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Complete Prototype Services, Inc. v. Trans Am Worldwide, LLC

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

August 25, 2017

COMPLETE PROTOTYPE SERVICES, INC., Plaintiff,
v.
TRANS AM WORLDWIDE, LLC, Defendant.

          OPINION AND ORDER DENYING DEFENDANT'S RENEWED MOTION TO DISMISS (DKT. 19)

          TERRENCE G. BERG, UNITED STATES DISTRICT JUDGE

         I. Introduction

         This is a breach of contract case. In January 2015, the Parties agreed that Plaintiff would manufacture an automotive bumper for Defendant. After Plaintiff made a few mockups and collaborative adjustments to specifications, Defendant approved Plaintiffs quote to make 50 parts for $134, 600. Plaintiff delivered the parts. But Defendant did not pay the total due under the contract. Plaintiff now seeks to recover the unpaid balance of $112, 897. Defendant Trans Am Worldwide, LLC, incorporated and headquartered in Florida, has moved to dismiss claiming that this Court has no personal jurisdiction over it.

         Defendant previously moved to dismiss the case under Fed.R.Civ.P. 12(b)(2), arguing that Plaintiff failed to plead facts sufficient to establish this Court's personal jurisdiction over Defend- ant. Dkt. 6. The Court denied that motion without prejudice in order to allow Plaintiff to amend its complaint. Dkt. 14. Plaintiff filed an amended complaint, Dkt. 18, and Defendant has now filed this renewed motion to dismiss. Dkt. 19.

         For the reasons outlined below, Defendant's Renewed Motion to Dismiss is DENIED.

         II. Background

         The Parties first met at a Nevada trade show in November 2014. Dkt. 19, Pg. ID 279; Dkt. 19-2, Pg. ID 296. It is not clear from the record whether an agreement was formed at that time, Dkt. 21, Pg. ID 371-72, but in January 2015, Plaintiff received a purchase order from Defendant for tooling and 25 Trans Am fas-cias (automotive bumpers). Dkt. 18, Pg. ID 228. Throughout that month, the Parties negotiated about engineering specifications and fabrication timelines. Dkt. 18, Pg. ID 228. In early February, Defendant's representative visited Plaintiff in Michigan to review some data concerns. Dkt. 18, Pg. ID 228. In April, Plaintiff completed the first two bumpers and Defendant's agent again came to Michigan to pick them up. Dkt. 18, Pg. ID 229.

         In May, Defendant expressed satisfaction with the overall look of the bumpers, but wanted to use a tougher, more expensive material. Dkt. 18, Pg. ID 229. So in June, Plaintiff fabricated two more bumpers using the new materials and sent them to Defend- ant, who responded with another engineering update. Dkt. 18, Pg. ID 229. When reviewing the update, Plaintiff found data that suggested there would be a gap in the headlamps. Dkt. 18, Pg. ID 229. Defendant then shipped sample headlamps to Plaintiff to inspect. Dkt. 18, Pg. ID 230. According to Plaintiff, these headlamps had the same gaps found in the data. Dkt. 18, Pg. ID 230. On June 29, 2015, one of Defendant's representatives visited Plaintiff in Michigan to review the project. Id.

         Throughout July, the Parties continued to tweak specifications and the production timeline. Dkt. 18, Pg. ID 231. On August 4th, Defendant submitted a revised purchase order for the tooling and production of 50 Trans AM rear fascias. Dkt. 18, Pg. ID 235; Dkt. 18-8, Pg. ID 253. Plaintiff provided a new quote of $134, 600, which decreased the price of tooling and increased the number of parts to 50. Dkt. 18, Pg. ID 235. Defendant approved the new quote on September 10, 2015. Dkt. 18, Pg. ID 235. Plaintiff then made and shipped two more bumpers to Defendant in Florida. Dkt. 18, Pg. ID 231.

         In October, another one of Defendant's representatives came to Michigan to review the project. Dkt. 18, Pg. ID 231. Plaintiff asked for approval of recent tooling changes, and the representative signed off on a mockup in person. Dkt. 18, Pg. ID 231. Defendant gave Plaintiff a check for $4, 600. Dkt. 18, Pg. ID 235. Later that month, Defendant told Plaintiff the part fit well but they were waiting on ownership for an official signoff. Dkt. 18, Pg. ID 231.

         Then, on October 29th, Defendant reported that depressions were appearing on the front bumpers after exposure to the sun. Dkt. 18, Pg. ID 232. In November, Plaintiff shipped rear bumpers and Defendant expressed its satisfaction with them. Dkt. 18, Pg. ID 232. In December, Defendant requested 8 more front bumpers with a thicker top area. Dkt. 18, Pg. ID 232. Plaintiff then provided a quote for the thickness modification. Dkt. 18, Pg. ID 232.

         After two conference calls (in December 2015 and January 2016), Plaintiffs President visited Defendant in Florida. Dkt. 20, Pg. ID 341. New, thicker front bumpers were shipped to Defendant in March 2016. Dkt. 18, Pg. ID 232. In April 2016, Defendant informed Plaintiff of another problem: inner ribs were showing through after sanding. Dkt. 18, Pg. ID 233. Defendant cancelled its order for front bumpers but kept an order for additional rear ones, which Plaintiff filled by shipping 10 parts in May. Dkt. 18, Pg. ID 233.

         In June 2016, the parties held a conference call to discuss past due payments but were unable to resolve the dispute. Dkt. 18, Pg. ID 233. Plaintiff alleges that it has sustained damages of $112, 897.00 because Defendant has paid Plaintiff only $4, 600 by check in October 2015, with the remainder of the amount owed for parts and tooling having gone unpaid. Dkt. 18, Pg. ID 233 Plaintiff filed suit in Macomb County Circuit Court and Defendant removed to this Court in December of 2016. Dkt. 1, Pg. ID 2. Defendant then moved to dismiss the case, arguing that Plaintiff had failed to plead facts sufficient to establish this Court's personal jurisdiction over Defendant. Dkt. 6. This Court denied that motion without prejudice, allowing Plaintiff to amend its complaint. Dkt. 14. Plaintiff filed an amended complaint. Dkt. 18. And Defendant has filed a renewed motion to dismiss. Dkt. 19. Having considered the Parties' submissions, the Court finds that oral argument would not help the Court resolve Defendant's motion. Thus the Court will decide the motion based on the Parties' written submissions. See E.D. Mich. LR 7.1(f). For the reasons set out in detail below, Defendant's motion will be denied.

         III. Standard of Review

         Upon a defendant's motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), "[t]he plaintiff bears the burden of establishing that jurisdiction exists." Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).

         A district court has three options when deciding a 12(b)(2) motion. Id. It may rule based on written submissions and affidavits, hold an evidentiary hearing, or order discovery limited to the personal jurisdiction issue. Air Prod. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th Cir. 2007); Theunissen, 935 F.2d at 1458. "The court has discretion to select which method it will follow [.]" Theunissen, 935 F.2d at 1458 (internal citations omitted). Neither party has asked for an evidentiary hearing or for limited discovery. And the Court finds that the Parties' written submissions and affidavits are sufficient to resolve Defendant's motion. So the Court will decide the motion based solely on those submissions and affidavits.

         Thus "the burden on the plaintiff is relatively slight and the plaintiff must only make a prima facie showing that personal jurisdiction exists in order to defeat dismissal." Air Prod., 503 F.3d at 549 (quoting Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988; Theunissen, 935 F.2d at 1458) (internal quotation marks omitted). The materials must be reviewed in the light most favorable to the plaintiff and "the district court should not weigh the controverting assertions of the party seeking dismissal." Theunissen, 935 F.2d at 1458 (internal quotation marks omitted).

         IV. Analysis

         a. Personal Jurisdiction

         "Personal jurisdiction can be either general or specific depending upon the nature of the contacts that the defendant has with the forum state." Bird v. Parsons, 289 F.3d 865, 873 (6th Cir. 2002). General jurisdiction depends on continuous and systematic contact with the forum state, such that the courts may exercise jurisdiction over any claims a plaintiff may bring against the defendant. Kerry Steel, Inc. v. Paragon Industries, Inc., 106 F.3d 147, 149 (6th Cir. 1997). Specific jurisdiction grants jurisdiction only to the extent that a claim arises out of or relates to a defendant's contacts in the forum state. Id. Here, Plaintiff argues that this Court has specific jurisdiction over Defendant due to the Defendant's contact with the forum state. Dkt. 10-1, Pg. IDs 7-12.

         A 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 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. The long-arm analysis thus merges into the due process analysis and the Court need only determine whether exercising personal jurisdiction violates constitutional due process. Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 477 (6th Cir. 2003).

         Due 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 that is the basis for its jurisdiction over ...


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