Powertrain, Inc. v. Ma, CIVIL ACTION NO. 1:11-CV-00105-GHD-DAS
| Decision Date | 27 February 2012 |
| Docket Number | CIVIL ACTION NO. 1:11-CV-00105-GHD-DAS |
| Court | U.S. Bankruptcy Court — Northern District of Mississippi |
| Parties | POWERTRAIN, INC., a Mississippi corporation PLAINTIFF v. JOYCE MA, individually; and BEST MACHINERY & ELECTRICAL, INC. DEFENDANTS |
Presently before the Court are Defendant Joyce Ma's motions to dismiss [9] brought pursuant to Rules 12(b)(2), 12(b)(3), and 12(b)(6) of the Federal Rules of Civil Procedure. After due consideration, the Court finds that the three motions should be denied.
On May 3, 2011, Plaintiff PowerTrain, Inc. ("Plaintiff or "PowerTrain'') initiated a contract dispute action against Defendants Joyce Ma, individually, and Best Machinery & Electrical, Inc. PowerTrain is a Mississippi corporation with its principal place of business in Golden, Mississippi. PowerTrain designs and imports small engines manufactured in China and sells engines through various retailers. Defendant Best Machinery & Electrical, Inc. ("Defendant Best Machinery" or "Best Machinery") is a California corporation which is now dissolved. Defendant Best Machinery was engaged in commercial activity consisting of importing small engines from China to the United States for resale. Defendant Joyce Ma ("Defendant Ma" or "Ma") is a resident of South El Monte, California, who allegedly "has conducted business individually and under the corporate name 'Best Machinery & Electrical, Inc.' " Pl.'s Compl. [1] at 1-2.
The facts giving rise to this dispute are as follows. Plaintiff allegedly initiated purchase orders from 2002 until 2006 through Defendants Ma and Best Machinery for at least 78,284small non-road engines that would be manufactured in China. Defendants obtained these engines and shipped them to Plaintiff, which allegedly sold or distributed the subject engines to Wood Sales, Inc., a Mississippi corporation. Wood Sales, Inc. or Tool Matt, Inc., another Mississippi corporation, further resold the subject engines. Oneal Wood is the president of PowerTrain, Inc.; Wood Sales, Inc.; and Tool Mart, Inc.
Plaintiff alleges that to obtain the subject engines, Defendants Best Machinery and Ma first went through a Chinese manufacturer named Zing Everfind Electric Appliance Group Company, LTD ("Zing Everfind"). All engines manufactured by Zing Everfind met the PowerTrain Certificate of Conformity. Plaintiff alleges that Best Machinery then ceased their manufacturing relationship with Zing Everfind and began importing the subject engines from another Chinese manufacturer, Chong City Tong Yong Engine Mating Company ("Tong Yong"). Plaintiff alleges that the Tong Yong-manufactured engines did not meet the PowerTrain Certificate of Conformity. Plaintiff asserts that Defendants Best Machinery and Ma "imported, sold[,] or otherwise introduced into commerce most or all of these 78,284 uncertified subject engines, which resulted in the emission of at least 166 excess tons of HC + NOx and 5,236 excess tons of CO, in violation of emission standards in 40 C.F.R. § 90.103." Id. at 8. Plaintiff further alleges that as a result of this conduct by Defendants, Plaintiff offered for sale, introduced, or delivered for introduction into commerce the subject engines.; which were in violation of the Clean Air Act. The United States filed civil actions against Plaintiff for injunctive relief and the assessment of civil penalties for these violations. A consent decree/judgment was entered against Plaintiff for civil penalties in the amount of $2 million plus interest, and Plaintiff was ordered to export or permanently destroy the certain engines that were in violation of federal law and implement an emission off-set project. Plaintiff seeks relief forthe civil penalties lodged against Plaintiff, as well as the cost of export and/or destruction of the subject engines as required by the EPA and the cost of implementation of the emission off-set project.
Defendant Ma has filed motions to dismiss the causes of action against her for lack of personal jurisdiction, improper venue, and failure to state a claim [9]. Plaintiff has filed a response in opposition to the motions to dismiss [13], and Defendant Ma has filed a reply to the response [15]. On January 23, 2012, the Clerk of the Court entered default against Defendant Best Machinery [20] for failure to plead or otherwise defend the claims asserted against it. The Court now turns to Defendant Ma's motions to dismiss.
First, Defendant Ma has moved to dismiss the causes of action against her for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure.1 A plaintiff has the burden to show that the court enjoys personal jurisdiction over a nonresident defendant who has challenged that jurisdiction. Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994), cert, denied, 513 U.S. 930, 115 S. Ct. 322, 130 L. Ed. 2d 282 (1994). On a motion to dismiss for lack of personal jurisdiction, the plaintiff need only make a prima facie showing of jurisdiction. Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (internal citation omitted). When a court rules on the motion before holding a hearing, it must accept as true all uncontroverted allegations in the complaint and must resolve any factual disputes in favor of the plaintiff. Id. (internal citation omitted). In making its determination, the Court may review any part of the record, including pleadings, affidavits, interrogatories, depositions, oraltestimony, exhibits, and any combination thereof. Command—Aire Corp. v. Ontario Mech. Sales & Serv. Inc., 963 F.2d 90, 95 (5th Cir. 1992). In a personal jurisdiction determination, the Court first turns to Rule 4(k)(l)(A) of the Federal Rules of Civil Procedure, which provides that a court has personal jurisdiction over any defendant who would be subject to personal jurisdiction under the long-arm statute of the state in which the court sits. Thus, in this diversity action, the Court must conduct a two-prong analysis: first, examine whether Defendant Ma is amenable to suit under the Mississippi long-arm statute, Mississippi Code § 13-3-57; and second, determine whether the exercise of personal jurisdiction over Defendant Ma would comport with the Due Process Clause of the Fourteenth Amendment to the United States Constitution.2
Miss. CODE ANN. § 13-3-57. The three prongs of the statute are commonly referred to as the "contract prong," the "tort prong," and the "doing-business prong."
Plaintiff alleges the contract prong and doing-business prong of the Mississippi long-arm statute are satisfied. For the court to have personal jurisdiction over a nonresident defendant pursuant to the doing-business prong, "(1) the non-resident. . . must purposefully do some act or consummate a transaction in Mississippi; (2) the cause of action must either arise from or beconnected with the act or transaction; and (3) the assumption of jurisdiction by Mississippi must not offend traditional notions of fair play and substantial justice." Internet Doorway, Inc. v. Parks, 138 F. Supp. 2d 773, 775 (S.D. Miss. 2001) (citing Gross v. Chevrolet Country, Inc., 655 So. 2d 873, 877 (Miss. 1995) (citing Rittenhouse v. Mabry, 832 F.2d 1380, 1384 (5th Cir. 1987)). The Mississippi Supreme Court has stated that "the long-arm statute, by its plain terms, applies to any person or corporation performing any character of work in this state." Estate of Jones v. Phillips ex rel. Phillips, 992 So. 2d 1131, 1139 (Miss. 2008); see also ITL Int'l, Inc. v. Constenla, S.A., No. 10-60892, 2012 WL 266987, at *2 (5th Cir. Jan. 31, 2012). A nonresident defendant is subject to personal jurisdiction in Mississippi under the contract prong of the Mississippi long-arm statute if the defendant entered into a contract with a Mississippi resident that is to be at least partially performed in Mississippi. Miss. CODE ANN. § 13-3-57.
Plaintiff alleges that the Mississippi long-arm requirements for personal jurisdiction were met in this case based on the following alleged facts. First, Defendants Best Machinery and Ma entered into a contract with Plaintiff PowerTrain, Inc., a Mississippi corporation, whereby Plaintiff would initiate purchase orders from its office in Belmont, Mississippi, for engines with certain specifications and submit to Defendants' California office for order fulfillment. Plaintiff and Defendants had an ongoing business relationship that lasted for four years, from 2002 until 2006, during which time Defendants would order engines to meet Plaintiff's specifications from a Chinese manufacturer and then have them shipped to Memphis, Tennessee, for pick up by Plaintiff. Once the engines were received by Plaintiff, Plaintiff would sell or otherwise distribute the engines to Wood Sales, Inc., another Mississippi corporation, for resale by Wood Sales, Inc. or Tool Mart, Inc., another Mississippi corporation. Plaintiff maintains that by this activity, Defendants "offered for sale, sold and introduced and delivered for introduction into commerce,all of the subject engines through the Plaintiff." See Pl.'s Compl. [1] at 3. Plaintiff further maintains that Ma's counterclaim against American Honda Motor Company filed in another case concerning the same subject engines, styled Powertrain, Inc. v. American Honda Motor Co., Civil Action Number 1:03-CV-00668-MPM, "clearly reflects...
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