Tuesday, July 19, 2011

First Circuit Upholds Specific Jurisdiction Over Israeli Citizen in Contract Case

In one of the first federal Court of Appeals cases to cite both Goodyear and Nicastro, the First Circuit has upheld the exercise of personal jurisdiction by the District of Massachusetts over an Israeli business manager formerly employed by the plaintiff, who was the U.S. owner of a company with an office in Massachusetts.  Adelson v. Hananel, 2011 WL 2698330 (1st Cir. July 13, 2011). 

The parties disputed the compensation terms of an oral contract.  After a full trial on the merits resulting in a judgment for the plaintiff employer, defendant appealed the lower court’s finding of specific personal jurisdiction as well as the merits rulings.

Defendant was “a native, citizen, and resident of Israel,” and was based in the employer’s Israel office.  He had visited Massachusetts only twice (once before entering into the employment contract), but had frequent communications with a Massachusetts company related to his employer, and funding for the Israeli office came through Massachusetts.  Defendant’s budgets were “routinely faxed to the office in Massachusetts.”  He “sought this employment contract with a company whose key officers were all located in Massachusetts,” according to the court, and hence demonstrated purposeful availment of the privilege of conducting business in Massachusetts.

The case is factually distinct from either Goodyear or Nicastro, as it involves neither “stream of commerce” nor general jurisdiction.  The court cited the two recent Supreme Court cases, but apparently did not think they merited a reexamination of the personal jurisdiction analysis in an international contract case.



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