Frazier v. Eagle Air Med Corp.

Decision Date02 May 2022
Docket Number3:21-cv-136
PartiesJeffrey Frazier, an individual and Sentinel Air Medical Alliance, LLC, a Wyoming limited liability company; Plaintiffs, v. Eagle Air Med Corporation, a Utah Corporation; and Valley Med Flight, Inc., a North Dakota corporation; and Does, 1-50; Defendants.
CourtU.S. District Court — District of North Dakota

ORDER ON DEFENDANTS' MOTION TO DISMISS

Peter D. Welte, Chief Judge United States District Court.

Before the Court is Defendants Eagle Air Med Corporation's (Eagle Air) and Valley Med Flight, Inc.'s (Valley) motion to dismiss for lack of personal jurisdiction and for improper venue pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure. Doc. No. 5. Alternatively, Eagle Air and Valley move to dismiss or transfer this case to the United States District Court for the District of Utah pursuant to 28 U.S.C § 1406(a) or 1404(a). Doc. No. 11. Plaintiffs Jeffrey Frazier (Frazier) and Sentinel Air Medical Alliance, LLC (Sentinel) responded to the motion on October 15, 2021. Doc. No. 15. Defendants filed a reply on October 29, 2021. Doc. No. 18. For the reasons below, the motion to transfer this case is granted.

I. BACKGROUND

This case involves a long-standing commercial dispute between Frazier and Sentinel, on the one hand, and Eagle Air and Valley, on the other, and is the second federal district court action involving these parties. Frazier is an individual and a citizen of Nevada. Doc. No. 4 ¶ 2. He has also been a “partner in Sentinel” since 2009.[1] Doc. No. 15-2 ¶ 2. Sentinel is a Wyoming limited liability company with its principal place of business in Missoula, Montana and is comprised of two members, Frazier and Dirk Visser (Visser). Doc. No. 4 at 2. Visser is an individual and a citizen of Montana.[2] Id. According to Frazier, Sentinel provides consulting services “to self-funded health benefit plans” including plans in North Dakota. Doc. Nos. 15-2 at 1; 4, ¶ 13.

Turning to the Defendants, Eagle Air is a Utah corporation, and Valley is a North Dakota corporation. Doc. No. 7, ¶ 4. Both Eagle Air and Valley provided “air medical services, specializing in the emergency care and transport of patients in medical need[.] Doc. No. 4, ¶¶ 5, 7.

Sentinel's claims against Eagle Air and Valley in this action originate from causes of action pursued by Eagle Air and Valley against Sentinel in Eagle Air Med Corporation, et al., v. Sentinel Air Medical Alliance, LLC, et al., Case Number: 2:16-cv-00176-TC, U.S. District Court, District of Utah (the “Underlying Action”). Doc. Nos. 4 ¶ 1; 15-1. As alleged, the Underlying Action involved Sentinel's review, in its role as a consultant, “of claims for payment for Eagle Air and Valley's air ambulance transport services.” Doc. No. 4, ¶ 13. The Underlying Action was ultimately resolved on summary judgment in favor of Sentinel.

Based on the damages Sentinel allegedly suffered because of the filing and prosecution of the Underlying Action, Sentinel commenced the instant action on June 22, 2021. See Doc. No. 1. It filed its amended complaint August 24, 2021. See Doc. No. 4. The amended complaint pleads four claims against both Valley and Eagle Air: (1) wrongful use of civil proceedings; (2) abuse of process; (3) tortious interference; and (4) civil conspiracy. Id. On September 17, 2021, Eagle Air and Valley responded with the pending motion to dismiss. Doc. No. 5.

II. LEGAL DISCUSSION

The motion to dismiss raises two arguments. First, Eagle Air asserts the Court lacks personal jurisdiction over it under Federal Rule of Civil Procedure 12(b)(2). Second, and relatedly, Eagle Air and Valley assert that venue is improper under Federal Rule of Civil Procedure 12(b)(3). While Eagle Air and Valley primarily request dismissal of the action against both entities, both also argue for the transfer of the case to the United States District Court for the District of Utah as an alternative to dismissal.

A. Personal Jurisdiction and Rule 12(b)(2)

The Court addresses Eagle Air's motion as to personal jurisdiction first. To defeat the motion to dismiss for lack of personal jurisdiction, Sentinel must establish a prima facie showing of personal jurisdiction over Eagle Air. Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). That prima facie showing is analyzed “not by the pleadings alone, but by the affidavits and exhibits presented with the motions and in opposition thereto.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004). The party seeking to establish that a court has in personam jurisdiction carries the burden of proof, and the burden does not shift to the party challenging jurisdiction. Epps, 327 F.3d at 647.

This Court may properly exercise personal jurisdiction over a party if a two-step inquiry is satisfied. First, the party must be “amenable to service of process under the appropriate long-arm statute.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Second, the party challenging personal jurisdiction must have engaged in activities which satisfy the minimum contacts requirement of the Due Process Clause. Id. The jurisdiction of North Dakota courts is governed by the North Dakota long-arm statute set forth in Rule 4(b)(2) of the North Dakota Rules of Civil Procedure. The North Dakota Supreme Court has held that Rule 4(b)(2) “authorizes North Dakota courts to exercise jurisdiction over nonresident defendants to the fullest extent permitted by due process.” Hansen v. Scott, 2002 ND 101, ¶ 16, 645 N.W.2d 223. The Eighth Circuit Court of Appeals has held that when a state construes its long-arm statute to grant jurisdiction to the fullest extent permitted by the Constitution, the Court must determine whether the exercise of personal jurisdiction comports with due process. Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006).

“Due Process requires ‘minimum contacts' between [a] non-resident defendant and the forum state such that ‘maintenance of the suit does not offend traditional notions of fair play and substantial justice.' Dever, 380 F.3d at 1073 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92 (1980). A non-resident defendant's contacts with a forum state, for example, must be sufficient to cause the defendant to “reasonably anticipate being haled into court there.” Epps, 327 F.3d at 648. There are two categories of minimum contacts with a state that may subject a defendant to jurisdiction in that forum: general jurisdiction and specific jurisdiction. With respect to general personal jurisdiction over a defendant, “a defendant may be subject to the forum state's exercise of personal jurisdiction if contacts with the state are continuous and systematic.” Id. A state has specific personal jurisdiction over a defendant when the suit arises out of, or is related to, the defendant's contacts with the forum state. Johnson, 444 F.3d at 956.

The Eighth Circuit has established a five-factor test for measuring minimum contacts for purposes of asserting personal jurisdiction[3] over a defendant:

(1) the nature and quality of [a defendant's] contacts with a forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) [the] convenience of the parties.

Dever, 380 F.3d at 1073-74 (quoting Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996). In determining whether a defendant has sufficient contacts with the forum state to exercise personal jurisdiction, the court must consider all of the contacts in the aggregate and examine the totality of the circumstances. Northrup King Co. v. Compania Productora Semillas Algoddoneras Selectas, S.A., 51 F.3d 1383, 1388 (8th Cir. 1995). However, the Eighth Circuit directs courts to give “significant weight” to the first three factors. Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004).

Under the test outlined above, Sentinel has the burden of proving facts to support personal jurisdiction. Dever, 380 F.3d at 1072. Sentinel need not prove personal jurisdiction by a preponderance of the evidence until a court holds an evidentiary hearing or until trial. Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). Absent a hearing, the Court will consider the facts in the light most favorable to the non-moving party and resolve all conflicts in favor of that party. Romak USA, 383 F.3d at 983-84.

Additionally, although Sentinel is correct that pleadings and affidavits must be construed in the light most favorable to the plaintiff, ‘conclusory non-fact-specific jurisdictional allegations or a legal conclusion couched as a factual allegation will not establish a prima facie showing of jurisdiction.' DeLorenzo v. Ricketts & Assocs., Ltd., No. 15-CV-2506 (VSB), 2017 WL 4277177, at *5 (S.D.N.Y. Sept. 25, 2017), aff'd sub nom. DeLorenzo v. Viceroy Hotel Grp., LLC, 757 Fed.Appx. 6 (2d Cir. 2018). “Accordingly, affidavits or declarations in support of personal jurisdiction ‘must be made on personal knowledge, set out facts that would be admissible in evidence, and show that the affiant or declarant is competent to testify on the matters stated.'

Fed. R. Civ. P. 56(c)(4).” Vasquez v. Hong Kong & Shanghai Banking Corp., Ltd., 477 F.Supp.3d 241, 251 (S.D.N.Y. 2020), appeal withdrawn, No. 20-3081, 2021 WL 4190722 (2d Cir. Apr. 14, 2021) (quoting Bracken v. MH Pillars Inc., No. 15-CV-7302 (RA), 2016 WL 7496735, at *2 (S.D.N.Y. Dec. 29, 2016)).

Before moving to the Eighth Circuit's minimum contacts test, the Court notes that the parties rely on their respective declarations and affidavits. Frazier provided a declaration for Sentinel, summarizing his...

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