J.A.A. v. The Rawlings Company LLC et al, No. 2:2019cv01036 - Document 28 (W.D. Wash. 2019)
Court Description: ORDER granting Rawling's 9 Motion to Dismiss or Change Venue. This matter is hereby TRANSFERRED to the United States District Court for the Western District of Kentucky. Signed by Judge Barbara J. Rothstein. (TH)
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J.A.A. v. The Rawlings Company LLC et al 2 Doc. 28 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WASHINGTON 3 4 5 6 7 8 ) ) ) ) ) ) ) ) ) ) ) J.A.A., Plaint{[[, v. THE RAWLINGS COMPANY, LLC 9 10 Defendant. CASE NO. 2:19-cv-01036-BJR ORDER FINDING NO PERSONAL JURISDICTION AND TRANSFERRING VENUE 11 12 I. INTRODUCTION 13 J.A.A. (J.A.A. or Plaintiff) brings this action for negligence against Defendant Rawlings 14 Company, LLC (Rawlings) based upon Rawlings's alleged negligent training and supervision of 15 one of Rawlings's employees. Presently before the Court is Rawlings's motion to dismiss or 16 change venue. See ECF No. 9. J.A.A. opposes the request. See ECF No. 13. Rawlings's motion 17 challenges this Court's jurisdiction over it. After considering the parties' submissions, the record 18 19 20 21 of the case, and the relevant legal authorities, the Court decides that it is in the interest of justice that the case be transferred to the Western District of Kentucky. II. BACKGROUND 22 Rawlings is a Kentucky corporation with its principal place of business in La Grange, 23 Kentucky, an office in Florence, Kentucky, and an office in Van Nuys, California. ECF. No 7 at 24 1. Rawlings provides subrogation outsourcing and other services to healthcare clients ,throughout 25 the country, including Premera Blue Cross, Plaintiffs insurance company. ECF No. 1 at 2. To perform its services, Rawlings receives paid insurance claims data from its health insurance clients 1 Dockets.Justia.com and then sends out collection notices based on that data. ECF No. 17 at 1. Paid insurance claims 1 2 3 data received by Rawlings does not include medical chart notes. Id. The insurance data is stored on Rawlings's servers in Kentucky and Georgia. Id. 4 On May 7, 2016, Plaintiff, then a resident of King County, Washington and now a resident 5 of New Jersey, met Rawlings's employee, Brandon Ray (Mr. Ray or employee) at the Kentucky 6 Derby. ECF No. 1 at 1-2; ECF No. 26 at 1. Their relationship became romantic. Id. Mr. Ray 7 revealed to Plaintiff on April 3 0, 2018 that he looked through Plaintiffs "medical history" while 8 9 10 11 12 13 14 at work. Id. at 3. On May 1, 2018, Mr. Ray told Plaintiff that he regularly accessed medical records unrelated to his work. Id. at 4. As a result of this disclosure, Plaintiff brings this suit for negligence and breach of contract by Rawlings. Id. at 1. III. PERSONAL JURISDICTION A Court must dismiss a claim for lack of personal jurisdiction over the Defendant. See Fed. R. Civ. P. 12(b)(2). When the defendant moves to dismiss a complaint for lack of personal 15 jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is appropriate. Sher v. 16 17 Johnson, 911F.2d1357, 1361 (9th Cir. 1990). The court reviewing a Rule 12(b)(2) motion for 18 lack of personal jurisdiction must take as true the allegations of the non-moving party and resolve 19 all factual disputes in its favor. See Dole Food Co. v. Watts, 303 F.3d 1104, 1107 (9th Cir 2002). 20 When there is no applicable federal statute governing personal jurisdiction, the district court must 21 apply the law of the state in which it sits. See Fed. R. Civ. P. 4(k)(l)(A); Hylwa, MD., Inc. v. 22 Palka, 823 F.2d 310, 312 (9th Cir. 1987). Washington's long-arm statute is coextensive with 23 federal due process. See Shute v. Carnival Cruise Lines, 113 Wn.2d 763, 771 (Wash. 1989). 24 25 Therefore, the court need only determine whether the exercise of personal jurisdiction is consistent 2 with federal due process limits under the 14th Amendment. Chan v. Society Expeditions, Inc., 39 2 F.3d 1398, 1404-05 (9th Cir. 1994). 3 Rawlings argues that it is not subject to the jurisdiction of this Court and, therefore, this 4 suit should be dismissed or transferred pursuant to Fed. R. Civ. P. 12(b)(3) (improper venue). 5 Plaintiff opposes Rawlings's assertion that there is an absence of personal jurisdiction and asserts, 6 to the contrary, that this Court has specific and/or general jurisdiction over Rawlings. 7 A. General Jurisdiction 8 Rawlings alleges in its motion that it is not subject to personal jurisdiction in Washington 9 10 via the theory of general jurisdiction. In support of its contention, Rawlings notes that 1) it has no 11 offices in the state and 2) its conduct is not sufficiently continuous or systematic to warrant 12 jurisdiction. Plaintiff argues that Rawlings's contacts with Washington are sufficiently continuous 13 and systematic to subject it to general jurisdiction within the state. ECF No. 13 at 7. 14 A court obtains general jurisdiction over a defendant when that defendant has its place of 15 incorporation in the forum, its principal place of business within the forum, or continuous and 16 17 18 systematic contacts with the forum. See Daimler AG v. Bauman, 571 U.S. 117, 137 (2014). In this case, Rawlings's principal place of business is in La Grange, Kentucky, and its other two 19 offices are in Florence, Kentucky and Van Nuys, California. ECF. No 7 at 1. There is no evidence 20 that either Rawlings's principal place of business or its place of incorporation is within the state 21 22 of Washington. Id. When a defendant's place of incorporation and principal place of business is outside of the 23 forum, the standard for proving the existence of general jurisdiction over a nonresident defendant 24 25 is "fairly high ... " Brand v. Menlove Dodge, 796 F.2d 1070, 1073 (9th Cir. 1986); see also Helicopteros Nacionales de Colombia, SA. v. Hall, 466 U.S. 408, 418 (1984) (finding no general 3 jurisdiction in Texas where defendant bought 80% of its parts over four years for its products, 2 accepted bank account checks drawn on a Houston bank, sent its executive for travel, and sent 3 employees for training); Bancroft & Masters, Inc. v. Augusta Nat'! Inc., 223 F.3d 1082, 1086 (9th 4 Cir. 2000) (finding that Georgia defendant's several license agreements with television networks 5 and vendors in California and regular telephone calls were insufficient to establish general 6 jurisdiction). And the contacts that suffice for general jurisdiction are thoroughly systematic and 7 continuous. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 447-48 (1952) (holding 8 9 10 that a Philippine corporation was subject to the general jurisdiction of Ohio because its presidentalso the general manager and principal stockholder-ran the corporate office from his home in 11 Ohio, handling correspondence, business files, directors' meetings, and major financial matters in 12 the state and through its banks). 13 14 Rawlings's principal contact with Washington, its regular mailing of collection notices from its office in Kentucky to Washington residents, is not a sufficient basis for asserting general 15 jurisdiction over the company. ECF No. 15 at 2. Mailing collection notices simply do not rise to 16 17 the all-encompassing corporate activity the Supreme Court found indicative of general jurisdiction 18 in Perkins, where the Philippine corporate defendant's president operated the corporation from his 19 home in Ohio. See Perkins, 342 U.S. at 447-48; ECF No. 15 at 2. Rawlings's notices are similar 20 to defendant's activities in Bancroft, where the court held that phone calls and letters "are not 21 activities which support a finding of general jurisdiction." See Bancroft & Masters, Inc. v. Augusta 22 Nat 'l, Inc., 45 F. Supp.2d 777, 781 (N.D. Cal. 1998) (quoting Gates Learjet Corp. v. Jensen, 743 23 F.2d 1325, 1331 (9th Cir. 1984)); ECF No. 15 at 3. 24 25 Moreover, unlike in Helicopteros, where the defendant's employees and executives frequently traveled to the forum for business, there is no evidence that Rawlings has any employees 4 based in, or that travel to, Washington. See· Helicopteros, 466 U.S. at 418; ECF No. 7 at 1. Even 2 Rawlings's collection notices - the only contacts with the forum of which this Court is aware - 3 are payable to its office in La Grange, KY, not a bank in the forum as was the case in Perkins. See 4 Perkins, 342 U.S. at 447-48 (finding that defendant's payment of his employees' salaries from an 5 Ohio bank account contributed to the finding of general jurisdiction); ECF No. 15 at 2. 6 Rawlings's contact with Washington constitutes "commerce with residents of the forum 7 state," but "is not in and of itself the kind of activity that approximates physical presence within 8 the state's borders." Bancroft, 223 F.3d at 1086. The Court concludes that without a showing of 9 10 11 12 13 14 sufficiently continuous and systematic contacts, Rawlings is not within the general jurisdiction of this Court. B. Specific Jurisdiction Plaintiff avers that because Rawlings purposefully directed its activities toward Washington and through its work for Premera obtained and improperly used her Personal Health 15 Information (PHI), this Court has personal jurisdiction over it. This Court finds otherwise. 16 17 18 Rawlings's contacts with the forum do not amount to contacts sufficient to establish specific jurisdiction. 19 The Ninth Circuit's tripartite test for specific jurisdiction is as follows: 20 (1) The non-resident defendant must purposefully direct his activities or consummate some 21 22 23 24 transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable. 25 5 Lake v. Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). The plaintiff must prove the first two prongs 2 of the test; failure to satisfy either of the two prongs results in a failure to establish specific 3 jurisdiction. See Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004) 4 (citing Sher v. Johnson, 911F.2d1357, 1361 (9th Cir. 1990)). 5 6 The Ninth Circuit employs two different tests for the first prong of its specificjurisdiction test. See Harris Rutsky & Co. Insurance Services, Inc. v. Bell & Clements Ltd., 328 F.3d 1122, 7 1130 (9th Cir. 2003) (holding that purposeful availment includes the distinct concepts of 8 9 10 purposeful direction and purposeful availment). Purposeful availment is used when the suit sounds in contract and purposeful direction is used when the suit sounds in tort. Schwarzenegger, 374 11 F.3d at 802. Because there is no contract between Rawlings and Plaintiff, and Plaintiffs claim is 12 based in negligence, the Court focuses on purposeful direction. 13 14 a. First Prong: Purposeful Direction To determine whether there was purposeful direction, the Court examines evidence of 15 Rawlings's activities outside of but directed towards the forum. Id. at 803 (holding that "the 16 17 distribution in the forum state of goods originating elsewhere" constitutes purposeful direction). 18 The test for purposeful direction used by the Ninth Circuit is the Calder effects test, which 19 establishes specific jurisdiction if Rawlings's contact with the forum was: 1) an intentional act, 2) 20 explicitly aimed at the forum state, 3) causing harm that the Rawlings knows is likely to be suffered 21 22 in the forum state. Dole Food Co. v. Watts, 303 F.3d 1104, 1111 (9th Cir. 2002). An intentional act is not "mere untargeted negligence." Calder v. Jones, 465 U.S. 783, 789 (1984). 23 Plaintiff alleges that Rawlings's failure to properly train and supervise its employees in the 24 25 handling of PHI proximately caused Plaintiffs injury. ECF No. 1 at 5. Rawlings training and supervising of Mr. Ray occurred entirely in Kentucky. ECF No. 7 at 1. No evidence has been 6 presented that Rawlings ever intentionally or expressly directed its training and supervision of Mr. 2 Ray or any other employee toward Washington. Moreover, Plaintiffs is a negligence claim, which 3 the Supreme Court expressly excluded from its definition of "intentional act" in Calder. See 4 Calder, 465 U.S. at 789. In short, Rawlings's training and supervising of Mr. Ray was not an 5 intentional act expressly aimed at the forum state because it was a negligent act occurring in 6 Kentucky. Lacking an intentional act purposefully directed at the State of Washington, Plaintiff 7 has failed to establish personal jurisdiction in this Court. See Schwarzenegger, 374 F.3d at 802 8 (holding that failure to establish purposeful direction or availment results in a failure to establish 9 10 specific jurisdiction). IV. 11 TRANSFER OF VENUE 12 When venue is improper in a civil suit, as it is here due to the Court's lack of personal 13 jurisdiction, 28 U.S.C. § 1406(a) allows a district court to dismiss a suit or transfer it to a district 14 "in which it could have been brought" if it is in the interest of justice. 28 U.S.C. § 1406(a); 15 Kawamoto v. CB Richard Ellis, Inc., 225 F. Supp.2d 1209, 1211-12 (D. Haw. 2002). A court 16 17 transferring under§ 1406(a) need not have personal jurisdiction over the defendant. Kawamoto, 18 225 F. Supp.2d at 1214. In this suit, it is in the interest of justice to transfer instead of to dismiss. 19 Neither party contests that the Western District Kentucky would be an appropriate forum for this 20 suit. 21 22 23 24 25 7 V. 2 3 4 5 CONCLUSION The Court ORDERS as follows: Rawlings's Motion to Transfer Venue (ECF No. 9) to the Western District of Kentucky is GRANTED. Dated this 12th day of November, 2019. 6 7 Barbara Jac, othstein U.S. District'Court Judge 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 8
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