Magee v. Fla. Marine, LLC

• Jurisdiction: United States,Federal
• Parties: NICHOLAS REED MAGEE v. FLORIDA MARINE, LLC, ET AL
• Decision Date: 16 January 2024
• Court: U.S. District Court — Eastern District of Louisiana
• Docket Number: Civil Action 22-3835

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NICHOLAS REED MAGEE v. FLORIDA MARINE, LLC, ET AL

Civil Action No. 22-3835

United States District Court, E.D. Louisiana

January 16, 2024

SECTION “P” (5)

ORDER AND REASONS

DARREL JAMES PAPILLION UNITED STATES DISTRICT JUDGE

Before the Court is a Motion to Dismiss for Lack of Personal Jurisdiction filed by Third-Party Defendant, McNational, Inc. (“McNational”).^[1] Defendants and Third-Party Plaintiffs, Florida Marine, LLC, Florida Marine Transporters LLC, and PBC Management, LLC (collectively, “Florida Marine” or “Defendants”) oppose the motion.^[2] In response, McNational filed a reply memorandum in support of its motion.^[3] For the reasons assigned below, McNational's Motion to Dismiss for Lack of Personal Jurisdiction is GRANTED.

I. BACKGROUND

This action arises out of injuries allegedly sustained by Plaintiff Nicholas Reed Magee while working as a deckhand aboard the M/V JOHN PASENTINE II (“Vessel”) on March 6, 2022.^[4] According to Plaintiff, the Vessel was on the Ohio River near Catlettsburg, Kentucky when the Master of the Vessel instructed him to unload material from the Vessel by traversing a barge and dock, and while doing as instructed, Plaintiff fell into the river and sustained injuries to his lungs, back, knees, legs, neck, and other parts of his body.^[5] Plaintiff alleges he was employed by Florida Marine as a Jones Act seaman at the time of the incident and that Florida Marine owns and operates the M/V JOHN PASENTINE II.^[6] Plaintiff filed a Complaint against Florida Marine in this Court on October 13, 2022, asserting claims under the Jones Act and general maritime law.^[7]

On November 8, 2022, Florida Marine filed an Answer to Plaintiff's Complaint as well as a Third-Party Demand and Rule 14(c) Tender (“Demand”) against McNational.^[8] In its Demand, Florida Marine alleges that McNational conducts business operations through several “divisions” along the Mississippi River.^[9] These “divisions” include, in relevant part: (1) an Illinois corporation, Mid America Fuels, Inc. (“MAF”), which has a facility in Kentucky where the barge and dock mentioned in Plaintiff's Compliant are located, and (2) a Louisiana corporation, National Maintenance & Repair of Louisiana, Inc. (“NMR-LA”).^[10] Florida Marine further alleged that Plaintiff slipped and fell while walking between the barge and dock that were in the care, custody, and garde of McNational and that it was the negligence of McNational that caused Plaintiff's injuries.^[11] Florida Marine thus contends that McNational is solely liable to Plaintiff for his injuries and is also liable to Florida Marine for reimbursement of all maintenance and cure paid to, or on behalf of, Plaintiff arising out of the incident.^[12]

In response, McNational filed the instant motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).^[13] At the request of Florida Marine, the parties then engaged in jurisdictional discovery related to the issues raised in McNational's motion.^[14] The motion is now fully briefed and ripe for the Court's review.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(2) permits a party to seek dismissal of the claims against it for lack of personal jurisdiction. When a third-party defendant challenges personal jurisdiction, the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists.^[15] “The court may determine the jurisdictional issue by receiving affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.”^[16] When the court decides the motion without holding an evidentiary hearing, as in the instant case, the burden of proof is satisfied by “a prima facie showing of the facts on which jurisdiction is predicated.”^[17] In determining whether a prima facie case exists, this Court “must accept as true [Florida Marine's] uncontroverted allegations, and resolve in its favor all conflicts between the jurisdictional facts contained in the parties' affidavits and other documentation.”^[18]

III. LAW AND ANALYSIS

In an admiralty case, a federal district court may exercise personal jurisdiction over a nonresident defendant if: (1) the forum state's long-arm statute confers personal jurisdiction over that defendant; and (2) the exercise of jurisdiction complies with the Due Process Clause of the Fourteenth Amendment.^[19] Because the limits of Louisiana's long-arm statute are coextensive with constitutional due process limits,^[20] this Court's sole inquiry is whether the exercise of personal jurisdiction comports with federal constitutional guarantees.^[21] A court's exercise of personal jurisdiction over a non-resident defendant is consistent with due process only when: (1) that defendant has certain minimum contacts with the forum state; and (2) the exercise of jurisdiction over that defendant does not offend traditional notions of fair play and substantial justice.^[22] “Whether a defendant has ‘minimum contacts' with the forum depends on the nature and extent of ‘the defendant's relationship to the forum.”^[23] That focus has led the courts to recognize “two kinds of personal jurisdiction: general (sometimes called all-purpose) jurisdiction and specific (sometimes called case-linked) jurisdiction.”^[24]

“General jurisdiction, as its name implies, extends to ‘any and all claims' brought against a defendant” regardless of whether those claims “relate to the forum State or the defendant's activity there.”^[25] A court may exercise general jurisdiction only when a defendant's contacts with the forum are so “continuous and systematic” as to render the defendant “essentially at home” in the forum.^[26] Specific jurisdiction, conversely, applies to a narrower class of claims: those that “arise out of or relate to the defendant's contacts with the forum.”^[27] The contacts needed for specific jurisdiction to attach often go by the name “purposeful availment.”^[28] That is, the nonresident defendant must have taken “some act by which [it] purposefully avail[ed] itself of the privilege of conducting activities in the forum state.”^[29] “The ‘purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts.”^[30]

In the present case, Florida Marine avers that this Court may exercise general jurisdiction over McNational because of McNational's contacts with Louisiana through the operations of its subsidiaries, NMR-LA and Excell Marine Corporation (“Excell Marine”). As a general rule, courts may not exercise personal jurisdiction over a non-resident parent company based solely on the presence of a subsidiary company in the forum state.^[31] However, and as Florida Marine argues here, when the parent and subsidiary are mere alter egos of one another, the contacts of the subsidiary may be imputed to the parent for purposes of jurisdiction.^[32] “The theory behind this principle is that the relationship between the parent and subsidiary is so intertwined that they do not in reality constitute separate and distinct corporate entities but are one and the same corporation for purposes of jurisdiction.”^[33]

By arguing that McNational is subject to the Court's general jurisdiction based on the jurisdictional contacts of NMR-LA and Excell Marine, Florida Marine implicitly concedes that without the contacts of these subsidiaries, McNational is not “at home” in Louisiana. McNational, on the other hand, seemingly concedes that if the contacts of its subsidiaries are imputed to it, this Court may exercise personal jurisdiction over McNational. The disagreement, and the focus of the parties' briefing, is whether McNational is, in fact, the alter ego of NMR-LA and Excell Marine.^[34] For the reasons explained below, the Court finds that it is not, and therefore, the contacts of NMR-LA and Excell Marine cannot be imputed to McNational for purposes of jurisdiction. Florida Marine's alternative arguments are also unavailing. Accordingly, Florida Marine has failed to make a prima facie showing that the Court may exercise personal jurisdiction over McNational, and the Court finds that McNational's motion should be granted and the claims against it dismissed.

A. Alter Ego Analysis

The parties appear to agree that Hargrave v. Fibreboard Corp., 710 F.2d 1154 (5th Cir. 1983) provides the appropriate test for determining whether to impute NMR-LA's and Excell Marine's jurisdictional contacts to McNational based on the alter ego theory.^[35] In Hargrave, the Fifth Circuit considered whether a parent corporation exerted “such domination and control over its subsidiary” that the two entities were “one and the same for purposes of jurisdiction.”^[36] Although the Court recognized that “all the relevant facts and circumstances surrounding the operations of the parent and subsidiary must be examined,” the Court considered seven factors- now dubbed “the Hargrave factors”-to be particularly relevant to its analysis.^[37]

The Hargrave factors are (1) amount of stock owned by the parent of the subsidiary; (2) did the two corporations have separate headquarters; (3) did they have common officers and directors; (4) did they observe corporate formalities; (5) did they maintain separate accounting systems; (6) did the parent exercise complete authority over general policy; (7) did the subsidiary exercise complete authority over daily operations.^[38]

The Court now considers these factors in turn to determine whether McNational exerts such domination and control over NMR-LA or Excell Marine that it should be considered one and the same as either subsidiary for purposes of jurisdiction.

i. Stock Ownership

It is undisputed that...