U.S. Virgin Islands corporations have the potential to be sued in all areas of the country. It is important to understand how your company’s interactions in another jurisdiction may bring about the required jurisdictional requirements to be sued there.
There are two types of personal jurisdiction: general and specific. General jurisdiction is found where a plaintiff’s claim arises out of the defendant’s “continuous and systematic” contacts with the forum state. It exists even if the cause of action is unrelated to the defendant’s activities in the forum state. Specific jurisdiction exists when the plaintiff’s claim arises out of the defendant’s activities within the forum, in such a way that a defendant could reasonably anticipate being sued in the state’s courts.
Susan and Jeffrey Rocke, sought review of the District Court’s decision granting Pebble Beach Company’s motion to dismiss for lack of personal jurisdiction and the District Court’s denial of the Rockes’ request to conduct jurisdictional discovery. The Rockes are residents of Pennsylvania, and Pebble Beach owns and operates The Lodge at Pebble Beach, a golf and spa resort located in California. Prior to their 2011 visit to the Lodge, the Rockes allege they received mailings and emails advertisements soliciting business from Pebble Beach. The Rockes alleged their decision to visit the Lodge was based on these ads. In addition, Pebble Beach has a toll-free telephone number and a website on which Pennsylvania residents can make reservations. However, the Rockes didn’t use these resources, but made their reservations via a friend in Ohio. In September 2011, Mrs. Rocke slipped, fell and struck her head while walking in the resort. She alleged that she sustained a traumatic brain injury as a result of the accident. After the Rockes returned home, an employee in Pebble Beach’s Risk Management Office left four voicemail messages acknowledging that Pebble Beach was responsible for Mrs. Rocke’s fall and injury. He asked for an update on her injuries so that they could reimburse her medical expenses. The Rockes claimed that the District Court erred in dismissing their complaint for lack of personal jurisdiction. In the alternative, they argued they were entitled to jurisdictional discovery to uncover facts they allege would reveal the nature and extent of Pebble Beach’s business activities in Pennsylvania. Circuit Judge Joseph A. Greenaway, Jr. of the United States Court of Appeals, Third Circuit wrote in his opinion that the long arm statute in Pennsylvania allowed courts to exercise personal jurisdiction “to the full extent allowed under the Constitution of the United States.” Judge Greenaway stated that Pebble Beach’s contacts with Pennsylvania were not sufficient to establish general jurisdiction. General jurisdiction arises only if a defendant has maintained “continuous and systematic general business contacts” with the state. Judge Greenaway went on to say that, although the Rockes alleged they received mailings and emails from Pebble Beach before their visit to the Lodge, these contacts didn’t meet the continuous and systematic presence needed to establish general jurisdiction. Pebble Beach was not incorporated in Pennsylvania and didn’t maintain an office or an agent there. The record was also missing any evidence of ongoing contractual relationships between Pebble Beach and Pennsylvania residents. There was no basis, on the record, to conclude that Pebble Beach’s contacts with Pennsylvania were sufficiently continuous and substantial to establish general jurisdiction. The Third Circuit also concluded that based on Pebble Beach’s contacts with Pennsylvania, specific jurisdiction wasn’t established. Specific jurisdiction exists when the plaintiff establishes the existence of minimum contacts between the defendant and the forum state. To do so, Judge Greenaway explained that the plaintiff must satisfy three steps. 1. The plaintiff must show that the defendant has “purposefully directed its activities” at the forum; 2. The litigation must “arise out of or relate” to at least one of those activities; 3. If these two requirements are met, then the court may then consider whether the exercise of jurisdiction would “comport with fair play and substantial justice.” Physical entrance is not required to satisfy the first prong of the specific jurisdiction test, but the defendant must have “purposefully availed itself of the privilege of conducting activities within the forum" before specific jurisdiction can occur. The Rockes didn’t show that Pebble Beach’s contact with Pennsylvania prior to the accident met the threshold of contact. The Rockes asserted Pebble Beach sent an unspecified amount of advertising material to them via mail and emails. Isolated or sporadic contact absent a showing of deliberate action is insufficient to establish the minimum contacts required to establish specific jurisdiction. Pebble Beach’s website also failed to qualify as purposeful contact. The Third Circuit has previously held that operating of a commercial web site alone would not subject the operator to jurisdiction anywhere in the world. Instead, there must be evidence that the defendant “purposefully availed” itself to conducting activity in the forum state, by directly targeting its web site to the state, knowingly interacting with residents of the forum state via its web site, or through sufficient other related contacts. The Third Circuit saw nothing in the record to suggest the web site directly targeted Pennsylvania, or that Pebble Beach knowingly interacted with Pennsylvania residents through the web site. Since Pebble Beach’s contacts failed to establish specific jurisdiction, the District Court properly concluded that there was a lack of personal jurisdiction based on the record before it. Judge Greenaway wrote that while the Court of Appeals agreed with the District Court that the record before it failed to support personal jurisdiction, it concluded that the District Court abused its discretion in denying the Rockes’ request for jurisdictional discovery. The Supreme Court has held that “where issues arise as to jurisdiction or venue, discovery is available to ascertain the facts bearing on such issues.” The Third Circuit has held that unless a plaintiff’s claim is “clearly frivolous,” jurisdictional discovery should be allowed. Further, Judge Greenaway wrote, the Court of Appeals has found jurisdictional discovery particularly appropriate where a defendant is a corporation. Rocke v. Pebble Beach Co., — Fed.Appx. —-, 2013 WL 5568727 (C.A.3 (Pa.) Oct. 10, 2013). BoltNagi PC is one of the largest firms in the United States Virgin Islands and has experienced legal professionals to assist companies based in or seeking to relocate in the U.S. Virgin Islands.