Coast Equities, LLC v. Right Buy Properties, LLC
701 F. App'x 611
| 9th Cir. | 2017Background
- Coast Equities (Oregon/Nevada) acquired contract rights to purchase Florida real estate; suit alleges breach of contract and fraud by defendants.
- Defendants: Right Buy Properties, LLC; Ronald Mackie (located in Michigan); Investus (Michigan); and eleven Exit Strategy LLCs.
- Relevant communications regarding the transaction were by e-mail and telephone between Mackie (Michigan) and Coast Equities’ manager in Oregon.
- Coast Equities sued in Oregon federal court asserting specific personal jurisdiction based on those contacts.
- The district court dismissed for lack of personal jurisdiction; Coast Equities appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Oregon court has specific personal jurisdiction over out-of-state defendants for contract/fraud claims | Communications (calls/emails) and negotiations with Oregon-based manager suffice to establish purposeful availment/targeting | Calls/emails are insufficient; transaction was a one-time out-of-state real-estate sale with no Oregon ties; no fraud expressly aimed at Oregon | No personal jurisdiction: contacts were insufficient for purposeful availment or purposeful direction |
| Whether contract negotiations and terms establish purposeful availment | Prior negotiations and contemplated consequences tied the deal to Oregon | Contract was a one-time sale; terms and course of dealing did not involve Oregon | No: one-time remote negotiation insufficient under Sher/Burger King principles |
| Whether alleged fraud was purposefully directed at plaintiff in Oregon (Calder effects test) | Fraudulent statements to Coast Equities’ Oregon manager amount to targeting Oregon | No evidence statements were expressly aimed at a plaintiff known to be in Oregon | No: plaintiff failed to show wrongful conduct expressly aimed at Oregon |
| Whether Mackie’s contacts suffice to impute jurisdiction to Investus and Exit Strategy LLCs | Mackie’s Oregon contacts establish jurisdiction over associated entities | Jurisdictional argument rests solely on Mackie’s contacts, which are insufficient | No jurisdiction over Investus and Exit Strategy LLCs either |
Key Cases Cited
- Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191 (9th Cir. 1988) (articulates three-part test for specific personal jurisdiction)
- Sher v. Johnson, 911 F.2d 1357 (9th Cir. 1990) (consider prior negotiations, contemplated consequences, contract terms, course of dealing for contract-based purposeful availment)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (framework for analyzing purposeful availment in contractual relationships)
- Calder v. Jones, 465 U.S. 783 (U.S. 1984) (effects test for purposeful direction in intentional torts)
- Dole Food Co. v. Watts, 303 F.3d 1104 (9th Cir. 2002) (applies Calder effects test to fraud claims)
- Peterson v. Kennedy, 771 F.2d 1244 (9th Cir. 1985) (telephone calls and letters to forum alone insufficient for jurisdiction)
- Boschetto v. Hansing, 539 F.3d 1011 (9th Cir. 2008) (no jurisdiction for one-time out-of-state sale that touched forum only because buyer resided there)
- McGlinchy v. Shell Chem. Co., 845 F.2d 802 (9th Cir. 1988) (if first prong of minimum contacts fails, court need not reach relatedness and reasonableness prongs)