Service of a “Preservation Notice” in the Forum District Does Not Confer Long-Arm Jurisdiction Over the Out-of-State Sender

[EDRM Editor’s Note: The opinions and positions are those of Michael Berman.]

Plastics Industry Assoc. v. Bonta, 2024 WL 4699927 (D.D.C. Nov. 6, 2024), held in part that the defendant’s act of serving a “preservation demand” on the plaintiff in the forum district did not confer long-arm jurisdiction over the serving-defendant in that forum.

“Preservation notices” are routinely sent to a potential opposing party in order to trigger the common-law duty to preserve potentially responsive information by putting the recipient on notice that litigation should be anticipated.  Often, it may be necessary to send them to a potential litigant located in another State.

Summarizing a complex doctrine, a court has “personal jurisdiction” over a non-resident defendant when the defendant’s contacts with the forum make it fair to exercise such jurisdiction.  That usually involves interpretation of the forum’s “long-arm statute” and “minimum contacts” under the U.S. Constitution.

In Plastics Industry, the forum was the U.S. District Court for the District of Columbia.  The plaintiff, a Washington-based company, filed suit there.  The defendant was the Attorney General of California.  Plastics Industry Association was suing in D.C. to preliminarily enjoin enforcement of a subpoena issued by Mr. Bonta in connection with a California investigation.  Of course, as plaintiff, Plastics Industry Association needed to establish personal jurisdiction over Mr. Bonta in the D.C. forum.

ROUND ONE – ISSUE RAISED TOO LATE

In a prior decision, the Plastics Industry court held that it lacked personal jurisdiction over Mr. Bonta.  In the original decision, ECF No. 21 (9/11/2024), the court explained that Mr. Bonta – the Attorney General of California – was investigating the fossil fuel and petrochemical industries in connection with plastics recycling and pollution. 

“As part of that investigation,” Mr. Bonta sent preservation letters, and then subpoenas, to two Washington, D.C. based industry groups.  Id. at1-2.  Plastics Industry Association and another company sued him under 42 U.S.C. §1983, in the District for the District of Columbia, to enjoin the subpoena and investigation.  Id. at 2.  They asserted – – in very brief summary – – that First Amendment protections barred the subpoena.

The California Attorney General challenged personal jurisdiction in D.C., and he prevailed.   The central issue in the prior decision was whether long-arm jurisdiction was based on contacts at the time of filing or whether post-filing contacts in the forum could be considered.  The court held that post-filing contacts could not confer jurisdiction.  Id. at 12. 

Plastics Industry Association contended that service of the preservation notice was relevant; however, the court wrote: “That disclosure [in a supplemental filing] comes too late.”  The court had closed the record.  Id. at 13 n. 4.

ROUND TWO – SERVICE OF THE PRESERVATION DEMAND

Plastics Industry Association amended its complaint and renewed its jurisdictional argument.  The court wrote:

Plastics now explicitly alleges that, on April 28, 2022, months before issuing the subpoena, Bonta served a document “Preservation Notice” on Plastics in the District of Columbia via a hired process server.  Second, Plastics asserts a new subsection of the D.C. long-arm statute, D.C. Code § 13-423(a)(4), as a basis for personal jurisdiction.

Id. at *1 (emphasis added).  

The Plastics Industry court held that “the fact of personal service of the Preservation Notice does not change the result,” and rejected the §13-423(a)(4) argument.  It also rejected merits arguments. [emphasis added].

On its motion for preliminary injunction, Plastics Industry Association was required to demonstrate a likelihood of success in establishing personal jurisdiction over California Attorney General Bonta in the District of Columbia.  It failed to do so.

The court’s reasoning was straightforward:

According to Plastics, Bonta’s service of the Preservation Notice suffices to establish jurisdiction under subsections (a)(1) and (a)(3) of the D.C. long-arm statute…. But Plastics overlooks an additional crucial element to long-arm jurisdiction under those provisions: the plaintiff’s suit must “aris[e] from” the jurisdiction-conferring contacts….  Plastics’ suit does not “aris[e] from” the Preservation Notice. Rather, as the amended complaint makes clear, it arises from “Bonta’s issuance of the subpoena[.]”

Id. at *2 (emphasis added; citations omitted).

The Plastics Industry court explained that the gravamen of the complaint was that Mr. Bonta’s service of a subpoena chilled Plastics Industry Association’s first amendment rights; however, PIA provided no facts to show that the alleged “chill” arose out of the preservation notice:

The fact that Bonta personally served the Preservation Notice in the District of Columbia through an agent therefore cannot form the basis of exercising long-arm jurisdiction over him…. And, contrary to what it says in its reply brief, Plastics has failed altogether to present any evidence that the Preservation Notice “initiated” any chilling effect on its or its members’ exercise of constitutional rights. That Bonta followed the Preservation Notice with a subpoena that, according to Plastics, did have the requisite chilling effect does not transform service of the Preservation Notice into a relevant in-forum contact. 

Id. at *2-3.

The court also held that a “public-facing” Instagram page and some webpages were “scant contacts” that “fall well short” of showing a persistent course of conduct in the forum. Id. at *3.

Frequently, a preservation demand must be sent to an entity in another State.  Plastics Industry importantly shows that doing so does not operate to expose the sender to jurisdiction in the recipient state.  While Plastics Industry was decided under the District of Columbia long-arm statute, I suggest that the same result would likely be reached under the Constitutional “minimum contacts” standard.

Assisted by GAI and LLM Technologies per EDRM GAI and LLM Policy.