Summary
The Fourth Circuit affirmed the dismissal of third-party claims against Westerfeld Construction by Glick, LLC for lack of personal jurisdiction in South Carolina. The court held that Westerfeld lacked general jurisdictional contacts with South Carolina and that the alleged agreements and activities of other parties could not establish specific jurisdiction based on Westerfeld's own conduct. The court also rejected a conspiracy theory of jurisdiction because the allegations of conspiracy were conclusory and speculative.
Topics
Practice areas
Questions Presented
- Whether the South Carolina federal district court had general personal jurisdiction over Westerfeld.
- Whether Westerfeld had sufficient minimum contacts with South Carolina to support specific personal jurisdiction based on the Funds Control Agreement and related loan contracts.
- Whether Mobilization Funding's South Carolina contacts could be imputed to Westerfeld under the conspiracy theory of personal jurisdiction.
- Whether the district court abused its discretion by denying as moot GSH's motion to strike an affidavit and by declining to permit jurisdictional discovery.
Holdings
- The district court lacked general personal jurisdiction over Westerfeld because GSH identified no facts showing that Westerfeld maintained continuous and systematic contacts with South Carolina, and GSH did not challenge that conclusion on appeal.
- The Funds Control Agreement and the Loan Contracts could not establish specific personal jurisdiction over Westerfeld because they reflected conduct by third parties, not contacts created by Westerfeld itself.
- GSH failed to establish specific jurisdiction under the conspiracy theory because it did not plausibly allege with particularity that Westerfeld participated in a conspiracy with Mobilization Funding.
- When no evidentiary hearing is held on a Rule 12(b)(2) motion, the party asserting jurisdiction must establish a prima facie case by proffering specific facts sufficient to support jurisdiction; conclusory averments are insufficient.
- The district court did not abuse its discretion by denying GSH's motion to strike as moot or by declining to permit jurisdictional discovery.
Key quotations
“We agree that there are no factual allegations plausibly connecting Westerfeld to South Carolina and thus affirm the judgment of the district court.” (3)
“Due process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the . . . attenuated contacts he makes by interacting with other persons affiliated with the State.” (11)
“a “naked assertion of conspiracy” offered to establish jurisdiction “stops short of the line between possibility and plausibility,”” (14)
Factual background
Westerfeld is a Florida-based general contractor hired by Florida to perform work in Florida under the Rebuild Florida Project. Westerfeld retained Jessup Construction as a subcontractor, and Jessup entered into a joint venture with GSH of Alabama. Mobilization Funding, which has a presence in South Carolina, loaned Jessup $5.8 million and entered into loan and funds-control agreements with Jessup and related parties; Westerfeld was not a party to those agreements. GSH alleged that Westerfeld conspired with Mobilization Funding to induce the loan and divert project payments, but it offered no specific facts plausibly connecting Westerfeld's own conduct to South Carolina.
Procedural history
Mobilization Funding sued Jessup Construction, GSH, and the Stokeses in South Carolina state court to recover amounts allegedly owed under loan contracts. After removal to the United States District Court for the District of South Carolina, GSH and the Stokeses asserted third-party claims against Westerfeld. The district court dismissed those claims for lack of general and specific personal jurisdiction, certified the order as a final judgment under Rule 54(b), and the Fourth Circuit affirmed.