Alisoglu v. Cent. States Thermo King of Oklahoma, Inc.

• Decision Date: 11 May 2012
• Docket Number: No. 12-cv-10230,12-cv-10230
• Parties: ROY ALISOGLU and NANCY ALISOGLU, Plaintiffs, v. CENTRAL STATES THERMO KING OF OKLAHOMA, INC., an Oklahoma corporation, 4-STAR TRAILERS, INC., an Oklahoma corporation, and OUTLAW CONVERSION, INC., a Texas corporation, Defendants.
• Court: U.S. District Court — Eastern District of Michigan

ROY ALISOGLU and NANCY ALISOGLU, Plaintiffs,

v. CENTRAL STATES THERMO KING OF OKLAHOMA, INC., an Oklahoma corporation, 4-STAR TRAILERS, INC.,an Oklahoma corporation, and OUTLAW CONVERSION, INC., a Texas corporation, Defendants.

No. 12-cv-10230

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

Dated: May 11, 2012

Hon. Gerald E. Rosen

OPINION AND ORDER GRANTING DEFENDANT CENTRAL STATES'

MOTION TO DISMISS AMENDED COMPLAINT FOR LACK OF

PERSONAL JURISDICTION

I. INTRODUCTION

This matter is presently before the Court on the Fed. R. Civ. P. 12(b)(2) Motion to Dismiss Amended Complaint for Lack of Jurisdiction filed by Defendant Central States Thermo King of Oklahoma, Inc. ("Central States"). Plaintiffs have responded to the motion and Central States has replied. Having reviewed and considered the parties' briefs and the record of this matter, the Court has concluded that oral argument is not necessary. Therefore, pursuant to Eastern District of Michigan Local Rule 7.1(f)(2), this matter will be decided "on the briefs." This Opinion and Order sets forth the Court's ruling.

II. RELEVANT FACTUAL BACKGROUND

In July 2010, Plaintiffs Roy and Nancy Alisoglu, Michigan citizens, traveled to Oklahoma City, Oklahoma to purchase a 4-Star horse trailer with living quarters from Defendant Central States, a dealership located in Oklahoma City. The Alisoglus gained knowledge of the trailer from viewing Central States' listing on a third-party marketplace website: www.horsetrailerworld.com. Central States' listings on this site allows viewers to access a website that Central States itself maintains: www.trailersokc.com. Visitors to this website can view pictures and details about the listed trailers. The site also provides information as to whom to contact for price quotes. However, customers are unable to purchase trailers or pay invoices via this website.

Upon viewing Central States' listing of a 4-Star trailer with an Outlaw interior that they were interested in, the Alisoglus contacted Central States via the toll-free telephone number provided in the listing. Following that telephone conversation, a Central States employee emailed the Alisoglus additional pictures and details about the trailer.

The Alisoglus then arranged with the employee to visit the Central States Oklahoma City dealership on Saturday, July 10, 2010, even though the dealer is ordinarily closed for business on weekends. During that July 10, 2010 visit, pursuant to the Alisoglus' request, Central States agreed to install a larger water tank and arranged for Defendant Outlaw Conversion, Inc. ("Outlaw") to install a DirecTV satellite dish on the trailer. The Alisoglus then executed a purchase agreement and made a $40,000 down payment on the trailer.

After executing the purchase agreement, the Alisoglus returned to Michigan. Soon thereafter, Central States called them in order to secure payment of the remaining balance of the purchase price by the end of July so that the dealer could "close out its books." The Plaintiffs, accordingly, mailed Central States a cashier's check from Michigan for the balance of the purchase price on July 25, 2010. Then, in September 2010, the Alisoglus once again drove to Oklahoma to take delivery of the trailer.

On their way back to Michigan, however, Plaintiffs traveled through a storm and noticed that water was beginning to accumulate in the horse area of the trailer. They immediately contacted Central States to report the problem, and an employee at Central States directed them to contact Defendant 4-Star Trailers, Inc. ("4-Star"), the manufacturer of the trailer. The Alisoglus were then directed by 4-Star to contact Triple C Trailer Sales Inc., ("Triple C") in Watervliet, Michigan, the nearest authorized 4-Star dealer and repair center, which was 190 miles from the Alisoglus' home.

Triple C's first attempt to repair the trailer in November 2010 was unsuccessful as the leak continued. The Alisoglus again contacted Central States and were advised by both Central States and 4-Star to return the trailer to Triple C for more repair work. The Alisoglus complied and took the trailer to Triple C a total of seven times, but the problem persisted. In May 2011, Defendant Outlaw, the supplier and installer of the interior of the living quarters, arranged for the transfer of the trailer to its place of business in Stephenville, Texas for repair. Mr. Alisoglu thereafter traveled to Texas to inspect the trailer and was assured that the leak had been repaired. Outlaw then returned the trailer to the Plaintiffs in August 2011, but the trailer continued to leak.

As a result of the failure to repair the leak, the Alisoglus commenced this action against Defendants Central States, 4-Star, and Outlaw on January 18, 2012, alleging that each defendant violated the Magnuson-Moss Warranty Act, as well as Oklahoma state law. See 15 U.S.C. § 2304(a)(4); OK. ST. T. 12A § 2-313. Central States responded with a motion to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2). After Plaintiff filed an amended complaint, Central States filed the instant motion to dismiss the amended complaint.

III. DISCUSSION

A. STANDARDS APPLICABLE TO MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION

Although this matter is before the Court on Defendant Central States' motion to dismiss, Plaintiffs have the burden of establishing that the exercise of jurisdiction over the defendant is proper. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002). Where, as here, there has been no evidentiary hearing regarding personal jurisdiction, the plaintiffs "need only make a prima facie showing of jurisdiction." Id. (quoting Compuserve, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996)). However, it is insufficient for the plaintiffs to merely reassert the allegations contained in their pleadings. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). The plaintiffs must articulate specific facts to show that the court has jurisdiction. Id. The court must then consider all the facts presented in the pleadings and affidavits in a light most favorable to the plaintiffs, and does not weigh any contrary allegations offered by the defendant. Intera Corp v. Henderson, 428 F.3d 605, 614 (6th Cir. 2005).

B. LIMITATIONS ON THE COURT'S EXERCISE OF PERSONAL JURISDICTION OVER A DEFENDANT

Although both the Plaintiffs and Defendant seem to have glossed over this fact, it is worth noting that Plaintiffs brought this action in this Court pursuant to both federal question subject matter jurisdiction and diversity of citizenship. Though this dual basis for subject matter jurisdiction could impact a court's personal jurisdiction analysis, as shown below, in this case, it does not.

A federal court sitting in diversity is limited in its exercise of personal jurisdiction by the state's long-arm statute and the Fourteenth Amendment's Due Process Clause. See Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 888 (6th Cir.2002) ("A federal court's exercise of personal jurisdiction in a diversity of citizenship case must be both (1) authorized by the law of the state in which it sits, and (2) in accordance with the Due Process Clause of the Fourteenth Amendment.") In general, this calls for application of the "minimum contacts" doctrine established by International Shoe Co. v. Washington, 326 U.S. 310 (1945).

Where, however, a federal court's subject matter jurisdiction over a case stems from the existence of a federal question, the personal jurisdiction analysis depends on whether the federal statute in question contains a national service of process provision. The existence of a national service of process provision "confers personal jurisdiction in any federal district court over a defendant with minimum contacts to the United States." Medical Mutual of Ohio v. DeSoto, 248 F.3d 561, 567 (6th Cir. 2001) (quoting UnitedLiberty Lobby Life Ins. Co. v. Ryan, 958 F.2d 1320, 1330 (6th Cir. 1993)). As the Sixth Circuit explained in DeSoto,

[T]he personal jurisdiction requirement restricts judicial power as a matter of individual liberty - the individual's due process right not to be subject to extra-territorial jurisdiction unless he has a sufficient relationship with the state asserting jurisdiction. When, however, a federal court sitting pursuant to federal question jurisdiction exercises personal jurisdiction over a U.S. citizen or resident based on a congressionally authorized nationwide service of process provision, that individual liberty interest is not threatened. In such cases, the individual is not being subject to extra-territorial jurisdiction, because the individual is within the territory of the sovereign - the United States - exercising jurisdiction. In other words, when a federal court exercises jurisdiction pursuant to a national service of process provision, it is exercising jurisdiction for the territory of the United States and the individual liberty concern is whether the individual over which the court is exercising jurisdiction has sufficient minimum contacts with the United States.

248 F.3d at 567-68.

Here, Plaintiffs are asserting violations of the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., as the basis for federal question jurisdiction. The Magnuson-Moss Act, however, does not authorize nationwide service. See Weinstein v. Todd Marine Enterprises, 115 F. Supp. 2d 668, 671 (E.D.Va.2000). The Supreme Court has held that when there is no provision authorizing nationwide service, federal courts must follow Rule 4(k) of the Federal Rules of Civil Procedure, which, inter alia, limits a court's exercise of personal jurisdiction to persons who can be reached by the forum state's long-arm statute. Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 108 (1987).

The end result of Omni is to require a court to apply in federal question cases such as this case where there is no provision authorizing nationwide service...