ABC Phones of N.C., Inc. v. Yahyavi
Decision Date | 22 July 2020 |
Docket Number | No. 5:20-CV-0090-BR,5:20-CV-0090-BR |
Court | U.S. District Court — Eastern District of North Carolina |
Parties | ABC PHONES OF NORTH CAROLINA, INC., d/b/a VICTRA, Plaintiff, v. ALI YAHYAVI, and WIRELESS WORLD, LLC d/b/a EXPERTS CHOICE, Defendants. |
This matter is before the court on Wireless World, LLC d/b/a Experts Choice ("Experts Choice" or "Wireless World"), and Ali Yahyavi's ("Yahyavi") (collectively "defendants") motion to dismiss ABC Phones of North Carolina, Inc., d/b/a Victra's ("Victra") claims. (DE # 25.) Victra filed a response in opposition. (DE # 29.) Thereafter, defendants filed a reply, (DE # 30). Also before the court is Victra's motion for a preliminary injunction, (DE # 19), to which defendants responded, (DE # 22), and Victra replied, (DE # 23). These matters have been fully briefed and are ripe for adjudication.
The statement of facts, taken from the court's previous order, is as follows:
(Order, DE # 24, 1-4 (internal citations omitted).)
Defendants move to dismiss Victra's amended complaint for lack of personal jurisdiction over Experts Choice and failure to state a claim against either defendant.1 (See Defs.' Mem., DE # 26, at 2.)
Defendants contend Victra "cannot establish specific jurisdiction because none of the activity that forms the basis for the action occurred in North Carolina" and "there are no allegations that Experts Choice 'purposefully availed itself'" of business in North Carolina to establish a nexus sufficient for specific personal jurisdiction.2 (Defs.' Mem., DE # 26, at 5-6.) Victra contends Experts Choice "waived any challenge it may have had to personal jurisdiction by failing to present the issue to the court at the first possibility" and by actively participating in the litigation as it filed a notice of removal, response to Victra's motion for a temporary restraining order, and response to Victra's motion for expedited review, before filing this motion. (Pl.'s Resp. Opp'n, DE # 29, at 7.) Even if personal jurisdiction was not waived, Victra contends, "the Court has specific jurisdiction over Experts Choice based on Yahyavi's Agreement with Victra and Experts Choice's tortious interference with the Agreement." (Id. at 9.)
A party waives its personal jurisdiction defense if it does not raise it at the time it files a Rule 12 motion or an answer, whichever is first. Fed. R. Civ. P. 12(h)(1); see e.g., Foster v. Arletty 3 Sarl, 278 F.3d 409, 414 (4th Cir. 2002) (); Bethlehem Steel Corp. v. Devers, 389 F.2d 44, 46 (4th Cir. 1968) ( ); Convergence Techs. (USA), LLC v. Microloops Corp., 711 F. Supp. 2d 626, 632 (E.D. Va. 2010) .
Furthermore, "in some circumstances, the actions of [a] defendant may amount to a legal submission to the jurisdiction of the court, whether voluntary or not." SAS Inst. Inc. v. World Programming Ltd., No. 5:10-CV-25-FL, 2011 WL 322408, at *2 (E.D.N.C. Jan. 28, 2011) (internal quotation marks and citation omitted); see Smith v. Am. Exp., No. CIV.A. 1:13-3014, 2014 WL 1338537, at *3 (S.D.W. Va. Mar. 31, 2014) ("[A] party can be held to have waived a defense listed in Rule 12(h)(1) through conduct, such as extensive participation in the discovery process or other aspects of the litigation of the case even if the literal requirements of Rule 12(h)(1) have been met[.]" (citing 5C Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure § 1391 (3d ed.) (updated Apr. 2020)). In those circumstances, courts consider the degree of defense participation in the litigation, such as "entering an appearance, filing motionsand requesting relief, or participating in hearings or discovery." U.S. to Use of Combustion Sys. Sales, Inc. v. E. Metal Prod. & Fabricators, Inc., 112 F.R.D. 685, 687 (M.D.N.C. 1986) (collecting cases); see Bel-Ray Co. v. Chemrite Ltd., 181 F.3d 435, 443 (3d Cir. 1999) ( ); Wyrough & Loser, Inc. v. Pelmor Labs., Inc., 376 F.2d 543, 547 (3d Cir. 1967) ( ).
Defendants raise a timely personal jurisdiction defense in their first Rule 12(b) motion. Further, in the filings defendants made prior to their Rule 12(b) motion, they specifically preserved the objection to personal jurisdiction over Experts Choice. (See DE # 1, at 2 n.1; DE # 17, at 1 n.1.) Therefore, Experts Choice's participation in the litigation—filing a notice of appearance, a notice of removal, and response to plaintiff's motion for a temporary restraining order with objections to personal jurisdiction before being served—does not constitute waiver by active participation in litigation. See SAS Inst. Inc., 2011 WL 322408, at *2 ( ).
Under Rule 12(b)(2), a defendant "must affirmatively raise a personal jurisdiction challenge, but the plaintiff bears the burden of demonstrating personal jurisdiction at every stage following such a challenge." Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). The plaintiff must establish personal jurisdiction by a preponderance of the evidence but need only make a prima facie showing. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). In considering whether a plaintiff has met this burden, a court may look beyond the complaint to affidavits and exhibits in order to assure itself of personal jurisdiction. Grayson, 816 F.3d at 269. A court must also "construe all relevant pleading allegations in the light mostfavorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of...
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