United States District Court, W.D. Michigan, Southern Division
T. NEFF United States District Judge.
Brace Kern and Jessica Huigens bring this action under the
Telephone Consumer Protection Act (TCPA), 47 U.S.C. §
227, alleging that they received unsolicited phone calls to
cell phone numbers that are listed on the national
“do-not-call” registry. Before the Court are two
motions to dismiss, one filed by Defendant AM Resorts, LP
(referred to herein and in the complaint as
“Secrets”) (ECF No. 154), and one filed by
Defendants Newport Hospitality, LLC and Newport Vacations,
LLC (collectively, “Newport”) (ECF No. 157). Also
before the Court is Plaintiffs' motion to amend the
complaint to add Newport Marketing, LLC as a defendant to the
action (ECF No. 173). For the reasons stated herein, the
motions to dismiss will be granted and the motion to amend
will be denied.
are residents of Michigan. Newport is incorporated in Florida
and owns a resort in Florida. Secrets is incorporated in
Pennsylvania and owns resorts in the Dominican Republic,
Jamaica, and Mexico. The TCPA makes it unlawful to make a
call using an “automatic telephone dialing system or
prerecorded device . . . to any telephone number assigned to
a . . . cellular telephone service.” 47 U.S.C. §
227(b)(1)(A)(iii); 47 C.F.R. § 64.1200(a)(1)(iii). Under
FCC regulations, it is also unlawful to initiate a telephone
solicitation to a residential telephone subscriber who has
registered his or her telephone number on the national
do-no-call registry. 47 C.F.R. § 64.1200(c)(2).
allege that they received several dozen telephone calls from
VIP Travel Services and United Shuttle Alliance
Transportation Corp. (collectively,
“USA”) in January, February, and October of 2013
to their cell phone numbers, which are registered on the
national do-not-call registry. When answering the calls,
Plaintiffs heard an automated voice telling them, “Pack
Your Bags! You've won a Disney vacation.” (2d Am.
Compl. ¶ 45, ECF No. 152.) The voice told Plaintiffs to
press 1 to reach a representative. Plaintiffs did so, and
they were told that they could purchase a discounted vacation
package, but they had to verify their eligibility by meeting
minimum age, income, and other requirements. Plaintiff Kern
decided to purchase such a package, and he was directed to a
website to complete a form to select his preferred dates of
travel. After submitting the form, Kern received an email
from USA encouraging him to visit USA's website and
recommending that he look into Silver Lake or Summer Bay
resorts. USA told Kern that he could visit any of the resorts
listed on its website. Kern made reservations with USA to
stay at three resorts, including Summer Bay Resort, Newport
Beachside Resort,  and Villa Del Palmar. Plaintiffs allegedly
received emails from these three resorts to confirm their
reservations, but Plaintiffs did not confirm their
reservations. Plaintiffs contend that the reservations would
have required them to attend a presentation about owning
property at the resorts.
claim that the telephone calls made by USA violated the TCPA,
and that Newport and Secrets (collectively, the
“Resorts”) are vicariously liable for these
calls. Plaintiffs contend that the Resorts “manifested
their assent” that USA act for them by:
(1) accepting reservations from people who were unlawfully
solicited, (2) sharing computer database reservation
information with [USA] to allow [USA] to reserve available
dates and provide reservation information to the Resorts, (3)
permitting [USA] to include links to the Resorts'
websites on [USA's] websites, and (4) controlling the
content of the telemarketing call by scripting the questions
that must be asked of the potential purchaser to verify the
purchaser's ability to close on the sale of real estate.
(2d Am. Compl. ¶ 55.) Plaintiffs further allege that the
Resorts contracted with USA to solicit customers, knowingly,
recklessly, or negligently disregarding the fact that USA
would violate the TCPA. Plaintiffs claim that the Resorts
failed to investigate or take adequate measures to ensure
that USA would not violate the TCPA, failed to rescind their
contract s w i t h USA after learning of TCPA violations, and
failed to have links to the Resorts' websites removed
after learning of USA's activity.
support of their motion to add Newport Marketing, LLC as a
defendant to this action, Plaintiffs rely on evidence that
Newport Marketing entered into an agreement with USA to have
USA sell vacation packages for a Newport resort to qualified
customers, contingent upon the customer's participation
in a timeshare presentation. (Marketing Agreement, ECF No.
asserts that the Court lacks personal jurisdiction over it.
In the alternative, it asserts that Plaintiffs' complaint
fails to state a claim. Secrets also asserts that the
complaint fails to state a claim. The Court must decide the
issue of personal jurisdiction first. “A federal court
may not assume jurisdiction to decide the merits of a
dispute; it must satisfy itself in the first instance that it
has jurisdiction over the parties and the subject
matter.” Miami Valley Fair Housing Ctr., Inc. v.
Steiner & Assocs., Inc., 483 F.App'x 67, 70 (6th
Cir. 2012). When the issue is raised, the plaintiff bears the
burden of establishing personal jurisdiction over the
defendant. Beydoun v. Wataniya Rest. Holding,
Q.S.C., 768 F.3d 499, 504 (6th Cir. 2014).
Court has three options for ruling on the motion to dismiss
for lack of personal jurisdiction, it may: (1) “decide
the motion upon the affidavits alone”; (2)
“permit discovery in aid of deciding the motion”;
or (3) “conduct an evidentiary hearing to resolve any
apparent factual questions.” Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Where, as
here, the court considers only the parties' written
submissions, “the plaintiff must make only a prima
facie showing that personal jurisdiction exists.”
Id. Regardless of the method employed to rule on the
motion, the plaintiff cannot “rest on his pleadings to
answer the movant's affidavits, but must set forth, by
affidavit or otherwise [, ] . . . specific facts showing the
court has jurisdiction.” Id. (quotation
omitted). When ruling on such a motion without conducting an
evidentiary hearing, the Court must consider the pleadings
and affidavits in the light most favorable to the nonmoving
party. Beydoun, 768 F.3d at 504. Nevertheless, the
Court may accept as true uncontroverted factual assertions of
the defendant, provided they are “consistent with the
representations of the plaintiff.” Kerry Steel,
Inc. v. Paragon Indus., Inc., 106 F.3d 147, 153 (6th
federal-question case like this one, personal jurisdiction
exists if the defendant would be subject to personal
jurisdiction under the forum state's long-arm statute and
if “‘exercise of personal jurisdiction would not
deny the defendant[ ] due process.'” Bird v.
Parsons, 289 F.3d 865, 871 (6th Cir. 2002) (quoting
Mich. Coal. of Radioactive Material Users, Inc. v.
Griepentrog, 954 F.2d 1174, 1176 (6th Cir. 1992)). Due
process concerns are governed by the standard articulated in
International Shoe and its progeny: ensuring that a
defendant has “certain minimum contacts with [the forum
state] such that 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) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
A. General Jurisdiction
Personal jurisdiction may be general or limited.
Michigan's long-arm statute for general personal
jurisdiction over a corporation provides that [t]he existence
of any of the following relationships between a corporation
and the state shall constitute a sufficient basis of
jurisdiction to enable the courts of record of this state to
exercise general personal jurisdiction over the corporation
and to enable such courts to render personal judgments
against the corporation.
(1) Incorporation under the laws of this state.
(2) Consent, to the extent authorized by the consent and
subject to the limitations provided in section.
(3) The carrying on of a continuous and systematic part of
its general business within the state.
Mich. Comp. Laws § 600.711.
Newport entities (including Newport Marketing, LLC) have not
been incorporated under the laws of Michigan, are not
residents of Michigan, do not maintain any offices or
employees in Michigan, and are not licensed or registered to
conduct business in Michigan. (Hurowitz Aff., ECF No. 158-1.)
Nevertheless, Plaintiffs assert that Newport conducts
continuous and systematic business in Michigan, as evidenced
by the fact that
[USA] sent Plaintiffs['] qualifying information,
including telephone recordings, to [Newport], Newport
reviewed the Michigan resident's qualifying information
and valid credit card before emailing [USA] to go ahead and
confirm the reservation with these Plaintiffs. Upon receipt
of [Newport's] reservation confirmation, [USA] mailed a
confirmation package for [Newport] to these Plaintiffs'
Michigan address. In addition, discovery will undoubtedly
reveal numerous other reservations, and even timeshare
purchases, by Michigan residents . . . .
(Pls' Response Br. 7., ECF No. 161.) In other words,
Plaintiffs assert that Newport conducted systematic business
in Michigan by receiving and responding to reservation
requests from Plaintiffs, and probably others in Michigan.
Even if this satisfies the requirements of Mich. Comp. Laws
§ 600.711(3), it is ...