Collazo v. Enterprises Holdings Inc
Filing
32
OPINION AND ORDER: Defendants' motion to dismiss 19 and 22 are DENIED. Moreover, because the Court finds that it lacks personal jurisdiction over the Defendants, Defendants' requests for a finding of improper venue, pursuant to Rule 12 (b)(3) are DENIED AS MOOT. Finally, the Court hereby orders the Clerk of this Court to TRANSFER this action pursuant to 28 USC 1406(a) to the USDC for the District of Puerto Rico, for all further proceedings. Signed by Chief Judge Philip P Simon on 10/5/2011. (cc: USDC Puerto Rico) (rmn)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
ELSA COLLAZO,
Plaintiff,
v.
ENTERPRISE HOLDINGS, INC., d/b/a
ENTERPRISE RENT-A-CAR, and
PRERAC, INC., d/b/a ENTERPRISE
RENT-A-CAR,
Defendants.
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2:11-CV-00108-PPS-APR
OPINION AND ORDER
This diversity case arises out of a trolley accident in Puerto Rico in which plaintiff Elsa
Collazo, who was riding the trolley from the airport to pick up a car she had rented from
Enterprise, was ejected from her seat during a sudden stop. Collazo alleges both negligence and
breach of contract against Enterprise Holdings, Inc. and its Puerto Rican subsidiary, Prerac, Inc.
Both Defendants have filed nearly identical motions to dismiss [DE 19 & 22], arguing that the
Court lacks personal jurisdiction, and that venue is improper [Id.]. Collazo’s response requests
that I transfer the case to the district court in Puerto Rico, should I find that personal jurisdiction
is lacking [DE 28]. For the reasons explained below, I agree that the Court lacks jurisdiction
over these Defendants, so I need not reach the improper venue arguments. However, I find that,
rather than dismissal, the interests of justice favor a transfer of Collazo’s suit to the district court
in Puerto Rico, where Collazo’s injury occurred. So the motions to dismiss are DENIED, and
Collazo’s request for transfer is GRANTED.
BACKGROUND
Collazo, an Indiana citizen, alleges that she entered into an agreement with the
Defendants to rent a car, for her use during a visit to Puerto Rico [DE 16, ¶ 6]. As part of the
agreement, Defendants were to provide her with transportation by trolley from a Puerto Rico
airport to an Enterprise rental car terminal there [Id., ¶ 7]. On April 27, 2010, while Collazo was
riding in the trolley down an expressway in Carolina, Puerto Rico, Collazo was partially ejected
from her seat and injured, following a sudden stop [Id., ¶¶ 8-9 & 18]. Collazo’s negligence and
breach of contract claims against Defendants are based on her allegation that the trolley was not
equipped with a seatbelt, which she asserts is a violation of Puerto Rico law and a breach of
Defendants’ agreement to provide her with safe transportation [Id., ¶¶ 15, 17 & 21].
Enterprise Holdings, a Missouri corporation with its principal place of business in
Missouri, and Prerac, a Puerto Rico corporation with a principal place of business in Puerto
Rico, contend that the Court lacks personal jurisdiction over them because neither conducts
business in Indiana. Collazo argues that Defendants are subject to general personal jurisdiction
on the basis of the “interactivity” of their websites – enterprise.com and erac.com – which are
accessible in Indiana. She also asserts an alter ego theory, arguing that general personal
jurisdiction can be exercised on the ground that Enterprise Holdings and its subsidiaries,
including those in Puerto Rico (i.e., Prerac) and Indiana, “function with a single identity” [DE 28
at 10]. Finally, Collazo argues that Defendants are subject to specific personal jurisdiction based
on her rental car contract, as well as the relationship between her claims and Defendants’
websites.
2
DISCUSSION
I.
Personal Jurisdiction
The first issue is whether this Court has personal jurisdiction over the Defendants. A
federal court’s personal jurisdiction is determined by the laws of its forum state. Tamburo v.
Dworkin, 601 F.3d 693, 700 (7th Cir. 2010). Indiana’s long-arm statute allows jurisdiction so
long as it’s consistent with the Due Process Clause of the Fourteenth Amendment. Ind. R. Trial.
P. 4.4(a); Rodriguez v. Cavitec AG, No. 1:09-CV-336, 2010 WL 2519715, at *4 (N.D. Ind. June
14, 2010). As a result, the state statutory and federal constitutional inquiries merge, and the
determinative issue is whether the exercise of jurisdiction over these Defendants comports with
the federal Due Process Clause. Tamburo, 601 F.3d at 700; Terry McKannan v. National
Council of Young Men’s Christian Assocs. of the U.S., No. 3:10-CV-88, 2010 WL 4668437, at
*3 (S.D. Ind. Nov. 9, 2010).
Collazo has the burden of establishing personal jurisdiction, though without the benefit of
an evidentiary hearing, she need only make a prima facie showing of the jurisdictional facts.
Tamburo, 601 F.3d at 700; Purdue Research Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773,
782 (7th Cir. 2003). At this stage, I must accept as true all well-pleaded facts in the complaint
and resolve any factual disputes in Collazo’s favor. Id.
To confer jurisdiction, due process requires that a defendant has purposefully established
“minimum contacts” with the forum state “such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S.
310, 316 (1945) (internal citations and quotations omitted); Burger King Corp. v. Rudzewicz,
471 U.S. 462, 474 (1985). Crucial to this analysis is a showing that the defendant “should
3
reasonably anticipate being haled into court [in the forum State]” because it “purposefully
avail[ed] itself of the privilege of conducting activities” there. Burger King, 471 U.S. at 474-75.
Personal jurisdiction can be general or specific depending on the extent of the
defendant’s contacts. Mobile Anesthesiologists Chicago, LLC v. Anesthesia Assocs. of Houston
Metroplex, 623 F.3d 440, 444 (7th Cir. 2010). “If a defendant’s contacts are so extensive that it
is subject to general personal jurisdiction, then it can be sued in the forum state for any cause of
action arising in any place. More limited contacts may subject the defendant only to specific
personal jurisdiction, in which case the plaintiff must show that its claims against the defendant
arise out of the defendant’s constitutionally sufficient contacts with the state.” uBID, Inc. v.
GoDaddy Group, Inc., 623 F.3d 421, 425 (7th Cir. 2010). Either way, the ultimate constitutional
question is whether the defendant had “certain minimum contacts with [the forum] such that the
maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”
Id. (quoting Int’l Shoe, 326 U.S. at 316).
Collazo contends that Defendants are subject to both general and specific jurisdiction in
Indiana. For the reasons I discuss below, I find that Defendants are subject to neither.
A.
General Personal Jurisdiction
General jurisdiction is permitted only when the defendant has “continuous and systematic
general business contacts” with the forum state. Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 415–16 (1984). This standard, which is considerably more stringent than the
standard for specific jurisdiction, “requires the defendant to have such extensive contacts with
the state that it can be treated as present in the state for essentially all purposes.” uBID, 623 F.3d
at 425-26 (citing Tamburo, 601 F.3d at 701; Purdue Research Found., 338 F.3d at 787).
4
1.
Defendants’ Websites
Collazo’s first argument – that general jurisdiction may be based on the supposed
interactivity of the enterprise.com and erac.com websites – requires a word of terminological
clarification. “Interactive” is a legal term of art that derives from the sliding-scale jurisdictional
test for Internet-based cases employed in Zippo Manufacturing Co. v. Zippo Dot Com, Inc., 952
F. Supp. 1119, 1124 (W.D. Pa. 1997). Under Zippo, and other opinions that have adopted
Zippo’s analytical framework, “interactive” websites, which allow the exchange of information,
are more likely to support personal jurisdiction than the “passive” websites at the other end of
the scale, which do not permit the user to exchange information with the host computer. Zippo,
952 F. Supp. at 1124.
The Seventh Circuit has declined to adopt Zippo’s approach for cases involving Internet
contacts, see Illinois v. Hemi Group LLC, 622 F.3d 754, 758 (7th Cir. 2010); Tamburo, 601 F.3d
at 703 n.7, including by declining to decide “what level of ‘interactivity’ is sufficient to establish
personal jurisdiction based on the operation of an interactive website.” Hemi Group, 622 F.3d at
759 (quoting Jennings v. AC Hydraulic A/S, 383 F.3d 546, 549 (7th Cir. 2004)); see also uBID,
623 F.3d at 431 (the interactivity of a defendant’s website “is relevant to, but not dispositive of,
the sufficiency” of the defendant’s contacts).
The maintenance of a public Internet website, without more, will not establish general
jurisdiction. uBID, 623 F.3d at 426; Tamburo, 601 F.3d at 701. In fact, in the Seventh Circuit,
even the operation a “highly interactive” website will not, alone, subject a defendant to general
jurisdiction. be2 LLC v. Ivanov, 642 F.3d 555, 559 (7th Cir. 2011); see also Hemi Group, 622
F.3d at 760 (“Courts should be careful in resolving questions about personal jurisdiction
5
involving online contacts to ensure that a defendant is not haled into court simply because the
defendant owns or operates a website that is accessible in the forum state, even if that site is
‘interactive’”); uBID, 623 F.3d at 427-29.
The proper jurisdictional test for Internet-based cases is instead a matter of determining
whether a defendant has established sufficient minimum contacts with a forum to justify the
exercise of personal jurisdiction over it in the forum state. Hemi Group, 622 F.3d at 759. Thus,
even if I assume that the Defendants here operate interactive websites (and this is by no means
clear, based on Collazo’s submissions), the question is not how interactive those sites are, but
whether Defendants, through those sites, in some way targeted Indiana’s market. be2, 642 F.3d
at 559; uBID, 623 F.3d at 427-29.
Collazo, however, has introduced no evidence that Defendants, through these websites,
targeted the Indiana market. The fact that both websites are accessible in Indiana is insufficient
to show conduct targeted at Indiana. See Mobile Anesthesiologists, 623 F.3d at 446 (defendant’s
operation of website that could be accessed in Illinois was not sufficient to support personal
jurisdiction). Moreover, courts have consistently refused to exercise jurisdiction based solely on
the fact that reservations can be placed and purchased through a website. See
Apollo Galileo USA P’ship v. Am. Leisure Holdings, Inc., No. 07 C 4403, 2009 WL 377381, at
*4 (N.D. Ill. Feb. 11, 2009) (“booking and paying for travel arrangements ( i.e., making
reservations by way of the Internet) is insufficient to subject an out-of-state resident to personal
jurisdiction in Illinois absent evidence that the company specifically or deliberately directs its
activities to Illinois residents”); Breschia v. Paradise Vacation Club, Inc., No. 02 C 3014, 2003
WL 22872128, at *4 (N.D. Ill. Dec. 4, 2003) (“website that allows customers to make and pay
6
for reservations over the Internet for lodging in foreign states . . . is not a continuous and
systematic contact with Illinois that justifies general jurisdiction”).
It may be true, as Collazo’s attorney avers, that Indiana residents can make reservations
to rent a vehicle through the enterprise.com website [DE 27-3, ¶ 5], or search for employment
opportunities through the erac.com website [DE 27-3, ¶ 6; see also
http://www.erac.com/default.aspx (last visited September 30, 2011)]. But so can residents of any
state in the U.S., as well as citizens in Canada, Ireland, Germany and the U.K. [Id.; DE 27-4].
And, tellingly, Collazo never contends that she made any reservations through either of these
sites. Nor does she contend that consumers generally can make payments for goods or services,
or enter into contracts with Defendants, through either of these sites. Indeed, the screen shot she
provides for the enterprise.com website does not include a menu that would permit a user to
enter a credit or debit card number, or otherwise purchase good or services [DE 27-4]. Cf. uBID,
623 F.3d at 428-29 (finding that defendant targeted Illinois market through advertising campaign
that produced hundreds of thousands of customers in the state and millions of dollars in annual
revenues).
Moreover, Defendants present undisputed evidence that Enterprise Holdings and Prerac
have no offices or employees in Indiana [DE 22-2, ¶ 4; DE 22-3, ¶ 5]. And neither is registered
with Indiana’s Secretary of State, or has an agent for service of process in Indiana [DE 22-2, ¶ 5;
DE 22-3, ¶ 4]. On this record, no matter how interactive Defendants’ websites may be,
Defendants’ maintenance of these sites, alone, does not approach the level of “continuous and
systematic” contacts necessary to establish general personal jurisdiction.
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2.
Alter-Ego
Collazo’s alternative theory of general jurisdiction is based on the premise that
Enterprise’s subsidiaries, including those doing business in Puerto Rico (Prerac) and Indiana, are
alter egos of Enterprise Holdings. Although it is by no means clear, Collazo appears to argue
that each of these entities functions with a single identity, which supposedly establishes general
jurisdiction over Defendants on the basis of the contacts of the subsidiary doing business in
Indiana.1
To begin with, Enterprise Holdings’ status as the parent of the Enterprise subsidiary in
Indiana, alone, does not establish general jurisdiction over Enterprise Holdings. A parent
corporation generally may not be held liable for the actions of a subsidiary “unless the legal
separateness of parent and subsidiary has been disregarded in a wide range of corporate matters.”
Esmark, Inc. v. N.L.R.B., 887 F.2d 739, 753 (7th Cir. 1989). Thus, “personal jurisdiction cannot
be premised on corporate affiliation or stock ownership alone where corporate formalities are
substantially observed and the parent does not exercise an unusually high degree of control over
the subsidiary.” Central States, Southeast & Southwest Areas Pension Fund v. Reimer Express
World Corp., 230 F.3d 934, 943 (7th Cir. 2000).
Nor has Collazo established that general jurisdiction over Enterprise Holdings is proper
on a theory that Prerac and Enterprise’s Indiana subsidiary are its alter egos. All that Collazo
1
Collazo never actually asserts that her alter-ego theory of jurisdiction is based on
imputing the contacts of Enterprise’s Indiana subsidiary to Enterprise Holdings. But that seems
to be the thrust of her argument. Moreover, though she argues that Prerac is also an alter ego of
Enterprise Holdings, she never explains how that is supposed to establish jurisdiction over
Prerac in Indiana. However, her theory appears to be that the contacts of Enterprise’s Indiana
subsidiary can be imputed to Prerac as well, since these entities along with the parent and all
other Enterprise subsidiaries form a single undifferentiated corporate entity.
8
has presented in support of this theory is a screen shot from the enterprise.com website [DE 279], and an affidavit in which Collazo’s attorney states that the screen shot reveals no evidence of
a parent-subsidiary relationship, and shows that all Enterprise entities use a common logo,
trademark, and the like, along with shared contact and customer support information [DE 27-3,
¶¶ 9-10].
This evidence falls far short of showing that Enterprise Holdings exerts the “unusually
high degree of control” over its subsidiaries needed to establish an alter ego relationship, much
less to establish Collazo’s theory that each of these entities functions with a single corporate
identity. To begin with, the screen shot that Collazo relies on does not reference either of the
Defendants or the Enterprise subsidiary doing business in Indiana. So the fact that it supposedly
contains “no evidence of a parent/subsidiary relationship” between those entities is of no
significance. More fundamentally, even if these entities do share a common website for
marketing purposes, along with shared contact information and customer support, that alone is
not sufficient to impute the contacts of a subsidiary (like Enterprise’s Indiana subsidiary) to a
parent (like Enterprise Holdings), much less to a separate subsidiary (like Prerac), for personal
jurisdictional purposes. See Central States, 230 F.3d at 939 (“the provision of administrative
services by a parent for a subsidiary does not trigger personal jurisdiction over the parent”; fax
address shared by parent and subsidiary was insufficient); IDS Life Ins. Co. v. SunAmerica Life
Ins. Co., 136 F.3d 537, 540 (7th Cir. 1998) (parent advertising its subsidiaries’ products and
services in national media was insufficient to subject parent to jurisdiction); accord Fletcher v.
Atex, Inc., 68 F.3d 1451, 1460 (2d Cir. 1995) (district court properly rejected argument that the
presence of the parent’s logo in subsidiary’s promotional literature justified piercing the
9
corporate veil).
Collazo also points to features of Enterprise’s erac.com website, which she contends
establish that Enterprise Holdings and its subsidiaries “function with a single identity” –
specifically, the fact that a screen shot from this site [DE 27-8] references Enterprise’s 7,000
branches without also discussing “separate corporate/ownership structures” [DE 28 at 11]. Here
again, the absence of such information on this screen shot provides no evidence that Enterprise
exerted the “unusually high degree of control” over its subsidiaries needed to premise
jurisdiction over Enterprise Holdings on the contacts of its Indiana subsidiary, let alone to base
jurisdiction over Prerac on such contacts. And even if the absence of such information showed
that Enterprise Holdings controlled or directed its subsidiaries to some extent, that, alone, would
still be insufficient. See Purdue Research Found., 338 F.3d at 788 n.17 (“Parents of wholly
owned subsidiaries necessarily control, direct, and supervise the subsidiaries to some extent.”)
(quoting IDS Life Ins. Co., 136 F.3d at 540).
By contrast, Defendants present undisputed evidence, in the form of an affidavit by
Robert Smith, the vice president of Enterprise Holdings, that Enterprise Holdings does not
operate the Enterprise Rent-A-Car brand in Indiana [DE 22-3, ¶¶ 2 & 6]. That brand, according
to Smith, is operated by a number of Enterprise Holdings’ subsidiaries,2 each of which, along
with Prerac, “retains ultimate authority to make decisions regarding their own general business
policies and day-to-day operations, . . . and hiring, firing promotions [and] compensation” [DE
22-3, ¶ 10]. Smith avers, more generally, that Enterprise Holdings observes all corporate
2
These are: Enterprise Leasing of Indianapolis, Enterprise Leasing Company of
Chicago, Enterprise RAC of Cincinnati and Enterprise Rent-A-Car Company of KY [DE 22-3, ¶
7].
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formalities with respect to Prerac and each of the other “separate and distinct” corporate entities
operating the Enterprise Rent-A-Car brand in Indiana [DE 22-3, ¶ 9].
Collazo’s failure to rebut this evidence, along with her inability to present any evidence
that Enterprise Holdings disregarded the legal separateness of its subsidiaries doing business in
Indiana and Puerto Rico, prevents her from establishing a prima facie case for general
jurisdiction based on an alter ego theory. Cf. Central States, 230 F.3d at 945 (corporate
affiliation insufficient basis for jurisdiction over parent where subsidiary observed “all corporate
formalities”).
Having found that the Court lacks general personal jurisdiction over the Defendants, I
turn now to the issue of specific personal jurisdiction.
B.
Specific Personal Jurisdiction
Specific personal jurisdiction “turns on a particularized assessment of the ‘relationship
among the defendant, the forum, and the litigation.’” Saylor v. Dyniewski, 836 F.2d 341, 344
(7th Cir. 1988) (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). In particular, specific
jurisdiction is appropriate where (1) the defendant purposefully availed himself of the privilege
of doing business in a state, (2) the alleged injury “arises out of or relates to” the defendant’s
activities in that state, and (3) the exercise of jurisdiction comports with traditional notions of
fair play and substantial justice. Tamburo, 601 F.3d at 702; see also uBID, 623 F.3d at 429
(“Mere minimum contacts [] are not sufficient to establish specific personal jurisdiction.”). This
test aims to “ensure that an out-of-state defendant is not bound to appear to account for merely
‘random, fortuitous, or attenuated contacts’ with the forum state.” Tamburo, 601 F.3d at 702
(quoting Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1071 (10th Cir. 2008)).
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I need only address the “arises out of or relates to” element of this test, since Collazo’s
failure to establish this element is dispositive of her argument for specific jurisdiction.
The Seventh Circuit recently discussed the applicable standard for determining whether a
plaintiff’s injury arises out of or relates to a defendant’s forum-related activities in uBID. There,
the Seventh Circuit noted the competing approaches adopted by other circuit courts, and then
declined to endorse either the proximate cause approach – which requires that the defendant’s
contacts to a forum be the legal cause of the plaintiff’s injuries for the injuries to arise out of
those contacts – or the but-for approach – which only requires that the plaintiff’s injuries would
not have occurred but-for the defendant’s contacts to the forum. uBID, 623 F.3d at 430 (finding
the but-for approach “vastly overinclusive” while the proximate cause approach “would exclude
too many claims”); see also Tamburo, 601 F.3d at 708 (comparing the breakdown in the
circuits). Instead, uBID endorsed the “middle-ground approach” adopted by the Third Circuit in
O’Connor v. Sandy Lane Hotel, Co., 496 F.3d 312, 322 (3d Cir. 2007), which avoids a
mechanical test in favor of a more pragmatic focus on the “tacit quid pro quo that makes
litigation in the forum reasonably foreseeable.” uBID, 623 F.3d at 430 (quoting O’Connor, 496
F.3d at 322). In other words, “the precise causal relationship between contacts and claim [is] not
important,” so long as the reciprocal relationship between the parties makes jurisdiction in the
state foreseeable. Id.
Here, the relationship between the websites Collazo references, and the injury she
sustained on the trolley in Puerto Rico, are simply not related to one another at all. As for the
erac.com website, Collazo herself acknowledges that it is “meant to serve as a venue for the
initial application, hiring, and employment processes for careers” with Enterprise [DE 28 at 7].
12
But she offers no theory as to how that site is connected to her alleged injuries. Indeed, she does
not even contend that the erac.com website had anything to do with her trip to Puerto Rico, or
her agreement with Enterprise to rent a car there.
The enterprise.com website also falls short of the mark for establishing specific
jurisdiction. That site appears at least to permit customers to make reservations to rent a vehicle.
And Collazo’s trolley injury is, at least in some sense, related to her decision to rent a car in
Puerto Rico. But this is insufficient to establish the relatedness required for specific personal
jurisdiction for a number of reasons.
First, Collazo does not contend that she actually used that site to book a reservation for
her rental car in Puerto Rico, only that the site permits Indiana residents to make such
reservations [DE 28 at 9]. Second, even if Collazo had made a reservation in Indiana through the
enterprise.com website, there are no allegations in the complaint, and Collazo does not argue,
that the injuries she sustained in Puerto Rico from the trolley’s sudden stop somehow resulted
from the enterprise.com website. On the contrary, she alleges that her injuries occurred because
the trolley was not equipped with a seatbelt [DE 16, ¶ 17]. So even if Collazo had used the
enterprise.com website in Indiana to reserve a car, the injury she suffered in Puerto Rico did not
arise out of that reservation for jurisdictional purposes. Cf. Elayyan v. Sol Media, SA, 571 F.
Supp. 2d 886, 905 (N.D. Ind. 2008) (injuries sustained in Mexican hotel’s swimming pool could
not have arisen out of plaintiff’s use of defendant’s website in Indiana to book hotel reservation).
Collazo’s attempt to base specific jurisdiction on the contract she allegedly entered into
with Defendants for a rental car in Puerto Rico [DE 16, ¶ 6] fares no better. Collazo fails to
produce any evidence of such an agreement. Collazo does not even allege that she negotiated or
13
executed an agreement with Defendants in Indiana. Indeed, for all I can determine from the
record before me, any agreement between Collazo and Defendants was entered into in Puerto
Rico, not Indiana.3 It’s true that Collazo contends that Defendants’ websites provide Indiana
citizens with the ability “to make reservations for rental agreements, . . . in and outside of
[Indiana]” [DE 28 at 9]. But, as noted, she provides no evidence that she even made a
reservation with Defendants via an Indiana-accessed website, much less entered into a rental
agreement from such a site.
In any event, even if Collazo had entered into a rental agreement with Defendants, that,
alone, would not establish specific jurisdiction. Purdue Research Found., 338 F.3d at 781
(“contracting with an out-of-state party alone cannot establish automatically sufficient minimum
contacts in the other party’s home forum”) (citing Burger King v. Rudzewicz, 471 U.S. 462, 478
(1985)); RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1277 (7th Cir. 1997) (same). Collazo
would still need to present evidence showing how her injuries arise out of, or are connected with,
Defendants’ activities in Indiana such that litigation in that forum would be reasonably
foreseeable. See uBID, 623 F.3d at 430. Because she has not done this, she fails to meet her
burden of establishing specific personal jurisdiction.
II.
Dismissal or Transfer
The next issue is whether the case should be dismissed or transferred. Collazo requests
that I transfer this case to the district court in Puerto Rico, pursuant to 28 U.S.C. § 1406(a),
3
Defendants, for their part, contend that “no contract [is] established by virtue of the mere
reservation. Rather, once a customer arrives at the rental destination, presents a valid driver’s
license showing the customer is of age under [Enterprise’s] guidelines . . . agrees on insurance
terms, and signs the rental agreement, a contract is then and there established” [DE 31 at 7].
14
should I find that this Court lacks personal jurisdiction over the Defendants.
This Court has the power to transfer the case to an appropriate venue pursuant to 28
U.S.C. § 1406(a), notwithstanding that it has no personal jurisdiction over the Defendants. See
Hapaniewski v. City of Chicago Heights, 883 F.2d 576, 579 (7th Cir. 1989); Cote v. Wadel, 796
F.2d 981, 985 (7th Cir. 1986). Under 28 U.S.C. § 1406(a), a district court may “transfer a case
brought in the wrong division or district” to a district where it might have been originally
brought if it is “in the interest of justice.” If, on the other hand, I deny Collazo’s transfer request,
I must dismiss her suit. Hapaniewski, 883 F.2d at 579 (citing 28 U.S.C. § 1406(a)).
In deciding whether transfer is appropriate under Section 1406(a), courts look at whether
the transfer is in the interests of justice; that is, whether the transferee forum is convenient to the
parties and witnesses as well as what impact transfer has on the efficient administration of the
court system. Wild v. Subscription Plus, Inc., 292 F.3d 526, 530 (7th Cir. 2002) (noting that
both section 1404(a) and 1406(a) have similar analyses).
Here, the most compelling reason why the interests of justice favor transfer rather than
dismissal is identified by Defendants – namely, that Collazo’s tort claim likely would be barred
were she forced to re-file after a dismissal. “A compelling reason for transfer is that the plaintiff,
. . . will be time-barred if [her] case is dismissed and thus has to be filed anew in the right court.”
Phillips v. Seiter, 173 F.3d 609, 610 (7th Cir. 1999); see also Wild, 292 F.3d at 531 (transfers are
appropriate when plaintiff's claims otherwise would be time-barred). If Collazo must re-file in
the District of Puerto Rico, where Defendants concede that venue is assured [DE 31 at 15],
Puerto Rico law likely would apply to her personal injury claim, since her injury occurred there.
See Bahia Las Minas Corp. v. General Elec. Co., 267 F. Supp. 2d 154, 156 (D. P.R. 2003) (“this
15
Court . . . adopts the rule that in situations where a case is transferred to cure a jurisdictional
defect, the Court must apply the law of the transferee district”); see also Montalvo v. GonzalezAmparo, 587 F.3d 43, 46 (1st Cir. 2009) (applying Puerto Rico tort law, including statute of
limitations, in diversity case where injury occurred in Puerto Rico). And Puerto Rico has a oneyear statute of limitations for personal injury claims. See 31 L.P.R.A. § 5298(2); see also
Arturet-Velez v. R.J. Reynolds Tobacco Co., 429 F.3d 10, 12 (1st Cir. 2005) (noting § 5298's
one-year limitations period).
For all I can determine on the basis of the sparse record before me, the clock on Collazo’s
tort claim started to run on the April 27, 2010 date of her injury – unless notice of the injury or
the party responsible for it was delayed. See Lopez-Flores v. Cruz-Santiago, 526 F. Supp. 2d
188, 190 (D. P.R. 2007). This means that the limitations period for that claim likely expired on
or about April 27, 2011. See Vargas-Ruiz v. Golden Arch Development, Inc., 283 F. Supp. 2d
450, 455-56 (D. P.R. 2003). Thus, if I decide to dismiss rather than transfer the case, Collazo’s
tort claim could well be time-barred.
Defendants, relying on Saylor v. Dyniewski, 836 F.2d 341, 345 (7th Cir. 1988), oppose
transfer on the ground that Collazo should bear the risk of failing to file in the District of Puerto
Rico. I disagree. Saylor affirmed this district court’s decision to dismiss rather than transfer
because the plaintiffs had “gambled their case on an extremely dubious theory of personal
jurisdiction.” Saylor, 836 F.2d at 345. That’s not what Collazo did here.
Granted, she made a mistake in calculating that the interactivity of Defendants’ websites
would establish personal jurisdiction. But numerous courts have recognized that the operation of
an interactive website may subject a defendant to (general or specific) personal jurisdiction. See
16
Jennings, 383 F.3d at 549 (collecting cases). So her mistake does not rise to the level of the sort
of elementary error that can, in some instances, justify the penalty of forever barring a plaintiff
from bringing a claim, particularly considering that Collazo is not a commercially sophisticated
party. Cf. Cont'l Ins. Co. v. M/V ORSULA, 354 F.3d 603, 608 (7th Cir. 2003) (dismissal proper
because plaintiff’s choice of forum was “an obvious mistake made by a sophisticated party”);
Cote, 796 F.2d at 985 (“If [plaintiff’s] mistake were one easy to commit, the penalty [of
dismissal] might be so disproportionate to the wrong that it would have to be reversed, as a clear
abuse of discretion. But the mistake was elementary.”); Brown v. Grimm, 624 F.2d 58, 59 (7th
Cir.1980) (distinguishing mistake from “blatant disregard[ ] for the elementary principles of in
personam jurisdiction”).
Defendants also argue that transfer would be futile since Collazo did not name Prerac, the
Enterprise subsidiary doing business in Puerto Rico, until she filed her amended complaint on
June 16, 2011 [DE 16], which is after the limitations period that Defendants suppose the district
court in Puerto Rico would apply to Collazo’s tort claim. But Defendants ignore that, pursuant
to Rule 15(c), Collazo’s amended complaint will likely relate back to the date of the original
complaint, in which case her action would not be time-barred as to Prerac. See Fed. R. Civ. P.
15(c)(1); see also Ayala-Gonzalez v. Toledo Davila, 623 F. Supp. 2d 181, 188 (D. P.R. 2009).
It’s not for me to predict how a district court in Puerto Rico would decide this issue. But
the parent-subsidiary relationship between Enterprise Holdings and Prerac, and the apparently
substantial identity between the claims Collazo asserts against them, suggests that Collazo may
satisfy Rule 15(c)’s relation back standard. Cf. Figueroa v. J.C. Penney Puerto Rico, Inc., 247
F.R.D. 274, 281 n.7 (D. P.R. 2007) (“Courts have found a sufficient identity of interest [for
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relation back purposes] when the original and added plaintiffs are a parent corporation and a
wholly-owned subsidiary.”), rev’d on other grounds, 568 F.3d 313 (1st Cir. 2009).
And, anyway, Defendants overlook that Collazo’s amended complaint asserts a claim for
breach of contract [DE 16], for which the Puerto Rico Civil Code prescribes a fifteen-year
limitations period. See Caribbean Mushroom Co., Inc. v. Gov’t Dev. Bank For Puerto Rico, 102
F.3d 1307, 1312 (1st Cir. 1996) (citing 31 L.P.R.A. § 5294); see also Nazario Martinez v.
Johnson & Johnson Baby Prods., Inc., 184 F. Supp. 2d 157, 162 (D. P.R. 2002) (“statue of
limitations in this District is the residual contract statute found in the Puerto Rico Civil Code, . . .
which provides fifteen years for any action ‘for which no special term of prescription has been
fixed’”).
In the end, whether the breach of contract claim is a viable one or whether the amended
complaint will relate back to the original complaint under Rule 15 is not for me to decide.
These are decisions best left for my colleague in Puerto Rico. All I find here is that, rather than
dismissal, the equities favor transfer of this action, pursuant to 28 U.S.C. § 1406(a), to the
District of Puerto Rico, where Collazo’s injury occurred and where Defendants represent that
venue is assured [DE 31 at 15].
CONCLUSION
For the foregoing reasons, Defendants’ motions to dismiss [DE 19 & 22] are DENIED.
Moreover, because the Court finds that it lacks personal jurisdiction over the Defendants,
Defendants’ requests for a finding of improper venue, pursuant to Rule 12(b)(3), are DENIED
AS MOOT. Finally, the Court hereby orders the Clerk of this Court to TRANSFER this action,
pursuant to 28 U.S.C. § 1406(a), to the United States District Court for the District of Puerto
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Rico, for all further proceedings.
SO ORDERED.
ENTERED: October 5, 2011
s/ Philip P. Simon
PHILIP P. SIMON, CHIEF JUDGE
UNITED STATES DISTRICT COURT
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