An Example of Personal Jurisdiction in the Cyberworld

By Jared R. Green & Elie A. Maalouf¹

I. Introduction 

We recently obtained a favorable order in a complicated, highly litigated  civil case in which Judge St. Hilaire found that it was proper for the court to  exercise personal jurisdiction over a foreign corporation without any physical  presence in New Hampshire, but which regularly communicated employment  screening information to customers in New Hampshire over the Internet. This  article will discuss the facts giving rise to this jurisdictional dispute and it will  explain the court’s decision.

II. Factual Background  

In Cormier v. Cadient, LLC et al.², we represented a widower whose wife  was murdered by a security guard at her place of employment. We alleged that  the killer had deep-seated psychological issues that should have been  uncovered by the pre-employment assessment that Cadient implemented for  his employer. Cadient had no physical presence in New Hampshire, and, it  argued that it did not send any information to its customers in New  Hampshire. Rather, according to Cadient, its customers reached out to its out of-state computer servers to obtain pre-employment assessment results.

III. Procedural History  

We initially filed this case in federal court on the basis of diversity  jurisdiction because Cadient was organized outside of New Hampshire and its  offices were outside New Hamphsire. The federal court, however, sua sponte  issued an order finding that the complaint lacked sufficient evidentiary  allegations to support diversity jurisdiction over Cadient because it is a limited  liability corporation (LLC), which requires proving that every member of the  LLC was not domiciled in New Hampshire. After consultation with Cadient’s  counsel, we learned that there were many different “members” of the LLC, some  of which were LLCs themselves, and that it would be virtually impossible to  identify all of them and their domiciles. We provided the court with an affidavit  from Cadient stating that none of the members were domiciled in New  Hampshire, however, the court found this insufficient. After further  consultation with defense counsel, all parties agreed to voluntarily dismiss the  federal suit without prejudice and re-file in state court. After we did so, Cadient moved to dismiss, in part, for lack of personal jurisdiction.

IV. The Court’s Decision 

In our objection to Cadient’s motion to dismiss, we argued that the court  had specific personal jurisdiction over Cadient. Specific jurisdiction requires  that: (1) the defendant’s New Hampshire contacts relate to the cause of action;  (2) the defendant has purposefully availed itself of the protection of New  Hampshire’s laws; and (3) it would be fair and reasonable to require [the  defendant] to defend the suit in New Hampshire.³

A. Relatedness to the Causes of Action

First, the trial court analyzed whether Cadient’s New Hampshire contacts  were related to the cause of action.⁴ “To satisfy the relatedness factor, there  must be more than just an attenuated connection between the contacts and  the claim; the defendant’s in-state conduct must form an important, or at least  material, element of proof in the plaintiff’s case. The court’s assessment of  relatedness is informed by the concept of foreseeability.”⁵

We argued, and the Court agreed, that the cause of action against  Cadient arose from the communication of its negligent pre-employment  assessment to its customer’s New Hampshire office.⁶ Moreover, the court found that “it was entirely foreseeable that injury could result from the negligent  provision of advice as to whether a person is fit to be a security guard,” thus  satisfying the “relatedness” prong of the inquiry.⁷

B. Purposeful Availment

The court next considered whether Cadient purposefully availed itself of  the protection of New Hampshire laws. Citing the New Hampshire Supreme  Court’s decision in Kimball Union Academy v. Genovesi,⁸ the court explained:

Purposeful availment requires both foreseeability and

voluntariness. Voluntariness requires that the

defendant’s contacts with the forum state proximately

result from actions by the defendant…. The contacts

must be deliberate, and not based on the unilateral

actions of another party. Foreseeability requires that

the contacts also must be of a nature that the

defendant could reasonably anticipate being haled into

court there.⁹

Here, the court found that Cadient voluntarily contracted with its customer’s  New Hampshire office to provide employment screening for candidates seeking  New Hampshire jobs and it was “entirely foreseeable” that the injury in this  case could result from a negligent employment assessment.¹⁰ Thus, Cadient  could reasonably expect to be “haled into court” in New Hampshire.¹¹ Since

Cadient’s New Hampshire contacts proximately result from its voluntary  conduct and it was “foreseeable that such contacts are of a nature that Cadient  could reasonably foresee being haled into Court,” the court found that the  purposeful availment prong was satisfied.¹²

C. Fair and Reasonable

In assessing the final prong—whether it was fair and reasonable to  require Cadient to defend the lawsuit in New Hampshire—the court considered  the following factors: (1) The burden on the defendant; (2) the forum state’s  interest in adjudicating the dispute; (3) the plaintiff’s interest in obtaining  convenient and effective relief; (4) the interstate judicial system’s interest in  obtaining the most efficient resolution of controversies; and (5) the shared  interest of the several states in furthering fundamental substantive social  policies.

With respect to the first factor, the court recognized the inherent burden  non-resident defendants face in defending a lawsuit in a foreign jurisdiction,  however, the court noted that Cadient did not identify any specific reason why  it would be burdened by defending the suit in New Hampshire. Nevertheless,  the Court found that this factor weighed “in Cadient’s favor to some degree” but  that it was outweighed by the remaining factors. ¹³

Next, the court found that New Hampshire’s adjudicatory interest and  the plaintiff’s interest in obtaining convenient relief both substantially weighed  in favor of exercising jurisdiction because the case involved a New Hampshire  citizen who was killed at work in New Hampshire by a New Hampshire  employee.¹⁴

In analyzing the fourth factor, the court did not “perceive a threat of  piecemeal litigation,” finding that the interstate judicial system’s interest  weighed in favor of the plaintiff.¹⁵ Finally, since the complaint alleged that  harm occurred to a New Hampshire resident in New Hampshire, the public  policy considerations also weighed in favor of exercising jurisdiction.¹⁶

Since the totality of the factors weighed in favor of exercising jurisdiction,  the court concluded that it was fair and reasonable to do so.¹⁷

V. Conclusion 

The court concluded that it was proper to exercise jurisdiction over  Cadient because its contacts with New Hampshire gave rise to the cause of  action, Cadient purposefully availed itself of the protection of New Hampshire’s  laws, and it was fair and reasonable to require Cadient to defend itself in a New  Hampshire court. The court’s decision is an important ruling in the emerging

area of Internet-based commerce, but it is ultimately just a confirmation of New  Hampshire’s “interest in preventing [out-of-state companies] from avoiding  personal jurisdiction, limiting injured parties’ recovery, and in essence blocking  their own liability….”¹⁸

¹Jared Green and Elie Maalouf are attorneys at Abramson, Brown & Dugan in Manchester,  New Hampshire. Their firm’s practice focuses on representing plaintiffs in medical malpractice  and personal injury litigation.

Jared started working with Abramson, Brown & Dugan in 1992 while still attending law school.  In the subsequent thirty years, he has represented injured people and their families in some of  New Hampshire’s most complex and tragic cases, including victims of clergy sexual abuse and  victims of the Hepatitis C outbreak. Most recently, Jared wrote the Brief for the Plaintiff and  presented the oral argument before the New Hampshire Supreme Court in Chartier v. Apple  Therapy, Inc. et al.—a decision in which the Court clarified the law regarding bystander  emotional distress claims in the context of medical negligence cases.

Elie joined Abramson, Brown & Dugan in 2017 after graduating from Suffolk University Law  School, where he served as an editor on the Suffolk University Law Review. Since then, Elie has  represented numerous medical negligence victims and their families in cases involving  catastrophic injuries and wrongful death. In addition to his practice, Elie serves on the New  Hampshire Association for Justice’s Board of Governors and Publications Committee. He is  also the editor of the Verdicts and Settlements Report in the New Hampshire Trial Lawyer’s  Quarterly.

² Rockingham Sup. Ct. No. 218-2022-CV-00234 (Feb. 16, 2023) (St. Hilaire, J.) ³ Red Oak Apt. Homes v. Strategis Floor & Décor, 173 N.H. 529, 533-34.

⁴ Cormier v. Cadient LLC et al., Rockingham Sup. Ct. No. 218-2022-CV-00234 (Feb. 16, 2023)  (St. Hilaire, J.) (citing Petition of Reddam, 170 N.H. 590, 599 (2018) (“This factor involves  whether the claim underlying the litigation directly arises out of or relates to the defendant’s  forum-state activities.”)).

⁵ Petition of Reddam, 170 N.H. 590, 599 (2018).

⁶ Cormier v. Cadient LLC et al., Rockingham Sup. Ct. No. 218-2022-CV-00234 at *8 (Feb. 16,  2023) (St. Hilaire, J.) (explaining that even if Cadient made the assessment in a different state,  this does not mean that Cadient’s communication of the assessment to New Hampshire was  “’attenuated’ and not a material element of proof in the Plaintiff’s case.”)

⁷ Id.

⁸ 165 N.H. 132 (2013).

⁹ Cormier, at *9 (quoting Genovesi, at 140).

¹⁰ Id. at *9.

¹¹ Id.

¹² Id.

¹³ Id. at *10.

¹⁴ Id.

¹⁵ Id. at *11.

¹⁶ Id.

¹⁷ Id.

¹⁸ State v. N. Atl. Ref., Ltd., 160 N.H. 275, 287 (2010).