Pastiche, LLC v. Sipp et al, No. 2:2009cv02829 - Document 19 (E.D. La. 2009)
Court Description: ORDER & REASONS that John and Nancy Sipp's 5 Motion to Dismiss for lack of personal jurisdiction is GRANTED. Signed by Judge Ivan L. R. Lemelle on 7/31/09. (dno, )
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Pastiche, LLC v. Sipp et al Doc. 19 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA PASTICHE, LLC CIVIL ACTION VERSUS NO. 09-2829 SECTION: “B”(5) JOHN SIPP AND NANCY SIPP ORDER AND REASONS Before the Court is Defendants John and Nancy Sipp’s, Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). (Rec. Doc. No. 5). After review of the pleadings and applicable law, and for the reasons that follow, IT IS ORDERED that Defendants’ Motion to Dismiss for Lack of Personal Jurisdiction (Rec. Doc. No. 5) is GRANTED. BACKGROUND For approximately 20 years Ned Marshall individually performed interior design services for Defendants in New York. At the time Ned Marshall business in the state of New York. was living and doing During the course of the parties’ business relationship, Ned Marshall relocated to New Orleans, Louisiana and formed the business entity Pastiche, LLC on March 14, 2005. Plaintiff’s After the 1 Dockets.Justia.com move, Marshall and Defendants continued their business relationship, and as a result of the parties’ pre-existing business relationship, Defendants continued to employ him to perform services in connection with two residences owned by Defendants in New York. However, it is disputed as to whether individually LLC. Marshall was hired or as Pastiche, No formal written contract was executed. Over several months the parties’ business relationship began to deteriorate. Plaintiff, Plaintiff Displeased with services provided by Defendants in filed 2008. suit Subsequently, in New York Plaintiff against filed the present suit in the Civil District Court for the Parish of Orleans in January 2009 to recover on unpaid invoices. case was subsequently removed diversity jurisdiction. to this Court based The on Defendants now request that the Court dismiss this action pursuant to Rule 12(b)(2). DISSCUSION When a nonresident defendant, like the Sipps, moves to dismiss for lack of personal jurisdiction, the plaintiff seeking to invoke the jurisdiction of this Court bears the burden of establishing it. Luv N’ Care v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006). In order to establish personal jurisdiction, the plaintiff need only present a prima facie showing that the 2 defendant has sufficient contacts with Louisiana. Id. all allegations in the The Court must accept as true complaint, resolving factual conflicts in favor of the plaintiff. Id. A federal court may exercise jurisdiction over a nonresident defendant only if (1) the long-arm statute of the forum defendant; state and confers (2) the personal exercise jurisdiction of over jurisdiction by the the forum state is consistent with due process under the U.S. Constitution. Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 2006). long-arm statute is co-extensive Given that Louisiana’s with the limits of constitutional due process, this Court must decide whether this Court’s exercise of jurisdiction over Defendants would offend the Due Process Clause of the Fourteenth Amendment. Seatrepid Louisiana, LLC v. Richard Phillips Marine, Inc., 2009 U.S. Dist. LEXIS 46274, at *9 (E.D. La. May. 14, 2009). The Due Process Clause limits the Court’s power to assert personal jurisdiction over a nonresident defendant. Id. The “constitutional touchtone for the exercise of personal jurisdiction is whether the defendant purposefully established minimum contacts with the forum state.” Asahi Metal Indus. Co., Ltd v. Super Ct. of Cal., Solano County, 480 U.S. 102, 108-09 (1987). Thus, due process will not be 3 offended if the nonresident defendant has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Personal jurisdiction over a nonresident defendant can be general or specific. In order for the Court to exercise specific jurisdiction, relationship among the the court must defendant, the examine forum the and the litigation. Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773, 777 (5th Cir. 1986). This allows the court to determine whether the defendant has purposefully availed himself of the forum state’s benefits and protections. Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985). the Court may nonresident contacts exercise defendant with the on general any forum if are the King Conversely, jurisdiction claim, state Burger over a defendant’s “continuous and systematic.” Helecopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 413-14 (1984). However, the continuous and systematic test is difficult to meet because it requires that a defendant have extensive contacts between him/her and the forum. Kenneth W. Andrieu v. Countrywide Home Loans, Inc., Et Al., 2006 U.S. Dist. LEXIS 51449, at *9 (E.D. La. Jul. 26, 2006). 4 In the present case, there is nothing to suggest that Defendants have the type of systematic and continuous contacts with the State of Louisiana necessary to meet the requirements of general personal jurisdiction. Defendants are private citizens of New York who had a previous existing business relationship with Plaintiff’s principal, Ned Marshall. (Rec. Doc. No. 15-4 at 4). It is undisputed that but for about the last four years of their twenty year business relationship, Plaintiff’s principal, Mr. Marshall was not a Louisiana resident and the ongoing relationship began when the principals for each side were nonresidents of Louisiana. Defendants did not seek out a Louisiana company to perform work on their properties. (Rec. Doc. No. 5-2 at 6). Additionally, Defendants assert that they have never traveled to Louisiana to conduct any business with Plaintiff or any other Louisiana resident. Defendants’ assertions are uncontradicted. Id. at 3. Therefore, the Court’s ability to exercise jurisdiction solely depends on whether the requirements of specific jurisdiction are met. Specific Jurisdiction The Fifth Circuit has outlined a three-step test for determining whether specific jurisdiction exists: (1) whether the defendant has minimum contacts with the forum 5 state, purposefully forum; (2) directing whether defendant’s his plaintiff’s forum-related activities claim activities; toward arises and the out (3) of whether exercising personal jurisdiction would be reasonable and fair. Burger King Corp., 471 U.S. at 474. In order for the Court to exercise jurisdiction over a nonresident defendant, Defendants have privileges of the Court purposefully conducting must availed activities analyze whether themselves in to Louisiana, the thus invoking the benefits and protections of Louisiana laws. Seatrepid Louisiana, 2009 U.S. Dist at 12-13. contracting with a resident of the forum The mere state is insufficient to establish minimum contacts such that the forum state may exercise personal jurisdiction defendants. Burger King Corp., 471 U.S. at 479. over the Rather, the Fifth Circuit in regards to contract cases has “looked to the whether place the of making purposeful to Louisiana, 2009 contractual of a satisfy U.S. performance contract minimum Dist at 14 with to a resident contacts.” (citing determine is Seatrepid Barnstone v. Cogregation Am. Echad, 574 F.2d 286, 288 (5th Cir. 1978); accord St. Martin & Mahoney, APLC v. Diversified Aircraft Holdings, Ltd., 934 F. Supp. 200, 205 (E.D. La. 1996) (Fallon, J.) (“One of the most pivotal considerations in 6 determining whether there has been ‘purposeful availment’ is where the material performance of the contract was centered.”). In this case, all of the material performance was done outside of Louisiana. entered in New contract was The York. alleged The centered oral performance in New contract of York. the was alleged Plaintiff was contractually obligated to provide workers to the two job sites located in New York, and made several trips to New York to satisfy his obligations. (Rec. Doc. No. 15-4 at 3). Defendants’ sole obligation was to pay Plaintiff for its services. Accordingly, no part of the contract was performed in Louisiana. Conversely, Plaintiff contends that work was done both in Louisiana asserts and that Louisiana; in the New York. design materials were Specifically, services ordered were from Plaintiff performed Louisiana; in sub- contractors were coordinated through Louisiana; bills were issued from performed Louisiana; in New Opposition, ¶ coordination done incidental” to contract and York. 14). in and only on-site (Exhibit However, Louisiana performance “resulted such by of only 7 A from supervision to the the Plaintiff’s preparation Plaintiff New was are and “merely York-centered coincidence that [Plaintiff] Brammer is now, since Engineering, Partnership, 307 Inc. Fed. 2005, v. a East Appx. Louisiana Wright 845, resident.” Mountain 848 (5th Ltd. Cir. 2009)(finding that defendant’s did not purposefully avail themselves of the benefits of Louisiana Law where the performance of the contract was centered in another state). Additionally, the fact that Defendants are parties to an alleged oral contract with Plaintiff, now a Louisiana resident, does not give rise to jurisdiction. The Fifth Circuit has continuously held that personal jurisdiction does not exist if the defendant’s contacts result from “the mere fortuity that the plaintiff happens to be a resident of the forum.” Patterson v. Dietze, Inc., 764 F.2d 1145, 1147 (5th Cir. 1985). The mere factors that Defendants mailed payments to Louisiana, along with the exchange of email correspondence principal, Ned between Marshall, are Defendants and insufficient Plaintiff’s to constitute purposeful availment. Such interactions are the type of fortuitous that jurisdiction. contacts cannot support personal This alleged ongoing business relationship initially arose from an oral agreement between nonresident principals/parties to perform properties in New York. 8 ultimate services to Because Defendants do not have the requisite minimum contacts with Louisiana necessary to support the exercise of jurisdiction over them, the Court need not extensively address the reasonableness and fairness tier of the due process inquiry. parties We note, however, that it appear from the submission workmanship, quality that most of performance material and evidence breach in of general would be found in New York, along with most witnesses. None support benefits of a Defendants’ finding and of contacts purposeful protections of with Louisiana activity Louisiana. can invoking the Additionally, because Defendants’ contacts with Louisiana do not rise to the level of specific jurisdiction, no reasonable case can be made that Defendants’ contacts can reach the higher threshold of “continuous and systematic” contacts required for general jurisdiction. Furthermore, even if the Court had jurisdiction, venue would be improper. 1 Accordingly, IT IS ORDERED that Defendants’ Motion to Dismiss for 1 American Bankers Life Assurance Co. of Fla. v. Overton, 128 Fed.Appx. 399, 403 (5th Cir.2005)(finding that when related cases are pending,the first-to-file rule instructs the court with the later-filed action to transfer it to the first-filed forum). 9 Lack of Personal Jurisdiction (Rec. Doc. No. 5) is GRANTED. New Orleans, Louisiana, this 31st day of July, 2009. IVAN L.R. LEMELLE UNITED STATES DISTRICT JUDGE 10
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