Court Opinion

ID: 2735152
Source: CourtListenerOpinion
Date Created: 2014-09-20 01:06:13.636522+00
Date Added: 2024-06-11T10:25:32.476906
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
                                    Pursuant to Sixth Circuit I.O.P. 32.1(b)
                                             File Name: 14a0243p.06

                        UNITED STATES COURT OF APPEALS
                                         FOR THE SIXTH CIRCUIT
                                           _________________

 NASSER M. BEYDOUN and MAYSA BEYDOUN,                              ┐
 individually and as parents and general guardians of              │
 AB, JB, and MJ.B, minor children,                                 │
                                                                   │         No. 13-2437
                                Plaintiffs-Appellants,
                                                                   │
                                                                    >
                                                      │
            v.
                                                      │
                                                      │
 WATANIYA RESTAURANTS HOLDING, Q.S.C.; QATAR │
 NATIONAL    HOTELS        COMPANY;        GLOBAL │
 INVESTMENT HOUSE; HAMAD BIN ABDULLAH AL │
 ATTIYAH; ABDUL AZZIZ BIN HAMAD AL ATTIYA; │
 ABDUL AZZIZ BIN MOHAMED AL ATTIYA; KHALID │
 BIN MOHAMMED AL ATTIYAH,                             │
                            Defendants-Appellees. │
                                                      │
                                                      ┘
                       Appeal from the United States District Court
                      for the Eastern District of Michigan at Detroit.
                No. 2:12-cv-10461—Bernard A. Friedman, District Judge.
                                           Argued: August 6, 2014
                                 Decided and Filed: September 19, 2014

                 Before: COOK and GRIFFIN, Circuit Judges; RICE, District Judge.*

                                             _________________

                                                  COUNSEL

ARGUED: James P. Allen, Sr., ALLEN BROTHERS ATTORNEYS AND COUNSELORS,
PLLC, Detroit, Michigan, for Appellants. Jonathan D. King, DLA PIPER LLP, Chicago,
Illinois, for Appellees. ON BRIEF: Edward M. Turfe, TURFE LAW, PLLC, Detroit,
Michigan, for Appellants. Jonathan D. King, Joseph A. Roselius, Stephanie A. Zosak, DLA
PIPER LLP, Chicago, Illinois, for Appellees.

        *
           The Honorable Walter Herbert Rice, Senior United States District Judge for the Southern District of Ohio,
sitting by designation.

                                                         1
No. 13-2437      Beydoun, et al. v. Wataniya Restaurants Holding, et al.               Page 2

                                       _________________

                                            OPINION
                                       _________________

       GRIFFIN, Circuit Judge. Plaintiffs sued plaintiff Nasser Beydoun’s former employer,
Qatari-based Wataniya Restaurants Holding—along with Wataniya shareholders and members of
the Wataniya board of directors—in federal district court in Michigan, alleging various causes of
action based on events that took place after Beydoun’s employment as Wataniya’s CEO ended
contentiously. The district court dismissed plaintiffs’ complaint for lack of personal jurisdiction.
Because plaintiffs have failed to establish that their alleged causes of action proximately resulted
from Wataniya’s contacts with Michigan, we affirm the judgment of the district court.

                                                 I.

       None of the defendants in this case are citizens of the United States, nor of Michigan.
Wataniya is a Qatari corporation that, among other things, operates restaurant franchises in the
Middle East and North Africa. Its principal place of business is in Qatar, and it has never
operated any franchises in the United States, nor does it have any offices, representatives, or
employees in Michigan. Qatar National Hotels Company is a Qatari company based in Qatar
with no ties to Michigan. Global Investment House is based in Kuwait with no ties to Michigan.
The non-Wataniya defendants named in Beydoun’s complaint who are natural persons were
shareholders or representatives of shareholders of Wataniya, and all are citizens of Qatar.

       Beydoun is a citizen of the United States and of Michigan. He is a businessman in
Detroit. In 2006, Beydoun was approached by Donald Jordan, a representative of Wataniya,
about Beydoun moving to Qatar and becoming Wataniya’s CEO. Jordan told Beydoun that
Wataniya’s goal in recruiting him was to “bring Western culture and restaurant franchises to the
Middle East.” In January 2007, Beydoun and Jordan met at a Starbucks in Northville, Michigan.
During that meeting, Beydoun and Jordan

       spoke at length regarding the terms and conditions of [Beydoun’s] employment
       with Wataniya and [Beydoun’s] moving to Qatar, as well as “the vision” and
       desires of the . . . Board members, directors and shareholders of Wataniya. At the
       conclusion of [the] meeting [Jordan and Beydoun] had agreed in principle that
No. 13-2437         Beydoun, et al. v. Wataniya Restaurants Holding, et al.                          Page 3

        [Beydoun] would accept the position as President and Chief Operating Officer of
        Wataniya. [Beydoun] advised Jordan that [he] needed to discuss everything with
        [his] wife . . . and think things over.

Following the Starbucks meeting, Jordan and Beydoun had “[m]ultiple discussions and emails”
about the position, occurring after Jordan returned to Qatar (Beydoun remained in Michigan).1
Beydoun “ultimately accepted the position” and moved to Qatar in mid-March 2007; his family
followed in August 2008.

        After moving to Qatar, Beydoun made more than ten business trips to Michigan on
Wataniya’s behalf. During this same time, Wataniya purchased restaurant equipment from
several Michigan-based companies.

        Wataniya lost money while Beydoun was CEO; consequently, the relationship between
the two soured. In late October 2009, Beydoun was summoned to meet with Hamad bin
Abdullah al Attiyah (Hamad). Hamad was a shareholder in Wataniya and, at the time, was an
adviser to Wataniya’s board.            At the meeting, Hamad accused Beydoun of mismanaging
Wataniya and accused Beydoun of stealing “significant sums of money from the company.”
Hamad told Beydoun that he would have to personally reimburse the company for $13.7 million
for losses the company had sustained. Beydoun responded that the company had not yet paid
him his salary nor reimbursed him for his living expenses. Following this meeting, Beydoun
learned that Wataniya had revoked his exit visa, rendering Beydoun unable to leave Qatar.2

        On December 12, 2009, Beydoun filed suit in the Qatari courts seeking back pay and
benefits. Four days later, Wataniya filed suit against Beydoun in Qatar, seeking to recover $13.7
million.    Beydoun claims that many of the allegations in Wataniya’s lawsuit were false.

        1
           Plaintiffs suggest that Beydoun and Jordan met in person in Michigan after the January 2007 Starbucks
meeting to discuss the Wataniya CEO job. See Plaintiffs’ Br. at 11 (stating that after the Starbucks meeting “Jordan
and Beydoun, while in Michigan, exchanged several emails discussing the Wataniya opportunity”); id. at 20 (stating
that Jordan “met with Beydoun on more than one occasion in Michigan”). Although Beydoun’s affidavit indicates
multiple communications via email and telephone between Beydoun and Jordan discussing the Wataniya CEO
position, it only references one in-person meeting in Michigan—the Starbucks meeting. Indeed, Beydoun’s affidavit
specifically indicates that Beydoun’s and Jordan’s post-Starbucks-meeting communications occurred after Jordan
had returned to Qatar and Beydoun remained in Michigan.
        2
           Apparently, under Qatari law, an immigrant employee such as Beydoun must be “sponsored” by his
employer while in Qatar, and the sponsoring employer has “absolute discretion to revoke an expatriate employee’s
exit visa.”
No. 13-2437       Beydoun, et al. v. Wataniya Restaurants Holding, et al.            Page 4

Additionally, Wataniya lodged a criminal complaint against Beydoun. Ultimately, Wataniya’s
lawsuit was dismissed, and Beydoun’s lawsuit was successful—Beydoun was awarded $170,000
by the Qatari courts. The criminal complaint against Beydoun was dismissed as well. However,
Beydoun’s exit visa was not reinstated while these matters were litigated and resolved.
Accordingly, Beydoun was not legally permitted to return home to Michigan until February 7,
2011.

         On February 2, 2012, plaintiffs filed the instant lawsuit. The complaint alleged thirteen
counts, including false imprisonment, abuse of process, and malicious prosecution.            The
complaint alleged limited personal jurisdiction over all defendants because they “[had]
transacted business within the State of Michigan, and [their] agents . . . caused consequences to
occur in the state of Michigan, which actions and consequences have resulted in this action for
tort.”

         Defendants moved to dismiss under Rule 12(b)(2) of the Federal Rules of Civil
Procedure on the basis that the court lacked personal jurisdiction over them. The district court
agreed and dismissed plaintiffs’ claims. Plaintiffs timely appealed.

                                                II.

         We review de novo a motion to dismiss under Rule 12(b)(2). Neogen Corp. v. Neo Gen
Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002). The party seeking to establish the existence
of personal jurisdiction bears the burden to establish such jurisdiction, CompuServe, Inc. v.
Patterson, 89 F.3d 1257, 1261–62 (6th Cir. 1996), “over each defendant independently.” Days
Inns Worldwide, Inc. v. Patel, 445 F.3d 899, 904 (6th Cir. 2006) (citing Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 475 (1985)). When, as here, “a district court rules on a jurisdictional
motion to dismiss made pursuant to [Rule 12(b)(2)] without conducting an evidentiary hearing,
the court must consider the pleadings and affidavits in a light most favorable to the [nonmoving
party—here, plaintiffs].” CompuServe, 89 F.3d at 1262. “To defeat such a motion, [plaintiffs]
need only make a prima facie showing of jurisdiction.” Id. In deciding a motion under Rule
12(b)(2), this court “will construe the facts in the light most favorable to the nonmoving party.”
Neogen Corp., 282 F.3d at 887.
No. 13-2437       Beydoun, et al. v. Wataniya Restaurants Holding, et al.               Page 5

                                                 III.

         “A federal court’s exercise of personal jurisdiction in a diversity of citizenship case must
be both (1) authorized by the law of the state in which it sits, and (2) in accordance with the Due
Process Clause of the Fourteenth Amendment.” Id. at 888 (citing Reynolds v. Int’l Amateur
Athletic Fed’n, 23 F.3d 1110, 1115 (6th Cir. 1994)). We address each part of this test in turn.

                                                 IV.

         Michigan’s long-arm statute, Mich. Comp. Laws § 600.715, provides limited personal
jurisdiction over a nonresident corporation for claims “arising out of the act or acts which create
any of the following relationships,” including “[t]he transaction of any business within the state.”
The Michigan Legislature’s “use of the word ‘any’ to define the amount of business that must be
transacted establishes that even the slightest transaction is sufficient to bring a corporation within
Michigan’s long-arm jurisdiction.” Oberlies v. Searchmont Resort, Inc., 633 N.W.2d 408, 413
(Mich. Ct. App. 2001); see also Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 679 (6th Cir.
2012).

         Wataniya’s contacts with Michigan satisfy Michigan’s long-arm statute. Defendants do
not dispute that Wataniya, acting through its agent, Jordan, travelled to Michigan for the purpose
of recruiting Beydoun to be its CEO. This single act is sufficient to satisfy Michigan’s long-arm
statute under the broad “slightest transaction” test described above. However, even assuming,
arguendo, that Wataniya’s recruitment of Beydoun in Michigan was not enough on its own,
Wataniya subsequently made over ten business trips to Michigan and made numerous purchases
of equipment from Michigan companies.             These contacts certainly satisfy the “slightest
transaction” test above.

         Accordingly, Michigan’s long-arm statute is satisfied as to Wataniya. Michigan’s long-
arm statute is not satisfied, however, as to the remaining non-Wataniya defendants, none of
whom had any contact with Michigan whatsoever. Again, it is plaintiffs’ burden to establish
personal jurisdiction as to each defendant. CompuServe, Inc., 89 F.3d at 1261–62; Days Inns
Worldwide, Inc., 445 F.3d at 904.        Here, plaintiffs’ appellate brief focuses exclusively on
Wataniya; plaintiffs do not address all defendants separately. Plaintiffs not only fail in their
No. 13-2437      Beydoun, et al. v. Wataniya Restaurants Holding, et al.               Page 6

appellate brief to explain whether the non-Wataniya defendants had any contact with Michigan,
they fail to mention the non-Wataniya defendants altogether. By failing to address any claims as
to the non-Wataniya defendants, plaintiffs have failed to meet their burden to establish
jurisdiction over each defendant individually.

                                                  V.

       “Although Michigan’s long-arm statute authorizes personal jurisdiction over [Wataniya],
a court in Michigan cannot exercise its personal jurisdiction in violation of [Wataniya’s]
constitutional right to due process.” Neogen Corp., 282 F.3d at 889. Accordingly, “[i]n order to
survive [Wataniya’s] motion to dismiss, [plaintiffs are] required to present a prima facie case that
the district court’s exercise of personal jurisdiction would not offend due process.” Id. When
determining whether a district court’s exercise of personal jurisdiction would offend due process,
“[t]he relevant inquiry is whether the facts of the case demonstrate that the non-resident
defendant possesses such minimum contacts with the forum state that the exercise of jurisdiction
would comport with ‘traditional notions of fair play and substantial justice.’” Theunissen v.
Matthews, 935 F.2d 1454, 1459 (6th Cir. 1991) (quoting Int’l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945)). In Southern Machine Co. v. Mohasco Industries, Inc., this court articulated a
three-pronged test to guide this determination:

       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.

401 F.2d 374, 381 (6th Cir. 1968). We address each prong of this test in turn.

                                                  A.

       Purposeful availment . . . is present where the defendant’s contacts with the forum
       state proximately result from actions by the defendant himself that create a
       substantial connection with the forum [s]tate, and where the defendant’s conduct
       and connection with the forum are such that he should reasonably anticipate being
       haled into court there.
No. 13-2437        Beydoun, et al. v. Wataniya Restaurants Holding, et al.           Page 7

Neogen Corp., 282 F.3d at 889 (citations, quotation marks, and emphasis omitted). “In the Sixth
Circuit, the emphasis in the purposeful availment inquiry is whether the defendant has engaged
in some overt actions connecting the defendant with the forum state.” Fortis Corporate Ins. v.
Viken Ship Mgmt., 450 F.3d 214, 218 (6th Cir. 2006) (citations and quotation marks omitted).

       Here, plaintiff argues that Wataniya purposefully availed itself of Michigan: (1) by
targeting the Detroit area for its CEO candidates; (2) by corresponding with Beydoun; (3) by
selecting Beydoun to be CEO; (4) by engaging in business trips to and equipment purchases in
Michigan once Beydoun was CEO; and (5) by “caus[ing] an investigation in Michigan in an
effort to bolster its efforts in the Qatari courts” once proceedings against Beydoun there had
commenced.

       Plaintiffs also allege that Wataniya sent private investigators to Michigan to investigate
Beydoun for purposes of prosecuting their lawsuit in Qatar—plaintiffs argue that this constitutes
purposeful availment. However, as the district court correctly recognized, this allegation is
based on hearsay.      The sole factual support for the allegation is the affidavit of Kassem
Chammout, who averred that he was told by a third party, Kamal Mustapha, “an employee of
Wataniya,” that Wataniya sent the investigators to Michigan. Chammout does not claim to have
any personal knowledge of these investigators, nor does plaintiff identify any other evidence
relevant to this allegation. In general, it is improper for a court to consider hearsay statements
when ruling on a motion to dismiss. See Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d
Cir. 1986).      Accordingly, we decline to address plaintiffs’ allegations about the private
investigators.

       Whether Wataniya’s contacts with Michigan are sufficient to satisfy the “purposeful
availment” requirement is not clear. On one hand, Beydoun’s repeated business trips to and
purchases of equipment in Michigan on behalf of Wataniya are “overt actions connecting
[Wataniya] with” Michigan. Fortis Corporate Ins., 450 F.3d at 218. And, these business trips
were directed at Michigan specifically, because Michigan was where Beydoun had business
contacts that permitted Wataniya to purchase equipment. “Despite its label, [the ‘purposeful
availment’] prong includes both purposeful availment and purposeful direction. It may be
satisfied by purposeful availment of the privilege of doing business in the forum; by purposeful
No. 13-2437      Beydoun, et al. v. Wataniya Restaurants Holding, et al.               Page 8

direction of activities at the forum; or by some combination thereof.” 4 Fed. Prac. & Proc. Civ.
§ 1067.1 (3d ed.) (citation omitted). On the other hand, we doubt whether these business trips
and equipment purchases were a sufficiently “substantial connection” such that Wataniya would
anticipate being haled into a Michigan court. Neogen Corp., 282 F.3d at 889 (citation and
quotation marks omitted). We need not decide whether Wataniya’s contacts with Michigan
satisfy the purposeful availment prong of the Southern Machine test because, even assuming,
arguendo, that plaintiffs have satisfied the purposeful availment prong, they have failed to satisfy
the other two prongs.

                                                B.

       To satisfy the “arising from” prong of the Southern Machine test, the plaintiff must
demonstrate a causal nexus between the defendant’s contacts with the forum state and the
plaintiff’s alleged cause of action. See Burger King Corp., 471 U.S. at 474 (“[I]t may well be
unfair to allow [out-of-state parties] to escape having to account in other States for consequences
that arise proximately from such activities.”). As our circuit has explained, “the cause of action
must . . . have a substantial connection with the defendant’s in-state activities.” Dean v. Motel 6
Operating L.P., 134 F.3d 1269, 1275 (6th Cir. 1998) (quotation marks omitted). Put another
way, “[t]he ‘arising from’ requirement under the second prong [of the Southern Machine test] is
satisfied when the operative facts of the controversy arise from the defendant’s contacts with the
state. ‘Only when the operative facts of the controversy are not related to the defendant’s contact
with the state can it be said that the cause of action does not arise from that contract.’”
Calphalon Corp. v. Rowlette, 228 F.3d 718, 723–24 (6th Cir. 2000) (quoting S. Mach. Co.,
401 F.2d at 384 n.29); see also Carrier Corp. v. Outokumpu Oyj, 673 F.3d 430, 451 (6th Cir.
2012) (“Even a single act by a defendant directed toward the relevant forum that gives rise to a
cause of action can support” a finding of personal jurisdiction. (emphasis added, citation,
quotation marks, and alterations omitted)).

       Not all of our opinions treat this analysis the same. Some apply the requirement that
there be a causal connection between the party’s contacts with the forum state and the cause of
action as part of the “purposeful availment” prong of the Southern Machine test, rather than the
“arising from” prong. These opinions, at the very least, implicitly recognize that the analysis on
No. 13-2437       Beydoun, et al. v. Wataniya Restaurants Holding, et al.             Page 9

the first prong of the Southern Machine test involves some overlap with the analysis on the
second prong. See, e.g., Neogen Corp., 282 F.3d at 891 (“‘[P]urposeful availment’ is something
akin to a deliberate undertaking to do or cause an act or thing to be done in [the forum state] or
conduct which can be properly regarded as a prime generating cause of the effects resulting in
[the forum state], something more than a passive availment of [the forum state’s] opportunities.”
(emphasis added, citation omitted)); compare Dean, 134 F.3d at 1275 (reasoning that the
requirement that the cause of action must have a “substantial connection with the defendant’s in-
state activities” applies to the Southern Machine’s “arising from” prong), with Cmty. Trust
Bancorp, Inc. v. Cmty. Trust Fin. Corp., 692 F.3d 469, 472 (6th Cir. 2012) (citing Neogen Corp.,
282 F.3d at 889) (reasoning that the “substantial connection” requirement applies to the
“purposeful availment” prong of the Southern Machine test). In all cases, however, the elements
required to establish personal jurisdiction remain the same—some cases simply address them at
different levels of analysis.

        Here, plaintiffs argue that “but for Jordan’s outreach to . . . Beydoun on behalf of
Wataniya, Beydoun would not have been in a position to have been injured by Wataniya. . . .
Thus, Beydoun’s cause of action arises out of Wataniya’s connections to Michigan.” Essentially,
plaintiffs argue that their causes of action arose from Wataniya’s initial contact with Michigan
because but for the initial contact with Michigan, Beydoun would never have moved to Qatar,
and if Beydoun had never moved to Qatar, he could not have been wrongfully blamed for
Wataniya’s financial losses and wrongfully detained for them.

        We disagree because more than mere but-for causation is required to support a finding of
personal jurisdiction. To the contrary, the plaintiff’s cause of action must be proximately caused
by the defendant’s contacts with the forum state. Indeed, the Supreme Court has emphasized
that only consequences that proximately result from a party’s contacts with a forum state will
give rise to jurisdiction. Burger King Corp., 471 U.S. at 474. As our sister circuits have noted:

        [A]lthough the analysis may begin with but-for causation, it cannot end there.
        The animating principle behind the relatedness requirement is the notion of a tacit
        quid pro quo that makes litigation in the forum reasonably foreseeable. See
        Burger King, 471 U.S. at 475–76. . . . But-for causation cannot be the sole
        measure of relatedness because it is vastly overinclusive in its calculation of a
        defendant’s reciprocal obligations. The problem is that it “has . . . no limiting
No. 13-2437       Beydoun, et al. v. Wataniya Restaurants Holding, et al.               Page 10

       principle; it literally embraces every event that hindsight can logically identify in
       the causative chain.” See Nowak v. Tak How Invs., Ltd., 94 F.3d 708, 715 (1st
       Cir. 1996). If but-for causation sufficed, then defendants’ jurisdictional
       obligations would bear no meaningful relationship to the scope of the “benefits
       and protection” received from the forum. See Int’l Shoe, 326 U.S. at 319. As a
       result, the relatedness inquiry cannot stop at but-for causation.

O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 322 (3d Cir. 2007).

       In this case, plaintiffs have failed to establish that their alleged causes of action
proximately resulted from Wataniya’s contacts with Michigan. Plaintiffs’ alleged causes of
action all occurred in Qatar, years after Wataniya recruited Beydoun in Michigan. Plaintiffs do
not argue that Wataniya’s financial collapse—which led to the dispute in Qatar that caused
Wataniya to detain Beydoun—was the result of any of Beydoun’s business trips to Michigan or
his equipment purchases in Michigan, each of which was done on Wataniya’s behalf. To the
contrary, plaintiffs argue that Wataniya’s financial collapse was the result of the global economic
downturn in 2007–2008. In other words, plaintiffs have failed to establish that “the operative
facts of the controversy are . . . related to [Wataniya’s] contact with the state,” Calphalon Corp.,
228 F.3d at 723, or that their causes of action had a “substantial connection” to Wataniya’s
activities in Michigan. Dean, 134 F.3d at 1275.

                                                  C.

       Regarding the third prong of the Southern Machine test, the district court correctly ruled
that it would be unreasonable to exercise jurisdiction over Wataniya. The Supreme Court has
held that the reasonableness analysis is a function of three factors: “[1] the burden on the
defendant, [2] the interests of the forum State, and [3] the plaintiff’s interest in obtaining relief.”
Asahi Metal Indus. Co. v. Super. Court of Cal., 480 U.S. 102, 113 (1987) (citation omitted); see
generally Lauren A. Kwapis, The United States Supreme Court Brings General Jurisdiction
Over Corporate Defendants Back “At Home,” Mich. Defense Quarterly, April 2014 at 21
(describing recent Supreme Court developments in personal jurisdiction over foreign corporate
defendants). Here, even assuming, arguendo, that plaintiffs’ interest in obtaining relief counsels
in favor of a finding of reasonableness, the other two factors weigh heavily against such a
finding. As the district court noted, “all the relevant underlying events occurred in Qatar,”
No. 13-2437      Beydoun, et al. v. Wataniya Restaurants Holding, et al.           Page 11

Wataniya is a Qatari corporation, and “most of the discovery will necessarily involve the
exhaustive production of Qatari legal papers and deposing Qatari legal experts.” And, the
Supreme Court has held that “[g]reat care and reserve should be exercised when extending our
notions of personal jurisdiction into the international field.” Asahi, 480 U.S. at 115. Moreover,
plaintiffs make no argument whatsoever that in this particular case Michigan has an interest in
exercising its jurisdiction. Accordingly, we conclude that it would be unreasonable to find
personal jurisdiction in Michigan.

                                               VI.

       For these reasons, we affirm the judgment of the district court.