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Estes v. JI-EE Industry Co., Ltd.

United States District Court, E.D. Kentucky, Central Division, Lexington

February 20, 2018

CONNIE ESTES and HAROLD ESTES, as next friends and custodians of Kenton Estes, an infant PLAINTIFFS



         This matter is before the Court on the motion to dismiss (DE 7) by defendant JI-EE Industry Co., Ltd. With its motion, JI-EE objects to this Court's personal jurisdiction over it. For the following reasons, the Court will exercise its discretion to permit limited discovery on this issue.

         The plaintiffs, who are Kentucky citizens, bring this action as the custodians of their grandson. They assert in their complaint that their grandson, who was two-years old at the time of this incident, was injured while riding in an E-Ton ATV with their 12-year old granddaughter. The plaintiffs assert in their complaint that the E-Ton ATV was designed, manufactured, and exported to the United States by JI-EE. In their response to JI-EE's motion to dismiss, however, the plaintiffs states that the ATV at issue was designed and manufactured by a company called E-Ton Dynamics Technology Co., Ltd. (“E-Ton Dynamics”), which the plaintiffs assert was a division of JI-EE when the ATV at issue was manufactured, marketed, and sold in Kentucky. (DE 8, Response at 2-3.)

         The plaintiffs assert that, due to the negligent design of the ATV, their grandson's right toes were amputated by the ATV's chain/chain guard.

         JI-EE was organized in China and has its principal place of business in Taiwan. (DE 7-1, Response at 8.) It argues that this Court cannot exercise personal jurisdiction over it and moves to dismiss the action under Federal Rule of Civil Procedure 12(b)(2). "The procedural scheme which guides the district court in disposing of Rule 12(b)(2) motions is well-settled.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). The plaintiff has the burden of establishing personal jurisdiction. Id. In responding to a “properly supported” motion challenging personal jurisdiction, the plaintiff cannot “stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction.” Id.

         When determining whether personal jurisdiction exists over a defendant in a diversity case, “a federal court must apply the law of the state in which it sits, subject to constitutional limitations.” Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110, 1115 (6th Cir.1994). “[T]he defendant must be amenable to suit under the forum state's long-arm statute and the due process requirements of the Constitution must be met. “ CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996) (citation omitted).

         The Kentucky Supreme Court has determined that the state's long-arm statute does not allow for personal jurisdiction to the full extent of the due-process clause. Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011). In other words, there may be situations where a defendant has sufficient contacts with the state to satisfy jurisdiction under the due-process clause but the Kentucky statute still does not permit jurisdiction. Id. (citing Banco Ambrosiano, S.P.A. v. Artoc Bank & Trust Ltd., 62 N.Y.2d 65, 476 N.Y.S.2d 64, 464 N.E.2d 432, 435 (1984)).

         Thus, in determining whether this Court may exercise personal jurisdiction over a defendant, the Court will first look to whether jurisdiction is permissible under Kentucky's long-arm statute. The plaintiff asserts that four provisions of that statute permit this Court to exercise personal jurisdiction over JI-EE. Those provisions provide that a Kentucky court may exercise personal jurisdiction over a person with regards to a claim arising from that person engaging - either directly or through an agent - in the following activity:

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 this Commonwealth;
4.Causing tortious injury in this Commonwealth by an act or omission outside this Commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth, provided that the tortious injury occurring in this Commonwealth arises out of the doing or soliciting of business or a persistent course of conduct or derivation of substantial revenue within the Commonwealth;

KRS § 454.210(2)(a)(1)-(4).

         As evidence in support of its motion to dismiss, JI-EE relies solely on the affidavit of its chairman, Stephen Wu, who asserts that the company has never directly engaged in any of this conduct. (DE 7-2, Wu Aff.) Wu asserts that JI-EE does not “currently” conduct any “direct” business with any company or customer in the United States, including Kentucky. Wu also ...

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