A New York based attorney licensed in California who negotiated contracts with California residents under California law has sufficient contacts with the state to invoke subject matter jurisdiction.
In 1997 film producer Shawn Simons retained Mark Steverson of the New York firm Rudolph & Beer to negotiate agreements in connection with a planned film. According to the complaint, the venture was compromised due to Mr. Steverson’s failure to negotiate contracts on a timely basis and his subsequent misrepresentations about their status.
Plaintiffs sued Mr. Steverson and Rudolph & Beer for breach of contract, fraud, constructive fraud, and professional negligence. Defendants sought to quash service of the summons on grounds that the court lacked both general and limited personal jurisdiction. Defendants urged the court to analyze whether the non-resident defendants had sufficient contacts with California to subject them to the court’s jurisdiction based on Sher v. Johnson (9th Cir. (1990) 911F.2d, 1357, 1361 and Cubbage v. Merchant (9th Cir. 1984) 744 F.2d. 665, 668. Rudolph & Beer claimed that they did not solicit or conduct legal business in California and that Steverson functioned essentially as a supervised law clerk. Steverson claimed he was a New York resident and did not travel to California to conduct business on any other matter.
The Court of Appeals rejected the “Sher/Cubbage” analysis. The correct analysis is whether the court can exercise specific jurisdiction. Under Carnelson v. Charney (1976) 16 Cal.3d 143 there must be a substantial connection between the defendant’s forum contacts and the plaintiff’s claim. This is not a rigid analysis; courts should employ a flexible approach.
The court found that Steverson’s activities established sufficient contacts to invoke specific subject matter jurisdiction in California. The court rejected Rudolph & Beer’s claim that Steverson was acting as a law clerk. He was a licensed attorney who agreed to provide legal services to California residents. The Court of Appeals also rejected the trial court’s finding that the California to draft contracts for California residents under California law. Thus, Rudolph & Beer sought benefits and privileges specific to California.
Comment: Physical absence from California will not shield attorneys servicing California clients from responding to claims in California courts. There are no bright lines delineating when a court will refrain from invoking subject matter jurisdiction over out-of-state attorneys.