Entu Auto Services Inc v. PicMyRide.Biz L L C et al

Filing 24

ORDER granting 6 Motion to Dismiss for Lack of Jurisdiction is granted, and this matter is transferred to the United States District Court for the Western District of Louisiana. Signed by Judge Mary Ann Vial Lemmon on 4/9/15. (cbn)[Transferred from Louisiana Eastern on 4/13/2015.]

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ENTU AUTO SERVICES, INC.

CIVIL ACTION

VERSUS

NO: 15-77

PICMYRIDE.BIZ, LLC D/B/A
QUICKPICAUTO, TIMMY
HENDRIX, AND AUBREY KING

SECTION: "S" ()

ORDER AND REASONS
IT IS HEREBY ORDERED that Timmy Hendrix's Motion to Dismiss for Improper Venue
(Doc. #6) is GRANTED, and this matter is TRANSFERRED to the United States District Court
for the Western District of Louisiana.
BACKGROUND
This matter is before the court on a motion to dismiss for improper venue filed by defendant,
Timmy Hendrix.1 Hendrix argues that venue does not lie in the United States District Court for the
Eastern District of Louisiana because none of the defendants reside in this district and none of the
actions or omissions giving rise to plaintiff's cause of action occurred in the district. Hendrix
contends that the proper venue is the United States District Court for the Western District of
Louisiana.
Plaintiff, ENTU Auto Services, Inc., and defendants, PicMyRide.Biz, LLC d/b/a
Quickpicauto, Timmy Hendrix, and Aubrey King, are competing businesses that provide online
inventory management tools to automobile dealerships. ENTU has been in business since 2000, and

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Hendrix's motion is titled "Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue,
Lack of Service of Process and Failure to State Claim for which Relief Can Be Granted Pursuant to C.C.P.
12(B)(1)(2)(3)(4) & (6)." The memorandum in support of the motion focuses on the venue issue, and this
court finds that a transfer of venue to the United States District Court for the Western District of Louisiana
is appropriate. Thus, the court will not address the other portions of the motion.

operates in Louisiana, Texas and Mississippi. Its inventory management tools "include software
solutions for inventory management, photography, automobile descriptions derived from VIN codes,
market analysis tools, custom window stickers, incentive and rebate tools, and custom buyer
guides."
From 2009 to 2013, ENTU worked with Hendrix, who was in the business of providing print,
radio and television marketing to automobile dealerships. Hendrix would approach dealerships and
offer his services along with ENTU's. In 2013, ENTU stopped working with Hendrix due to
customer complaints about Hendrix. In 2014, Hendrix, along with King, formed PicMyRide.Biz,
LLC, which directly competes with ENTU in providing online inventory management services to
automobile dealerships.
On January 13, 2015, filed this action, along with an application for a temporary restraining
order, alleging that defendants engaged in false advertising under the Lanham Act, 15 U.S.C. §
1125(a), by circulating an advertisement that contains false, misleading and deceptive statements
about ENTU's pricing and performance and the capabilities of its services. ENTU alleges that in
December 2014, defendants prepared an advertisement that contained false information about
ENTU's services and distributed it to automobile dealerships in Louisiana. ENTU claims that
"Defendants used ENTU's confidential information obtained by Hendrix to directly target ENTU's
customers with the False Ad." ENTU alleges that the advertisement "purports to compare the
advantages of ENTU's online inventory management services with the services of Defendant[s],"
and that it includes:

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1. literally false information about ENTU's pricing because it states that the subscription
fee for ENTU's services is $375, when it is actually $149;
2. a literally false statement that ENTU's services do not provide the client with tools that
are "usable to manage your inventory," when ENTU does provide such tools;
3. a misleading and deceptive statement that ENTU's services involve "manual upload" of
inventory information, while defendants' services provide "same day upload," when in
reality, there is no difference between the upload services offered; and,
4. a misleading and deceptive statement that ENTU's service "uses a 3rd party vendor . .
. causing inaccuracies on almost a daily basis," and in comparison, defendants' provide
"100% accuracy with" a customer's inventory, when in reality, ENTU's system is exactly
as accurate as defendants' system.
ENTU alleges that defendants' false advertisement violates the Lanham Act, 15 U.S.C. §
1125(a); violates the Louisiana Unfair Trade Practices Act ("LUTPA"), Louisiana Revised Statutes
§ 51:1405; constitutes fraud under Louisiana Civil Code article 1953; violates Louisiana's False
Advertising law, La. Rev. Stat. § 51:411; and, violates Louisiana's Anti-Dilution Statute, La. Rev.
Stat. § 51:223.1. In its complaint, ENTU seeks a preliminary and permanent injunction preventing
defendants from distributing the false advertisement, or any other false advertisement, and requiring
defendants to issue corrective advertising. ENTU also seeks an award of lost profits and actual
damages attributable to the false advertising, treble damages, interest, costs, expenses and attorneys'
fees.
ENTU filed an application for a temporary restraining order, arguing that it is warranted due
to defendants' violation of the Lanham Act, 15 U.S.C. § 1125(a). ENTU seeks an injunction
preventing defendants from:
1. distributing, transmitting, publishing or circulating any statement that incorrectly states
or suggests pricing of ENTU's services;
2. distributing, transmitting, publishing or circulating any statement that compares ENTU's
prices to Defendants' prices;
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3. distributing, transmitting, publishing or circulating any statement that states or suggests
that ENTU's services do not allow clients to manage client's inventory;
4. distributing, transmitting, publishing or circulating any statement that characterizes
ENTU's services as incapable of allowing clients to manage client's inventory;
5. distributing, transmitting, publishing or circulating any statement that states or suggests
that ENTU's services rely on "manual" uploading of data;
6. distributing, transmitting, publishing or circulating any statement that characterizes the
uploading feature of ENTU's services as functionally different from Defendants'
services;
7. distributing, transmitting, publishing or circulating any statement that states or suggests
that ENTU's services result in inaccuracies in client's inventory as a result of ENTU's use
of a third-party DMS provider; and
8. distributing, transmitting, publishing or circulating any statement that states or suggests
that ENTU's DMS provider is not certified.
On January 29, 2015, the parties entered into a consent order that resolved the temporary restraining
order and preliminary injunction issues. Under the consent order, Hendrix agreed to be enjoined
from the eight actions listed.
Prior to entering in the consent order, Hendrix filed a motion to dismiss arguing that this
court is an improper venue for this action. He states in his affidavit that he is a resident of the
Western District of Louisiana, and that the document that ENTU refers to as the false advertisement
was not an advertisement, but was a one-page comparison sheet that he gave to only two automotive
dealerships in Iberville Parish, Louisiana, which is in the Western District of Louisiana. He claims
that he did not distribute it in the Eastern District of Louisiana, and has "no intention of publishing
or otherwise using the offending documents in any other business activity." Hendrix also notes that
PicMyRide.Biz, LLC d/b/a Quickpicauto was dissolved on December 30, 2014, and that he is no

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longer associated with King. ENTU argues that venue is proper in the Eastern District of Louisiana
because it resides in this district and will feel the effects of Hendrix's actions in this district.
ANALYSIS
A.

Venue
Under Rule 12(b)(3) of the Federal Rules of Civil Procedure, a defendant may move to

dismiss an action du to "improper venue." The court's authority to dismiss an action due to improper
venue is governed by 28 U.S.C. § 1406. Section 1406(a) states that, if an action is filed in the wrong
district, the district court "shall dismiss, or if it be in the interest of justice, transfer such case to any
district or division in which it could have been brought." 28 U.S.C. § 1406(a).
The court accepts all undisputed facts contained in the plaintiff's pleadings as true, and
factual conflicts are resolved in the plaintiff's favor. See Ginter ex.re. Ballard v. Belcher, Pendergast
& Laporte, 536 F.3d 439, 448-49 (5th Cir. 2008). The court may consider evidence outside of the
complaint and the attachments thereto in determining whether venue is proper. Ambraco Inc. v.
Bossclip B. V., 570 F.3d 233, 238 (5th Cir. 2009). There is a split of authority regarding which
party the burden of establishing whether venue is proper. 5B Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1352 (3d ed. 2014). As explained by Wright and Miller:
A number of federal courts have concluded that the burden of doing
so is on the defendant, since venue is a "personal privilege" that can
be waived and a lack of venue should be established by the party
asserting it. On the other hand, an equal (perhaps larger) number of
federal courts have imposed the burden on the plaintiff in keeping with
the rule applied in the context of subject mater and personal
jurisdiction defenses. The latter view seems correct inasmuch as it is
the plaintiff's obligation to institute his action in a permissible forum,
both in terms of jurisdiction and venue. There seems to be little
justification for distinguishing between the two types of defenses in
determining the placement of the burden.

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Because the plaintiff must institute his action in a permissible forum in terms of jurisdiction and
venue, the plaintiff must demonstrate that venue is proper.
Section 1391(b), Title 28 of the Untied States Code provides that a civil action may be
brought in:
(1)

a judicial district in which any defendant resides, if all
defendants are resident of the State in which the district is
located;

(2)

a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial
part of property that is the subject of the action is situated; or

(3)

if there is no district in which an action may otherwise be
brought as provided in this action, any judicial district in
which any defendant is subject to the court's personal
jurisdiction with respect to such action.

In this case, the parties' arguments concern the application of the transactional venue
provision in § 1391(b)(2). Hendrix argues that the only "events or omissions" that give rise to
ENTU's claims are his distribution of the allegedly false advertisement to two automobile
dealerships in Iberville Parish, Louisiana, which is in the Western District of Louisiana. ENTU
contends that "a substantial part of the events or omissions" that give rise to its claim occurred in
the Eastern District of Louisiana where it resides, because that is where it will feel the economic
effects of Hendrix's alleged actions.
As noted by Wright and Miller, "[i]n determining whether a substantial part of the events
underlying a claim arose in a district, some courts consider only the activities of the defendants.
Other courts, however, decline to limit their assessment to acts or omissions of the defendants, and
will consider plaintiff's activities in the district as well." 14D Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 3806 (4th ed. 2014) The United States Court of Appeals
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for the Fifth Circuit has not ruled upon this issue. Wright and Miller also notes that "[i]n tort cases,
courts tend to focus on where the allegedly tortious actions took place and where the harms were
felt."2 Id. But, "[t]here is a tendency to conclude that suffering economic harm within a district is
not by itself sufficient to warrant transactional venue there." Id. This "is probably the correct view,
because otherwise venue almost always would be proper at the place of the plaintiff's residence, an
option that Congress abolished in the general venue statute [in] 1990," by eliminating the language
that stated that the district "in which the claim arose" was the proper venue. Id. Indeed, many
district courts in the Fifth Circuit have held that the focus of the transactional venue inquiry is on
the actions or omissions of the defendant, and not where the plaintiff later feels the economic effects
of those actions. See Gray Cas. and Sur. Co. v. Lebas, 2013 WL 74351, at *2 (E.D. La. 1/7/2013)
(Engelhardt, J.) (listing cases).
In this case, Hendrix's affidavit establishes that his actions that gave rise to ENTU's claim
occurred in the Western District of Louisiana. ENTU's sole argument to establish venue in the
Eastern District of Louisiana is that it will feel the economic effects of Hendrix's actions in the
district, which, as noted by Wright and Miller, is insufficient to warrant transactional venue.
Therefore, transferring this case to the Western District of Louisiana is appropriate.
CONCLUSION
IT IS HEREBY ORDERED that Timmy Hendrix's Motion to Dismiss for Improper Venue
(Doc. #6) is GRANTED, and this matter is TRANSFERRED to the United States District Court
for the Western District of Louisiana.

2

Lanaham Act claims are based on common law tort claims. See Chevron Chem. Co. v. Voluntary
Purchasing Grp., Inc., 659 F.2d 695, 700–01 (5th Cir. 1981).

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9th
New Orleans, Louisiana, this _____ day of April, 2015.

____________________________________
MARY ANN VIAL LEMMON
UNITED STATES DISTRICT JUDGE

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