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Benton v. Cameco Corp. - 375 F.3d 1070 (10th Cir. 2004)

Rule:

Although a court finds that there are sufficient minimum contacts between a defendant and a forum state, it is also required to consider whether the exercise of personal jurisdiction over the defendant offends traditional notions of fair play and substantial justice. Therefore, the court inquires its exercise of personal jurisdiction over a defendant with minimum contacts is reasonable in light of the circumstances surrounding the case. In assessing whether an exercise of jurisdiction is reasonable, a court considers (1) the burden on the defendant, (2) the forum state's interest in resolving the dispute, (3) a plaintiff's interest in receiving convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental social policies. The analyses of minimum contacts and reasonableness are complementary, such that the reasonableness prong of the due process inquiry evokes a sliding scale: the weaker the plaintiff's showing on minimum contacts, the less a defendant need show in terms of unreasonableness to defeat jurisdiction. The reverse is equally true: an especially strong showing of reasonableness may serve to fortify a borderline showing of minimum contacts.

Facts:

Plaintiff Oren L. Benton, a Colorado resident, and defendant Cameco Corporation, a Canadian company, entered into a Memorandum of Understanding in which Benton agreed to purchase uranium from Cameco for resale. The agreement also set forth the key terms of a planned joint venture to conduct uranium trading activities. When Cameco's board did not approve the transactions contemplated by the Memorandum of Understanding, Benton sued Cameco in federal district court in Colorado, asserting claims for breach of contract and tortious interference with existing and prospective business relationships. The district court granted Cameco's motion to dismiss on the grounds that Cameco did not have sufficient contacts with Colorado to allow the court to exercise personal jurisdiction over Cameco. Benton appealed. 

Issue:

Did the district court lack personal jurisdiction over Cameco, thereby warranting the dismissal of Benton’s claims? 

Answer:

Yes.

Conclusion:

The court held that Cameco had sufficient minimum contacts with Colorado; however, traditional notions of fair play and substantial justice (reasonableness) factors weighed against an exercise of personal jurisdiction over it. For reasonableness the appeals court considered (1) the burden on the seller, (2) the forum state's interest in resolving the dispute, (3) the buyer's interest in receiving convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering fundamental social policies. The analyses of minimum contacts and reasonableness were complementary, such that the reasonableness prong of the due process inquiry evoked a sliding scale: since the buyer's showing on minimum contacts was weak, the seller's showing of unreasonableness to defeat jurisdiction was less. In the instant case, a majority of the reasonableness factors weighed against an exercise of personal jurisdiction. The reasonableness factors were reviewed with special care since the interests of Canada were involved. Canadian law and policy also applied. There was no general jurisdiction over the seller.

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