CE DISTRIBUTION v

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CE DISTRIBUTION v. NEW SENSOR CORP.02-1630508/10/04

Court:	U.S. 9th Circuit Court of Appeals
Topic:	Civil Procedure, Contracts, Injury And Tort Law
Title:	CE DISTRIBUTION v. NEW SENSOR CORP.
Date:	08/10/04
Case Number:	02-16305
Summary:	[2] We apply the following three-part test to determinewhether the exercise of specific jurisdiction over a defendant comports with due process:2 (1) the non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privileges of conducting activities in the forum . . . (2) the claim must be one which arises out of or relates to the defendant’s forum-related activities; and (3) the exercise of jurisdiction must . . . be reasonable. Harris Rutsky, 328 F.3d at 1129 (citation omitted) B. Intentional Tort Claim (Interference With Distributor Agreement) [3] When an intentional tort claim is asserted, purposeful availment of the privilege of conducting activities in the forum state can be met by the “purposeful direction of a foreign act having effect in the forum state.” Id. at 1130 (citation and internal quotation marks omitted). This standard, referred to as the “effects test,” was articulated by the United States Supreme Court in Calder v. Jones, 465 U.S. 783 (1984). [4] The effects test is satisfied if the defendant (1) commits an intentional act; (2) expressly aimed at the foreign state; (3) causing harm in the foreign state that the defendant knew was likely to be suffered in that state. See Harris Rutsky, 328 F.3d at 1131; see also Bancroft & Masters, Inc. v. Augusta Nat’l Inc., 223 F.3d 1082, 1087 (9th Cir. 2000) (holding that the “express aiming” requirement of the effects test is met “when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state.”). CE alleges that New Sensor intentionally entered into a contract with a distributor of Jensen speakers outside of the United States, knowing that its action would impair CE’s distribution rights, thereby causing harm to CE in Arizona. In Harris Rutsky, we ruled that the effects test was met when the defendant, a London company, allegedly interfered with the plaintiff’s contractual relations by urging other London companies not to do business with the plaintiff. See 328 F.3d at 1128. We found this behavior sufficient to meet the effects test and support jurisdiction in district court in California, even though it occurred entirely in London. See id. at 1131. Similarly, in Myers v. Bennett Law Offices, 238 F.3d 1068 (9th Cir. 2001), we held that when an employee of an out-ofstate defendant improperly ordered the plaintiffs’ credit report, he was intentionally directing his activity into the forum where the plaintiffs resided. Id. at 1073-74. Dismissal of plaintiff's claims for lack of personal jurisdiction is reversed where the district court had personal jurisdiction of plaintiff's torts claim under the "effects test." Subsequently, the case is remanded to determine whether pendant personal jurisdiction exists over plaintiff's other claim for breach of contract.

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