903 F.3d 896
9th Cir.2018Background
- InfoSpan (Cayman) and Emirates NBD Bank PJSC (the Bank) contracted in Dubai (SVC Agreement) governed by UAE law and UAE courts; dispute arose after Bank terminated the contract.
- InfoSpan and affiliate InfoSpan Gulf sued the Bank in California (InfoSpan I) asserting tort and contract claims; Bank timely moved to dismiss for lack of personal jurisdiction and initially succeeded in part but was overruled as to tort claims.
- Bank repeatedly preserved and asserted its personal-jurisdiction objection while also litigating defenses, seeking arbitration, and proposing counterclaims in InfoSpan I; some counterclaims were later dismissed voluntarily.
- InfoSpan filed a second suit (InfoSpan II) seeking a declaratory judgment compelling arbitration in California; the district court found the Bank had waived its personal-jurisdiction defense by litigating InfoSpan I and compelled arbitration.
- On appeal, the Ninth Circuit reversed: it held the district court abused its discretion in finding waiver and concluded California courts lack personal jurisdiction over the Bank for the contract-related claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Waiver of personal jurisdiction | Bank litigated InfoSpan I and its counterclaims, so it submitted to jurisdiction and waived the defense | Bank timely asserted and litigated personal-jurisdiction; defending merits and filing counterclaims after an adverse ruling does not waive the defense | Reversed: timely assertion and litigation to an adverse ruling preserved the defense; vigorous merits litigation and counterclaims do not constitute waiver absent improper conduct limited to sandbagging or failure to litigate the jurisdictional issue itself |
| Personal jurisdiction (merits) | California courts can exercise specific jurisdiction (including under Rule 4(k)(2)) based on communications, limited US contacts, and litigation conduct | Bank’s contacts with California/US are scant and unrelated to the contract (contract formation and performance occurred in UAE), so no specific or general jurisdiction | Affirmed that plaintiffs failed to meet burden for specific jurisdiction; no basis under Rule 4(k)(2); personal jurisdiction over the Bank in California is lacking |
Key Cases Cited
- Peterson v. Highland Music, Inc., 140 F.3d 1313 (9th Cir. 1998) (waiver analysis limited to deliberate procedural conduct affecting assertion of jurisdictional defense)
- Hillis v. Heineman, 626 F.3d 1014 (9th Cir. 2010) (permissive counterclaims do not waive a contemporaneously asserted personal-jurisdiction defense)
- SEC v. Ross, 504 F.3d 1130 (9th Cir. 2007) (filing counterclaims does not waive jurisdictional defenses asserted in same pleading)
- Walden v. Fiore, 571 U.S. 277 (2014) (personal-jurisdiction inquiry focuses on defendant’s contacts with the forum, not contacts with forum residents)
- Axiom Foods, Inc. v. Acerchem Int’l, Inc., 874 F.3d 1064 (9th Cir. 2017) (federal courts apply state law bounds for jurisdiction; due-process framework for specific jurisdiction)
- Holland Am. Line Inc. v. Wärtsilä N. Am., Inc., 485 F.3d 450 (9th Cir. 2007) (scant, fleeting, and attenuated contacts with the United States insufficient for Rule 4(k)(2) jurisdiction)