Amin v. Kyros Energy LLC et al

Filing 22

RULING denying 6 Motion to Dismiss for lack of personal jurisdiction. Signed by Judge Shelly D. Dick on 6/22/2017. (LLH)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

RUPAL AMIN

CIVIL ACTION

VERSUS

17-56-SDD-EWD

KYROS ENERGY, LLC AND
STAN CONLEY

RULING
This matter is before the Court on the Motion to Dismiss1 filed by Defendant Kyros
Energy LLC (“Kyros”). Plaintiff Rupal Amin (“Plaintiff”) has filed an Opposition2 to this
motion. For the reasons which follow, the Court finds that it has personal jurisdiction over
Kyros, and the motion will be denied.
I.

FACTUAL & PROCEDURAL BACKGROUND
Plaintiff, a resident of East Baton Rouge Parish, State of Louisiana, along with his

business partner Roy Lindsey (“Lindsey”), are members of The Molecular Group, LLC,
(“The Molecular Group”) a Louisiana limited liability company.3 Plaintiff contends that, in
July 2015, Stan Conley (“Conley”), President and CEO of Kyros, sent correspondence to
The Molecular Group, directed to Lindsey, seeking investors for a government contract in

1

Rec. Doc. No. 6.
Rec. Doc. No. 18.
3
Rec. Doc. No. 18-1.
2

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Africa.4 This correspondence allegedly included business records intended to entice
investors.5 Based on this correspondence, Plaintiff, Lindsey, and Conley (on behalf of
Kyros) began negotiating terms involving The Molecular Group loaning funds to Kyros.
These negotiations resulted in a proposed Promissory Note6 by Kyros and
Personal Guarantee by Conley, which was rejected by Plaintiff.

In response, Plaintiff

presented a Promissory Note to Conley which changed the choice-of-law provisions from
the State of Maryland to Louisiana, and, in his Personal Guarantee, Conely agreed to
include language providing that he would submit to the jurisdiction of the State of
Louisiana and the United States District Court Middle District of Louisiana for purposes
of any legal action arising out of the guarantee.7 Thereafter, the Promissory Note and
Personal Guarantee were executed by Conley, individually and on behalf of Kyros.8
In keeping with the agreement, Plaintiff issued payments to Kyros on July 16 and
17, 2015, totaling $20,000.00, which Kyros accepted.9 Plaintiff contends repayment on
the Note was due on November 1, 2015. Further, Plaintiff maintains that, after the
Promissory Note was executed, Plaintiff’s counsel and counsel for Kyros were in constant
communication.10 Plaintiff further contends Kyros continued to keep Plaintiff informed
regarding the status of its business activities and plans for repayment;11 however, no

4

Rec. Doc. No. 18-2.
Rec. Doc. No. 18-3.
6
Rec. Doc. No. 18-4.
7
Rec. Doc. No. 18-5.
8
Id.
9
Rec. Doc. No. 18-6.
10
Rec. Doc. No. 18-7.
11
Id.
5

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payment was ever made by Kyros. Plaintiff provides correspondence wherein Kyros
acknowledges that the debt is overdue and attempts to negotiate a new re-payment plan,
but this re-negotiation was refused by Plaintiff.12

Plaintiff also claims that, upon

information and belief, Kyros reached out to other Louisiana residents seeking
investors.13
Plaintiff filed this action in state court on November 15, 2016, and Defendants
Kyros and Conley removed the matter to this Court on January 27, 2017.14 Kyros is a
Maryland limited liability company, organized under the laws of Maryland, and it contends
it has never conducted business in the State of Louisiana and has no other contacts in
Louisiana.15 Conley declared that Kyros does not have a registered agent for service of
process in Louisiana; has never registered to do business in Louisiana; has no officers,
directors, employees, and/or agents located in Louisiana; and maintains no residence or
place of business in Louisiana.16 Further, Conley declared that Kyros has no property or
physical presence in the State of Louisiana; neither has it ever solicited business in
Louisiana or to Louisiana residents.17 As such, Kyros moves to dismiss this action against
it on the basis that this Court lacks personal jurisdiction over it because Kyros has
insufficient minimum contacts with the State of Louisiana to satisfy due process
requirements. Plaintiff opposes the motion.

12

Rec. Doc. No. 18-7, p. 14.
Rec. Doc. No. 18-1.
14
Rec. Doc. Nos. 1 & 2.
15
Rec. Doc. No. 6-2.
16
Id.
17
Id.
13

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II.

LAW
A. General Personal Jurisdiction
When a nonresident defendant presents a motion to dismiss for lack of personal

jurisdiction, the plaintiff bears the burden of establishing the court's jurisdiction over the
nonresident.18 When a district court rules on a motion to dismiss without an evidentiary
hearing, the plaintiff need only present a prima facie case of personal jurisdiction.19 At
this stage, uncontroverted allegations in the complaint must be taken as true, and conflicts
between the parties' affidavits must be resolved in the plaintiff’s favor.20
To aid resolution of the jurisdictional issue, a court “may receive interrogatories,
depositions or any combination of the recognized methods of discovery ... But even if the
court receives discovery materials, unless there is a full and fair hearing, it should not act
as a fact finder and must construe all disputed facts in the plaintiff's favor and consider
them along with the undisputed facts.”21 “Once a plaintiff has established minimum
contacts, the burden shifts to the defendant to show that the assertion of jurisdiction would
be unfair.”22
“A federal district court has personal jurisdiction over a nonresident defendant to

18

Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir.1985); Brown v. Flowers Indus., Inc., 688 F.2d 328,
332 (5th Cir.1982), cert. den., 450 U.S. 1023, 103 S.Ct. 1275, 75 L.Ed.2d 496 (1983).
19
Trinity Indus., Inc. v. Myers & Assoc., Ltd., 41 F.3d 229, 230–31 (5th Cir.1995) (citing Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 472–73 [1985], and Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773 (5th
Cir.1986), cert. den., 481 U.S. 1015 (1987).
20
D.J. Inv., Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 546 (5th Cir.1985).
21
Walk Haydel & Assoc., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008) (holding that
a district court erred in requiring a plaintiff to establish more than a prima facie case even after a limited
pretrial evidentiary hearing) (internal citations and quotations omitted).
22
Id. at 245 (quoting Wien Air Alaska, Inc. v. Brandt, 195 F.3d 208, 215 (5th Cir.1999)).

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the same extent as a state court in the state in which the district court is located.”23 Thus,
personal jurisdiction over a nonresident defendant attaches only when a defendant is
amenable to service of process under the forum state's long-arm statute and the exercise
of jurisdiction comports with the due process clause of the fourteenth amendment. In this
case, these two queries merge into one because Louisiana's long-arm statute extends
jurisdiction coextensively with the limits of the Due Process Clause of the U.S.
Constitution.24
Where a defendant has “continuous and systematic general business contacts”
with the forum state, the court may exercise “general jurisdiction” over any action brought
against the defendant.25 Where contacts are less pervasive, a court may still exercise
“specific” jurisdiction “in a suit arising out of or related to the defendant's contacts with the
forum.”26
B. Specific Jurisdiction
The constitutional requirements for specific jurisdiction may be satisfied by
showing that the defendant has sufficient “minimum contacts” with the forum state such
that imposing a judgment would not “offend traditional notions of fair play and substantial
justice.”27 The Fifth Circuit follows a three-step analysis for this determination. First, a
court must determine “whether the defendant has minimum contacts with the forum state,

23

Walk Haydel, 517 F.3d at 242.
Moncrief Oil Int'l, Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007); St. Martin & Mahoney v.
Patton, 863 F.Supp. 311, 313–14 (E.D.La.1994).
25
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984).
26
Id. at 414; Luv N' care, Ltd., v. Insta–Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006).
27
Luv N' care, 438 F.3d at 469 (quoting Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)).
24

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i.e., whether it purposely directed its activities toward the forum state or purposefully
availed itself of the privileges of conducting activities there.”28
This “minimum contacts”/”purposeful availment” inquiry is fact intensive. No one
element is decisive, and the number of contacts with the forum state is not, by itself,
determinative.29 A single, substantial act directed toward the forum can support specific
jurisdiction,30 but even multiple contacts, if “[r]andom, fortuitous, or attenuated ... are not
sufficient to establish jurisdiction.”31 What is significant is whether the contacts suggest
that the nonresident defendant purposefully availed himself of the privileges or benefits
of the laws of the forum state.32
Second, a court considers “whether the plaintiff's cause of action arises out of or
results from the defendant's forum-related contacts.”33 At this step, the proper focus in
the analysis is on the “relationship among the defendant, the forum, and the litigation.”34
This is a claim-specific inquiry, as “the Due Process Clause prohibits the exercise of
jurisdiction over any claim that does not arise out of or result from the defendant's forum
contacts.”35

28

Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002); see also Hanson v.
Denckla, 357 U.S. 235, 250–251 (1958).
29
Luv N' care, 438 F.3d at 470.
30
See ASARCO, Inc. v. Glenara, Ltd., 912 F.2d 784, 786 (5th Cir.1990).
31
Moncrief Oil, 481 F.3d at 312 (citing Burger King, 471 U.S. at 479 (1985)).
32
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (citing Hanson 357 U.S. at 251,
254); Hydrokinetics, Inc. v. Alaska Mech., Inc., 700 F.2d 1026, 1028 (5th Cir.1983), cert. den., 466 U.S.
962 (1984).
33
Nuovo Pignone, 310 F.3d at 378.
34
Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 487 (5th Cir. 2008).
35
Conwill v. Greenberg Traurig, L.L.P., et al., No. 09-4365, 2009 WL 5178310 at *3 (E.D.La. Dec. 22, 2009)
(quoting Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274–75 (5th Cir. 2006)).

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Finally, “[i]f the plaintiff successfully satisfies the first two prongs, the burden shifts
to the defendant to defeat jurisdiction by showing that its exercise of jurisdiction would be
unfair or unreasonable.”36 In this inquiry, a court analyzes five factors: “(1) the burden on
the nonresident defendant, (2) the forum state's interests, (3) the plaintiff's interest in
securing relief, (4) the interest of the interstate judicial system in the efficient
administration of justice, and (5) the shared interest of the several states in furthering
fundamental social policies.”37 “It is rare to say the assertion [of jurisdiction] is unfair after
minimum contacts have been shown.”38
C. Minimum Contacts
Personal jurisdiction may not be avoided merely because a defendant did not
physically enter the forum state. Although territorial presence frequently will enhance a
potential defendant's affiliation with a state and reinforce the reasonable foreseeability of
suit there, it is an inescapable fact of modern commercial life that a substantial amount of
business is transacted solely by mail and wire communication across state lines, thus
obviating the need for physical presence within a state in which business is conducted.
As long as a commercial actor's efforts are “purposefully directed” toward residents of the
state in question, courts have consistently rejected the notion that an absence of physical
contacts can defeat personal jurisdiction there.39

36

Seiferth, 472 F.3d at 271 (citing Burger King, 471 U.S. at 382).
Luv N' care, 438 F.3d at 473; see also, Burger King Corp., 471 U.S. at 476–77 (listing 7 factors).
38
Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 615 (5th Cir. 2008)(citing Wein Air Alaska, Inc. v.
Brandt, 195 F.3d 208, 215 (5th Cir.1999)).
39
Burger King, 471 U.S. at 476–77.
37

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Even so, “merely contracting with a resident of the forum state does not establish
minimum contacts.”40 “A contract is ordinarily but an intermediate step serving to tie up
prior business negotiations with future consequences which themselves are the real
object of the business transaction. It is these factors—prior negotiations and
contemplated future consequences, along with the terms of the contract and the parties'
actual course of dealing—that must be evaluated in determining whether the defendant
purposefully established minimum contacts within the forum.”41
Although a single act, such as a telephone call or mailing a letter, can be sufficient
to establish minimum contacts, precedent is clear that communications alone are
insufficient when “the communications with the forum did not actually give rise to [the]
cause of action.”42 Rather, when communications relating to conducting business are the
only contacts, courts generally require some type of “continuing obligations” between the
defendant and residents of the forum, such as is found in an ongoing business
relationship, to find that the defendant availed himself of the privilege of conducting
business in the forum. Only then, “because his activities are shielded by ‘the benefits and
protections’ of the forum's laws, it is presumptively not unreasonable to require him to
submit to the burdens of litigation in that forum as well.”43
On the other hand, for claims of intentional tort, “[a] single act by a defendant can

40

Moncrief Oil, 481 F.3d at 311.
Burger King, 471 U.S. at 479 (internal citations omitted).
42
Wein Air, 195 F.3d at 213; Aviles v. Kunkle, 978 F.2d 201, 205 (5th Cir.1992).
43
Burger King, 471 U.S. at 476.
41

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be enough to confer personal jurisdiction if that act gives rise to the claim being
asserted.”44 “When the actual content of communications with a forum gives rise to
intentional tort causes of action, this alone constitutes purposeful availment.”45
III.

ANALYSIS
Applying the specific jurisdiction test to the facts alleged by Plaintiff, which must

be accepted by the Court as true for purposes of this motion, the Court finds that there
are multiple grounds by which Kyros has sufficient contacts with the State of Louisiana to
subject him to this Court’s jurisdiction. The record demonstrates that Conley acted as
President and CEO on behalf of Kyros. Further, all of Kyros’ contacts with The Molecular
Group were relating to the solicitation of investments and resulting Promissory Note and
Personal Guarantee that forms the basis of this lawsuit. Through its agent, Kyros solicited
investors from the State of Louisiana, entered into a Promissory Note with a Louisiana
resident, and, as the record reflects, subsequently corresponded on numerous occasions
with Louisiana residents in efforts to manage and re-negotiate this transaction. Notably,
Kyros also agreed to a change in the choice-of-law provision from Maryland to Louisiana,
and the record reflects that Conley, on behalf of Kyros, explicitly agreed to the jurisdiction
of this very Court over any litigation resulting from the Promissory Note and Personal
Guarantee. The Court finds that Plaintiff’s allegations are sufficient to establish that

44

Lewis v. Fresne, 252 F.3d 352, 358 (5th Cir. 2001) (citing Brown v. Flowers Indus., 688 F.2d 328, 332–
33 (5th Cir.1984)(holding that one long distance telephone call alleged to constitute defamation was enough
to establish minimum contacts)).
45
Wein Air, 195 F.3d at 213 (5th Cir.1999); see also, Ross, 246 Fed.Appx. 856, 859–60 (5th Cir.
2007)(deeming allegations that out of state counsel communicated false information to client in Texas alone
sufficient to make prima facie case of specific personal jurisdiction).

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Kyros’ contacts with Louisiana residents may have resulted in harm to Louisiana
residents.

Further, the Court finds that the alleged harm was foreseeable as the

nonpayment to a Louisiana resident on a valid Promissory Note clearly causes harm.
The facts of this case are not unlike those in Central Progressive Bank v. Kuntz,46
decided by the District Court for the Eastern District of Louisiana, a case in which Ohio
resident defendants executed a promissory note in favor of a Louisiana banking
institution. When the defendants defaulted on the note, the bank filed suit in Louisiana
state court, and the suit was removed to federal court.47 The Ohio defendants moved to
dismiss for lack of personal jurisdiction for many of the same arguments asserted herein
by Kyros. The court rejected these arguments, finding as follows:
This Court has previously addressed the issue of personal jurisdiction in
cases similar to the present case. In Consolidated Companies, Inc. v. Kern,
No. 99–2704, 2000 WL 1036186 (E.D.La. July, 25, 2000) (Fallon, J.), the
Court found that there were minimum contacts with Louisiana established
when a non-resident defendant voluntarily executed a Guaranty in favor of
a Louisiana entity to induce the Louisiana entity to provide credit. Id. at *9–
10. Similarly, in Asean Homes, Inc. v. Miller, No. 99–294, 1999 WL 1102427
(E.D.La. Dec. 3, 1999) (Clement, J.), this Court found that personal
jurisdiction could properly be exercised over a non-resident defendant when
that defendant had sought out a loan from a Louisiana entity, entered into
an agreement to borrow money from a Louisiana entity, the parties had a
continuing business relationship, money transferred from Louisiana to the
defendant, the agreements were executed in part in Louisiana, and the
Guaranty contained a Louisiana choice of law provision. Id. at *3. In Asean
Homes, the defendant specifically argued that there could be no jurisdiction
in Louisiana because all but one of the promissory notes were executed
outside Louisiana and payment was to be made outside Louisiana. Id. The
court found this arguments of no moment and instead recognized that “[t]he
relevant conduct at issue ... is [defendant's] solicitation of a loan agreement
46
47

No. 08-4147, 2008 WL 5264260 (E.D. La. Dec. 17, 2008).
Id. at *1.

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from plaintiff and his actions in signing promissory notes for loans issued by
a Louisiana corporation through a Louisiana bank. As to the promissory
notes signed elsewhere, the fact that a contract was not executed or
finalized in Louisiana is not controlling, nor is it dispositive of the issue of
personal jurisdiction.” Id.48
A review of CPB's allegations demonstrates that the requisite minimum
contacts are present, similar to the cases discussed above, to satisfy the
requirements of specific jurisdiction. The defendants in this case personally
solicited CPB, a Louisiana financial lending institution, to lend them money
for their business. In connection with the loan, the defendants negotiated
and executed a Business Loan Agreement, a Promissory Note, numerous
Change in Terms Agreements, and the Commercial Guaranties in favor of
CPB, a Louisiana entity. Although these documents were signed outside of
Louisiana they were all delivered to CPB in Louisiana. In addition, all
payments on these agreements and the Commercial Guaranties that are
the subject of this suit were to be made to CPB in Louisiana. The defendants
voluntarily sought to engage in business with a Louisiana entity for the
purpose of securing funds from that Louisiana entity. They signed loan
documents that were prepared by CPB and its lawyers and that are
governed by Louisiana law. The Commercial Guaranties that are the subject
of this lawsuit created an ongoing relationship between the defendants and
CPB, a Louisiana entity. As a result of these facts, the Court finds that the
defendants have sufficient minimum contacts with Louisiana, which
contacts specifically relate to the instant cause of action.49
The analysis set forth above by the court in Central Progressive is directly
applicable to the facts in the case before the Court. Moreover, while Kyros has completely
ignored the fact that it consented to the jurisdiction of this Court in the choice-of-law
provision of the Promissory Note, Louisiana federal courts take such choice of law
provisions seriously for purposes of determining jurisdiction. In Reliant Management
Group, LLC v. UltraCare Healthcare, LLC,50 a defendant challenging the personal

48

Id. at *3.
Id. at *4.
50
No. 13-250, 2013 WL 3864321 (M.D. La. July 24, 2013).
49

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jurisdiction of this Court argued that the forum selection clause in the contract at issue
was unreasonable.51 Unpersuaded by this argument, the Court reasoned:
Further, enforcement of the Facility Defendants' forum selection clauses
would not be unreasonable in this case. The Facility Defendants are not
unsophisticated consumers. The Facility Defendants are sophisticated
commercial business entities who are owned and managed by principals
who boast of similar business dealings in several states. The Facility
Defendants entered into potentially lucrative contracts with a Louisiana
company, and during the contract negotiation process they agreed to submit
to the jurisdiction of a Louisiana court. It was therefore wholly foreseeable
to these entities that they might have to defend a lawsuit in this state should
one be filed. No equities in this case militate in favor of forcing the Louisiana
plaintiff to forfeit its contractually-bargained-for choice of forum in order to
sue the Facility Defendants in a forum that they now consider more
convenient than the one that they bargained for.52
While Kyros has failed to acknowledge the forum selection clause, much less
challenge its reasonableness, the Court finds that the facts of this case require the same
result as set forth in Reliant. There is no suggestion that Kyros is not a sophisticated
business entity; indeed, the record demonstrates the opposite. Moreover, Kyros should
have foreseen the potential for this Court’s jurisdiction when Plaintiff specifically rejected
the Maryland choice of law provision in the originally proposed Promissory Note and
agreed, through Conley, to the Louisiana choice of law provision in the executed Note.
The Court finds that Plaintiff has established a prima facie case for jurisdiction.
Having established a prima facie case for jurisdiction, the burden shifted to Kyros
to demonstrate how this Court’s exercise of jurisdiction over it would be unfair or

51
52

Id. at *2.
Id. at *4.

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unreasonable. Kyros did not address this issue or provide any argument or evidence to
the Court establishing that its defense of this lawsuit in this Court would be unfair or
unreasonable. Kyros apparently rests its entire motion on the facts that it is a Maryland
resident. This is wholly insufficient to defeat Plaintiff’s assertion of personal jurisdiction.
Hence, upon consideration of the fairness factors discussed above,53 the Court finds that
the balance of those factors overwhelmingly favors a finding of jurisdiction. Kyros has not
shown how this Court’s exercise of jurisdiction over it would be burdensome; the State of
Louisiana’s interests in protecting its citizens is present as is the Plaintiff’s interest in
securing relief; and the interests of justice and the effective administration of justice
among the States is served by the exercise of jurisdiction in this matter. Further, the
Court finds that imposing jurisdiction over Kyros under the facts of this case would not
offend traditional notions of fair play and substantial justice but would, rather, serve the
interests of justice.

53

See n. 30, supra. (In this inquiry, a court analyzes five factors: “(1) the burden on the nonresident
defendant, (2) the forum state's interests, (3) the plaintiff's interest in securing relief, (4) the interest of the
interstate judicial system in the efficient administration of justice, and (5) the shared interest of the several
states in furthering fundamental social policies.”).

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IV.

CONCLUSION
For the reasons set forth above, the Motion to Dismiss54 filed by Defendant Kyros

Energy LLC for lack of personal jurisdiction is DENIED.
IT IS SO ORDERED.
Signed in Baton Rouge, Louisiana on June 22, 2017.

S

JUDGE SHELLY D. DICK
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

54

Rec. Doc. No. 6.

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