Power Investments, LLC v. SL EC, LLC, No. 18-6098 (6th Cir. 2019)Annotate this Case
Becker, a Missouri citizen, wanted to buy the St. Louis Ashley Power Plant. Through a Missouri corporation, SL, he secured financing from Power Investments, a Nevada corporation with one member, Miller, who lives and practices law in Kentucky. Power loaned SL $300,000. Becker called, texted, and emailed Miller extensively, seeking funds and making allegedly false assurances. Becker (through another Missouri entity, Ashley) signed a purchase agreement. The sale fell apart. Power bought Becker’s interest in Ashley, assuming the obligation of the power-plant deal. Power now owns the plant. Miller sued in Kentucky, alleging fraudulent misrepresentation and unjust enrichment. Becker sued in Missouri, alleging breach of contract and fraudulent conveyance. Becker successfully moved to dismiss the Kentucky case for lack of personal jurisdiction.
The Sixth Circuit reversed. Becker “transact[ed] . . . business” and made “a telephone solicitation” within the meaning of Kentucky's long-arm statute. Under the Due Process Clause, a state can exercise jurisdiction over an out-of-state defendant only if that defendant has “minimum contacts” with the state sufficient to accord with “traditional notions of fair play and substantial justice.” This case turns on specific jurisdiction, based on the “affiliation between the forum and the underlying controversy.” Becker initiated the relationship. He communicated with Miller extensively; Becker’s alleged misrepresentations in these communications constitute the core of Miller’s fraud claims. Becker “purposefully avail[ed] himself of the privilege of acting in [Kentucky] or causing a consequence” there.