Personal District Court Finds Specific Personal Jurisdiction over Nonresident Because He Traveled to Michigan and Successfully Solicited Investments from American Citizens

The World in U.S. Courts: Summer and Fall 2016 - Personal Jurisdiction/Forum Non Conveniens/ Foreign Sovereign Immunity Act (FSIA)

Akbar v. Bangash, U.S. District Court for the Eastern District of Michigan, July 29, 2016

Plaintiff Amin Khan, a Michigan resident, along with other American citizens, sued Global Health Services Limited (GHS), a Pakistani company, and its Chief Executive Officer, Bangash (a Pakistani resident), for soliciting them to enter into a contract and invest in allegedly “worthless” shares.  The complaint alleged that Bangash traveled to Khan’s home in Michigan and defrauded him into investing in the development of hospital facilities in Pakistan.  The defendants moved to dismiss the complaint, arguing that the Court lacked personal jurisdiction over them and that forum non conveniens required dismissal.

The District Court in Michigan rejected defendants’ arguments.  In finding that the plaintiffs established a prima facie showing of personal jurisdiction, the Court applied the traditional two-part analysis, examining whether personal jurisdiction over defendants satisfied both Michigan’s “long-arm” statute and the requirements of the Due Process Clause.  

First, the Court noted that Michigan’s long-arm statute extends specific personal jurisdiction over nonresidents who conduct “even the slightest act of business” in Michigan.  Given that Bangash visited Khan at his home in Michigan to persuade him to invest in GHS and persuaded Khan at that time to sign the investment contract and present an installment payment, the Court found that this transaction satisfied Michigan’s long-arm statute.

Second, the Court determined that exercising specific personal jurisdiction in this case comports with the Due Process Clause.  The Court evaluated three factors:  1) whether defendants purposefully availed themselves of acting in the forum state; 2) whether plaintiffs’ claims arose from defendant’s actions in the forum state; and 3) whether exercise of jurisdiction over defendants was reasonable.  The Court concluded that the three factors weighed in favor of subjecting defendants to personal jurisdiction in Michigan.  According to the Court, the facts that Bangash called Khan in Michigan to solicit investments and that the transaction was consummated in Khan’s home supported a finding that defendants purposefully availed themselves of acting in the forum state.  The Court also found that plaintiffs demonstrated a causal nexus between their claims and defendants’ activities in Michigan.  Finally, it concluded  that jurisdiction over defendants would not be unreasonable, particularly when Michigan has an interest in ensuring that its residents, like Khan, have an adequate recourse for harms inflicted by nonresidents.

Next, the Court applied a three-part test to determine whether the Court should, at its discretion, decline jurisdiction on forum non conveniens grounds.  First, the Court noted that defendants failed to overcome the presumption of deference afforded to a U.S. resident’s choice of a U.S. forum.  Then, the Court concluded that Pakistan is potentially an alternative forum because its laws may provide an adequate remedy for plaintiffs’ dispute.  Finally, the Court found that, upon balancing “public” and “private” interests, plaintiffs’ choice of forum was not unnecessarily burdensome.  As to the private interests, the Court concluded that the relative costs associated with obtaining witnesses and the ease of gathering evidence did not weigh in favor of dismissal.   Moreover, as to the public interests, the Court determined that any interest that Pakistan might have in the litigation did not outweigh the interest of plaintiffs’ connections to the local forum or the location of their injuries—both of which are in the U.S.  The Court also emphasized that the defendants failed to overcome the presumption that Michigan law applies to plaintiffs’ tort claims or to rebut the arguments that a Michigan juror would be minimally burdened in addressing those claims.  Thus, the Court declined to dismiss the case on forum non conveniens grounds.

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