Ford v. Rdi/Caesars Riverboat Casino, LLC

• Decision Date: 17 August 2007
• Docket Number: Civil Action No. 3:06CV-243-H.
• Citation: 503 F.Supp.2d 839
• Parties: John FORD, Ancillary Administrator of the Estate of Charles M. Jayne, Deceased, Plaintiff v. RDI/CAESARS RIVERBOAT CASINO, LLC Caesars Riverboat Casino LLC Caesars Indiana, Defendants.
• Court: U.S. District Court — Western District of Kentucky

503 F.Supp.2d 839

John FORD, Ancillary Administrator of the Estate of Charles M. Jayne, Deceased, Plaintiff v. RDI/CAESARS RIVERBOAT CASINO, LLC Caesars Riverboat Casino LLC Caesars Indiana, Defendants.

Civil Action No. 3:06CV-243-H.

United States District Court, W.D. Kentucky, Louisville Division.

August 17, 2007.

COPYRIGHT MATERIAL OMITTED

Donald R. Forrest, Forrest and Bourne, New Albany, IN, Michael E. Morken, Indianapolis, IN, for Plaintiff.

Gene F. Price, Joshua Taylor Rose, Susan L. Williams, Frost Brown Todd LLC, Louisville, KY, Keith R. Conrad, Frost Brown Todd LLC, New Albany, IN, for Defendants.

MEMORANDUM OPINION AND ORDER

HEYBURN, Chief Judge.

Plaintiff John Ford is the administrator of the estate of Charles M. Jayne ("Jayne"). Jayne was killed in an accident in Floyd County, Indiana, apparently caused by the driver of another car, Carla Burkhead. At the time of the accident, Burkhead was returning from Caesars Indiana casino. Ford has filed a wrongful death lawsuit against Caesars Riverboat Casino LLC, the operator of that casino, alleging that Caesars contributed to the accident by serving Burkhead while she was intoxicated. Caesars has now filed this motion to dismiss for lack of personal jurisdiction. For the following reasons, the Court will deny that motion.

I.

On September 8, 2004, Burkhead was driving home from Caesars Indiana when she crossed the center line of State Road 111 and hit the car of Charles Jayne. Jayne sustained fatal injuries as a result of the accident. It is uncontroverted that Burkhead was intoxicated at the time of the accident, and that she had been drinking at Caesars Indiana prior to the accident. Ford filed this suit, alleging that Caesars served Burkhead alcohol when its employees knew or should have known that she was actually or apparently under the influence of alcohol and knew there was a reasonable likelihood that upon leaving the casino she would operate a motor vehicle. Burkhead pled guilty in state court to the felony of driving while intoxicated and is serving a four year sentence. Burkhead and Jayne are both Kentucky residents.

Some part of Caesars' business is undeniably connected to and carried out in Kentucky. As Plaintiff's discovery has demonstrated, a large portion of Caesars' revenue comes from Kentucky. Various studies and reports have concluded that somewhere around fifty percent of Caesars' customers are from Kentucky. During discovery, Caesars, provided forty-three pages of newspaper and billboard ads that appeared in Kentucky during the year leading up to the accident. The advertisements provided are not "exhaustive" and clearly Caesars has undertaken a comprehensive advertising campaign in Kentucky. Caesars earned at least $109 million from Kentucky residents in 2000, demonstrating the financial significance of Kentucky residents to Caesars.

Caesars is also active in Kentucky as sponsor of events and donor of charitable contributions. In the twenty-four months preceding the accident, Caesars donated $478,000 to such causes. The largest contribution by far was $400,000 to the Kentucky Derby Festival. Finally, Caesars has an active direct mail marketing campaign to Kentucky residents. Both Burkhead and Jayne received direct mail advertising from Caesars, both were regular patrons of Caesars, both were members of its Rewards Club for several years prior to the accident, and both were holder of Players Cards. In the twelve months prior to the accident, Burkhead visited the casino on average 13.5 times per month; in the same period, Jayne visited on average 1.5 times per month. Jayne's personal effects at his death included a Caesars "Certificate of Achievement" for completing a gaming instruction course, Caesars hotel receipts, and a wide variety of Caesars merchandise, including T-shirts, a key chain, drinking mugs, an umbrella, a fanny pack, a barbeque tool set, a watch, and a hat.

In June 2006, Caesars filed a motion to dismiss for lack of personal jurisdiction. The Court has allowed limited discovery on the issue of personal jurisdiction to be conducted. This issue is now fully briefed.

II.

Traditionally, when evaluating questions of personal jurisdiction, a federal court must apply the long-arm statute of the state in which it sits, then evaluate the case under the limits of the Due Process Clause. The plaintiff has the burden of establishing personal jurisdiction. See Welsh v. Gibbs, 631 F.2d 436, 438 (6th Cir.1980). Kentucky courts may employ the state's long-arm statute to exercise jurisdiction over nonresidents "only to the limits of the Constitution's due process clause." Wright v. Sullivan Payne Co., 839 S.W.2d 250, 253 (Ky.1992). However, Kentucky courts "have determined that the long-arm statute within this jurisdiction allows Kentucky courts to reach the full constitutional limits of due process in entertaining jurisdiction over non-resident defendants." Wilson v. Case, 85 S.W.3d 589, 592 (Ky.2002) (quoting Mohler v. Dorado Wings, Inc., 675 S.W.2d 404, 405 (Ky.App.1984)). "In practice, the precise language of the statute and the application of its terms are much less important than the simple fact that the statute exists." Id.

There are several possible means by which this Court could assert personal jurisdiction over the Defendant. The Sixth Circuit has discussed the two alternatives in some detail:

In analyzing the due-process limits of personal jurisdiction, a distinction is made between "general" jurisdiction and "specific" jurisdiction. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 & 473 n. 15, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). In a case of general jurisdiction, a defendant's contacts with the forum state are of such a "continuous and systematic" nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state. See, e.g., Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952). In a specific jurisdiction case, "a State exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant's contacts with the forum." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984).

Third Nat'l Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir. 1989). The Court will consider each possibility in turn.

A court may exercise "general jurisdiction" over a defendant where that defendant has "continuous and systematic" contacts with the forum state. Id. Where a nonresident "carries on substantial and more or less continuous business within a state it should reasonably expect to be required to defend actions in the courts of that state." Handley v. Indiana & Michigan Elec. Co., 732 F.2d 1265, 1272 (6th Cir.1984). However, the burden to establish general jurisdiction is quite high and generally requires the existence of "an office in the forum state" or other physical presence. Amoco Egypt Oil Co. v. Leonis Navigation Co., 1 F.3d 848, 851 n. 3 (9th Cir.1993). See generally Kattula v. Jade, No. 07-52, 2007 WL 1695669 at *4 (W.D. Ky. June 8, 2007). Here, Caesars' contacts with Kentucky certainly clime close to being "continuous and systematic." Given Caesars' placement practically immediately adjacent to the largest metropolitan area in Kentucky, this does not come as a surprise. Caesars does carry on "substantial and more or less continuous" business with the state of Kentucky, but does not have any physical presence in the state. At this time, however, the Court is unwilling to conclude that it may exercise general jurisdiction over Caesars in all cases, but there is no question that the facts present a very close case for general jurisdiction.

The second way the Court could assert personal jurisdiction is via specific jurisdiction. Under the applicable portion of Kentucky's long-arm statute, a court "may exercise personal jurisdiction over a person who acts directly ... as to a claim arising from the person's ... [t]ransacting any business in this Commonwealth." KRS § 454.210(2)(a)(1). The question, therefore, is whether Caesars transacts any business in the Commonwealth and whether Plaintiff's claim "arises" from that transaction. There is little question that Caesars transacts business in Kentucky. True, no Kentucky court has ruled one way or the other whether advertising alone would constitute transacting business in the state. However, the wide expanse of Caesars' activities in Kentucky — including but going beyond purely advertising — is strong evidence that the company does "transact business" in the state. The next question, therefore, is whether this claim "arises" from Defendant's transacting business in Kentucky. This inquiry is identical to that presented by the Due Process Clause's "minimum contacts" analysis, so the Court will now turn to that inquiry.

For the Court to assert personal jurisdiction over a non-resident defendant while comporting with the requirements of the Due Process Clause, the defendant must have "minimum contacts" with the forum "such that maintenance of the suit does not offend traditional...