Premier Diagnostics v. Invitae Corporation , 2023 ME 1 ( 2023 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2023 ME 1Docket: Som-22-26
Argued: October 5, 2022
Decided: January 5, 2023
Panel: STANFILL, C.J., and MEAD, JABAR, HORTON, CONNORS, and LAWRENCE, JJ.
PREMIER DIAGNOSTICS
v.
INVITAE CORPORATION
STANFILL, C.J.
[¶1] Premier Diagnostics appeals from an order of the Superior Court
(Somerset County, Mullen, C.J.) dismissing its complaint for lack of personal
jurisdiction over the defendant, Invitae Corporation. Because we conclude that
Maine has personal jurisdiction over Invitae in this case, we vacate the
judgment of dismissal.
I. BACKGROUND
[¶2] The following facts, which we construe in Premier’s favor, are
contained in the parties’ pleadings and affidavits. See Fore, LLC v. Benoit, 2012
ME 1, ¶ 10, 34 A.3d 1125.
2
[¶3] Premier is a Delaware limited liability company, and its principal
place of business is in Madison, Maine. As such, Premier is a Maine resident.1
Kelly Hall is a member and the only employee of Premier; she also resides in
Madison. A significant element of Premier’s business is to use Hall to introduce
pharmacogenetic testing services (PGx testing) to healthcare organizations and
match them with laboratories who provide PGx testing.
[¶4] Invitae is a Delaware corporation with its principal place of business
in California. It is a leading national provider of medical genetic testing
services. It asserts it is not registered to do business in Maine, has no registered
agent in Maine, and does not own any real or personal property in Maine. Of its
2,555 employees, six are located in Maine and work from home. In 2020,
Invitae made $1,194,409 in sales to customers in Maine, representing less than
one-half of one percent of its total sales for that period. Premier does not argue
that these contacts with Maine are sufficient, without more, to confer personal
jurisdiction over Invitae.
1For purposes of personal jurisdiction, a limited liability company is a resident or citizen of the
state under whose laws it is organized and of the state where it has its principal place of business.
See Daimler AG v. Bauman, 571 U.S. 117, 137 (2014) (explaining that a corporation is “at home” in the
state where it is incorporated and the state where it has its principal place of business); Frank v. PNK
(Lake Charles) LLC, 947 F.3d 331, 337 n.10 (5th Cir. 2020) (noting that many courts apply the same
“at home” test used for corporations to LLCs). Thus, Premier is a citizen of both Delaware and Maine.
3
[¶5] In June 2019, Hall was working with a healthcare system in Florida,
Baptist Health (Baptist), to match it with a new PGx testing laboratory. Around
the same time, Hall started networking with a PGx testing laboratory called
Genelex. Hall corresponded with Genelex and its chief executive officer,
Chris Howlett, for several months during 2019, discussing the benefits that
Genelex could provide to her client, Baptist. After some time, the Genelex team
represented to Hall that if she could broker a deal between Genelex and Baptist,
she would be Genelex’s designated “point person” on the Baptist account. As
the point person on the account, Hall would have a host of responsibilities,
including onboarding, regular evaluation, monitoring, and consulting. Genelex
formalized this representation in a letter of intent, emailed to Hall around
August 21, 2019, offering to engage Premier as a consultant on various Genelex
PGx accounts, including the Baptist account.
[¶6] In September and October 2019, Hall spent considerable time
cultivating the relationship between Genelex and Baptist. Eventually, Baptist
informed Hall that it had decided to partner with Genelex based on her
recommendation and efforts. For the next six months, Hall worked nearly full
time to finalize the Genelex-Baptist agreement.
4
[¶7] In January 2020, Howlett emailed Hall a proposed consulting
services agreement (CSA) between Premier and Genelex; the CSA included a
statement of work for the Baptist account. Hall signed and returned the
agreement about a month later. Thereafter, Hall continued to work diligently
to finalize the deal between Baptist and Genelex. Hall did so at Genelex’s
request, even though Genelex had not yet signed the CSA.
[¶8] In March 2020, with the CSA still only partially executed, Invitae
announced that it had entered into an agreement to acquire Genelex.2 For
purposes of this appeal, Invitae concedes that Genelex was thereafter acting as
its agent. On March 11, 2020, Hall emailed Howlett from her office in Maine to
ask whether the acquisition would impact their pending contract and whether
Premier should “explore relationships with other PGx testing labs.” In
response, Howlett emailed Hall a fully executed copy of the CSA and informed
her “that Invitae had confirmed that its acquisition of Genelex would have no
impact on the relationship, or contract, between Genelex and Premier
Diagnostics.”
[¶9] Baptist and Genelex then executed an agreement under which
Genelex would provide PGx testing for Baptist. Baptist’s decision to move
2 Invitae officially acquired a one hundred percent ownership interest in Genelex on April 1, 2020.
5
forward with the deal was “a direct result” of Hall’s efforts on behalf of Premier
and Genelex’s “assurances that the Invitae transaction would have no impact
on the relationship with Premier.” Thereafter, Hall contacted Howlett multiple
times to determine when her onboarding and orientation would occur as
provided in the CSA. Howlett responded that his time working with Premier
was limited by the Invitae acquisition, and her onboarding could not be
scheduled. Genelex never onboarded Hall.
[¶10] On May 27, 2020, Hall learned from Baptist that Invitae was
excluding her from onboarding meetings with Baptist by instructing Genelex to
hold the meetings using Invitae employees instead of Hall and Premier. The
next day, Invitae instructed Genelex to terminate the CSA.
[¶11] The complaint alleges that Invitae, through Genelex, fraudulently
misrepresented to Hall that the acquisition by Invitae would not impact
Premier and Genelex’s agreements; fraudulently induced Premier to continue
to work to finalize the Baptist deal; instructed Genelex to hold onboarding
meetings with Baptist and exclude Premier from that process; and pressured
and instructed Genelex to terminate the CSA after Baptist had finalized the
agreement with Genelex. Premier alleges it suffered significant economic
damages as a result of Invitae’s conduct.
6
[¶12] Based on these allegations, Premier asserted a claim of tortious
interference with contractual and advantageous economic relations against
Invitae, as Genelex’s principal.3 Invitae moved to dismiss the complaint on the
ground that Maine lacked personal jurisdiction over Invitae. The court agreed
and dismissed the complaint.4 The court's order was based on the pleadings,
exhibits, and affidavits only; it did not hold an evidentiary hearing. Premier
filed a timely appeal.
II. DISCUSSION
[¶13] “The term ‘personal jurisdiction’ refers to a court’s power to bring
a person into its adjudicative process.” Fore, 2012 ME 1, ¶ 5, 34 A.3d 1125(alteration and quotation marks omitted). “We review de novo whether
personal jurisdiction exists.” Id.[¶14] Maine’s long-arm statute “shall be applied so as to assert
jurisdiction over nonresident defendants to the fullest extent permitted by the
3Although the complaint purports to assert only a claim of tortious interference with contractual
and advantageous economic relations, it also contains allegations asserting the elements of
fraudulent misrepresentation, as outlined above. See St. Francis De Sales Fed. Credit Union v. Sun Ins.
Co. of N.Y., 2002 ME 127, ¶ 26, 818 A.2d 995 (explaining that a defendant is liable for fraud when it
“(1) makes a false representation (2) of a material fact (3) with knowledge of its falsity or in reckless
disregard of whether it is true or false (4) for the purpose of inducing another to act or to refrain
from acting in reliance upon it, and (5) the plaintiff justifiably relies upon the representation as true
and acts upon it to his damage” (quotation marks omitted)).
4The end of the order contains a clerical error stating the court granted Invitae’s motion to
dismiss Premier’s complaint pursuant to M.R. Civ. P. 12(b)(6), instead of M.R. Civ. P. 12(b)(2).
7
due process clause of the United States Constitution.” 14 M.R.S. § 704-A(1)
(2022). Put another way, the reach of the statute “is coextensive with the
permissible exercise of personal jurisdiction under the due process clause of
the fourteenth amendment.” Dorf v. Complastik Corp., 1999 ME 133, ¶ 9,
735 A.2d 984 (quotation marks omitted).
[¶15] Personal jurisdiction may be either general or specific. See
Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1779-80 (2017);
Goodyear Dunlop Tires Operations v. Brown, 564 U.S. 915, 919 (2011); see also
Restatement (Fourth) of Foreign Rels. L. of the U.S. § 422 cmt. c (Am. L. Inst.
2019). A state court may establish general personal jurisdiction over an
individual if the individual is domiciled in the state. Bristol-Myers Squibb Co.,
137 S. Ct. at 1780. Similarly, a state court may establish general personal
jurisdiction over a corporation if the corporation is “at home” in the state . Id.;
see Daimler AG v. Bauman, 571 U.S. 117, 137 (2014) (explaining that a
corporation is “at home” in the state where it is incorporated and the state
where it has its principal place of business). General personal jurisdiction may
also be established when the individual or corporation has continuous and
systematic contacts with the state. See BNSF Ry. Co. v. Tyrell, 137 S. Ct. 1549,
1558 (2017). If a court has general personal jurisdiction over a defendant, it
8
“may hear any claim against that defendant, even if all the incidents underlying
the claim occurred in a different State.” Bristol-Myers Squibb Co., 137 S. Ct. at
1780.
[¶16] As discussed above, Premier does not allege that Invitae’s general
contacts with Maine are sufficient, without more, to confer personal
jurisdiction over it. Accordingly, the issue is whether Maine has specific
personal jurisdiction over Invitae.
[¶17] A state court may exercise specific personal jurisdiction over a
defendant only if the suit “arises out of or relates to the defendant’s contacts
with the forum.” Daimler AG, 571 U.S. at 127 (alterations and quotation marks
omitted); see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). In other
words, “specific jurisdiction is confined to adjudication of issues deriving from,
or connected with, the very controversy that establishes jurisdiction.”
Goodyear Dunlop Tires Operations, 564 U.S. at 919 (quotation marks omitted).
[¶18] In discussing personal jurisdiction over nonresidents, we have
held that due process requires that “(1) Maine . . . have a legitimate interest in
the subject matter of [the] litigation; (2) the defendant, by its conduct,
reasonably could have anticipated litigation in Maine; and (3) the exercise of
jurisdiction by Maine’s courts comports with traditional notions of fair play and
9
substantial justice.” Bickford v. Onslow Mem’l Hosp. Found., Inc., 2004 ME 111,
¶ 10, 855 A.2d 1150 (alteration and quotation marks omitted); see
Bristol-Meyers Squibb Co., 137 S. Ct. at 1780-81. It is the plaintiff’s burden to
demonstrate that specific facts in the record show that the first two elements
are met. Id. If the plaintiff satisfies its burden, “the burden shifts to the
defendant to demonstrate that the exercise of jurisdiction does not comport
with traditional notions of fair play and substantial justice.” Id. When the trial
court resolves a motion to dismiss after a review of the parties’ pleadings and
affidavits, as it did here, “the plaintiff need only make a prima facie showing
that jurisdiction exists, and the plaintiff’s written allegations of jurisdictional
facts should be construed in its favor.” Fore, 2012 ME 1, ¶ 10, 34 A.3d 1125(quotation marks omitted).
A. Maine Has a Legitimate Interest in the Subject Matter of the
Litigation.
[¶19] Invitae argues that the court erroneously held that Premier made
a prima facie showing that Maine has a legitimate interest in the subject matter
of the litigation.
[¶20] “Maine has a ‘legitimate interest’ in affording a forum for its
citizens to redress injuries caused by nonresidents.” Connelly v. Doucette,
2006 ME 124, ¶ 8, 909 A.2d 221. To satisfy due process, however, a party
10
asserting that a Maine court has jurisdiction must present an additional interest
of the state beyond merely providing Maine citizens with a forum for redress
against noncitizens. Murphy v. Keenan, 667 A.2d 591, 594 (Me. 1995) (clarifying
that Maine’s interest must be “beyond mere citizenry . . . such as the protection
of its industries, the safety of its workers, or the location of witnesses and
creditors within its borders”).
[¶21] We have recognized that such an additional interest exists when
the effect of an injury is felt in Maine. See Connelly, 2006 ME 124, ¶ 8,
909 A.2d 221 (determining Maine had a legitimate interest when the citizen
“felt the effects of her injury” in Maine, received treatment in Maine, and had
medical witnesses and records in Maine); Harriman v. Demoulas Supermarkets,
Inc., 518 A.2d 1035, 1036-37 (Me. 1986) (determining Maine had a legitimate
interest because, among other factors, the citizen felt the effects of his injury in
Maine). An additional interest also exists when Maine is protecting a citizen
from fraudulent or tortious conduct. See Suttie v. Sloan Sales, 1998 ME 121, ¶ 5,
711 A.2d 1285 (determining Maine has a legitimate interest when it is
“protecting its citizens from fraudulent employment practices”); Fore,
2012 ME 1, ¶¶ 11-12, 34 A.3d 1125 (determining Maine had a legitimate
interest in protecting the interests of a citizen and business owner when the
11
defendant allegedly “committed a tort or caused the consequences of a tort to
occur within Maine”).
[¶22] We agree with the Superior Court that Premier met its burden of
presenting prima facie evidence of Maine’s legitimate interest in the subject
matter of this litigation. Premier pleaded sufficient facts to show that it felt the
effects of its injury in Maine as a result of Invitae’s alleged fraudulent conduct.
Thus, Maine’s interest in this matter goes beyond simply providing a citizen
with a forum for redress; it has an interest in protecting Premier from Invitae’s
alleged fraudulent and tortious conduct and its consequences.
B. Invitae Could Reasonably Anticipate Litigation in Maine.
[¶23] Premier argues the court erred in finding it did not meet its burden
to show that Invitae could reasonably anticipate litigation in Maine. We agree.
[¶24] A defendant may reasonably anticipate litigation in a forum when
it (1) “purposefully directs [its] activities at” a Maine citizen or (2) “creates
continuing obligations between [itself] and” a Maine citizen. Fore, 2012 ME 1,
¶ 8, 34 A.3d 1125 (quotation marks omitted). In determining whether Invitae
purposefully directed its activities at a Maine citizen, we “consider whether the
defendant’s conduct affected a Maine resident who was in Maine when affected
by the conduct.” Id.
12[¶25] We have held that a defendant purposefully directed his activities
at a Maine citizen when he made a fraudulent misrepresentation to the Maine
citizen over the telephone. See id. ¶¶ 2, 14. Other courts have applied this
principle to different means of communication, including mail and email. See
Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664 (1st Cir. 1972) (mail); David v.
Weitzman, 677 F. Supp. 95, 97-98 (D. Conn. 1987) (mail and telephone);
Natalia v. Tax Credits, LLC, No. 15-270, 2016 U.S. Dist. LEXIS 96953, at *5-8
(D.R.I. July 25, 2016) (email); Power Invs., LLC v. SL EC, LLC, 927 F.3d 914, 919
(6th Cir. 2019) (telephone, text, and email). In holding that mailing a fraudulent
misrepresentation into Massachusetts was purposeful availment sufficient for
personal jurisdiction, the First Circuit noted: “We would be closing our eyes to
the realities of modern business practices were we to hold that a corporation
subjects itself to the jurisdiction of another state by sending a personal
messenger into that state bearing a fraudulent misrepresentation but not when
it follows the more ordinary course of employing the United States Postal
Service as its messenger.” Murphy, 460 F.2d at 664. We believe the same logic
applies here. Email and internet communications are used every day in the
ordinary course of business. We would be closing our eyes to the realities of
modern business practices were we to hold that a corporation subjects itself to
13
Maine’s jurisdiction when it makes a fraudulent misrepresentation to a Maine
citizen via telephone but not when it emails a fraudulent misrepresentation to
a Maine citizen in Maine.
[¶26] Here, Premier alleges that Invitae, through its agent Genelex, made
a fraudulent misrepresentation regarding the CSA to Premier through email
while Premier was in Maine. It further alleges that, as a result, Premier suffered
damages. Invitae’s email communication made through its agent, like the
telephone communication in Fore, was a fraudulent misrepresentation directed
at a Maine citizen who was in Maine at the time of the communication. Given
this, we conclude that Invitae purposefully directed its activities at a Maine
citizen.
[¶27] In addition, a contract constitutes a continuing obligation sufficient
to support the exercise of personal jurisdiction when there is “ongoing contact
between the parties with the expectation of conducting future business.”
Murphy, 667 A.2d at 594-95 (holding a warranty provision in a contract for the
sale of a boat between a New Hampshire citizen and a Maine citizen was not
enough to establish continuing obligations); see Interstate Food Processing
Corp. v. Pellerito Foods, Inc., 622 A.2d 1189, 1192 (Me. 1993) (holding the
defendant had continuing obligations to a Maine citizen when it contacted the
14
citizen with regard to their existing contract, and the relationship was “not the
result of unilateral action by” the Maine citizen); Caluri v. Rypkema, 570 A.2d
830, 831-33 (Me. 1990) (holding the defendant had continuing obligations to a
Maine citizen when it hired her as its representative and she was actively
working on its behalf).
[¶28] Here, Invitae created continuing obligations between itself and
Premier when its agent, Genelex, executed the CSA on March 11, 2020, upon
Invitae’s approval. The CSA and accompanying statement of work stated that
Premier would provide consulting services for Genelex in the future on an
ongoing basis. Further, the agreement was not the result of Premier’s unilateral
action; rather, it was the product of ongoing negotiations and discussions
between the parties. Thus, Premier alleged sufficient facts to show that Invitae
created ongoing obligations between itself and Premier.
[¶29] In sum, Invitae purposefully directed activity at Premier and
created continuing obligations between itself and Premier. Accordingly, Invitae
could have reasonably anticipated litigation in Maine.
C. Maine’s Exercise of Jurisdiction Comports with Traditional Notions
of Fair Play and Substantial Justice.
[¶30] The Superior Court concluded that there was no personal
jurisdiction because Premier failed to show that Invitae could reasonably
15
anticipate litigation in Maine. As a result, it did not address the third element:
whether Premier demonstrated that the exercise of jurisdiction over Invitae
comports with traditional concepts of fair play and substantial justice. We need
not remand for the court to consider that element, however, because Invitae
has conceded that if Premier has met its burden on the first two elements, it is
reasonable to require it to defend the action in Maine, and the exercise of
personal jurisdiction over it comports with traditional notions of fair play and
substantial justice. See Fore, 2012 ME 1, ¶ 16, 34 A.3d 1125. In conclusion, all
the due process requirements are met, and the court has specific personal
jurisdiction over Invitae. We therefore vacate the dismissal of Premier’s
complaint.
The entry is:
Judgment vacated. Remanded for further
proceedings consistent with this opinion.
Braden M. Clement, Esq. (orally), and Theodore A. Small, Esq., Skelton, Taintor
& Abbott, Lewiston, for appellant Premier Diagnostics
Roy T. Pierce, Esq. (orally), Jensen Baird, Portland, for appellee Invitae
Corporation
Somerset County Superior Court docket number CV-2021-29
FOR CLERK REFERENCE ONLY