C.W. Downer & Company v. Bioriginal Food & Science Corp
2014 U.S. App. LEXIS 21448
| 1st Cir. | 2014Background
- Downer, a Boston-based investment bank, and Bioriginal, a Canadian company, entered a remote Letter Agreement in 2009 making Downer Bioriginal's exclusive financial adviser for a potential sale; the agreement was negotiated and performed largely by calls, emails, and documents exchanged over four years.
- Bioriginal transmitted a signed agreement from Canada; there were no in-person meetings between the contracting parties, but Downer’s Boston office performed extensive services (information memoranda, contacting ~206 buyers, joint presentations, conference calls) and received three milestone payments in Massachusetts.
- In 2013 Bioriginal sold to Westbridge; Downer claims it is owed a contingent transaction fee and a fourth milestone payment and sued in Massachusetts state court for breach of contract and related claims; Bioriginal removed and moved to dismiss for lack of personal jurisdiction.
- The district court dismissed under Rule 12(b)(2) for lack of personal jurisdiction; Downer appealed.
- The First Circuit evaluated specific jurisdiction (not general), considering relatedness, purposeful availment, and reasonableness under the Due Process Clause given the cross-border, communications-based relationship.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Massachusetts has specific personal jurisdiction over Bioriginal | Downer: long-term, purposeful contractual relationship with extensive, ongoing performance in Massachusetts by Downer gives rise to suit-related contacts | Bioriginal: negotiations and performance occurred in Canada; communications alone insufficient; forum selection/choice-of-law favors Saskatchewan | Yes. Relatedness and purposeful availment satisfied; jurisdiction is reasonable. |
| Whether the defendant purposefully availed itself of Massachusetts forum | Downer: Bioriginal solicited and contracted with Downer and caused Downer to perform significant activities in Massachusetts (payments, outreach, joint work) | Bioriginal: contacts were remote; most communications initiated by Downer; Bioriginal was essentially passive and benefited in Canada | Yes. Court found Bioriginal reached into Massachusetts by contracting for continuing, wide-ranging services performed there. |
| Whether communications by phone/email/Internet can support jurisdiction | Downer: sustained, bilateral electronic communications and in-state performance create substantial connection | Bioriginal: remote communications alone are insufficient without physical presence or solicitation in forum | Court: Remote communications may support jurisdiction given the nature, number, duration of contacts and integrated course of dealing. |
| Whether asserting jurisdiction is reasonable given international context | Downer: Massachusetts has strong interest protecting its resident business and remedying alleged breach; logistical burdens are not unusual | Bioriginal: cross-border burdens on witnesses and litigation favor Saskatchewan; choice-of-law favors Saskatchewan | Yes. Gestalt factors (burden, forum interest, plaintiff's interest, judicial efficiency, shared policies) do not outweigh jurisdiction; Massachusetts' interests are significant. |
Key Cases Cited
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (established minimum contacts/Due Process standard)
- Milliken v. Meyer, 311 U.S. 457 (fair play and substantial justice standard cited)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and contract-related contacts analysis)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (foreseeability versus purposeful availment)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (reasonableness factors especially in international-defendant context)
- Walden v. Fiore, 571 U.S. 277 (contacts must be with the forum state itself, not merely with a forum resident)
- Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42 (First Circuit approach to contract contacts and prima facie jurisdictional review)
- Adelson v. Hananel, 652 F.3d 75 (relatedness as a relaxed, flexible standard)
- Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201 (gestalt reasonableness factors)