United States District Court, D. New Hampshire
Francis M. Reynolds
InVivo Therapeutics Holdings Corp., et al. Opinion No. 2016 DNH 214
Christopher H.M. Carter, Esq.
R. Greenberg, Esq.
N. Laplante United States District Judge.
defamation action turns on whether this court has specific
personal jurisdiction over several Massachusetts citizens and
a Nevada corporation that has its principal place of business
in Massachusetts. Plaintiff Francis Reynolds, a New Hampshire
businessman, brings claims of defamation, conspiracy, and
tortious interference with prospective contractual relations
against his former corporation, InVivo Therapeutics Corp.,
and several of its officers. This court has subject-matter
jurisdiction under 28 U.S.C. § 1332(a) (diversity).
to dismiss this action, the defendants challenge this
court's personal jurisdiction over them. See Fed.R.Civ.P.
12(b)(2). They also move to dismiss for failure to state a
claim for relief. See Fed.R.Civ.P. 12(b)(6). After holding
oral argument, the court grants the defendants' motion.
The plaintiff has failed to establish that defendants have
the minimum contacts with New Hampshire required for this
court to exercise personal jurisdiction over them in this
action consistent with the Fourteenth Amendment's Due
Process Clause. Specifically, the plaintiff has not
demonstrated relatedness between his claims and the
defendants' forum-based activities or that the defendants
engaged in purposeful contact with the forum such that they
could expect to be haled into court to answer for their
Applicable legal standard
jurisdiction implicates the power of a court over a defendant
. . . . [B]oth its source and its outer limits are defined
exclusively by the Constitution, ” namely, the due
process clause of the Fourteenth Amendment.
Foster-Miller, Inc. v. Babcock & Wilcox Can., 46
F.3d 138, 143-44 (1st Cir. 1995) (citing Ins. Corp. of
Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S.
694, 702 (1982)); U.S. Const. Am. XIV. “To establish
personal jurisdiction in a diversity case, a plaintiff must
satisfy both the forum state's long-arm statute and the
Due Process Clause of the Fourteenth Amendment.”
C.W. Downer & Co. v. Bioriginal Food & Sci.
Corp., 771 F.3d 59, 65 (1st Cir. 2014). Where, as here,
the applicable long-arm statute is coextensive with federal
due process limitations, the court proceeds directly to the
due process inquiry. See Phillips Exeter Acad.
v. Howard Phillips Fund, 196 F.3d 284, 287 (1st Cir.
process requires that a defendant have sufficient
“minimum contacts” with the forum “such
that the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.”
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (internal quotations omitted). Consistent with those
requirements, a court may exercise either general or specific
jurisdiction over the defendants. Reynolds invokes only this
court's specific jurisdiction over the
defendants.Specific jurisdiction “is confined to
adjudication of issues deriving from, or connected with, the
very controversy that establishes jurisdiction.”
Goodyear, 131 S.Ct. at 2851 (internal quotations omitted).
“[T]he constitutional test for determining specific
jurisdiction . . . has three distinct components, namely,
relatedness, purposeful availment (sometimes called
‘minimum contacts'), and reasonableness.”
Adelson v. Hananel, 652 F.3d 75, 80-81 (1st Cir.
2011) (internal quotations and citations omitted).
plaintiff bears the burden of demonstrating that these three
components are satisfied by “proffer[ing] evidence
which, if credited, is sufficient to support findings of all
facts essential to personal
jurisdiction.” A Corp. v. All Am. Plumbing,
Inc., 812 F.3d 54, 58 (1st Cir. 2016) (quoting
Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st
Cir. 2008)). “To satisfy the prima facie standard in a
specific jurisdiction case, a plaintiff may not rest on mere
allegations but, rather, must submit competent evidence
showing sufficient dispute-related contacts between the
defendant and the forum.” Carreras v. PMG Collins,
LLC, 660 F.3d 549, 552 (1st Cir. 2011). The court
“view[s] this evidence, together with any evidence
proffered by the defendant[s], in the light most favorable to
the plaintiff and draw[s] all reasonable inferences therefrom
in the plaintiff's favor, ” albeit without
“credit[ing] bald allegations or unsupported
conclusions.” Id. The following factual
summary takes this approach.
founded InVivo, a medical device company, in November 2005.
He served as the company's CEO, CFO, CSO, President, and
Chairman of the Board of Directors from that time until
August 22, 2013. Though InVivo established its headquarters
in Cambridge, Massachusetts, in 2012, Reynolds largely worked
out of his home in Salem, New Hampshire, between October 2012
and his departure from the company in August 2013. That
August, Reynolds resigned from his position as Chairman, CEO,
and CFO of InVivo.
week after resigning from InVivo, Reynolds formed a new
company, PixarBio, which focused on developing non-opioid
pain relief products. PixarBio operated out of Reynolds'
Salem home until it moved to Medford, Massachusetts, in early
2014. In March 2016, it obtained additional
office facilities in Salem.
Reynolds' resignation from InVivo, Reynolds alleges, the
defendants made several allegedly defamatory statements about
his work at that company. First, the company issued two press
releases. In one, dated August 22, 2013, InVivo announced
that Reynolds had resigned from the company due to his
medical condition. The next press release, issued August 27,
2013, announced “an update on the clinical timeline for
its biopolymer scaffolding to treat acute [spinal cord
injuries]. The Company now expects that, based on the
judgment of new management, it will enroll the first patient
during the first quarter of 2014.” Following the
press releases, Reynolds alleges that defendant Luque made
certain statements to investors. Specifically, in September
2013, defendant Luque allegedly told an InVivo investor that
Reynolds “had been forced to resign because the
NeuroScaffold clinical studies were ‘bogus' and
their result had been ‘fudged' by [Reynolds],
” and that “Plaintiff misrepresented the timeline
for InVivo to obtain regulatory approval for the
NeuroScaffold.” Reynolds further alleges that Luque made
similar statements during an August 2014 telephone conference
with a second InVivo investor, to the effect that Reynolds
had “misled people” about clinical trial results
and “deliberately manipulated the release of test
results to distort the beneficial effects of the
NeuroScaffold.” These allegations, Reynolds contends,
were then circulated in the biotechnology community via,
among other media, “a crowd-sourced service for
financial markets” called “Seeking
22, 2016, Reynolds filed this action in Hillsborough County
Superior Court, asserting claims for defamation, conspiracy,
and tortious interference with prospective contractual
relations against all defendants, and a claim based in the
doctrine of respondeat superior against InVivo. Defendants
subsequently removed the case to this court in light of the
parties' diversity of citizenship. See 28 U.S.C. §
discussed supra, “the constitutional test for
determining specific jurisdiction . . . has three distinct
components, namely, relatedness, purposeful availment
(sometimes called ‘minimum contacts'), and
reasonableness.” Adelson, 652 F.3d at 80-81 (internal
quotations and citations omitted). The court addresses these
components in that order, see United States v. Swiss Am.
Bank, Ltd., 274 F.3d 610, 621 (1st Cir. 2001) (quoting
Phillips Exeter Acad., 196 F.3d at 288), and concludes that
the plaintiff has not established this court's personal
jurisdiction over the defendants.
satisfy the relatedness prong, the plaintiff must show a
nexus between [his] claims and the defendants'
forum-based activities. Although this is a ‘relaxed
standard, ' it nevertheless requires [the court] to hone
in ‘on the relationship between the defendant and the
forum.'” A Corp., 812 F.3d 54, 59 (1st Cir. 2016).
“[A] defendant need not be physically present in the
forum state” for such a nexus to exist, N. Laminate
Sales, Inc. v. Davis, 403 F.3d 14, 25 (1st Cir. 2005)
(citing Calder, 465 U.S. at 789), and when he is not, the
court “looks for some other indication that the
defendant reached into the forum, such as mail or telephone
contacts, ” Swiss Am. Bank, 274 F.3d at 622.
arguing that a nexus exists between the defendants'
activities and the forum, the plaintiff invokes only his
allegations that he was injured in New Hampshire by the
effects of the defendants' conduct. It is,
however, the defendants, and not the plaintiff or any third
parties, who must create the contacts with the forum state.
Walden v. Fiore, 134 S.Ct. 1115, 1122 (2014)
(minimum contacts analysis “looks to defendant's
contacts with forum State itself, not the defendant's
contacts with persons who reside there”). That the
plaintiff felt the effects of the defendants' activities
in the forum does not, alone, qualify as related contacts.
Swiss Am. Bank, 274 F.3d at 622-23.
fact, the First Circuit Court of Appeals has specifically
cautioned against conflating the relatedness requirement with
the effects test for purposeful availment, discussed infra
Part III.B, which is what the plaintiff invites the court to
do here. Swiss Am. Bank, 274 F.3d at 622-25. The court must,
accordingly, decline that invitation. None of the other cases
relied upon by the plaintiffs convince it to do otherwise. In
each of those cases, the defendant acted within the forum;
the plaintiff's injuries did not constitute the sole
relationship between the forum and the defendants. See R
& R Auction Co., LLC v. Johnson, 2016 DNH 40, 20-21
(Barbadoro, J.) (plaintiff met relatedness requirement
because defendant made allegedly false statements to
“someone he knew to be a New Hampshire-based
reporter”); New Eng. Coll. v. Drew Univ., 2009
DNH 158, 14 (Laplante, J.) (defendant university's agent
acted within New Hampshire to interfere with plaintiff's
business relations); Sindi v. El-Moslimany, No.
13-cv-10798-IT, 2014 WL 6893537, at *8 (D. Mass. Dec. 5,
2014), 2014 WL 6893537, at *8 (finding relatedness where
defendant “came to Needham, Massachusetts and . . .
allegedly followed [the plaintiff] around” and
defendant's conduct “affected [plaintiff's]
relationship with Massachusetts organizations”).
had the plaintiff satisfied the relatedness requirement, the
court would still be unable to exercise specific personal
jurisdiction over the defendants because the plaintiff has
not shown purposeful availment. The Supreme Court has
adopted, and the First Circuit Court of Appeals has employed,
“an effects test for determining purposeful availment
in the context of defamation cases.” Noonan v.
Winston Co.,135 F.3d 85, 90 (1st Cir. 1998) (citing
Calder v. Jones,465 U.S. 783, 789 (1984)). This
test, unlike that for relatedness, focuses on the location at
which the effects of the alleged defamation are directed ...