The World in U.S. Courts: Winter 2015 - Personal Jurisdiction
In 2011 and 2012, Plaintiffs entered into office agreements with Defendants to lease commercial office space in California and New York, based on representations made on defendants’ website. Plaintiffs alleged that Defendants assessed charges beyond what was permitted by their agreements. The complaint alleged state law claims as well as one based on the federal RICO law. Defendant Regus PLC (“Regus”), a Channel Islands public limited company, moved to dismiss for lack of personal jurisdiction.
Courts in the Ninth Circuit evaluate personal jurisdiction using a three-prong test, according to which: (1) the non-resident defendant must purposefully direct activities to the forum state, (2) the claim must arise out of or relate to the defendant's forum-related activities, and (3) the exercise of jurisdiction must comport with fair play and substantial justice.
The Court denied Regus’ motion. First, the Court considered Regus’ operation of a website targeting California residents, and found that conduct to satisfy the “purposeful direction” portion of the test, because it was an intentional act and there was a foreseeability of harm suffered in California from the alleged conduct. Second, the Court found that Plaintiffs’ alleged injuries would not have occurred but for Regus’ activities directed at California, as they would not have rented office space from Defendants absent the website’s solicitation of business. Finally, adopting a multi-factor test used by Courts in the Ninth Circuit, the Court found that, on balance, the factors (including, among others, the extent of a defendant’s purposeful interjection, the forum state’s interest in adjudicating the dispute, and the existence of an alternative forum) weighed considerably in favor of exercising personal jurisdiction over Defendants. Finally, the Court concluded that the assertion of jurisdiction comported with the traditional notions of fair play and substantial justice.