American Fidelity Assurance Company v. Bank of New York Mellon
Filing
62
ORDER denying 48 Motion to Dismiss for Lack of Jurisdiction. Signed by Honorable Timothy D. DeGiusti on 9/10/2014. (mb)
IN THE UNITED STATES DISTRICT COURT FOR THE
WESTERN DISTRICT OF OKLAHOMA
AMERICAN FIDELITY ASSURANCE
COMPANY,
Plaintiff,
v.
THE BANK OF NEW YORK MELLON,
Defendant.
)
)
)
)
)
)
)
)
)
)
Case No. CIV-11-1284-D
ORDER
Before the Court is Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction or, in
the Alternative, for Leave to Amend the Answer and Brief in Support [Doc. No. 48]. Plaintiff has
responded to the motion [Doc. No. 60] and Defendant has filed a reply [Doc. No. 61]. For the
reasons set forth below, Defendant has waived the defense of personal jurisdiction and Defendant’s
motion, therefore, is denied.
I.
Case History
This action was filed on November 1, 2011. Defendant filed its first motion to dismiss on
April 12, 2012, pursuant to Fed. R. Civ. P. 12(b)(6).
On January 18, 2013, the Court granted
Defendants’s motion to dismiss but further granted Plaintiff’s request for leave to amend the
complaint. Plaintiff filed an amended complaint on February 8, 2013 and a second amended
complaint on April 19, 2013. Defendant then moved to dismiss the second amended complaint and
again sought dismissal pursuant to Fed. R. Civ. P. 12(b)(6). The court denied the motion to dismiss
on December 26, 2013. Defendant filed its answer to the second amended complaint on January 10,
2014.
Thereafter, on February 27, 2014, the parties submitted a Joint Status Report and Discovery
Plan. Defendant states therein that it “may move to dismiss the case in light of recent Supreme
Court decisions that limit the permissible scope of personal jurisdiction under the U.S. Constitution.”
See id. at p. 3, ¶ 6. Defendant filed the pending motion to dismiss on March 3, 2014, raising for the
first time the defense of lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2).
Defendant moves for dismissal on grounds that this Court lacks both general and specific
personal jurisdiction over it. Defendant relies on two recent decisions of the United States Supreme
Court, Daimler AG v. Bauman, – U.S. –, 134 S.Ct. 746 (2014) and Walden v. Fiore, – U.S. –, 134
S.Ct. 1115 (2014). Defendant contends that in Daimler, the Supreme Court announced a change in
law regarding general personal jurisdiction and that prior to Daimler, existing Tenth Circuit
precedent precluded Defendant from raising the defense.
II.
Discussion
A.
The Waiver Rule
Personal jurisdiction is a defense that is subject to waiver. Williams v. Life Sav. and Loan,
802 F.2d 1200, 1202 (10th Cir. 1986) (“A defect in the district court’s jurisdiction over a party,
however, is a personal defense which may be asserted or waived by a party.”). Pursuant to Fed. R.
Civ. P. 12(h)(1), a party waives the defense of lack of personal jurisdiction if the party moves for
dismissal and does not include the defense in the motion. See id. (“A party waives any defense
listed in Rule 12(b)(2)-(5) by . . . omitting it from a motion in the circumstances described in Rule
12(g)(2) . . . .”); see also United States v. 51 Pieces of Real Property, Roswell, N.M., 17 F.3d 1306,
1314 (10th Cir. 1994)(“If a party files a pre-answer motion and fails to assert the defenses of lack
of personal jurisdiction or insufficiency of service, he waives these defenses.”); Thus, when
2
Defendant moved to dismiss Plaintiff’s complaint (and amended complaint) pursuant to Fed. R. Civ.
P. 12(b)(6) it was required under the federal rules to simultaneously move for dismissal under Fed.
R. Civ. P. 12(b)(2)-(5).
Defendant acknowledges the waiver provisions of Rule 12(h), but contends the defense of
lack of personal jurisdiction was not available when it previously moved for dismissal. See Fed. R.
Civ. P. 12 (g)(2) (“[A] party that makes a motion under this rule must not make another motion
under this rule raising a defense or objection that was available to the party but omitted from its
earlier motion.”) (emphasis added). Generally, a defense is unavailable “if its legal basis did not
exist at the time of the answer or pre-answer motion . . . .” Chatman-Bey v. Thornburgh, 864 F.2d
804, 813 n. 9 (D.C. Cir. 1988) (citations omitted). See also Holzsager v. Valley Hospital, 646 F.2d
792, 796 (2d Cir. 1981) (“[A] party cannot be deemed to have waived objections or defenses which
were not known to be available at the time they could first have been made . . . .”).
As stated, Defendant contends the Supreme Court’s Daimler decision constitutes a change
in law as to general personal jurisdiction.1 According to Defendant, general personal jurisdiction
existed over it before this change in law. See Defendant’s Motion at p. 6 (“[t]he plaintiff appeared
to meet the then-governing standard” for general personal jurisdiction) (emphasis added).2
Defendant contends the fact that general personal jurisdiction “appeared” to be satisfied, rendered
a challenge to specific personal jurisdiction superfluous. See id., see also Defendant’s Motion at p.
1
Defendant does not contend there has been a change in the law regarding the grounds for its defense of lack
of specific personal jurisdiction but does rely upon Walden to support its argument that there is no specific personal
jurisdiction under the facts of this case. According to Defendant, Walden has “sharpened” the arguments available to
establish a lack of specific jurisdiction. See Defendant’s Motion at p. 15. Indeed, Defendant relies almost exclusively
on well-established Tenth Circuit authority to support its argument that there is no specific personal jurisdiction.
2
ECF pagination is used to reference portions of Defendant’s brief.
3
20 (“[W]hen BNYM filed its answer it would have been held subject to general jurisdiction in
Oklahoma” and, therefore, “arguments related to specific jurisdiction . . . would have been
irrelevant because BNYM would have been subject to general jurisdiction.”). In other words,
Defendant concedes it could have previously challenged specific personal jurisdiction but did not
do so because Plaintiff’s allegations were purportedly sufficient to establish general jurisdiction.3
The Court finds these arguments unavailing. Contrary to Defendant’s argument, Daimler
did not create a basis for challenging personal jurisdiction not previously available to Defendant.
B.
The Supreme Court’s Daimler Decision
According to Defendant, the Daimler decision “dramatically narrowed the circumstances in
which a court may exercise general personal jurisdiction over an out-of-state corporation.”
See Defendant’s Motion at p. 1. Defendant contends that under Daimler, “[g]eneral jurisdiction
exists only when the defendant’s contacts with the forum state are so ‘continuous and systematic as
to render [it] essentially at home’ there.” See id. at p. 6 (quoting Daimler, 134 S.Ct. at 761).
Defendant further contends – albeit erroneously – that Daimler holds for the first time that general
jurisdiction only exists in a forum where a corporation is incorporated or has its principal place of
business. See Defendant’s Motion at p 2.4
Defendant contends Plaintiff’s conclusory allegation that Defendant “engaged in systematic
and continuous contact with Oklahoma” does not come close to meeting this “new standard.” See
3
In response, Plaintiff contends it has never sought to invoke general personal jurisdiction over Defendants.
4
As discussed infra, the Court found in Goodyear that a corporation is at home where it has its principal place
of business or where it is incorporated but did not limit general jurisdiction to these two locations. Defendant claims
in Daimler the Court did just that. But contrary to Defendant’s assertion, in Daimler the Court expressly continued to
acknowledge that it would be possible for a corporation to be “at home” in places outside of its place of incorporation
or principal place of business. See Daimler, 134 S.Ct. at 761 n. 19.
4
Defendant’s Motion at p. 12. And Defendant contends that because it is neither incorporated in the
state of Oklahoma nor has its principal place of business there, general jurisdiction is now lacking.
Defendant impermissibly asks this Court to presume that Plaintiff’s mere allegation that
Defendant has “continuous and systematic” contacts with the forum state was sufficient under preDaimler authority to establish general personal jurisdiction. Significantly, Defendant makes no
attempt to develop this argument or demonstrate how the exercise of general jurisdiction would have
been proper prior to Daimler.
More importantly, the standard Defendant relies upon was not pronounced by the Supreme
Court in Daimler, but was pronounced more than two years earlier in Goodyear Dunlop Tires
Operations, S.A. v. Brown, – U.S. –, 131 S.Ct. 2846 (2011). And unlike the case law relied upon
by Defendant to support the unavailability of the defense, as discussed below, Daimler did not
announce a new constitutional rule or overrule prior precedent. Compare Holzsager, 646 F.2d at 795
(personal jurisdiction defense not waived where intervening Supreme Court decision declared
unconstitutional state law permitting exercise of personal jurisdiction through quasi-in-rem
attachment of insurance policies issued by resident insurers). Nor has Defendant shown the defense
would have been futile under pre-Daimler precedent. See Bennett v. City of Holyoke, 362 F.3d 1,
7 (1st Cir. 2004) (upholding waiver of defense where party failed to demonstrate it would have been
futile to raise if timely asserted where defense was “fairly available”; absence of precedent directly
on point does not excuse a party’s failure to assert an available defense”); Hawknet, Ltd. v. Overseas
Shipping Agencies, 590 F.3d 87, 92 (2d Cir. 2009) (finding no waiver where defense of lack of
personal jurisdiction, if previously raised, would have been “directly contrary to controlling
precedent” and subsequent decision “overruled that precedent”).
5
In Goodyear, the Supreme Court held that a court may assert general jurisdiction over a
foreign corporation “to hear any and all claims against them when their affiliations with the State
are so ‘continuous and systematic’ as to render them essentially at home in the forum state.”
Goodyear, 131 S.Ct. at 2851. The “paradigm forum for the exercise of general jurisdiction . . . [is]
one in which the corporation is fairly regarded as at home.” Id. at 2853-54. These “paradigm
forums” are the principle place of business and the place of incorporation. Id.
Thus, Defendant’s challenge to general jurisdiction was available well before the
Daimler decision. Indeed, multiple statements by the Court in Daimler demonstrate that the
standard Defendant relies upon was clearly first expressed in Goodyear. See, e.g, Daimler, 134
S.Ct. at 758 n. 11 (“As the Court made plain in Goodyear and repeats here, general jurisdiction
requires affiliations ‘so continuous and systematic’ as to render [the foreign corporation] essentially
at home in the forum State.’”) (emphasis added); id., 134 S.Ct. at 751 (“Instructed by Goodyear, we
conclude Daimler is not ‘at home’ in California . . . .”) (emphasis added); id., 134 S.Ct. at 761
(“[T]he inquiry under Goodyear is not whether a foreign corporation’s in-forum contacts can be said
to be in some sense ‘continuous and systematic,’ it is whether that corporation’s ‘affiliations with
the State are so ‘continuous and systematic’ as to render [it] essentially at home in the forum state.”)
(emphasis added).
To counter waiver, in its reply Defendant cites to the concurrence of Justice Sotomayer in
Daimler in which she states that the Supreme Court has “adopt[ed] a new rule of constitutional law.”
See Defendant’s Reply at p. 9 citing Daimler, 134 S.Ct. at 773 (Sotomayor, J., concurring). But
Defendant injects an overly broad application of the statement made in the concurrence.
Significantly, Justice Sotomayor was not addressing the “at home” standard central to Defendant’s
6
argument here. Instead, she was addressing a holding of the Court not relied upon by Defendant –
the majority’s conclusion that a foreign defendant’s contacts with the forum must be “viewed in
comparison to the company’s nationwide and worldwide activities.” Id. at 770.
Defendant further cites what it contends to be contrary Tenth Circuit precedent that predates
the Goodyear decision to support its contention that the argument concerning general jurisdiction
could not have been raised pre-Daimler.5
But Defendant ignores Tenth Circuit precedent
immediately after Goodyear that clearly relies upon the “at-home” standard announced in Goodyear.
See, e.g., Monge v. RG Petro-Machinery (Group) Co. Ltd., 701 F.3d 598, 620 (10th Cir. 2012); see
also Grynberg v. Ivanhoe Energy, Inc., 490 Fed. Appx. 86, 94-96 (10th Cir. 2012). This precedent
existed in 2012, well before the Supreme Court’s Daimler decision.
Moreover, circuit courts to address general jurisdiction post-Daimler have recognized that
it “reaffirmed” Goodyear. Significantly, these courts have not presumed general jurisdiction is
lacking if the corporation’s place of incorporation or principal place of business is not in the forum
state. Instead, the inquiry the courts continue to make even, post-Daimler, is whether the contacts
with the forum state are so continuous and systematic as to render a defendant “at home” in the
forum state. See, e.g., Sonera Holding B.V. v. Cukurova Holding, A.S., 750 F.3d 221, 222 (2d Cir.
2014) (noting that Daimler “reaffirms that general jurisdiction extends beyond an entity’s state of
incorporation and principal place of business only in the exceptional case where its contacts with
5
For example, Defendant cites Newsome v. Gallacher, 722 F.3d 1257, 1264 (10th Cir. 2013). See Defendant’s
Motion at p. 6. But in Newsome, the court’s analysis focused solely on specific jurisdiction as the plaintiff did not
contend general jurisdiction existed over defendants. Thus, Defendant’s reliance on Newsome is unpersuasive.
7
another forum are so substantial as to render it ‘at home’ in the state.”) (emphasis added);6
Snodgrass v. Berklee College of Music, 559 Fed. Appx. 541, 542 (7th Cir. 2014) (addressing – post
Daimler – whether out-of-state corporation’s affiliations with the forum state were so continuous
and systematic as to render the corporation at home in that state). In addition, at least one district
court has found waiver of the defense of personal jurisdiction where, as here, the defendants
contended that Daimler announced a new rule. See Gilmore v. Palestinian Interim Self-Government
Authority, – F.Supp.2d – , No. 1-853 (GK), 2014 WL 2865538 at * 4 (D.D.C. June 23, 2014) (stating
that defendants were “flat-out wrong that Daimler was the genesis of [the “at home”] rule [and that]
[t]he ‘at home’ standard was unmistakably announced in Goodyear . . . .”).
III.
Conclusion
In sum, therefore, Goodyear announced the “at home” standard relied upon by Defendant.
Because that standard was available more than two years ago, Defendant has not demonstrated the
defense of lack of general personal jurisdiction was “unavailable” until January 2014 when Daimler
was decided. Absent reliance u pon Daimler, Defendant has no other grounds upon which to defeat
waiver of the personal jurisdiction defense.
Because the Court finds Defendant has waived the defense, there is no need to analyze
whether specific personal jurisdiction exists over Defendant. Moreover, Defendant’s request for
6
Defendant relies on another post-Daimler decision from the Second Circuit, In re Roman Catholic Diocese
of Albany, New York, Inc., 745 F.3d 30 (2d Cir. 2014). But there, too, the Second Circuit acknowledged that Daimler
“reaffirmed that, under Goodyear, general jurisdiction might, ‘in an exceptional case,’ extend beyond a corporation’s
state of incorporation and principal place of business to a forum where ‘a corporation’s operations . . . [are] so substantial
and of such a nature as to render the corporation at home in that State.’” Id. at 39 (quoting Daimler, 134 S.Ct. at 761 n.
19). Moreover, in analyzing the issue of general personal jurisdiction, the Second Circuit measured the contacts with
the forum state not only against the “at home” standard expressed in both Goodyear and Daimler, but relied on prior
Supreme Court precedent regarding the exercise of general personal jurisdiction including Perkins v. Benguet
Consolidated Mining Co., 342 U.S. 437 (1952) and Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408
(1984). See id. at 40.
8
leave to amend the answer is denied. Granting such relief would be inconsistent with the Court’s
finding that Defendant has waived the lack of personal jurisdiction defense.
IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss for Lack of Personal
Jurisdiction or, in the Alternative, for Leave to Amend the Answer and Brief in Support [Doc. No.
48] is DENIED.
IT IS SO ORDERED this 10th day of September, 2014.
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?