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Hicks v. Jayco, Inc.

United States District Court, M.D. North Carolina

March 15, 2018

LLOYD HICKS, Plaintiff,
v.
JAYCO, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          N. Carlton Tilley, Jr. Senior United States District Judge.

         This matter comes before the Court on Defendant Jayco, Inc.'s (“Jayco”) Motion to Dismiss (“Motion”) [Doc. #9] pursuant to Federal Rule of Civil Procedure 12(b)(2). For the reasons explained below, Jayco's Motion will be denied.

         Jayco is a Recreational Vehicle (“RV”) manufacturer incorporated in Indiana with its principal place of business there. (Compl. [Doc. #5] ¶ 4; Newcomer Aff. [Doc. #10-1] ¶ 3.) According to the Complaint, on May 16, 2015, Mr. Hicks, a resident of King, North Carolina, purchased a Jayco RV from Tennessee RV Sales and Service (“Tennessee RV”) in Knoxville, Tennessee. (Compl. ¶¶ 2, 5, 6.) The RV came with a limited warranty from Jayco. (Id. ¶¶ 7, 8.) Since he bought the RV, it has been out of service for warranty repairs for over two months. (Id. ¶ 18.) Mr. Hicks alleges that, throughout this time, he has been in continuous contact with both Tennessee RV and Jayco and that the RV continues to suffer from defects and nonconformities. (Id. ¶¶ 19, 21.) Except for the final repair work done at Bill Plemmons RV World, [1] Mr. Hicks took the RV to Tennessee RV for all servicing. (Id. ¶¶ 13-15.) Ultimately, on May 20, 2016, Jayco transported the RV from Bill Plemmons RV World to its factory in Middlebury, Indiana for repairs. (Id. ¶ 16.) On that occasion, Jayco kept the RV for twenty-five days. (Id.) However, according to the Complaint, despite all repair attempts, the RV continued to experience a multitude of problems. (Id. ¶ 17.)

         As a result of these events, Mr. Hicks filed the present action against Jayco asserting claims for (1) breach of implied warranty of merchantability pursuant to North Carolina General Statute § 25-2-314 and (2) breach of express/implied warranty pursuant to the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq. (See generally Compl.) In support of his first claim for relief, Mr. Hicks alleges that Jayco “breached the implied warranty of merchantability” because the RV was “not in merchantable condition when sold or at any time thereafter, was not fit for the ordinary purposes for which such goods are used, and will not pass without objection in the trade.” (Compl. ¶ 27.) In support of his second claim for relief, Mr. Hicks asserts that he was damaged by Jayco's failure to comply with its warranty of the RV and is, therefore, “entitled to a refund of the [RV's] purchase price” and other damages. (Id. ¶ 39.) In response, Jayco moved to dismiss the Complaint pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. (Mot. to Dismiss.)

         “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff ultimately bears the burden of proving to the district court judge the existence of jurisdiction over the defendant by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.” New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, n.5 (4th Cir. 2005) (citing Prod. Grp. Int'l v. Goldman, 337 F.Supp.2d 788, n.2 (E.D. Va. 2004)). “But when . . . the court addresses the question on the basis only of motion papers, supporting legal memoranda and the relevant allegations of a complaint, the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge.” Id. at 294 (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989), and In re Celotex Corp., 124 F.3d 619, 628 (4th Cir. 1997)). “Under such circumstances, courts ‘must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction.'” Id. (quoting Combs, 886 F.2d at 676). A plaintiff makes a prima facie showing in this context when it “present[s] evidence sufficient to defeat a motion for judgment as a matter of law.” In re Polyester Staple Antitrust Litig., No. 3:03CV1516, 2008 WL 906331, at *7 (W.D. N.C. Apr. 1, 2008) (quoting Reese Bros., Inc. v. U.S. Postal Serv., 477 F.Supp.2d 31, 36 (D.D.C. 2007)); see also Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857, 862 (9th Cir. 2003) cited in Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 561 (4th Cir. 2014) (stating that a plaintiff makes a prima facie showing of personal jurisdiction by presenting facts that, if true, would support jurisdiction). Stated another way, a plaintiff makes a prima facie showing when there is evidence which, if true, a reasoning mind could accept as sufficient to support the proposition in question.

         Rule 4(k)(1)(A) of the Federal Rules of Civil Procedure confers personal jurisdiction over any defendant who would be subject to personal jurisdiction under the long-arm statute of the state in which the district court sits. In order for a district court to exercise personal jurisdiction over a defendant pursuant to a state long-arm statute, (1) the forum state's long-arm statute must authorize the exercise of personal jurisdiction and (2) the defendant must have sufficient minimum contacts with the forum state to satisfy the Due Process Clause of the Fourteenth Amendment. Christian Sci. Bd. of Dirs. of the First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). Because North Carolina's long-arm statute “is designed to extend jurisdiction over nonresident defendants to the fullest limits permitted by the Fourteenth Amendment's due process clause, ” these inquiries collapse into one. See ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 623 (4th Cir.1997). “Thus, the court's focus becomes whether the plaintiff has made a prima facie showing that the defendant's contacts with North Carolina satisfy constitutional due process.” JPB Installers, LLC v. Dancker, Sellew & Douglas, Inc., No. 1:17CV292, 2017 WL 2881142, at *2 (M.D. N.C. July 6, 2017) (internal citation omitted).

         In International Shoe Co. v. Washington, 326 U.S. 310 (1945), the Supreme Court recognized that due process authorizes a state to “exercise personal jurisdiction over an out-of-state defendant if 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 (2011) (quoting Int'l Shoe Co., 326 U.S. at 316) (internal quotations omitted) (alteration in original); accord Daimler AG v. Bauman, U.S., 134 S.Ct. 746, 754 (2014). Two categories of personal jurisdiction have developed from this principle: “'general' (sometimes called ‘all-purpose') jurisdiction and ‘specific' (sometimes called ‘case-linked') jurisdiction.” Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cnty., U.S., 137 S.Ct. 1773, 1780 (2017). “Specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Id. (internal quotations and citations omitted). In contrast, a court with general jurisdiction may hear any claim against that defendant, even if all the incidents underlying the claim occurred in a different State.” Id.

         First, there is no general jurisdiction over Jayco.[2] Corporations are subject to general jurisdiction in any state where “their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State.” Goodyear, 564 U.S. at 919. A corporation's “place of incorporation and principal place of business are paradig[m] . . . bases for general jurisdiction.” Daimler, 134 S.Ct. at 760. It is the “exceptional case” when a court exercises general jurisdiction in a forum outside of those paradigm bases. Id. at n.19. Jayco is an Indiana corporation with its principal place of business and its manufacturing facility in Middlebury, Indiana. (Newcomer Aff. [Doc. #11-1] ¶ 3.) Jayco is not incorporated in North Carolina nor does it have its principal place of business here. (Id. ¶¶ 4, 13.) It also has no employees or agents in North Carolina. (Id.) As the Supreme Court recognized in Daimler, a corporation cannot be considered “at home” when it “operates in many places” because it “can scarcely be deemed at home in all of them.” 134 S.Ct. at 762 n.20. Jayco's contacts with North Carolina are not “so constant and pervasive as to render [Jayco] essentially at home in the forum State.” Id. at 751 (internal quotations and citation omitted). There is nothing before the Court suggesting that Jayco is “at home” in North Carolina nor that Jayco has “continuous and systematic” contacts with North Carolina. Mr. Hicks has not met his prima facie burden as to general jurisdiction.

         However, there is specific jurisdiction for one of the claims in this cause of action. “[S]pecific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.” Goodyear, 564 U.S. at 919 (internal marks and citation omitted). For jurisdiction to comport with the limits of due process, the defendant's suit-related conduct must create a substantial connection with the forum state. Walden v. Fiore, U.S., 134 S.Ct. 1115, 1121 (2014). This jurisdictional inquiry focuses on whether the defendant has sufficient minimum contacts with the forum and whether the plaintiff's cause of action arises out of or relates to those forum-related contacts. Id. at 1121. To decide whether or not specific jurisdiction exists, a court examines “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiff[‘s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable.” Mitrano v. Hawes, 377 F.3d 402, 407 (4th Cir. 2004).

         The initial inquiry, purposeful availment, “is grounded on the traditional due process concept of ‘minimum contacts[.]'” Universal Leather, 773 F.3d at 559. “[A] single act can support jurisdiction, ” so long as that act “creates a ‘substantial connection' with the forum.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 n.18 (1985). “[T]he constitutional touchstone remains whether the defendant purposefully established ‘minimum contacts' in the forum State.” Id. at 474. “Th[e] ‘purposeful availment' requirement ensures that a defendant will not be hauled into a jurisdiction solely as a result of ‘random, ' ‘fortuitous, ' or ‘attenuated' contacts, or of the ‘unilateral activity of another party or a third person.'” Id. at 475 (internal citations omitted); see also Unspam Techs., Inc. v. Chernuk, 716 F.3d 322, 328 (4th Cir. 2013); ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 392 (4th Cir. 2012).

         Courts analyze “various nonexclusive factors” to determine if a corporate defendant has purposefully availed itself of the privilege of conducting activities in the state, including, but not limited to:

• whether the defendant maintains offices or agents in the forum state,
• whether the defendant owns property in the forum state,
• whether the defendant reached into the forum state to solicit or initiate business,
• whether the defendant deliberately engaged in significant or long-term business activities in ...

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