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Greentech Automotive, Inc. v. Franklin Center for Government and Public Integrity

United States District Court, N.D. Mississippi, Oxford Division

July 24, 2014

GREENTECH AUTOMOTIVE, INC., Plaintiff,
v.
FRANKLIN CENTER FOR GOVERNMENT AND PUBLIC INTEGRITY d/b/a WATCHDOG.ORG, ET AL., Defendants.

ORDER

MICHAEL P. MILLS, District Judge.

This cause comes before the court on defendants' motion to dismiss for lack of jurisdiction [Doc. 58]. The plaintiff has responded in opposition. Upon consideration of the relevant law and the submissions of the parties, the court is prepared to rule.

Defendants, Franklin Center for Government and Public Integrity and Kenric Ward (collectively Franklin), move the court to dismiss GreenTech's complaint for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), or, in the alternative, to transfer this action to the United States District Court for the Eastern District of Virginia pursuant to 28 U.S.C. ยง 1404(a).

The Franklin Center publishes the website Watchdog.org and is a nonprofit organization that is organized under the laws of North Dakota and has its principal place of business in Virginia. Mr. Ward is a reporter for Watchdog and is a resident of Virginia. GreenTech is a corporation organized under the laws of Mississippi and has its principal place of business in Tunica, Mississippi.

This case concerns two articles published on Watchdog.org that allegedly contain false statements about GreenTech. GreenTech argues that Franklin is subject to personal jurisdiction in this forum because it published the two articles with knowledge and intent that they would be read in Mississippi and that the articles have direct detrimental effects in Mississippi on the finances and reputation of GreenTech.

The first article that is the subject of this action was written by Kenric Ward and published on April 1, 2013 and it is titled " McAuliffe car funding a fraud' investment adviser says. " The next article, " Feds look closer at cash source in McAuliffe car scam, " was also written by Ward and published on the website on April 3, 2013.[1] The articles were part of a series of articles (72) published on Watchdog that criticized Terry McAuliffe during his gubernatorial bid in Virginia.[2]

Plaintiff alleges that the articles give rise to specific jurisdiction and does not argue that Franklin is subject to general jurisdiction in Mississippi. The court, therefore, will limit its analysis to specific jurisdiction in its inquiry of personal jurisdiction over Franklin.

Plaintiff first argues that defendants waived personal jurisdiction by moving forward on the request to transfer venue. The court does not find the argument credible, but a timeline of this case is warranted to "set the stage" before the merits of defendants' motion are considered.

GreenTech filed the complaint on April 8, 2013 in this court. GreenTech alleged defamation and intentional interference with business and prospective business relations against Franklin. On May 6, 2013 Franklin filed an opposed motion for an extension of time to respond to the complaint without a waiver of any defenses. Judge Alexander ordered that defendants be granted until June 17, 2013 to file an answer or other responsive pleading. Franklin filed a motion to dismiss for lack of personal jurisdiction, or in the alternative, request to transfer venue on June 10, 2013. GreenTech then filed a motion to stay briefing on the motion to dismiss pending jurisdictional discovery. Because GreenTech did not file a response to Franklin's motion to transfer and GreenTech did not request the court to stay a ruling on the motion to transfer, Franklin moved the court to grant the transfer motion citing Local Rule 7(3)(C) that states that when "a party fails to respond to any motion, other than a dispositive motion, within the time allotted, the court may grant the motion as unopposed." Franklin noted that transferring the case would moot GreenTech's motion to stay and the motion to dismiss. This court granted GreenTech's motion to stay pending jurisdictional discovery on January 30, 2014 and dismissed Franklin's motion to dismiss without prejudice pending the outcome of discovery. After completion of discovery, Franklin filed the current motion to dismiss for lack of personal jurisdiction/transfer venue on May 30, 2014.

GreenTech argues that defendants' "calculated decision to abandon its personal jurisdiction defense and move forward on its request to transfer venue... is an action that amounts to a legal submission of jurisdiction.'" Further, plaintiff avers that because of the Notice filed by Franklin seeking transfer of venue, Franklin now "find[s] themselves in essentially the same scenario as the defendants in General Design by only having a venue objection before the Court and not a personal jurisdiction objection." General Design Sign Co. v. American General Design, Inc., WL 251931 (N.D. Tex. Jan 31, 2003). However, the defendants in General Design first moved for dismissal for improper venue and subsequently moved to dismiss for lack of personal jurisdiction (The court held that any possible ground for dismissal not raised in the first motion is waived). Id. Franklin's first filing in response to GreenTech's complaint was the motion to dismiss plaintiff's complaint for lack of personal jurisdiction, or, in the alternative, to transfer. Franklin's request to transfer was only in the event the court determines that jurisdiction was proper over the defendants.

The court finds that the Notice filed by Franklin does not constitute a waiver of their personal jurisdiction argument and was not a legal submission of jurisdiction.

Next, the plaintiff claims that even if defendants have not waived their objection to personal jurisdiction, defendants' contacts with Mississippi support a finding of specific jurisdiction and that an exercise of jurisdiction by this court comports with fairness.

Under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of establishing personal jurisdiction over a non-resident defendant. At this stage, the plaintiff need only make a prima facie case. Johnston v. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008). The court, sitting in diversity, may exercise personal jurisdiction over a non-resident defendant if: 1) allowed under the state's long-arm statute; and 2) to the extent permitted by the Due Process Clause of the Fourteenth Amendment. Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009). The defendants do not dispute that in the proper circumstances Mississippi's long-arm statute may create personal jurisdiction but argue that constitutional due process limits Mississippi's long-arm statue and does not permit a Mississippi court to exercise jurisdiction over defendants in this lawsuit.

To satisfy the requirements of due process, GreenTech must demonstrate that Franklin purposely availed itself of the benefits and protections of Mississippi by establishing "minimum contacts" with Mississippi and that the exercise of jurisdiction does not offend "traditional notions of fair play and substantial justice." Multidata Sys. Int'l Corp. at 609 (citing Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994) (other citations omitted)). A defendant establishes minimum contacts with a state if "the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Burger ...


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