Lachman v. Bank of Louisiana in New Orleans

• Decision Date: 20 March 1981
• Docket Number: No. C80-1776.,C80-1776.
• Citation: 510 F. Supp. 753
• Parties: Michele S. LACHMAN, Plaintiff, v. BANK OF LOUISIANA IN NEW ORLEANS et al., Defendants.
• Court: U.S. District Court — Northern District of Ohio

510 F. Supp. 753

Michele S. LACHMAN, Plaintiff, v. BANK OF LOUISIANA IN NEW ORLEANS et al., Defendants.

No. C80-1776.

United States District Court, N. D. Ohio, E. D.

March 20, 1981.

Roy E. Lachman, Cleveland, Ohio, for plaintiff.

Sidney M. Bach, Bach & Wasserman, New Orleans, La., for defendant Bank of Louisiana.

Edmond G. Mirranne, Mirranne & Mirranne, New Orleans, La., Robert G. McCreary, Jr., Arter & Hadden, Cleveland, Ohio, for defendant Security Homestead Association.

David G. Heiman, Cleveland, Ohio, Edmund J. Adams, Frost & Jacobs, Cincinnati, Ohio, for defendant VISA, U.S.A., Inc.

MEMORANDUM and ORDER

BEN C. GREEN, Senior District Judge:

This is an action brought by plaintiff Michele Lachman against defendants Bank of Louisiana in New Orleans, the Security Homestead Association, the Southern States Bankcard Association, and VISA, U.S.A., Inc.

The complaint alleges violations of the Fair Credit Billing Act, 15 U.S.C. §§ 1666 et seq. and the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., along with common law tort claims for international infliction of emotional distress and invasion of privacy. Jurisdiction is alleged pursuant to 15 U.S.C. §§ 1640(e), 1692k on the statutory claims and pursuant to 28 U.S.C. § 1332 (diversity of citizenship) on the tort claims.

Defendants VISA, Bank of Louisiana, and Security Homestead Association have moved, pursuant to Rule 12(b), Federal Rules of Civil Procedure, to quash service and dismiss the complaint against them for lack of personal jurisdiction. Alternatively, Bank of Louisiana and Security Homestead seek dismissal for lack of venue or transfer of venue pursuant to 28 U.S.C. § 1404(a) (forum non conveniens) to the Eastern District of Louisiana.

From plaintiff's affidavit, and from documents the authenticity of which has not been denied, it appears that while a resident of Louisiana in 1978, Mrs. Lachman applied for and received a VISA charge card from defendants Bank of Louisiana and Security Homestead. In August, 1979, Mrs. Lachman moved to her present home in Shaker Heights, Ohio, notifying defendant Southern Bankcard of her change of address.

Mrs. Lachman and her husband used the VISA cards to make purchases while in Louisiana, and made payments therefor to Southern Bankcard, the latter apparently acting as collection agent for Bank of Louisiana and Security Homestead.

After they moved to Ohio, plaintiff and her husband continued to use the cards to make purchases. In September, 1979, they were billed for $143.74 for purchases made in Ohio and paid that amount to Southern Bankcard. In October, 1979, Southern Bankcard billed them $426.94 for charges made in Ohio and that amount was paid.

On October 10, 1979, Mrs. Lachman's VISA card was stolen. She immediately notified Southern Bankcard of the theft, a notification acknowledged by Southern Bankcard by way of a letter dated October 19, 1979.

By the latter date, however, the account balance was $1,431.72, an amount which plaintiff alleges is substantially due to unauthorized use of the card. The letter from Southern Bankcard requested prompt notification of "questionable charges." On October 24, plaintiff notified Southern Bankcard that the balance "greatly exceeds our purchases" and requested copies of the charge slips so that she could verify those which were authentic.

On November 5, 1979, Southern Bankcard sent plaintiff a statement of account showing a balance of $1,431.72. The statement was not itemized, a factor brought to Southern Bankcard's attention by a letter from plaintiff dated November 15. The letter recited that the entire amount was disputed.

Thereafter, numerous statements, letters, and some documentation were exchanged by the parties. These exchanges, plaintiff complains, were not in conformity with the Fair Credit Billing Act.

Further, plaintiff complains, the defendants attempted to collect the disputed amounts from her in a manner which violated the Fair Debt Collection Practices Act. These attempts at collection, plaintiff complains, coupled with the violations of the Fair Credit Billing Act, were of such a nature as to give rise to the tort claims. Mrs. Lachman seeks statutory, compensatory, and punitive damages, plus attorneys' fees.

In their motions to dismiss, the moving defendants claim they have insufficient contacts with the State of Ohio to allow this Court to assert in personam jurisdiction over them. All claim that they are not licensed or incorporated in Ohio, maintain neither offices nor agents for service of process in Ohio, and that they do not do business in Ohio. Therefore, defendants assert, the claims against them must be dismissed.

The parties agree that the law to be applied in determining whether jurisdiction may be asserted and process was adequate is the law of Ohio. Rule 4(f), Federal Rules of Civil Procedure, In-Flight Devices v. Van Dusen Air, Inc., 466 F.2d 220, 224 (C.A. 6, 1972).

The parties further agree that personal jurisdiction over a non-resident defendant, or "long-arm" jurisdiction, is governed by Section 2307.382, Ohio Revised Code, which reads, in relevant part:

(A) A 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:

(1) Transacting any business in the state;

* * * * * *

(4) Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state; ....

Section 2307.382 was enacted by the Ohio General Assembly to extend the "long-arm" jurisdiction of the courts in the state as far as the due process clause of the Fourteenth Amendment will allow. In-Flight Devices Corp. v. Van Dusen Air, Inc., supra.

The due process limitation, however:

... requires ... that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notices of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945).

In Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), the Court limited the International Shoe doctrine, requiring that a defendant must have "purposely availed itself of the privilege of conducting activities within the forum State ..." if long-arm jurisdiction is to be exercised over him.

These principles have been recently reaffirmed in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), where the Court noted, at 444 U.S. 297, 100 S.Ct. 567:

When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," citing Hanson, it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State.

The foregoing rules, the Supreme Court said:

... give a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.

The Supreme Court has confined its statements in the area of long-arm jurisdiction to broad principles, heavily founded in equity and determinations of "fairness" and "reasonableness." It noted in World-Wide Volkswagen at 444 U.S. at 292, 100 S.Ct. at 564:

Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum state's interest in adjudicating the dispute ...; the plaintiff's interest in obtaining convenience and effective relief ..., at least where that interest is not adequately protected by the plaintiff's power to choose the forum, ...; the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in furthering fundamental substantive social policies.

Other than the above, the Supreme Court has not set forth specific guidelines which could be mechanically applied to a given fact situation to arrive at a simple result.

The Sixth Circuit did set forth such guidelines in Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374 (C.A.6, 1978). The parties have devoted much of their advocacy on this issue to application of the Southern Machine and other mechanical tests.

But the Sixth Circuit made plain in Welsh v. Gibbs, 631 F.2d 436 at 440 (1980):

Though Southern Machine provides a framework of analysis, it cannot be mechanically applied. A case does not automatically warrant dismissal because its facts do not fit the pattern of ... one of our other decisions.... "The existence or nonexistence of the necessary `minimum contacts' to justify the upholding of personal jurisdiction over foreign corporations under the Fourteenth Amendment as interpreted in the International Shoe Company case must obviously be worked out with reference to the facts of a particular case rather than in a statement of dogmatic rules of all-inclusive principles."

The burden of establishing in personam jurisdiction rests with the party claiming jurisdiction, i. e., the plaintiff. Weller v. Cromwell Oil Co., 504 F.2d 927 (C.A.6, 1974). Where the issue is to be decided on briefs and affidavits, the plaintiff is required to make out a prima facie case of jurisdiction, that is, he need only "demonstrate facts which support a finding of jurisdiction in order to avoid a motion to dismiss." Welsh v. Gibbs, supra, citing Data Disc,...