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National Community Reinvestment Coalition v. Novastar Financial

June 22, 2009

NATIONAL COMMUNITY REINVESTMENT COALITION, PLAINTIFF,
v.
NOVASTAR FINANCIAL, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Royce C. Lamberth, United States District Judge,

MEMORANDUM AND ORDER

Before the Court is defendant W. Lance Anderson's Motion [63] to Dismiss the plaintiff's complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Upon consideration of the motion, the opposition, the reply thereto, and the record herein, the Court will deny defendant's motion.

I. BACKGROUND

Plaintiff National Community Reinvestment Coalition alleges violations of the federal Fair Housing Act, 42 U.S.C. §§ 3601 et seq. ("FHA") by defendants NovaStar Mortgage, Inc. ("NMI") and its parent company, NovaStar Financial, Inc. ("NFI") (collectively, "NovaStar"). Recently, plaintiff amended its complaint to add W. Lance Anderson ("Anderson"), the President, Chief Operating Officer, and co-founder of NFI and the President of NMI, as an individual defendant.

Anderson has moved to dismiss plaintiff's complaint for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. Specifically, Anderson alleges that his involvement in the making and implementation of NovaStar's policies against making loans secured by homes on Indian reservations, homes used for adult foster care, and row houses in Baltimore, Maryland was limited to his capacity as a corporate officer. (See Def.'s Mot. to Dismiss 2-3.) Anderson asserts that for the foregoing reason, combined with the fact that he is a nonresident who has no substantial contacts with the District of Columbia, the Court should decline to exercise personal jurisdiction over him. (See id. at 3.) Because Anderson's contacts with the District are all in his corporate capacity, defendant argues, the fiduciary shield doctrine makes jurisdiction over him improper. Plaintiff argues in response that Anderson can be tried as a defendant in his personal capacity under the "more an employee" exception to the fiduciary shield doctrine. (See Pl.'s Opp'n to Mot. to Dismiss 1-2.)

II. ANALYSIS

A. Legal Standard

When personal jurisdiction is challenged, the plaintiff bears the burden of establishing a factual basis for the Court's exercise of personal jurisdiction over each individual defendant. Crane v. N.Y. Zoological Soc'y, 894 F.2d 454, 456 (D.C. Cir. 1990). The plaintiff must allege specific facts that connect the defendant with the forum. Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001). The plaintiff may not aggregate factual allegations concerning multiple defendants in order to demonstrate personal jurisdiction over any individual defendant. See Rush v. Savchuk, 444 U.S. 320, 331-32 (1980) (rejecting aggregation of co-defendants' forum contacts in determining personal jurisdiction because "the requirements of International Shoe must be met as to each defendant over whom a. court exercises jurisdiction"). When contemplating personal jurisdiction, the Court is not required to treat all of the plaintiff's allegations as true, but "may receive and weigh affidavits and other relevant matter to assist in determining the jurisdictional facts." United States v. Philip Morris Inc., 116 F. Supp. 2d 116, 120 n. 4 (D.D.C. 2000) (Kessler, J.); see also Capital Bank Int'l, Ltd. v. Citigroup, Inc., 276 F. Supp. 2d 72, 74 (D.D.C. 2003) (Urbina, J.); Novak-Canzeri v. Al Saud, 864 F. Supp. 203, 206 (D.D.C. 1994) (Friedman, J.) ("the Court must accept Plaintiff's claims as true in ruling on a 12(b)(2) motion, unless they are directly contradicted by an affidavit").

B. Personal Jurisdiction

There are two variants of personal jurisdiction: "(1) general, 'all purpose' adjudicatory authority to entertain a suit against a defendant without regard to the claim's relationship vel non to the defendant's forum-linked activity, and (2) specific jurisdiction to entertain controversies based on acts of a defendant that touch and concern the forum." Kopff v. Battaglia, 425 F. Supp. 2d 76, 81 (D.D.C. 2006) (Bates, J.) (citing Steinberg v. Int'l Criminal Police Org., 672 F.2d 927, 928 (D.C. Cir. 1981)). General jurisdiction requires that the defendant's contacts within the forum be "continuous and systematic" in order for the defendant to be forced to defend a suit arising out of any subject matter unrelated to the defendant's activities within the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984). Alternatively, the District of Columbia may exercise specific jurisdiction over a defendant if the plaintiff demonstrates that (1) the District of Columbia's long arm statute, D.C. Code § 13-423, authorizes jurisdiction, and (2) the exercise of jurisdiction comports with the federal requirement of constitutional due process. D'Onofrio v. SFX Sports Group, Inc., 534 F. Supp. 2d 86, 90 (D.D.C. 2008) (Bates, J.). The District of Columbia long-arm statute provides:

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-

(1) transacting any business in the District of Columbia;

(2) contracting to supply services in the District of Columbia;

(3) causing tortious injury in the District of Columbia by an act or omission in ...


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