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Lucas v. Desilva Automotive Services

United States District Court, S.D. Ohio, Western Division

May 1, 2018

VINCENT LUCAS, Plaintiff,
v.
DESILVA AUTOMOTIVE SERVICES, et al., Defendants.

          Barrett, J.

          REPORT AND RECOMMENDATION

          Stephanie K. Bowman United States Magistrate Judge

         I. Background

         Plaintiff Vincent Lucas (“Lucas”) is an experienced pro se litigant who frequently litigates claims against Defendants that he believes have illegally placed telemarketing calls to his home telephone number.[1] Plaintiff initiated this lawsuit on July 27, 2016, by paying the requisite filing fee and filing a complaint that alleged only that “John Doe” Defendants had violated federal law by engaging in illegal telemarketing practices. Although Plaintiff failed to identify any of the “John Does” within the first 90 days after filing suit, he eventually identified a total of seventeen Defendants alleged to be responsible for various calls on multiple dates.

         More than a year after Plaintiff had initiated suit, on September 12, 2017, the undersigned magistrate judge[2] granted Plaintiff leave to file a second amended complaint. At the same time, the Court entered a calendar order. (Docs. 106, 121). On October 19, 2017, the undersigned filed a Report and Recommendation (“R&R”) that recommended rulings on approximately a dozen motions, most of which had been filed by Plaintiff. (Doc. 122). Plaintiff vigorously objected to that R&R, (Doc. 123), and those objections were submitted to the presiding district judge, U.S. District Judge Michael R. Barrett, for de novo review. On March 31, 2018, Judge Barrett adopted the R&R as the opinion of the Court, with one notable exception discussed below. (Doc. 156).

         On November 16, 2017, Defendants 310 Network Inc., NexInteractive Inc., and Rodolfo Salazar (hereinafter the “Salazar Defendants”), through counsel, filed a motion to dismiss, asserting that this Court lacks personal jurisdiction over them. (Doc. 124). While that motion remained pending, the parties proceeded with contentious discovery, leading to multiple rulings by the undersigned on disputed issues. (Docs. 126, 134, 138, 139, 143).

         Defendants' motion to dismiss for lack of jurisdiction remains pending and is addressed by this R&R, along with a motion more recently filed by Plaintiff that seeks to hold the Defendants in both civil and criminal contempt.[3] For the following reasons, I recommend that Defendants' motion be granted and that Plaintiff's motion be denied.

         II. Defendants' Motion to Dismiss

         Plaintiff seeks to hold the three Salazar Defendants liable for four telephone calls he received on separate dates in February 2015. Plaintiff alleges that the Salazar Defendants are liable under the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§227(b) and 227(c), the Ohio Telephone Solicitation Act, the Ohio Consumer Sales Practices Act, and for alleged regulatory violations of the Public Utility Commission of Ohio. (Doc. 108). Plaintiff further alleges that all seventeen identified defendants, including the Salazar Defendants, committed a “pattern of corrupt activity under Ohio Rev. Code § 2923.32, ” that “Salazar personally participated in or authorized the violation of the TCPA and OCSPA, ” that “Salazar has failed to follow the corporate formalities” for NexInteractive, Inc. and 310 Networks, and that Salazar is “personally liable for the actions of the respective companies.” (Id. at ¶¶94-96). Plaintiff seeks the imposition of joint and several liability against the Salazar Defendants for “at least $18, 000” in statutory damages, the imposition of treble damages, and permanent injunctive relief, as well as “costs, attorney fees, and interest.” (Doc. 108 at 14).

         The Salazar Defendants argue that the allegations do not satisfy the requirements of Ohio's long-arm statute, Ohio R.C. §2307.382, or the Due Process Clause of the U.S. Constitution to permit this Court to exercise personal jurisdiction over them.

         A. The Threshold Issues of Waiver and Consent to Personal Jurisdiction

         Before turning to the merits of Defendants' motion, the Court must address threshold issues of waiver and consent. Plaintiff argues that the Salazar Defendants have consented to the Court's personal jurisdiction and/or waived their personal jurisdiction defense through their conduct.

         Plaintiff served Defendant Salazar on January 12, 2017, and served Defendants 310 Network, Inc. and NexInteractive, Inc. on or about January 17, 2017. Plaintiff sought and obtained a Clerk's entry of default after Defendant Salazar failed to timely answer Plaintiff's amended complaint. (Doc. 29). On March 20, 2017, Plaintiff filed a motion seeking default judgment against Salazar. (Doc. 68). Thereafter, Salazar sent a letter to the Court, which the Clerk of Court construed and docketed as an Answer on April 18, 2017. (Doc. 74). On May 30, 2017, after Plaintiff filed his first motion to amend/correct his amended complaint (Doc. 80), Salazar sent a second letter to the Clerk of Court, which the Clerk also construed and docketed as an Answer. (Doc. 89). On July 21, 2017, Salazar filed a third pro se document, which was docketed as a Motion to Dismiss on behalf of all three Salazar Defendants. (Doc. 98). None of the referenced pro se documents sent to the Court by Salazar raised the affirmative defense of personal jurisdiction.

         Based upon the failure of Salazar to raise the defense in his three pro se communications, Plaintiff argues that Salazar has consented to the jurisdiction of this Court over his person, and also has consented to jurisdiction over the two corporations associated with him. For similar reasons, Plaintiff argues that Salazar has waived any personal jurisdiction defense. However, Judge Barrett recently determined that the two letters were improperly construed by the Clerk as responsive pleadings. In the same Order, Judge Barrett struck Salazar's pro se motion to dismiss from the record. (Doc. 156). Judge Barrett's Order is controlling and dispositive on all issues presented concerning the Salazar Defendants' alleged consent and/or waiver of their personal jurisdiction defense.

         By way of background, on August 21, 2017, newly retained counsel entered his appearance on behalf of the Salazar Defendants. (Doc. 103). After Plaintiff was granted leave to file a Second Amended Complaint, Defendants, through counsel, filed an answer and a motion to dismiss, both of which assert the defense of personal jurisdiction. Plaintiff initially objected to the Salazar Defendants being permitted to file an Answer to the Second Amended Complaint, based in part on arguments that Salazar exhibited undue delay and failed to cure deficiencies in his earlier pro se filings. Both the undersigned in her R&R and Judge Barrett rejected Plaintiff's arguments. (See Doc. 156 at 19-20). In overruling Plaintiff's Objections to the R&R, Judge Barrett explained that Salazar's initial pro se communications had been improperly construed by the Clerk of Court as pleadings:

Plaintiff's initial pro se letters were construed by the clerk and docketed as answers, but the Court is not convinced they should be treated as such. Plaintiff appears to concede that the letters are not easily classifiable. (Doc. 68; PageID 261). Indeed, Defendant Salazar's letters could be construed as inquiries to the Clerk's Office about whether the summons/complaint were legitimately issued by the Clerk, as Defendant Salazar feared he had received essentially a counterfeit summons. (Doc. 68; PageID 269). See also Doc. 112-3, PageID 682. Thus, under the specific facts of this case, the Court declines to treat Defendant Salazar's letters as his initial responsive papers.

(Doc. 156 at 20, n.6)(emphasis added).

         In his objections to the R&R, Plaintiff maintained that even if the Court did not strike the Defendants' Answer in its entirety, the Court should at least strike the affirmative defenses of personal jurisdiction and improper venue. However, Judge Barrett also rejected Plaintiff's arguments that Salazar had forfeited those defenses:

Plaintiff argues that Defendant Salazar waived his personal jurisdiction and venue defenses because they were not included “in his original answer or motion permitted by Rule 12.” However, the defense is included [in] the original answer (Doc. 109), as this Court has declined to treat Defendant Salazar's pro se letters to the Clerk as his initial pleadings. See n. 6, supra. Furthermore, Salazar's only motion predating the answer has been stricken, per Plaintiff's request. See n. 1, supra. Therefore, there has been technical compliance with Rule 12(h). ...Furthermore, the Court is not persuaded that Defendant Salazar's early conduct in this litigation created the “expectation” that he intended to defend on the merits. Indeed, Plaintiff has argued that Defendant Salazar's early resistance to participating in this litigation amounts to sanctionable conduct. Plaintiff cannot have it both ways.

         Accordingly, Plaintiff's forfeiture objection is overruled.

(Doc. 156 at 22, distinguishing King v. Taylor, 694 F.3d 650, 656 (6th Cir. 2012) and State Auto Ins. Co. v. Thomas Landscaping & Constr., Inc., 494 Fed.Appx. 550, 554 (6th Cir. 2012)(affirming waiver on grounds that the defendant's pro se Answer was never stricken). In short, based upon the thorough analysis and rulings contained in Judge Barrett's Order of March 31, 2018, none of the three Salazar Defendants have consented to the jurisdiction of this Court or waived their right to assert the affirmative defense of this Court's lack of personal jurisdiction.

         To the extent that Plaintiff may be arguing that the two corporate entities lack the capacity to present any defense at all, including but not limited to the affirmative defense of personal jurisdiction, based upon their “suspended” status in California, Judge Barrett's recent Order also resolved that issue.

[T]he Court is persuaded that the proper course is to treat these two corporations as “unincorporated associations, ” which - regardless of state law on capacity - may “be sued” where enforcement of a federal right is at issue. Because this Court is exercising its federal question jurisdiction over the TCPA claim, and Rule 17(b)(3)(a) confers on Defendants 310 Network, Inc. and NexInteractive, Inc. the capacity to present a defense, so to[o] may they present a defense to the claims over which this Court exercises supplemental jurisdiction.

(Doc. 156 at 13).

         Plaintiff also argues that the Defendants waived the personal jurisdiction defense when newly retained counsel filed a Notice of Appearance on August 21, 2017. (See Doc. 103). In his opposition to Defendants' motion to dismiss, Plaintiff cites Gerber v. Riordan, 649 F.3d 514 (6th Cir. 2011) to argue that a general Notice of Appearance by counsel waives both service and the defense of personal jurisdiction. In his Objections to the undersigned's October 2017 R&R, Plaintiff also cited Gerber to support his waiver argument, maintaining that, contrary to Defendants' position, that case has not been “abrogated.” (Doc. 123-1 at 20 and n.25).

         Although Judge Barrett's March 31, 2018 Order does not specifically discuss Gerber, the Court did cite King v. Taylor, a post-Gerber case in which the Sixth Circuit clarified that the mere filing of an appearance is not sufficient to waive service. See King, 694 F.3d at 656 n. 7. More importantly, Judge Barrett unequivocally held that the Salazar Defendants had not waived or forfeited their right to present a personal jurisdiction defense to Plaintiff's Second Amended Complaint. (See Docs. 109, 124). Judge Barrett's rulings represent the law of the case on these issues. The undersigned further finds persuasive the Defendants' arguments that post-Gerber case law, including Taylor and other lower court cases, have appropriately rejected the broad interpretation of Gerber advocated by Plaintiff. Additionally, Gerber is factually distinguishable.

         For similar reasons, and based upon Judge Barrett's rejection of the same argument, the undersigned rejects Plaintiff's argument that the Defendants waived their personal jurisdiction defense through conduct that gave the “reasonable expectation” that they intended to defend the case on the merits. (Accord Doc. 156 at 21-22). In short, I find no waiver on the record presented.

         B. The Merits of Defendants' Motion To Dismiss: A Lack of Ohio Contacts

         Having determined that the Salazar Defendants have neither consented to personal jurisdiction in this Court nor waived their ability to present that defense, the undersigned turns to the merits of the Defendants' motion. The Defendants argue that they do not transact business in Ohio and do not contract to provide goods or services in this state.

         “The plaintiff bears the burden of demonstrating that such jurisdiction exists…. Additionally, in the face of a properly supported motion for dismissal, the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991)(internal citations omitted). When the matter is resolved on written submissions alone, the plaintiff will satisfy his burden if he can make a “prima facie showing” of personal jurisdiction. By contrast, when a pretrial-evidentiary hearing is conducted, the preponderance-of-the-evidence standard applies. Schneider v. Hardesty, 669 F.3d 693, 697 (6th Cir. 2012)(citing Serras v. First Tennessee Bank National Association, 875 F.2d 1212, 1214 (6th Cir.1989)). On the written record presented, and assuming that the lower prima facie standard applies, the undersigned recommends that the Defendants' motion be granted, because all of the specific facts Lucas has alleged “collectively fail[] to state a prima facie case for jurisdiction.” Theunissen, 935 F.2d at 1459.

         As grounds for the exercise of personal jurisdiction, Plaintiff relies in part on Advanced Dermatology v. Adv-Care Pharmacy, Inc., 2017 WL 5067576 (N.D. Ohio, 2017), a recent unpublished TCPA case from the Northern District of Ohio. In that case, the district court denied a Canadian defendant's motion to dismiss a TCPA claim, where either the defendant, or a third-party telemarketer on its behalf, sent unwanted telemarketing faxes to Plaintiff's office fax machine without his consent. Although the undersigned finds Advanced Dermatology to be factually distinguishable, its explanation of Ohio's long-arm statute is helpful:

[U]nder Ohio law, “personal jurisdiction over non-resident defendants is available only if (1) the long-arm statute confers jurisdiction and (2) jurisdiction is proper under the Federal Due Process Clause.” Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012). The critical constitutional due process inquiry is whether the defendant has sufficient “minimum contacts” with the forum state so that the district court's exercise of jurisdiction over it comports with “traditional notions of fair play and substantial justice.” International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Depending on the type of minimum contacts in a case, personal jurisdiction can either be general or specific. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1263 (6th Cir. 1996); Reynolds v. Intern. Amateur Athletic Ass'n, 23 F.3d 1110, 1116 (6th Cir. 1994). General jurisdiction exists where a defendant's “continuous and systematic” contacts with a forum render the defendant amenable to suit in any lawsuit brought against it in the forum. Specific jurisdiction exists if the subject matter of the lawsuit arises out of or is related to the defendant's contacts with the forum. See Nationwide Mut. Ins. Co. v. Tryg Int'l Ins. Co., Ltd., 91 F.3d 790, 793 (6th Cir. 1996). In this case, only specific jurisdiction is applicable. The Sixth Circuit has consistently applied the following criteria to determine whether specific jurisdiction exists:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection ...

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