 672, 676-77 (7th Cir. 2001) (when jurisdiction depends on contested facts, court may hold hearing and resolve factual dispute before allowing case to proceed); 2 Moore's Federal Practice § 12.31[5] at 12-45 (3d ed. 2000).
Facts
Defendant George C. Myers is a patent attorney. Myers worked for the Washington, D.C. office of Wigman Cohen Leitner Meyers, PC ("Wigman Cohen"), until it merged with Blank Rome Comisky McCauley, LLP ("Blank Rome") in 1998. He is currently of counsel with Blank Rome and works out of its Washington, D.C. office. Staffan I. Kaempe, an Indiana resident, and Dennis G. Ewald, an Illinois resident, invented a hydraulic pump. Ewald contacted Myers in Washington, D.C. to file a patent application on their behalf with the United States Patent and Trademark Office ("PTO"). Myers agreed and sent a retainer agreement, dated September 26, 1997, to Ewald's Illinois address. Myers filed the patent application on January 30, 1998. On November 28, 2000, the PTO issued U.S. Patent No. 6,152,715 for the invention.
Myers performed all legal work regarding the patent in Washington, D.C. He sent all bills for his legal services and all letters regarding the patent to Ewald's Illinois address. Ewald mailed all payments from Illinois to Myers' office in Washington, D.C. Neither Myers nor anyone else from Wigman Cohen or Blank Rome ever traveled to Indiana regarding the patent.
Kaempe has testified that Myers made four or five telephone calls to him at his residence in Paoli, Indiana, regarding the patent. Myers also sent e-mails to Kaempe at the address "kaempe@kiva.net." Kaempe received several of Myers' e-mails at his Indiana residence.
Kaempe filed this suit against Myers on March 28, 2001. In his complaint, he alleges Myers committed conversion and professional malpractice. To support the conversion claim, Kaempe points to correspondence between Ewald in Illinois and Myers in the District of Columbia that Kaempe claims suggests Myers performed legal work regarding assignment of the patent and even filed such an assignment with the PTO. With respect to the professional malpractice claim, Kaempe alleges that Myers assigned Kaempe's rights in the patent without his consent and denied Kaempe access to legal documents concerning the patent. The refusal to provide Kaempe the documents allegedly prevented him from filing a continuation-in-part application to supplement the patent.
Discussion
A federal district court exercising diversity jurisdiction has personal jurisdiction over a nonresident defendant "only if a court of the state in which it sits would have such jurisdiction." RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). In Indiana, personal jurisdiction depends on whether requirements of the state long-arm statute are met and whether federal due process is satisfied. Anthem Ins. Cos. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000). In federal court, the plaintiff bears the burden of showing personal jurisdiction when it is challenged by a Rule 12(b)(2) motion. RAR, Inc., 107 F.3d at 1276.
Indiana Trial Rule 4.4(A) serves as Indiana's long-arm statute. Anthem, 730 N.E.2d at 1231. It permits personal jurisdiction where the defendant's contacts with Indiana fall into one of eight enumerated categories and the plaintiff's action arises from those contacts. Id. at 1233.
Federal due process requirements are satisfied when jurisdiction is asserted over a nonresident defendant who has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984), quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Application of the federal due process standard depends on whether the defendant's contacts with the forum are "general" or "specific." RAR, Inc., 107 F.3d at 1277. A court may exercise general jurisdiction over a defendant whose contacts with the forum are continuous and systematic, even though they may be unrelated to the plaintiff's cause of action. See Helicopteros Nacionales de Colombia, 466 U.S. at 414-15. Specific jurisdiction may be based on less extensive contacts if they have a substantial connection to the plaintiff's action. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-76 (1984); RAR, Inc., 107 F.3d at 1277.
The court dismisses Kaempe's action because he has failed to show sufficient contacts with Indiana to satisfy Indiana Trial Rule 4.4(A) and to give the court specific jurisdiction in accord with federal due process. Kaempe does not contend there is general jurisdiction over defendants in this case. The court addresses Indiana Trial Rule 4.4(A) and specific jurisdiction separately, consistent with the Indiana Supreme Court's approach in Anthem, 730 N.E.2d at 1232.
I. Indiana Trial Rule 4.4(A)
Prior to the Indiana Supreme Court's decision in Anthem, deciding personal jurisdiction in Indiana required consideration only of federal due process standards. See, e.g., Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990). The Seventh Circuit understood Indiana Trial Rule 4.4(A) to extend personal jurisdiction to the limits of federal due process, and so collapsed the application of the state rule and federal due process into a single inquiry. In Anthem, the Indiana Supreme Court reinvigorated Indiana Trial Rule 4.4(A) by requiring courts to determine separately and initially whether its provisions have been satisfied. 730 N.E.2d at 1232.
Because Trial Rule 4.4(A) is an "enumerated act" long-arm statute, its initial requirement is that the defendant's contacts with Indiana must fall within one of its eight enumerated categories. See Anthem, 730 N.E.2d at 1232-33. The rule's second requirement appears in its introduction, which states: "Any person or organization that is a nonresident of this state . . . submits to the jurisdiction of the courts of this state as to any action arising from the following acts." Thus, the plaintiff's claim must arise from the same Indiana contacts that fall into one of the rule's enumerated categories. See Sohacki v. Amateur Hockey Ass'n of Illinois, 739 N.E.2d 185, 189 (Ind.App. 2000) (holding that trial court lacked jurisdiction under Indiana Trial Rule 4.4(A) because none of the allegedly wrongful acts "arose from any action performed by [defendant] in Indiana").
Kaempe argues that Myers' telephone calls to him and the e-mails Kaempe received in Indiana constituted "doing any business in this state" by Myers under Indiana Trial Rule 4.4(A)(1). Kaempe cites Anthem for support of this conclusion, but the case does not reach so far without showing a stronger connection between those communications and Kaempe's claims against Myers.
In Anthem, the plaintiff insurer filed suit against numerous health care providers for insurance fraud. The trial court dismissed the action against several providers for lack of personal jurisdiction. The plaintiff insurer appealed the dismissal of two providers, one of which was National Medical Enterprises ("NME"). When finally before the Indiana Supreme Court, the insurer argued that personal jurisdiction over NME was proper based on telephone calls and letters that it directed to recipients in Indiana.
Writing for the court, Justice Sullivan held that Indiana had jurisdiction over NME under Indiana Trial Rule 4.4(A)(1) because its telephone calls and letters to Indiana were "in furtherance of its business in Indiana." Anthem, 730 N.E.2d at 1241. Further, NME's telephone calls and letters were the "very means by which Anthem claims that NME Hospitals perpetrated its fraud." Id.
In this case, Myers' telephone calls to Kaempe in Indiana were in furtherance of his business relationship with Kaempe and therefore constitute "doing any business" under Indiana Trial Rule 4.4(A)(1). (The e-mails do not amount to doing any business in Indiana. Kaempe could have received them anywhere, they were not addressed to him specifically in Indiana, and the focus of the parties' relationship was Illinois and the District of Columbia.) However, the telephone calls do not satisfy the trial rule's second requirement because they do not have as substantial a relationship to Kaempe's claims as did NME's contacts in Anthem.
Kaempe does not allege that Myers converted his interest in the patent or committed any malpractice by means of the Indiana telephone calls and e-mails. In fact, Kaempe has provided only a sparse and general description of the substance of those telephone calls from Myers to his Indiana residence. He says only that they "dealt with his legal representation of [Kaempe] regarding the patent for [his] invention, and no other topics." Second Kaempe Aff. at 1. The e-mails that Kaempe offers as exhibits cover administrative matters relating to Myers' representation and certainly do not support either his conversion or malpractice claim. See First Kaempe Aff. at 4-6. Without a showing that Kaempe's claims arose from Myers' few Indiana contacts, there is no personal jurisdiction under the "arising from" language of Indiana Trial Rule 4.4(A).
Kaempe also argues that Myers cannot escape personal jurisdiction in Indiana solely because his law practice is based in Washington, D.C. In support, Kaempe cites two Indiana cases in which the Court of Appeals found personal jurisdiction to exist over nonresident corporations without any offices or employees in Indiana: Griese-Traylor Corp. v. Lemmons, 424 N.E.2d 173 ( Ind. App. 1981), and Fidelity Financial Services, Inc., v. West, 640 N.E.2d 394 (Ind.App. 1994). However, the defendants in Griese-Traylor and Fidelity had significant contacts with Indiana that distinguish their situations from this case.
In Griese-Traylor, plaintiffs were Indiana residents who sold their stock in an Indiana corporation to a Florida company, defendant Griese-Traylor Corporation. One provision of the contract for sale required Griese-Traylor to make $300 weekly payments to the sellers for fifteen years. Griese-Traylor prematurely discontinued the payments and plaintiffs brought suit for breach of contract. Griese-Traylor argued that the court lacked personal jurisdiction because its only contact with Indiana was execution of the contract to buy the stock. 424 N.E.2d at 176. The Court of Appeals disagreed and cited several substantial contacts with Indiana. Griese-Traylor had purchased stock of an Indiana corporation. It also had negotiated the contract for sale in Indiana and had closed the sale in Indiana. The contract, which was the basis of plaintiffs' suit, expressly provided that it would be governed by Indiana law. Id. at 181.
After the sale, one of the sellers had provided consulting services for Griese-Traylor from Indiana. Griese-Traylor also had made partial payments to the sellers in Indiana. Id. Based on the close relationship between Griese-Traylor, Indiana and the plaintiffs' claim for breach of contract arising from the sale, the Court of Appeals held that the Florida company was subject to personal jurisdiction for the claims in Indiana. Myers' contacts with Indiana fall far short of the contacts in Griese-Traylor.
Myers agreed to perform legal work for Kaempe after Ewald contacted him in the District of Columbia. He performed all of the legal work in the District of Columbia and directed his correspondence to the inventors in Illinois. The few contacts he made with Kaempe in Indiana were telephone calls and e-mails, neither of which required Myers to consult Indiana law. To paraphrase the Supreme Court, Griese-Traylor had purposefully availed itself of the privilege of conducting activities in Indiana and thus had invoked the benefits and protections of Indiana law, see Hanson v. Denckla, 357 U.S. 235, 253 (1958), but Myers did nothing comparable.
The defendant in Fidelity Financial Services had made a loan in Kentucky to Indiana residents, but it had conditioned the loan on the execution of a second mortgage on the plaintiffs' Indiana home. 640 N.E.2d at 399. The Court of Appeals held that the defendant's mortgage constituted "an interest in real property" sufficient to provide personal jurisdiction under Indiana Trial Rule 4.4(A)(5). Id. at 398. The court reasoned that the defendant should have foreseen that it would have to avail itself of Indiana law to foreclose on the property in the event of plaintiffs' default on the loan. Id. at 399. The mortgage, as a required condition of the loan agreement in dispute, also bore a close enough connection to plaintiff's breach of contract claim to extend personal jurisdiction under federal due process. Id. at 399, citing Burger King, 471 U.S. at 479.
Thus, the Indiana cases Kaempe relies upon fall well short of showing that his claims arise from Myers' minimal contacts with Indiana. Another case somewhat similar to this one provides a useful illustration of the types of contacts that may support jurisdiction in an interstate attorney-client relationship. In Sher v. Johnson, 911 F.2d 1357, 1363 (9th Cir. 1990), the Ninth Circuit held that a Florida attorney retained to perform legal work in Florida for a California client submitted to California's jurisdiction by conditioning his services on the execution of a deed of trust on property in California.
The defendant attorney had also made telephone calls and sent letters to the plaintiff in California. The Ninth Circuit found that the attorney's communications alone were not sufficient to show personal jurisdiction:
As normal incidents of [the attorney's Florida] representation the partnership accepted payment from a California bank, made phone calls and sent letters to California. These contacts, by themselves, do not establish purposeful availment; this is not a deliberate creation of a substantial connection with California.
Sher, 911 F.2d at 1362, citing Burger King, 471 U.S. at 475. The Florida attorney had also made three trips to California regarding the Florida representation. The Ninth Circuit considered them to be conveniences to the client and also insufficient to support jurisdiction in California. Id. at 1363.
When the attorney obtained the deed of trust on the California property, however, he availed himself of the forum in a manner sufficient to support personal jurisdiction. Id. The attorney had demanded the deed of trust to guarantee payment for his legal services, which would require invoking the power of California law and courts to enforce the deed and the right to payment. When that reliance upon California law was added to the additional contacts with California, the Ninth Circuit held, the defendant attorney had established a sufficient basis for personal jurisdiction in California for a dispute arising from the attorney-client relationship. Sher, 911 F.2d at 1363-64.
In this case, Myers' contacts with Indiana fall well short of that standard. He did not avail himself of Indiana law in any way similar to the defendants' actions in Sher, Griese-Traylor, or Fidelity. The court does not have jurisdiction under Indiana Trial Rule 4.4(A) because Kaempe has not shown that his claims arise from Myers' minimal Indiana contacts.
II. Due Process — Specific Jurisdiction
Even if the court could exercise personal jurisdiction over Myers pursuant to Indiana Trial Rule 4.4(A), such jurisdiction would still violate federal due process requirements. Kaempe does not contend that there is general jurisdiction over defendants in this case. The court considers only whether the contacts could support specific jurisdiction.
Specific jurisdiction exists where the defendant has purposefully made contact with the forum state and the basis of the lawsuit arises out of those contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). "[I]t is essential in each case that there be 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." Hanson v. Denckla, 357 U.S. 235, 253 (1958). The connection with the forum must be such that the defendant "should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).
Even a single act can support jurisdiction so long as it creates a "substantial connection" with the forum state and the suit is based on that connection. McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957). However, "`some single or occasional acts' related to the forum may not be sufficient to establish jurisdiction if `their nature and quality and the circumstances of their commission' create only an `attenuated' affiliation with the forum." Burger King, 471 U.S. at 475 n. 18, quoting International Shoe Co. v. Washington, 326 U.S. 310, 318 (1945). Random or fortuitous acts, or the unilateral activity of a third party, do not establish personal jurisdiction. Burger King, 471 U.S. at 475. If the contacts are sufficient, then the court must evaluate whether the exercise of personal jurisdiction offends "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316.
Again, Kaempe relies on Myers' telephone calls and e-mails to make a case for specific jurisdiction. He also notes that his Indiana address appears on the patent application that Myers filed in Washington, D.C. This additional contact, which fell outside of Indiana Trial Rule 4.4(A), has little impact on the due process analysis.
The e-mails contribute little or nothing to specific jurisdiction here. Myers sent e-mails to Kaempe at the address "kaempe@kiva.net." First Kaempe Aff. at 4. Myers had no control over where Kaempe received the e-mails. For all Myers knew, Kaempe could have retrieved them from anywhere in the world. Such incidental contact with Indiana cannot reasonably be described as purposeful availment of the forum, and so does not support specific jurisdiction. The contents of the e-mails are not even relevant to Kaempe's conversion and malpractice claims.
In his affidavit, Kaempe testified that Myers also called him at his Indiana residence four or five times over a two to three year period. The calls did not cluster around or deal with any particular issue or event. Rather, Kaempe testified only that they generally concerned the patent and were made at various times over the course of the attorney-client relationship. The mere fact that a few telephone calls were made concerning the patent does not create a substantial connection between Indiana and Kaempe's claims. See Cote v. Wadel, 796 F.2d 981, 984 (7th Cir. 1986) (holding, in a suit for legal malpractice, that the "handful of letters and phone calls" that passed between plaintiff-client and defendant-attorneys regarding their legal work in another state was not enough to establish personal jurisdiction); Campbell v. Gasper, 102 F.R.D. 159, 162 (D. Nev. 1984) (following, in a suit for legal malpractice, the Ninth Circuit rule that "use of the mails or telephone does not amount to purposeful activity" invoking the benefits and protections of the state on the receiving end of the communications). Over the course of a roughly two-year relationship, these four or five telephone calls amount to merely fortuitous and incidental contacts, especially in light of the more substantial and greater volume of contacts between the District of Columbia and Illinois.
The general information about the calls' content does not strengthen the connection either. Kaempe does not suggest that Myers perpetrated any fraud or malpractice by means of his calls to Indiana. Cf. Anthem, 730 N.E.2d at 1241 (Ind. 2000) (finding jurisdiction where telephone calls and letters were directed into Indiana to carry out fraudulent scheme); Mart v. Hess, 703 N.E.2d 190, 192-93 (Ind.App. 1998) (finding jurisdiction where defendant's defamatory letters and facsimiles were published in Indiana); Mullen v. Cogdell, 643 N.E.2d 390, 398 (Ind.App. 1994) (finding jurisdiction where defendants' misrepresentations during telephone calls to forum residents and in documents mailed into forum gave rise to plaintiff's action). The acts leading to the alleged conversion of Kaempe's patent took place in the District of Columbia and Illinois. In short, the nature and quality of Myers' infrequent telephone calls to Indiana create at most only an "attenuated affiliation" with Indiana and do not support specific jurisdiction. See Burger King, 471 U.S. at 475 n. 18.
Kaempe also notes that Myers placed his Indiana address on the patent application for the hydraulic pump. From this, Kaempe surmises that Myers knew Kaempe was an Indiana resident from the beginning of their relationship. However, an attorney does not submit to the jurisdiction of another state solely by agreeing to represent one of its residents. See Trinity Indus., Inc. v. Myers Assoc., Ltd., 41 F.3d 229, 230 (5th Cir. 1995) ("bare existence of an attorney-client relationship is not sufficient" to establish personal jurisdiction); Sher v. Johnson, 911 F.2d 1357, 1363 (9th Cir. 1990) ("Out-of-state legal representation does not establish purposeful availment of the [forum], where the law firm is solicited in its home state and takes no affirmative action to promote business within the forum state."). If an attorney initiates the attorney-client relationship with a forum resident, advertises in the forum, or otherwise actively solicits clients in the forum, she may submit to the forum's jurisdiction, see Sher, 911 F.2d at 1362, but no such contacts are present in this case.
Other courts also have required a more substantial relationship with the forum before exercising personal jurisdiction over a nonresident attorney. See Austad Co. v. Pennie Edmonds, 823 F.2d 223 (8th Cir. 1987); Clark v. Milam, 830 F. Supp. 316 (S.D.W.Va. 1993) (extending personal jurisdiction over attorney who repeatedly represented plaintiff in litigation within the forum, but not over attorneys who performed legal work outside the forum).
In Austad, the plaintiff was a South Dakota sporting goods distributor. Together with other distributors, it retained a New York law firm to pursue a declaratory judgment invalidating a patent. 823 F.2d at 224. All litigation regarding the patent took place in Maryland. During the course of its representation, however, the New York law firm sent an associate and law clerk to South Dakota for three days to review the client's documents. The firm also made numerous telephone calls to South Dakota, exchanged correspondence with the client through a courier service, billed the client in South Dakota, and received payments from a South Dakota bank. As the legal expenses began to mount, the client terminated its relationship with the law firm and brought suit in South Dakota for legal malpractice. The district court dismissed the suit for lack of personal jurisdiction, and the Eighth Circuit affirmed. The Eighth Circuit explained that the law firm's limited contacts with South Dakota did not amount to "purposeful availment" of the forum. Austad, 823 F.2d at 226-27.
Myers' contacts with the forum were even less substantial than those in Austad. Myers did not exchange correspondence with Kaempe in Indiana. Myers did not receive payments from Indiana or any checks drawn against an Indiana bank. Kaempe's argument that there is specific jurisdiction in this case — based on contacts with the forum less extensive than those deemed insufficient in Austad — must fail.
Considering all Myers' contacts with Indiana, Kaempe has not shown that there is specific jurisdiction in this case. The attorney-client relationship alone does not suffice, and Myers' telephone calls and e-mails do not significantly strengthen his connection with Indiana.
Conclusion
The court dismisses Kaempe's action pursuant to Rule 12(b)(2) for lack of personal jurisdiction. The court therefore makes no ruling on defendants' motion to dismiss Kaempe's conversion claim under Rule 12(b)(6) and their motion for Rule 11 sanctions based on the conversion claim. Judgment shall be entered accordingly.
So ordered.