Garcia et al v. LQ Properties, Inc. et al

Filing 22

OPINION AND ORDER transferring case to the Northern District of Texas for further proceedings and the motion to dismiss is MOOT. The Clerk of theCourt is instructed to transfer this case to the U.S. District Court for the Northern District of Texas. Signed by Judge William C Lee on 6/20/2016. (rmn)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
MARTA GARCIA and OSCAR GARCIA,
Plaintiffs,
v.
LQ PROPERTIES, INC., d/b/a LA QUINTA
INN LAREDO and d/b/a LA QUINTA INNS
& SUITES, LQ MANAGEMENT, LLC, d/b/a
LA QUINTA INNS & SUITES, and BRE/LQ
PROPERTIES, LLC, n/k/a LQ PROPERTIES,
LLC, d/b/a LA QUINTA INNS AND SUITES
and d/b/a LA QUINTA INN LAREDO,
Defendants.

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Cause No.: 2:15-CV-440

OPINION AND ORDER
This matter is before the court on the motion to dismiss or, alternatively, to transfer filed
by the Defendants (collectively referred to as “the LaQuinta Defendants”) (ECF at 12). Plaintiffs
Marta Garcia and Oscar Garcia filed a response in opposition to the motion (ECF at 19) and
Defendants filed a reply brief (ECF at 21). For the reasons discussed below, this case is
TRANSFERRED to the U.S. District Court for the Northern District of Texas for further
proceedings and the motion to dismiss is MOOT. The Clerk of the Court is instructed to transfer
this case to the Northern District of Texas.
BACKGROUND
On October 24, 2013, the Garcias were guests staying at the LaQuinta Inn in Laredo,
Texas. During the stay, Marta Garcia slipped and fell in the bathtub of the Garcias’ room. Mrs.
Garcia suffered injuries as a result of the fall, which was witnessed only by her husband, Oscar.
Immediately after her fall, Mrs. Garcia sought treatment at a local emergency room in Laredo,

Texas. After returning home to Indiana, Mrs. Garcia had surgery and requires continuing physical
therapy. With the exception of the emergency room visit in Texas, all of Mrs. Garcia’s medical
procedures and treatments took place in Indiana and Chicago.
In October 2015, the Garcias filed their Complaint (ECF at 6) in Indiana’s Lake County
Superior Court, alleging negligence and seeking damages from the LaQuinta Defendants for Mrs.
Garcia’s injuries. The Garcias named three LaQuinta related entities as defendants. The first
defendant, LQ Properties, Inc., does not exist. Defendants’ Memorandum in Support of Motion
to Dismiss, Affidavit of Steven K. Read (ECF at 13-1), ¶ 7. The second defendant, BRE/LQ
Properties, is a limited liability company incorporated in Delaware and has a principal place of
business in Texas. Id. The third defendant, LQ Management, is also a limited liability company
incorporated in Delaware with a principal place of business in Texas. Id. Both BRE/LQ
Properties and LQ Management are indirect subsidiaries of La Quinta Holdings, Inc. Id. The
LaQuinta Inn Laredo, where Mrs. Garcia was injured, is also an indirect subsidiary of La Quinta
Holdings, Inc. Id.
The LaQuinta Defendants removed this action to this court on the basis of diversity
jurisdiction. Notice of Removal (ECF at 1). The Defendants now move to dismiss the Garcias’
Complaint claiming lack of personal jurisdiction and improper venue. Motion to Dismiss, p. 1.1
In the alternative, the Defendants argue that this action should be transferred to the U.S. District
Court for the Northern District of Texas. Id. The court agrees that it lacks personal jurisdiction
over the LaQuinta defendants. But the court also finds that the interests of justice are best met not
by dismissing this action, but by transferring it to a sister court in Texas. In fact, while the
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Because the personal jurisdiction issue is dispositive, the court need not address the parties’
venue arguments.
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Garcias oppose the motion to dismiss, they are agreeable–albeit perhaps reluctantly–to the
transfer of this case to the Northern District of Texas in lieu of dismissal. See Plaintiffs’
Response, pp. 7-8 (“[G]iven that the Garcias’ claim would likely be time-barred if the case is
dismissed, there is a compelling reason why the interests of justice favor transfer rather than
dismissal.”).
STANDARD OF REVIEW
The LaQuinta Defendants bring their motion to dismiss pursuant to Federal Rule of Civil
Procedure 12(b)(2), which requires dismissal of a claim if personal jurisdiction is lacking. The
plaintiff “bears the burden of demonstrating the existence of jurisdiction.” Purdue Research
Found. v. Sanofi–Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). Where the court
determines personal jurisdiction based only on reference to submissions of written materials, the
plaintiff simply needs to make a prima facie case of personal jurisdiction. GCIU–Employer Ret.
Fund v. Goldfarb Corp., 565 F.3d 1018, 1023 (7th Cir. 2009). The plaintiff may make a prima
facie showing of jurisdiction by demonstrating, via affidavits or other written materials, facts
that, if true, would be sufficient to establish jurisdiction over the nonresident defendant. Saratoga
Potato Chips Co. v. Classic Foods, Inc., 2015 WL 1778786, at *2 (N.D. Ind. Apr. 20, 2015). In
determining whether the plaintiff has met the prima facie standard, the court resolves any
disputed relevant facts in favor of the plaintiff. uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421,
423–24 (7th Cir. 2010). If the defendant has submitted evidence in opposition to the exercise of
jurisdiction, however, “the plaintiff must go beyond the pleadings and submit affirmative
evidence supporting the exercise of jurisdiction.” Purdue, 338 F.3d at 782–83.

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DISCUSSION
The LaQuinta Defendants summarize their jurisdictional argument as follows:
This is a premise liability lawsuit that should never have been brought in Indiana.
. . . [T]his Court does not have personal jurisdiction over any of the LaQuinta
Defendants. The only actual connection to Indiana is that the Garcias reside here. .
. . [N]one of the Defendants can be said to be “at home” in Indiana and general
personal jurisdiction is thus lacking. Further, because the alleged negligence
would have occurred in Laredo, Texas[,] at the hotel there, none of the suit-related
conduct that is the subject of the Garcia’s Complaint forms any substantial
connection to Indiana and specific personal jurisdiction is thus lacking, as well.
The case law is clear that the Garcias’ residency in Indiana is not alone sufficient
for an Indiana court to exert personal jurisdiction over the LaQuinta Defendants.
Defendants’ Brief in Support of Motion to Dismiss, pp. 1-2 (italics in original).
The Garcias do not argue that specific jurisdiction applies, see Plaintiff’s Response, p. 6,
n. 1 (“Plaintiffs do not contest that Defendants are not subject to specific personal jurisdiction
under the facts at bar.”), but they do argue (rather timidly) that general personal jurisdiction
exists. This is so, say the Garcias, based on the following factors: 1) LaQuinta operates 17 hotels
in Indiana;2 2) LaQuinta has offices and employees in Indiana and so “regularly conducts
business” in the state; 3) LaQuinta “regularly advertises in the Chicagoland/Northwest Indiana”
market; and 4) LaQuinta “has also designated an agent for service of process in Indiana.”
Plaintiffs’ Response, p. 5. The Garcias also say there are similarities between the Merrillville,
Indiana, LaQuinta hotel and the Laredo, Texas, LaQuinta hotel–including the company
structures, corporate address, similar websites, logos, and stationary.3 None of these factors,
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LaQuinta is a national hotel chain that operates 876 hotels in 47 states and operated 17 hotels in
Indiana as of December 31, 2015. Read Aff. ¶ 6.

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Both the Merrillville, Indiana, LaQuinta hotel and the Laredo, Texas, LaQuinta hotel are
indirect subsidiaries of LaQuinta Holdings, Inc. and have a corporate address of 909 Hidden
Ridge, Suite 600, Irving, Texas. Read Aff. ¶ 7.
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however, provide the requisite connection between the business activities of LaQuinta hotels in
Indiana and the circumstances that may have caused the alleged injury in Texas.
A federal district court exercising diversity jurisdiction has personal jurisdiction over a
nonresident defendant only if a court of the state in which it sits would have such jurisdiction.
Purdue, 338 F.3d at 779. The court must examine whether the forum state’s long-arm statute
reaches the defendant and whether the exercise of jurisdiction over the defendant would violate
federal due process. Id. Indiana’s long-arm statute, Trial Rule 4.4(A), provides in pertinent part
that an Indiana court “may exercise jurisdiction on any basis not inconsistent with the
Constitutions of this state or the United States.” Ind.Tr.R. 4.4. Thus, Indiana courts determine
their personal jurisdiction over nonresident defendants by applying the long-arm statute which
extends personal jurisdiction to the limits allowed under the Due Process Clause of the
Fourteenth Amendment to the United States Constitution. See LinkAmerica Corp. v. Cox, 857
N.E.2d 961, 967 (Ind. 2006). Personal jurisdiction can be either general (when the defendant has
continuous and systemic general business contacts with the forum state) or specific (when the
alleged injury arises out of the defendant’s forum state related activities). uBID, Inc., 623 F.3d at
425–426.
“A court may assert general jurisdiction over foreign (sister-state or foreign-country)
corporations to hear any and all claims against them when their affiliations with the State are so
‘continuous and systematic’ as to render them essentially at home in the forum State.” Goodyear
Dunlop Tires Operations, S.A. v . Brown, 131 S. Ct. 2846, 2851 (2011) (citing International
Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). Goodyear made clear that only a limited set
of affiliations with a forum will render a defendant amenable to general jurisdiction there.
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Daimler AG v. Bauman, 134 S. Ct. 746, 760 (2014). “As International Shoe teaches, a
corporation’s ‘continuous activity of some sorts within a state is not enough to support the
demand that the corporation be amenable to suits unrelated to that activity.’” Daimler, 134 S. Ct.
at 757 (citing International Shoe, 326 U.S. at 318). The Seventh Circuit has explained that “these
contacts must be so extensive to be tantamount to [the nonresident defendant] being
constructively present in the state to such a degree that it would be fundamentally fair to require
it to answer in an Indiana court.” Purdue, 338 F.3d at 787.
A corporation is “essentially at home” both where it is incorporated and where its
principal place of business is located. Goodyear, 131 S. Ct. at 2853–54; Daimler, 134 S. Ct. at
751. A corporation’s principal place of business and its state of incorporation are paradigm bases
for determining whether a court may exercise general jurisdiction. Daimler, 134 S. Ct. at 760.
This standard is stringent “because the consequences can be severe: if a defendant is subject to
general jurisdiction in a state, then it may be called into court there to answer for any alleged
wrong, committed in any place, no matter how unrelated to the defendant’s contacts with the
forum.” uBID, 623 F.3d at 426. “Such exorbitant exercises of all-purpose jurisdiction would
scarcely permit out-of-state defendants ‘to structure their primary conduct with some minimum
assurance as to where that conduct will and will not render them liable to suit.’” Daimler, 134 S.
Ct. at 760!62 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).
The inquiry under Goodyear is not whether a foreign corporation’s in-forum contacts can
be said to be in some sense “continuous and systematic,” it is whether that corporation’s
“affiliations with the State are so ‘continuous and systematic’ as to render [it] essentially at home
in the forum State.” Daimler, 134 S. Ct. at 761 (citing Goodyear, 564 U.S. at 919). The mere
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presence of multiple LaQuinta hotels in Indiana is insufficient to render the LaQuinta Defendants
“essentially at home” in this state. See Daimler, 134 S. Ct. at 762 n.20 (“A corporation that
operates in many places can scarcely be deemed at home in all of them.”). Under such an
approach, LaQuinta could be said to be “at home,” for purposes of personal jurisdiction, in the 47
states where LaQuinta hotels operate. This approach is counterintuitive to Daimler.
International Shoe speaks of “instances in which the continuous corporate operations
within a state [are] so substantial and of such a nature as to justify suit . . . on causes of action
arising from dealings entirely distinct from those activities.” 326 U.S. at 318 (emphasis added).
But in this case, the Garcias, both Indiana residents, sued LaQuinta on a claim that neither arose
in Indiana nor related to the LaQuinta Defendants’ activities in the State. Again, a corporation’s
“continuous activity of some sorts within a state is not enough to support the demand that the
corporation be amenable to suits unrelated to that activity.” Daimler, 134 S. Ct. at 757 (citing
International Shoe, 326 U.S. at 318). The Garcias have failed to show that their claims, which
arose in Texas, have any substantial connection (or any connection at all, really) to the LaQuinta
Defendants’ activity in Indiana. Thus, the court holds that the Garcias have not carried their
burden to show that LaQuinta is subject to general personal jurisdiction in Indiana.
As stated above, both the Garcias and LaQuinta have requested that the court transfer this
case to the U.S. District Court for the Northern District of Texas, pursuant to 28 U.S.C. §
1406(a), if the court finds a lack of personal jurisdiction. Motion to Dismiss, p. 1; Plaintiffs’
Response, pp. 7-8. 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.” A court has the power to transfer a case to an appropriate venue pursuant to
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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) (“[P]ersonal
jurisdiction over the defendant is not a prerequisite for district courts to utilize the transfer
provision in § 1406(a).”) (citations omitted). “A compelling reason for transfer is that the
plaintiff . . . will be time-barred if his 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). Here, the court has determined that it
lacks personal jurisdiction over the LaQuinta Defendants. Given that the Garcias’ claims would
likely be time-barred if the case is dismissed (and because no purpose is served by forcing the
Garcias to file a new complaint and incur a new filing fee), the court finds it is in the interests of
justice to transfer this matter to an appropriate district rather than dismiss the case.
CONCLUSION
For the reasons set forth above, this case is TRANSFERRED to the Northern District of
Texas for further proceedings and the motion to dismiss (ECF at 12) is MOOT. The Clerk of the
Court is instructed to transfer this case to the U.S. District Court for the Northern District of
Texas.

Date: June 20, 2016.

/s/ William C. Lee
William C. Lee, Judge
U.S. District Court
Northern District of Indiana

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