United States District Court, D. Arizona
DOUGLAS L. RAYES UNITED STATES DISTRICT JUDGE
the Court is Defendant St. Francis Hospital
Incorporated's (“St. Francis”) motion to
dismiss for lack of personal jurisdiction or, alternatively,
to transfer venue. (Doc. 11.) The motion is fully briefed,
and the Court heard oral argument on October 16, 2018. (Docs.
17-18.) For the following reasons, St. Francis' motion is
Apogee Medical Management Incorporated (“Apogee”)
is an inpatient physician (“Hospitalist”)
provider with its principal place of business in Arizona.
(Doc. 1 ¶¶ 1, 6.) Apogee contracts with hospitals
around the country to arrange and manage Hospitalist care.
(¶ 5.) In South Carolina, Apogee's Hospitalists
provide medical services through Apogee's affiliated
physician group. (¶ 7.) In 2014, Apogee began
discussions with St. Francis about managing the Hospitalist
program at St. Francis' facilities in South Carolina.
(Doc. 17-3 ¶¶ 5-10.) Apogee and St. Francis
formally entered into a Hospitalist Services Agreement
(“HSA”) in July 2015. (Doc. 1 ¶ 17.)
early 2017, Apogee became concerned about high patient
volumes at St. Francis' facilities. (¶ 21.) Apogee
and St. Francis agreed to add permanent staffing and to the
use of Locum Tenens physicians (“Locums”) for
interim coverage. (¶¶ 12, 22.) With St.
Francis' approval, Apogee submitted monthly invoices for
reimbursement of the Locums' cost, which St. Francis
paid. (¶¶ 26, 28.)
point thereafter, St. Francis requested additional
Hospitalists. (¶ 29.) On April 19, 2017, Apogee and St.
Francis met to discuss increasing the number of Hospitalists.
(¶ 30.) Apogee and St. Francis agreed upstaffing
required continued use of Locums. (¶ 31.) Following the
meeting, Apogee and St. Francis exchanged emails to
memorialize their discussion, thereby amending the HSA
(“April 2017 Amendment”). (¶¶ 33-35.)
the April 2017 Amendment, St. Francis continued to pay
Apogee's monthly invoices for the Locums. (¶ 46.) In
December 2017, however, St. Francis refused to pay the
outstanding balance of Locums invoices and asked Apogee to
refund all amounts invoiced and paid by St. Francis in 2017,
and for certain amounts invoiced and paid in 2016.
(¶¶ 48-49.) When St. Francis refused to pay the
agreed-upon amounts, Apogee filed this lawsuit. (¶ 50.)
relevant here, Apogee alleges St. Francis breached the HSA
and its implied covenant of good faith and fair dealing when
St. Francis refused to pay for the Locums services.
(¶¶ 52-55, 57-60.) Alternatively, Apogee argues St.
Francis' refusal to pay for the Locums services
constitutes unjust enrichment, Apogee is entitled to recover
the reasonable value of its services provided under the HSA,
and that Apogee detrimentally relied on St. Francis'
promises to pay for the Locums services. (¶¶ 62-69,
73-74, 76-79.) St. Francis has moved to dismiss the claims
against it for lack of personal jurisdiction or,
alternatively, to transfer the case to the District of South
Carolina. (Doc. 11.)
Motion to Dismiss for Lack of Personal Jurisdiction
a defendant moves to dismiss for lack of personal
jurisdiction, the plaintiff bears the burden of demonstrating
that the court has jurisdiction over the defendant.”
Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th
Cir. 2006). “Where, as here, the defendant's motion
is based on written materials rather than an evidentiary
hearing, the plaintiff need only make a prima facie showing
of jurisdictional facts to withstand the motion to
dismiss.” Mavrix Photo, Inc. v. Brand Techs.,
Inc., 647 F.3d 1218, 1223 (9th Cir. 2011). Moreover,
“uncontroverted allegations in [the plaintiff's]
complaint must be taken as true, and conflicts between the
facts contained in the parties' affidavits must be
resolved in [the plaintiff's] favor for purposes of
deciding whether a prima facie case for personal jurisdiction
exists.” Am. Tel. & Tel. Co. v. Compagnie
Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 1996)
(internal quotation and citation omitted). The court,
however, “may not assume the truth of allegations in a
pleading which are contradicted by affidavit.” Data
Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280,
1284 (9th Cir. 1977).
courts ordinarily follow state law in determining the bounds
of their jurisdiction over persons.” Walden v.
Fiore, 571 U.S. 277, 283 (2014). Arizona authorizes
courts to exercise jurisdiction to the maximum extent
permitted by the Due Process Clause of the United States
Constitution. Ariz. R. Civ. P. 4.2(a). Thus, courts in this
District may exercise personal jurisdiction over a defendant
who is not physically present in Arizona if the defendant has
sufficient minimum contacts with the state, such that the
suit can be maintained without offending traditional notions
of fair play and substantial justice. See Int'l Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945).
jurisdiction may be general or specific. General personal
jurisdiction over a nonresident defendant requires
“continuous corporate operations within a state so
substantial and of such a nature as to justify suit against
it on causes of action arising from dealings entirely
distinct from those activities.” Id. at 318.
Specific personal jurisdiction exists when a lawsuit arises
out of, or is related to, the defendant's contacts with
the forum. Helicopteros Nacionales de Colo., S.A. v.
Hall, 466 U.S. 408, 414 n.8 (1984). Here, Apogee
contends only that St. Francis is subject to specific
jurisdiction. (Doc. 17 at 6-12.)
determining whether specific jurisdiction over an
out-of-state defendant exists, the Court applies a
(1) The non-resident defendant must purposefully direct [its]
activities or consummate some transaction with the forum or
resident thereof; or perform some act by which [it]
purposefully avails [itself] of the privilege of conducting
activities in the forum, thereby invoking the benefits and
protections of its laws;
(2) the claim must be one which arises out of or relates to
the defendant's forum-related activities; and
(3) the exercise of jurisdiction must comport with fair play
and substantial justice, i.e. it must be reasonable.
Schwarzenegger v. Fred Martin Motor Co., 374 F.3d
797, 802 (9th Cir. 2004) (internal quotation and citation
omitted). Apogee bears the burden of satisfying the first two
prongs. Id. at 802. If Apogee succeeds, the burden
shifts to St. Francis to “present a compelling