Settlement Negotiations and Accompanying Correspondence Insufficient to Create Contacts Warranting Exercise of Personal Jurisdiction (Specific Jurisdiction)

From Ramparts, Inc. v. Weldon, 2011 U.S. Dist. LEXIS 111123 (D. Nev. Sept. 28, 2011):

Although it is an issue of first impression in Nevada, other jurisdictions have held that settlement negotiations and accompanying correspondence do not suffice to create sufficient contact for the exercise of personal jurisdiction. In re Shipowners Litigation, 361 N.W.2d 112 (Minn.App. 1985) (citing Washington Sci. Indus., Inc. v. Polan Indus., Inc., 302 F.Supp. 1354, 1358 (D.Minn. 1969). The court in In re Shipowners found that to allow personal jurisdiction to attach when the defendants came to the forum state at the request of the plaintiff to discuss a possible settlement of their contract difference would amount to a form of civil entrapment. Id. at 115. Other jurisdictions have also held that an out of state defendant's contacts with the forum state for purposes of settlement negotiations does not amount to "purposeful availment" for purposes of finding personal jurisdiction over the defendant. See Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1360-1361 (Fed. Cir. 1998) (Offer for a license within a cease and desist letter likened to offer of settlement, and alone, does not confer personal jurisdiction); Digi-Tel Holdings, Inc. v. Proteq Telecommunications, Ltd., 89 F.3d 519, 524-525 (8th Cir.1996) ("courts have hesitated to use unsuccessful settlement discussions as "contacts' for jurisdictional purposes"); Smith Architectural Metals, LLC v. Am. Railing Sys., Inc., 698 S.E.2d 752, 756 (Ct. App. N.C. 2010)("[I]f every offer to compromise and promote peace is used as a contact to establish personal jurisdiction in this State over the party who presents it, "many settlements would be prevented, and unnecessary litigation would be produced and prolonged.'" (citing Hammond Packing Co. v. Dickey, 183 F.977, 978 (8th Cir. 1911)).

Likewise, this Court is hesitant to confer jurisdiction based on conduct which Defendant characterizes as a settlement negotiation not a business negotiation. Plaintiff claims that it was during the course of this negotiation that Defendant made false statements that induced Plaintiff to continue to spend money to promote a mark that it did not yet have rights to use. Defendant establishes, and Plaintiff does not deny, that it was Plaintiff who first contacted Defendant to discuss the concurrent use agreement. While an on-going business relationship was discussed and probably contemplated, it is apparent that at some point these negotiations broke down. (See e-mail, Ex. G, ECF No. 19.) The court finds that the negotiation itself, including any communications and false statements that may have or may not have occurred, is not enough to satisfy the expressly aimed prong of specific personal jurisdiction.

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