Franceschi v. Hyatt Corp.

747 F. Supp. 138

Astrid Castro FRANCESCHI, et al., Plaintiffs, v. HYATT CORPORATION, et al., Defendants.

Civ. No. 88-285(PG).

United States District Court, D. Puerto Rico.

September 25, 1990.

Harry Anduze Montaño and Guillermo Ramos Luiña, Hato Rey, P.R., for plaintiffs.

Keith Graffam, Cordero, Miranda & Pinto, Old San Juan, P.R., for defendants.

OPINION AND ORDER

PEREZ-GIMENEZ, Chief Judge.

This is an action seeking damages and injunctive relief as a result of the Cerromar Beach Hotel's refusal to allow admittance into its premises to co-plaintiffs Miguel Nogueras and Barbara Blanco at a time when they were planning to visit co-plaintiffs and registered guests Astrid Castro and Annette Nogueras. In plaintiffs' view of things, the incident was based on racial and ethnic considerations, inasmuch as in denying them entrance the security guard allegedly stated that "the hotel's management is prejudiced against people of our race."

As a result of this incident, plaintiffs filed claims against the Hyatt Corporation, Hyatt Hotels of Puerto Rico, Inc., and Dorado Beach Corporation under the provisions of 42 U.S.C. §§ 1981 et seq. (Civil Rights) and 42 U.S.C. §§ 2000a et seq. (Prohibition Against Discrimination and Segregation in Places of Public Accommodations). They have also stated claims under Article II, Sections 1 and 8 of the Constitution of the Commonwealth of Puerto Rico, and Articles 1802 and 1803 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, §§ 5141 & 5142. Jurisdiction is therefore premised on the determination of plaintiffs' underlying federal rights and the doctrine of pendent jurisdiction. Venue is proper under 28 U.S.C. §§ 1391.

The matter pends before the Court on defendants' October 17, 1988, motion to dismiss or, alternatively, for summary judgment, which has precipitated the filing of an inordinate number of oppositions, replies, and responses from both sides. On January 23, 1990, the Court referred the motions to the United States Magistrate for his report and recommendation and on April 16, 1990, the magistrate complied. Displeased with the magistrate's recommendation, both parties filed objections before the Court, plaintiffs in the form of a partial motion for reconsideration on April 26, 1990, and defendants by way of an appeal filed on May 16, 1990. Specific written objections having been seasonably filed, the magistrate's recommendation is subject to de novo review before this Court. Fed.R.Civ.P. 72(b), Paterson-Leitch v. Massachusetts Elec., 840 F.2d 985, 990 (1st Cir.1988).

Four are the issues which are presently before the Court for review. First, we must determine whether in personam jurisdiction can be exercised over the Hyatt Corporation, the same being a Delaware corporation whose principal place of business is in Illinois and whose dealings in Puerto Rico are admittedly slim. Next, we turn to consider whether the facts of this case are sufficient to state causes of action under 42 U.S.C. §§ 1981 et seq. and 2000a et seq. Finally, we must decide whether, in our discretion, we should exercise pendent jurisdiction over plaintiffs' local law claims.

The facts of this case can be summarized as follows. On March 26, 1987, Astrid Castro Franceschi and her daughter, Annette M. Nogueras, checked into the Hyatt Cerromar Hotel in order to attend Citibank's 936 Conference. On Saturday, March 28, 1987, Mrs. Castro's son and daughter-in-law, Miguel A. Nogueras and Barbara F. Blanco, travelled to the Hotel, at Mrs. Castro's request, to spend the day with her. When Mr. and Mrs. Miguel Nogueras arrived at the gate, they were denied admittance to the Hotel's premises and were further advised that, pursuant to instructions from the management, they could not be allowed to call Mrs. Castro from the gate. The security guard suggested that if they wanted to communicate with Mrs. Castro they would have to drive to a nearby phone located about a mile away, something that Mr. and Mrs. Nogueras reluctantly had to do. Upon communicating with Mrs. Castro, she informed them that she would immediately go to the front desk to clear the matter up.

At the front desk, Mrs. Castro was informed that hotel policy directed that no visitors could be allowed to enter the hotel. She informed the hotel employees that these visitors were her son and daughter-in-law whom she had invited to spend the day with her. Even after listening to her explanation, however, the employees reiterated that they could not give her relatives access to the hotel. Understandably irated, Mrs. Castro asked to see the manager. When the manager arrived, Mrs. Castro related to her the essence of her complaint but, much to her surprise, the manager simply turned her back to her and left. These incidents, it is contended, took place in the presence of third parties both known and unknown to the plaintiffs. In order to save herself and her family further humiliation and embarrassment, Mrs. Castro called her son at the hotel gate and told him to leave. While waiting at the gate, Mr. and Mrs. Nogueras presumably witnessed how the security guard would consistently admit every English-speaking visitor and deny admittance to the Spanish-speaking ones. Perhaps more importantly, the Nogueras also allege that an employee of the hotel (of Puerto Rican descent) informed them that "this management is prejudiced against people of our race." Defendants, predictably, deny that these latter allegations ever took place.

Before leaving the facts we must add that co-defendant Hyatt Corporation is a corporation organized under the laws of the State of Delaware whose principal place of business is in the State of Illinois. It is not the owner of the Hyatt Regency Cerromar Beach Hotel, nor is it responsible for the administration or operation of the hotel. Furthermore, the Hyatt Corporation does not have any employees, officers, bank accounts, or telephone listings in Puerto Rico. In every room of the Dorado and Cerromar Hotels, however, patrons can find self-addressed, postage prepaid questionnaires in which the Hyatt Corporation requests comments and suggestions on the service of these hotels and advertises a toll-free number to be used for future reservations. Co-defendants Dorado Beach Hotel Corporation and Hyatt Hotels of Puerto Rico, Inc. are corporations organized under the laws of the State of Delaware whom defendants allege, and plaintiffs adventurously deny, have their principal places of business in Puerto Rico.

We begin by determining whether we can constitutionally exercise in personam jurisdiction over the Hyatt Corporation, a nonresident corporate defendant. The Due Process Clause of the Constitution of the United States limits the power of courts to render judgments against nonresident defendants. Kulko v. California, 436 U.S. 84, 91, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978), World Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1979).¹ Due process requires, at a minimum, that the defendant be subject to the personal jurisdiction of the court. International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). A court may exercise personal jurisdiction over a nonresident defendant only as long as there exist "minimum contacts" between the defendant and the forum State. International Shoe, 326 U.S. at 316, 66 S.Ct. at 158.²

In World Wide Volkswagen the Court gave flesh to this latter requirement's bare bones. It saw the concept of "minimum contacts" as performing two related, but distinguishable, functions. First "it protects the defendant against the burden of litigating in a distant or inconvenient forum." World Wide Volkswagen, 444 U.S. at 292, 100 S.Ct. at 564. Secondly, it acts to ensure that courts and the States they reside in do not reach out beyond the limits imposed on them by the federal system. Id. The protection against inconvenient litigation requires that the defendant's contacts with the forum state be such that maintenance of the suit "does not offend traditional notions of fair play and substantial justice." Id., quoting from International Shoe, 326 U.S. at 316, 66 S.Ct. at 158, in turn quoting from Milliken v. Meyer, 311 U.S. 457, 61 S.Ct. 339, 85 L.Ed. 278 (1940). Put another way, only when a defendant has performed acts with relation to a particular state which have allowed it to enjoy the protection afforded by its laws would it then be fair that it be required to defend a particular suit which is brought against it in its courts. Cf. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). With regard to the second function, the Court noted that "the Due Process clause does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations." World Wide Volkswagen 444 U.S. at 294, 100 S.Ct. at 565, quoting from International Shoe, 326 U.S. at 319, 66 S.Ct. at 159. See generally Donatelli v. N.H.L., 893 F.2d 459 (1st Cir.1990).

In light of these principles, it is with little pause that we conclude that this Court may not constitutionally exercise in personam jurisdiction over the Hyatt Corporation under the circumstances of this case. Plaintiffs would have us hold that the fact that the Hyatt Corporation makes brochures available to its Dorado Beach and Cerromar Hotel guests through which comments and suggestions on the Hotels' services are requested and a toll-free reservations number is displayed constitutes the required "minimum contacts" that would confer in personam jurisdiction over said codefendant upon this Court. A recent First Circuit decision, however, decidedly cuts against the argument presented by the plaintiffs before us. In Pizarro v. Hoteles Concorde Intern., C.A., 907 F.2d 1256 (1st Cir.1990), plaintiffs were attempting to have the district court exercise in personam jurisdiction over a nonresident defendant on the...