C. DARNELL JONES, II, District Judge.
Plaintiffs claim to represent a class of former campaign workers who were hired by several state democratic parties during the 2016 presidential election. According to Plaintiffs, these state parties colluded with the Democratic National Committee to over work and underpay field organizers in violation of various federal and state wage laws. The out-of-state democratic party defendants seek dismissal of the instant action on the grounds that this Court cannot exercise personal jurisdiction over these foreign parties with no meaningful ties to the Commonwealth. Plaintiffs retort that each defendant to this suit meaningfully contributed to the Pennsylvania-based campaign efforts in the nationally coordinated campaign to get Hillary Clinton elected as president. Plaintiffs further argue that the out-of-state defendants are mere extensions of the Democratic National Committee, over which jurisdiction is proper, and as such there is sound legal basis for requiring said defendants to defend suit in the Commonwealth. For the reasons that follow, this Court finds that (1) it would be improper to exercise jurisdiction over any one of the out-of-state democratic party defendants and (2) Plaintiffs fail to demonstrate that further jurisdictional discovery would be fruitful. The claims against the Democratic Parties of Arizona, North Carolina, Missouri, Michigan, Virginia, and Florida are dismissed for want of personal jurisdiction.
Named Plaintiffs are former field organizers who were employed by seven different state democratic parties in the months leading up to the 2016 presidential election. (ECF No. 68, ¶¶ 23.) As field organizers, Plaintiffs were responsible for completing a host of campaign related activities, including canvassing, contacting voters telephonically and in person, and soliciting volunteers. (ECF No. 68, ¶ 101.) Plaintiffs allege that they regularly worked upwards of twelve hours in a day on behalf of their respective state party employers but were only paid a flat monthly rate regardless of the total number of hours worked. (ECF No. 68, 117-128.)
Based on the foregoing, Plaintiffs filed the Second Amended Complaint on March 7, 2017, naming as defendants DNC Services Corp. — doing business as Democratic National Committee — ("Defendant DNC") and the state democratic parties of Pennsylvania ("Defendant PDP"), Florida ("Defendant FDP"), Missouri ("Defendant MODP"), Virginia ("Defendant VDP"), North Carolina ("Defendant NCDP"), Arizona ("Defendant ADP"), and Michigan ("Defendant MIDP"). (ECF No. 68.) In the Second Amended Complaint, Plaintiffs advance individual, class, and collective action claims against Defendants for alleged violations of the Fair Labor Standards Act, various state wage statutes, and state common law torts. (ECF No. 68.) Plaintiffs allege that the state party defendants conspired with one another and with Defendant DNC to unlawfully designate Plaintiffs, and those similarly situated, as exempt employees under the FLSA and applicable state wage statutes, thereby denying Plaintiffs full and appropriate compensation. (ECF No. 68, ¶ 39.)
Defendants FDP, MODP, VDP, NCDP, ADP, and MIDP (collectively "Foreign Defendants") timely filed Motions to Dismiss the Second Amended Complaint for Lack of Personal Jurisdiction and for Improper Venue pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3), respectively. (ECF. Nos. 74, 75, 77.) Over Foreign Defendants' opposition, Plaintiffs maintain that this Court may exercise personal jurisdiction over Foreign Defendants because Defendant DNC — a corporation over which this Court undoubtedly has jurisdiction — exercised such operational control over each Foreign Defendant so as to be considered the alter ego thereof. (ECF No. 90, p. 11.) Plaintiffs contend that pursuant to the alter ego theory of personal jurisdiction, this Court should exercise jurisdiction over each Foreign Defendant because Defendant DNC is subject to the jurisdiction of this Court. (ECF No. 90, p. 11.) Plaintiffs further argue that Foreign Defendants' participation in 2016 presidential campaign activities constituted in-state contacts sufficient to independently support a finding of general personal jurisdiction over each state party. (ECF No. 90, p. 7-8.)
In support of their respective Motions, Foreign Defendants submitted virtually unopposed affidavits that collectively establish the following: (1) Foreign Defendants are neither corporate parent nor subsidiary to any other corporate entity; (2) Foreign Defendants are each subject to individual state and federal campaign finance requirements; (3) Foreign Defendants do not own property, solicit business, advertise, or hire within the Commonwealth; (4) Foreign Defendants are self-governing; and (5) Foreign Defendants did not require any plaintiff employed as a field organizer to work within the Commonwealth as a condition of employment. (ECF No. 74, ex. 1-4.)
Presently before this Court are Plaintiffs' Second Amended Complaint, Defendants ADP, FDP, MIDP, and NCDP's Motion to Dismiss, Defendant VDP's Motion to Dismiss, Defendant MODP's Motion to Dismiss, Plaintiffs' consolidated Response in Opposition to the aforementioned Motions, and Defendants ADP, FDP, MIDP and NCDP's Reply. Upon thorough consideration of all relevant jurisdictional facts, and for the reasons that follow, this Court grants Foreign Defendants' Motions to Dismiss for want of personal jurisdiction.
Pursuant to Federal Rule of Civil Procedure 12(b)(2), a defendant may move to dismiss a claim for lack of personal jurisdiction. Once a defendant has raised this jurisdictional defense, the burden shifts to the plaintiff to present a prima facie case establishing jurisdiction over the non-resident defendant in the forum.
In determining the existence of personal jurisdiction, courts "must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff."
Federal courts may assert jurisdiction over a nonresident defendant to the extent authorized by the law of the forum.
For the reasons that follow, this Court finds that Plaintiffs fail to establish that Foreign Defendants' contacts with this forum, alone or in the aggregate, are sufficient to support general or specific jurisdiction consistent with constitutional due process.
Plaintiffs' arguments in support of general jurisdiction are two-fold. First, Plaintiffs argue that Foreign Defendants' respective participation in state-based campaign activities is independently sufficient to support requiring Foreign Defendants to defend suit in this forum. (ECF No. 90, p. 6-8.) Second, Plaintiffs' argue that Defendant DNC has so usurped the corporate identities of each state party defendant that Foreign Defendants should be considered mere alter egos of Defendant DNC. (ECF No. 90, p. 10-12.) Plaintiffs urge the Court to impute Defendant DNC's in-state contacts to each Foreign Defendant and thereby find the exercise of general jurisdiction consistent with constitutional requirements. (ECF No. 90, p. 11.) This Court finds neither argument persuasive.
In the Second Amended Complaint, Plaintiffs allege that general jurisdiction over Foreign Defendants is properly predicated on Foreign Defendants' involvement in various Pennsylvania-based campaign initiatives. (ECF No. 68, ¶ 13.) In the Response in Opposition to Defendants' respective Motions to Dismiss, Plaintiffs focus entirely on Foreign Defendants' — with the exception of Defendant ADP — involvement in the Hillary Victory Fund. (ECF No. 90, p. 6-8.) According to Plaintiffs, the Hillary Victory Fund ("HVF") was a joint fundraising endeavor created by Hillary for America ("HFA"), Defendant DNC, and dozens of state democratic parties. (ECF No. 90, p. 6.) Contributors to the HVF could reportedly combine individual donations to HFA, DNC, and each participating state party into one large lump sum donation, which could exceed $300,000.00 per donor. Plaintiffs report that funds received were distributed to HFA, DNC, and each state party participant on a pro rata basis. (ECF No. 90, p. 6.)
Based on what this Court could surmise from Plaintiffs' Response and the accompanying exhibits, several of Foreign Defendants transferred the funds they received from HVF to Defendant DNC, which then reallocated the funds to states that required additional campaign resources. (ECF No. 90, p. 6); (ECF No. 90, ex. 1A — 1F.) According to Plaintiffs, in the year preceding the 2016 presidential election, the state Democratic Party for Pennsylvania — Defendant PDP — received over $18,000,00.00 from Defendant DNC. (ECF No. 90, p. 7.) Plaintiffs argue that Foreign Defendants "funneled" HVF funds through Defendant DNC to Defendant PDP, which used said funds to pay — albeit allegedly insufficiently — field organizers and to propel Pennsylvania's campaign efforts. (ECF No. 90, p. 7.) Plaintiffs' primary argument in support of general jurisdiction is this alleged indirect financial support Foreign Defendants supplied Defendant PDP and the Pennsylvania campaign efforts at large.
The link Plaintiffs attempt to establish between Foreign Defendants and the Commonwealth is far too attenuated to justify the exercise of jurisdiction here. First, while the Court recognizes the fungible nature of money, Plaintiffs fail to demonstrate that they could — even with targeted discovery — establish the exact source of the funds allocated to Defendant PDP by Defendant DNC or quantify with any reasonable particularity the extent to which those funds were derived from Foreign Democrats' financial contributions. Second, even if Plaintiffs could tie Foreign Democrats to Defendant PDP's receipt of campaign funds, Plaintiffs provide this Court with no reason to believe Foreign Defendants intended for their contribution to Defendant DNC to be distributed to Defendant PDP specifically. Third and most importantly, even if Plaintiffs could demonstrate that Foreign Defendants' indirect payouts to Defendant PDP were more than incidental occurrences, these limited contacts could not establish the "at home" connection to the Commonwealth necessary for a finding of general jurisdiction.
"General jurisdiction . . . calls for an appraisal of a corporation's activities in their entirety, nationwide and worldwide. A corporation that operates in many places can scarcely be deemed at home in all of them. Otherwise, `at home' would be synonymous with `doing business' tests framed before specific jurisdiction evolved in the United States. Nothing in International Shoe and its progeny suggests that a `particular quantum of local activity' should give a state authority over a `far larger quantum of activity' having no connection to any state activity."
Plaintiffs argue in the alternative that the alter ego theory supports a finding of jurisdiction. "[A] court may exercise personal jurisdiction, consistent with the Constitution, over a corporate entity that is the alter ego of a party over which jurisdiction is proper."
As a preliminary matter, this Court questions the applicability of the alter ego theory to the case at bar. There is, undisputedly, no formal corporate relationship between Defendant DNC and any one of the Foreign Defendants. (ECF No. 74, ex. 1-4); (ECF No. 75, p. 5); (ECF No. 77, p. 5.) And this Court's jurisdiction over Defendant DNC is predicated entirely on Defendant DNC's waiver of jurisdictional challenge — not an independent judicial finding of sufficient in-forum contacts. Thus, even if the Court could impute Defendant DNC's in-state contacts to corporate entities to which Defendant DNC is not formally related, the record before the Court does not address the extent to which those imputed contacts would support a finding of general jurisdiction.
Despite its reservations, this Court will proceed with a merits analysis of Plaintiffs' argument. At least one court within this Circuit contemplated the applicability of the alter ego theory to corporate relationships less formal than that of a parent and subsidiary.
The alter ego theory requires more than relatedness between the corporate entities. "The relevant jurisdictional inquiry is whether the subsidiary and the parent
"No one aspect of the relationship between two corporations unilaterally disposes of the analysis, and the court may consider any evidence bearing on the corporations' functional interrelationship."
Third and most importantly, all of Plaintiffs arguments surrounding the existence of common marketing strategies, logos, trademarks, and information databases are limited to presidential campaign efforts, not that of state or local elections. In the Second Amended Complaint, Plaintiffs explicitly confine their assertions of pervasive operational control by Defendant DNC over Foreign Defendants to the "pendency of the 2016 national presidential campaign." (ECF No. 68, ¶ 12.) Thus, even if Plaintiffs' arguments surrounding Defendants' interrelatedness were supported by affidavits or other competent evidence, they would be insufficient to establish that the control exercised by Defendant DNC pervaded Foreign Defendant's day-to-day operations. Foreign Defendants' express purpose is to support democratic candidates vying for positions not only in national office, but also at the local and state level. Plaintiffs' failure to address the role, if any, Defendant DNC plays in Foreign Defendants' affairs when a presidential election is not on the horizon is fatal to their argument. If Defendant DNC's control over Foreign Defendants is limited to presidential campaign efforts that occur once every few years, there is simply no basis upon which to find an alter ego relationship. At best, Plaintiffs' proffered evidence demonstrates a voluntary and informal, albeit tangible, commitment amongst Defendants to the shared goal of electing a democratic president.
Even if this Court agreed with Plaintiffs' assessment of the alter ego factors, it would still decline to exercise jurisdiction over Foreign Defendants. "Even where an alter ego relationship has been shown, personal jurisdiction must ultimately be consistent with traditional notions of fair play and substantial justice."
If this Court were to exercise jurisdiction over Foreign Defendants, Foreign Defendants would be required to litigate in a forum in which they have no meaningful presence.
The record is similarly bereft of facts that would support a finding of specific jurisdiction over Foreign Defendants. Unlike general jurisdiction, specific jurisdiction exists only where the plaintiff's claims arise from the defendant's in-state contacts, and "the relationship among the defendant, cause of action, and the forum falls within the minimum contacts' framework."
This Court finds no act by Foreign Defendants that would constitute purposeful availment sufficient to confer specific jurisdiction. In the Second Amended Complaint, Plaintiffs seem to suggest Foreign Defendants' preparation for and attendance at the 2016 Democratic National Convention amounted to activity purposely directed at Pennsylvania. (ECF No. 68, ¶ 13.) But "[the minimum contacts] standard ensures that a defendant will not be ha[u]led into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts. . . ."
Plaintiffs also fail to satisfy the second element of the specific jurisdiction standard, which requires a showing that Plaintiffs' claims arise from or relate to Foreign Defendants' in-state activities. The claims contained in the Second Amended Complaint are premised on alleged failures to compensate field organizers for campaign-related work completed on behalf of Plaintiffs' respective state party employers within Plaintiffs' respective home states. Plaintiffs do not allege that any unpaid overtime stemmed from work conducted at the behest of Foreign Defendants in the Commonwealth, and do not challenge the veracity of Foreign Defendants' affidavits affirming that field organizers worked exclusively in their respective states. There is, thus, no reasonable basis upon which Plaintiffs could argue that their claims for unpaid wages arose from or related to in-state activity by Foreign Defendants. Plaintiffs' bald allegations of a collusive scheme amongst Defendants to withhold owed wages fails to plead facts that would connect any alleged conspiracy to Foreign Defendants' limited contacts with Pennsylvania.
For all of the foregoing reasons, this Court finds no basis upon which to exercise specific jurisdiction over Foreign Defendants. Plaintiffs fail to establish a prima facie case of either general or specific jurisdiction as it relates to the foreign state Democratic Parties. Foreign Defendants' Motions to Dismiss the Second Amended Complaint are granted for want of personal jurisdiction.
Plaintiffs petition this Court for leave to conduct jurisdictional discovery if the Court finds Plaintiffs unable to meet their burden to establish jurisdiction. (ECF No. 90, p. 9.) "A plaintiff's right to conduct jurisdictional discovery should be sustained `if a plaintiff presents factual allegations that suggest with reasonable particularity the possible existence of the requisite contacts between the party and the forum state."
The record before this Court cannot support a finding of personal jurisdiction over Foreign Defendants. Foreign Defendants' limited activity within the Commonwealth are insufficient for an independent finding of jurisdiction, and Plaintiffs fail to demonstrate that Defendant DNC's in-state contacts should be imputed to Foreign Defendants by way of the alter ego theory of personal jurisdiction. As Plaintiffs have not made a prima facie showing of jurisdiction, this Court finds no basis in fact or in law for subjecting Foreign Defendants to the expense of further jurisdictional discovery. Foreign Defendants' Motions to Dismiss are granted.
A corresponding Order follows.