Salas et al v. White et al

Filing 33

ORDER denying without prejudice 15 , 19 Motion to Dismiss; granting 27 Motion for Early Expedited Discovery as provided in Order; denying as moot 32 Motion for Extension of Time. Signed by Chief Judge Frank D. Whitney on 6/18/2015. (tmg)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:15-cv-00122-FDW-DSC

S & S MANAGEMENT, INC. and
MARTIN SALAS,
Plaintiffs,
vs.
GREGORY L. WHITE, JAMES R.
WHITE, JR., PHYLLIS M. WHITE,
JAMES R. WHITE, SR., THE
HOMESOURCE, CORP., SOFTWARE
SUPPORT-PMW, INC., and
CENTERSPEC, LLC,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

ORDER

THIS MATTER is before the Court on Defendant CenterSpec, LLC’s (“CenterSpec’s”)
Motion to Dismiss for Lack of Personal Jurisdiction (Doc. No. 15), Defendant Software SupportPMW, Inc.’s (“Software Support’s”) Motion to Dismiss for Lack of Personal Jurisdiction (Doc.
No. 19), Plaintiff S&S Management, Inc. and Plaintiff Martin Salas’ (collectively, “Plaintiffs’”)
Motion for Early Expedited Discovery Regarding Personal Jurisdiction of Defendant, Software
Support-PMW, Inc., and CenterSpec, LLC (Doc. No. 27), and Plaintiffs’ Motion for Extension of
Time to Reply to Defendant, Software Support-PMW, Inc.’s Motion to Dismiss for Lack of
Personal Jurisdiction and CenterSpec, LLC’s Motion to Dismiss for Lack of Personal Jurisdiction
(Doc. No. 32). For the reasons stated herein, Plaintiffs’ Motion for Early Expedited Discovery is
GRANTED, CenterSpec and Software Support’s (collectively, “Defendants’”) Motions to Dismiss
1

for Lack of Personal Jurisdiction are DENIED without prejudice, and Plaintiff’s Motion for an
Extension of Time is DENIED as moot.
I.

Background
Plaintiff S & S Management, Inc., a North Carolina corporation with its principal place of

business in Mecklenburg County, and Plaintiff Salas, an individual residing in Mecklenburg
County, filed this action against Defendants alleging breach of contract, among other causes of
action. (Doc. No. 1). Plaintiffs assert that the Court has personal jurisdiction over Defendants
because they have “consistently and pervasively conducted business in Mecklenburg County,
North Carolina and in doing so [have] availed [themselves] to the personal jurisdiction of the
Federal Courts in Mecklenburg County, North Carolina.” (Doc. No. 1, ¶¶ 8, 9). Defendants each
filed a Motion to Dismiss, contending that this Court lacks personal jurisdiction. (Doc. Nos. 15,
19). Plaintiffs then filed a Motion for Early Expedited Discovery, requesting the Court to grant
early expedited and limited discovery of matters related strictly to the issue of personal jurisdiction
of Defendants. (Doc. No. 27). Plaintiffs contend that they have alleged sufficient facts in their
Complaint to show that Defendants have availed themselves to the personal jurisdiction of this
Court and that Defendants have evidence supporting this claim. Id. Therefore, because Plaintiffs
claim that they do not have access to this evidence available to Defendants, they request the Court
to allow limited discovery so that they can adequately respond to Defendants’ motions to dismiss
based on lack of personal jurisdiction. Id. Plaintiffs also filed a motion requesting an extension
of time to respond to Defendants’ motions to dismiss until after the parties have conducted the
requested early discovery. (Doc. No. 32).
II.

Analysis
2

A party invoking federal jurisdiction has the burden of establishing that personal
jurisdiction exists over the defendant. New Wellington Fin. Corp. v. Flagship Resort Dev. Corp.,
416 F.3d 290, 294 (4th Cir. 2005); Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989).
When a court’s personal jurisdiction is properly challenged by a
Rule 12(b)(2) motion, the jurisdictional question thus raised is one
for the judge, with the burden on the plaintiff ultimately to prove the
existence of a ground for jurisdiction by a preponderance of
evidence … . [W]hen, as here, the court addressees the question on
the basis only of motion papers, supporting legal memoranda and
the relevant allegations of a complaint, the burden on the plaintiff is
simply to make a prima facie showing of a sufficient jurisdictional
basis in order to survive the jurisdictional challenge. In considering
a challenge on such a record, the court must construe all relevant
pleading allegations in the light most favorable to the plaintiff,
assume credibility, and draw the most favorable inferences for the
existence of jurisdiction.
Combs, 886 F.2d at 676 (internal citations omitted). “Mere allegations of in personam jurisdiction
are sufficient for a party to make a prima facie showing.” Barclays Leasing, Inc. v. National
Business Systems, Inc., 750 F. Supp. 184, 186 (W.D.N.C. 1990). The plaintiff, however, “may
not rest on mere allegations where the defendant has countered those allegations with evidence
that the requisite minimum contacts do not exist.” IMO Industries, Inc. v. Seim S.R.L., 3:05-CV420-MU, 2006 WL 3780422, at *1 (W.D.N.C. Dec. 20, 2006). “Rather, in such a case, the plaintiff
must come forward with affidavits or other evidence to counter that of the defendant … factual
conflicts must be resolved in favor of the party asserting jurisdiction … .” Id.
It is well settled that “District Courts have broad discretion to allow jurisdictional discovery
pursuant to Rule 26 of the Federal Rules of Civil Procedure.” Mylan Labs., Inc. v. Akzo, 2 F.3d
56, 64 (4th Cir. 2003). The Court has reviewed the pleadings and submissions of counsel and finds
that a short period of limited discovery would be useful to the parties and likely provide assistance
3

to the Court in addressing the issue of personal jurisdiction. Accordingly, the Court will permit
limited discovery on the topic of Defendants’ contacts with North Carolina. Plaintiffs may serve
eight (8) interrogatories and (8) requests for production of documents on both Defendant
CenterSpec and Defendant Software Support. Unless the parties stipulate otherwise, Plaintiffs
shall serve these interrogatories and requests within seven (7) days from the date of this Order,
with responses to be served by Defendants twenty-one (21) days after service from Plaintiffs.
Plaintiffs may also take one Rule 30(b)(6) deposition of Defendants’ designee, with such
deposition to be limited to five (5) hours. Unless the parties stipulate otherwise, this deposition
must occur within forty (40) days from the date of this Order.
In light of this ruling, and in order to allow Defendants to fully brief their previous
arguments that may be addressed during this limited discovery, the Court will deny Defendants’
pending motions to Dismiss without prejudice. The Court specifically notes that by virtue of this
ruling, Defendants have preserved all personal jurisdiction arguments, and the Court will not
construe its dismissal, or the granting of Plaintiffs’ motion for expedited discovery, as a waiver of
any arguments, including those that may arise for the first time during discovery to further support
Defendants’ motions.
If, after this limited discovery, Defendants intend to renew their motions to dismiss for lack
of personal jurisdiction, they must file such motions no later than forty-seven (47) days from the
date of this Order. Plaintiffs shall file their responses to such motions no later than seven (7) days
after service of the renewed motions, and Defendants’ replies shall be filed within three (3) days
following service of Plaintiff’s response. This shortened briefing schedule is necessary to promote
the prompt and efficient resolution of this matter.
4

IT IS THEREFORE ORDERED that Defendants’ Motions to Dismiss for Lack of Personal
Jurisdiction (Doc. Nos. 15, 19) are DENIED WITHOUT PREJUDICE, Plaintiffs’ Motion for
Early Expedited Discovery Regarding Personal Jurisdiction of Defendant, Software SupportPMW, Inc., and CenterSpec, LLC (Doc. No. 27) is GRANTED as provided in this Order, and
Plaintiffs’ Motion for Extension of Time to Reply to Defendant, Software Support-PMW, Inc.’s
Motion to Dismiss for Lack of Personal Jurisdiction and CenterSpec, LLC’s Motion to Dismiss
for Lack of Personal Jurisdiction (Doc. No. 32) is DENIED AS MOOT.
IT IS SO ORDERED.
Signed: June 18, 2015

5