Confederate Motors, Inc. v. Terny
831 F. Supp. 2d 405 · District Court, D. Massachusetts · 2011
Facts
Confederate Motors, Inc. is a publicly-traded company manufacturing motorcycles. H. Matthew Chambers served as its President, Chief Executive Officer, and Chairman of the Board. Francois-Xavier Terny invested $450,000 in Confederate between December 2008 and September 2009, receiving 800,000 shares. In April 2009, Terny was appointed to Confederate's Board. In September 2009, Terny entered into a Consulting Agreement with Confederate, receiving an additional 505,000 shares for his services. Chambers signed this Consulting Agreement on behalf of Confederate as its President and CEO. The agreement included a clause stating that any dispute "shall be brought exclusively in the courts of Massachusetts," though it was undisputed that neither party was from Massachusetts, the contract was not negotiated or performed there, and the reference to Massachusetts was a typographical error. Disagreements between Chambers and Terny regarding company operations arose shortly after the agreement, with none of their communications or actions taking place in Massachusetts.
Procedural history
Confederate Motors, Inc. commenced an action against Terny in the United States District Court for the Northern District of Alabama, Southern Division, seeking a declaratory judgment. Terny filed a Motion to Enforce Forum Selection Clause, seeking to dismiss the Alabama case and have it refiled in Massachusetts. The Alabama District Court denied dismissal but granted the transfer of the case to Massachusetts. After the case was transferred, Terny brought counterclaims against Confederate and Chambers, asserting personal jurisdiction over Chambers based on the forum selection clause. Chambers responded by filing the instant motion to dismiss for lack of personal jurisdiction.
Issue
Does the court have personal jurisdiction over H. Matthew Chambers, either because he consented to jurisdiction by signing a corporate Consulting Agreement containing a Massachusetts forum selection clause, or because he has sufficient minimum contacts with Massachusetts?
Holding
No, the court does not have personal jurisdiction over H. Matthew Chambers. Chambers did not personally consent to the jurisdiction of the Massachusetts courts, and he does not have sufficient contacts with the Commonwealth of Massachusetts to permit the court to exercise personal jurisdiction over him. Therefore, Chambers' Motion to Dismiss is ALLOWED.
Rule
A plaintiff bears the burden of persuading the court that personal jurisdiction exists, demonstrating facts satisfying both the forum's long-arm statute and the Due Process Clause. While personal jurisdiction can be waived by consent, such as through a forum selection clause, jurisdiction over individual corporate officers cannot be based solely on jurisdiction over the corporation; an independent basis is required. Signing an agreement on behalf of a corporation does not create personal jurisdiction over the individual. Specific jurisdiction requires relatedness between the claim and the defendant's forum contacts, purposeful availment of the privilege of conducting activities in the forum state, and reasonableness, with random, fortuitous, or attenuated contacts being insufficient for purposeful availment.
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