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SUNLITE, INC. v. BFG BANK AG

April 14, 1994

SUNLITE, INC., Plaintiff,
v.
BfG BANK AG, Defendant.



The opinion of the court was delivered by: CHARLES R. RICHEY

 Plaintiff in the above-entitled case filed a Complaint for a Declaratory Judgment on April 30, 1993, and later filed an Amended Complaint. Plaintiff seeks a declaration from this Court that Plaintiff has fulfilled its obligations to Defendant under a "comfort letter" *fn1" and is not liable to Defendant for any sums of money, and also seeks to restrain Defendant from instituting any action against Plaintiff for recovery. Plaintiff pleads personal jurisdiction over Defendant pursuant to D.C. Code §§ 13-334, 13-423(a).

 Before the Court are Defendant's Motion to Dismiss, the Opposition and Reply thereto, and Supplemental Memoranda submitted by both parties. In bringing this Motion, the Defendant moves to dismiss the Amended Complaint for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure, or, alternatively, to dismiss under the doctrine of forum non conveniens. Upon consideration of the papers filed by the parties, the applicable law, and the entire record herein, the Court shall grant Defendant's Motion to Dismiss for lack of personal jurisdiction.

 Background

 Plaintiff Sunlite, Inc., is a Delaware corporation which has its principal executive offices located in the District of Columbia and its principal operating division located in Texas.

 In 1992, a branch bank of Defendant in Braunschweig, Germany, extended a credit line of DM 1,000,000 to Herbort Maschinenbau GmbH ("Herbort"), a German limited-liability company. Plaintiff owns 67% of the stock in Herbort. As security for the line of credit, and the underlying basis of the Complaint, Plaintiff signed a comfort letter, drafted and prepared by Defendant. The comfort letter was written in German by Defendant, and is a document separate and apart from the line of credit. Defendant provided no English translation to Plaintiff. Defendant refused to accept Plaintiff's signed English translation, and insisted that Plaintiff execute the comfort letter in its original German text. Plaintiff executed the comfort letter, in its original German, on May 26, 1992, at its offices in Washington, D.C. Plaintiff returned the comfort letter to Defendant by mail, in care of Herbort.

 Defendant later extended Herbort's line of credit through December 31, 1992. On July 17, 1992, Plaintiff executed an extension of the comfort letter, also in the original German as drafted by Defendant, to cover the additional time period. Plaintiff executed the extension in Washington, D.C., and returned the executed document to Defendant by courier, in care of Herbort.

 Herbort filed for bankruptcy under German law on December 17, 1992. Thereafter, Defendant demanded by letter that Plaintiff repay Herbort's indebtedness under the credit line, plus interest. Defendant later threatened to sue unless Plaintiff made payment immediately.

 The nature and extent of Plaintiff's obligations under the comfort letter are at issue in the underlying Complaint. However, the Court does not reach the merits of the case, because Defendant's Motion is dispositive.

 Analysis

 The Due Process Clause of the Fourteenth Amendment limits the power of a court to exert personal jurisdiction over a nonresident defendant. The "constitutional touchstone" of the determination whether an exercise of personal jurisdiction comports with due process remains whether the defendant "purposefully established 'minimum contacts' in the forum State." Asahi Metal Ind. v. Superior Court of California, 480 U.S. 102, 108, 94 L. Ed. 2d 92, 107 S. Ct. 1026 (1988) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985)). These minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Asahi Metal, 480 U.S. at 109 (citing Burger King, 471 U.S. at 475) (emphasis added). The "purposeful availment" requirement insures that a defendant will not be haled into court solely as a result of random, or attenuated contacts. Health Communications, Inc. v. Mariner Corp., 860 F.2d 460, 462-63 (D.C. Cir. 1988).

 The plaintiff has the burden of making a prima facie showing of the pertinent jurisdictional facts for a court to exercise personal jurisdiction. First Chicago Int'l v. United Exchange Co., 267 U.S. App. D.C. 27, 836 F.2d 1375, 1378 (D.C. Cir. 1988); Crane v. New York Zoological Society, 282 U.S. App. D.C. 295, 894 F.2d 454, 456 (D.C. Cir. 1990). In determining whether such a basis exists, factual discrepancies appearing in the record must be resolved in favor of the plaintiff. Crane, 894 F.2d at 456. However, a plaintiff must allege specific acts connecting the defendant with the forum State, and bare allegations are insufficient. First Chicago, 836 F.2d at 1378-79. Further, conclusory statements "do not constitute the prima facie showing necessary to carry the burden of establishing personal jurisdiction." Id. at 1378.

 Plaintiff asserts that personal jurisdiction exists over Defendant based on the District of Columbia's long arm statutes, D.C. Code §§ 13-334 and 13-423(a). D.C. Code Section 13-334 provides for service on foreign corporations "doing business" or "transacting business" in the District of Columbia. With respect to personal jurisdiction based upon conduct, according to D.C. Code § 13-423(a)(1), "[a] District of Columbia court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim for relief arising from the person's . . . transacting any business in the District of Columbia." This provision for ...


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