United States District Court, E.D. Michigan, Southern Division
FORD MOTOR COMPANY, a Delaware corporation, and FORD GLOBAL TECHNOLOGIES, LLC, Delaware Limited Liability Company, Plaintiffs and Counterclaim Defendants,
AUTEL U.S. INC, a New York corporation, and AUTEL INTELLIGENT TECHNOLOGY CO., LTD, a Chinese corporation, Defendants and Counter Claimants,
LAUNCH TECH CO. LTD, a Chinese corporation, INNOVA ELECTRONICS, CORP., a California corporation, and IEON CHEN, an individual, Counterclaim Defendants.
OPINION AND ORDER GRANTING IEON CHENS' AND LAUNCH
TECH CO. LTD'S MOTIONS TO DISMISS FOR LACK OF PERSONAL
JURISDICTION (DKTS. 57 AND 65)
TERRENCE G. BERG UNITED STATES DISTRICT JUDGE
this action alleging trade secret misappropriation and
trademark and copyright infringement, Ford claims that Autel
obtained access to Ford's proprietary
automobile-diagnostic software, hacked it, copied proprietary
information, and pasted that information into Autel's own
diagnostic software. Autel denies the allegations, and contends
in response that Counterclaim Defendants Launch Tech Co. Ltd,
Innova Electronics, and Ieon Chen teamed up with Ford to
craft and spread Ford's allegations to damage Autel's
position in the marketplace-in essence to take out the
competition. Third Party Defendants Chen and Launch have
moved to dismiss the case against them on the ground that the
Court lacks personal jurisdiction over them. Because Autel
has failed to present a prima facie case that the
Court has personal jurisdiction over Chen and Launch,
Chen's and Launch's motions are GRANTED and
Autel's claims against them are DISMISSED WITHOUT
the CEO of Innova, a Nevada corporation. Dkt. 57, Pg. ID
1595. He lives in California. Dkt. 57, Pg. ID 1595. He does
no business in Michigan and has not entered into any
contracts here. Dkt. 57, Pg. ID 1595. Twice, in connection
with this matter, Chen affirmatively contacted a Michigan
resident by email. On August 23, 2013, Chen emailed Colin
Fielding at Bosch Automotive. Dkt. 57, Pg. ID 1595. And on
October 3, 2013, Chen emailed Ken Dornoy of Ford. Dkt. 57,
Pg. ID 1596. Both emails concerned information Innova had
obtained relating to Ford's diagnostic software and
Autel's diagnostic software. These emails set off a
series of communications between Chen and Ford's lawyers,
who are located in Utah. Dkt. 57, Pg. ID 1597.
is a Chinese corporation headquartered in Shenzhen, China.
Dkt. 65, Pg. ID 1838. It manufactures automotive diagnostic
tools and sells them throughout the world using third-party
distributors. Dkt. 65, Pg. ID 1838. In the United States,
Launch sells to two third-party distributors, Matco Tools and
Launch Tech, Inc. Dkt. 65, Pg. ID 1838. Launch Tech, Inc. is
a California corporation. Launch Tech, Inc. is not a
subsidiary of Launch; their relationship is that of customer
and vendor. Dkt. 65, Pg. ID 1839. Launch does no business in
Michigan. Dkt. 65, Pg. ID 1839. It has neither offices nor
employees here, owns no property here, has no bank accounts
here, and neither ships nor sells here. Dkt. 65, Pg. ID 1839.
alleges that Launch asked Chen to establish an ongoing
relationship with Ford and that Launch supplied information
to Chen that Chen then relayed to Ford. Dkt. 38, Pg. ID 814.
Autel further alleges that the information Launch supplied
included a false claim: that Autel used a program called
PARSEALL.EXE to hack Ford's diagnostic software. Dkt. 38,
Pg. IDs 814-815. And Autel alleges that Launch, Chen, and
Ford knew or should have known that the PARSEALL.EXE hacking
claim was false. Dkt. 38, Pg. ID 815.
and Launch filed their motions to dismiss in September of
2016. Dkts. 57, 65. Autel opposed both motions. Dkts. 69, 75.
Following full briefing, the Court held oral argument on
November 30, 2016.
and Launch argue that this Court lacks both general and
specific jurisdiction over them. Dkt. 57, Pg IDs 1601-1615;
Dkt. 65, Pg. IDs 1844-1849. Autel concedes that this Court
lacks general jurisdiction, but maintains that it has
specific jurisdiction over them. Dkts. 69, 75.
Standard of Review.
federal court's exercise of jurisdiction over litigants
must be both “(1) authorized by the law of the state in
which it sits, and (2) in accordance with the Due Process
Clause of the Fourteenth Amendment.” Neogen Corp.
v. Neo Gen Screening, Inc., 282 F.3d 883, 888 (6th Cir.
2002). Michigan's long-arm statute, Mich. Comp. Laws
§§ 600.715 (corporations) and 600.705
(individuals), governs issues of personal jurisdiction and
gives the “maximum scope of personal jurisdiction
permitted by the due process clause of the Fourteenth
Amendment.” Chrysler Corp. v. Fedders Corp.,
643 F.2d 1229, 1236 (6th Cir. 1981). Accordingly, if
jurisdiction is proper under the Fourteenth Amendment, it is
also proper under Michigan's long-arm statute.
process is satisfied if a defendant has “sufficient
minimum contacts” with the forum state “such that
the maintenance of the suit does not offend traditional
notions of fair play and substantial justice.”
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (citation omitted). “But the plaintiff cannot be
the only link between the defendant and the forum. Rather, it
is the defendant's conduct that must form the necessary
connection with the forum State.” Walden v.
Fiore, 134 S.Ct. 1115, 1122 (2014) (citing Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)). For
the Court to find that it has specific personal jurisdiction
over Chen and Launch, three factors must be met: (1) the
defendant must “purposefully avail himself [or itself]
of the privilege of acting in the forum state;” (2)
“the cause of action must arise from the
defendant's activities there;” and (3) “the
acts of the defendant ... must have a substantial enough
connection with the forum state to make the exercise of
jurisdiction over the defendant reasonable.”
Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d
374, 381 (6th Cir. 1968).