K. Morrill v. Scott Financial Corp. , 873 F.3d 1136 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KENNETH LAYNE MORRILL; No. 14-16922
MORRILL & ARONSON, P.L.C., an
Arizona professional limited liability D.C. No.
company, 2:14-cv-00922-
Plaintiffs-Appellants, HRH
v.
OPINION
SCOTT FINANCIAL CORPORATION, a
North Dakota corporation; BRADLEY
J. SCOTT, an individual; KEMP,
JONES & COULTHARD, LLP, a
Nevada limited liability partnership;
HARRISON, KEMP & JONES
CHARTERED, a Nevada professional
corporation; J. RANDALL JONES,
Defendants-Appellees.
Appeal from the United States District Court
for the District of Arizona
H. Russell Holland, Senior District Judge, Presiding
Argued and Submitted October 19, 2016
San Francisco, California
Filed October 23, 2017
2 MORRILL V. SCOTT FINANCIAL
Before: Andrew J. Kleinfeld and Milan D. Smith, Jr.,
Circuit Judges, and John A. Kronstadt, * District Judge.
Opinion by Judge Kronstadt;
Dissent by Judge Kleinfeld
SUMMARY **
Personal Jurisdiction
The panel affirmed the district court’s dismissal due to
lack of personal jurisdiction over any defendant of an action
brought by an attorney and his law firm, alleging claims for
abuse of process and wrongful institution of civil
proceedings.
The plaintiffs resided, or were located, in Arizona, and
they brought claims in the District of Arizona. The
defendants were a North Dakota corporation and its sole
shareholder and officer, and a Nevada attorney and law
firms.
The panel applied the three-part test for specific personal
jurisdiction. Under the first prong, the panel applied the
purposeful direction test because the nature of the underlying
claims arose from alleged tortious conduct. The panel held
that defendants’ actions were not purposefully directed at
* The Honorable John A. Kronstadt, United States District Judge for
the Central District of California, sitting by Designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
MORRILL V. SCOTT FINANCIAL 3
Arizona. The panel further held that to establish personal
jurisdiction over defendants in this action, plaintiffs were
required to make a prima facie showing that defendants’
alleged actions were directed at Arizona, not just at
individuals who resided there, and plaintiffs failed to do so.
The panel rejected plaintiffs’ contention that the
purposeful availment test also applied to this case. First, the
panel held that the claims at issue were premised on alleged
tortious conduct by defendants, and therefore, the purposeful
availment test did not apply. Second, the panel held that
even if the test applied, plaintiffs’ allegations as to the
relevant conduct were insufficient to show purposeful
availment.
Judge Kleinfeld dissented because he concluded that the
majority misinterpreted, and misapplied, the law. Judge
Kleinfeld would hold that the district court erred in finding
that it could not exercise personal jurisdiction over
defendants.
COUNSEL
Kenneth Layne Morrill (argued), Morrill & Aronson PLC,
Phoenix, Arizona, for Plaintiffs-Appellants.
Anthony S. Vitagliano (argued), Phoenix, Arizona; Ed
Hendricks Jr., Meyer Hendricks PLLC, Phoenix, Arizona;
for Defendants-Appellees.
4 MORRILL V. SCOTT FINANCIAL
OPINION
KRONSTADT, District Judge:
K. Layne Morrill (“Morrill”), an attorney who resides in
Arizona, and the law firm where he practices, Morrill &
Aronson, P.L.C. (“Morrill & Aronson”), which is also
located in Arizona (collectively “Plaintiffs”), brought claims
in the District of Arizona for abuse of process and wrongful
institution of civil proceedings. The complaint named five
defendants. The District Court dismissed the action,
concluding that there was no personal jurisdiction over any
defendant. Plaintiffs appealed. We affirm.
I. BACKGROUND
In December 2008, Plaintiffs began representing Gary
Tharaldson (a Nevada resident), Club Vista Financial
Services, L.L.C. (a Nevada corporation whose principal
place of business is in Nevada), and Tharaldson Motels, II,
Inc. (a North Dakota corporation whose principal place of
business is in Nevada) (collectively “Tharaldsons”) in
connection with a failed condominium construction project
in Las Vegas, Nevada. In January 2009, the Tharaldsons
filed a civil action in the Eighth District Court of Clark
County, Nevada (“Tharaldson Litigation”), in which
Plaintiffs were counsel. Through that action, the Tharaldsons
sought to be relieved of obligations associated with their
previous guaranty of a $100 million construction loan made
in connection with the condominium project. Plaintiffs
continued to represent the Tharaldsons in that litigation until
June 2011.
The defendants in the Tharaldson Litigation were Scott
Financial Corporation (“Scott Financial”) (a North Dakota
Corporation with its principal place of business in Nevada)
MORRILL V. SCOTT FINANCIAL 5
and its sole shareholder and officer, Bradley J. Scott (a North
Dakota resident) (collectively “Scott Parties”). J. Randall
Jones (“Jones”), who is a resident of Nevada, represented the
Scott Parties in the Tharaldson Litigation. During that
representation, Jones practiced with Kemp, Jones &
Coulthard, L.L.P., which is a law firm based in Nevada, and
Harrison, Kemp & Jones, Chartered, which is a Nevada law
firm and professional corporation. The Scott Parties, Jones
and the two law firms are the defendants in this action
(“Defendants”).
Plaintiffs claim that, during the Tharaldson Litigation,
Defendants “engaged in a campaign to harm [Plaintiffs]” in
retaliation for their role as counsel to the Tharaldsons. The
first step in this alleged campaign occurred in October 2010,
which was five months before the scheduled trial date. At
that time, the Scott Parties sought to depose Morrill and his
partner, Martin Aronson. As part of that process, the Scott
Parties commenced companion civil proceedings in an
Arizona Superior Court seeking to obtain a separate
deposition subpoena for each witness. At that time, these
civil proceedings were required by Arizona Rule of Civil
Procedure 30(h) when an out-of-state party sought to depose
a person who resided in Arizona. Ariz. R. Civ. P. 30(h)
(2010) (deleted August 30, 2012, effective January 1,
2013). 1 Jones represented the Scott Parties in those
proceedings.
1
The relevant portion of Rule 30(h) provided: “When an action is
pending in a jurisdiction foreign to the State of Arizona and a party or a
party’s attorney wishes to take a deposition in this state, it may be done
and a subpoena or subpoena duces tecum may issue therefor from the
Superior Court of this state. The party or attorney shall file, as a civil
action, an application, under oath, captioned as is the foreign action[.]”
6 MORRILL V. SCOTT FINANCIAL
An Arizona Superior Court issued the requested
subpoenas, and Morrill and Aronson were served. Morrill
and Aronson then brought a motion to quash the subpoenas
in the Arizona Superior Court. They argued that the “true
purpose in taking the depositions . . . was to pry into what
[Plaintiffs] had learned about the [Tharaldson] case and to
obtain privileged information and to attempt to drive a
wedge between [Plaintiffs] and their clients” in that
litigation. Jones was admitted pro hac vice in Arizona so that
he could participate in the proceedings with respect to the
motion to quash. The Scott Parties filed an opposition to the
motion, and Jones appeared at the hearing on the motion that
was held in the Arizona Superior Court. At the conclusion of
the hearing, the Superior Court judge granted the motion.
However, that order was without prejudice to having the
issue reviewed and decided de novo by the Special
Discovery Master in Nevada who was overseeing discovery
disputes in the Tharaldson Litigation. As the Superior Court
judge explained, “I want the minute entry to reflect that this
Court does not intend in any way to suggest to Floyd A.
Hale, Special Master, what he ought to rule with regard to
the matters which will finally be briefed [for] him on
December 3rd, 2010.”
The Scott Parties then provided Special Master Hale with
Plaintiffs’ motion to quash and their response that had been
filed in the Arizona Superior Court. Special Master Hale
denied the motion to quash and ruled that the depositions of
Morrill and Aronson could proceed. Plaintiffs appealed that
order through the Nevada courts, including to the Nevada
Supreme Court. The Nevada Supreme Court held that the
depositions could proceed if the Scott Parties successfully
demonstrated that “(1) no other means exist to obtain the
information than to depose opposing counsel; (2) the
information sought is relevant and non-privileged; and
MORRILL V. SCOTT FINANCIAL 7
(3) the information is crucial to the preparation of the case.”
Thereafter, the Scott Parties elected not to proceed further,
and the depositions were not taken.
In April 2011, the Scott Parties brought a defamation
action against Plaintiffs in a Nevada court. It was based on
alleged statements made by Plaintiffs to a Nevada mortgage
lender during the course of discovery in the Tharaldson
Litigation. The Scott Parties effected service of the
complaint on Plaintiffs in Arizona. Plaintiffs argued that the
action was without merit in light of the broad litigation
privilege that applies under Nevada law to statements made
during a pending judicial proceeding. After the Scott Parties
declined to dismiss the action voluntarily, Plaintiffs moved
for summary judgment. Their motion was granted. The
Nevada Supreme Court affirmed that ruling.
In May 2011, Jones filed a grievance with the Nevada
State Bar “alleging that Morrill acted unethically and
unprofessionally.” The Screening Panel of the Nevada State
Bar decided not to initiate disciplinary proceedings against
Morrill, and dismissed the complaint without prejudice.
In June 2011, the Tharaldsons elected to retain new
counsel to represent them in the Tharaldson Litigation.
Plaintiffs contend that the aforementioned conduct of
Defendants “was a factor that contributed to the . . . decision
to retain new trial counsel.”
Based on the foregoing alleged conduct, Plaintiffs
brought the present action in the District of Arizona. As
noted, it advances claims against Defendants for abuse of
process and wrongful institution of civil proceedings. As
also noted, Defendants moved to dismiss the complaint for
lack of personal jurisdiction. The District Court granted the
8 MORRILL V. SCOTT FINANCIAL
motion, concluding that there was no personal jurisdiction
over any of the Defendants.
II. STANDARD OF REVIEW
We review dismissals for lack of personal jurisdiction de
novo. Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d
668, 671 (9th Cir. 2012). When a defendant moves to
dismiss for lack of personal jurisdiction, “the plaintiff bears
the burden of demonstrating that jurisdiction is appropriate.”
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,
800 (9th Cir. 2004). Because no evidentiary hearing
occurred in this action, “the plaintiff need only make a prima
facie showing of jurisdictional facts.” Id. (quoting Sher v.
Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990)). All
uncontroverted allegations in the complaint are deemed true,
and factual disputes are to be resolved in favor of the non-
moving party. Id.
III. ANALYSIS
A. Standards for Establishing Personal Jurisdiction
“Federal courts ordinarily follow state law in
determining the bounds of their jurisdiction over persons.”
Daimler AG v. Bauman, 134 S. Ct. 746, 753 (2014). Arizona
law permits the exercise of personal jurisdiction to the extent
permitted under the United States Constitution. See Ariz. R.
Civ. P. 4.2(a). Therefore, the determination whether the
District Court had personal jurisdiction over Defendants is
subject to the terms of the Due Process Clause of the
Fourteenth Amendment.
Constitutional due process requires that defendants
“have certain minimum contacts” with a forum state “such
that the maintenance of the suit does not offend ‘traditional
MORRILL V. SCOTT FINANCIAL 9
notions of fair play and substantial justice.’” Int’l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken
v. Meyer, 311 U.S. 457, 463 (1940)). Minimum contacts are
shown if the defendant has “continuous and systematic
general business contacts” with a forum state (general
jurisdiction), or if the defendant has sufficient contacts
arising from or related to specific transactions or activities in
the forum state (specific jurisdiction). Schwarzenegger,
374 F.3d at 800–02.
Plaintiffs do not contend that Defendants are subject to
general jurisdiction in Arizona. Instead, they argue that
Defendants are subject to specific jurisdiction there. We
apply a three-part test to determine whether a defendant has
sufficient contacts to be subject to specific personal
jurisdiction:
(1) The non-resident defendant must
purposefully direct his activities or
consummate some transaction with the
forum or resident thereof; or perform
some act by which he purposefully avails
himself of the privilege of conducting
activities in the forum, thereby invoking
the benefits and protections of its laws;
(2) the claim must be one which arises out of
or relates to the defendant’s forum-
related activities; and
(3) the exercise of jurisdiction must comport
with fair play and substantial justice, i.e.
it must be reasonable.
10 MORRILL V. SCOTT FINANCIAL
Id. at 802 (quoting Lake v. Lake, 817 F.2d 1416, 1421 (9th
Cir. 1987)). “The plaintiff bears the burden of satisfying the
first two prongs of the test. If the plaintiff fails to satisfy
either of these prongs, personal jurisdiction is not established
in the forum state.” Id. (citation omitted). “If the plaintiff
succeeds in satisfying both of the first two prongs, the
burden then shifts to the defendant to ‘present a compelling
case’ that the exercise of jurisdiction would not be
reasonable.” Id. (quoting Burger King Corp. v. Rudzewicz,
471 U.S. 462, 476–78 (1985)).
B. Defendants’ Actions Were Not Purposefully
Directed at Arizona
Under the first prong of the test for specific personal
jurisdiction, Plaintiffs must show that Defendants
purposefully directed their activities toward Arizona, or
purposefully availed themselves of the privilege of
conducting activities there. We generally apply the
purposeful availment test when the underlying claims arise
from a contract, and the purposeful direction test when they
arise from alleged tortious conduct. Id. at 802. The latter test
applies here given the nature of the underlying claims.
Purposeful direction “requires that the defendant . . .
have (1) committed an intentional act, (2) expressly aimed at
the forum state, (3) causing harm that the defendant knows
is likely to be suffered in the forum state.” Id. at 803 (quoting
Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir.
2002)). Actions may be directed at the forum state even if
they occurred elsewhere. Id. However, “random, fortuitous,
or attenuated contacts” are insufficient to create the requisite
connection with the forum. Burger King, 471 U.S. at 475
(internal quotation marks omitted). An intentional act is one
“denot[ing] an external manifestation of the actor’s will . . .
not includ[ing] any of its results, even the most direct,
MORRILL V. SCOTT FINANCIAL 11
immediate, and intended.” Wash. Shoe, 704 F.3d at 673–74
(quoting Schwarzenegger, 374 F.3d at 806).
Plaintiffs claim that Defendants engaged in conduct that
was sufficient to show that they “committed an intentional
act” expressly aimed at the forum state of Arizona. That
conduct included the following:
• Making phone calls, sending letters, mailing
pleadings and discovery documents, and sending
emails to Plaintiffs in Arizona.
• Filing civil actions in Arizona in order to have
deposition subpoenas issued for Morrill and
Aronson, and serving those subpoenas and notices of
deposition on them in Arizona.
• Filing an opposition to Plaintiffs’ motion to quash the
subpoenas that was brought in the Arizona Superior
Court, and appearing pro hac vice in those
proceedings, including at the hearing on the motion.
• Seeking a ruling by Special Master Hale on the
motion to quash by submitting to him copies of the
briefs that had been filed in the Arizona Superior
Court, and after the decision by Special Master Hale
that denied the motion, opposing Plaintiffs’ appeals
in the Nevada courts.
• Filing the defamation action brought by the Scott
Parties against Plaintiffs in Nevada, serving the
complaint in that action on Plaintiffs in Arizona, and
pursuing the claims for defamation until Plaintiffs
prevailed on their motion for summary judgment.
12 MORRILL V. SCOTT FINANCIAL
Thereafter, appealing that order to the Nevada
Supreme Court.
As the Supreme Court stated in Walden v. Fiore, 134 S.
Ct. 1115, 1126 (2014), the “mere fact that [a defendant’s]
conduct affected plaintiffs with connections to the forum
State does not suffice to authorize jurisdiction.” Instead, two
factors are considered in determining whether an action is
expressly aimed at the forum state:
(1) First, the relationship must arise out of
contacts that the defendant himself
creates with the forum State. . . . Put
simply, however significant the plaintiff's
contacts with the forum may be, those
contacts cannot be decisive in
determining whether the defendant’s due
process rights are violated.
(2) Second, our “minimum contacts”
analysis looks to the defendant’s contacts
with the forum State itself, not the
defendant’s contacts with persons who
reside there.
Id. at 1122 (citations omitted).
In Walden, an agent of the federal Drug Enforcement
Administration seized $97,000 in cash from two professional
gamblers at an airport in Atlanta, Georgia. The gamblers
were citizens of Nevada. Thereafter, the agent assisted in
drafting an allegedly fraudulent affidavit in support of the
claim of probable cause for the seizure. Id. at 1120. The
MORRILL V. SCOTT FINANCIAL 13
gamblers brought a Bivens action 2 against the agent in the
District of Nevada, seeking damages for alleged violations
of their Fourth Amendment rights. Id. The District Court
dismissed the action after concluding that there was no
personal jurisdiction over the agent in Nevada. We reversed.
That decision concluded that the agent “had ‘expressly
aimed’ his submission of the allegedly false affidavit at
Nevada by submitting the affidavit with knowledge that it
would affect persons with a ‘significant connection’ to
Nevada.” Id. (citations omitted).
The Supreme Court reversed in a unanimous decision.
The Court concluded that the agent had not expressly
targeted the state of Nevada. He had “never traveled to,
conducted activities within, contacted anyone in, or sent
anything or anyone to Nevada,” and for these reasons had
“formed no jurisdictionally relevant contacts with Nevada.”
Id. at 1124. The Court added that the alleged harm was not
sufficiently linked to Nevada. The gamblers “would have
experienced this same lack of access [to the confiscated
funds] in California, Mississippi, or wherever else they
might have traveled and found themselves wanting more
money than they had.” Id. at 1125.
Walden distinguished Calder v. Jones, 465 U.S. 783
(1984), in which the Court affirmed a finding of personal
jurisdiction in California over two Florida residents. Those
defendants had written and edited an allegedly libelous
article about a California resident that was published in the
National Enquirer. Id. at 783. Although that publication was
circulated throughout the country, the Court found that the
2
Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics,
403 U.S. 388 (1971).
14 MORRILL V. SCOTT FINANCIAL
actions of the authors “were expressly aimed at California.”
Id. at 789. As Walden explained:
The crux of Calder was that the reputation-
based “effects” of the alleged libel connected
the defendants to California, not just to the
plaintiff. The strength of that connection was
largely a function of the nature of the libel
tort. However scandalous a newspaper article
might be, it can lead to a loss of reputation
only if communicated to (and read and
understood by) third persons. Accordingly,
the reputational injury caused by the
defendants’ story would not have occurred
but for the fact that the defendants wrote an
article for publication in California that was
read by a large number of California citizens.
134 S. Ct. at 1123–24 (citations omitted).
Plaintiffs rely on this language to support their
contention that the “crux” of their claims “is the reputational
injury [Defendants] intentionally caused [Plaintiffs] to suffer
at their Arizona Domicile.” They argue that, “[l]ike [the]
defamation in Calder, abuse of process and [wrongful
institution of civil proceedings] were not complete until
[Plaintiffs] suffered in Arizona the harm from the
[Defendants’] wrongful conduct.”
Plaintiffs’ argument is unpersuasive. In Calder the
defendants published the allegedly defamatory statements in
the forum state, and the claimed harm to the plaintiff
occurred when the residents of that state read them. It was
the publication itself that caused the alleged injury in the
forum state. Consistent with the standard of Walden, this
“relationship . . . ar[o]se out of contacts that the defendant
MORRILL V. SCOTT FINANCIAL 15
himself create[d] with the forum State.” 134 S. Ct. at 1122.
Here, by contrast, Plaintiffs elected to work outside of
Arizona in order to participate as counsel in the Tharaldson
Litigation that was conducted in Nevada. The allegedly
tortious conduct here involved very limited communications
and proceedings in Arizona, all of which arose out of and
were component parts of the litigation in Nevada. Any links
to Arizona, which included Defendants’ communications
with Plaintiffs by telephone and email about the Tharaldson
Litigation, occurred only because it happened to be where
Plaintiffs resided. The primary effects of Defendants’
actions, including the alleged harm, were tied directly to the
litigation in Nevada. This is confirmed by the order issued
by the Arizona Superior Court that quashed the subpoenas
issued in connection with the Tharaldson Litigation. It was
without prejudice to a de novo review by the Special Master
in Nevada who had been appointed in the Tharaldson
Litigation. He later denied the motions, a ruling that was
ultimately affirmed, with limitations, by the Nevada
Supreme Court. Thus, even the deposition subpoena process,
which is a significant basis for Plaintiffs’ claim of
jurisdiction in Arizona, was definitively adjudicated in
Nevada.
Because Defendants knew that Plaintiffs were from
Arizona, it was foreseeable that some injury to them could
have been experienced there based on the actions taken by
Defendants in connection with the Tharaldson Litigation.
Harm suffered in the forum state is a necessary element in
establishing purposeful direction. See Schwarzenegger,
374 F.3d at 802. However, the potential foreseeability of
some incidental harm to Plaintiffs in Arizona due to
substantial litigation that was pending in Nevada, without
more, does not show that Defendants expressly targeted the
forum state. “Such reasoning improperly attributes a
16 MORRILL V. SCOTT FINANCIAL
plaintiff’s forum connections to the defendant and makes
those connections ‘decisive’ in the jurisdictional analysis. It
also obscures the reality that none of [the] challenged
conduct had anything to do with [the forum state] itself.”
Walden, 134 S. Ct. at 1125. Calder adopted the rule that to
establish the basis for specific personal jurisdiction, a tort
must involve the forum state itself, and not just have some
effect on a party who resides there.
This case has more in common with Walden than Calder.
In Walden, the sole connection to the forum state of Nevada
was that plaintiffs resided there. The relevant actions–the
seizure of the money and the preparation of the affidavit–
occurred in Georgia, and were related to the plaintiffs’ brief
presence there. Here, Plaintiffs’ Complaint alleges that
Defendants’ tortious activities were undertaken for “ulterior
purposes,” including the following:
(a) to invade the attorney-client privilege
between Plaintiffs and the Tharaldson
Entities (as well as attorney work
product) for tactical advantage in the
Tharaldson Proceeding;
(b) to interfere with Plaintiffs’ trial
preparation in the Tharaldson
Proceeding;
(c) to punish Plaintiffs for discovering and
marshalling [evidence contrary to
Defendants’ position in the Tharaldson
Proceeding]; . . . and
(d) to manufacture the appearance of a
conflict of interest with respect to
MORRILL V. SCOTT FINANCIAL 17
Plaintiffs as counsel in the Tharaldson
Proceeding that might lead the
Tharaldson Entities either to settle or to
switch trial counsel shortly before the
trial . . . .
According to Plaintiffs, all of these alleged actions had a
common and improper purpose–to gain an advantage for
Defendants and their clients in the Tharaldson Litigation that
was proceeding in Nevada. From this they contend that these
actions did not constitute legitimate litigation conduct. To be
sure, the purpose of a party’s action is not the lodestar for
our jurisdictional determination; rather, we consider the
nature of the action itself and the resulting harm. Under the
facts of the instant case, however, the driving force behind
Defendants’ actions–the ongoing litigation in Nevada–also
provides the framework within which the actions occurred
and the foreseeable harm would result. In other words, the
allegedly tortious acts were not simply motivated by, or
designed to achieve a benefit in, the Nevada litigation, they
were component parts of that litigation. Indeed, the manner
in which the Defendants allegedly conducted the litigation
in Nevada, i.e., the Tharaldson Litigation, the defamation
action and the Nevada State Bar proceeding, is the basis for
Plaintiffs’ claims. For example, Defendants pursued the
depositions at issue as part of the discovery process in the
Tharaldson Litigation. The litigation challenging the right to
take the depositions took place under its auspices, as
confirmed by the deference of the Arizona Superior Court to
the Nevada Special Master when issuing its ruling on
Plaintiffs’ motion to quash. The involvement of Arizona
procedures was solely a by-product of Plaintiffs’ residence.
Further, as noted, the propriety of the subpoenas was
ultimately decided by the Nevada Supreme Court.
18 MORRILL V. SCOTT FINANCIAL
The facts of this case may not be as clear-cut as those in
Walden: The Walden defendant had “never traveled to . . . or
sent anything or anyone to” the forum state. Walden, 134 S.
Ct. at 1124. Here, Defendants did both. However, they did
so in the course of complying with procedural requirements
for advancing litigation being prosecuted entirely in another
state, not as a separate action in which substantive claims
were presented. Therefore, as in Walden, the forum state was
only implicated by the happenstance of Plaintiffs’ residence;
if other states had procedural rules similar to those that were
in place in Arizona at the time that the Tharaldson Litigation
was pending and Plaintiffs resided in one of them, they
would have “experienced this same [alleged tortious
conduct] in California, or Mississippi, or wherever else they
might have [resided].” Id. at 1125.
Service of counsel at the address of that person’s office
is contemplated by Nevada law. Nev. R. Civ. P. 5(b)(2)
(allowing service on an attorney by in-person service,
delivery to the attorney’s office, mailing to the attorney’s last
known address, or by electronic delivery where prior consent
has been provided). Because these actions were undertaken
as part of the Tharaldson Litigation, which was pending in
Nevada, they did not constitute independent wrongdoing.
“For a State to exercise jurisdiction consistent with due
process, the defendant’s suit-related conduct must create a
substantial connection with the forum State.” Walden, 134 S.
Ct. at 1121.
Nor do the actions taken by the Defendants in Arizona in
an effort to depose Morrill and Aronson as part of the
Tharaldson Litigation provide a sufficient basis to show that
the alleged torts were “expressly aimed” at Arizona. As the
District Court correctly concluded, the Scott Parties
commenced the companion civil proceedings in Arizona
MORRILL V. SCOTT FINANCIAL 19
because they were required to do so in order to subpoena
Plaintiffs for depositions in the Nevada litigation. At that
time, Arizona had adopted the commonplace procedural
requirement that a party seeking to depose an Arizona
resident in connection with a civil action pending in another
state had to initiate a civil action in Arizona. Ariz. R. Civ. P.
30(h) (deleted August 30, 2012, effective January 1, 2013).
Such a process permitted an Arizona witness the benefit of a
more convenient forum in which to raise any challenge to
the subpoena. 3 Jones appeared in the Arizona Superior Court
as part of that process.
“Physical entry into the State–either by the defendant in
person or through an agent, goods, mail, or some other
means–is certainly a relevant contact.” Walden, 134 S. Ct. at
1122 (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770,
774–75 (1984)). However, physical entry that is merely
3
This rule was similar to the version of Fed. R. Civ. P. 45 that was
in place prior to its amendment in 1991. Until that time, Rule 45 required
that a party to litigation in one judicial district, who sought to take a
deposition of a person who resided in another district, seek the issuance
of a subpoena from “the district court for the district in which the
deposition is to be taken.” Fed. R. Civ. P. 45(d) (1991). After the 1991
Amendment, a party seeking to subpoena an out-of-district deponent no
longer had to apply directly to the clerk of the district where the
deposition would proceed. However, the subpoena had to “issue . . . from
the district in which the deposition [was] to be taken.” Fed. R. Civ. P.
45(a)(2) (1992) and Comment. This requirement remained in place until
Rule 45 was amended in 2013. The Rule now requires the issuance of
the subpoena from the district in which the case is pending. Fed. R. Civ.
P. 45(a)(2). However, it also provides that disputes as to the scope or
validity of the subpoena are to be addressed by the court in the district
where the deponent resides unless there are exceptional circumstances
that warrant the transfer of those disputes to the court that issued the
subpoena, or if the person whose deposition is sought agrees to such a
transfer. Fed. R. Civ. P. 45(f).
20 MORRILL V. SCOTT FINANCIAL
incidental to an out-of-state transaction does not satisfy the
constitutional minimum contacts requirement. See Picot v.
Weston, 780 F.3d 1206, 1213 (9th Cir. 2015) (defendant’s
two trips to California did not establish personal jurisdiction
because the trips were short, defendant’s role in California
was “relatively small,” and both trips “grew incidentally”
out of the broader non-California relationship). 4
4
The dissent suggests that this analysis differs from that adopted by
the Sixth Circuit in MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d 894,
896 (6th Cir. 2017). We disagree. The factual bases for claimed
jurisdiction in the two cases are quite different. In MAG IAS Holdings,
Inc., the plaintiff was a Michigan corporation that brought claims there
against a defendant who was the former CEO of plaintiff’s parent
company, the “MAG Group.” Id. at 897. The defendant, a German
citizen residing in Germany, contested jurisdiction. Id. The claims
included breach of fiduciary duty, professional negligence and waste of
corporate assets based on an alleged scheme by defendant and others to
“engineer a ‘fire sale’ of MAG Group assets for [defendant’s] own
personal benefit.” Id. Applying Walden, the Sixth Circuit concluded that
there was personal jurisdiction over the defendant. Id. at 901. This
determination was based on the defendant’s substantial, alleged contacts
with Michigan:
[Defendant] purposefully availed himself of the
benefits of doing business in Michigan by: (1) being
CEO of the MAG Group and holding himself out as
having “global authority” over MAG operations,
including those in Michigan; (2) directing and
controlling MAG operations in Michigan;
(3) traveling to Michigan on two occasions to meet
with executives and customers; (4) initiating calls and
emails to the state each week to direct MAG business;
(5) transferring business from Michigan to Germany
to prop up the German operations at the expense of
those in Michigan; (6) engaging Michigan-based
executives in strategic financing and sales
negotiations; and (7) arranging for the Michigan
MORRILL V. SCOTT FINANCIAL 21
Nor did the service of the defamation complaint on
Plaintiffs in Arizona reflect an action directed toward
Arizona. The defamation action was filed in Nevada. The
claimed defamatory statements were made by Plaintiffs in
Nevada, to a Nevada resident and in the course of discovery
in the Tharaldson Litigation. Service of process on Plaintiffs
where they resided was consistent with the requirements of
Nevada law. Nev. R. Civ. P. 4(d)(6) (upon filing of a
complaint, process is to be served “to the defendant
personally, or by leaving copies thereof at the defendant’s
dwelling house or usual place of abode . . . or by delivering
a copy of the summons and complaint to an agent authorized
by appointment or by law to receive service of process”). It
was not otherwise linked to Arizona. Cf. Wallace v. Herron,
778 F.2d 391, 394 (7th Cir. 1985) (in malicious prosecution
action, no personal jurisdiction in Indiana over defendants
who were California attorneys who had “served
interrogatories [in Indiana], requested the production of
documents, and caused the plaintiff to respond to five
complaints,” because “defendants filed these motions on
behalf of their clients in a California court pursuant to a
California lawsuit, and it would be unreasonable to require
the defendants to appear in Indiana to defend this suit on the
basis of such attenuated contacts”).
The dissent disagrees with this overall analysis. It
suggests that considering the challenged actions as ones
undertaken to advance the interests of Defendants’ clients in
operations to pay part of his salary by instituting a €1.5
million transfer payment from MAG Automotive to
MAG Germany.
Id. Because the contacts with Arizona by the Defendants in this action
are not of a similar nature, there is no conflict with MAG IAS Holdings,
Inc.
22 MORRILL V. SCOTT FINANCIAL
the Tharaldson Litigation creates a new rule that does not
comport with the controlling standards. The dissent
describes the new rule as one under which a defendant’s
purpose for an alleged tortious act has greater jurisdictional
significance than where the challenged act occurred. The
hypothetical that is offered in support of this position
involves conduct by a defendant that has a physical effect in
the state where jurisdiction is disputed, e.g., throwing a rock
through a window of the plaintiff’s residence in the forum
state.
No such rule is adopted here. As previously explained,
Defendants’ subjective motivations are not material to the
analysis–it simply happens that, under the facts before us,
the reason for Defendants’ action (litigation in Nevada) also
provides the relevant context within which we must assess
the nature and consequences of Defendants’ alleged acts. As
in Walden, when a defendant’s relationship to the forum
state arises from the fortuity of where the plaintiff resides
and the corresponding procedural requirements for the
issuance of a deposition subpoena, it does not provide the
basis for specific jurisdiction there.
Our analysis does not conflict with the well-established
rule–to which the dissent alludes–that, when a defendant
engages in tortious activity toward a plaintiff in the state
where that plaintiff resides, the defendant is subject to
personal jurisdiction there. Brainerd v. Governors of the
University of Alberta, 873 F.2d 1257, 1258–60 (9th Cir.
1989) (personal jurisdiction in Arizona established by
communications sent by out-of-state defendant to recipients
in Arizona that allegedly interfered with plaintiff’s
contractual and other rights). Defendants’ conduct in
Arizona occurred as part of the required process for pursuing
discovery and serving Plaintiffs in connection with the
MORRILL V. SCOTT FINANCIAL 23
litigation in Nevada. The outcome would be different if, as
suggested by the hypothetical presented by the dissent, an
attorney had traveled to Arizona, not to appear at a hearing
on a motion to quash a subpoena, but to throw a rock through
the window of the Arizona residence of opposing counsel in
litigation that was pending in Nevada. The reason for such
inappropriate conduct could have been the animosity
between counsel that resulted from their interaction during
the litigation in Nevada. However, the throwing of the rock
would not have been required, or in any manner justified, by
the litigation process there. 5
To establish personal jurisdiction over Defendants in this
action, Plaintiffs were required to make a prima facie
5
A consideration of a modified version of the hypothetical presented
by the dissent confirms this analysis. Suppose that an attorney from
Arizona was representing a client in a contentiously litigated matter that
was pending in Nevada. Opposing counsel, who was a citizen of Nevada,
threw a rock through the window of the hotel room in Nevada in which
the Arizona attorney was staying during the litigation. The Arizona
attorney then brought a tort action in Nevada in which opposing counsel
was named as the defendant. In the course of the litigation, the defendant
wished to depose certain partners of the plaintiff who had witnessed the
alleged tort. As a result, the defendant initiated proceedings in Arizona–
like the ones here–to obtain deposition subpoenas for these non-parties.
The proposed deponents then moved to quash the subpoenas in a
proceeding in the Arizona Superior Court. The defendant, who was
representing himself, appeared pro hac vice in Arizona to oppose the
motions. The motions were granted. At that point, the plaintiff elected to
re-file the tort action in Arizona, claiming that, by causing the issuance
of the subpoenas and participating in the proceedings on the motions to
quash, defendant had engaged in conduct related to the alleged tort that
subjected him to specific jurisdiction in Arizona. This claim of specific
jurisdiction would fail for the same reasons stated above. The ancillary
proceedings in Arizona would not constitute a sufficient basis for
jurisdiction over the defendant with respect to the underlying event that
occurred in Nevada.
24 MORRILL V. SCOTT FINANCIAL
showing that Defendants’ alleged actions were directed at
Arizona, not just at individuals who resided there. Plaintiffs
failed to do so. The alleged tortious conduct was a
component part of the litigation in Nevada. Contacts with
Arizona, including the appearance at the hearing on the
motion to quash, were quite limited and ancillary to the
litigation in Nevada. These conclusions are consistent with
our recent statement of the principles governing specific
jurisdiction. Williams v. Yamaha Motor Co., 851 F.3d 1015,
1022–24 (9th Cir. 2017).
C. Defendants Did Not “Purposefully Avail”
Themselves of the Benefits of Arizona Law
As noted, a different test for personal jurisdiction is
applied in cases that arise from disputes about contracts.
Plaintiffs argue that this test also applies to the present
action. Under this test, we ask whether a defendant
“purposefully availed” itself of the laws of the forum state.
The Supreme Court has defined purposeful availment as
where the defendant deliberately has engaged
in significant activities within a State, or has
created continuing obligations between
himself and residents of the forum, he
manifestly has availed himself of the
privilege of conducting business there, and
because his activities are shielded by the
benefits and protections of the forum’s laws
it is presumptively not unreasonable to
require him to submit to the burdens of
litigation in that forum as well.
Burger King Corp., 471 U.S. at 475–76 (citations omitted).
MORRILL V. SCOTT FINANCIAL 25
Plaintiffs argue that the Defendants “expressly invoked
the ‘benefits and protections’ of the laws of Arizona” in
taking all of the actions described above with respect to the
deposition subpoenas. These actions included the
commencement of the civil actions as to the deposition
subpoenas, service of the deposition notices, opposing the
motion to quash and appearing at the hearing before the
Arizona Superior Court.
Plaintiffs’ arguments fail for two reasons. First, the
claims at issue are premised on alleged tortious conduct by
Defendants. Therefore, the purposeful availment test does
not apply. See Ziegler v. Indian River County, 64 F.3d 470,
473 (9th Cir. 1995) (“[W]e apply different purposeful
availment tests to contract and tort cases. . . . [M]erely
contracting with a resident of the forum state is insufficient
to confer specific jurisdiction over a nonresident. In tort
cases, however, jurisdiction may attach if an out-of-forum
defendant merely engages in conduct aimed at, and having
effect in, the situs state.” (citations omitted)).
Second, even if the test applied, Plaintiffs’ allegations as
to the relevant conduct are insufficient to show purposeful
availment. For the reasons stated earlier with respect to the
application of the purposeful direction test, Defendants’
contacts with Plaintiffs arose from the Tharaldson Litigation
in which the principal parties here were opposing counsel.
These contacts were related not to Plaintiffs’ status as
residents of Arizona, but to their role as counsel in the
Tharaldson Litigation, which was pending in Nevada.
Therefore, Defendants’ actions did not create a “substantial
connection” with Arizona, or give rise to any “ongoing
obligations” there. Boschetto v. Hansing, 539 F.3d 1011,
1017 (9th Cir. 2008).
26 MORRILL V. SCOTT FINANCIAL
IV. CONCLUSION
For the foregoing reasons, the judgment dismissing this
action for lack of personal jurisdiction is AFFIRMED.
KLEINFELD, Senior Circuit Judge, dissenting:
I respectfully dissent. The majority gets the law wrong
and misapplies it to the extent it is stated correctly.
I.
This is a civil procedure case arising from uncivil
conduct by lawyers in hardball litigation. Because there
have been no evidentiary findings or hearings, the plaintiff
need make only a prima facie showing of jurisdiction, “the
court resolves all disputed facts in favor of the plaintiff,” and
the allegations in the complaint are for purposes of decision
assumed to be true. 1
In a now-settled Nevada lawsuit, Arizona lawyer K.
Layne Morrill and his law firm represented developer Gary
Tharaldson and related entities against Bradley J. Scott and
his related entities. Scott and his companies were
represented by J. Randall Jones and two law firms where
Jones practiced. The litigation concerned alleged fraud in
inducing Tharaldson to participate in a $100 million loan to
a failed Las Vegas real estate venture. Neither the fraud, the
1
In re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716,
741 (9th Cir. 2013) (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151,
1154 (9th Cir. 2006)); Sher v. Johnson, 911 F.2d 1357, 1360–61 (9th Cir.
1990) (noting the court assumes allegations as true for purposes of
determining jurisdiction).
MORRILL V. SCOTT FINANCIAL 27
real estate, the contracts relating to the development deal,
nor Tharaldson are involved in the case before us now.
Instead, this lawsuit is about the hardball litigation
tactics that Jones and Scott used against Morrill and his firm.
Hardball litigation occurs when attorneys depart from the
“high degree of civility and respect” on which “[o]ur
adversarial system relies.” 2 Jones and Scott sought to
depose Morrill and his partner Martin A. Aronson in Arizona
even though Morrill and Aronson were opposing counsel,
not percipient witnesses. This tactic is often used for the sole
purpose of driving a wedge between a lawyer and his client.
Under the Arizona Rules of Civil Procedure at the time, 3
Jones and Scott filed a civil action in Arizona state court to
subpoena Morrill and his law partner Martin Aronson to
submit to depositions. Morrill filed a motion to quash the
subpoenas, or in the alternative, for a protective order. Jones
2
Ahanchian v. Xenon Pictures, Inc., 624 F.3d 1253, 1263 (9th Cir.
2010).
3
The relevant rule at the time, former Arizona Rule of Civil
Procedure 30(h), stated:
When an action is pending in a jurisdiction foreign to
the State of Arizona and a party or a party’s attorney
wishes to take a deposition in this state, it may be done
and a subpoena or subpoena duces tecum may issue
therefor from the Superior Court of this state. The
party or attorney shall file, as a civil action, an
application, under oath, captioned as is the foreign
action . . . .
Former Ariz. R. Civ. P. 30(h). Arizona now conforms its rules to the
Uniform Interstate Depositions and Discovery Act along with 36 other
states. Unif. Interstate Depositions & Discovery Act (2017).
28 MORRILL V. SCOTT FINANCIAL
appeared pro hac vice in Arizona Superior Court to oppose
the motion. In addition to the depositions, Jones and Scott
filed a bar grievance in Nevada against Morrill, and in yet
another lawsuit, they sued Morrill for defamation.
Nominally, all of Scott and Jones’s hardball tactics
failed. The Arizona court granted the motion to quash the
depositions. Scott and Jones then argued before the special
master in charge of discovery in the Nevada litigation to
order the depositions. Upon recommendation of the special
master, a Nevada trial court ordered the depositions to take
place. Morrill appealed and the Nevada Supreme Court
remanded the deposition proceedings, noting that seeking to
make opposing counsel a witness “has long been
discouraged and recognized as disrupting the adversarial
nature of our judicial system.” 4 Jones and Scott did not
pursue the depositions further. The Nevada state court
entered judgment for Morrill in the defamation suit, and the
Nevada State Bar Screening Panel rejected disciplinary
proceedings against Morrill.
But Jones and Scott won the war even though they lost
all the battles. Despite the fact that each of their attacks was
ultimately determined to be without merit, Jones and Scott
succeeded in destroying Morrill and his firm’s relationship
with their clients. Tharaldson fired Morrill and his firm
before the Nevada litigation settled.
To recoup the damage Morrill and his law firm suffered,
they brought four claims against Scott, Jones, and their
4
Club Vista Fin. Servs., L.L.C. v. Eighth Judicial Dist. Court,
276 P.3d 246, 248 (Nev. 2012) (quoting Shelton v. Am. Motors Corp.,
805 F.1323, 1327 (8th Cir. 1986)).
MORRILL V. SCOTT FINANCIAL 29
respective firms in the District Court for the District of
Arizona. The claims alleged the torts of abuse of process
and wrongful institution of civil proceedings for the
depositions, and wrongful institution of civil proceedings for
the defamation suit and the Nevada bar grievance. 5 The
district court dismissed the case for lack of personal
jurisdiction. Personal jurisdiction, not the merits of the
attacks on Morrill, is the issue before us.
II.
Arizona’s long-arm statute allows for personal
jurisdiction to the maximum extent allowed by the United
States Constitution. 6 Morrill does not assert that Jones and
Scott have “continuous and systematic general business
contacts” with Arizona that would create general jurisdiction
and allow Morrill to sue Jones and Scott for any claim in
Arizona. 7 Morrill contends only that there exists specific
jurisdiction, or in other words, that Jones and Scott’s conduct
5
Morrill later acknowledged that the bar grievance claim was barred
by Nevada law. See Nev. S. Ct. Rule 106(1) (“All participants in the
discipline process, including grievants, bar counsel staff, members of
disciplinary panels, diversion and mentoring participants, and witnesses,
shall be absolutely immune from civil liability. No action may be
predicated upon the filing of a disciplinary complaint or grievance or any
action taken in connection with such a filing by any of the participants.”).
6
Ariz. R. Civ. P. 4.2(a) (2016).
7
See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797,
801–02 (9th Cir. 2004).
30 MORRILL V. SCOTT FINANCIAL
created minimum contacts with Arizona sufficient to enable
an Arizona court to assert jurisdiction in this case. 8
We apply a three-part test to determine if a court can
exercise specific jurisdiction over a non-resident defendant:
(1) The non-resident defendant must
purposefully direct his activities or
consummate some transaction with the forum
or resident thereof; or perform some act by
which he purposefully avails himself of the
privilege of conducting activities in the
forum, thereby invoking the benefits and
protections of its laws;
(2) the claim must be one which arises out of
or relates to the defendant’s forum-related
activities; and
(3) the exercise of jurisdiction must comport
with fair play and substantial justice, i.e. it
must be reasonable. 9
The second and third prong of this test raise no serious issue
in this case. For the second prong, the “but for” test is used
to determine whether claims arise out of the contacts. 10
Here, the abuse of process and wrongful institution claims
would not have occurred “but for” Jones entering Arizona to
8
See Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408,
414, n.8 (1984).
Schwarzenegger, 374 F.3d at 802 (quoting Lake v. Lake, 817 F.2d
9
1416, 1421 (9th Cir. 1987)).
10
Menken v. Emm, 503 F.3d 1050, 1058 (9th Cir. 2007).
MORRILL V. SCOTT FINANCIAL 31
depose Morrill and Aronson, invoking the assistance of the
Arizona courts, and suing Morrill for defamation. For the
third prong, Jones and his firm found it worthwhile to travel
and litigate the depositions in Arizona. So it is hard to
imagine how it could be a denial of “fair play and substantial
justice” to make them defend their actions in Arizona.
To decide the first prong, we must apply yet another test.
In tort cases we generally apply the “purposeful direction
test,” and in contract cases we generally apply the
“purposeful availment analysis.” 11 The separation is not
absolute, but as this is a tort case, the purposeful direction
test is generally the most appropriate. That test, derived
from Calder v. Jones, 12 requires the defendant to have
“(1) committed an intentional act, (2) expressly aimed at the
forum state, (3) causing harm that the defendant knows is
likely to be suffered in the forum state.” 13
For the first prong, whether the defendant has committed
an intentional act, all a plaintiff must show is that a defendant
has an “intent to perform an actual, physical act in the real
world.” 14 There were a multitude of intentional acts in this
case, such as opening a civil action to compel depositions
11
Schwarzenegger, 374 F.3d at 802.
12
465 U.S. 783 (1984).
13
Schwarzenegger, 374 F.3d at 805 (quoting Dole Food Co. v.
Watts, 303 F.3d 1104, 1111 (9th Cir. 2002)).
Picot v. Weston, 780 F.3d 1206, 1214 (9th Cir. 2015) (quoting
14
Schwarzenegger, 374 F.3d at 806).
32 MORRILL V. SCOTT FINANCIAL
and traveling to Arizona to appear in Arizona Superior Court
to compel the depositions. This prong is clearly met.
The second prong, whether a defendant’s actions are
“expressly aimed at the forum state,” requires more
analysis. 15 The language of this prong comes from Calder,
and to understand the prong it is necessary to understand the
case it comes from. In Calder, actress and California
resident Shirley Jones sued two Florida-based editors of the
National Enquirer, a tabloid with a large California
circulation, for libel. 16 The editors had few relevant contacts
with California other than writing the allegedly libelous
story. 17 But the Court nonetheless found that the editors had
enough minimum contacts with California to establish
jurisdiction there because the editors had “expressly aimed”
an intentional tort at a California resident and therefore they
could “reasonably anticipate being haled into court” in
California. 18
Calder is not the only relevant case, however. In Walden
v. Fiore the Supreme Court clarified what minimum contacts
are needed with the forum state in an intentional tort case.
There, Nevada gamblers had a suitcase of money seized by
a Georgia police officer at the Atlanta Airport. 19 The
15
Id.
16
Calder, 465 U.S. at 784.
17
Id. at 784–86.
Id. at 789–90 (quoting World-Wide Volkswagen Corp. v.
18
Woodson, 444 U.S. 286, 297 (1980)).
19
Walden v. Fiore, 134 S. Ct. 1115, 1119 (2014).
MORRILL V. SCOTT FINANCIAL 33
gamblers alleged that the officer helped draft a false
probable cause affidavit to support forfeiture of the money,
and they filed a lawsuit in Nevada. 20 The Supreme Court
reaffirmed Calder but held that the Nevada court lacked
personal jurisdiction because there were not “sufficient
minimum contacts” with Nevada. 21 The Court noted that the
officer’s only contact with Nevada was that the gamblers
happened to live there, and it concluded that “a defendant’s
relationship with a plaintiff or third party, standing alone, is
an insufficient basis for jurisdiction.” 22 Calder and Walden
serve as bookends for determining whether a defendant has
sufficient minimum contacts with a forum state.
In this case, we need not resolve whether the defendants’
conduct in Nevada, such as the defamation suit they filed
against the Arizona lawyers, creates the minimum contacts
needed for jurisdiction. Their conduct in Arizona plainly
does. The defendants’ contacts with Arizona are stronger
than those the Supreme Court held to be sufficient in Calder
because of their travel to and actions in Arizona. Unlike the
Florida editors in Calder who had few direct contacts arising
out of the suit with California, 23 and unlike the Georgia
police officer in Walden who never visited Nevada, 24 Jones
and Scott had direct and extensive contacts with Arizona.
Jones filed a civil action in an Arizona state court. This was
not meaningless paperwork but a new civil action to obtain
20
Id. at 1119–20.
21
Id. at 1123–24.
22
Id.
23
Calder, 465 U.S. at 784–86.
24
See Walden, 134 S. Ct. at 1119–20.
34 MORRILL V. SCOTT FINANCIAL
a subpoena to compel Arizonans to submit to depositions.
When a motion to quash was filed, Jones sought pro hac vice
admission in the Arizona court. He then traveled to Arizona
to argue the motion. Routine matters in foreign states are
often handled by local counsel. But Jones made the trip to
Arizona to argue the motion himself. As the 39-page
transcript shows, the argument was no formality. It was a
lengthy and substantial adversarial hearing, in which Jones
must have invested considerable effort. Had Jones
succeeded in defeating the motion to quash, he would have
spent hours or days deposing Morrill and Aronson in
Arizona. Such extensive contacts are more than enough to
satisfy the second prong and show that Jones and Scott
expressly aimed their actions at Arizona.
Finally, for the third prong of the purposeful direction
test, a defendant must know the harm was “likely to be
suffered” in the forum state. 25 This prong can be met even
if “the bulk of the harm” occurs outside the forum so long as
the defendant knew that some harm would occur in the
forum state. 26 While Scott and Jones may have been
motivated by the Nevada litigation, they used an Arizona
court to direct harm at Arizona lawyers in Arizona. Using
hardball litigation tactics, such as deposing opposing counsel
to drive a wedge between a firm and client, can damage not
only a firm’s business but also its reputation. Word of a firm
losing its client in a multimillion-dollar litigation is likely to
25
Collegesource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1079
(9th Cir. 2011) (quoting Brayton Purcell LLP v. Recordon & Recordon,
606 F.3d 1124, 1128 (9th Cir. 2010)).
26
Brayton Purcell LLP, 606 F.3d at 1131 (quoting Yahoo! Inc. v. La
Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1207 (9th
Cir. 2006) (en banc)).
MORRILL V. SCOTT FINANCIAL 35
spread and cause lasting damage. We have held that
economic and reputational loss to a law firm are foreseeable
harms felt in the law firm’s home state. 27 Thus, much as the
National Enquirer editors in Calder could foresee the
emotional harm and reputation damage to the California
actress from their false story, 28 Jones and Scott could foresee
the economic and reputational damage to Morrill in Arizona.
Because all three prongs of the purposeful direction test
are met, the remaining prong of the minimum contacts test
is met. The district court therefore erred in finding that it
could not exercise personal jurisdiction over Scott and Jones.
III.
The majority creates a new and erroneous legal rule: if
the plaintiff has acted in the defendant’s state, and if the
“driving force behind” the defendant’s conduct arises from
litigation elsewhere, 29 then the courts of the plaintiff’s state
lack jurisdiction over the defendant, despite the defendant’s
travel to and conduct in the plaintiff’s state. Even filing a
lawsuit in the courts of the plaintiff’s state and traveling
there to litigate it will not, under the majority’s view, suffice
for jurisdiction there. There is no support in the case law for
the majority’s new rule.
The majority creates this erroneous rule because it
focuses on the “driving force behind” the defendants’
conduct, the so-called “framework” for the conduct, rather
27
See id.
28
Calder, 465 U.S. at 789–90.
29
See Maj. op. at 17.
36 MORRILL V. SCOTT FINANCIAL
than on the defendants’ contacts with the state of Arizona. 30
Analogizing this case to Walden, the majority discusses the
purpose of the contacts listed in the complaint rather than the
contacts themselves:
According to Plaintiffs, all of these alleged
actions had a common and improper
purpose–to gain an advantage for Defendants
and their clients in the Tharaldson Litigation
that was proceeding in Nevada. . . . [T]he
driving force behind Defendants’ actions–the
ongoing litigation in Nevada– . . . provides
the framework within which the actions
occurred and the foreseeable harm would
result. 31
The defendants’ contacts with Arizona were indeed related
to the plaintiffs’ conduct in the Nevada lawsuit. And Walden
does hold that a “plaintiff cannot be the only link between
the defendant and the forum.” 32 But in our case, Morrill was
far from the “only link” with the forum. The defendants
developed sufficient contacts with the state of Arizona by
filing a civil action in Arizona, traveling to Arizona,
appearing pro hac vice in an Arizona court, and arguing the
new case in an adversarial hearing. Nor was the foreseeable
harm caused by defendants limited to the Nevada litigation
as the majority seems to suggest. 33 The foreseeable harm of
30
Maj. op. at 17–18.
31
Maj. op. at 1717.
32
Walden, 134 S. Ct. at 1122.
33
Maj. op. at 17–18.
MORRILL V. SCOTT FINANCIAL 37
defendants’ conduct included economic effects in the state
of Arizona as well as reputational loss to the plaintiffs in
Arizona. 34 The defendants’ conduct was designed to harm
the Arizona plaintiffs in Arizona. And that harm—
destroying the Arizona plaintiffs’ relationship with their
client and damaging their professional reputation—
foreseeably would be felt in Arizona, even if it was only a
means to an end (winning the Nevada lawsuit) from the
viewpoint of Scott and Jones.
Walden offers no support for disregarding connections to
the forum state, as the majority does, because of their
relationship to a plaintiff’s conduct elsewhere. If because of
something you were doing to me in Nevada, I traveled to
Arizona and threw a rock through your window, my
conduct’s relationship to Nevada does not deprive an
Arizona court of jurisdiction over your tort action—even if
the “driving force behind” what I did to you was for the
purpose of gaining an advantage over you in Nevada, and
even if what you did to me in Nevada “provide[d] the
framework within which” I threw the rock. 35
The majority’s new rule also finds no basis in Supreme
Court precedent interpreting Walden. In Bristol-Myers
Squibb Co. v. Superior Court of California, the Supreme
Court summarized Walden as concerning a defendant’s lack
of contacts, not the “framework” within which they
occurred:
In [Walden], Nevada plaintiffs sued an out-
of-state defendant for conducting an
34
Cf. Brayton Purcell LLP, 606 F.3d at 1131.
35
Contra Maj. op. at 17–18.
38 MORRILL V. SCOTT FINANCIAL
allegedly unlawful search of the plaintiffs
while they were in Georgia preparing to
board a plane bound for Nevada. We held that
the Nevada courts lacked specific jurisdiction
even though the plaintiffs were Nevada
residents and “suffered foreseeable harm in
Nevada.” Because the “relevant conduct
occurred entirely in Georgi[a] . . . the mere
fact that [this] conduct affected plaintiffs
with connections to the forum State d[id] not
suffice to authorize jurisdiction. 36
Nor is there any justification for the majority’s rule in the
two published cases interpreting Walden in this circuit. In
Williams v. Yamaha Motor Co. Ltd.,37 we summarized
Walden as concerning the extent of a defendant’s contacts,
not the “framework” within which they occurred:
[Walden] dealt with the scenario in which the
connection between the defendant and the
forum was provided only by the plaintiff, and
could aptly be described as “random,
fortuitous, or attenuated.” 38
And in Picot v. Weston, we applied Walden and found no
jurisdiction because the defendant committed all of his
tortious conduct out of state with no meaningful contacts
36
137 S. Ct. 1773, 1781–82 (2017).
37
851 F.3d 1015 (9th Cir. 2017).
38
Id. at 1023–24 (quoting Walden, 134 S. Ct. at 1123).
MORRILL V. SCOTT FINANCIAL 39
with the forum state. 39 Nowhere in Williams or Picot was
the purpose for contacts analyzed, nor were substantial in-
forum contacts disregarded because of an out-of-forum
“framework.”
The majority’s new rule creates at least an implicit
circuit split with the Sixth Circuit. In MAG IAS Holdings
Inc. v. Schmückle, 40 a Michigan company sued a German
resident who was CEO of its parent company. The German
resident invoked Walden and argued that “because he
targeted his conduct only at plaintiffs and not at Michigan
itself” there was no jurisdiction. 41 The Sixth Circuit rejected
this view and held that “Walden simply holds that an out-of-
state injury to a forum resident, standing alone, cannot
constitute purposeful availment.” 42 “It would severely limit
the availability of personal jurisdiction if every defendant
could simply frame his conduct as targeting only the
plaintiffs and not the forum state.” 43 In Schmückle and in
our case, the out-of-state injury to the forum resident did not
“stand alone.” So we should, as the Sixth Circuit did,
conclude that Walden is distinguishable.
When the majority does get to discussing the defendants’
contacts with Arizona (rather than their “driving force” or
39
780 F.3d 1206, 1214–15 (9th Cir. 2015).
40
854 F.3d 894 (6th Cir. 2017).
41
Id. at 901.
42
Id.
43
Id.
40 MORRILL V. SCOTT FINANCIAL
the “framework within which” they occurred), 44 it
characterizes them as a “component part” of the plaintiffs’
conduct. 45 The majority relies on an incorrect premise: that
Scott’s and Jones’s filing of a new lawsuit in Arizona state
court to depose plaintiffs was a “component part” of the
parties’ ongoing litigation in Nevada. 46 It was not.
Accepting plaintiffs’ allegations as true, as we must at this
stage, 47 the defendants’ conduct was an illegitimate use of
the Arizona court system to harm plaintiffs by driving a
wedge between plaintiffs and their clients. Courts in
Arizona and Nevada acknowledged as much when they
erected hurdles to the defendants’ Arizona depositions so
that the depositions were never taken.
While the Nevada lawsuit may have been the impetus for
the defendants’ conduct, their contacts—filing a civil action
in Arizona, traveling to Arizona, appearing pro hac vice in
an Arizona court, and arguing a new case in an adversarial
hearing—were not “limited and ancillary” as the majority
suggests. 48 Certainly the lawyers’ fees stemming from all of
this work in Arizona would not be small. And Walden
stressed that “physical presence within the territorial
jurisdiction,” such as Jones entering Arizona to commit the
44
Maj. op. at 17.
45
Maj. op. at 15, 17–18, 24–25.
46
See id.
47
Sher, 911 F.2d at 1360–61.
48
Maj. op. at 24.
MORRILL V. SCOTT FINANCIAL 41
alleged tort in this case, is “certainly a relevant contact.”49
So, although the Arizona conduct may have been the tail of
the dog, it was a very big dog with a very big tail.
I do not understand the majority’s argument that the
defendants’ conduct established only “the potential
foreseeability of some incidental harm to Plaintiffs in
Arizona.” 50 We have held that the economic and
reputational loss to a law firm occurs in that firm’s home
state. 51 There is nothing “incidental” about filing a new
lawsuit, creating a rift between attorney and client, causing
a client to fire his lawyer in the middle of litigation, causing
a lawyer to lose a major client in a huge case, and causing
both economic and reputational harm in the process. While
Morrill may have suffered harm in Nevada, that does not
negate the harm defendants directed at Morrill in Arizona
using the Arizona courts. It is not required that a plaintiff
suffer all of the harm in the forum state. 52
Trial lawyers say of hardball litigation, “live by the
sword, die by the sword.” Yet Scott and Jones avoid the
jurisdictional consequences of both their Arizona-directed
conduct and their conduct in Arizona. Scott’s and Jones’s
decision to bring the fight to Morrill and his firm in Arizona
by availing themselves of the Arizona state courts subjected
them to jurisdiction in Arizona to determine if their hardball
litigation tactics were tortious. The majority’s opinion today
not only allows Scott and Jones to use the Arizona legal
49
Walden, 134 S. Ct. at 1122.
50
Maj. op. at 15.
51
See Brayton Purcell LLP, 606 F.3d at 1131.
52
Id.
42 MORRILL V. SCOTT FINANCIAL
system against an Arizona resident yet avoid being held
accountable in Arizona, but it will also deprive future
plaintiffs of the ability to sue in the forum to which a
defendant has traveled to do them harm. It is mistaken. The
majority’s “driving force” and “framework” test enables a
tortfeasor to evade jurisdiction where his actions or their
consequences occur, so long as the tortfeasor’s purpose is to
use the tort as a means to his own end that will occur
elsewhere.