Hollingsworth v. Acumen I.T., LLC

Filing 7

MEMORANDUM OPINION re: 5 MOTION to Dismiss Case filed by Defendant Acumen I.T., LLC motion is GRANTED. Signed by District Judge Stephen N. Limbaugh, Jr on 12/10/14. (MRS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

MICHAEL D. HOLLINGSWORTH, )
)
Plaintiff,
)
)
vs.
)
)
ACUMEN I.T., LLC,
)
)
Defendant.
)

Case No. 4:14CV1492 SNLJ

MEMORANDUM
Plaintiff, pro se, brought this wrongful termination and unpaid wages lawsuit
against his former employer, defendant Acumen I.T., LLC, in the Cicuit Court of St.
Louis County, Missouri. Defendant removed to this Court based on diversity jurisdiction
and has now moved to dismiss based on either lack of personal jurisdiction or failure to
state a claim. (#5.) Plaintiff has not responded, and the time for doing so has now
passed.
I.

Background
Plaintiff alleges that he applied for employment with the defendant through an

employment agency specializing in candidates whose background is “primary and the
consulting of Microsoft Dynamics GP application.” Plaintiff interviewed with
defendant’s president and COO, Toby Stansell, and engaged in negotiation regarding
defendant’s hiring of plaintiff. The plaintiff and Mr. Stansell exchanged numerous
emails, and, in one of those email exchanges, plaintiff disclosed to Mr. Stansell his
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minority ownership of a company called CDM Associates, LLC. Plaintiff signed an
employment agreement with defendant. Plaintiff alleges that less than a week after he
started, Mr. Stansell questioned plaintiff regarding his ownership interest in CDM and
“without warning terminated” his employment on Tuesday, August 9. Plaintiff alleges he
did not receive any compensation on the day of his dismissal. Further, plaintiff alleges he
turned down another lucrative job offer at a competitor in order to take the job with
Acumen, but the other job was not available by the time Acumen terminated his
employment. Plaintiff alleges he “did not receive any monies relating to final payment
until after August 30, 2013” and that he is still owed money. Plaintiff filed his complaint
on June 24, 2014, and it has two counts: Count I is for wrongful termination, and Count
II is for unpaid final wages. Defendant removed to this Court and filed a motion to
dismiss.
II.

Legal Standard
In a diversity action such as this one, the Court “may assume jurisdiction over the

nonresident defendants only to the extent permitted by the long-arm statute of the forum
state and by the Due Process Clause.” Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th
Cir. 2004).
To survive a motion to dismiss for lack of personal jurisdiction, the non-moving
party need only make a prima facie showing of jurisdiction; that is, the “plaintiff must
state sufficient facts in the complaint to support a reasonable inference that defendants
may be subjected to jurisdiction in the forum state.” Steinbuch v. Cutler, 518 F.3d 580,
585 (8th Cir. 2008).
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The Eight Circuit employs a five-factor test in determining whether personal
jurisdiction exists, giving “significant weight” to the first three factors: (1) the nature and
quality of defendant’s contacts with Missouri; (2) the quantity of such contacts; (3) the
relation of the cause of action to the contacts; (4) the interest of Missouri in providing a
forum for its residents; and (5) the convenience of the parties. Romak USA, Inc., 384
F.3d at 984 (quoting Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir.
2004)).
III.

Discussion
Defendant Acumen is a South Carolina limited liability company with its office in

South Carolina, and all of its members are citizens of South Carolina or Georgia. (#1.)
Plaintiff was a citizen of Missouri at the time he negotiated and accepted employment
with Acumen, and he returned to Missouri immediately upon his termination from
Acumen. Plaintiff’s employment took place in South Carolina, and he was allegedly
wrongfully terminated in South Carolina. Defendant contends that this lawsuit does not
arise out of any activity that occurred in Missouri, nor does it have sufficient minimum
contacts with the State of Missouri such that imposition of personal jurisdiction over
defendant can satisfy due process requirements.
The Missouri Long-Arm Statute provides that jurisdiction extends to “any cause of
action arising from” the “transaction of business within” or the “making of any contract”
within Missouri. § 506.500.1 RSMo.

Because plaintiff’s brief employment with and

termination by defendant occurred in South Carolina, the only possible connection
defendant had with Missouri was telephone calls and email transmissions with plaintiff
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regarding the negotiation of his employment. “The Missouri courts have liberally
construed the statutory requirement of ‘transacting any business’ within the state for
purposes of long-arm jurisdiction. … However, these cases have required some activity,
directly or indirectly related to the transaction in question, on the part of the nonresident
defendant in Missouri.” Scullin Steel Co. v. Nat'l Ry. Utilization Corp., 676 F.2d 309,
312 (8th Cir. 1982) (citing Wooldridge v. Beech Aircraft Corp., 479 F. Supp. 1041, 1053
(W.D. Mo. 1979); J. F. Pritchard & Co. v. Dow Chemical of Canada, Ltd., 331 F. Supp.
1215, 1218 (W.D. Mo. 1971) (“transacting any business” concept significantly broader
than “doing business” concept), aff'd, 462 F.2d 998 (8th Cir. 1972); American Hoechst
Corp. v. Bandy Laboratories, Inc., 332 F. Supp. 241, 243 (W.D. Mo. 1970); State ex rel.
Farmland Industries, Inc. v. Elliott, 560 S.W.2d 60, 62-63 (Mo. App. 1977)).
Importantly, the Eighth Circuit has noted that telephone calls and use of mail does not
constitute transaction of business within the state. Id.
As for plaintiff’s Letter Agreement with defendant, it was sent via email between
the parties and states it is subject to the laws of South Carolina. Defendant asserts that no
representative of defendant ever traveled to Missouri as part of the contract’s negotiation
(or for any other reason in conjunction with the matters alleged in the complaint), and
plaintiff does not contend otherwise. The Supreme Court has articulated that
If the question is whether an individual’s contract with an out-of-state party
alone can automatically establish sufficient minimum contacts in the other
party's home forum, we believe the answer clearly is that it cannot. The
Court long ago rejected the notion that personal jurisdiction might turn on
mechanical tests, or on conceptualistic theories of the place of contracting
or of performance. Instead, we have emphasized the need for a highly
realistic approach that recognizes that a contract is ordinarily but an
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intermediate step serving to tie up prior business negotiations with future
consequences which themselves are the real object of the business
transaction. 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 Corp. v. Rudzewicz, 471 U.S. 462, 478-79 (1985) (internal quotations and
citations omitted).1 The mere fact that defendant contracted with an individual in
Missouri does not confer jurisdiction over defendant. See id. Because plaintiff pleaded
no facts that would show otherwise, the long-arm statute does not reach defendant in this
case.
Moreover, even if the long-arm statute did confer jurisdiction over defendant, the
plaintiff cannot demonstrate that personal jurisdiction over defendant in this case would
be consistent with due process. “To satisfy due process a defendant must have sufficient
minimum contacts with the forum state such that maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” Romak USA, 384 F.3d at 984
(quoting Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004)) (internal
quotations omitted). The Eight Circuit employs a five-factor test in determining whether
personal jurisdiction exists, giving “significant weight” to the first three factors: (1) the
nature and quality of defendant’s contacts with Missouri; (2) the quantity of such
contacts; (3) the relation of the cause of action to the contacts; (4) the interest of Missouri
in providing a forum for its residents; and (5) the convenience of the parties. Romak
In addition, this Court has observed that “Missouri courts have held that telephone and
mail contacts alone are not sufficient to confer a Missouri court's jurisdiction over a nonresident defendant.” Anheuser-Busch, Inc. v. All Sports Arena Amusement, Inc., 244 F.
Supp. 2d 1015, 1018 (E.D. Mo. 2002) (collecting cases).
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USA, 384 F.3d at 984. “Contacts are sufficient when ‘defendant’s conduct and
connection with the forum State are such that he should reasonably anticipate being haled
into court there.’” Anheuser-Busch, Inc. v. All Sports Arena Amusement, Inc., 244 F.
Supp. 2d 1015, 1018 (E.D. Mo. 2002) (quoting World–Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297 (1980)). “Furthermore, 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.’” Id. (quoting Burger King, 471 U.S. at 475). The Court holds that defendant
here could not have reasonably anticipated being sued in Missouri in light of its contacts
with Missouri --- although plaintiff and defendant communicated while plaintiff was in
Missouri, and plaintiff was in Missouri while he negotiated his contract, that is the extent
of defendant’s “Missouri contacts.” Defendant never purposefully availed itself of the
benefits and protections of Missouri law. This Court does not, therefore, have personal
jurisdiction over defendant. The Court need not reach defendant’s argument that plaintiff
failed to state a claim as a matter of law under Federal Rule of Civil Procedure 12(b)(6).
Accordingly,
IT IS HEREBY ORDERED that defendant’s Motion to Dismiss (#5) is
GRANTED.
Dated this 10th day of December, 2014.

STEPHEN N. LIMBAUGH, JR.
UNITED STATES DISTRICT JUDGE

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