Court lacks jurisdiction over NC-based defendants

Where a company and individual sued for violations of the Lanham Act, defamation, tortious interference with plaintiffs’ prospective business advantages and relationships and business conspiracy did not purposefully avail themselves of the benefits and privileges of Virginia law, there was no jurisdiction over them.

Background

Commission on Health Care Certification Inc. and V. Robert May III  bring this action against FIG Services Inc., Shelene J. Giles and Susan Riddick­Grisham, alleging violations of the Lanham Act, defamation, tortious interference with plaintiffs’ prospective business advantages and relationships and business conspiracy between and among all of the defendants.

FIG is a corporation organized under the laws of the State of North Carolina with a principal office in North Carolina. Giles, a resident of North Carolina, co-owns and serves as president of FIG. Both FIG and Giles have filed a motion to dismiss for lack of personal jurisdiction.

Analysis

The exercise of personal jurisdiction over the NC defendants does not comport with the Due Process Clause of the Fourteenth Amendment because they did not purposefully avail themselves of the privilege of conducting activities in Virginia. Plaintiffs base their claims against the NC defendants on their infringement on plaintiffs’ trademarks, various torts and conspiracy with Riddick-Grisham to commit those torts.

The contacts that support plaintiffs’ assertion of jurisdiction predominantly arise from its business affiliation with the NC defendants, specifically, the NC defendants’ status as an approved educator for the professional certifications that the Virginia-based plaintiffs offer. Plaintiffs allege that the NC defendants hold out their Commission-approved status on their website, course certificates and Giles’ resume. In turn, the Commission lists the NC defendants as an approved educator on its website.

Plaintiffs cite three specific communications from the NC defendants to plaintiffs regarding that status in 2014, 2017 and 2021. Additionally, plaintiffs allege two specific instances in which the NC defendants reached out regarding access to a professional database that the Commission maintains.

While this affiliation between plaintiffs and the NC defendants gives rise to some contact between the NC defendants and the forum state, the court must “look to the quality and nature of the contacts in evaluating whether they meet the minimum contacts requirement.” The NC defendants do not have offices or employees in Virginia, nor do they own property there. They have no ongoing business activity in Virginia. The record does not reflect any in-person contact with plaintiffs in Virginia.

The record gives rise to the reasonable inference that the NC defendants corresponded with plaintiffs regarding their approved educator status from North Carolina, where they conduct their instruction for in-person classes and broadcast virtually. Moreover, the NC defendants have not presented at any conferences in Virginia or provided life care planning services in Virginia.

Plaintiffs proffer that Giles directs continuing education webinars to certified life care planner, or CLCP, professionals, including those living in Virginia, and advertises professional services in trade journals that circulate in Virginia, such as the Journal of Nurse Life Care Planning. However, it proves insufficient that those communications merely reached Virginia; the NC defendants must have purposefully directed them there. Plaintiffs do not, and cannot, allege that requisite intent.

The NC defendants admit that 10 of their approximately 1,000 students hailed from Virginia. However, these de minimis contacts do not contradict the NC defendants’ proffer that they have never targeted Virginia with marketing efforts or advertising campaigns. Indeed, that low level of Virginian participation corroborates the fact that the NC defendants only conduct generalized marketing campaigns, insufficient to amount to purposeful availment of the benefits and privileges of Virginia law.

Plaintiffs also claim that jurisdiction exists based on its allegations of conspiracy, arguing that the court has personal jurisdiction over the NC defendants, because they conspired with Virginia resident Riddick-Grisham to carry out a conspiracy in Virginia. Plaintiffs, however, fail to plead any facts that the NC defendants acted in concert with Riddick­Grisham. Plaintiffs’ speculation that the NC defendants coordinated their activities to injure them in Virginia “does not suffice to allege a plausible claim of the existence of a Conspiracy.” Plaintiffs, therefore, cannot proceed on a conspiracy theory of specific jurisdiction.

Because plaintiffs failed to meet the first prong of the Fourth Circuit’s test for specific personal jurisdiction, plaintiffs’ claims against the NC defendants cannot survive the motion to dismiss. The court need not address whether this action arose out of the NC defendants’ insignificant contacts with Virginia or whether exercising personal jurisdiction over the NC defendants would prove constitutionally reasonable.

NC defendants’ motion to dismiss for lack of personal jurisdiction granted.

Commission on Health Care Certification Inc. v. FIG Services Inc., Case No.  3:22-cv-39, May 26, 2022. EDVA at Richmond (Novak). VLW 022-3-231. 18 pp.