In a wrongful death suit by a Massachusetts wife of a man and their child who drowned in a Montreal hotel pool, a Massachusetts federal court held in Nandjou v. Marriott Internationalthat it had jurisdiction under the state long-arm statute over hotel franchisor, Marriott, and its Montreal franchisee.
The court applied a three part test for personal jurisdiction over defendants Marriott and its franchisee, non-residents of Massachusetts: (1) whether the claim arose out of Marriott’s and the franchisee’s Massachusetts activities, (2) whether those Massachusetts contacts were a “purposeful availment” of the privilege of doing business in Massachusetts, and (3) whether the exercise of jurisdiction was reasonable.
The court analyzed whether Marriott’s actions in Massachusetts could be attributed to its Montreal franchisee. In exchange for annual fees and costs, Marriott marketed the franchisee’s hotel, and the franchisee used Marriott’s name and marketing abilities expecting Marriott would advertise its hotel and customers would visit the hotel because it was affiliated with Marriott. The court found that when the plaintiff’s husband checked into the hotel, the franchisee accepted the discounted rate Marriott gave the plaintiff’s husband in Massachusetts. Therefore, based on the relationship between the parties, the court held that Marriott’s communications to the plaintiff’s family in Massachusetts was attributable to the franchisee.
Next, the court looked at the purposeful availment test. For defendants to purposefully avail themselves of the privilege of doing business in Massachusetts, their contacts must be voluntary, such that they should reasonably anticipate being brought into court in Massachusetts. The court found both requirements were met because Marriott chose to advertise the franchisee’s hotel in Massachusetts through direct mail advertisements and other means.
Finally, the court held that exercising jurisdiction over the defendants would be reasonable. The court considered the potential burden on the defendants, Massachusetts’ interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the judicial system’s interest in the most effective resolution and social policy considerations. These factors weighed in favor of the plaintiff, therefore the court’s exercise of jurisdiction was reasonable.
Generally, if a business uses an agent or maintains an office with staff, a bank account, and a local phone number in a jurisdiction, the assertion of personal jurisdiction is expected. However, as this case shows, franchisees in systems that advertise on the internet and by direct mail need to realize that absence of a physical presence in a forum sometimes is not is enough to avoid being brought into unexpected and inconvenient courts.
Source: Nandjou v. Marriott International Inc., D. Mass., ¶16,417
