134 F.3d 1269 (6th Cir. 1998), 96-6435, Dean v. Motel 6 Operating L.P.

Docket Nº96-6435.
Citation134 F.3d 1269
Party NameLisa DEAN, Plaintiff-Appellant, v. MOTEL 6 OPERATING L.P.; Motel 6 G.P., Inc.; Accor North America Corporation; and Accor S.A., Defendants-Appellees.
Case DateJanuary 27, 1998
CourtUnited States Courts of Appeals, Court of Appeals for the Sixth Circuit

Page 1269

134 F.3d 1269 (6th Cir. 1998)

Lisa DEAN, Plaintiff-Appellant,

v.

MOTEL 6 OPERATING L.P.; Motel 6 G.P., Inc.; Accor North

America Corporation; and Accor S.A., Defendants-Appellees.

No. 96-6435.

United States Court of Appeals, Sixth Circuit

January 27, 1998

Argued Dec. 1, 1997.

Page 1270

[Copyrighted Material Omitted]

Page 1271

William R. Garmer (argued and briefed), Savage, Garmer & Elliott, Lexington, KY, for Plaintiff-Appellant.

C. Mitchell Brown (argued and briefed), Joel H. Smith (briefed), Christopher J. Daniels, Nelson, Mullins, Riley & Scarborough, Columbia, SC, Ronald L. Green, Gregory K. Jenkins (briefed), Michael J. Cox, Boehl, Stopher & Graves, Lexington, KY, Thomas M. Cooper, Landrum & Shouse, Lexington, KY, for Defendants-Appellees.

Before: BOGGS and MOORE, Circuit Judges; and DOWD, [*] District Judge.

OPINION

BOGGS, Circuit Judge.

Lisa Dean appeals the district court's grant of summary judgment, which was based on lack of personal jurisdiction. We affirm for reasons, discussed below, that differ from those used by the district court. We therefore take this opportunity to set forth the processes and standards that the district court should have used to determine personal jurisdiction. This inquiry should have focused primarily on whether a controlling minority shareholder actually "purposefully availed" itself of activities in the forum state. Additionally, though it reached the proper result, the district court's analysis should have been more deferential to the plaintiff, given the absence of an evidentiary hearing.

I

Dean worked at the Motel 6 in Richmond, Kentucky, where on May 5, 1993 she was sexually assaulted by a guest of the motel. She sued Motel 6 Operating, Motel 6 G.P., Accor North America, and Accor, which are successive links in a corporate ownership chain. The suit, in diversity, alleged that the defendants "negligently, carelessly, and recklessly supervised, maintained, and otherwise established policies causing the unsafe operation and management of the premises." In the meantime, Dean obtained Kentucky workers' compensation benefits.

Accor, a French joint stock company, moved to dismiss under FED.R.CIV.P. 12(b)(2) and (6) on the grounds that the court lacked personal jurisdiction. The district court denied the motion because there was insufficient evidence in the record from which to make a determination of jurisdiction. Discovery proceeded on the issues of jurisdiction, on the exclusivity of Kentucky's workers' compensation scheme, and on the possible liability of parent corporations notwithstanding that exclusivity, under Boggs v. Blue Diamond Coal Co., 590 F.2d 655 (6th Cir.), cert. denied, 444 U.S. 836, 100 S.Ct. 71, 62 L.Ed.2d 47 (1979).

All of the defendants moved for summary judgment on the exclusivity issue. Accor North America and Accor also moved for summary judgment for failure to state a claim and for lack of personal jurisdiction. The district court granted the motions, dismissing all of the defendants from the case, and holding that Accor lacked sufficient contacts with Kentucky to warrant personal jurisdiction. Dean filed this timely appeal.

II

The only questions presented on appeal are (1) whether the district court properly granted summary judgment for Accor for lack of personal jurisdiction; and (2) whether the district court improperly limited discovery and prejudiced the jurisdiction determination against Dean. Dean does not challenge the dismissal of the other defendants.

A

The procedure for determining jurisdiction, and the standard of review on appeal, are clearly defined in this circuit:

The case law establishes a settled procedural scheme to guide trial courts in the

Page 1272

exercise of this discretion. If it decides that the motion can be ruled on before trial, the court may determine the motion on the basis of affidavits alone; or it may permit discovery in aid of the motion; or it may conduct an evidentiary hearing on the merits of the motion.

Serras v. First Tennessee Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989) (quotation marks omitted).

Ordinarily, the plaintiff must prove jurisdiction by a preponderance of the evidence. Ibid. That standard does not apply in this case, however, because (although there was discovery) there was no evidentiary hearing on the jurisdiction question. The lack of such a hearing mandates a specific standard for weighing the evidence:

When ... a district court rules on a jurisdictional motion to dismiss ... without conducting an evidentiary hearing, the court must consider the pleadings and affidavits in a light most favorable to the plaintiff.... To defeat such a motion, [the plaintiff] need only make a prima facie showing of jurisdiction.

Furthermore, a court ... does not weigh the controverting assertions of the party seeking dismissal....

CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996) (emphasis, citations, and quotation marks omitted); see Nationwide Mutual Ins. Co. v. Tryg Int'l Ins. Co., 91 F.3d 790, 792-93 (6th Cir.1996) (favoring interpretation expressed at Conti v. Pneumatic Prods. Corp., 977 F.2d 978, 987 (6th Cir.1992) (Boggs, J., dissenting)); Serras, 875 F.2d at 1214.

We have explained elsewhere why this relatively light standard for a plaintiff in this situation is appropriate: "Any other rule would empower a defendant to defeat personal jurisdiction merely by filing a written affidavit contradicting jurisdictional facts alleged by a plaintiff." Serras, 875 F.2d at 1214. Although at first glance this appears to be a lopsided standard, the defendant has adequate recourse against a plaintiff who "merely [files] a written affidavit [asserting] jurisdictional facts":

First, a defendant who alleges facts that would defeat the court's personal jurisdiction can invoke the court's discretion to order a pretrial evidentiary hearing on those facts. If the written submissions raise disputed issues of fact or seem to require determinations of credibility, the court retains the power to order an evidentiary hearing, and to order discovery of a scope broad enough to prepare the parties for that hearing. At this stage, the burden on the party asserting jurisdiction quite properly increases. She must now establish that jurisdiction exists by the same standard that would obtain if the matter were deferred to trial: the preponderance of the evidence.

Ibid. (citations omitted). Furthermore, Accor can raise jurisdictional arguments during the trial as well. It is not as if this early determination, with the burden on the plaintiff so low, is the last word on jurisdiction. See Conti, 977 F.2d at 991 (Boggs, J., dissenting).

As a final consideration, we would not use this standard if the reason for not having an evidentiary hearing was that there was no "real dispute" as to the facts or to the extent of discovery. International Technologies Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 391 (6th Cir.1997); Conti, 977 F.2d at 980. If there was no such dispute, it would be a waste of resources to conduct an evidentiary hearing, but we would not prejudice defendants because of this desire for efficiency. In such cases, plaintiffs face the same burden as they would if there had been an evidentiary hearing: proof of jurisdiction by a preponderance of the evidence. In this case, however, Dean contests the denial to her of certain discovery, and the facts are in dispute, so this exception does not apply.

To summarize, then, the district court in this case should have required Dean only to make a prima facie showing of personal jurisdiction. The district court should have viewed the evidence in the light most favorable to Dean, and it should not have considered any controverting evidence submitted by Accor.

B

Unfortunately, the district court did not follow these standards. The only evidentiary

Page 1273

standard it cited was the regular summary judgment standard, and it expressly credited evidence submitted by Accor. It did this despite the existence of factual and discovery disputes.

The main disputed jurisdictional fact in this case is the level of control exercised by Accor over Motel 6 Operating. Indeed, Dean and the district court largely limited their analysis to this question, even though an alleged parent's control over a subsidiary is merely one factor of many to be considered. See Third Nat'l Bank in Nashville v. WEDGE Group Inc., 882 F.2d 1087, 1090 n. 1 (6th Cir.1989), cert. denied, 493 U.S. 1058, 110 S.Ct. 870, 107 L.Ed.2d 953 (1990); Velandra v. Regie Nationale des Usines Renault, 336 F.2d 292, 296 (6th Cir.1964).

Dean argues that Accor controlled the operations of the Richmond Motel 6; Accor counters that it is merely an investor. Accor submitted an affidavit from Sven Boinet, perfunctorily but thoroughly denying any contacts between Accor and Kentucky. Dean, by contrast, notes deposition testimony in which Boinet is identified as "the...

To continue reading

FREE SIGN UP