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Marks v. Otis Elevator Co.

United States District Court, D. Kansas

June 16, 2017

MICHAEL MARKS and DOROTHY MARKS, Plaintiffs,
v.
OTIS ELEVATOR COMPANY and VENETIAN CASINO RESORT, LLC, Defendants.

          MEMORANDUM AND ORDER

          ERIC F. MELGREN UNITED STATES DISTRICT JUDGE.

         Plaintiffs Michael and Dorothy Marks filed a negligence action against Defendants Venetian Casino Resort, LLC (“Venetian”) and Otis Elevator Company (“Otis”). This matter comes before the Court on Defendants' motion to dismiss for improper venue. Alternatively, Defendants move to transfer venue for convenience (Doc. 8, 12). For the reasons stated below, the Court grants Defendants' motion to dismiss.

         I. Factual and Procedural Background

         On May 29, 2016, Plaintiffs were in Las Vegas celebrating their grandson's 21st birthday. While at a casino owned and operated by Venetian, they entered an elevator manufactured by Otis. The elevator malfunctioned and Plaintiffs were subsequently injured. Plaintiffs filed a negligence action in this Court, alleging diversity jurisdiction. Plaintiffs are residents of Kansas. Otis is a for-profit corporation organized under the laws of New Jersey. Otis operates other elevators in Kansas and maintains a resident agent there. Venetian is a Nevada limited liability company with its principal place of business and headquarters also in Nevada. Venetian maintains no place of business or resident agent in Kansas. Otis and Venetian have each filed a motion to dismiss due to improper venue, or alternatively to transfer venue to Nevada. The Court now considers these motions in turn.

         II. Legal Standard

         A. Motion to Dismiss for Improper Venue

         Under Rule 12(b)(3), defendants may request dismissal for improper venue. Venue is proper in Kansas under 28 U.S.C. § 1391(b) only when (1) all defendants are residents of Kansas, (2) a substantial part of the events giving rise to the action occurred in Kansas, or (3) there is no other venue in which the action could have been brought.

         When a defendant challenges venue, the plaintiff bears the burden of showing that venue is proper.[1] In a motion to dismiss for improper venue, the plaintiff is only required to make a prima facie showing that venue is proper to avoid dismissal; this is the same standard as motions to dismiss for lack of personal jurisdiction.[2] Particularly in this case, an analysis of proper venue is subsumed into an analysis of personal jurisdiction.

         Allegations in a complaint “must be taken as true to the extent they are uncontroverted by the defendant's affidavits. If the parties present conflicting affidavits, all factual disputes must be resolved in the plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.”[3] “However, only the well pled facts of the plaintiff's complaint, as distinguished from mere conclusory allegations, must be accepted as true.”[4]

         B. Alternative Motion to Transfer Venue

         Transfer of venue is governed by 28 U.S.C. § 1404 or § 1406. Which section governs depends on whether Plaintiffs' choice of venue is proper. If the original venue is proper, § 1404 is the governing section; if venue is improper, § 1406 governs.

         The relevant portion of § 1404 states: “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought . . . .”[5] Unless the balance of interests “is strongly in favor of the movant, the plaintiff's choice of forum should rarely be disturbed.”[6]

         The relevant portion of § 1406 states: “The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.”[7] The phrase “if it is in the interest of justice” grants the Court discretion in deciding to dismiss or transfer an action.[8]

         III. Analysis

         First, the Court will consider whether venue is proper in Kansas. If venue is improper, the Court will next consider whether transfer of venue is in the interest of justice.

         A. Improper Venue pursuant to 28 U.S.C. § 1391

         Plaintiffs can lay proper venue in one of three ways, each of which is correspondingly set forth in 28 U.S.C. § 1391(b)(1-3). For the purposes of this case, the only dispositive and relevant subsection is (b)(1).[9]

         1. Residential Venue - § 1391(b)(1)

         Venue is proper pursuant to 28 U.S.C. § 1391(b)(1) if all Defendants are residents of Kansas. In the present case, both Defendants are businesses. For the purpose of determining proper venue, if a district court has personal jurisdiction over a business, that business is a resident of the state where the district resides.[10] As such, in this case an analysis of personal jurisdiction is determinative to proper venue under (b)(1).

         In a diversity action, “personal jurisdiction over a nonresident defendant is determined by the law of the forum state.”[11] Under Kansas law, the exercise of personal jurisdiction generally requires a two-step analysis to determine “whether the exercise of jurisdiction is sanctioned by the long-arm statute of the forum state and comports with due process requirements of the Constitution.”[12] However, because the Kansas long-arm statute is construed liberally, federal courts may proceed directly to the due process analysis.[13]

         The due process analysis involves a two-step inquiry.[14] First, the plaintiff must show that the nonresident defendant has “minimum contacts” with the forum state by demonstrating that it purposefully availed itself of the protections or benefits of the state's laws, such that it should reasonably anticipate being haled into court there.[15] If the plaintiff successfully establishes such minimum contacts, the burden shifts to the defendant to prove that the exercise of jurisdiction would offend “traditional notions of fair play and substantial justice.”[16] This second inquiry is commonly referred to as the “reasonableness” test.

         a. Minimum Contacts

         The constitutional touchstone of the Due Process Clause is whether the defendant purposefully established minimum contacts in the forum state.[17] This requirement ensures “that a defendant will not be subject to the laws of a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person.”[18] “The minimum contacts standard may be met in one of two ways: (1) a court may exercise general jurisdiction if the defendant's contacts with the forum state are continuous and systematic; or (2) a court may exercise specific jurisdiction over a defendant if it purposefully directs activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities.”[19] The Court will address specific jurisdiction and general jurisdiction in turn.

         i. Specific Jurisdiction

         In tort cases, “the minimum contacts necessary for specific personal jurisdiction are established when the defendant has ‘purposefully directed' its activities toward the forum jurisdiction and where the underlying action is based upon activities that arise out of or relate to the defendant's contacts with the forum.”[20] Under the purposeful direction test, Plaintiffs must show that Defendants expressly intended to act in Kansas with knowledge that the brunt of the injury would be felt there.[21] Specific jurisdiction is “based on a matter occurring in the forum state.”[22] With regard to this consideration, “although physical presence in the forum is not a prerequisite to jurisdiction, physical entry into the State-either by the defendant in person or through an agent, goods, mail, or some other means-is certainly a relevant contact.”[23]

         But it is not enough for Plaintiffs to show that Defendants purposefully directed their activities toward Kansas. For the Court to have specific jurisdiction, Plaintiffs must also demonstrate that its alleged injuries arose from Defendants' activities in Kansas. The key inquiry is whether a nexus exists between Defendants' contacts and Plaintiffs' cause of action.[24]For this determination, the Tenth Circuit has not decided whether to adopt a “but-for” or a “proximate cause” standard.[25] However, it is clear that the “arise out of” requirement is not met if Plaintiffs would have suffered the same injury even if Defendants had no activity in Kansas.[26]

         In the present case, Venetian's sole contact with Kansas is that it advertises there. As explained below, mere advertising is insufficient contact to support general jurisdiction, let alone specific jurisdiction. Nothing about Venetian's advertising proves that it purposefully directs its activities toward citizens of Kansas. Furthermore, Plaintiffs' injuries could have occurred whether or not Venetian advertised in Kansas, thus negating the “arising out of” element. Because Venetian does not purposefully direct its activities toward citizens of Kansas, and because Plaintiffs' injuries did not arise out of Venetian's contact with Kansas, the Court lacks specific jurisdiction over Venetian.

         Likewise, Plaintiffs' injuries did not arise out of Otis's contacts with Kansas. The elevator that caused Plaintiffs' injuries is located in Nevada. Otis's operation of other elevators in Kansas is irrelevant. This action is not based on activities arising out of Otis's contacts with Kansas; rather, it is based on activities arising out of Otis's contact with Nevada. Since the “arising out of” element is clearly lacking, the Court's determination of “purposeful direction” is unnecessary. The Court lacks ...


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