United States District Court, N.D. Ohio, Eastern Division
MEMORANDUM OPINION AND ORDER
HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE
the Court is the motion to dismiss for lack of personal
jurisdiction filed by defendant Cars Universal, Inc.
(“Cars Universal”). (Doc. No. 10
[“MTD”].) Plaintiff M11 Motors, LLC
(“M11”) has filed its opposition brief (Doc. No.
14 [“Opp'n”]), and Cars Universal has filed
its reply (Doc. No. 15 [“Reply”]). For the
reasons set forth herein, the motion to dismiss for lack of
personal jurisdiction is granted.
filed its complaint against Cars Universal and Up Trading on
June 28, 2017. M11 is an Ohio limited liability company with
its principal place of business in North Olmsted, Ohio. It is
in the business of selling and servicing new and used motor
vehicles and is an authorized dealer for the sale and service
of new Mercedes-Benz branded vehicles, which it sells in
Massachusetts and surrounding states. (Complaint, Doc. No. 1
[“Compl.”] ¶ 1.)
Universal is an Oregon corporation with its principal place
of business in Oregon. Up Trading is an Ohio limited
liability company with its principal place of business in
Akron, Ohio.Both are in the business of exporting
vehicles purchased in the United States for resale in foreign
markets. (Id. ¶¶ 2, 3.)
acquires its inventory of new Mercedes-Benz vehicles directly
from Mercedes-Benz USA, LLC (“MBUSA”). As part of
the dealership agreement, MBUSA requires M11 to agree not to
sell new Mercedes-Benz vehicles for export. (Id.
¶ 5.) If M11 violates this contractual requirement,
MBUSA imposes a monetary chargeback and also reduces the
number of vehicles allocated to be sold to M11. (Id.
¶¶ 7, 8.) M11 requires all of its customers to sign
a non-export agreement, making an affirmative representation
that the customer will not export the vehicle and that the
customer is not acquiring the vehicle for export purposes.
(Id. ¶ 10.)
Count III of its complaint, M11 alleges that Up Trading
conspired with two of M11's employees (non-parties Larry
Marcus [“Marcus”] and Sean King
[“King”]) to purchase at least five new vehicles
for subsequent export, in a scheme to defraud M11 in
violation of the Racketeer Influenced and Corrupt
Organizations Act, 18 U.S.C. §§ 1961-1968
(“RICO”). (Id. ¶¶ 18, 20,
21-22.) In Count I, M11 alleges that, when purchasing each
vehicle, Up Trading signed non-export agreements with M11,
fraudulently misrepresenting that it would not export any of
the purchased vehicles. (Id. ¶ 11.) In Count
II, M11 alleges that, by later exporting the vehicles, Up
Trading breached the non-export agreement. (Id.
¶ 14.) Finally, in Count VI, M11 asserts a claim of
unfair trade practices under Massachusetts law.
Cars Universal, in Count IV, M11 alleges that Cars Universal
conspired with two of M11's employees (non-parties Danny
Kaboub [“Kaboub”] and King) to purchase from M11
at least 36 new Mercedes-Benz vehicles for export, using
straw buyers/agents who were allegedly indemnified by Cars
Universal, in a scheme to defraud M11, in violation of RICO.
(Id. ¶¶ 26, 27, 33, 34-35.) In Count V,
M11 alleges that Cars Universal, as the principal of the
agents who purchased the vehicles that were later exported,
breached the non-export agreements signed by each straw
purchaser. (Id. ¶ 39.) Finally, the state law
claim in Count VI is also leveled against Cars Universal.
bears the burden of showing that this Court has personal
jurisdiction over Cars Universal. CompuServe, Inc. v.
Patterson, 89 F.3d 1257, 1261-62 (6th Cir. 1996);
Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th
Cir. 1991). When a district court rules on a motion to
dismiss for lack of jurisdiction without conducting an
evidentiary hearing, it must consider the pleadings and
affidavits in the light most favorable to plaintiff.
CompuServe, 89 F.3d at 1262. To defeat the motion,
plaintiff need only make a prima facie showing of
meet its burden of establishing personal jurisdiction,
plaintiff must show both (1) that the defendant is amenable
to service of process . . .; and (2) that the exercise of
personal jurisdiction would not deny the defendant due
process.” Tradesmen Int'l, LLC v. Tradesmen
Staffing, LLC, No. 5:15-CV-1368, 2017 WL 2620660, at *2
(N.D. Ohio June 16, 2017) (citations omitted). Although
Ohio's long-arm statute is typically the starting point,
in the instant case, M11 asserts personal jurisdiction over
Cars Universal “by reason of the provisions of 18 USC
§ 1965(b).” (Compl. ¶ 3.) This statutory
(b) In any action under section 1964 of this chapter [for
civil remedies for RICO violations] in any district court of
the United States in which it is shown that the ends of
justice require that other parties residing in any other
district be brought before the court, the court may cause
such parties to be summoned, and process for that purpose may
be served in any judicial district of the United States by
the marshal thereof.
deciding when the ‘ends of justice require'
national service, courts are to consider the legislative
history of RICO. Courts have found that Congress intended the
‘ends of justice' language to provide a means for
‘plaintiffs to bring all members of a nationwide RICO
conspiracy before the court in a single trial.'”
Iron Workers Local Union No. 17 Ins. Fund v. Philip
Morris Inc., 23 F.Supp.2d 796, 803 (N.D. Ohio
1998) (citation omitted); see also Butcher's Union
Local No. 498 v. SDC Invest., Inc., 788 F.2d
535, 539 (9th Cir. 1986).
“the right to nationwide service in RICO suits is not
unlimited.” Butcher's Union, 788 F.2d at
539. “For nationwide service to be imposed under
section 1965(b), the court must have personal jurisdiction
over at least one of the participants in the alleged
multidistrict conspiracy and the plaintiff must show that
there is no other district in which a ...