Source: http://cabfinancial.com/articles/category/cases-from-bits/c198-volume-18-edition-1-cases/
Timestamp: 2019-04-21 16:07:00+00:00

Document:
JM-Nipponkoa Insurance Co., Ltd., et al, Plaintiffs, vs. Dove Transportation, LLC, et al, Defendants.
COUNSEL: [*1] For JFM – Nipponkoa Insurance Company, LTD (U.S. Branch), MAKINO, Inc., Plaintiffs: Douglas J May, Cincinnati, OH.
For Dove Transportation, Inc., Defendant: Chad Michael Sizemore, LEAD ATTORNEY, Montgomery Rennie & Jonson, Cincinnati, OH.
JUDGES: Sandra S. Beckwith, Senior United States District Judge.
Plaintiffs, JM-Nipponkoa Insurance Company and its insured, Makino, Inc., filed this action against Dove Transportation, LLC, and Geneva Logistics, LLC, alleging they were jointly and/or severally liable under the Carmack Amendment, 49 U.S.C. §14706(a)(1). (Doc. 1) Plaintiffs sought to recover damages from Defendants, after a large machine that Dove transported from Virginia to California, pursuant to a bill of lading issued by Makino, was rejected by Makino’s customer. Dove filed a motion to dismiss, arguing that this Court lacked personal jurisdiction over Dove. (Doc. 12) Plaintiffs asked for additional time to respond to Dove’s motion, contending they needed to conduct discovery to counter Dove’s jurisdictional arguments. Dove objected, and this Court held a conference on August 25, 2014 to discuss the dispute. At the conference, counsel agreed to proceed with the deposition of Thomas Canada, Dove’s Managing [*2] Member, limited to the issue of jurisdiction. Mr. Canada was deposed on September 9.
The motion to dismiss and to transfer venue were fully briefed when Plaintiffs filed a second amended complaint on December 4 (Doc. 28). Dove then moved to strike that pleading, arguing that it was improperly filed. (Doc. 29) [*3] All of the motions are fully briefed and ready for decision.
The Second Amended Complaint omitted the three state law claims that Plaintiffs first asserted in their First Amended Complaint, leaving only their original claim under the Carmack Amendment. Dove challenged these state law claims under Rule 12(b)(6) in its motion to dismiss (see Doc. 19 at p. 16). The jurisdictional allegations against Dove contained in paragraph 8 of the First and Second Amended Complaints are identical.
In its motion to strike the Second Amended Complaint, Dove quite rightly contends that Rule 15 required Plaintiffs to seek leave of Court to file their Second Amended Complaint, and that Dove is prejudiced because it must file yet another motion to dismiss to reiterate its jurisdictional arguments. Plaintiffs respond that Dove will not be prejudiced because they are simply dropping their state law claims.
Given the age of this case, and the fact that the Second Amended Complaint is identical to the First Amended Complaint with respect to the jurisdictional allegations and the Carmack claim, the Court will permit the Second Amended Complaint to remain on the docket despite the fact that Plaintiffs did not properly seek leave [*4] of Court to file it. Dove’s arguments concerning the now-abandoned state law claims that were asserted in the First Amended Complaint are moot, and those claims (Counts 2-4 of the First Amended Complaint) are dismissed with prejudice. Dove need not file another motion to dismiss, and the Court will address Dove’s jurisdictional arguments which are fully briefed regarding the First Amended Complaint.
Plaintiffs have the burden of establishing that personal jurisdiction is properly exercised over a defendant. The Court may rule on a jurisdictional motion to dismiss without an evidentiary hearing. If so, the Court must consider the pleadings and any affidavits filed in the light most favorable to Plaintiffs. Plaintiffs need only make a prima facie showing of jurisdiction, which they can do by establishing “with reasonable particularity sufficient contacts between [Dove] and the forum state to support jurisdiction.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002).
Pursuant to Fed. R. Civ. Proc. 4(k)(1), in order to exercise personal jurisdiction over a non-resident defendant, Plaintiffs must show that jurisdiction is proper under applicable state law. In Ohio, a non-resident may be subject to specific jurisdiction in the state if [*5] a basis for jurisdiction contained in Ohio’s long-arm statute, Ohio Rev. Code 2307.382, applies. That statute does not extend to the limits of the due process clause, and so Plaintiffs must also establish that exercising personal jurisdiction would not offend Dove’s Due Process rights. Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 679-680 (6th Cir. 2012).
Plaintiffs argue that Dove has “continuous, systematic and substantial” contacts with Ohio, and that this Court has personal jurisdiction over Dove under the Carmack Amendment. Plaintiffs therefore suggest that Dove’s arguments about specific jurisdiction under Ohio law are irrelevant. Plaintiffs cite 49 U.S.C. §14706(d)(1), which states that a civil action “may be brought against a delivering carrier in a district court of the United States or in a State court. Trial, if the action is brought in a district court of the United States[,] is in a judicial district, and if in a State court, is in a State through which the defendant carrier operates.” Dove concedes it was the “delivering carrier” of the machinery at issue, and Plaintiffs contend that is all they need show for the proper exercise of jurisdiction under the statute.
… venue provisions do not trump the question of personal jurisdiction… . Although the [Carmack] Amendment allows actions to be brought in two potentially different venues, the statute’s specific venue provisions are not a substitute for personal jurisdiction – the court must still ensure at the outset that it has the power to compel the defendant to appear in its court, and that is ultimately a question of Due Process.
Id. at *4 and n.1, and citing Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002), where the Sixth Circuit noted that when federal question jurisdiction is asserted, “personal jurisdiction over a defendant exists if the defendant is amenable to service of process under the [forum] state’s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant due process.” (internal quotations [*7] omitted) See also Tokio Marine & Nichido Fire Ins. Co., Ltd. v. Flash Expedited Services, 2012 U.S. Dist. LEXIS 163399 (D.N.J., Nov. 15, 2012), construing the Carmack statute as a venue provision, not one conferring personal jurisdiction in plaintiff’s chosen venue, and transferring the case to Ohio where the cargo loss at issue actually occurred.
(7) Causing tortious injury to any person by a criminal act, any element of which takes place in this state, which he commits or in the commission of which he is guilty of complicity.
(9) Contracting to insure any person, property, or risk located within this state at the time of contracting.
Dove argues that the evidence in the record conclusively establishes that it does not “transact business” in Ohio under subsection (1) of the statute, and that subsection (4) is therefore also inapplicable. According to Mr. Canada’s affidavit and deposition testimony, Dove has no employees, bank accounts, real estate, or terminal locations in Ohio. Dove does not engage in direct marketing of its services, [*11] and does not advertise its business in Ohio. While the phrase “transacting any business” has been interpreted broadly by the Ohio courts, the long-arm statute also requires that the damages at issue must arise from the defendant’s contacts with Ohio, that there be a proximate cause relationship between the two. See Section 2307.382(C); Brunner v. Hampson, 441 F.3d 457, 463 (6th Cir. 2006). Dove contends there is no causal nexus between the alleged damage to the machinery at issue and Dove’s contacts with Ohio.
The Court agrees. Dove’s assorted and attenuated contacts with Ohio are not causally related to the damages that Plaintiffs allegedly sustained. And those contacts are insufficient to show that Dove “transacts business” in Ohio, or that it regularly engages in a course of conduct in Ohio or derives substantial revenue in this state.
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 [*12] 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.
Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir. 1968). The “purposeful availment” prong, which is the “constitutional touchstone” of personal jurisdiction, protects a non-resident defendant from being subjected to personal jurisdiction based on random or attenuated contacts with the forum or its residents. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1980)(internal citation omitted). The existence of a contract involving an Ohio resident is not enough to show that a non-resident purposefully availed itself of the privilege of acting in Ohio. Calphalon Corp. v. Rowlette, 228 F.3d 718, 722 (6th Cir. 2000).
Plaintiffs’ damages did not arise from Dove’s actions in Ohio. There is no evidence that Dove had any direct dealings or negotiations with Makino, much less any contacts with Makino in Ohio. The bill of lading attached to Plaintiffs’ complaint states that the bill was issued to Trinity Logistics, not to Dove. The machinery was to be shipped from Virginia to California. Trinity did not directly deal with Dove but contacted Geneva, who in turn contacted Dove. Plaintiffs’ amended complaint alleged that [*13] Dove’s driver picked up the cargo in Virginia and drove it to Alabama (Dove’s headquarters) and then quit his job, so there is no way to “verify” that the driver did not come through Ohio on that trip. (See Doc. 28, ¶8(f)) But as Dove notes, common sense would dictate that the driver went directly from Virginia to Alabama, which would not involve traveling in or through Ohio. To assume otherwise would be to engage in sheer speculation. Moreover, simple but-for causation (the machinery was damaged while Dove transported it) is not enough to satisfy the due process relatedness requirement. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985).
The third prong of the due process analysis requires a showing that Dove has a substantial connection to Ohio, such that asserting jurisdiction would be reasonable. The “reasonableness” analysis involves three factors: the burden on the defendant, the interests of the forum state, and the plaintiff’s interest in obtaining relief. Beydoun v. Wataniya Restaurants Holdings, et al, 768 F.3d 499, 508 (6th Cir. 2014), quoting Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987). Dove has consistently argued that it is extremely burdensome on the company to defend this case in Ohio. It is a small company with seven trucks, about 12 employees, one dispatch terminal located in Lincoln, Alabama, and is uninsured for this claim. Plaintiffs [*14] undoubtedly have an interest in obtaining relief, but Ohio’s interest in this dispute is rather slight. Most, if not all, of the salient events took place elsewhere. Makino is headquartered in Ohio but is described on its website as a large machining and engineering company with technical centers located in many states (including Ohio and Alabama).1 Nipponkoa (which paid Makino the bulk of its loss and is subrogated to Makino) is organized under Japanese law and its principal place of business is in Japan. Dove notes that in Walden v. Fiore, 134 S.Ct. 1115, 1122, 188 L. Ed. 2d 12 (2014), the Supreme Court recently reaffirmed the principle that a substantial connection must “arise out of contacts that the ‘defendant himself’ creates with the forum state.” Dove created no contacts with Ohio: Makino issued a bill of lading to Trinity, and Trinity arranged for the cargo shipment. The other contacts Plaintiffs cite (Dove’s insurer is located in Ohio, or the bill of lading’s requirement that a copy be faxed to Makino in Ohio) are the sort of attenuated and fortuitous contacts that are insufficient to satisfy due process concerns and establish personal jurisdiction.
1 See www.makino.com, last accessed January 7, 2015.
For all of these reasons, the Court [*15] concludes that Dove is not subject to personal jurisdiction in this Court in this case.
In responding to Dove’s motion to dismiss, Plaintiffs alternatively seek an order transferring venue of this case to the Northern District of Alabama, the district where Dove’s terminal and offices are located. Plaintiffs cite 28 U.S.C. §§1406 and 1631, which permit a court to transfer venue of an action to another district. Section 1631 particularly states that if the court finds that it lacks jurisdiction over the case, it may transfer the action in the interests of justice. Plaintiffs argue that they are facing the expiration of a statute of limitations on their claim against Dove, and that dismissing the action rather than transferring it would risk the loss of their claim.
Dove opposes Plaintiffs’ motion. (Doc. 24) Dove notes that a dismissal for lack of personal jurisdiction is without prejudice, leaving Plaintiffs free to re-file the action in an appropriate jurisdiction if they wish. Dove concedes that the Court has discretion to transfer the case in the interests of justice, but argues that Plaintiffs have not identified what those interests are and why a transfer to Alabama might serve them. Dove notes that [*16] many fact witnesses are likely not in Alabama, but are elsewhere. Dove also notes that Trinity is in Minnesota, and it is unclear if Trinity would be subject to jurisdiction in Alabama. Dove contends that it is Plaintiffs’ obligation to select an appropriate forum for its claims, and that this Court should not attempt to select a “more appropriate” court in the absence of a more complete factual record.
Section 1631 authorizes the Court to transfer a case when it concludes that jurisdiction in Plaintiffs’ originally chosen forum is lacking. The statute simply requires that the transferee court be one in which the action “could have been brought at the time it was filed …”. The Court has little trouble concluding that Plaintiffs could have brought this action against Dove and Geneva in the Northern District of Alabama. Myriad cases have concluded that the transfer of a case is proper if personal jurisdiction is found lacking. See, e.g., Winona Foods v. Kennedy, supra, transferring a Carmack Amendment claim; Donaldson Technology Group LLC v. Landstar Ranger, 347 F.Supp.2d 525 (S.D. Ohio 2004)(same); W. Inv. Total Return Fund v. Bremner, 762 F.Supp.2d 339 (D. Mass. 2011)(transferring venue to Illinois after finding lack of personal jurisdiction over the defendants). Whether the transferee court might ultimately conclude that a different venue is proper is not before [*17] this Court at this time.
The Court therefore grants Plaintiffs’ alternative motion to transfer venue of this case to the Northern District of Alabama.
Therefore, to avoid any preclusive effect of a default judgment against Geneva, the Court will deny without prejudice Plaintiffs’ motion for a default judgment, which may be renewed at an appropriate time.
Dove’s motion to strike the Second Amended Complaint (Doc. 29) is denied for the reasons stated above. Counts 2, 3 and 4 as alleged in Plaintiffs’ First Amended Complaint are dismissed with prejudice. Dove’s motion to dismiss Plaintiffs’ complaint for lack of personal jurisdiction over Dove (Doc. 19) is granted. Plaintiff’s motion to conduct additional jurisdictional discovery (Doc. 20) is denied as moot.
Plaintiff’s alternative motion to transfer venue of this case to the Northern District of Alabama (Doc. 22) is granted. Dove’s motion for leave to file a sur-reply on the venue issue (Doc. 27) is granted.
LAUREN HODGE and DELORES MCDANIEL, Plaintiffs, v. STAN KOCH & SONS, TRUCKING, INC. and NICK BRESHEARS, Defendants.
COUNSEL: [*1] For Lauren Hodge, Delores McDaniel, Plaintiffs: Timothy R. Haney, LEAD ATTORNEY, Sherman, TX; Jonathan C. Kieschnick, PRO HAC VICE, The Crim Law Firm, PC, Houston, TX.
For Stan Koch & Sons Trucking, Inc., Nick Breshears, Defendants: Dan S. Folluo, Lindsay J. McDowell, Rhodes Hieronymus Jones Tucker & Gable, Tulsa, OK.
JUDGES: KIMBERLY E. WEST, UNITED STATES MAGISTRATE JUDGE.
This matter comes before the Court on Defendant Stan Koch & Sons Trucking, Inc.’s Motion for Summary Judgment (Docket Entry #37). On February 7, 2011, Plaintiffs were involved in a traffic accident with Defendant Breshears in a tractor trailer owned and operated by Defendant Stan Koch & Sons Trucking, Inc. (“Stan Koch”). In their Petition removed to this Court on February 14, 2013, Plaintiffs allege the accident was as a result of Defendant Breshears’ negligence. Plaintiffs also brought claims for negligence and negligence per se against Defendant Stan Koch for (1) failing to properly screen, test, and qualify drivers, including Defendant Breshears; (2) negligent hiring, employing, and retention of unqualified drivers; (3) filing to properly train and supervise drivers; and (4) failing to properly [*2] implement and enforce policies, procedures, and protocols to properly screen, test, train, qualify, supervise, and retain drivers to operate motor vehicles. Plaintiffs expressly state in their Petition that their claims against Defendant Stan Koch are based upon vicarious liability for Defendant Breshears’ actions.
In its answer to the Petition, Defendant Stan Koch admitted that Defendant Breshears was acting within the course and scope of his employment at the time of the accident. In so doing, Defendant Stan Koch stipulated to the potential respondeat superior liability for Defendant Breshears’ conduct while in its employ.
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Universal Money Centers v. A.T. & T., 22 F.3d 1527, 1529 (10th Cir.), cert. denied, 513 U.S. 1052, 115 S. Ct. 655, 130 L. Ed. 2d 558 (1994). The moving party bears the initial burden of showing that there is an absence of any issues of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2553-54, 91 L.Ed.2d 265 (1986). A genuine issue of material fact exists when “there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” [*3] Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2510-11, 91 L.Ed 2d 202 (1986). In determining whether a genuine issue of a material fact exists, the evidence is to be taken in the light most favorable to the nonmoving party. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 1608, 26 L.Ed.2d 142 (1970). Once the moving party has met its burden, the opposing party must come forward with specific evidence, not mere allegations or denials of the pleadings, which demonstrates that there is a genuine issue for trial. Applied Genetics v. Fist Affiliated Securities, 912 F.2d 1238, 1241 (10th Cir. 1990); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir. 1983).
With regard to the material facts set forth above, this Court finds no significant dispute. In their response to the summary judgment request, Plaintiffs “reluctantly” concedes that Oklahoma law does not permit additional negligence claims when vicarious liability is admitted by the employer.
By virtue of the pending Motion, Defendant Stan Koch contends the Oklahoma Supreme Court has not permitted claims for negligent hiring, supervision, and retention to proceed to trial in the circumstance where an employer has admitted vicarious liability. In support of this proposition, Defendant cites to the seminal case of Jordan v. Cates, 1997 OK 9, 935 P.2d 289 (Okla. 1997). In Jordan, an individual who went to a convenience store to pay off a returned check. Id. at 291. During the course of an alleged altercation with an employee of the store, the individual contended the employee assaulted [*4] and battered him. Id. He brought suit against the convenience store, as the employer of the offending employee, under the theory of respondeat superior liability for the negligent hiring and retention of the employee. Id.
Recognizing the required elements to confer respondeat superior liability, the employer stipulated that the altercation occurred while its employee was acting within the course and scope of his employment and that it would be liable for any damages awarded by a jury. Id. at 292. As a result, the trial court granted the employer summary judgment, dismissing the claims of negligent hiring and retention, in light of the employer’s admission that it’s employee was acting within the scope of his employment during the altercation. Id.
that the theory of negligent hiring and retention is available in a nonvicarious liability case or in a case where vicarious liability has not been established. In the case at bar, vicarious liability has been established through stipulation.
Our holding today is limited to those situations where the employer stipulates that liability, if any, would be under the [*5] respondeat superior doctrine, thereby making any other theory for imposing liability on the employer unnecessary and superfluous. Because vicarious liability can include liability for punitive damages, the theory of negligent hiring and retention imposes no further liability on employer.
Id. at 293 (emphasis in original).
The same court recognized this legal limitation in the later case of N.H., a minor v. Presbyterian Church (U.S.A.), 1999 OK 88, 998 P.2d 592, 600 (Okla. 1999)(“In Oklahoma, the theory of recovery [employer negligence] is available if vicarious liability is not established.”) The defendant church did not admit vicarious liability in that case, however, causing the court to also consider whether the defendant church was put on sufficient notice of the propensity for its employee to molest so as to confer liability upon the church. The law appears clearly established in Oklahoma that once an employer, such as Defendant Stan Koch in this case, has admitted vicarious liability for its employee’s actions, no further theory of negligence associated with the particular incident may be maintained against the employer.
After conceding the holding in Jordan, Plaintiffs contend in a section of their responsive brief entitled “Plaintiffs’ Public Policy Point” [*6] that Defendant Stan Koch maintains a corporate policy which allegedly demonstrates a “willful and deliberate refusal … to review the preventability of collisions that could minimize the risk of repeat occurrences.” This argument does not alter the Jordan rationale. Such claims remain barred by the admission of vicarious liability by Defendant Stan Koch.
IT IS THEREFORE ORDERED that Defendant Stan Koch & Sons Trucking, Inc.’s Motion for Summary Judgment (Docket Entry #37) is hereby GRANTED. As a result, Plaintiffs’ claims for negligence and negligence per se associated with the hiring, training, supervision, retention, and policies and procedures established by Defendant Stan Koch are hereby DISMISSED.
IT IS SO ORDERED this 20th day of January, 2015.

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