Luxton et al v. Leja et al
Filing
76
OPINION AND ORDER by Judge John E Dowdell ; denying 35 Motion to Dismiss for Lack of Jurisdiction; denying 66 Motion to Strike Document(s); denying 67 Motion for Leave to File Document(s) (Re: 27 Amended Complaint ) (SAS, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
JUDY LUXTON, Individually and as
Surviving Spouse of TERRENCE J.
LUXTON, Deceased, and CHRISTEL
RYLEY, Surviving Adult Child of
TERRENCE J. LUXTON, Deceased,
Plaintiffs,
v.
REBECCA L. LEJA, HENRY LEJA,
DELTA TRANZ, L.L.C., a foreign limited
liability company, DELTA TRANS, L.L.C.,
a foreign limited liability company, and
TRANSPORT REPAIR SERVICE, INC.,
d/b/a SHUTTLE TRANSPORT, INC., a
foreign limited liability company,
Defendants.
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Case No. 14-CV-416-JED-PJC
OPINION AND ORDER
Before the Court are Defendant Delta Trans, L.L.C.’s Special Appearance and Motion to
Dismiss for Lack of Personal Jurisdiction (Doc. 35) and Defendant Delta Trans, L.L.C.’s Motion
to Strike, or, in the Alternative, Motion for Leave to Respond (Docs. 66, 67). Plaintiffs have
opposed both motions.
I.
Background
Plaintiffs filed this wrongful death action after Terrence Luxton (“Mr. Luxton”) was
fatally injured while attempting to change a flat tire on the side of Interstate 44 in Ottawa
County, Oklahoma on February 7, 2014. Plaintiffs’ First Amended Complaint (the “Complaint”)
alleges that a tire or wheel detached from a passing tractor trailer and struck Mr. Luxton, causing
his fatal injuries. The Complaint alleges that the tractor trailer was owned by defendant Delta
Tranz, L.L.C. (“Delta Z”) or defendant Delta Trans, L.L.C. (“Delta S”), or by both defendants.
(Doc. 27 at 3, ¶¶ 9-10). Plaintiffs further allege that the driver of the tractor trailer, defendant
Rebecca Leja (“RLeja”), and the passenger, defendant Henry Leja (“HLeja”), were agents or
employees of either or both Delta Z and Delta S, and at the time of the accident were acting
within the course and scope of their employment. (Id. at 5, ¶ 18). Accordingly, plaintiffs’
Complaint alleges that one or both of defendants Delta Z and Delta S are liable to plaintiffs
under the doctrine of respondeat superior. (Id.).
Delta S’s Motion to Dismiss challenges this Court’s jurisdiction, arguing that it has no
contacts with Oklahoma sufficient to subject Delta S to personal jurisdiction in this forum. To
that end, the Motion is accompanied by the affidavit of Admir Duric (“Mr. Duric”), the sole
owner of Delta S. (Doc. 35-2). Delta S is a commercial interstate motor carrier company with
its principal and sole place of business in Michigan. (Doc. 35-5). At the time of the accident,
Delta S owned one 2013 Freightliner which was driven by a contract employee. (Doc. 35-2, ¶
7). The tractor trailer that caused the accident was a 2014 Volvo semi-tractor. (Doc. 35-2, ¶ 4).
Mr. Duric’s affidavit shows that the only contact Delta S had with the state of Oklahoma at the
time of the accident was that the Freightliner traveled through Oklahoma approximately once a
month. (Id., ¶ 7).
Delta Z is also a Michigan-based commercial interstate motor carrier company. (Doc. 27,
¶ 4). Delta Z is solely owned by Edina Duric (“Ms. Duric”), who is Mr. Duric’s wife. The joint
status report entered on October 16, 2014, before Delta S was joined as a defendant in the
lawsuit, indicates that defendants RLeja and HLeja were agents, servants, or employees of Delta
Z and were working within the course and scope of their employment at the time of the incident
involving Mr. Luxton. (Doc. 19 at 3). Delta Z has not raised a jurisdictional challenge.
2
The Court granted plaintiffs’ request for additional discovery on the jurisdictional issue in
light of Delta S’s Motion to Dismiss. (Doc. 40). Based on the additional discovery, plaintiffs
filed a supplemental response (Doc. 55), to which Delta S filed a supplemental reply (Doc. 64).
II.
Defendant Delta Trans, L.L.C.’s Motion to Strike, or, in the Alternative, Motion for
Leave to Respond (Docs. 66, 67)
Delta S’s Motion requests the Court to strike portions of plaintiffs’ supplemental Post-
Discovery Response to Motion to Dismiss for Lack of Personal Jurisdiction by Defendant Delta
Trans, L.L.C. (the “Supplemental Response”) (Doc. 55), or alternatively, grant defendant leave
to respond to portions of plaintiffs’ Supplemental Response. (See Doc. 66).
Delta S argues that plaintiffs’ Supplemental Response violates LCvR 7.2(e), which
makes clear that a response to a motion “may not also include a motion or a cross-motion made
by the responding party.”
Specifically, Delta S points to pages 4-7 and 11-13 of the
Supplemental Response, which it contends “amount to a Motion to Compel and/or a Motion for
Sanctions for Delta S’s alleged failure to sufficiently respond to Plaintiffs’ discovery requests.” 1
(Doc. 66 at 2). Delta S further argues that the Supplemental Response asks the Court to draw
negative inferences against Delta S for allegedly providing insufficient discovery responses.
(Id.). In response, plaintiffs deny that the Supplemental Response requests either a motion to
compel or a motion for sanctions, arguing instead that an “explanation was necessary to ensure
this Court did not mistake the absence of ordinary documents and facts typically used to
conclusively prove” facts in support of establishing personal jurisdiction.
(Doc. 68 at 4).
Plaintiffs also represent that they intend to file a motion to compel at a later time. (Id. at 5).
1
Pages 4-7 provide a procedural background of the case, including the Court’s authorization of
jurisdiction-specific discovery. Pages 11-13 refer to a section entitled “Missing Facts Due to
Alter Ego Delta’s Refusal to Comply with Discovery Mandates.” (See Doc. 55).
3
While plaintiffs’ Supplemental Response includes argument and facts that are wholly
irrelevant to the Court’s determination of the jurisdictional question, the Court declines to read
plaintiffs’ Supplemental Response as a de facto motion to compel or a motion for sanctions. The
Court hereby denies Defendant Delta Trans, L.L.C.’s Motion to Strike, or, in the Alternative,
Motion for Leave to Respond (Docs. 66, 67).
III.
Defendant Delta Trans, L.L.C.’s Special Appearance and Motion to Dismiss for
Lack of Personal Jurisdiction (Doc. 35)
Delta S’s Motion to Dismiss is premised upon its argument that plaintiff is unable to
demonstrate that the Court has either general or specific jurisdiction over defendant. Plaintiffs’
Response argues that Delta S’s Motion should be denied because Delta S is an alter ego of Delta
Z. (Doc. 41 at 1). Plaintiffs’ Supplemental Response further argues that based on facts learned
during the additional jurisdictional discovery period granted by the Court, they are able to
establish a prima facie showing of personal jurisdiction because both defendants were operating
a joint venture. (Doc. 55 at 14).
A. Legal Standard
Plaintiffs bear the burden of establishing that the Court has personal jurisdiction over
Delta S. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998).
“When a district court rules on a Fed. R. Civ. P. 12(b)(2) motion to dismiss for lack of personal
jurisdiction without holding an evidentiary hearing . . . the plaintiff need only make a prima facie
showing of personal jurisdiction to defeat the motion.” Id. (citations omitted). “The plaintiff
may make this prima facie showing by demonstrating, via affidavit or other written materials,
facts that if true would support jurisdiction over the defendant.” Id. at 1091. “In order to defeat
a plaintiff’s prima facie showing of jurisdiction, a defendant must present a compelling case
demonstrating ‘that the presence of some other considerations would render jurisdiction
4
unreasonable.’” Id. (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985)). The
court must accept as true “any allegations in the complaint not contradicted by the defendant’s
affidavits, and resolve any factual disputes in the plaintiff’s favor.” Melea, Ltd. v. Jawer SA, 511
F.3d 1060, 1065 (10th Cir. 2007).
For a court to exercise personal jurisdiction over a nonresident defendant, the plaintiff
must demonstrate the existence of every fact required to satisfy both the forum’s long-arm statute
and the Due Process Clause of the United States Constitution. See Okla. Stat., tit. 12, § 2004(F).
“Because Oklahoma’s long-arm statute permits the exercise of jurisdiction that is consistent with
the United States Constitution, the personal jurisdiction inquiry under Oklahoma law collapses
into the single due process inquiry.” Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d
1244, 1247 (10th Cir. 2000) (citing Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1416 (10th Cir.
1988)); see also Hough v. Leonard, 867 P.2d 438, 442 (Okla. 1993).
“Due process requires that the nonresident defendant’s conduct and connection with the
forum state are such that the nonresident could reasonably anticipate being haled into court in
that state.” Conoco, Inc. v. Agrico Chem. Co., 115 P.3d 829, 835 (Okla. 2004) (citing World–
Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). “The Due Process Clause
permits the exercise of personal jurisdiction over a nonresident defendant ‘so long as there exist
minimum contacts between the defendant and the forum State.’” Intercon, 205 F.3d at 1247
(quoting World-Wide Volkswagen, 444 U.S. at 291)).
A court “may, consistent with due
process, assert specific jurisdiction over a nonresident defendant ‘if the defendant has
purposefully directed his activities at the residents of the forum, and the litigation results from
alleged injuries that arise out of or relate to those activities.’” Id. at 1247 (quoting Burger King,
471 U.S. at 472 (1985)). “When a plaintiff’s cause of action does not arise directly from a
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defendant’s forum related activities, the court may nonetheless maintain general personal
jurisdiction over the defendant based on the defendant’s business contacts with the forum state.”
Id. at 1247 (citing Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414-16 & n.9
(1984)).
B. Analysis
Plaintiffs’ original Response asserts personal jurisdiction under an alter ego theory, and
their Supplemental Response argues that personal jurisdiction exists because Delta S and Delta Z
are operating under a joint venture. (Doc. 55 at 4). However, plaintiffs’ Supplemental Response
states that “it appears now the relationship between Delta [Z] and Delta [S] is likely more
appropriately viewed from the lens of a joint venture.” 2 (Doc. 55 at 4 n.1). Accordingly, the
Court will only address plaintiffs’ joint venture argument.
Moreover, it appears that plaintiffs are asserting personal jurisdiction based upon specific
jurisdiction, not general jurisdiction. The Court does not find that general jurisdiction exists in
this case, as Delta S is not based in Oklahoma and has no other continuous, general or systematic
ties to the state of Oklahoma. Thus, the Court only analyzes whether Delta S is subject to
specific jurisdiction, which requires: (1) minimum contacts between the Delta S and the forum
state, and (2) an analysis of whether exercising personal jurisdiction over Delta S would offend
“traditional notions of fair play and substantial justice,” or, instead, is “reasonable.” OMI
Holdings, Inc., 149 F.3d at 1091.
2
Plaintiff acknowledges that when they originally filed their Response, it “appeared that
[defendants] were alter egos.” (Doc. 55 at 14). The Court notes that plaintiffs “reserve the right
to argue [the alter ego] theory based on the facts which are ultimately available at trial.” (Id.).
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1. Sufficient minimum contacts
The touchstone of a minimum contacts analysis is whether “the defendant’s conduct and
connection with the forum State are such that he should reasonably anticipate being haled into
court there.” World-Wide Volkswagen, 444 U.S. at 297. The “question of ‘[w]hether a nonresident defendant has the requisite minimum contacts with the forum state to establish in
personam jurisdiction must be decided on the particular facts of each case.’” Benton v. Cameco
Corp., 375 F.3d 1070, 1076 (10th Cir. 2004) (quoting Kuenzle v. HTM Sport–Und Freizeitgerate
AG, 102 F.3d 453, 456 (10th Cir. 1996)). A party may establish minimum contacts using agency
theory, such as joint venture. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A.,
290 F.3d 42, 55 (1st Cir. 2002). “The joint venture theory provides that the minimum contacts of
one co-venturer are attributable to other co-venturers such that personal jurisdiction over one
means personal jurisdiction over all.” Hill v. Shell Oil Co., 149 F. Supp. 2d 416, 418 (N.D. Ill.
2001). A defendant is precluded from challenging personal jurisdiction where it has claimed and
held itself out to be part of a joint venture. Certain Underwriters at Lloyd’s, London v. Garmin
Int’l Inc., 2012 WL 1158849, at *4 (D. Kan. Apr. 6, 2012).
The parties dispute whether Oklahoma law—where the incident occurred, or Michigan
law—where Delta S and Delta Z were formed, governs the joint venture analysis. As it is
unclear which choice of law is applicable, the Court will apply both. Under Oklahoma law, the
three elements for establishing a joint venture are: (1) a joint interest in property; (2) an express
or implied agreement to share profits and losses of the venture; and (3) action or conduct
showing cooperation in the project. Price v. Howard, 236 P.3d 82, 91 (Okla. 2010). Although
“[t]he contributions of the respective parties need not be equal or of the same character for the
relationship to be a joint venture . . . there must be some contribution of each co-adventurer of
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something promotive of the enterprise.” Sholer v. State ex rel. Dep’t of Pub. Safety, 149 P.3d
1040, 1047 (Okla. Ct. App. 2006). “Each member of a joint venture acts for himself as principal
and as agent for the other members within the general scope of the enterprise.” King v. Modern
Music Co., 33 P.3d 947, 955 (Okla. Ct. App. 2001).
Plaintiffs have alleged facts, that if true, establish a prima facie case that Delta Z and
Delta S are engaged in a joint venture to carry out a common carrier business. Under the first
factor, whether there was a joint interest in property, Ms. Duric testified that Mr. Duric is an
owner of Delta Z’s trucks, which Delta Z uses as part of its regular business. (Doc. 55, Exh. 9 at
76:21-77:24). Moreover, plaintiffs have shown that there was commingling of funds between
the two businesses, which supports a joint interest in property. Specifically, Ms. Duric testified
that Delta Z’s gross earnings were deposited into Delta S’s account for a period of time where
Delta Z had problems with its bank account. (Doc. 55, Exh. 9 at 89:8-10).3 While Mr. Duric
asserts Delta S operates out of his home and only had a single contract employee at the time of
the incident, plaintiffs have provided evidence of a UCC filing that shows Delta S listed its
address as Delta Z’s address, and that Delta S’s balance sheet lists expenses for “building
repairs,” “rent expense,” “office supplies,” and “employee benefits.” (Doc 55, Exhs. 6, 14).
Viewing the facts in a light most favorable to plaintiffs, there are sufficient facts to support a
finding that Delta S and Delta Z share an interest in property.
As to the second factor, the facts support the existence of an implied agreement to share
profits and losses of the common carrier business. Despite the fact that Mr. Duric, by agreement,
3
There is conflicting testimony regarding whether or not the transfer of Delta Z’s earnings into
Delta S’s account was considered a loan. Construing the evidence in a light most favorable to
plaintiffs, the Court determines there was no loan because there was no loan agreement, Delta Z
never calculated the total amount of money that was transferred, and Delta S never reimbursed
Delta Z for the deposits. (See Doc. 55, ¶ 12).
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was no longer the co-owner of Delta Z as of November 15, 2013 (Doc. 55, Exh. 5) (filed under
seal), the parties’ conduct suggests otherwise. The Court is particularly persuaded by the fact
that, as discussed above, Delta Z’s gross earnings were deposited into Delta S’s account, which
supports a finding that the businesses shared profits and losses. Specifically, plaintiffs state that
because the funds were “never reconciled back” to Delta Z, Delta S “retained all of the profit
from [Delta Z’s] operations.” (Doc. 55 at 17). The Court notes, however, that plaintiffs’
showing as to this factor is the weakest.
Lastly, there are a multitude of facts demonstrating that Delta Z and Delta S cooperated
in the joint venture.
For example, the “Amendment to Operasting (sic) Agreement” (the
“Agreement”) states that Delta Z would lease equipment to Delta S without charge for a period
of one and a half years, after which Mr. Duric would be required to pay Delta Z to lease its
equipment. (Doc. 55, Exh. 5). The Agreement further shows that Mr. Duric held a management
role which included signing authority for Delta Z and that Ms. Duric held the same for Delta S.
(Id.). This demonstrates that Mr. Duric and Ms. Duric acted as an agent for one another within
the general scope of the common carrier business. See King, 33 P.3d at 955. Delta S paid for the
repairs of Delta Z’s tractor trailers. (Doc. 55, Exh. 15). Delta S’s balance sheet also shows that
Delta S issued checks dated March 12, 2014 to RLeja and HLeja, the Delta Z employees who are
also defendants in this case. (Doc. 55, Exh. 10). Finally, Delta Z’s business number routes calls
to a cellphone that both Mr. and Ms. Duric share. (Doc. 55, Exh. 9 at 50:17-51:1). Ms. Duric
testified that she and Mr. Duric, in their capacities as owners of Delta Z and Delta S, did favors
for one another’s business, which is consistent with the concept of cooperation.4 (See, e.g., Doc.
4
The following testimony from Ms. Duric’s deposition provides an example of a typical favor:
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55, Exh. 9 at 138:11-15). Moreover, Ms. Duric and Mr. Duric each testified that they did not
keep track of the time spent in their managerial roles for Delta Z and Delta S, nor are they
compensated financially for their roles. (Doc. 55, Exh. 9 at 10:19-23; Doc. 55, Exh. 11 at 87:1321). In sum, plaintiffs have provided sufficient evidence to establish a prima facie case for a
joint venture under Oklahoma law.5
Based upon the facts discussed above, which are to be viewed in a light most favorable to
plaintiffs, the Court also concludes there is evidence supporting a prima facie case of joint
venture under Michigan law. Michigan law requires plaintiffs to establish the following six
elements:
“(a) an agreement indicating an intention to undertake a joint venture;
“(b) a joint undertaking of
“(c) a single project for profit;
“(d) a sharing of profits as well as losses;
“(e) contribution of skills or property by the parties;
“(f) community interest and control over the subject matter of the enterprise.”
Kay Inv. Co. v. Brody Realty No. 1, L.L.C., 731 N.W.2d 777, 781 (Mich. Ct. App. 2006). To be
clear, the facts demonstrate: (1) there was an implied agreement between the owners of Delta S
Q:
In fact, you told me earlier that [Delta] S gets repairs at Transport Repair Service
and [Delta] Z pays for them, and you don’t ask for that to be paid back, right?
That’s just one instance.
A:
I get a favor back.
(Doc. 55, Exh. 9 at 138:11-15).
5
The Court notes that this case is similar to S.W. Bell Media, Inc. v. Arnold, 819 P.2d 293 (Okla.
Ct. App. 1991), where an Oklahoma appellate court found a material dispute of fact regarding an
agency relationship between two companies that used the same logo, had similar names, and had
signing authority for one another. Likewise, Delta S and Delta Z have very similar names, and
the owner of each business has signing authority for the other business.
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and Delta Z supporting their intention to undertake a joint venture; (2) the owners of Delta S and
Delta Z jointly undertook (3) a single project—a common carrier business—for profit; (4) Delta
Z shared its profits with Delta S; (5) Delta S’s owner and Delta Z’s owner contributed their
management skills to both businesses, and Delta Z contributed its earnings and leased its trucks
free of charge for a period of time to Delta S; and (6) the owner of Delta S was a manager for
Delta Z and vice versa, thus showing the existence of mutual community interest and control
over the subject matter of the venture.
While Delta S argues that plaintiffs have only shown that Mr. Duric, and not Delta S, had
a relationship with Delta Z, the Court does not find merit to this argument because Mr. Duric is
the sole owner of Delta S. Moreover, Delta S’s reliance on Fireman’s Fund Ins. Co. v. Thyssen
Min. Const. of Canada, Ltd., 703 F.3d 488, 494 (10th Cir. 2012) is misplaced, as there, the Tenth
Circuit found that personal jurisdiction did not extend to a party based on agency theory because
the purported agent’s actions were “completely unrelated to . . . the joint venture.” That is not
the case here, as both Mr. Duric and Ms. Duric undertook actions related to and in furtherance of
the common carrier business.
Thus, plaintiffs have presented sufficient evidence to meet their burden of establishing a
prima facie case of joint venture under both Oklahoma and Michigan law, thereby satisfying the
minimum contacts test.
2. Traditional notions of fair play and substantial justice
Next, the Court must consider whether its “exercise of personal jurisdiction over a
defendant with minimum contacts is ‘reasonable’ in light of the circumstances surrounding the
case.” OMI Holdings, Inc., 149 F.3d at 1091.
In assessing whether an exercise of jurisdiction is reasonable, we
consider [a] the burden on the defendant, [b] the forum state’s
11
interest in resolving the dispute, [c] the plaintiff’s interest in
receiving convenient and effective relief, [d] the interstate judicial
system’s interest in obtaining the most efficient resolution of
controversies, and [e] the shared interest of the several states in
furthering fundamental social policies.
Id. at 1095. The Court applies a sliding scale analysis: “the weaker the plaintiff’s showing on
[minimum contacts], the less a defendant need show in terms of unreasonableness to defeat
jurisdiction. The reverse is equally true: an especially strong showing of reasonableness may
serve to fortify a borderline showing of [minimum contacts].” Id. at 1092.
Delta S has presented no argument that it would be unreasonable for the Court to exercise
jurisdiction over it in this case. See Pro Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270,
1280 (10th Cir. 2005) (in seeking to defeat jurisdiction under the second prong, a defendant
“must present a compelling case demonstrating that the presence of some other considerations
would render jurisdiction unreasonable” (quotations and citations omitted)). Nonetheless, the
Court concludes that an exercise of personal jurisdiction over Delta S in the Northern District of
Oklahoma is not contrary to the traditional notions of fair play and justice. First, there may be
some burden on Delta S to litigate a case in Oklahoma although it is headquartered in Michigan.
Second, although none of the parties are residents of Oklahoma, the state retains an interest
where “resolution of the dispute requires a general application of the forum state’s laws.” Pro
Axess, Inc. v. Orlux Distribution, Inc., 428 F.3d 1270, 1280 (10th Cir. 2005). The third factor
“hinges on whether the Plaintiff may receive convenient and effective relief in another forum.”
OMI Holdings, Inc., 149 F.3d at 1096. There is no evidence that plaintiffs would be able to
receive convenient and effective relief in another forum. Fourth, it is clear that Oklahoma is the
most efficient place to litigate the dispute, as the wrong occurred in Oklahoma, witnesses who
viewed the incident are likely located in Oklahoma, and Oklahoma law will govern the dispute.
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There is also no sign that this Court’s exercise of jurisdiction would result in piecemeal
litigation. Fifth, the Court can discern no substantive social policy that would be affected by
either the exercise or non-exercise of jurisdiction in Oklahoma. In sum, the five factors do not
weigh in Delta S’s favor and the Court accordingly concludes that its exercise of personal
jurisdiction over Delta S would not offend traditional notions of fair play and justice.
Given the relatively strong showing of reasonableness and a sufficient showing of
minimum contacts, both prongs of the federal due process analysis are satisfied and the Court
may properly exercise personal jurisdiction over Delta S. The Court notes that it remains open to
the possibility that evidence obtained at later stages of this litigation may show that personal
jurisdiction over Delta S is inappropriate. To that extent, the Court’s denial of the Motion to
Dismiss is without prejudice.
IV.
Conclusion
For the reasons discussed, both of Delta S’s motions are denied.
IT IS THEREFORE ORDERED that Delta S’s Special Appearance and Motion to
Dismiss for Lack of Personal Jurisdiction (Doc. 35) is denied without prejudice and Delta S’s
Defendant Motion to Strike, or, in the Alternative, Motion for Leave to Respond (Docs. 66, 67)
is denied.
SO ORDERED this 19th day of September, 2016.
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