Construction Vignette on Personal Jurisdiction

Recently the United States District Court for the District of Rhode Island offered a concise refresher on personal jurisdiction through the lens of construction contractors.  In Sugar Fox 218, LLC v. Greython Constr., LLC, No. CV 16-470S, 2017 WL 1906963 (D.R.I. Mar. 17, 2017), rep. & rec. adopted sub nom. 2017 WL 1900273 (D.R.I. May 9, 2017), the court walked through the several factors that established general jurisdiction in Rhode Island over a defendant contractor who had performed the disputed work for a project in neighboring Connecticut.  Recall that, "[u]nlike specific jurisdiction, which focuses on the cause of action, the defendant and the forum, general jurisdiction is dispute blind with the sole focus on whether the defendant is 'fairly regarded as at home' in the forum." Id. (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011)).  The Court's step-wise analysis serves as an important reminder that a contractor's business touches in a state can add up to "minimum contacts" and being haled to court in a state even though the dispute did not even stem from work in that state.  

To confer general jurisdiction, the Court recounted that "(1) the defendant must have sufficient contacts with the forum state; (2) those contacts must be purposeful; and (3) the exercise of jurisdiction must be reasonable under the circumstances." Id.  In Sugar Fox 218, the defendant's main location was in Connecticut, it was organized under Connecticut LLC law, its employees all resided in Connecticut, and it did do much work there.  However, Court determined that the following purposeful contacts all weighed in favor of exercising general jurisdiction over the contractor as though Rhode Island was its "home":

• website included locations in Providence and Watch Hill, Rhode Island (noting that "the website alone would not be sufficient to confer general personal jurisdiction in this case")
• routinely sent employees into Rhode Island
• completed at least seven projects in Rhode Island in the months prior to suit
• currently is completing projects in Rhode Island
• maintained a permanent “on call” status for one project in Rhode Island
• registered as a contractor to do business in Rhode Island
• its proximity to Rhode Island

As far as the fairness and reasonableness of exercising jurisdiction, the "gestalt" factors, the defendant contractor was not able to carry its burden that the Rhode Island jurisdiction was unfair. The Rhode Island courthouse was actually more convenient for the defendant in terms of distance, the plaintiff was from Rhode Island and selected Rhode Island as its forum, and there was no injustice for a Rhode Island federal court interpreting Connecticut law.  Note also that the defendant contractor  was unable to carry its burden to transfer the venue to Connecticut, which analysis was similarly based on convenience and fairness.

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The author, Katharine Kohm, is a committee member for The Dispute Resolver. Katharine practices construction law and commercial litigation in Rhode Island and Massachusetts. She is an associate at Pierce Atwood, LLP in Providence, Rhode Island. She may be contacted at 401-490-3407 or kkohm@PierceAtwood.com.