Babcox Media, Inc. v. TFI Envision, Inc., 5:19-cv-1786

CourtUnited States District Courts. 6th Circuit. United States District Court of Northern District of Ohio
Decision Date07 September 2021
Docket Number5:19-cv-1786



No. 5:19-cv-1786

United States District Court, N.D. Ohio, Eastern Division

September 7, 2021



This matter is before the Court on defendant TFI Envision, Inc.'s (“TFI”) motion to dismiss (Doc. Nos. 37 (Motion) and 37-1 (Memorandum in Support)) the amended complaint of plaintiff Babcox Media, Inc. (“Babcox”) (Doc. No. 17 (Amended Complaint)). Babcox opposed the motion (Doc. No. 39 (Opposition to the Motion)), and TFI filed a reply (Doc. No. 41 (Reply in Support of Motion)).

For the reasons that follow, TFI's motion is denied.

I. Background

Babcox is an Ohio corporation with its principal place of business in Akron, Ohio. It supplies media services in Ohio and elsewhere, including paper and online publications. (Doc. No. 17 ¶ 6.) TFI is an advertising agency and media buyer for clients, including clients who place automotive advertising in media published by Babcox in Ohio. (Id. ¶ 7.) TFI is a Connecticut corporation with its principal place of business in Connecticut. (Id. ¶ 2.) TFI has negotiated and entered into numerous agreements with Babcox between 2015 and 2019 to place advertising for clients both on its own account and jointly with defendants Sean-Patrick Hillman (“Hillman”), Hillstory Media (“Hillstory”), and Hillcorp, LLC (“Hillcorp”) (collectively, the “Hillman defendants” or “Hill”). (Id. ¶ 8.) Hillman is a resident of New York, doing business through Hillstory and Hillcorp. Hillcorp is a Delaware limited liability company with its principal place of business in New York, New York. (See id. ¶¶ 3-4.) Babcox alleges that the amount in controversy between plaintiff and defendants exceeds $75, 000.00 and brings this action pursuant to the Court's diversity subject matter jurisdiction, 28 U.S.C. § 1332(a). (Id. ¶ 5.)

The specific facts that give rise to this action are alleged in the amended complaint as follows. For many years, Babcox provided media services for advertisers such as Standard Motor Products (“SMP”) and Old World Industries (“OWI”), including orders placed between 2015 and 2019 by TFI on its own account and jointly with the Hillman defendants. Babcox did business directly with TFI for years but did not do business with the Hillman defendants until TFI began working in conjunction with them around 2018. (Id. ¶¶ 9-10.)

In 2018, TFI contacted Babcox about placing advertisements in association with the Hillman defendants for advertisers SMP and OWI with the understanding that the defendants would place the advertisement orders, receive payment from the advertisers, and forward the payments to Babcox for the advertising work it performed. (Id. ¶ 11; see id. at 10-17.[1]) Attached to amended complaint are copies of approximately 80 ad orders for SMP and OWI bearing both TFI and Hillstory logos.[2] (Id. ¶ 12.) The orders state that “Hillstory Media will bill the advertiser, and upon receipt of payment due, will remit the amount due to the media vendor [Babcox] upon payment due date.” (Id. ¶ 13; see also id. at 10.) Babcox alleges that it fully performed the media services ordered by TFI and the Hillman defendants and the advertisers paid them for Babcox's work, but neither TFI nor the Hillman defendants forwarded payment to Babcox for its services. (Id. ¶¶ 14-16.) These unpaid orders, totaling at least $113, 106.86, form the basis for Babcox's claim against TFI for breach of contract (count I) and unjust enrichment (count II). (Id. ¶¶ 17-25.)

TFI does not dispute that Babcox was not paid for the advertising orders at issue in this lawsuit and acknowledges that the Hillman defendants “absconded with the money.” (See Doc. No. 37-1 at 5.) But TFI claims that the ads were ordered by Hillstory and TFI did not enter into any contract with Babcox, had no direct dealings with Babcox, and did not purposefully avail itself of the privilege of acting in Ohio. “Beyond working with [the Hillman defendants] for shared clients, being credited for its creative work, and introducing Babcox to [the Hillman defendants], TFI has no connection to this dispute or to Ohio.” (Id.)

On this basis, TFI moves to dismiss the complaint pursuant to both Fed.R.Civ.P. 12(b)(2) and 12(b)(6). TFI contends that the Babcox's claims against it should be dismissed under Rule 12(b)(2) for lack of personal jurisdiction and, in addition, counts I and II for breach of contract and unjust enrichment should be dismissed under Rule 12(b)(6) as to TFI[3] for failure to state a claim.

The Court begins with the threshold issue of personal jurisdiction because without personal jurisdiction over a defendant a court cannot proceed on the merits of the case as to that defendant. See Friedman v. Estate of Presser, 929 F.2d 1151, 1156 (6th Cir. 1991).

II. TFI's Rule 12(b)(2) Motion

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of a defendant where the Court lacks personal jurisdiction over that party. Babcox bears the burden of making a prima facie showing that this Court has personal jurisdiction over TFI. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991).

In support of its Rule 12(b)(2) motion, TFI submits the declaration of Elizabeth Ball, TFI's president and creative director. (Doc. No. 37-2). In the face of a supported motion to dismiss for lack of personal jurisdiction, Babcox may not rest upon its pleadings but must, by affidavit or otherwise, set forth specific evidence supporting personal jurisdiction of this Court over TFI. Theunissen, 935 F.2d at 1458. In opposition to TFI's Rule 12(b)(2) motion (Doc. No. 39), Babcox submits the declarations of Greg Cira, its president (Doc. No. 39-1 at 1-26), and Jay Eskstein, SMP's director of marketing services (id. at 27-32).

When deciding TFI's Rule 12(b)(2) motion the Court may, in its discretion: (1) decide the motion on affidavits alone, (2) permit discovery in aid of deciding the motion, or (3) conduct an evidentiary hearing to resolve any apparent factual questions. Theunissen, 935 F.2d at 1458; see Burnshire Dev., LLC v. Cliffs Reduced Iron Corp., 198 Fed.Appx. 425, 434 (6th Cir. 2006). Having reviewed the parties' briefs and declarations attached thereto, the Court concludes that a hearing will not assist the Court and that TFI's Rule 12(b)(2) motion may be resolved on the submissions. When the Court elects to decide the motion upon the written submissions, it must view the declarations, pleadings and related documentary evidence in the light most favorable to the plaintiff.[4] Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002). Where, as here, a district court decides the issue solely on the basis of written materials and affidavits, “the burden on the plaintiff is relatively slight, . . . and the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal[.]” Air Prods. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th Cir. 2007) (internal quotation marks and citations omitted). A plaintiff can meet this burden by “establishing with reasonable particularity sufficient contacts between [the defendant] and the forum state to support jurisdiction.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002) (internal quotation marks and citation omitted). “Dismissal [is] only proper if all of the specific facts [plaintiff] alleged collectively fail[] to state a prima facie case for jurisdiction under the appropriate standards.” Theunissen, 935 F.2d at 1459; see also Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997).

To assert personal jurisdiction over a defendant, a federal court with subject matter jurisdiction pursuant to 28 U.S.C. § 1332 must find that: (1) defendant is amenable to service of process under the forum state's long-arm statute, and (2) the exercise of personal jurisdiction will not deny defendant due process. See Theunissen, 935 F.2d at 1459; see also Chapman v. Lawson, 89 F.Supp.3d 959, 970 (S.D. Ohio 2015) (“Under Ohio law, personal jurisdiction over nonresident defendants exists only if: (1) Ohio's long-arm statute confers jurisdiction, and (2) the requirements of the federal due process clause are met.”) (emphasis in original) (citations omitted).

Ohio's long-arm statute, Ohio Rev. Code § 2307.382(A), provides for personal jurisdiction over a non-resident if that person's conduct falls within one of the nine bases for jurisdiction listed in the statute. The due process inquiry requires determining “whether the facts of the case demonstrate that the non-resident defendant possesses such minimum contacts with the forum state that the exercise of jurisdiction would comport with ‘traditional notions of fair play and substantial justice.'” Theunissen, 935 F.2d at 1459 (quoting Int'l Shoe Co. v. State of Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)).

B. Analysis

1. Ohio's long arm statute

Babcox contends that this Court has jurisdiction over TFI under Ohio's long arm statute § 2307.382(A)(1). Under that section, the Court “may exercise personal jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's . . . [t]ransacting any business in this state[.]”

Babcox alleges in the complaint and offers two declarations in support of its argument that the advertising orders at issue here and attached to the amended complaint-which bear the logos of both TFI and Hillstory-were entered by Hillstory in an agency relationship with TFI. (See Doc. No. 17 ¶¶ 10-12; id. at 10-17; Doc. No. 39-1 at 1-2 (¶¶ 4 -5); id at 27-28 (¶¶ 5-7)). In support of its allegation that TFI and Hillstory were in an agency/partnership relationship at the time the orders at issue were placed, Babcox attaches the declarations of Greg Cira, its president, and Jay Eckstein,...

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