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Smith v. Antler Insanity, LLC

United States District Court, S.D. Mississippi, Northern Division

October 27, 2014

SHANE SMITH, PLAINTIFF
v.
ANTLER INSANITY, LLC; BYG OUTDOORS, LLC; JOHN YOUNG; SCOT GARLAND; RANDY BUCKNER; and DARRIN HOLT, DEFENDANTS

Page 717

For Shane Smith, Plaintiff: David R. Lynch, LEAD ATTORNEY, THE LYNCH LAW FIRM, PLLC, Jackson, MS; Anders Ferrington, ANDERS FERRINGTON, PLLC, Jackson, MS.

For Antler Insanity, LLC, BYG Outdoors, LLC, John Young, Scot Garland, Randy Buckner, Darrin Holt, Defendants, Counter Claimants: Matthew R. Dowd, LEAD ATTORNEY, Martin Patrick McDowell, BRUNINI, GRANTHAM, GROWER & HEWES, PLLC-Jackson, Jackson, MS.

For Antler Insanity, LLC, Counter Defendant: Matthew R. Dowd, LEAD ATTORNEY, Martin Patrick McDowell, BRUNINI, GRANTHAM, GROWER & HEWES, PLLC-Jackson, Jackson, MS.

For Shane Smith, Counter Defendant, Counter Claimant: David R. Lynch, LEAD ATTORNEY, THE LYNCH LAW FIRM, PLLC, Jackson, MS.

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ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

David Bramlette, UNITED STATES DISTRICT JUDGE.

This matter is before the Court on Defendants', Antler Insanity, LLC, BYG Outdoors, LLC, John Young, Scot Garland, Randy Buckner, and Darrin Holt, Motion to Dismiss [docket entry no. 39]. Having carefully considered the motion and responses, applicable statutory and case law, and being otherwise fully informed in the premises, the Court finds as follows:

I. Factual and Procedural Background

The Plaintiff Shane Smith initiated this action in the Circuit Court of Yazoo County, Mississippi, on May 31, 2013. The

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Defendants removed it to this Court, claiming diversity jurisdiction, on June 24, 2013. Notice Removal, ECF No. 1. Smith filed his amended complaint on May 1, 2014. Am. Compl., ECF No. 37. In it he puts forth five causes of action against the defendants: (1) breach of contract, (2) negligent and/or intentional infliction of emotional distress, (3) defamation, (4) tortious interference with business relations, and (5) violations of the Lanham Act. Am. Compl. ¶ ¶ 40-44.

The dispute arises from the termination of Smith's contractual relationship with Antler Insanity, LLC, (" Antler Insanity" ) and BYG Outdoors, LLC, (collectively, the " corporate defendants" ) and some unreimbursed expenses from before his termination. Smith began working for the corporate defendants in May of 2011. Am. Compl. ¶ 11. The corporate defendants terminated Smith's employment on April 30, 2012. Am. Compl. ¶ 20. Smith had previously submitted an " expense reimbursement report" on April 7, 2012. Am. Compl. ¶ 19. After his termination, the corporate defendants sent Smith a letter " partially approving [his] reimbursement request, but denying part of the reimbursement until additional documentation could be provided by [Smith]." Am. Compl. ¶ 21. Smith submitted " additional documentation to [the corporate] Defendants or provided explanation as to why such documentation was not necessary" in a letter dated September 11, 2012. Am. Compl. ¶ 22. Smith further alleges that, even up to the date of filing this suit, the corporate defendants and John Young, Scot Garland, Randy Buckner, and Darrin Holt (collectively, the " individual defendants" ) have " sought to intentionally disparage [Smith] to others in the outdoor television industry" and harm his future employment prospects. Am. Compl. ¶ ¶ 33-34. Lastly, Smith alleges that he created a " specific graphic logo, which he registered with the United States Patent and Trademark Office" (" PTO" ), and the corporate defendants and individual defendants continue to use the mark in their business. Am. Compl. ¶ ¶ 36-38. Antler Insanity has filed a counterclaim against Smith alleging fraudulent registration of the logo by Smith, a right to register the logo itself, and common law unfair competition created by Smith's allegedly fraudulent registration. Answer & Countercl. p. 12-14, ECF No. 38.

II. Analysis

The individual defendants have moved to have the case against them dismissed for lack of personal jurisdiction through Federal Rule of Civil Procedure 12(b)(2). Both the corporate and individual defendants have moved to dismiss the case for failure to state a claim through Rule 12(b)(6).[1]

A. Personal Jurisdiction Over the Individual Defendants

" A federal court sitting in diversity may exercise personal jurisdiction only to the extent permitted a state court under state law." Paz v. Brush Engineered Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006). The Mississippi Supreme Court has ruled that " [t]he proper order when analyzing personal jurisdiction over nonresident defendants is to first consider whether the long-arm statute subjects a nonresident defendant to personal jurisdiction and then to consider whether the statute's application to that defendant offends the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution." Estate of

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Jones v. Phillips ex rel. Phillips, 992 So.2d 1131, 1137 (Miss. 2008). Mississippi's long-arm statute provides the courts shall have jurisdiction over a nonresident who: (1) " make[s] a contract with a resident of this state to be performed in whole or in part by any party in this state," (2) " commit[s] a tort in whole or in part in this state against a resident or nonresident", or (3) " do[es] any business or perform[s] any character of work or service in this state." Miss. Code Ann. § 13-3-57 (1991).

The individual defendants are not residents of Mississippi. Further, Smith concedes that the individual defendants are not subject to jurisdiction under either the contract or business prongs of the long-arm statute. Mem. Opp. p. 4, ECF No. 45. (" Plaintiff Shane Smith does not allege that the non-resident individual Defendants are subject to personal jurisdiction under the first or third prongs of the Mississippi long-arm statute." ) Therefore, the Court will only analyze whether the individual defendants meet the tort prong of the statute.

When " personal jurisdiction is predicated on the commission of a tort: 'The jurisdictional question involves some of the same issues as the merits of the case, and the plaintiff must make a prima facie case on the merits to withstand a motion to dismiss under Rule 12(b)(2).'" Unified Brands, Inc. v. Teders, 868 F.Supp.2d 572, 577-78 (S.D.Miss. 2012) (quoting Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). The plaintiff must not only show " that a tort has occurred. . . . [The plaintiff] must also make a prima facie showing that the tort occurred within [Mississippi]." Wyatt, 686 F.2d at 280. Mississippi courts " do[] not require that the action giving rise to the tort actually occur in Mississippi in order for a tort to be committed in state." Yatham v. Young, 912 So.2d 467, 470 (Miss. 2005). Further, " a tort is committed in Mississippi when the injury results in this State. This is true because an injury is necessary to complete a tort." Id. As the individual defendants correctly state in their brief, the Fifth Circuit has " been careful to distinguish actual injury from its resultant consequences." Allred v. Moore & Peterson, 117 F.3d 278, 282 (5th Cir. 1997); see also Reply p. 2, ECF No. 46. And the " consequences stemming from the actual tort injury do not confer personal jurisdiction at the site or sites where such consequences happen to occur." Jobe v. ATR Marketing, Inc., 87 F.3d 751, 753 (5th Cir. 1996). However, the result is different when the damages are an element of the tort.

Smith alleges tortious interference with his business by the individual defendants. Smith alleges that he suffered " financial detriment" because of the individual defendants' efforts " to prevent [him] from being able to procure employment with competitors of the Defendant." See Am. Compl. ¶ ¶ 34-35. A court in this district has previously addressed the application of Mississippi's long-arm statute to this tort:

It is without question that Mississippi recognizes the claim of tortious interference with a business relationship, which " occurs when a person unlawfully diverts prospective customers away from one's business." Par Indus., Inc. v. Target Container Co., 708 So.2d 44, 48 (Miss. 1996) . . . The elements necessary to prove such claim are: " (1) the acts were intentional and willful; (2) the acts were calculated to cause damage to the plaintiffs in their lawful business; (3) the acts were done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendants (which constitutes malice); and (4) actual damage and loss

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resulted." MBF Corp. v. Century Bus. Commc'ns, Inc., 663 So.2d 595, 598 (Miss. 1995) (alterations in original).
The Court finds the allegations in the Amended Complaint are sufficient to establish a prima facie showing that the tortious interference claim was committed, at least in part, in Mississippi because this is the state in which the alleged damage and loss occurred. See Allred v. Moore & Peterson, 117 F.3d 278, 282 (5th Cir. 1997) (explaining that " [u]nder the tort prong of the Mississippi long-arm statute, personal jurisdiction is proper if any element of the tort (or any part of any element) takes place in Mississippi." ) . . . [T]he Court finds ...

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