Top Tobacco, L.P. v. Abdelshahed

• Decision Date: 08 September 2020
• Docket Number: NO. 3:19-cv-00356,3:19-cv-00356
• Parties: TOP TOBACCO, L.P., REPUBLIC TECHNOLOGIES (NA), LLC, and REPUBLIC TOBACCO, L.P., Plaintiffs, v. WASSEM ABDELSHAHED and SMOKE DREAMS LLC, Defendants.
• Court: U.S. District Court — Middle District of Tennessee

TOP TOBACCO, L.P., REPUBLIC TECHNOLOGIES (NA), LLC,and REPUBLIC TOBACCO, L.P., Plaintiffs, v. WASSEM ABDELSHAHED and SMOKE DREAMS LLC, Defendants.

NO. 3:19-cv-00356

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF TENNESSEE NASHVILLE DIVISION

September 8, 2020

MEMORANDUM OPINION

In this case, Top Tobacco, L.P., Republic Technologies (NA), LLC, and Republic Tobacco, L.P. seek to hold Wassem Abdelshahed and Smoke Dreams LLC ("Smoke Dreams") liable for the sale of counterfeit cigarette rolling papers. On February 11, 2020, the Court granted Smoke Dreams' Rule 12(b)(2) motion to dismiss on personal jurisdiction grounds, denied Smoke Dreams' Rule 12(b)(6) motion as moot, and denied Abdelshahed's Rule 12(b)(6) motion to dismiss on the merits. (Doc. No. 34.) Plaintiffs have filed a "Motion for Partial Reconsideration and/or to Alter or Amend Judgment." (Doc. No. 36). The Court granted leave for additional discovery and supplemental briefing. (Doc. No. 40.) The motion is now ripe for consideration.

I. Legal Standard

Under Rule 59(e), the Court may grant a motion to alter or amend a judgment if there is a clear error of law, newly discovered evidence, an intervening change in controlling law, or a need to prevent manifest injustice. Intera Corp. v. Henderson, 428 F.3d 605, 620 (6th Cir. 2005). However, Rule 59(e) only applies to a judgment or a final order. See Keith v. Bobby, 618 F.3d 594, 597 (6th Cir. 2010) ("This court has interpreted the term 'judgment' to refer to a judgment or a final order."). An order granting partial dismissal of a plaintiff's claims is not a final order that permits the Court to entertain a Rule 59(e) motion. See CGH Transport, Inc. v. Quebecor World, Inc., 261 F. App'x 817, 823 n.10 (6th Cir. 2008). Here, the Court's February 11, 2020, Order was not final because it left claims remaining against Abdelshahed. Accordingly, to the extent Plaintiffs bring a "motion to alter and/or amend judgment" under Rule 59(e), it is procedurally improper.

However, "[d]istrict courts have authority both under common law and Rule 54(b) to reconsider interlocutory orders and to reopen any part of a case before entry of final judgment." Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 F. App'x 949, 959 (6th Cir. 2004) (citing Mallory v. Eyrich, 922 F.2d 1273, 1282 (6th Cir. 1991)); see also In re Life Investors Ins. Co. of Am., 589 F.3d 319, 326 n. 6 (6th Cir. 2009) ("[A] district court may always reconsider and revise its interlocutory orders while it retains jurisdiction over the case.") (citing Rodriguez, 89 F. App'x at 959 and Mallory, 922 F.2d at 1282). Thus, district courts may "afford such relief from interlocutory orders as justice requires." Rodriguez, 89 F. App'x at 959 (internal quotation marks and brackets omitted). Courts traditionally will find justification for reconsidering interlocutory orders when there is (1) an intervening change of controlling law; (2) new evidence available; or (3) a need to correct clear error or prevent manifest injustice. Louisville/Jefferson Cty. Metro Gov't v. Hotels.com, L.P., 590 F.3d 381, 389 (6th Cir. 2009) (citing Rodriguez, 89 F. App'x at 959).

II. Analysis

Plaintiffs first contend that new evidence supports specific personal jurisdiction. In the alternative, Plaintiffs argue that they are entitled to an inference establishing personal jurisdiction based on Smoke Dream's failure to preserve certain evidence. The first issue is dispositive: Plaintiffs have adduced sufficient evidence to support the Court's exercise of specific personal jurisdiction over Smoke Dreams.

A. Specific Jurisdiction

Specific personal jurisdiction over a nonresident defendant exists only to the extent permitted by a state's long-arm statute and the Due Process Clause of the United States Constitution.¹ Bridgeport Music, Inc. v. Still N The Water Pub, 327 F.3d 472, 477 (6th Cir. 2003). "The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts." Walden v. Fiore, 571 U.S. 277, 283 (2014) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)). For a nonresident defendant to be subject to personal jurisdiction, he 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." Id. (citations, quotation marks, and ellipsis omitted). Therefore, the Court focuses on "the relationship among the defendant, the forum, and the litigation," AlixPartners, LLP v. Brewington, 836 F.3d 543, 549 (6th Cir. 2016) (citing Walden, 571 U.S. at 283; Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472-73 (1985)), and employs three criteria for the exercise of specific jurisdiction:

"First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable."

Id. at 549-50 (emphasis in original) (quoting Air Prods. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544, 550 (6th Cir. 2007) and S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374 (6th Cir. 1968)).

The Sixth Circuit has directed that "[w]hen the district court resolves a Rule 12(b)(2) motion solely on written submissions, the plaintiff's burden is "relatively slight," and "the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal[.]" AlixPartners, LLP, 836 F.3d at 549 (quoting Air Prods., 503 F.3d at 549 (citations and quotation marks omitted)). A plaintiff meets this burden by setting forth "specific facts showing that the court has jurisdiction." Serras v. First Tenn. Bank Nat. Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989) (citation and quotation marks omitted). "[T]he pleadings and affidavits submitted must be viewed in a light most favorable to the plaintiff, and the district court should not weigh 'the controverting assertions of the party seeking dismissal.'" Air Prods., 503 F.3d at 549 (quoting Theunissen v. Matthews, 935 F.2d 1454, 1459 (6th Cir. 1991)).

B. The Court's February 2020 Ruling

In the February 11, 2020, Memorandum Opinion on the Motions to Dismiss, the Court found that Plaintiffs had not established that Smoke Dreams purposefully availed itself of the privilege of acting in Tennessee in a manner sufficient to allow the reasonable exercise of specific personal jurisdiction. (Doc. No. 34 at 6-11.) Of particular note, the Court declined to infer, without more, that Smoke Dreams demonstrated an intent to maintain continuing relationships and obligations in Tennessee by locating a retail store near the Tennessee border. (Id. at 9.) The Court concluded that there was insufficient evidence that Smoke Dreams engaged itself in Tennessee in relation to this dispute. (Id. at 10-11.)

C. Discussion of Plaintiffs' New Evidence

Plaintiffs argue that new evidence satisfies the first part of the three-prong specific jurisdiction test - purposeful availment - by demonstrating that Smoke Dreams intentionally and successfully marketed its products to Tennesseans. For evaluating purposeful availment, the Sixth Circuit has adopted the "stream of commerce 'plus' approach," under which "[t]he placement of a product into the stream of commerce, without more, is not an act of the defendant purposely directed toward the forum State." Bridgeport Music, 327 F.3d 472, 479-80 (6th Cir. 2003). "The question is whether a defendant has followed a course of conduct directed at the society or economy within the jurisdiction of a given sovereign." J. McIntyre Mach. v. Nicastro, 564 U.S. 873, 884 (2011); Devault-Graves Agency, LLC v. Salinger, No. 2:15-cv-02178-STA, 2015 WL 6143513, at *5 (W.D. Tenn. Oct. 19, 2015). The court may consider (1) the defendant's direction or control over the flow of the product into the forum; (2) the quantity of the defendant's particular product regularly flowing into the forum; and (3) the distinctive features of the forum that connect it with the product in question. Devault-Graves, 2015 WL 6143513, at *5.

Plaintiffs primarily rely on deposition testimony from Abdelshahed, Smoke Dreams manager Fanous Kamel, and Mina Sanek, the purchaser and current operator of Smoke Dreams. Abdelshahed testified that he opened the Smoke Dreams store in Oak Grove, Kentucky because it was "very close" to the "main target" of Fort Campbell and would "attract" military business; and he intended for the store's "main customers" to come "from the base camp." (Doc. No. 67-1 at 27, 41, 81.) Although Abdelshahed knew many military personnel lived in Kentucky, he also knew part of Fort Campbell was "in Tennessee." (Id. at 27.) Furthermore, Smoke Dreams advertised a 15% "military discount" in the window of the store to attract more of those customers. (Id. at 29; Doc. Nos. 67-2 at 57, 67-3 at 37.)

Kamel and Sanek confirmed the strategy of attracting the business of military members stationed at "very big" Fort Campbell. (Doc. Nos. 67-2 at 57, 67-3 at 37.) Kamel testified that military personnel stationed at Fort Campbell were the primary customers at Smoke Dreams. (Doc. No. 67-2 at 52-53.) Moreover, Sadek testified that "soldiers make up a big part of [the] customer base"; "90% of the people [ ] are military and soldiers"; the soldiers either live on the base, in Oak Grove, Kentucky, or in Clarksville, Tennessee; Clarksville is much larger than Oak Grove; and the store relies on customers from Clarksville, Tennessee in addition to Oak Grove. (Doc. No. 67-3 at 37, 86, 107.) Kamel and Sanek checked drivers' licenses as part of making sales at the store, and they each saw Tennessee licenses. (Doc. Nos. 67-2 at 54, 67-3 at 87.)

The Court concludes that Plaint...