Santander Consumer USA Inc v. Ryan Motor Corp.

Filing 22

MEMORANDUM OPINION AND ORDER Transferring Case to District of New Jersey. (Ordered by Judge Sam A Lindsay on 9/29/2017) (epm) Modified on 9/29/2017 (epm).

IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
SANTANDER CONSUMER USA, INC.,

Plaintiff,
v.
RYAN MOTOR CORP.,
Defendant.

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Civil Action No. 3:16-CV-2704-L

MEMORANDUM OPINION AND ORDER
Before the court is Defendant’s Motion to Dismiss for Lack or Personal Jurisdiction and
for Improper Venue or, in the Alternative to Transfer Venue, Subject to De[f]endant’s Special
Appearance, Motion to Dismiss for Forum Non Convenience/Motion to Transfer to Venue, filed
on October 28, 2016 (Doc. 6). After careful consideration of the motions, pleadings, record, and
applicable law, the court determines that it lacks personal jurisdiction over Defendant and that
venue is improper in the Northern District of Texas. The court, rather than dismiss for lack of
personal jurisdiction or for improper venue, hereby transfers this action to the District of New
Jersey, pursuant to 28 U.S.C. §§ 110; 1391(a),(b), and (c); 1406(a); and 1631.
I.

Factual and Procedural Background
On July 29, 2016, Santander Consumer USA, Inc. (“Plaintiff” or “Santander”) filed

Plaintiff’s Original Petition (“Plaintiff’s Petition”) in the 44th Judicial District Court of Dallas
County, Texas. On September 22, 2016, Defendant removed on the basis of diversity jurisdiction.
Defendant now moves to dismiss this action for lack of personal jurisdiction or, in the alternative,
to transfer the case to the United States District Court for the District of New Jersey.

Memorandum Opinion and Order - Page 1

In Plaintiff’s Petition, Santander asserts a breach of contract claim against Ryan Motor
Corp. (“Defendant” or “Ryan”). Plaintiff is a Illinois corporation with its principal place of
business in Dallas, Texas, and Defendant is a New Jersey corporation with its principal place of
business in East Brunswick, New Jersey. Pl.’s Original Pet. ¶¶ 2-3. The parties entered into a
Non-Recourse Dealer Retail Agreement (the “Agreement”) governing the purchase of retail
installment sales contracts for automobiles. Id. ¶ 7. Plaintiff is in the business of buying
automobile retail installment sales contracts from automobiles dealers such as Defendant. Id. ¶ 6
Plaintiff alleges that pursuant to the Agreement, Defendant assigned thirty-five separate retail
installment contracts to Plaintiff in which Defendant misrepresented the customer’s income,
employment, credit information, and other customer identifying information. Id. ¶ 8. Plaintiff
alleges that these misrepresentations are in violations of paragraph 9(a) of the Agreement. Id.
Plaintiff further maintains various other violations of the Agreement, including failure to tender
payment for “Additional Products and Services,” pursuant to paragraph 4(C) of the Agreement,
and failure to pay the value of “reserve amounts.” Id. ¶¶ 8-11.
Ryan contends that it did not purposely establish the requisite minimum contacts needed
for the court to establish personal jurisdiction over it and that it has virtually no contacts in the
State of Texas. Specifically, Ryan contends it: (1) has never been a resident of Texas; (2) has
never maintained an agent for service in Texas; and (3) has never engaged in business in Texas.
Defendant further contends that the Agreement was not negotiated or signed in Texas, and that the
Agreement does not require any contractual obligations to be performed in Texas.

Memorandum Opinion and Order - Page 2

II.

Legal Standard for Rule 12(b)(2) - Lack of Personal Jurisdiction
On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of

establishing a prima facie case for the court’s jurisdiction over a nonresident defendant. See Ham
v. La Cienega Music Co., 4 F.3d 413, 415 (5th Cir. 1993); Stuart v. Spademan, 772 F.2d 1185,
1192 (5th Cir. 1985). When the court rules on the motion without an evidentiary hearing, the
plaintiff may establish personal jurisdiction by presenting a prima facie case that personal
jurisdiction is proper, id.; proof by a preponderance of the evidence is not required. International
Truck and Engine Corp. v. Quintana, 259 F. Supp. 2d 553, 556 (N.D. Tex. 2003) (citing WNS, Inc.
v. Farrow, 884 F.2d 200, 203 (5th Cir. 1989)). The court may determine the jurisdictional issue
by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the
recognized methods of discovery. Stuart, 772 F.2d at 1192. Uncontroverted allegations in a
plaintiff’s complaint must be taken as true, and conflicts between the facts contained in the parties’
affidavits must be resolved in favor of the plaintiff. Bullion v. Gillespie, 895 F.2d 213, 217 (5th
Cir. 1990). After a plaintiff makes his prima facie case, the burden then shifts to the defendant to
present “a compelling case that the presence of some other consideration would render jurisdiction
unreasonable.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
A federal court has jurisdiction over a nonresident defendant if the state long-arm statute
confers personal jurisdiction over that defendant, and if the exercise of jurisdiction is consistent
with due process under the United States Constitution. Ruston Gas Turbines, Inc. v. Donaldson
Co., Inc., 9 F.3d 415, 418 (5th Cir. 1993). Because the Texas long-arm statute extends to the limits
of federal due process, Schlobohm v. Schapiro, 784 S.W.2d 355, 357 (Tex. 1990), the court must
determine whether (1) the defendants have established “minimum contacts” with the forum state;
and, (2) whether the exercise of personal jurisdiction over the defendants would offend “traditional
Memorandum Opinion and Order - Page 3

notions of fair play and substantial justice.” Ruston Gas, 9 F.3d at 418 (citing International Shoe
Co. v. Washington, 326 U.S. 310, 316 (1945)).
The “minimum contacts” prong is satisfied when a defendant “purposefully avails itself of
the privilege of conducting activities within the forum state, thus invoking the benefits and
protections of its laws.” Burger King, 471 U.S. at 475. The nonresident defendant’s availment
must be such that the defendant “should reasonably anticipate being haled into court” in the forum
state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). This test “ensures
that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or
‘attenuated’ contacts, or of the ‘unilateral activity of another party or a third person.’” Burger
King, 471 U.S. at 475 (citations omitted). The “minimum contacts” prong of the inquiry may be
subdivided into contacts that give rise to “specific” personal jurisdiction and those that give rise to
“general” personal jurisdiction. Marathon Oil Co. v. A.G. Ruhrgas, 182 F.3d 291, 295 (5th Cir.
1999). Specific jurisdiction is only appropriate when the nonresident defendant’s contacts with
the forum state arise from, or are directly related to, the cause of action. Helicopteros Nacionales
de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984). The exercise of general personal
jurisdiction is proper when the nonresident defendant’s contacts with the forum state, even if
unrelated to the cause of action, are continuous, systematic, and substantial. Id. at 414 n.9.
In evaluating the second prong of the due process test, the court must examine a number
of factors in order to determine fairness and reasonableness, including: (1) the defendant’s burden;
(2) the forum state’s interests; (3) the plaintiff’s interest in convenient and effective relief; (4) the
judicial system’s interest in efficient resolution of controversies; and (5) the state’s shared interest
in furthering social policies. Asahi Metals Indus. Co. v. Superior Court, 480 U.S. 102, 112 (1987).
As noted above, “once minimum contacts are established, a defendant must present ‘a compelling
Memorandum Opinion and Order - Page 4

case that the presence of some consideration would render jurisdiction unreasonable.’” Eviro
Petroleum, Inc. v. Kondur Petroleum, 79 F. Supp. 2d 720, 725 (S.D. Tex. 1999) (quoting Burger
King, 471 U.S. at 277). In fact, “[o]nly in rare cases . . . will the exercise of jurisdiction not
comport with fair play and substantial justice when the nonresident defendant has purposefully
established minimum contacts with the forum state.” Id.

(quoting Guardian Royal Exch.

Assurance, Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 231 (Tex. 1991)).
III.

Analysis
The court notes that a number of cases have been filed in this district under remarkably

similar facts or virtually identical facts in which the judges transferred the cases to the districts in
which the cases could have been brought originally. These cases are Santander Consumer USA,
Inc. v. Shults Ford, Inc., 3:11-CV-614-L; Santander Consumer USA, Inc. f/k/a Drive Financial
Services v. Anchor Motor Co., Inc., 3:13-CV-154-N; Santander Consumer USA Inc. v. Union
Pontiac-GMC Inc., 3:16-CV-2420-M; Santander Consumer USA, Inc. v. Mayors Auto GroupWoodside, LLC, 3:16-CV-2549-L. Moreover, the Shults Ford, Inc. and Mayors Auto GroupWoodside, LLC cases were transferred by the undersigned. In the interest of judicial economy,
and in light of the similarity of facts and issues raised, rather than engage in a detailed and erudite
discussion of the facts and law, the court accepts the reasoning and analysis set forth in these cases
as sound and applicable to this action.
IV.

Conclusion
For the reasons herein stated, the court determines that Defendant does not have sufficient

contacts with the State of Texas to establish general or specific jurisdiction over it and that venue
is improper in the Northern District of Texas. While Ryan is entitled to dismissal of this action,
the court concludes that it is in the interest of justice to transfer this action to a district in which it
Memorandum Opinion and Order - Page 5

could have been brought originally. Accordingly, the court, rather than dismiss for lack of personal
jurisdiction and improper venue, hereby transfers this action to the District of New Jersey
pursuant to 28 U.S.C. §§ 110; 1391(a),(b), and (c); 1406(a); and 1631. The clerk of the court shall
effect this transfer in accordance with the usual procedure.
It is so ordered this 29th day of September, 2017.

_________________________________
Sam A. Lindsay
United States District Judge

Memorandum Opinion and Order - Page 6