Downing v. Goldman Phipps, PLLC
764 F.3d 906
8th Cir.2014Background
- Plaintiffs' common-benefit attorneys (CBAs) led an MDL in the Eastern District of Missouri prosecuting rice-contamination claims against Bayer; they created extensive work product and a court-supervised Common Benefit Trust Fund (CBTF).
- Several plaintiff-side lawyers (Phipps group, Murray, Banks, Keller) represented clients in both the MDL and related state-court cases; some attended MDL hearings, depositions, bellwether trials, and multiple Missouri settlement conferences.
- The MDL leadership alleges those outside-counsel used MDL-generated materials in state trials and obtained recoveries through a global settlement (including a GMB settlement) without contributing to the CBTF.
- Downing sued those lawyers in Missouri state court (removed to federal MDL) for unjust enrichment and quantum meruit, alleging they were unjustly enriched by MDL work product created in Missouri and then used in state cases.
- The district court dismissed for lack of personal jurisdiction; the Eighth Circuit reversed, holding the lawyers’ repeated, voluntary trips to Missouri to negotiate settlement and obtain fees sufficed for Missouri long-arm jurisdiction and due-process minimum contacts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants "transacted business" in Missouri under Mo. Rev. Stat. § 506.500 | Downing: defendants entered Missouri to negotiate settlement and obtain fees, thus transacting business. | Defendants: fees from state cases not generated by Missouri activity; travel was involuntary due to MDL transfer. | Transacting business — yes; trips to Missouri to negotiate produced pecuniary benefit and satisfy the long-arm statute. |
| Whether defendants purposefully availed themselves of Missouri such that due-process minimum contacts exist | Downing: multiple voluntary settlement trips and related conduct created sufficient minimum contacts. | Defendants: contacts were not voluntary or purposeful; actions were tied to MDL transfer and were unrelated to Downing's claims. | Purposeful availment — yes; repeated voluntary trips seeking financial gain support specific jurisdiction. |
| Whether the forum-relatedness (nexus) requirement for specific jurisdiction is met | Downing: settlement negotiations and refusal to pay into the Missouri-based CBTF connect defendants’ Missouri acts to the unjust-enrichment/quantum-meruit claims. | Defendants: the alleged misuse of materials occurred in other states (e.g., Arkansas), so no sufficient nexus to Missouri. | Nexus satisfied — litigation arises from injuries related to defendants’ Missouri activities (settlement and failure to pay). |
| Whether exercising jurisdiction would offend fair play and substantial justice | Downing: Missouri has interest in providing a forum for a Missouri resident and the contacts are substantial. | Defendants: jurisdiction would be unfair because contacts were incidental to representation and MDL transfer. | No offense to due process — given voluntary, repeated entry for pecuniary gain, jurisdiction is consistent with fair play and substantial justice. |
Key Cases Cited
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (forum-contacts must comport with traditional notions of fair play and substantial justice)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and foreseeability of being haled into court)
- Steinbuch v. Cutler, 518 F.3d 580 (Eighth Circuit five-factor due-process test for jurisdiction)
- Myers v. Casino Queen, Inc., 689 F.3d 904 (specific-jurisdiction analysis does not require proximate cause; relatedness standard)
- Chromalloy Am. Corp. v. Elyria Foundry Co., 955 S.W.2d 1 (Mo. Banc 1997) (single trip into Missouri to negotiate/purchase can satisfy "transaction of any business")
- State ex rel. Metal Serv. Ctr. of Ga., Inc. v. Gaertner, 677 S.W.2d 325 (Mo. Banc 1984) (Missouri adopts broad construction of "transaction of any business")
- Precision Const. Co. v. J.A. Slattery Co., Inc., 765 F.2d 114 (Eighth Cir. 1985) (entering a state for pecuniary gain subjects defendant to suit there)