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Sheridan v. Roberts

United States District Court, E.D. Pennsylvania

August 14, 2019

THOMAS W. SHERIDAN and SHERIDAN AND MURRAY, LLC, Plaintiffs,
v.
RANDELL C. ROBERTS and THE ROBERTS LAW FIRM, Defendants.

          MEMORANDUM

          JOSHUA D. WOLSON, J.

         This is a dispute between two law firms, one in Texas and one in Pennsylvania, about a referral fee. In this Motion, the Texas law firm and its principal argue that they are not subject to personal jurisdiction in Pennsylvania. The Court concludes that the law firm is subject to personal jurisdiction but the individual defendant is not. Defendants also ask to transfer this case to Texas, but the Court declines to do so.

         I. FACTUAL BACKGROUND

         Randell Roberts is a partner at The Roberts Law Firm (the “Roberts Firm”), a firm located in Tyler, Texas. (ECF No. 7 ¶¶ 5, 6.) In 2013, James and Kay Burgess (the “Clients”) hired the Roberts Firm to represent them in connection with injuries that James Burgess suffered while working on an oil rig in Pennsylvania. (ECF No. 9-2 ¶ 31.) As part of that representation, the Roberts Firm identified potential claims against Clark Electric Contractors, which would have to be brought in Pennsylvania. (Id. ¶ 35.)

         Mr. Roberts met Thomas Sheridan at a seminar in California in October 2013. (Id. ¶ 36.) During that seminar, they discussed the Burgess's case. (Id. ¶ 37.) In November 2013, Mr. Sheridan followed up with Mr. Roberts about the Burgess's case via e-mail. (Id. Ex. B.) Mr. Roberts then sent information about the Clients' claims to Mr. Sheridan. (Id. ¶ 41.) In September 2014, Mr. Sheridan and Mr. Roberts spoke by phone and discussed a referral fee arrangement. Mr. Sheridan sent a proposed referral fee agreement and engagement letters for the Clients to engage Sheridan & Murray. (Id. ¶¶ 42-46.) The Clients ultimately executed Consents to Refer, which authorized the Roberts Firm to refer their case to Sheridan & Murray. (Id. ¶ 49 & Ex. G.) However, it does not appear that any of the Parties ever signed the referral fee agreement.

         The Parties now have a dispute about the terms of their referral arrangement. Plaintiffs claim that the referral agreement that Mr. Sheridan sent to Mr. Roberts in 2014 was inaccurate. In 2018, Mr. Sheridan and Mr. Roberts spoke about the terms of the referral agreement and allegedly clarified or altered the terms of that arrangement. Mr. Sheridan sent a confirmatory email to Mr. Roberts, which Mr. Roberts acknowledged. (Id. ¶¶ 60-61 & Ex. H.) However, Defendants dispute the validity of that modification.

         II. LEGAL STANDARD

         To survive a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing the court's personal jurisdiction over the defendant. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). The court's review of a motion to dismiss under Rule 12(b)(2) is not limited to the pleadings, and the court may rely on sworn affidavits submitted by the parties or other competent evidence. O'Connor v. Sandy Land Hotel Co., Ltd., 396 F.3d 312, 316 (3d Cir. 2007). In the absence of an evidentiary hearing, the plaintiff need only present a prima facie case of personal jurisdiction, and the court must take all of the plaintiff's factual allegations as true and resolve all factual disputes in the plaintiff's favor. See Eurofins Pharma U.S. Holdings v. BioAlliance Pharma SA, 623 F.3d 147, 155 (3d Cir. 2010). The burden then shifts to the defendant to establish that the exercise of jurisdiction would be unreasonable. Carteret Sav. Bank v. Shushan, 954 F.2d 141, 150 (3d Cir.1992).

         Under the Due Process Clause of the Fourteenth Amendment, personal jurisdiction over an out-of-state defendant requires that the defendant have “minimum contacts” with the forum state such that exercising jurisdiction would “not offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945). Personal jurisdiction can arise under two distinct theories: general jurisdiction and specific jurisdiction. See Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 334 (3d Cir. 2009). Plaintiffs do not contend that this Court has general jurisdiction over Defendants, therefore the Court limits its analysis to specific jurisdiction.

         For specific jurisdiction, the Third Circuit uses a three-part test to determine “minimum contacts”: (1) a nonresident defendant must “purposefully direct” his activities at a resident of the forum, (2) the injury arises from, or relates to, those activities, and (3) the exercise of jurisdiction otherwise comports with fair play and substantial justice. D'Jamoos ex rel. Estate of Weinegroff v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009). Questions of specific jurisdiction also depend on the particular claims asserted. Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). In contracts cases, a court must consider the “totality of the circumstances” in evaluating minimum contacts, including the agreement terms, the place and character of prior negotiations, contract performance, contemplated future consequences, and the resolution of post-contract difficulties. See Remick v. Manfredy, 238 F.3d 248, 256 (3d Cir. 2001); Gen. Elec. Co., 270 F.3d at 150.

         III. ANALYSIS

         A. The Court Has Specific Jurisdiction Over The Roberts Firm

         The totality of the circumstances supports this Court's specific jurisdiction over the Roberts Firm. First, the Roberts Firm purposefully directed its activities at Sheridan & Murray. It communicated with Sheridan & Murray prior to entering into the referral agreement and after its formation. See Strick Corp. v. A. J. F. Warehouse Distributors, Inc., 532 F.Supp. 951, 959 (E.D. Pa. 1982) (to determine whether a non-resident defendant's contracting with a resident involved “purposeful” activity, “courts should look to whether the non-resident defendant initiated the deal, attempted to alter the terms of the contract, or conducted significant negotiations with the plaintiff.”). Indeed, those subsequent communications, and whether the e-mail exchange in 2018 between Mr. Roberts and Mr. Sheridan constitutes an enforceable agreement, is at the crux of this case. Moreover, by referring the Clients to Sheridan & Murray and entering into a referral agreement, the Roberts Firm set in motion litigation in Pennsylvania from which the Roberts Firm hoped to profit. See Jaffe v. Julien, 754 F.Supp. 49, 53 (E.D. Pa. 1991) (explaining that the “essence” of a referral agreement is the performance of legal services in the forum in which they are performed).

         In Defendants' Motion, they minimize the significance of the litigation in Pennsylvania by describing it as Sheridan & Murray's “unilateral activity.” (ECF No. 9-1 at 7.) That argument minimizes the Roberts Firm's own role, however. Sheridan & Murray did not act unilaterally; it acted exactly as the Roberts Firm intended when the Roberts Firm referred the case to Sheridan & Murray. Defendants also argue that the mere fact that Sheridan & Murray discharged its obligations in Pennsylvania is not enough to subject them to personal jurisdiction. (Id. at 7-8 and citing Picot v. Weston, 780 F.3d 1206, 1213 (9th Cir. 2015)). Again, that argument misses the point, however. The Roberts Firm was not ...


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