Adelson v. Hananel
652 F.3d 75
| 1st Cir. | 2011Background
- Adelson filed a declaratory judgment action against Hananel seeking interpretation of an oral contract governing Hananel's purported 12% investment option in Adelson's Macau casino venture.
- The district court had ruled that the contract did not give Hananel a 12% Macau option and thus denied relief; prior appeal (Adelson I) affirmed personal jurisdiction but remanded on forum non conveniens issues.
- Hananel argued the contract limited him to a 12% share of net profits from Israeli high-tech investments discovered and supervised by Hananel, during his IPI employment.
- Evidence showed Hananel worked from Israel for IPI, with funding routed through Massachusetts entities and ongoing Massachusetts contact, including meetings, faxes, and budget submissions.
- On remand, the district court found no meeting of the minds on the contract terms and held Hananel did not initiate the Macau investment; the court also denied a missing witness instruction.
- The First Circuit affirmed, holding personal jurisdiction proper, the burden of proof properly placed, and the contract interpreted as lacking an initiation of Macau investment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had specific personal jurisdiction over Hananel | Adelson contends forum contacts connect to contract formation/performance. | Hananel argues Massachusetts contacts are insufficient and contract formed abroad. | Yes; Massachusetts jurisdiction proper under relatedness, purposeful availment, and reasonableness. |
| Who bears the burden of proof in the declaratory action | Adelson as plaintiff should bear burden given declaratory posture. | Hananel argues burden should shift based on illegality/meeting of minds. | Massachusetts law places burden on the proponent of the asserted right; error harmless. |
| Meaning of the option and whether Hananel initiated the Macau investment | Adelson asserts a narrow option limited to Israeli investments initiated by Hananel and realized during employment. | Hananel asserts a broader 12% option on investments he or the Israeli office initiated outside the US. | There was no meeting of the minds; Hananel failed to initiate the Macau investment. |
| Whether the court abused the missing witness inference | Adelson should be allowed a missing witness inference for Raviv's absence. | Hananel argues inference should be drawn against Adelson for not producing Raviv. | No abuse; district court properly declined missing witness instruction. |
| Whether any district court factual findings are clearly erroneous | Adelson argues trial facts support the contract interpretation. | Hananel challenges the formation and performance findings. | No clearly erroneous findings; court properly weighed evidence and credibility. |
Key Cases Cited
- Adelson v. Hananel, 510 F.3d 43 (1st Cir. 2007) (reversed forum non conveniens dismissal but upheld personal jurisdiction)
- Adelson v. Hananel, 641 F. Supp. 2d 65 (D. Mass. 2009) (district court decision on merits; no Macau option)
- Hannon v. Beard, 524 F.3d 275 (1st Cir. 2008) (relatedness and minimum contacts analysis for specific jurisdiction)
- Daynard v. Ness, Motley, Loadholt, Richardson & Poole, 290 F.3d 42 (1st Cir. 2002) (three-component test for specific jurisdiction: relatedness, purposefulness, reasonableness)
- J. McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780 (2011) (specific jurisdiction requires purposefully directed conduct toward the forum)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (reasonableness gestalt factors in jurisdiction analysis)
- Sawtelle v. Farrell, 70 F.3d 1381 (1st Cir. 1995) (relatedness and connectivity considerations in forum-state contacts)
- Fairview Mach. & Tool Co. v. Oakbrook Intern., Inc., 56 F. Supp. 2d 134 (D. Mass. 1999) (broader view of transacting business under Massachusetts long-arm statute)