# LEEP, Inc. v. Nordstrom

> District Court, D. Oregon · December 5, 2022

URL: https://www.frixlaw.com/law-library/cases/10395395

## Case

- **Court:** District Court, D. Oregon
- **Decided:** December 5, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

EUGENE DIVISION

LEEP, INC., an Oregon corporation,

Plaintiff, Case No. 6:20-cv-01673-MC

v. OPINION AND ORDER

JOHN NORDSTROM, an individual,
AMERICAP CO., L.P., AMERICAP
TWO, AMERICAP THREE,
LAURENCE ZIELKE and ZIELKE
LAW FIRM,

Defendants.
_____________________________

MCSHANE, Judge:
The current controversy involves Defendant Nordstrom’s retention of the Zielke law firm
to represent the interests of LEEP in a Kentucky arbitration proceeding. The arbitration occurred
at a time when Nordstrom’s legitimacy as CEO of LEEP, Inc., was in question. Plaintiff LEEP,
Inc. alleges that the Zielke firm breached numerous duties by failing to recognize the removal of
Nordstrom as CEO and by objection to Plaintiff’s attempt to substitute alternative counsel at the
1 – OPINION AND ORDER
arbitration proceeding. Because Plaintiff fails to show that Zielke has sufficient minimum
contacts in Oregon, Zielke’s Motion to Dismiss (ECF No. 160) is GRANTED.1
BACKGROUND
Plaintiff LEEP is a publicly traded corporation, organized in Oregon, with its principal
place of business in Idaho. FAC ¶¶ 4, 11; Def. Zielke Mot. Dismiss, Ex. 1 ¶ 1. From 2007 until

August 31, 2020, Defendant Nordstrom—a Kentucky resident—was on Plaintiff’s Board of
Directors as the Chief Executive Officer. FAC ¶¶ 5, 12. Defendant Zielki Law Firm is a law
firm—organized in Kentucky, with its principal place of business in Kentucky. Defendant Zielke
is an attorney-partner at Zielki Law Firm, admitted to practice law in Kentucky and Florida. FAC
¶¶ 9–10; Zielke Decl. ¶¶ 4, 7, ECF No. 160-5. In 2013, Nordstrom engaged Zielke. as counsel
for Plaintiff and filed a lawsuit in Kentucky state court for claims arising from a joint business
venture that was to be organized in Kentucky. FAC ¶¶ 60–61; Zielke Mot. Dismiss 10. The
parties settled that action pursuant to a settlement agreement that included an arbitration
provision for future disputes arising from any alleged breach of the agreement. FAC ¶¶ 70–71.

The agreement also provided a cash payment to LEEP, with the funds being delivered to
Nordstrom via Zielki Law Firm. . FAC ¶¶ 74–78. In August 2019, Zielke filed a demand for
arbitration in Kentucky state court on Plaintiff’s behalf. Pl.’s Resp. Mot. Dismiss 2, ECF No.
173.
On August 21, 2020, at a special shareholders meeting, Plaintiff’s shareholders appointed
a new Board of Directors. The new Board of Directors removed Nordstrom as CEO. FAC ¶¶ 97,
104–05. On September 13, 2020, Plaintiff provided Zielki notice of Nordstrom’s removal, but

1 Plaintiff names Laurence Zielke and the Zielki Law Firm as Defendants. Unless specifically stated otherwise, the
Court generally refers to those Defendants interchangeably as Zielke or the Zielki Law Firm.
2 – OPINION AND ORDER
the change in leadership was contested by Nordstrom and ZielkeFAC ¶ 110; see also Opinion
and Order, October 14, 2021, ECF No. 98. Plaintiff engaged Ziliak Law, LLC as counsel to
represent Plaintiff in the arbitration proceedings before an American Arbitration Association
arbitrator in Kentucky. FAC ¶¶ 114–15; Zielke Mot. Dismiss 11, Ex. 6, at 2. Ziliak filed an
appearance in the arbitration proceeding, but the arbitrator required a stipulated order

substituting counsel before it would recognize anyone other than Zielke as Plaintiff’s counsel.
FAC ¶ 116; Zielke Mot. Dismiss, Ex. 4, at 126. Zielki opposed the substitution of counsel, and
the arbitrator decided the arbitration would continue with Zielki representing Plaintiff. FAC ¶¶
121–22; Zielke Mot. Dismiss, Ex. 4, at 126. In December 2020, the arbitrator found partially in
favor of and partially against Plaintiff and awarded the other party attorney’s fees and costs.
Zielke Mot. Dismiss 11, Ex. 6, at 2. In April 2021, on behalf of Plaintiff, Zielki filed suit to
vacate or modify the arbitration award. Zielke Mot. Dismiss, Ex. 1. In October 2021, this Court
determined that Plaintiff’s change in leadership was valid, and Zielke withdrew as counsel from
the arbitration litigation. Zielke Mot. Dismiss, Ex. 7; see also Opinion and Order 5, ECF No. 98.

Plaintiff alleges that Zielke breached the fiduciary duty to Plaintiff by refusing to
acknowledge and accept the direction of Plaintiff’s new CEO during the arbitration,2 for failing
to account for and deliver payments owed to LEEP,3 for failing to insist the arbitration
proceeding be postponed until the question of Plaintiff’s governance was resolved,4 and for
delivering Plaintiff’s funds to Nordstrom rather than Plaintiff.5 FAC ¶ 3

2 See FAC ¶¶ 258–64.
3 See FAC ¶¶ 265–85.
4 See FAC ¶¶ 262–63.
5 See FAC ¶¶ 282–85.
3 – OPINION AND ORDER
STANDARD OF REVIEW
“Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the
plaintiff bears the burden of demonstrating that jurisdiction is appropriate.” Schwarzenegger v.
Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). “Although the plaintiff cannot
‘simply rest on the bare allegations of its complaint,’ uncontroverted allegations in the complaint

must be taken as true.” Id. (quoting Amba Mktg. Sys., Inc. v. Jobar Int’l, Inc., 551 F.2d 784, 787
(9th Cir. 1977).
DISCUSSION
Because there is no applicable federal statute governing personal jurisdiction, the Court
looks to Oregon law. See Fed. R. Civ. P. 4(k)(1)(A). Oregon law authorizes personal jurisdiction
to the fullest extent permitted by the Due Process Clause of the U.S. Constitution. See Or. R.
Civ. P. 4L. To be consistent with due process, a plaintiff must show a defendant has “minimum
contacts” with Oregon, such that the exercise of personal jurisdiction “does not offend
‘traditional notions of fair play and substantial justice.’” Int'l Shoe Co. v. Washington, 326 U.S.

310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). “[T]he defendant’s suit-
related conduct must create a substantial connection with the forum State,” and that connection
must arise out of contacts that the defendant created “with the forum State itself, not the
defendant’s contacts with persons who reside there.” Walden v. Fiore, 571 U.S. 277, 284–85
(2014). “[T]he plaintiff cannot be the only link between the defendant and the forum.” Walden,
571 U.S. at 285. Due process also demands that a defendant’s contact with the forum state be
purposeful, and not merely “random, fortuitous, or attenuated.” Burger King Corp. v. Rudzewicz,
471 U.S. 462, 475–76 (1985).

4 – OPINION AND ORDER
A court can have personal jurisdiction over a defendant that is either specific or general,
depending on the defendant’s contacts with the forum state and the nature of the claim.
Schwarzenegger, 374 F.3d at 801; Helicopteros Nacionales de Colombia, 466 U.S. 408, 414
(1984). A finding of general jurisdiction requires a defendant’s contacts with the forum state be
so “continuous and systematic” as to “‘approximate physical presence’ in the forum state.”

Schwarzenegger, 374 F.3d at 802 (quoting Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223
F.3d 1082, 1087 (9th Cir. 2000)). And a court with general jurisdiction may require a defendant
to answer for any of its activities, even if the cause of action does not arise from the defendant’s
contacts with the forum state. Schwarzenegger, 374 F.3d at 801; Helicopteros Nacionales de
Colombia, 466 U.S. at 409. Here, Plaintiff concedes that this Court does not have general
jurisdiction over Defendants Zielke, et al. Pl.’s Resp. 6.
A finding of specific personal jurisdiction requires a defendant to have less contacts with
the forum state, but only with respect to a narrower class of claims. Ford Motor Co. v. Mont.
Eighth Judicial Dist. Ct., 141 S. Ct. 1017, 1024 (2021). For a court to exercise specific

jurisdiction over a defendant, there must be “a connection between the forum and the specific
claims at issue.” Bristol-Meyers Squibb Co. v. Superior Court, 173 S. Ct. 1773, 1781 (2017).
“[M]ere injury to a forum resident is not a sufficient connection to the forum.” Walden, 571 U.S.
at 290.
The Ninth Circuit has established a three-prong test for analyzing whether specific
jurisdiction over a defendant is proper:
1) The non-resident defendant must purposefully direct his activities or
consummate some transaction with the forum or resident thereof; or perform
some act by which he purposefully avails himself of the privilege of conducting
activities in the forum, thereby invoking the benefits and protections of its laws;

5 – OPINION AND ORDER
2) The claim must be one which arises out of or relates to the defendant’s forum-
related activities.

3) The exercise of jurisdiction must comport with fair play and substantial justice.

Schwarzenegger, 374 F.3d at 802.
“The plaintiff bears the burden of satisfying the first two prongs of the test.”
Schwarzenegger, 374 F.3d at 802. “If the plaintiff succeeds . . ., the burden then shifts to the
defendant to present ‘present a compelling case’ that the exercise of jurisdiction would not be
reasonable.” Schwarzenegger, 374 F.3d at 802 (quoting Burger King Corp., 471 U.S. at 476–78).
Here, Zielke, et al. have one contact with Oregon—Plaintiff—and Plaintiff’s claim arises out of
that activity—Zielke, et al. and Plaintiff’s attorney-client relationship. The inquiry is whether
Zielke et al.’s contact with Plaintiff satisfies the first prong: “purposeful availment.”
To satisfy the first prong, a plaintiff must show the defendant either purposefully availed
himself of the privilege of conducting activities in the forum or purposefully directed his
activities toward the forum. Schwarzenegger, 374 F.3d at 802. A purposeful availment analysis
is applied most often in actions based in contract or when a defendant’s tortious actions occur in
the forum state. Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 605 (9th
Cir. 2018). A purposeful direction analysis applies in actions based in tort, “where the tort was
committed outside the forum state.” Freestream Aircraft (Bermuda) Ltd., 905 F.3d at 605. Here,
Plaintiff’s claims sound in tort and the tort was committed outside of Oregon, so the Court
proceeds with a purposeful direction analysis.
To show purposeful direction, a plaintiff must establish that the defendant (1) committed
an intentional act, (2) expressly aimed at the forum state, (3) causing harm that the defendant
knows is likely to be suffered in the forum state. Dole Food Co., Inc. v. Watts, 303 F.3d 1104,
6 – OPINION AND ORDER
1111 (9th Cir. 2002) (interpreting the effects test set forth by the Supreme Court in Calder v.
Jones, 465 U.S. 783 (1984)). “However, the potential foreseeability of some incidental harm to
Plaintiffs” in the forum state, due to Defendant’s alleged conduct, “without more, does not show
that Defendants expressly targeted the forum state.” Morrill v. Scott Fin. Corp., 873 F.3d 1136,
1145 (9th Cir. 2017). To establish “specific personal jurisdiction, a tort must involve the forum

state itself, and not just have some effect on a party who resides there.” Morrill, 873 F.3d at
1145.
The Court finds that Plaintiff has not satisfied the “purposeful direction” test. Zielke
committed an intentional act—serving as Plaintiff’s legal counsel—and Zielke knew the harm of
any negligent representation would likely be suffered by Plaintiff in Oregon.6 However, Zielke’s
conduct was not “expressly aimed at the forum state.” Plaintiff fails to present any facts showing
Zielke’s contacts with Oregon apart from Zielke’s attorney-client relationship with Plaintiff. By
all accounts, the substance of that relationship and the alleged tortious conduct all took place in
Kentucky. Zielke never represented Plaintiff in an Oregon court, never traveled to Oregon to

meet with Plaintiff, never communicated with Plaintiff in Oregon. Zielke’s only communication
with Plaintiff was through Nordstrom, who lives in Kentucky. Neither Zielke nor any other
attorney at Zielki Law Firm is admitted to practice law in Oregon. Plaintiff is the only link
between Zielke and Oregon, and under Walden that is insufficient to establish specific personal
jurisdiction.
Plaintiff argues that Zielke purposefully directed his activities toward Oregon through his
actions as Plaintiff’s counsel. First, Plaintiff asserts that Zielkes representation of Plaintiff went

6 Even though Plaintiff’s principal place of business has moved over the years, Plaintiff is incorporated in Oregon.
See Pl.’s Resp. 11.
7 – OPINION AND ORDER
beyond the litigation and arbitration in Kentucky to more general representation of Plaintiff,
representation that may have involved “questions of Oregon law.” Pl.’s Resp. 1–3, 10. But even
if Zielke represented Plaintiff in other matters, that fact does not show an additional purposeful
contact with Oregon or a connection between Oregon and the specific claims at issue here.
Rather, that fact shows Zielke merely had a “random, fortuitous, or attenuated” contact with

Oregon because Nordstrom—a Kentucky resident—was referred to Zielke while seeking legal
services—in Kentucky—on Plaintiff’s behalf. FAC ¶ 60; Zielke Mot. Dismiss 9.
Second, relying on evidence of communications between Zielke and Nordstrom, Plaintiff
asserts that Zielke instructed Nordstrom to defy Plaintiff’s Board of Directors, thereby
deliberately interjecting the firm into the issue of who controlled Plaintiff, deliberately
interfering with Plaintiff’s Board of Directors’ authority to manage Plaintiff, and intending to
deny Plaintiff’s rights under Oregon law. See Record Decl. ¶ 24, Ex. 10, ECF No. 174.; Pl.’s
Resp. 13–14. But that assertion relates to conduct that was purposefully directed toward Plaintiff,
not conduct that was purposefully directed toward Oregon, the forum itself.7 Plaintiff alleges no

conduct that occurred in Oregon itself, no conduct that creates a substantial connection between
Zielke and Oregon; rather, the suit-related conduct arises out of Zielke’s contacts with an Oregon
corporation, an insufficient basis for personal jurisdiction under Walden. Any mention of Oregon
law or an Oregon state agency was due to Plaintiff’s connections to Oregon and was not a result
of Zielke’s purposeful contacts with the state. See Pl.’s Resp. 14–16. And even if the alleged
conduct had an effect on Plaintiff in Oregon, under Walden, mere injury to a forum resident is

7 “The discussion below will demonstrate that Plaintiff’s attorney client relationship with Defendants extended
beyond the Kentucky litigations and that Defendants’ conduct giving rise to Plaintiff’s claims was specifically
directed at Plaintiff’s rights under Oregon law and Plaintiff’s activities in Oregon.” Pl.’s Resp. 1–2 (emphasis
added).
8 – OPINION AND ORDER
not a sufficient connection to establish personal jurisdiction. In fact, Plaintiff’s incorporation in
Oregon is the only connection any Defendant, including Nordstom himself, has with the District
of Oregon. But that lone connection does not mean, as Plaintiff would have the Court believe,
that the Court has personal jurisdiction over any party whose actions taken in another state
impact Plaintiff. Personal jurisdiction requires more.

Given the above, Zielke’s representation of Plaintiff was not “expressly aimed” at
Oregon. Itfollows that they did not “purposefully avail” themselves of the privilege of
conducting activities in Oregon. Plaintiff’s three claims as alleged in the complaint all relate to
Zielke’s conduct as Plaintiff’s counsel in Kentucky. Ultimately, the Court must look to a
defendant’s actions and determine whether purposeful acts exist—expressly aimed at Oregon—
that would make Oregon’s exercise of jurisdiction proper. In this case, the Court finds no such
acts.
CONCLUSION
For the foregoing reasons, Defendants Zielke’s Motion to Dismiss (ECF No. 160) for
lack of personal jurisdiction8 is GRANTED, and the claims against them are DISMISSED

without prejudice.
IT IS SO ORDERED.
DATED this 5th day of December 2022.
_______/s/ Michael J. McShane ________
Michael McShane
United States District Judge

8 Even if this Court has personal jurisdiction, venue in Oregon is improper because all of the acts or omissions
giving rise to Plaintiff’s claims occurred in Kentucky. See 28 U.S.C. § 1391(b)(2) (venue proper when “a substantial
part of the events or omissions giving rise to the claim occurred” in the district). As noted above, no Defendant has
any connection with Oregon other than the fact that Plaintiff happened to choose, many decades ago, to incorporate
in Oregon.
9 – OPINION AND ORDER

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10395395. Public record. Not legal advice.