Roberson v. Waste Management, Inc. et al
Filing
15
MEMORANDUM OPINION AND ORDER granting 8 Motion to Dismiss for Lack of Jurisdiction filed by Defendant Waste Management, Inc.. Signed by Judge Greg N. Stivers on 1/21/2016. cc: Counsel(JBM)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
BOWLING GREEN DIVISION
CIVIL ACTION NO. 1:15-CV-00107-GNS
TYLER G. ROBERSON
PLAINTIFF
v.
WASTE MANAGEMENT, INC. and
SOUTHERN WASTE SERVICES, LLC
DEFENDANTS
MEMORANDUM OPINION AND ORDER
This matter is before the Court on the Motion to Dismiss for Lack of Personal
Jurisdiction (DN 8) filed by Defendant Waste Management, Inc. (“WMI”). The motion has been
fully briefed and is ripe for decision. For the reasons stated below, the Court GRANTS the
motion.
I.
BACKGROUND
This action arises from alleged violations of Kentucky worker’s compensation law, the
Kentucky Civil Rights Act, the Americans with Disabilities Act, Kentucky Wage and Hour Law,
and the Fair Labor Standards Act. (Pl.’s Resp. in Opp. to Def.’s Mot. to Dismiss for Lack of
Personal Jurisdiction 1, DN 9 [hereinafter Pl.’s Resp.]). Plaintiff, Tyler G. Roberson
(“Roberson”) claims that Defendants improperly terminated him due to an injury he sustained on
the job and refused to record Roberson’s hours for work done before operational hours. (Pl.’s
Resp. 4). Plaintiff filed his complaint against Waste Management, Inc. (“WMI”) in Logan
Circuit Court on June 12, 2015. (Pl.’s Resp. 1). Roberson amended his complaint to include
Defendant Southern Waste Services (“SWS”) on August 27, 2015. (Pl.’s Resp. 2). SWS is a
subsidiary of WMI operating in the state of Kentucky. (Pl.’s Resp. 2). Defendant removed to this
Court on September 10, 2015. (Def.’s Notice of Removal 1, DN 1). WMI filed the motion at
issue on September 16, 2015. (Def.’s Mot. to Dismiss , DN 16 [hereinafter Def.’s Mot.]).
II.
STANDARD OF REVIEW
“When a district court rules on a jurisdictional motion to dismiss, without conducting an
evidentiary hearing, the court must consider the pleadings and affidavits in a light most favorable
to the plaintiff.” Moore v. Irving Materials, Inc., No. 4:05-CV-184, 2007 WL 2081095, at *2
(W.D. Ky. July 18, 2007). “To defeat such a motion, the plaintiff need only make a prima facie
showing of jurisdiction and the court should not weigh the controverting assertions of the party
seeking dismissal.” Id. (citing Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1272 (6th Cir.
1998)).
III.
DISCUSSION
The Court must determine whether personal jurisdiction exists over a nonresident
defendant by applying the law of the state in which it sits. Third Nat’l Bank v. WEDGE Grp.
Inc., 882 F.2d. 1087, 1089 (6th Cir. 1989). Until recently, the Kentucky long-arm statute was
understood to reach the limit permitted by the Constitution. Wilson v. Case, 85 S.W.3d 589, 592
(Ky. 2002), overruled by Caesar’s Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky.
2011). The Kentucky Supreme Court, however, overruled this standard in Caesar’s Riverboat
establishing a two-step analysis to establish jurisdiction. Caesar’s Riverboat, 336 S.W.3d at 57.
“First, review must proceed under KRS 454.210. . . . When that initial step results in a
determination that the statute is applicable, a second step of analysis must be taken to determine
if exercising personal jurisdiction over the non-resident defendant offends his federal due process
rights.” Id.
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Defendant incorrectly argues under the overruled standard which finds the Kentucky long
arm statute merges with a due process analysis. (Def’s Mot. 5 (citing Tobin v. Astra Pharm.
Prods., Inc., 993 F.2d 528, 543 (6th Cir. 1993)). Caesar’s Riverboat makes jurisdiction more
difficult to establish in Kentucky, yet Defendant has opted to argue only under due process rather
than the Kentucky long-arm statute. (Def.’s Mot. 5). Regardless, Roberson still fails to establish
jurisdiction even under the less strict confines of constitutional due process and therefore would
fail to establish jurisdiction under the Kentucky long-arm statute as well.
“The Supreme Court has repeatedly held that if a defendant is not present in the forum
state, in order to subject him to an in personam judgment, he must have ‘certain minimum
contacts with it such that maintenance of the suit does not offend ‘traditional notions of fair play
and substantial justice.’” Moore, 2007 WL 2081095, at *2 (quoting Int’l Shoe Co. v. Wash., 326
U.S. 310, 316 (1945)). The Sixth Circuit has established a three-part test for determining whether
personal jurisdiction is consistent with due process. S. Mach. Co. v. Mohasco, 401 F.2d. 374, 381
(6th Cir. 1968).
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
reasonable.
Id. Utilizing the three-part test set forth in Mohasco, the Court finds that specific jurisdiction
does not exist over Defendant WMI.
The first Mohasco factor requires that the defendant must have “purposefully avail[ed]
itself of the privilege of acting in the forum state or causing a consequence in the forum state.”
Id. In the context of parent companies and subsidiaries, “a company does not purposefully avail
itself merely by owning all or some of a corporation subject to jurisdiction.” Motel 6, 134 F.3d at
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1274 (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13 (1984)). Plaintiff must
establish that the parent company is being brought into court for its own conduct, not just the
conduct of its subsidiary. Id. The Court must find some “overt action” connecting the parent
company with the forum state, rather than action conducted by the subsidiary. Moore, 2007 WL
2081095, at *3 (citing Motel 6, 134 F.3d at 1274). An overt act exists when evidence is presented
that the parent company “actually controls” the subsidiary. Id. Therefore, to establish jurisdiction
over a parent through the actions of its subsidiaries, the Court must engage into an inquiry
regarding the level of control the parent has over the company.
In Motel 6, the court held that the plaintiff failed to show that the defendant parent
corporation purposely availed itself of the privilege of conducting activities in Kentucky since
the plaintiff failed to “provide any direct evidence of [the parent company]’s involvement in the
operation of the [subsidiary].” Motel 6, 134 F.3d at 1274. While the plaintiff could establish
ownership by defendant, the plaintiff pointed only to vague financial statements and that some
managers at the subsidiary formerly worked at the parent company. Id. at 1275. The court also
indicated, however, that direct evidence of management, consulting, and financial services
provided to the subsidiary by the parent and “a network of simultaneous board memberships”
supports a finding that the parent controls the subsidiary. Id.
Similarly, in WEDGE, the Sixth Circuit held that even though the parent corporation
never directly conducted business in the forum state, jurisdiction was proper. WEDGE, 882 F.2d.
at 1090. In WEDGE, the parent was the sole owner of the subsidiary, the parent company’s
officers were directors of the subsidiary, the parent had a tax-sharing agreement with the
subsidiary, the parent company participated in negotiations on behalf of the subsidiary, and it
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deposited funds in the subsidiary’s account. These factors in combination were sufficient to
establish jurisdiction. Id.
In this case, Roberson presents several exhibits which establish that the WMI trade name
was used by its subsidiary, SWS, in connection with its employment policies, hiring, earning
statements, and phone listing. (Pl.’s Resp. 7-8). The Plaintiff does not, however, establish any
overt actions conducted by WMI to establish control over SWS. WMI provided little support to
SWS beyond the allowance of the WMI trade name and providing its human resources materials.
Plaintiff admits Defendant is a parent of SWS and therefore the sole question is whether WMI
provided enough support to plausibly constitute an overt act of control. See Moore, 2007 WL
2081095, at *2-3. A subsidiary’s use of its parent company’s trade name, by itself, is not
sufficient to establish personal jurisdiction over the parent company. Phonometrics, Inc. v. N.
Telecom Inc., 133 F.3d 1459, 1463 n.5 (Fed. Cir. 1998); In re Ski Train Fire in Kaprun, Austria,
230 F. Supp. 2d 403, 411 (S.D.N.Y. 2002); Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285,
1301 (S.D. Cal. 2003). Instead, Roberson must show some form of overt act by the parent
company to directly control the subsidiary. Motel 6, 134 F.3d at 1274. Roberson has failed to do
so. Plaintiff presents substantial evidence that SWS, acting under the WASTE MANAGEMENT
trade name of its parent holding company WMI, has substantial contacts in the state of
Kentucky. (Pl.’s Resp. 2-5). Jurisdiction over SWS, however, is not at issue. Roberson fails to
make the important distinction between WMI’s actions and those of SWS acting under the
WASTE MANAGEMENT trade name. (See Pl.’s Resp. 7-8). Plaintiff cannot establish
jurisdiction over WMI simply by referring to SWS by the WASTE MANAGEMENT trade name
in its briefs and exhibits. Like the plaintiff in Motel 6, Roberson has established little more than
ownership by WMI and de minimis support . See Motel 6, 134 F.3d at 1274. WMI does not have
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its own employees, does not have any assets beyond the stock of its subsidiaries, nor does it have
any control over the operation of Roberson’s former work site. (Tippy Decl. ¶¶ 5-8, DN 8-2).
Further, the Kentucky phone book listing directs callers to SWS rather than WMI. (Tippy Decl.
¶¶ 5-8).
Roberson repeatedly refers to materials, documents, and listings as belonging to WMI;
however, the foregoing analysis reveals these materials in fact were generated by SWS acting
under the WASTE MANAGEMENT trade name. Roberson argues that the fact its brochure sent
to Kentucky customers regarding payment information not only bears the WASTE
MANAGEMENT trade name, but also bears the WMI parent company address in Texas. (Pl.’s
Sur-Reply 1-2, DN 11). Plaintiff’s argument ignores the key fact that the brochure clearly
indicates it is “a sample invoice for solicitation purposes only.” (Pl.’s Sur-Reply Ex. A, at 1, DN
11-2).
Roberson makes no claim that payments were ever directly sent to the Texas
headquarters by Kentucky customers. Instead, Roberson essentially claims that sample
documents sent to SWS customers which happened to bear WMI’s address for entirely
instructional purposes is sufficient for purposeful availment. The Court rejects this argument.
While WMI plausibly produced some of the employment materials utilized by SWS, there is no
evidence that WMI had any direct control over any of SWS personnel or facilities. Further,
Roberson claims WMI distributed these documents to Kentucky customers, but again provides
no evidence to support this assertion beyond the fact the sample brochure happens to bear
WMI’s Texas address. (Pl.’s Sur-Reply 1-2). Regardless, merely sending employment materials
on behalf of WMI’s subsidiary is at most a de minimis connection which does not constitute an
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overt act establishing direct control over SWS. See Motel 6, 134 F.3d at 1274-75; Moore, 2007
WL 2081095, at *2-3.
Roberson provides no evidence beyond the usage of this trade name which supports
personal jurisdiction over WMI. The Court finds that use of the WASTE MANAGEMENT trade
name alone is insufficient to find WMI purposefully availed itself to Kentucky law. Therefore,
WMI’s motion to dismiss for lack of jurisdiction must be granted.
IV.
CONCLUSION
For the foregoing reasons, IT IS HEREBY ORDERED the Motion to Dismiss for Lack
of Personal Jurisdiction (DN 8) filed by Defendant Waste Management, Inc. is GRANTED.
Greg N. Stivers, Judge
United States District Court
January 21, 2016
cc:
counsel of record
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