United States District Court, D. Maine
ORDER ON MOTION TO DISMISS FOR LACK OF
BROCK HORNBY UNITED STATES DISTRICT JUDGE.
issue here is whether a federal court in Maine, with
diversity jurisdiction, has specific personal jurisdiction
over a family of mostly Illinois residents. Five members of
that family-Richard L. Duchossois and his children Craig J.
Duchossois, Kimberly T. Duchossois, Dayle P.
Duchossois-Fortino, and Richard Bruce
Duchossois-signed contracts giving a Maine company
the option to acquire their interests in an Illinois limited
partnership involving Illinois real estate and the right to a
portion of the cash distributions from the partnership in the
meantime. The Maine company, LP Solutions, LLC (LPS),
exercised its options in due course. When the Duchossoises
stopped making payments allegedly due under the agreements,
LPS sued them in Maine state court for breach of contract and
unjust enrichment. Compl. ¶¶ 63-83 (ECF No. 5-2).
The Duchossoises removed the case to federal court and moved
to dismiss for lack of personal jurisdiction or, in the
alternative, for a stay pending the results of a related
lawsuit in Illinois state court between LPS and the Illinois
partnership's General Partner. Notice of Removal (ECF No.
1); Defs.' Mot. 1-2 (ECF No. 6). After briefing and
argument, I now Grant the defendants'
motion and Dismiss the complaint, concluding
on a prima facie record that the defendants have not
purposefully availed themselves of Maine and thus that there
is no specific personal jurisdiction over them here.
the First Circuit's “prima facie review”
standard for determining personal jurisdiction, I accept the
specific facts that the plaintiff alleges so far as record
evidence supports them. I also accept the facts that the
defendants offer to the extent they are uncontradicted.
Cossaboon v. Maine Med. Ctr., 600 F.3d 25, 31 (1st
Cir. 2010). I construe the plaintiff's “properly
documented evidentiary proffers . . . in the light most
favorable to [its] jurisdictional claim.” A Corp.
v. All American Plumbing, Inc., 812 F.3d 54, 58 (1st
the five defendants are domiciled in Illinois, and their
agents acted on their behalf from Illinois.
Before he died in July of 2014, Richard Bruce Duchossois
split his time between South Carolina and Florida, where his
estate is now in probate. The defendants have no connections
to Maine apart from this lawsuit and the events underlying
it. Defs.' Mot. 2-3.
September of 2013, the defendants received form letters from
the plaintiff soliciting the purchase of their interests in
Elm Street Plaza Venture, an Illinois limited partnership
(the Partnership). An agent of the plaintiff, William
Gendron, followed up by phone with an agent of the
defendants, Jennifer Hager, about the offer. Hager rejected
the offer based on tax considerations. Gendron then told
Hager about LPS's “Option Program, ” which he
said would have attractive tax consequences for the
defendants. Hager asked to see the agreements embodying the
Option Program. A few days later Gendron emailed a draft of
the Option Agreement to another Duchossois agent, Janet
Czosek, along with a letter outlining the proposal. That
proposal said the Option Program would allow the defendants
to “lock [in]” the value of their partnership
interests “at today's market value, receive a
significant portion of the purchase price on a tax-deferred
basis and avoid tax recapture.” Affordable Option
Program, Hager Decl. Ex. D (ECF No. 6-8). Czosek forwarded
these materials to Hager. Fully drafted versions of the
Option Agreement arrived in Illinois by FedEx shortly
thereafter, already signed by a representative of the
plaintiff. Hager and Czosek emailed LPS that the terms of the
Option Agreement were acceptable, collected signatures from
the Duchossoises in Illinois and South Carolina, and, in
early October, FedExed the executed agreements to the
plaintiff in Maine. An LPS employee then emailed Hager and
Czosek that the signed agreements lacked witness signatures.
Hager and Czosek obtained new signature pages from the
Duchossoises (presumably with witness signatures) and sent
them to the plaintiff. Defs.' Mot. 4-6; Czosek Decl.
¶¶ 10-21 (ECF No. 6-1); Hager Decl. ¶¶
20-27 (ECF No. 6-4); Pl.'s Opp'n 3, 7 (ECF No. 7);
Gendron Decl. ¶¶ 4-8 (ECF No. 7-13).
Option Agreements gave the plaintiff a twenty-year option to
purchase each of the defendants' interests in the
Partnership for a specified amount (the plaintiff would also
take on certain related tax liability incurred by a defendant
for selling the interest during his or her lifetime). Option
Agreement ¶ 2, Booth Decl. Ex. 2 (ECF No.
7-3). The plaintiff agreed to pay 50% of the
option price upon execution of the Option Agreement, followed
by two additional installment payments of about 10% of the
option price, to be paid annually, with the balance due upon
exercise of the option. Id. ¶¶ 3, 5. In
turn, prior to exercise, the defendants agreed to pay the
plaintiff a portion of cash flow distributions from the
Partnership equal to the proportion LPS had paid of the
option price (e.g., if LPS had paid 50% of the
option price, it would be entitled to 50% of normal
distributions from the partnership). Id. ¶ 6.
The defendants also agreed not to alienate or encumber their
partnership interests and to vote their interests as directed
by the plaintiff. Id. ¶ 4. The Agreements
specify that communications to the plaintiff were to be sent
to its address in Maine. Id. ¶ 9. They also
contain a Maine choice-of-law provision. Id. ¶
defendants agreed that, upon the plaintiff's exercise of
the options, they would transfer their partnership interests
to the plaintiff for nominal consideration by executing the
Assignment of Partnership Interest, attached to the Option
Agreements as an exhibit. Id. ¶ 5. The
Assignments purport to transfer completely the
defendants' partnership interests to the plaintiff.
Assignment of Partnership Interest ¶ 1, Ex. A. to Option
Agreement, Booth Decl. Ex. 2 (ECF No. 7-3). Unlike the Option
Agreements, the Assignments are governed by “the laws
of the state where the Partnership is domiciled, ”
which is Illinois. Id. ¶ 5.
Exercise of Options, and Breach
the Option Agreements were signed, LPS made the initial
installment payments to the defendants in Illinois in October
of 2013 by mailing checks to the children and wiring money to
the father. Booth Decl. ¶ 10 (ECF No. 7-1); Booth Decl.
Ex. 3 (ECF No. 7-4).
2014, the defendants paid the plaintiff a portion of cash
distributions from the Partnership, as required by paragraph
six of the Option Agreements. It did so by sending checks
into Maine. Booth Decl. ¶ 25; Booth Decl. Ex. 8 (ECF No.
Richard Bruce Duchossois died in July 2014, an agent notified
the plaintiff by email. The plaintiff then exercised its option
on his interest and, in late August, sent the balance of the
option price to Richard Bruce Duchossois's estate by
check. The estate executed the Assignment and sent it to the
plaintiff in Maine in early August. Booth Decl. ¶¶
10, 17; Booth Decl. Ex. 4 (ECF No. 7-5); Defs.' Mot. 7;
Hager Decl. ¶ 31.
October of 2014, LPS made the second round of installment
payments to the other four defendants (again by mailing
checks to the children and wiring money to the father). Booth
Decl. ¶ 10; Booth Decl. Ex. 3.
November 12, 2014, Hager on behalf of the Duchossoises
emailed Gendron that “[w]e are anxious to speak to you
about the tax consequences” of the Option Agreements.
Booth Decl. Ex. 5 (ECF No. 7-6). Gendron understood this to
mean that the defendants wanted the plaintiff to exercise its
remaining options on the Family's interests. Gendron
Decl. ¶ 14. Hager and Gendron spoke by phone on the 18th
about this wish, and the parties corresponded back and forth
into January about getting the Assignments signed. Gendron
Decl. ¶¶ 14-18; Booth Decl. ¶¶ 19-22. The
plaintiff exercised its Options effective as of December
2014. The plaintiff received Richard L. Duchossois's
signed Assignment in December and scans of the remaining
signed Assignments in January 2015. Booth Decl. ¶¶
21-23. The plaintiff paid the balance on Richard L.
Duchossois's interest by wire transfer on December 30,
2014, and on the remaining interests by check on February 3,
2015. Booth Decl. ¶ 10; Booth Decl. Ex. 3.
of 2015 and May and June of 2016, the defendants sent their
Partnership distributions by check to the plaintiff in
Maine. Booth Decl. ¶¶ 26-27. The
parties engaged in routine correspondence regarding these
payments. Booth Decl. Ex. 11 (ECF No. 7-12).
parties also collaborated on tax issues. Specifically, the
plaintiff prepared and sent the defendants certain tax forms
for tax years 2014 and 2015 to shift the defendants'
Partnership tax liabilities to the plaintiff. Booth Decl.
¶¶ 31-32. The plaintiff says the defendants
“solicited” it to prepare these forms, Pl.'s
Opp'n at 10, a characterization that is
arguably supported by the record, at least as to
the forms for tax year 2014. Booth Decl. ¶ 32; Booth
Decl. Ex. 10 (ECF No. 7-11). (The Option Agreement and
Assignment are silent on the parties' responsibilities
for accomplishing the shift in tax burden.)
October of 2016, the Partnership experienced a “capital
event” that led to combined distributions of over $1,
000, 000 to the defendants. The defendants have refused to
turn over these distributions to the plaintiff despite its
demands. Booth Decl. ¶¶ 33-34; Compl. ¶¶
the factual record I use for the prima facie jurisdictional
Subject Matter Jurisdiction
defendants removed the case from Maine Superior Court on the
basis of diversity jurisdiction. Notice of Removal ¶ 7
(citing 28 U.S.C. § 1332(a)(1)). The parties are
diverse: the plaintiff is a citizen of Maine, while the
defendants are citizens of other states. Id. ¶
conclude that the amount-in-controversy requirement is also
satisfied. The defendants aggregate the value of the
plaintiff's claims against each of them in their Notice
of Removal to reach an amount in controversy of $1, 044, 490.
Id. ¶ 15(c). But claims by a single plaintiff
against multiple defendants cannot be aggregated to satisfy
the amount in controversy requirement unless those defendants
are jointly liable. 14AA Wright & Miller, Fed. Prac.
& Proc. Juris. § 3704 n.15 (4th ed.) (collecting
cases). Nevertheless I am satisfied that the amount claimed
against each defendant individually satisfies the
jurisdictional threshold. Compl. ¶¶ 43-44.
subject matter jurisdiction is based upon diversity of
citizenship, a federal court asserts personal jurisdiction in
accordance with the law of the forum (here, Maine) and the
Fourteenth Amendment's due process clause. Sawtelle
v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). The
federal court becomes “the functional equivalent of a
state court sitting in the forum state.”
Baskin-Robbins Franchising LLC v. Alpenrose Dairy,
Inc., 825 F.3d 28, 34 (1st Cir. 2016) (quoting
Sawtelle, 70 F.3d at 1387). The Maine Law Court says
that its statutory analysis tracks the due process clause.
Murphy v. Keenan, 667 A.2d 591, 593 (Me. 1995)
(“Maine's jurisdictional reach is coextensive with
the due process clause of the United States
Constitution.”). This leaves only the federal
constitutional inquiry. The plaintiff asserts specific, not
Due Process Clause of the Fourteenth Amendment requires that
a defendant ‘have certain minimum contacts with [the
forum state] such that the maintenance of the suit does not
offend traditional notions of fair play and substantial
justice.'” Baskin-Robbins, 825 F.3d at 35
(quoting Int'l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945)). The First Circuit has said that the legal
elements of minimum contacts analysis in specific
jurisdiction cases are, in the conventional jargon,
relatedness, purposeful availment, and reasonableness.
Id. (citing C.W. Downer & Co. v. Bioriginal
Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014)).
The plaintiff “ordinarily must shoulder the burden of
proving personal jurisdiction over the defendant.”
United States v. Swiss Am. Bank, Ltd. 191 F.3d 30,
40 (1st Cir. 1999).
speaking, each defendant must stand or fall based on its own
contacts with the forum.” Phillips Exeter Acad. v.
Howard Phillips Fund, Inc., 196 F.3d 284, 288 n.2 (1st
Cir. 1999). Because all the defendants' contacts with
Maine were accomplished through their agents, however, I
analyze them all at once save, briefly, on one of the
“Gestalt” reasonableness factors.
large over any analysis of personal jurisdiction in a
contract case like this one is the Supreme Court's
seminal decision in Burger King Corp. v. Rudzewicz,
471 U.S. 462 (1985). The Court there rejected the notion that
a “contract with an out-of-state party alone
can automatically establish sufficient minimum
contacts” in the plaintiff's home forum.
Id. at 478.
Instead, we have emphasized the need for a “highly
realistic” approach that recognizes that a
“contract” is “ordinarily but an
intermediate step serving to tie up prior business
negotiations with future consequences which themselves are
the real object of the business transaction.” It is
these factors-prior negotiations and contemplated future
consequences, along with the terms of the contract and the
parties' actual course of dealing-that must be evaluated
in determining whether the defendant purposefully established
minimum contacts with the forum.
Id. at 479 (citations omitted). The First Circuit
describes this as a “‘contract-plus'
analysis.” United States v. Swiss Am. Bank,
Ltd., 274 F.3d 610, 621 (1st Cir. 2001) (quoting
Ganis Corp. of California v. Jackson, 822 F.2d 194,
197-98 (1st Cir. 1987). It applies to both relatedness and