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Nalpac, Ltd. v. Hustler Cincinnati, Inc.

United States District Court, E.D. Michigan, Southern Division

November 1, 2016

NALPAC, LTD., Plaintiff,
v.
HUSTLER CINCINNATI, INC. and JIMMY FLYNT, Defendants.

          OPINION AND ORDER GRANTING DEFENDANT JIMMY FLYNT'S MOTION TO DISMISS

          LINDA V. PARKER U.S. DISTRICT JUDGE.

         This is a breach of contract action arising from the alleged failure of Defendants Hustler Cincinnati, Inc. (“Hustler”) and Jimmy Flynt (“Flynt”) to pay Plaintiff Nalpac, Ltd. (“Nalpac”) for certain goods. Presently before the Court is Flynt's motion to dismiss for lack of personal jurisdiction, filed pursuant to Federal Rule of Civil Procedure 12(b)(2) on April 8, 2016. (ECF No. 3.) The motion has been fully briefed. (ECF Nos. 5, 7.) Finding the facts and legal arguments sufficiently presented in the parties' briefs, the Court is dispensing with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f). For the reasons that follow, the Court is granting Flynt's motion.

         Background

         Nalpac is a Michigan corporation, with its principal place of business in Ferndale, Michigan. (Notice of Removal ¶ 3, ECF No. 1; Compl. ¶ 1, ECF No. 1-1.) Hustler is an Ohio corporation, with its principal place of business in Cincinnati, Ohio. (Notice of Removal ¶ 3; Compl. ¶ 2.) Flynt is a citizen of Kentucky. (Notice of Removal ¶ 3.)

         In the Complaint, Nalpac alleges that Hustler and Flynt applied for and received a credit line to obtain goods from Nalpac. (Compl. ¶ 7.) The credit application, dated March 1, 2010, is signed by Flynt as “owner” of Hustler. (Compl., Ex. A.) Nalpac claims that Hustler and Flynt thereafter ordered goods, but failed to pay the principal sum due of $52, 186.75. (Id. ¶¶ 8-9, 11.) Pursuant to the terms of the credit application, Nalpac also claims interest on that amount at a rate of 18% per annum.

         On February 17, 2016, Nalpac initiated this lawsuit in Michigan state court to collect the unpaid amount. (ECF No. 1-1.) Flynt removed the action to federal court based on diversity jurisdiction on April 4, 2016. (ECF No. 1.)

         Applicable Standard

         The plaintiff bears the burden of establishing the existence of personal jurisdiction. Air Prods. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th Cir. 2007) (citing Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989)). The district court may address a Rule 12(b)(2) motion on the parties' submissions or permit limited discovery and hold an evidentiary hearing. Id. Where, as here, the court does not conduct an evidentiary hearing and relies only on written submissions and affidavits to resolve the motion, “ ‘the plaintiff need only make a prima facie showing of jurisdiction. In this situation, [the court] will not consider facts proffered by the defendant that conflict with those offered by the plaintiff, and [it] will construe the facts in a light most favorable to the nonmoving party.' ” Indah v. SEC, 661 F.3d 914, 920 (6th Cir. 2011) (quoting Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002)). Additionally, in this situation, the burden on the plaintiff is “relatively slight.” Air Prods. & Controls, 503 F.3d at 549 (citing Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988)).

         Law & Analysis

         Federal courts may exercise personal jurisdiction in diversity cases only if such jurisdiction is (1) authorized by the law of the state in which the court sits; and (2) is consistent with the Due Process Clause of the Fourteenth Amendment. Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003); see also Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000) (“The exercise of personal jurisdiction is valid only if it meets both the state long-arm statute and constitutional due process requirements.”). When the state's long-arm statute has been interpreted to be “coterminous with the limits on personal jurisdiction imposed by the due process clause[, ]” the two inquiries merge and the court need only determine whether the assertion of personal jurisdiction comports with due process. Intera Corp. v. Henderson, 428 F.3d 605, 616 (6th Cir. 2005) (internal quotation marks and citations omitted). “Under Michigan's long-arm statute, the state's jurisdiction extends to the limits imposed by federal constitutional due process requirements and thus, the two questions become one. Mich. Coalition of Radioactive Material Users v. Griepentrog, 954 F.2d 1174, 1176 (6th Cir. 1992) (citing Chandler v. Barclays Bank PLC, 898 F.2d 1148, 1150 (6th Cir. 1990))

         “Due process requires that a defendant have ‘minimum contacts . . . with the forum State . . . such that he should reasonably anticipate being haled into court there.' ” Schneider v. Hardesty, 669 F.3d 693, 701 (6th Cir. 2012) (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). This requirement ensures that the exercise of jurisdiction does not “offend traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945); Neal v. Jannsen, 270 F.3d 328, 331 (6th Cir. 2001). “Depending on the type of minimum contacts in a case, personal jurisdiction can either be specific or general.” Air Products & Controls, 503 F.3d at 549-50 (citing Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110, 1116 (6th Cir. 1994)).

         General jurisdiction requires the defendant to have “continuous, substantial, and systematic” contacts with the forum State. Daimler AG v. Bauman, __ U.S. __, 134 S.Ct. 746, 769 (2014). As the Supreme Court has articulated, the defendant's “affiliations with the State [must be] so ‘continuous and systematic' as to render [the defendant] essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). Contacts in the forum resulting from the “unilateral activity” of another party or person are insufficient to support the exercise of general personal jurisdiction over a defendant. Burger King Corp. v. Rudzewicz, 471 US. 462, 475 (1985) (“The purposeful availment requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person.”).

         “ ‘[S]pecific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.' ” Indah, 661 F.3d at 920 (quoting Goodyear, 564 U.S. at 919). In other words, “[w]hen the cause of action at issue ‘arises out of or relates to' [the defendant's] contacts [with the forum], a court may properly assert personal jurisdiction, even if those contacts are ‘isolated and sporadic.' ” Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 148 F.3d 1355, 1359 (Fed. Cir. 1998) (quoting Burger King, 471 U.S. at 472-73). The Sixth Circuit has identified three requirements which must be satisfied to exercise specific jurisdiction:

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with ...

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