907 F.3d 95
1st Cir.2018Background
- LP Solutions, a Maine LLC, solicited and entered option-and-assignment agreements with members of the Duchossois family (mostly Illinois residents) to acquire limited partnership interests in Elm Street Plaza Venture, an Illinois LLLP owning Chicago real estate.
- LPS initiated contact, sent draft Option and Assignment agreements from Maine, and made three rounds of payments to the family in Illinois; family members sent three annual partnership distributions to LPS in Maine and transmitted executed Assignments and tax forms to LPS.
- The Option agreements designated Maine law for the Option; the Assignments were governed by Illinois law; neither agreement contained a forum-selection clause. LPS assumed transfer risk; family members had contingent obligations triggered by partnership actions or LPS exercise of options.
- Elm Street’s General Partners (in Illinois) refused to recognize transfers to LPS and sued LPS in Illinois state court; the family were not parties to that Illinois suit.
- LPS sued the family in Maine for breach of contract and unjust enrichment; the family removed and moved to dismiss for lack of personal jurisdiction. The district court dismissed for lack of specific personal jurisdiction; the First Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Maine courts have specific personal jurisdiction over Illinois-resident family members | LPS: defendants entered and performed contracts with Maine entity, sent payments and documents to Maine, and thus purposefully availed themselves of Maine; jurisdiction is foreseeable | Family: contacts with Maine were limited, contingent, and initiated by LPS; mere awareness of plaintiff’s location and isolated payments/communications do not establish purposeful availment | Held: No specific personal jurisdiction; purposeful availment not shown; dismissal affirmed |
| Relatedness: whether the claim arises out of forum contacts | LPS: claims (breach/unjust enrichment) arise from contractual relationship and payments/assignments involving Maine | Family: relevant contacts were incidental or initiated by LPS and not instrumental to breach | Held: Court assumed relatedness to the extent district court did but found purposeful availment lacking, so jurisdiction fails |
| Effect of choice-of-law clause and contractual term length on foreseeability | LPS: Maine law choice for Option and 20-year option period show long-term Maine connection | Family: Assignments are governed by Illinois law; the Option required only limited payments and contingent obligations, so choice-of-law and term do not create sufficient contacts | Held: Choice-of-law for Option is not dispositive; Illinois-law Assignments and Illinois-centered transactions weigh against jurisdiction |
| Whether continued communications, payments, and tax-related paperwork establish continuous contacts | LPS: payments, executed assignments, tax form exchanges, and correspondence into Maine demonstrate ongoing contacts | Family: contacts were sporadic, mostly responsive, and contingent; only three payments and limited communications, not the continuous, wide-reaching contacts required | Held: Contacts were occasional and insufficient; purposeful availment not established |
Key Cases Cited
- Copia Commc'ns, LLC v. AMResorts, L.P., 812 F.3d 1 (1st Cir. 2016) (prima facie evaluation of evidentiary proffers in jurisdictional contested cases)
- C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59 (1st Cir. 2014) (contract-based jurisdictional analysis; relatedness and purposeful availment framework)
- International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts due process standard)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (foreseeability and purposeful availment in contractual relationships)
- Walden v. Fiore, 571 U.S. 277 (U.S. 2014) (contacts must arise from defendant’s own actions directed at the forum)
- Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28 (1st Cir. 2016) (continuous, repeated payments and ongoing operational contacts can support jurisdiction)