MDM Group Associates, Inc. v. JLT Specialty Limited
1:18-cv-01123
| D. Colo. | Feb 21, 2019Background
- MDM Group (Delaware corp., Colorado principal place) developed a Trip Cancellation Program (TCP) and Security Deposit Waiver (SDW) and contracted with London underwriter AmTrust Syndicates Ltd. (ANV) and London broker Lloyd & Partners Ltd. (LPL) to market/underwrite the products.
- John Smith and Peter Young were LPL brokers in London who left LPL in late 2014, briefly were unemployed, then joined Ambris in March 2015; MDM alleges they continued communications with PAC7 and MAPFRE and helped PAC7 bypass MDM.
- PAC7 was MDM’s exclusive North America/Caribbean sales agent; MDM alleges LPL, ANV, PAC7, Smith, and Young conspired to remove MDM from its role and obtain direct relationships with PAC7/underwriters.
- MDM sued in Colorado state court asserting tortious interference and conspiracy claims; case removed to federal court and claims against LPL and ANV were dismissed, leaving only claims against Smith and Young.
- Defendants moved to dismiss for lack of personal jurisdiction (Rule 12(b)(2)) and alternatively for failure to state a claim (Rule 12(b)(6)). The Court granted the 12(b)(2) dismissal for lack of specific jurisdiction, without reaching 12(b)(6), and dismissed without prejudice, granting leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Colorado court has specific personal jurisdiction over Smith and Young | Smith and Young intentionally directed torts at Colorado (harmful-effects/Calder) by interfering with MDM’s Colorado contracts and prospects | Most challenged acts were performed as LPL/Ambris agents in the U.K.; defendants have no Colorado contacts and agency acts cannot be imputed to them personally | No personal jurisdiction: plaintiff failed to make a prima facie showing of purposeful direction by the individuals |
| Whether acts performed while employed by LPL can be used to establish individual jurisdiction | Communications continued after leaving LPL and during a gap in employment, showing individual conduct | Acts while employed were corporate/agent acts and cannot be attributed to individuals for jurisdictional purposes | Acts performed in corporate/representative capacity were insufficient to establish individual contacts with Colorado |
| Sufficiency of complaint and affidavit to plead individual tortious acts aimed at Colorado | Complaint paragraphs and MDM president’s affidavit show post-employment communications and emails evidencing conspiracy and interference | Allegations are conclusory, lack facts showing communications were aimed at Colorado or made in individuals’ personal capacities | Allegations and affidavit were conclusory and failed to plead specific factual contacts with Colorado; insufficient for prima facie jurisdiction |
| Relief and next steps | Keep Smith and Young as parties to avoid prejudice and allow discovery | Dismiss for lack of jurisdiction; defendants requested dismissal | Court dismissed claims without prejudice, granted leave to amend within 30 days; if amended adequately, court will address remaining jurisdictional and 12(b)(6) arguments on renewed motion |
Key Cases Cited
- Equifax Servs., Inc. v. Hitz, 905 F.2d 1355 (11th Cir. 1990) (forum long-arm analysis and due process requirements for personal jurisdiction)
- AST Sports Sci., Inc. v. CLF Distribution Ltd., 514 F.3d 1054 (10th Cir. 2008) (Colorado long-arm statute permits constitutional-only jurisdictional inquiry)
- International Shoe Co. v. Washington, 326 U.S. 310 (U.S. 1945) (minimum contacts and due process framework)
- Old Republic Ins. v. Continental Motors, Inc., 877 F.3d 895 (10th Cir. 2017) (purposeful establishment of minimum contacts; reasonableness inquiry)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (purposeful availment and ‘‘fair play and substantial justice’’ test)
- OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086 (10th Cir. 1998) (distinction between general and specific jurisdiction)
- Walden v. Fiore, 571 U.S. 277 (U.S. 2014) (contacts must be defendant’s own and relationship among defendant, forum, and litigation controls)
- Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (U.S. 1984) (focus on relationship among defendant, forum, and litigation)
- Ten Mile Indus. Park v. West Plains Service Corp., 810 F.2d 1518 (10th Cir. 1987) (corporate employees not subject to jurisdiction for acts solely in representative capacity)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (U.S. 2011) (general jurisdiction requires continuous and systematic contacts)
- Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102 (U.S. 1987) (reasonableness factors in jurisdictional analysis)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading standard: plausible claim required)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (conclusory allegations are not entitled to weight)
- Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174 (10th Cir. 2007) (Twombly standard applied in Tenth Circuit)
- Wenz v. Memery Crystal, 55 F.3d 1503 (10th Cir. 1995) (prima facie jurisdictional showing and resolution of factual disputes)
- Bryson v. Gonzales, 534 F.3d 1282 (10th Cir. 2008) (pleading must raise right to relief above speculative level)