Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Power Investments, LLC v. SL EC, LLC

United States Court of Appeals, Sixth Circuit

June 20, 2019

Power Investments, LLC, Plaintiff-Appellant,
v.
SL EC, LLC; Michael F. Becker, Defendants-Appellees.

          Appeal from the United States District Court for the Eastern District of Kentucky at Lexington. No. 5:18-cv-00466-Danny C. Reeves, District Judge.

          Carl D. Edwards, Jr., Andrew R. Smith, MILLER EDWARDS RAMBICURE PLLC, Lexington, Kentucky, for Appellant.

          William H. Mooney, LYNCH, COX, GILMAN & GOODMAN, PSC, Louisville, Kentucky, for Appellees.

          Before: SUTTON, BUSH, and LARSEN, Circuit Judges.

          OPINION

          SUTTON, CIRCUIT JUDGE.

         A Missouri corporation financed part of its purchase of property through a Nevada investment company. Before long, the investment company ended up with the property, discovering some problems with the deal along the way. It filed this lawsuit in Kentucky court against the Missouri defendants, which removed the case to federal court. The district judge dismissed the case for lack of personal jurisdiction over the Missouri defendants. We reverse.

         Michael Becker, a Missouri citizen, wanted to buy the Ashley Power Plant in St. Louis. Built to power the World's Fair, the plant has generated steam heat and electricity on the banks of the Mississippi since 1904. Becker (through a Missouri corporation, SL EC, LLC) secured financing from Power Investments, which is incorporated in Nevada and has one member, Mason Miller, who lives in Lexington, Kentucky, and practices law there. Through Miller, Power Investments loaned SL EC about $300, 000 in 2016 and 2017 to cover rising costs as Becker prepared to purchase the power plant. Miller also arranged for a private equity fund to loan SL EC the purchase price of the plant. Over the course of these negotiations, Becker called, texted, and emailed Miller many times, seeking funds and making many allegedly false assurances.

         Eventually, Becker (through another Missouri entity, Ashley Energy) signed a purchase agreement for the plant. The sale fell apart at closing. Power Investments agreed to buy out Becker's controlling interest in Ashley Energy, assuming the obligation to follow through on the power-plant deal. Power Investments thus now owns the plant.

         Miller came to believe that Becker had been less than honest about his use of the loaned funds as well as Ashley Energy's liabilities and the plant's operating costs. Power Investments and Becker proceeded to a duel, using lawsuits as their weapons of choice. Miller filed the first lawsuit in state court in Kentucky based on fraudulent misrepresentation and unjust enrichment. Becker filed the second lawsuit in state court in Missouri based on breach of contract and fraudulent conveyance. Becker removed the Kentucky case to federal court on the basis of diversity jurisdiction, then moved to dismiss it for lack of personal jurisdiction. (Miller by the way successfully removed the Missouri case to federal court in Missouri.) The district court granted Becker's motion to dismiss the case. Power Investments appealed.

         To exercise jurisdiction over an out-of-state individual, a federal court must satisfy the long-arm law of the State and federal due process. Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 679 (6th Cir. 2012). All agree that Miller's lawsuit satisfies the Kentucky long-arm statute because Becker directed his allegedly fraudulent emails and phone calls to Miller and so "transact[ed] . . . business" and made "a telephone solicitation" within the meaning of Kentucky law. Ky. Rev. Stat. § 454.210(2)(a)(1), (9). That leaves due process.

         The Due Process Clause of the Fourteenth Amendment limits a State's power to bind an out-of-state defendant to a judgment of its courts. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). Only if the out-of-state defendant has "minimum contacts" with the State sufficient to accord with "traditional notions of fair play and substantial justice" may the state court exercise power over it. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)).

         On top of that, a State may invoke two types of personal jurisdiction against a defendant. One is "general" and turns on the defendant's generic connections to the State-say that it resides there or regularly does business there-connections that need not have any relationship to the allegations in the complaint. See Daimler AG v. Bauman, 571 U.S. 117, 127 (2014). The other is "specific" and turns on the defendant's case-related contacts to the jurisdiction. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). The parties and the district court agree that this case turns on specific jurisdiction. So do we.

         Specific jurisdiction requires us to focus on the "affiliation between the forum and the underlying controversy." Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (quotation omitted). The foreign defendant's "suit-related conduct" must establish "a substantial connection with the forum State." Walden v. Fiore, 571 U.S. 277, 284 (2014). The plaintiff must show that the defendant "purposefully avail[ed] himself of the privilege of acting in the forum state." Miller, 694 F.3d at 680 (quotation omitted).

         While this rule can be "more aspirational than self-defining" in practice, Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir. 2008) (Gorsuch, J.), we have a few guideposts. A foreign defendant's relationship with an in-forum plaintiff does not suffice "standing alone" to confer jurisdiction. Walden, 571 U.S. at 286. The defendant needs its "own affiliation" with the State. Id. A single deal with an in-forum resident also does not by itself suffice. Burger King, 471 U.S. at 478. But a contract that bears a "substantial connection" to the forum, such as one designed to exploit the forum's market, Walden, 571 U.S. at 284-85 (emphasis added), or a "20-year relationship that envisioned continuing and wide-reaching contacts with [the plaintiff] in [the forum]," makes the cut, Burger King, 471 U.S. at 479-80; seeNeogen Corp. ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.