Summary
holding that pre-employment discussions and negotiations occurring in California did not create personal jurisdiction over foreign employer who hired California attorney to perform work in Bosnia
Summary of this case from Hanna v. Am. Cruise Lines, Inc.Opinion
No. C-08-01911 RMW.
October 14, 2009
ORDER GRANTING MOTION TO DISMISS [Re Docket No. 21]
Plaintiff Anthony Sarkis has filed suit against the Office of the High Representative for Bosnia and Herzogovina (the "OHR") and Ambassador Miroslav Lajcák, in his official capacity as the High Representative, for wrongful termination. The complaint asserts twenty claims arising out of the termination of Sarkis' employment. Defendants have moved to dismiss the complaint for lack of subject matter jurisdiction under Rule 12(b)(1) on the basis of claimed sovereign immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. § 1330(a), for lack of personal jurisdiction under Rule 12(b)(2), and for insufficient service of process under Rule 12(b)(5). Sarkis opposes the motion. The court has reviewed the papers and considered the arguments of counsel. For the following reasons, the court grants the motion to dismiss for lack of personal jurisdiction and, because this issue is dispositive, the court does not reach the remaining asserted grounds.
I. BACKGROUND
A. The Office of the High Representative
The Office of the High Representative for Bosnia and Herzogovina was created under the 1995 Dayton Peace Accords, formally referred to as the General Framework Agreement for Peace ("GFAP") to oversee the implementation of the civilian aspects of the Peace Agreement on behalf of the international community. It is the chief civilian peace implementation agency in Bosnia and Herzogovina. It is a separate legal entity from the parties to the GFAP, and it consists of diplomats seconded by the governments of the Peace Implementation Council countries, international experts and national staff from Bosnia. The High Representative is "the final authority in theater regarding interpretation of [GFAP, Annex 10] on the civilian implementation of the peace settlement." Cymrot Decl. Ex. D. The OHR and its High Representative work "with the people and institutions of Bosnia and Herzegovina and the international community to ensure that Bosnia and Herzegovina evolves into a peaceful and viable democracy on course for integration into Euro-Atlantic institutions." Sarkis Decl. Ex. B. Id. The OHR is headquartered in Sarajevo, Bosnia and Herzogovina. Complaint ¶ 9.
B. The OHR's Contacts with Sarkis and California
The OHR advertised an open position for a "Legal Counsel" in The Economist, a global weekly news magazine. Compl. ¶ 12. Anthony Sarkis read the advertisement in California. Id. He applied for the position from California, and conveyed this to the OHR by displaying California contact information in his cover letter and on his resume. Id. ¶ 14.
The OHR responded in February 2003 by emailing Sarkis and proposing to interview him over the phone. Id. ¶ 15. The parties conducted the interview on February 25, 2003, with Ian Campbell (then-Deputy High Representative and head of the OHR's Legal Department) speaking for the OHR. Id. ¶¶ 15-16. Gilbert Bruns, the director's the OHR's Resources Department, and Sunita Samarah, the OHR's principal Personnel Officer, also participated in the interview. Id. ¶¶ 18-19. After the interview, Sarkis provided contact information for a person in Los Angeles to serve as a job reference. Id. ¶ 20. The OHR also called the job reference and spoke for a long time. Id.
Samarah offered the Legal Counsel position to Sarkis by email on March 4, 2003. Id. ¶ 21. Sarkis read the offer and responded to Samarah's email voicing concerns about the job's duration. Id. ¶ 23. Sarkis and Samarah again spoke over the phone on March 5, 2003, and Samarah allayed Sarkis's worries. Id. ¶¶ 23-25. Sarkis promptly signed the OHR's employment contract in California and faxed it to the OHR. Id. ¶¶ 26-27.
Over the following month, Sarkis coordinated his travel plans with the OHR and the OHR purchased Sarkis' airfare to Bosnia. Id. ¶ 28. Sarkis also engaged in two email exchanges with the OHR regarding various terms of the employment agreement related to the job's duration. See id. ¶¶ 29-37. One such exchange was with Ian Doig, the head of the OHR's Personnel Department. Id. ¶ 33. Doig declares that at the time of the emails, he was aware that Sarkis resided in California. Decl. of Ian Doig, Docket No. 31-2 ¶ 3. Indeed, one of Doig's reasons for wanting to hire Sarkis was to get "one of those sophisticated West Coast lawyers," and he shared his desire with other members of the OHR. Id. From 2003 through 2007, Sarkis and the OHR entered into written annual employment contracts. Compl. ¶¶ 39-45. Plaintiff alleges that the employment arrangement could only be terminated for cause.
C. Sarkis's Work for the OHR and Eventual Termination
Sarkis began working for the OHR as a legal counsel, but was promoted to the position of "General Counsel" in mid-2005. Compl. ¶ 56. From 2003 through 2007, Sarkis and the OHR entered into written annual employment contracts. Compl. ¶¶ 39-45. Sarkis handled a number of sensitive tasks and led negotiations with multiple foreign governments on the OHR's behalf. See id. ¶¶ 54, 57-58. Sarkis never received a critical or negative annual performance evaluation. Id. ¶ 60.
Nevertheless, on April 13, 2007, the OHR terminated Sarkis' employment. Id. ¶ 53. The OHR did not state a reason for doing so. Id. It also expelled Sarkis from the OHR's premises and banned him from returning. Id. Sarkis believes he was fired in retaliation for providing frank legal advice. See id. His lawsuit claims that the OHR breached its agreements with him, committed promissory fraud in its employment negotiations with him, inflicted emotional distress on him and libeled him in connection with his firing and expulsion.
D. Defendant Lajcák's Involvement
Defendant Lajcák was not personally involved in any of the underlying events and has been named solely in his official capacity as the High Representative. He succeeded to the position of High Representative after the events underlying plaintiff's termination. He has no material contacts with California.
II. ANALYSIS
Defendants move to dismiss under Rule 12(b)(2) for lack of personal jurisdiction. The parties dispute whether the defendants have sufficient minimum contacts with California such that the exercise of personal jurisdiction over the defendants would be reasonable. According to Sarkis, the OHR availed itself of California when it advertised the Legal Counsel position in The Economist which Sarkis read in California, contacted him in California, interviewed him over the telephone when he was in California, paid for his travel from California, and deposited some of his pay in a California account. Based on these acts, Sarkis argues that the OHR has sufficient contacts with California to permit it to be sued in California. Defendants disagree.
Where there is no applicable federal statute governing personal jurisdiction, the court applies the long-arm statute of the forum state. Yahoo! Inc. v. La Ligue Contre Le Racisme et L'Antisemitisme, 433 F.3d 1199, 1205 (9th Cir. 2006) (en banc). California's long arm statute is coextensive with federal due process requirements so the jurisdictional analysis reduces to whether the exercise of jurisdiction over the nonresident defendants is constitutional. Id. Under International Shoe Co. v. Washington, 326 U.S. 310 (1945), a court may exercise personal jurisdiction over a nonresident defendant consistent with due process only if the defendant has sufficient minimum contacts with the forum state that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice. The Ninth Circuit analyzes 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 arises out of or results from the defendant's forum-related activities, and
(3) the exercise of jurisdiction must be reasonable.Yahoo!, 433 F.3d at 1205-06, citing Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004).
The mere existence of a contract between Sarkis and the OHR does not determine this issue. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478-79 (1985). Instead, the court must take a "highly realistic" approach and evaluate the "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing" to determine whether the OHR availed itself of California. Id. This "qualitative analysis" must determine whether the OHR could have reasonably anticipated being haled into court in California. Harris Rutsky Co. Ins. Servs., Inc. v. Bell Clements Ltd., 328 F.3d 1122, 1130 (9th Cir. 2003).
Realistically, the court cannot conclude that the OHR could have anticipated in 2003 when it placed an ad in The Economist that it would be sued in California. The OHR did not specifically target California to recruit an attorney, although it was pleased when it found a "sophisticated West Coast lawyer" to join its operations. On the contrary, it advertized in The Economist, a magazine with a global circulation. Placing an advertisement in an international publication seeking to hire an employee for a position out of state does not rise to the level of "purposeful availment." Katerndahl v. Brindenberg Securities A/S, 1996 U.S. Dist. Lexis 22024 (N.D. Cal. 1996); Johnston v. Frank E. Basil, 803 F.2d 418, 420 (11th Cir. 1986). Similarly, the fact that there were telephone calls and e-mail communications with plaintiff in California in the course of the negotiations leading to the formation of the initial employment contract is not sufficient. Katerndahl, at *11; Peterson v. Kennedy, 771 F.2d 1244, 1262 (9th Cir. 1985); Markey v. Kudelski S.A., 2007 WL 1110787, *5 (S.D. Cal. 2007). Notably, after the initial contract was entered, it was performed outside of California, in Bosnia, as were the succeeding annual contracts over the next four years.
Sarkis contends that particular actions by the OHR constitute purposefully directing its activities toward California, sufficient to justify the exercise of jurisdiction over it. For example, Sarkis argues that "[t]he situs of OHR's primary performance on all its contracts with Plaintiff was California" because "on a monthly basis, the OHR transmitted nearly 66% of Plaintiff's monthly compensation package to his California Wells Fargo bank account." Opp. at 26. Sarkis' argument is not persuasive. Sending payments to California when the material and essentially all of the performance of the contract was in Bosnia is not sufficient to justify the exercise of personal jurisdiction in California. See Holt Oil Gas Corp. v. Harvey, 801 F.2d 773, 778 (5th Cir. 1986) (given that the material performance of the contract occurred outside of the forum, the fact that payments were made to plaintiff in the forum did not "weigh heavily" in the jurisdictional determination). Without elaboration, Sarkis cites Markey in support of his argument, presumably because the court there noted that the plaintiff had accepted payment from defendant-employer in Tennessee. It is not clear from the discussion in Markey whether the defendant was in Tennessee when payment was made or whether plaintiff was in Tennessee when he accepted payment, but in any event, Markey does not support plaintiff's position. To the contrary, Markey found no personal jurisdiction in a wrongful termination action on facts similar to those presented here — a foreign employer, limited contacts with California, and work performance outside of California.
Sarkis also argues that the OHR hired him because he is admitted to the California bar, that this was important to the OHR in its decision to hire him, and that this shows the OHR's availment of the benefits of California. Sarkis Decl. ¶ 30. Sarkis also points out that the OHR stressed his obligations as a member of the California bar in its rejection of his settlement demand. Id., Ex. AA. The court is not persuaded that this Sarkis' membership in the California bar is sufficient to bear any jurisdictional weight. Markey, although cited by Sarkis, offers him no support.
Sarkis also argues that in tort cases, the court applies an "effects" test, such that the "purposeful availment" prong may be met where a defendant's tortious acts have an effect in the forum. Opp. at 22. A foreign act, aimed at the forum state and having an effect in the forum state, may give rise to personal jurisdiction over the foreign actor. Calder v. Jones, 465 U.S. 783 (1984); Bancroft Masters Inc. v. Augusta Nat'l Inc., 223 F.3d 1082, 1087-88 (9th Cir. 2000). The gravamen of Sarkis' claim is that he was induced to enter into an employment arrangement based on representations that the position could be terminated only for cause, and he was subsequently terminated without cause four years later in Bosnia. Following his termination, Sarkis returned to California. Even assuming, for the sake of analysis, that some effects of the allegedly tortious misrepresentations were in California, Sarkis has not established that such effects were "jurisdictionally sufficient." Yahoo!, 433 F.3d at 1207. Sarkis contends that the OHR made misrepresentations to him in California (i.e., that termination would only be for cause), which plaintiff relied on to his detriment by leaving California and relocating overseas foregoing "the opportunity to locate less arbitrary employment in California." Opp. at 23. This same argument was rejected by the Sixth Circuit in Conti v. Pneumatic Products Corp., 977 F.2d 978 (6th Cir. 1992), a wrongful termination case involving similar facts.
In Conti, an Ohio plaintiff responded to an ad in the Wall Street Journal and submitted his resume to a recruiting firm in Florida. Thereafter, a company in Florida enlisted the recruiting firm to fill a position in Florida, the recruiter contacted plaintiff and negotiations commenced. Ultimately, plaintiff accepted the resulting offer of employment, relocated to Florida where he performed the job, and was thereafter terminated. Plaintiff sued in Ohio, alleging that representations made to him in the course of the negotiations were fraudulent and that he had relied to his detriment in accepting the offer and relocating. The district court found that there was no personal jurisdiction over the Florida defendant, and the Sixth Circuit affirmed, both on the purposeful availment prong and on the basis that exercising jurisdiction over the out-of-state defendant in these facts would not be reasonable. Conti, 977 F.2d at 983. The present case is not materially different. Moreover, similar wrongful termination cases are in accord. See Houseman v. DPI Food Prods. Inc., 2005 WL 2656123 (E.D. Ky.) (no personal jurisdiction over out-of-state employer who recruited plaintiff to work out-of-state); Condon v. Flying Puck, LLC, 35 Fed. Appx. 173, 174 (6th Cir. 2002) (same).
Turning to the second prong of the analysis, most of Sarkis' claims do not arise out of or result from the California contacts. Sarkis' claims arise out of the termination of his employment, outside of California, in 2007 some four years after his employment commenced. The termination does not "arise out of" or result from the defendants' forum-related activities, specifically the pre employment discussions and negotiations at the outset of the parties' relationship.
Finally, the court finds that the exercise of personal jurisdiction over the defendants in this case would not be reasonable. In considering whether the exercise of personal jurisdiction would be reasonable, the court considers the following seven factors:
1) the extent of the defendant's purposeful interjection into the forum state's affairs;
2) the burden on the defendant in defending in the forum;
3) the extent of conflict with the sovereignty of the defendant's state;
4) the forum state's interest in adjudicating the dispute;
5) the most efficient judicial resolution of the controversy;
6) the importance of the forum to the plaintiff's interest in convenient and effective relief; and
7) the existence of an alternate forum.Menken v. Emm, 503 F.3d 1050, 1058 (9th Cir. 2007), citing CE Distrib. LLC. v. New Sensor Corp., 380 F.3d 1107, 1112 (9th Cir. 2004). These factors generally weigh in favor of the defendants.
First, there was little purposeful injection into the forum state's affairs and none by defendant Lajcák.
Second, defendants would face some burden in defending a lawsuit in a foreign country. Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 114 (1987); Core-Vent Corp. v. Nobel Indus. AB, 11 F.3d 1482, 1488 (9th Cir. 1993). Although modern technology has reduced the burden of litigating in a distant forum to some degree, this factor weighs in defendants' favor.
The third factor regarding the extent of conflict with the sovereignty of the defendant's state is difficult to assess. Defendants contend that the exercise of jurisdiction would "conflict with OHR's mission;" Sarkis contends that Bosnia and Herzogovina "has declared its disinterest in this matter." Opposition at 29 n. 54. The court weighs this factor in favor of defendants, but not dispositively so.
Fourth, California's interest in adjudicating the dispute is modest, but weighs slightly in plaintiff's favor. Although this action involves a California plaintiff and California generally has an interest in protecting the interests of its residents, that interest is lessened to some degree where plaintiff resided outside of California at the time of the materially significant acts giving rise to the action. Sarkis contends that California has a substantial interest in the action because California law and public policy have been violated, yet cites no authority that California's public policy relating to employment relationships applies to employment contracts with non-California employers that are performed (and allegedly breached) outside of the state.
Fifth, the efficient resolution of the controversy factor focuses on where the witnesses and evidence are likely to be located. Menken, 503 F.3d at 1060-61. With the exception of Sarkis himself, it appears that no witnesses or evidence are in California. Plaintiff has identified four US resident witnesses, three UK resident witnesses and one witness who is a resident of Moldova (Sarkis Decl. ¶ 37); defendants contend that the relevant witnesses and evidence are in Bosnia. Reply at 19. This factor does not weigh in Sarkis' favor.
With regard to the sixth factor — the importance of the forum to plaintiff's interest in convenient and effective relief — Sarkis focuses solely on his own convenience. Opp. at 29 n. 54. This factor does not focus on plaintiff's convenience, however, and plaintiff's convenience is given little weight. Menken, 503 F.3d at 1061; Core-Vent, 11 F.3d at 1490.
Seventh, with regard to the availability of an alternate forum, defendants suggest that an alternate forum exists, specifically the internal dispute resolution procedures incorporated into the employment contract. Complaint Ex. D at ¶ 3.2 (contract), incorporating Policies and Procedures (Ex. E) including § 40 (internal grievance procedure). Sarkis simply asserts that there is no alternative forum. Opp. at 29, n. 54. Sarkis has not carried his burden of establishing that there is no alternate forum available. Menken, 503 F.3d at 1061. Thus, this factor weighs in defendants' favor.
Taking into account all seven reasonableness factors, the court finds that they predominantly weigh in favor of defendants such that the exercise of jurisdiction over the defendants in this case would not be reasonable.
Accordingly, the court finds that there is no personal jurisdiction over the defendants and grants the defendants' motion to dismiss for lack of personal jurisdiction.
Defendants motion also seeks dismissal for lack of subject matter jurisdiction, contending that they are entitled to sovereign immunity under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330(a), and for insufficient service of process under the Act. Whether the FSIA applies to an entity such as the OHR, or to the High Representative, presents novel and thorny issues. It is not necessary for the court to reach these issues, however, because the lack of personal jurisdiction disposes of this case. The court thus exercises its discretion to not reach the alternate grounds asserted in defendants' motion.
III. ORDER
For the foregoing reasons, the court grants defendants' motion to dismiss under Rule 12(b)(2) for lack of personal jurisdiction.