Also, jurisdictional contacts must be analyzed in totality, not isolation. Id.
¶ 29. For example, telephone calls, e-mails, letters or faxes, particularly those initiated by the plaintiff, may alone be insufficient. See,
e.g.,
Taylor v. Fireman’s Fund Ins. Co. of Can., 161 Ariz. 432, 436, 778 P.2d 1328, 1332 (Ct. App. 1989);
G.T. Helicopters, Inc. v. Helicopters, Ltd.,
135 Ariz. 380, 383-84, 661 P.2d 230, 233-34 (Ct. App. 1983);
Coast to Coast Mktg. Co., Inc. v. G & S Metal Prods. Co., Inc.,
130 Ariz. 506, 508, 637 P.2d 308, 310 (Ct. App. 1981). However, they must be analyzed in connection with any other contacts with the forum state. See, e.g., Brainerd v. Governors of Univ of Alta.,
873 F.2d 1257, 1259 (9th Cir. 1989) (non-resident defendant’s two telephone calls and responsive letter directed to Arizona about alleged defamatory statements constituted purposeful availment ); EDIAS Software Int’l, LLC v. BASIS Int’l Ltd.,
947 F. Supp. 413, 421 (D. Ariz. 1996) (non-resident defendant’s many phone, fax and e-mail communications to Arizona, among other contacts, constituted purposeful availment).
In determining whether a non-resident defendant in a securities case engaged in purposeful conduct in the forum state, relevant contacts to consider are the solicitations, negotiations, course of dealings, contracts (discussions, drafting, execution and performance thereof), communications and payments among the parties.
For example, the Arizona Supreme Court found purposeful direction in a case for securities fraud where the subject representations, which played an important role in the investment decisions, were made during communications by the defendants to the plaintiff and its representative in Arizona, the defendants directed the delivery of a due diligence report to the plaintiff in Arizona and the defendants repeatedly contacted plaintiff’s representative in Arizona. See Planning Group,
226 Ariz. at 268, ¶¶ 30-31, 246 P.3d at 350-51. Accord Rollin v. William V. Frankel & Co., Inc.,
196 Ariz. 350, 355 n.3, 996 P.2d 1254, 1259 n.3 (Ct. App. 2000) (recognizing case in which “nonresident’s transmission of fraudulent misrepresentations to a Connecticut resident by telephone and electronic mail for the purpose of inducing him to buy and hold securities renders him subject to suit in Connecticut”) (citing Cody v. Ward,
954 F. Supp. 43, 44 (D. Conn. 1997)). However, the court noted “it is not enough that a defendant know that he is dealing with an Arizona resident then located in another state; the requisite activity must instead be purposefully directed at the forum.” See Planning Group, 226 Ariz. at 271, ¶ 41, 246 P.3d at 352
The Supeme Court also found purposeful availment on the contract claims because the defendants actively sought out to make a deal with the Arizona plaintiffs, who ultimately loaned money to the defendants with the expectation of repayment to be made in Arizona. See Id.
at 269-70, ¶¶ 33-34, 246 P.3d at 351. See also MacPherson,
158 Ariz. at 312, 762 P.2d at 599 (non-resident defendant solicited plaintiff in Arizona to purchase rare coins and delivered coins to plaintiff in Arizona); Rollins v. Vidmar,
147 Ariz. 494, 496-97, 711 P.2d 633, 635-36 (Ct. App. 1985) (non-resident defendant solicited money from plaintiff in Arizona, plaintiff withdrew money from Arizona bank account, and plaintiff received several loan repayments in Arizona).
In short, in a securities case, a non-resident defendant may engage in purposeful conduct toward Arizona based on the following: (1) plaintiff is solicited and induced to enter into a contract in Arizona based upon representations and/or documents received in Arizona; (2) the contract is negotiated, drafted, executed and/or performed in Arizona; and (3) plaintiff’s payment is made from Arizona and/or repayment or return is expected in Arizona. See, e.g., Davis v. Metro Prod., Inc., 885 F.2d 515 (9th Cir. 1989); Sullivan v. Metro Prod., Inc., 150 Ariz. 573, 724 P.2d 1242 (Ct. App. 1986).
2. Claims Arise Out of and Relate to Non-Resident Defendants’ Contacts.
The second requirement for establishing specific personal jurisdiction is that a causal nexus must exist between a plaintiff’s causes of action and a defendant’s activities in the forum state. Williams, 199 Ariz. at 4, 13 P.3d at 283. In determining whether a plaintiff’s claim arises out of or relates to a defendant’s contacts with the forum state, the focus is on the relationship between the defendant, the forum and the litigation. Id.
at 4, 13 P.3d at 283. This causal nexus test “ensures that forums will not exercise jurisdiction over nonresident defendants based solely upon random, fortuitous, or attenuated contacts, or upon the unilateral activity of another person.” Id.
at 4, 13 P.3d at 283. “Foreseeability, relevant as it may be to the defendant’s liability, cannot substitute for the require causal nexus between the defendant’s contact with the forum state and an eventual injury.” Id.
at 6, 13 P.3d at 285.
Where the defendant’s solicitations, negotiations or communications to the plaintiff, or the defendant’s formation, execution or performance of a contract, related to and ultimately facilitated the underlying securities investment, which is the crux of the plaintiff’s claims, then arguably they arise out of and relate to the defendants’ contacts.
3. Reasonableness of Exercise of Specific Personal Jurisdiction.
“Once the plaintiff establishes that minimum contacts occurred with the forum state and that the events causing the injury arose out of that contact, a rebuttable presumption arises that the forum reasonably can exercise jurisdiction.” Williams, 199 Ariz. at 3, 13 P.3d at 282. In deciding whether the exercise of specific personal jurisdiction over a non-resident defendant is reasonable, the third requirement, the court can consider several factors, including the following: (1) the burden on the defendant; (2) the existence of an alternative forum; (3) the convenience and effectiveness of relief for the plaintiff; (4) the interest of the forum state; (5) the efficiency of adjudication; (6) the extent of the defendant’s purposeful interjection into the forum; and (7) the possibility of conflict with over sovereignty. Brainerd, 873 F.2d at 1260.
In Arizona, courts place little weight on the first factor, a non-resident defendant’s burden in litigating out-of-state, particularly where the defendants has retained counsel:
Telephones, facsimile machines, and photocopiers answer the logistical problems as easily for lawsuits pending in Arizona as those anywhere in a world reached by telecommunications satellites. As Defendant has already demonstrated, competent Arizona counsel is available to represent it. Defendant’s burden may be greater defending in [Arizona] than in [a foreign tribunal], but it is certainly manageable.
Uberti, 181 Ariz. at 575-76, 892 P.2d at 1364-65.
In securities cases, the fairness factors would also likely favor the exercise of personal jurisdiction over non-resident defendants in Arizona, as Arizona has a strong interest in protecting its residents from fraudulent investments. Arizona’s strong interest is evident from the Arizona Securities Act, which is “‘liberally construed as a remedial measure in order not to defeat the purpose thereof.’” Siporin v. Carrington, 200 Ariz. 97, 103, 23 P.3d 92, 99 (Ct. App. 2001). “The intent and purpose of this Act is for the protection of the public, the preservation of fair and equitable business practices, the suppression of fraudulent or deceptive practices in the sale or purchase of securities, and the prosecution of persons engaged in fraudulent or deceptive practices in the sale or purchase of securities.” 1951 Ariz. Sess. Laws ch. 18, § 20. To that effect, A.R.S. § 44-2003(A) provides that a statutory securities action “may be brought against any person, including any dealer, salesman or agent, who made, participated in or induced
the unlawful sale or purchase . . . .” (emphasis added).
Further, exercising jurisdiction over non-resident defendants provides a forum for the Arizona residents harmed by such fraudulent investments, and acts a deterrent to others perpetrating such frauds in Arizona. Finally, a plaintiff has a strong interest in obtaining relief in Arizona based on any solicitations, negotiations or communications related to the investment made to the plaintiff in Arizona, the formation, execution or performance of the underlying investment contract in Arizona, and the transmittal of investment funds from Arizona and potential profit or repayment sent to Arizona. Under these circumstances, it is likely that there is no jurisdiction more reasonable than Arizona. To otherwise require a plaintiff to sue each defendant in its home state would be inequitable, inefficient, and contrary to the interest of judicial economy and efficiency.