March 3, 1993
United States Court of Appeals
United States Court of Appeals
For the First Circuit
For the First Circuit
____________________
No. 92-1865
UNITED ELECTRICAL RADIO AND MACHINE WORKERS
OF AMERICA (UE)., ET AL.,
Plaintiffs, Appellants,
v.
163 PLEASANT STREET CORPORATION, ET AL.,
Defendants, Appellees.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. A. David Mazzone, U.S. District Judge]
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____________________
Before
Torruella, Circuit Judge,
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Bownes, Senior Circuit Judge,
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Stahl, Circuit Judge.
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Mark D. Stern with whom Brian W. Mellor, Mary Leary, and Edward
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J. Dailey were on brief for appellants.
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David D. Cole on brief for Barney Frank, Gerry E. Studds, Chester
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G. Atkins, Joseph D. Early, Joseph P. Kennedy, II, Edward J. Markey,
Nicholas Mavroules, John Joseph Moakley, Richard E. Neal, John W.
Oliver, and Senators Edward M. Kennedy and John F. Kerry, amici
curiae.
Charles L. Janes with whom James C. Stokes and Bingham, Dana &
_________________ ________________ _______________
Gould were on brief for appellees.
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____________________
March 3, 1993
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STAHL, Circuit Judge. This appeal requires us to
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decide for a second time1 whether plaintiffs-appellants
("plaintiffs") have sufficiently demonstrated that the
district court has personal jurisdiction over the primary
defendants-appellees ("defendants") to this action to pursue
their claims under the Employee Retirement Income Security
Act ("ERISA"), 29 U.S.C.A. 1001-1461 (West 1985 & Supp.
1992), the Labor-Management Relations Act ("LMRA"), 29
U.S.C.A. 141-187 (West 1973 & Supp. 1992), and
Massachusetts common law. Finding that plaintiffs' showing
at this stage of the litigation is adequate to meet the
relevant legal standard, we vacate the district court's order
of dismissal and remand this action for further proceedings.
I.
I.
__
PROCEDURAL BACKGROUND
PROCEDURAL BACKGROUND
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We begin our analysis with a recounting of the
already eventful procedural history of this litigation.
Plaintiffs are the United Electrical, Radio and Machine
Workers of America ("the Union") and certain retired or
disabled employees of the defendant corporations or one of
these corporations' predecessor-in-interest.2 On July 19,
____________________
1. See generally United Elec., Radio and Mach. Workers of
___ _________ __________________________________________
America v. 163 Pleasant Street Corp., 960 F.2d 1080 (1st Cir.
_______ _________________________
1992) (hereinafter referred to as "163 Pleasant Street I").
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2. One plaintiff is the surviving spouse of a deceased
retired employee of the defendant corporations.
-2-
2
1991, plaintiffs initiated these proceedings by suing
defendants International Twist Drill (Holdings), Ltd.
("ITDH"), 163 Pleasant Street Corporation ("PSC"), a
Massachusetts subsidiary of ITDH,3 and Blue Cross/Blue
Shield of Massachusetts ("BCBS"). At issue was whether
defendants were contractually bound to provide plaintiffs
with medical and life insurance.4 In their complaint,
plaintiffs sought both damages and equitable relief. As part
of the equitable relief sought, plaintiffs requested that
the district court enter a preliminary injunction directing
defendants to continue paying plaintiffs' insurance premiums
pendente lite.
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On July 24, 1991, the district court, after hearing
oral argument, granted plaintiffs' request for a temporary
restraining order preserving the status quo until a hearing
on plaintiffs' request for a preliminary injunction could be
arranged. On August 13, 1991, the district court heard oral
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3. Prior to 1991, PSC was known as Morse Tool, Inc. Because
this fact is not relevant to this appeal, and in order to
identify the parties in a consistent fashion, we refer to the
company as PSC even when describing events that occurred
while the company was still Morse Tool, Inc.
4. Specifically, plaintiffs alleged that they were either
signatories to or beneficiaries of agreements, including a
collective bargaining agreement between PSC and the Union,
under which PSC contracted to provide them with the
aforementioned insurance "for life." They further contended
that, for a variety of reasons, ITDH, which owned and
controlled the now defunct PSC, was liable for these
contractual obligations despite the fact that its name did
not appear upon these agreements.
-3-
3
argument on plaintiffs' request for a preliminary injunction
and on a motion to dismiss for lack of personal jurisdiction
filed by ITDH on August 6. That same day, the district court
granted plaintiffs' request for a preliminary injunction5
and denied ITDH's motion. On August 22, 1991, PSC filed for
bankruptcy without paying the disputed premiums. After ITDH
also refused to pay the premiums, the district court issued
an order holding ITDH in contempt. Subsequently, ITDH
appealed the preliminary injunction and the contempt orders.
During the pendency of ITDH's appeals, however,
discovery was proceeding in the underlying case. As a result
of information obtained in the course of this discovery,
plaintiffs moved to amend their complaint in order to join
International Twist Drill ("ITD") as a defendant and to
include additional (at least insofar as ITDH is concerned)
allegations against the ITD companies.6 Plaintiffs' motion
was allowed on January 23, 1992. Meanwhile, each side
continued to supplement the record by filing with the
district court further documentation in the form of
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5. Specifically, the district court ordered that "[PSC],
initially, and [ITDH], secondarily, . . . make whatever
payments are necessary to continue the medical insurance
coverage of these plaintiffs until final judgment is entered
in this case."
6. ITD, a subsidiary of ITDH, was not a party when ITDH took
its appeal of the preliminary injunction and contempt orders.
Therefore, all uses of the acronym "ITD" made in 163 Pleasant
____________
Street I should be construed as being references to ITDH.
________
-4-
4
affidavits and otherwise. Because of the timing of these
filings, this material was not part of the record in ITDH's
initial appeal.
On March 30, 1992, this court handed down 163
___
Pleasant Street I, which vacated the district court's
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injunction and contempt orders. In so doing, we did not
reach the merits of the lower court's decisions. Rather, we
found that plaintiffs had not established that the court had
personal jurisdiction over ITDH. Accordingly, we directed
that the preliminary injunction and contempt orders be
vacated and remanded the case "for further proceedings not
inconsistent [with our opinion]." Id. at 1099.
___
After publication of 163 Pleasant Street I, ITDH
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and ITD filed a joint motion to dismiss for lack of personal
jurisdiction, incorporating by reference our opinion of March
30, 1992. Plaintiffs opposed the motion, relying upon
allegations in their recently amended complaint and upon
materials not part of the record in 163 Pleasant Street I.
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On May 8, 1992, the district court issued a two-page
memorandum and order granting ITDH's and ITD's motion.7 The
memorandum and order stated: "[Each] issue and theory upon
which plaintiffs' claims rest has been thoroughly analyzed
and addressed in the decision of the Court of Appeals. There
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7. Although entered on May 8, 1992, the memorandum and order
was dated May 4, 1992.
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5
is nothing to be gained from prolonging this case further."
Plaintiffs moved for reconsideration of the district court's
order, again directing the court's attention to materials
made part of the record after ITDH had taken its initial
appeal and other materials filed by plaintiffs on May 8,
1992. By margin order entered June 24, 1992, the district
court denied plaintiffs' motion.8 Plaintiffs now appeal the
district court's order of dismissal and denial of their
motion for reconsideration.
II.
II.
___
DISCUSSION
DISCUSSION
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Because 163 Pleasant Street I exhaustively
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delineated both the facts underpinning this dispute and the
law implicated by its resolution, we do not engage in rehash
here. Suffice it to say that the question of whether, at this
stage of the litigation, plaintiffs have made a sufficient
showing that ITDH and ITD, both Scottish corporations, are
subject to the personal jurisdiction of the district court
hinges upon whether there is adequate record evidence that
the two entities (1) "transact[ed]. . . business in
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8. Although resolution of plaintiffs' motion by margin order
contravened the separate document requirement of Fed. R. Civ.
P. 58, see Fiore v. Washington County Community Mental Health
___ _____ _________________________________________
Ctr., 960 F.2d 229, 234-36 (1st Cir. 1992), we deem
____
plaintiffs' appeal, which is timely when viewed against the
date the order was entered, to be a waiver of the
requirement. See Bankers Trust Co. v. Mallis, 435 U.S. 381,
___ _________________ ______
387-88 (1978); Fiore, 960 F.2d at 236 n.10.
_____
-6-
6
[Massachusetts]," thus subjecting them to the Commonwealth's
long-arm statute, see Mass. Gen. Laws Ann. ch. 223A, 3(a)
___
(West 1985 & Supp. 1992), and (2) have acted in such a manner
that the district court's exercise of jurisdiction over them
would not offend the constitutionally anchored "minimum
contacts" rule. See International Shoe Co. v. Washington,
___ ______________________ __________
326 U.S. 310, 316 (1945).9
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9. In 163 Pleasant Street I, though we observed that "the
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lower court's ruling that ITD[H] was `transacting business'
in Massachusetts is likely sustainable," see 163 Pleasant
___ ____________
Street I, 960 F.2d at 1087, we did not determine whether ITDH
________
was subject to the Commonwealth's long-arm statute as we
found that the minimum contacts rule was not satisfied. In
so doing, we began by noting that ITDH's contacts with
Massachusetts were "manifestly insufficient to ground a claim
of general jurisdiction. . . ." Id. at 1088. Next, we
___
distilled the jurisprudence governing the ascertainment of
specific jurisdiction (which, along with general
jurisdiction, is one of the two types of personal
jurisdiction we have recognized in analyzing minimum
contacts) into the following tripartite test: (1) the claim
underlying the litigation must directly arise out of, or
relate to, the defendant's forum-state activities, (2) the
defendant's in-state contacts must represent a purposeful
availment of the privilege of conducting activities in the
forum state, thereby invoking the benefits and protections of
that state's laws and making the defendant's involuntary
presence before the state's courts foreseeable, and (3) the
exercise of jurisdiction must, in light of five specified
criteria for evaluating the fairness of subjecting a
nonresident to the authority of a foreign tribunal
(collectively dubbed the "Gestalt factors"), be reasonable.
See id. at 1088-89.
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In applying the specific jurisdiction test, we first
found that, of the forum-related contacts between ITDH and
the Commonwealth mentioned by the district court in the
August 13, 1991, hearing, only the involvement of John
Lindsay, an ITDH principal, in negotiating the collective
bargaining agreement at the heart of this litigation could be
thought of as giving rise to, or relating to, this cause of
action. Id. at 1089. Limiting our inquiry to this contact,
___
we then determined that the evidence surrounding Lindsay's
-7-
7
In arguing that the above question should be
answered in the affirmative, plaintiffs contend that our
analysis in 163 Pleasant Street I has been rendered obsolete
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by additions to the record which occurred while the first
appeal was pending. As a result, plaintiffs assert, the
district court's uncritical reliance upon our previous
opinion was in error.10 We agree with plaintiffs'
position.
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involvement was insufficient for us to determine "that
ITD[H], through its own affirmative conduct, purposefully
availed itself of the privilege of conducting activities in
Massachusetts. . . ." Id. at 1090-91. Central to this
___
determination was the lack of record evidence suggesting that
the negotiations over the collective bargaining agreement
and, a fortiori, Lindsay's participation therein took place
_ ________
in Massachusetts. Id. at 1090. Accordingly, we held that
___
the constitutionally required minimum contacts between ITDH
and Massachusetts were not present and declined to address
the question of reasonableness in light of the Gestalt
factors. See id. at 1090 n.11.
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10. In response to plaintiffs' argument, defendants do not
attempt to demonstrate that the current record is
insufficient to support an exercise of personal jurisdiction
over them. Rather, defendants essentially argue (1) that
ITDH and ITD should not be held liable, through corporate
veil piercing, for PSC's contractual obligations, and (2)
that the materials submitted to the district court on May 8,
1992, were submitted after the order of dismissal and
therefore should not be considered by us in this appeal.
Though defendants' first argument ultimately may prove
meritorious, it has no bearing on the question raised in the
instant appeal. Accordingly, we do not discuss it.
Moreover, because, as will be more fully explained infra, we
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find that the record was sufficient for the court to exercise
personal jurisdiction over ITDH and ITD even before the
documents submitted on May 8, 1992, were made a part thereof,
we need notreach the merits of defendants' second argument.
-8-
8
Where, as here, a district court elects to dispose
of a Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of
personal jurisdiction without holding an evidentiary
hearing,11 the "prima facie" standard should govern the
court's review. See Boit, 967 F.2d at 675; Kowalski v.
___ ____ ________
Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir.
____________________________________
1986). Under this standard, it is plaintiff's burden to
demonstrate the existence of "every fact required to satisfy
`both the forum's long-arm statute and the [D]ue [P]rocess
[C]lause of the Constitution.'" Boit, 967 F.2d at 675
____
(quoting U.S.S. Yachts, Inc. v. Ocean Yachts, Inc., 894 F.2d
___________________ __________________
9, 11 (1st Cir. 1990)).
The prima facie showing must be based upon evidence
of specific facts set forth in the record. Boit, 967 F.2d at
____
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11. During the course of oral argument at the August 13,
1991, hearing on ITDH's initial Rule 12(b)(2) motion, the
district court did make reference to certain affidavits which
had been introduced into the record at that time and did
allow counsel for ITDH to speak on the issue of personal
jurisdiction. (Plaintiffs' counsel did not address the court
on this issue because the court found in plaintiffs' favor at
the conclusion of ITDH's presentation.) Also, in determining
that it had personal jurisdiction over ITDH, the court
indicated that it so found by "clear and convincing
evidence." Therefore, it appears that the August 13, 1991,
hearing was a limited evidentiary hearing. See Boit v. Gar-
___ ____ ____
Tec Products, Inc., 967 F.2d 671, 676 (1st Cir. 1992)
____________________
(evidentiary hearings need not involve evidence taken orally
in open court, but may proceed with all evidence being
introduced by means of affidavits, authenticated documents,
answers to interrogatories or requests for admissions, and
depositions, and with findings being made under a
preponderance-of-the-evidence-standard). However, it is
apparent from the record that no evidentiary hearing was held
on the joint motion to dismiss filed by ITDH and ITD.
-9-
9
675; Kowalski, 787 F.2d at 9. This means that plaintiff
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"`must go beyond the pleadings and make affirmative proof.'"
Boit, 967 F.2d at 675 (quoting Chlebda v. H.E. Fortna & Bro.,
____ _______ ___________________
Inc., 609 F.2d 1022, 1024 (1st Cir. 1979)). However, in
____
determining whether the prima facie demonstration has been
made, the district court is not acting as a factfinder;
rather, it accepts properly supported proffers of evidence by
a plaintiff as true and makes its ruling as a matter of law.
See Boit, 967 F.2d at 675; see also Kowalski, 787 F.2d at 9.
___ ____ ___ ____ ________
Therefore, appellate review of such a ruling is
nondeferential and plenary. See Boit, 967 F.2d at 675.
___ ____
Leaving aside the material which was filed on May
8, 1992, see supra note 10, we believe that the effect of two
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additions to the record made by plaintiffs while the first
appeal was pending is such that, applying the prima facie
standard, the district court should have denied the joint
motion to dismiss filed by ITDH and ITD. First, in their
amended complaint, plaintiffs had made the following new
allegations:
3. . . . [T]he plaintiff retirees were
employed at the defendant corporations'
plant in New Bedford, Massachusetts, the
obligations to provide insurance were
incurred in Massachusetts, and the
termination of the insurance giving rise
to this claim occurred in this District.
14. The defendant [ITDH] of Scotland is
incorporated in Great Britain and was
doing business as Morse Tool, Inc. in the
Commonwealth of Massachusetts prior to
-10-
10
and up to the time of the closure of its
New Bedford facility in January[] 1990.
It is the sole shareholder in the
defendant [PSC].
15. The defendant [ITD] of Scotland is
incorporated in Great Britain and was
doing business as Morse Tool, Inc. in the
Commonwealth of Massachusetts prior to
and up to the time of the closure of its
New Bedford Facility in January 1990. It
is owned and controlled by the defendant
ITDH.
17. At all relevant times the defendants
constituted an integrated enterprise
and/or single employer doing business in
the Commonwealth of Massachusetts.
18. At all relevant times the defendants
ITDH and/or ITD constituted the alter ego
of the defendant [PSC].
19. At all relevant times the defendants
ITDH and/or ITD jointly employed the
plaintiffs along with the defendant
[PSC].
20. . . . The most recent collective
bargaining agreement between plaintiffs
and defendant corporations covers the
period from May 1987 through May 1990. .
. . [The collective bargaining agreement]
was negotiated for the defendants by an
agent of the defendant ITD, acting for
and on behalf of the defendant ITDH.
Moreover, on April 16, 1992, plaintiffs had introduced an
affidavit of Dennis Brady, a Union officer and member of the
Union negotiating team, which contained the following
assertions:
3. All the negotiations between [the
Union] and [ITDH and ITD] occurred in New
Bedford, Massachusetts. . . .
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11
5. Raymond Zemon [sic] was the primary
negotiator of the collective bargaining
agreement. He acted on behalf of [ITDH
and ITD]. . . .
6. During the negotiations Raymond Zemon
[sic] would often make telephonic contact
from Massachusetts with individuals in
Scotland before agreeing to any
proposals. . . .12
Simply put, we believe that the combination of the
complaint amendments and the Brady affidavit is sufficient to
cure the deficiency -- i.e., that ITDH had not purposely
availed itself of the privilege of conducting activities in
Massachusetts -- on which our holding in 163 Pleasant Street
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I was premised. As noted above, see supra note 9, the only
_ ___ _____
record evidence before us in 163 Pleasant Street I which was
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even remotely relevant to the purposeful availment inquiry
was the fact that John Lindsay had some "involvement in" the
negotiation of the collective bargaining agreement. See 163
___ ___
Pleasant Street I, 960 F.2d at 1090. The record did not
_________________
reveal where Lindsay was located during the period of his
involvement Id. Indeed, the record did not even indicate
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where the negotiations had taken place. Id.
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12. Further support for the allegation that the collective
bargaining agreement between the Union and PSC actually was
negotiated by Raymond Zeman acting on behalf of ITDH and ITD
can be found in the agreement itself. The first paragraph of
the agreement contains the following provision: "This
Agreement is contingent upon and will not become effective
until [PSC] is purchased by Scottish interests presently
represented by Zeman International." The agreement then is
signed by Raymond Zeman on behalf of Zeman International.
-12-
12
After remand, however, the record before the
district court was significantly less enigmatic than that
before us in 163 Pleasant Street I. It now contained an
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affirmative allegation that the collective bargaining
agreement was negotiated "for the defendants by an agent of
ITD, acting for and on behalf of defendant ITDH."13 More
significantly, the record also contained "affirmative proof,"
see Boit, 967 F.2d at 675, tending to support this allegation
___ ____
and plaintiffs' claim that the aforementioned negotiations
took place in the Commonwealth of Massachusetts.
We think that this is sufficient. If true,
plaintiffs' evidence tends to show that, at the time the
collective bargaining agreement between PSC and the Union was
being negotiated, (1) ITDH and ITD were actively engaged in
the process of purchasing PSC, a Massachusetts corporation,
(2) ITD, acting on behalf of ITDH, had retained an agent to
negotiate the agreement, the efficacy of which was made
contingent upon ITDH's and ITD's subsequent purchase of PSC,
(3) the negotiations took place in Massachusetts, and (4) the
agent often called "individuals in Scotland" from
Massachusetts before agreeing to any proposals. In our view,
such activity within Massachusetts cannot be viewed as
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13. As our earlier opinion noted, the contacts of a
corporation's agent obviously can subject the corporation to
the personal jurisdiction of the forum in which those
contacts occur. See id.
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-13-
13
"random, fortuitous, or attenuated." Cf. Burger King Corp.
___ _________________
v. Rudzewicz, 471 U.S. 462, 475 (1985) ("Th[e] purposeful
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availment requirement ensures that a defendant will not be
haled into a jurisdiction solely as a result of random,
fortuitous, or attenuated contacts. . . .") (quoting Keeton
______
v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984) and
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World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299
____________________________ _______
(1980)) (internal quotation marks omitted). Rather, we
believe that it is more accurately characterized as a
deliberate engagement in significant activities within
Massachusetts, and thus a purposeful availment of the
privilege of conducting activities within the Commonwealth,
making involuntary presence before a Massachusetts court a
reasonably foreseeable event. See Burger King, 471 U.S. at
___ ___________
474-76. Accordingly, we hold that plaintiffs have met their
prima facie burden of demonstrating the existence of
sufficient facts to meet the second prong of the tripartite
specific jurisdiction test announced in our previous opinion.
See 163 Pleasant Street I, 960 F.2d at 1089.14
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This conclusion does not end our inquiry. As
previously noted, see supra note 9, because we found
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____________________
14. Obviously, the evidence that Raymond Zeman negotiated
the agreement as an agent of ITD, acting on behalf of ITDH,
is also sufficient, under the prima facie standard, to
satisfy part one of the tripartite specific jurisdiction
test: that the claim underlying the litigation arise out of,
or relate to, ITDH's and ITD's forum state activities. See
___
163 Pleasant Street I, 960 F.2d at 1089.
_____________________
-14-
14
insufficient proof of minimum contacts in 163 Pleasant Street
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I, we did not address whether subjecting ITDH to the personal
_
jurisdiction of Massachusetts would be reasonable in light of
the Gestalt factors. Nor did we formally determine whether
ITDH was within the reach of the Massachusetts long-arm
statute. Extending our query also to include ITD, we discuss
each question in turn.
Once a court has determined that a defendant has
purposefully established minimum contacts within the forum
state, these contacts may be considered in light of certain
factors to determine whether the assertion of personal
jurisdiction would comport with "fair play and substantial
justice." Burger King, 471 U.S. at 476 (quoting
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International Shoe, 326 U.S. at 320). These Gestalt factors
__________________
include: (1) the defendant's burden of appearing, (2) the
forum state's interest in adjudicating the dispute, (3) the
plaintiff's interest in obtaining convenient and effective
relief, (4) the judicial system's interest in obtaining the
most effective resolution of the controversy, and (5) the
common interests of all sovereigns in promoting substantive
social policies. 163 Pleasant Street I, 960 F.2d at 1088
______________________
(citing Burger King, 471 U.S. at 477).
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Application of these five factors to the facts
before us easily yields the conclusion that the district
court's exercise of personal jurisdiction over ITDH and ITD
-15-
15
would meet International Shoe's "fair play and substantial
___________________
justice" requirement. While we do not doubt that traveling
to Massachusetts for purposes of defending this action will
place a significant burden upon ITDH and ITD, we believe that
this burden is substantially outweighed by Massachusetts'
interest in adjudicating this dispute and plaintiffs'
interest in obtaining convenient and effective relief. Cf.
___
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 114
______________________ ______________
(1987) ("[O]ften the interests of the plaintiff and the forum
in the exercise of jurisdiction will justify even the serious
burdens placed upon [an] alien defendant."). In this era of
ever burgeoning health care costs, Massachusetts clearly has
a vital interest in seeing bargained-for health insurance
benefits provided to its residents. If this case is
dismissed, many plaintiffs may be forced to rely upon public
funds to help defray health care costs, which fact in turn
will place an increased financial burden upon the
Commonwealth.15 Moreover, in light of the obvious costs of
and obstacles to obtaining insurance elsewhere, the effects
upon plaintiffs of losing the benefits at issue in this
lawsuit are manifest and can hardly be overstated.
____________________
15. We note that the cogent and persuasive brief filed on
behalf of plaintiffs by the individual members of
Massachusetts' congressional delegation as amici curiae
_____ ______
speaks volumes about the interest of the Commonwealth in
seeing this matter adjudicated before the district court.
-16-
16
The fourth Gestalt criterion, the judicial system's
interest in obtaining the most effective resolution of the
controversy, also favors the retention of jurisdiction over
this dispute. If this case is dismissed, it is far from
clear that there will be any judicial resolution, let alone
the most effective judicial resolution, of this controversy.
Even if we assume that this action could be brought in
Scotland, the fact remains that all of the individual
plaintiffs, many of whom are disabled and/or of advanced
years, reside in Massachusetts. Moreover, it is apparent
that most of the potential witnesses reside nearer to the
seat of the district court than to wherever the case might be
tried in Scotland. Given these facts, the logistics of
bringing suit in Scotland might prove insurmountable. At any
rate, whether or not the significant logistical obstacles
could be overcome, it is obvious that efficiency
considerations weigh heavily in favor of litigating this case
in Massachusetts.
The final Gestalt factor, the common interests of
all sovereigns in promoting substantive social policies, does
not support a contrary conclusion. As an initial matter, we
note that defendants have not identified, nor can we discern,
any substantive Scottish social policy which might counsel
against an exercise of jurisdiction on the facts before us.
More importantly, however, while we are mindful of the
-17-
17
Supreme Court's admonition that courts should be "unwilling[]
to find the serious burdens on an alien defendant outweighed
by minimal interests on the part of the plaintiff or the
forum State[,]" Asahi Metal Industry, 480 U.S. at 115, we are
____________________
confident that plaintiffs' and Massachusetts' interests in
litigating this dispute before the district court, far from
being minimal, are serious enough to outweigh any such social
policy. Therefore, we conclude that the exercise of
jurisdiction over ITDH and ITD is reasonable in light of the
Gestalt factors.
Having determined that, under the prima facie
standard, plaintiffs have made a sufficient showing to pass
constitutional muster, we need now only formally assert that
which we indicated was "likely" before: plaintiffs have also
made a prima facie showing that ITDH and ITD are amenable to
suit in Massachusetts. Without question, ITDH's and ITD's
activities during the negotiation of the collective
bargaining agreement, see supra page 13, must, even under the
___ _____
narrowest possible construction of the term, be construed as
a "transaction of business" within Massachusetts. Moreover,
plaintiffs' cause of action clearly arose from this
transaction of business. Thus, ITDH and ITD fall within the
reach of the Commonwealth's long-arm statute. See Mass. Gen.
___
Laws. Ann. ch. 223A, 3(a).
-18-
18
Before concluding, we elaborate upon why the
district court should not have construed 163 Pleasant Street
___________________
I as a mandate to dismiss ITDH and ITD on personal
_
jurisdiction grounds.16 We begin by reiterating that, at the
August 13, 1991, hearing, the district court's initial
personal jurisdiction determination was made at the
conclusion of ITDH's oral presentation and without
plaintiffs' input. See supra note 11. Therefore, with
___ _____
regard to the question of personal jurisdiction, plaintiffs
never had a full opportunity (1) to address the court, either
orally or on paper,17 (2) to introduce further evidence, or
(3) to request discovery. As a result, the record before us
in 163 Pleasant Street I was incomplete.
_____________________
Under the facts of this case, the incomplete nature
of the record prevented any sort of conclusive determination
on the personal jurisdiction issue at the time 163 Pleasant
____________
____________________
16. In so stating, we clarify that our comment in 163
___
Pleasant Street I that "[i]t follows inexorably that ITD[H]'s
_________________
motion to quash the complaint for want of personal
jurisdiction should have been granted," 163 Pleasant Street
___________________
I, 960 F.2d at 1099, was not intended as a directive to the
_
district court, but as an assessment of the record as it
__ __
stood when the original motion to dismiss was filed.
_____ ____ ___ ________ ______ ___ _______ ___ _____
17. We note that ITDH first moved to dismiss on personal
jurisdiction grounds on August 6, 1991, a mere seven days
before the August 13, 1991, hearing. We also note that the
fourteen day period for submitting an opposition to ITDH's
motion provided for by Rule 7.1(a)(2) of the Local Rules for
the United States District Court for the District of
Massachusetts had not yet expired when the court denied
ITDH's motion.
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Street I was handed down. The jurisdictional deficiency
_________
which informed the holding in our previous opinion did not
stem from either a settled factual predicate or legally
insufficient allegations, but from perceived voids in the
evidentiary landscape. See 163 Pleasant Street I, 960 F.2d
___ ______________________
at 1090. As noted, no discovery directed at filling these
voids took place. Accordingly, 163 Pleasant Street I can
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only be interpreted as holding that plaintiffs'
jurisdictional showing was insufficient to support the entry
of the injunction and contempt orders against ITDH.18 See
___
7-Pt. 2 James W. Moore et al., Moore's Federal Practice
__ ___
65.03[3], at 65-28 (2d ed. 1989) ("A court must have in
personam jurisdiction over the party against whom the
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18. To reinforce this point, we note that if, on the record
before it, the district court had decided the personal
jurisdiction issue adversely to plaintiffs without at least
_________
affording them the opportunity to respond to ITDH's argument
and/or to request discovery, we almost certainly would have
declined to affirm the district court's judgment and held the
ruling to be an abuse of the court's discretion. Cf. Boit,
___ ____
967 F.2d at 681 (refusal to defer ruling on Rule 12(b)(2)
motion until after there has been discovery on personal
jurisdiction issue can be an abuse of discretion); Surpitsky
_________
v. Hughes-Keenan Corp., 362 F.2d 254, 255-56 (1st Cir. 1966)
___________________
(district court erred in refusing to allow a diligent
plaintiff who was a stranger to a defendant corporation
discovery on question of personal jurisdiction); see also 5A
___ ____
Charles A. Wright & Arthur R. Miller, Federal Practice and
Procedure 1351 at 256-59 (2d ed. 1990) ("In particularly
complex cases, . . . it may be desirable to hold in abeyance
a decision on a motion to dismiss for lack of personal
jurisdiction. Doing so will enable the parties to employ
discovery on the jurisdictional issue, which might lead to a
more accurate judgment than one made solely on the basis of
affidavits.").
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20
injunction runs."); see also 163 Pleasant Street I, 960 F.2d
___ ____ ______________________
at 1084 ("`Given that civil contempt is designed to coerce
compliance with the court's decree, it is logical that the
contempt order itself should fall with a showing that the
court was without authority to enter the underlying
decree.'") (quoting Willy v. Coastal Corp., 112 S. Ct. 1076,
_____ _____________
1081 (1992)).
In sum, the district court should not have
summarily granted ITDH's and ITD's motion to dismiss.
Instead, after remand, it should have determined, on the
record then before it, whether it had jurisdiction over ITDH
and ITD. In so doing, it should have proceeded in accordance
with one of the approaches outlined in Boit. See Boit, 967
____ ___ ____
F.2d at 675-78.
III.
III.
____
CONCLUSION
CONCLUSION
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Because plaintiffs have made a prima facie
demonstration of every fact required to satisfy both
Massachusetts' long-arm statute and the Due Process Clause of
the United States Constitution, the district court erred in
granting the second motion to dismiss filed by ITDH and ITD.
Accordingly, we vacate the judgment of the district court and
remand this case for further proceedings.19
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19. Having found that plaintiffs have made a prima facie
showing that the district court had personal jurisdiction
over the ITD companies, we need not reach the merits of
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Vacated and remanded.
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____________________
plaintiffs' argument that alternative bases for the assertion
of jurisdiction over defendants exist in this matter.
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