United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT GLEASON
CORPORATION'S MOTION TO DISMISS (DOC. 5)
CARAM STEEH UNITED STATES DISTRICT JUDGE.
ABC Debt Collections, LLC sued Gleason Corporation and
Gleason Gear Technology (Suzhou) Co. Ltd., hereafter referred
to as GGTS, arising out of a failure to complete payments
under a sales contract. Plaintiff brings three claims, Breach
of Contract against GGTS (Count 1); Open Account under Mich.
Comp. Laws § 600.2145 against GGTS (Count II); and
Unjust Enrichment against both defendants (Count III).
Plaintiff also seeks to pierce the corporate veil and hold
Gleason Corporation liable for Counts I and II. The matter is
presently before the Court on defendant Gleason
Corporation's motion to dismiss pursuant to Federal Rules
of Civil Procedure 12(b)(2) for lack of personal
jurisdiction, and 12(b)(6) for failure to state a claim.
(Doc. 5). The Court heard oral argument on May 11, 2017. For
the reasons stated below, Gleason Corporation's motion to
dismiss will be GRANTED pursuant to Rule 12(b)(2). The Court,
therefore, does not address the arguments based upon Rule
2012, GGTS contracted to purchase eleven machines from Moore
Controls, LLC. (Doc. 1 at PageID 7). GGTS is a Chinese
corporation with its principal place of business in China.
(Doc. 10 at PageID 197). GGTS is owned by Gleason (Mauritius)
Holdings Ltd., which is incorporated in and has its principal
place of business in Mauritius. (Doc. 10 at PageID 197).
Gleason Holdings Ltd. is held by The Gleason Works, a New
York corporation with its principal place of business in New
York. (Doc. 10 at PageID 197-98). The Gleason Works is held
by Gleason Corporation. (Doc. 10 at PageID 198). Gleason
Corporation is incorporated in Delaware and has its principal
place of business in New York. (Doc. 10 at PageID 196).
made several progress payments, but allegedly failed to make
the final payment amounting to 10% of the purchase price.
(Doc. 1 at PageID 8). Moore Controls, LLC assigned this
account to plaintiff, a Michigan limited liability company,
on May 20, 2016. (Doc. 1 at PageID 8). Plaintiff sued GGTS
and Gleason Corporation in Washtenaw County Circuit Court in
an attempt to receive this final payment. (Doc. 1 at PageID
6). Gleason Corporation was served on November 22, 2016.
(Doc. 1 at PageID 2). Gleason Corporation removed the case to
federal court on December 2, 2016. (Doc. 1 at PageID 1-3).
GGTS has not yet been served, and did not join in the
removal. (Doc. 1 at PageID 1-3).
bears the burden of establishing the Court's personal
jurisdiction over Gleason Corporation. Neogen Corp. v.
Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir.
2002). Where, as here, the court does not conduct an
evidentiary hearing regarding personal jurisdiction, the
plaintiff “need only make a prima facie showing of
jurisdiction.” Id. at 887.
“Nevertheless, the plaintiff may not simply reassert
the allegations contained in its pleadings, but instead must
‘set forth specific facts showing that the court had
jurisdiction.'” GKN Driveline v. Stahl
Specialty Company, No. 15-cv-14427, 2016 WL 1746012, at
*3 (E.D. Mich. May 3, 2016) (quoting Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). The
Court must view the pleadings and affidavits in the light
most favorable to plaintiff, Third Nat. Bank in Nashville
v. WEDGE Group Inc., 882 F.2d 1087, 1089 (6th Cir.
1989), and will not consider contrary assertions made by
defendant. Neogen, 282 F.3d at 887 (citing
Serras v. First Tenn. Bank Nat'l Ass'n, 875
F.2d 1212, 1214 (6th Cir. 1989)).
federal court's exercise of personal jurisdiction in a
diversity of citizenship case 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, 282 F.3d at 888 (quoting
Reynolds v. Int'l Amateur Athletic Fed'n, 23
F.3d 1110, 1115 (6th Cir. 1994)).
long-arm statute extends general jurisdiction pursuant to
Mich. Comp. Laws § 600.711 and limited jurisdiction
pursuant to Mich. Comp. Laws § 600.715. General
jurisdiction enables a court to exercise jurisdiction over a
corporation “regardless of whether the claim at issue
is related to its activities in the state or has an in-state
effect.” Neogen, 282 F.3d at 888. Limited
jurisdiction, in contrast, “extends only to claims
arising from the defendant's activities that were either
within Michigan or had an instate effect.” Id.
General Jurisdiction over Defendant Gleason
order to be subject to general jurisdiction in Michigan, a
nonconsenting, nonresident corporation. . . must have carried
on a ‘continuous and systematic part of its general
business' within Michigan.” Id. at 889
(citing Mich. Comp. Laws § 600.711(3)). The Supreme
Court stated that the appropriate inquiry is whether a
foreign corporation's “affiliations with the State
are so ‘continuous and systematic' as to render
[it] essentially at home in the forum state.”
Daimler AG v. Bauman, 134 S.Ct. 746, 749 (2014)
(quoting Goodyear Dunlop Tires Operations, S.A. v.
Brown, 131 S.Ct. 2846, 2853 (2011)). Michigan courts
require foreign corporations to “actually be present
within the forum state on a regular basis, either personally
or through an independent agent.” Glenn v. TPI
Petroleum, Inc., 305 Mich.App. 698, 707 (2014). In
making this determination, Michigan courts consider
“whether the particular corporate entity has a physical
location, officers, employees, or bank accounts in Michigan,
” and the corporation's “conduct in
soliciting and procuring sales and purchases within
Michigan.” Id. at 707. The “mere
suggestion” that a defendant corporation “is, in
some manner, conjoined with various subsidiaries that operate
in Michigan is not sufficient to establish general personal
jurisdiction.” Id. at 710 (citing Avery v.
American Honda Motor Car Co., 120 Mich.App. 222, 225
(1982). Plaintiff must instead “plead or demonstrate an
adequate ‘alter ego' relationship between” a
defendant corporation “and its subsidiaries or
that” a defendant corporation had control over the
subsidiaries. Id. at 711.
Corporation states that it does not have a physical location,
officers, employees, or bank accounts in Michigan. (Doc. 5-2
at PageID 69). Plaintiff alleges that Gleason Corporation
conducts business in Michigan and, by way of William J.
Simpson's involvement in negotiating with Christopher
Mackey of Moore, solicited and procured a sale within
Michigan. (Doc. 1 at PageID 7; Doc. 12-1 at PageID 205).
These contacts are not of a “continuous and
systematic” nature to render Gleason Corporation
“at home in [Michigan], ” Daimler, 134
S.Ct. at 754, or establish that Gleason Corporation is
“actually present within [Michigan] on a regular
basis.” Glenn, 305 Mich.App. at 707. The
Court, therefore, does not have general jurisdiction over
Limited Jurisdiction over Defendant ...