United States District Court, W.D. North Carolina, Charlotte Division
C. Keesler, United States Magistrate Judge.
MATTER IS BEFORE THE COURT on “Defendant GC
Equipment, LLC's Motion to Dismiss for Lack of Personal
Jurisdiction” (Document No. 32). The parties have
consented to Magistrate Judge jurisdiction pursuant to 28
U.S.C. § 636(c), and this motion is now ripe for
disposition. Having carefully considered the motion, the
record, and applicable authority, the undersigned will
deny the motion.
Axxon International, LLC (“Plaintiff” or
“Axxon”), initiated this action with the filing
of its Complaint (Document No. 1) against Defendant GC
Equipment, LLC, doing business as Globecore GmbH, on July 20,
2017. GC Equipment, LLC (“GC Equipment” or
“Defendant”) originally argued for dismissal
based on insufficient process and insufficient service of
process pursuant to Fed.R.Civ.P 12(b)(4) and 12(b)(5) in a
“Motion To Dismiss” filed on September 5, 2017.
(Document No. 12). GC Equipment later withdrew its original
motion to dismiss on September 20, 2017. (Document No. 20).
November 20, 2017, GC Equipment filed a “Motion to
Dismiss, Answer, And Affirmative Defenses.” (Document
No. 21). GC Equipment's Answer asserted for the first
time that there is a lack of personal jurisdiction. (Document
No. 21, p. 1). The Answer also asserted that GC Equipment
should be dismissed pursuant to Fed.R.Civ.P. 12(b)(6).
(Document No. 21, p. 2).
parties consented to Magistrate Judge jurisdiction on
December 8, 2017, and this case was reassigned to the
undersigned. (Document Nos. 22 and 23). On January 31, 2018,
the Court issued the “Pretrial Order And Case
Management Plan” (Document No. 26). The
“…Case Management Plan” includes the
following deadlines: discovery - September 24, 2018;
mediation - October 15, 2018; and dispositive motions -
October 22, 2018. Id.
filed an “Amended Complaint” on March 20, 2018,
naming both GC Equipment and Globecore GmbH
(“Globecore”) as Defendants. (Document No. 28).
Amended Complaint states that Plaintiff is a limited
liability company, organized and existing under the laws of
the State of North Carolina, with its principal place of
business in Rock Hill, South Carolina. (Document No. 28, p.
1). Plaintiff's members are Randy Lenz
(“Lenz”), Art Ward (“Ward”), and
Equity Investment Partners, LLC (“EIP”).
Id. Lenz is a citizen of Florida and Ward is a
citizen of South Carolina. Id. EIP's members are
The Adler Trust and the KMR Trust. (Document No. 28, pp.
1-2). The Trustees and beneficiaries of the Adler Trust and
KMR Trust are not citizens of California. Id.
Plaintiff is “a wholesale supplier of medical equipment
and industrial machinery and fabrication, ” providing
“complete project management support for local, state,
and federal agencies.” (Document No. 28, p. 4).
Amended Complaint describes GC Equipment as “a limited
liability company, organized and existing under the laws of
the State of California, with its principal place of business
in Los Angeles, California.” (Document 28, p. 2). GC
Equipment's members are Dylan Baum (“Baum”)
and Richard Messina (“Messina”), both citizens of
Globecore “is a foreign corporation organized and
existing under the laws of Germany, with its principal place
of business in Oldenburg Eversten, Germany.”
Id. Plaintiff contends that Globecore “is a
transformer oil filtration equipment manufacturer that sells
and manufactures industrial equipment for the production of
bitumen and transformer oil purification and regeneration
across the country.” (Document No. 28, p. 4). GC
Equipment is Globecore's “factory franchised new
equipment/material dealer with full parts, service, and
warranty capacity in the United States.” (Document 28,
entered into a contract (the “USACE Contract”)
with the U.S. Army Corp. of Engineers (the
“USACE”) on September 30, 2016, that was later
modified on October 17, 2017. Id. See also (Document
No. 28-1 and 28-2).
contracted with Globecore through a “Purchase
Order” in November 2016, to provide an oil filtration
system in fulfillment of Plaintiff's USACE contract.
(Document No. 28, p. 4). Baum, of GC Equipment, executed the
“Purchase Order” agreement (the “Globecore
Contract”) as Globecore's authorized agent on
November 9, 2016. Id. See also (Document No. 28, p.
3; Document No. 30, p. 6). The Globecore Contract designates
Globecore and/or Dylan Baum as “Vendor” and
provides an address in Dickinson, Texas. (Document No.
28-3). Plaintiff paid a $20, 000.00 deposit in
accordance with the Globecore Contract to GC Equipment as the
agent for Globecore. (Document No. 28, p. 5).
to the Complaint, this Court has in personam jurisdiction
over GC Equipment and Globecore because of their
“substantial and continuous contacts with the State of
North Carolina, including entering into a subcontractor
agreement with North Carolina.” (Document No. 28, p.
2). Additionally, Plaintiff asserts that the Globecore
Contract “has a mandatory venue provision, which
requires that venue for any dispute shall be in North
Carolina.” Id.; see also, (Document
No. 23-3). Plaintiff maintains that GC Equipment “was
and is Globecore's authorized agent to act on behalf of
Globecore, ” and acted as Globecore's authorized
agent pertaining to the Globecore Contract. Id.
Plaintiff also asserts that GC Equipment had “routine
and continuous” contact with Plaintiff in North
Carolina regarding execution of the underlying agreement(s).
(Document No. 28, pp. 2-3).
Amended Complaint asserts claims for: (1) breach of contract
against Globecore; and (2) intentional interference with
contract against both GC Equipment and Globecore. (Document
No. 28, pp. 7-10). Plaintiff contends that GC Equipment and
Globecore “knowingly and willfully interfered with
Axxon's contractual relationship with USACE.”
(Document No. 28, p.9).
“Amended Complaint” notes that it was filed with
opposing counsel's written consent. (Document No. 28, p.
1, n. 1). Moreover, on April 3, 2018, “Defendant GC
Equipment LLC's Written Consent To Amend Complaint”
was filed with the Court confirming that GC Equipment
consented to allowing Plaintiff to amend its Complaint,
naming GC Equipment as a Defendant, on March 20, 2018.
(Document No. 29). Neither the “Amended Complaint,
” nor “Defendant GC Equipment LLC's Written
Consent To Amend Complaint” suggest that GC Equipment
disputed the Court's jurisdiction in this matter.
(Document Nos. 28 and 29). However, “Defendant GC
Equipment LLC's Motion To Dismiss, Answer, And
Affirmative Defenses In Response To Plaintiff's Amended
Complaint” (Document No. 30) was also filed on April 3,
2018, and in that pleading again included motions to dismiss
pursuant to Fed.R.Civ.P. 12 (b)(2) and 12(b)(6).
pending before the Court is “Defendant GC Equipment
LLC's Motion to Dismiss for Lack of Personal
Jurisdiction” (Document No. 32) and “Brief in
Support . . .” (Document No. 33), filed April 17, 2018.
GC Equipment seeks dismissal of this action pursuant to
Fed.R.Civ.P. 12(b)(2), for lack of personal jurisdiction.
(Document No. 32). GC Equipment contends that it is not
subject to personal jurisdiction in North Carolina because it
lacks the requisite contacts with the forum state. (Document
No. 33, p. 7). “Plaintiff's Brief in Opposition to
Defendant's Motion to Dismiss” was filed May 1,
2018; and “Defendant GC Equipment LLC's Reply Brief
in Support of . . .” was filed May 8, 2018.
pending “…Motion to Dismiss for Lack of Personal
Jurisdiction” is now ripe for review and disposition.
STANDARD OF REVIEW
invoking federal court jurisdiction has the burden of
establishing that personal jurisdiction exists over the
defendant. New Wellington Fin. Corp. v. Flagship Resort
Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005); Combs
v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989).
When a court's personal jurisdiction is properly
challenged by a Rule 12(b)(2) motion, the jurisdictional
question thus raised is one for the judge, with the burden on
the plaintiff ultimately to prove the existence of a ground
for jurisdiction by a preponderance of evidence . . . .
[W]hen, as here, 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 in order to survive the
jurisdictional challenge. In considering a challenge on such
a record, the court 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.
Combs, 886 F.2d at 676 (internal citations omitted).
“Mere allegations of in personam jurisdiction are
sufficient for a party to make a prima facie showing.”
Barclays Leasing, Inc. v. National Business Systems,
Inc., 750 F.Supp. 184, 186 (W.D. N.C. 1990). The
plaintiff, however, “may not rest on mere allegations
where the defendant has countered those allegations with
evidence that the requisite minimum contacts do not
exist.” IMO Industries, Inc. v. Seim S.R.L.,
3:05-CV-420-MU, 2006 WL 3780422 at *1 (W.D. N.C. December 20,
2006). “Rather, in such a case, the plaintiff must come
forward with affidavits or other evidence to counter that of
the defendant . . . factual conflicts must be resolved in
favor of the party asserting jurisdiction….”
are two varieties of personal jurisdiction, general and
specific. General jurisdiction requires
“substantial” or “continuous and
systematic” contacts or activities in the forum state
and is not at issue in the instant case. Specific
jurisdiction exists when a court exercises personal
jurisdiction over a defendant in a suit arising out
of or related to the defendant's contacts
with the forum. Helicopterous Nacionales de Columbia,
S.A. v. Hall, 466 U.S. 408, 414 n.8 (1984).
of jurisdiction are answered by a two-step analysis: (1) the
court must determine whether the North Carolina long-arm
statute confers personal jurisdiction; and (2) the court must
determine whether the exercise of that statutory power will
violate the due process clause of the U.S. Constitution.
Gen Latex & Chem. Corp. v. Phoenix Med. Tech.,
765 F.Supp. 1246, 1248-49 (W.D. N.C. 1991). The statutory
inquiry merges with the constitutional inquiry, essentially
becoming one. See ESAB Group, Inc. v. Centricut,
Inc., 126 F.3d 617, 623 (4th Cir. 1997).
process precludes a court from asserting jurisdiction over a
defendant unless the defendant has certain minimum contacts
with the forum state. The Fourth Circuit has
“synthesized the Due Process Clause for asserting
specific jurisdiction into a three-part test . . . ‘(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 ...