Eighteen Seventy v. Jayson ( 2022 )

Appellate Case: 20-8015 Document: 010110675716 FILED Page: 1
Date Filed: 04/26/2022
United States Court of Appeals
Tenth Circuit
PUBLISH April 26, 2022
Christopher M. Wolpert
UNITED STATES COURT OF APPEALS Clerk of Court
TENTH CIRCUIT
EIGHTEEN SEVENTY, LP; MARIE
KENNEDY FOUNDATION,
Plaintiffs - Appellants,
No. 20-8015
v.
RICHARD JAYSON,
Defendant - Appellee.
Appeal from the United States District Court
for the District of Wyoming
(D.C. No. 2:19-CV-00022-SWS)
Leah C. Schwartz, Ranck & Schwartz, LLC, Jackson, Wyoming, for Plaintiffs-
Appellants.
Tyler J. Garrett, Hathaway & Kunz, LLP, Cheyenne, Wyoming, for Defendant-
Appellee.
Before HARTZ, HOLMES, and PHILLIPS, Circuit Judges.
HOLMES, Circuit Judge.
This case presents an issue of whether a federal court in Wyoming has
personal jurisdiction over a defendant who is domiciled and resides in the United
Kingdom and has never visited Wyoming. Over the course of four years,
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Plaintiffs-Appellants Eighteen Seventy, LP and the Marie Kennedy Foundation
(the “Kennedy Entities” or “Entities”) lost more than $10 million that they
invested in CRUPE Pte. Ltd. (“CRUPE”) and its subsidiaries. CRUPE is a
foreign company organized under the laws of Singapore and managed in Zurich,
Switzerland. Believing that CRUPE’s co-founder and CFO, Defendant-Appellee
Richard Jayson, induced their investment losses through misrepresentations and
material omissions, the Kennedy Entities sued Mr. Jayson for gross negligence
and breach of fiduciary duty in the U.S. District Court for the District of
Wyoming. The Entities—both of which have their principal place of business in
Wyoming—averred that Mr. Jayson surreptitiously used their financial support to
compensate himself and another company co-founder while failing to provide the
Kennedy Entities with information about CRUPE’s viability and the true nature of
their investments.
Mr. Jayson, a domiciliary and resident of the United Kingdom, moved to
dismiss the Kennedy Entities’ suit, pursuant to Federal Rule of Civil Procedure
12(b)(2), arguing that the court lacked personal jurisdiction over him. The
district court agreed with Mr. Jayson and dismissed the complaint.
The Kennedy Entities now appeal, claiming the district court erred when it
held that Mr. Jayson lacked the requisite minimum contacts with Wyoming to
afford the court personal jurisdiction. They contend that Mr. Jayson purposefully
directed his tortious activities at Wyoming by preparing investment documents
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that encouraged the Kennedy Entities’ investments and by communicating with
the Entities’ owners about the investments. Because the Kennedy Entities’ losses
allegedly stemmed from these actions of Mr. Jayson, they assert that they have
made a prima facie showing of his minimum contacts with Wyoming.
Accordingly, they urge us to hold that the court erred in determining that it lacked
personal jurisdiction over Mr. Jayson and to reverse the district court’s judgment
and remand for further proceedings.
However, exercising jurisdiction under 28 U.S.C. § 1291, we affirm the
district court’s judgment dismissing this action for lack of personal jurisdiction.
Stated concisely, because the Kennedy Entities assert a “purposeful direction”
theory of personal jurisdiction, the operative standard calls for an inquiry into
whether the Entities have shown that Mr. Jayson’s acts were (1) intentional,
(2) “expressly aimed” at Wyoming, and (3) done with “knowledge that the brunt
of the injury would be felt” in Wyoming. Dudnikov v. Chalk & Vermillion Fine
Arts, Inc., 514 F.3d 1063, 1072 (10th Cir. 2008).
Although the Kennedy Entities meet the first prong of the purposeful
direction test, they fail to satisfy the second: that is, they fail to show that Mr.
Jayson expressly aimed his conduct at Wyoming. Because the Kennedy Entities’
failure to make this showing is sufficient, standing alone, to fatally undercut their
efforts to show purposeful direction and, more generally, to establish a prima
facie case of personal jurisdiction over Mr. Jayson, we end our analysis there and
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uphold the district court’s judgment. The upshot is that the Kennedy Entities’
appellate challenge fails.
I
A
The Kennedy Entities are organized under the laws of Delaware. Each has
a principal place of business in Big Horn, Wyoming. 1 Eighteen Seventy, LP is a
limited partnership that invests in stocks, bonds, commodities, futures, and other
investment instruments, including private equity, while the Marie Kennedy
Foundation is a private foundation that “makes grants to qualified grantees from a
pool of capital, which is invested to generate funds for grants.” Aplts.’ App.,
Vol. I, ¶ 7, at 7 (Compl., filed Jan. 31, 2019). Two brothers—Wyoming resident
Peter Kennedy and Florida resident Paul Kennedy—make the investment
decisions for each Entity. A third brother, John Kennedy—also a resident of
Wyoming—owns Eighteen Seventy along with Peter and Paul. In addition to each
Entity having its headquarters in Wyoming, Eighteen Seventy maintains its
minute book and other corporate documents in Wyoming. The record does not
1
In reviewing a district court’s grant of a motion to dismiss for lack of
personal jurisdiction, we construe the facts “in the light most favorable to
plaintiffs.” Dudnikov, 514 F.3d at 1068.
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tell us, however, whether either entity has any Wyoming-based investments or
bank accounts. 2
B
In 2011, Eighteen Seventy was introduced to Stuart Robertson, CRUPE’s
CEO and co-founder, regarding a possible capital investment in CRUPE. CRUPE
claimed to have developed a unique building substance used in construction,
which derived its value from being “environmentally-friendly, seismically,
thermally and acoustically superior[,] . . . lighter than other building materials[,] .
. . [and] fire-retardant.” Id., ¶ 30, at 12. CRUPE, based in Singapore and
managed in Zurich, Switzerland, sought investments around the world to develop
and market this product. Prior to investing in CRUPE, the Kennedy Entities
allege that they were advised that CRUPE’s unique building substance was
technology that could not be reverse-engineered and was protected by patents
pending in the United States and abroad. Furthermore, they allegedly were
assured that “the technology, patent position, know-how and registered
trademarks constituted the intellectual property of CRUPE”—owned through a
CRUPE subsidiary, CRUPE IP GmbH. Id., ¶ 31, at 12–13. The Entities
considered this technology (the “CRUPE IP” or “IP”) to be CRUPE’s most
valuable asset.
2
The Kennedy Entities assert in their briefing on appeal that “[s]everal
of the Foundation’s grantees are Wyoming non-profits,” Aplts.’ Opening Br. at 3
n.2, but there is no support for this assertion in either the complaint or the record.
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Mr. Jayson, a resident of the U.K., did not participate in these initial
investment-related discussions, which took place over email and in meetings held
outside of the United States. As CRUPE’s director and CFO, Mr. Jayson was
responsible for gathering information and drafting documents for potential
investors. He first became involved with the Kennedy Entities indirectly, when
he helped prepare a confidential memorandum (“Confidential Memorandum”) for
those interested in investing in CRUPE. 3 CRUPE’s attorney, Andreas Bihrer,
subsequently emailed the memorandum to Peter and Paul Kennedy.
After reviewing the Confidential Memorandum, Eighteen Seventy, along
with eleven other international investors, entered into a written investment
agreement (the “Investment Agreement”) with CRUPE on February 15, 2012. See
Aplts.’ App., Vol. II, at 381 (Investment Agreement, dated Feb. 15, 2012)
(showing investors located in St. Lucia, the British Virgin Islands, Hong Kong,
Switzerland, the United Kingdom, and Singapore); see also Aplts.’ Opening Br.
at 8 (asserting that Eighteen Seventy decided to invest in CRUPE “[b]ased on the
Confidential Memo and accompanying documents”). The Investment Agreement
3
Apparently, the Confidential Memorandum was sent to potential
investors besides the Entities because the memorandum is not specifically tailored
to the Entities and offers advisements—speaking generally—to a class of
“[p]otential investors.” Aplts.’ App., Vol. II, at 421 (Confidential Mem., dated
Nov. 2011). In this vein, Mr. Jayson asserts that his “assistance” with this
memorandum “came before the Kennedy Entities came on the scene, as those
documents had to be reviewed and approved by CRUPE’s Board of Directors
before being sent to potential investors.” Aplee.’s Resp. Br. at 36. The Entities
do not dispute this assertion as it relates to the initial Confidential Memorandum.
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assured investors that “all the IP will be held, registered, maintained and
developed by the Company and its subsidiaries henceforth as owner of the IP.”
Aplts.’ App., Vol. II, at 396. It also imposed upon all CRUPE
directors—including Mr. Jayson—obligations separate from those of the
Company itself, including duties to: (1) “ensure that all decisions which are
material . . . shall be taken at a properly convened board meeting,” (2) “procure
. . . all reasonable steps within their respective powers to sufficiently protect [the
Company and its subsidiaries’] intellectual property rights,” (3) refrain without
Board approval from “enter[ing] into any transaction to transfer or license any
IPR [i.e., IP rights],” and (4) refrain from incurring over one million euros in
debt. Id. at 391–93. This agreement, along with all of CRUPE’s subsequent
investment agreements, provided that it was governed by Swiss law and subject to
Swiss jurisdiction. Mr. Jayson reviewed, commented on, and later signed the
agreement, which listed Eighteen Seventy’s address in Wyoming along with those
of the other investors; he did not, however, have any direct contact with Eighteen
Seventy during this time.
In accordance with the initial Investment Agreement and subsequent
agreements involving the Kennedy Entities, they invested a total of $10 million in
CRUPE and its subsidiaries through share purchases and loans from 2012–2016,
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becoming CRUPE’s largest investors. 4 During this period, Paul and Peter
Kennedy met with Mr. Jayson several times in the course of their business
dealings with CRUPE; all of these meetings, however, took place outside of the
United States.
For example, in the spring of 2012, following Eighteen Seventy’s initial
investment, Peter Kennedy (the Wyoming resident) met with Mr. Jayson and Mr.
Robertson in Hong Kong, where Mr. Jayson “extolled the opportunities for
CRUPE in China.” Id. at 475 (Peter Kennedy Decl., filed Oct. 25, 2019). The
meeting allegedly convinced Eighteen Seventy to make a second investment, and
Mr. Bihrer emailed Peter and Paul—copying Mr. Jayson—with another
subscription agreement containing Eighteen Seventy’s address in Wyoming. 5
Pursuant to this agreement, Eighteen Seventy purchased another $1.8 million
worth of CRUPE shares on July 7, 2012.
Later, in September 2012, Peter and Paul met with Mr. Jayson and other
CRUPE executives overseas, where they discussed Eighteen Seventy’s
willingness to provide CRUPE with a $2 million loan in lieu of a traditional
investment. Following that meeting, in an email primarily directed at Mr.
4
In 2014, Paul Kennedy also became a member of CRUPE’s Board.
5
Though this specific email from Mr. Bihrer had a field or space
expressly designated for any “Cc,” most of the emails discussed herein
technically did not have such a space or field, but the emails’ contents leave no
doubt whom the sender was conversing with, or directing questions to, in the
emails and, on the other hand, whom the email sender was courtesy copying.
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Robertson—which copied Mr. Jayson and Peter Kennedy (the Wyoming
resident)—Paul Kennedy (the Florida resident) mentioned his interest in speaking
with Mr. Jayson on the phone to go over “a few balance sheet-related questions.”
Id. at 483–84 (Email Exchange, dated Sept. 25, 2012). Mr. Jayson responded
regarding his availability for a phone call in an email exchange with Paul
Kennedy. See, e.g., id. at 484 (noting that he would be available on “Thursday
. . . anytime U.S. time”). This email exchange courtesy copied Peter Kennedy
and Mr. Robertson. And Mr. Jayson subsequently sent via email to Paul Kennedy
a copy of CRUPE’s “sales analysis”; notably, only Mr. Robertson was copied on
this email—not Peter Kennedy. Id. at 485. After further discussions, which
apparently involved Mr. Jayson and Paul (the Florida resident), the Kennedy
Entities provided the loan, with shares of CRUPE’s subsidiaries—including
CRUPE IP, which owned the intellectual property rights—serving as collateral.
In 2013, Mr. Jayson ran several analyses of CRUPE Framing, a CRUPE
subsidiary formed to hold title to “rollformer” machines, which used CRUPE’s
material to produce building frames. Id., Vol. I, ¶ 52, at 19. In August 2013, Mr.
Jayson emailed Paul Kennedy (the Florida resident) answering several questions
about these analyses and stating that CRUPE Framing “expect[ed] to outperform
the business plans . . . [and] want[ed] to ensure [it] ha[d] sufficient funding in
place to run the business.” Id., Vol. II, at 368–71 (Email Exchange, dated
Aug. 21, 2013). The Kennedy Entities allege that they loaned CRUPE Framing
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an additional $920,000 ($500,000 from Eighteen Seventy and $420,000 from the
Foundation) as a result of these representations. The first page of the resulting
investment agreement, which Mr. Jayson signed, identifies Eighteen Seventy as
“lender” and lists Eighteen Seventy’s Wyoming address by handwritten edit. Id.
at 315 (Loan Agreement, undated). Mr. Jayson emailed only Paul as part of this
transaction, however, and there is no record of Mr. Jayson otherwise
communicating with the Entities in relation to this deal.
Finally, Mr. Jayson participated in meetings with Peter and Paul Kennedy
in Zurich and Hong Kong in the spring of 2014. During these meetings, Mr.
Jayson produced and discussed CRUPE’s cash flow documents. Based on these
documents, the Kennedy Entities agreed to restructure a previous $2 million loan
to provide CRUPE with an additional $700,000 loan, plus an additional $300,000
equity investment. 6
In addition to his in-person meetings abroad with members of the Kennedy
family, Mr. Jayson also was copied on several email exchanges with the Kennedy
Entities, some of which involved their decisions to invest. In most of these email
exchanges, Mr. Jayson did not participate in the communications, and was only
courtesy copied. Those few communications where Mr. Jayson directly provided
information about CRUPE’s business operations and financials were addressed
6
Peter Kennedy also alleges that he met Mr. Jayson for dinner in
Zurich “in early 2013,” although it is unclear if this meeting involved the CRUPE
investment. See Aplts.’ App., Vol. II, at 475.
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only to Paul Kennedy (the Florida resident). The only three communications by
Mr. Jayson involving Peter Kennedy (the Wyoming resident) are emails to Paul in
which Peter is courtesy copied: his two emails responding to Paul’s email
scheduling a call following the September 2012 meeting abroad and an email
responding to Paul’s recommendation for a potential recruiting hire in China.
C
Nearly four years after the Kennedy Entities’ initial investments, they
allegedly uncovered evidence that CRUPE’s leadership had surreptitiously
transferred CRUPE’s IP out of the company “to a Foundation established and
controlled” by Mr. Jayson and Mr. Robertson, and had overstated CRUPE’s
annual revenue by hundreds of millions of dollars. See Aplts.’ App., Vol. II,
at 267 (Paul Kennedy Decl., filed Oct. 25, 2019). By then, CRUPE was on the
verge of defaulting on its loans from the Kennedy Entities.
As part of a flurry of legal proceedings spawned by this discovery, Paul
Kennedy brought a federal lawsuit in his home state of Florida against Mr.
Robertson, his wife, Mr. Bihrer, and the entities they controlled—but, crucially,
not against Mr. Jayson—based in part upon Paul’s own personal investments in
CRUPE (the “Florida Lawsuit”). The Kennedy Entities joined Paul as plaintiffs
in the Florida Lawsuit, raising similar allegations as those in the instant case.
The Florida district court found that it had personal jurisdiction over the
defendants, based on allegations that the “[d]efendants made numerous phone
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calls and sent numerous emails, documents, sales pitches and offerings to Plaintiff
[Paul] Kennedy in Florida,” and that “[Paul] Kennedy was in Florida for many of
the Board of Directors meetings where he participated.” Aplts.’ App., Vol. III,
at 588 (S.D. Fla. Order, dated Nov. 1, 2019). It later awarded a default judgment
against the defendants for $15 million.
D
On January 31, 2019, the Kennedy Entities commenced this lawsuit against
Mr. Jayson, who had thus far avoided suit after being fired by CRUPE in 2016 for
gross negligence and breach of fiduciary duty. Specifically, the Entities aver the
offering documents that Mr. Jayson prepared contained several critical omissions
and misstatements concerning CRUPE’s corporate structure, its financial margins,
conflicts of interest within its organization, and deficiencies in the underlying
performance of its products. Furthermore, they allege that Mr. Jayson presented
false information about CRUPE’s financial performance during their meetings
with him, all while secretly helping to transfer the valuable CRUPE IP out of the
parent company’s control.
Finally, the Kennedy Entities contend that Mr. Jayson stood silent while
Mr. Robertson redirected their CRUPE investments to pay other companies that
Mr. Jayson and Mr. Robertson owned, in direct contravention of their investment
agreements. The Kennedy Entities allege that Mr. Jayson played a role in
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inducing, in total, at least ten transactions through material misrepresentations
and omissions, causing them to lose over $10 million.
Mr. Jayson filed a motion to dismiss for lack of personal jurisdiction,
which the district court granted without conducting an evidentiary hearing. It
found Mr. Jayson had not “purposefully directed” his activities toward Wyoming,
and that the Entities’ injuries did not “arise out of” any of Mr. Jayson’s forum-
directed activities. 7 Eighteen Seventy, L.P. v. Jayson, 532 F. Supp. 3d 1125,
1139–40 (D. Wyo. 2020). The Entities thus failed to meet their burden of
showing Mr. Jayson had the requisite “minimum contacts” with Wyoming. The
court granted Mr. Jayson’s motion to dismiss due to lack of personal jurisdiction,
and the Entities timely filed this appeal.
II
Before analyzing the Kennedy Entities’ specific arguments, we describe the
relevant legal principles that govern this appeal. First, we outline the applicable
standard of review. Next, we explain the steps of our personal jurisdiction
7
Mr. Jayson also had asserted that “his actions as a corporate agent [of
CRUPE] c[ould not] be attributed to him individually for purposes of the personal
jurisdiction calculus.” Eighteen Seventy, L.P. v. Jayson, 532 F. Supp. 3d 1125,
1132 (D. Wyo. 2020). The district court held that the “no imputed contacts rule
d[id] not prevent an exercise of personal jurisdiction over Mr. Jayson,” because
he was alleged to be a “‘primary participant’ in the alleged wrongdoing.” Id.
at 1133 (quoting Calder v. Jones, 465 U.S. 783, 790 (1984)). Furthermore,
because it held that Mr. Jayson lacked the requisite minimum contacts with
Wyoming, the district court found it unnecessary to address whether the fiduciary
shield doctrine protected him from suit. Id. at 1134. Mr. Jayson does not pursue
these issues in this appeal; therefore, we do not consider them further.
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inquiry. Finally, because this case requires us to evaluate whether a court’s
exercise of personal jurisdiction comports with due process in the context of
alleged tortious conduct, we briefly introduce here (and explicate further infra)
the “effects” test from the Supreme Court’s seminal decision in Calder v. Jones,
465 U.S. 783 (1984), which we use to determine whether Mr. Jayson had
sufficient minimum contacts with the forum state, Wyoming.
A
The Kennedy Entities, as plaintiffs, bear the burden of establishing personal
jurisdiction. See, e.g., XMission, L.C. v. Fluent LLC, 955 F.3d 833, 839 (10th
Cir. 2020) (“The plaintiff has the burden of establishing personal jurisdiction.”).
When, as here, the district court finds personal jurisdiction lacking based on the
complaint and affidavits, we review the court’s dismissal de novo, taking as true
all well-pleaded facts alleged in the complaint. Dudnikov, 514 F.3d at 1070(“[A]ny factual disputes in the parties’ affidavits must be resolved in plaintiffs’
favor.”). And at this early stage in the litigation, in the absence of an evidentiary
hearing, the Entities need only make a prima facie showing of personal
jurisdiction. See OMI Holdings, Inc. v. Royal Ins. Co. of Can., 149 F.3d 1086,
1091 (10th Cir. 1998) (“When a district court rules on a Fed. R. Civ. P. 12(b)(2)
motion to dismiss for lack of personal jurisdiction without holding an evidentiary
hearing . . . the plaintiff need only make a prima facie showing of personal
jurisdiction to defeat the motion.”). In other words, the plaintiff may defeat a
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motion to dismiss by presenting evidence—either uncontested allegations in its
complaint or evidence in the form of an affidavit or declaration—“that if true
would support jurisdiction over the defendant.” XMission, 955 F.3d at 839
(quoting OMI Holdings, 149 F.3d at 1091).
B
“Where a federal lawsuit is based on diversity of citizenship, the court’s
jurisdiction over a nonresident defendant is determined by the law of the forum
state.” Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011).
Ordinarily, a plaintiff seeking to establish personal jurisdiction over an out-of-
state defendant must show both that the exercise of jurisdiction is sanctioned by
the state’s long-arm statute and that it comports with the requirements of due
process under the Fourteenth Amendment. See Emps. Mut. Cas. Co. v. Bartile
Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010) (“To obtain personal
jurisdiction over a nonresident defendant in a diversity action, a plaintiff must
show that jurisdiction is legitimate under the laws of the forum state and that the
exercise of jurisdiction does not offend the due process clause of the Fourteenth
Amendment.” (quoting TH Agric. & Nutrition, LLC v. Ace Eur. Grp. Ltd., 488
F.3d 1282, 1286–87 (10th Cir. 2007))); accord Marcus Food, 671 F.3d at 1166(“The party seeking to establish personal jurisdiction over a foreign litigant must
make two showings: first, that the exercise of jurisdiction is sanctioned by the
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state’s long-arm statute; and second, that it comports with the due process
requirements of the Fourteenth Amendment.”).
Because Wyoming’s long-arm statute confers jurisdiction “on any basis not
inconsistent with the Wyoming or United States constitution,” Wyo. Stat. Ann.
§ 5-1-107(a), the “statute extends state court jurisdiction in Wyoming to the
constitutionally permissible limit.” Shanks v. Westland Equip. and Parts Co.,
668 F.2d 1165, 1167 (10th Cir. 1982). Accordingly, “the first, statutory, inquiry
effectively collapses into the second, constitutional, analysis” of whether personal
jurisdiction comports with due process. Anzures v. Flagship Rest. Grp., 819 F.3d
1277, 1279 (10th Cir. 2016) (quoting Dudnikov, 514 F.3d at 1070); accord
Rusakiewicz v. Lowe, 556 F.3d 1095, 1100 (10th Cir. 2009). In other words, the
Kennedy Entities’ ability to establish personal jurisdiction depends entirely on
whether a Wyoming court’s exercise of personal jurisdiction over Mr. Jayson
comports with due process.
Consistent with due process, a court may exercise specific personal
jurisdiction 8 over a non-resident defendant only when that defendant has the
requisite “minimum contacts” with the forum state, such that having to defend the
lawsuit there would not “offend ‘traditional notions of fair play and substantial
8
The Kennedy Entities do not contend that the Wyoming district court
had general jurisdiction over Mr. Jayson; the relevant inquiry in that context is
whether a defendant was “essentially at home” in a forum state. Ford Motor Co.
v. Mont. Eighth Jud. Dist. Ct., --- U.S. ----, 141 S. Ct. 1017, 1024 (2021) (quoting
Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915, 919 (2011)).
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justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). “Because a state’s sovereignty is
territorial in nature, a defendant’s contacts with the forum state must be sufficient
such that, notwithstanding [the defendant’s] lack of physical presence in the state,
the state’s exercise of sovereignty over [the defendant] can be described as fair
and just.” Dudnikov, 514 F.3d at 1070.
The Supreme Court has explained that these rules “derive from and reflect
two sets of values—treating defendants fairly and protecting ‘interstate
federalism.’” Ford Motor Co. v. Mont. Eighth Jud. Dist. Ct., --- U.S. ----, 141
S. Ct. 1017, 1025 (2021) (quoting World-Wide Volkswagen Corp. v. Woodson,
444 U.S. 286, 293 (1980)). A defendant thus may be subject to personal
jurisdiction when it has “‘fair warning’—[that is,] knowledge that ‘a particular
activity may subject [it] to the jurisdiction of a foreign sovereign.’” Id. (second
alteration in original) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,
472 (1985)); see also XMission, 955 F.3d at 839–40 (“[T]he contacts with the
forum State must be such that the defendant ‘should reasonably anticipate being
haled into court there.’” (quoting World-Wide Volkswagen, 444 U.S. at 297)).
Further, “States with ‘little legitimate interest’ in a suit” are not permitted to
“encroach” on sovereigns that are “more affected by the controversy.” Ford
Motor Co., 141 S. Ct. at 1025 (quoting Bristol-Myers Squibb Co. v. Super. Ct. of
Cal., --- U.S. ----, 137 S. Ct. 1773, 1780 (2017)).
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To give effect to these principles—and, in doing so, to determine whether
these requisite minimum contacts exist—we “focus[] on the nature and extent of
‘the defendant’s relationship to the forum State.’” Id. at 1024 (quoting Bristol-
Myers, 137 S. Ct. at 1779). “[T]he Supreme Court has instructed that the
‘minimum contacts’ standard requires, first, that the out-of-state defendant must
have ‘purposefully directed’ its activities at residents of the forum state, and
second, that the plaintiff’s injuries must ‘arise out of’ [a] defendant’s forum-
related activities.” Dudnikov, 514 F.3d at 1071 (quoting Burger King, 471 U.S.
at 472); accord XMission, 955 F.3d at 840.
If a court determines that the minimum contacts standard is satisfied, it
next assesses whether “exercising personal jurisdiction over defendants” would
otherwise “be consonant with traditional notions of fair play and substantial
justice,” in order to fully satisfy due process requirements. Dudnikov, 514 F.3d
at 1071 (citing Int’l Shoe Co., 326 U.S. at 316); see also OMI Holdings, 149 F.3d
at 1091 (“[I]f the defendant’s actions create sufficient minimum contacts, we
must then consider whether the exercise of personal jurisdiction over the
defendant offends ‘traditional notions of fair play and substantial justice.’”
(emphasis added) (quoting Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480
U.S. 102, 113 (1987))). Here, “[b]ecause we [ultimately] conclude that [Mr.
Jayson] do[es] not have the minimum contacts necessary to support the exercise
of specific jurisdiction over [him] in [Wyoming], we need not determine whether
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the exercise of personal jurisdiction over [Mr. Jayson] would ‘offend traditional
notions of fair play and substantial justice.’” Anzures, 819 F.3d at 1282
(quoting Int’l Shoe Co., 326 U.S. at 316).
C
To assess the merit of the Kennedy Entities’ arguments—and, more
specifically, to determine whether they have satisfied the purposeful direction
standard concerning Mr. Jayson’s conduct—we apply what is known as the
Calder “effects” test. 9 This test analyzes whether an out-of-state defendant’s
9
Although Mr. Jayson posits that we should apply a contract-based
test for personal jurisdiction because this case involves a contract dispute, see
Aplee.’s Resp. Br. at 26–27, our precedent suggests that the effects test is the
correct test to use in the context of business torts committed by an out-of-state
defendant. See, e.g., Anzures, 819 F.3d at 1280 (evaluating tort claims under the
effects test notwithstanding the parties’ contractual relationship); Niemi v.
Lasshofer, 770 F.3d 1331, 1348 (10th Cir. 2014) (same); cf. Dental Dynamics,
LLC v. Jolly Dental Grp., LLC, 946 F.3d 1223, 1229 & n.3 (10th Cir. 2020)
(reasoning that “purposeful availment” and “purposeful direction” are
interchangeable terms, while applying the effects test to tort-based claims in a
mixed tort and contract case). In any event, the Entities bear the burden of proof
on the jurisdictional question, see XMission, 955 F.3d at 839, and they have
elected to rely on the tort-based effects test on appeal, see Aplts.’ Opening Br.
at 22; see also Aplts.’ App., Vol. II, at 256–260 (Opp’n to Mot. to Dismiss, filed
Oct. 25, 2019) (repeatedly citing to effects-test cases, such as Dudnikov and
Newsome v. Gallacher, 722 F.3d 1257 (10th Cir. 2013), to support their theory of
personal jurisdiction). Accordingly, it is appropriate for us to focus on their
theory for jurisdictional relief—and also to concomitantly hold them to the
consequences of that choice. See Dudnikov, 514 F.3d at 1071 (“While we do not
imagine that Calder necessarily describes the only way to satisfy the purposeful
direction test, because plaintiffs assert it provides the key to unlocking the
courthouse door for them, we are able to limit our attention in this case to
Calder’s demands.”); cf. Raley v. Hyundai Motor Co., 642 F.3d 1271, 1275
(10th Cir. 2011) (“Where an appellant fails to lead, we have no duty to follow. It
(continued...)
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tortious conduct satisfies three elements: “(1) an intentional action; (2) expressly
aimed at the forum state; and (3) . . . knowledge that the brunt of the injury would
be felt in the forum state.” Dental Dynamics, LLC v. Jolly Dental Grp., LLC,
946 F.3d 1223, 1231 (10th Cir. 2020); see also Grynberg v. Ivanhoe Energy, Inc.,
490 F. App’x 86, 96 (10th Cir. 2012) (unpublished) (“One way to conduct [the
purposeful direction] analysis in tort cases is to consider the ‘effects test’ of
Calder v. Jones . . . .”). 10
As the proponent of jurisdiction, plaintiffs must demonstrate each element
of the effects test to satisfy the purposeful direction standard; that is, plaintiffs’
failure to establish even one of the elements will doom their showing of
purposeful direction. See Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir.
2011) (noting that the three elements “together indicate ‘purposeful direction’”);
accord Pakootas v. Teck Cominco Metals, Ltd., 905 F.3d 565, 577 (9th Cir. 2018)
(“We construe Calder as imposing three requirements . . . .”).
9
(...continued)
is the appellant’s burden, not ours, to conjure up possible theories to invoke our
legal authority to hear her appeal.”). And, limiting our focus to the effects test
permits us to avoid being distracted by the merits, or lack thereof, of other
potential theories of minimum contacts.
10
We recognize that this unpublished case is not binding on us. We
nevertheless find the case persuasive and helpful to our analysis and, therefore,
we elect to employ it here. See, e.g., United States v. Engles, 779 F.3d 1161,
1162 n.1 (10th Cir. 2015).
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With these governing legal principles in mind, we proceed to assess the
Kennedy Entities’ arguments regarding why the Wyoming federal court
purportedly erred in determining that it lacked personal jurisdiction over Mr.
Jayson.
III
On appeal, the Kennedy Entities argue that the district court had
jurisdiction over Mr. Jayson because he purposefully directed his tortious conduct
at Wyoming, thus establishing the requisite minimum contacts. They contend that
we should reverse the court’s ruling to the contrary. Further, they urge us to
complete the jurisdictional analysis by holding that the Entities’ injuries arise out
of Mr. Jayson’s contacts with Wyoming, and that the district court’s exercise of
personal jurisdiction over Mr. Jayson would not offend traditional notions of fair
play and substantial justice.
However, we cannot give the Entities what they want. Our minimum
contacts analysis in this case ends with our determination that the Entities have
not made a prima facie showing that Mr. Jayson purposefully directed his
allegedly tortious conduct at Wyoming. More specifically, we conclude that they
have not made an adequate showing that Mr. Jayson expressly aimed his conduct
at the forum state. See, e.g., Dental Dynamics, 946 F.3d at 1231–32. Not
uncommonly, our decisions have ended the Calder effects analysis after holding
that the plaintiffs have failed to meet the second, express aiming, element of the
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test. See, e.g., id. at 1232 (omitting any discussion regarding Calder’s third
prong where the plaintiff failed to show defendant had expressly aimed its
conduct at the forum); Anzures, 819 F.3d at 1281–82 (holding, as to the tort
claims, that the plaintiff failed to establish that the defendant’s conduct was
expressly aimed at the forum and effectively ending the inquiry there); see also
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 807 n.1 (9th Cir. 2004)
(noting “[b]ecause Schwarzenegger has failed to sustain his burden with respect
to the second part of the Calder effects test, we need not, and do not, reach the
third part of the test”). 11 We follow this route here.
A
The first Calder element—an “intentional action” by the
defendant—“requires little discussion.” See Newsome v. Gallacher, 722 F.3d
1257, 1268 (10th Cir. 2013). The Entities adequately alleged—as the district
court concluded—that Mr. Jayson undertook intentional tortious action. See, e.g.,
Aplts.’ App., Vol. I, ¶¶ 29–75, at 12–25 (describing Mr. Jayson’s allegedly
erroneous material statements and omissions about CRUPE to induce the Entities
11
We have repeatedly referenced Schwarzenneger as persuasive in our
own express aiming precedent. See Dudnikov, 514 F.3d at 1076 (citing to
Schwarzennegger as “[i]nformative in its contrast” and comparing
Schwarzenneger to the case before it); see also Newsome, 722 F.3d at 1268–69
(citing two Ninth Circuit cases, including Schwarzenneger, as “cases [that] help
to illustrate the contours of” the “focal point” requirement); see Grynberg, 490 F.
App’x at 98 (observing how the Dudnikov court “instructively compared two
decisions of the [Ninth Circuit],” including Schwarzenegger).
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to invest in CRUPE IP, and recounting the $10 million invested in CRUPE to the
detriment of the Entities); Eighteen Seventy, 532 F. Supp. 3d at 1138 (noting that
the Entities “generally alleg[ed] Mr. Jayson ‘stood silent’ while actions
detrimental to investors were taken and ‘failed to disclose’ certain information
material to investors”).
And although Mr. Jayson “adamantly denies the salacious allegations set
forth in the Kennedy Entities’ complaint,” he concedes that “the district court
correctly applied the standard,” that “those allegations must be considered [if they
are] plausible, non-conclusory, and non-speculative,” and that “it is unnecessary
. . . to take the Court’s time” to argue “why the Kennedy Entities cannot meet
[this] first element.” Aplee.’s Resp. Br. at 33–34. Because this first element is
easily met, we turn to the second element. See, e.g., Dudnikov, 514 F.3d at 1073(noting allegations of an intentional tortious act satisfy the first Calder element);
Newsome, 722 F.3d at 1268 (same). And that is where the Kennedy Entities
confront an insurmountable obstacle.
B
1
Under Calder’s second prong, a defendant’s allegedly tortious actions must
be “expressly aimed” at the forum state. Calder, 465 U.S. at 789. In determining
whether a defendant expressly aimed his conduct at the forum state, “a plaintiff’s
contacts with the defendant and forum” cannot “drive the jurisdictional analysis.”
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Walden v. Fiore, 571 U.S. 277, 289 (2014) (emphasis added). Rather, the forum
state must be the “focal point” of the defendant’s tortious conduct. Newsome,
722 F.3d at 1268. Stated differently, “the defendant’s conduct [must] connect[]
him to the forum in a meaningful way.” Walden, 571 U.S. at 290 (emphases
added).
Two Supreme Court decisions mark the guideposts by which we must
evaluate whether Mr. Jayson “expressly aimed” his conduct at Wyoming. The
first is Calder itself. In Calder, actress Shirley Jones sued a Florida-based editor
and writer based on an allegedly libelous article they had written in Florida about
her for the National Enquirer, which was published nationwide, including in
California. See Calder, 465 U.S. at 784–86. The writer and the editor challenged
the California court’s exercise of personal jurisdiction, emphasizing that they had
few contacts with California despite the Enquirer’s national distribution, and that
the article was written and edited in Florida, not California. See id.But the Supreme Court held that the California court could appropriately
exercise personal jurisdiction over the defendants because “their intentional, and
allegedly tortious, actions were expressly aimed at California.” Id. at 789. The
Court highlighted that “[the writer] wrote and [the editor] edited an article that
they knew would have a potentially devastating impact upon respondent [that is,
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Ms. Jones]” in California. 12 Id. at 789–90. And, in Dudnikov, we underscored
that the Calder Court’s express aiming holding rested on the fact that “the article
was about a California resident and her activities in California; [and] likewise it
was drawn from California sources and widely distributed in that state.” 514 F.3d
at 1072.
Twenty years later, the Court elaborated on the purposeful direction
requirement and, as particularly relevant here, further defined the contours of the
express aiming requirement. In Walden v. Fiore, a Georgia law enforcement
officer improperly seized almost $97,000 in gambling winnings from a couple at
the Atlanta airport as they waited to board their next flight. 571 U.S. at 279–80.
The couple, who were passing through the Atlanta airport to get to their final
destination in Nevada, later filed a tort suit in Nevada against the police officer.
Id. at 280–81.
12
Notably, in the same passage of Calder, the Court elaborated on the
point about the defendants’ knowledge of the adverse impact of their actions,
stating that they “knew that the brunt of th[e] injury would be felt by respondent
in” California, “the State in which she lives and works.” Calder, 465 U.S.
at 789–90. We recognized in Dudnikov that there “is some overlap between this
[express aiming] test and Calder’s additional requirement”—that the defendant
know that the brunt of the injury would be felt in the forum state. 514 F.3d
at 1074–75. But we stressed that “the overlap is far from complete”: specifically,
we observed that “the ‘express aiming’ test focuses more on a defendant’s
intentions—[i.e.,] where was the ‘focal point’ of its purposive efforts—while the
latter requirement concentrates on the consequences of the defendant’s
actions—[i.e.,] where was the alleged harm actually felt by the plaintiff.” Id.
at 1075. This overlap is evident in our analysis infra but we center our attention
on Mr. Jayson’s intentions with respect to contacts with the forum.
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Considering whether the Nevada federal court had personal jurisdiction
over the officer, the Supreme Court reversed the Ninth Circuit, which had held
that the district court had personal jurisdiction because the police officer had
tortiously acted with the knowledge that his conduct would affect persons with
significant Nevada connections. Id. at 282. The Court took issue with the Ninth
Circuit’s reliance on the plaintiffs’ residence and forum connections, reasoning
that “[r]ather than assessing [the officer’s] own contacts with Nevada, the Court
of Appeals looked to [the officer’s] knowledge of [the plaintiffs’] ‘strong forum
connections.’” Id. at 289 (quoting Fiore v. Walden, 688 F.3d 558, 577–79, 581
(9th Cir. 2012)). But “[t]his approach to the ‘minimum contacts’ analysis
impermissibly allows a plaintiff’s contacts with the defendant and forum to drive
the jurisdictional analysis.” Id.The Court explained that “when viewed through the proper lens—[that is,]
whether the defendant’s actions connect him to the forum—[the
defendant-officer] formed no jurisdictionally relevant contacts with Nevada.” Id.Crucially, the Court held that the officer’s “actions in Georgia did not create
sufficient contacts with Nevada simply because he allegedly directed his conduct
at plaintiffs whom he knew had Nevada connections.” Id. In the Court’s view,
“[s]uch reasoning improperly attributes a plaintiff’s forum connections to the
defendant and makes those connections ‘decisive’ in the jurisdictional analysis,”
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despite “the reality that none of [the officer’s] challenged conduct had anything to
do with Nevada itself.” Id.Calder and Walden thus provide helpful principles in assessing when it is
appropriate to exercise jurisdiction over an out-of-state defendant. On one hand,
Calder makes clear that a defendant need not be physically present in a state to
have “expressly aimed” his conduct there. See Calder, 465 U.S. at 785–86, 789
(holding a California court had personal jurisdiction over individual defendants
when the defendants had not visited the state in connection with an allegedly
defamatory article and “[we]re not responsible for the circulation of the article in
California”); see also Newsome, 722 F.3d at 1269 (holding that an Oklahoma
court had personal jurisdiction over individual defendants who had not visited the
state when they breached their fiduciary duty to a subsidiary that they knew
“operated exclusively” in Oklahoma); Dudnikov, 514 F.3d 1075–76 (holding that
a Colorado court had personal jurisdiction over a defendant despite “the lack of
defendants’ physical presence in Colorado” because they acted “with the ultimate
purpose of cancelling plaintiffs’ auction in Colorado”).
On the other hand, Walden—as well as our subsequent cases—have made
plain that a defendant’s knowledge of a plaintiff’s connection to a forum state,
without more, cannot establish express aiming towards the forum state. See
Walden, 571 U.S. at 289 (“Petitioner’s actions in Georgia did not create sufficient
contacts with Nevada simply because he allegedly directed his conduct at
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plaintiffs whom he knew had Nevada connections. Such reasoning improperly
attributes a plaintiff’s forum connections to the defendant and makes those
connections ‘decisive’ in the jurisdictional analysis.”); see also Rockwood Select
Asset Fund XI (6)-1, LLC v. Devine, Millimet & Branch, 750 F.3d 1178, 1180
(10th Cir. 2014) (“Walden teaches that personal jurisdiction cannot be based on
interaction with a plaintiff known to bear a strong connection to the forum
state.”).
2
Mr. Jayson’s nexus to the forum state, Wyoming, rests between the points
on the continuum that Calder and Walden mark. 13 The Kennedy Entities contend
that Mr. Jayson expressly aimed his conduct at Wyoming because his connections
go well beyond the “single out-of-forum event” described in Walden. Aplts.’
Opening Br. at 31. They argue that Mr. Jayson’s “tortious conduct involved years
of forum-directed investment cultivation, his negotiation and approval of loans
(including one referenced during a board meeting as ‘Eighteen Seventy,
Wyoming’), as well as his review and/or signing of documents (including nearly
13
Though the district court here concluded that Walden was
“dispositive” in establishing that it lacked personal jurisdiction over Mr. Jayson,
see Eighteen Seventy, 532 F. Supp. 3d at 1138, we do not believe that the facts of
this case militate as strongly as they did in Walden against a finding of personal
jurisdiction. Nevertheless, Walden is quite instructive in answering the personal
jurisdiction question before us. And, ultimately, our more restrained view
regarding Walden’s impact on this case does not prevent us from upholding the
district court’s judgment dismissing this action against Mr. Jayson for lack of
personal jurisdiction.
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half a dozen contracts) in which [the Entities’] Big Horn, Wyoming address was
prominently and repeatedly displayed.” Id. at 34.
However, Mr. Jayson responds that the Entities have failed to meet the
“express aiming” standard, because “they identify conduct that is tenuously
connected to Wyoming.” Aplee.’s Resp. Br. at 36. He contends that “[i]t cannot
reasonably be considered that [his] work in Switzerland with CRUPE on the
Information Memorandum [i.e., Confidential Memorandum], the Investment
Agreement, and other agreements,” some of which were prepared “before the
Kennedy Entities came on the scene” could have been done “with Wyoming as his
focal point.” Id. He also takes issue with “the Kennedy Entities[’] attempt to
conflate [his] . . . actions with those of Mr. Robertson and Mr. Bihrer,” whom he
asserts had much more substantial contact with the Kennedy Entities. Id. at 37.
In substance, we believe that Mr. Jayson has the better of this dispute.
Although the Kennedy Entities argue Walden is distinguishable because “the
underlying and alleged wrongful conduct in this case was, from the beginning, of
direct consequence to the plaintiffs in the forum,” Aplts.’ Opening Br. at 31
(emphasis added), we believe that the Entities’ express aiming argument places
undue emphasis on the fact that their principal place of business is in the forum.
Crucially, “Calder made clear that mere injury to a forum resident is not a
sufficient connection to the forum.” Walden, 571 U.S. at 290. As Walden further
reasoned, “the mere fact that [the defendant’s] conduct affected plaintiffs with
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connections to the forum State does not suffice to authorize jurisdiction.” Id.
at 291; see Rush v. Savchuk, 444 U.S. 320, 332 (1980) (noting that “plaintiff’s
contacts with the forum [could not be] decisive in determining whether the
defendant’s due process rights are violated”).
Finding clear guidance regarding the express aiming factor in the Supreme
Court’s seminal case, Calder, our precedent has zeroed in on whether “the forum
state itself . . . [is] the ‘focal point of the tort.’” Dudnikov, 514 F.3d at 1074 &
n.9 (quoting Far W. Cap., Inc. v. Towne, 46 F.3d 1071, 1080 (10th Cir. 1995));
accord Anzures, 819 F.3d at 1281–82; Newsome, 722 F.3d at 1268; see also
Calder, 465 U.S. at 789 (noting in finding personal jurisdiction in plaintiff’s libel
action, that “California is the focal point both of the story and of the harm
suffered”). In other words, we have centered the express aiming analysis on
whether the defendant’s allegedly tortious conduct was focused on or directed at
the forum state—not, as the Entities would seemingly have it, on whether the
defendant’s wrongful conduct was focused on or directed at the interests of
plaintiffs who reside in or otherwise have significant connections to the forum
state.
As a consequence of our “somewhat . . . restrictive approach” regarding
this focal point analysis, to the extent practicable, we ensure, as due process
demands, that “an out-of-state defendant is not bound to appear to account for
merely ‘random, fortuitous, or attenuated contacts’ with the forum state.”
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Dudnikov, 514 F.3d at 1071, 1074 n.9 (quoting Burger King, 471 U.S. at 475).
And even the Entities do not question the importance of this objective. See
Aplts.’ Opening Br. at 28 (noting that “the overriding ‘purposeful direction’
inquiry . . . [is] whether [Mr.] Jayson is being called ‘to account for merely
random, fortuitous, or attenuated contacts with the forum state’” (quoting
Dudnikov, 514 F.3d at 1071)).
The problem for the Entities, however, is that, based on the record
evidence, we cannot help but conclude that Wyoming was not the focal point for
Mr. Jayson’s allegedly tortious conduct and, relatedly, that his personal dealings
with the Entities were far too attenuated to warrant the exercise of personal
jurisdiction over him. Consequently, the Entities are unable to make a sufficient
showing of the express aiming requirement.
What follows is our explication of the foundation for this conclusion. First,
we discuss some of our key cases that illustrate the circumstances in which we
have determined—expressly or in so many words—that the forum state was the
focal point for the defendants’ allegedly tortious conduct, as well as cases in
which the proof of such a focal point was wanting. And then we explain why the
legal principles and facts of these cases make clear that Mr. Jayson’s allegedly
tortious conduct does not provide an adequate foundation for the Entities to
satisfy the express aiming requirement.
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a
In Dudnikov, we held that the federal district court in Colorado had
personal jurisdiction over two defendants—a British company and its
Connecticut-based corporate agent—that halted the plaintiffs’ Colorado business
from hosting an eBay auction of its fabric prints online. See 514 F.3d at 1082.
The defendants—alleged owners of the copyright of a work that the plaintiffs’
business was reproducing—filed a notice of claimed infringement with eBay
against the business. See id. at 1069. Their actions led eBay to halt the Colorado
company’s auction. See id. One of the owners of the Colorado business
contacted the defendants requesting that they withdraw the notice—explaining
that she made her “living” on eBay and that the notice “put[] [her Colorado]
business in danger of going under.” Id. In response, the defendants threatened to
sue if the auction were reinstated. See id. As relevant here, we held that the
defendants—even though acting through their third-party contact with eBay—had
targeted Colorado because their “express aim in acting was to halt a Colorado-
based sale by a Colorado resident.” Id. at 1076. We noted that, as alleged, the
defendants “intended their extra-forum conduct to reach and affect plaintiffs’
business operations in Colorado.” Id.Dudnikov thus provides useful guidance regarding the circumstances under
which it may be said that the “focal point” of a defendant’s tortious conduct was
the forum state. There, the defendants had notice that the plaintiffs’ business
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activities related to the defendants’ alleged infringement claim—that is, selling
crafts in online auctions—were anchored in the forum state. See id. at 1068.
And, yet, they acted with the allegedly tortious intent to disrupt or impair those
forum-based activities. See id. at 1076.
These circumstances stand in stark contrast to those where we effectively
determined that the forum state was not the focal point of the defendants’
wrongful conduct. 14 For example, in Anzures, we held that a Colorado plaintiff’s
fraud and misrepresentation claims against two out-of-state defendants could not
satisfy the express aiming element when the defendants never targeted Colorado.
14
The Ninth Circuit’s decision in Schwarzenegger also helps to
illustrate the circumstances where the forum state reasonably cannot be said to be
the focal point of the defendant’s wrongful conduct. See 374 F.3d at 807. As we
described the case in Dudnikov, in Schwarzenegger, an Ohio car dealership used a
photograph of Arnold Schwarzenegger—a well-known actor and star of The
Terminator movie—in its local advertisements, without his permission, to
encourage potential buyers to “terminate” their current car lease and acquire a
new vehicle from the dealership. Dudnikov, 514 F.3d at 1076. Mr.
Schwarzenegger sued the Ohio car dealership in California for the unauthorized
use of his photograph. Id. But “the Ninth Circuit refused jurisdiction, stressing
that, unlike the defendants in Calder, the car dealership’s advertisements were not
‘expressly aimed’ at Mr. Schwarzenegger in the forum state (California).” Id.(quoting Schwarzenegger, 374 F.3d at 807). In Dudnikov, we effectively
interpreted Schwarzenegger as involving insufficient “focal point” evidence
because “[w]hile [the dealership owner] perhaps knew Mr. Schwarzenegger lived
in California, this was insufficient to convey jurisdiction there because the
intentions behind his advertisement w[ere] solely to entice local market Ohioans,
not Californians, ‘to buy or lease cars from [the dealership owner].’” Id. That is,
the dealership owner’s intentions were to influence the market conduct of
Ohioans—not the conduct of those in California, the forum state; it was of no
major significance that the dealer arguably knew that the photographic subject of
his advertisement, Mr. Schwarzenegger, resided in California.
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See Anzures, 819 F.3d at 1281. The plaintiff had entered into a business venture
with two Nebraska-based defendants, forming a Nevada LLC with a principal
place of business in Nebraska. Id. at 1278–79. The relationship later soured, and
the plaintiff sued the defendants in Colorado for allegedly attempting to
“squeeze” him out of the company. Id. at 1279.
Relying on Walden—and distinguishing Calder and Dudnikov—we
concluded that the Colorado court lacked personal jurisdiction over the
defendants because “the facts of record d[id] not show that either defendant
expressly aimed any conduct at Colorado” as part of the torts in question, which
involved “the formation . . . or ownership structure” of the company, “or the
reduction of [the plaintiff’s] compensation.” Id. at 1281. Because the torts
lacked a “focal point” in Colorado, “the fact that [the plaintiff] was affected in
Colorado (because he resides there) [was] insufficient to authorize personal
jurisdiction over defendants.” Id. at 1281–82.
Importantly, our resolution of the express aiming question in one
case—Newsome—helps to demarcate the circumstances where we have
determined, on the one hand, that the forum state was the “focal point” of
defendants’ tortious conduct from those, on the other hand, where we have
reached the opposite determination. That is because, in Newsome, we had the
occasion to determine that the district court properly exercised jurisdiction over
some defendants but not others: specifically, we held that certain Canadian
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corporate executives expressly aimed their tortious behavior at a forum but a
Canadian law firm did not.
In particular, we addressed whether a Canadian-owned natural gas
company, Mahalo USA, which was “operating exclusively in Oklahoma[,] [could]
sue the corporation’s Canadian officers and directors in Oklahoma.” Newsome,
722 F.3d at 1261 (emphasis added). The Canadian officers and directors sat on
the Board of Mahalo USA’s Canadian parent, and some of them were also
directors or officers of Mahalo USA itself. They were accused of “conspir[ing] to
maximize their own profits by shifting unsustainable debt to” the Oklahoma-based
corporation—thereby, breaching their fiduciary duties. Id. at 1262. The
individual defendants—several of whom had never traveled to Oklahoma—argued
that they could not be subject to the personal jurisdiction of the Oklahoma court.
See id. at 1263. We determined otherwise, asserting that “the individual
defendants do not contest that they knew [the corporation] operated exclusively in
Oklahoma, making Oklahoma the focal point of any tort against [the corporation]
they may have committed.” Id. at 1269 (emphasis added). Consequently, we
reasoned that the individual defendants had “expressly aimed” their actions at
Oklahoma when they allegedly breached fiduciary duties towards a corporation
that they knew was exclusively operating its related business in Oklahoma. Id.
It bears underscoring that a central factor in our express aiming analysis in
Newsome was not simply that the company had its headquarters in Oklahoma;
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instead, it was the fact that the company exclusively operated its business
activities related to the Canadian parent in Oklahoma. From this, we could
reasonably infer that, when the defendants allegedly intended to engage in
wrongful conduct that would be harmful to the company’s business operations
related to the Canadian parent, they necessarily intended for the focal point of
their wrongful conduct to be Oklahoma. In other words, as in Dudnikov, we
determined that a group of defendants had notice that the harmed business’s
activities implicating the defendants were centered in the forum state. See id.
at 1262–63. Yet, they nevertheless acted with allegedly tortious intent to alter or
disrupt those forum-based activities. See id. at 1268–69 (holding the defendants
intended to transfer debt to a company that exclusively operated its business
activities related to the defendants in Oklahoma).
Significantly, we reached the opposite conclusion as to another defendant
in Newsome. We distinguished the corporate officers who made Oklahoma the
focal point of their tortious conduct from the Canadian law firm that had
facilitated the debt-shifting transaction. In particular, we observed that “an out-
of-state attorney working from out-of-state on an out-of-state matter does not
purposefully avail himself of the client’s home forum’s laws and privileges, at
least not without some evidence that the attorney reached out to the client’s home
forum to solicit the client’s business.” Id. at 1280–81. And we acknowledged
that the Canadian law firm defendant “never reached out to Mahalo USA in
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Oklahoma to solicit its business, but instead . . . represent[ed] its Canadian parent
company in Canada.” Id. at 1281. We noted that, as alleged, the law firm’s sole
tortious acts had been to “‘facilitat[e]’ the placement of liens on Oklahoma
property and receiv[e] payments from Mahalo USA’s Oklahoma bank accounts.”
Id. This was not enough to satisfy the express aiming requirement.
We held that “the firm did not purposefully direct its efforts at Mahalo
USA in Oklahoma.” Id. Significantly, we should highlight that this is not a
situation where the law firm’s interactions with Mahalo USA’s affairs and the
forum were non-existent; indeed, the firm’s actions helped to facilitate the
wrongful conduct of the Canadian corporate officers and directors as to which the
court did have personal jurisdiction. However, we effectively determined that the
law firm’s contacts with the forum were too attenuated to support an exercise of
personal jurisdiction. And we tacitly implemented a vision of the express aiming
requirement that was substantially congruent with the one adopted a year later by
the Supreme Court in Walden—which, as we have noted, reasoned that “the mere
fact that [the defendant’s] conduct affected plaintiffs with connections to the
forum State does not suffice to authorize jurisdiction.” 571 U.S. at 291.
b
Guided by the legal principles and illustrative facts of the foregoing
cases—as augmented by our other relevant decisions—we conclude that the focal
point of Mr. Jayson’s allegedly tortious acts clearly was not Wyoming and,
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relatedly, that any contacts by Mr. Jayson with Wyoming were too attenuated to
allow a court to exercise jurisdiction over him. Accordingly, we conclude that the
Entities cannot satisfy the express aiming requirement.
The Kennedy Entities’ complaint asserts that Mr. Jayson, through his work
for CRUPE, “transacted business within the United States and within the State of
Wyoming . . . that caused harm to Plaintiffs” by “making continuous securities
offerings in the United States and in the State of Wyoming . . . [which] were sold
to investors in Wyoming and elsewhere in the United States.” Aplts.’ App.,
Vol. I, ¶¶ 20–21, at 9 (emphasis added). Indeed, CRUPE solicited investors
worldwide. See id., Vol. II, at 381 (showing investors located in St. Lucia, the
British Virgin Islands, Hong Kong, Switzerland, the United Kingdom, and
Singapore).
Even giving full weight to the Kennedy Entities’ contention that they “were
CRUPE’s primary funder and repeat lender,” Aplts.’ Reply Br. at 23, it is clear to
us that Mr. Jayson’s purported aim was to encourage and induce (allegedly
through deceit) sustained investments in his foreign company through, in essence,
geographically undirected solicitations; the fact that the Kennedy Entities were
especially taken with CRUPE’s business plan and invested more than others did
not alter the nature of Mr. Jayson’s intentions. He did not intend for Wyoming to
be the focal point of his allegedly tortious conduct. Indeed, there was nothing
unique about the Kennedy Entities, much less Wyoming, that led Mr. Jayson to
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prepare fraudulent materials or withhold information about CRUPE. Thus, “[t]he
jurisdictional analysis of [the Entities’] tort claims is distinguishable from that in
Calder and Dudnikov, . . . [because i]n each of those cases, it was not only
important that the plaintiff felt the effects of the defendants’ actions in the forum
state but that the defendants’ actions targeted the forum state.” Anzures, 819 F.3d
at 1281.
And the lack of evidence of a meaningful nexus between the Kennedy
Entities’ CRUPE-related business and the forum state of Wyoming only serves to
bolster our conclusion that Mr. Jayson could not have expressly aimed his
allegedly wrongful conduct at Wyoming. Despite the Kennedy Entities’
assertions that the “business end of the transactions,” took place in Wyoming,
Aplts.’ Opening Br. at 31 (quoting Benton v. Cameco Corp., 375 F.3d 1070, 1077
(10th Cir. 2004)), and the undisputed fact that their principal place of business
was Wyoming, there are no averments that the Kennedy Entities’ CRUPE
investments had any meaningful connection to their business activities in
Wyoming—much less averments permitting a plausible inference that Mr. Jayson
would have been aware of any such Wyoming-CRUPE connections when he
committed his tortious acts. Indeed, the record is silent about whether the
Kennedy Entities even had meaningful business activities in Wyoming—let alone
business activities with a meaningful connection to their CRUPE investments. Cf.
Far W. Cap., 46 F.3d at 1075–76 (rejecting contention that plaintiff’s
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establishment of an escrow account in Utah “is sufficient to provide minimum
contacts” because “defendants could claim rights to funds in the Utah account and
because they received royalties from this account” given that “at the time of the
negotiations, there is no evidence that defendants even knew the account would
be located in Utah” and therefore there was “no evidence that defendants
purposefully availed themselves of Utah law by drawing royalties from the
account”).
In other words, there are no averments from which a reasonable inference
could be drawn that, when Mr. Jayson allegedly sought through deceit to induce
the Kennedy Entities to invest in CRUPE and its subsidiaries, he necessarily
intended that his actions would affect any business operations of the Kennedy
Entities in Wyoming with any significant connection to, or relationship with,
CRUPE. See, e.g., Niemi v. Lasshofer, 770 F.3d 1331, 1348–49 (10th Cir. 2014);
Dudnikov, 514 F.3d at 1076. Stated otherwise, the record certainly does not
permit a court to form a reasonable inference that Mr. Jayson knew about any
such CRUPE-related business activities of the Kennedy Entities in
Wyoming—much less harbored the intent to direct his wrongful conduct to
Wyoming to adversely impact or disrupt such activities.
In addition to the contrast that Dudnikov and Newsome draw on this score,
the circumstances of this case are markedly distinct from those in Niemi v.
Lasshofer, where we concluded that the court properly exercised personal
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jurisdiction over the defendants. In Niemi, we held that a court in the forum state,
Colorado, had personal jurisdiction over an individual and his affiliated
companies that allegedly “perpetrated a fraudulent financing scheme that caused
the collapse of [p]laintiffs’ large-scale real estate development project in
Breckenridge, Colorado.” 770 F.3d at 1337. We determined that the fraudulent
scheme “was expressly aimed at Colorado” because the defendants “knew
unquestionably” that they would be “participat[ing] in loans to entities in
Colorado for the purpose of developing a resort at Breckenridge, Colorado.” Id.
at 1348–49. Although we recognized that the defendants knew that two of the
plaintiffs were Colorado residents, like the district court, we concentrated in our
jurisdictional analysis on “the project being in Colorado,” and the defendants’
understanding that “the loan funds were to be extended to and used in Colorado”
and “the hardship being caused by the delay in the loan funding.” Id. at 1349. In
this regard, Niemi’s analysis is entirely compatible with Dudnikov, 514 F.3d
at 1076, and Newsome, 722 F.3d at 1269, and the Supreme Court precedent that
they rely on. And its analysis underscores why it cannot be reasonably said that
Mr. Jayson’s allegedly tortious activities were expressly aimed at the forum state,
Wyoming, when there is no meaningful evidence that Mr. Jayson was aware that
his allegedly wrongful conduct would adversely impact or disrupt the Kennedy
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Entities’ business activities with any significant connection to CRUPE in
Wyoming. 15
Indeed, cases from our sister circuits involving investment-related personal
jurisdiction issues apply, at least tacitly, similar reasoning, in that they zero in on
whether the tortious activity targets investments in a forum state—thus making
the forum state the focal point of the tortious activity. See Kaliannan v. Liang,
2 F.4th 727, 734 (8th Cir. 2021) (holding that defendants had sufficiently targeted
North Dakota to establish personal jurisdiction, despite their meetings with
plaintiffs occurring outside of the state, where “the communications—and
‘investments’ themselves—still concerned North Dakota properties” (emphasis
added)), cert denied, --- U.S. ----, 142 S. Ct. 758 (2022); cf. SPV Osus Ltd. v.
UBS AG, 882 F.3d 333, 345 (2d Cir. 2018) (holding that “a handful of
communications and transfers of funds” between a plaintiff investor and
defendant investment fund were “insufficient to allow the exercise of specific
personal jurisdiction” because “‘communications with and payments to New York
merely to ensure compliance with contract terms negotiated and executed outside
of New York do not “project” a defendant into the state sufficiently to confer’
15
See also Far W. Cap., 46 F.3d at 1080 (where, inter alia, “the most
important negotiations took place in Nevada, and the enterprise was designed to
use Nevada resources to supply power to a Nevada utility,” noting that “[u]nlike
Calder, . . . the focal point of this relationship was Nevada rather than Utah . . .
[and] there is no indication that Utah had anything but a fortuitous role in the
parties’ past dealing or would have any role in their continuing relationship”
(citation omitted)).
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specific jurisdiction over foreign defendants” (quoting Hau Yin To v. HSBC
Holdings PLC, No. 15-cv-3590, 2017 WL 816136, at *5 (S.D.N.Y. Mar. 1, 2017)
(unpublished))).
To be sure, the Kennedy Entities seem to argue that we should infer that
Mr. Jayson targeted Wyoming due to his sustained role in “prepar[ing] numerous
financial documents that he himself either delivered or knew would be delivered
to the Wyoming Entities with the goal of soliciting their funds.” Aplts.’ Reply
Br. at 15. They contend that his actions—which purportedly were “far greater in
number” than those found to establish personal jurisdiction in Newsome and
Dudnikov and “spann[ed] a period of years”—were “conducted with the purpose
of directly impacting a forum-state business.” Id. at 23. More specifically, the
Entities focus on Mr. Jayson’s work in Switzerland with CRUPE on the
Confidential Memorandum, the Investment Agreement, and other documents.
They suggest that Mr. Jayson purposefully directed his activities towards
Wyoming because he filled out forms that listed the Entities’ physical Wyoming
address, and knew that two of its partners were located in Wyoming. See, e.g.,
Aplts.’ App., Vol. I, ¶ 28, at 12 (“Accordingly, [Mr. Jayson] purposefully directed
activity toward Wyoming through substantial and knowing contacts with
Wyoming, the headquarters of . . . Eighteen Seventy and related entity the
[Foundation] . . . .”).
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However, this argument does not dissuade us from our belief that any
contacts by Mr. Jayson with Wyoming do not satisfy the express aiming
requirement and, relatedly, were too attenuated to allow a court to properly
exercise jurisdiction over him. Our decision in Rockwood Select especially
hammers this point home. In Rockwood Select, we considered whether a Utah
court could exercise personal jurisdiction over the New Hampshire law firm
defendant where the plaintiff “informed [the law firm] that it was a limited
liability company organized under Utah law,” the law firm addressed an opinion
letter to the plaintiff at a Utah location, and the plaintiff “relied on the opinion
letter while in Utah and suffered injury there.” 750 F.3d at 1180. We held that
these connections were insufficient to establish personal jurisdiction over the law
firm. See id.
First, we noted that under Walden, the plaintiff’s “reliance on its own Utah
connections [wa]s misguided,” and we specifically rejected the plaintiff’s
argument that the law firm’s “decision to address [an] opinion letter to . . . a Utah
address” tilted the balance in favor of a finding of personal jurisdiction. Id.
at 1180–81. We highlighted in this discussion our earlier decision in Trierweiler
v. Croxton & Trench Holding Corp., 90 F.3d 1523 (10th Cir. 1996). In
Trierweiler, we held that the defendant lawyer “could not have reasonably
foreseen being subjected to . . . jurisdiction” in the forum simply by preparing and
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sending an opinion letter that turned up in the hands of the plaintiff in the forum.
Id. at 1534.
We rejected the effort of the Rockwood Select plaintiff to distinguish
Trierweiler on the ground that it was clear in its lawsuit that the lawyer defendant
had addressed the opinion letter to it in Utah (the forum state), while the same
could not be said for the defendant lawyer in Trierweiler. Rockwood Select, 750
F.3d at 1181 & n.2. We described this “distinction” as “immaterial” because
“[r]egardless of how the opinion letter was addressed in Trierweiler, the
plaintiff’s allegation was that the letter was going to end up” in the “forum state”
and the “law firm knew that.” Id. at 1181 (emphasis added). And just as those
circumstances were not enough of a hook for personal jurisdiction in Trierweiler,
the Rockwood Select panel reasoned that it was not enough in the case before it
that the defendant addressed the opinion letter to a location in the forum state. Id.
at 1181–82. Further, the panel stressed that the plaintiff’s “strong connection to
Utah,” the forum state, could not drive the jurisdictional analysis and shape our
judgment regarding whether the defendant’s activities were expressly aimed at the
forum state. Id. at 1182. As in Rockwood Select, Mr. Jayson’s acts in preparing
and signing documents bearing the Kennedy Entities’ Wyoming address and even
his knowledge that the documents would end up in Wyoming, standing alone,
signifies little in the express aiming analysis.
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The Kennedy Entities attempt to bolster their proof of Mr. Jayson’s
connection to Wyoming with allegations of CRUPE’s contacts with Peter and
Paul Kennedy, which were allegedly aimed at inducing them to invest—including
allegations regarding meetings abroad, phone calls, and exchanged emails. See
Aplts.’ Opening Br. at 6 (alleging CRUPE’s attorney delivered a Confidential
Memorandum “directly to Eighteen Seventy in Wyoming by email to Peter and
Paul Kennedy”); id. at 7 (noting that CRUPE’s attorney “sent the Investment
Agreement directly to Eighteen Seventy in Wyoming by email addressed to Peter
and Paul Kennedy (and no other email recipient) with [Mr.] Robertson [courtesy
copied]”). But this line of argument conflates the activities of other CRUPE
executives with the activities of Mr. Jayson, individually. As such, it implicates
little of relevance to our inquiry, which is centered on whether the personal
conduct of Mr. Jayson was sufficient to establish express aiming.
To this point, the Kennedy Entities direct us to multiple emails from
CRUPE that reference Wyoming, but Mr. Jayson is merely copied or entirely
absent from several of these communications. See id. at 11 (describing an email
from Mr. Robertson without Mr. Jayson copied); id. at 14 (describing an email to
Mr. Bihrer that was forwarded to Mr. Jayson). Two other exchanges involved
only Paul, the chair of CRUPE’s board, who was based in Florida, not Wyoming.
Id. at 12, 16–17. The sole email exchanges in the record in which Mr. Jayson
emailed someone located in Wyoming consisted of emails responding to outreach
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from Paul (the Florida resident) and copying Peter (the Wyoming resident): the
first two emails indicating that Mr. Jayson could speak on the phone “Thursday
. . . anytime U.S. time,” Aplts.’ App., Vol. II, at 483–85, and a third thanking
Paul for recommending a potential recruiting hire in China, see id. at 481–82
(Email Exchange, dated Aug. 14, 2014). 16 The Kennedy Entities also point to a
handful of Mr. Jayson’s face-to-face meetings with Peter and Paul. But, notably,
these meetings did not even take place in the United States—much less Wyoming.
They were in Hong Kong and Switzerland. Aplts.’ Opening Br. at 8–9, 15.
Considering the full picture, then, all the Entities can point to in attempting
to forge a connection between Mr. Jayson and the forum is the fact that Mr.
Jayson sent three emails copying someone in Wyoming and several other emails
to a member of one of the Kennedy Entities who resided in Florida (Paul
16
In seeking to establish Mr. Jayson’s forum contacts, the Kennedy
Entities also reference an email signed “Stuart [Robertson] and Richard [Jayson]”
sent to Paul and Peter Kennedy discussing CRUPE’s financial performance.
Aplts.’ Reply Br. at 12 (second alteration in original). Although Mr. Jayson’s
name is included in the signature line of this message, we believe that the most
reasonable conclusion to reach from the contents of the email—which was sent
from Stuart Robertson’s email address and copied Mr. Jayson and mentioned him
in the third-person in the body of the email—is that Stuart Robertson was actually
the sole sender of the email and was not joined in sending it by Mr. Jayson. See
Aplts.’ App., Vol. II, at 511–12 (Email Exchange, dated May 13, 2014)
(mentioning “Richard [Jayson] and I” in the first line of the email). But even
if—under a generous application of our standard of review—we were to view this
email as another email message from Mr. Jayson, it would not alter our analysis.
Like the other three emails in question, this email is addressed to Paul Kennedy
(the Florida resident) with Peter Kennedy (the Wyoming resident) copied. And,
like the others, this email contains no indication that Wyoming was a focal point
of Mr. Jayson’s conduct.
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Kennedy), and met with an operator of the Kennedy Entities who resided in
Wyoming (Peter Kennedy) in foreign countries over the course of an alleged
three-year relationship. These contacts simply are not enough: “the forum state
itself must be the ‘focal point of the tort.’” Dudnikov, 514 F.3d at 1074 n.9
(quoting Far W. Cap., 46 F.3d at 1080). And were a court to rely on them in
asserting personal jurisdiction over Mr. Jayson, it would be improperly obliging
him “to appear to account for merely ‘random, fortuitous, or attenuated contacts’
with the forum state” in contravention of due process. Id. at 1071 (quoting
Burger King, 471 U.S. at 475). Notwithstanding the degree of connection that
other members of CRUPE may have had with the Kennedy Entities—and we
express no opinion on the jurisdictional import of those contacts—Mr. Jayson
cannot be said to have made Wyoming the focal point of his allegedly tortious
conduct.
In sum, we should not “attribute[]” the Kennedy Entities’ connections to
the forum—however strong they may be—to Mr. Jayson and allow them to dictate
the jurisdictional analysis. Walden, 571 U.S. at 289; accord Rockwood Select,
750 F.3d at 1180. Here, we conclude that the forum state, Wyoming, was not the
focal point of Mr. Jayson’s allegedly tortious acts—despite that state being the
principal place of business of the Kennedy Entities. And, relatedly, Mr. Jayson’s
contacts with the forum were too attenuated to allow a court to properly exercise
jurisdiction over him. Accordingly, the Kennedy Entities cannot satisfy the
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second prong of the Calder “effects test”—the express aiming requirement. And
this failure to demonstrate express aiming, standing alone, is fatal to the Kennedy
Entities’ jurisdictional cause: they cannot show that Mr. Jayson purposefully
directed his allegedly tortious activity at the forum state, Wyoming.
Consequently, the district court correctly determined that it lacked personal
jurisdiction over Mr. Jayson.
IV
For the foregoing reasons, we AFFIRM the district court’s judgment
dismissing the Kennedy Entities’ lawsuit for lack of personal jurisdiction.
49