Hosseini et al v. National Cooperative Bank
Filing
14
MEMORANDUM OPINION & ORDER: IT IS ORDERED that Dft's motion to dismiss is GRANTED. Signed by Judge Joseph M. Hood on 3/29/2018.(GLD)cc: COR, pro se plaintiffs
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION at LEXINGTON
MEHRDAD HOSSEINI and
NASRIN ABDOLRAHMANI,
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Plaintiffs,
v.
NATIONAL COOPERATIVE BANK,
Defendant.
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Action No. 5:17-cv-216-JMH
MEMORANDUM OPINION AND ORDER
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This matter is before the Court on the Defendants’ Motion
to Dismiss for Lack of Personal Jurisdiction [DE 11].
The
plaintiffs responded [DE 13] and the motion is ripe for ruling.
For the reasons stated herein, the motion will be GRANTED.
I.
Factual Background
Plaintiffs, proceeding pro se, filed the Complaint in this
matter against National Cooperative Bank for violations of the
Fair
Credit
Reporting
Act,
15
U.S.C.
§
Collection Practices Act, 15 U.S.C. § 1692.
a loan from Defendant in 2000.
1681
and
Fair
Debt
Plaintiffs obtained
The loan related to property or an
interest in a co-op (it is not clear from the record at this
stage), which Defendant says is located in Michigan and Plaintiff
claims
is
an
intangible
interest
not
located
in
any
state.
Plaintiffs allege Defendant misapplied payments on their loan and
1
made inaccurate reports to the credit reporting agencies that
negatively affected their credit scores.
Plaintiffs moved from
Michigan to Kentucky in 2006.
Defendant
filed
an
Answer
to
the
Complaint,
but
soon
thereafter moved to dismiss the Complaint for lack of personal
jurisdiction under Fed. R. Civ. P. 12(b)(2).
Plaintiffs did not
aver any facts relating to personal jurisdiction in the Complaint
other than that Defendant’s principal place of business is in
Hillsboro, Ohio, a fact that Defendant admits as true.
II.
Standard of Review
Plaintiffs
“need
only
make
a
prima
facie
showing
of
jurisdiction.” CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262
(6th Cir. 1996).
To meet this burden, they must establish “with
reasonable particularity sufficient contacts between [Defendants]
and the forum state to support jurisdiction.”
Neogen Corp. v. Neo
Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002) (citation
omitted).
In reviewing a defendant’s motion to dismiss pursuant
to Rule 12(b)(2), this Court relies on the pleadings and affidavits
of the parties and construes the facts in the light most favorable
to the nonmoving parties.
See Serras v. First Tenn. Bank Nat’l
Ass’n, 875 F.2d 1212, 1214 (6th Cir. 1989).
“[T]the plaintiff
must make only a prima facie showing that personal jurisdiction
exists in order to defeat dismissal . . . the pleadings and
affidavits submitted must be viewed in a light most favorable to
2
the
plaintiff,
and
the
district
court
should
not
weigh
the
controverting assertions of the party seeking dismissal. Air Prod.
& Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th
Cir. 2007) (internal quotation marks and citations omitted).
“Where a federal court's subject matter jurisdiction over a
case stems from the existence of a federal question, personal
jurisdiction over a defendant exists ‘if the defendant is amenable
to service of process under the [forum] state's long-arm statute
and if the exercise of personal jurisdiction would not deny the
defendant[ ] due process.’”
(6th
Cir.
2002)
(quoting
Bird v. Parsons, 289 F.3d 865, 871
Michigan
Coalition
of
Radioactive
Material Users, Inc. v. Griepentrog, 954 F.2d 1174, 1176 (6th
Cir.1992).
Where, as here, the defendant objects to personal
jurisdiction, this Court may exercise personal jurisdiction over
a defendant only if such jurisdiction is (1) authorized by Kentucky
law and (2) otherwise consistent with the Due Process Clause of
the Fourteenth Amendment.
See Youn v. Track, Inc., 324 F.3d 409,
417 (6th Cir. 2003) and Fed. R. Civ. P. 4(k)(1).
Kentucky’s long-
arm statute provides in pertinent part:
(2) (a) A court may exercise personal
jurisdiction over a person who acts directly
or by an agent, as to a claim arising from the
person’s:
1.
Transacting
any
business
in
this
Commonwealth;
2. Contracting to supply services or goods in
this Commonwealth;
. . . .
3
KRS § 454.210(2)(a). Kentucky courts construe the state’s longarm statute as coextensive with the limits of due process.
v. Case, 85 S.W.3d 589, 592 (Ky. 2002).
jurisdiction
over
Defendants
if
Wilson
The Court may exercise
personal
jurisdiction
is
consistent with the requirements of federal due process.
Specific jurisdiction exists where the claims in the case
arise from or are related to the defendant’s contacts with the
forum state.
Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d
147, 149 (6th Cir. 1997).1
The Court addresses three criteria to determine if an exercise
of specific jurisdiction is proper.
First, Defendants must have
purposefully availed themselves of the privilege of acting in
Kentucky or purposefully caused a consequence in the state.
the
cause
of
action
must
arise
from
the
exercise
of
Defendants’
Next,
actions
jurisdiction
must
in
Kentucky.
Finally,
be
reasonable.
See Aristech Chem. Int’l Ltd. v. Acrylic Fabricators
Ltd., 138 F.3d 624, 628 (6th Cir. 1998); Southern Machine Co. v.
1
General jurisdiction, on the other hand, exists when a defendant’s “contacts
with the forum state are of such a continuous and systematic nature that the
state may exercise personal jurisdiction over the defendant even if the action
is unrelated to the defendant’s contacts with the state.” Bird v. Parsons, 289
F.3d 865, 873 (6th Cir. 2002). It is not clear whether Plaintiffs claim the
Court has specific or general jurisdiction over Defendant, although the
Complaint and Response to the Motion to Dismiss allege facts that lead the Court
to believe Plaintiffs allege specific jurisdiction. To the extent Plaintiffs
claim the Court has general jurisdiction over Defendant, the Court holds that
there are no facts that support a finding of general jurisdiction because
Defendant has no loans on its books originated in Kentucky and does not market
to Kentucky residents.
4
Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968); Wilson,
85 S.W.3d at 592.
A court may not exercise in personam jurisdiction if the
defendant has not purposefully entered into a connection with the
forum state “such that he should reasonably anticipate being haled
into court there.”
World-Wide Volkswagen Corp. v. Woodson, 444
U.S. 286, 297 (1980).
“This ‘purposeful availment’ requirement
ensures that a defendant will not be haled into a jurisdiction
solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’
contacts.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
(1985)(citations omitted).
III. Analysis
Defendant is a federally-chartered bank with its primary
place of business in Ohio.
by
its
authorized
Defendant submitted an affidavit sworn
representative
and
Vice
President,
Tonia
Vorhies, upon which it relies as proof that the Court does not
have personal jurisdiction over it.
The affiant states Defendant
does not provide services in Kentucky, does not market its services
to residents of Kentucky, has never had a branch or physical
presence in Kentucky, has not originated any loans in the state of
Kentucky in the past five years, does not have any loans originated
in the state of Kentucky on its balance sheet, and that the
specific loan at issue in this case relates to property located in
5
the state of Michigan, with no connection to Kentucky.
[DE 11,
Ex. 1, ¶¶ 3-7].
The exhibits Plaintiffs offered in response to the motion to
dismiss (as well as the exhibits attached to the Complaint) relate
only to the substantive claims in the case, and do not refute
Defendant’s affidavit.
Plaintiff does state in the response that
the loan that is the subject of this dispute “is not bound to any
property,” which, although not evidence, does dispute Defendant’s
claim that the loan relates to property in Michigan.
If the loan
does not relate to property in any particular state, however, this
fact does not support a finding of in personam jurisdiction over
Defendant.
In deciding a Rule 12(b)(2) motion without a hearing, the
Court must construe all facts in the light most favorable to the
plaintiffs,
and
should
“not
consider
facts
proffered
by
the
defendant that conflict with those offered by the plaintiff.”
Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th
Cir. 2002).
Even under this very generous standard, the Court
holds it cannot exercise personal jurisdiction over the defendant.
There are no facts which indicate Defendant has any contacts with
Kentucky,
other
than
correspondence
it
sent
to
Plaintiff.
Defendant did not purposefully avail itself of the jurisdiction of
this court; rather, Defendant made a loan to Plaintiffs in 2000
and then Plaintiffs moved to Kentucky six years later.
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Defendant
did not have any reason to suspect that it would be haled into
court in Kentucky because its loan customers moved and it had to
send them mail at their new address.2
Exercising in personam jurisdiction over Defendant pursuant
to these facts would “offend traditional notions of fair play and
substantial justice.”
U.S. 310, 316 (1945)).
International Shoe Co. v. Washington, 326
Accordingly, Defendant’s motion will be
granted.
IV.
Conclusion
For the reasons stated herein and the Court being otherwise
sufficiently advised, IT IS ORDERED that Defendant’s Motion to
Dismiss [DE 11] is hereby GRANTED.
This 29th day of March, 2018.
2
The Court notes that various federal regulations, such as the Fair Credit
Reporting Act, the Truth-in-Lending Act, and others require notices be sent
from lenders to borrowers throughout the life of the loan. Defendant had no
choice but to send mail to its borrowers in Kentucky in order to be compliant
with regulatory requirements.
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