by Philip A. O’Connell, Jr. and Tony K. Lu
Given the nature of the national and global economies, commercial litigators are ever more frequently confronted with disputes concerning the existence of personal jurisdiction. While an expansive body of case law addresses this issue, the question of when jurisdictional discovery is appropriate is not often addressed at sufficient length to be instructive. In this regard, the recent First Circuit decision in Motus, LLC v. CarData Consultants, Inc., 23 F. 4th 115 (1st Cir. 2022) is illuminating.
Motus, LLC and CarData Consultants, Inc. are both in the business of providing “tools for managing businesses’ reimbursement of employee expenses,” including use of personal automobiles for business travel. Id. at 120. Motus is a Delaware limited liability company headquartered in Boston; CarData is a Toronto-based Canadian corporation. Id.
Motus claimed proprietary rights in the phrase “corporate reimbursement services.” At one point in time, the meta-title of CarData’s website incorporated that phrase. Although CarData had removed that phrase from the meta-title of its website at Motus’s request, Motus still sued CarData in the United States District Court for the District of Massachusetts, citing the Lanham Act, 15 U.S.C. secs. 1051-1129, and seeking damages for trademark infringement, trademark dilution and unfair competition. Motus alleged that Cardata maintained a website, but failed to allege how or why operation of that website would result in personal jurisdiction over Cardata in Massachusetts. Id.
The district court dismissed Motus’s suit against CarData based on lack of personal jurisdiction and denied Motus’s request for jurisdictional discovery. Motus, LLC v. CarData Consultants, Inc., 520 F. Supp. 3d 87, 94 (D. Mass. 2021). That “request for jurisdictional discovery comprised a single conclusory sentence, accompanied by a footnote, and contained no indication of what facts might be developed through discovery.” 23 F. 4th at 128.
Motus appealed to the United States Court of Appeals for the First Circuit. After determining that Motus had failed to carry its burden of making out a prima facie case of personal jurisdiction over CarData, the court addressed what it called Motus’s “last-ditch effort to snatch victory from the jaws of defeat”; namely, the contention that the district court had abused its discretion in refusing to allow Motus to conduct jurisdictional discovery. Id. at 127-28.
Relying upon Federal Rule of Civil Procedure 7(b) (“request for a court order must be made by motion”), the First Circuit made it clear that requests for jurisdictional discovery should be made by a separate, formal motion, not merely addressed in passing in an opposition brief. Citing the fact that Motus “merely mentioned the option of jurisdictional discovery in its opposition to CarData’s motion to dismiss” (id at 127), the First Circuit noted that “the best way to ensure that a request for jurisdictional discovery is preserved for appeal if denied is to file a timely motion.” Id.
The decision recognized that “district courts have a certain amount of leeway to treat informal requests for jurisdictional discovery made in opposition papers as if made by motion when there is no prejudice to the other party” (id.), but noted the peril associated with such a minimalist approach, concluding that “Motus did not act diligently to preserve its rights.” Id. at 128.
The First Circuit emphasized that a party seeking jurisdictional discovery must (i) “explain why jurisdictional discovery [is] appropriate” and (ii) identify “what relevant information it hope[s] to glean through such discovery…” Id. It concluded that the “barebones nature of Motus’s presentation” in its opposition brief had not done so. Id.
The lesson is clear: Although a district court may, in its discretion, elect to entertain an informal request for jurisdictional discovery incorporated in a party’s briefing, best practice dictates that a party should not make a request for such discovery in passing in an opposition. Rather:
- The party should file a separate, formal motion for jurisdictional discovery.
- The motion should explicitly request jurisdictional discovery and identify, with whatever degree of specificity is possible, exactly what the party seeks to discover. Indeed, if drafts of focused jurisdictional discovery can be attached to the motion for the court’s consideration, all the better.
- The motion should explain why that discovery is necessary and appropriate. What is the non-frivolous factual dispute that the discovery addresses and how will the proposed discovery help resolve it?
- The separate formal motion and an opposition to the motion to dismiss should pointedly reference each other, so that they support each other and so the court does not lose track of the separate motion and fail to consider it in connection with the opposition.
The good news, as the First Circuit held in an earlier case, is that when a request for jurisdictional discovery is timely made and properly supported, it “merits solicitous attention.” United States v. Swiss American Bank, Ltd., 274 F. 3d 610, 626 (1st Cir. 2001).
Philip A. O’Connell, Jr. is the Managing Partner of the Boston office of Dentons US LLP. He is admitted to practice in Massachusetts, California, Illinois and Nevada. He represents clients primarily in insurance and commercial litigation.
Tony K. Lu is a Senior Managing Associate in the Boston office of Dentons. He is admitted in Massachusetts and Connecticut. He represents clients primarily in trade secret litigation, other commercial litigation and insurance litigation.
Both Phil and Tony were on brief for the appellee in Motus, LLC v. CarData Consultants, Inc., 23 F.4th 115 (1st Cir. 2022).