857 F. Supp. 2d 104
D.D.C.2012Background
- Plaintiffs are former RSHT students alleging violations of ECOA, Title VI, Virginia CPA, and common-law claims (breach of contract and fraudulent inducement).
- RSHT is a for-profit vocational college with Virginia campuses; tuition ranges from $10,000 to $20,000 per program and is largely funded by federal financial aid processed by RSHT with DOE involvement.
- Plaintiffs allege RSHT misrepresented educational outcomes, failed to provide necessary licensing/certification prep, externships, equipment, or qualified instructors.
- The Second Amended Complaint adds five claims: ECOA discrimination, Title VI discrimination, Virginia CPA fraud, breach of contract with implied covenant, and fraudulent inducement.
- RSHT moved to dismiss or transfer under Rules 12(b)(2) and 12(b)(3); plaintiffs opposed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether personal jurisdiction exists | Plaintiffs rely on RSHT's DOE-funded activities in DC as sufficient for jurisdiction. | RSHT's DC contacts are government-contacts only and fall within the government contacts exception. | No personal jurisdiction; government contacts exception applies. |
| Whether the government contacts exception to the DC long-arm statute applies | DC interactions with DOE establish jurisdiction over RSHT. | Federal financial aid involvement is a governmental activity but not a basis for jurisdiction absent non-governmental actions. | Government contacts exception does not confer jurisdiction here. |
| Whether a fraud exception to the government contacts exception applies | Fraud in obtaining DOE funds negates the exception. | Fraud exception is narrow and does not apply; no fraud alleged that coerced government action. | Fraud exception does not apply; no grounds to pierce the exception. |
| Whether transfer to the Eastern District of Virginia is appropriate | Transfer would be improper given venue considerations. | Transfer is appropriate because venue is proper there and all events/witnesses are there. | Transfer to the Eastern District of Virginia is warranted. |
| Whether dismissal or transfer is in the interest of justice | Dismissal preserves forum for litigants; transfer is less prejudicial. | Transfer better serves efficiency and convenience. | Transfer is preferred; case to be transferred under 28 U.S.C. §1406(a). |
Key Cases Cited
- FC Inv. Grp. LC v. IFX Mkts., Ltd., 529 F.3d 1087 (D.C. Cir. 2008) (burden to show jurisdiction over each defendant; specific facts required)
- Kopff v. Battaglia, 425 F. Supp. 2d 76 (D.D.C. 2006) (jurisdictional framework; required factual allegations)
- First Chicago Int'l v. United Exchange Co., 836 F.2d 1375 (D.C. Cir. 1988) (minimum contacts and long-arm analysis)
- Naartex Consulting Corp. v. Watt, 722 F.2d 779 (D.C. Cir. 1983) (venue transfer and forum convenience considerations)
- Siam Kraft Paper Co. v. Parsons & Whittemore, Inc., 400 F. Supp. 810 (D.D.C. 1975) (government contacts exception and limitations)
- Envtl. Research Int’l, Inc. v. Lockwood Green Eng’rs, Inc., 355 A.2d 808 (D.C. App. 1976) (government contacts exception and scope)
- NBC-USA Housing, Inc. Twenty-Six v. Donovan, 741 F. Supp. 2d 55 (D.D.C. 2010) (government contracts and jurisdictional reach)
- Ficken v. Rice, 594 F. Supp. 2d 71 (D.D.C. 2009) (governmental funding context for jurisdiction)
- Savage v. BioPort, Inc., 560 F. Supp. 2d 55 (D.D.C. 2006) (contracts with government entities and related issues)
- Companhia Brasileira Carbureto De Calcio-CBCC v. Applied Indus. Materials Corp., 35 A.3d 1127 (D.C. 2012) (fraud exception to government contacts is narrow)