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Xenophon Strategies, Inc. v. Jernigan Copeland & Anderson, PLLC

United States District Court, District of Columbia

April 6, 2016

XENOPHON STRATEGIES, INC., Plaintiff,
v.
JERNIGAN COPELAND & ANDERSON, PLLC, Defendant.

MEMORANDUM OPINION

REGGIE B. WALTON United States District Judge

The plaintiff, Xenophon Strategies, Inc., brought this civil action in the Superior Court of the District of Columbia against the defendant, Jernigan Copeland & Anderson, PLLC, alleging a breach of contract claim based on the defendant’s failure to compensate the plaintiff for the performance of the contract. See Petition for Removal (“Removal Pet.”) at 1; Removal Pet., Complaint (“Compl.”) ¶ 1. The defendant then removed the case to this Court pursuant to 28 U.S.C. § 1441(a) (2012). See Removal Pet. at 1. Currently before the Court is Defendant Jernigan Copeland & Anderson PLLC’s Motion to Dismiss the Complaint for Lack of Personal Jurisdiction (“Def.’s Mot.”).[1] Defendant’s Motion to Dismiss (“Def.’s Mot.”). Upon careful consideration of the parties’ submissions, [2] the Court concludes that it must deny the defendant’s motion for the reasons that follow.

I. BACKGROUND

The plaintiff is a “strategic communications firm, ” that was “organized under the laws of the Commonwealth of Virginia” and “specializ[es] in public and media relations, public affairs, crisis communication, advertising and advocacy, and government affairs.” Removal Pet., Compl. ¶ 2. The plaintiff’s “principal place of business is . . . [in] Washington, D.C., ”[3] id., and the defendant is a law firm “organized under the laws of . . . Mississippi, ” with its “principal place of business . . . [also in] Mississippi, ” id. ¶ 3.

In December 2014, the defendant contracted with the plaintiff for “a variety of public and media relations services in support of a lawsuit that the [defendant] intended to file in . . . Mississippi.”[4] Id. ¶ 11; see also Def.’s Mem. at 2 (the plaintiff was “to perform some focused public relations work in Mississippi and nationally in connection with a prospective lawsuit then being contemplated by . . . Mississippi”); Removal Pet., Compl., Exhibit (“Ex.”) 1 (December 1, 2014 Contract (“Contract”)) ¶¶ 1.1-1.2 (defining the scope of services). The plaintiff “generated the [contract at issue] from its office[] in [the District of Columbia] . . . on October 20, 2014, ” and then it was “subsequently counter-signed . . . on December 1, 2014[, ] from . . . Mississippi” by the defendant. Def.’s Mem., Ex. A (Affidavit of Arthur Jernigan in Support of Defendant Jernigan Copeland’s Motion to Dismiss the Complaint for Lack of Personal Jurisdiction (“First Jernigan Aff.”)) ¶ 6. The contract came into existence because

the Mississippi State Auditor’s office (the “Auditor”) [had earlier] retained [the defendant] to pursue potential claims against a group of nationally-recognized plaintiff[s’] attorneys located in Mississippi and elsewhere . . . . The . . . [a]ttorneys previously had represented the State in litigation against a number of large tobacco companies to recover funds on behalf of the State for Medicaid expenses caused by smoking. The State’s case against the tobacco companies ultimately settled, and the . . . [a]ttorneys negotiated to have their legal fees in the tobacco litigation paid to them directly by the tobacco companies. The State contend[ed] that the amounts paid to the . . . [a]ttorneys are public funds that should have been paid to the State, not directly to the . . . [a]ttorneys. The State retained [the defendant] to pursue recovery of these funds in litigation . . . .
After retaining [the defendant] to pursue . . . [the recovery of the funds that had been paid to the attorneys], the Auditor became concerned about the public relations fallout of pursuing the case against the . . . [a]ttorneys, particularly given their broad public recognition. In that regard, an advisor to the Auditor recommended retaining the plaintiff . . . . [The defendant] then contacted [the] [p]laintiff, on behalf of the State, regarding the potential retention of [the] [p]laintiff to perform certain public relations services related to the . . . [recovery effort].

Id. ¶¶ 4-5. In connection with the plaintiff’s contractual obligations, the plaintiff and the defendant met “on more than one occasion in Mississippi . . . .” Id. ¶ 8. They never met in the District of Columbia, and the defendant never traveled to this jurisdiction in connection with the contract. Id. And aside from in-person meetings in Mississippi, “[a]ll other business between [the defendant] and the [p]laintiff was transacted by phone and email.” Id.

In July 2015, the defendant “provided notice that it was terminating the [contract] pursuant to its terms, ” id. ¶ 9; see also Removal Pet., Compl. ¶ 13, and in September 2015, the contract was terminated, see Def.’s Mem., Ex. A (First Jernigan Aff.) ¶ 11; see also Removal Pet., Compl. ¶ 13. To date, the defendant has not paid any of the invoices billed by the plaintiff. See Removal Pet., Compl. ¶¶ 18-19; see also Def.’s Mem., Ex. A (First Jernigan Aff.) ¶ 10 (“[The defendant]’s retention agreement with [Mississippi] provides that expenses associated with the . . . [the defendant’s recovery efforts], including the fees and costs associated with [the] [p]laintiff’s services, would be fronted by [the defendant] and other law firms [also] representing the State in the . . . [recovery efforts]. These expenses [were later] to be reimbursed to [the defendant] and the other law firms from amounts recovered by the State . . . . [The defendant] agreed to retain [the] [p]laintiff on this basis [i.e., ] based on [the defendant’s] good faith reliance on representations by the Auditor that the . . . [recovery effort] would proceed expeditiously against the [p]laintiff[s’] [a]ttorneys. To date, however, the Auditor has not permitted the . . . [recovery effort] to proceed, effectively leaving [the defendant] holding the bill for amounts incurred on the State’s behalf, including [the] [p]laintiff’s fees and expenses. In addition, the other Mississippi-based law firms that have a contractual obligation to contribute with [the defendant] to expenses fronted on the State’s behalf have not done so with respect to [the] [p]laintiff’s fees and expenses.”).

II. STANDARD OF REVIEW

When a defendant moves to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), a plaintiff bears the burden of establishing a factual basis for the court’s exercise of personal jurisdiction over the defendant. Crane v. N.Y. Zoological Soc’y, 894 F.2d 454, 456 (D.C. Cir. 1990); see also First Chi. Int’l v. United Exch. Co., 836 F.2d 1375, 1378 (D.C. Cir. 1988) (“[A] plaintiff must make a prima facie showing of the pertinent jurisdictional facts.” (citations omitted)). Conclusory statements do not satisfy this burden. See GTE New Media Servs., Inc. v. BellSouth Corp., 199 F.3d 1343, 1349 (D.C. Cir. 2000) (citing First Chicago, 836 F.2d at 1378-79). Instead, there must be specific allegations connecting the defendant to the forum. See, e.g., Second Amendment Found. v. U.S. Conference of Mayors, 274 F.3d 521, 524 (D.C. Cir. 2001). Because the court is permitted to “consider material outside of the pleadings in ruling on a motion to dismiss for lack of . . . personal jurisdiction, ” Artis v. Greenspan, 223 F.Supp.2d 149, 152 (D.D.C. 2002) (citing Land v. Dollar, 330 U.S. 731, 735 n.4 (1947)), those allegations may be “bolstered by . . . affidavits and other written materials as [the plaintiff] can otherwise obtain, ” Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005). And although the court need not accept the plaintiff’s allegations bearing upon personal jurisdiction as true, e.g., Alkanani v. Aegis Def. Servs., LLC, 976 F.Supp.2d 13, 22 (D.D.C. 2014), appeal dismissed, No. 14-7056, 2014 WL 4628907 (D.C. Cir. Aug. 11, 2014), “factual discrepancies appearing in the record must be resolved in favor of the plaintiff, ” Crane, 894 F.2d at 456 (citation omitted).

III. ANALYSIS

Under the District of Columbia long-arm statute, a court “may exercise personal jurisdiction over a person . . . [when] a claim for relief aris[es] from the . . . [non-resident defendant’s] . . . transacting . . . [of] business in the District of Columbia.”[5] D.C. Code § 13-423(a)(1) (2001). The District of Columbia Circuit has interpreted this provision of the long-arm statute “to provide jurisdiction to the full extent allowed by the Due Process Clause” of the United States Constitution, and so “the statutory and constitutional jurisdiction questions . . . merge into a single inquiry, ” that is, whether the court’s exercise of jurisdiction over the nonresident defendant satisfies “the demands of due process.” Thompson Hine, LLP v. Taieb, 734 F.3d 1187, 1189 (D.C. Cir. 2013) (citing United States v. Ferrara, 54 F.3d 825, 828 (D.C. Cir. 1995)). Jurisdiction over a non-resident defendant will satisfy due process if

there are “minimum contacts” between the [non-resident] defendant and the forum, “such that he should reasonably anticipate being haled into court there.” Such minimum contacts must show that [this] defendant “purposefully avail[ed] itself of the privilege of conducting activities ...

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