Azumi LLC v. Lott & Fischer, PL

United States District Court

District of Massachusetts

)

Azumi LLC et al., )

)

Plaintiffs, )

)

v. )

) Civil Action No.

Lott & Fischer, PL, ) 21-11311-NMG

)

Defendant. )

)

MEMORANDUM & ORDER

GORTON, J.

This action arises from alleged legal malpractice committed

by defendant law firm Lott & Fischer, PL (“L&F” or “defendant”).

Pending before the Court is L&F’s motion to dismiss the

complaint for lack of personal jurisdiction (Docket No. 10).

For the reasons that follow, the Court concludes that it cannot

exercise personal jurisdiction over L&F. Rather than dismiss

the action, however, the Court will transfer it to the United

States District Court for the Southern District of Florida.

I. Background

A. The Parties

Plaintiff Azumi, Ltd. is a foreign company organized under

the laws of England and Wales with a principal place of business

in London, England. It operates a global brand of upscale

modern Japanese restaurants under the brand name “Zuma”.

Plaintiff Azumi LLC (together with Azumi, Ltd., “plaintiffs” or

“the Azumi entities”) is a Massachusetts limited liability

company. Its sole member is Azumi, Ltd. and its principal place

of business is in the Commonwealth. It was organized in 2017 to

operate a Zuma restaurant in Boston, Massachusetts.

Defendant L&F is a law firm specializing in intellectual

property and a Florida professional limited liability company

with its principal place of business in Coral Gables, Florida.

L&F avers that none of its attorneys resides or regularly works

outside of Florida.

B. Factual and Procedural History

In 2007, L&F represented plaintiff Azumi, Ltd. in a

trademark dispute with a third party, B.B. Kitchen, Inc. (“B.B.

Kitchen”). The dispute, which was heard by the Trademark Trial

and Appeal Board in Alexandria, Virginia, concerned a challenge

brought by Azumi, Ltd. to B.B. Kitchen’s ownership of the “Zuma”

trademark which both Azumi, Ltd. and B.B. Kitchen used in the

names of their respective restaurants. B.B. Kitchen’s

restaurant, which it continues to operate, is named “Zuma Tex-

Mex Grill” and is located in Boston, Massachusetts.

Although Azumi, Ltd.’s challenge was unsuccessful, the

parties eventually agreed to a settlement whereby B.B. Kitchen

transferred the “Zuma” mark to Azumi, Ltd. (“the Settlement

Agreement”) and Azumi, Ltd., in turn, licensed the mark to B.B.

Kitchen for exclusive use in New England (“the License

Agreement”). In addition to the provisions concerning use of

the mark, the License Agreement afforded Azumi, Ltd. the right

to make annual inspections of Zuma Tex-Mex Grill to ensure that

it operated in a manner “consistent with the maintenance of the

ZUMA trademark.” L&F contends that it hired an independent

consultant based in Connecticut to conduct those inspections and

reported the results to Azumi, Ltd.

Approximately a decade later, an Azumi, Ltd. employee

inquired of L&F about whether it could open a Zuma-branded

restaurant in Boston (“Zuma Boston”) without violating its

obligations to B.B. Kitchen. An L&F attorney allegedly advised

that, based upon her review of the License Agreement, there was

no restriction to opening Zuma Boston.

The Settlement Agreement did, however, preclude Azumi from

doing just that and, shortly after Zuma Boston opened, B.B.

Kitchen sued the Azumi entities in the Massachusetts Superior

Court for Suffolk County for breach of the Settlement and

License Agreements. In the course of that litigation, B.B.

Kitchen obtained an injunction preventing the Azumi entities

from using the “Zuma” mark in Boston. Plaintiffs submit that,

faced with an injunction and having already opened their

restaurant in Boston, they had no choice but to settle the

litigation with B.B. Kitchen at substantial expense.

Thereafter, the Azumi entities, dissatisfied with the legal

advice they had received from L&F, commenced this action. In

addition to the facts recited above, plaintiffs argue that,

after erroneously advising them that they could open Zuma Boston

consistent with their obligations to B.B. Kitchen, L&F engaged

in a prolonged and concerted effort to conceal its unsound

advice. They assert claims against L&F for 1) legal malpractice

in the inconsistent drafting of the Settlement and License

Agreements and the erroneous advice rendered to Azumi, Ltd.

(“Count I”) and 2) breach of fiduciary duty by virtue of L&F’s

cover-up of that malpractice (“Count II”).

L&F denies any such wrongdoing and has moved to dismiss the

complaint. It contends that this Court does not have personal

jurisdiction over it consistent with the Massachusetts long-arm

statute, M.G.L. c. 223A, § 3, and the Due Process Clause of the

Fourteenth Amendment to the United States Constitution.

II. Motion to Dismiss

A. Legal Standard

On a motion to dismiss for lack of personal jurisdiction,

plaintiffs bear the burden of showing that the court has

personal jurisdiction over defendant. Cossart v. United Excel

Corp., 804 F.3d 13, 18 (1st Cir. 2015). Where, as here, the

motion is decided without first holding an evidentiary hearing,

the Court applies the “prima facie” standard of review and takes

plaintiffs’

properly documented evidentiary proffers as true and

construe[s] them in the light most favorable to [plaintiffs’]

jurisdictional claim.

A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir.

2016). A plaintiff cannot rely, however, on “unsupported

allegations” and “must put forward evidence of specific facts to

demonstrate that jurisdiction exists.” Id. (internal citations

omitted); see Vapotherm, Inc. v. Santiago, 38 F.4th 252, 2022

U.S. App. LEXIS 17786, at *6 (1st Cir. June 28, 2022).

In a diversity suit, this Court acts as “the functional

equivalent of a state court sitting in the forum state.” See

Astro–Med, Inc. v. Nihon Kohden America, Inc., 591 F.3d 1, 8

(1st Cir. 2009). As such, this Court must determine whether the

exercise of jurisdiction comports with the Due Process Clause of

the United States Constitution and the Massachusetts long-arm

statute. Id. The two are not coextensive: rather, the

Massachusetts long-arm statute imposes limits upon the exercise

of jurisdiction more restrictive than the demands of

constitutional due process. SCVNGR, Inc. v. Punchh, Inc., 83

N.E.3d 50, 52 (Mass. 2017).

The Massachusetts Supreme Judicial Court (“the SJC”) has

instructed that, in order to avoid unnecessary consideration of

constitutional questions, the personal jurisdiction inquiry

commences with consideration of the long-arm statute. Mojtabai

v. Mojtabai, 4 F.4th 77, 85 (1st Cir. 2021) (citing SCVNGR,

Inc., 85 N.E.3d at 52); see Duggan v. Martorello, No. 18-12277-

JGD, 2022 U.S. Dist. LEXIS 58075, at *30 n.5 (D. Mass. Mar. 30,

2022) (explaining that “unless a challenge under the long-arm

statute has been waived, it is necessary to determine whether

jurisdiction is appropriate under that statute before engaging

in a constitutional analysis”). Only if the statutory

requirements are satisfied should the court consider whether its

exercise of jurisdiction is permitted by the Constitution.

SCVNGR, Inc., 85 N.E.3d at 56; see Exxon Mobil Corp. v. Attorney

General, 94 N.E.3d 786, 792 n.3 (Mass. 2018).

1. Application

The Massachusetts long-arm statute sets forth eight grounds

upon which jurisdiction may be based. M.G.L. c. 223A, § 3(a)-

(h). Subsection 3(a), upon which the plaintiffs rely, provides

for the exercise of jurisdiction over a defendant when the cause

of action at issue arises from its transaction of business in

the Commonwealth. M.G.L. c. 223A, § 3(a); see SCVNGR, Inc., 85

N.E.3d at 55. Accordingly, to establish jurisdiction under

§ 3(a), plaintiff must allege facts which satisfy two

requirements: 1) that defendant transacted business in

Massachusetts and 2) that the claims at issue arose from that

transaction of business. Exxon Mobil Corp., 94 N.E.3d at 793.

Neither condition is met here. Although the transacting-

business requirement is construed broadly, Tatro v. Manor Care,

635 N.E.2d 549, 551 (Mass. 1994), it nevertheless imposes real

limitations, see Lacy v. Jublia Pte LTD., No. 20-P-1319, 2022

Mass. App. Unpub. LEXIS 230, at *7 (Mass. App. Ct. Apr. 1, 2022)

(collecting cases), which L&F’s limited in-forum activity fails

to meet. The Azumi entities proffer a myriad of actions

purportedly connecting L&F to Massachusetts, including 1) its

international legal practice, 2) its representation of Azumi,

Ltd. in the 2007 trademark dispute which included service of

pleadings upon B.B. Kitchen in Massachusetts, 3) a forum

selection clause in the settlement documents, 4) the annual

inspections of Zuma Tex-Mex that L&F arranged and 5) advice

rendered about the right of the Azumi entities to open a Zuma-

branded restaurant in Boston. None of those purported

connections affords jurisdiction. There is no evidence that L&F

regularly advised clients in Massachusetts and, in any event,

Azumi, Ltd. was not one such client. The trademark dispute took

place in Virginia and the settlement was negotiated between L&F

attorneys in Florida and B.B. Kitchen counsel located in New

York, not Massachusetts. Nor did the resulting agreements

contain any reference to Massachusetts beyond 1) the fact that

Zuma Tex-Mex was located there and 2) the prohibition upon Azumi

opening a restaurant in New England. Although the inspections

of Zuma Tex-Mex did occur in Boston, L&F hired a Connecticut-

based contractor to perform them.

Under such circumstances, the Court cannot conclude that

L&F participated in the “economic life” of the Commonwealth. See

Access Now, Inc. v. Otter Prods., LLC, 280 F. Supp. 3d 287, 291

(D. Mass. 2017) (finding transacting-business requirement met

where, inter alia, defendant had $20 million worth of in-forum

sales, had sales representative in forum and was registered to

do business there).

In any event, even if those connections were sufficient to

constitute the transaction of business in Massachusetts,

jurisdiction would not lie because the claims here at issue do

not arise from the alleged in-forum activity. Exxon Mobil Corp.,

94 N.E.3d at 793. A claim arises from a defendant’s transaction

of business if it “was made possible by [it], or lies in [its]

wake”. Access Now, Inc. v. Otter Prods., LLC, 280 F. Supp. 3d

287, 291 (D. Mass. 2017). Put differently, the “arising from”

inquiry asks whether the defendant’s contacts with the forum

“constitute the first step in a train of events” leading to the

injury. Id.

Here, the plaintiffs’ claims do not arise from L&F’s

purported connections to Massachusetts. The negligence and

malpractice alleged by plaintiffs in Count I concerns the

purported failure of L&F 1) to draft consistent Settlement and

License Agreements, 2) to search for and review those agreements

adequately, 3) to advise plaintiffs correctly about their legal

import and 4) to advise plaintiffs timely of mistaken advice.

While some of L&F’s purported forum contacts concern, as a

general matter, the disputed trademark, none of them has any

causal relation to the alleged malpractice here at issue.

Rather, the operative allegations arise either from conduct that

occurred wholly in Florida or advice that was rendered from

Florida and received in London. See B2 Opportunity Fund, LLC v.

Trabelsi, No. 17-10043-RGS, 2017 U.S. Dist. LEXIS 137544, at

*12-14 (D. Mass. Aug. 28, 2017) (citing Sawtelle v. Farrell, 70

F.3d 1381 (1st Cir. 1995)).

The allegations in Count II with respect to an alleged

breach of fiduciary duty arising from the failure of L&F to

disclose its erroneous legal advice are derivative of the

alleged malpractice itself and similarly lack any causal

connection to business allegedly transacted by defendant in

Massachusetts. See Phillips Exeter Acad. v. Howard Phillips

Fund, 196 F.3d 284, 291 (1st Cir. 1999) (“A breach of fiduciary

duty occurs where the fiduciary acts disloyally.”).

In sum, the Massachusetts long-arm statute does not permit

the exercise of personal jurisdiction over L&F. Accordingly,

the Court need not opine on whether an assertion of jurisdiction

would be constitutionally sound. SCVNGR, Inc., 85 N.E.3d at 56;

see Doe v. JetBlue Airways Corp., No. 20-11623-ADB, 2021 U.S.

Dist. LEXIS 145125, at *21-22 (D. Mass. Aug. 3, 2021) (declining

to reach constitutional question where jurisdiction could not be

exercised under long-arm statute).

V. Transfer

Because this Court lacks jurisdiction over L&F, it must

either dismiss the case, as requested by L&F, or transfer it to

the United States District Court for the Southern District of

Florida, as requested by the plaintiffs. Under 28 U.S.C.

§ 1631,

[w]henever a civil action is filed in a court . . . and

that court finds that there is a want of jurisdiction, the

court shall, if it is in the interest of justice, transfer

such action . . . to any other such court . . . in which

the action . . . could have been brought at the time it was

filed[.]

28 U.S.C. § 1631. Section 1631 establishes a presumption in

favor of transfer which is rebutted only if the transfer is “not

in the interest of justice.” Fed. Home Loan Bank of Bos. v.

Moody's Corp., 821 F.3d 102, 119 (1st Cir. 2016) (abrogated on

other grounds by Lightfoot v. Cendant Mortg. Corp., 137 S. Ct.

553 (2017)).

When determining whether a transfer is appropriate, the

Court evaluates 1) whether the action could have been brought in

another federal court, 2) whether a limitations period has run

that would preclude filing in the correct court and 3) whether

the case is frivolous or brought in bad faith. Shelton Bros.,

Inc. v. Three Pirates, LLC, No. 15-30140-MGM, 2017 WL 1227922,

at *6–7 (D. Mass. Mar. 31, 2017) (quoting Britell v. United

States, 318 F.3d 70, 74-75 (1st Cir. 2003)).

Each factor weighs in favor of transfer. The Azumi

entities could have filed this action in the Southern District

of Florida, where the advice giving rise to this malpractice

claim was rendered. Plaintiffs contend that L&F has alluded to

a statute of limitations defense which, if successful, would

preclude their claims. Finally, there is no evidence that

plaintiffs brought their claims in bad faith, nor does L&F make

any such allegation. For those reasons, and because the Court

is satisfied that transfer is in the interest of justice, this

case will be transferred to the Southern District of Florida.

ORDER

In accordance with the foregoing, defendant’s motion to

dismiss for lack of personal jurisdiction in this Court (Docket

No. 10) is DENIED but plaintiffs’ action is hereby TRANSFERRED

pursuant to 28 U.S.C. § 1631 to the United States District Court

for the Southern District of Florida for further proceedings.

So ordered.

__/s/ Nathaniel M. Gorton __

Nathaniel M. Gorton

United States District Judge

Dated: August 16, 2022