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Communications Network Billing, Inc. v. ILD Telecommunications, Inc.

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

August 16, 2017

COMMUNICATIONS NETWORK BILLING, INC., a Nevada corporation, Plaintiff,
ILD TELECOMMUNICATIONS, INC., nka ILD CORP., a Delaware corporation, Defendant.



         I. Introduction

         This lawsuit arises from an agreement made between Plaintiff Communications Network Billing, Inc. (“Plaintiff” or “CNBI”) and Defendant ILD Telecommunications, Inc. nka ILD Corp. (“Defendant” or “ILD”). (ECF No. 1.) Through the agreement, Plaintiff hired Defendant for billing and collection work related to Plaintiff's long distance services. (Id. at Pg ID 2.) Plaintiff alleges Defendant failed to remit fees and owes Plaintiff $838, 870.92. (Id. at Pg ID 3.)

         Presently before the court is Defendant's motion to dismiss or in the alternative motion to transfer venue, filed pursuant to Federal Rule of Civil Procedure 12(b)(2) and 28 U.S.C. § 1404(a) respectively on February 21, 2017. The motion has been fully briefed. Finding the facts and legal arguments sufficiently presented in the parties' briefs, the Court dispensed with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f) on this date. For the reasons that follow, the Court is granting Defendant's motion to dismiss and denying the motion to transfer venue as moot.

         II. Applicable Standards

         When reviewing a Rule 12(b)(2) motion, a federal district court may proceed by relying solely on written submissions and affidavits to resolve the jurisdictional questions or it may permit limited discovery or hold an evidentiary hearing in aid of the motion. Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989) (citation omitted). In all scenarios, “ ‘the plaintiff always bears the burden of establishing that jurisdiction exists.'” Id. (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936).

         A federal court may only exercise personal jurisdiction in a diversity case if such jurisdiction is (1) authorized by the law of the state in which the court sits; and (2) is otherwise consistent with the Due Process Clause of the Fourteenth Amendment. Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110, 1115 (6th Cir. 1994); Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980). The Sixth Circuit “historically has understood Michigan to intend its long-arm statute to extend to the boundaries of the fourteenth amendment” and therefore, “the court need only determine whether exercising personal jurisdiction violates constitutional due process.” Children's Legal Servs., PLLC v. Shore Levin and Derita, PC, 850 F.Supp.2d 673, 679 (6th Cir. 2012) (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) and Bridgeport Music, Inc. v. Still N The Water Publ'g, 327 F.3d 472, 477 (6th Cir. 2003)).

         Personal jurisdiction over an out-of-state defendant arises from “certain minimum contacts with [the forum] 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 (1945) (internal citation omitted). Personal jurisdiction takes two forms: general and specific. “A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (citing Int'l Shoe Co., 326 U.S. at 317.) “For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded at home.” Id. at 924.

         The Supreme Court recently reiterated the governing principles of specific jurisdiction in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S.Ct. 1773 (2017). “In order for a state court to exercise specific jurisdiction, ‘the suit' must ‘aris[e] out of or relat[e] to the defendant's contacts with the forum.'” Bristol-Myers Squibb Co., 137 S.Ct. at 1780 (citing Daimler AG v. Bauman, 571 U.S. ---, 134 S.Ct. 746, 754 (2014) (internal quotation marks omitted; emphasis added)); see Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-473 (1985); Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414. “In other words, there must be an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.” Id. (citing Goodyear Dunlop Tires Operations, S.A., 564 U.S. at 919.)

         The Sixth Circuit has established a three-part test to determine whether a court may exercise specific personal 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 the forum state to make the exercise of jurisdiction over the defendant reasonable.

Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000) (citing Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)).

         A defendant “purposefully avails” himself if his “contacts proximately result from the actions by the defendant himself that create a ‘substantial connection' with the forum State.” Burger King Corp. 471 475. This requirement “ensures that a defendant will not be haled into a jurisdiction solely as the result of ‘random, ' ‘fortuitous, ' or ‘attenuated' contacts, or of the ‘unilateral activity of another party or third person.'” Id. at 475 (quoting Keeton v. Hustler Magazine, 465 U.S. 770, 774 (1984); Helicopteros, 466 U.S. at 417)).

         A court may transfer an action under 28 U.S.C. § 1404(a) if “(1) the action could have been brought in the transferee district court; (2) a transfer serves the interest of justice; and (3) a transfer is in the convenience of the witnesses and parties.” Kepler v. ITT Sheraton Corp., 860 F.Supp. 393, 398 (E.D. Mich.1994) (internal ...

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