United States District Court, N.D. West Virginia
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S
MOTION TO DISMISS [DKT. NO. 6]
M. KEELEY UNITED STATES DISTRICT JUDGE
is the defendant's motion to dismiss this case for lack
of personal and subject matter jurisdiction. For the reasons
that follow, the Court GRANTS the motion
(Dkt. No. 6).
facts alleged in the complaint are as follows. The plaintiff,
March-Westin Company, Inc. (“March-Westin”),
“is a full-service engineering, general contracting and
design-building enterprise headquartered in Morgantown, West
Virginia” (Dkt. No. 1 at 2). The defendant, Swinerton
Builders, Inc. (“Swinerton”), is a California
corporation that offers “general contracting services,
including, without limitation, project management and
supervision services and subcontractor administration.”
Id. at 1-2.
2016, Viega LLC retained Swinerton to manage the construction
of two buildings in Broomfield, Colorado (“the
Project”). When Swinerton sought bids from
subcontractors in January 2017, LignaTerra Global, LLC
(“LignaTerra”), submitted a preliminary bid to
provide “cross-laminated” and
“glue-laminated” timber, which are uncommon
building materials in the United States. Id. at 2-3.
March-Westin “originally corresponded with LignaTerra .
. . to assist it in its methodology in developing its bid,
” but LignaTerra subsequently determined that it would
not be able “to meet prequalification requirements to
be a subcontractor on the project.” Id. at 3.
In April 2017, Swinerton asked March-Westin to provide its
own bid for the timber products, with LignaTerra acting as
March-Westin's vendor. Id.
early as April 24, 2017, Swinerton began communicating with
March-Westin and its principal, Phillip Weser
(“Weser”), and continued to do so over the course
of the following two months. In reliance on Swinerton's
requests for a bid, requests for performance and payment
bonds, and transmission of draft contracts, March-Westin
prepared a bid, which it eventually submitted to Swinerton on
June 26, 2017. Id. at 3-4.
March-Westin submitted its bid, Swinerton transmitted drafts
of a Master Service Agreement (“MSA”), which
Weser executed on behalf of March-Westin on July 7,
2017. After Weser executed the MSA, Swinerton
transmitted draft work orders, including one on July 21,
2017. In reliance on Swinerton's correspondence,
March-Westin “paid $137, 000 to LignaTerra to cover
certain project costs including a payment to Hess Timber
Limitless (a German timber supplier) in order to guarantee
[Swinerton's] construction schedule.” Id.
at 4. Thereafter, March-Westin incurred internal costs
related to the Project. Id. at 4-5.
having March-Westin's bid in its possession, Swinerton
transmitted draft work orders containing incorrect prices.
Upon inquiry, Swinerton repeatedly stated that these errors
were clerical and would be corrected. Nevertheless, because
revised drafts consistently contained the inaccurate price,
March-Westin never executed them. Id. at 5.
March-Westin alleges that Swinerton's communications were
designed to induce it to believe that a contract existed and
to continue to devote time and effort to the Project. On
August 14, 2017, Swinerton sent March-Westin a “Notice
of Intent to Not Award, ” which advised that the work
order and MSA “should be considered rescinded.”
Id. Since that time, Swinerton has worked
“directly with the timber supplier procured by
LignaTerra and [March-Westin], ” and “has made
use of and benefitted from the cost estimates, designs and
techniques introduced to the project by
[March-Westin].” Id. at 5-6.
complaint filed on November 21, 2017, March-Westin claims
relief for 1) Fraudulent or Negligent Inducement, 2) Breach
of Contract, 3) Unjust Enrichment, 4) Promissory Estoppel,
and 5) Conversion. Id. at 6-9. Swinerton was served
through the Secretary of State on December 6, 2017 (Dkt. No.
3). After the parties stipulated to an extension of time for
it to do so, Swinerton moved to dismiss the complaint on
January 15, 2018 (Dkt. Nos. 5; 6). The Court heard argument
on the motion at a scheduling conference on February 22,
argues that March-Westin's complaint should be dismissed
for lack of personal jurisdiction (Dkt. No. 7 at 14-17).
“Under Rule 12(b)(2), a defendant must affirmatively
raise a personal jurisdiction challenge, but the plaintiff
bears the burden of demonstrating personal jurisdiction at
every stage following such a challenge.” Grayson v.
Anderson, 816 F.3d 262, 267 (4th Cir. 2016).
“[W]hen . . . the court addresses the question on the
basis only of motion papers, supporting legal memoranda and
the relevant allegations of a complaint, the burden on the
plaintiff is simply to make a prima facie showing of a
sufficient jurisdictional basis to survive the jurisdictional
challenge.” Combs v. Bakker, 886 F.2d 673, 676
(4th Cir. 1989).
however, a plaintiff must establish facts supporting
jurisdiction over the defendant by a preponderance of the
evidence, ” and the Court should “follow a
procedure that allows it to dispose of the [issue] as a
preliminary matter.” Grayson, 816 F.3d at 268.
“[I]f a court requires the plaintiff to establish facts
supporting personal jurisdiction by a preponderance of the
evidence prior to trial, ” it must “afford the
parties a fair opportunity to present both the relevant
jurisdictional evidence and their legal arguments.”
case, both Swinerton and March-Westin have presented evidence
outside the pleadings in the course of briefing the motion to
dismiss. As well, the Court has heard oral argument on the
motion, and, after fair consideration of the arguments of the
parties, concludes that the parties have had “a fair
opportunity to present both the relevant jurisdictional
evidence and their legal arguments.” Grayson,
816 F.3d at 268. In light of the evidence, the Court further
concludes that March-Westin has failed to establish the
existence of this Court's personal jurisdiction over
Swinerton under either a prima facie or preponderance of the
Standard of Review
federal district court may only exercise personal
jurisdiction over a foreign corporation if such jurisdiction
is authorized by the long-arm statute of the state in which
it sits and application of the long-arm statute is consistent
with the due process clause of the Fourteenth
Amendment.” Consulting Eng'rs Corp. v.
Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009).
“[B]ecause the West Virginia long-arm statute is
coextensive with the Due Process Clause, it is unnecessary .
. . to go through the normal two-step formula for determining
the existence of personal jurisdiction. Rather, the statutory
inquiry necessarily merges with the Constitutional
inquiry.” Shelton v. Crookshank, No.
3:17-CV-108, 2018 WL 527423, at *3 (N.D.W.Va. Jan. 24, 2018)
(quoting In re Celotex Corp., 124 F.3d 619, 627-28
(4th Cir. 1997)).
To satisfy the constitutional due process requirement, a
defendant must have sufficient “minimum contacts”
with the forum state such that “the maintenance of the
suit does not offend traditional notions of fair play and
substantial justice.” The minimum contacts test
requires the plaintiff to show that the defendant
“purposefully directed his activities at the residents
of the forum” and that the plaintiff's cause of
action “arise[s] out of” those activities. This
test is designed to ensure that the defendant is not
“haled into a jurisdiction solely as a result of
random, fortuitous, or attenuated contacts.” It
protects a defendant from having to defend himself in a forum
where he should not have anticipated being sued. Because a
sovereign's jurisdiction remains territorial, to justify
the exercise of personal jurisdiction over a non-resident
defendant, the defendant's contacts with the forum state
must have been so substantial that “they amount to a
surrogate for presence . . . .”
Geometric, 561 F.3d at 277-78 (internal citation
Fourth Circuit “has synthesized the due process
requirements for asserting specific personal jurisdiction in
a three part test in which ‘we consider (1) the extent
to which the defendant purposefully availed itself of the
privilege of conducting activities in the State; (2) whether
the plaintiffs' claims arise out of those activities
directed at the State; and (3) whether the exercise of
personal jurisdiction would be constitutionally
reasonable.'” Id. at 278 (quoting ALS
Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d
707, 712 (4th Cir. 2002)). Under the first prong, in the business
context, courts consider various nonexclusive factors,
including “whether the defendant maintains offices or
agents in the forum state, ” “whether the
defendant owns property in the forum state, ”
“whether the defendant reached into the forum state to
solicit or initiate business, ” “whether the
defendant deliberately engaged in significant or long-term
business activities in the forum state, ”
“whether the parties contractually agreed that the law
of the forum state would govern disputes, ”
“whether the defendant made in-person contact with the
resident of the forum state in the forum state regarding the
business relationship, ” “the nature, quality and
extent of the parties' communications about the business
being transacted, ” and “whether performance of
the contractual duties was to occur within the forum.”
Id. (internal citations omitted). Only if the first
prong is satisfied does the Court analyze the second and
third prongs. Id.
threshold inquiry in this case is whether Swinerton meets
“the minimum contacts requirement of constitutional due
process that [it] purposefully availed [itself] of the
privilege of conducting business under the law of the forum
state.” Geometric, 561 F.3d at 278. Swinerton
contends that it lacks sufficient contacts with West Virginia
(Dkt. Nos. 7 at 17; 10 at 8-10), while March-Westin contends
that Swinerton's contacts were much more than
“random, fortuitous, or attenuated” (Dkt. No. 9
at 6). Because the Court's analysis is fact-intensive, it
is instructive to survey how other courts have considered
Burger King Corp. v. Rudzewicz, the Supreme Court
found that Florida could exercise personal jurisdiction over
a Michigan franchisee whose dispute with the franchiser
“grew directly out of ‘a contract which had a
substantial connection with [Florida], '”
despite the fact that he had no physical ties with the state.
471 U.S. 462, 479 (1985) (quoting McGee v. Int'l Life
Ins., Co., 355 U.S. 220, 223 (1957) (emphasis added)).
The defendant had deliberately reached out to a
“Florida corporation for the purchase of a long-term
franchise.” Id. at 480. In doing so, he
“entered into a carefully structured 20-year
relationship that envisioned continuing and wide-reaching
contacts with Burger King in Florida, ” including
contractual provisions that selected the law of Florida to
govern any disputes. Id. at 480-81. In other words,
he voluntarily accepted “long-term and exacting
regulation of his business from Burger King's Miami
headquarters.” Id. at 480. Moreover, by
breaching the franchise agreement, the defendant had caused
foreseeable injury in Florida. The “quality and
nature” of his relationship with Florida was thus much
more than random, fortuitous, or attenuated. Id.
Consulting Engineers Corp. v. Geometric Ltd.,
Consulting Engineers Corp. (“CEC”), a Virginia
corporation, had a business relationship with Structure
Works, LLC (“Structure Works”) and Geometric
Software Solutions (“Geometric”), Colorado and
Indian corporations respectively. 561 F.3d 273, 275 (4th Cir.
2009). Structure Works retained Geometric to work on a design
project, and introduced Geometric to CEC, which it believed
might be able to assist with an aspect of the project.
Thereafter, following several emails and phone calls, CEC
entered into non-disclosure agreements with both Geometric
and Structure Works. Id. at 275-76. During the four
subsequent months of negotiation regarding CEC's