Jerri Jones v. Artists Rights Enforcement ( 2019 )

Case: 19-30374 Document: 00515167911 Page: 1 Date Filed: 10/22/2019
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 19-30374 October 22, 2019
Summary Calendar
Lyle W. Cayce
Clerk
JERRI JONES,
Plaintiff - Appellant
v.
ARTISTS RIGHTS ENFORCEMENT CORPORATION,
Defendant - Appellee
Appeal from the United States District Court
for the Eastern District of Louisiana
USDC 2:19-CV-505
Before KING, GRAVES, and WILLETT, Circuit Judges.
PER CURIAM:*
Jerri Jones appeals the dismissal of her lawsuit arising from a music-
royalty dispute. Jones asserts that the district court erred in concluding that
it lacked personal jurisdiction over Artists Rights Enforcement Corporation.
For the following reasons, we AFFIRM the district court’s decision that it
lacked jurisdiction.
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 19-30374 Document: 00515167911 Page: 2 Date Filed: 10/22/2019
No. 19-30374
I.
Joan Marie Johnson was a member of the The Dixie Cups, a music group
based in Louisiana, and whose debut single, “Chapel of Love,” reached number
one on the Billboard Hot 100 Chart in June 1964. In 1984, Johnson entered
into a contract with the Artist Rights Enforcement Corporation (“AREC”) to
help collect Johnson’s music royalties. In return, AREC would keep fifty
percent of the royalties it collected. Johnson passed away in 2016 and
bequeathed her music royalties to her niece and goddaughter, Jerri Jones.
As relevant here, AREC continued to collect music royalties following
Johnson’s death. Jones asserts that Johnson’s death dissolved AREC’s
contractual right to collect royalties and filed suit in the Eastern District of
Louisiana. AREC filed a motion to dismiss for lack of personal jurisdiction,
arguing that AREC is a New York corporation that lacks sufficient minimum
contacts with the State of Louisiana. The district court agreed, finding that
neither a contractual relationship nor the scant communications between
Johnson and AREC were sufficient to establish personal jurisdiction. Jones
now appeals.
II.
We review a district court’s determination that it lacks personal
jurisdiction de novo. Pervasive Software, Inc. v. Lexware GmbH, 688 F.3d 214,
219 (5th Cir. 2012). The party seeking jurisdiction bears the burden of proof
but must only present a prima facie case. Id. To determine whether a prima
facie case exists, we accept the plaintiff’s “uncontroverted allegations” as true
and resolve all conflicts of “[jurisdictional] facts contained in the parties’
affidavits and other documentation” in the plaintiff’s favor. Freudensprung v.
Offshore Tech. Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004) (alteration in
original) (citation omitted).
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III.
A federal court sitting in diversity may exercise personal jurisdiction
only to the extent permitted by the long-arm statute of the state in which it
sits and the Fourteenth Amendment’s due process clause. Paz v. Brush
Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006). To comport with
due process, the defendant must have “establish[ed] minimum contacts with
the forum state,” and the exercise of jurisdiction must “not offend traditional
notions of fair play and substantial justice.” Walk Haydel & Assocs., Inc. v.
Coastal Power Prod. Co., 517 F.3d 235, 243 (5th Cir. 2008) (quoting Panda
Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 867 (5th Cir.
2001)).
Personal jurisdiction may be established through either specific or
general jurisdiction. Daimler AG v. Bauman, 571 U.S. 117, 127-28 (2014). This
court applies a three-step analysis to determine whether specific jurisdiction
exists:
(1) whether the defendant has minimum contacts with the forum
state, i.e., whether it purposely directed its activities toward the
forum state or purposefully availed itself of the privileges of
conducting activities there; (2) whether the plaintiff's cause of
action arises out of or results from the defendant’s forum-related
contacts; and (3) whether the exercise of personal jurisdiction is
fair and reasonable.
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)
(quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th
Cir. 2002)). By contrast, to establish general jurisdiction over a corporation,
the forum state must be its place of incorporation or primary place of business.
See Daimler, 571 U.S. at 137-38.
Jones asserts two theories on appeal for asserting personal jurisdiction
over AREC. First, Jones asserts that Johnson’s prior business and contractual
relationship with AREC establishes specific jurisdiction in Louisiana. Second,
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Jones alleges that AREC committed intentionally tortious activity that
independently creates specific jurisdiction. Although Jones does not specify the
alleged tort on appeal, a conversion claim was included in the original
complaint. We conclude that neither theory establishes personal jurisdiction.
A.
In the context of business relationships, it is “well settled that ‘an
individual’s contract with an out-of-state party alone [cannot] automatically
establish sufficient minimum contacts in the other party’s home forum.’”
Pervasive Software, 688 F.3d at 222-23 (alteration in original) (quoting Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)). Similarly, “[a]n exchange
of communications in the course of developing and carrying out a contract also
does not, by itself, constitute the required purposeful availment of the benefits
and protections of [a forum state’s] law.” Moncrief Oil Int’l Inc. v. OAO
Gazprom, 481 F.3d 309, 312 (5th Cir. 2007); see also Wien Air Alaska, Inc. v.
Brandt, 195 F.3d 208, 213 (5th Cir. 1999).
Instead, the Supreme Court has emphasized a “highly realistic
approach” rather than “mechanical tests” or “theories of the place of
contracting or of performance” to determine whether personal jurisdiction
exists. Pervasive Software, 688 F.3d at 223 (internal quotation marks omitted)
(quoting Burger King, 471 U.S. at 478-79). This approach considers “prior
negotiations and contemplated future consequences, along with the terms of
the contract and the parties’ actual course of dealing” to determine whether
“the defendant purposefully established minimum contacts” with the forum
state. Id. (quoting Burger King, 471 U.S. at 479).
The district court correctly concluded that it lacked personal jurisdiction
over AREC. Although Johnson signed the contract in Louisiana, and
presumably communicated with AREC from Louisiana, the contract itself was
not drafted in Louisiana. Even if the contract was discussed and drafted in
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Louisiana, the exchange of communications in carrying out a contract is not
enough to establish personal jurisdiction. Moreover, these activities could not
create a business relationship between Jones and AREC because Jones was
not contemplated in the contract or involved in its negotiation.
In addition, neither the terms of the contract nor the parties’ actual
course of dealing suggests that the defendant purposefully established
minimum contacts with Louisiana. AREC did not collect royalties in Louisiana,
nor did AREC conduct any other business in Louisiana. When royalties were
collected, they were sent to New York and stored in a New York bank.
Consequently, both the performance and the focus of the contract occurred
outside Louisiana. See Moncrief Oil, 481 F.3d at 312 (noting a lack of minimum
contacts where “the contract did not require performance in Texas, and the
contract is centered outside of Texas”); see also Int’l Energy Ventures Mgmt.,
L.L.C. v. United Energy Grp., Ltd., 818 F.3d 193, 213 (5th Cir. 2016) (noting
that the defendant “had no presence in Texas” because, in part, the agreement
“did not require performance in Texas”).
Although AREC sent payments to Louisiana, this court has previously
indicated that payments are also insufficient to establish minimum contacts
with the state. See, e.g., Hydrokinetics, Inc. v. Alaska Mech., Inc., 700 F.2d
1026, 1029 (5th Cir. 1983) (noting that “no performance” took place in the
forum state “other than perhaps the payment for the goods”). The payments
were sent to Louisiana only because Johnson resided there, which fails to
establish purposeful minimum contacts. See McFadin v. Gerber, 587 F.3d 753,
761 (5th Cir. 2009) (“The little contact with Texas came only from the fortuity
of the plaintiffs’ residence there.”). Accordingly, Johnson’s prior business and
contractual relationship is insufficient to establish specific jurisdiction.
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B.
Exercising personal jurisdiction “over an out-of-state intentional
tortfeasor must be based on intentional conduct by the defendant that creates
the necessary contacts with the forum.” Walden v. Fiore, 571 U.S. 277, 286
(2014). In other words, the defendant must “commit[] a tort within the state”
to establish “sufficient minimum contacts.” Moncrief Oil, 481 F.3d at 314
(citation omitted). In the case of conversion, “the wrongful exercise of dominion
and control over another’s property” must occur in the forum state. Pervasive
Software, 688 F.3d at 229 (citation omitted).
Jones alleges that an intentional tort occurred, but if it did, it was not in
Louisiana. AREC is based in New York, and Jones resides in Texas. In the
context of an alleged conversion claim, Jones fails to establish how AREC
wrongfully exercised dominion and control in Louisiana. See id. at 229 (finding
a lack of specific jurisdiction because the alleged conversion could not have
occurred in the forum state). Consequently, this allegation cannot establish
specific jurisdiction.
In sum, AREC has not purposely directed its activities toward Louisiana
or purposefully availed itself of the privileges of conducting activities there.
Therefore, the district correctly determined that specific jurisdiction was
lacking.
IV.
For the foregoing reasons, we AFFIRM the district court’s dismissal of
Jones’s claims against AREC.
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