Personal Jurisdiction Exists Where Canadian Citizen Was Personally Served In Forum State, And Where He Had Travelled To Conduct Business, Lease Space, And Hire Independent Contractor In State In Connection With Allegedly Breached Contract

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Alley Cat, Inc. v. Duncan, US District Court for the District of Nevada, September 28, 2017

Plaintiffs Nicholas Pinkowski and two corporations he controls create and distribute adult entertainment. Pinkowski contracted with defendant Stuart Duncan for the sale of the companies. Pinkowski sued Duncan for breach of contract in federal court in Nevada, claiming Duncan failed to make required payments and undertake certain marketing and licensing activities.

Among other motions, Duncan moved to dismiss the complaint for lack of personal jurisdiction. Pinkowski is a resident of Nevada, while his companies are Wyoming and Nevada corporations respectively, both with their principal place of business in Nevada. Defendant Duncan is a Canadian citizen who owns a home in California.

The District Court denied Duncan’s motion to dismiss. The Court first held that personal service of the complaint on Duncan when he was in Nevada was likely sufficient unto itself to establish personal jurisdiction, but noted that the US Supreme Court had never definitively so ruled, and so conducted a “minimum contacts” jurisdictional analysis under the Due Process Clause of the Constitution. After noting that Pinkowski had not alleged general jurisdiction, the Court applied the three-prong test applicable in the Ninth Circuit for finding specific personal jurisdiction:

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;
2. The claim must be one which arises out of or relates to the defendant’s forum related activities; and
3. The exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.

The Court found that Pinkowski had established a prima facie showing of personal jurisdiction based principally on the following facts: Duncan had travelled to Las Vegas at least three times for matters related to the purchase, had personally rented office space in Las Vegas to store assets acquired in the purchase, had hired and managed an independent contractor who conducted business related to the purchase in Las Vegas, and had submitted paychecks to employees in the State. The Court also noted that the majority of the parties’ negotiations occurred over phone calls Duncan “knowingly made and initiated into the State of Nevada, text messages that Duncan sent to Pinkowski while he knew Pinkowski was in Nevada and during Duncan’s admitted trips to Nevada.” The Court held that these facts, in conjunction with personal service within the State, established the court’s personal jurisdiction over Duncan.

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