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Babcock v. Anthony's LLC

United States District Court, Sixth Circuit

November 14, 2013

ANTHONY'S LLC, a New Jersey limited Defendants liability company and MARC GUITMAN and ROBERT GELLER


THOMAS B. RUSSELL, District Judge.

This matter is before the Court upon Defendants Anthony's, LLC, Marc Guitman i/s/a Marc Guitman, and Robert Geller's Motion to Dismiss as to Defendant Robert Geller pursuant to Federal Rule of Civil Procedure 9, 12(b)(2), and 12(b)(6). (Docket No. 33.) Plaintiff Christopher Babcock has responded, (Docket No. 42), and Defendants have replied. (Docket No. 46.) This matter is now ripe for adjudication. For the reasons that follow, Defendants' Motion to Dismiss will be GRANTED.


This action involves eleven separate alleged contracts entered into by Plaintiff and Defendant Anthony's, LLC to purchase certain coins between November 2008 to October 2010. These contracts allegedly originated from either Plaintiff being the high bidder on "e-Bay" or through direct offers for sale from Defendants by either telephone or email solicitation. Over the course of the parties' relationship, Plaintiff alleges he repeatedly requested reassurances that the coins sold to him by Defendants were authentic. Plaintiff states Defendants repeatedly gave assurances that the coins sold were authentic.

On February 11, 2013, this Court permitted Plaintiff's First Amended Complaint ("Complaint") which added Robert Geller ("Geller") as a defendant. Geller is a manager at Anthony's, LLC. (Docket No. 33-2, Page 1.) Paragraph 2 of the Complaint explicitly states "Defendants" as used in the Complaint shall mean all of the defendants, thereby making all accusations and factual assertions about "Defendants" applicable to Geller. Plaintiff's Affidavit states Geller represented to Plaintiff in two separate telephone calls in 2008 and 2010 that he was "purchasing genuine coins that were not counterfeit" and he was receiving the correct weight of coins. (Docket No. 42-1, Page 1-2.) Additionally, the Affidavit states in the 2010 telephone call Geller encouraged Plaintiff to continue purchasing coins from Defendants and attempted to resolve a settlement relating to the alleged counterfeit and under-weight coins sold to him. (Docket No. 42-1, Page 2.)

Geller's Affidavit states that he did not participate in the listing of goods purchase by Plaintiff or negotiations with Plaintiff. (Docket No. 33-2.) He states he communicated with Plaintiff only once-in 2008-during the period when he was making purchases from Anthony's and that was when he answered the phone when Plaintiff called with questions about certain lots of coins offered by Anthony's. Id. Geller states that "[o]ther than that single phone call, my only involvement with Plaintiff was, as a manager of Anthony's, to assist Marc Guitmann, an Anthony's employee, in his attempts to resolve Plaintiff's complaints amicably." Id. Finally, Geller states he is a New Jersey resident, has never traveled to Kentucky, and to his knowledge has never solicited business from anyone in Kentucky or personally communicated with any Kentucky residents in the course of doing business. Id.

Defendants make three separate arguments for why all the claims or some of the claims against Defendant Geller should be dismissed. First, Defendants argue the Complaint lacks allegations of sufficient contacts to support personal jurisdiction as to claims against Geller. Second, Defendants allege the addition of Geller as a defendant is improper because Plaintiff has alleged no specific conduct whatsoever that should make Geller personally liable for the acts alleged in the complaint. (Docket No. 33-3, Page 1.) Third, even if the Court preserves other claims against Geller, Defendants argue the claims sounding in fraud are not pled with sufficient particularity and should be dismissed. (Docket No. 33-3, Page 2.)


Personal Jurisdiction As To Defendant Geller

Defendants argue that the Complaint lacks allegations of sufficient contacts to support personal jurisdiction as to the newly amended claims against Geller. The Sixth Circuit recognizes that personal jurisdiction may be either "specific" or "general, " depending on the nature of the defendant's contacts with the forum state. See, e.g., Gerber v. Riordan, 649 F.3d 514, 517 (6th Cir. 2011). In his Complaint, Plaintiff does not specify whether he believes personal jurisdiction is specific or general. Therefore, the Court will consider both possibilities.

I. General Jurisdiction Does Not Exist

"General jurisdiction is proper only where a defendant's contacts with the forum state are of such a continuous and systematic nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state." Gerber, 649 F.3d at 517 (quoting Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000)). The Supreme Court has held that a nonresident defendant who lacked a place of business and had never been licensed to do business in the forum state lacked sufficient contacts to support the exercise of general jurisdiction. See Helicopteros Nacionales de Colom., S.A. v. Hall, 466 U.S. 408, 416-18 (1984). In Helicopteros, the Court found that a number of contacts, including (1) sending a corporate officer to the forum to negotiate contracts, (2) accepting checks written on a forum bank, (3) purchasing a substantial sum of equipment and services from a forum state business, and (4) sending personnel to a forum state business for training-even when taken together-were insufficient to support the exercise of general jurisdiction. Id. By contract, the Court has found general jurisdiction where a nonresident corporate officer maintained an office and held meetings in the forum state, supervised corporate business while situated in the forum state, distributed payroll checks drawn on a forum bank account, and engaged a forum bank in the corporation's business. See Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 448 (1952). The Sixth Circuit follows this reasoning by declining to find general jurisdiction where a plaintiff "has not alleged that [the defendant] has an office in [the forum state], is licensed to do business there, has [a forum state] bank account, or directs its business operations from [the forum state]." Bird v. Parsons, 289 F.3d 865, 873 (6th Cir. 2002).

In the instant case, Plaintiff does not allege that Defendant Geller maintains an office in Kentucky, is licensed to do business in Kentucky, maintains a bank account in Kentucky, or directed any operations from within Kentucky. It does not appear Geller has ever even been to Kentucky. Indeed, it appears that Geller has no contacts with Kentucky beyond two alleged isolated communications over the telephone in 2008 and 2010, during which Geller would have been in New Jersey. Accordingly, Plaintiff has not demonstrated that Geller's contacts with Kentucky are sufficiently continuous and systematic as to support the exercise of general personal jurisdiction.

II. Specific Jurisdiction

In order to determine whether specific personal jurisdiction exists, a federal court applies the law of the forum in which it sits, subject to the requirements of constitutional due process. Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 149 (6th Cir. 1997). That is, "[a] federal court's exercise of personal jurisdiction in a diversity of citizenship case must be both (1) authorized by the law of the state in which it sits, and (2) in accordance with the Due Process Clause of the Fourteenth Amendment." Bird, 289 F.3d at 888 (citing Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110, 1115 (6th Cir. 1994)).

i. The Kentucky Long-Arm Statute

As an initial matter, although courts previously have held that Kentucky's long-arm statute, Ky. Rev. Stat. § 454.210, extends to the outer reaches of due process, see, e.g., Morris Aviation, LLC v. Diamond Aircraft Indus., Inc., 730 F.Supp.2d 683, 689 (W.D. Ky. 2010), the Kentucky Supreme Court recently clarified that the statute is not, per se, coextensive with the limits of federal due process. Caesars Riverboat Casino, LLC v. Beach, 336 SW.3d 51, 56-57 (Ky. 2011). Accordingly, for personal jurisdiction to be proper: (1) Kentucky's longarm statute, § 454.210, must be satisfied; and (2) the exercise of jurisdiction must comport with due process. Therefore, this Court first turns to the question of whether this Court can exercise personal jurisdiction over Defendants under the Kentucky long-arm statute.

KRS 454.210(2)(a), Kentucky's long-arm statute, states:

(2)(a) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from the person's:
1. Transacting any business in this Commonwealth
2. Contracting to supply services or goods in this Commonwealth;
3. Causing tortious injury by an act or omission in ...

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