Howard Industries, Inc. v. Ridgeway et al

Filing 33

ORDER granting Defendant Inline's 10 Motion to Dismiss. Plaintiff's claims against Inline are dismissed without prejudice. Signed by District Judge Keith Starrett on June 29, 2015 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
HOWARD INDUSTRIES, INC.
V.

PLAINTIFF
CIVIL ACTION NO. 2:15CV38-KS-MTP

TERRY RIDGEWAY, et al.,

DEFENDANTS

MEMORANDUM OPINION AND ORDER
10].

For the reasons below, the Court grants Inline’s Motion to Dismiss [ECF No.
I. BACKGROUND
Defendants Terry Ridgeway (“Ridgeway”) and Beth Ezell (“Ezell”) worked for

Plaintiff Howard Industries, Inc. (“Howard”). See Compl., ECF No. 1-2.

While

employed by Howard, Ridgeway and Ezell each signed a Confidentiality, NonDisclosure, and Non-Competition Agreement. Id. After they stopped working for
Howard, they accepted jobs with co-defendant Inline Electric Supply Company, Inc.
(“Inline”). Id.
On February 26, 2015, Howard filed suit against Defendants in the Chancery
Court for the First Judicial District of Jones County, Mississippi. Id. Howard seeks
monetary and injunctive relief against Ridgeway and Ezell for their alleged
violations of the Mississippi Uniform Trade Secrets Act, violations of the noncompete contracts, and intentional interference with Howard’s contractual and
business relationships. Id. Additionally, Howard seeks monetary and injunctive
relief against Inline for its alleged conspiracy with Ridgeway and Ezell, and
interference with their non-compete contracts. Id.

On March 27, 2015, Inline removed the case to this Court. See Notice of
Removal, ECF No. 1. It then filed a Motion to Dismiss pursuant to Rule 12(b)(2).

See Mot. to Dismiss, ECF No. 10.
II. DISCUSSION
“A federal court sitting in diversity may exercise personal jurisdiction only to
the extent permitted [in] a state court under state law.” Paz v. Brush Engineered

Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006) (citations omitted). “The court
may only exercise jurisdiction if: (1) the state’s long-arm statute applies, as
interpreted by the state’s courts, and (2) if due process is satisfied under the 14th
Amendment to the federal Constitution.” Id. (citing Alfred v. Moore & Peterson, 117
F.3d 278 (5th Cir. 1997)). “When a nonresident defendant moves to dismiss for lack
of personal jurisdiction, the plaintiff bears the burden of establishing the district
court’s jurisdiction over the nonresident . . . . A plaintiff satisfies this burden by
presenting a prima facie case for personal jurisdiction.” Unified Brands, Inc. v.

Teders, 866 F. Supp. 2d 572, 577 (S.D. Miss. 2012) (citations omitted). “The district
court is not obligated to consult only the assertions in the plaintiff’s complaint . . . .
Rather, the district court may consider the contents of the record at the time of the
motion, including affidavits . . . .” Paz, 445 F.3d at 812 (citations omitted). But
“uncontroverted allegations in the plaintiff’s complaint must be accepted as true,
and all disputed facts must be construed in the plaintiff’s favor.” Blacklidge

Emulsions, Inc. v. Blankenship, No. 1:13-CV-293, 2013 WL 6492876, at *1 (S.D.
Miss. Dec. 10, 2013) (citations omitted).
A. Long-Arm Statute
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“Mississippi’s long-arm statute provides the courts shall have jurisdiction
over a nonresident who: (1) makes a contract with a resident of this state to be
performed in whole or in part by any party in this state, (2) commits a tort in whole
or in part in this state against a resident or nonresident, or (3) does any business or
performs any character of work or service in this state.” Smith v. Antler Insanity,

LLC, 58 F. Supp. 3d 716, 720 (S.D. Miss. 2014) (citing Miss. Code Ann. § 13-3-57
(1991)) (punctuation omitted).
Plaintiff argues Inline is subject to personal jurisdiction under the tort prong
of Mississippi’s long-arm statute. See Pl.’s Resp. to Mot. to Dismiss, ECF No. 19.
When personal jurisdiction is predicated on the commission of a tort . .
. [t]he plaintiff must not only show that a tort has occurred . . . . The
plaintiff must also make a prima facie showing that the tort occurred
within Mississippi. Mississippi courts do not require that the action
giving rise to the tort actually occur in Mississippi in order for a tort to
be committed in state. Further, a tort is committed in Mississippi
when the injury results in this State. This is true because an injury is
necessary to complete a tort . . . . [T]he consequences stemming from
the actual tort injury do not confer personal jurisdiction at the site or
site where such consequences happen to occur. However, the result is
different when the damages are an element of the tort.

Smith, 58 F. Supp. 3d at 720 (citations and punctuation omitted).
Plaintiff alleges Inline tortiously interfered with the non-compete contracts
signed by Ridgeway and Ezell by requiring “Ridgeway and Ezell to violate and
breach the terms” of the agreements “for the benefit of Inline.” Compl., ECF No. 1-2
at 14.
“Mississippi recognizes the claim of tortious interference with a
business relationship, which occurs when a person unlawfully diverts
prospective customers from one’s business. The elements necessary to
prove such claim are (1) the acts were intentional and willful; (2) the
acts were calculated to cause damage to the plaintiffs in their lawful
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business; (3) the acts were done with the unlawful purpose of causing
damage and loss, without right or justifiable cause on the part of the
defendants (which constitutes malice); and (4) actual damage and loss
resulted.”

Smith, 58 F. Supp. 3d at 720-21 (citations omitted).
Plaintiff claims Inline’s tortious interference caused damage to Plaintiff’s
business in Mississippi. See ECF No. 1-2. The alleged damage “would necessarily
occur in Mississippi as [it is] the principal place of business for” Plaintiff. Unified,
868 F. Supp. 2d at 579. Accordingly, Plaintiff made a prima facie showing that
Inline committed a tort in whole or part in Mississippi against Plaintiff, a
Mississippi resident, subjecting Inline to the jurisdiction of the Mississippi courts.

See Allred v. Moore & Peterson, 117 F.3d 278, 282 (5th Cir. 1997) (explaining that
“[u]nder the tort prong of the Mississippi long-arm statute, personal jurisdiction is
proper if any element of the tort (or any part of any element) takes place in
Mississippi”).
B. Due Process
The next step in analyzing whether the court has personal jurisdiction is
whether the exercise of such jurisdiction under state law would
comport with the dictates of the Fourteenth Amendment Due Process
Clause. This Clause permits the exercise of personal jurisdiction over a
nonresident 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.
Minimum contacts, for the purpose of satisfying due process, can be
established either through contacts sufficient to assert specific
jurisdiction, or contacts sufficient to assert general jurisdiction.

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Unified, 868 F. Supp. 2d at 579 (citations omitted). Plaintiff argues specific
jurisdiction is proper here. To determine whether specific jurisdiction exists, the
Court applies a three-step analysis:
(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 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.

Blacklidge, 2013 WL 6492876 at *3 (quoting McFadin v. Gerber, 587 F.3d 753, 759
(5th Cir. 2009).
Here, Plaintiff provided few facts to support its allegation that Inline’s
activities are purposely directed towards Mississippi. Plaintiff merely provided the
Court with conclusory statements of Inline’s alleged conspiracy and tortious
interference.1 Furthermore, Plaintiff provided no specific facts regarding Inline’s
alleged actions.
Although jurisdictional allegations must be accepted as true, such
acceptance does not automatically mean that a prima facie case for
specific jurisdiction has been presented. Establishing a prima facie
case still requires the plaintiff to show the nonresident defendant’s
purposeful availment of the benefits and protections of and minimum
contacts with the forum state . . . . [T]he prima-facie-case requirement
does not require the court to credit conclusory allegations, even if
uncontroverted.

1

See Compl., ECF No. 1-2 (stating “Inline conspired with Ridgeway and Ezell . . . in an effort
to cause Howard damage in its lawful business . . . . Inline intentionally, willfully and
maliciously encouraged and directed and required Ridgeway and Ezell to violate and breach
the terms of . . . [their] agreement[s] . . . .”); ECF No. 20 (stating “Inline had knowledge of the
non[-]compete agreements . . . . Howard’s business and contract relationships were injured due
to the tortious conduct of Ridgeway and Ezell . . . .”)

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Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.2d 865, 868-69 (5th Cir.
2001) (citations omitted). Here, Plaintiff’s conclusory allegations are insufficient to
establish a prima facie case that the Court has specific jurisdiction.
Plaintiff cites Blacklidge, 2013 WL 6492876 at *2, and Unified, 868 F. Supp.
2d at 577-82 to support its position. Both cases are distinguishable. In Blacklidge,
the plaintiff alleged specific facts, describing how, when, and where the defendants
committed acts of conspiracy and tortious interference. Blacklidge, 2013 WL
6492876 at *1. In Unified, the plaintiff provided e-mail communications between
the defendants to support its tortious interference claim. Unified, 868 F. Supp. 2d at
580. Therefore, in both cases, the court had sufficient evidence and/or factual
allegations in the complaint to satisfy the due process requirement. Id.; Blacklidge,
2013 WL 6492876 at *3. Here, Plaintiff submitted no evidence supporting its
conclusory allegations against Inline, and it alleged no factual details to support its
claim.
Plaintiff also argues Inline had contacts with Mississippi because of its
communications and business relationships with A to Z Muni-DOT (“A to Z”), a
division of Howard Industries. See ECF No. 19. However, Plaintiff has not
demonstrated or argued that its claims arise out of or result from Inline’s contacts
with A to Z. Blacklidge, 2013 WL 6492876 at *3 (providing requirements for specific
jurisdiction). Finally, Plaintiff supplied invoices demonstrating that Inline had
purchased supplies from Plaintiff,2 but – again – Plaintiff failed to demonstrate or
argue that its claims against Inline arise out of those purchases. Id.
2

See ECF No. 19-1 Ex. A.

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III. CONCLUSION
For the reasons above, the Court finds that Plaintiff failed to allege sufficient
facts or provide evidence to demonstrate that the elements of specific jurisdiction
have been met. Accordingly, the Court grants Inline’s Motion to Dismiss [ECF No.
10]. Furthermore, Howard’s claims against Inline are dismissed without prejudice.
SO ORDERED this the 29th day of June, 2015.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

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