Miller v. Cobra Enterprises of Utah, Inc. et al
Filing
117
MEMORANDUM OPINION AND ORDER denying without prejudice defendant's 109 MOTION to Dismiss; directing parties to complete limited jurisdictional discovery within 60 days of entry of this Order; directing parties to conduct limited discovery on the nature and extent of Bearman's contacts with West Virginia; discovery shall be limited to the personal jurisdiction issue only; the Court will hold an evidentiary hearing on the issue of personal jurisdiction on 6/30/2022, at 10:30 a.m. Signed by Judge Thomas E. Johnston on 4/21/2022. (cc: counsel of record; any unrepresented party) (tmr)
Case 2:18-cv-00269 Document 117 Filed 04/21/22 Page 1 of 7 PageID #: 963
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF WEST VIRGINIA
CHARLESTON DIVISION
FRANK KENNETH MILLER, JR.,
Plaintiff,
v.
CIVIL ACTION NO. 2:18-cv-00269
BEARMAN INDUSTRIES, LLC,
Defendant.
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant Bearman Industries, LLC’s (“Bearman”) Motion to
Dismiss. (ECF No. 109.) For the reasons discussed more fully below, Bearman’s motion is
DENIED WITHOUT PREJUDICE.
I.
BACKGROUND
Plaintiff instituted a products liability action against Cobra Enterprises of Utah, Inc.
(“Cobra”) on February 6, 2018. (ECF No. 1.) On July 11, 2019, this Court granted Default
Judgment for Plaintiff’s claims against Cobra, (ECF No. 66), and, on January 24, 2020, entered a
Judgment Order against Cobra, (ECF No. 80-81). On September 3, 2020, this Court entered an
order granting Plaintiff’s Motion to Reopen this Case and file a Third Amended Complaint against
Bearman. (ECF No. 86.) The Third Amended Complaint alleges that, on July 11, 2018, Mr. Jared
Yeates (“Yeates”)—the owner of Cobra—created Bearman and “incur[ed] a transfer of assets from
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Cobra needed to satisfy the [January 24, 2020] judgment” in anticipation of Cobra’s bankruptcy,
which was filed on February 24, 2020. (See ECF No. 87 at ¶¶ 11, 20.)
On November 30, 2021, Bearman filed the pending motion to dismiss for lack of personal
jurisdiction and, in the alternative, for failure to state a claim upon which relief can be granted.
(ECF No. 109.) Plaintiff timely responded, (ECF No. 115), and Bearman timely replied, (ECF
No. 116). As such, the motion is fully briefed and ripe for adjudication.
II.
LEGAL STANDARD
A. Federal Rule of Civil Procedure 12(b)(2)
When a district court considers a motion to dismiss under Rule 12(b)(2) for lack of personal
jurisdiction without an evidentiary hearing, “the party asserting jurisdiction has the burden of
establishing a prima facie case of jurisdiction.” Hawkins v. i-TV Digitalis Tavkozlesi zrt., 935 F.3d
211, 226 (4th Cir. 2019). This prima facie analysis resembles the plausibility analysis under Rule
12(b)(6). Id. “[T]he district court must determine whether the facts proffered by the party asserting
jurisdiction—assuming they are true—make out a case of personal jurisdiction over the party
challenging jurisdiction.” Id. (citing Sneha Media & Ent., LLC v. Associated Broad. Co. P Ltd.,
911 F.3d 192, 196-97 (4th Cir. 2018)).
In considering a challenge to personal jurisdiction at the pleadings stage, a district court
may consider affidavits and other exhibits submitted by the parties. UMG Recordings, Inc. v.
Kurbanov, 963 F.3d 344, 350 (4th Cir. 2020). The allegations of the complaint are taken as true
only if they are not controverted by evidence from the defendant. See Wolf v. Richmond Cnty.
Hosp. Auth., 745 F.2d 904, 908 (4th Cir. 1984). Where both sides present evidence about personal
jurisdiction, factual conflicts must be resolved in favor of the party asserting jurisdiction for the
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limited purpose of determining whether a prima facie showing has been made. Mylan Lab’ys, Inc.
v. Akzo, N.V., 2 F.3d 56, 62 (4th Cir. 1993); Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989);
Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 560 (4th Cir. 2014) (directing courts to
also “draw all reasonable inferences in favor of the party asserting jurisdiction”).
B. Limited Jurisdictional Discovery
“The ‘broad discretion’ entrusted to district courts in their resolution of discovery problems
applies to jurisdictional discovery.”
Sportrust Assocs. Int’l, Inc. v. The Sports Corp., 304
F.Supp.2d 789, 794 (E.D. Va. 2004) (citing Carefirst of Md., Inc., v. Carefirst Pregnancy Centers,
Inc., 334 F.3d 390, 402 (4th Cir. 2003)). However, when a plaintiff offers only speculation or
“conclusory assertions” about contacts with a forum state, a court is within its discretion in denying
jurisdictional discovery. ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 716 n.3
(4th Cir. 2002). Similarly, “[t]he court does not abuse its discretion to deny jurisdictional
discovery when the plaintiff raises only ‘bare allegations’ to dispute [a] defendant’s affidavits
denying jurisdictional acts or contacts.”
The Sports Corp., 304 F.Supp.2d at 794 (citing
McLaughlin v. McPhail, 707 F.2d 800, 807 (4th Cir. 1983)). “Thus, the converse follows that
jurisdictional discovery may be appropriate where a plaintiff provides more than bare allegations
to dispute a defendant’s denial of personal jurisdiction.” Weirton Area Water Bd. v. 3M Co., No.
5:20-CV-102, 2020 WL 8184647, at *3 (N.D. W. Va. Nov. 20, 2020) (internal citation omitted)
(“This Court does not believe that permitting jurisdictional discovery would amount to nothing
more than a ‘fishing expedition.’”).
III.
DISCUSSION
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“Federal courts ordinarily follow state law in determining the bounds of their jurisdiction
over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014) (citing Fed. R. Civ. P.
4(k)(1)(A)). This decision involves two steps: (1) assessing whether the forum state’s long-arm
statute authorizes jurisdiction and (2) ensuring that such “application of the long-arm statute is
consistent with the due process clause of the Fourteenth Amendment.” UMG Recordings, Inc. v.
Kurbanov, 963 F.3d 344, 350 (4th Cir. 2020). The long-arm statutes of many states are coextensive
with due process, collapsing the two-prong test into one inquiry. Id. at 350-51. But the Supreme
Court of Appeals of West Virginia has held that West Virginia’s long-arm statutes are not
coextensive with due process and, thus, courts “must use [the] two-step approach.” Syl. Pt. 3,
State ex rel. Ford Motor Co. v. McGraw, 788 S.E.2d 319 (W. Va. 2016); but see In re Celotex
Corp., 124 F.3d 619, 627 (4th Cir. 1997) (citing Pittsburgh Terminal Corp. v. Mid Allegheny
Corp., 831 F.2d 522, 525 (4th Cir. 1987)) (holding that West Virginia’s long-arm statutes are
coextensive with due process).1
In this case, Plaintiff asserts that Bearman availed itself to the jurisdiction of this Court by
(1) transacting business in West Virginia; (2) contracting to supply products in West Virginia; and
(3) causing injuries to persons in West Virginia, including Plaintiff. (ECF No. 87 at 2, ¶ 4.)
Specifically, Plaintiff alleges that Bearman is “in the business of manufacturing, re-manufacturing,
modifying and/or altering, fabricating, designing, packaging, shipping, selling, servicing, and/or
The Court notes that, while the Fourth Circuit has found that West Virginia’s long-arm statutes are coextensive with
the due process clause, it has also held that federal courts must interpret a state’s long-arm statute in the same manner
as the state supreme court. See Shealy v. Challenger Mfg. Co., 304 F.2d 102, 104 (4th Cir. 1962) (“We, of course, are
bound by South Carolina’s interpretation of her service of process statutes.”); Snyder v. Hampton Indus., Inc., 521 F.
Supp. 130 (D. Md. 1981), aff’d, 758 F.2d 649 (4th Cir. 1985) (“This court is bound by the decisions of the Court of
Appeals of Maryland as to whether a particular subsection will reach certain conduct” in the Maryland long-arm
statute); see also Hortonville Joint Sch. Dist. No. 1 v. Hortonville Educ. Ass’n, 426 U.S. 482, 488 (1976) (explaining
that federal courts are “bound to accept the interpretation of [state] law by the highest court of the State”). Thus, to
be sure, the Court will conduct the two-step inquiry.
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distributing firearms in the State of West Virginia, including but not limited to a .38 Cal Derringer
firearm.” (Id. at 1, ¶ 2.) Both jurisdictional analyses under the West Virginia long-arm statutes2
and the Due Process Clause3 hinge on this factual assertion.
Bearman’s motion to dismiss contends that Plaintiff’s allegations “are contrary to the
record,” and cites to Yeates’s affidavit previously submitted with Bearman’s Motion to Set Aside
Default. (ECF No. 110 at 10.) This affidavit claims, inter alia, that Bearman “does not and has
never regularly conducted business in West Virginia” and “has no business contracts or agreements
for services performed in West Virginia or involving West Virginia-domiciled parties.” (ECF No.
103-1.) Plaintiff counters that Yeates’s affidavit testimony “is false,” (ECF No. 115 at 6), and
submitted an affidavit from Mr. Tony Kirkwood, claiming that he purchased a Bearman firearm
in West Virginia, as well as five other exhibits that purport to show that Bearman firearms can be
purchased in West Virginia,4 (see ECF No. 115-1, 115-2, 115-3, 115-4, 115-5, 115-6). In its reply,
2
West Virginia Code § 56-3-33; W. Va. Code § 31D-15-1501(d).
To satisfy due process, “a defendant must have sufficient ‘minimum contacts’ with the forum state such that ‘the
maintenance of the suit does not offend traditional notions of fair play and substantial justice.’” Consulting Eng’rs
Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945)). Courts may evaluate minimum contacts through the prism of general or specific jurisdiction. See Perdue
Foods LLC v. BRF S.A., 814 F.3d 185, 188-89 (4th Cir. 2016). Plaintiff only contends that this Court has specific
jurisdiction over the claims against Bearman, (ECF No. 115 at 5), which exists when a nonresident defendant “has
‘purposefully directed’ his activities at residents of the forum, and the litigation results from alleged injuries that ‘arise
out of or relate to’ those activities.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985) (quoting Keeton
v. Hustler Mag., Inc., 465 U.S. 770, 774 (1984), and Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 414 (1984)).
4
Plaintiff also argues that “Jared Yeates, the owner of Bearman, is the former owner Cobra, and was involved in
litigation before this very Court before he created Bearman,” (ECF No. 115 at 6), and that “if the Court were to accept
[certain arguments] by Bearman, it would stand that this Court never had jurisdiction over Cobra,” (id. at 8). However,
despite the nexus between Yeates, Cobra, and Bearman, the Court again notes that they are three distinct entities, as
both parties have acknowledged, (ECF Nos. 110 at 4; 115 at 16), and Plaintiff has not even attempted to pierce the
corporate veil, see Southern States Cooperative, Inc. v. Dailey, 280 S.E.2d 821 (W. Va. 1981) (explaining that the
doctrine of “piercing the corporate veil” allows courts, in certain circumstances, to disregard the corporate form and
“look beyond the bare legal relationship of the parties to prevent the corporate form from being used to perpetrate
injustice, defeat public convenience or justify wrong”); see also Syl. Pt. 2, Norfolk Southern Railway Company v.
Maynard, 437 S.E.2d 277 (W. Va. 1993) (providing eleven factors for courts to consider for jurisdictional veil
piercing, as opposed to substantive veil piercing).
3
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Bearman offered another affidavit by Yeates, averring, in part, that Bearman sells its firearms
“directly to [five] distributors only,” none of which are located in West Virginia, and “does not
discuss, cooperate with, or direct any of the distributors regarding where the distributors sell the
firearms.” (ECF No. 116-1 at 1-2.) Yeates also states that Bearman does have any “business
relationship with any person or business in West Virginia,” and “[t]o the extent distributors or
retailers market firearms by identifying them as being made by ‘Bearman,’ Bearman does not
control or direct such marketing[.]” (Id. at 2.)
Ultimately, the parties’ briefings and minimal substantive evidence are of little help in
determining whether Plaintiff has made a prima facie showing of personal jurisdiction. While
Plaintiff’s allegations are close to “bare” and “conclusory,” see The Sports Corp., 304 F.Supp.2d
at 794; ALS Scan, Inc, 293 F.3d at 716 n.3, Plaintiff must only establish a prima facie case of
jurisdiction at this stage, see Hawkins, 935 F.3d at 226. Similarly, although Bearman’s evidence
seems to undermine Plaintiff’s evidence that Bearman’s firearms are being marketed and available
for sale in West Virginia, factual conflicts must be resolved Plaintiff’s favor. See Mylan Labs., 2
F.3d at 62; see also Combs, 886 F.2d at 676. Further, based on the facts and procedural posture
of this case, the Court does not find that personal jurisdiction over Bearman is “speculative,” ALS
Scan, Inc, 293 F.3d at 716 n.3, or that jurisdictional discovery would be a “fishing expedition,”
3M Co., 2020 WL 8184647, at *3. Therefore, in its broad discretion, the Court finds it appropriate
to permit a period of time for the parties to conduct limited jurisdictional discovery.
IV.
CONCLUSION
For the foregoing reasons, this Court DENIES WITHOUT PREJUDICE Bearman’s
Motion to Dismiss. (ECF No. 109.) The Court ORDERS the parties to complete limited
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jurisdictional discovery within sixty (60) days of entry of this Order. The parties are hereby
DIRECTED to conduct limited discovery on the nature and extent of Bearman’s contacts with
West Virginia. Discovery shall be limited to the personal jurisdiction issue only.
Further, the Court will hold an evidentiary hearing on the issue of personal jurisdiction on
June 30, 2022, at 10:30 a.m.
IT IS SO ORDERED.
The Court DIRECTS the Clerk to send a copy of this Order to counsel of record and any
unrepresented party.
ENTER:
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April 21, 2022
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