Garlock v. The Ohio Bell Telephone Company et al
Filing
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Opinion and Order granting Defendant AT&T Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction (Related Doc # 10 ). Judge Christopher A. Boyko on 5/15/2014.(R,D)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION
GREGG GARLOCK,
Plaintiff,
Vs.
THE OHIO BELL TELEPHONE
COMPANY INC., ET AL.,
Defendants.
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CASE NO. 1:13CV02200
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER
CHRISTOPHER A. BOYKO, J:
Before the Court is Defendant AT&T Inc.’s Motion to Dismiss for Lack of Personal
Jurisdiction, filed on January 9, 2014 (ECF DKT #10). On November 4, 2013, Plaintiff filed his
First Amended Complaint with the Court (ECF DKT # 4) (hereafter, “Complaint”). For the
reasons stated below, the Court GRANTS Defendant AT&T Inc.’s Motion to Dismiss for Lack
of Personal Jurisdiction.
I. PROCEDURAL BACKGROUND
Plaintiff, Gregg Garlock (“Plaintiff”), alleges that his employer, Defendant, The Ohio
Bell Telephone Company Inc. (hereafter “Ohio Bell”), refused to accommodate his reasonable
accommodation of a reduced work schedule and Family Medical Leave Act (FMLA) leave.
(Complaint, ¶¶ 39-41). Plaintiff brings claims of FMLA interference, FMLA Retaliation,
Disability Discrimination and Denial of Reasonable Accommodation under FMLA. (Complaint
¶¶ 64-99). Plaintiffs seek to recover compensatory damages, liquidated damages, punitive
damages, attorneys fees, court costs, equitable relief and injunctive relief. (Complaint, at 12).
II. FACTS
According to the Complaint, Plaintiff first began to experience stress-induced panic
attacks around March 2011. (Complaint ¶34). Prior to these first panic attacks, Plaintiff often
worked over sixty hours per week in his positions as Customer Service Specialist and U-Verse
Premise Technician at the Ohio Bell Field Operations Office located in Highland Heights, Ohio.
(Complaint ¶¶ 33-35). In April 2011, Plaintiff was diagnosed with anxiety disorder, and in June
2011 he was diagnosed with panic disorder. (Complaint ¶¶ 36-37). Subsequently, in June 2011,
Plaintiff sought FMLA leave on an intermittent basis and a reduced work schedule of eight hours
a day and forty hours a week from his employer. (Complaint ¶ 38). This request was processed
and denied by AT&T Services, Inc. (Complaint ¶¶ 39-41). Plaintiff’s treating Psychiatrist
informed him that while he was on FMLA leave he should participate in whatever activities
reduced his anxiety. (Complaint ¶ 42). Plaintiff claims that playing drums in his band was the
most effective way to reduce his stress levels. (Complaint ¶ 43). Plaintiff took FMLA leave
from June 2011 through October 2011. (Complaint ¶ 45). Plaintiff learned that Defendants
investigated Plaintiff during his FMLA leave. (Complaint ¶ 46). On about November 5, 2011,
Defendants suspended Plaintiff pending his termination, giving the reason that he abused his
medical leave by playing in his band. (Complaint ¶ 49). After suspending Plaintiff from
November 14, 2011 through November 27, 2011, Defendants made Plaintiff sign a Back to
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Work Agreement. (Complaint ¶¶ 55-56). Then, in February 2012, Defendants fired Plaintiff for
alleged pretextual reasons: false claims that Plaintiff was improperly charging clients for work
performed. (Complaint ¶¶ 61-62).
Plaintiff filed suit against Ohio Bell, AT&T Corp., AT&T Teleholdings, Inc., AT&T
Datacomm, Inc., AT&T Capital Holdings, Inc., AT&T Services, Inc. and AT&T Inc. (ECF
DKT Nos. 1 & 4). Plaintiff has dismissed AT&T Corp., AT&T Teleholdings, Inc., AT&T
Datacomm, Inc. and AT&T Capital Holdings, Inc. (ECF DKT No. 4). Plaintiff refuses to
dismiss AT&T Inc. despite Defendants’ requests to dismiss AT&T Inc. as an improper party.
(ECF DKT No. 12-2). Ohio Bell, Plaintiff’s direct employer, is a wholly-owned subsidiary of
AT&T Inc. (Complaint ¶ 6). AT&T Services Inc. is also a wholly-owned subsidiary of AT&T
Inc. (Complaint ¶ 6). AT&T is a publicly traded Delaware corporation with its principal place
of business in Texas. (Complaint ¶ 9). Plaintiff alleges in his Complaint that AT&T Inc. holds
itself out to the public via advertising, as a provider of telecom services and does not distinguish
services which it offers through its subsidiaries, such as Ohio Bell. (Complaint ¶¶ 10-11).
Plaintiff contends that AT&T Inc. exercises control over its subsidiaries, including Ohio Bell and
AT&T Services, Inc., at a level that exceeds the control normally exercised by a parent company
over its subsidiaries in order to maintain separate and distinct corporate entities. (Complaint ¶
12). Plaintiff alleges that all revenues from Ohio Bell go directly to AT&T Inc. and are reported
as such in AT&T’s public SEC filings. (Complaint ¶ 13). Plaintiff believes that Ohio Bell and
AT&T Inc. share common management, officers, directors and/or board members as well as
offices and other resources and employees. (Complaint ¶¶ 16-19). Plaintiff alleges that
customers are billed by AT&T Inc. for services rendered by employees of Ohio Bell.
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(Complaint ¶ 20). Plaintiff charges that each of the AT&T defendants interchangeably uses the
AT&T logo. (Complaint ¶ 17). Plaintiff asserts that Ohio Bell and AT&T Services Inc. share
an office located at 45 Erieview Plaza, Cleveland, Ohio 44114. (Complaint ¶ 18). AT&T
Services Inc. processes and investigates FMLA requests for all AT&T Inc. subsidiaries,
including Ohio Bell, as directed by AT&T Inc. (Complaint ¶ 24).
Plaintiff alleges that AT&T
Inc. determines the employment policies and Code of Business Conduct for its subsidiaries,
including Ohio Bell. (Complaint ¶ 23). Finally, Plaintiff states that job positions working for
AT&T Services Inc. and Ohio Bell, including the particular job position held by Plaintiff, are
advertised on AT&T Inc.’s website. (Complaint ¶¶ 25-26).
III. ISSUE
Defendant AT&T Inc. filed a Motion to Dismiss for Lack of Personal Jurisdiction
pursuant to Fed. R. Civ. P. 12(b)(2). (ECF DKT No. 10). Specifically, AT&T Inc. asserts that
the Court should dismiss it because it is not a proper Defendant in this case. (ECF DKT No. 101, at 1). Defendant, AT&T Inc. asserts that, as solely a holding company, it has no contacts in
Ohio and does not transact any business in Ohio that would provide the requisite personal
jurisdiction in this Court. (ECF DKT No. 10-1, at 1-2). Plaintiff filed a Brief in Opposition on
February 14, 2014, alleging that AT&T Inc. has sufficient business contacts in Ohio to establish
personal jurisdiction (ECF DKT # 17). Defendant, AT&T Inc., filed a Reply Brief in Support of
its Motion to Dismiss on February 27, 2014, which addressed each of Plaintiff’s arguments and
restated AT&T Inc.’s original arguments. (ECF DKT # 18).
IV. LAW AND ANALYSIS
A. Legal Standard
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In deciding a motion to dismiss under Fed. R. Civ. P. 12(b)(2), the court applies a twostep inquiry when examining if it has personal jurisdiction over the parties. “First, we must
determine whether Ohio law authorizes jurisdiction. If it does, we must determine whether that
authorization comports with the Due Process Clause of the Fourteenth Amendment.” Estate of
Thomson ex rel. Estate of Rakestraw v. Toyota, 545 F.3d 357, 361 (6th Cir. 2008). Where
personal jurisdiction is challenged in a Rule 12(b)(2) motion, the plaintiff has the burden of
establishing that personal jurisdiction exists. Weller v. Cromwell Oil Co., 504 F.2d 927 (6th Cir.
1974). However, the nature of plaintiff’s burden changes depending on the manner in which the
district court approaches the motion. American Greetings Corp. v. Cohn, 839 F.2d 1164, 1168
(6th Cir. 1988). When a court approaches a motion to dismiss for lack of personal jurisdiction
based solely on written materials and affidavits, “the burden on the plaintiff is relatively slight, . .
. and the plaintiff must make only a prima facie showing that personal jurisdiction exists in order
to defeat dismissal[.]” Ampco System Parking v. Imperial Parking Canada Corp., No.
1:11CV1172, 2012WL1066784, at *2 (N.D. Ohio Mar. 28, 2012) (quoting Air Prods., &
Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th Cir. 2007). Plaintiff need only
establish jurisdictional claims with “reasonable particularity” and the pleadings and affidavits are
construed in the light most favorable to plaintiff. Id. The burden is on the plaintiff, however, to
establish that jurisdiction exists, and the plaintiff may not merely stand on his pleadings in the
face of a properly supported motion for dismissal. Theunissen v. Matthews, 935 F.2d 1454, 1458
(6th Cir. 1991). The plaintiff must set forth specific facts showing that the court has jurisdiction.
Id. Therefore, dismissal is proper only if all the specific facts which the plaintiff alleges
collectively fail to state a prima facie case for jurisdiction. CompuServe, Inc. v. Patterson, 89
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F.3d 1257, 1262 (6th Cir. 1996).
B. Personal Jurisdiction
Plaintiff bears the burden of establishing the Court’s exercise of personal jurisdiction
over Defendant AT&T Inc. meets the requirements of both Ohio’s long-arm statute and the
limits of the Constitutional Due Process Clause. Id. Ohio’s long-arm statute does not extend to
the constitutional limits of the Due Process Clause; therefore, this becomes a threshold issue to
determine jurisdiction. Calphalon Corp. V. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000).
1. Ohio’s Long Arm Statute
The pertinent section of the Ohio long-arm statute reads:
(A) A court may exercise personal jurisdiction over a person who acts directly or by an
agent, as to a cause of action arising from the person’s:
(1) Transacting business in this state ; [or]
(2) Contracting to supply services or goods in this state; [or]
(3) Causing tortious injury by an act or omission in this state.
Plaintiff asserts that jurisdiction is proper in Ohio under sections (1), (2), and (3).
Plaintiff contends that Defendant AT&T Inc. is implicated under the Ohio long-arm statute both
by conducting business in Ohio through its own actions and by the actions of Ohio Bell as an
agent of AT&T Inc.
a. Plaintiff Fails to Establish That AT&T Inc. Conducts Business in
Ohio or Contracts for the Supply of Goods or Services in Ohio
First, Plaintiff contends that AT&T Inc. is subject to personal jurisdiction in Ohio by
transacting business in Ohio and by contracting for the supply of goods or services in Ohio.
While Plaintiff’s Complaint contains assertions which are sufficient to establish that AT&T Inc.
transacted business in Ohio, the Court is required to evaluate Defendant’s Motion to Dismiss for
Lack of Personal Jurisdiction under the standard which requires Plaintiff to support personal
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jurisdiction by written materials to support his factual assertions. Theunissen, 935 F.2d at 1458.
The written materials relied upon by Plaintiff in arguing that AT&T Inc. transacts business in
Ohio are a press release stating that AT&T is investing $225 Million in Ohio wireless and
wireline networks via a project called Project Velocity IP. (ECF DKT No. 17-3). Plaintiff also
provides an executive bio of Lori Lee, identified as Senior Executive Vice President - Home
Solutions, providing that Lee is the leader of Project Velocity IP. (ECF DKT No. 17-4). Finally,
Plaintiff also provides a State of Changes in Beneficial Ownership SEC filing, filed by Lori Lee,
providing that she is “Sr. Exec. VP - Home Solutions” of AT&T Inc. (ECF DKT No. 17-7).
Upon closer look, the press release provided by Plaintiff includes an asterisk next to the first
mention of AT&T. The asterisk references the statement that: “AT&T products and services are
provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not
by AT&T Inc.” (ECF DKT No. 17-4). This statement shows that it is AT&T Inc.’s subsidiaries
and affiliates that are conducting business in Ohio, not AT&T Inc. itself. Furthermore, both the
executive bio of Lori Lee and the SEC filing provide that Lori Lee is Senior Executive Vice
President of Home Solutions. However, Defendant provided the affidavit of AT&T Services
Inc.’s Executive Director of Payroll, Michelle Zollmann, stating that Lori Lee is actually the
Senior Executive Vice President with AT&T Services, Inc. and she has never been an employee
of AT&T Inc. (ECF DKT No. 18-1). Therefore, it is not clear whether Lori Lee is actually an
employee of AT&T Inc. or one of its subsidiaries. Even construing the facts in the light most
favorable to Plaintiff, and assuming Lee is an employee of AT&T Inc., the press release
provided by Plaintiff establishing business transactions in Ohio explicitly provided that the
business being conducted is through AT&T Inc.’s subsidiaries and affiliates, and not AT&T Inc.
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Plaintiff provides no other written materials providing AT&T Inc. conducted business or entered
into contracts for the supply of goods or services in Ohio. Thus, the Court finds that Plaintiffs do
not satisfy the requirements for personal jurisdiction for Defendant AT&T Inc. under either
subsection A(1) or (2) of Ohio’s long-arm statute.
b. Plaintiff Fails to Establish Defendant AT&T Inc. Caused Tortious
Injury to Plaintiff in Ohio
Next, Plaintiff argues that AT&T Inc. is subject to personal jurisdiction under Ohio’s
long-arm statute for its actions constituting the alleged tortious injury in this case. In support of
this contention, Plaintiff provides a company FMLA investigation printout and a letter allegedly
written by George Ron Williams on behalf of Plaintiff, which Plaintiff alleges he was forced to
sign to come back to work following his FMLA leave. (ECF DKT No. 17, at 6). The FMLA
investigation printout has AT&T Inc. printed at the top and identifies Ohio Bell as the involved
subsidiary. (ECF DKT No. 17-1). The letter has AT&T Inc. printed at the top, with the AT&T
logo and identifies George Ron Williams as the asset protection manager with AT&T Inc. (ECF
DKT No. 17-8). In Defendant’s Reply Brief, it provides the Declaration of Michelle Zollman,
establishing that George Ron Williams is not an employee of AT&T Inc. but rather an employee
of AT&T Services, Inc. (ECF DKT No. 18-1). However, the Court must construe the written
materials in the light most favorable to the Plaintiff when evaluating a motion to dismiss for lack
of personal jurisdiction. Ampco System Parking v. Imperial Parking Canada Corp., No.
1:11CV1172, 2012 WL 1066784, at *2 (N.D. Ohio Mar. 28, 2012). Therefore, the Court will
evaluate this argument under the assumption that George Ron Williams is an employee of AT&T
Inc. Plaintiff alleges that he was forced to sign the letter when he returned to work and did not
actually write the letter himself. However, the language of the letter indicates otherwise; it states
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that plaintiff “freely and voluntarily provide[d] the following statement . . . [and] [n]o force,
threats or coercion have been made to induce [Plaintiff] to make this statement.” (ECF DKT No.
17-8). Plaintiff has provided no written materials to support the contention that he was forced to
sign the letter in order to come back to work. Thus, the written materials can only support the
alleged facts that AT&T Inc. was informed of and assigned a representative to interview Plaintiff
about his FMLA leave. Plaintiff did not provide any written materials indicating that it was
AT&T Inc. that made any decisions relating to Plaintiff’s FMLA rights. AT&T Inc. simply kept
a record of its subsidiary’s employee’s FMLA leave in the ordinary course of business. This
does not constitute any tortious act in Ohio; in fact, “covered employers who have
FMLA-eligible employees are subject to certain record-keeping requirements, and must maintain
records that must disclose, inter alia, dates on which FMLA leave is taken, the hours of leave
taken if leave is taken in increments of less than one full day, and records of any dispute between
the employer and employee concerning the designation of leave as FMLA leave time.” Gardner
v. Great Lakes Cheese Co., Inc., No. 1:10 CV 183, 2011 WL 6749795, *5, (N.D. Ohio Dec. 22,
2011) (citing The Family Medical Leave Act of 1993 Recordkeeping Requirements, 29 C.F.R. §
825.500 (2013)). Thus, Plaintiff is unable to establish that Defendant AT&T Inc. caused tortious
injury to Plaintiff in Ohio and consequently, cannot establish personal jurisdiction under the
corresponding portion of Ohio’s long-arm statute.
c. Plaintiff Fails to Establish Ohio Bell is an Agent of AT&T Inc. to
Establish Personal Jurisdiction
Plaintiff’s argument, that AT&T Inc. is subject to personal jurisdiction in Ohio through
the actions of Ohio Bell as AT&T Inc.’s agent, implicates a jurisdictional analysis of whether a
parent corporation is subject to general jurisdiction based on activities of its subsidiary. Several
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circuit courts, including the Sixth Circuit, have recognized that “federal courts have consistently
acknowledged that it is compatible with due process for a court to exercise personal jurisdiction
over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in
that court when the individual or corporation is an alter ego or successor of a corporation that
would be subject to personal jurisdiction in that court.” Estate of Thomson v. Toyota Motor
Corp. Worldwide, 545 F.3d 357, 362 (6th Cir. 2008) (quoting Patin v. Thoroughbred Power
Boats Inc., 294 F.3d 640, 653 (5th Cir. 2002)(collecting cases)). During such parent-subsidiary
relationship analyses, courts will apply the alter-ego theory of personal jurisdiction. Id. The
alter-ego theory of personal jurisdiction in the context of parent-subsidiary relationships provides
that “a non-resident parent corporation is amenable to suit in the forum state if the parent
company exerts so much control over the subsidiary that the two do not exist as separate entities
but are one and the same for purposes of jurisdiction.” Id. (quoting Danton v. Innovative Gaming
Corp., 246 F.Supp.2d 64, 72 (D. Me. 2003) (providing several cases Sixth Circuit district court
cases which have endorsed the use of the alter-ego theory to exercise personal jurisdiction in the
parent-subsidiary context).
In order to apply the alter-ego theory of personal jurisdiction, the Court must consider
Ohio’s alter-ego test. Ohio courts have considered the following factors in determining whether
a subsidiary is an alter-ego of the parent corporation, whether: (1) corporate formalities are
observed; (2) corporate records are kept; and (3) the corporation is financially independent. Id.
(citing Microsys Computing, Inc. v. Dynamic Data Sys., LLC, No. 4:05CV2205, 2006 WL
2225821, *6, 2006 U.S. Dist. LEXIS 53397 (N.D. Ohio Aug. 2, 2006)). Furthermore, the Sixth
Circuit has considered additional factors: (1) sharing the same employees and corporate officers;
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(2) engaging in the same business enterprise; (3) having the same address and phone lines; (4)
using the same assets; (5) completing the same jobs; (6) not maintaining separate books, tax
returns and financial statements; and (7) exerting control over the daily affairs of another
corporation. Id. While Plaintiff’s Complaint alleges that many of these factors are satisfied,
Plaintiff cannot “merely stand on his pleadings” in order to sufficiently establish his prima facie
showing of personal jurisdiction. Theunissen, 935 F.2d at 1458. Plaintiff is required to provide
written materials and affidavits which establish the facts giving rise to his prima facie showing
of personal jurisdiction. The most significant written materials relied upon by Plaintiff in
support of establishing personal jurisdiction for AT&T Inc. under the alter-ego theory are: (1)
Plaintiff’s FMLA internal investigation documentation with an AT&T Inc. header; (2) a press
release indicating AT&T’s $225 million investment in its Ohio market; (3) internet information
regarding Lori Lee as the Senior Executive Vice President of Home Solutions for AT&T; (4)
AT&T Inc.’s SEC prospectus and annual investor reports; and (5) a letter which Plaintiff was
allegedly required to sign to come back to work following his FMLA leave in which George Ron
Williams is identified as Asset Protection Manager working for AT&T Inc.
As discussed earlier, Plaintiff and Defendant have presented conflicting information
regarding the actual employer of Lori Lee. However, as stated above, the Court must construe
the written materials in the light most favorable to the Plaintiff. Even where the officers and
directors of a subsidiary and parent corporation overlap, that factor alone is not enough to
warrant a finding that the subsidiary is an alter-ego of the parent corporation. Invacare Corp. v.
Sunrise Med. Holdings, Inc., 2004 U.S. Dist. LEXIS 28169, *26 (N.D. Ohio Dec. 15, 2004). See
also Matthews v. Kerzner Int’l 2011 U.S. Dist. LEXIS 124727, *12-13; 2011 WL 5122641 (N.D.
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Ohio Oct. 27, 2011) (citing United States v. Bestfoods, 524 U.S. 51, 69, 118 S. Ct. 1876, 141 L.
Ed.2d 43 (1998)). Thus, assuming Lori Lee is a common employee of AT&T Inc. and one or
more of AT&T Inc.’s subsidiaries, that is still not enough for the Court to find that any AT&T
Inc. subsidiary is acting as an alter-ego of AT&T Inc.
Similarly, Plaintiff cannot demonstrate that based on AT&T Inc.’s financial reports, since
AT&T Inc. wholly owns AT&T Services, Inc. and Ohio Bell, that AT&T Inc. is subject to
personal jurisdiction based solely on those relationships. Plaintiff provides the FMLA
documentation of AT&T Inc. in relation to this suit and AT&T Inc. financial reports to
presumptively establish a blurring of corporate formalities, exercise of control by the parent
company over the subsidiary’s daily affairs and sharing of assets. However, the Court has
previously recognized that the “fact that the stock of the subsidiary was held by the foreign
corporation and that the foreign corporation exercised control over the subsidiary through
ownership of the stock, the corporate identity being formally preserved, is not sufficient to
subject such foreign corporation to the jurisdiction of the state court.” Matthews v. Kerzner Int’l
2011 U.S. Dist. LEXIS 124727, *12-13; 2011 WL 5122641 (N.D. Ohio Oct. 27, 2011) (quoting
Rucker v. Personal Finance Co. of Columbus, 86 Ohio App. 110, 90 N.E.2d 428, 430-312 (Ohio
Ct. App. 1948). In fact, the Court previously found that even where the parent corporation and
subsidiary share the same business, phone line and address and where the parent has no
employees, “while [the facts] weigh in favor of [plaintiff’s] alter-ego theory of jurisdiction, [the
facts] fail to sufficiently demonstrate that [the parent and subsidiary] operate, in fact, as one
business or are fundamentally indistinguishable.” Microsys Computing, Inc. v. Dynamic Data
Systems, LLC., No. 05-2205, 2006 WL 2225821, *7 (N.D. Ohio August 02, 2006). Thus,
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Plaintiff is required to provide more credible written material to support its alter-ego theory of
personal jurisdiction. Plaintiff’s arguments that Ohio Bell was acting as the agent, or alter-ego,
of AT&T Inc., thus subjecting AT&T Inc. to personal jurisdiction in Ohio, are not sufficiently
supported. Plaintiff does not cite sufficient written material to support his allegation that the
operation of AT&T Inc., AT&T Services, Inc. and Ohio Bell are fundamentally
indistinguishable. Therefore, Plaintiff is not able to establish a prima facie showing of personal
jurisdiction satisfying Ohio’s long-arm statute.
Since Ohio’s long arm statute does not extend to the constitutional limits of personal
jurisdiction required under the Constitution’s Due Process clause, determining Ohio’s long-arm
statute becomes a threshold jurisdictional issue. Since Plaintiff is unable to satisfy the
requirements of Ohio’s long-arm statute for personal jurisdiction, it is not necessary for the
Court to evaluate AT&T Inc.’s personal jurisdiction under the Constitution’s Due Process
Clause. Accordingly, Defendant AT&T Inc.’s Motion to Dismiss for Lack of Personal
Jurisdiction is GRANTED.
IT IS SO ORDERED.
/S/Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge
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