Arias et al v. Mercedes-Benz USA, LLC
Filing
29
RULING AND ORDER The #10 Motion to Dismiss First Amended Complaint Pursuant To Fed. R. Civ. P. 12(b)(2)is GRANTED IN PART AND DENIED IN PART. The #12 Motion to Stay Decision on Defendants #10 Motion to Dismiss and to Compel Jurisdictional Discovery is DENIED. This matter be and is hereby transferred to the United States District Court for the Southern District of Mississippi. The #4 Motion to Dismiss Pursuant To Fed. R. Civ. P. 12(b)(2) (Doc. 4) is DENIED AS MOOT. Signed by Judge Brian A. Jackson on 3/30/2021. (LLH) [Transferred from Louisiana Middle on 3/31/2021.]
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
JOSE AKIAS, ET AL. CIVIL ACTION
VEKSUS
MERCEDES-BENZ USA, LLC, NO. 20-00546-BAJ-SDJ
ETAL.
RULING AND ORDER
Before the Court is Defendant Mercedes-Benz USA, LLC's IVIotion To
Dismiss First Amended Complaint Pursuant To Fed. R. Civ. P. 12(b)(2)
(Doc. 10). Plaintiffs oppose the Motion. (Doc. 11). Defendant filed a Reply
Memorandum. (Doc. 14). Relatedly, Plaintiffs filed a IVEotion To Stay Decision On
Defendant s Motion To Dismiss And To Compel Jurisdictional Discovery.
(Doc. 12, Doc. 13).
For the reasons stated herein, Defendants Motion to Dismiss (Doc. 10) is
GRANTED IN PART and DENIED IN PART and Plaintiff^ Motion to Stay
(Doc. 12) is DENIED. The Court finds that it lacks personal jurisdiction over
Defendant but concludes that it is in the interest of justice to transfer the matter to
the United States District Court for the Southern District of Mississippi pursuant to
28 U.S.C. § 1631 rather than dismiss the case.
I. BACKGROUND
This case arises out of a dispute over an allegedly defective vehicle. Plaintiffs
Jose and Wynette Arias, domiciled in Louisiana, are the purchasers of the vehicle.
(Doc. 6, UU 1. 17-19). Defendant Mercedes-Benz USA, LLC ("MBUSA") is a Delaware
corporation with its principal place of business in Atlanta, Georgia. (Id. at ^f 21).
Plaintiffs allegedly purchased a vehicle from Mercedes Benz of
South Mississippi, an authorized MBUSA dealership located in D Iberville,
Mississippi, for $79,037.77. (Id. at 1H[ 19, 23). At the time of purchase, the vehicle was
accompanied by a written warranty providing bumper-to-bumper coverage for a
period of four years or 50,000 miles. (Id. at 1[ 25).
During the warranty period, Plaintiffs allegedly began to experience an odor
emanating from the vehicle's HVAC system. (Id. at Tf 28). Plaintiffs assert that they
repeatedly brought the vehicle to Mercedes-Benz of New Orleans ("MBNO") for
repairs.1 (M at H 28-35). MBNO, however, only offered the Plaintiffs "for-fee"
maintenance and cleanings. {Id. at 1[ 28). After various attempted repairs, the defects
at issue remained. (Id. at ^ 28-35).
Plaintiffs allege that they wrote to Defendant MBUSA to put it on notice that
the vehicle was defective. {Id. at ^[ 35). Plaintiffs assert that Defendant refused to
repair, repurchase, or replace the vehicle. {Id.}. Plaintiffs now bring claims against
Defendant for breach of express warranty (Id. at ^ 36-45), breach of implied
warranty {Id. at ^\ 46-50), violations of the Magnusson-Moss Warranty Act,
1 MBNO is not a defendant in this matter.
2
15 U.S.C. § 2301, et seq. (Id. at U1[ 51-61), and unjust enrichment or "opportunistic
breach of contract" {Id. at fl 62-68). (Id. at ^[ 3).
Defendant MBUSA moves to dismiss this action for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). (Doc. 10, p. 1).
II. LEGAL STANDARD
Personal jurisdiction is an essential element of the jurisdiction of a district
court, without which it is powerless to proceed to an adjudication." Ruhrgas AG v.
Marathon Oil Co., 526 U.S. 574, 583 (1999). "The plaintiff bears the burden of
establishing jurisdiction, but need only presentprtma/acie evidence." Eevell v. Lidov,
317 F.3d 467, 469 (5th Cir. 2002). In considering a motion to dismiss for lack of
personal jurisdiction, the Court must accept the plaintiffs "uncontroverted
allegations, and resolve in [his] favor all conflicts between the facts contained in the
parties' affidavits and other documentation." Alpine View Co. Ltd. v. Atlas CopcoAB,
205 F.3d 208, 215 (5th Cir. 2000).
A federal district court sitting in diversity may exercise personal jurisdiction
over a foreign defendant if the following are met: (1) the long-arm statute of the forum
state creates personal jurisdiction over the defendant; and (2) the exercise of personal
jurisdiction is consistent with the due process guarantees of the U.S. Constitution.
Revell, 317 F.3d at 469. Because Louisiana's long-arm statute, La. R.S. § 13:3201,
et seq., extends jurisdiction to the full limits of due process, the Court's focus is solely
on whether the exercise of its jurisdiction over Defendant would offend federal due
process. See Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 336 (5th Cir. 1999)
(citing La. R.S. § 13:3201(B)).
The Due Process Clause of the Fourteenth Amendment permits a court
to exercise personal jurisdiction over a foreign defendant when (1) that
defendant has purposefully availed himself of the benefits and
protections of the forum state by establishing minimum contacts' with
the forum state; and (2) the exercise of jurisdiction over that defendant
does not offend 'traditional notions of fair play and substantial justice.
Sufficient minimum contacts will give rise to either specific or general
jurisdiction. General jurisdiction exists when a defendant's contacts
with the forum state are unrelated to the cause of action but are
continuous and systematic. Specific jurisdiction arises when the
defendant's contacts with the forum arise from, or are directly related
to, the cause of action.
Revell, 317F.3dat470.
The Court has two options upon determining that it lacks personal jurisdiction
over a foreign defendant. The first option is to dismiss the foreign defendant without
prejudice. Guidry v. U.S. Tobacco Co., 188 F.3d 619, 623 n.2 (5th Gir. 1999).
Alternatively, the Court may transfer the entire action "to any other such court . . .
in which the action . . . could have been brought at the time it was filed/'
28 U.S.C. § 1631; see Franco u. Mabe Trucking Co., No. 19-30316, 2021 WL 1035958,
at *3 (5th Cir. Mar. 18, 2021) (holding that "the plain text of § 1631 indicates that it
permits a district court to transfer an action when it lacks subject-matter jurisdiction,
personal jurisdiction, or both.").
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III. DISCUSSION
A. Defendant's Motion to Dismiss
Defendant asserts that the Court does not have jurisdiction over it pursuant
to Federal Rule of Civil Procedure 12(b)(2). (Doc. 10-1, p. 1).
i. Specific Jurisdiction
Defendant argues that the Court lacks specific jurisdiction over it because the
Plaintiffs action does not arise from forum-related contacts. (Doc. 10-1, p. 3, 6).
Plaintiffs purchased the vehicle in Mississippi. (Id. at p. 6). Plaintiffs then drove the
vehicle from Mississippi to their home in Louisiana. (Id.). While the vehicle was
repaired in Louisiana, Defendant asserts that it was repaired by an independently
owned and operated authorized dealer, MBNO, and Plaintiffs make no claim for
negligent repair. (Id.). Defendant argues that absolutely no activities pertinent to
Defendant's relation to the vehicle occurred in Louisiana. {Id.). Defendant contends
that because the claim does not arise out of forum contacts created by Defendant,
Plaintiffs cannot establish specific jurisdiction over Defendant. (Id. at p. 8).
Plaintiffs respond that Defendant failed to honor its warranty in Louisiana in
three ways: (1) Defendant allowed MBNO to charge Plaintiffs for warranty repairs or
refused coverage; (2) Defendant authorized MBNO to perform ineffective repair
attempts; and (3) when Plaintiffs contacted Defendant, Defendant communicated to
Plaintiffs through their Louisiana counsel. (Doc. 11, p. 11).
Additionally, Plaintiffs argue that Defendant purposely avails itself of
Louisiana because it markets and sells thousands of Mercedes-Benz cars with its
warranties in Louisiana every year. (Doc. 11, p. 10). Plaintiffs argue that Defendant
distributes Mercedes-Benz branded vehicles in Louisiana throughout a network of
authorized dealers. (Id. at p. 4). Plaintiffs also assert that Defendant authorizes
MBNO, the company that performed the repairs on the vehicle, to use its trademarks
and trade dress and contend that Defendant and MBNO use similar fonts.
(Id. at p. 10).
Defendant responds that its sales volume in Louisiana is immaterial because
Plaintiffs cause of action did not arise from a Louisiana sale. (Doc. 14, p. 5).
Defendant also asserts that MBNO is not a subsidiary of Defendant, but rather, is an
independent and privately owned company. {Id. at p. 6). Ultimately, Defendant
argues that Plaintiffs warranty claims arise out of the sale and purchase of the
vehicle. (Id. at p. 7). The transaction occurred in Mississippi, not Louisiana; Plaintiffs
then transported the vehicle to Louisiana where they reside. (Mat p. 7-8).
Defendant argues that [djue process does not permit plaintiffs to create personal
jurisdiction by their own actions." {Id. at p. 8).
The United States District Court for the Western District of Louisiana recently
considered strikingly similar circumstances in Dupree v. Mercedes-Benz, LLC. There,
plaintiff purchased a vehicle from defendant MBUSA in Mississippi and drove it to
his home in Louisiana. Dupree v. Mercedes-Bens USA LLC, No. CV 6:19-00734, 2019
WL 7597605, at *4 (W.D. La. Dec. 26, 2019), report and recommendation adopted. No.
CV 6:19-00734, 2020 WL 262759 (W.D. La. Jan. 16, 2020). Repairs were performed
on the vehicle at an independently owned and operated authorized dealer rather than
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defendant MBUSA. Id. While defendant MBUSA provided the warranty at issue,it
did not directly repair the vehicle it warranted in Louisiana. Id.
The court applied the United States Court of Appeals for the Fifth Circuit's
three-step analysis for specific jurisdiction and found that the plaintiff failed to
establish that his claims resulted from defendant MBUSA s forum-related contacts.
Id. at *4. The Fifth Circuit's analysis is as follows: (1) whether the defendant has
minimum contacts with the forum state, i.e., whether it purposely directed its
activities toward the forum state or purposefully availed itself of the privileges of
conducting activities there; (2) whether the plaintiffs 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. Id. at 3 (citing Monkton Ins. Services,
Ltd. v. Hitter, 768 F.3d 429, 433 (5th Cir. 2014)). The court ultimately concluded that
no activities germane to [defendant] MBUSAs relation to the vehicle occurred in
Louisiana." Id. Accordingly, the court found that it did not have specific jurisdiction
over defendant MBUSA. Id.
Similarly, here, Plaintiffs cause of action does not arise out of Defendant's
forum-related contacts. See id, at 4; see also Revell v. Lidov, 317 F.3d 467, 470
(5th Cir. 2002) ("Specific jurisdiction arises when the defendant's contacts with the
forum arise from, or are directly related to, the cause of action"). No activities
germane to Defendant's relation to the vehicle occurred in Louisiana. See Dupree,
2019 WL 7597605, at *4. Rather, Plaintiffs drove to IVtississippi, purchased the
vehicle, and then drove the vehicle to their home in Louisiana. (Doc. 6, ^ 19, 23-24).
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Plaintiffs later sought repairs to the vehicle at MBNO, a Louisiana company that is
not named as a defendant in this matter. {Id. at ^[ 28). Even if Defendant sells vehicles
in Louisiana in general, Plaintiffs did not purchase the vehicle at issue in Louisiana.
{Id. at ^[D 19, 23m24). Plaintiffs did not obtain the warranty from Defendant in
Louisiana. (Id. at ^ 23-25). Additionally, the fact that Defendant sent two letters to
Plaintiffs counsels Louisiana address does not rise to the level of "purposefully
availing] itself of the privileges of conducting activities" in Louisiana necessary to
establish specific jurisdiction. (Doc. 11-1); see Monkton Ins. Services, Ltd. u. Ritter,
768 F.3d 429, 433 (5th Cir. 2014)).
Plaintiffs unsupported allegation that MBNO is the "agent" of Defendant, or
that Defendant authorized MBNO to take certain actions or use certain fonts or
trademarks does not persuade otherwise, especially in light of the Declaration of
Defendants Sales Operations Manager, Clifford Thomas Cieslak. (Doc. 11, p. 3;
Doc. 10-2); see also DaimlerAG v, Banman, 571 U.S. 117, 135 (2014) (finding that the
Court did not have general jurisdiction and noting: "Agencies Q come in many sizes
and shapes: One may be an agent for some business purposes and not others so that
the fact that one may be an agent for one purpose does not make him or her an agent
for every purpose/"); see also Dnpree v. Mer cedes-Bens USA LLC, No. CV 6:19-00734,
2019 WL 7597605, at *5 (W.D. La. Dec. 26, 2019), report and recommendation
adopted. No. CV 6:19-00734, 2020 WL 262759 (W.D. La. Jan. 16, 2020) (finding that
plaintiffs allegations related to [defendant] MBUSA's business office and marketing
and selling of products in Louisiana are merely conclusive allegations and
unsubstantiated assertions which may not be relied on as evidence) (citing Butts v.
Martin, 877 F.3d 571, 581-82 (5th Cir. 2017); Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009) (A pleading does not "suffice if it tenders naked assertions devoid of further
factual enhancement )).
Cieslak verified the following: Defendant neither manufactures nor assembles
Mercedes-Benz parts or passenger vehicles in Louisiana (Doc. 10-2, ^ 5); Defendant
maintains no manufacturing or assembly facility, or presence of any kind, in
Louisiana (Id. at ^ 6); Defendant does not maintain a regional office in Louisiana
(Id. at U 7); Defendant provides service and technical information to the independent
Louisiana dealerships by periodically issuing technical and dealer bulletins
(Id. at 1[ 9); and Defendant does not directly make warranty repairs to Mercedes-Benz
passenger vehicles serviced in Louisiana (Id. at ^ 11).
Because Plaintiffs' cause of action does not arise out of or result from the
Defendant's forum-related contacts, the Court lacks specific jurisdiction over this
matter.
ii. General Jurisdiction
Defendant also argues that the Court lacks general jurisdiction over it.
(Doc. 10-1, p. 9). Plaintiffs respond generally that [m]inimum contacts with a forum
state may be established generally or specifically. . . Both types of contacts with
Louisiana are present here." (Doc. 11, p. 8). Apart from this, Plaintiffs make no
particular arguments and present no evidence to establish that the Court has general
jurisdiction over Defendant.
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Contacts between a defendant and the forum state must be "extensive" to
satisfy the continuous and systematic test. Submersible Sys., Inc. v.
Per foradora Cent., S.A. de C.V., 249 F.3d 413, 419 (5th Cir. 2001); see also
Goody ear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (2011) ("For an
individual, the paradigm forum for the exercise of general jurisdiction is the
individual's domicile; for a corporation it is an equivalent place, one in which the
corporation is fairly regarded as at home."). Clearly, Plaintiffs have failed to establish
that Defendants contacts with Louisiana were so "extensive" to satisfy the
continuous and systematic test, to render Defendant at home in Louisiana.
Accordingly, the Court will grant Defendant s Motion to Dismiss.
B. Transfer
In the Opposition to Defendant's Motion to Dismiss, Plaintiffs assert that if the
Court determines that it lacks jurisdiction, the Court should transfer the case to an
appropriate federal forum—the "District of Mississippi. (Doc. 11, p. 14). Defendants
concede that the U.S. District Court for the Southern District of Mississippi would be
the appropriate forum. (Doc. 14, p. 8).
Under 28 U.S.C. § 1631, when a federal court finds that there is a want of
jurisdiction and that a transfer would be 'in the interest of justice/ 'the court. . . shall
transfer the action to another court 'in which the action could have been brought' and
the transferred action 'shall proceed as if it had been filed in ... the court to which it
was transferred ... on the date it was actually filed in ... the court from which it was
transferred." Franco v. Mabe Trucking Co., No. 19-30316, 2021 WL 1035958, at *2
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(5th Cir. Mar. 18, 2021). The Fifth Circuit held that "the plain text of § 1631 indicates
that it permits a district court to transfer an action when it lacks subject-matter
jurisdiction, personal jurisdiction, or both. Id. at 3. In light of the mandatory
language, the Fifth Circuit also recognized that our sister circuits have approved
transfers even when the parties did not move under § 1631 and where the
transferring court did not mention § 1631 in its transfer orders. Id. at *4.
"A case is transferable' pursuant to § 1631 when three conditions are met:
(1) the transferee court would have been able to exercise its jurisdiction on the date
the action was misfiled; (2) the transferor court lacks jurisdiction; and (3) the transfer
serves the interest of justice. Harutyunyan v. Love, No. 19-cv-41, 2019 WL 5551901,
at *6 (E.D. La. Oct. 28, 2019) (quoting Trejo-Mejia v. Holder, 593 F.3d 913, 915
(9th Cir. 2010)).
Here, there is no dispute that this action could have been brought in the
Southern District of Mississippi. Further, this Court has now determined that it lacks
personal jurisdiction over Defendant. Additionally, the Court determines that
transfer, not dismissal, best serves the interests of justice to promote judicial
efficiency, conserve the parties resources, and avoid duplication of efforts. Thus, the
elements of the test for transferability under § 1631 are satisfied. See id.
C. Plaintiffs^ Motion to Stay
Finally, Plaintiffs ask the Court to reserve its decision on Defendant's Motion
to Dismiss until after the completion of jurisdictional discovery. (Doc. 13, p. 4).
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Plaintiffs assert that the opportunity to collect jurisdictional discovery would simplify
the resolution of Defendants challenge to jurisdiction. {Id.}.
It is well established that "discovery on matters of personal jurisdiction . . .
need not be permitted unless the motion to dismiss raises issues of fact. Kelly v,
Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 855 (5th Cir. 2000). And, (<[w]hen the
lack of personal jurisdiction is clear, discovery would serve no purpose and should not
be permitted." 721 Bourbon, Inc. v. House of Auth, LLC,
140 F. Supp. 3d 586, 600 (E.D. La. 2015).
In the interest of judicial economy and preservation of the parties' resources,
the Court will transfer the matter to the U.S. District Court for the Southern District
of Mississippi rather than grant the stay, permit jurisdictional discovery, and
continue to expend resources litigating this preliminary stage in the litigation when
the parties could achieve more expeditious resolution in the proper forum.
IV. CONCLUSION
Accordingly,
IT IS ORDERED that Defendant Mercedes-Benz USA, LLCs Motion To
Dismiss First Amended Complaint Pursuant To Fed. R. Civ. P. 12(b)(2)
(Doc. 10) is GRANTED IN PART and DENIED IN PART. The Court finds that it
does not have personal jurisdiction over Defendant.
IT IS FURTHER ORDERED that Plaintiffs' Motion To Stay Decision On
Defendant's Motion To Dismiss And To Compel Jurisdictional Discovery
(Doc. 12) is DENIED.
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IT IS FURTHER ORDERED that this matter be and is hereby transferred
to the United States District Court for the Southern District of Mississippi.
IT IS FURTHER ORDERED that Defendant Mercedes-Benz USA, LLC's
Motion To Dismiss Pursuant To Fed. R. Civ. P. 12(b)(2) (Doc. 4) is DENIED
AS MOOT.
^-
Baton Rouge, Louisiana, this lh-?u day of March, 2021
JUDGE BRIAN A.MMXSON
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA
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