Complete Prototype Services, Inc. v. Trans Am Worldwide, LLC
OPINION AND ORDER DENYING 19 Defendant's Renewed Motion to Dismiss. Signed by District Judge Terrence G. Berg. (AChu)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
Case No. 16-14254
Hon. Terrence G. Berg
OPINION AND ORDER DENYING DEFENDANT’S
RENEWED MOTION TO DISMISS (DKT. 19)
This is a breach of contract case. In January 2015, the Parties
agreed that Plaintiff would manufacture an automotive bumper
for Defendant. After Plaintiff made a few mockups and collaborative adjustments to specifications, Defendant approved Plaintiff’s
quote to make 50 parts for $134,600. Plaintiff delivered the parts.
But Defendant did not pay the total due under the contract. Plaintiff now seeks to recover the unpaid balance of $112,897. Defendant Trans Am Worldwide, LLC, incorporated and headquartered
in Florida, has moved to dismiss claiming that this Court has no
personal jurisdiction over it.
Defendant previously moved to dismiss the case under Fed. R.
Civ. P. 12(b)(2), arguing that Plaintiff failed to plead facts sufficient to establish this Court’s personal jurisdiction over Defend-
ant. Dkt. 6. The Court denied that motion without prejudice in order to allow Plaintiff to amend its complaint. Dkt. 14. Plaintiff
filed an amended complaint, Dkt. 18, and Defendant has now filed
this renewed motion to dismiss. Dkt. 19.
For the reasons outlined below, Defendant’s Renewed Motion to
Dismiss is DENIED.
The Parties first met at a Nevada trade show in November
2014. Dkt. 19, Pg. ID 279; Dkt. 19-2, Pg. ID 296. It is not clear
from the record whether an agreement was formed at that time,
Dkt. 21, Pg. ID 371-72, but in January 2015, Plaintiff received a
purchase order from Defendant for tooling and 25 Trans Am fascias (automotive bumpers). Dkt. 18, Pg. ID 228. Throughout that
month, the Parties negotiated about engineering specifications
and fabrication timelines. Dkt. 18, Pg. ID 228. In early February,
Defendant’s representative visited Plaintiff in Michigan to review
some data concerns. Dkt. 18, Pg. ID 228. In April, Plaintiff completed the first two bumpers and Defendant’s agent again came to
Michigan to pick them up. Dkt. 18, Pg. ID 229.
In May, Defendant expressed satisfaction with the overall look
of the bumpers, but wanted to use a tougher, more expensive material. Dkt. 18, Pg. ID 229. So in June, Plaintiff fabricated two
more bumpers using the new materials and sent them to Defend2
ant, who responded with another engineering update. Dkt. 18, Pg.
ID 229. When reviewing the update, Plaintiff found data that suggested there would be a gap in the headlamps. Dkt. 18, Pg. ID
229. Defendant then shipped sample headlamps to Plaintiff to inspect. Dkt. 18, Pg. ID 230. According to Plaintiff, these headlamps
had the same gaps found in the data. Dkt. 18, Pg. ID 230. On June
29, 2015, one of Defendant’s representatives visited Plaintiff in
Michigan to review the project. Id.
Throughout July, the Parties continued to tweak specifications
and the production timeline. Dkt. 18, Pg. ID 231. On August 4th,
Defendant submitted a revised purchase order for the tooling and
production of 50 Trans AM rear fascias. Dkt. 18, Pg. ID 235; Dkt.
18-8, Pg. ID 253. Plaintiff provided a new quote of $134,600, which
decreased the price of tooling and increased the number of parts to
50. Dkt. 18, Pg. ID 235. Defendant approved the new quote on
September 10, 2015. Dkt. 18, Pg. ID 235. Plaintiff then made and
shipped two more bumpers to Defendant in Florida. Dkt. 18, Pg.
In October, another one of Defendant’s representatives came to
Michigan to review the project. Dkt. 18, Pg. ID 231. Plaintiff asked
for approval of recent tooling changes, and the representative
signed off on a mockup in person. Dkt. 18, Pg. ID 231. Defendant
gave Plaintiff a check for $4,600. Dkt. 18, Pg. ID 235. Later that
month, Defendant told Plaintiff the part fit well but they were
waiting on ownership for an official signoff. Dkt. 18, Pg. ID 231.
Then, on October 29th, Defendant reported that depressions
were appearing on the front bumpers after exposure to the sun.
Dkt. 18, Pg. ID 232. In November, Plaintiff shipped rear bumpers
and Defendant expressed its satisfaction with them. Dkt. 18, Pg.
ID 232. In December, Defendant requested 8 more front bumpers
with a thicker top area. Dkt. 18, Pg. ID 232. Plaintiff then provided a quote for the thickness modification. Dkt. 18, Pg. ID 232.
After two conference calls (in December 2015 and January
2016), Plaintiff’s President visited Defendant in Florida. Dkt. 20,
Pg. ID 341. New, thicker front bumpers were shipped to Defendant in March 2016. Dkt. 18, Pg. ID 232. In April 2016, Defendant
informed Plaintiff of another problem: inner ribs were showing
through after sanding. Dkt. 18, Pg. ID 233. Defendant cancelled
its order for front bumpers but kept an order for additional rear
ones, which Plaintiff filled by shipping 10 parts in May. Dkt. 18,
Pg. ID 233.
In June 2016, the parties held a conference call to discuss past
due payments but were unable to resolve the dispute. Dkt. 18,
Pg. ID 233. Plaintiff alleges that it has sustained damages of
$112,897.00 because Defendant has paid Plaintiff only $4,600 by
check in October 2015, with the remainder of the amount owed for
parts and tooling having gone unpaid. Dkt. 18, Pg. ID 233
Plaintiff filed suit in Macomb County Circuit Court and Defendant removed to this Court in December of 2016. Dkt. 1, Pg. ID 2.
Defendant then moved to dismiss the case, arguing that Plaintiff
had failed to plead facts sufficient to establish this Court’s personal jurisdiction over Defendant. Dkt. 6. This Court denied that motion without prejudice, allowing Plaintiff to amend its complaint.
Dkt. 14. Plaintiff filed an amended complaint. Dkt. 18. And Defendant has filed a renewed motion to dismiss. Dkt. 19. Having
considered the Parties’ submissions, the Court finds that oral argument would not help the Court resolve Defendant’s motion.
Thus the Court will decide the motion based on the Parties’ written submissions. See E.D. Mich. LR 7.1(f). For the reasons set out
in detail below, Defendant’s motion will be denied.
III. Standard of Review
Upon a defendant’s motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), “[t]he
plaintiff bears the burden of establishing that jurisdiction exists.”
Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).
A district court has three options when deciding a 12(b)(2) motion. Id. It may rule based on written submissions and affidavits,
hold an evidentiary hearing, or order discovery limited to the per5
sonal jurisdiction issue. Air Prod. & Controls, Inc. v. Safetech Int’l,
Inc., 503 F.3d 544, 549 (6th Cir. 2007); Theunissen, 935 F.2d at
1458. “The court has discretion to select which method it will follow[.]” Theunissen, 935 F.2d at 1458 (internal citations omitted).
Neither party has asked for an evidentiary hearing or for limited
discovery. And the Court finds that the Parties’ written submissions and affidavits are sufficient to resolve Defendant’s motion.
So the Court will decide the motion based solely on those submissions and affidavits.
Thus “the burden on the plaintiff is relatively slight and the
plaintiff must only make a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” Air Prod., 503 F.3d
at 549 (quoting Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169
(6th Cir. 1988; Theunissen, 935 F.2d at 1458) (internal quotation
marks omitted). The materials must be reviewed in the light most
favorable to the plaintiff and “the district court should not weigh
the controverting assertions of the party seeking dismissal.”
Theunissen, 935 F.2d at 1458 (internal quotation marks omitted).
a. Personal Jurisdiction
“Personal jurisdiction can be either general or specific depending upon the nature of the contacts that the defendant has with
the forum state.” Bird v. Parsons, 289 F.3d 865, 873 (6th Cir.
2002). General jurisdiction depends on continuous and systematic
contact with the forum state, such that the courts may exercise jurisdiction over any claims a plaintiff may bring against the defendant. Kerry Steel, Inc. v. Paragon Industries, Inc., 106 F.3d 147,
149 (6th Cir. 1997). 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. Here, Plaintiff argues that this
Court has specific jurisdiction over Defendant due to the Defendant’s contact with the forum state. Dkt. 10-1, Pg. IDs 7-12.
A federal court’s exercise of jurisdiction over litigants must be
both “(1) authorized by the law of the state in which it sits, and (2)
in accordance with the Due Process Clause of the Fourteenth
Amendment.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d
883, 888 (6th Cir. 2002). Michigan’s long-arm statute gives the
“maximum scope of personal jurisdiction permitted by the due
process clause of the Fourteenth Amendment.” Chrysler Corp. v.
Fedders Corp., 643 F.2d 1229, 1236 (6th Cir. 1981). Accordingly, if
jurisdiction is proper under the Fourteenth Amendment, it is also
proper under Michigan’s long-arm statute. The long-arm analysis
thus merges into the due process analysis and the Court need only
determine whether exercising personal jurisdiction violates consti-
tutional due process. Bridgeport Music, Inc. v. Still N The Water
Pub., 327 F.3d 472, 477 (6th Cir. 2003).
Due process is satisfied if a defendant has “sufficient minimum
contacts” with the forum state “such that the maintenance of the
suit does not offend traditional notions of fair play and substantial
justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (citation omitted). “But the plaintiff cannot be the only link between
the defendant and the forum. Rather, it is the defendant’s conduct
that must form the necessary connection with the forum State
that is the basis for its jurisdiction over him.” Walden v. Fiore, 134
S. Ct. 1115, 1122 (2014) (citing Burger King Corp. v. Rudzewicz,
471 U.S. 462, 478 (1985)).
The Sixth Circuit encapsulated the Supreme Court’s “minimum
contacts” jurisprudence in the three-part test articulated in
Southern Machine v. Mohasco:
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.
Air Prod., 503 F.3d at 550 (quoting S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir.1968)).
Though announced in 1968, the Mohasco test still provides the
elemental structure for the Sixth Circuit’s personal-jurisdiction
analysis. Where relevant however, the analysis below discusses
subsequent Supreme Court jurisdiction decisions that pertain to
i. Minimum Contacts
Defendant first argues that it did not purposefully avail itself of
the privilege of acting in Michigan because its contacts with Michigan were “random, fortuitous, and attenuated.” Dkt. 19, Pg. ID
279 (quoting Compuserve v. Patterson, 89 F.3d 1257, 1263 (6th
Cir. 1996)). Defendant characterizes the relationship between the
parties as a “one-off transaction” initiated by Plaintiff at a Nevada
trade show. Dkt. 19, Pg. ID 279. According to Defendant, its contacts with Michigan only multiplied due to Plaintiff’s unilateral
actions in shipping defective products. Dkt. 19, Pg. ID 279.
Plaintiff responds that in January 2015, Defendant began conducting business in Michigan that it knew would amount to several hundred thousand dollars. Dkt. 20, Pg. ID 346-47. Plaintiff
submits that the companies took part in an on-going business relationship over the next year, during which Defendant sent a
number of representatives to Michigan including its owner, general manager, and designer to approve designs, make engineering
modifications, and pick up finished products. Dkt. 20, Pg. ID 34647.
To address Defendant’s argument that its contacts with Michigan were too attenuated to constitute purposeful availment, it is
helpful to separate1 the minimum contacts requirement from International Shoe, 326 U.S. at 316, and the purposeful availment
requirement added later by Hanson v. Denckla, 357 U.S. 235
The minimum contacts requirement grew out of the realization
that jurisdictional rules requiring a corporation’s “presence” within a state’s borders were hamstringing the courts. Int’l Shoe, 326
U.S. at 316 (“…it is clear that unlike an individual [a corporation’s] ‘presence’ … can be manifested only by activities carried on
in its behalf …”).
The initial minimum contacts test granted courts a great deal
of flexibility. Id. at 318. The Supreme Court explained that some
corporate acts in a state were too incidental to justify the exercise
The two elements are often combined, as “minimum contacts” refers to objective qualities of the defendant’s activities while purposeful availment refers to subjective qualities of the same. Nonetheless, they are historically and conceptually distinct. In this
case, Defendant’s arguments that its contacts were too “attenuated” will be considered under the rubric of minimum contacts while
its arguments that its contacts were “random [and] fortuitous” will
be discussed under the rubric of purposeful availment.
of personal jurisdiction, while “other such acts, because of their
nature and quality and the circumstances of their commission,
may be deemed sufficient to render the corporation liable to suit.”
Id. But in order for a federal court to exercise personal jurisdiction
over a party, the party “must have certain minimum contacts with
[the forum] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Id. at 316.
The Sixth Circuit, when formulating the Mohasco test, found
this principle so well established that the phrase “minimum contacts” was not expressly included in the court’s test. As the court
explained, “[t]oday, it can no longer be doubted, if it ever was, that
the doing of an act or the causing of a consequence in the forum
state by the defendant can satisfy the requirements of the ‘minimum contacts’ test.” 401 F.3d at 380 (emphasis added). Thus, Defendant’s characterization of its relationship with Plaintiff as a
“one-shot transaction” would not necessarily change the outcome
of the analysis.
Considering the facts alleged by Plaintiff, they are more than
sufficient to satisfy the minimum contacts requirement: Defendant’s contacts with Michigan include at least three project-related
visits to the jurisdiction by Defendant’s personnel; at least three
requests by Defendant to change the engineering specifications,
which impacted work being conducted here; at least three sub11
stantial changes to the purchase agreement for parts to be fabricated in the district; and many more smaller, logistical communications that surrounded these contacts with the forum.
Even if Defendant were correct that Plaintiff’s inadequate performance caused the parties’ relationship to continue longer than
Defendant’s initial expectations, that issue is relevant to the question of breach of contract, not to whether Defendant’s contacts
with the forum were sufficient to allow an exercise of personal jurisdiction. Here, Defendant had an ongoing business relationship
with Plaintiff that was partly conducted in, and fully directed toward the forum. Such contacts were sufficient to allow the exercise of personal jurisdiction.
ii. Purposeful Availment
Purposeful availment is a separate requirement that, given the
highly flexible minimum-contacts requirement, has become the
primary site of a personal jurisdiction inquiry. The requirement
originated in Hanson v. Denckla, a case concerning Florida’s personal jurisdiction over a Delaware trust company. 357 U.S. at 238.
A woman had created a trust with the Delaware company while
residing in Pennsylvania. Id. at 238-43. She later moved to Florida. Once there, she would occasionally contact the company to
conduct administrative business. Id. Upon her death, a dispute
arose over the probation of her will. Id. The Supreme Court held
that Florida could not exercise personal jurisdiction over the Delaware corporation. The plaintiff had unilaterally reached out from
Florida and the defendant responded, but the defendant never
purposely reached into Florida. The Court reaffirmed this reasoning almost 30 years later:
The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy
the requirement of contact with the forum State. The
application of that rule will vary with the quality and
nature of the defendant's activity, but it is essential in
each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75 (1985)
(quoting Hanson v. Denckla, 357 U.S. at 253).
In addition to Burger King’s reaffirmation of the Hanson purposeful availment principle, the Supreme Court has addressed the
situation where a company does not directly place its products in a
state but can foresee being carried there by the “stream of commerce.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286
(1980); Asahi Metal Indus. Co., Ltd. V. Superior Court of California, Solano County, 480 U.S. 102 (1987).
In Asahi, the Court unanimously ruled that California had no
personal jurisdiction over a Japanese company, Asahi, when the
company had sold valve assemblies to a Chinese tire manufacturer that incorporated Asahi’s assemblies into its tires, which were
involved in a California accident. But the Asahi Court was split in
its reasoning. Justice Brennan, joined by three Justices, stressed
the unfairness of making Asahi litigate in the United States when
more appropriate forums were available in China and Japan.
Asahi, 480 U.S. at 116-21. Justice O’Connor, also joined by three
justices, stressed that, although Asahi was aware that some of its
products would end up in California, the company had not purposefully availed itself of California’s market by taking direct,
unmediated action toward the state. Id. at 112. Justice O’Connor’s
test required: “[a]dditional conduct of the defendant [that] may
indicate an intent or purpose to serve the market in the forum
State, for example . . . advertising in the forum State . . . or marketing the product through a distributor who has agreed to serve
as the sales agent in the forum State.” Id.
The divided Asahi opinion eventually led to a circuit split, with
the Sixth Circuit following Justice O’Connor’s reasoning, which
has become known as the “stream of commerce plus” theory.
Bridgeport Music, Inc. v. Still N The Water Publ’g, 327 F.3d 472,
478 (6th Cir. 2003).
Defendant contends that it did not purposefully avail itself under the “stream of commerce plus” test because it did not “[touch]
the stream of commerce with respect to Michigan: (1) through
sales of Defendant’s products; or (2) through purchase of goods or
services from Michigan.” Dkt. 19, Pg. ID 280.
While the first part of Defendant’s contention may be true—
Defendant did not introduce products into the stream of commerce
directed toward Michigan—the second part of Defendant’s contention (that it did not purchase goods or services from Michigan) is
not. Moreover, whether Defendant was targeting its own products
at Michigan through the stream of commerce is irrelevant to
whether its relationship with Plaintiff constitutes purposeful
availment. Air Prod. & Controls, Inc. v. Safetech Int’l, Inc., 503
F.3d 544 (6th Cir. 2007) (holding that personal jurisdiction was
appropriate where Kansas corporate defendant had long term
purchase agreement with Michigan manufacturer). Plaintiff need
only make a prima facie showing of purposeful availment under
the Mohasco test, which mirrors the simple, unmodified Hanson/Burger King formulation that governs all non-“stream of
Where the defendant deliberately has engaged in significant activities within a State, or has created continuing obligations between himself and residents of
the forum, he manifestly has availed himself of the
privilege of conducting business there
Burger King, 471 U.S. at 475 (citations and quotation marks omitted); e.g., Air Prod. & Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d
544 (6th Cir. 2007); Kerry Steel, 106 F.3d at 150; Compuserve, 89
F.3d at 1263; LAK, Inc. v. Deer Creek Enter., 885 F.2d 1293, 1300
(6th Cir. 1989).
Defendant relies on the Sixth Circuit’s decision in Kerry Steel
for the proposition that logistical activities stemming from a purchase contract with a Michigan corporation may not be enough to
constitute purposeful availment on their own. However, the facts
of that case are distinguishable from the current case.
In Kerry Steel, a Michigan plaintiff solicited an Oklahoma defendant to buy steel coils. 106 F.3d at 148. The parties negotiated
and expressed mutual assent by fax and telephone. Id. The defendant took possession of the goods in Illinois. There was no evidence to suggest the goods had ever been within Michigan borders. The defendant found the goods below agreed quality standards and refused to pay. Id. The plaintiff brought suit in Michigan
and the defendant moved to dismiss for lack of personal jurisdiction. Id.
The Sixth Circuit applied the Mohasco test and held that the
defendant: “in response to an unsolicited sales call, ordered products from a Michigan seller and negotiated with the seller via fax
and telephone to finalize the transaction. This does not constitute
a purposeful availment of the privilege of transacting business in
Michigan.” Id. at 152. The Court explained that “Paragon has no
employees or offices in Michigan, and there has been no showing
that any Paragon employee has ever been in Michigan for the
purpose of conducting business there. It was Kerry Steel that initially contacted Paragon in Oklahoma—and Paragon responded
without leaving home, as it were.” Id. at 151. Here, in contrast,
several of Defendants’ employees left home and traveled to Michigan to conduct business.
The Kerry Steel Court also relied on factual similarities to LAK,
Inc. v. Deer Creek Enter., where a Michigan corporation sued an
Indiana partnership in Michigan over a one-time sale of land in
Florida that the plaintiff had solicited. Id. at 152-53 (citing LAK,
885 F.2d at 1301). The logistical activities of negotiating over the
phone from Indiana and signing the contract in Michigan were not
enough to establish the defendant’s purposeful availment. Id.
The facts of this case are notably different from the one-time
transactions at issue in Kerry Steel and LAK. Here, the Parties’ relationship did not consist of logistical communications leading to a
one-time transfer of prefabricated, publicly-marketed property.
Rather, in this case the Defendant collaborated with Plaintiff for
over a year to create customized parts that would never have existed but for Defendant’s purposeful actions toward Michigan.
Unlike in Kerry Steel and LAK, the parties here engaged in
much more than an exchange of purchase orders or signing of an
instrument; they had a creative, mutual exchange of expertise and
productive capabilities that impacted the forum state. Defendant’s
employees came to Michigan to participate in the process of assuring that the parts being made in Michigan were fabricated in an
Defendant contends that there has been “no affirmative effort
on the part of Defendant to reach into Michigan for its own gain.”
Dkt. 19, Pg. ID 282. But Defendant ordered custom bumpers from
Plaintiff. By working with Plaintiff to design these custom bumpers, Defendant: (1) knowingly entered into a relationship with a
Michigan company; (2) purposefully engaged in multiple communications, exchanges, and renegotiations over a period longer than
a year; (3) knowingly entered such a course of dealing, as evidenced by its failure to terminate the relationship throughout that
period. “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.” Burger King, 471 U.S. at 479.
Here, Defendant purposefully established minimum contacts with
Michigan in order to secure the custom bumpers it sought.
iii. Cause of Action arising from Defendant’s
Activities in the Forum
Defendant maintains that its relationship with Plaintiff consists solely of Plaintiff’s unilateral actions toward Florida. Dkt. 19,
Pg. ID 284-85. Defendant contends that Plaintiff’s cause of action
did not arise from Defendant’s activities in Michigan because (1)
Plaintiff is not asserting a claim based on the fitness of a product
purchased from Defendant and consumed or used in Michigan and
(2) the claims merely arise from Defendant’s purchase of goods
from Michigan, shipped to Florida for a Florida assembly/conversion process, meaning the claims arise from “an alleged
debtor-creditor relationship,” not the conduct of any business in
Michigan by Defendant. Dkt. 19, Pg. ID 284.
This argument conflates the first two elements of the Mohasco
test. The purposeful availment analysis focuses on the activities
connecting the defendant to the forum. Air Prod., 503 F.3d at 551.
The “arising from” analysis examines the connection between that
activity-forum state nexus and the subject matter of the suit. Id.
The “arising from” requirement is a “lenient standard,” Air
Prod., 503 F.3d at 553; Bird, 289 F.3d at 875, that is satisfied as
long as the “defendant’s contacts with the forum state are related
to the operative facts of the controversy.” CompuServe, 89 F.3d at
1267. This requirement would not permit personal jurisdiction
when (1) the defendant has sufficient, purposeful contacts in one
domain of activity but the plaintiff sues over activities in another,
or (2) the subject matter has little to do with the forum state, as in
Kerry Steel and LAK. The present case does not fall in either category.
Here, the lawsuit pertains to the contract for goods that were
purchased and transferred from Michigan, which is sufficient to
satisfy the “arising from” element. Air Prod., 503 F.3d at 553
(“One element of Air Products’ cause of action for fraudulent
transfer is that there be a debtor-creditor relationship which, as
just explained, was made possible by and would not have existed
but for Defendants’ business relationship with Air Products.”); see
also Neo-Gen Corp. v. Neo-Gen Screening, Inc., 232 F.3d 883, 892
(6th Cir. 2002) (holding that a but-for causal relationship between
the actions that allegedly establish minimum contacts and the
possibility of the plaintiff prevailing in its present cause of action
is enough to satisfy the “arising from” requirement). Thus, because this case involves Defendant’s failure to pay for goods that it
purchased from Michigan, the Court finds that Plaintiff’s cause of
action arises from Defendant’s activities in Michigan.
Finally, Defendant argues that it unreasonable to hail it into a
Michigan court. Dkt. 19, Pg. ID 287. The “reasonableness” inquiry
under the Mohasco test has evolved to mirror the Supreme Court’s
four-factor “fair play and substantial justice” analysis. Air Prod.,
503 F.3d at 554 (quoting Burger King, 471 U.S. at 477-78; WorldWide Volkswagen, 444 U.S. at 292).
In determining whether the exercise of jurisdiction is
reasonable, the court should consider, among others,
the following factors: (1) the burden on the defendant;
(2) the interest of the forum state; (3) the plaintiff's interest in obtaining relief; and (4) other states' interest
in securing the most efficient resolution of the policy.
Air Prod., 503 F.3d at 554 (citing Intera Corp. v. Henderson, 428
F.3d 605, 618 (6th Cir.2005)).
When, as here, the plaintiff has established the purposeful
availment and “arising from” elements, “an inference of reasonableness arises and only the unusual case will not meet this third
criteria.” Air Prod., 503 F.3d at 554 (quoting Theunissen, 935 F.2d
at 1461). “[The defendant] must present a compelling case that the
presence of some other considerations would render jurisdiction
unreasonable.” Id. (quoting Burger King, 471 U.S. at 447).
Defendant argues that litigating in Michigan will require essential personnel to leave the business unattended while travelling to participate, Dkt. 19, Pg. ID 287-88, and that this sort of
travel has a disparate, unreasonable impact on a small business.
Dkt. 19, Pg. ID 288. Furthermore, Defendant submits that it
would incur disparate costs if it decides to bring a counterclaim.
Dkt. 19, Pg. ID 288.
Defendant also argues that Michigan lacks any notable interest
in this case, which concerns a financial dispute between private
companies that has no impact on public policy. Dkt. 19, Pg. ID
288. Defendant contends that Florida, on the other hand, has a
public policy interest in protecting its businesses from defective
out-of-state products. Dkt. 19, Pg. ID 289.
In Air Products, the Sixth Circuit rejected substantively identical contentions: “[a]lthough it would be a burden on [defendant] to
travel from Kansas for this litigation, Michigan clearly has an interest in protecting a company whose principal place of business is
located in Michigan . . . the exercise of personal jurisdiction is reasonable under the circumstances of this case.” 503 F.3d at 555.
The same is true here: Michigan has an interest in protecting a
company whose principal place of business is located in Michigan,
and who has not been paid for work that it did for Defendant.
Defendant also raises the contention that it did not do business
in Michigan, while Plaintiff purposefully did business in Florida.
Dkt. 19, Pg. ID 288-89. As such, Defendant argues, it is more reasonable to require Plaintiff to bring suit in a state that it reached
into than for Defendant to defend in a state with which it has attenuated contacts. Dkt. 19, Pg. ID 289. As explained above, De22
fendant’s argument that it never reached into Michigan is misplaced.
Finally, Defendant argues that the interstate judicial system’s
interest in efficient resolution is best served in Florida because the
case could commence there immediately without a forum dispute.
Dkt. 19, Pg. ID 289. Whenever the parties are from different
states, one or the other party will suffer some inconvenience from
litigating the matter in a remote forum. There is no reason to believe the inconvenience to Defendant would be greater than to
Plaintiff. As to the need for efficiency in resolving disputes about
the forum, that need is met by this Court’s decision in determining
that personal jurisdiction is appropriate.
After application of the Mohasco test, the Court concludes that
Defendant purposefully availed itself of the privilege of acting in
Michigan, that the cause of action in this case arises from Defendant’s activities here, and that Defendant’s actions here have a
substantial enough connection to Michigan that it is reasonable
for the Court to exercise personal jurisdiction over Defendant.
For the foregoing reasons, Defendant’s Renewed Motion to
Dismiss is DENIED.
Dated: August 25, 2017
s/Terrence G. Berg
TERRENCE G. BERG
UNITED STATES DISTRICT JUDGE
Certificate of Service
I hereby certify that this Order was electronically filed, and
the parties and/or counsel of record were served on August 25,
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