State of Maine v. McGraw-Hill Companies, Inc.

 ENTERED JAN 1 4 2015 STATE OF MAINE BUSINESS AND CONSUMER COURT KENNEBEC, ss. Location: Portland Docket No.: BCD-CV-14-49 MN\M- J loys zero employees in Maine. (Hallet! Aff.·~V 2-tl.) 10 S&P's Client Business Mnnoger, Anthony lvanovich and Executive Managing Director Paul Coughlin were responsible for much of the correspondence. (Pl.'s Ex. D, E). The State contends that the em ails were an attempt encourage the Maine Treasury to patronize S&P for its services and f\lrlhet· avers thai the misrepresentation of S&P objectivity and independence were present in some of the communications. 8 The court finds that the Defendants' cont&cts in Maine are not merely fort11itous ot· incidental. Rather, the Defendants have purposefully availed themselves of the benefits and protections of Maine law. Based on the totality of the contacts the Defendants have with the State, it is foreseeable tllat the Defendnnts may have to defend themselves in Maine. The Defendants t·outinely conduct business in Mnine and advertise and pt·omote S&P by targeting Maine Businesses and govemmental offices. 11 Thus, viewing the facts in the record in the light most favorable to the plnintiff for the pmposes of the pending motion to dismiss, the court finds that there is a sufficient basis to conclude that the detendants nvailed themselves of Maine's jmisdiction through their actions. c. Trntlillounluotious of Fnlr Play ami substantial justice The third part of the test concerns whether it is t'easonable to l'equire the defendant to litigate in Maine. See CaveJ•s, 2008 ME 164, ~~ 36-40, 958 A.2d 905. The comt looks to the resomces of the defendant to make this determination. !d. ~ 39. Because the court has found the first two prongs of the jurisdictional chte process test to be satisfied u[t]he burden ... shifts to the defendant to show thnt jul'isdiction is impropet' .. ."Interstate Food Processing Corp. v. Pellerito Foods, Inc., 622 A.2d 1189, 1191 (Me. 1993). 11 In Harl'iman v. Dem11/as Supermarkets, The defendrmt supermarket b\lsincss mailed checks to Maine, h11cl phone calls with the Maine plrtintifrs employer, advertised in Maine, and permitted the use of its private labels In Moine, but there is no indication that any t'epresentative of the defendant actually entered the state. The co use of nction in tlt!lt cnse did not arise from these contacts themselves, but t·athet· from an accident·thnt the plaintiff employee of a Maine supplier had while delivering goods to the defendant in Massachusetts. We held thatlhe defendant's contacts were sufficient to convey personal jurisdiction. Here, Benoit hnd sufficient contact with Maine to satisfY d\IC process requirements. Fore, LLC v. Benoit, 2012 ME I, 34 A.3d 1125, I 130 (citing Harriman v. Demulas Supermarkets, 518 A.2d I 035 (Me. 1986)) (citntion omitted). 9 In detcnni.tting fairness, "the court considers the mnubet·, nature nnd purpose of the defendant's contacts with Maine, the cotmection between those contacts and the cause of action, the interest of Maine in the controversy, and the convenience to both parties." Harriman v. Demoulas Supermarkets, Inc., 518 A.2d 1035, 1038 (Me. 1986) (citing Labbe v. Nissen COIJJ., 404 A.2d 564, 570 (Me. 1979)). 11 [I]n most instances it is less unfair to require a non-resident defendant to try a case in a state in which he hns vohtntarily chosen to engage in business than to require a plaintiff to travel out of state and try his case in a jurisdiction which has no nexus whatsoever with the event wltich gave rise to the action." Labbe, 404 A.2d nt573. In this case, the Defendants have not demonstrated that litigation iu Maine would be "so gravely difficult and inconvenient" that the Defendants are at a "severe disadvantage in comparison to the [Plnintift]." Burger King Co11J. v. Rudzewicz, 471 U.S. 462,477 (1985). The natme alld purpose of the Defen laintiffs or third parties. See World-Wide Volkswagen Corp., supra, at 291-292, 100 S.Ct. 559 .... Put simply, however significant the plaintiffs contacts with the fomm may be, those contacts cannot be 11 decisive in determining whether the defendant's due process l'ights m·e violated." Rush 444 U.S., at 332, 100 S.Ct. 571. Second, our "minimum contacts" analysis looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there. See, e.g., lntemallonal Shoe, supra, at 319, 66 S.Ct. 154 (Due pmcess "does not contemplate that a stole may make binding n judgment in personam against an individual ... with which I he 12 In Walden, the agent did not purposefully target Nevada o1· any Nevada citizen. The agent did 1101 intend for any of his actions tn haven consequence in Nevadn. The Supreme Court determined that such contact with Nevada WIIS random nnd attemllllcd to the defendnnt officer's action in Georgia. 11 state has no contacts, ties, o1· relations"); Hanson, supra, at 251, 78 S.Ct. 1228 (''However mini.tnEJI the burden of defending iu a foreign tribunnl, a defendant may not be called upon to do so unless he has had the 'minimal contacts' with tbat State that are a prerequisite to its exercise of power over him"). Accordingly, we have upheld the assertion of jurisdiction over defendants who have purposefully "reach[edJ out beyond" their State and into another by, for example, entering a contmchtHI relationship that "envisioned continuing and wide· reaching contacts" in the fonun Stale, Burger King, supra, at 479-480, IOS S.Ct. 2174, m· by circulating magazines to 11deliberately exploi[tr a market in the fonnn State, Keeton, supra, at 781, I 04 S.Ct. 1473. And although physical presence in the fomm is not a prerequisite to jmisdiclion, Burger King, supra, nt 4 76, 105 S.Ct. 2174, )Jhysical entry into the State-either by the defendant in person or through an agent, goods, mail, or some other means-is certainly a relevant contact. See, e.g., Keeton, supm, at 773-774, 104 S,Ct. 1473. Wet/den v. Flore, 134 S. Ct. at 1122 (20 14). Tlms, Walden does not altct· the well-established due process analysis necessary for establishing personal jmisdictiou. Rather, the Comi reiterates that the plaintiff cmutot be the only link between the defendm1t and the forum. The defendant's conduct must form the necessary connection \Vith the fbntm State thot is the bnsis for its jurisdiction over him. 13 The Comt disagrees with Defendants' contention thnt Walden dictates the result in this case. S&P directed its activity to Maine consumers through cmt1il correspondence and targeted presentations advertising rating services. The Defendants' relationship with the Slate of Maine is fundamentally different fi·om the agent's connection to Nevada in T·Valden. V, CONCLUSION The entry shall be: Defendants' Motion to Dismiss is DENIED. Pursuant to M.R. Civ. P. 79, the clerk is hereby directed to incorporate this ordc1· iuto the docket by J'eference. l.l "To be sure, 11 defendant's contacts with the forum State may be inler!wincd with his transactions or interactions with the plaintiff or other pnr!ies. Dut n defendant's relationship with n plaintiff or third party, standing alone, is an insufficient basis for jurisdiction." Walden, 134 S. Ct. Rl 1123. 12 Dnted ~~~ M. Michnela Murphy,<Jt stlce B~1silless & Consumer Docket Entered on the Docket: II· :l t, ·1'-/ Copies sent via Maii_EiectronicallyJL 13 State Of Maine v. The McGraw-Hill Companies Inc. and Standard & Poor's Financial Services, LLC. BCD-CV-14-49 State Of Maine Plaintiff Counsel: Linda Conti, AAG 6 State House Station Augusta, ME 04333-0006 The McGraw-Hill Companies Inc. and Standard & Poor's Financial Services, LLC Defendants Counsel: Sigmund D. Schutz, Esq. One City Center PO Box 9546 Portland, ME 04112-9546