Hamm v. Acadia HealthCare Co., 3:21-cv-00550

• Court: United States District Courts. 6th Circuit. United States District Court of Middle District of Tennessee
• Parties: AMY HAMM, on behalf of herself and all others similarly situated, Plaintiff, v. ACADIA HEALTHCARE CO., INC., ACADIA JV HOLDINGS, LLC, and RED RIVER HOSPITAL, LLC Defendants.
• Docket Number: 3:21-cv-00550
• Decision Date: 04 August 2022

AMY HAMM, on behalf of herself and all others similarly situated, Plaintiff,
v.
ACADIA HEALTHCARE CO., INC., ACADIA JV HOLDINGS, LLC, and RED RIVER HOSPITAL, LLC Defendants.

No. 3:21-cv-00550

United States District Court, M.D. Tennessee, Nashville Division

August 4, 2022

FRENSLEY, MAGISTRATE JUDGE.

MEMORANDUM

WILLIAM L. CAMPBELL, JR. UNITED STATES DISTRICT JUDGE.

Pending before the Court are Defendants' Motion to Dismiss (Doc. No. 22) and Motion for Rule 11 Sanctions (Doc. No. 33). Both motions have been fully briefed and are ripe for review. For the reasons stated below, Defendants' Motion to Dismiss will be GRANTED in part, and DENIED in part; and the Motion for Sanctions will be DENIED.

I. BACKGROUND

Plaintiff Amy Hamm is a nurse who currently resides in Destrehan, Louisiana. (Doc. No. 1, ¶ 12). Hamm worked as a nurse at Red River Hospital (“Red River”) in Wichita Falls, Texas, and at River Place Behavioral Health (“River Place”) in LaPlace, Louisiana. (Id.). She asserts that while employed at these facilities, she was not paid for all hours worked and was not paid time and a half for hours worked in excess of forty hours per week. (Id. ¶¶ 4-5).

In this case, Plaintiff brings claims against Red River Hospital, LLC (“Red River”), Acadia Healthcare Company, Inc. (“Acadia Healthcare”), and Acadia JV Holdings (“JV Holdings”)

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alleging violations of the Fair Labor Standards Act (“FLSA”) as a collective action pursuant to 29 U.S.C. § 216(b) on behalf of herself and a putative nationwide class of similarly situated employees. She also brings claims under Texas state law on behalf of herself and a putative “Texas Class” pursuant to Federal Rule of Civil Procedure 23(a) and (b)(3).

Plaintiff's claims arising out of her work at River Place in Louisiana are the subject of a separate lawsuit in the United States District Court for the Eastern District of Louisiana. Hamm v. Acadia Healthcare Company, Inc., No. 20-1515 (E.D. La. May 22, 2020) (the “Louisiana Action”). The Louisiana Action also named Acadia Healthcare and Red River as defendants. After allowing jurisdictional discovery, the Louisiana court dismissed both of these Defendants for lack of personal jurisdiction. Louisiana Action, Doc. No. 50 (March 31, 2021).

Now before the Court is Defendants' Motion to Dismiss Red River for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2) and Motion to Dismiss Acadia Healthcare and JV Holdings for failure to state a claim under Fed.R.Civ.P. 12(b)(6).

II. MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION

A. Standard of Review

Federal Rule of Civil Procedure 12(b)(2) allows a defendant to file a motion to dismiss for lack of personal jurisdiction. “In deciding a motion to dismiss for lack of personal jurisdiction, the district court may rely ‘upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to resolve any apparent factual questions.'” MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d 894, 899 (6th Cir. 2017) (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). The party asserting jurisdiction has the burden of proof. Ingram Barge Co. v. Louis Dreyfus Co., 455 F.Supp.3d 548, 554 (M.D. Tenn. 2020)

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(citing Bird v. Parsons, 289 F.3d 865, 871 (6th Cir. 2002)). “Although plaintiffs have the burden of establishing that a district court can exercise jurisdiction over the defendant, that burden is ‘relatively slight' where, as here, the district court rules without conducting an evidentiary hearing.” MAG IAS Holdings, Inc. v. Schmuckle, 854 F.3d at 899 (quoting Air Prods. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 549 (6th Cir. 2007)). “To defeat dismissal in this context, plaintiffs need make only a prima facie showing that personal jurisdiction exists.” Id. To do so, the plaintiff “may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing the court has jurisdiction.” Ingram Barge Co., 455 F.Supp.3d at 554 (citing Theunissen, 935 F.2d at 1458). When determining whether the party asserting jurisdiction has made a prima facie showing, the court construes the facts in the light most favorable to that party. Id.

B. Personal Jurisdiction Over Red River

The Court may only exercise “personal jurisdiction over a nonresident defendant” if jurisdiction “meets the [forum] state's long-arm statute and constitutional due process requirements.” Intera Corp. v. Henderson, 428 F.3d 605, 615 (6th Cir. 2005). Tennessee's long-arm statute authorizes Tennessee courts to exercise jurisdiction on “[a]ny basis not inconsistent with the constitution of this state or of the United States,” in other words, to the limits of due process. Mfrs. Consol. Serv., Inc. v. Rodell, 42 S.W.3d 846, 855 (Tenn. Ct. App. 2000) (citing Tenn. Code Ann. §§ 20-2-214(a)(6), 20-2-225(2)); see also Bridgeport Music, Inc. v. Still N The Water Pub., 327 F.3d 472, 477 (6th Cir. 2003) (citing Payne v. Motorists' Mut. Ins. Cos., 4 F.3d 452, 454 (6th Cir. 1993) (“[T]he Tennessee long-arm statute has been interpreted as coterminous with the limits on personal jurisdiction imposed by the due process clause.”).

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“The bedrock principle of personal jurisdiction due process is that when a Defendant is not physically present in the forum, [he or she] must have ‘certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'” Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003) (quoting Int'lShoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The Supreme Court distinguishes between two types of personal jurisdiction - general and specific. BNSF Ry. Co. v. Tyrrell, 137 S.Ct. 1549, 1558 (2017). Specific jurisdiction “grants jurisdiction only to the extent that a claim arises out of or relates to a defendant's contact in the forum state.” Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 678-79 (6th Cir. 2012) (citing Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997)). General jurisdiction, on the other hand, allows the court to “exercise jurisdiction over any claims a plaintiff may bring against the defendant.” Id.

Plaintiff does not contend that the court has specific jurisdiction over Red River. Accordingly, only general jurisdiction is at issue here. “A court may assert general jurisdiction over foreign [] corporations to hear any and all claims against them when their affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” BNSF, 137 S.Ct. at 1558 (citing Daimler AG v. Bauman, 571 U.S. 117, 127 (2014)). “The ‘paradigm' forums in which a corporate defendant is ‘at home' ... are the corporation's place of incorporation and its principal place of business.” Id. “Those affiliations have the virtue of being unique - that is each ordinarily indicates only one place - as well as easily ascertainable.” Daimler, 571 U.S. at 137. “These bases afford plaintiffs recourse to at least one clear and certain forum in which a corporate defendant may be sued on any and all claims.” Id. “The exercise of general jurisdiction is not limited to these forums; in an ‘exceptional case,' a corporate defendant's

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operations in another forum ‘may be so substantial and of such a nature to render the corporation at home in that State.'” BNSF, 137 S.Ct. at 1558.

Plaintiff does not contend this is an “exceptional case” such that Red River is subject to personal jurisdiction due to the nature of its operations in Tennessee. With regard to the paradigm forums - place of incorporation and principal place of business - there is no dispute that Red River is incorporated in Delaware and is, therefore, not subject to general personal jurisdiction in Tennessee based on its place of incorporation. Although determination of a corporation's principal place of business is intended to be “easily ascertainable,” Daimler, 571 U.S. at 760, the parties disagree on the location of Red River's principal place of business and whether the court may exercise general jurisdiction over Red River on that basis. Plaintiff argues Red River's principal place of business is in Franklin, Tennessee. Defendants claim the principal place of business is in Wichita Falls, Texas.

A corporation's principal place of business is “the place where officers direct, control, and coordinate a corporation's activities,” often referred to as the corporation's “nerve center.”^[1] Hertz Corp. v. Friend, 559 U.S. 77, 92-93 (2010). Under Hertz, the principal place of business, usually a corporation's main headquarters, must be a single place. Id. at 93.

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Defendants' contention that the Sixth Circuit applies the “total activity test” to determine a corporation's principal place of business is mistaken. In support of this assertion, Defendants rely upon Waste Mgmt. v. Mock, No. 3:09-00409, 2009 WL 2038144 (M.D. Tenn. Jul. 9, 2009), which in turn cites Gafford v. General Electric Co., 997 F.2d 150, 163 (6th Cir. 1993), which was was abrogated by Hertz. See Hertz, 559 U.S. at 91-93. (rejecting Gafford's “center of gravity” test for principal place of business in favor of a “nerve center” test).

Defendants assert Red River's principal place of business is Wichita Falls, Texas. (Id.). In support of this contention, Defendants submitted the Declaration of Michelle Powell, Chief Executive Officer for Red River. (Powell Decl., Doc. No. 22-2). Powell states that “Red River's principal place of business is in Wichita Falls, Texas, where it receives correspondence and its managers principally conduct its affairs in operating Red River Hospital.” (Id., ¶ 3). In addition, Red River is registered to do business in Texas, not in Tennessee, and Red River does not have any offices in Tennessee. (Id., ¶¶ 2-3). Defendants also submitted the Declaration of Andrew...