Talbot's Pharm. Family Prods. L. L. C. v. Skanda Grp. Indus. L. L. C., CIV. ACTION NO. 3:20-0716

• Decision Date: 28 April 2021
• Docket Number: CIV. ACTION NO. 3:20-0716
• Parties: TALBOT'S PHARMACEUTICALS FAMILY PRODUCTS L. L. C. v. SKANDA GROUP INDUSTRIES L. L. C., ET AL.
• Court: U.S. District Court — Western District of Louisiana

TALBOT'S PHARMACEUTICALS FAMILY PRODUCTS L. L. C. v. SKANDA GROUP INDUSTRIES L. L. C., ET AL.

CIV. ACTION NO. 3:20-0716

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA MONROE DIVISION

April 28, 2021

JUDGE TERRY A. DOUGHTY

MAG. JUDGE KAYLA D. MCCLUSKY

REPORT AND RECOMMENDATION

Before the undersigned Magistrate Judge, on reference from the District Court, is a motion to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer venue [doc. # 27] filed by Defendants Skanda Group of Industries, L.L.C. and Nagendra Karri. The motion is opposed. For reasons that follow, it is recommended that the motion to dismiss for lack of personal jurisdiction be GRANTED-IN-PART and DENIED-IN-PART, and that the motion to dismiss for improper venue or in the alternative, to transfer venue be DENIED.

Background

On June 5, 2020, Plaintiff Talbot's Pharmaceuticals Family Products, L.L.C. ("Dr. Talbot") filed the instant diversity suit for breach of contract and fraud against Defendants, Skanda Group of Industries, L.L.C. ("Skanda") and Nagendra Karri ("Karri"),¹ Skanda's alleged alter ego.² Following at least two amendments to properly allege subject matter jurisdiction, seedoc. #s 19-26, the operative complaint at this time is the Second Amended Complaint for Breach of Contract and Fraud ("SAC") [doc. # 25].

According to the SAC,

[t]his action arises out of Defendants' bait and switch scheme aimed at defrauding Plaintiff of almost $2 million. Plaintiff Dr. Talbot is in the health and wellness industry. When the Corona Virus pandemic struck, Dr. Talbot was approached by buyers and sellers of face masks and other medical products. Defendants offered to sell Dr. Talbot 1 million KN95 face masks of a specific style for immediate delivery in the United States. On the basis of Defendants' representations and offer regarding the specific style of face mask and immediate delivery, Dr. Talbot secured a customer, Harris County Texas. Dr. Talbot accepted Defendants' offer and paid Defendants $1.8 million in consideration for the sale of 1 million units of the specified KN95 face mask that would be immediately delivered to Harris County Texas. To expedite the delivery, Dr. Talbot paid to air ship the face masks to Texas. Defendants failed to deliver the face masks timely causing Dr. Talbot to lose the Harris County sale. Subsequently, Defendants shipped to Dr. Talbot 750,000 face masks that were not as specified in the order and of an inferior design. Dr. Talbot rejected the shipment, notified Defendants that the goods shipped were not as ordered and demanded return of its $1.65 million payment for the 750,000 face masks and expedited shipping charges.

(SAC).

Dr. Talbot seeks an award of actual damages, including lost profits, attorneys' fees and expenses, plus legal interest. Id.

On September 14, 2020, Defendants Skanda and Karri filed the instant motion to dismiss for lack of personal jurisdiction and improper venue pursuant to Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure, or in the alternative, to transfer venue to the United States District Court for the Central District of California under 28 U.S.C. § 1404(a) (sometimes referred to by Movants as § 1406). Following delays for the parties to conduct jurisdictional discovery, Plaintiff filed its opposition to the motion to dismiss on March 17, 2021. [doc. #s 38-39]. Defendants filed their reply brief on March 24, 2021. [doc. # 40]. Accordingly, the matter is ripe.

Personal Jurisdiction

I. General Principles

When a defendant timely questions a federal district court's in personam jurisdiction, the plaintiff has the burden of proving that the court has jurisdiction over the defendant. Travelers Indem. Co. v. Calvert Fire Ins. Co., 798 F.2d 826, 831B32 (5th Cir.1986), on reh'g in part, 836 F.2d 850 (5th Cir.1988) (citations omitted); In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 778 (5th Cir.2018) (citation omitted) (plaintiff's burden to establish personal jurisdiction).

If the court resolves a motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, then plaintiff only need make a prima facie showing of the jurisdictional facts. Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 343 (5^th Cir. 2004). In assessing whether plaintiff has made a prima facie showing, the court "must accept as true [the plaintiff's] uncontroverted allegations, and resolve in [its] favor all conflicts between the [jurisdictional] facts contained in the parties' affidavits and other documentation." Id. (citation and internal quotation marks omitted).³ However, the court need not credit plaintiff's conclusory allegations, even if uncontroverted. Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001) (citations omitted).

A federal district court sitting in diversity may exercise personal jurisdiction over a nonresident defendant as long as, (1) the long-arm statute of the forum state confers personaljurisdiction over that defendant; and (2) exercise of such jurisdiction by the forum state does not violate due process protections under the United States Constitution. Latshaw v. Johnston, 167 F.3d 208, 211 (5^th Cir. 1999). Louisiana's long-arm statute extends jurisdiction to the full limits of the United States Constitution. See LA. R.S. § 13:3201(B); LA. CODE CIV. P. ART. 6(B). Therefore, the sole inquiry is whether exercising in personam jurisdiction over the defendant comports with federal due process. Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 584 (5th Cir. 2010) (citation omitted).

For personal jurisdiction to satisfy due process requirements, the plaintiff must establish that the defendant has "certain minimum contacts with [the State] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923; 131 S.Ct. 2846, 2853 (2011) ("Goodyear") (quoting Int'l Shoe Co. v. State of Wash., Office of Unemployment Comp. & Placement, 326 U.S. 310, 316; 66 S.Ct. 154 (1945)). In the years following its landmark decision in International Shoe, the Supreme Court has "differentiated between general or all-purpose jurisdiction, and specific or case-linked jurisdiction." Goodyear, supra; Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., ___ U.S. ___, 137 S.Ct. 1773, 1780 (2017) (emphasis added).

In this case, Dr. Talbot contends that this court "has both general and specific personal jurisdiction over Defendant Skanda and specific jurisdiction only over Defendant Karri." (Pl. Opp. Memo., pg. 5). The court will address general and specific jurisdiction separately.

II. General Jurisdiction

a) Law

"A court may assert general jurisdiction over foreign (sister-state or foreign-country) 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 Ry. Co. v. Tyrrell, ___ U.S. ___, 137 S.Ct. 1549, 1558 (2017) ("BNSF") (citations omitted).⁴ The "paradigm" forums where a corporate defendant is considered "at home," are the corporation's place of incorporation and its principal place of business. Id. (citing inter alia, Daimler AG v. Bauman, 571 U.S. 117, 137; 134 S.Ct. 746, 760 (2014) (emphasis added). Further, in an "exceptional case, a corporate defendant's operations in another forum may be so substantial and of such a nature as to render the corporation at home in that State." BNSF, supra (citations and internal quotation marks omitted).

In Daimler, although the Supreme Court discussed where corporations could be deemed "at home" for purposes of general jurisdiction, one of the entities at issue in that case was a limited liability company ("LLC") -- Mercedes-Benz USA, L.L.C. ("MBUSA"). Daimler, supra. Nevertheless, the Supreme Court did not distinguish between these different entities. In fact, the Court ultimately concluded that it could not exercise general jurisdiction over Daimler because "neither Daimler nor MBUSA is incorporated in California, nor does either entity have its principal place of business there." Daimler, 134 S.Ct. at 761-62.

Citing Daimler, other district courts have determined that LLCs may be considered "athome" for purposes of general jurisdiction in the states where they were organized and where they have their principal place of business. See Duncanson v. Wine & Canvas IP Holdings LLC, Civ. Action No. 16-0788, 2017 WL 6994541, at *4 (S.D. Ind. Apr. 20, 2017); Miller v. Native Link Constr., LLC, No. 15-1605, 2017 WL 3536175, at *30 (W.D. Pa. Aug. 17, 2017); Blocker v. Black Entm't Television, LLC, Civ. Action No. 17-1406, 2018 WL 3797568, at *6 (D. Or. June 26, 2018), R&R adopted, 2018 WL 3795219 (D. Or. Aug. 8, 2018); Garcia Hamilton & Associates, L.P. v. RBC Capital Markets, LLC, 466 F.Supp.3d 692, 699 n5 (S.D. Tex.2020).

Furthermore, in Frank v. P N K (Lake Charles) L.L.C., the Fifth Circuit observed that

neither the Supreme Court nor a sister circuit has directly addressed whether the type of artificial entity, e.g., partnership or limited liability company, affects the "at home" analysis. Our circuit and several in-circuit district courts have applied the "at home" test to entities other than corporations, albeit without analyzing whether the entity type changes the outcome.

Here, we are examining the corporate structure of a limited liability company whose physical corporate operations are domiciled in Louisiana. The rationale behind this test is to rely on a business's domicile or place of principal business as a guidepost in ascertaining where the business is "at home." Considering this premise, the entity type is not germane to this jurisdictional analysis; instead it is the company's domicile that merits attention.

Frank v. P N K (Lake...