United States District Court, E.D. North Carolina, Western Division
RECO D. SMITH, Plaintiff,
HEALTHCARE FINANCIAL SERVICES and CAMC PHYSICIANS GROUP, Defendants.
C. DEVER, III CHIEF UNITED STATES DISTRICT JUDGE.
21, 2017, Reco D. Smith ("Smith" or
"plaintiff'), a federal prisoner proceeding pro se
and currently detained at the Federal Medical Center in
Burner, North Carolina, filed a complaint against Healthcare
Financial Services ("HCFS") and CAMC Physicians
Group ("CAMC"). Compl. [D.E. 1]; see [D.E. 1-3];
[D.E. 20] 3. Smith alleged violations of the Fair Debt
Collection Practices Act and the Fair Credit Reporting Act,
and state-law claims under the North Carolina Debt Collection
Act and for negligence. See Compl. at 8-12. On October 20,
2017, defendant CAMC moved to dismiss the action under
Federal Rule of Civil Procedure 12(b)(2) [D.E. 15], and
defendant HCFS moved to dismiss the action under Federal
Rules of Civil Procedure 12(b)(4), (5), and (6) [D.E. 17]. On
November 14, 2017, Smith responded in opposition to both
motions [D.E. 20]. As explained below, the court grants CAMC
s motion to dismiss, denies HCFS's motion to dismiss, and
transfers this action to the United States District Court for
the Southern District of West Virginia.
is a prisoner at the Federal Medical Center in Burner, North
Carolina. Compl. ¶ 4; [D.E. 20] 3. HCFS is a debt
collection agency with its principal place of business in
Knoxville, Tennessee. See Id. ¶ 5. CAMC is a
medical provider headquartered in Charleston, West Virginia.
See Id. ¶ 6. Smith alleges that CAMC
and HCFS engaged in unfair and deceptive trade practices
while trying to collect a $302.00 debt, which Smith alleges
is not properly attributable to him. See id.
¶¶ 10, 12, 35. Smith became aware of the $302.00
debt when it appeared on his Transunion credit report, which
indicated that he owed the debt to "Healthcare Fincl
Svcs" and listed a post office box in Charleston, West
Virginia as HCFS's address. See Id. ¶ 12;
[D.E. 1-1]. Defendant CAMC is the original creditor for this
debt. See [D.E. 1-1]. CAMC contends that Smith incurred this
debt for medical services while a prisoner at the Gilmer
Federal Correction Center in Glenville, West Virginia. See
[D.E. 16] 7; Crotty Dec. [D.E. 16-1] ¶ 13. Smith
contends that CAMC sold this debt to HCFS for collection and
that each organization violated federal and state law in
attempting to collect the debt. See Compl. ¶¶ 6,
moves to dismiss the action for lack of personal
jurisdiction. See [D.E. 15-16]; Fed.R.Civ.P. 12(b)(2). In
support, CAMC states that it is a "nonprofit corporation
organized and existing under the laws of the State of West
Virginia, " which operates exclusively within West
Virginia, and does not do business, employ workers, or supply
services within North Carolina. [D.E. 16-1] ¶¶ 2,
plaintiff must prove personal jurisdiction by a preponderance
of the evidence. See Grayson v. Anderson, 816 F.3d
262, 268 (4th Cir. 2016); Combs v. Rakker, 886 F.2d
673, 676 (4th Cir. 1989). If a court rules on a motion to
dismiss for lack of personal jurisdiction without an
evidentiary hearing, the plaintiff need only establish a
prima facie case. Combs, 886 F.2d at 676. When
determining whether the plaintiff has met this burden, courts
resolve all factual disputes and draw all reasonable
inferences in the light most favorable to the plaintiff.
Id.; see Mylan Labs., Inc. v. Akzo, N.V., 2
F.3d 56, 60 (4th Cir. 1993). However, an evidentiary hearing
need not include live testimony, but merely the opportunity
for the parties to present evidence and argument concerning
jurisdiction. Grayson, 816 F.3d at 268. After the
court has considered such evidence and argument, it
determines whether a plaintiff has proven by a preponderance
of the evidence that the court has personal jurisdiction over
the defendant. Id.
federal court may exercise personal jurisdiction over a
person to the extent allowed by state law in the state where
the federal court sits. See Fed.R.Civ.P. 4(e)(1), (h)(1)(A),
(k)(1)(A). The North Carolina long-arm statute extends
personal jurisdiction over out-of-state defendants to the
fullest limits permitted by the Fourteenth Amendment's
Due Process Clause. See Dillon v. Numismatic Funding
Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 630-31 (1977);
Century Data Sys., Inc. v. McDonald, 109 N.C.App.
425, 427, 428 S.E.2d 190, 191 (1993). To determine whether
the North Carolina long-arm statute reaches a particular
defendant, courts analyze whether the defendant has
sufficient minimum contacts with North Carolina such that
"maintenance of the suit does not offend traditional
notions of fair play and substantial justice."
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945) (quotation omitted); see Dillon, 291 N.C. at
676-80, 231 S, E.2d at 630-33.
recognize two types of personal jurisdiction: general and
specific. See Goodyear Dunlop Tires Operations, S.A. v.
Brown, 564 U.S. 915, 919 (2011). Smith does not argue
that the court has general jurisdiction over CAMC. See [D.E.
20] 4. When assessing specific jurisdiction, courts consider
three factors: "(1) the extent to which the defendant
has purposefully availed itself of the privilege of
conducting activities in the [forum] state; (2) whether the
plaintiffs' claims arise out of those activities directed
at the state; and (3) whether the exercise of personal
jurisdiction would be constitutionally
'reasonable.'" Carefirst of Md., Inc. v.
Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 397 (4th
Cir. 2003); see Bristol-Myers Squibb Co. v. Superior
Court of Cal., 137 S.Ct. 1773, 1780-81 (2017);
Walden v. Fiore, 134 S.Ct. 1115, 1121-22 (2014);
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-77
(1985). When analyzing the first two elements, courts
consider only the defendant's activities-those contacts
that the defendant itself has created with the forum. See
Bristol-Myers Squibb Co., 137 S.Ct. at 1781-82;
Walden, 134 S.Ct. at 1122; Burger King, 471
U.S. at 472-78. In accordance with this principle,
"[t]he substantial connection between the defendant and
the forum State necessary for a finding of minimum contacts
must come about by an action of the defendant purposefully
directed toward the forum State." Asahi Metal Indus.
Co. v. Superior Court of Cal., 480 U.S. 102, 112 (1987)
(plurality opinion) (citations and emphasis omitted); see
Bristol-Myers Squibb Co., 137 S.Ct. at 1781-82;
Walden, 134 S.Ct. at 1122.
argues that CAMC targeted the conduct alleged in the
complaint at him while he resided in North Carolina. See
[D.E. 20] 4. Thus, according to Smith, CAMC has sufficient
contacts with North Carolina for the court to exercise
personal jurisdiction. See id.
alleged conduct does not suffice for this court to exercise
personal jurisdiction over CAMC. The only contact Smith
alleges between CAMC and North Carolina is the contact that
Smith made with CAMC when Smith began to reside in North
Carolina. Nothing in the complaint suggests that CAMC
purposefully directed actions towards North Carolina, and
CAMC's alleged conduct would not cause CAMC to
"reasonably anticipate being haled into court" in
North Carolina. See, e.g., Calder v. Jones,
465 U.S. 783, 790 (1984). Accordingly, exercising personal
jurisdiction over CAMC would violate due process. See,
e.g., Bristol-Myers Squibb Co., 137 S.Ct. at
1781-82; Walden, 134 S.Ct. at 1122-26;
World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 292 (1980); Hanson v. Denckla, 357 U.S. 235,
251-52 (1958). Thus, this court lacks personal jurisdiction
over CAMC and grants CAMC's motion to dismiss.
HCFS moves to quash service of process, or alternatively, to
dismiss the complaint based on Federal Rules of Civil
Procedure 12(b)(4), (5), and (6). See [D.E. 17]. HCFS argues
that it is the wrong defendant, and that another organization
with a similar name, but which is based in West Virginia and
not Tennessee, is the organization that Smith should have
sued. In support of its motion to quash, HCFS cites the
address listed on Smith's original Transunion credit
report and a registered mail receipt both of which list a
Charleston, West Virginia address. See [D.E. 18] ¶¶
2-6. A motion to quash or dismiss under Rule 12(b)(4)
challenges the sufficiency or "form" of the process
itself, while a motion to quash or dismiss under Rule
12(b)(5) challenges the sufficiency of the act of
"service" of process. See Fed.R.Civ.P. 12(b)(4),
(b)(5); Lee v. City of Fayetteville, No.
5:15-CV-638-FL, 2016 WL 1266597, at *2 (E.D. N.C. Mar. 30,
2016) (unpublished). In other words, a Rule 12(b)(4) motion
to dismiss objects to a defect in the content of the
documents served, while a Rule 12(b)(5) motion to dismiss
objects to a defect in the act (or lack) of delivery.
See, e.g., 5B Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 1353
(3d ed. 2004). A typical Rule 12(b)(4) challenge alleges that
the entity named in the summons is different from the entity
named in the complaint, and a typical Rule 12(b)(5) challenge
alleges that the process was delivered by a person incapable
of serving process (e.g., a party), to a person or entity
incapable of receiving service (e.g., a minor), or that the
service was delivered in an improper way (e.g., via
first-class mail). See Stokes v. JPMorgan Chase Bank,
NA, No. JFM 8:11-cv-2620, 2012 WL 527600, at *5-6 (D.
Md. Feb. 16, 2012) (unpublished). Plaintiff bears the burden
of establishing proper service of process. See Mylan
Labs., 2 F.3d at 60; Dalenko v. Stephens, 917
F.Supp.2d 535, 542 (E.D. N.C. 2013).
alleges that the conduct described in Smith's complaint
is properly ascribed to a different entity with a similar
name, but which is based in West Virginia and not in
Tennessee. Under Rule 12(b)(4), HCFS argues that Smith named
the wrong party in the complaint and summons. See [D.E. 18]
4-6. Under Rule 12(b)(5), HCFS argues that the service was
improper because Smith failed to satisfy either Rule
4(h)(1)(B) or Rule 4(h)(1)(A), incorporating the Tennessee
state law governing service on a domestic corporation. See
[D.E. 18] 4. Specifically, HCFS argues that both rules
require the delivery of a summons and a copy of the complaint
to a corporate officer who is authorized to receive process.
See Fed.R.Civ.P. 4(h); Term. R. Civ. P. 4.04. HCFS argues
that service was improper because service was made to an
agent of the Tennessee HCFS, not the West Virginia HCFS. See
[D.E. 18] 4-6.
misconstrues Rule 12(b)(4) and (5). Under Rules 12(b)(4) and
(5), "wrong" does not mean "not liable."
Instead, it means "a party not named in the
summons." See 5B Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1353 (3d ed.
2004). The Tennessee entity named HCFS, with its principal
place of business at 265 Brookview Centre Way, Suite 400,
Knoxville, TN 37919, is named as a defendant in the
complaint, and in the summons, copies of which were delivered
in a manner prescribed under the rules. See Compl. 1-2; [D.E.
1-4] 1; Affidavit of Service [D.E. 14]. HCFS's factual
claim that it is not liable to Smith is not properly
expressed via ...