Levine Hat Co. v. Innate Intelligence, LLC et al

Filing 92

MEMORANDUM AND ORDER : IT IS HEREBY ORDERED that the defendants' motions to dismiss for lack of personal jurisdiction [Docs. # 59 , # 72 , and # 76 ] are denied without prejudice. IT IS FURTHER ORDERED that the parties shall have until Septem ber 18, 2017, to conduct discovery limited to the issue of personal jurisdiction. After the close of the limited discovery period, defendants may re-file their motions to dismiss for lack of personal jurisdiction, if appropriate. ( Discovery Completion due by 9/18/2017.). Signed by District Judge Carol E. Jackson on 7/17/17. (KKS)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
LEVINE HAT CO., on behalf of itself and
all others similarly situated,
Plaintiff,
vs.
INNATE INTELLIGENCE, LLC, d/b/a
INNATE WELLNESS CENTERS, et al.,
Defendants.

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No. 4:16-CV-1132 (CEJ)

MEMORANDUM AND ORDER
This matter is before the Court on separate motions to dismiss for lack of
personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2), filed by the Bria defendants
(Jeremy L. Bria, Bria Investments, LLC, JLB, Inc., and Well Adjusted Investments,
LLC); the Eyler defendants (Gary Robert Eyler and Eyler Investments, LLC); and
Pure Family Chiropractic. Plaintiff opposes dismissal and seeks leave to conduct
discovery on facts related to jurisdiction.
I.

Background

On July 5, 2016, defendant Innate Intelligence, LLC, doing business as
Innate Wellness Centers (Innate), sent plaintiff a fax advertising “a FREE Lunch ‘n
Learn on Stress Management for your employees.” The following notice appears at
the bottom of the fax:
To opt out from future faxes go to www.removemyfax number
and enter PIN# 17204, or call 800-321-4433. The recipient
may make a request to the sender not to send any future faxes
and failure to comply with the request within 30 days is
unlawful.
[Doc. # 27-1].

Plaintiff alleges that the opt-out notice does not comply with the minimum
requirements of 47 C.F.R. § 64.1200. On July 12, 2016, plaintiff initiated this
action, under the Telephone Consumer Protection Act (TCPA), 47 U.S.C. §§ 227 et
seq., on behalf of itself and a purported nationwide class.
Plaintiff initially proceeded against defendants Innate and Nepute Enterprises
LLC (Nepute). On January 3, 2017, plaintiff amended its complaint to name
additional defendants,1 including the Bria defendants, the Eyler defendants, and
Pure Family Chiropractic. Plaintiff alleges that the defendants are directly liable for
violations of the TCPA because the faxes were sent on their behalf and that they are
vicariously liable because defendant Innate was their alter ego and/or agent. The
defendants contend that they do not have sufficient contacts with Missouri to
support the exercise of personal jurisdiction, consistent with the Missouri long-arm
statute and the requirements of due process.
II.

Legal Standard

When a motion to dismiss challenges the existence of personal jurisdiction,
the plaintiff bears the burden of establishing that the court has personal jurisdiction
over the defendant. K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591–92
(8th Cir. 2011); Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741, 745 (8th Cir.
2011). If the court does not hold a pretrial evidentiary hearing on the issue of
personal jurisdiction, the plaintiff need only make a prima facie showing of
jurisdiction based on the pleadings, affidavits, and exhibits. Dakota Indus., Inc. v.
Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). The evidentiary

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Plaintiff named ProFax, Inc., which admits it sent the July 5, 2016 and does not contest
personal jurisdiction, and RedMoxy Communications, Inc., which was dismissed from this
action on plaintiff’s notice of dismissal.

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showing required at this stage is “minimal.” K–V Pharm., 648 F.3d at 592. Although
the plaintiff bears the burden of proof, Miller v. Nippon Carbon Co., 528 F.3d 1087,
1090 (8th Cir. 2008), the court views the facts in the light most favorable to the
plaintiff and resolves all factual conflicts in the plaintiff’s favor. See Creative Calling
Sols., Inc. v. LF Beauty Ltd., 799 F.3d 975, 979 (8th Cir. 2015) (where court
considers affidavits, motion to dismiss is “in substance one for summary
judgment”). As long as there is “some evidence upon which a prima facie showing
of jurisdiction may be found to exist,” the Rule 12(b)(2) motion will be denied. Pope
v. Elabo GmbH, 588 F. Supp. 2d 1008, 1014 (D. Minn. 2008) (quoting Aaron Ferer
& Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir. 1977) and
citing Watlow Elec. Mfg. Co. v. Patch Rubber Co., 838 F.2d 999, 1000 (8th Cir.
1988)).
III.

Discussion
A.

Evidence in the Record

Defendant Jeremy L. Bria has submitted an affidavit on behalf of himself and
the other Bria defendants. [Doc. # 59-1]. Bria lives in Wisconsin and has never
lived, owned or leased property, or conducted business in Missouri. He is the
president of defendant JLB, Inc., and the sole member of defendants Well Adjusted
Investments, LLC, and Bria Investments, Inc. Defendant JLB, Inc., is a Wisconsin
corporation, and defendants Well Adjusted Investments, LLC, and Bria Investments,
LLC, are Wisconsin limited liability companies. The business entities are not
registered to and have never conducted business in Missouri, had any employees or
offices in Missouri, or owned or leased property in Missouri. Bria disavows any role

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in the creation or transmission of the July 2016 fax on behalf of himself and the
business entities.
Defendant Gary Robert Eyler submits an affidavit on behalf of himself and
Eyler Investments, LLC. [Doc. # 72-1]. Eyler lives in Wisconsin and has never
owned property, conducted personal business, entered into any contracts,
committed tortious acts, or advertised personal services in Missouri. He is the sole
member and manager of defendant Eyler Investments, LLC, an Indiana limited
liability company. Defendant Innate was a Wisconsin limited liability company
whose only members were defendants Eyler Investments and Well Adjusted
Investments. Eyler was an officer of defendant Innate from 2013 until January 31,
2017, but was never a member. Defendants Innate and Eyler Investments were
never registered to do business in Missouri. Defendant Eyler Investments has never
conducted business or had any employees or offices in Missouri; entered into
contracts, committed tortious acts, or advertised any products or services in
Missouri. Finally, Eyler attests that Eyler Investments maintains its own bank
accounts, books and records, and its funds have never been comingled with those
of any other person or entity.
Defendant Eyler also submits an affidavit on behalf of defendant Pure Family
Chiropractic LLC, a Wisconsin limited liability company, whose only members are
defendants Eyler Investments and Well Adjusted Investments. [Doc. # 77-1]. Pure
Family is not registered to and has never conducted business in Missouri; had any
property, offices, or employees in Missouri; or entered into contracts, committed
tortious acts, or advertised products or services in Missouri. Pure Family maintains

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its own bank accounts, books and records, and its funds have never been
comingled with those of any other person or entity.
Plaintiff submits the following documents to support its assertion that
personal jurisdiction exists: (1) emails from January 2016 in which defendants Eyler
and Bria discuss the content of the Lunch ‘n Learn faxes with an account executive
from defendant RedMoxy [Docs. # 65-2, #74-1]; (2) a May 2016 email from Eyler
requesting a list of fax numbers for businesses located in Missouri zip codes [Doc. #
74-2]; (3) a January 2016 email from Eyler returning an executed service
agreement to a fax broadcaster [Doc. # 74-3]; (4) a February 2016 partnership
agreement between defendants Innate and Nepute executed by Eyler on behalf of
Innate [Doc. # 74-4]; (5) documents setting out Eyler’s strategy to generate
business leads through Lunch ‘n Learns [Doc. # 82-2, see also Docs. # 82-3, #82-4
(setting out talking points)]; (6) the July 2013 operating agreement for Innate,
signed by defendants Eyler, on behalf of Eyler Investments, and Bria, on behalf of
Well Adjusted Investments, showing initial capitalization in the total amount of
$4,000 [Doc. # 65-1]; (7) a document from Innate Wellness, entitled “About Us,”
which purports to tell the history of Innate’s creation by Eyler and Bria [Doc. # 654]; and (8) information from Innate’s website showing the locations of various
affiliated offices, including three locations for Pure Family Chiropractic (in Indiana
and Wisconsin) and Nepute Wellness Center in Missouri. [Doc. # 65-8].
A.

Waiver

Plaintiff contends that the Eyler defendants and Pure Family waived any
defense based on personal jurisdiction. In March 2017, defendants timely filed
answers to the first amended complaint in which they asserted lack of personal

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jurisdiction as an affirmative defense. [Docs. #50 at 19, #51 at 21, #56 at 24]. In
May 2017, they filed the present motions to dismiss. Plaintiff argues that
defendants were required to raise the defense in a pre-answer motion, citing Rule
12(b), which provides that a motion asserting the defense of lack of personal
jurisdiction “must be made before pleading if a responsive pleading is allowed.”
Fed.R.Civ.P. 12(b). Defendants counter that they preserved the defense by
asserting it as an affirmative defense in their answers. They cite Rule 12(h), which
states that a party waives certain Rule 12(b) defenses, including lack of personal
jurisdiction, by “failing to either . . . make [the defense] by motion under this rule;
or . . . include it in a responsive pleading . . .” Fed.R.Civ.P. 12(h)(1)(B) (emphasis
added).
Rule 12(b)(2) motions to dismiss for lack of personal jurisdiction are
technically untimely where they postdate the filing of an answer. Anderson v.
Sullivan, No. 03CV4064 (DRH)(MLO), 2005 WL 1123772, at *2 (E.D.N.Y. May 9,
2005) (citations omitted). However, federal courts will generally deem a Rule
12(b)(2) motion timely if the defendant’s previously-filed answer expressly includes
the lack of personal jurisdiction as an affirmative defense. Id.; Molnlycke Health
Care AB v. Dumex Med. Surg. Prods. Ltd., 64 F. Supp. 2d 448, 449 n. 1 (E.D. Penn.
1999) (citations omitted) (allowing motion to dismiss for, inter alia, lack of personal
jurisdiction and improper venue that was filed after answer, where defenses were
raised in the answer); see also Island Stone Int’l Ltd. v. Island Stone India Private
Ltd., No. 616CV656ORL40KRS, 2017 WL 1437464, at *2 (M.D. Fla. Apr. 4, 2017),
report and recommendation adopted, 2017 WL 1426664 (M.D. Fla. Apr. 21, 2017)

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(untimely Rule 12(b)(2) motion “becomes a Rule 12(i) 2 motion for disposition
before trial.”). Here, because the defendants asserted lack of personal jurisdiction
as an affirmative defense, the Court will deem their Rule 12(b)(2) motions as
timely.
B.

Personal Jurisdiction

Personal jurisdiction can be general or specific. Bristol-Myers Squibb Co. v.
Superior Court of California, San Francisco Cty., 137 S. Ct. 1773, 1780 (2017);
Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 593
(8th Cir. 2011). “For an individual, the paradigm forum for the exercise of general
jurisdiction is the individual’s domicile.” Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 924 (2011). There is no evidence or even an allegation that
defendants Bria and Eyler are domiciled in Missouri, and thus they are not subject
to general personal jurisdiction in this forum.
A corporation is subject to general jurisdiction in any forum in which its
“affiliations with the State are so ‘continuous and systematic’ as to render them
essentially at home in the forum State.” Id. at 919 (citing International Shoe Co. v.
Washington, 326 U.S. 310, 317 (1945)). Only a limited set of affiliations with a
forum will render a defendant amenable to general jurisdiction there. Daimler AG v.
Bauman, 134 S. Ct. 746, 760 (2014). A corporation’s place of incorporation and
principal place of business are “paradig[m] . . . bases for general jurisdiction.” Id.
(citation omitted). These “affiliations have the virtue of being unique — that is,
each ordinarily indicates only one place — as well as easily ascertainable,” and

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Fed. R. Civ. P. 12(i) provides: “If a party so moves, any defenses listed in Rule 12(b)(1)(7)[,] whether made in a pleading or by motion . . .[,] must be heard and decided before
trial unless the court orders a deferral until trial.”

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“afford plaintiffs recourse to at least one clear and certain forum in which a
corporate defendant may be sued on any and all claims.” Id. (citations omitted).
The general jurisdiction inquiry does not “focu[s] solely on the magnitude of the
defendant’s in-state contacts,” but calls for an appraisal of a corporation’s activities
in their entirety, nationwide and worldwide. Id. at 762 n.20. “A corporation that
operates in many places can scarcely be deemed at home in all of them.” Id. Here,
the defendant business entities are not registered to do business in and do not
maintain a physical presence in Missouri, and they have corporate homes in other
fora. Thus, the business entities are not subject to general jurisdiction here.
“Specific jurisdiction refers to jurisdiction over causes of action arising from
or related to a defendant’s actions within the forum state.” Dairy Farmers of Am.,
Inc. v. Bassett & Walker Int’l, Inc., 702 F.3d 472, 475 (8th Cir. 2012) (citation
omitted). In a recent case, the Supreme Court reiterated that, in order for a court
to exercise specific jurisdiction, “the suit must aris[e] out of or relat[e] to the
defendant’s contacts with the forum.” Bristol-Myers Squibb, 137 S. Ct. at 1780
(quoting Daimler, 134 S. Ct. at 754 (internal quotation marks omitted). In other
words, there must be “an affiliation between the forum and the underlying
controversy, principally, [an] activity or an occurrence that takes place in the forum
State and is therefore subject to the State’s regulation.” Id. (quoting Goodyear, 564
U.S. at 919 (alterations in original). Thus, “specific jurisdiction is confined to
adjudication of issues deriving from, or connected with, the very controversy that
establishes jurisdiction.” Id. Furthermore, specific jurisdiction arises solely from the
contacts of the defendant with the forum, and not the “random, fortuitous, or
attenuated contacts or . . . the unilateral activity of another party or a third

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person.” Stanton v. St. Jude Med., Inc., 340 F.3d 690, 693-94 (8th Cir. 2003)
(quoting Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985)).
Based on its review of the evidence submitted by the parties, the Court
concludes that it cannot exercise jurisdiction over the moving defendants based on
their personal contacts with Missouri.

However, it is undisputed that Innate is

subject to specific personal jurisdiction arising from its actions in relationship to the
July 2016 fax, and the Court may assert personal jurisdiction over the moving
defendants if Innate was their alter ego. In that event, the Court can disregard the
corporate entities and attribute Innate’s contacts with Missouri to the moving
defendants. Fleishman-Hillard, Inc. v. McCombs, No. 4:10-CV-676 CAS, 2011 WL
53077, at *2 (E.D. Mo. Jan. 7, 2011).
While courts ordinarily protect the separate legal identities of individual
corporations, there are situations in which one corporation “shows such domination
and control over another that the latter corporation becomes an adjunct or alter
ego of the first.” Real Estate Inv’rs Four, Inc. v. Am. Design Grp. Inc., 46 S.W.3d
51, 56 (Mo. Ct. App. 2001). “In such a situation, when the formal corporate
separateness and the arrangements between the two corporations is devised or
used to accomplish a fraud, injustice, or some unlawful purpose, then the separate
formal corporate structures will be ignored.” Id. (quoting Collet v. American Nat.
Stores, Inc., 708 S.W.2d 273, 284 (Mo. Ct. App.1986)); see also Lakota Girl Scout
Council, Inc. v. Havey Fund-Raising Mgmt., Inc., 519 F.2d 634 (8th Cir. 1975)
(“where a corporation is the alter ego of the stockholders so as to justify disregard

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of the corporate entity[,] jurisdiction over the corporation will support jurisdiction
over the stockholders.”).3
If Innate acted as an agent, personal jurisdiction exists over the moving
defendants based on Innate’s actions in Missouri that were done in the scope of its
authority.4 Blanks v. Fluor Corp., 450 S.W.3d 308, 378–79 (Mo. Ct. App. 2014). An
agency relationship exists when three essential elements are met: (1) the agent
holds a power to alter legal relations between the principal and a third party; (2)
the agent is a fiduciary with respect to matters within the scope of the agency; and
(3) the principal has the right to control the conduct of the agent with respect to
matters entrusted to the agent. Id. at 382-83 (citations omitted).
Although plaintiff has produced some evidence in support of its contention
that Innate acted as the alter ego or agent of the moving defendants, the Court
finds that it cannot reach a decision on the evidence presently before it. Where, as
here, the plaintiff offers documentary evidence in support of allegations of personal
jurisdiction, the court abuses its discretion by dismissing the action without
permitting the plaintiff to take some jurisdictional discovery. Foreign Candy Co. v.
Tropical Paradise, Inc., 950 F. Supp. 2d 1017, 1036 (N.D. Iowa 2013) (citing
Steinbuch v. Cutler, 518 F.3d 580, 589 (8th Cir. 2008)). The Court will order the
parties to engage in a period of jurisdictional discovery, after which time the
defendants may renew their motions to dismiss.
3

The terms “alter ego” and “piercing the corporate veil” are used interchangeably. See id.
(citing cases).
4

The agency theory differs from piercing the corporate veil in theory and operation in that
the parent is held liable to the extent it authorized its agent’s conduct. Under an agency
theory, the separate corporate identities are preserved, while they are set aside when
courts pierce the corporate veil. Blanks v. Fluor Corp., 450 S.W.3d 308, 379–80 (Mo. Ct.
App. 2014)

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Accordingly,
IT IS HEREBY ORDERED that the defendants’ motions to dismiss for lack of
personal jurisdiction [Docs. # 59, # 72, and # 76] are denied without prejudice.
IT IS FURTHER ORDERED that the parties shall have until September 18,
2017, to conduct discovery limited to the issue of personal jurisdiction. After the
close of the limited discovery period, defendants may re-file their motions to
dismiss for lack of personal jurisdiction, if appropriate.

CAROL E. JACKSON
UNITED STATES DISTRICT JUDGE
Dated this 17th day of July, 2017.

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