
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT        No. 97-1387                          LYLE RICHARDS INTERNATIONAL, LTD.,                                Plaintiff, Appellant,                                          v.                                   ASHWORTH, INC.,                                 Defendant, Appellee.                                                                                      ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                  [Hon. George A. O'Toole, Jr., U.S. District Judge]                                                ___________________                                                                                      ____________________                                        Before                                Stahl, Circuit Judge,                                       _____________                       Godbold* and Cyr, Senior Circuit Judges.                                         _____________________                                                                                      ____________________             Michael J. Traft, with whom Carney & Bassil was on brief for             ________________            _______________        appellant.             Toni G. Wolfman, with whom Foley, Hoag & Eliot LLP was on brief             _______________            _______________________        for appellee.                                                                                      ____________________                                  December 22, 1997                                                                                      ____________________                                    ____________________             *Of the Eleventh Circuit, sitting by designation.                    CYR,  Senior Circuit  Judge.   Plaintiff  Lyle Richards                    CYR,  Senior Circuit  Judge.                          _____________________          International, Ltd., a Massachusetts  corporation, appeals from a          district court  judgment dismissing  its contract  action against          Ashworth, Inc., a  Delaware corporation with its  principal place          of business in California.  We affirm.                                            I                                          I                                      BACKGROUND                                      BACKGROUND                                      __________                    In March 1994,  Ashworth hired a former  Lyle employee,          Andrew Tarlow,  to direct  its  new golf  shoewear operations  in          California.    Shortly  thereafter, without  direct  or  indirect          solicitation from Ashworth, Lyle made  overtures, through Tarlow,          to  serve as  Ashworth's purchasing  agent.   Over  the next  two          months, Lyle  and Ashworth discussed  the matter by phone  and at          meetings  in California  and  China.   At  no  time did  Ashworth          advertise for or solicit a purchasing agent in Massachusetts.                    Not  later than  July 1994,  Ashworth, through  Tarlow,          proposed entering into a formal  written agreement with Lyle.  In          due  course,  the  Agreement,  drafted  and  signed  by  Lyle  in          Massachusetts, was mailed to California, where  Ashworth executed          it  on August  5.   The Agreement  designated Lyle  as Ashworth's          purchasing agent for  footwear manufactured in China  and Taiwan,          but  required  Ashworth  to  undertake  no  specific  contractual          responsibilities in Massachusetts.                    Thereafter,  Ashworth  periodically  forwarded purchase          orders  to Lyle in  Massachusetts, which Lyle  transmitted to the          appropriate Chinese or Taiwanese factory.   Ashworth communicated                                          2          with Lyle  in Massachusetts two  or three times a  week regarding          ongoing contract performance, and from time to time placed orders          with  shoe-component suppliers which were instructed to bill Lyle          directly.   In  addition, during  the  term of  the Agreement  an          Ashworth   representative   attended   three   trade   shows   in          Massachusetts, accompanied on two occasions by a Lyle employee.                    The Agreement  prescribed  a  one-year  term.    Absent          written notice of  termination from either party  at least ninety          days prior to its anniversary date, the Agreement renewed  itself          automatically.   In August 1995, Ashworth provided written notice          of termination to Lyle, dated April 19, 1995.                    Thereafter,  Lyle  filed  suit  against  Ashworth in  a          Massachusetts  superior court,  alleging  breach of  contract and          unfair trade  practices under Mass. Gen. Laws  ch. 93A,    2, 11,          claiming that the termination notice had been back-dated to April          1995  to conceal its untimeliness under the Agreement.  Following          its  removal,  see  28  U.S.C.       1332(a)  &  1441(a),  and  a                         ___          nonevidentiary  hearing, the  action was  dismissed  for lack  of          personal jurisdiction pursuant to Federal Rule of Civil Procedure          12(b)(2).                                          II                                          II                                     DISCUSSION1                                     DISCUSSION                                     __________                                        ____________________               1We review  de novo.  Nowak v. Tak  How Invs., Ltd., 94 F.3d                           __ ____   _____    ____________________          708, 712 (1st  Cir. 1996), cert. denied, 117 S.  Ct. 1333 (1997).                                     _____ ______          Since  the  district  court  resolved  the  jurisdictional  issue          without an  evidentiary  hearing, "we  draw  the facts  from  the          pleadings  and  the  parties'  supplementary  filings,  including          affidavits,  taking facts affirmatively  alleged by  plaintiff as          true and construing disputed facts  in the light most  hospitable                                          3          A.   The Breach of Contract Claim          A.   The Breach of Contract Claim               ____________________________                    In  a  diversity  case, personal  jurisdiction  over  a          nonresident defendant is constrained both by the long-arm statute          of the forum state and the  Due Process Clause of the  Fourteenth          Amendment.   See Ticketmaster-New York,  Inc. v. Alioto,  26 F.3d                       ___ ____________________________    ______          201, 204 (1st Cir. 1994).  Massachusetts law permits Commonwealth          courts to assert  jurisdiction "over a person, who  acts directly          or by an agent, as to a cause of action in law  or equity arising          from  the  person's  .  .  . transacting  any  business  in  this                                       ___________  ___  ________  __  ____          commonwealth . . . ."  Mass. Gen. Laws ch. 223A,   3(a) (emphasis          ____________          added).                    The  "transacting business" test  under section 3(a) is          designed   to   identify   deliberate,  as   distinguished   from          fortuitous, contacts  with the  forum by  the nonresident  party,          see, e.g., Good  Hope Indus., Inc. v. Ryder Scott Co., 389 N.E.2d          ___  ____  _______________________    _______________          76, 82  (Mass. 1979),  with a view  to determining  whether "'the          possible  need to  invoke  the benefits  and  protections of  the          forum's  laws was reasonably foreseeable . .  . .'"  Id. (quoting                                                               ___          Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 496 (5th Cir.          ________________________    ________          1974)).   Often, the  "transacting business" test  is importantly          informed  by ascertaining whether the nonresident party initiated          or  solicited the  business transaction  in  Massachusetts.   For          instance, the  Massachusetts Supreme  Judicial Court  ("SJC") has          held  that  a  California   corporation  transacted  business  in                                        ____________________          to plaintiff[,]" but without crediting "conclusory allegations or          draw[ing] farfetched inferences."  Ticketmaster-New York, Inc. v.                                             ___________________________          Alioto, 26 F.3d 201, 203 (1st Cir. 1994).          ______                                          4          Massachusetts by systematically  advertising its California hotel          in Massachusetts.  See Tatro v. Manor Care, Inc., 625 N.E.2d 549,                             ___ _____    ________________          551-52 (Mass. 1994); see also Hahn v. Vermont Law Sch.,  698 F.2d                               ___ ____ ____    ________________          48,  51  (1st  Cir.  1983)  (nonresident  law  school  transacted          business  by  sending  application for  admission  and  notice of          acceptance  to plaintiff  in  Massachusetts); New  Hampshire Ins.                                                        ___________________          Guar. Ass'n v. Markem Corp.,  676 N.E.2d 809, 812-13 (Mass. 1997)          ___________    ____________          (nonresident insured did not transact business by mailing premium          payments  to  Massachusetts,  since  Massachusetts-based  insurer          solicited insurance business in New Hampshire).                    An  Ashworth  affidavit      attesting  that  Lyle  had          proposed, in March  1994, to serve as Ashworth's purchasing agent                       _____  ____              went  unopposed by  Lyle.    Instead,  Lyle relied  upon  the          inapposite fact  that it was Ashworth which suggested, during the          summer  of  1994,  that   the  precise  terms  of   the  business          ______  __  ____          relationship previously proposed by Lyle be reduced to writing.                       __________                    Although any effect a nonresident defendant's  activity          may  have  had upon  commerce  in  Massachusetts  is also  to  be          considered in determining  whether it transacted business  in the          Commonwealth, see Droukas  v. Divers Training Academy,  Inc., 376                        ___ _______     ______________________________          N.E.2d 548, 551  n.5 (Mass. 1978), the purely incidental contacts          involved  here were  insufficient  to  support  an  assertion  of          personal  jurisdiction over Ashworth.  See, e.g., Whittaker Corp.                                                 ___  ____  _______________          v. United  Aircraft Corp.,  482 F.2d 1079,  1085 (1st  Cir. 1973)             ______________________          (finding  defendant's contacts  with Massachusetts  insufficient,          and   thus  no  personal   jurisdiction,  where  there   was  "no                                          5          requirement in any of the  agreements that performance take place          ___________          in  Massachusetts") (emphasis added);   New Hampshire  Ins. Guar.                                                  _________________________          Ass'n v.  Markem Corp., 676  N.E.2d 809, 812 (Mass.  1997) ("That          _____     ____________          [plaintiff] then decided to conduct  some administration . . . in                                               ____          Massachusetts . . . cannot be the basis for personal jurisdiction          against [defendant] where [defendant] reasonably assumed it would          be doing  business with [plaintiff]  in New Hampshire and  did in          fact  conduct most  of  its  business .  .  . there.")  (emphasis                        ____          added).  See also Nichols Assocs., Inc. v. Starr, 341 N.E.2d 909,                   ___ ____ _____________________    _____          912 (Mass. App. Ct. 1976) (no significant involvement in commerce          of  Massachusetts,  and  thus  no  personal  jurisdiction,  where          nonresident  defendant's  "contact [was]  limited  to the  .  . .          acceptance  of services  which  the  plaintiff  simply  chose  to                                                                  _____          perform in Massachusetts.") (emphasis added).                    For  one  thing,  most performance  required  from Lyle          under the  Agreement was  to be  rendered outside  Massachusetts.                                                    _______          The   Agreement  did   not  even   require   that  the   internal          administrative   functions   actually   conducted   by  Lyle   in          Massachusetts   be  performed  there,   such  as   arranging  for          merchandise  shipments from  the  Chinese-Taiwanese suppliers  to          Ashworth in California, receiving price quotes or product samples          from the  Asian  factories, or  reporting to  Ashworth on  market          conditions and the availability of merchandise.                    Nor does the Agreement indicate that Lyle either needed          or  intended to perform its "quality control" responsibilities in          Massachusetts.      Rather,   most   of   its  core   contractual                                          6          responsibilities relating  to the inspection of merchandise would          have had to  have been performed in China or  Taiwan, rather than          Massachusetts.  Thus, its performance of various attendant chores          in  Massachusetts  was   incidental  to  the  formation   of  the          Agreement.  See Nichols Assocs., Inc., 341 N.E.2d at 912.2                      ___ _____________________                    Finally,  Lyle  notes,  Ashworth  attended three  trade          shows  in Massachusetts,  accompanied by  a  Lyle employee  on at          least two occasions, and Lyle performed two contract functions in                                                  Massachusetts:  designing golf shoes and purchasing various golf-          shoe components and the materials  with which to package them for          shipment  to Asia.    Nevertheless,  as  these  initiatives  were          undertaken  unilaterally by the  respective parties,  even though          neither  was   responsible  for  their   performance  under   the          Agreement,  this  attempt to  assert  personal jurisdiction  over          Ashworth is unavailing since chapter 223A requires that the cause          of action have "aris[en] from  [Ashworth's] . . . transacting any                          ________ ____   __________          business in [Massachusetts] . . . ."  Mass. Gen. Laws ch. 223A,            3(a) (emphasis added).  We explain briefly.                    The  "arising from"  clause in  chapter 223A  is to  be          generously construed in favor of asserting personal jurisdiction,                                        ____________________               2The  contention   that  Ashworth  transacted   business  in          Massachusetts  by mailing  its  termination  notice  to  Lyle  in          Massachusetts  is  flawed  as well,  since  Ashworth  cannot have          solicited business by terminating the business relationship.  Nor          _________             ___________          was  the Agreement  executed by  Ashworth  in Massachusetts,  see                                                                        ___          Carlson  Corp. v.  University  of Vermont,  402  N.E.2d 483,  485          ______________     ______________________          (Mass.  1980) (defendant  transacted  business in  Massachusetts,          where it  signed the  contract), but in  California where  it had          been   forwarded  after   having  been   executed   by  Lyle   in          Massachusetts, supra p. 2.                         _____                                          7          by  applying the  following "but  for" causation  test:   Did the          defendant's contacts with the  Commonwealth constitute "the first          step  in  a train  of  events  that  result[ed] in  the  personal          injury."   Tatro, 625  N.E.2d at  553.   The  plaintiff in  Tatro                     _____                                            _____          almost   certainly  would  not   have  selected  the  defendant's          California hotel  but for  the advertisements  the defendant  had                            ___ ___          placed in various Massachusetts media.   Lyle, on the other hand,          does  not contend  that  component  purchases,  shoe  design,  or          attendance   at   trade   shows  comprised   any   part   of  the          responsibilities of either party under the Agreement.                      Since  the  extra-contractual  activities  unilaterally          undertaken  by  the  respective  parties  in  Massachusetts  were          extraneous to the formation of the Agreement, see Hahn v. Vermont                                                        ___ ____    _______          Law Sch.,  698 F.2d 48,  51 (1st Cir. 1983)  (holding, pre-Tatro:          ________                                                   _____          "we have no doubt that  [the 'arising from' requirement] has been          satisfied when the  cause of action is  for an alleged breach  of          contract  and the  business transacted  was  instrumental in  the                                                       ____________ __  ___          formation of the  contract.") (emphasis added), those  activities          _________ __ ___  ________          did  not constitute a  "but for" cause for  the alleged breach of          contract, see Tatro, 625 N.E. 2d at 553.                    ___ _____          B.   The Unfair Trade Practices          B.   The Unfair Trade Practices               __________________________               Claim Under Chapter 93A               Claim Under Chapter 93A               _______________________                    Finally,  Lyle  contends,  since  Chapter  223A  grants          jurisdiction over  "a cause  of action   .  . .  arising from  [a          defendant's] . . . causing tortious injury by  an act or omission          in [Massachusetts] . .  . [,]" Mass. Gen. Laws ch.  223A,   3(c),          the federal  district court possessed personal  jurisdiction over                                          8          Ashworth in  relation to the  unfair trade practices  claim under          Mass. Gen. Laws  ch. 93A.  For present purposes  we shall assume,          without deciding, that a Chapter 93A violation would constitute a          "tortious  injury" under Chapter  223A.  Cf.  Burtner v. Burnham,                                                   ___  _______    _______          430 N.E.2d 1233, 1237 (Mass. App. Ct. 1982) ("Whether a violation          of . . . chapter [93A] constitutes a 'tortious injury' within the          meaning of c. 223A,   3(c) may be open to some doubt.").                    Lyle  alleges that  Ashworth attempted  to  conceal the          tardiness of  its nonrenewal  notice by  backdating its  untimely          termination letter to Lyle, see supra  p. 3, and that the alleged                                      ___ _____          deception  was designed to prevent Lyle  from pursuing a contract          action for wrongful  termination of the  Agreement.  Assuming  as          much,  we nonetheless conclude  that Lyle  cannot prevail  on its          Chapter 93A claim.                    Chapter 93A,  section 11,  provides that "[a]ny  person          who  engages  in the  conduct of  any trade  or commerce  and who                                                                    ___ ___          suffers  any loss of  money or property,  real or personal,  as a          _______  ___ ____ __  _____ __ ________          result of the use  or employment by another person who engages in          any  trade or commerce  of an unfair method  of competition or an          unfair or  deceptive act or  practice . .  . may  . . .  bring an          action in the superior court . . . ." (emphasis added).  Thus, in          order  to  state  a  chapter  93A claim,  Lyle  was  required  to          demonstrate a loss  of money or property.  Yet it alleged no such          loss.   Instead, it asserted  a breach  of contract by  virtue of          Ashworth's failure  to provide  timely notice  of termination  as          required  by  the Agreement.    In  addition, Lyle  alleged  that                                          9          Ashworth violated chapter 93A by engaging in the deceptive act of          backdating  the  notice  of  termination.    As  to   the  latter          allegation,  however,  Lyle  claimed no  injury  apart  from that                                                   ______          caused  by the alleged  breach of  contract.   Consequently, Lyle          failed to allege a "loss of  money or property . . . as  a result          of [Ashworth's]  use or employment .  . . of [a] .  . . deceptive          act . . . [,]" as required by chapter 93A, section 11.   Finally,          a  breach-of-contract claim,  without more,  cannot  be converted          into a  tort claim.   See Redgrave v. Boston  Symphony Orchestra,                                ___ ________    ___________________________          Inc., 557 F. Supp. 230, 238 (D. Mass. 1983).          ____                    Affirmed.                    ________                                          10
