FC Meyer Packaging, LLC v. Converting Alternatives International

Filing 29

ORDER denying Plaintiff's 18 Motion to Dismiss. Signed by District Judge Keith Starrett on November 18, 2016 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
FC MEYER PACKAGING, LLC

PLAINTIFF

V.

CIVIL ACTION NO. 2:16-CV-80-KS-MTP

CONVERTING ALTERNATIVES
INTERNATIONAL, LLC

DEFENDANT

MEMORANDUM OPINION AND ORDER
For the reasons below, the Court denies Plaintiff’s Motion to Dismiss [18]
Defendant’s counterclaim.
I. BACKGROUND
Plaintiff, a Connecticut corporation, owns a carton printing and packaging plant
in Quitman, Mississippi. Defendant, a Michigan corporation, installs and services
printer and cutter equipment. Plaintiff claims that it hired Defendant to inspect an
outdated printer/cutter machine in Minnesota to determine whether it could be
refurbished and modified for Plaintiff’s use at its Mississippi plant. Relying on
Defendant’s advice, Plaintiff purchased the machine and hired Defendant to modify
and install it. However, Defendant was purportedly unable to get the machine running
at the rate specified in Plaintiff’s initial inspection request.
Plaintiff claims to have paid Defendant approximately $600,000 throughout the
course of this transaction. Additionally, it believes that Defendant placed an electronic
device on the machine which renders it inoperable. Therefore, Plaintiff filed this
lawsuit against Defendant, asserting the following claims: breach of express warranty,
breach of implied warranty of merchantability and fitness for a particular purpose,

negligence, gross negligence, and breach of contract. Plaintiff seeks compensatory
damages of approximately $750,000 and an injunction barring Defendant from
interfering with the operation of the machine.
Defendant denies most of these allegations. It asserted its own breach of
contract counterclaim against Plaintiff, alleging that $49,450.99 remains due for
services rendered in the installation of the machine. Plaintiff filed a Motion to Dismiss
[18] the counterclaim, which the Court now considers.
II. DISCUSSION
To survive a motion to dismiss under Rule 12(b)(6), “a complaint must contain
sufficient factual matter, accepted as true, to state a claim to relief that is plausible on
its face.” Great Lakes Dredge & Dock Co. LLC v. La. State, 624 F.3d 201, 210 (5th Cir.
2010) (punctuation omitted). “To be plausible, the complaint’s factual allegations must
be enough to raise a right to relief above the speculative level.” Id. (punctuation
omitted). The Court must “accept all well-pleaded facts as true and construe the
complaint in the light most favorable to the plaintiff.” Id. But the Court will not accept
as true “conclusory allegations, unwarranted factual inferences, or legal conclusions.”
Id. Likewise, “a formulaic recitation of the elements of a cause of action will not do.”
PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412, 417 (5th Cir. 2010)
(punctuation omitted). “While legal conclusions can provide the framework of a
complaint, they must be supported by factual allegations.” Ashcroft v. Iqbal, 556 U.S.
662, 679, 129 S. Ct. 1937, 1950, 173 L. Ed. 2d 868 (2009). When considering a Rule
12(b)(6) motion, the Court may also consider documents referred to in the operative
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pleading and central to the plaintiff’s claims. Collins v. Morgan Stanley Dean Witter,
224 F.3d 496, 498 (5th Cir. 2000).
Plaintiff argues that Mississippi’s “door-closing” statute bars Defendant from
asserting its counterclaim in this Court. The statute provides, in pertinent part: “[A]
foreign corporation transacting business in this state without a certificate of authority
may not maintain a proceeding in any court in this state until it obtains a certificate
of authority.” MISS. CODE ANN. § 79-4-15.02. Therefore, “a foreign corporation without
a certificate of authority can not maintain an action in Mississippi if they are also
transacting business in Mississippi,” but “[i]f they are not so transacting business, a
certificate of authority is not required in order to maintain an action.” Miss. Ins. Guar.
Ass’n v. Harkins & Co., 652 So. 2d 732, 737 (Miss. 1995). The following activities do not
constitute “transacting business” within the meaning of the statute: “[m]aintaining,
defending or settling any proceeding;” “[c]onducting an isolated transaction that is
completed within thirty (30) days and that is not one in the course of repeated
transactions of a like nature;” and “[t]ransacting business in interstate commerce.”
MISS. CODE ANN. §§ 79-4-15-01(b)(1), (10)-(11).
In response to Plaintiff’s motion, Defendant submitted an uncontroverted
affidavit from its President, Thomas Williams [25-1]. Therein, Williams declared that
Defendant “does not regularly conduct business in the State of Mississippi,” and that
the transaction which is the subject of this case “was an isolated transaction that
[Defendant] performed principally in the State of Michigan and, on a limited basis, in
the State of Mississippi. [Defendant] anticipated that the installation and startup of
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the machine at issue . . . would take far less than thirty (30) days and it was not one
in the course of repeated transactions of a like nature.” Williams further declared that
Defendant “was not conducting any business in the State of Mississippi” at the time
Plaintiff filed its Amended Complaint, at the time it filed its own Counterclaim, or at
any time since. Plaintiff did not file a reply and, therefore, has not disputed any of
these assertions. Moreover, Plaintiff made no attempt to demonstrate that the single
transaction which led to this proceeding constitutes “transacting business” within the
meaning of MISS. CODE ANN. §§ 79-4-15.01, 79-4-15.02.
The Court is “granted some amount of discretion” when applying the “door
closing” statute. Harkins, 652 So. 2d at 737. In the Court’s opinion, Defendant’s
activity in Mississippi falls within the “interstate commerce” exception cited above and,
therefore, did not constitute “transacting business” within the meaning of the statute.
See MISS. CODE ANN. §§ 79-4-15-01(b)(11). “It is well settled that a state cannot require
a foreign corporation to obtain a certificate to do business if that corporation is engaged
solely in interstate sales.” Barbee v. United Dollar Stores, Inc., 337 So. 2d 1277, 1279
(Miss. 1976). The record contains no evidence that Defendant has conducted any
business in Mississippi other than the transaction which is the subject of this suit. The
facts of the subject transaction

– corporations from Connecticut and Michigan

contracted to purchase a machine from Minnesota and install it in Mississippi – are
not sufficiently intrastate to require a certificate of authority. Id. (citing Allenberg
Cotton Co., Inc. v. Pittman, 419 U.S. 20, 95 S. Ct. 260, 42 L. Ed. 2d 195 (1974)); see also
Fred Hale Machinery, Inc. v. Laurel Hill Lumber Co., 483 F.2d 58, 60 (5th Cir. 1973).
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Accordingly, Defendant is not barred from maintaining its counterclaim. Harkins, 652
So. 2d at 737.
III. CONCLUSION
For these reasons, the Court denies Plaintiff’s Motion to Dismiss [18]
Defendant’s counterclaim.
SO ORDERED AND ADJUDGED, on this, the 18th day of November, 2016.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

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