Gerald E. Rosen, Chief Judge, United States District Court.
On December 30, 2014, Plaintiff AlixPartners LLP, a global consulting and business advisory firm organized under the laws of the state of Delaware,
Having reviewed and considered the parties' briefs and supporting documents and the entire record of this matter, the Court has determined that the pertinent allegations and legal arguments are sufficiently addressed in these materials and that oral argument would not assist in the resolution of this motion. Accordingly, the Court will decide the parties' motions "on the briefs." See L.R. 7.1(f)(2). This Opinion and Order sets forth the Court's ruling.
Defendant was hired by Plaintiff in April 2013 as a recruiter for Plaintiff's Dallas,
Employment Agreement, Dkt. # 9, Ex. A, at 4. At the time of Defendant's hiring, both parties signed the Agreement without dispute.
As relevant here, Defendant's hiring occurred between Plaintiff's Southfield, Michigan office and Defendant's Texas residence. Defendant alleges, and Plaintiff does not appear to dispute, that Defendant's three in-person pre-employment interviews were conducted by Plaintiff's employees in its Dallas office. Brewington Decl., Dkt. # 7-1, ¶ 2 (describing interviews with Joel Bines, Jay Marshall, and Caralyn Markets). However, Plaintiff notes that, as part of the evaluation process, Defendant spoke on the telephone with Dr. Leslie Evola, an AlixPartners employee located in Michigan, who then prepared a summary report of Defendant's interviews. Severson Decl., Dkt. # 9-1, ¶ 8. Following the successful completion of the interview process, Defendant signed the Employment Agreement in Texas, and sent it to Plaintiff's offices in Michigan, where it was received and processed by Plaintiff's human resources department. Id. ¶¶ 9-11.
After being hired and completing his employment paperwork, Defendant began work on April 15, 2013. Brewington Decl., Dkt. # 7-1, ¶ 3. On April 22 and 23, 2013, Defendant attended a mandatory orientation session in Plaintiff's Michigan office,
Defendant also worked with Ray Kantor, Plaintiff's Internal Audit Director, who also works in the Michigan office. Kantor Decl. ¶ 2-3. According to Kantor, "Brewington actively worked to recruit candidates to fill internal audit positions for which I have responsibility as Internal Audit Director in AlixPartners' Southfield, Michigan office." Id. ¶ 3.
After about a year of employment with Plaintiff, Defendant was terminated in March 2014. The parties disagree as to the reasons for the termination. Plaintiff maintains that the termination was due to repeated "deficiencies in [Defendant's] performance." Pl.'s Mot. for Summary Judgment, Dkt. # 11, at 2 n.1. Defendant, however, alleges that the termination was racially motivated and unlawful. Accordingly, Defendant filed a demand for arbitration with the AAA alleging claims of racial discrimination under Title VII. Critically, however, Defendant did not file the demand on behalf of only himself, but rather, as Plaintiff described the demand, "on behalf of himself and a purported, nation-wide class of current, former, and potential AlixPartners employees in various positions and circumstances." Id. at 3.
Defendant subsequently filed this Motion to Dismiss (Dkt.# 7), asserting that (1) the Court lacks personal jurisdiction over Defendant, (2) the Eastern District of Michigan is not the proper venue for this action, and (3) in the alternative, the Court should transfer the case to another district pursuant to 28 U.S.C. § 1404(a). The Court addresses each argument below.
On a motion to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), Plaintiff has the burden of establishing that the exercise of jurisdiction over the defendant is proper. Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir.2002). Where, as here, there has been no evidentiary hearing regarding personal jurisdiction, a plaintiff "need only make a prima facie showing of jurisdiction." Id. (quoting CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir.1996)) (internal quotation marks omitted). However, it is insufficient for a plaintiff to merely reassert the allegations contained in its pleadings. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). The plaintiff must articulate specific facts to show that the court has jurisdiction. Id. The court must then consider all of the facts presented in the pleadings and affidavits in a light most favorable to the plaintiff, and does not weigh any contrary assertions offered by the defendant. Intera Corp. v. Henderson, 428 F.3d 605, 614 (6th Cir.2005).
In federal question cases where the law at issue does not contain a nationwide service of process provision, the court must follow Rule 4(k) of the Federal Rules of Civil Procedure, which "limits a court's exercise of personal jurisdiction to persons who can be reached by the forum state's long-arm statute." Alisoglu v. Cent. States Thermo King of Oklahoma, Inc., No. 12-CV-10230, 2012 WL 1666426, at *3 (E.D.Mich. May 11, 2012) (citing Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 108, 108 S.Ct. 404, 98 L.Ed.2d 415 (1987)). Accordingly, the Court's analysis here proceeds as it would in a diversity case, assessing personal jurisdiction under both Michigan's long-arm statute and the Due Process Clause of the Fourteenth Amendment. See Bird v. Parsons, 289 F.3d 865, 871 (6th Cir.2002) ("Where a federal court's subject matter jurisdiction over a case stems from the existence of a federal question, personal jurisdiction over a defendant exists `if the defendant is amenable to service of process under the [forum] state's long-arm statute and if the exercise of personal jurisdiction would not deny the defendant[] due process.'" (alterations in original) (quoting Mich. Coalition of Radioactive Material Users, Inc. v. Griepentrog, 954 F.2d 1174, 1176 (6th Cir. 1992))).
Michigan's long-arm statute provides for both "limited" jurisdiction over
M.C.L. § 600.705. Though it appears clear that Defendant's actions satisfy the statute,
The Sixth Circuit has partitioned the minimum contacts analysis into a three-part test:
S. Mach., 401 F.2d at 381. "The test must never be applied mechanically, however,... [and] the facts of each individual case must always be weighed in determining whether an exercise of personal jurisdiction would comport with fair play and substantial justice." Int'l Technologies Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 395 (6th Cir.1997).
"`[P]urposeful availment' is something akin to a deliberate undertaking to do or cause an act or thing to be done in [the forum state] or conduct which can be properly regarded as a prime generating cause of the effects resulting in [the forum state], something more than a passive availment of [the forum state's] opportunities." S. Mach., 401 F.2d at 381 (quoting Khalaf v. Bankers & Shippers Ins. Co., 404 Mich. 134, 273 N.W.2d 811, 819 (1978))
Because the purposeful availment test is admittedly murky, the best approach is often to compare and contrast the facts of the case with that of factually similar cases, always recognizing that the particular circumstances of each case is unique. Here, several in-circuit cases provide an indication that Defendant's conduct constitutes purposeful availment in Michigan. First, in Kelly Servs. v. Eidnes, 530 F.Supp.2d 940 (E.D.Mich.2008), the plaintiff, a Delaware corporation with its principal place of business in Michigan, hired the defendant, a Minnesota resident, to perform legal staffing services for the plaintiff in Minnesota markets. Id. at 944-45. As part of her hiring, the defendant signed an agreement that prohibited her from using trade secrets possessed by plaintiff in any subsequent employment. Id. at 945. When the defendant quit her job and began working for a direct competitor, the plaintiff brought suit, alleging a violation of Michigan's Uniform Trade Secrets Act, M.C.L. § 445.1901 et seq. Id. The defendant moved to dismiss the case for lack of personal jurisdiction, arguing that "she is a resident of Minnesota and has come to Michigan once, for a training session entirely unrelated to her job with [the plaintiff]." Id. at 946. The court found that personal jurisdiction over the defendant was present, noting that the defendant "accessed a Michigan-based computer server and database networks as part of her job responsibilities" and that "as evidence by the e-mails and phone logs produced by plaintiff ... [the defendant] had at least semi-regular contact with Michigan-based supervisors during the course of her employment with [the plaintiff]. Id.
Also instructive is Superior Consulting Co. v. Walling, 851 F.Supp. 839, 843 (E.D.Mich.1994). Like Eidnes, that case also involved a corporate plaintiff based in Michigan. Id. at 841. The defendant, a Texas resident, worked in the plaintiff's Dallas office, and signed a non-compete agreement as well as an agreement limiting him from disclosing any confidential or proprietary information he acquired during the course of his employment. Id. at 842. The defendant eventually left his job to work with competitor Ernst & Young, and the plaintiff subsequently filed suit in the Eastern District of Michigan, alleging breach of contract. Id. at 843. In finding that the defendant had purposefully availed himself of the forum state, the court noted that the defendant had made trips to Michigan as part of his employment and maintained "contact with the Michigan office via telephone, voice mail, telefax, mail, and e-mail." Id. at 844. Likewise, the defendant had initially executed his employment contract both "in Michigan, as well as by mail and phone calls from Texas to Michigan." Id. at 843. Further, the court found relevant that the defendant had "performed work for a Michigan client on at least one occasion" and that the employment contract contained a Michigan choice-of-law provision, which "should not be ignored in considering whether a defendant has `purposefully invoked the benefits and protections of a State's law' for jurisdictional purposes." Id. at 844 (quoting Burger King, 471 U.S.
Last, in Santa Rosa Consulting, LLC v. Arredondo, No. 09-CV-13368, 2009 WL 5171837 (E.D.Mich. Dec. 22, 2009), a Michigan corporation likewise sued a former employee who was a Texas resident, alleging a breach of the employment contract that the two had reached. Id. at *1-2. As in Eidnes and Walling, the court found that the purposeful availment prong was satisfied because the defendant's contract negotiations occurred both in Michigan and "via telephone and e-mail," the defendant had traveled to Michigan once after beginning his employment to make a sales presentation on behalf of the plaintiff, the defendant had frequent telephone and e-mail contact with the plaintiff in its Michigan office, and the defendant's e-mails were housed on servers located in Michigan. Id. at *4.
The instant case, though not identical to Eidnes, Walling, or Arredondo, is strikingly similar. As in all three cases, Defendant here "had at least semi-regular contact with Michigan-based supervisors during the course of [his] employment" with Plaintiff. Eidnes, 530 F.Supp.2d at 947. As in Arredondo, Defendant here made e-mail and telephone contact with Plaintiff's Michigan office to secure his contract and employment, important considerations despite the fact that Defendant was not physically present in Michigan when he signed the contract. See Burger King, 471 U.S. at 476, 105 S.Ct. 2174 ("Jurisdiction... may not be avoided merely because the defendant did not physically enter the forum State. Although territorial presence frequently will enhance a potential defendant's affiliation with a State... it is an inescapable fact of modern commercial life that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted."). As in Walling, that contract contained a Michigan choice-of-law provision, implying purposeful availment of the state's legal protections. As in Eidnes, Defendant attended a training session in Michigan in order to begin his employment. As in Walling, Defendant conducted work for Michigan clients by recruiting Michigan candidates for Plaintiff's "Detroit Internal Audit Manager" position. And as in Eidnes and Arredondo, Defendant sent and received e-mails contained on servers located entirely in Michigan. At bottom, Defendant's contract and job duties appeared to "envision[] continuing and wide-reaching contacts" between himself and Michigan through his employment with Plaintiff. Burger King, 471 U.S. at 480, 105 S.Ct. 2174. Put together, each of these facts indicates that Defendant established connections with Michigan and availed himself of the forum.
Next, given that the Court has found that Defendant has purposefully availed himself of the forum state, the Court must examine whether the action in the instant case arises from the connections constituting purposeful availment. "The only requirement is that the cause of action, of whatever type, have a substantial connection with the defendant's in-state activities." S. Mach., 401 F.2d at 384; see also Third Nat. Bank in Nashville v. WEDGE Grp. Inc., 882 F.2d 1087, 1091 (6th Cir.1989) (describing qualifying facts as those that have a "close relationship" with the action). Here, the action is a declaratory judgment action seeking to determine the rights granted under the employment contract between the parties. Accordingly, facts such as Defendant's returning of contract documentation to Michigan, communicating regularly with Plaintiff in Michigan, agreeing to a Michigan choice-of-law provision, and participating in an orientation session in Michigan that was directly related to the start of his employment are all clearly connected to the issues raised in the action. See Cole v. Mileti, 133 F.3d 433, 436 (6th Cir.1998) ("If, as here, a nonresident defendant transacts business by negotiating and executing a contract via telephone calls and letters to a [forum state] resident, then the defendant has purposefully availed himself of the forum by creating a continuing obligation in [the forum state]. Furthermore, if the cause of action is for breach of that contract, as it is here, then the cause of action naturally arises from the defendant's activities in [the forum state]."). Other facts, such as Defendant's consistent communications with Plaintiff's Michigan office, though not as directly related, are still part of his decision to connect himself with the forum.
Defendant maintains that, because Plaintiff has not clearly established that its principal place of business is in Michigan, it cannot show that Defendant's conduct in Michigan is sufficiently related to the action. This does not follow. Defendant fails to cite any such requirement, and the Court is not aware of any case describing one. Indeed, as the Supreme Court has recently reiterated, the touchstone of personal jurisdiction under the Due Process Clause is that it "looks to the defendant's contacts with the forum State itself, not the defendant's contacts with persons who reside there." Walden, 134 S.Ct. at 1122. Regardless of Plaintiff's status as a forum resident, Defendant's actions established connections with Michigan, and those connections gave rise to this action.
Last, under the third requirement of the Southern Machine test, "the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable." S. Mach., 401 F.2d at 381. "This requirement exists because minimum requirements inherent in the concept of fair play and substantial justice may defeat the reasonableness of jurisdiction even if the defendant has purposefully engaged in forum activities."
The Court does not find any of these factors overwhelming in this case. Defendant asserts that the burden placed on him by litigating this case in Michigan is high, and opines that Plaintiff "has essentially usurped Brewington's choice to litigate this employment dispute in Dallas by filing this declaratory judgment action in Michigan." Def.'s Mot. to Dismiss, Dkt # 7, at 9. But Plaintiff here does not seek to usurp Defendant's choice of forum on the merits of its underlying discrimination claim; rather it seeks to resolve a potentially "gateway" arbitration issue, "such as whether the parties have a valid arbitration agreement at all or whether a concededly binding arbitration clause applies to a certain type of controversy," Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452, 123 S.Ct. 2402, 156 L.Ed.2d 414 (2003); the type of dispute that is typically resolved through a declaratory judgment action. See Reed Elsevier, Inc. ex rel. LexisNexis Div. v. Crockett, 734 F.3d 594, 599 (6th Cir.2013) ("[T]he question whether an arbitration agreement permits classwide arbitration is a gateway matter, which is reserved `for judicial determination unless the parties clearly and unmistakably provide otherwise.'" (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002)). Regardless of the outcome of this action, Defendant will still have the chance to litigate the merits of his claim in his forum of choice, either through arbitration or alternatively a separate court action (should this Court eventually find that the parties' Agreement does not allow for classwide arbitration).
Next, Defendant asserts that venue is improper in the Eastern District of Michigan, primarily because "the declaratory judgment sought by Alix relates to what Brewington may or may not allege in an employment discrimination case pending before the AAA with a hearing scheduled for Dallas." Def.'s Mot. to Dismiss, at 10.
Venue in federal question cases is governed by 28 U.S.C. § 1391(b). Under that statute,
A civil action may be brought in —
Venue is determined "at the commencement of an action." Sullivan v. Tribley, 602 F.Supp.2d 795, 799 (E.D.Mich.2009). Plaintiff bears the initial burden of establishing venue. Kepler v. ITT Sheraton Corp., 860 F.Supp. 393, 396 (E.D.Mich. 1994). Upon this showing, the burden shifts to the defendant to "establish[] that venue is improper." Eidnes, 530 F.Supp.2d at 948.
While Defendant may be correct that "a substantial part of the events or omissions giving rise to" Defendant's employment discrimination allegations occurred in Texas, the substance of those allegations is not a part of the declaratory judgment action here. Instead, this declaratory judgment action solely involves "the question of whether the parties agreed to arbitrate" any class action employment claims. AT & T Technologies, Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986). The events giving rise to Defendant's employment discrimination claim, which are not even discussed in the parties' briefings or supporting documents, are wholly irrelevant to the resolution of that question, and indeed, this Court would likely not be the proper venue for those claims. But because of the connections between the formation, execution, and enforcement of the contract and this District, the Court finds that "a substantial part of the events or omissions giving rise to the claim" did occur in this District, as discussed above regarding personal jurisdiction. Accordingly, the Court finds that venue in this District, pursuant to 28 U.S.C. § 1391, is proper.
Last, Defendant requests that, even if the Court has personal jurisdiction over him and the Eastern District of Michigan is a proper venue, the Court transfer the case to the Northern or Eastern District of Texas, pursuant to 28 U.S.C. § 1404(a), which allows that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." "The statute is broadly drafted, and leaves much to the discretion of the district court." Walling, 851 F.Supp. at 845 (citing Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3847). In exercising such discretion, courts in this Circuit typically rely on a number of factors, including:
IFL Group v. World Wide Flight Services, 306 F.Supp.2d 709, 712 (E.D.Mich.2004).
While a plaintiff typically enjoys a measure of deference in choice of forum, the Court recognizes that plaintiffs in declaratory judgment actions sometimes do not
Examining the other factors, the Court finds no compelling argument warranting transfer. The question presented is predominantly a legal one that does not rely on facts or documents located in one forum. If anything, the operative facts relate to the formation of the Agreement between the parties, and most of the witnesses and documents relating to that Agreement appear to be located in Michigan. At the very least, transfer would appear to "exchange[] the inconvenience of one party for that of the other. Walling, 851 F.Supp. at 845. Last, the agreement contains a Michigan choice-of law provision, and this Court likely has greater familiarity with the governing law than would a federal court in Texas. Accordingly, the Court finds that transfer pursuant to § 1404(a) is not warranted.
For all of the foregoing reasons,
IT IS HEREBY ORDERED that Defendant's Motion to Dismiss (Dkt.# 7) is
