By Conner Poulin
On March 7, 2025, the United States District Court for the District of Nevada issued a decision in App-Order LLC v. Reynolds, addressing two pivotal procedural motions: Defendant Harold C. Reynolds’s motion to dismiss for lack of personal jurisdiction and Plaintiff App-Order LLC’s motion to compel arbitration. The court’s ruling underscores two essential principles: (1) a contractual agreement to arbitrate does not automatically bind all involved parties unless proper jurisdiction is established, and (2) a forum selection clause alone does not create sufficient ties to a jurisdiction to satisfy constitutional due process.
The dispute stems from a failed business collaboration between Harold Reynolds (“Reynolds” or “Defendant”)—a former professional baseball player and television analyst—and Zorts Sports (“Zorts” or “Plaintiff”), a Nevada-based technology company doing business as App-Order LLC. In summer 2022, Reynolds, through a meeting arranged by his brother, approached Zorts with an idea for an app that would connect youth baseball players with collegiate and professional scouts. Following several meetings, Zorts developed a mock-up of the proposed application, and both parties began collaborating. Reynolds, meanwhile, created instructional videos demonstrating the app’s usage.
The parties formalized their relationship through a Joint Venture Agreement (the “Agreement”), signed by Zorts and by Reynolds, on behalf of his company, HR4. The Agreement included both an arbitration clause and a forum selection provision, specifying that any litigation must occur in Clark County, Nevada. This language suggested that Nevada would serve as the exclusive venue for any legal disputes arising from the agreement.
However, events soon unraveled. By late 2022, Zorts presented the app to various MLB executives while Reynolds met separately with two Zorts competitors—Elysian Park Ventures and Field Level—without disclosure. At a December 2022 pitch meeting with MLB representatives in San Diego, Reynolds introduced a representative from Field Level, causing confusion and undermining the presentation. Despite Reynolds’ assurances that Field Level was a partner, MLB later indicated they would proceed only with Field Level, effectively excluding Zorts.
Feeling betrayed, Zorts initiated arbitration. Reynolds contested the arbitrability of the dispute, prompting the arbitrator to defer the issue of enforceability to a court of competent jurisdiction. Zorts responded by filing suit in Nevada, seeking to compel arbitration. Reynolds moved to dismiss the case for lack of personal jurisdiction and failure to state a claim.
Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move at any time to dismiss a complaint if the court lacks personal jurisdiction. When evaluating such a motion based solely on written materials, the plaintiff bears the burden of making a prima facie showing of jurisdiction. Nevada’s long-arm statute permits jurisdiction to the extent permitted by federal due process, which requires that a defendant have “minimum contacts” with the forum state such that exercising jurisdiction does not offend traditional notions of fair play and substantial justice.
There are two forms of personal jurisdiction: general and specific. General jurisdiction applies when a defendant’s contacts with the forum are continuous and systematic, regardless of the nature of the dispute. Specific jurisdiction, by contrast, arises when a defendant’s in-state conduct gives rise to the claims at issue.
The Ninth Circuit, whose precedent governs the District of Nevada, applies a three-prong test to determine specific jurisdiction: (1) the defendant must purposefully direct their activities at the forum state or its residents, (2) the plaintiff’s claims must arise out of those activities, and (3) the exercise of jurisdiction must be reasonable.
Before addressing the merits of a case, a court must first establish that it has personal jurisdiction over the parties. In this matter, Plaintiff asserts that the Court has specific personal jurisdiction over Defendant Reynolds, arguing that his conduct was sufficiently connected to Nevada such that it would be reasonable to require him to defend the action there.
Specific jurisdiction arises from a defendant’s contacts with the forum state that are directly related to the plaintiff’s claims. Crucially, these contacts must result from the defendant’s own purposeful actions, not those of the plaintiff or any third party. Courts emphasize that it is the defendant who must create a substantial connection with the forum state to satisfy due process requirements.
To determine whether specific jurisdiction exists, courts in the Ninth Circuit apply a well-established three-prong test. First, the nonresident defendant must either purposefully direct activities toward the forum or purposefully avail himself of the privileges of conducting activities in the forum. Second the plaintiff’s claim must arise out of or relate to those forum-related activities. Finally, the exercise of jurisdiction must be reasonable and comport with fair play and substantial justice.
The plaintiff bears the burden of satisfying the first two prongs. If met, the burden shifts to the defendant to demonstrate that the exercise of jurisdiction would be unreasonable.
The Ninth Circuit distinguishes between cases sounding in contract, where courts examine purposeful availment, and cases sounding in tort, where courts apply the purposeful direction framework. In the present case, Plaintiff contends that only tort claims are at issue, whereas Defendant maintains that both standards are relevant. Regardless, the core inquiry under either approach is whether the defendant has voluntarily engaged in conduct that creates a substantial connection to the forum state, such that being haled into court there is neither unfair nor arbitrary.
This framework presents a growing hurdle in an era where business relationships are increasingly formed and conducted virtually. Courts remain cautious in expanding jurisdiction based solely on electronic communications, even where the consequences are felt in the forum state.
Purposeful Availment
In contract-based cases, a court considers whether the defendant has purposefully availed himself of the forum state’s laws, such that he should reasonably anticipate being haled into court there. This analysis considers the totality of the defendant’s dealings with the forum — not just those directly giving rise to the dispute — including prior negotiations, contemplated future consequences, the contract’s terms, and the parties’ course of dealing.
Here, the Court found that Defendant Reynolds’ contacts with Nevada were insufficient to establish purposeful availment. Although Reynolds communicated with Zorts Sports over a three-month period, all communication occurred remotely, and he never physically entered Nevada. Critically, Reynolds did not initiate contact with the Nevada-based company; rather, the relationship began through his brother’s outreach. The Court held that such indirect and remote contact does not constitute a purposeful invocation of Nevada’s legal protections.
Plaintiff also pointed to the formation of a contractual relationship between Zorts Sports and HR4, the company for which Reynolds serves as an officer. However, the Court found this insufficient as well. While Plaintiff is a Nevada-based entity, the agreement was signed by Reynolds in New Jersey, and courts do not impute a corporation’s forum contacts to its individual agents merely because they act on the company’s behalf. Therefore, Reynolds’ role as an officer of HR4 did not establish personal jurisdiction over him individually.
While the court’s conclusion aligns with existing doctrine, it raises questions about whether personal jurisdiction standards have kept pace with the realities of modern commerce. Parties can develop significant business relationships entirely online—yet still evade jurisdiction unless they take formal, targeted steps toward the forum state.
Purposeful Direction
In tort-based cases, courts assess purposeful direction using the three-part “effects test” articulated in Calder v. Jones, as refined by the Ninth Circuit in Axiom Foods, Inc. v. Acerchem Int’l, Inc.. Under this test, a plaintiff must show that the defendant, (1) committed an intentional act, (2) expressly aimed that act at the forum state, and (3) caused harm that the defendant knew was likely to be suffered in the forum.
Plaintiff argued that Reynolds’ actions were intentionally harmful and targeted a company known to be based in Nevada. However, the Court rejected this as insufficient. As clarified by the Supreme Court in Walden v. Fiore, it is not enough that a defendant knows the plaintiff has ties to the forum — the defendant’s own conduct must be expressly aimed at the forum state itself.
Because Plaintiff failed to demonstrate that Reynolds directed any intentional act toward Nevada beyond knowledge of the Plaintiff’s location, the Court found no basis to conclude that he purposefully directed conduct at the forum. Accordingly, Plaintiff failed to satisfy the first prong of the jurisdictional test under either theory, and the Court did not reach the remaining two prongs.
The court’s reliance on Walden emphasizes the narrow path plaintiffs must walk to establish purposeful direction. Even when a defendant knows harm will occur in the forum, courts demand more than foreseeability—they want evidence of targeted, forum-directed conduct. This approach may insulate certain bad-faith actors so long as they avoid direct engagement with the forum.
Since Plaintiff failed to satisfy its burden under either the purposeful availment or purposeful direction tests, the Court concluded it lacked specific personal jurisdiction over Reynolds. Without such jurisdiction, the Court could not proceed to the merits of the dispute. Accordingly, Reynolds’ motion to dismiss was granted, and Plaintiff’s motion to compel arbitration was denied as moot.
This ruling underscores the ongoing rigor with which courts apply personal jurisdiction standards, particularly in the context of virtual communications and interstate business relationships. The decision reinforces that mere knowledge of a plaintiff’s location or virtual interactions with an in-state entity—absent intentional conduct aimed at the forum—does not suffice to establish specific jurisdiction. For plaintiffs pursuing claims arising from tort or contract in interstate disputes, this case highlights the continued necessity of showing that a defendant deliberately engaged with the forum state in a manner that justifies haling them into court.
This decision reflects the judiciary’s continued reluctance to stretch personal jurisdiction boundaries in the absence of clearly forum-directed conduct. While consistent with precedent, it arguably creates a safe harbor for sophisticated actors operating remotely. As digital and cross-border interactions become the norm, litigants may need to explore legislative or doctrinal changes to prevent jurisdictional gaps from frustrating legitimate claims.
