Opinion
Case No. 01-73383
February 28, 2002
OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND TRANSFERRING CASE TO WESTERN DISTRICT OF LOUISIANA
This matter came before the court on defendant First Acadiana Financial Services' October 17, 2001 motion to dismiss. Plaintiff Lyndecon filed a response November 7, 2001; and Defendant filed a reply November 16, 2001. No oral argument was heard.
BACKGROUND FACTS
This is an action for breach of contract between a Michigan limited liability company, plaintiff Lyndecon, and a Louisiana limited liability company, defendant First Acadiana Financial Services ("FAFS"). FAFS, which has its principal place of business in Lafayette, Louisiana, is in the business of operating fast food restaurants in Louisiana and Mississippi.
Agents from the two parties met at a franchisee trade show in Louisville, Kentucky, in June 2000. Eight months later the two entered into negotiations which culminated in the sale of three restaurants from plaintiff Lyndecon to defendant FAFS.
Defendant FAFS asserts that this court lacks personal jurisdictionbecause, among other things, the company does not carry on any business in Michigan; has never transacted business in Michigan; does not have any office or place of business in Michigan; has no agents, employees or officers in Michigan; does not advertise in Michigan; and has never designated any agent in Michigan to accept service ofprocess. PlaintiffLyndecon, however, contends that Defendants' numerous telephone calls and some mailings to Plaintiff, including the mailing of the Agreement to Buy and Sell Assets, constitute sufficient business contacts in Michigan to confer personal jurisdiction over Defendant.
LAW AND ANALYSIS
In a diversity case, federal courts look to the law of the forum state to determine whether personal jurisdiction exists. Calphon Corp. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000). The plaintiff bears the burden of establishing the existence of personal jurisdiction. Serras v. First Tenn. Bank Nat. Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989).
Under Michigan law, courts may exercise general personal jurisdiction over an unincorporated voluntary association only if: (1) the association was formed under the laws of the State of Michigan, (2) the association consents to jurisdiction, or (3) the association is carrying on a continuous and systematic part of its general business within Michigan. Mich. Comp. Laws Ann. § 600.731. In this case FAFS is not a Michigan association, does not consent to jurisdiction and is not carrying on a continuous and systematic part of its business in Michigan.
Michigan's limited personal jurisdiction statute provides that "the existence of any of the following relationships . . . shall constitute a sufficient basis of jursdiction . . .: (1) the transaction of any business within the state, (2) the doing or causing any act to be done, or consequences to occur, in the state resulting in an action for tort . . . ." Mich. Comp. Laws Ann. § 600.735.
In this case Defendant does not fall within these categories. The claims do not arise out of the transaction of any business within the State of Michigan. Defendant FAFS signed in Louisiana the agreement, governed by Louisiana law, to buy three restaurants located in Louisiana. Also, although the complaint alleges a tort claim for misrepresentation, under Michigan law such allegations are actionable only in contract, not in tort. Boston Piano Music Co. v. Pontiac Clothing Co., 199 Mich. 141, 146 (1917).
Even if the court were to find that the claims alleged arise out of the transaction of business in Michigan by virtue of the telephone communications and mailings between the two parties, these contacts are insufficient to satisfy the Due Process Clause of the United States Constitution. The three factors to be considered are as follows:
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.Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968).
With regard to the first requirement, "purposeful availment," the court must find an act by which "`the defendant purposefully avails itself of the privilege of conducting activities in the forum state, thus invoking the benefits and protections of its laws.'" International Tech. Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 395-96 (6th Cir. 1997) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). This "`ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts . . . .'"Id. at 396 (quoting Burger King at 475).
The Sixth Circuit has found that the argument that a "claimed injury to the plaintiffs purse may be said to have been suffered in Michigan is not material if the defendants did not purposely avail themselves of the protection of Michigan law." Id. at 394. The Euroglas court was equally unswayed by the fact that the defendants had communicated with the plaintiff in Michigan by letter, telephone and facsimile. Id. at 395. It found "no talismanic qualities" to these communications, which were directed to Michigan only because the plaintiff was present there. Id. at 395. As the court explained, the defendant was not trying to exploit any market for its products in Michigan; the company presumably would have been pleased to communicate with the plaintiff wherever the latter wished. It was purely fortuitous that Michigan happened to be the place where the plaintiff was located.
The facts in this case militate even more strongly against the exercise of personal jurisdiction over FAFS. Unlike the corporate defendants inEuroglas, FAFS dis not send any representatives to Michigan, did not employ anyone in Michigan to work for it, and did not pay anyone in Michigan to work on the transaction. Given the facts of this case, FAFS has not purposefully availed itself of the privilege of conducting business in Michigan or invoked the benefits and protections of Michigan law.
Although this court has determined that it lacks personal jurisdiction over the defendant, it may transfer this action to Louisiana pursuant to 28 U.S.C. § 1406. See Taylor v. Love, 415 F.2d 1118 (6th Cir. 1969).
ORDER
It is hereby ORDERED that Defendant's October 17, 2001 motion to dismiss is GRANTED.
It is further ORDERED that this case is TRANSFERRED to the United States District Court for the Western District of Louisiana.