Haffey et al v. Seymour et al

Filing 11

OPINION AND ORDER: The motion to dismiss 5 for lack of personal jurisdiction filed by the defendants is GRANTED and that the complaint is DISMISSED without prejudice. The Clerk of Court SHALL STRIKE this case from the Court's active docket. Signed by Judge Karen K. Caldwell on 05/17/2017.(LC)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
AT LEXINGTON
SHANE HAFFEY and HEATHER
McKEEVER,

CIVIL ACTION
NO. 5:17-124-KKC

Plaintiffs,
V.

OPINION & ORDER

BARBARA M. SEYMOUR, in her
official and individual capacity, and
UNKNOWN MEMBERS OF THE
COMMISSION ON LAWYERS
MISCONDUCT, in their official and
individual capacity,1
Defendants.

*****
Heather McKeever is a licensed attorney in the Commonwealth of Kentucky who is
the subject of a disciplinary investigation and prosecution in South Carolina for alleged
professional misconduct in the Palmetto State. McKeever and her husband, Shane Haffey,
bring this suit to strike down as unconstitutional an administrative rule related to the
disciplinary process McKeever is facing and to hold Barbara M. Seymour, the Deputy
Disciplinary Counsel of the South Carolina Office of Disciplinary Counsel, and Unknown
Members of the South Carolina Commission of Lawyer Conduct accountable for their
involvement in the proceedings.
This matter, however, cannot go forward as Kentucky’s ties to this case are too loose
to haul these out-of-state defendants before this Court. Because Kentucky’s long-arm statute
does not reach so far as to touch any of the defendants’ alleged conduct, this case is dismissed

The caption uses the name reflected on the docket sheet. The proper name is the “South Carolina Commission
of Lawyer Conduct” and it will be used in this opinion.
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for want of personal jurisdiction. McKeever and Haffey must find another forum in which to
assert their claims.
I.
Heather McKeever and Shane Haffey are a married couple who reside in Lexington,
Kentucky. McKeever is a licensed attorney in the Commonwealth with experience in the area
of mortgage document fraud (Compl. ¶ 7), and Haffey is a heritage breed livestock farmer.
(Compl. ¶ 8). Sometime in August 2016, McKeever received a letter from the South Carolina
Commission of Lawyer Conduct. (Compl ¶ 28). The letter was signed by Jody W. Gilham, an
administrative assistant for the Commission. (Compl. ¶ 29). Gilham carbon copied Barbara
Seymour, the Deputy Disciplinary Counsel of the South Carolina Office of Disciplinary
Counsel on the letter. (Compl. ¶ 29). Dated July 16, 2016, the letter informed McKeever that
the Commission of Lawyer Conduct had launched a disciplinary investigation into her alleged
unauthorized practice of law in a lawsuit regarding her and her husband’s real property
located in Mount Pleasant, South Carolina. The letter also noted that a hearing on the matter
was set for September 19, 2016, and notified McKeever that she must attend or face default.
(Compl. ¶ 30).
Apparently McKeever did not attend the hearing, as a document obtained by
McKeever titled “Default Order” later revealed.2 (Compl. ¶ 31). The Order noted that
Seymour had filed the underlying disciplinary charges on April 7, 2016, and served McKeever
in accordance with Rule 14(c) of the South Carolina Rules for Lawyer Disciplinary

The circumstances surrounding McKeever’s receipt of the letter are ambiguous at best. The complaint states
that the August letter notified McKeever of a September 19 hearing date, which at that point was a month away.
The next line in the complaint alleges that the letter also stated that “the hearing panel ruled that you are in
default and that the factual allegations have been deemed admitted” (Compl. ¶ 30), implying that the hearing
already took place. The August letter is not filed in the record, so it is not at all clear what actually occurred or
when McKeever was deemed to have been in default.
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Enforcement. (Compl. ¶ 32). McKeever denies having received any notice or service before
receiving the August letter. (Compl. ¶ 33).
In response to the disciplinary proceedings, McKeever, along with her husband, sued
Seymour, in her individual and official capacity, and Unknown Members of the South
Carolina Commission of Lawyer Conduct asserting the following:
1. A declaratory judgment action requesting that this Court declare Rule 14(c) of the
South Carolina Rules for Lawyer Disciplinary Enforcement, which refers to the
service of process requirement of disciplinary charges and is codified as a part of
Rule 413 of the South Carolina Appellate Court Rules (“SCACR”), unconstitutional
under the Due Process Clause of the Fourteenth Amendment (Compl. ¶¶ 56–72.);
2. A claim under 42 U.S.C. § 1983 against all defendants for violations of their
“ministerial and discretionary duties” related to the prosecution of the disciplinary
complaint filed against McKeever (Compl. ¶¶ 73–83.);
3. A claim under the provisions of the Racketeer Influenced and Corrupt Organizations
Act (“RICO”), 18 U.S.C. § 1961 et seq., alleging that the defendants “us[ed] the mails
to defraud Haffey of money and/or property” (Compl. ¶¶ 84–88.);
4. A claim for “Tortious Interference with Court Ordered Agreements and Private
Contracts” (Compl. ¶¶ 89–93.);
5. A violation of the South Carolina Rules for Lawyer Disciplinary Enforcement, Rule
413, SCACR, related to Deputy Disciplinary Counsel’s alleged interference with
plaintiffs’ right to counsel at the September 16, 2016 disciplinary hearing (Compl. ¶¶
94–98); and
6. A violation of the South Carolina Rules for Lawyer Disciplinary Enforcement, Rule
413, SCACR, related to Deputy Disciplinary Counsel’s alleged “forcible recruitment”
of Betty McMichael—the plaintiffs’ formal real estate agent—to act as a
Complainant against McKeever in the disciplinary action proceeding against
McKeever (Compl. ¶¶ 99–103).
The defendants now move under Federal Rule of Civil Procedure 12(b)(2) to dismiss
this action for a lack of personal jurisdiction and improper venue, or, in the alternative, under
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Rule 12(b)(3) to transfer this action to the District of South Carolina pursuant to 28 U.S.C. §
1404. (DE 5). Because the Court lacks the requisite power to exercise personal jurisdiction
over the defendants, this case will be dismissed on that ground alone without need to address
the defendants’ alternative arguments.
II.
When a federal court’s subject-matter jurisdiction is based on a federal question, like
it is here, the court’s exercise of personal jurisdiction must both be authorized by the forum
state’s long-arm statute and be in accordance with the Due Process Clause of the Fourteenth
Amendment. AlixPartners, LLP v. Brewington, 836 F.3d 543, 549 (6th Cir. 2016) (internal
citations omitted). The Supreme Court of Kentucky has construed Kentucky’s long-arm
statute to have significance independent of the constitutional inquiry. Caesars Riverboat
Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011); see also Newberry v. Silverman, 789 F.3d
636, 641 (2015). In Kentucky, therefore, “the proper analysis of long-arm jurisdiction over a
nonresident defendant [under Kentucky’s long-arm statute] consists of a two-step process.”
Id. First, a court must examine the plain language of K.R.S. 454.210 to determine whether
the alleged conduct or activity of the defendant arises from the type of conduct or activity
that is enumerated in the long-arm statute itself. Id. Then, only if the long-arm statute covers
the type of conduct at issue will a court then assess whether “exercising personal jurisdiction
over the non-resident defendant offends his federal due process rights.” Id.
McKeever and Haffey’s claims against the defendants fail at step one because the
defendants’ conduct, no matter how it is framed, simply does not fit within any of the
categories enumerated in Kentucky’s long-arm statute. Kentucky elects to extend the reach
of its long-arm statute to nine categories of conduct that will subject a defendant to personal
jurisdiction in the Commonwealth:

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1. Transacting any business in this Commonwealth;
2. Contracting to supply services or goods in this Commonwealth;
3. Causing tortious injury by an act or omission in this Commonwealth;
4. Causing tortious injury in this Commonwealth by an act or omission outside this
Commonwealth if he regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods used or
consumed or services rendered in this Commonwealth, provided that the tortious
injury occurring in this Commonwealth arises out of the doing or soliciting of business
or a persistent course of conduct or derivation of substantial revenue within the
Commonwealth;
5. Causing injury in this Commonwealth to any person by breach of warranty expressly
or impliedly made in the sale of goods outside this Commonwealth when the seller
knew such person would use, consume, or be affected by, the goods in this
Commonwealth, if he also regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods used or
consumed or services rendered in this Commonwealth;
6. Having an interest in, using, or possessing real property in this Commonwealth,
providing the claim arises from the interest in, use of, or possession of the real
property, provided, however, that such in personam jurisdiction shall not be imposed
on a nonresident who did not himself voluntarily institute the relationship, and did
not knowingly perform, or fail to perform, the act or acts upon which jurisdiction is
predicated;
7. Contracting to insure any person, property, or risk located within this Commonwealth
at the time of contracting;
8. Committing sexual intercourse in this state . . . ; or
9. Making a telephone solicitation, as defined in KRS 367.46951, into the
Commonwealth.
K.R.S. § 454.210.
For jurisdictional purposes, the conduct alleged in the complaint can be construed in
two ways, neither of which falls within the reach of the Kentucky long-arm statute. First,
though not specifically alleged in their complaint, McKeever and Haffey implicitly argue the
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defendants had contact with Kentucky because the defendants sent a letter in August 2016
notifying McKeever of the impending hearing regarding the disciplinary proceedings ongoing in South Carolina. As an initial matter, such contact is rarely sufficient to satisfy the
minimum due process requirement. See, e.g., Calphalon Corp. v. Rowlette, 228 F.3d 718, 723
(6th Cir. 2000) (upholding a district court’s decision that a defendant who sent only one letter
to a plaintiff did not purposely avail himself of the laws in the state where the letter was
sent). But more relevant here, McKeever and Haffey make no attempt in their complaint or
in their response to the defendants’ motion to dismiss to fit this conduct into one of the
enumerated categories set out in the Kentucky long-arm statute. The reason is presumably
obvious. The long-arm statute does not cover this type of conduct, which abruptly ends the
Court’s inquiry at this “initial step.” See Caesars, 336 S.W.3d at 57.
The complaint also alleges that the defendants injured McKeever and Haffey by virtue
of filing and pursuing the disciplinary proceeding against McKeever in South Carolina. Of
the nine categories of conduct listed in the statute, only categories four, five, and nine allow
for jurisdiction when the act in question took place outside of Kentucky. Category four
requires that the defendant regularly engage in or solicit business in Kentucky. McKeever
and Haffey do not and cannot argue that the defendants did so. In order for category five to
apply, the defendants would have had to sell goods outside Kentucky with the knowledge
that they would be brought into the state. This is also a no-go. Lastly, there are no allegations
that the defendants made a telephone solicitation into the Commonwealth. Without a fit, the
Court’s inquiry must, again, end here. See Caesars, 336 S.W.3d at 57.
As the complaint itself makes clear, the alleged conduct by the defendants is not a
product of a random act of investigatory overreach by the South Carolina Office of
Disciplinary Counsel or South Carolina Commission of Lawyer Conduct into the professional
actions of a lawyer with no connection to either entity’s state. Rather, everything about this
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case has to do with South Carolina. This matter concerns a disciplinary investigation arising
from McKeever’s alleged unauthorized practice of law while in South Carolina. The property
related to the investigation is also in South Carolina. Indeed, there is no allegation that
Kentucky has any connection to this action aside from the fact that McKeever and Haffey
happen to live in the Commonwealth and received a letter from the defendants while at home
in Lexington. Thus, it is clear that the defendants’ conduct, no matter how it is framed, does
not fit within any of the categories enumerated in Kentucky’s long-arm statute.
McKeever and Haffey do not address the applicability of the Kentucky long-arm
statute, let alone offer an argument to the contrary. Instead, McKeever and Haffey respond
to the defendants’ motion to dismiss with vague reference to the fact that the administrative
rule the complaint challenges applies “to both out of state attorneys and all lay persons
residing outside the State of South Carolina who are not licensed attorneys.” (DE 9, at 1).
That is true as far as it goes. The administrative rule challenged here provides the
mechanism by which the defendants inform out-of-state attorneys of disciplinary actions like
the one against McKeever. But that hardly offers a rebuttal to the question whether this
Court can exercise personal jurisdiction over these defendants, particularly in the face of the
Kentucky long-arm statute. Moreover, if by this argument McKeever and Haffey mean to
imply that any court across the country would have personal jurisdiction over the defendants
under these facts, such a theory stretches too far to merit further discussion.
To be sure, this Court certainly has the subject-matter jurisdiction to hear the claims
alleged in the complaint, see 28 U.S.C. § 1331, but no matter a court’s ability to hear a claim,
it must also have the power to exercise that subject-matter jurisdiction over a particular
defendant. The two are separate inquiries that demand separate considerations. And as
established above, McKeever and Haffey fail to shoehorn the conduct alleged in the complaint
into an enumerated category of the Kentucky long-arm statute.
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Perhaps realizing the lack of sufficient contact in Kentucky, McKeever and Haffey use
the majority of their two-page response to waive any objection to the defendants’ alternative
argument for a transfer to the United States District Court for the District of South Carolina.
(DE 9, at 2). This request is also problematic. The defendants are not subject to personal
jurisdiction in the Commonwealth of Kentucky. As a result, this Court cannot authorize a
transfer to South Carolina under 28 U.S.C. § 1404, which is the sole method by which the
defendants argue that this case should change jurisdictions. See Newberry, 789 F.3d at 643
(citing Martin v. Stokes, 623 F.2d 469, 473–74 (6th Cir.1980) (“[The] construction of §1406(a)
necessarily limits the application of § 1404(a) to the transfer of actions commenced in a
district court where both personal jurisdiction and venue are proper.”)). Thus, the better
course is to dismiss this case for lack of personal jurisdiction, which will allow the plaintiffs,
if they so choose, to bring this action in a proper forum.
III.
For the reason stated herein, IT IS HEREBY ORDERED that the motion to dismiss
(DE 5) for lack of personal jurisdiction filed by the defendants is GRANTED and that the
complaint (DE 1) is DISMISSED without prejudice. The Clerk of Court SHALL STRIKE
this case from the Court’s active docket.

Dated May 17, 2017.

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