Automotive Experts, LLC v. St. Charles Pontiac Inc

Filing 16

ORDER AND REASONS granting defendant's 9 Motion to Dismiss Plaintiff's Complaint for Lack of Jurisdiction. Signed by Judge Ivan L.R. Lemelle. (ijg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
AUTOMOTIVE EXPERTS, LLC

CIVIL ACTION

VERSUS

NO. 14-1941

ST. CHARLES PONTIAC INC.

SECTION “B”(3)

ORDER AND REASONS

I.

NATURE OF MOTION AND RELIEF SOUGHT
Before the Court is Defendant St. Charles Pontiac, Inc.’s

Motion to Dismiss Plaintiff’s Complaint for lack of personal
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). (Rec. Doc.
9). Plaintiff, Automotive Experts, L.L.C., opposes the motion
(Rec. Doc. 12) and Defendant has filed a reply. (Rec. Doc. 13).
For the reasons that follow,
IT IS ORDERED THAT Defendant’s Motion is GRANTED.
II. FACTS AND PROCEDURAL HISTORY
Plaintiff, Automotive Experts, L.L.C., filed a Complaint in
this Court on August 26, 2014, invoking the Court’s diversity
jurisdiction pursuant to 28 U.S.C. § 1332 and alleging breach of
contract for failure to pay on an open account by Defendant St.
Charles Pontiac Inc. (Rec. Doc. 1). Plaintiff is a Louisiana
limited liability company, with its registered office in the
Parish

of

Orleans,

State

of

Louisiana,

which

provides

advertising and promotional services to automotive dealerships.

1

(Rec. Doc. 1 at 1). Defendant is a Delaware corporation licensed
to do business in Illinois. (Rec. Doc. 9-2 at 1). It has one
place of business located in the town of St. Charles, Illinois
from which it sells new cars to customers in the Chicago market.
(Rec. Doc. 9-2 at 1).
On

or

about

November

14,

2013,

Plaintiff

and

Defendant

entered into two “Contracts of Retention” under which Plaintiff
was to provide advertising and promotional services to Defendant
in

connection

with

certain

upcoming

sales

promotion

events.1

(Rec. Doc. 1 at 2). Although the parties do not specify, it
would appear that the first contract may have been entered into
between

Plaintiff

and

an

affiliate

of

Defendant,2

while

the

second contract was entered into between Plaintiff and Defendant
directly. (See Rec. Doc. 12-1 at 1, 3). In any event, both
contracts appear to have been signed by the same individual,
above a legend reading “Nissan of St. Charles.” (Rec. Doc. 12-1
at 2, 4).
According

to

Plaintiff’s

Complaint,

it

performed

all

services due under the contracts but was never paid by Defendant
for the services rendered. (Rec. Doc. 1 at 3). On July 11, 2014,
1

The contracts specifically state: “. . . Automotive Experts will provide
highly skilled management team [sic] consisting of two managers who will be
paid by Automotive Experts and a number of sales professionals on a temporary
basis for the dates and terms of the Sales Promotion to assist and supplement
Client’s sales staff. . . .” (See Rec. Doc. 12-1 at 1, 3).
2
Defendant notes in its Motion to Dismiss that it has “an affiliate, PreOwned of St. Charles, L.L.C., with locations in West Chicago and East
Dundee.” (Rec. Doc. 9-2 at 1). Defendant purports to sell new cars, while its
affiliate sells used cars.
2

Plaintiff

claims

it

sent

a

certified

letter

making

demand

pursuant to La. Rev. Stat. ann. § 9:2781 for payment of an
invoice in the amount of $91,768.00 within 30 days of receipt.
(Rec. Doc. 1 at 3). When Defendant allegedly failed to respond
or pay within the designated period, Plaintiff instituted the
instant

breach

of

contract

action

seeking

that

amount

in

addition to reasonable attorney fees and costs. (Rec. Doc. 1 at
3).
III. CONTENTIONS OF MOVANT
Defendant contends this Court lacks personal jurisdiction
over it for purposes of the instant suit. In support of this
contention,

Defendant

argues

it

lacks

the

minimum

contacts

necessary to establish jurisdiction in Louisiana and has never
availed itself of the privilege of conducting activities within
Louisiana, nor invoked the benefits or protection of Louisiana
law. (Rec. Doc. 9 at 1). Further, Defendant argues the contract
at issue was negotiated and performed in Illinois, rather than
Louisiana. Consequently, Defendant argues the Court has neither
general nor specific personal jurisdiction over it and should
dismiss the case. (Rec. Doc. 9 at 1). Alternatively, Defendant
argues the Court should transfer the case to the appropriate
federal district in Illinois for further resolution. Id.
IV. CONTENTIONS OF OPPONENTS

3

Plaintiff argues the Court has personal jurisdiction over
Defendant

for

contract

with

the

reasons

that:

Plaintiff,

a

Defendant

Louisiana

entered

resident;

into

a

Plaintiff

executed the contract in Louisiana; Plaintiff retained services
of other Louisiana entities in fulfilling its obligations under
the contract; all marketing materials were printed and mailed
from Louisiana; and the parties agreed the contract would be
governed by and construed in accordance with the laws of the
State

of

Louisiana.

(See

Rec.

Doc.

12

at

2).

Accordingly,

Plaintiff argues “there is no question this Court has personal
jurisdiction over St. Charles and it must answer for the torts
it

committed

under

Louisiana

law.”

(Rec.

Doc.

12

at

3).3

Alternatively, Plaintiff contends Defendant waived objection to
the

Court’s

exercise

of

personal

jurisdiction

by

failing

to

timely file an answer in these proceedings and by participating
in a Rule 16 scheduling conference. (See Rec. Doc. 12 at 5).
V. MOTION TO DISMISS STANDARD
Where

a

defendant

challenges

personal

jurisdiction,

the

party seeking to invoke the power of the court bears the burden
of proving that jurisdiction exists. Wyatt v. Kaplan, 686 F.2d
276,

280

(5th

Cir.

1982).

The

plaintiff

need

not,

however,

establish jurisdiction by a preponderance of the evidence; a
prima facie showing suffices. Id. This court must resolve all
3

The reference to torts is perplexing in light of the contractual nature of
the instant cause of action.
4

undisputed facts submitted by the plaintiff, as well as all
facts contested in the affidavits, in favor of jurisdiction. Id.
The Due Process Clause of the Fourteenth Amendment guarantees
that no federal court may assume jurisdiction in personam of a
non-resident

defendant

unless

the

defendant

has

meaningful

“contacts, ties, or relations” with the forum state. Int'l Shoe
Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95
(1945).
Jurisdiction may be general or specific. Where a defendant
has “continuous and systematic general business contacts” with
the forum state, Helicopteros Nacionales de Colombia, S.A. v.
Hall, 466 U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984),
the court may exercise “general” jurisdiction over any action
brought against that defendant. Id. at 414, 104 S.Ct. 1868 n. 9.
Where contacts are less pervasive, the court may still exercise
“specific” jurisdiction “in a suit arising out of or related to
the defendant's contacts with the forum.” Id. at 414, 104 S.Ct.
1868

n.

8.

Because

it

is

continuous

and

systematic

Louisiana,

this

case

undisputed
general

presents

only

that

Defendant

business
the

has

contacts

issue

of

no

with

specific

jurisdiction.
A federal court may satisfy the constitutional requirements
for specific jurisdiction by a showing that the defendant has
“minimum contacts” with the forum state such that imposing a
5

judgment would not “offend traditional notions of fair play and
substantial justice.” Int'l Shoe, 326 U.S. at 316, 66 S.Ct. 154;
Luv N’ care, Ltd. V. Insta-Mix, Inc., 438 F.3d 465, 469 (5th
Cir. 2006). In Nuovo Pignone v. STORMAN ASIA/MV, 310 F.3d 374
(5th Cir. 2002), the Fifth Circuit “consolidated the personal
jurisdiction inquiry into a convenient three-step analysis:”
(1) Whether
the
defendant
purposely
directed its activities toward the forum
state or purposely availed itself of the
privileges of conducting activities there;
(2) Whether the plaintiff’s cause of action
arises
out
of
or
results
from
the
defendant’s forum-related contacts; and,
(3) Whether
the
exercise
of
personal
jurisdiction is fair and reasonable.
See also, Luv N’ care, Ltd., 438 F.3d at 469. A forum state may
create additional jurisdictional restrictions by statute, which
bind the federal courts. However, Louisiana’s so-called “longarm” statute extends jurisdiction to the constitutional limits
of due process, causing the inquiries here to fold into one. Id.
(citing La. Rev. Stat. ann. § 13:3201(B)).

VI. DISCUSSION
A. Minimum Contacts
In

the

context

of

the

instant

Rule

12(b)(2)

motion,

Plaintiff bears the burden of making a prima facie showing of
personal jurisdiction. Thus, as a preliminary matter, Plaintiff

6

must

establish

both

that

Defendant

had

sufficient

“minimum

contacts” with Louisiana and that its cause of action “arises
out of” those contacts.
As to the issue of minimum contacts, Plaintiff relies upon:
(1)

Defendant’s

domiciliary,

entering

(2)

the

into

a

choice

of

contract
law

with

a

provision

Louisiana
designating

Louisiana law as applicable to the contracts, and (3) various
other items relating to Plaintiff’s relations with the forum.4
These latter items reflect a misapprehension of the proper focus
of the minimum contacts analysis. “The inquiry whether a forum
State

may

assert

specific

jurisdiction

over

a

nonresident

defendant focuses on the relationship among the defendant, the
forum, and the litigation.” Walden v. Fiore, 134 S.Ct. 1115,
1121-22,

188

L.Ed.2d

12

(2014)(internal

quotations

omitted,

emphasis added). The Supreme Court has “consistently rejected
attempts
inquiry

to
by

satisfy

the

demonstrating

defendant-focused

‘minimum

contacts

the

between

contacts’

plaintiff

(or

third parties) and the forum state.” Id. The various instances
of contact between Plaintiff and the forum in connection with
the

contract

minimum

or

contacts

otherwise
analysis.

are

therefore

Accordingly,

4

inapposite
it

remains

to
to

the
be

These include Automotive Experts, LLC: being domiciled in Louisiana;
executing the contract in the State of Louisiana; retaining services from
other entities domiciled in Louisiana in fulfilling the contractual
obligations; as well as, marketing materials being printed in Louisiana and
artwork and graphic design services being performed in Louisiana. (See Rec.
Doc. 12 at 2).
7

determined whether the circumstances surrounding execution of
the contract between the parties, and inclusion of a choice-oflaw clause therein, are sufficient to establish minimum contacts
between Defendant and the forum.
With respect to the negotiations leading up to execution
of the contract, Plaintiff’s Opposition and the declaration of
Vincent Iacono, a manager for Plaintiff, state merely that: “St.
Charles entered into a contract with the plaintiff, Automotive
Experts,

LLC.”

(See

Rec

Docs.

12

at

2,

12-2

at

1).

Iacono

expounds that no representative of Plaintiff visited Defendant’s
location and that “all negotiations regarding the contract and
sales were done on the telephone.” (Rec. Doc. 12-2 at 1). By
contrast, in its Rule 12(b)(2) motion, Defendant asserts that:
“In

2013,

regarding

Automotive
the

approached

possibility

of

St.

conducting

Charles

in

sales

events

Illinois
at

St.

Charles’s location.” (Rec. Doc. 9-2 at 2). Further, Defendant
asserts that it executed its contract in Illinois, while stating
that

upon

information

and

belief,

Plaintiff

never

executed

either contract. (Rec. Doc. 9-2 at 2). Plaintiff, however, avers
that it executed the contract at its office in New Orleans.
(Rec. Doc. 12-2 at 1). As to this issue, the Court notes that
copies of the contracts attached to Plaintiff’s Complaint are
only signed by Defendant (See Rec. Doc. 1 at 5,7), while the
copies attached to Plaintiff’s Opposition to the instant motion
8

appear to be signed by both parties (See Rec. Doc. 12-1 at 2,4).
While the Court must accept as true all the allegations in the
complaint and resolve all factual conflicts in favor of the
plaintiff, here, this merely compels the conclusion that all
negotiations were conducted via telephone and that the parties
executed the contracts at their respective locations. Further,
Plaintiff has failed to introduce any evidence or arguments that
conflict with Defendant’s contention that Plaintiff initiated
contact

with

it

for

purposes

of

negotiating

the

service

agreements. Thus, these facts are insufficient to demonstrate
that Defendant has “purposefully directed its activities at the
forum state.” Burger King v. Radziewicz, 471 U.S. 462, 472, 105
S.Ct. 2174, 85 L.Ed.2d 528 (1985)).
As to the terms of the contract itself, Plaintiff places
particular emphasis on the inclusion of a choice-of-law clause
applying the laws of the State of Louisiana. (See Rec. Doc. 12
at 4). Nevertheless, the Fifth Circuit has held that choice-oflaw

provisions,

without

more,

are

insufficient

to

create

personal jurisdiction or put a defendant on notice that it might
be subject to suit in a different state. See Stuart v. Spademan,
772

F.2d

weight
invoked

1185,

in
the

1195

(“Choice-of-law

considering
benefits

jurisdictional

whether
and

purposes,

a

defendant

protection
although
9

provisions

of

such

a
a

has

warrant

some

purposefully

state’s
provision

laws

for

standing

alone would be insufficient to confer jurisdiction.”)(internal
citations omitted). Unlike a forum-selection clause, a choiceof-law

provision

anticipation

of

Accordingly,

itself

the

Louisiana

law

being

does

haled

provision

is

merely

not

evince

into

the

relating
one

foreign

to

factor

the

the

to

be

defendant’s
forum.

Id.

application

of

considered

in

determining whether sufficient minimum contacts exist for the
Court to exercise jurisdiction.
In light of the foregoing, the Court must turn to the terms
of the contracts and the performances contemplated thereunder in
order to determine whether any further evidence supports minimum
contacts
“retains

in

this

case.

[Plaintiff]

The

to

contracts

provide

the

state

that

services

Defendant
listed

at

[Defendant’s] dealership” for the specified term. (See Rec. Doc.
12-1

at

3,

5)(emphasis

added).

Thus,

the

parties’

agreement

anticipated that performance would be rendered by Plaintiff in
Illinois. While Defendant agreed to certain payment obligations
under the contract, there is no indication that any amount of
performance by Defendant was required or even contemplated in
Louisiana. This is in stark contrast with cases in which the
contractual relationship was found to create sufficient minimum
contacts with a foreign forum. In Burger King, supra, the Court
concluded

that

the

contract

10

at

issue

had

“substantial”

connections with the forum state. 471 U.S. at 480. In reaching
this conclusion, the Court emphasized that the defendant:
. . . entered into a carefully structured
20-year
relationship
that
envisioned
continuing and wide-reaching contacts with
[the plaintiff] in Florida. In light of [the
defendant’s] voluntary acceptance of the
long-term and exacting regulations of his
business
from
[the
plaintiff’s]
Miami
headquarters, the ‘quality and nature’ of
his relationship to the company in Florida
[could] in no sense be viewed as ‘random,’
‘fortuitous,’ or ‘attenuated.’
Id.

at

Mech.,

480.
Inc.,

By

contrast,

the

Fifth

in

Hydrokinetics,

Circuit

concluded

Inc.

that

v.

Alaska

insufficient

contacts existed with the forum (Texas), where the plaintiff
relied merely on the following facts:
(1) Alaska Mechanical agreed to purchase
specific goods to be manufactured in Texas;
(2) payment for these goods was to be made
in Texas; (3) before any written agreement
was
signed,
extensive
communications
occurred between the parties, originating in
Texas and Alaska; (4) officers of Alaska
Mechanical traveled to Texas to “close” the
deal; and (5) the contract was formally
created in Texas because that was the place
of the acceptance of Alaska Mechanical's
offer by Hydrokinetics.
700 F.2d 1026, 1028-29 (5th Cir. 1983).5 In the instant case,
where

the

parties

under

which

no

entered

amount

of

into

contracts

performance

5

was

of

short

required

duration,
or

even

The Court notes that Hydrokinetics was decided before Burger King, supra,
however the minimum contacts analysis conducted therein remains valid
following that decision, and the opinion was cited with approval by the Fifth
Circuit as recently as Parker v. Pro W. Contractors, L.L.C., 536 F. App’x
400, 401-02 (5th Cir. 2013).
11

contemplated

in

the

forum,

the

mere

facts

that

one

of

the

parties was domiciled in the forum and that the contract applied
the forum State’s law are insufficient to establish the minimum
contacts

required

for

exercise

of

the

Court’s

personal

jurisdiction. “For a State to exercise jurisdiction consistent
with

due

process,

the

defendant’s

suit-related

conduct

must

create a substantial connection with the forum State. . . . Due
process limits on the State’s adjudicative authority principally
protect

the

liberty

of

the

nonresident

defendant

–

not

the

convenience of plaintiffs or third parties.” Walden v. Fiore,
134 S.Ct. at 1121-22 (internal citations omitted). Under the
present facts it cannot be said that Defendant’s conduct, which
appears

to

domiciliary

be

limited

to

contracting

and

engaging

in

limited

with

a

telephone

Louisiana

discussions,

created a substantial connection with Louisiana. Further, the
record

indicates

that

Plaintiff

sought

out

Defendant

for

purposes of confecting the agreement at issue, further belying
any

claim

that

Defendant

purposely

directed

activity

at

Louisiana. Accordingly, the Court concludes that Plaintiff has
failed to carry its threshold burden of making out a prima facie
showing

of

minimum

contacts

necessary

to

support

specific

jurisdiction. The Court need not therefore address the issues of
whether the instant cause of action arises out of those contacts
or

whether

the

exercise

of

jurisdiction
12

would

be

fair

or

reasonable under these circumstances. Nuovo Pignone v. STORMAN
ASIA/MV, 310 F.3d 374 (5th Cir. 2002).
B. Waiver
The

Court

argument,

that

turns

now

Defendant

briefly

to

Plaintiff’s

waived

its

objection

alternative
to

personal

jurisdiction by failing to timely file an answer in the instant
proceedings, and in allegedly failing to object at the Rule 16
scheduling conference.
Waiver of the defense of personal jurisdiction is governed
by Fed. R. Civ. P. 12(h)(1), which provides:
(1)

In

the

A party waives any defense listed in Rule
12(b)(2)-(5) by:
(A) omitting it from a motion in the
circumstances
described
in
Rule
12(g)(2); or
(B) failing to either:
(i)
make it by motion under this rule; or
(ii)
include it in a responsive pleading
or in an amendment allowed by Rule
15(a)(1) as a matter of course.
instant

Complaint,

case,

Defendant

following

sought

and

the
was

filing
granted

of
an

Plaintiff’s
extension

of

time, to October 20, 2014, within which to answer or file other
responsive

pleadings.

(See

Rec.

Doc.

6).

It

is

true

that

Defendant did not comply with this deadline, failing to file the
instant

responsive

pleading

until

December

23,

2014.

In

the

interim, the parties held a Rule 16 scheduling conference with
the Court on December 4, 2014. (See Rec. Doc. 7). Defendant

13

contends its failure to file a timely answer or other pleading
was

caused

by

its

belief

that

Plaintiff

would

voluntarily

dismiss this action after the Attorney General for the State of
Illinois
performance

instituted
under

an

the

investigation

contract

at

into

issue

in

this

Plaintiff’s
case

and

subsequently reached an agreement with Plaintiff prohibiting it
from doing business in the State of Illinois.6 (Rec. Doc. 13 at
6). While this was certainly a foolhardy tack to adopt, given
the risk of default, the Court is aware of no legal authority
(and the parties cite none) for treating a party’s failure to
timely respond as a waiver of the 12(b)(2) defense of lack of
personal jurisdiction. Compare Swanson v. City of Hammond, Ind.,
411 F.App’x 913, 915 (7th Cir. 2011)(“As long as defendants
comply with the rules by raising their defenses in their first
responsive

pleading

or

consolidate

their

defenses

in

a

pre-

pleading motion under Fed. R. Civ. P. 12(b), they do not waive
their Rule 12(b) defenses.”)
Under

the

present

circumstances,

the

only

responsive

pleading filed by Defendant was the instant motion to dismiss,
which raised the defense of lack of personal jurisdiction. Thus,
Defendant complied with the requirements of Rule 12(h)(1) as
they pertain to waiver of that defense. Further, it is no answer

6

Although it is immaterial for present purposes, the subject of the
investigation appears to relate to allegations of violations of Illinois
advertising regulations and potentially fraudulent behavior.
14

that

counsel

for

Defendant

participated

in

the

Rule

16

scheduling conference, as counsel indicated at that conference
that

the

instant

motion

was

to

be

forthcoming.

Mere

participation in a scheduling conference will not suffice to
waive a Rule 12(b) defense, particularly where the participating
party indicates its intention to assert the defense at issue.
See, e.g., Rojek v. Catholic Charities, Inc., 2009 WL 3834013
(E.D. Mich. 2009)(finding that defendant did not waive defense
of

insufficient

process

by

participating

in

scheduling

conference and citing to Rule 12(h) as the source of the rules
governing waiver). In light of the foregoing, the Court finds
that

Defendant

did

not

waive

its

Rule

12(b)(2)

defense

by

participating in the December 4, 2014 scheduling conference.
C. Transfer
As to the issue of transfer, Plaintiff does not request
this

form

of

relief

and

the

Court

declines

Defendant’s

invitation to transfer the matter to the United States District
Court for the Northern District of Illinois. Although this would
undoubtedly

be

a

proper

venue,

given

Defendant’s

statements

pertaining to its business operations, the Court is unable to
conclude

that

this

is

the

appropriate

action,

absent

any

indication from Plaintiff. It may be that Plaintiff would prefer
to attempt to establish personal jurisdiction in some other,

15

more convenient forum, and this Court’s order will not prevent
it from so doing.
VII. CONCLUSION
Plaintiff failed to carry its burden of making out a prima
facie showing of personal jurisdiction, specifically by failing
to establish minimum contacts between Defendant and Louisiana.
Plaintiff further failed to establish that Defendant waived its
Rule 12(b)(2) defense either by failing to timely answer or by
participating in the Rule 16 scheduling conference. Because the
Court

declines

Defendant’s

to

Motion

transfer
is

this

GRANTED

and

case,

IT

IS

Plaintiff’s

ORDERED
claims

THAT

against

Defendant in this action are dismissed without prejudice.
New Orleans, Louisiana, this 25th day of February, 2015.

____________________________
UNITED STATES DISTRICT JUDGE

16