United States District Court, N.D. Alabama, Northeastern Division
MADELINE HUGHES HAIKALA UNITED STATES DISTRICT JUDGE.
case involves a dispute over payment for mining equipment
that the parties installed in a plant in Chatsworth, Georgia.
Before the Court is defendant Dan Lee's motion to dismiss
this action pursuant to Federal Rule of Civil Procedure
12(b)(2) for lack of personal jurisdiction. (Doc. 12).
Alternatively, Mr. Lee joins his co-defendant, Precision
Technologies, Inc. (PTI), and asks the Court to dismiss this
case for improper venue pursuant to Rule 12(b)(3). (Doc. 12,
p. 2).Alternatively, both defendants ask the
Court to transfer this case to the District Court for the
Northern District of Georgia pursuant to 28 U.S.C. §
1404. (Doc. 12, p. 3). Plaintiff Aldridge Industries opposes
the defendants' motions. (Doc. 16). The Court considers
each motion in turn.
Jurisdiction over Dan Lee
to Rule 12(b)(2), Mr. Lee asserts that this Court may not
exercise jurisdiction over him because he lacks minimum
contacts with the Northern District of Alabama. Mr. Lee is
domiciled in Tennessee, and he is a corporate officer of PTI,
a Tennessee corporation with its principal place of business
in Englewood, Tennessee. (Doc. 16, as amended by Doc. 22, p.
1). Mr. Lee argues that his contacts with the Northern
District of Alabama exist only by virtue of his work as
PTI's representative. He asserts that the Court cannot
attribute PTI's contacts to him because he was acting as
PTI's agent when he established business contacts in
Alabama. (Doc. 12, pp. 2, 6).
determine whether it has personal jurisdiction over an
out-of-state defendant, a district court applies a two-prong
test. First, the court asks whether the state's long-arm
statute confers jurisdiction over the defendant. That is a
question of law. If the state's long-arm statute confers
jurisdiction over the defendant, then the district court asks
whether the defendant has sufficient contacts with the forum
“to satisfy traditional notions of fair play and
substantial justice under the Due Process Clause of the
Fourteenth Amendment.” Stubbs v. Wyndham Nassau
Resort and Crystal Palace Casino, 447 F.3d 1357, 1360
(11th Cir. 2006) (internal marks omitted); see also
Mutual Serv. Ins. Co. v. Frit Indus., Inc., 358 F.3d
1312, 1319 (11th Cir. 2004). That is a question of fact.
plaintiff seeking to establish personal jurisdiction over a
nonresident defendant ‘bears the initial burden of
alleging in the complaint sufficient facts to make out a
prima facie case of jurisdiction.'” Louis
Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350
(11th Cir. 2013) (quoting United Techs. Corp. v.
Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009)). The
district court must accept as true the allegations in the
complaint unless a defendant challenges jurisdiction and
offers evidence to contradict the plaintiff's
allegations. Mosseri, 736 F.3d at 1350; see also
Stubbs, 447 F.3d at 1360.
a defendant challenges personal jurisdiction ‘by
submitting affidavit evidence in support of its position, the
burden traditionally shifts back to the plaintiff to produce
evidence supporting jurisdiction.'”
Mosseri, 736 F.3d at 1350 (quoting Madara v.
Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)) (internal
quotation marks omitted in Mosseri). The burden does
not return to the plaintiff “when ‘the
defendant's affidavits contain only conclusory assertions
that the defendant is not subject to
jurisdiction.'” Mosseri, 736 F.3d at 1350
(quoting Stubbs, 447 F.3d at 1360). If the burden
does shift back to the plaintiff, then the plaintiff must
provide enough information concerning the nonresident
defendant's contacts with the forum to withstand a motion
for a directed verdict. Meier ex rel. Meier v. Sun
Int'l Hotels, Ltd., 288 F.3d 1264, 1268-69 (11th
Cir. 2002). A district court must view the jurisdictional
evidence in the light most favorable to the plaintiff.
Meier, 288 F.3d at 1269.
the Court begins the personal jurisdiction analysis with an
examination of Alabama's long-arm statute. That statute
permits courts within the state, including federal courts, to
exercise jurisdiction to the full extent allowed by the Due
Process Clause. Frit Indus. Inc., 358 F.3d at 1319.
Consequently, the Court must determine whether Aldridge
Industries has established that Mr. Lee has sufficient
minimum contacts with the state to satisfy due process. A
defendant has sufficient minimum contacts with a forum when
the defendant “purposefully avails [him]self of the
privilege of conducting activities within the forum, ”
and when “the defendant's contacts with the forum .
. . relate to the plaintiff's cause of action or have
given rise to it.” Oldfield v. Pueblo De Bahia
Lora, S.A., 558 F.3d 1210, 1220 (11th Cir. 2009)
(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)
and Burger King Corp. v. Rudzewicz, 471 U.S. 462,
allegations in Aldridge Industries's complaint are of
limited use in assessing Mr. Lee's contacts with this
forum. Aldridge Industries alleges conclusively that this
Court may exercise jurisdiction over PTI and Mr. Lee because
“[a]ll of the events or omissions giving rise to
Aldridge Industries, Inc.'s claims occurred within the
State of Alabama and, more particularly, within this judicial
district.” (Doc. 1, p. 2, ¶ 6). Aldridge
Industries asserts that it is an Alabama corporation with its
primary place of business in Madison County, Alabama. (Doc.
1, p. 2, ¶ 1, as amended by Doc. 22, p. 1, ¶6(a)).
Aldridge Industries alleges that in January of 2014, it met
with PTI, a Tennessee corporation that operates out of
Englewood, Tennessee, “to discuss providing a company,
Cimbar Performance Minerals  with the tools, machinery,
equipment and programming necessary to create a
‘classifier disk' for equipment to be used in
mining operations.” (Doc. 1, p. 2, ¶ 7; Doc. 1, as
amended by Doc. 22, ¶6(b)). Aldridge Industries contends
that Dan Lee, a resident of Tennessee, “on behalf of
PTI, approached Warren Aldridge and Aldridge Industries to
assist in the sale of the equipment and finalizing the
deal.” (Doc. 1, p. 2, ¶ 9; Doc. 1, as amended by
Doc. 22, ¶6(c)). The complaint does not indicate where
these meetings took place.
to Aldridge Industries, after the company agreed to
collaborate with PTI on the project, PTI contracted with
Cimbar for the sale and installation of mining equipment.
(Doc. 1, p. 2). The contract price with Cimbar was $928, 777.
(Doc. 1, p. 3, ¶11). From that amount, Aldridge
Industries was to collect commissions and be paid “for
engineering and programming services required per PTI
purchase order number: PTI-12-1297.” (Doc. 1, p. 3,
¶11). The complaint does not state where Cimbar is
located or the extent to which Mr. Lee was involved in
negotiations with Cimbar or the payments to Aldridge
support of his motion to dismiss, Mr. Lee submitted an
affidavit in which he challenged Aldridge Industries's
assertion that the events and omissions giving rise to the
company's claims took place in Alabama. In his affidavit,
Mr. Lee states that he is the president of PTI, that he
resides in Tennessee, and that he never has resided in
Alabama. (Doc. 12, p. 15). Mr. Lee asserts that he has not entered
a contract with Aldridge Industries relating to the Cimbar
project, and he conducts no personal business in Alabama.
(Doc. 12, p. 15). According to Mr. Lee, Mr. Aldridge, acting
on behalf of PTI, submitted a quote to Cimbar for a lathe, a
bridge mill, the engineering services reflected in purchase
order PTI-12-1297, and a MasterCam package for the lathe and
the mill. (Doc. 12, pp. 16, 19). Mr. Lee states that PTI
placed the equipment order for the Cimbar project from
Tennessee, and the equipment was installed in Georgia. (Doc.
12, p. 16). Mr. Lee adds that Mr. Aldridge agreed to perform
the engineering work for the project in Georgia and that Mr.
Aldridge made multiple trips to Georgia to fulfill the
requirements of the Cimbar contract. (Doc. 12, p. 16). In his
affidavit, Mr. Lee does not describe the extent of his
contact with Alabama either individually or as an agent of
Industries relies on the affidavit of Warren Aldridge, III to
contradict Mr. Lee's assertions. Mr. Aldridge states that
Mr. Lee “actually conducted business” in Alabama
“on many occasions, specifically with Aldridge
Industries, Inc. At one point in time, PTI was doing
sufficient business at our location that Dan Lee requested we
set aside a small office for his use.” (Doc. 16-1, p.
1). Mr. Aldridge adds that “PTI actually kept a sign
inside our building advertising their business, as well as
had PTI literature and apparel onsite.” (Doc. 16-1, p.
1). According to Mr. Aldridge, “PTI also conducted
meetings, sales conferences and had other dealings with
suppliers and potential customers in Alabama at our
facility.” (Doc. 16-1, p. 1).
Aldridge attributes the conduct that he describes in his
affidavit to PTI, not Mr. Lee, but Aldridge Industries
alleged in its second amended complaint that Mr. Lee is the
alter ego of PTI. (Doc. 26, p. 1). In support of that
allegation, Aldridge Industries relies on the affidavit of
Rickey Dale Woods, “the Operations Manager for Aldridge
Industries, Inc.” Mr. Woods states that Dan Lee invited
him to visit PTI's offices on Mr. Lee's farm in the
fall of 2014 to train Mr. Lee and his family to use
accounting software. (Doc. 16-3, p. 1). Mr. Woods, having
seen Mr. Lee's accounts and bookkeeping practices,
concluded that Mr. Lee did not observe proper record keeping
practices because “there was no separation between PTI
accounts, Dan Lee's personal accounts, or [Dan Lee's]
farm accounts.” (Doc. 16-3, p. 1). Mr. Woods observed
that Mr. Lee comingled personal and business accounts and
that Mr. Lee did not treat PTI as a distinct entity for
accounting purposes. (Doc. 16-3, p. 1).
on its assertion that PTI is Mr. Lee's alter ego,
Aldridge Industries argues that the Court may exercise
personal jurisdiction over Mr. Lee by piercing the corporate
veil and attributing PTI's contacts with this forum to
Mr. Lee. Under Alabama law, courts may pierce the veil
separating corporations and shareholders in a limited set of
circumstances. Those circumstances exist:
“where a corporation is set up as a subterfuge, where
shareholders do not observe the corporate form, where the
legal requirements of corporate law are not complied with,
where the corporation maintains no corporate records, where
the corporation maintains no corporate bank account, where
the corporation has no employees, where corporate and
personal funds are intermingled and corporate funds are used
for personal purposes, or where an individual drains funds
from the corporation.”
Claybar v. Huffman, 54 F.Supp.3d 1284, 1289 (S.D.
Ala. 2014) (quoting Econ Mktg., Inc. v. Leisure
Am. Resorts, Inc., 664 So.2d 869, 870 (Ala. 1994)).
corporation is the alter ego of an individual, then the court
may disregard the corporate form and exercise personal
jurisdiction over the individual. “[A]ttribution of
contacts to the individual defendant merely reflects the
reality that, although the contacts were ostensibly those of
the corporation, the true actor was the individual.”
Ex Parte Puccio, 923 So.2d 1069, 1076 (Ala. 2005)
(quoting Home-Stake Prod. Co. v. Talon Petroleum,
C.A., 907 F.2d 1012, 1021 (10th ...