Dochnal v. Thomson Reuters Corporation (PLR1)
Filing
40
MEMORANDUM OPINION. Signed by District Judge Pamela L Reeves on 10/17/18. (JBR)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF TENNESSEE
MAREK A. DOCHNAL,
Plaintiff,
v.
THOMSON REUTERS CORPORATION
Defendant.
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No. 2:18-CV-00044
REEVES/CORKER
MEMORANDUM OPINION
Plaintiff, Marek A. Dochnal, is a citizen of Poland with no connection to the State
of Tennessee. He has sued defendant, Thomson Reuters Corporation (TRC), a Canadian
corporation, over the alleged practices of a TRC subsidiary Well-Check, a business
managed in London, England. TRC moves to dismiss the complaint on three grounds (1)
lack of personal jurisdiction over TRC, (2) improper venue, and (3) Dochnal’s lack of
standing to bring suit in this court. Because Dochnal fails to plead any facts connecting
his claims to Tennessee, TRC’s motion to dismiss is granted.
I. Background
Dochnal sued TRC in the Eastern District of Tennessee, alleging violations of the
Fair Credit Reporting Act and the Tennessee Consumer Protection Act. Plaintiff alleges
that TRC operates a subscription-only, public records database known as World-Check,
that is used by financial institutions and governments “to combat crime and international
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terrorism.” Dochnal avers his profile on World-Check is harmful to his reputation. For
jurisdictional purposes, Dochnal avers that TRC does business in Washington County,
Tennessee.
Plaintiff is a Polish activist, who resides outside the United States and is a citizen of
a foreign country.
TRC is incorporated in Ontario, Canada, and maintains a place of business in
Toronto, Canada. One of TRC’s many subsidiaries is World-Check, a London-based group
that compiles information about individuals and businesses gathered through various
public sources. World-Check is managed by Reuters Limited, a subsidiary of TRC located
in London, England.
Dochnal’s World-Check profile contains his name, date of birth, place of birth,
citizenship, location, companies, biography, and a summary report. The narrative section
of the profile addresses criminal history, including dates of arrest, convictions, and releases
from detention. All data comes from publicly-available sources and is not generated by
World-Check. World-Check provides cites to publicly available sources for the
information contained therein. World-Check profiles contain a general legal notice that
subscribers should conduct independent checks to verify its profile, and that World-Check
is “not responsible for the content of third party sites or sources.”
According to his World-Check profile, Dochnal’s criminal history includes
convictions for corruption, racketeering, and bribing members of the Polish Parliament.
Dochnal claims that as a result of this information being compiled and provided to
subscribers by World-Check, he has experienced harm to his reputation and economic
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damages. Dochnal further alleges “mysterious lost business opportunities” due to denial
of his “right to open a bank account at several banks in different countries, including the
United States.” Dochnal alleges TRC has violated the Fair Credit Reporting Act as well
as the Tennessee Consumer Protection Act. Dochnal is seeking injunctive relief requiring
all records concerning him be removed from TRC’s databases and reports, as well as
unspecified damages.
III. Analysis
A.
Personal Jurisdiction
TRC asserts the complaint should be dismissed under FRCP 12(b)(2) because the
court has no personal jurisdiction over TRC. As a Canadian-incorporated and Canadianheadquartered company, TRC is not subject to general jurisdiction in Tennessee, nor is
there specific jurisdiction over TRC.
Dochnal bears the burden of demonstrating that personal jurisdiction exists. Youn
v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003). A district court may decide to rule on the
jurisdictional issue upon a full trial record, after an evidentiary hearing, or merely on the
basis of a written record. Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir. 1980). This matter
has been fully briefed by the parties and affidavits and exhibits have been filed. There is
no need for an evidentiary hearing in this matter and the motion will be decided on the
record.
When a court decides the issue on the basis of the written record alone, plaintiff
needs only to make a prima facie case of jurisdiction. To survive a motion to dismiss,
plaintiff needs only to “demonstrate facts which support a finding of jurisdiction.” Id. The
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burden on plaintiff is relatively slight. The court considers the pleadings and affidavits in
the light most favorable to the plaintiff. Any conflicts between facts contained in the
parties’ affidavits must be resolved in the plaintiff’s favor. See Neogen Corp. v. Neo Gen
Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002) (the court does not consider facts
proffered by the defendant that conflict with those proffered by the plaintiff); Air Prods. &
Controls, Inc. v. Safetech Int’l, Inc., 503 F.3d 544, 549 (6th Cir. 2007) (a court disposing of
a Rule 12(b)(2) motion does not weigh the controverting assertions of the party seeking
dismissal). Dismissal under Rule 12(b)(2) is proper only if the specific facts alleged by
plaintiff, taken as a whole, fail to state a prima facie case for personal jurisdiction.
Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 478 (6th Cir. 2003). Thus,
as long as the plaintiff is able to “demonstrate facts which support a finding of jurisdiction,”
the motion to dismiss will be denied, even in the face of controverting evidence presented
by the moving party. Serras v. First Tenn. Bank Nat’l Ass’n, 875 F.2d 1212, 1214 (6th Cir.
1989).
In order for a non-resident defendant to be subject to the jurisdiction of a court, the
defendant must have “certain minimum contacts . . . such that the maintenance of a suit
does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945). A defendant’s minimum contacts with the forum
state may create two types of personal jurisdiction, general or specific. Daimler AG v.
Bauman, 134 S. Ct. 746, 748 (2014).
General jurisdiction over a defendant exists where the defendant’s contacts with the
forum state are “continuous and systematic” such that a defendant should “reasonably
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anticipate being haled into court there.” Helicopteros Nacionales de Columbia, S.A., 466
U.S. 408 U.S. 408, 416 (1984). General jurisdiction allows a defendant to be sued in the
forum state even where the cause of action has no relation to the contacts that the defendant
has made in that state because the defendant is essentially “at home” in the forum state. Id.
A defendant will be found “at home” in the state where the business is incorporated and
the state in which the principal place of business is located. Daimler, 571 U.S. at 139.
Here, while Dochnal asserts that TRC and its subsidiaries operate several services
that are used in Tennessee by a multitude of Tennesseans, TRC is not “at home” in
Tennessee. It is incorporated in Ontario, Canada, and its principal place of business is in
Toronto, Canada. TRC does not have any offices or employees in Tennessee, nor does
TRC own real property, or a bank account in this state. TRC is not licensed to do business
in Tennessee, nor does it have an agent for service of process in Tennessee. Apart from a
general allegation that TRC is doing business in Washington County, Tennessee, the
complaint contains no specific allegations about the nature and extent of any TRC contacts
in the state. Dochnal alleges no facts showing that TRC’s contacts in Tennessee are
sufficient enough to render TRC “at home” in Tennessee.
The general jurisdiction inquiry does not focus solely on the “magnitude of the
defendant’s in-state contacts.” Id. at 139 n. 20. Instead, a corporation’s activities in the
forum state must be weighed against its activities in every other forum, as a “corporation
that operates in many places can scarcely be deemed at home in all of them.” Id. And, as
TRC points out, subsidiary conduct is generally not relevant for purposes of determining
general jurisdiction over the parent company. See Third Nat’l Bank v. WEDGE Grp., Inc.,
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882 F.2d 1087, 1089 (6th Cir. 1989); see also Dean v. Motel 6 Operating L.P., 134 F.3d
1269, 1274 (6th Cir. 1998) (holding a company does not purposefully avail itself merely by
owning all or some of a corporation subject to personal jurisdiction). Accordingly, the
court finds that TRC is not subject to general jurisdiction in Tennessee.
Next, the court will analyze whether specific jurisdiction exists over TRC in this
court. Specific jurisdiction allows a defendant to be sued in the forum state where the
issues of the suit derive from or are connected to the contacts that establish jurisdiction.
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011). The
existence of specific jurisdiction is determined by looking at the relationship among the
defendant, the forum, and the litigation. Keeton v. Hustler Magazine, Inc., 465 U.S. 770,
775 (1984).
For a court to exercise specific jurisdiction that is consistent with
constitutional due process, the defendant’s “suit-related conduct must create a substantial
connection with the forum state.” Walden v. Fiore, 134 S. Ct. 115, 1121 (2014).
The Sixth Circuit has established a three-part test to determine whether the court
may exercise specific jurisdiction over a particular defendant. First, the defendant must
purposefully avail itself of the privilege of acting in the forum state or causing a
consequence in the forum state.
Second, the cause of action must arise from the
defendant’s activities there. Finally, the acts of the defendant or consequences caused by
the defendant must have a substantial enough connection with the forum state to make the
exercise of jurisdiction over defendant reasonable. Southern Machine Co. v. Mohasco
Indus. Inc., 401 F.2d 374, 381 (6th Cir. 1968). Specific jurisdiction will not exist unless all
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three prongs are satisfied. LAK Inc. v. Deer Creek Enters., 885 F.2d 1293, 1303 (6th Cir.
1989).
1. Purposeful Availment
The purposeful availment requirement is considered the most important
requirement. Id. The defendant must have purposefully availed itself of the “privilege of
acting in the forum state or causing a consequence in the forum state.” Id. Requiring that
the defendant take purposeful steps in the forum state ensures that a defendant’s “random,
fortuitous, or attenuated” contacts with the forum state will not subject it to being haled
into court there. Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985). Additionally, the
defendant’s relationship with the forum state must arise out of the contacts that the
defendant itself created with the forum state. Id. The unilateral activity of the plaintiff or
a third party cannot be the basis of exercising personal jurisdiction over the defendant. Id.
The basis for haling a foreign defendant into court must be clearly articulated when
establishing personal jurisdiction. Malone v. Windsor Casino Ltd., 14 Fed. Appx. 634, 636
(6th Cir. 2001).
A defendant purposefully avails itself of the privilege of acting in a state through its
website if the website is interactive to a degree that reveals specifically intended interaction
with residents of the state. Neogen, 282 F.3d at 890. Dochnal lists a variety of web-based
services offered through TRC’s many subsidiaries, but he has failed to list any products or
services that are actually maintained by TRC itself. It is the defendant’s own contacts with
the forum state that give rise to personal jurisdiction; unilateral acts of a third party play no
role in the analysis. Burger King, 471 U.S. at 475. A parent-subsidiary relationship alone
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does not establish personal jurisdiction. See Estate of Thomson ex rel. Estate of Rakestraw
v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 361-63 (6th Cir. 2008). Rather, a parent
company must exert so much control over the subsidiary that the two do not exist as
separate entities but are one and the same. Id. at 362.
The Sixth Circuit considers several factors when determining whether a subsidiary
is merely an alter-ego of the parent company including
(1) sharing the same employees and corporate officers; (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.
Anwar v. Dow Chem. Co., 876 F.3d 841, 849 (6th Cir. 2017). Total ownership and shared
management personnel are not by themselves enough to render a parent company subject
to personal jurisdiction. Id. Dochnal fails to allege any facts that would indicate these
subsidiaries are an alter-ego of TRC. He offers no facts required under Anwar, and instead
asks the court to “look through this disguised corporate web and see that [TRC] is the nerve
center . . . .” The only concrete assertions that Dochnal makes are that TRC operates a
website accessible in Tennessee and uses the same logo and branding materials within
several of its subsidiaries. However, the Sixth Circuit has determined that operating a
website in a state does not in and of itself constitute purposeful availment. Neogen, 282
F.3d at 892. The same has never been held by the Sixth Circuit for using shared branding
materials, and at least one federal district court has explicitly determined that sharing a
brand is not sufficient to create alter-egos. See Tuttle v. Sky Bell Asset Mgmt., 2011 WL
4713233 (N.D.Cal. Oct. 7, 2011). Finally, this alter-ego test requires that there be “an
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element of injustice or fundamental unfairness” if it is not applied. Flynn v. Greg Anthony
Constr. Co., 95 Fed. Appx. 726, 737 (6th Cir. 2003). Dochnal offers no facts to support an
alter-ego theory, or that would indicate the presence of any unfairness in failing to apply
the test. Dochnal will not be denied the opportunity to bring suit in another jurisdiction
and denial of personal jurisdiction in the Eastern District of Tennessee is unlikely to
substantially affect his ability to recover damages. The court finds Dochnal has failed to
meet the purposeful availment requirement to bring this action in the Eastern District of
Tennessee.
2. Arising From
The second criterion under Southern Machine asks whether the plaintiff’s claims
“arise from” the defendant’s contacts with Tennessee. The Sixth Circuit has observed that
the “arising from” prong is met when the operative facts arise from the defendant’s contacts
with the state. Bird v. Parsons, 289 F.3d 865, 875 (6th Cir. 2002). This requirement ensures
that defendants are not lightly made to “submit to the coercive power of a state that may
have little legitimate interest in the claims in question. Bristol-Myers Squibb Co. v.
Superior Court of California, San Francisco Cnty, 137 S.Ct 1773, 1780 (2017). To show
that the alleged harm arose from the defendant’s in-state activity, a plaintiff must
“demonstrate a causal nexus between the defendant’s contacts with the forum state and the
plaintiff’s alleged cause of action.” Beydoun v. Wataniya Rests. Holding, Q.S.C., 768 F.3d
499, 507 (6th Cir. 2014). Mere “but-for causation” is insufficient. Id. Instead, the
plaintiff’s cause of action “must be proximately caused by the defendant’s contacts with
the forum state.” Id. at 507-08.
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Here, Dochnal fails to show that his claims arise from any TRC activity in
Tennessee. He complains of being “denied the right to open a bank account at several
banks in different countries, including the United States.” But he does not allege he was
denied a bank account in Tennessee because of any TRC activity in Tennessee. Dochnal
also complains of being “rejected for participation in business activities based on being a
compliance risk.” But, again, his complaint fails to suggest those business activities arose
in Tennessee and were lost because of any in-state TRC activity. Finally, he alludes
generally to “lost business opportunities based on THOMSON REUTERS publishing
information.”
However, Dochnal does not claim these lost opportunities arose in
Tennessee, nor does he plead any facts connecting those events to any in-state activity by
TRC. Dochnal fails to show a connection between the forum and the specific claims at
issue. When none of the events in the complaint happen in the forum state and none of the
actions taken by the defendant happen in the forum state, the court lacks specific
jurisdiction. Negash v. Devry Univ., 2018 WL 1570625 at *5 (E.D.Mich. March 30, 2018).
In his response, Dochnal states that he was denied credit by a bank in Switzerland.
Dochnal has not alleged any TRC activity in Tennessee; he has only alleged actions by
subsidiaries. His entire argument depends on this court imputing subsidiary action to the
parent company. As discussed above, TRC is not the alter-ego of these subsidiaries, and
corporate ownership alone is insufficient for the purposes of exercising personal
jurisdiction. Dochnal provides no factual support for his claim that the events giving rise
to his alleged harm occurred in Tennessee, and he thus fails to meet the second prong of
the test.
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3. Reasonableness
The third prong of the Southern Machine test requires that the exercise of personal
jurisdiction over the defendant in the forum state must be reasonable. Southern Machine,
401 F.2d at 381. Reasonableness is based on an assessment of (1) the burden on the
defendant, (2) the interests of the forum state, and (3) the plaintiff’s interest in obtaining
relief. Beydoun, 768 F.3d at 508. This requirement exists because “minimum requirements
inherent in the concept of fair play and substantial justice may defeat the reasonableness of
jurisdiction even if the defendant has purposefully engaged in forum activities.” Johnson
v. Sandvik, Inc., 2017 WL 3263465 at *4 (E.D.Mich. Aug. 1, 2017). This factor weighs
against jurisdiction when all the relevant underlying events occur outside the forum state,
the defendant is a foreign corporation, and any discovery would involve the production of
foreign papers and deposition of foreign witnesses. Beydoun, 768 F.3d at 508.
Nothing in Dochnal’s complaint suggests that Tennessee has any interest in
adjudicating this dispute. A Polish national is suing a Canadian corporation for the
activities of a business managed in London, England. Neither Dochnal nor TRC have any
apparent connections with Tennessee. None of the underlying events took place in
Tennessee. World-Check business records and employees are not located in Tennessee.
Jurisdiction is unreasonable when it would impose a heavy burden on a defendant with no
presence in the forum, all of the events underlying the dispute occurred in another forum,
and all of the evidence and witnesses are there as well. Miller v. AXA Winterthur Ins. Co.,
694 F.3d 675, 681 (6th Cir. 2012). Dochnal does nothing more than ask, once again, that
this court impute subsidiary actions to the parent and alleges that Tennessee does have an
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interest in this case since the case involves “ongoing” violations of “federal statutes.” This
argument, however, does not sufficiently show why Tennessee would have a particular
interest in this case.
Moreover, Dochnal has made no showing that his interests in obtaining relief will
be seriously affected by this case being dismissed. Cases that are dismissed for lack of
jurisdiction do not act as an adjudication on the merits. See FRCP 41(b); Intera Corp. v.
Henderson, 428 F.3d 605, 620 (6th Cir. 2005). Dochnal will not be precluded from refiling
his suit in a more appropriate location such as Canada, Poland, or England. Since all of
the relevant events underlying the controversy did not occur in Tennessee and most of the
discovery will necessarily involve the production of foreign legal papers and deposing
foreign witnesses, the court finds exercising jurisdiction over TRC would not be
reasonable.
B. Venue
TRC asserts the complaint should also be dismissed pursuant to FRCP 12(b)(3) for
improper venue. Dochnal argues that venue is proper under 28 U.S.C. § 1391(b)(3), which
provides that a civil action may be brought in any judicial district in which any defendant
is subject to the court’s personal jurisdiction. As discussed above, TRC is not subject to
personal jurisdiction in the Eastern District of Tennessee. Thus, it follows that venue is
improper, as well. See Brent v. Hyundai Capital Am., 2014 WL 7335415 at *5 (W.D.Tenn.
Dec. 19, 2014) (holding that when no defendant is subject to the court’s personal
jurisdiction, the action should be dismissed for lack of venue).
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Congress has given the district courts discretion to transfer a case to any district or
division in which it could have been brought. 28 U.S.C. § 1406(a); see also Reese v. CNH
Am. LLC, 574 F.3d 315, 320 (6th Cir. 2009). The problem here is there is no forum within
the United States that appears to be an appropriate venue for this case. The only harm
Dochnal has specifically alleged is being denied a bank account in Switzerland. General
jurisdiction cannot be obtained anywhere in the United States, specific jurisdiction only
seems appropriate in Poland, Canada, England or Switzerland. Transfer out of the country
is not contemplated under § 1406. Rather, it appears more appropriate to dismiss the case
without prejudice and allow Dochnal to file suit in a more appropriate forum. Although
Dochnal has alleged violations of Tennessee law as well, he “should not be permitted by
means of a transfer to resurrect claims which might be lost due to a complete lack of
diligence in determining the proper forum in the first place.” Stanifer v. Brannan, 564 F.3d
455, 457 (6th Cir. 2009).
C.
Motion to Amend Complaint
Dochnal moves to amend his complaint to add additional plaintiffs, additional
defendants, a claim for unreasonable intrusion upon seclusion under Tennessee common
law, and to certify this case as a class action. Specifically, Dochnal seeks to add as
defendants Reuters Limited, Global World Check, West Publishing Corporation, and
Global World-Check Holdings Ltd. Dochnal seeks to add as plaintiffs Douglas A. Dyer,
Aleksandra Dochnal, and Henry M. Love.
Rule 15(a) of the Federal Rules of Civil Procedure allows for the amendment of
pleadings prior to trial. At a certain point though, a party may amend the complaint “only
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with the opposing party’s written consent or the court’s leave,” which is to be given freely
“when justice so requires.”
FRCP 15(a)(2).
The court has discretion to deny an
opportunity to amend for a variety of reasons, such as “undue delay, bad faith, or dilatory
motive on the part of the movant, repeated failure to cure deficiencies by amendments
previously allowed, undue prejudice to the opposing party by virtue of allowance of the
amendment, and futility of the amendment.” Forman v. Davis, 371 U.S. 178, 182 (1962).
A proposed amendment is considered “futile” when it would not survive a motion to
dismiss. Kreipke v. Wayne State Univ., 807 F.3d 768, 782 (6th Cir. 2015).
First, the proposed amended complaint is futile as to Dochnal. The court has found
that it lacks personal jurisdiction over plaintiff’s claims against TRC. The proposed
amended complaint does not cure this defect. It does not include any allegations supporting
the exercise of general jurisdiction over TRC or the proposed new defendants. The
proposed amended complaint contains no factual allegations that any of the proposed
defendants is incorporated or principally based in Tennessee. Global World-Check, Global
World-Check Holdings, Ltd., and Reuters Ltd. are London-based companies, organized
under the laws of England. West Publishing Corporation is a Minnesota-based company,
incorporated in Minnesota. Nor has Dochnal shown that his alleged injury arose in
Tennessee. Similarly, the claims of the new plaintiffs fail because the proposed amended
complaint fails to allege any facts connecting their claims and any conduct in Tennessee
by a named defendant.
Second, the proposed plaintiffs’ claims also fail for lack of personal jurisdiction
over defendants because the proposed amended complaint fails to allege any connection
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between their claims and any conduct in Tennessee by a named defendant. The proposed
plaintiffs allege “they might be on the Thomson Reuters World Check One list,” and they
“have sent in requests to defendants’ that have not yet been answered.” For jurisdictional
purposes, the proposed amended complaint merely states that “Defendants are and were
doing business in Washington County, Tennessee.” This is insufficient as a matter of law
to confer personal jurisdiction. The proposed amended complaint attaches requests from
the proposed plaintiffs sent by their counsel in Miami, Florida to “World Check” in London
England. Because the proposed plaintiffs’ cause of action does not arise from the activities
of any defendant in Tennessee, this court has no specific jurisdiction.
Because the proposed amended complaint does not cure the defects of the original
complaint, the court finds it would not survive a motion to dismiss. Accordingly, the
motion to amend is denied.
IV. Conclusion
In light of the foregoing discussion, Thomson Reuter’s motion to dismiss [R. 12] is
GRANTED, and Dochnal’s motion to amend complaint [R. 38] is DENIED.
ENTER:
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UNITED STATES DISTRICT JUDGE
UNITED STATES DISTRICT
A S S
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