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Qandah v. Johor Corporation

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

August 18, 2017

NATALIE QANDAH, Plaintiff,
v.
JOHOR CORPORATION & YB DATO DAMARUZZAMAN BIN ABU KASSIM, Defendants.

          ORDER CONVERTING MOTION HEARING TO STATUS CONFERENCE AND DIRECTING PARTIES TO CONFER

          ROBERT H. CLELAND UNITED STATES DISTRICT JUDGE

         Pending before the court is Defendants' Motion to Dismiss the First Amended Complaint. (Dkt. #11.) Plaintiff filed a response (Dkt. #17), and Defendants submitted a reply (Dkt. #18).

         I. BACKGROUND

         Defendants argue that this court lacks jurisdiction to hear the dispute because Johor Corporation (“JCorp”) is owned by the Malasian government and thus falls under the Foreign Sovereign Immunity Act, 28 U.S.C. § 1602 et seq (“FSIA”).[1] In any case, they insist, the constitutional requirements of due process do not permit the assertion of jurisdiction over JCorp or its President and CEO, Defendant Dato' Kamaruzzaman Bin Abu Kassim, because they have not purposely availed themselves of the forum, since Plaintiff's actual employer, WLC SA, is only tangentially related to their business activities. Defendants also move for dismissal on substantive grounds under Federal Rule of Civil Procedure 12(b)(6).

         II. STANDARD A. Subject Matter Jurisdiction, Federal Rule of Civil Procedure 12(b)(1)

         Federal Rule of Civil Procedure 12(b)(1) allows for dismissal for “lack of jurisdiction over the subject matter.” Fed.R.Civ.P. 12(b)(1). When a defendant challenges subject matter jurisdiction pursuant to this Rule, the plaintiff has the burden of proving jurisdiction in order to survive the motion. Mich. S. R. R. Co. v. Branch & St. Joseph Ctys. Rail Users Ass'n Inc., 287 F.3d 568, 573 (6th Cir. 2002). “The FSIA provides the ‘sole basis' for the exercise of jurisdiction over a foreign state, including its instrumentalities.” Rote v. Zel Custom Mfg. LLC, 816 F.3d 383, 387-88 (6th Cir. 2016) (citing Republic of Argentina v. Weltover, 504 U.S. 607, 611, 112 S.Ct. 2160, 119 L.Ed.2d 394 (1992)). “Under the Act, a foreign state is ‘immune from the jurisdiction of the courts of the United States and of the States' unless one of the statutory exceptions applies.” Id. (quoting 28 U.S.C. § 1604).

         B. Personal Jurisdiction, Federal Rule of Civil Procedure 12(b)(2)

         If a district court lacks jurisdiction over the defendants, dismissal is appropriate under Federal Rule of Civil Procedure 12(b)(2). “The burden of establishing jurisdiction is on the plaintiff.” Tobin v. Astra Pharm. Prod., Inc., 993 F.2d 528, 543 (6th Cir. 1993). “A district court, in its discretion ‘may decide the motion upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve any apparent factual questions.'” Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 449 (6th Cir. 2012) (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). However, when the court has elected to proceed without discovery or a hearing, the evidence is considered in the light most favorable to the plaintiff: the plaintiff must only make a prima facie case, and the court does not consider the “controverting assertions of the party seeking dismissal.” Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1272 (6th Cir. 1998). In addition, the plaintiff must follow the general guidelines for pleading standards-the plaintiff must allege specific facts to show the standard has been met for personal jurisdiction. Palnik v. Westlake Entm't, Inc., 344 Fed. App'x. 249, 251 (6th Cir. 2009) (stating that complaints must follow federal pleading standards for personal jurisdiction issues as well).

         A federal court's exercise of jurisdiction over litigants 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 Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 888 (6th Cir. 2002). For Michigan, the courts have determined Michigan's long-arm statute 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). Due process is satisfied if the 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). The test to satisfy the requirements of due process “has three elements, all of which must be met for personal jurisdiction to be found: (1) ‘The defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state[;]' (2) ‘[t]he cause of action must arise from the defendant's activities in the forum state[; and]' (3) ‘[t]he 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 personal jurisdiction reasonable.'” One Media IP Ltd. v. S.A.A.R. SrL, 122 F.Supp.3d 705, 716 (M.D. Tenn. 2015) (quoting S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)). “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 that is the basis for its jurisdiction over him.” Walden v. Fiore, 134 S.Ct. 1115, 1122 (2014) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985)).

         To assert personal jurisdiction over a defendant outside of the United States on a federal claim for which nationwide service of process is authorized, Federal Rule of Civil Procedure 4 requires both that “the defendant [be] not subject to jurisdiction in any state's courts of general jurisdiction; and exercising jurisdiction is consistent with the United States Constitution and laws.” Fed.R.Civ.P. 4(k)(2). The constitutional question “will require an analysis under the Due Process Clause of the Fifth Amendment, rather than the Fourteenth Amendment.” 4 Charles Alan Wright, et al., 4 Fed. Prac. & Proc. Civ. § 1068.1 (4th ed. 2017). The Fifth Amendment Due Process analysis mirrors that outlined in International Shoe but looks to the contacts that Defendant had with the United States as a whole rather than just the forum state. See, e.g., See, Inc. v. Imago Eyewear Pty, Ltd., 167 Fed. App'x. 518, 522-524 (6th Cir. 2006) (affirming district court's determination that “Defendants' website was passive with respect to the United States, . . . the Defendants' overall contacts with the United States, including the Defendants' website, did not provide sufficient contacts with the United States to satisfy due process.”).

         III. DISCUSSION

         A. Subject Matter Jurisdiction Over JCorp

         “The party claiming FSIA immunity bears the initial burden of proof of establishing a prima facie case that it satisfies the FSIA's definition of a foreign state; once this prima facie case is established, the burden of production shifts to the non-movant to show that an exception applies.” O'Bryan v. Holy See, 556 F.3d 361, 376 (6th Cir. 2009) (quoting Keller v. Cent. Bank of Nig., 277 F.3d 811, 815 (6th Cir. 2002)). “The party claiming immunity under FSIA retains the burden of persuasion throughout this process.” Id.

         Plaintiff argues that JCorp fails at the first point of inquiry---that it is an “agency or instrumentality of a foreign state” and thus entitled to immunity under FSIA---because it has not shown that a majority stake of its ownership interest is held by Malaysia. See 28 U.S.C. § 1603(b)(2). Defendants' reply contends in a footnote that Plaintiff's arguments are inconsistent with the assertion in her complaint that jurisdiction exists under the FSIA, and that “Defendants' ...


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