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explaining that "solicitation of business from Massachusetts residents, through the joint activities and agency of its sister corporations" was sufficient to satisfy the requirements of the Massachusetts long arm statute
Summary of this case from Solta Med., Inc. v. Lumenis, Inc.Opinion
CIVIL ACTION NO. 02-12433-GAO
November 25, 2003
MEMORANDUM AND ORDER
Margaret Rooney, a Massachusetts resident, brought this action to recover for injuries she sustained while vacationing at a Walt Disney World resort in Florida. The defendant Walt Disney World Co. has moved to dismiss for lack of personal jurisdiction, invoking Fed.R.Civ.P. 12(b)(2). The defendant Walt Disney Parks and Resorts, LLC has moved to dismiss for failure to state a claim, invoking Fed.R.Civ.P. 12(b)(6). Alternatively, the defendants have moved to transfer venue to the United States District Court for the Middle District of Florida. For the reasons set forth below, the defendants' motions are all DENIED.
I. Personal Jurisdiction Over Walt Disney World Co.
A. Standard of Proof
"The most commonly used method of determining a motion to dismiss for want of personal jurisdiction is for the district court to consider only whether the plaintiff has proffered evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction."Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675 (1st Cir. 1992). This prima facie standard may be unfair to an out-of-state defendant, and a court may be required to hold an evidentiary hearing and resolve factual disputes, "when the proffered evidence is conflicting and the record is rife with contradictions, or when a plaintiffs affidavits are 'patently incredible.'" Id. at 676 (citations omitted). Here, the plaintiff need not make more than aprima facie showing because the material facts are not in dispute and the affidavits are not incredible. Applying the prima facie standard to the personal jurisdiction dispute, I "tak[e] facts affirmatively alleged by plaintiff as true and constru[e] disputed facts in the light most hospitable to plaintiff." Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir. 1994).
B. Summary of Facts
Disney Enterprises, Inc. ("Enterprises") is the parent corporation of a number of Disney entities (collectively, "Disney"). Walt Disney World Co. ("World Co."), a subsidiary of Enterprises, owns and manages the Walt Disney World Resort complex ("Resort") in Florida which includes the BoardWalk Inn and Villas resort hotel ("BoardWalk"). World Co. does not directly conduct or solicit business or advertise in Massachusetts. Walt Disney Parks and Resorts LLC ("Parks and Resorts"), another subsidiary of Enterprises, purchases hotel rooms and theme park tickets from World Co. and resells them to customers. It also advertises nationally and owns and operates a Central Reservation Center in Florida at which it takes reservations for the vacation packages it sells. Walt Disney Travel Co., Inc. ("Travel Co."), also a subsidiary of Enterprises, purchases and resells travel services for a fee. Travel Co. advertises in newspapers and operates a toll-free telephone number which customers can call to obtain information concerning travel to Disney resorts.
During 2000, Travel Co. advertised in the Boston area concerning vacation opportunities at the Resort. In early 2000, Rooney and her husband viewed a number of advertisements for the Resort in Boston area newspapers and on Boston area television stations. In March 2000, in response to the advertising campaign, they called Travel Co.'s toll-free telephone number to inquire about vacationing at the Resort. Travel Co.'s operator offered to send them a promotional video describing accommodations, attractions, and vacation packages at the Resort. After receiving and viewing the video, Rooney called Parks and Resorts' Central Reservation Center and made a reservation to vacation at the Boardwalk.
In June 2000, Rooney and her husband vacationed at the BoardWalk. She has alleged that during their stay she was injured by a BoardWalk employee, and she seeks damages from World Co. and Parks and Resorts for the employee's negligent acts.
C. Long-Arm Jurisdiction
This Court has personal jurisdiction over an out-of-state defendant in a diversity case if the defendant is within the reach of the Massachusetts long-arm statute and if the exercise of personal jurisdiction comports with the due process requirements of the Fourteenth Amendment. See, e.g., Alioto, 26 F.3d at 204.
The Massachusetts long-arm statute provides, in pertinent part, that "[a] court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth. . . ." Mass. Gen. Laws ch. 223 A, § 3. "To satisfy the requirements of the long-arm statute, Section 3(a), the defendant must have transacted business in Massachusetts and the plaintiffs' claim must have arisen from the transaction of business by the defendant." Nowak v. Tak How Invs. Ltd., 94 F.3d 708, 712 (1st Cir. 1996) (citingTatro v. Manor Care, Inc., 625 N.E.2d 549, 551 (Mass. 1994)).
In Tatro, a case concerning a Massachusetts resident who was injured at a California hotel, the Supreme Judicial Court stated,
The "transacting any business" clause [in § 3] has been construed broadly. Although an isolated (and minor) transaction with a Massachusetts resident may be insufficient, generally the purposeful and successful solicitation of business from residents of the Commonwealth, by a defendant or its agent, will suffice to satisfy this requirement. It is obvious that the defendant, which solicited and obtained meeting and convention business from at least ten Massachusetts businesses, and maintained telephone and mail contact with them, transacted business in the Commonwealth during the relevant period.
We also think that the defendant's acceptance of the plaintiffs room reservation formed part of the defendant's overall purposeful solicitation of hotel business from residents of Massachusetts.625 N.E.2d at 551-52 (citations and internal quotation marks omitted, alteration in original); see also Nowak, 94 F.3d at 712 (Hong Kong hotel's solicitation of business and acceptance of reservation from Massachusetts resident sufficient to satisfy long-arm statute requirements).
Guided by Tatro and Nowak. I have no difficulty finding that World Co.'s solicitation of business from Massachusetts residents, through the joint activities and agency of its sister corporations in the Disney family, are sufficient to satisfy the requirements of the long-arm statute. Travel Co. directed its advertising campaign at Massachusetts residents via the Boston area media for the specific purpose of inducing them to go to Florida and stay, as paying guests, at World Co. 's hotel. The advertising campaign had the hoped-for effect: Rooney, enticed by the advertisements, contacted Travel Co. for more information. Travel Co.'s operators were ready for the call and offered to send to Massachusetts additional material, including a promotional video, intended to encourage Rooney's interest in a trip to the Resort. After receiving and viewing the additional material that Travel Co. mailed to her in Massachusetts, she called Parks and Resorts' Central Reservation Center to book the vacation the advertisements had promised. As a result of the successful efforts to solicit business from Massachusetts customers, Rooney traveled to the BoardWalk where she sustained the injuries that gave rise to this action.
The Massachusetts long-arm statute states that "[a] court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth. . . ." Mass. Gen. Laws ch. 223 A, § 3 (emphasis added). The record, viewed in Rooney's favor, reflects that Parks and Resorts and Travel Co. acted as World Co.'s agents when they solicited business from and transacted business with Rooney in Massachusetts. Accordingly, Parks and Resorts' and Travel Co.'s Massachusetts activities can be imputed to World Co. to bring it within the reach of the long-arm statute.
D. Constitutional Constraints
To determine whether exercising personal jurisdiction comports with the constraints of the Constitution, the First Circuit applies a three-part test:
First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.United Elec. Workers v. 163 Pleasant St. Corp., 960 F.2d 1080, 1089 (1st Cir. 1992).
1. Relatedness
In approaching the "arise out of, or relate to" inquiry, the First Circuit applies a standard that "represents a small overlay of 'but for' on 'proximate cause'":
When a foreign corporation directly targets residents in an ongoing effort to further a business relationship, and achieves its purpose, it may not necessarily be unreasonable to subject that corporation to forum jurisdiction when the efforts lead to a tortious result. The corporation's own conduct increases the likelihood that a specific resident will respond favorably. If the resident is harmed while engaged in activities integral to the relationship the corporation sought to establish, we think the nexus between the contacts and the cause of action is sufficiently strong to survive the due process inquiry at least at the relatedness stage.Nowak, 94 F.3d at 715-16. In Nowak, the Court found that although the nexus between defendant's solicitation of business in Massachusetts and the injuries suffered in Hong Kong "does not constitute a proximate cause relationship, it does represent a meaningful link between [defendant's] contact and the harm suffered."Id. at 716. This precedent, when applied to the facts described above, compels the same result.
2. Purposeful availment
Again in Nowak, the First Circuit explained that for purposes of the purposeful availment analysis:
Our two focal points are voluntariness and foreseeability. The defendant's contacts with the forum state must be voluntary — that is, not based on the unilateral actions of another party or a third person. In addition, the defendant's contacts with the forum state must be such that he should reasonably anticipate being haled into court here.Id. at 716 (citations omitted). Here, Disney targeted its advertising campaign at Massachusetts to lure Massachusetts residents to vacation at its resort in Florida. Those advertisements directed residents, including Rooney, to contact Travel Co.'s information center for further information. After receiving the inquiries it sought, Travel Co. mailed information to Rooney in Massachusetts. That information directed her to contact Parks and Resorts' Central Reservation Center, which she did, and the Reservation Center booked her vacation reservation. The result — Rooney's trip to Florida — was the very result defendants sought when they directed their advertisements at Massachusetts residents. Their efforts to solicit business from Massachusetts customers "rendered foreseeable the possibility of being haled into a Massachusetts court." Id. at 717.
3. Fairness and Justice
The First Circuit applies the following "gestalt factors" to determine whether the exercise of personal jurisdiction "comports with traditional notions of fair play and substantial justice":
(1) the defendant's burden of appearing, (2) the forum state's interest in adjudicating the dispute, (3) the plaintiffs interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) common interests of all sovereigns in promoting substantive social policies.Pleasant St., 960 F.2d at 1088. "The purpose of the gestalt factors is to aid the court in achieving substantial justice, particularly where the minimum contacts question is very close. In such cases, the gestalt factors may tip the constitutional balance."Nowak, 94 F.3d at 717.
Here, given the nature and extent of the activities in Massachusetts it is not substantially unjust to subject World Co. to the jurisdiction of this Court. World Co.'s burden of appearing in Massachusetts is no greater than that placed on any party that must litigate in a foreign jurisdiction. Id. at 718. "Massachusetts has a strong interest in protecting its citizens from out-of-state solicitations for goods or services that prove to be unsafe, and it also has an interest in providing its citizens with a convenient forum in which to assert their claims." Id. at 718. Massachusetts is a more convenient forum for Rooney, and "[t]his Court must accord deference to the [plaintiffs] choice of a Massachusetts forum." Id. The remaining factors do nothing to tip the constitutional inquiry in World Co.'s favor.
Accordingly, the exercise of personal jurisdiction over World Co. does not offend the due process protections of the Constitution.
II. Parks and Resorts' Motion to Dismiss
Parks and Resorts has moved to dismiss invoking Fed.R.Civ.P. 12(b)(6) and arguing that it is not a proper defendant to this suit because it did not own, control, operate, or maintain the BoardWalk property where Rooney sustained her injuries. Parks and Resorts submits affidavits with its motion and asks that I treat it as a motion for summary judgment. At this stage of the action, I decline the invitation and treat it as a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). In so doing, I accept as true the facts Rooney has alleged in the complaint.
She has alleged that while vacationing at the BoardWalk in Florida she was injured by the negligent acts of the BoardWalk's employee. She specifically has alleged that Parks and Resorts "owned, controlled, operated and/or maintained" the resort at which she was injured. Compl. ¶ 3. These allegations, which I accept as true, are sufficient to survive Parks and Resorts' motion to dismiss.
III. Defendants' Motion to Transfer
The defendants' have moved for a transfer of venue to the United States District Court for the Middle District of Florida. There are two bases upon which the defendants may seek a transfer of venue. Under 28 U.S.C. ¶ 1406(a), a court shall dismiss a case or transfer it to a different venue if venue is improper in the forum where the case was brought. Under 28 U.S.C. ¶ 1404(a), a court in its discretion may transfer a case to a different venue if the court determines that an alternative venue is more convenient and justice will be better served.
The difference between § 1406(a) and § 1404(a) is material. The former provides that if venue is improper in this district, then the court should either dismiss the case or "if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). However, if venue is proper in this district, then under § 1406(a) the court does not reach the question whether the interest of justice would require transfer to another venue. Alternatively, under § 1404(a), even if venue is proper in this district, the court has the discretion to transfer to a different venue if it is more convenient and justice is served.
The motion papers suggest that the parties have not focused on whether the defendants' motion to transfer is based on improper venue under § 1406(a) or forum non conveniens under § 1404(a). The defendants' memorandum in support of their motion cites § 1406(a), suggesting a motion based on improper venue. The citation, however, is followed by arguments that Florida is a more convenient forum and a lack of arguments that venue is improper in Massachusetts. Further confusing matters, Rooney's opposition cites only § 1404(a) and seeks to rebut the defendants' motion as though it were based on forum non conveniens. Rooney too fails to address whether venue is proper in Massachusetts. The defendants' reply brief does not identify the inconsistency or shed any additional light on the issue. Based on the defendants' citation to § 1406(a) and notwithstanding their arguments concerning the convenience of the forum rather than the propriety of the venue, I treat the motion as a motion based on improper venue and conclude that venue is proper in this district.
Were I to consider defendants' motion as based on forum non conveniens. I would reach the same result and deny the motion.
Section 1391(a) provides that, in a diversity action, venue is proper in either "(1) a judicial district where any defendant resides, if all defendants reside in the same State, [or] (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated. . . ." Massachusetts is not a proper venue under subsection one. Massachusetts is a proper venue under subsection two if "a substantial part of the events . . . giving rise to the claim occurred" in Massachusetts. The cases construing subsection two are spare.
The First Circuit, in Uffner v. La Reunion Francaise, S.A., 244 F.3d 38 (1st Cir. 2001), identified the principles which inform the analysis. The Court "look[s] . . . not to a single 'triggering event' prompting the action, but to the entire sequence of events underlying the claim." Id. at 42. "[A]n event need not be a point of dispute between the parties in order to constitute a substantial event giving rise to the claim." Id. at 43. Venue may be proper where a single event in the forum "was one part of the historical predicate for the instant suit," even though that single event was "not related to the principal question for decision." Id. at 42-43.
Applying these principles, I find that venue is proper in Massachusetts. As I have already discussed at length above, numerous events occurred in Massachusetts. While those events may bear little weight in the ultimate determination of Rooney's tort claim, they are a significant part of the "entire sequence" and "historical predicate" of events giving rise to her claim.
This conclusion is supported by the similarity of (1) § 1391(a)(2)'s requirement that "a substantial part of the events . . . giving rise to the claim" must have occurred in the forum; (2) the long-arm statute's requirement that "plaintiffs' claim must have arisen from the transaction of business by the defendant" in the forum, Nowak, 94 F.3d at 712; and (3) the constitutional requirement that "the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities," Pleasant St., 960 F.2d at 1089. Having already concluded that personal jurisdiction is proper because Rooney's claim arises from the defendants' activities in Massachusetts, I also conclude that venue is proper.
IV. Conclusion
The defendants' motions to dismiss the complaint pursuant to Fed.R.Civ.P. 12(b)(2) and (6) or, in the alternative, to transfer venue are DENIED.
It is SO ORDERED.