Starkes v. Greene

Background

Collin Starkes sued John Greene, identified as Discover Bank’s chief financial officer. Starkes alleged that he gave Discover a “lawful note” that should have fully discharged his debt, but that Discover refused to reduce the account to zero. He asserted claims for dishonor in commerce, fraud, racketeering, and theft of public funds, seeking $1,000,000 for each claim.

Greene moved to dismiss. The court had jurisdiction under 28 U.S.C. § 1332, but Greene challenged the court’s personal jurisdiction over him under Federal Rule of Civil Procedure 12(b)(2). Personal jurisdiction is a court’s authority to exercise power over a particular defendant.

Personal Jurisdiction

The court explained that personal jurisdiction must exist for each claim. It considered both general jurisdiction and specific jurisdiction.

General jurisdiction permits a court to hear any claim against a defendant when the defendant’s connections with the state are so continuous and substantial that the defendant is essentially at home there. The court found that Greene was a resident of Illinois, worked for an Illinois-based company as its chief financial officer, had never resided in California, and owned no property there. His occasional visits to California were insufficient to establish general jurisdiction.

Specific jurisdiction exists when the defendant’s contacts with the state are connected to the claims. The court applied the Ninth Circuit’s three-part test, which asks whether the defendant purposefully engaged in activities directed at the state, whether the claims arose from those activities, and whether exercising jurisdiction would be reasonable.

The court found that Starkes had not met his burden on the first two parts of the test. According to the opinion, Starkes’s only allegation against Greene was that Starkes sent Greene multiple letters at Greene’s place of business in Illinois asking Greene to discharge Starkes’s debt to Discover. The court held that this did not constitute purposeful activity by Greene in California. The court also noted that a person’s association with a company that causes an injury in the forum state is not, by itself, enough to establish jurisdiction over that person.

The opinion states that Starkes conceded that the court lacked personal jurisdiction. The court therefore concluded that it lacked personal jurisdiction over Greene.

Disposition

The court granted Greene’s motion to dismiss. It ordered dismissal without leave to amend because amendment would be futile. The Clerk was directed to enter judgment and close the file. Judge Jon S. Tigar signed the order on September 17, 2024.