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Amiad U.S.A., Inc. v. Advanced Water Technologies, Inc.

United States District Court, M.D. North Carolina

March 26, 2019

AMIAD U.S.A, INC., Plaintiff,
v.
ADVANCED WATER TECHNOLOGIES, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          LORETTA C. BIGGS UNITED STATES DISTRICT JUDGE.

         Plaintiff Amiad U.S.A., Inc. (“Amiad”) initiated this breach of contract action in Guilford County Superior Court on May 17, 2018. (ECF No. 2.) Defendant Advanced Water Technologies, Inc. (“AWT”) removed the action to this Court on June 19, 2018, pursuant to 28 U.S.C. § 1332(a). (ECF No. 1 ¶¶ 5-6.) Before the Court is Defendant's Motion to Dismiss or, in the Alternative, to Transfer. (ECF No. 9.) For the reasons stated below, Defendant's motion to dismiss will be granted.

         I. BACKGROUND

         Amiad is a California corporation with its headquarters in Mooresville, North Carolina. (ECF No. 2 ¶ 1.) AWT is a New York corporation with its headquarters in New York, New York. (Id. ¶ 2.) In 2005, AWT and Amiad entered into a contract (the “Agreement” or the “2005 Agreement”) that provided that “AWT would be Amiad's exclusive distributor of certain water filtration products” for New York City and Long Island. (Id. ¶ 4-5.)

         In 2005, when the parties entered into the Agreement, Amiad was headquartered in Oxnard, California, and much of the negotiation and execution of the Agreement occurred in California. (ECF No. 10-1 ¶¶ 21-24.) Amiad moved its headquarters to Mooresville, North Carolina in 2011. (Id. ¶ 27; ECF No. 12-1 at 2 ¶¶ 4, 6.) Amiad alleges that “[b]eginning in late 2017, AWT fell substantially behind on payment of certain invoices . . ., and failed to make payment within the time required under the [Agreement].” (ECF No. 2 ¶ 8.) Amiad claims that “AWT's failure to timely pay amounts owed to Amiad was a material breach of the [Agreement], entitling Amiad to cancel the [Agreement].” (Id. ¶ 12.)

         Amiad then filed this action, requesting a declaratory judgment and damages for breach of contract. (Id. ¶¶ 17-25.) AWT now moves to dismiss this case for lack of personal jurisdiction, or, in the alternative, to transfer this case to the United States District Court for the Southern District of New York. (ECF No. 9.)

         II. STANDARD OF REVIEW

         On a personal jurisdiction challenge, the plaintiff bears the burden of ultimately proving personal jurisdiction by a preponderance of the evidence. Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). When, however, as here, the court decides a pretrial personal jurisdiction motion without conducting an evidentiary hearing-relying instead on the motion papers, supporting legal memoranda, and allegations in the complaint[1]-the plaintiff need only make a prima facie showing of personal jurisdiction. See Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009); Carefirst of Md., 334 F.3d at 396. “[A] plaintiff makes a prima facie showing of personal jurisdiction by presenting facts that, if true, would support jurisdiction over the defendant.” Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 561 (4th Cir. 2014) (citing Mattel, Inc. v. Greiner & Hausser GmbH, 354 F.3d 857, 862 (9th Cir. 2003)). However, a threshold prima facie finding of jurisdiction does not settle the issue, as the plaintiff “must eventually prove the existence of personal jurisdiction 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, 294 n.5 (4th Cir. 2005).

         When considering whether the plaintiff has made a prima facie showing of jurisdiction, 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.” Universal Leather, 773 F.3d at 558 (quoting Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)); see also Sneha Media & Entm't, LLC v. Associated Broad. Co. P Ltd., 911 F.3d 192, 196 (4th Cir. 2018) (“[W]hen the parties have not yet had a fair opportunity to develop and present the relevant jurisdictional evidence, we have treated the disposition of Rule 12(b)(2) motions to dismiss for a lack of personal jurisdiction in conceptually the same manner as we treat the disposition of motions to dismiss under Rule 12(b)(6).”). “Once a defendant presents evidence indicating that the requisite minimum contacts do not exist, the plaintiff must come forward with affidavits or other evidence in support of its position.” Pathfinder Software, LLC v. Core Cashless, LLC, 127 F.Supp.3d 531, 538 (M.D. N.C. 2015) (quoting Vision Motor Cars, Inc. v. Valor Motor Co., 981 F.Supp.2d 464, 468 (M.D. N.C. 2013)). When both sides present evidence, factual conflicts must be resolved in favor of the party asserting jurisdiction for the limited purpose of determining whether a prima facie showing has been made. Id.

         III. DISCUSSION

         A federal district court can exercise personal jurisdiction over a nonresident defendant only if “(1) such jurisdiction is authorized by the long-arm statute of the state in which the district court sits; and (2) application of the relevant long-arm statute is consistent with the Due Process Clause of the Fourteenth Amendment.” Universal Leather, 773 F.3d at 558. North Carolina's long-arm statute “permits the exercise of personal jurisdiction over a defendant to the outer limits allowable under federal due process.” Id. (citing N.C. Gen. Stat. § 1-75.4(1)(d); Dillon v. Numismatic Funding Corp., 231 S.E.2d 629, 630 ( N.C. 1977)). The two-prong test therefore “merges into [a] single question” when North Carolina is the forum state, allowing the court to proceed directly to the constitutional analysis. See Id. at 558-59; ESAB Grp., Inc. v. Zurich Ins. PLC, 685 F.3d 376, 391 (4th Cir. 2012).

         Under the Due Process Clause of the Fourteenth Amendment, two paths permit a court to exercise personal jurisdiction over a nonresident defendant: general or specific personal jurisdiction. Universal Leather, 773 F.3d at 559. “General personal jurisdiction requires ‘continuous and systemic' contacts with the forum state.” Perdue Foods LLC v. BRF S.A., 814 F.3d 185, 188 (4th Cir. 2016) (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 (1984)). Amiad does not claim that AWT had such contacts with North Carolina and does not assert that this Court has general personal jurisdiction over AWT. (ECF No. 12 at 6 n.2.) Instead, Amiad claims that this Court has specific personal jurisdiction over AWT arising from AWT's contacts with Amiad in North Carolina. (ECF No. 2 ¶ 3; ECF No. 12 at 6-7.)

         For specific personal jurisdiction, the defendant must have “purposefully established minimum contacts in the forum State” such “that [it] should reasonably anticipate being haled into court there.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (internal quotation marks and citations omitted). Courts use a three-prong test to evaluate specific personal jurisdiction: “(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the 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.” Perdue Foods, 814 F.3d at 189 (quoting ALS Scan, Inc. v. Dig. Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002)).

         In this matter, it is beneficial to first address the second prong of the specific personal jurisdiction test, “whether the plaintiff['s] claims arise out of those activities directed at the State, ” id., because AWT conducted certain activities in North Carolina that are not connected with the claims at issue in this case. (See ECF No. 12-1 at 3-4 ΒΆΒΆ 14-20.) The Court will then address the extent of AWT's ...


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