High Adventure Ministries Inc. v. Tayloe et al
Filing
18
MEMORANDUM OPINION AND ORDER Signed by Senior Judge Thomas B. Russell on 4/17/2018 granting 11 Motion to Dismiss: All of High Adventure's claims against Defendants are DISMISSED. cc: Counsel (JM)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
AT LOUISVILLE
CIVIL ACTION NO. 3:17-cv-00399
HIGH ADVENTURE MINISTRIES, INC.,
PLAINTIFF
v.
JOHN D. TAYLOE, et al.,
DEFENDANTS
Memorandum Opinion & Order
This matter comes before the Court upon Motion by Defendants John Tayloe and
Strategic Communications Group, Inc. to dismiss this action pursuant to Federal Rules of Civil
Procedure 12(b)(2) and 12(b)(5). [DN 11.] This matter is ripe for adjudication and, for the
reasons that follow, IT IS HEREBY ORDERED that Defendants’ Motion, [DN 11], is
GRANTED.
A. Background
Plaintiff High Adventure Ministries, Inc., (“High Adventure”), “is a California Domestic
Nonprofit Corporation, with a principal place of business located” in Louisville, Kentucky. [DN
1, at 2.]1 According to its website, the company was founded in 1973 by George Otis (“Otis”).
[www.highadventure.org.] Otis has since passed away and Jackie Yockey, (“Yockey”), is now
the President and Chief Executive Officer of High Adventure. [Id.] According to her Bio on the
company’s website, Yockey “has established a radio studio that is sending the message of the
Gospel of Jesus Christ throughout Israel and around the world from Jerusalem.” [Id.] Yockey’s
Bio further notes that, in addition to the radio station, High Adventure has three internet
1
High Adventure’s corporate offices were previously located in California, but those offices were moved to
Louisville in 2001.
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television stations and provides radios to people across the globe to further spread its religious
message. [Id.]
John Tayloe, (“Tayloe”), was the son-in-law of High Adventure’s founder, George Otis.
[DN 1, at 4.] Tayloe began his career with High Adventure “in 1986 as a radio announcer, and
ultimately served as Executive Vice President of the company and Corporate Director.” [Id.]
According to High Adventure’s Complaint, by virtue of “his position at High Adventure, Tayloe
had access to all of the confidential material of the company, including detailed donor lists and
operating information” about the company. [Id. at 4-5.] Due to internal “discord” concerning the
manner and direction of the management of High Adventure, Tayloe was fired from the
company in 1996. [Id. at 5.] High Adventure brought Tayloe back into the fold soon thereafter,
but he was again fired. [Id.] In 1998, High Adventure hired Tayloe a third time, but fired him
again in 1999. [Id.]
According to High Adventure’s Complaint, Tayloe incorporated Defendant company
Strategic Communications Group, Inc., (“SCG”), “[a]t some point in 1998.” [Id.] SCG “operates
radio stations in the vicinity of Simi Valley, [California,] including country music stations as
well as Christian broadcasting.” [Id. at 6.] SCG apparently has a similar company vision as Otis
had for High Adventure: namely, the establishment and operation of radio stations in the Middle
East to spread a religious message. [Id.] High Adventure asserts that “Tayloe and [SCG] have
attempted to use the imagery and name of ‘Voice of Hope’ to create a false association with the
work of the late George Otis and the success of High Adventure as a fundraising mechanism.”
[Id.] According to High Adventure’s Complaint, the name “Voice of Hope” was the original
name given to the radio program Otis created in the Middle East in 1979, and which operated
there until 2000, when Voice of Hope radio was forced to relocate. [Id. at 3-4.] High Adventure
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asserts that SCG “claims to be involved in international gospel radio broadcasting to ‘honor the
original vision of George Otis,’ the founder of Plaintiff High Adventure Ministries and Voice of
Hope,” and that SCG “acquired the domain name of ‘voiceofhope’ and promotes, markets, and
advertises its radio stations and other services through traditional commerce channels and at the
website www.voiceofhope.com. [Id. at 6.]
On July 6, 2017, High Adventure filed the instant suit asserting the following claims: (1)
false advertising in violation of the Lanham Act, 15 U.S.C. § 1125(a) False or Misleading
Advertising Statements; (2) misappropriation of trade secrets; (3) federal unfair competition –
passing off in violation of the Lanham Act, 15 U.S.C. § 1125(a); (4) common law unfair
competition and trademark claims; (5) infringement of a federally registered trademark, 15
U.S.C. § 1114; (6) dilution of a federally registered trademark, 15 U.S.C. § 1125(c); (7) a
declaratory judgment; and (8) a civil RICO Act claim, 18 U.S.C. §§ 1961, et seq. [See id. at 1023.] On November 28, 2017, Tayloe and SCG, (collectively, “Defendants”), filed the instant
Motion to dismiss all claims against them (a) under Fed. R. Civ. P. 12(b)(5) for insufficient
service of process, and (b) under Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction over
both Tayloe and SCG. [DN 11, at 1.] High Adventure filed its Response on January 5, 2018, [DN
14], and Defendants filed their Reply on January 19. [DN 16.] The Court will now consider the
merits of Defendants’ arguments.
B. Discussion
1. Personal Jurisdiction
In the instant Motion, Defendants assert that this Court, located in the Western District of
Kentucky, lacks personal jurisdiction over them. [See generally DN 11.] In Defendants’ analysis,
they argue that this Court lacks both specific and general jurisdiction over them and,
3
consequently, the Court must dismiss this action. Conversely, High Adventure counters that (a)
this Court possesses specific jurisdiction over Defendants because this case arises out of
Defendants’ contacts with Kentucky, and (b) this Court possesses personal jurisdiction pursuant
to 18 U.S.C. § 1965(b), as this is a civil RICO case.
i. Legal Background
“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.’” Bird v. Parsons, 289 F.3d 865, 871
(6th Cir. 2002) (quoting Michigan Coal. of Radioactive Mat. Users, Inc. v. Griepentrog, 954
F.2d 1174, 1176 (6th Cir. 1992)). “In response to a motion to dismiss, the plaintiff may not stand
on his pleadings, but must show the specific facts demonstrating that the court has jurisdiction.”
Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 678 (6th Cir. 2012) (citing Theunissen v.
Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). However, “[i]n order to defeat the motion to
dismiss, the plaintiff’s affidavit(s) must make only a prima facie showing.” Id. (citing
Theunissen, 935 F.2d at 1458). Of course, “[t]he pleadings and affidavits are viewed in the light
most favorable to the plaintiff.” Id. (citing Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d
147, 153 (6th Cir. 1997)).
In analyzing the question of personal jurisdiction, there are two main “types,” which are
(1) general jurisdiction, and (2) specific jurisdiction. Id. (citing Air Prods. & Controls, Inc. v.
Safetech Int’l, Inc., 503 F.3d 544, 549-50 (6th Cir. 2007)). “General jurisdiction depends on
continuous and systematic contact with the forum state, so that the courts may exercise
jurisdiction over any claims a plaintiff may bring against the defendant.” Id. at 678-79 (citing
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Kerry Steel, 106 F.3d at 149). Conversely, specific jurisdiction “grants jurisdiction only to the
extent that a claim arises out of or relates to a defendant’s contacts in the forum state.” Id. (citing
Kerry Steel, 106 F.3d at 149). High Adventure has not alleged or otherwise argued that this
Court possesses general jurisdiction over Defendants and so the Court will not analyze the
question of general jurisdiction. Instead, High Adventure has claimed that this Court possesses
personal jurisdiction (a) under the rule of specific jurisdiction, and (b) under 18 U.S.C. §
1965(b). The Court will analyze each of these arguments in turn.
ii. Analysis
One of the two arguments advanced by Defendants is that this Court does not possess
specific jurisdiction over them. [DN 11, at 9.] The concept of specific jurisdiction relates to the
“[a]djudicatory authority” of a court where “the suit ‘aris[es] out of or relate[s] to the defendant’s
contacts with the forum….’” Daimler AG v. Bauman, 571 U.S. 117, 134 S. Ct. 746, 754 (2014)
(quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984)). As
the Supreme Court has stated, “specific jurisdiction has become the centerpiece of modern
jurisdiction theory….” Id. at 755.
There are “three criteria…for determining the…outerlimits of in personam jurisdiction
based on a single act.” Southern Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir.
1968). These three criteria are:
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 over
the defendant reasonable.
Beydoun v. Wataniya Restaurants Holding, Q.S.C., 768 F.3d 499, 505 (6th Cir. 2014) (quoting
Southern Mach., 401 F.2d at 381). Applied to the present case, this means that in order for this
5
Court to possess specific jurisdiction over Defendants, they must have purposefully availed
themselves of the privilege of acting in Kentucky or have caused a consequence in Kentucky; the
action filed by High Adventure must arise from Defendants’ activities in Kentucky, and
Defendants’ actions must have a “substantial enough connection” with Kentucky in order for this
Court to determine that exercising personal jurisdiction over both Tayloe and SCG would be
“reasonable.” See id.
As the Sixth Circuit Court of Appeals has explained with respect to the first prong,
“[p]urposeful availment…is present where the defendant’s contacts with the forum state
proximately result from actions by the defendant himself that create a substantial connection with
the forum [s]tate, and where the defendant’s conduct and connection with the forum are such that
he should reasonably anticipate being haled into court there.” Id. at 505-06 (internal citations
omitted). “In the Sixth Circuit, the emphasis in the purposeful availment inquiry is whether the
defendant has engaged in some overt actions connecting the defendant with the forum state.”
Fortis Corp. Ins. v. Viken Ship Mgmt., 450 F.3d 214, 218 (6th Cir. 2006) (citations and quotation
marks omitted).
In the present Motion, Defendants have attached the affidavit of Tayloe, wherein he
avers, among other things, that he has “no connection to the Commonwealth of Kentucky. I am a
California resident and I have never…set foot in Kentucky. I do not own any property in
Kentucky, I do not do business in Kentucky, and I have no documents or other materials relevant
to this action in Kentucky.” [DN 11-1, at 2.] Tayloe further avers that SCG “has no connection
with Kentucky,” that SCG “is a corporation organized and existing under the laws
of…California, with its principal place of business in California,” that SCG “is not registered to
do business in Kentucky and in fact does no business in Kentucky. It neither owns nor leases any
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property in Kentucky, has no employees nor agents in Kentucky, and maintains no documents in
Kentucky.” [Id.] Finally, Tayloe avers that SCG “does not purposely direct any communications
to residents of Kentucky.” [Id.]
To rebut this, High Adventure attached to its Response the affidavit of Rex Nichols,
(“Nichols”). [DN 14-4.] Therein, Nichols avers that he has been affiliated with High Adventure
for many years and has “been a frequent financial contributor as well as an advisor” to the
company. [Id. at 2.] Also, Nichols avers that he has been a Kentucky resident for many years,
that he has known Tayloe for some time and that “Tayloe was aware that I lived in Kentucky.”
[Id.] Next, he avers that, “[b]ased on my past association with Mr. Tayloe, I feel certain that Mr.
Tayloe knew I was a key financial contributor to High Adventure….” [Id.] Finally, Nichols avers
that, “[i]n September 2016, I had several telephone conversations with John Tayloe from
Louisville, Kentucky, concerning Mr. Tayloe’s ministry,” and that Tayloe “specifically solicited
me for a contribution of 1.1 million dollars for his activities, and asked that I join him in
promoting his competing ministry.” [Id.] High Adventure argues that these alleged specific and
purposeful contacts with Nichols constitute “overt actions connecting the defendant[s] [Tayloe
and SCG] with the forum state [Kentucky].” See Fortis Corp. Ins., 450 F.3d at 218.
In their Reply, Defendants argue that it was Nichols, and not Tayloe, who initiated the
contact between the pair. [DN 16, at 5.] According to Defendants, “the two knew each other but
had not had contact in many years, when Mr. Nichols called Rev. Tayloe claiming to be excited
about [SCG’s] project. Mr. Nichols requested a project proposal, which Rev. Tayloe transmitted
by email, whereupon Mr. Nichol’s enthusiasm cooled substantially, and Rev. Tayloe had
difficulty contacting Mr. Nichols.” [Id.] Moreover, when Tayloe allegedly “received a ‘cease and
desist’ letter from [High Adventure], Rev. Tayloe concluded that Mr. Nichols’s call had simply
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been a ruse to obtain information for” High Adventure. [Id.] Tayloe claims in Defendants’ Reply
that he did not even know that Nichols lived in Kentucky. [Id.]
Thus, the question becomes whether this interaction between Nichols and Tayloe
indicates that Defendants “purposefully avail[ed] [themselves] of the privilege of acting in the
forum state or causing a consequence in the forum state,” as required by the first prong of
Beydoun, 768 F.3d at 505. “A single act may meet the purposeful availment requirement.” Youn
v. Track, Inc., 324 F.3d 409, 419 (6th Cir. 2003) (citing McGee v. Int’l Life Ins. Co., 355 U.S.
220, 223 (1957) and explaining the Supreme Court’s “finding that a single contact, entered into
by mail with a forum state resident, could meet the minimum contacts test for suit on the
contract.”). However, it still must be that the defendant’s activity “should provide fair warning
that he may have to defend a lawsuit there.” Id.
It is not insignificant that Tayloe did not initiate contact with Nichols. Indeed, “the Sixth
Circuit has held that the purposeful availment prong is not satisfied where a resident of the forum
state, not the nonresident defendant, initiates the communications.” Gallagher v. E.W. Scripps
Co., No. 08-2153-STA, 2008 WL 5120902, at *3 (W.D. Tenn. Dec. 4, 2008) (citing Harris v.
Lloyds TSB Bank, PLC, 281 F. App’x 489 (6th Cir. 2008) for the “finding [of] no specific
jurisdiction where nonresident received but did not initiate multiple wire transfers from forum
state;” Rice v. Karsch, 154 F. App’x 454, 460-61 (6th Cir. 2005) for the “finding [of] no specific
jurisdiction where nonresident responded by mail and e-mail to communication initiated in
forum state;” and Calphalon Corp. v. Rowlette, 228 F.3d 718, 723 (6th Cir. 2000) for the
“finding [of] no specific jurisdiction where nonresident conducted telephone, fax, and email
correspondence with resident corporation.”).
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In neither Nichols’ affidavit nor in High Adventure’s Response to the instant Motion
does the company allege, aver, or otherwise show that Tayloe, and not Nichols, initiated the
contact between the parties. Specifically, Nichols’ affidavit states the following: “I had several
telephone conversations with John Tayloe…concerning Mr. Tayloe’s ministry,” and that Tayloe
“solicited me for a contribution of 1.1 million dollars for his activities, and asked that I join with
him in promoting his competing ministry.” [DN 14-4. at 2.] Nowhere in the affidavit does
Nichols aver that Tayloe called him first, emailed him first, or mailed him an unsolicited letter.
Additionally, High Adventure does not set forth any other specific facts regarding Tayloe’s or
SCG’s alleged involvement with the forum state: Kentucky.
Whether feigning interest in order to gather information for High Adventure or out of a
genuine interest in donating to Tayloe and SCG, the only evidence presented to the Court
concerning the sequence of interactions between the two men comes from Tayloe’s affidavit,
wherein he specifically avers that Nichols “called me unsolicited and asked for information
about my project” in May of 2016. [DN 16-1, at 2.] Tayloe further avers he found his “exchange
with Mr. Nichols strange at the time for more than one reason. First, the contact seemed to come
‘out of the blue’ because” Tayloe “has not had any contact with him since” the 1990s. [Id.]
Moreover, when Nichols initiated contact, he “asked [Tayloe] for information, and was
enthusiastic about providing financial support, but immediately became hard to reach.” [Id.] This
Court views the interactions between these two men as the “result of random, fortuitous, or
attenuated contacts,” thus falling outside the realm of purposeful availment. See Kerry Steel, 106
F.3d at 150 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). In Kerry Steel,
the Sixth Circuit Court of Appeals differentiated between purposeful availment of the kind that
would confer upon a court specific jurisdiction over a nonresident defendant and the kinds of
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“one-shot transaction[s]” where the plaintiff initiates contact with the defendant that do not give
rise to ongoing obligations. Id. at 150-51.
In its Response, High Adventure alleges that “Tayloe absconded2 with donors lists upon
his firing [from the company] and has specifically aimed his solicitation activities toward the
traditional benefactors and supporters of High Adventure….” [DN 14, at 8.] High Adventure’s
usage of “benefactors and supporters” in the plural form would appear to indicate that, in its
view, Tayloe has either contacted or been contacted by more people than just Nichols. However,
no other examples are given, and no other affidavits are attached tending to show that Tayloe’s
connection to the state of Kentucky results from anything more than Nichols’ contacting him.
See Bradley v. Mayo Found., No. Civ. A. 97-204, 1999 WL 1032806, at *8 (E.D. Ky. Aug. 10,
1999) (finding that “four letters, [and a] telephone call” were insufficient to establish personal
jurisdiction over a nonresident doctor where “[t]he plaintiff…initiated contact with the Mayo
Clinic unilaterally….”).
Accordingly, the Court finds that this falls short of establishing a “substantial connection
with the forum state” such that Defendants would “reasonably anticipate being haled into court”
in Kentucky, as contemplated by the Sixth Circuit Court of Appeals in Beydoun, 768 F.3d at
505-06. Finally, in his second affidavit, Tayloe also avers that, if “Nichols was located in
Kentucky at the time of th[e] communications, I was not aware of that, and at no time did he give
me a physical address. I believe the last time I knew where he lived, he was living in Texas.”
[DN 16-1, at 3.] It appears uncontested that Nichols was residing in Kentucky at the time of the
pair’s communications in September 2016, but it now appears as though there is some dispute as
to whether Tayloe even knew where Nichols lived when Nichols contacted him in the first place.
2
Even assuming that Tayloe absconded with such lists, and that he did so at the time of his third and final
termination from the company in 1999, that was still two years before High Adventure relocated its corporate
headquarters from California to Kentucky in 2001.
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The second prong requires that “the cause of action…arise from the defendant’s
activities” in the forum state, here Kentucky. See Beydoun, 768 F.3d at 505. “If a defendant’s
contacts with the forum state are related to the operative facts of the controversy, then an action
will be deemed to have arisen from those contacts.” CompuServe, Inc. v. Patterson, 89 F.3d
1257, 1267 (6th Cir. 1996) (citing Reynolds v. Int’l Amateur Athletic Fed’n, 23 F.3d 1110, 1119
(6th Cir. 1994)). Stated differently, “the plaintiff must demonstrate a causal nexus between the
defendant’s contacts with the forum state and the plaintiff’s alleged cause of action.” Beydoun,
768 F.3d at 506-07 (citing Burger King Corp., 471 U.S. at 474). Here, Defendants’ “activities” in
Kentucky consist, according to the parties’ briefs, of the contact Tayloe had with Nichols in
2016. [See DN 14-4, at 2.]
Defendants argue that, under this standard, the second prong cannot be met because,
according to Tayloe’s affidavit, neither he nor SCG do any business in the state of Kentucky.
[See DN 16, at 7; see also Tayloe Affidavit One, DN 11-1; Tayloe Affidavit Two, DN 16-1.]
Further, Defendants argue that High Adventure did not actually suffer any injury or damage from
the lone contact to which the company points in support of its argument that this Court has
personal jurisdiction: Tayloe’s correspondence with Nichols. [DN 16, at 7.] Indeed, in Tayloe’s
second affidavit, he avers that “Nichols never donated any money to [SCG].” [DN 16-1, at 2.]
High Adventure’s claims in this case are for: false advertising, misappropriation of trade
secrets, federal unfair competition, common law unfair competition and trademark claims,
trademark infringement, trademark dilution, a declaratory judgment, and a civil RICO Act claim.
[DN 1, at 10-23.] The Court cannot say that High Adventure’s “cause[s] of action…[were]
proximately caused by the defendant[s’] contacts with the forum state.” Beydoun, 768 F.3d at
507-08. High Adventure’s claims for false advertising and unfair competition stem from
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Defendants’ use of a website and the term “voice or hope,” which, in High Adventure’s view,
misleads the public and potential donors into believing a connection exists between Defendants
and High Adventure. [DN 1, at 10-15.] High Adventure does mention its donor list in its
misappropriation of trade secrets claim, although it does not allege that Nichols was on that list
nor does it allege that Tayloe obtained Nichols’ name or contact information from that list. [Id. at
12-13.] High Adventure’s trademark infringement and dilution claims do not relate directly to
any alleged solicitations made by Tayloe, and do not name Nichols either. [Id. at 16-18.] High
Adventure’s claim for a declaratory judgment points again to Defendants’ allegedly improper use
of the “voice of hope” name in connection with its business. [Id. at 19.] Finally, while High
Adventure’s civil RICO Act claim does mention Defendants’ allegedly improper solicitation of
former High Adventure donors, the Complaint does not provide any specific allegations
concerning the names and/or residencies of these individuals, instead merely alleging
misrepresentations by Defendants “domestically and abroad,” while focusing in particular on
contacts Defendants allegedly had with individuals in Israel. [See id. at 20-23.]
The “operative facts of the controversy” relate, for the most part, to trademark and
misappropriation issues concerning Defendants’ allegedly improper use of the “voice of hope”
phrase. To be sure, High Adventure’s claims touch on Tayloe’s alleged solicitation of either
current or former High Adventure donors (and improperly taking lists containing donor names),
but none of these individuals are named, nor are their residencies; therefore, the Court has
nothing in the way of evidence that any of the alleged harms done to High Adventure were
proximately caused by actions taken by Defendants directed at Kentucky. Indeed, as the Court
noted above, Nichols reached out to Tayloe, not the other way around, and no donation was ever
made. [See DN 16-1, at 2-3.] At best then, some of High Adventure’s claims may be tangentially
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related to Tayloe’s contact with Nichols in September 2016, but the connection remains
insufficient to satisfy this second prong.
The third prong asks whether “the acts of the defendant or consequences caused by the
defendant…have a substantial enough connection with the forum state to make the exercise of
jurisdiction over the defendant reasonable.” See Beydoun, 768 F.3d at 505. In reaching a decision
on this third prong, courts should ask whether exercising specific personal jurisdiction over the
defendant would “comport with ‘traditional notions of fair play and substantial justice.’”
Reynolds, 23 F.3d at 1117 (quoting Asahi Metal Indus. Co., Ltd. v. Superior Court of California,
Solano Cnty., 480 U.S. 102, 113 (1987)). Importantly, where the first two prongs are satisfied,
“an inference arises that this third [prong] is also present.” CompuServe, 89 F.3d at 1268 (citing
Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1170 (6th Cir. 1988)). “A court must consider
several factors in this context, including the burden on the defendant, the interest of the forum
state, the plaintiff’s interest in obtaining relief, and the interest of other states in securing the
most efficient resolution of controversies.” Id. (internal citations omitted).
In the present case, the Court finds that the burden placed upon Defendants would be
great, as both Tayloe and SCG are California residents and this action has been brought in the
Western District of Kentucky, where High Adventure has its corporate headquarters. The
Western District of Kentucky clearly has some interest in the present case, as the Plaintiff is a
resident of the Commonwealth, but the same could be said of California. And the Court cannot
say that allowing the case to proceed in this forum would or could provide a more efficient
resolution to the underlying claims High Adventure has brought against Defendants. Moreover,
“even assuming, arguendo, that [High Adventure’s] interest in obtaining relief counsels in favor
of a finding of reasonableness” under the third prong, “the other two factors weigh heavily
13
against such a finding.” See Beydoun, 768 F.3d at 508. Finally, the Court notes that, in its
Response, High Adventure does not point to any interest this forum has in adjudicating this
matter, why that interest is greater than any other forum, or the relative burdens on High
Adventure or Defendants by adjudicating this matter in Kentucky.
The second argument advanced by High Adventure in its Complaint relates to its civil
RICO Act3 claim under 18 U.S.C. § 1961. It is High Adventure’s assertion that, because this
action contains such a claim, this alone provides the basis for personal jurisdiction over
Defendants, irrespective of the traditional analyses for general and specific jurisdiction. In
support of this contention, it cites to 18 U.S.C. § 1965, which provides, in pertinent part, as
follows:
(a) Any civil action or proceeding under this chapter against any person may be
instituted in the district court of the United States for any district in which such
person resides, is found, has an agent, or transacts his affairs.
(b) In any action under section 1964 of this chapter in any district court of the
United States in which it is shown that the ends of justice require that other parties
residing in any other district be brought before the court, the court may cause such
parties to be summoned, and process for that purpose may be served in any
judicial district of the United States by the marshal thereof.
(c) …
(d) All other process in any action or proceeding under this chapter may be served
on any person in any judicial district in which such person resides, is found, has
an agent, or transacts his affairs.
18 U.S.C. § 1965(a)-(b), (d).
In essence, High Adventure alleges that “[a]ll that is required is for [High Adventure] to
show that at least one defendant ‘resides, is found, has an agent, or transacts his affairs’ in the
district, that the nonresident defendant has minimum contacts with the United States, and that
3
“RICO Act” is in reference to the Racketeer Influenced and Corrupt Organizations Act. The substantive
components of the RICO Act are not material to the Court’s present analysis regarding personal jurisdiction and so
no explanation is needed here.
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‘the ends of justice’ require the exercise of personal jurisdiction over the nonresident.” [DN 14,
at 6 (quoting 18 U.S.C. § 1965).] In response, Defendants argue that “[t]he RICO statute does
not provide nationwide jurisdiction over any defendant that a plaintiff names, contrary to [High
Adventure’s] argument.” [DN 16, at 8.]
District courts within the Sixth Circuit have weighed in on the question of the breadth of
the RICO nationwide service provision in different ways. For example, in 2007 this Court stated
that “RICO allows nationwide service of process even over defendants with no contacts to the
forum ‘when it is shown that the ends of justice require it’ so long as appropriate national
contacts exist.” Kattula v. Jade, No. 5:07-cv-52-TBR, 2007 WL 1695669, at *2 (W.D. Ky. Jun.
8, 2007) (quoting Iron Workers Local Union No. 17 Ins. Fund v. Phillip Morris, Inc., 23 F. Supp.
2d 796, 803 (N.D. Ohio 1996)). This means that “[i]f nationwide service of process applies, the
Plaintiff[] need only show that the Defendants maintained minimum contacts with the United
States as a whole, not just within Kentucky.” Id. (citing Iron Workers, 23 F. Supp. 2d at 803). “In
deciding when the ‘ends of justice require’ national service, courts are to consider the legislative
history of RICO. Courts have found that Congress intended the ‘ends of justice’ language to
provide a means for ‘plaintiffs to bring all members of a nationwide RICO conspiracy before the
court in a single trial.” Iron Workers, 23 F. Supp. 2d at 803 (citing Butcher’s Union Local No.
498 v. SDC Invest., Inc., 788 F.2d 535, 539 (9th Cir. 1986)).
However, another district court in the Western District of Kentucky, citing Kattula and
Iron Workers, as well as 800537 Ontario, Inc. v. Auto Enters., Inc., 113 F. Supp. 2d 1116 (E.D.
Mich. 2000), stated that “[t]he Sixth Circuit has not yet spoken concerning the breadth of the
RICO nationwide service provision,” and chose instead to “rely upon a traditional minimum
contacts analysis, consistent with the allegations of the complaint and established law to find
15
personal jurisdiction over” the defendant. See Kerman v. Chenery Assocs., Inc., No. 3:06-cv-338S, 2007 WL 2363283, at *1 n.1 (W.D. Ky. Aug. 14, 2007). As of the date of entry of this
Memorandum Opinion and Order, it does not appear that the Sixth Circuit Court of Appeals has
specifically answered this question.
However, even assuming that one or both Defendants have transacted affairs in the
Western District of Kentucky, 18 U.S.C. § 1965(d), this Court finds that “the ends of justice” do
not require this Court to exercise personal jurisdiction under the specific factual circumstances of
this case. As this Court explained in Kattula, “[p]laintiffs bear the burden of showing that the
ends of justice require the exercise of nationwide service of process for personal jurisdiction
purposes.” No. 5:07-cv-52, 2007 WL 1695669, at *3 (citing Southmark Prime Plus, L.P. v.
Falzone, 768 F. Supp. 487, 490 (D. Del. 1991)). Further, “courts have declined to exercise
personal jurisdiction under the nationwide service of process available for RICO claims ‘if there
is a district where venue is proper as to every RICO defendant, without resort to [§ 1965].” Id.
(quoting Falzone, 768 F. Supp. at 490, Anchor Glass Container Corp. v. Stand Energy Corp.,
711 F. Supp. 325, 331 (S.D. Miss. 1989)).
In short, the Court finds that “the ends of justice” do not warrant utilizing the RICO
jurisdictional provision to hale two individual defendants across the country to a venue already
deemed improper under the traditional specific jurisdiction analysis, explained above, especially
considering the fact that venue would presumably be proper for both Defendants elsewhere. In
its Response to the instant Motion, High Adventure, in arguing that the ends of justice require
this Court to exercise personal jurisdiction over Defendants, states the following: “[i]n a RICO
action, the ‘ends of justice’ require nationwide service of process to further the congressional
intent of allowing ‘plaintiffs to bring all members of a nationwide [] conspiracy before a court in
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a single trial.’” [DN 14, at 6 (quoting Butcher’s Union, 788 F.2d at 539).] However, the language
from Butchers Union explicitly refers to a “nationwide [] conspiracy.” Id. Here, there are
allegations against a single individual, John Tayloe, and SCG, the company of which he is Chief
Executive Officer and a co-founder. [See DN 11-1, at 1.] There are no overly complicated
jurisdictional issues concerning numerous defendants across multiple states or countries such
that this Court would consider utilizing the RICO jurisdictional provision to bring these two
Defendants to Kentucky to stand trial. Accordingly, the Court rejects High Adventure’s RICO
jurisdiction argument under these facts.
2. Service of Process
The other component of Defendants’ Motion to dismiss the action against them concerns
what they characterize to have been insufficient service of process. However, as the Court has
determined that it does not possess personal jurisdiction over Defendants, the Court need not
reach the issue of service of process.
C. Conclusion
For the reasons stated in this Opinion, IT IS HEREBY ORDERED that Defendants’
Motion to dismiss, [DN 11], is GRANTED. All of High Adventure’s claims against Defendants
are DISMISSED.
IT IS SO ORDERED.
April 17, 2018
cc:
Counsel of Record
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