Summary
finding insufficient evidence to conclude that Geico's subsidiaries in Oregon acted as agents of Geico Corporation where defendant pointed to no evidence that subsidiary issued insurance policies to Oregon residents or otherwise conducted business on Geico's behalf
Summary of this case from Glenn v. BP p.l.c. (In re BP p.l.c. Sec. Litig.)Opinion
CV 01-1458-BR
November 27, 2002
N. Robert Stoll, Steve D. Larson, Steven C. Berman, Stoll Stoll Berne Lokting Shlachter P.C., Portland, OR, Charles A. Ringo, Beaverton, OR, for Plaintiffs.
Jan K. Kitchel, Robert H. Hamrick, Schwabe, Williamson Wyatt, P.C., Portland, OR, for Defendants.
OPINION AND ORDER
This matter comes before the Court on Defendant's Motion for Summary Judgment (#52), Defendant's Motion to Strike Plaintiffs' Affidavits and Exhibits in Whole or in Part (#71), and Plaintiffs' Motion to Supplement the Record on Summary Judgment (#77).
For the reasons that follow, the Court DENIES Defendant's Motion for Summary Judgment and Defendant's Motion to Strike. The Court also DENIES Plaintiffs' Motion to Supplement the Record on Summary Judgment.
PROCEDURAL BACKGROUND
Plaintiffs Christina Sams and Amber Sommer assert this class action on behalf of all purchasers of automobile insurance from Defendant GEICO Corporation's subsidiaries from March 2000 to the present. Plaintiffs allege GEICO Corporation violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681. Plaintiffs contend GEICO Corporation took adverse action against them and other members of the alleged class based on information contained in consumer reports and willfully failed to notify them as required under FCRA. Plaintiffs seek statutory damages, punitive damages, and attorneys' fees.
On January 28, 2002, Defendant filed a Motion for Summary Judgment (#16) and contended, inter alia, this Court lacks personal jurisdiction over it. Defendant, however, did not apply the correct federal due process analysis to its jurisdictional argument. On March 18, 2002, the Court heard oral argument on Defendant's Motion and ordered the parties to conduct discovery limited to jurisdictional issues and to submit supplemental memoranda.
On April 9, 2002, before the supplemental memoranda on Defendant's Motion for Summary Judgment were filed, Plaintiffs filed a Motion for Leave to File a Second Amended Complaint (#29), which Defendant opposed. Plaintiffs sought to amend their Complaint to add four subsidiary companies of GEICO Corporation as defendants and to add an additional plaintiff.
On April 23, 2002, oral argument was heard on Plaintiffs' Motion. The Court denied Plaintiffs' Motion for Leave to File a Second Amended Complaint and directed the parties to continue jurisdictional discovery. On May 16, 2002, the Court on its own motion struck Defendant's Motion for Summary Judgment with leave to renew following completion of jurisdictional discovery.
On July 3, 2002, Defendant filed a second Motion for Summary Judgment (#52). In addition to its jurisdictional arguments, Defendant raised a statute of limitations argument and contended it was entitled to judgment as a matter of law on the merits. Plaintiffs filed a Motion to Strike the Non-Jurisdictional Arguments Raised in Defendant's Motion for Summary Judgment or, in the alternative, to allow Plaintiffs additional discovery for the purposes of responding to the nonjurisdictional arguments (#55). The Court granted this Motion and ordered the non-jurisdictional arguments stricken from Defendant's Motion for Summary Judgment. Accordingly, the only issue currently before the Court is whether the Court has personal jurisdiction over Defendant GEICO Corporation.
FACTS
GEICO Corporation is a general business corporation domiciled in Delaware. GEICO Corporation is a holding company with four principal insurance subsidiaries: Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company, and GEICO Casualty Company. All four insurance subsidiaries are registered to do business in Oregon. GEICO Corporation, through its subsidiaries, offers primarily private passenger automobile insurance to individuals in 48 states and the District of Columbia. GEICO Corporation and its subsidiaries share a common corporate headquarters and common officers. The domain names "GEICO.com" and "GEICODIRECT.com" are registered to GEICO Corporation.
Both Sommer and Sams reside in Oregon and have automobile insurance policies with GEICO General Insurance Company. At the time this action was filed, however, Sams lived in Vancouver, Washington, and worked in Oregon.
DEFENDANT'S MOTION TO STRIKE
Defendant moves to strike Sams's Affidavit, Steve D. Larson's Affidavit, and Exhibits 15-18 and 20-271 to the Larson Affidavit, all offered in support of Plaintiff's Response to Defendant's Concise Statement of Facts.
It is well settled that only admissible evidence may be considered when ruling on a motion for summary judgment. See Fed.R.Civ.P. 56(e). See also Orr v. Bank of America, 285 F.3d 764, 773 (9th Cir. 2002). Affidavits "shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e). Authentication is a condition precedent to admissibility. Orr, 285 F.3d at 773.
To authenticate through personal knowledge documents that are submitted to support or to oppose a summary judgment motion, the party must attach the documents to the affidavit of a person through whom the exhibits could be admitted into evidence at trial. Id. The affiant must show affirmatively he has personal knowledge and "is competent to testify to the matters stated therein." Fed.R.Civ.P. 56(e).
Sams Affidavit
Defendant moves to strike the Affidavit of Christina Sams on the basis that the Affidavit "is replete with bold conclusory assertions that lack any foundational indicia of personal knowledge." Defendant does not attempt to identify or to discuss the substance of Sams's Affidavit. Defendant's only specific complaint is that Sams "designates 'GEICO' to refer to GEICO Corporation . . . and later uses 'GEICO to refer to an insurance subsidiary." Sams does not make any assertions about GEICO's corporate structure or specifically designate "GEICO" as referring to any particular corporate entity. Sams's testimony is not confusing or misleading. She states with specificity which GEICO subsidiary issued each of her insurance policies and attaches the relevant policies as exhibits to her Affidavit. She relates her telephone contacts with GEICO representatives, which were a result of calling the toll-free number offered by "GEICO." Defendant does not present any evidence from which this Court can determine that Sams's use of "GEICO" to describe the entity with which she interacted was erroneous. The Court finds Sams's Affidavit sufficiently indicates it is based on Sams's personal knowledge. Accordingly, the Court denies Defendant's Motion to Strike the Sams Affidavit.
Larson Affidavit
Defendant moves to strike the Affidavit of Steve Larson but offers no argument in support of this Motion. The Court, therefore, denies Defendant's Motion to Strike the Larson Affidavit.
Exhibits 15-18 and 20-27 to the Larson Affidavit Defendant moves to strike Exhibits 15-18 and 20-27 to the Larson Affidavit on the basis that these documents are not properly authenticated. Defendant does not identify the substance of any of the exhibits but argues generally that any document not produced by Defendant is unauthenticated and, therefore, is not admissible.
Exhibits 15-18 and 27 are print-outs of information downloaded from websites. Exhibits 15, 16, and 27 were downloaded from two different GEICO websites. Exhibits 17 and 18 were downloaded from the VeriSign website. Plaintiffs' counsel, Steve Larson, identifies these exhibits in his Affidavit as "true and correct copies of pages that were downloaded" from GEICO.com, GEICODIRECT.com, and VeriSign websites. In response to Defendant's Motion to Strike, Plaintiffs also submitted an affidavit of Steven C. Berman that describes in more detail the circumstances under which the documents were downloaded. Berman states the documents were downloaded by him or under his direction.
A document is adequately authenticated by evidence sufficient to support a finding that the document in question is what its proponent claims. Fed.R.Evid. 901(a). United States v. Tank, 200 F.3d 627, 630 (9th Cir. 2000). This burden is met when "sufficient proof has been introduced so that a reasonable juror could find in favor of authenticity." Id. (citations omitted). The Court finds the Affidavits of Larson and Berman adequately establish the authenticity of Exhibits 15-18 and 27.
Exhibits 20, 22, and 25-27 are all publicly filed documents from Berkshire Hathaway, GEICO Corporation's parent company. The affidavits of Larson and Berman adequately set forth the information necessary to authenticate these documents as public records. See Fed.R.Evid. 903(b)(7) Exhibit 2 consists of pages downloaded from the Oregon Department of Business Consumer Affairs Division website and shows the four GEICO insurance subsidiaries are licensed to do business in Oregon. Exhibits 23 and 24 are copies of rate filings made on behalf of GEICO with the Oregon Department of Consumer Affairs. The Court finds these documents also are adequately authenticated by the affidavits of Larson and Berman. In addition, the Court finds Exhibits 23 and 24 are authenticated by the testimony of Defendant's employee, Paul Lavrey.
Defendant also originally moved to strike Exhibits 5 and 28. In Defendant's Reply in Support of its Motion to Strike, Defendant withdrew its motion as to Exhibits 5 and 28 and, for the first time, asserted it intended to move to strike Exhibits 4 and 14. The Court, in the exercise of its discretion, declines to address Defendant's Motion to Strike to the extent it raises objections for the first time in Defendant's Reply.
In any event, as Plaintiffs point out, each of the factual assertions supported by the challenged exhibits is supported also by other exhibits to which Defendant does not object. Even if the Court were to strike the exhibits, therefore, it would have no impact on Defendant's Motion for Summary Judgment. Accordingly, the Court denies Defendant's Motion to Strike in its entirety.
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Defendant GEICO Corporation moves for summary judgment and asserts this court lacks personal jurisdiction over it. Plaintiffs argue this Court has both general and specific jurisdiction over GEICO Corporation pursuant to Oregon's long-arm statute, Or. R.Civ.P. 4.
Standards
Plaintiffs have the burden of establishing personal jurisdiction. Ziegler v. Indian River County, 64 F.3d 470, 473 (9th Cir. 1995). "It is well established that where the district court relies solely on affidavits and discovery materials, the plaintiff need only establish a prima facie case of jurisdiction. If the court holds an evidentiary hearing or the case proceeds to trial, however, the burden on the plaintiff shifts to the preponderance of the evidence." Rano v. Sipa Press, Inc., 987 F.2d 580, 587 n. 3 (9th Cir. 1993) (citations omitted).
Personal jurisdiction over a nonresident defendant is proper only if the forum state's long-arm statute confers personal jurisdiction and the exercise of jurisdiction comports with federal due process standards. Fireman's Fund Ins. Co. v. national Bank of Coops., 103 F.3d 888, 893 (9th Cir. 1996). "Oregon's long-arm statute confers jurisdiction to the extent permitted by due process." Gray Co. v. Firstenberg Mach. Co., 913 F.2d 758, 760 (9th Cir. 1990). See Or. R.Civ.P. 4L.
Discussion
Generally, determining whether a federal court has personal jurisdiction over a nonresident defendant involves two inquiries: whether the forum state's long-arm statute permits the assertion of jurisdiction and whether assertion of personal jurisdiction violates federal due process. Fireman's Fund, 103 F.3d at 893. Oregon's long-arm statute confers personal jurisdiction coextensive with federal due process. Or. R.Civ.P. 4L. "Thus, the analysis collapses into a single framework and the court proceeds under federal due process standards." Millenium Enter., Inc. v. Millenium Music, LP, 33 F. Supp.2d 907, 909 (D.Or. 1999).
Due process requires a nonresident defendant to have certain minimum contacts with the forum state so that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice." Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). In judging minimum contacts, a court properly focuses on the relationship among the defendants, the forum, and the litigation. Calder v. Jones, 465 U.S. 783, 788 (1984) (internal quotations and citations omitted). "Applying the 'minimum contacts' analysis, a court may obtain either general or specific jurisdiction over a defendant." Doe v. Unocal Corp., 248 F.3d 915, 923 (9th Cir. 2001).
General Jurisdiction
General jurisdiction refers to the authority of a court to hear any action involving a defendant regardless whether the action arose from the defendant's activities within the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 415 (1984). A district court has general jurisdiction over a defendant if the plaintiff shows the defendant has "substantial" or "continuous and systematic" contacts with the forum state. Bancroft Masters, Inc. v. Augusta Nat'l, Inc., 223 F.3d 1082, 1086 (9th Cir. 2000) (quoting Helicopteros, 466 U.S. at 415). This standard is "fairly high" and requires the contacts to be of the sort that approximate physical presence within the state. Id. (internal citations omitted). Pertinent factors to consider are whether the defendant:
1. makes sales, solicits, or engages in business in the state,
2. serves the state's markets,
3. designates an agent for service of process,
4. holds a license, or
5. is incorporated in the state.
Id. (citing Hirsch v. Blue Cross, Blue Shield of Kansas City, 800 F.2d 1474, 1478 (9th Cir. 1986)).
GEICO Corporation has no physical presence in Oregon. It is not registered to do business in Oregon. The parties have not presented any evidence to suggest GEICO Corporation has any registered agents, employees, or sales representatives in Oregon. Plaintiffs, nonetheless, contend this Court has general jurisdiction over GEICO Corporation because GEICO Corporation's subsidiaries acted as general agents for GEICO Corporation in the state of Oregon.
If a subsidiary company acts as an agent of the parent company, the local subsidiary's contacts with the forum may be imputed to the nonresident parent corporation. Doe v. Unocal, 248 F.3d 915, 925 (9th Cir. 2001). See also Wells Fargo Co. v. Wells Fargo Express Co., 556 F.2d 406, 424 n. 620 (9th Cir. 1977) (if the in-state company is the general agent of the foreign principal, service on the in-state company is effective against the principal); Chan v. Society Expeditions, Inc., 39 F.3d 1398, 1404 (9th Cir. 1994), cert. denied, 514 U.S. 1004 (1995).
A district court also may have personal jurisdiction over a corporation when the corporation's subsidiary is subject to the court's jurisdiction and the subsidiary acts as the parent's "alter ego." American Tel. Tel. Co. v. Compagnie Bruxelles Lambert, 94 F.3d 586, 591 (9th Cir. 1996). Plaintiffs do not argue the subsidiaries are GEICO Corporation's alter ego. Instead Plaintiffs contend only that the subsidiaries are general agents for GEICO Corporation for purposes of Fed.R.Civ.P. 4(h). Accordingly, the Court does not undertake an "alter ego" analysis.
In Doe v. Unocal, the Ninth Circuit articulated the agency analysis as follows:
The agency test is satisfied by a showing that the subsidiary functions as the parent corporation's representative in that it performs services sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation's own officials would undertake to perform substantially similar services.
248 F.2d at 928 (internal quotation and citation omitted).
In deciding this question, the court may consider such factors as the percentage of the nonresident corporation's business that comes from the purported general agent and whether the purported agent is the nonresident corporation's only agent within the forum. See Chan, 39 F.3d at 1406. "At an irreducible minimum, the general agency test requires that the agent perform some service or engage in some meaningful activity in the forum state on behalf of its principal such that its presence substitutes for presence of the principal." Doe, 248 F.3d at 930 (internal quotation and citation omitted).
As noted, each of the GEICO subsidiaries is registered with the Insurance Division of the Oregon Department of Consumer and Business Services and GEICO General Insurance Company issued insurance policies to Oregon residents Sams and Sommers. Neither Plaintiffs nor Defendant has offered evidence of any other insurance policies issued to Oregon residents, and, in any event, Plaintiffs have not presented sufficient evidence from which this Court can find GEICO Corporation's subsidiary companies acted as the agents of GEICO Corporation in Oregon.
In summary, the Court finds Plaintiffs have not placed sufficient evidence in the record from which this Court can conclude that GEICO Corporation has the continuous and systematic contacts with this forum that are required to establish general jurisdiction.
Specific Jurisdiction
A court may exercise specific jurisdiction over a nonresident defendant if the defendant's less-substantial contacts with the forum give rise to action before the court. The issue is whether the action arises out of or has a substantial connection with the defendant's activity in the forum. Hanson v. Denckla, 357 U.S. 235, 250-53 (1958). See also Doe, 248 F.3d at 923. The Ninth Circuit applies a three-part test to determine whether a district court constitutionally may exercise specific jurisdiction over a nonresident defendant.
(1) The nonresident defendant must do some act or consummate some transaction with the forum 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 be one which arises out of or results from the defendant's forum-related activities; and (3) exercise of jurisdiction must be reasonable.
Panavision Int'l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir. 1998) (quoting Omeluk v. Langsten Slip Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995)).
The first prong of the three-part test requires a showing that Defendant GEICO Corporation purposefully availed itself of the privilege of conducting activities in the forum. The purposeful availment requirement ensures that a nonresident defendant will not be haled into court based upon "random, fortuitous or attenuated" contacts with the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).
Plaintiffs again fail to provide direct evidence of GEICO Corporation's activities in the forum. Instead Plaintiffs point to a statement by Michael Campbell, Associate Controller of GEICO Corporation, that "GEICO is an acronym that can be used to represent many entities depending upon the context it's being used in." Campbell admits "in some contexts, the acronym GEICO is used to refer to the consolidated entity GEICO Corporation and its subsidiaries." Plaintiffs extrapolate from this testimony that any time the acronym "GEICO" is used, it refers at least in part to GEICO Corporation. Plaintiffs, therefore, assert statements in the annual reports of Berkshire Hathaway, GEICO Corporation's parent company, that "GEICO" markets insurance nationally or underwrites insurance policies is evidence that GEICO Corporation engages in these activities in Oregon.
Plaintiffs also rely on pages from the GEICO.com and GEICODIRECT.com websites as evidence that GEICO Corporation has purposefully availed itself of the benefit of doing business in this jurisdiction. Plaintiffs have presented evidence that the websites are highly interactive and allow consumers from throughout the United States to contact "GEICO" and to obtain rate quotes, to purchase insurance policies, and to pay their premium bills. In fact, Sams testified she has paid her GEICO insurance bills on-line using the GEICO.com website.
Plaintiffs further assert GEICO Corporation participates in the underwriting of insurance policies issued by its subsidiaries and specifically participated in the use of consumer credit reports in setting insurance premium rates. Plaintiffs rely on evidence that GEICO Corporation contracted with Fair, Isaac to develop computer-assisted underwriting software that would use consumer credit information to determine premium rates for customers of GEICO Corporation's insurance subsidiaries.
The Court finds the record before it contains sufficient evidence of facts that, if true, would support a finding that GEICO Corporation purposefully availed itself of the benefits and protections of Oregon law.
The second prong of the Panavision test requires the claim to "arise out of" the defendant's forum-related activities. Neither party addresses this requirement. The Court, however, finds the record contains adequate evidence to indicate Plaintiffs' claims under FCRA arise out of GEICO Corporation's alleged forum-related activities, including its participation in insurance underwriting, rate setting and its use of consumer credit information.
After the first two prongs of the Panavision test have been met, the court still must determine whether the exercise of jurisdiction over GEICO Corporation would be reasonable.
However, where a defendant who purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.
Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482, 1487 (9th Cir. 1993) (internal quotations and citations omitted).
To determine whether the exercise of jurisdiction is reasonable, the Ninth Circuit examines seven factors:
(1) the extent of the defendants' purposeful interjection into the forum state's affairs; (2) the burden on the defendant of defending in the forum; (3) the extent of conflict with the sovereignty of the defendants' 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 alternative forum. None of the factors is dispositive in itself; instead, we must balance all seven.
Id. at 1487-88 (citations omitted).
Defendant has not presented any evidence or argument concerning the reasonableness factors. The Court, therefore, finds Defendant has failed to present a compelling case that the exercise of jurisdiction would be unreasonable.
The Court concludes, based on the record before it, Plaintiffs have established a prima facie case that this Court has specific personal jurisdiction over Defendant GEICO Corporation. The Court, therefore, denies Defendant's Motion for Summary Judgment.
PLAINTIFFS' MOTION TO SUPPLEMENT THE RECORD ON SUMMARY JUDGMENT
Plaintiffs filed a Motion to Supplement the Record on Summary Judgment (#77). In light of its ruling on Defendant's Motion to Strike, the Court finds it unnecessary for Plaintiffs to supplement the record on summary judgment. The Court, therefore, denies Plaintiffs' Motion to Supplement the Record.
CONCLUSION
For the above reasons, the Court DENIES Defendant's Motion for Summary Judgment (#52) and Defendant's Motion to Strike Plaintiffs' Affidavits and Exhibits in Whole or in Part (#71). The Court also DENIES Plaintiffs' Motion to Supplement the Record on Summary Judgment (#77).
IT IS SO ORDERED.