348 F.3d 704
United States Court of Appeals,
Eighth Circuit.
Scott B. LAKIN, Director of the Department of Insurance for the
State of
Missouri, in his statutory capacity as Liquidator of International
Financial
Services Life Insurance Company; George Dale, Commissioner of Insurance
for
the State of Mississippi, in his statutory capacity as
Liquidator of Franklin
Company Family Guarantee Life Insurance Company,
and First National Life
Insurance Company of America; Anne B. Pope, Commissioner of Commerce
for the
State of Tennessee in her statutory capacity as a Liquidator of
Franklin
American Life Insurance Company; Carroll Fisher, Insurance Commissioner
for
the State of Oklahoma, in his statutory capacity as Receiver
of Farmers and
Ranchers Life Insurance Company in Liquidation, Appellants,
v.
PRUDENTIAL SECURITIES, INC.; Prudential Investments, Inc., Appellees.
No. 02-2477.
Submitted:
Dec. 12, 2002.
Filed:
Nov. 4, 2003.
Before BOWMAN, RILEY, and SMITH, Circuit Judges.
SMITH, Circuit Judge.
Appellants filed suit in Missouri state court,
alleging claims of negligence, breach of contract, and breach of fiduciary
duties. After removal, Appellee Prudential Savings Bank ("Prudential
Savings") moved for dismissal for lack of personal jurisdiction. Appellants resisted the motion and filed a
request for jurisdictional discovery.
The district court then granted Prudential Securities' motion and denied
appellants' request. We affirm in part,
reverse in part, and remand for jurisdictional discovery.
I.
Beginning in 1991 a group of
individuals-including Martin Frankel, John Hackney,
Gary Atnip, and others-acquired and ran several
insurance companies. After acquiring the companies, they allegedly engaged in
an elaborate looting scheme, which converted and misappropriated the assets and
funds of these insurance companies. *706
The insurance companies are now insolvent and in receivership. Appellants serve as the court-appointed
receivers of these insurance companies, which are located in their respective
states-Missouri, Mississippi, Tennessee, and Oklahoma.
Appellee Prudential
Savings is a federally-chartered savings bank. Its principal place of business
and its home office are located in the State of Georgia. In December 1998, as part of the scheme,
Hackney opened a custody account at Prudential Savings on behalf of Franklin
American Life Insurance Company ("FAL"), a Tennessee-domiciled
insurance company. On December 28, 1999,
the account received a deposit of approximately $69 million; allegedly that money was later
transferred to another bank account in Tennessee and then to Frankel's Swiss
bank account.
After the alleged fraud was exposed and the
insurance companies went insolvent, appellants filed a complaint against
Prudential Savings and others [FN1] in
Missouri state court. In pertinent part,
the suit alleged that Prudential Savings was negligent and breached its
contractual and fiduciary duties to FAL when it allegedly permitted the $69
million to be released to Frankel without proper instruction from FAL's officers.
After the suit was filed, the case was
removed to the United States District Court for the Western District of
Missouri.
FN1. Appellants also
sued Prudential Securities, Inc. and Prudential Investments, Inc. Prudential
Securities is headquartered in New York, while Prudential Investments does
business in Missouri. Neither challenged
personal jurisdiction.
Prudential Savings then filed a motion to
dismiss for lack of personal jurisdiction, arguing that it has only one
physical office-located in Georgia- and that it has virtually no contact with
Missouri residents. Appellants countered
that from December 1998 to June 2001, Prudential Savings did have sufficient
contacts with the State of Missouri.
Appellants noted that Prudential Savings maintained home-equity loans
and lines of credit to Missouri residents totaling around $10 million, or one
percent of its loan portfolio. In addition, appellants noted that Prudential
Savings maintained a Web site- www.prudential.com/ banking [FN2]-on which Prudential Savings' services are offered to
Missouri residents. As an alternative,
appellants requested leave for jurisdictional discovery. The district court, however, disagreed with
appellants, granted Prudential Services' motion to dismiss, and denied
appellants' motion for jurisdictional discovery. For the reasons stated below, we affirm in part, reverse in part, and remand
for jurisdictional discovery.
FN2. As of October
2001, the Prudential Web site was located at www.prufn.com. This address now
automatically redirects users to Prudential's current Web site-www.
prudential.com
II.
[1] We review de novo whether appellants have presented a
prima facie case [FN3] of personal jurisdiction, viewing the evidence in the
light most favorable to the appellants and resolving all factual conflicts in
their favor. Pecoraro
v. Sky Ranch for Boys, Inc.,
340 F.3d 558, 561 (8th Cir.2003). As we sit in
diversity for this suit, our analysis of personal jurisdiction involves two
steps. We first must consider whether
the State of Missouri would accept jurisdiction under the facts of this
case. *707Sondergard
v. Miles, Inc.,
985 F.2d 1389,
1392 (8th Cir.1993). Then, we must determine whether that exercise
of jurisdiction comports with Constitutional Due Process restrictions. Id.
FN3. In order to
survive a motion to dismiss for lack of personal jurisdiction, appellants need
only make a prima facie showing of personal jurisdiction over Prudential
Savings. Digi-Tel
Holdings, Inc. v. Proteq Telecomm. (PTE), Ltd., 89 F.3d 519, 522 (8th Cir.1996).
A. Jurisdiction
The Supreme Court has noted that states
exercise two broad types of personal jurisdiction: specific jurisdiction and general
jurisdiction. Helicopteros Nacionales
de Colombia, S.A. v. Hall,
466 U.S. 408, 414 nn. 8-9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Specific jurisdiction refers to jurisdiction
over causes of action that "arise out of" or "relate to" a
defendant's activities within a state. Burger King Corp. v. Rudzewicz,
471 U.S. 462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528
(1985). General jurisdiction, "on the other
hand, refers to the power of a state to adjudicate any cause of action
involving a particular defendant, regardless of where the cause of action
arose." Sondergard,
985 F.2d at 1392 (citation omitted); see also Helicopteros,
466 U.S. at 414 & n. 9, 104 S.Ct. 1868.
[2] Appellants first argue that they have established a prima
facie case of specific jurisdiction.
However, a prima facie case of specific personal jurisdiction can only
be established if Prudential Savings "has purposefully directed [its]
activities at [Missouri] residents," and the claim of this suit either
"arises out of" or "relates to" these activities. Burger
King,
471 U.S. at 472, 105 S.Ct. 2174 (citation omitted);
see also State
ex rel. Newport v. Wiesman,
627 S.W.2d 874, 876 (Mo.1982) (en banc)
(extending the Missouri long-arm statute to
the extent permissible under the Due Process Clause). Here, the cause of action alleged-that
Prudential Savings was negligent and breached its contractual and fiduciary
duties to FAL-is entirely unrelated to Prudential Securities' activities in
Missouri. Rather, the cause of action
"arises out of" and "relates to" activities in the State of
Tennessee. As a result, appellants'
argument for specific jurisdiction fails.
Appellants next argue that the facts of this
case-specifically Prudential Securities' Web site and its home-equity loans and
lines of credit to Missouri residents [FN4]-are
sufficient to establish general jurisdiction over Prudential Securities. Thus, we must examine whether Missouri
"has authorized the exercise of general jurisdiction over non-resident
corporations, and whether it would apply the doctrine in this case." Sondergard,
985 F.2d at 1392.
FN4. Appellants also
cite a third factor-Mo. Rev. Stat. § 351.572.2 (2000)-as
a reason to support general jurisdiction over Prudential Securities. We find this argument to be misplaced and
without merit.
The Missouri Supreme Court has long held that
a "foreign corporation present and conducting substantial business in
Missouri" is subject to the jurisdiction of
Missouri courts. State
ex rel. K-Mart Corp. v. Holliger,
986 S.W.2d 165, 167 (Mo.1999) (en banc) (citing
cases holding the same from 1907 forward). Missouri courts have interpreted the
phrase "present and conducting substantial business" to mean that
jurisdiction will be established if a non-resident corporation has
"substantial" and "continuous" contacts with the State of
Missouri.
[FN5] *708Sloan-Roberts
v. Morse Chevrolet, Inc.,
44 S.W.3d 402, 409 (Mo.Ct.App.2001) (citing Int'l
Shoe Co. v. Washington,
326 U.S. 310, 318, 66 S.Ct. 154, 90 L.Ed. 95 (1945)); see also Shouse v. RFB Constr.
Co., Inc.,
10 S.W.3d 189, 193 (Mo.Ct.App.1999). This is identical to the federal due process
requirements. See Int'l
Shoe,
326 U.S. at 318, 66 S.Ct. 154; see also Helicopteros,
466 U.S. at 415, 104 S.Ct. 1868; Perkins
v. Benguet Consol. Mining Co.,
342 U.S. 437, 445, 72 S.Ct. 413, 96 L.Ed. 485 (1952).
FN5. It bears
mentioning that several district courts in our Circuit have previously come to
the puzzling conclusion that "the Missouri long-arm statute prohibits the
exercise of general personal jurisdiction over a nonresident defendant." United
Mo. Bank, N.A. v. Bank of N.Y.,
723 F.Supp. 408, 411
(W.D.Mo.1989); see also Wooldridge
v. Beech Aircraft Co.,
479 F.Supp. 1041 (W.D.Mo.1979). To spare future courts any confusion, we hold
today that such cases were erroneously decided.
Other courts agree. In
re Tex. Prisoner Litig.,
41 F.Supp.2d 960, 962 (W.D.Mo.1999); see also K-Mart,
986 S.W.2d at 168 n. 3 ("If the Bank
of New York case is read to limit general
jurisdiction based upon activities in Missouri, the case may be inconsistent
with some of our precedents.").
Having determined that Missouri courts have
authorized general jurisdiction, we must now determine if a Missouri court
would apply the doctrine in this case.
Generally, Missouri courts-like most courts-are hesitant to
"exercise general jurisdiction over non-resident defendants." Sloan-Roberts,
44 S.W.3d at 410;
see also Davis
v. Baylor Univ.,
976 S.W.2d 5, 7-8 (Mo.Ct.App.1998). Nevertheless, after reviewing the relevant
factors and the applicable law, we conclude that appellants could establish a
case of general personal jurisdiction if they are permitted to take
jurisdictional discovery on remand.
1. Business Contacts
First, from December 1998 to June 2001,
Prudential Savings maintained home- equity loans and lines of credit to persons
in Missouri. These contacts are
continuous. Home-equity loans and lines
of credit are not single point-of-sale transactions. Rather, the terms of these loans are
typically measured in months and years-creating continuous long-term contacts
with the State of Missouri.
Appellants also argue that these business
contacts are substantial because they total approximately $10 million. Prudential Securities
counters that the home-equity loans and lines of credit only makes up one
percent of their total loan portfolio.
They therefore reason that the contacts should be considered
insubstantial to establish general jurisdiction. [FN6] While Missouri courts have not commented on
whether percentages of a non-resident corporation's total business in a forum
state should be given special consideration in this determination, at least one
of our sister circuits has directly addressed this issue. Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Assoc.,
819 F.2d 434, 437-38 (3d Cir.1987) (dealing with
this issue in a very similar factual scenario). [FN7]
FN6. Prudential
Securities also argues that these contacts are insubstantial because it has no
offices, employees, or registered agents in the State of Missouri.
FN7. Other circuits,
while not addressing this issue directly, have considered the percentage of a
company's total business as just one of the factors to consider in a general
personal jurisdiction analysis-with varying results. Compare Provident,
819 F.2d at 437-38; Mich. Nat'l
Bank v. Quality Dinette, Inc.,
888 F.2d 462, 465-66 (6th Cir.1989) (furniture
machine manufacturer, whose sales in Michigan accounted for three percent of
its total sales when combined with other factors were sufficient contacts for
general jurisdiction); Gator.Com
Corp. v. L.L. Bean, Inc.,
341 F.3d 1072, 1074, 1076-79 (9th Cir.2003)
(general jurisdiction found where defendant's sole contacts were its Internet
Web site and sales in the State of California, which accounted for six percent
of its total sales) with Dalton
v. R & W Marine, Inc.
897 F.2d 1359, 1362 (5th Cir.1990) (company's
ownership of several boats in the state, which accounted for thirteen percent
of its total revenues, were insufficient for general jurisdiction); Nichols
v. G.D. Searle & Co.,
991 F.2d 1195, 1200 (4th Cir.1993) (company who
had two percent of total sales in Maryland when combined with other factors did
not have sufficient contacts for general jurisdiction); Stairmaster
Sport/Med. Prod. Inc.,
916 F.Supp. 1049, 1052-53
(W.D.Wash.1994), aff'd
78
F.3d 602 (Fed.Cir.1996) (mem.)
(no general jurisdiction for company that had isolated
visits and three percent of its total sales volume in Washington).
In Provident, Pennsylvania-based plaintiff Provident sued defendant
California *709 Federal in Pennsylvania.
Id.
at 435. California Federal, a federally-chartered
bank, whose headquarters were located in California,
had 138 branch offices in California, thirty-seven in Florida, thirteen in
Georgia, and six in Nevada, but no branches in Pennsylvania. Id.
at 436. Moreover, it "maintained no Pennsylvania
office, employees, agents, mailing address, or telephone number. It had not applied to do business in
Pennsylvania, did no advertising in Pennsylvania, and paid no taxes
there." Id. During the relevant period, California Federal had about
$10 million in outstanding loans with Pennsylvania residents. Id. This, however, only amounted to .083% of California Federal's total loan portfolio of $12 billion. Id. California Federal also had Pennsylvania depositors, whose
total deposits amounted to around $10 million, or .071% of its total deposits.
California Federal argued that the action
should be dismissed for lack of general personal jurisdiction. It further argued that if a company does a
small percentage of its business in a state, then such percentage should create
a presumption for a lack of jurisdiction.
The Court of Appeals disagreed, noting that "the size of the
percentage of California Federal's total business
represented by its Pennsylvania contacts is in general irrelevant ...." Id.
at 438; see also Gehling v. St. George's School of Medicine, Ltd.,
773 F.2d 539, 543 (3d Cir.1985) (stating the
same, but finding no jurisdiction). Likewise, it did not find the
"absolute amount of dollars" completely persuasive. Instead, it found more convincing the nature
of the deposits and the fact that the loans
and deposits were "central to the conduct of its business." Id. Finally, the court found significant the fact that
California Federal "can become the owner of a loan secured by property in
Pennsylvania...." Provident,
819 F.2d at 438 (citation omitted).
[3] We agree. Percentage of a company's sales in a given state are
generally irrelevant. Instead, our focus
is on whether a defendant's activity in the forum state is "continuous and
systematic." Helicopteros,
466 U.S. at 414, 104 S.Ct. 1868. Many companies
conduct millions of dollars in sales worldwide yet only do a small percentage
of their sales in any one state. E.g., L.L.
Bean, Inc.,
341 F.3d at 1074 (sales in California for L.L.
Bean, Inc. only accounted for six percent of its total sales). However, our relevant inquiry is not whether
the percentage of a company's contacts is substantial for that company; rather, our inquiry
focuses on whether the company's contacts are substantial for the forum.
As the record stands, Prudential Securities'
contacts are substantial. Prudential
Securities has nearly $10 million in its Missouri loan portfolio. Because home-equity
loans and lines of credit can represent indebtedness of as little as a few
thousand dollars, [FN8] $10 million in such loans can represent the establishment
of lending relationships with hundreds, if not thousands of Missouri
residents. Moreover, it is noteworthy
that home-equity loans and lines of credit are "central to the conduct of
[Prudential Securities']
business." *710 Provident,
819 F.2d at 438.
While it is true that the loans were made in Georgia, it is likely that
such loans are secured with Missouri residents' property, which was used as
collateral for the loan. See Mo.Rev.Stat. § 443 et seq. If this is true, then Prudential Security
will have liens on hundreds to thousands of pieces of real property in Missouri
and the power to use Missouri courts to enforce them. See Mo.Rev.Stat. § § 443.190, 443.290. However, it is
unclear from the record if this is the case.
Appellants must be permitted to have the opportunity to establish these
facts through jurisdictional discovery.
FN8. See Cathy
Lesser Mansfield, The Road
to Subprime "HEL" Was Paved with Good
Congressional Intentions: Usury Deregulation
and the Subprime Home Equity Market,
51 S.C. L.Rev. 473, 523 (2000) (stating that by 1994 about 8.2 million households had
"home equity debt totaling about $255 billion" (equaling an average
of over $30,000 per household)); cf. I.R.C.
§ 163(h)(3)
(capping the amount of interest deduction on a home- equity loan at
$100,000; $50,000 in the case of a
separate return by a married individual).
2. Internet Contacts
Second, appellants assert that Prudential
Securities' Web site should render it
subject to general jurisdiction.
Missouri courts have not yet addressed whether a Web site may provide
sufficient "minimum contacts" to invoke personal jurisdiction. [FN9] Neither have we. However, many of our sister circuits
have. Unfortunately, the majority of
these cases address whether a Web site can provide sufficient contacts to
invoke specific jurisdiction. E.g., Toys
"R" Us, Inc. v. Step Two, S.A.,
318 F.3d 446, (3d Cir.2003) (specific
jurisdiction in trademark infringement case);
ALS
Scan, Inc. v. Digital Serv. Consult., Inc.,
293 F.3d 707 (4th Cir.2002) (same); Bensusan Rest. Corp. v. King,
126 F.3d 25 (2d Cir.1997) (same); Cybersell, Inc., v. Cybersell,
Inc.,
130 F.3d 414 (9th Cir.1997) (same); CompuServe,
Inc. v. Patterson,
89 F.3d 1257 (6th Cir.1996) (same); see also Young
v. New Haven Advocate,
315 F.3d 256 (4th Cir.2002) (specific
jurisdiction for defamation action).
FN9. In one opinion,
however, the Missouri Court of Appeals mentioned the level of interactivity of
a Web site-apparently alluding to the Zippo test. See State
ex rel. Nixon v. Beer Nuts, Ltd.,
29 S.W.3d 828, 830, 835 (Mo.Ct.App.2000)
("In the summer and fall of 1997, Beer Nuts' website fell in the middle
range of websites accessible on the web in terms of its sophistication and
interactivity."). As it appeared
only in the factual summary, however, it played no part in the court's specific
personal jurisdiction determination. Thus, it is not binding upon us.
The great majority of these cases have adopted
the analytical framework of
Zippo
Manufacturing Co. v. Zippo Dot Com, Inc.,
952 F.Supp. 1119, 1124
(W.D.Pa.1997). In Zippo-also a case of specific jurisdiction-the court examined
the few cases that had previously addressed the issue of whether a Web site
could provide sufficient contacts for specific personal jurisdiction. It applied the results of these cases to the
traditional personal jurisdiction analytical framework, noting that "the
likelihood that personal jurisdiction can be constitutionally exercised is
directly proportionate to the nature and quality of the commercial activity
that an entity conducts over the Internet." 952 F.Supp. at
1124. In
order to measure the nature and quality of the commercial activity, the court
created a "sliding scale" to measure the likelihood of personal
jurisdiction. It noted:
At one end of the spectrum are situations where a defendant
clearly does business over the Internet.
If the defendant enters into contracts with residents of a foreign
jurisdiction that involve the knowing and repeated transmission of computer
files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a
defendant has simply posted information on an Internet Web site which is
accessible to users in foreign jurisdictions.
A passive Web site that does little more than make information available to those who are interested in it is
not grounds for the exercise [of] personal *711 jurisdiction. The middle ground is occupied by interactive
Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction
is determined by examining the level of interactivity and commercial nature of
the exchange of information that occurs on the Web site.
Id. (citations omitted).
We agree with our sister circuits that the Zippo model is an appropriate approach in cases of specific
jurisdiction-i.e., ones in which we need only find
"minimum contacts." However,
we are presented with a case of general personal jurisdiction-i.e., one in which we must find "substantial and
continuous" contacts. The circuits
that have addressed which analytical model to apply to a case of general
jurisdiction have split on whether to accept the Zippo "sliding scale."
Compare L.L.
Bean,
341 F.3d at 1079 (applying Zippo and finding general jurisdiction); Gorman
v. Ameritrade Holding Corp.,
293 F.3d 506, 513 (D.C.Cir.2002) (same); Soma
Med. Int'l v. Standard Chartered Bank,
196 F.3d 1292, 1296-97 (10th Cir.1999) (applying Zippo, but finding no general jurisdiction) with Revell v. Lidov,
317 F.3d 467, 471 (5th Cir.2002) (noting that the
Zippo sliding scale "is not well adapted to the general
jurisdiction inquiry"); Bell
v. Imperial Palace Hotel/Casino, Inc.,
200 F.Supp.2d 1082, 1091 (E.D.Mo.2001) (noting
that while the "sliding scale suggested
by the court in Zippo may be a relevant factor in assessing general
jurisdiction, it is not alone determinative") (footnote omitted).
We agree with the courts that do not apply the
"sliding scale" presumptively for cases of general jurisdiction. Certainly, we believe that a consideration of
the "nature and quality" of a Web site and a determination of whether
it is "interactive," "does business," or is merely
"passive" is an important factor in our analysis. However, we have long held that the
"nature and quality" of contacts is only one factor to consider. Instead, we consider a variety of
factors-depending on the circumstance-in a personal jurisdiction analysis. Aftanase
v. Econ. Baler Co.,
343 F.2d 187, 197 (8th Cir.1965) (creating the
five factors to consider for personal jurisdiction and applying them depending
on their relevance to the case).
We first discussed the factors in Aftanase. In this 1965 case, Judge Harry Blackmun [FN10] analyzed and summarized the controlling United States
Supreme Court cases on the subject of personal jurisdiction. Id.
at 195-96 (summarizing Hanson
v. Denckla,
357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958); McGee
v. Int'l Life Ins. Co.,
355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957); Perkins,
342 U.S. at 437, 72 S.Ct. 413; Travelers
Health Ass'n v. Virginia ex rel.
State Corp. Comm'n,
339 U.S. 643, 70 S.Ct. 927, 94 L.Ed.
1154 (1950);
Int'l
Shoe,
326 U.S. at 310, 66 S.Ct. 154). Judge Blackmun then observed that each of these cases established
"general" instead of "precise
guidelines," but that each of the cases had several factors, which the
Supreme Court repeatedly identified. Id.
at 197. Specifically, Judge Blackmun
noted that:
FN10. Prior to
assuming his seat as an Associate Justice of the United States Supreme Court,
Justice Blackmun served as a judge on this Court.
[A]t one time or another in the opinions, three primary
factors, namely, the quantity of the contacts, the nature and quality of the
contacts, and the source and connection of the cause of action with those
contacts, are stressed, and that two others, the interest of the forum *712
state and convenience of the parties, receive mention.
Id. It is apparent that the primary factors relate to our
consideration of a defendant's contacts. [FN11] At a minimum, in a specific jurisdiction case
we will consider the last two of the primary factors-"the nature and
quality of the contacts, and [their] source and connection" to "the
cause of action." In such a case,
the Zippo test would function appropriately. However, in a general
jurisdiction case, we do not consider the "source and connection" to
"the cause of action," but rather we consider the "nature and
quality of the contacts" as well as the "quantity of the
contacts." Bell Paper
Box, Inc. v. U.S. Kids, Inc.,
22 F.3d 816, 819 (8th Cir.1994) (citations
omitted) (distinguishing general jurisdiction from specific jurisdiction). This
is precisely why the Zippo test alone is insufficient for the general jurisdiction
setting.
FN11. It is equally
apparent that the secondary factors, i.e., "the interest of the forum
state and convenience of the parties" relate to our consideration of
"traditional notions of fair play and substantial justice" in our
reasonableness analysis. We consider
these factors in Part II.B, infra.
Under the Zippo test, it is possible for a Web site to be very
interactive, but to have no quantity of contacts. In other words, the contacts would be
continuous, but not substantial.
This is untenable in a general jurisdiction analysis. As one court has noted, the Zippo test "is not well adapted to the general jurisdiction
inquiry, because even repeated contacts with forum residents by a foreign
defendant may not constitute the requisite substantial, continuous and
systematic contacts required for a finding of general jurisdiction ...." Revell,
317 F.3d at 471. As a result, we will first apply the Zippo test and then also look at the quantity of those contacts
with Missouri residents.
Prudential Securities' Web site-www.prudential.com/banking-falls
under the middle category of Zippo-a
sophisticated, interactive Web site in which a user can exchange information
with the host computer. Not only
can Missouri consumers review detailed company, service, and financial
information about Prudential Savings, they can also exchange electronic mail; establish and
access secure online accounts; and
calculate home-mortgage rates. More
importantly, Missouri consumers are also able to complete online applications
for home-equity loans and lines of credit.
The site states that it provides electronic responses to the inquiry
within three to five business days. Through its Web site Prudential Savings could
have continuous, significant contacts with Missouri residents. In fact, because its site is available
twenty-four hours a day, it is possible for Prudential Securities "to have
contacts with the [State of Missouri] that are 'continuous and systematic' to a
degree that traditional foreign corporations can never even approach." Gorman,
293 F.3d at 513.
However, this is not sufficient for general
jurisdiction. As noted, we must also
consider the quantity of contacts that Prudential Securities'-through its Web
site-has with Missouri residents.
However, appellants were unable to conduct jurisdictional discovery
prior to the district court's grant of Prudential Savings' motion to dismiss. As a result, the record contains no
indication of: the number of times that
Missouri consumers have accessed the Web
site; the number of Missouri consumers
that have requested further information about Prudential Savings'
services; the number of Missouri consumers
that have utilized the online loan-application services; the number of times that a Prudential Savings
representative has responded to Missouri *713 residents after they have
applied for a loan; the number and
amounts of home-equity or other loans that resulted from online-application
submission by Missouri consumers, or which are secured by Missouri property.
Appellants did make such a motion. The district court, however, denied it. To not grant it was, in our view, an abuse of
discretion. Gen.
Elec. Capital Corp. v. Grossman,
991 F.2d 1376, 1388 (8th Cir.1993) (applying an
"abuse of discretion" standard when reviewing the denial of a request
for jurisdictional discovery); see
also Carefirst of Md., Inc. v. Carefirst
Pregnancy Ctrs., Inc.,
334 F.3d 390, 402-03 (4th Cir.2003) (same
standard of review in an Internet personal jurisdiction case); Harris
Rutsky & Co. Ins. Servs.,
v. Bell & Clements, Ltd.,
328 F.3d 1122, 1135 (9th Cir.2003) (same standard
of review and remanding for further jurisdictional discovery); Toys
"R" Us, Inc.,
318 F.3d at 455-58 (same standard of review and
remanding for further jurisdictional discovery in an Internet personal
jurisdiction case); Gorman,
293 F.3d at 513 (affirming on a different issue,
but noting that it would otherwise remand for jurisdictional discovery in an
Internet personal jurisdiction case); Shouse,
10 S.W.3d at 194-95 (Missouri appellate court remanding for jurisdictional
discovery). As a result, if appellants
can meet the second factor-i.e., the due process
inquiry-then remand to the district court for further jurisdictional discovery
is the appropriate disposition for this case.
B. Due Process
Regardless of the number of contacts to
support general jurisdiction, we will only reverse the order of the district
court if the assertion of jurisdiction would be reasonable and not offend
notions of "fair play and substantial justice." Int'l
Shoe,
326 U.S. at 316, 66 S.Ct. 154. In making this
determination, we must consider "the burden on [Prudential Securities],
the interests of [Missouri], and the [appellants'] interest in obtaining
relief." Asahi
Metal Indus. Co., Ltd. v. Superior Ct. of Cal.,
480 U.S. 102, 113, 107 S.Ct. 1026, 94 L.Ed.2d 92
(1987); Schilling
v. Hum. Supp. Serv.,
978 S.W.2d 368, 371 (Mo.Ct.App.1998). Additionally, we
must also weigh "the interstate judicial system's interest in obtaining
the most efficient resolution of controversies; and the shared interest of the several
States in furthering fundamental substantive social policies." Asahi
Metal,
480 U.S. at 113, 107 S.Ct. 1026 (citation omitted);
Schilling,
978 S.W.2d at 371.
[4] A consideration of these factors demonstrates that there
is adequate evidence in the record to conclude-if minimum contacts are present-
that asserting jurisdiction over Prudential Securities would not violate due process.
First, Missouri has a significant interest in giving insolvent insurance
companies a forum in which to litigate their claims. Moreover, while it might be a burden for Prudential
Securities to have to travel to Missouri, given the nature of this litigation,
it does not seem overly burdensome. This
litigation involves eight defunct insurance companies, who are fighting over
twenty-two accounts from four different states.
However, as alleged by appellants, the underlying evidence for each is
the same; each
of the accounts was managed by the same broker.
As a result, it would be a waste of judicial resources
to have the parties relitigate this single
insurance claim again in Georgia. It is
much more efficient for all parties to have the litigation centered in one
location. Therefore, as the record
stands, the exercise of general jurisdiction does not offend "notions of
fair play and substantial justice."
However, it is possible that on remand other facts might come *714
to light, which would require a different result.
III.
We therefore affirm the district court's
ruling that it lacked specific jurisdiction over Prudential Securities, reverse
its ruling on general jurisdiction, and remand this matter to the district
court for jurisdictional discovery and proceedings consistent with this
opinion.
348 F.3d 704
END OF
DOCUMENT