Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alsd-1_07-cv-00175/USCOURTS-alsd-1_07-cv-00175-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Contract Dispute

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IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

PROFESSIONAL LOCATE and )

RECOVERY, INC., )

 )

Plaintiff, )

 )

v. ) CIVIL ACTION 07-0175-WS-C

 )

PRIME, INC., et al., )

 )

Defendants. )

ORDER

This matter comes before the Court on Plaintiff Professional Locate & Recovery, Inc.’s

Statement of Appeal of Magistrate Judge’s Order (doc. 37) and plaintiff’s Motion for Leave to

Amend Complaint (doc. 32). Both issues have been briefed and are ripe for disposition at this

time.

I. Background.

Plaintiff Professional Locate & Recovery, Inc. (“Professional”) commenced this action

against named defendants Prime, Inc., GAB Robins North America, Inc., and Elliott Law

Offices, P.A., seeking relief for Prime’s alleged failure to defend or indemnify Professional

under a liability insurance policy in connection with a lawsuit filed against Professional styled

Robert Jackson, et al. v. Samuel Riase, Jr., et al., and pending in the Circuit Court of Mobile

County, Alabama. In its Complaint, Professional seeks relief on theories of breach of contract,

bad faith failure to investigate and/or pay insurance proceeds due, negligence, wantonness,

conspiracy, and liability under Alabama’s Unauthorized Insurers and Surplus Lines Law.

II. Appeal of Magistrate Judge Order.

A. Pertinent Facts.

Following removal of this action to federal court, Magistrate Judge Cassady entered a

Preliminary Scheduling Order (doc. 4) providing that, except as otherwise ordered, no formal

discovery could be conducted prior to the Rule 26(f) meeting of the parties except in certain

enumerated circumstances, such as “[a]ctions in which discovery is needed to resolve a

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preliminary motion such as an objection to personal jurisdiction or venue.” (Doc. 4, ¶ C.1.b.)

On March 21, 2007, defendant Elliott filed a Motion to Dismiss (doc. 9) for lack of

personal jurisdiction. In apparent anticipation of this personal jurisdiction challenge,

Professional had served certain discovery requests on Elliott several days earlier. In due course,

Elliott responded to those discovery requests by providing certain information and documents;

however, Elliott objected to Interrogatories #4 through #7, and Document Requests #1 through

#3 and #5 through #7 on the grounds that such requests “are in violation of the court’s

preliminary scheduling order in that they seek discovery of information that is unrelated to the

issue of personal jurisdiction.” (See doc. 18, at 2-5.) These discovery requests called for the

following information and documents: (a) identities of persons with knowledge of facts relating

to Elliott’s engagement to provide services in the Jackson litigation; (b) identities of persons

with knowledge of facts relating to Elliott’s engagement to assist Prime in coverage issues

pertaining to the Jackson matter; (c) a complete recitation of all acts taken by Elliott to determine

whether Professional was entitled to a defense in the Jackson matter; (d) enumeration of all

communications between Elliott and defendants GAB and Prime, or a person named Jeff Hale,

related to the Jackson coverage issues; (e) all documents sent to or received from ALEA North

America Insurance Company, Prime, GAB, or Hale that relate to Professional; (f) all documents

that relate to coverage or adjustment of the Jackson matter; and (g) all insurance policies that

relate to Professional.

Professional then filed a Motion to Compel Discovery Responses (doc. 18), asserting that

Elliott’s discovery responses “were inadequate and that many of the interrogatories and requests

which were not answered were directed to jurisdictional issues raised by Plaintiff’s conspiracy

count.” (Doc. 18, at 2.) Professional further maintained that the discovery requests in question

“all are calculated to lead to evidence of the contacts with Alabama of other members of the

conspiracy and specifically those of Mr. Elliott.” (Id. at 5.) On April 24, 2007, Magistrate Judge

Cassady entered an Order (doc. 30) denying the Motion to Compel for the stated reasons that the

discovery requests at issue “are clearly overbroad and not limited in scope to personaljurisdiction issues” and that “plaintiff has failed to allege facts that would establish a colorable

claim of conspiracy,” such that the discovery in question could not be justified on the basis of a

conspiracy theory of jurisdiction. Professional now appeals from Judge Cassady’s ruling.

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1 Even in making this argument, however, Professional concedes that its discovery

requests “may suffer from a desire to be comprehensive.” (Plaintiff’s Brief (doc. 38), at 9.) 

Although Professional seeks to circumscribe this admission by stating that “close reading” of its

requests establishes that they seek relevant facts to the jurisdictional question, on their face these

requests appear to extend far beyond any discovery reasonably necessary to resolution of the

personal jurisdiction issue. Professional also goes request-by-request in an effort to show that

each of them “seek[s] documents which will relate to the jurisdictional issue raised by

Defendant.” (Id. at 9.) That may be true, but each of those requests unquestionably seeks

information and/or documents greatly transcending that jurisdictional question as well. Plaintiff

is entitled to craft jurisdictional discovery requests in a manner that is comprehensive, but it is

not entitled to do so in a manner that is overbroad. Judge Cassady correctly determined that

Professional’s requests here fall into the latter category.

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B. Analysis.

The instant appeal is governed by Rule 72(a), Fed.R.Civ.P., which provides that, when

timely objections are made to a magistrate judge’s order on a nondispositive matter, “[t]he

district judge to whom the case is assigned shall consider such objections and shall modify or set

aside any portion of the magistrate judge’s order found to be clearly erroneous or contrary to

law.” Id. (emphasis added); see also 28 U.S.C. § 636(b)(1)(A) (reciting same standard); In re

Commissioner’s Subpoenas, 325 F.3d 1287, 1292 n.2 (11th Cir. 2003) (observing that district

court properly applied “clearly erroneous or contrary to law” standard of review in reconsidering

magistrate judge’s determination of pretrial matter); Merritt v. International Broth. of

Boilermakers, 649 F.2d 1013, 1017 (5th Cir. 1981) (“Pretrial orders of a magistrate under

s 636(b)(1)(A) are reviewable under the ‘clearly erroneous and contrary to law’ standard; they

are not subject to a de novo determination ....”). Accordingly, the “clearly erroneous or contrary

to law” standard of review is operative here.

On appeal, Professional maintains that Judge Cassady’s Order was clearly erroneous and

contrary to law because the disputed discovery requests sought facts relevant to the personal

jurisdiction issues raised by Elliott. In particular, Professional maintains that the challenged

discovery requests all call for information directly relevant to this Court’s personal jurisdiction

over Elliott under the conspiracy theory of jurisdiction.1

The undersigned recently summarized Alabama law on the conspiracy theory of personal

jurisdiction as follows:

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“Alabama courts have recognized and adopted the conspiracy theory of personal

jurisdiction. See Ex parte United Ins. Companies, Inc., 936 So.2d 1049 (Ala.

2006); Ex parte McInnis, 820 So.2d 795, 806-07 (Ala. 2001). However, it is well

established in Alabama that a plaintiff cannot establish personal jurisdiction under

a conspiracy theory unless the plaintiff "plead[s] with particularity the conspiracy

as well as the overt acts within the forum taken in furtherance of the conspiracy."

McInnis, 820 So.2d at 806-07 (citation omitted).”

Matthews v. Brookstone Stores, Inc., 469 F. Supp.2d 1056, 1066 (S.D. Ala. 2007) (footnote

omitted).

As Matthews makes clear, the conspiracy theory of personal jurisdiction comes into play

under Alabama law only when the complaint includes particularized allegations of both the

conspiracy and the overt acts within the forum taken in furtherance of same. Magistrate Judge

Cassady correctly noted that Professional’s Complaint is wholly lacking in this regard, with the

sum total of its conspiracy allegations consisting of a perfunctory, conclusory statement that

“Defendants GAB and Elliott and D, E and F conspired and acted in concert with Prime and A,

B, C or acted on their own behalf negligently and wantonly in the handling of the insurance

claim of Plaintiff.” (Complaint, ¶ 26.) This most superficial of conspiracy allegations is

categorically inadequate to trigger the conspiracy theory of personal jurisdiction over Elliott. 

The Complaint lacking any of the detail needed to establish personal jurisdiction on a conspiracy

theory, Magistrate Judge Cassady quite properly found that Professional cannot conduct freeranging, expansive merits discovery from Elliott at this juncture under the guise of such a

conspiracy theory. See Ex parte Gregory, 947 So.2d 385, 390 (Ala. 2006) (discovery to which

plaintiff is entitled “is only discovery that is relevant to the issue of personal jurisdiction, and the

plaintiff is entitled to that discovery only when the plaintiff has offered the court more than

conjecture and surmise in support of the jurisdictional theory”); Richards v. Duke University,

480 F. Supp.2d 222, 231 (D.D.C. 2007) (denying jurisdictional discovery on conspiracy theory

of personal jurisdiction, where plaintiff had not alleged underlying conspiracy with enough

specificity, allegations were conclusory, and request for such discovery appeared to be “the sort

of fishing expedition that the rules of jurisdictional discovery are designed to prevent”).

In apparent recognition of these patent deficiencies in its Complaint, Professional argues

in its memorandum in support of appeal that it filed a Motion for Leave to Amend Complaint

(doc. 32), and that the proposed amendment remedies these defects by “specifically stat[ing] the

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nature and basis of the conspiracy claims and specifically plead[ing] overt acts taken by the

Defendant Elliott directed toward the forum in furtherance of the conspiracy.” (Brief (doc. 38),

at 5.) What plaintiff overlooks is that the Motion for Leave to Amend Complaint was filed on

April 27, 2007, three days after Magistrate Judge Cassady’s Order from which appeal is taken. 

A Magistrate Judge’s Order cannot be clearly erroneous or contrary to law for failing to take into

account a pleading that was never filed until several days after entry of that order. Accordingly,

the April 27 Motion for Leave to Amend Complaint lacks significance for purposes of the appeal

of the April 24 decision denying plaintiff’s motion to compel.

For all of these reasons, the Court cannot find fault with the Magistrate Judge’s Order on

a de novo basis, much less conclude that it is clearly erroneous or contrary to law, as would be

necessary for such a ruling to be overturned on appeal pursuant to Rule 72(a). This is not a close

question. The Appeal (doc. 37) of the Magistrate Judge’s Order dated April 24, 2007 is

therefore denied. Plaintiff’s objections are overruled and Magistrate Judge Cassady’s Order

denying the motion to compel is affirmed.

III. Motion to Amend Complaint.

Next, the Court turns its attention to plaintiff’s Motion for Leave to Amend Complaint

(doc. 32). On April 30, 2007, the undersigned entered an Order (doc. 33) requiring any party

opposing the Motion to file a response on or before a date certain. The only defendant to step

forward was Elliott, which timely filed its Objection (doc. 40) on the grounds that the proposed

amendment is futile. But Elliott has no right to object to the Motion. Under Rule 15(a), “[a]

party may amend the party’s pleading once as a matter of course at any time before a responsive

pleading is served.” Id. Elliott has never filed a responsive pleading in this action, but has

simply filed a motion to dismiss for lack of personal jurisdiction. See Brewer-Giorgio v.

Producers Video, Inc., 216 F.3d 1281, 1284 (11th Cir. 2000) (for purposes of Rule 15(a), “the

term ‘responsive pleading’ does not include such filings as a motion to dismiss”). To be sure,

defendants Prime and GAB have filed responsive pleadings. But the Eleventh Circuit recently

explained that “[i]f the case has more than one defendant, and not all have filed responsive

pleadings, the plaintiff may amend the complaint as a matter of course with regard to those

defendants that have yet to answer.” Williams v. Board of Regents of University System of

Georgia, 477 F.3d 1282, 1291 (11th Cir. 2007). Clearly, then, Professional has the right under

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2 The practical effect of this ruling is that Professional has been given leave to

amend its Complaint in a manner that directly bears on the personal jurisdiction argument posed

by defendant Elliott’s Motion to Dismiss for Lack of Personal Jurisdiction (doc. 9). That Motion

to Dismiss is now moot because it relates to a superseded Complaint.

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Rule 15(a) to amend its complaint as a matter of course with regard to Elliott, and Elliott

therefore cannot be heard to oppose it. While defendants Prime and GAB could be heard in

opposition to the Motion for Leave to Amend, neither of them has objected, despite being given

a full and fair opportunity to do so.

In light of Professional’s right to amend the Complaint as a matter of course with respect

to Elliott, the failure of defendants Prime and GAB to object within the time frame specified by

the April 30 Order, and the mandate of Rule 15(a), Fed.R.Civ.P., that leave to amend shall be

freely given when justice so requires, the Court grants the Motion for Leave to Amend

Complaint (doc. 32).2

IV. Conclusion.

In sum, it is hereby ordered as follows:

1. Plaintiff’s Appeal (doc. 37) of the Magistrate Judge’s Order dated April 24, 2007

is denied. Plaintiff’s objections are overruled and Magistrate Judge Cassady’s

Order denying the motion to compel is affirmed.

2. Professional’s Motion for Leave to Amend Complaint (doc. 32) is granted. 

Pursuant to Section II.A.6. of this District Court’s Administrative Procedures for

Filing, Signing and Verifying Documents by Electronic Means, plaintiff is

ordered, on or before June 11, 2007, to file its Amended Complaint in the form

of the proposed pleading appended to its Motion as Exhibit A.

3. Defendant Elliott’s Motion to Dismiss for Lack of Personal Jurisdiction (doc. 9)

is now moot because it relates to a superseded Complaint; provided, however,

that nothing herein forbids Elliott from renewing such motion, if appropriate,

following the filing of plaintiff’s Amended Complaint.

DONE and ORDERED this 4th day of June, 2007.

s/ WILLIAM H. STEELE 

UNITED STATES DISTRICT JUDGE

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