[00:00:00] Speaker 01:
Good morning, Your Honors.

[00:00:01] Speaker 01:
Michael Dots on behalf of the Appellant Super Tech Inc., a site ban company involved in software installations who entered into a contract with My Choice Software, the appellee in the case, over the internet.

[00:00:20] Speaker 01:
And then things went wrong, and the lawsuit was filed alleging fraud and alleging breach.

[00:00:27] Speaker 01:
and the district court dismissed the complaint holding that My Choice, a California company, had, there was no personal jurisdiction in Saipan over My Choice.

[00:00:39] Speaker 01:
So we've appealed, there's basically two issues.

[00:00:42] Speaker 01:
There's a contract claim and then there's a tort claim, the fraud claim.

[00:00:47] Speaker 01:
The decision was made before the April of this year decision, an inbound decision in Brisbane.

[00:00:54] Speaker 01:
And so, briskin kind of changes the landscape on the tort claim.

[00:00:59] Speaker 01:
The lower court in this case relied on the older version of briskin before the embank review.

[00:01:06] Speaker 01:
And the new briskin, the new holding basically, if...

[00:01:14] Speaker 01:
The holding basically is if the interactive platform expressly aims its wrongful conduct toward a form state when its contents are its own choice and are not random, isolated, or fortuitous, then for the tort claim there is purposeful direction.

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and there is personal jurisdiction.

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And that's what we have here.

[00:01:40] Speaker 01:
So as far as purposeful direction, this was actually parties that had had an ongoing relationship going back to 2019.

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They had had some prior contracts.

[00:01:53] Speaker 01:
There's one relatively substantial, 174,000.

[00:01:57] Speaker 01:
They knew each other.

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And so it was a purpose, it was not random that,

[00:02:05] Speaker 01:
my super tech reached out to my choice for this contract.

[00:02:09] Speaker 01:
It was also not isolated because again there was a series of contracts between the parties and it was not fortuitous.

[00:02:19] Speaker 01:
Fortuitous would be

[00:02:21] Speaker 01:
You go on the Amazon website and you purchase a program.

[00:02:25] Speaker 01:
Amazon has no clue who's purchasing the program.

[00:02:29] Speaker 01:
Here, My Choice knew exactly who was purchasing it.

[00:02:33] Speaker 01:
This was a special software program that had complicated specifications.

[00:02:39] Speaker 01:
There was detailed email exchanges between the parties.

[00:02:42] Speaker 01:
There were Zoom conferences, and there was even a Zoom conference where

[00:02:45] Speaker 01:
the end user, a government agency, appeared in the Zoom conference dealing with the specifications.

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So my choice knew exactly who it was dealing with and that it was in SIPAN.

[00:02:57] Speaker 04:
Is there a different standard and would it apply differently to the facts of this case, depending whether we're talking about the tort or the contract claim?

[00:03:06] Speaker 01:
So there are technically two different terms that are used with the two different types of cases, but there's case law that basically says, most recent case law, it's really, it's the same thing.

[00:03:17] Speaker 01:
Purposeful availment, purposeful direction.

[00:03:20] Speaker 01:
Ultimately what you're looking at is a fundamental fairness under the due process clause.

[00:03:24] Speaker 01:
And is it fundamentally fair that somebody be hailed into that jurisdiction and have to defend the case there?

[00:03:31] Speaker 01:
And so whether you call it purposeful availment or purposeful direction,

[00:03:35] Speaker 01:
I think it's the same thing.

[00:03:37] Speaker 04:
And on the facts of this case, in your view, it comes to the same result?

[00:03:41] Speaker 01:
Yes, it does.

[00:03:42] Speaker 01:
Yes, it does.

[00:03:45] Speaker 01:
So I think the tort is pretty clear, given the new ruling in Briskin.

[00:03:51] Speaker 01:
I think also there was jurisdiction on the contract claim, which is the

[00:03:56] Speaker 01:
purposeful availment standard.

[00:04:01] Speaker 01:
The lower court relied heavily on Davis.

[00:04:05] Speaker 01:
We spent a lot of time in the brief discussing Davis as not really being applicable.

[00:04:09] Speaker 01:
And the ultimate holding of the lower court was it is unreasonable to subject MCS to the burden of litigation, the CNMI, based on super text actions.

[00:04:21] Speaker 01:
But what super text actions were,

[00:04:23] Speaker 01:
was reaching out to a party that it contracted with before, negotiating a contract, working with them on the specifications, including the end user, and then the software is delivered that doesn't conform.

[00:04:36] Speaker 03:
But are you suggesting we look at the defendant's actions as opposed to the plaintiff's?

[00:04:41] Speaker 03:
I think, okay, I think that- You might be muddling which party we're supposed to be looking at when we're looking at purposeful availment, unless I'm misunderstanding you.

[00:04:49] Speaker 01:
I think you look at what the situation was between the parties.

[00:04:53] Speaker 03:
I don't think you look specifically- We're trying to figure out whether it's fair to hail somebody into court, and so we're looking, I think, at the defendant's contacts and actions, and under this, as you're right, quite a different standard now.

[00:05:07] Speaker 03:
right, where they expressly aim their wrongful conduct towards the forum state when its contacts are its own choice and not random, isolated, or fortuitous.

[00:05:13] Speaker 03:
That's Ford.

[00:05:14] Speaker 03:
That's straight from the Supreme Court president.

[00:05:16] Speaker 03:
So whose actions are we looking at?

[00:05:19] Speaker 01:
Let me just rephrase what I just said.

[00:05:23] Speaker 01:
MCS responded to the inquiry from Supertech asking for a contract.

[00:05:28] Speaker 01:
MCS emailed and corresponded with Supertech for the contract.

[00:05:32] Speaker 01:
MCS worked with Supertech on the specifications.

[00:05:36] Speaker 01:
MCS joined in a Zoom call with the end users seen in my government over the specifications.

[00:05:42] Speaker 01:
That's what MCS did.

[00:05:44] Speaker 01:
So they purposely availed themselves of

[00:05:49] Speaker 01:
the CNMI to enter into this fairly large contract for specialized software.

[00:05:56] Speaker 01:
So that's what MCS's conduct in perpetuity.

[00:06:00] Speaker 03:
You've answered my question.

[00:06:01] Speaker 03:
I appreciate your patience with it.

[00:06:04] Speaker 04:
I'm good for now.

[00:06:05] Speaker 01:
Okay, so I don't want to take too long of your time.

[00:06:08] Speaker 01:
I'll reserve a bit of what's left.

[00:06:11] Speaker 01:
But basically, you know, super tech

[00:06:15] Speaker 01:
MCS purposely availed itself, and Davis is distinguishable.

[00:06:20] Speaker 01:
We spent a lot of time distinguishing Davis.

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And given the inbox ruling in Briskin, which changes the standard for the tort, I think that the dismissal of the tort claim should be reversed and the matter remanded to the district court.

[00:06:37] Speaker 03:
All right.

[00:06:38] Speaker 03:
We'll let you save the bulk of your time.

[00:06:40] Speaker 01:
I'll reserve the bulk of my time.

[00:06:42] Speaker 03:
Yes.

[00:06:42] Speaker 03:
We'll hear from opposing counsel now, please.

[00:06:48] Speaker 00:
Good morning, Your Honors, and may it please the Court.

[00:06:50] Speaker 00:
I'm going to jump straight into Briskin, which the Court has directed us to focus on, and we've only got 10 minutes.

[00:07:00] Speaker 00:
So, Mr. Dodds correctly summarized the holding in Briskin.

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An interactive forum expressly aims at its wrongful conduct.

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Supertech, throughout its briefings, both in the district court and here in the Ninth Circuit, has stressed that they didn't go through the website.

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In fact, the website had nothing to do with the alleged wrongful conduct in this case.

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And that's something that courts should keep in mind.

[00:07:32] Speaker 04:
Does that make it harder or easier for you that they did not go through the website?

[00:07:38] Speaker 00:
Well, in the one sense, if they had gone through the website, the website had a forum selection clause for California.

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And the district court noted that in their decision.

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We don't have that here, and possibly that's why this is just speculation.

[00:07:55] Speaker 00:
That's why Supertech didn't go through it.

[00:07:57] Speaker 00:
But it doesn't make it harder for us in a sense.

[00:08:04] Speaker 00:
We still win clearly on the law, even under briskin, that it's not through the website and there's no contract between SuperTech and MyChoice that has a form selection clause.

[00:08:19] Speaker 00:
So we do depend, in this case, on the law concerning exercise of specific personal jurisdiction.

[00:08:28] Speaker 04:
So why didn't your client purposely avail or purposely direct to the forum?

[00:08:38] Speaker 00:
Well, they didn't because they didn't reach out.

[00:08:41] Speaker 00:
And all the reaching out was from Supertech.

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Supertech's president, I think it was, called My Choice.

[00:08:51] Speaker 00:
And that was how all of the interactions, all of the sales had occurred.

[00:08:58] Speaker 00:
There was no point where someone from My Choice emailed or called Supertech and said, hey, is there any other product that you guys need?

[00:09:11] Speaker 00:
We've sold you stuff in the past.

[00:09:13] Speaker 00:
Anything else you need?

[00:09:14] Speaker 00:
No, they never reached out.

[00:09:16] Speaker 00:
It's not alleged they reached out that way.

[00:09:18] Speaker 00:
They never sent an email saying to Supertech as a previous customer saying, we're running specials.

[00:09:26] Speaker 00:
to the end of the year on Microsoft products.

[00:09:29] Speaker 00:
So they never reached out.

[00:09:30] Speaker 00:
It was always SuperTech.

[00:09:32] Speaker 02:
You're not suggesting that the contacts were random.

[00:09:38] Speaker 02:
I mean, at the end of the day, my choice knew that the software it sold to SuperTech was going to be used in the Northern Mariana Islands, right?

[00:09:47] Speaker 00:
Sure.

[00:09:48] Speaker 00:
But I would maintain that the contacts are random, isolated, and fortuitous because it's always Supertech that's calling them.

[00:10:00] Speaker 00:
It is random in that sense.

[00:10:03] Speaker 00:
There is nothing that my choice is doing to bring Supertech in for another sale.

[00:10:13] Speaker 00:
They're not following up with emails.

[00:10:16] Speaker 00:
They're not following up with letters.

[00:10:17] Speaker 00:
I would maintain that in that sense, it is random and fortuitous.

[00:10:22] Speaker 00:
They're not making another sale.

[00:10:24] Speaker 00:
There's nothing to indicate they're making another sale.

[00:10:26] Speaker 03:
You seem to be truncating the analysis and looking just to the initial contact.

[00:10:33] Speaker 03:
Who called whom first?

[00:10:34] Speaker 03:
What about herbal plants?

[00:10:35] Speaker 00:
Well, that's reaching out.

[00:10:36] Speaker 03:
Well, maybe that's one data point, right?

[00:10:39] Speaker 03:
But there was a course of conduct here that council has emphasized, and the court did not have our new Shopify opinion, but I think it did have our herbal plants opinion, where we said the conduct purposefully directed at the forum is the seller's action of accepting the order and causing the product to be delivered in the forum.

[00:10:59] Speaker 03:
there's more to that case than just sending a product into the form, to be sure, but to follow up on Judge Desai's point, this wasn't just a one phone call.

[00:11:07] Speaker 03:
What about the course of conduct between the parties?

[00:11:12] Speaker 03:
You have to satisfy this test.

[00:11:13] Speaker 03:
Let me just start with that to make sure we're on the same page.

[00:11:16] Speaker 03:
You agree that we're looking for this, the question is whether

[00:11:22] Speaker 03:
They expressly aimed their conduct and were looking for their own choice, not random, isolated, or fortuitous as the buzzwords of the test.

[00:11:30] Speaker 03:
Do you agree with that?

[00:11:32] Speaker 00:
As part of it, there's a second point in that the courts have said, the Ninth Circuit has said that there has to be something more than dependent operating a passive website accessible in the forum.

[00:11:47] Speaker 03:
We've said that in Mavericks when we're talking about a website, but you said at the top of the hour here that this order wasn't placed over the website.

[00:11:53] Speaker 00:
That's correct.

[00:11:55] Speaker 00:
It wasn't placed over the website.

[00:11:56] Speaker 03:
So we're looking at the other interactions that did happen.

[00:11:59] Speaker 03:
I'm trying to figure out why, to get back to Judge Desai's question, why you think this was random, isolated, or fortuitous.

[00:12:09] Speaker 00:
Still, because it's simply my choice.

[00:12:14] Speaker 00:
following up after they've been contacted by the buyer.

[00:12:20] Speaker 00:
And the buyer says, would you like to bid?

[00:12:23] Speaker 00:
Sure, I'll bid.

[00:12:24] Speaker 00:
And the buyer says, we need to have some discussions about this.

[00:12:30] Speaker 00:
So you have Zoom discussions.

[00:12:32] Speaker 02:
So what's the best case that you have or cite some authority that I think

[00:12:36] Speaker 02:
supports the argument that you're making that everything that occurs after the initial contact, we should just completely ignore that, that plays no role in determining whether or not the contacts were sufficient.

[00:12:54] Speaker 00:
I think Pebble Beach is a good case.

[00:12:57] Speaker 00:
It says something more has to be something other than a foreseeable effect in the forum state.

[00:13:02] Speaker 00:
And clearly there's a foreseeable effect in the forum state.

[00:13:04] Speaker 02:
Yeah, I think that you concede in response to my earlier question that you knew the software, or My Choice knew that the software that it sold to Supertech would be used in the forum, correct?

[00:13:17] Speaker 00:
Yes, yes, yes.

[00:13:20] Speaker 00:
It did know it would be used in the forum.

[00:13:23] Speaker 00:
that should not create a personal jurisdiction, specific personal jurisdiction in the forum.

[00:13:30] Speaker 00:
It's still

[00:13:33] Speaker 00:
It's still that the seller has not reached out.

[00:13:37] Speaker 00:
The seller then is trying to be a good seller and provide a product that the buyer is asking for.

[00:13:46] Speaker 00:
And the seller should not be penalized by having to go all the way out to Saipan to defend just because the seller is following up and trying to provide the proper product.

[00:13:57] Speaker 03:
I think that's right.

[00:13:58] Speaker 03:
But it's all sort of the devil's in the details.

[00:14:00] Speaker 03:
And we look at all of what happened here.

[00:14:02] Speaker 03:
I think the rule you're articulating would allow any entity contracting with the government to respond to a government request for proposal, submit a bid, and then deny that they've availed themselves of the jurisdiction.

[00:14:15] Speaker 03:
Is that right?

[00:14:20] Speaker 00:
Well, here the proposal did not come directly from the government.

[00:14:23] Speaker 00:
Here the proposal came from Supertech.

[00:14:28] Speaker 03:
Well, I'm giving you a hypothetical.

[00:14:30] Speaker 00:
Yes, the end user is the government.

[00:14:31] Speaker 00:
Isn't that right?

[00:14:32] Speaker 03:
I think your rule would knock out anybody responding to a government proposal.

[00:14:36] Speaker 00:
I think that's right.

[00:14:37] Speaker 00:
I think that is correct, Your Honor, and I don't think that the CNMI government should be treated differently than any private citizen within the CNMI.

[00:14:53] Speaker 04:
Did your client engage in any advertising in CNMI?

[00:14:58] Speaker 00:
I don't believe so, Your Honor.

[00:15:00] Speaker 00:
I don't think that there was anything in the record about that.

[00:15:04] Speaker 00:
There were declarations from Mr. Rogers from

[00:15:10] Speaker 00:
from my choice, but I don't think there was any advertising in the CNMI.

[00:15:16] Speaker 00:
The website was accessible in the CNMI.

[00:15:19] Speaker 04:
But maybe the advertisement was not specifically directed to CNMI.

[00:15:23] Speaker 04:
Obviously you had done business previously with CNMI, including with this particular person.

[00:15:30] Speaker 00:
Yes, we had done business before.

[00:15:32] Speaker 00:
But again, when they reach out to us and we haven't solicited further business from them, should we say, oh, jeez, we don't want to sell anything to them because then we may be stuck having to litigate in the CNMI.

[00:15:45] Speaker 04:
So your basic argument is it depends on who initiates the contact.

[00:15:49] Speaker 04:
If you did not initiate the contact, you're not vulnerable to jurisdiction because you're just, as it were, the recipient of the initial contact.

[00:15:57] Speaker 04:
And subsequent contact doesn't make any difference.

[00:16:00] Speaker 00:
Well, it's not just that there's the initial contact.

[00:16:03] Speaker 00:
So let's say that we had advertised and that the record showed that we were advertising and reaching out specifically to the jurisdiction and somebody responded to that.

[00:16:15] Speaker 00:
Then even though we got the order in from the CNMI, now there's some evidence that we were targeting the CNMI.

[00:16:21] Speaker 00:
And I understand that the holding in briskin is that differential targeting is not required.

[00:16:32] Speaker 00:
But it does go to the fact that my choice was not doing anything to try to get Supertech or anyone else in the CNMI to come in and buy from them.

[00:16:45] Speaker 00:
Thank you, Your Honor.

[00:16:51] Speaker 01:
Let me start with herbal brands.

[00:16:53] Speaker 01:
I guess the rules in herbal brands are, one, the sale is in the regular course of business, which it was.

[00:17:00] Speaker 01:
MCS is in the regular business of selling or licensed software.

[00:17:04] Speaker 01:
And two, the defendant exercises some level of control over distribution.

[00:17:11] Speaker 01:
So that's, when Super Tech called, My Choice could have said, we're not doing business in SIPAN.

[00:17:19] Speaker 01:
You know, refer them to some other vendor, maybe in Australia or somewhere closer.

[00:17:24] Speaker 01:
But My Choice took the call.

[00:17:27] Speaker 01:
And My Choice negotiated the contract.

[00:17:30] Speaker 01:
They had a provision.

[00:17:31] Speaker 01:
They wanted a full payment up front.

[00:17:32] Speaker 01:
And my client wired $844,000 to California.

[00:17:37] Speaker 01:
That's exercise and control.

[00:17:42] Speaker 01:
Because they could have said, no, we're not going to do business with you.

[00:17:45] Speaker 01:
We don't want to do business in Saipan because we're afraid of getting sued in Saipan.

[00:17:49] Speaker 01:
They could have had the selection of law clause as part of the agreement, which they didn't have.

[00:17:56] Speaker 01:
But when Supertech called, they answered.

[00:18:01] Speaker 01:
when Supertech offered them a lucrative contract, they accepted.

[00:18:06] Speaker 01:
And when Supertech worked with them, and they worked with Supertech... Are we looking at Supertech's actions?

[00:18:13] Speaker 01:
Yes.

[00:18:14] Speaker 01:
Yeah.

[00:18:14] Speaker 01:
So when Supertech called, they picked up the phone, they spoke with Supertech, they negotiated with Supertech over the specifications, they worked with Supertech, and they received the wire transfer from the CNMI.

[00:18:28] Speaker 01:
and knowing that this product is going to the CNMI to be used by the government in the CNMI.

[00:18:36] Speaker 01:
So under herbal brands, we think there is personal jurisdiction.

[00:18:42] Speaker 01:
And then it's kind of the same on the earlier argument.

[00:18:48] Speaker 01:
In the Embank decision in Briskin, there was talk about if you have a website that's available to anyone, well websites advertise and it's available on the CNMI and you can see what is on the website.

[00:19:05] Speaker 01:
Unsolicited spam emails are not necessarily the way people do business.

[00:19:10] Speaker 01:
If a customer is looking for software, they would Google, they would find MCS's website.

[00:19:16] Speaker 01:
They could maybe buy software off the website.

[00:19:19] Speaker 01:
This software they could not because it's specialized and then they reach out.

[00:19:23] Speaker 01:
So MCS was inviting by having that website that was available in the CNMI for people in the CNMI, companies in the CNMI to do business with them.

[00:19:32] Speaker 03:
Is there any other advertising other than ubiquitously available?

[00:19:35] Speaker 01:
No.

[00:19:35] Speaker 01:
There's nothing in the record.

[00:19:37] Speaker 01:
No specific advertising.

[00:19:40] Speaker 01:
There was the course of dealing back to 2019 from 2022, and there's a prior contract.

[00:19:46] Speaker 01:
So these people knew each other, and they knew who to talk to and who to send emails.

[00:19:51] Speaker 01:
But no other advertising that I'm aware of.

[00:19:52] Speaker 03:
All right.

[00:19:53] Speaker 03:
Judge Desai, anything else?

[00:19:55] Speaker 03:
Judge Fletcher, I think we've got your argument, both of you, and we want to thank you for it.

[00:19:59] Speaker 03:
We'll take that case under advisement.

[00:20:00] Speaker 03:
We're gonna just take a 10 minute recess and then we'll be back.

[00:20:02] Speaker 01:
Thank you, Your Honor.