Opinion
Case No. 5:99 CV 2770 (Resolving Doc. Nos. 10, 6, and 15)
April 12, 2000.
MEMORANDUM OF OPINION AND ORDER
The instant action is brought by Plaintiff Darlene Graham for the loss of her personal and household belongings destroyed by fire while in transit from Illinois to Ohio. She sues the moving companies North American Van Lines, Inc. ("NAVL") and Hall Transfer Inc.(erroneously sued as Carl Hall Transfer) ("Hall Transfer").
Before the Court are the following motions: Plaintiff's motion to remand to the Summit County Court of Common Pleas ( Doc. No. 10); Hall Transfer's motion to dismiss the complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) ( Doc. No. 6); and Hall Transfer's motion to dismiss the cross-claims filed by NAVL ( Doc. No. 15). For the reasons that follow, Plaintiff's motion for remand is DENIED, Hall Transfer's motion to dismiss the complaint for lack of personal jurisdiction is GRANTED, and Hall Transfer's motion to dismiss NAVL's cross-claims is GRANTED. Having dismissed Hall Transfer for lack of personal jurisdiction, the Court dismisses the action without prejudice, pursuant to Fed.R.Civ.P. 19(b), finding that Hall Transfer is an indispensable party without whom the case cannot proceed.
I.
Plaintiff, Darlene Graham hired defendants NAVL and Hall Transfer to move her personal and household goods from Arthur, Illinois to Tallmadge, Ohio. NAVL is a nationwide interstate shipper of goods. Hall Transfer is also an interstate shipper of goods and operates as a duly authorized agent of NAVL. Plaintiff contacted Hall Transfer on July 12, 1999, after calling a number listed for moving services provided by North American Van Services in the local yellow pages. Hall Transfer provided her with an estimate of $2,39.33. Complaint ¶ 7. In preparing the bill of lading, the employee of Hall Transfer "never offered or explained any insurance options for different rates for moving as required by the Carmack Amendment." Id . ¶ 10. The goods were to be picked up and packed on August 6, 1999 and delivered to her new residence on August 10, 1999. Final payment was to be made at the point of delivery. Id . ¶ 14.
On August 10, 1999, Plaintiff was notified that during transport, the trailer carrying her goods caught fire. Only two small boxes of miscellaneous items were salvaged from the shipment. In her complaint, Plaintiff states that Defendants have refused to acknowledge any responsibility for her goods and have not responded to any demands made by her.
Plaintiff filed this action in the Court of Common Pleas of Summit County. Her complaint alleges that defendants are liable for the following: violation of the Federal Carmack Amendment to the Interstate Commerce Act, 49 U.S.C. § 14706 (Count 1); violation of the Ohio Consumer Sales Practices Act. ORC § 1345.01 (Count 2); intentional infliction of emotional distress (Count 3); and fraud in the inducement (Count 4). Count 5 alleges that North American Van Lines is liable to her for the acts of its agent Hall Transfer, Inc. under theories of agency, and the master/servant relationship. NAVL removed the action to federal court pursuant to 28 U.S.C. § 1337 and on the basis of her claims under 49 U.S.C. § 14706 (Federal Carmack Amendment).
Without responding to the merits of Plaintiff's claims, Hall Transfer moves to dismiss the complaint and NAVL's cross-claims for lack of personal jurisdiction. Plaintiff has responded and has also moved to remand the case to state court.
II.
In her motion to remand, Plaintiff argues that: 1) the Carmack Amendment gives the Plaintiff a choice of district court or state court, and that the state court can properly determine issues of federal law; and 2) the district court lacks subject matter jurisdiction because the amount in controversy does not exceed $75,000.
Addressing the first argument, Defendant contends that unless exclusive jurisdiction is specified, federal law claims may be heard either in federal or state courts. "Removal was principally predicated upon 28 U.S.C. § 1331, federal question jurisdiction, based upon plaintiff's Carmack Amendment claim — and its broadly preemptive effect on plaintiff's state law claims. Opposition of Defendant at 4-5. Furthermore, Defendant maintains that 28 U.S.C. § 1337(a) provides that the value of a claim must only exceed $10,000 to furnish original jurisdiction to the federal court. Defendant's removal to federal court is certainly with merit.
Plaintiff's second argument that her claims do not exceed the jurisdictional amount stems is based in from her reliance upon the Carmack Amendment. Plaintiff contends that the Carmack Amendment provides that one's actual loss is limited to the market value of the goods being shipped at the time of their loss. Plaintiff's Motion to Remand at 2. She attaches a list of items lost together with an estimate of their market value which purportedly supports her assertion that her damages are not in excess of $75,000.
The total amount set forth in Plaintiff's itemized list of expenses is listed at $98,970.32. The Court questions how this itemized breakdown supports Plaintiff's assertions that her damages are less than $75,000.
However, Plaintiff, in her Complaint, clearly stated the amount of damages she is seeking: "Plaintiff demands that this Court grant actual and replacement value of her household goods lost in the amount of $99,000." Complaint, Prayer. Moreover, Plaintiff does not take into consideration the damages claimed under the other four claims set forth in her Complaint (Counts 2-5). Thus, the requisite jurisdictional amount in controversy was indisputably established on the face of Plaintiff's complaint at the time of removal. Therefore, Plaintiff's Motion to Remand to the Summit County Court of Common Pleas is DENIED.
III.
In its motion to dismiss, Hall Transfer asserts that this Court cannot exercise personal jurisdiction under either Ohio's long-arm statute, O.R.C. § 2307.382, or the limits imposed by the due process clause of the Constitution.
When ruling on a jurisdictional motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), without conducting an evidentiary hearing, the court must consider the pleadings in a light most favorable to the plaintiff. CompuServe Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). Plaintiff bears the burden of establishing the existence of personal jurisdiction over a non-resident defendant. International Tech. Consultants, Inc. v. Euroglass S.A., 107 F.3d 386, 391 (6th Cir. 1997). Plaintiff must make a prima facie showing of personal jurisdiction. Baltimore Ohio R. Co. v. Mobile Tank Car Serve, 673 F. Supp. 1436 (N.D. Ohio 1987). In order to establish personal jurisdiction over a nonresident defendant, plaintiff must show: (1) the defendant is amenable to suit under the forum state's long-arm statute; and (2) due process requirements of the Constitution are met. Id.
The Ohio long-arm statute, O.R.C. § 2307.382(A), broadly provides jurisdiction over any person or corporation:
(1) transacting any business in this state; (2) contracting to supply services or goods in this state; (3) causing tortious injury by an act or omission in this state; (4) causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;
. . . .
The Due Process Clause of the Fourteenth Amendment permits the exercise of personal jurisdiction over a nonresident defendant when (1) that defendant has purposefully availed himself of the benefits and protections of the forum state by establishing "minimum contacts" with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Tobin v. Astra Pharmaceutical Products, Inc., 993 F.2d 528, 542 (6th Cir. 1993).
The Sixth Circuit has identified three criteria that must all be met before a court can constitutionally assert jurisdiction over an out-of-state defendant pursuant to its long-arm statute:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.LAK, Inc., v. Deer Creek Enterprises, 885 F.2d 1293, 1299 (6th Cir. 1989).
The first inquiry, whether the nonresident defendant has purposely availed itself of the privilege of "acting in" or "causing a consequence" in Ohio is a baseline question. This requirement is satisfied if a defendant's "contacts create a `substantial connection' with the forum state such that defendant should reasonably anticipate being haled into court there." CompuServe, 89 F. Supp. at 830. Furthermore, as explained by the Supreme Court:
[W]here the defendant "deliberately" has engaged in significant activities within a state or has created "continuing obligations" between himself and residents of the forum, he manifestly has availed himself of the privilege of conducting business there, and because his activities are shielded by "the benefits and protections" of the forum's laws it is presumptively not unreasonable to require him to submit to the burdens of litigation in the forum as well.Burger King v. Rudzewicz, 471 U.S. 462, 475-76, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 (1985). "This `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous' or `attenuated' contacts." LAK, Inc., supra, at 1300, quoting Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985).
III.
In the instant action, Hall Transfer contends that Plaintiff has failed to satisfy the "purposeful availment" requirement so as to establish minimum contacts between Hall Transfer and the State of Ohio. It contends that it has no relation to the State of Ohio and has not conducted business within the state such that it has subjected itself to Ohio's personal jurisdiction.
In opposition, Plaintiff argues that Hall Transfer was transacting business in Ohio when it contracted to move goods to this state, and, that the entire purpose of the transaction was to move the goods to Ohio. In order to complete its contract with Plaintiff, defendant "had to expect to send its truck(s), equipment and employees to Ohio with the sole purpose of completing its contract for moving the plaintiff's household goods." Plaintiff's Motion in Opposition of Defendant Hall Transfer's Motion to Dismiss at 5. Further, Plaintiff argues that since the goods were not delivered (with the exception of 2 small boxes), the breach of contract took place in Ohio and caused Plaintiff injury in Ohio. Id .
Reviewing the facts most favorably to Plaintiff, the Court finds that there are no substantial contacts between Hall Transfer and this state such that Hall Transfer could have reasonably anticipated being haled into an Ohio court. Aside from this one time contract undertaking to deliver Plaintiff's household goods to Ohio, Hall Transfer has not transacted any business in this forum. The contract was signed and entered into in the State of Illinois. At the time of entering into the contract, Plaintiff resided in the State of Illinois. Hall Transfer is licensed and incorporated in the State of Illinois. It has no offices, nor lines of communication, nor is it licensed to do business in the State of Ohio. Hall Transfer does not have any agents or employees in the State of Ohio. Hall Transfer has not engaged in any conduct which would gain the business of, specifically, Ohio citizens. In this light, Plaintiff has not satisfied the first prong of the analysis and thus failed to state a prima facie case for personal jurisdiction. Without more, this showing hardly compels the conclusion that defendant had "minimum contacts" in Ohio, much less that it "purposefully availed' itself of the privileges and benefits of Ohio so that it may have a continuing relationship with this state. See LAK, Inc., supra.
Plaintiff argues that if given the opportunity for further discovery, they may be able to show a pattern of business activity in Ohio. Specifically, "[s]ince our allegation that Hall Transfer transports goods in Ohio remains uncontested, we ask this Court to presume it is true and therefore use that assumption in its evaluation of our arguments that follow." Plaintiff's Motion in Opposition at 2. However, the presence or absence of personal jurisdiction must be evaluated at the inception of the lawsuit. Whether or not the court has personal jurisdiction over defendant Hall Transfer cannot be deferred until some later time after the case has proceeded thru discovery.
Having failed to meet the "purposefully availed" requirement, it is not necessary to examine the second or third prong of analysis. However, a brief overview indicates that these additional requirements similarly fail to render personal jurisdiction over this defendant. The second prong in establishing jurisdiction over an out-of-state defendant requires that the cause of action must arise from the defendants' activities in Ohio. LAK, 885 F.2d at 1299. Plaintiff claims that the requisite "activity" is the moving of the goods to the Ohio residence and that her cause of action accrued here, in Ohio.
Plaintiff maintains that under the Carmack Amendment, the complaining party establishes prima facie case of carrier liability when they can show: a) delivery of the goods to the carrier in good condition (here, no dispute as to this); b) arrival in damaged condition; and c) an amount of damages. Missouri Pacific RR. Co. v. Elmore Stahl, 377 U.S. 134 (1964). She contends that the cause of action does not accrue until the goods arrive in damaged condition, and here, what remained of her goods was delivered in two small boxes to her new residence in Ohio, and therefore cause of action accrued in Ohio. Plaintif's Motion in Opposition of Defendant Hall Transfer's Motion to Dismiss at 5.
Despite Plaintiff's reliance on Missouri Pacific, the cause of action that brought about this lawsuit was the fire damage to her property which occurred in Indiana, not Ohio. On this basis, Hall Transfer maintains that jurisdiction is proper in Illinois or Indiana, not Ohio. The Court agrees. While Plaintiff may have stated a prima facie case under the Carmack Amendment, her pleadings fail to establish that a court in the State of Ohio has personal jurisdiction over defendant Hall Transfer.
Finally, the third criteria, that "the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of personal jurisdiction over the defendant reasonable," LAK, 885 F.2d at 1299, is not established because Plaintiff has shown no other acts by defendant, other than this one isolated incident, to make the substantial connection. While this Court may speculate as to whether Hall Transfer transacted business in this state at any other time, Plaintiff has failed to make the requisite showing of personal jurisdiction.
IV.
For the above-stated reasons, defendant Hall Transfer's Motion to Dismiss Plaintiff's claims for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) is hereby GRANTED. The Court having concluded that Ohio lacks personal jurisdiction over Hall Transfer, any cross-claims brought by NAVL against Hall Transfer are also without personal jurisdiction. Accordingly, defendant Hall Transfer's motion to dismiss defendant NAVL's cross-claims is GRANTED. Defendant Hall Transfer is hereby dismissed from this action.
V.
Having ruled that an Ohio court does not have personal jurisdiction over defendant Hall Transfer, Plaintiff is left to pursue her claims against NAVL alone. However, Hall Transfer is an indispensable party to this lawsuit. In pertinent part, Fed.R.Civ.P. 19(a) provides that a person shall be joined as a party in the action if:
(1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest. If the person has not been so joined, the court shall order that the person be made a party. If the person should join as a plaintiff but refuses to do so, the person may be made a defendant, or, in a proper case, an involuntary plaintiff. If the joined party objects to venue and joinder of that party would render the venue of the action improper, that party shall be dismissed from the action.
Fed.R.Civ.P. 19(b) provides that:
If a person as described in subdivision (a)(1)-(2) hereof cannot be made a party, the court shall determine whether in equity and good conscience the action should proceed among the parties before it, or should be dismissed, the absent person being thus regarded as indispensable. The factors to be considered by the court include: first, to what extent judgment rendered in the person's absence might be prejudicial to the person or those already parties; second, the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; third, whether a judgment rendered in the person's absence will be adequate; fourth, whether the plaintiff will have an adequate remedy if the action is dismissed for nonjoinder.
Applying the above factors, the Court must consider to what extent a judgment rendered in Hall Transfer's absence might be prejudicial to "those already parties." Here, Plaintiff would be prejudiced because her claims are based primarily upon the actions or inactions of defendant Hall Transfer, and in Hall Transfer's absence, the ultimate resolution of those claims would surely be impeded. Furthermore, as the only remaining defendant, NAVL would be precluded from pursuing its cross-claims and protecting its interests. It would be unjust to make either party go to trial without the presence of Hall Transfer as a defendant.
Second, the prejudice cannot be lessened or avoided by protective provisions in the judgment, by the shaping of relief, or other measures. Both Plaintiff and NAVL would be required to pursue their claims against Hall Transfer in another court, in a separate lawsuit. Third, a judgment rendered in Hall Transfer's absence would not be adequate; and fourth, the Plaintiff will have an adequate remedy if the action is dismissed because she can pursue her claims in their entirety in an Illinois court where Hall Transfer does business and the contract was formed. Dismissal under Rule 19(b) is without prejudice.
The Court finds that Hall Transfer is a "person needed for just adjudication," described in Fed.R.Civ.P. 19(a)(1) and (2), but who cannot be joined because the Court lacks personal jurisdiction. Thus, under Fed.R.Civ.P. 19(b), the action cannot in equity and good conscience proceed without Hall Transfer, and therefore, the Court dismisses the action without prejudice. Plaintiff's recourse lies in the State of Illinois.
IT IS SO ORDERED.
JUDGMENT ENTRY
For the reasons set forth in the Memorandum of Opinion filed contemporaneously with this Judgment Entry, and pursuant to Rule 58 of the Federal Rules of Civil Procedure, IT IS HEREBY ORDERED, ADJUDGED and DECREED that defendants Hall Transfer's Motion to Dismiss pursuant to Rule 12(b)(2) is GRANTED (Document No. 6) and the complaint is hereby dismissed as to defendant Hall Transfer.
It is FURTHER ORDERED, ADJUDGED and DECREED that the remaining action is dismissed without prejudice pursuant to Fed.R.Civ.P. 19(b). Accordingly, the above captioned action is hereby dismissed in its entirety.
Dan Aaron Polster United States District Judge