Thompson Hine, LLP v. Elicko Taieb

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 16, 2013 Decided November 12, 2013

No. 12-7009

THOMPSON HINE, LLP, AN OHIO LIMITED LIABILITY

PARTNERSHIP,

APPELLANT

v.

ELICKO TAIEB, AN INDIVIDUAL CITIZEN OF FLORIDA AND EC

DISTRIBUTION, INC.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:10-cv-01877)

Thomas L. Feher argued the cause for appellant. With

him on the briefs was C. Dennis Southard, IV.

Levi S. Zaslow argued the cause for appellee. With him

on the brief was Steven B. Vinick.

Before: ROGERS and TATEL, Circuit Judges, and

SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge TATEL.

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TATEL, Circuit Judge: A Florida resident retained lawyers

in an Ohio law firm’s District of Columbia office to represent

him in a matter pending in Oregon. When the client refused to

pay for services rendered, the firm sued in the United States

District Court for the District of Columbia, and the court

dismissed the case for lack of personal jurisdiction. Because

neither the retainer itself nor anything about the client’s

dealings with the law firm demonstrates that the client

“purposefully avail[ed] [him]self of the privilege of

conducting activities within the [District],” Hanson v.

Denckla, 357 U.S. 235, 253 (1958), we affirm.

I.

Appellant Thompson Hine LLP, an Ohio-based law firm,

has an office in the District of Columbia. Appellee Elicko

Taieb, a Florida resident, was, at the time of the events leading

up to this case, the majority owner, president, and CEO of

Smoking Everywhere, Inc. (SEI), a Florida corporation with its

principal place of business in Florida. Prior to its bankruptcy,

SEI imported and distributed electronic cigarettes.

In March 2009, SEI retained Thompson Hine to handle a

matter pending before the Food and Drug Administration

(FDA). Thompson Hine LLP v. Smoking Everywhere, Inc., 840

F. Supp. 2d 138, 140 (D.D.C. 2012). Written on Atlanta office

letterhead, the retainer was signed by Walt Linscott, an

attorney in the firm’s Atlanta office, and provided Linscott’s

billing rate. Taieb was not a party to the retainer. Under

Linscott’s supervision, two attorneys in the firm’s D.C. office,

Kip Schwartz and Eric Heyer, performed most of the work on

the FDA matter. Taieb met with Schwartz, Heyer, and Linscott

in the D.C. office to discuss the matter prior to attending a

court hearing. In the end, Thompson Hine’s work was

apparently successful, as it obtained a preliminary injunction

against the FDA. Id. at 146.

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Later that year, the firm entered into a second retainer—

“the Oregon retainer”—this time with both SEI and Taieb,

pertaining to an action brought against them by the Attorney

General of Oregon alleging violations of the state’s Unlawful

Trade Practices Act. Taieb signed this retainer in his individual

capacity. Addressed to Ray Story, SEI’s vice president, the

Oregon retainer, though written by Schwartz on the firm’s

D.C. office letterhead, was faxed from Atlanta. The retainer

included contact information for Linscott, provided billing

rates for Schwartz, Heyer, and another D.C.-based attorney,

and specified that the firm would deposit the $10,000 retainer

in a special account designated under Ohio law. According to

their declarations, Schwartz and Heyer performed all work on

the Oregon matter in the firm’s D.C. office and “exchanged at

least ten emails related to the FDA action and the Oregon

action.” Decl. of Eric Heyer 2.

Thompson Hine billed SEI and Taieb $480,000 for the

work on both matters. After paying the firm some $100,000,

they stiffed it for the rest. The firm then filed suit in the United

States District Court for the District of Columbia against both

SEI and Taieb. Attached to the complaint was Thompson

Hine’s final bill for both the FDA and Oregon matters. Written

on Atlanta office stationary, the bill identifies Linscott as the

supervising attorney and lists nineteen outstanding invoices for

work on the two matters.

SEI and Taieb moved to dismiss for lack of personal

jurisdiction, arguing that they had “little or no contacts with the

District of Columbia.” Mem. in Supp. of Defs.’ Mot. to

Dismiss 8. The district court, finding the parties’ briefs largely

conclusory, carefully and thoroughly reviewed the record in

light of factors the courts have established for determining

whether a non-resident’s contacts with the forum are sufficient

to ensure that “the maintenance of the suit does not offend

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traditional notions of fair play and substantial justice.”

International Shoe Co. v. Washington, 326 U.S. 310, 316

(1945) (internal quotation marks omitted). The record includes

the FDA and Oregon retainers, Thompson Hine’s final bill,

declarations by Schwartz, Heyer, and Taieb, and records from

the FDA litigation. Calling this a “close case,” and finding that

Thompson Hine “ha[d] not met its burden to prove that the

Court has personal jurisdiction over either defendant,” the

district court dismissed the complaint. Thompson Hine, 840 F.

Supp. 2d at 147–49.

Thompson Hine appeals. Because SEI is now bankrupt,

the firm presses this appeal only against Taieb. See Thompson

Hine, LLP v. Smoking Everywhere, Inc., No. 12-7009 (D.C.

Cir. July 26, 2012) (Order Dismissing Appeal). We review de

novo the district court’s dismissal for lack of personal

jurisdiction. FC Investment Group LC v. IFX Markets, Ltd.,

529 F.3d 1087, 1091 (D.C. Cir. 2008).

II.

“To establish personal jurisdiction over a non-resident, a

court must . . . first examine whether jurisdiction is applicable

under the state’s long-arm statute and then determine whether

a finding of jurisdiction satisfies the constitutional

requirements of due process.” GTE New Media Services, Inc.

v. BellSouth Corp., 199 F.3d 1343, 1347 (D.C. Cir. 2000).

Under the District of Columbia’s long-arm statute, courts

located in the District may exercise personal jurisdiction over

any individual who “transact[s] any business in the District of

Columbia.” D.C. Code § 13-423. Because we have interpreted

these words “to provide jurisdiction to the full extent allowed

by the Due Process Clause[,] the statutory and constitutional

jurisdictional questions, which are usually distinct, merge into

a single inquiry”: would exercising personal jurisdiction

accord with the demands of due process? United States v.

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Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995). A court’s

jurisdiction over a defendant satisfies due process when there

are “minimum contacts,” International Shoe, 326 U.S. at 316,

between the defendant and the forum “such that he should

reasonably anticipate being haled into court there,”

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297

(1980). Such minimum contacts must show that “the defendant

purposefully avail[ed] [him]self of the privilege of conducting

activities within the forum State, thus invoking the benefits and

protections of its laws.” Hanson, 357 U.S. at 253.

Two decisions guide our resolution of this case. The first,

Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985),

involved a suit by Burger King, a Florida corporation, against a

Michigan franchisee who had signed a 20-year contract with

Burger King. In considering whether the Florida court had

personal jurisdiction over the Michigan franchisee, the

Supreme Court began by making clear that an individual’s

contract with a non-resident “alone” cannot “automatically

establish sufficient minimum contacts in the other party’s

home forum.” Id. at 478 (internal citations omitted). The Court

also rejected “mechanical tests,” adopting instead a “highly

realistic” approach that examines “prior negotiations and

contemplated future consequences, along with the terms of the

contract and the parties’ actual course of dealing” to determine

“whether the defendant purposefully established minimum

contacts within the forum.” Id. at 479 (internal citations and

quotation marks omitted). The contacts with the forum, the

Court explained, must “proximately result from actions by the

defendant himself that create a ‘substantial connection’ with

the forum State.” Id. at 475 (internal citations omitted). “Thus,

where the defendant ‘deliberately’ has engaged in significant

activities within a State or has created ‘continuing obligations’

between himself and residents of the forum, he manifestly has

availed himself of the privilege of conducting business there”

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such that “it is presumptively not unreasonable to require him

to submit to the burdens of litigation in that forum as well.” Id.

at 475–76 (internal citations omitted).

Applying these principles, the Supreme Court concluded

that the franchisee had “established a substantial and

continuing relationship with Burger King’s Miami

headquarters [and] received fair notice from the contract

documents and the course of dealing that he might be subject to

suit in Florida.” Id. at 487. The franchisee had deliberately

“reached out . . . and negotiated with a Florida corporation”

and voluntarily entered into “a carefully structured 20-year

relationship that envisioned continuing and wide-reaching

contacts.” Id. at 479–480 (internal citations and quotation

marks omitted). In addition to paying Burger King a

substantial fee, the franchisee had “agree[d] to submit to

[Burger King’s] exacting regulation of virtually every

conceivable aspect of [its] operations.” Id. at 465. Specifically,

from its offices in Miami Burger King had imposed a series of

specific requirements on its franchisees relating to, among

other things, accounting and insurance practices, hours of

operation, and building layout, as well as the quality,

appearance, and taste of menu items. Id. at 465 n.4. Moreover,

“various franchise documents provid[ed] that all disputes

would be governed by Florida law.” Id. at 481. “[W]hen

combined with the 20-year interdependent relationship [the

franchisee] established with Burger King’s Miami

headquarters,” these choice-of-law provisions “reinforced his

deliberate affiliation with the forum State and the reasonable

foreseeability of possible litigation there.” Id. at 482. Finding

that “the ‘quality and nature’ of [the franchisee’s] relationship

to the company in Florida can in no sense be viewed as

‘random,’ ‘fortuitous,’ or ‘attenuated,’” id. at 480 (quoting

Hanson, 357 U.S. at 253), the Court concluded that the

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“exercise of jurisdiction . . . did not offend due process,” id. at

487.

The second case, this Court’s decision in Health

Communications, Inc. v. Mariner Corp., 860 F.2d 460 (D.C.

Cir. 1988), involved a Texas hotel management firm that had

retained the services of a District of Columbia-based company

to provide training to its employees. Following more than eight

months of telephone conversations and correspondence, the

parties signed a contract pursuant to which the D.C. company

conducted four workshop sessions in several locations outside

the District. Id. at 462. The D.C. company also distributed

manuals, graded exams, issued certificates, and corresponded

with the Texas firm—all from its District office. Id. When the

Texas firm failed to pay for the training services, the D.C. firm

sued, and the district court dismissed the case for lack of

personal jurisdiction over the Texas firm. Id. We affirmed,

concluding that the parties’ relationship was “narrowly

specialized” and that the D.C. company’s activities in the

District “[did] not begin to approach, in either scope or

importance, those that Burger King performed in Florida on

behalf of its out-of-state franchisee.” Id. at 463–64. Thus, the

Texas firm never “‘avail[ed] itself of the privilege of

conducting activities within the forum.’” Id. at 464 (quoting

Hanson, 357 U.S. at 253).

With Burger King and Health Communications in mind,

we return to the retainers at issue in this case. As Thompson

Hine concedes, because Taieb was not a party to the FDA

retainer and because this appeal no longer concerns SEI, the

only question before us is whether personal jurisdiction is

proper over Taieb with respect to the Oregon matter.

Thompson Hine nonetheless insists that the FDA matter

remains relevant because “[d]uring the course of the FDA

action, Taieb . . . developed a relationship” with Schwartz and

8

Heyer, whom he later “reached out to and retained” for the

Oregon matter. Appellant’s Br. 15. But as the district court

found, “the only two meetings that took place in the District in

connection with [the FDA] engagement were actually

meetings with [Linscott],” and Schwartz and Heyer simply

“assist[ed] him.” Thompson Hine, 840 F. Supp. 2d at 147. Any

“relationship” that Taieb developed during the FDA matter

was therefore with Thompson Hine and Linscott, not with the

firm’s D.C.-based lawyers, whose names appear nowhere in

the FDA retainer, and nothing in this “relationship”

demonstrates that Taieb “purposefully directed his activities at

residents of the forum.” Burger King, 471 U.S. at 472 (internal

quotation marks omitted). We therefore agree with the district

court that “the showing for [personal] jurisdiction as to [Taieb]

turns almost exclusively on his execution of the second

engagement letter”—the Oregon retainer. Thompson Hine, 840

F. Supp. 2d at 148.

Taieb argues that even the Oregon retainer provides no

basis for personal jurisdiction because his signature on it was

forged. Appellee’s Br. 7 n.3. But asked at oral argument where

Taieb had made this argument in the district court, counsel

pointed only to a line in Taieb’s affidavit that says nothing at

all about forgery. See Decl. of Elicko Taieb ¶ 9 (“I did not sign

any contracts with the plaintiff in this matter within the District

of Columbia or in Atlanta, Georgia.”). The argument is

therefore forfeited. See Meijer, Inc. v. Biovail Corp., 533 F.3d

857, 867 (D.C. Cir. 2008) (“Absent a showing that ‘injustice

might otherwise result,’ and the plaintiffs offer none, we do not

entertain an argument made for the first time on appeal.”)

(internal citations omitted).

According to Thompson Hine, the Oregon retainer on its

own is enough to establish “minimum contacts” with the

District because it demonstrates that Taieb “knowingly

9

retained” D.C. lawyers whom he had “reason to know” would

work in the District. Appellant’s Br. 14–15. But as Burger

King makes clear, in evaluating whether a contract establishes

“minimum contacts” we must look beyond the mere existence

of the contract to the parties’ “prior negotiations and

contemplated future consequences, along with the terms of the

contract and the parties’ actual course of dealing,” 471 U.S. at

479, paying particular attention to whether “actions by the

defendant himself,” id. at 475, demonstrate that he

“purposefully availed himself of the benefits” of conducting

business in the forum, id. at 488 (internal quotations omitted).

Viewed through that lens, Taieb’s engagement of Thompson

Hine falls short of establishing the requisite “minimum

contacts” with the District. For one thing, the retainer, which

Taieb signed outside the District, pertains to a matter in

Oregon, and nothing in the retainer itself requires that the firm

perform work or receive payment in the District. Further,

Linscott supervised the Oregon matter from Atlanta and

although we must credit Schwartz and Heyer’s statements that

they performed their work in the District, the record contains

no evidence of any meetings, phone calls, or emails between

Taieb and the firm’s D.C.-based lawyers concerning the

Oregon matter, other than Heyer’s vague statement that he

“exchanged at least ten emails [with Taieb] related to [both]

the FDA action and the Oregon action.” Decl. of Eric Heyer ¶

9. Nor does the retainer contain a choice-of-law provision or

provide for consent to suit in the District. “While such

provisions are clearly not dispositive under Burger King, their

presence can be indicative of the parties’ own perceptions of

their degree of contact with a particular forum.” Health

Communications, 860 F.2d at 464 n.2. Finally, according to the

invoice dates, Taieb’s engagement of Thompson Hine

pursuant to the Oregon retainer lasted at most seven months.

Not only is this shorter than the arrangement in Health

Communications and a small fraction of the duration of the

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franchise agreement in Burger King, but the entire relationship

between Taieb and Thompson Hine reflects none of the

“continuing and wide-reaching” contacts that provided a basis

for personal jurisdiction in Burger King. See Burger King, 471

U.S. at 480. Quite to the contrary, the Oregon matter is far

more like the “narrowly specialized” association at issue in

Health Communications. Besides signing the Oregon retainer,

neither Taieb’s own conduct nor the retainer’s “contemplated

future consequences,” Burger King, 471 U.S. at 479, “touched

the District in any way,” Health Communications, 860 F.2d at

464. To be sure, Schwartz and Heyer worked on the Oregon

matter from their offices in the District of Columbia, but the

D.C.-based company in Health Communications also

performed work in the District. Echoing Health

Communications, we therefore “cannot say that [Taieb]

‘avail[ed] [him]self of the privilege of conducting activities

within the forum.” Id. at 464 (quoting Hanson, 357 U.S. at

253).

Thompson Hine, which did not get around to citing

Burger King until its reply brief and never even acknowledges

Health Communications, instead relies on a series of decisions

by various courts of the District of Columbia that it claims

“have universally held that personal jurisdiction exists over a

nonresident who knowingly retains District of Columbia

counsel who will perform legal services for the nonresident in

the District.” Appellant’s Br. 16. But in two of these cases,

both federal court decisions, the contacts were far more

extensive than those between Taieb and Thompson Hine. See

Koteen v. Bermuda Cablevision, Ltd., 913 F.2d 973, 975 (D.C.

Cir. 1990) (upholding exercise of personal jurisdiction over

non-resident who retained plaintiff D.C. law firm, visited firm

multiple times, and “extensively communicat[ed] with it by

telephone and by mail”); Law Offices of Jerris Leonard P.C. v.

Mideast Sys., Ltd., 630 F. Supp. 1311, 1313 (D.D.C. 1986)

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(retaining personal jurisdiction over non-residents who had

multiple meetings with plaintiff D.C. lawyers in the District,

where alleged fraud took place).

The other decisions Thompson Hine cites all come from

the D.C. Court of Appeals. We certainly understand why

Thompson Hine relies on them, as they are highly protective of

law firms based in the District of Columbia, sustaining the

exercise of personal jurisdiction even when contacts between

the law firm and client are slim. The first case, Mouzavires v.

Baxter, 434 A.2d 988 (D.C. 1981) (en banc), involved a

Florida law firm that hired a D.C. patent attorney to assist in a

matter pending in Florida. Although the parties agreed that the

D.C. attorney would work primarily in the District, they had

few other contacts. The D.C. Court of Appeals nonetheless

found the exercise of personal jurisdiction appropriate because

the Florida law firm had “voluntarily initiated, and entered

into, a contract with one they knew to be located in the District

and engaged in a transaction which had a substantial

connection with the District and which they foresaw would

have consequences here.” Id. at 997. The contacts in Digital

Broadcast Corp. v. Rosenman & Colin, LLP, 847 A.2d 384

(D.C. 2004), were even more limited. There, a non-resident

company that retained a D.C.-based attorney specializing in

securities regulation had no additional contact with the

District. Again sustaining the exercise of personal jurisdiction

over the non-resident, the Court of Appeals considered the case

essentially indistinguishable from its previous decision in

Fisher v. Bander, 519 A.2d 162 (D.C. 1986), where it had

upheld the exercise of personal jurisdiction over a non-resident

company that had purposefully solicited and retained D.C.

counsel specializing in matters before the Federal

Communications Commission and attended just one meeting

in the District. See Digital Broadcast Corp., 847 A.2d at 391;

see also Fisher, 519 A.2d 162, 164–65 (D.C. 1986).

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Thompson Hine argues that Mouzavires, Digital

Broadcast, and Fisher establish that personal jurisdiction over

a non-resident is proper where, as here, the non-resident

deliberately retained D.C. counsel and should therefore have

anticipated that services would be performed in the District.

But in exercising jurisdiction over defendants with such

limited relationships to the District, these cases—or at least

Thompson Hine’s characterization of them—appear to have

adopted the very kind of “mechanical test” that Burger King

expressly rejected. In essence, they allow a contract with a

non-resident to “automatically” qualify as a “minimum

contact” without examining whether contacts arising either

from the contract itself or from actual dealings between the

parties demonstrated that the non-resident “purposefully

avail[ed] [him]self of the privilege of conducting activities

within the forum State.” 471 U.S. at 475 (quoting Hanson, 357

U.S. at 253). To be clear, under some circumstances the terms

of a contract may well create such a “substantial connection”

between the non-resident and the forum that the contract

“alone” could supply the necessary “minimum contacts.” Id. at

475–76. The “wide-reaching” and “exacting” franchise

agreement in Burger King did just that. Id. at 480; see also

McGee v. International Life Insurance Co., 355 U.S. 220, 223

(1957) (holding that “Due Process Clause did not preclude the

California court from entering a judgment” against a Texas

company when “the suit was based on a contract which had

substantial connection with that State”). But this is a very

different case. As explained above, neither the Oregon retainer

nor Taieb’s dealings with Thompson Hine demonstrates that

Taieb “purposefully avail[ed] [him]self of the privilege of

conducting activities” in the District. Burger King, 471 U.S. at

475 (internal quotation marks and citations omitted). Taieb’s

mere retention of attorneys in the District of Columbia is

insufficient. As we put it in Health Communications, “a

purchaser who selects an out-of-state seller’s goods or services

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based on their economic merit does not thereby purposefully

avail itself of the seller’s state law [or] submit to the laws of the

jurisdiction in which the seller is located.” 860 F.2d at 465;

accord Hanson, 357 U.S. at 253 (“The unilateral activity of

those who claim some relationship with a nonresident

defendant cannot satisfy the requirement of contact with the

forum State.”).

We therefore disagree with Thompson Hine that the

district court had personal jurisdiction over Taieb simply

because the firm performed work for him in the District. As the

D.C. Court of Appeals itself explained in a pre-Mouzavires

case, that position would effectively “remove any protection

which the due process clause affords a nonresident defendant.”

Environmental Research International, Inc. v. Lockwood

Greene Engineers, Inc., 355 A.2d 808, 812 (D.C. 1976) (en

banc). In language seemingly tailor-made for this case, the

court continued, “The mere fact that a nonresident has retained

the professional services of a District of Columbia firm,

thereby setting into motion the resident party’s own activities

within this jurisdiction, does not constitute an invocation by

the nonresident of the benefits and protections of the District’s

laws.” Id. Indeed, the dissent in Mouzavires

concluded—properly in our view—that this language “should

have been dispositive.” 434 A.2d at 1002 (Newman, C.J.,

dissenting).

In sum, after examining the “quality and nature of

[Taieb’s] activities,” we agree with the district court that he

never “purposefully avail[ed] [him]self of the privilege of

conducting activities” within the District. Hanson, 357 U.S. at

253. A non-resident’s mere retention of a D.C.-based service

provider, absent any other deliberate contact with the

forum—demonstrated either by the terms of the contract itself

or by the non-resident’s actual dealings with the

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District—cannot qualify as a “minimum contact.” If Taieb’s

engagement of Thompson Hine were sufficient to subject him

to the personal jurisdiction of the courts of the District of

Columbia, “then it is hard to imagine that anyone entering into

a contract for the provision of goods or services by an

out-of-state party could avoid being haled into court in the

seller’s forum.” Health Communications, 860 F.2d at 463.

III.

For the foregoing reasons, we affirm.

So ordered.