In a suit filed by investors in an apparent pyramid scheme, a district court for the District of Columbia held an interactive but non-service website, attracting a single identified customer, insufficient to establish continuous and systemic contacts for general personal jurisdiction over a United Kingdom corporation. The Court further found insufficient minimum contacts relating to the investment scheme for either specific jurisdiction, conspiracy jurisdiction, or RICO jurisdiction.
Eisenberg and FC Investment Group LC (“FCIG”), an investment company set up by Eisenberg, invested at first thousands and then millions of dollars in non-party Titan Global Strategies, Ltd (“Titan”). After an initial ten thousand dollar investment, Titan informed Eisenberg that Defendant IFX Markets, Ltd (“IFX”) would assume responsibility for managing his Titan investments. An IFX representative made additional pitches and, based on an IFX/Titan presentation in London, Eisenberg made a final investment of two million dollars. When Eisenberg sought to withdraw his substantial earnings, IFX denied his request, precipitating the present suit for intentional fraud, fraud in the inducement, civil conspiracy, civil aiding and abetting, and conspiracy to violate RICO.
Ruling on Defendant’s Rule 12(b)(2) motion to dismiss, the Court declined to exercise general personal jurisdiction over IFX for “doing business” in the District pursuant to D.C. Code § 13-334, which is interpreted as co-extensive with constitutional due process. Plaintiffs argued that IFX’s interactive website in which potential investors could download demos and practice using the company’s services demonstrated IFX’s “continuous and systemic” contacts with the District of Columbia. The Court disagreed. Rather the Court found that the website, though more than a passive informational website, did not arise to the “interactive” standard required for general jurisdiction since it did not allow registration and actual use of investment services online, but required potential customers to download an application and send it in with the appropriate authorization. Furthermore, the Court found that the Plaintiffs had only shown that IFX “can” transact business within the District, not that IFX does in fact “do” business since one customer relationship within the District in a eight-month period failed to demonstrate systemic and continuous contacts.
The Court then held that IFX could not be subject to suit under either specific, conspiracy, or RICO jurisdiction. The Count found that regular phone calls from IFX to Eisenberg related to his investments did not constitute “transacting business” in the District pursuant to D.C. Code § 13-423(a)(1), also interpreted as co-extensive with constitutional due process, since rather than the District of Columbia, the majority of operative events occurred in London. The Court further declined to exercise conspiracy jurisdiction, finding that the alleged coconspirator Titan’s contacts with the District—sending account information to Eisenberg and two phone calls—similarly insufficient minimum contacts for specific jurisdiction. Finally, the Court held that RICO jurisdiction required at least one conspirator have sufficient minimum contacts with the forum itself, rather than minimum nationwide contacts, and since both IFX and Titan failed this test, again declined jurisdiction.
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