Tuesday, January 31, 2017

Stewart v. Jayco, Inc. (U.S.D.C.)

Filed: January 18, 2017

Opinion by: Ellen L. Hollander, United States District Judge


In finding that no personal jurisdiction exists, the Court follows Maryland Court of Appeals precedent, applying a two-part test: (1) whether the requirements of Maryland’s long-arm statute are satisfied; and (2) whether the exercise of personal jurisdiction comports with the requirements imposed by the Due Process Clause of the Fourteenth Amendment.


Plaintiffs  are Maryland residents who, on August 29, 2015, purchased a 2016 Jayco Seneca Motorhome from Camping World RV Super Center, a dealer located in Fountain, Colorado. Plaintiffs paid $153,081.90 for the Motorhome, which they allege has “been plagued by non-stop problems arising from defects in the manufacturing of the vehicle,” arguing violations of the Magnuson-Moss Warranty Act. Camping World RV Sales in Hanover, Pennsylvania and Camping World RV Super Center in Fountain, Colorado serviced the vehicle.

Defendant manufactured the Motorhome in question. Defendant relies on a declaration by Craig Newcomer, Consumer Affairs Manager of “Jayco Motorhome Group,” arguing Defendant has no ties to Plaintiff or the state of Maryland. Newcomer avers that Jayco does not maintain an office in Maryland; does not have any employees in Maryland; does not own any real estate in Maryland; has no bank accounts in Maryland; and does not directly advertise in Maryland. In addition, Defendant asserts it is not licensed to do business in Maryland and does not “directly” pay any taxes in Maryland.

In alleging that Defendant is transacting business in Maryland, Plaintiff relies on the fact that Defendant has a dealer in Maryland and that Defendant maintains a website that directs customers to dealers operating within Maryland. According to Newcomer, Defendant’s dealers are independently owned and operated and there is only one dealer in Maryland, (Chesaco) which holds three locations in Maryland, and with whom Plaintiffs never interacted.

 Reviewing the facts in a light most favorable to the Plaintiff, the Court addresses the issue of personal jurisdiction as a preliminary matter, determining whether the Plaintiff made his requisite prima facie showing. Furthermore, a threshold prima facie finding that personal jurisdiction is proper does not finally settle the issue; plaintiff must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.

According to Fed. R. Civ. P. 4(k)(1)(A), a federal district court may exercise personal jurisdiction over a defendant in accordance with the law of the state in which the district court is located. Thus, the Court looked to Maryland law, which provides, “to assert personal jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state’s long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Carefirst of Maryland Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d at 396; Carbone v. Deutsche Bank Nat’l Trust Co., No. CV RDB-15-1063, 2016 WL 4158354, at *5 (D. Md. Aug. 5, 2016).
Relying on Carbone, the Court held “when interpreting the reach of Maryland’s long-arm statute, a federal district court is bound by the interpretations of the Maryland Court of Appeals.” See Carbone, 2016 WL 4158354 at *5. “The Maryland Court of Appeals has ‘consistently held that the reach of the long-arm statute is coextensive with the limits of personal jurisdiction delineated under the due process clause of the Federal Constitution’ and that the ‘statutory inquiry merges with the constitutional examination.’” See Beyond Systems, Inc. v. Realtime Gaming Holding Co., 388 Md. 1, 22, 878 A.2d 567, 580 (2005). While the Maryland Court of Appeals recognizes a two-step analysis is standard, the Maryland Court of Appeals, and thus this Court, also recognize that, in some situations, exceptions exist wherein courts may decline to consider the first step if the analysis of the second step demonstrates conclusively that the personal jurisdiction over the defendant would violate due process. See Bond v. Messerman, 391 Md. 706, 721, 895 A.2d 722, 895 (2006). According to the Court, this case falls within this exception.

In evaluating whether a nonresident defendant is subject to personal jurisdiction under due process requirements, the Court looks to the United States Supreme Court, which has long held that personal jurisdiction over a nonresident defendant is constitutionally permissible so long as the defendant has “minimum contacts with [the forum state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Courts have separated this test into two individual prongs: (1) the threshold of “minimum contacts,” and (2) whether the exercise of jurisdiction on the basis of those contacts is “constitutionally reasonable.” Due process jurisprudence recognizes “two types of personal jurisdiction: general and specific. CFA Inst. V. Inst. Chartered Fin. Analysts of India, 551 F.3d 285, 292 n. 15 (4th Cir. 2009). The Court determines that Defendant is not subject to general or specific personal jurisdiction, and as a result, the Court grants Defendant’s Motion to Dismiss.

In concluding no general personal jurisdiction exists, the Court relies on the rule from Goodyear, which states a court may exercise general jurisdiction over foreign corporations to hear “any and all claims” against the corporations “when their affiliations with the State are so ‘continuous and systematic’ as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). The Court also relies on Daimler, where plaintiffs sought to exercise general personal jurisdiction over defendant in California. Citing Burger King, the court of Daimler explained that Daimler, defendant, was neither incorporated in California nor did it maintain its principal place of business in California, and thus, “such exorbitant exercises of all-purposes jurisdiction would scarcely permit out-of-state defendants ‘to structure their conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.’” Daimler AG v. Bauman, 134 S.Ct. 760 (2014).

In light of the facts at hand, the Court argues, “although Plaintiffs point to some contacts that Defendant maintains with Maryland, those contacts are not so continuous and systematic as to ‘render [Defendant] essentially at home in the forum state.’” Goodyear, 564 U.S. at 919. In addition, the court heavily relies on the fact that Defendant is not incorporated in Maryland; it is not registered and qualified to do business in Maryland; it has no employees in Maryland; and it does not maintain an office in Maryland. Regarding the Maryland dealership, the Court notes Chesaco also sells other brands of recreational vehicles, and that Defendant only passively directs customers in Maryland to purchase its products from Chesaco. Chesaco is independently owned and operated. For the above reasons, the Court ultimately concludes no general personal jurisdiction exists.

To determine whether there is specific jurisdiction over a defendant, the Court considers: “(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.” Consulting Eng’rs Corp. v. Geometric Ltd., 561 F.3d at 278 (4th Cir. 2009). The Court further relies on Burger King, where the court explains, “the ‘benchmark’ is not the ‘foreseeability of causing injury in another state.’ Rather, it is ‘foreseeability . . . that the defendant’s conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.’” Burger King Corp. v. Rudzewicz, 471 U.S., at 474 (1985).

Here, the Court finds no specific personal jurisdiction. The Court bases its determination on the fact that Plaintiffs did not purchase their Motorhome from or through Defendant’s Maryland dealer, nor did Plaintiff allege that they used Defendant’s website or that Defendant was in any way involved with Plaintiff’s decision to purchase a Jayco Motorhome in Colorado. Furthermore, the Court notes that after Plaintiffs bought the Motorhome in Colorado, they had it serviced and repaired in Pennsylvania. Plaintiffs failed to allege that any contacts between Defendant and the state of Maryland are related to, or give rise to, the cause of action. For the foregoing reasons, the Court concluded no specific personal jurisdiction exists.

In sum, although Defendant has some contacts with the state of Maryland, Plaintiff failed to establish that such contacts satisfy its prima facie requirement for either general or specific jurisdiction to support a finding of this Court’s personal jurisdiction over Defendant.

The opinion is available in PDF. 

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