The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
ALL STAR ELECTRIC, INC. CIVIL ACTION
VERSUS NO. 19-1533-WBV-JCW
EAGLE ACCESS, LLC, ET AL. SECTION D(2)
ORDER
Before the Court is Defendant Eugene Sak’s Motion to Dismiss for Lack of
Personal Jurisdiction (R. Doc. 9), Plaintiff All Star Electric, Inc. (“ASE”)’s Response
in Opposition (R. Doc. 10), and Defendant’s Reply (R. Doc. 15). After consideration of
the parties’ memoranda and the applicable law, the defendant’s Motion to Dismiss
for Lack of Personal Jurisdiction (R. Doc. 9) is GRANTED.
I. Factual Background
ASE entered into a contract with Woodward Design + Build LLC (“Woodward”) on
October 24, 2016, to perform the electrical work on the Standard, a development
project, at South Market District in New Orleans, Louisiana (the “Project”).1
Woodward entered into a contract with Domain Companies, LLC, to construct the
Project.2 Woodward also entered into a Rental Agreement and a Subcontract with
Defendant Eagle Access, LLC (“Eagle”) to rent two hoist units and to erect, dismantle,
1 R. Doc. 1-2, p. 2.
2 Id.
engineer, maintain, and test the hoist units.3 On July 28, 2017, ASE employees and
others were riding in the elevator car of one of the hoists provided by Eagle when the
elevator car suddenly fell from the seventh story to the ground.4 ASE alleges that it
has incurred damages, such as the cost of responding to and investigating the
incident, general conditions, overtime, increased labor, inefficiencies because of
stacking of trades, increased labor because of wait times and extra stairs climbed,
delays, and decreased productivity.5 ASE claims that as a result of the incident, it
was forced to accelerate other work to keep the Standard Project on schedule, causing
further damages.6 ASE sued Eagle Access, LLC, Division Management, LLC,
Burlington Insurance Company, Eugene Sak, and Eagle Scaffolding and Equipment
Company, Inc. in Civil District Court for the Parish of Orleans.7 Defendant
Burlington Insurance Company removed the action to this Court.8
Before leasing the commercial elevator hoist to Woodward in 2016, Defendant
Division Management, LLC, purchased the assets of Defendant Eagle Access, and
Eagle Access dissolved.9 Division Management operates out of Eagle Access’ former
office in Florence, Alabama, employs Eagle Access’ former personnel, and has used
the trade name and identifiers of “Eagle Access,” which are known in the industry.10
3 Id. The parties stipulate that Defendant Division Management, LLC, is Eagle Access, LLC’s de facto
successor for these purposes.
4 R. Doc. 1-2, pp. 2-3.
5 R. Doc. 1-2, p. 3.
6 Id.
7 On November 25, 2019 Eagle Scaffolding and Equipment Company, Inc. was dismissed without
prejudice for the plaintiff’s failure to prosecute. R. Doc. 19.
8 R. Doc. 1.
9 R. Doc. 9-2, p. 2.
10 Id.
Both Eagle Access and Division Management are being defended in this action by
Defendant Burlington Insurance Company under the same commercial general
liability policy issued to both entities.11 Defendant Eugene Sak (“Sak”) was the
manager of Eagle Access.12 He signed the elevator hoist leasing and installation
contracts in Florence, Alabama, in his capacity as manager.13
Defendant Sak moves to dismiss the action against him for lack of personal
jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2).14 In support of his
motion, Defendant Sak provided an Affidavit that states that he has been a resident
of Alabama for 34 years and has never lived in, or owned property or assets in,
Louisiana. The Affidavit asserts that Division Management, LLC, a Delaware limited
liability corporation with its principal place of business in Alabama, was organized
as a single-member LLC, effective December 31, 2015. Shortly after it was organized,
Division Management purchased the assets of Eagle Access and, during the
transitional period, continued to do business as Eagle Access. Mr. Sak’s Affidavit
states that it was during this period that Division Management began to negotiate
with Woodward for the lease of the two commercial elevator hoists for the Standard
project. Sak asserts that he executed the “Man/Material Hoist Rental” agreements
delivered by Woodward for the hoists in Florence, Alabama. A subcontract agreement
was also signed by Sak as managing member of Eagle Access, LLC, in the Florence,
11 Id.
12 Id.
13 Id.
14 R. Doc. 9.
Alabama office. Mr. Sak advises that all documents were executed in his official
capacity as managing member of Eagle Access/Division Management. He further
advises that he never traveled to Louisiana to negotiate, execute, or perform these
contracts or to conduct any business in Louisiana on behalf of Eagle Access. Sak
asserts that he has only been in Louisiana twice in recent memory for social events—
2014 for Mardi Gras and Fall of 2018 for a football game—and once last Spring in
Baton Rouge in his capacity as a representative of a different company to negotiate a
contract unrelated to this action.15 He contends that he has never conducted business
in Louisiana in regard to the transactions for the Standard project.16 Sak does not
contest this Court’s jurisdiction over Defendants Eagle Access and Division
Management. Instead, relying on his uncontested Affidavit, Defendant Sak claims
that this Court lacks personal jurisdiction over him in this matter.
In its Opposition, Plaintiff argues that this Court has specific jurisdiction over the
defendant since the defendant created a continuing obligation with Woodward, the
general contractor.17 Further, Plaintiff argues that Eagle’s “minimum contacts,
including but not limited to performing a contract in Louisiana, can be imputed to its
shareholder for jurisdictional purposes by ‘piercing the corporate veil.’”18 In support
of this argument, plaintiff alleges that Mr. Sak did not follow formalities when he
signed the contract on behalf of Eagle Access when Eagle Access had been
dissolved.19
15 R. Doc. 9-2, p. 3.
16 Id.
17 R. Doc. 10.
18 Id.
19 Id.
Plaintiff further alleges that Sak did not have any of his companies registered as a
subcontractor with the Louisiana State Licensing Board for Contractors.20
II. Legal Standard
When a nonresident moves to dismiss for lack of personal jurisdiction, the burden
of establishing jurisdiction belongs to the plaintiff.21 The Court takes all
uncontroverted allegations in the complaint as true and resolves conflicts in the
plaintiff’s favor.22 The Court may consider affidavits, interrogatories, depositions, or
any combination of the recognized methods of discovery.23 The Court may exercise
personal jurisdiction over a nonresident defendant only if two requirements are
satisfied: (1) the forum state’s long-arm statute confers personal jurisdiction; and (2)
the exercise of jurisdiction does not exceed the boundaries of due process.24 The limits
of Louisiana’s long-arm statute are co-extensive with the limits of constitutional due
process, so the inquiry is simply whether this Court’s exercise of jurisdiction over the
defendant would offend due process.25
This Court has held that International Shoe Co v. State of Washington, Office of
Unemployment Compensation & Placement, 326 U.S. 310 (1945) is the “canonical
opinion” governing personal jurisdiction.26 In International Shoe, the Supreme Court
20 Id.
21 Hebert v. Wing Sale, Inc., 337 F. Supp. 3d 714, 717 (E.D. La. 2018) (citing Luv N’ Care v. Insta-Mix,
Inc., 438 F. 3d 465, 469 (5th Cir. 2006)).
22 Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994).
23 Jobe v. ATR Marketing, Inc., 87 F.3d 751, 752 (5th Cir. 1996).
24 Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 2006).
25 Hebert, 337 F. Supp. 3d at 717-18 (internal citations omitted).
26 Id.
held that a “State may authorize its courts to exercise personal jurisdiction over an
out-of-state defendant if the defendant has certain minimum contacts with [the State]
such that the maintenance of the suit does not offend traditional notions of fair play
and substantial justice.”27 Two categories of personal jurisdiction exist within the
International Shoe framework: specific jurisdiction and general jurisdiction.28 A court
has specific jurisdiction over a defendant when the suit arises out of or relates to the
defendant’s contacts within the forum state.29 A court has general jurisdiction over a
foreign corporation when its affiliations within the State are “so continuous and
systematic as to render them essentially at home in the forum State.”30 It does not
appear that the plaintiff is arguing that the Court has general jurisdiction over the
defendant.31 An inquiry as to specific jurisdiction requires the Court to consider the
relationship among the defendant, the forum, and the litigation.32 “For a State to
exercise jurisdiction consistent with due process, that relationship must arise out of
contacts, that the ‘defendant himself’ creates with the forum State.”33 “[T]he plaintiff
cannot be the only link between the defendant and the forum.”34
27 Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (internal quotation
marks omitted).
28 Id.
29 Hebert v. Wing Sale, Inc., 337 F. Supp. 3d 714, 718 (E.D. La. 2018) (citing Daimler AG v. Bauman,
134 S.Ct. 746, 754 (2014)).
30 Id.
31 R. Doc. 10.
32 Hebert, 337 F. Supp. 3d at 718 (citing Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 432 (5th Cir.
2014)).
33 Walden v. Fiore, 571 U.S. 277, 284 (2014).
34 Walden, 571 U.S. at 285.
The Fifth Circuit applies a three-step analysis for specific jurisdiction:
(1) whether the defendant has minimum contacts with the forum state,
i.e., whether it purposely directed its activities toward the forum state
or purposefully availed itself of the privileges of conducting activities
there; (2) whether the plaintiff's cause of action arises out of or results
from the defendant's forum-related contacts; and (3) whether the
exercise of personal jurisdiction is fair and reasonable.
Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th Cir. 2014) (citing Seiferth
v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006)). If Plaintiff ASE
successfully establishes the first two prongs, then the burden shifts to Defendant
Eugene Sak to show that exercising jurisdiction would be unfair or unreasonable.35
III. Analysis
The parties dispute the issue of specific jurisdiction over Defendant Sak—
specifically whether Defendant Sak has sufficient minimum contacts with Louisiana.
Defendant Sak contests that he has no personal involvement in any of the
transactions or the incident at issue in this action.36 He submits that he has resided
in Alabama for 34 years, owns no real or personal property or assets in Louisiana,
and that he has visited Louisiana in the past: once37 in New Orleans for Mardi Gras;
once38 in Baton Rouge for a college football game; and once39 last Spring in Baton
Rouge in his capacity as a representative of a different company—to negotiate a
35 Id.
36 R. Doc. 9-2, p. 5.
37 R. Doc. 9-2, p. 3, in which Defendant Sak states that he visited in 2014; R. Doc. 9-3, p. 3, in which
Defendant Sak states that he visited in 2013. Whether the correct year is 2013 or 2014 is not at issue
before the Court.
38 Id.
39 Id.
contract unrelated to this action. Defendant Sak states that he never travelled to
Louisiana on behalf of the defendants in action.40
Defendant Sak avers he signed the elevator hoist leasing and installation
contracts in Florence, Alabama, in his capacity as manager of Eagle Access.41 He
states that he did not sign any contracts in an individual capacity, he did not travel
to Louisiana to negotiate, implement, or oversee the performance of these contracts,
and he is not alleged to have personally caused or contributed to the incident in
question.42 The defendant argues that the plaintiff’s allegations against him are bare
and conclusory. The Court agrees.
Relying on Lloyd’s Syndicate 457 v. Am. Global Mar. Inc., 346 F. Supp. 3d 908,
929 (S.D. Tex. 2018), Plaintiff makes a “piercing the corporate veil” argument, stating
that “Eugene Sak [did] not follow formalities in his company, Eagle Access, LLC, in
fact he signed a contract in its name knowing that the company had been dissolved
in 2016. Mr. Sak also represented that he was the manager of Eagle, knowing that it
no longer existed.”43 The plaintiff also states, “The fact that Mr. Sak did not have the
correct company listed on the contract smells of bad faith and/or fraud.”44 Defendant
Sak rejoins, “Sak intended to execute ‘Eagle Access’ as a trade name designation for
defendant Division Management; Division Management, a viable company with
assets and general liability coverage defending both it and Eagle Access, concedes
40 R. Doc. 9-2, pp. 2-3.
41 R. Doc. 9-2, p. 2.
42 Id.
43 R. Doc. 10, p. 6.
44 R. Doc. 10, pp. 6-7.
ultimately [sic] responsibility for any judgment against Eagle Access.”45 The Court
finds plaintiff’s reliance on Lloyd’s Syndicate 457 perplexing. Although the court in
Lloyd’s correctly holds, “In determining whether to pierce the [corporate] veil,
Louisiana courts examine the totality of circumstances, taking into
consideration any commingling of funds, failure to follow corporate formalities,
undercapitalization, failure to keep separate accounts and records, and failure to hold
regular shareholder and director meetings.”46 It also correctly states, “Only
exceptional circumstances warrant the radical remedy of piercing the corporate
veil.”47 Further, that court held, “Absent allegations of fraud or deceit, a plaintiff has
the ‘heavy burden of proving that the shareholders disregarded the corporate
entity to such an extent that it ceased to become distinguishable from
themselves.”48 There has been no such showing in this case. The Court does not
find plaintiff’s assertions that Defendant Sak did not follow corporate formalities rise
to the level to such an extent that either Eagle Access or Division Management ceased
to become distinguishable from Eugene Sak.
Defendant Sak argues that he cannot be held liable to the plaintiff simply by
virtue of the fact that he was the managing member of Eagle Access/Division
Management.49 In fact, “[a] member, manager, employee, or agent of a limited
45 R. Doc. 15, p. 2. R. Doc. 9-3, ¶ 5. “During the transitional period. Division Management continued to
do business as the industry-recognized trade or brand name “Eagle Access” and routinely employed
existing “Eagle Access” letterhead, stationary and identifiers.” Id.
46 Lloyd’s Syndicate 457, 346 F. Supp. 3d at 929.
47 Id.
48 Id.
49 R. Doc. 9-2, pp. 6-7.
liability company is not a proper party to a proceeding by or against a limited liability
company, except when the object is to enforce such a person's rights against or
liability to the limited liability company.”50 “As a general rule, an individual member
is not personally responsible for the liabilities of an LLC beyond the member's capital
contributions, with only specifically enumerated exceptions in cases of fraud, breach
of professional duty, or other ‘negligent or wrongful act.”51 Louisiana Revised Statutes
§ 12:1320(D) provides enumerated exceptions to the general rule that LLC members
are not liable for the acts of the LLC:
Nothing in this Chapter shall be construed as being in derogation of any
rights which any person may by law have against a member, manager,
employee, or agent of a limited liability company because of any fraud
practiced upon him, because of any breach of professional duty or other
negligent or wrongful act by such person, or in derogation of any right
which the limited liability company may have against any such person
because of any fraud practiced upon it by him.
Id. The plaintiff alleges that Defendant Sak’s actions, for which Defendant Sak
provides a plausible explanation, “smell” of bad faith or fraud.52 The Plaintiff does
not provide any documentation, affidavits, depositions or interrogatories to support
this assertion. The Court finds that none of the plaintiff’s threadbare allegations
states a plausible claim of fraud, breach of a professional duty, negligence, or
wrongful act against another within the meaning of Louisiana Revised Statutes §
12:1320(D).
50 La. Rev. Stat. § 12:1320(C).
51 Audubon Real Estate Associates, L.L.C. v. Audubon Realty, L.L.C., 2016 WL 740467, at *2 (M.D. La.
Feb. 24, 2016) (internal quotation marks and citation omitted).
52 R. Doc. 10, pp. 6-7.
IV. CONCLUSION
Based on the foregoing, IT IS HEREBY ORDERED that Defendant Eugene
Sak’s Motion to Dismiss for Lack of Personal Jurisdiction (R. Doc. 9) is
GRANTED. All of Plaintiff All Star Electric, Inc.’s claims against Defendant
Eugene Sak are DISMISSED WITH PREJUDICE.
New Orleans, Louisiana, this the 22nd day of April, 2020.
eds & Vetter
WENDY B. VITTER
UNITED STATES DISTRICT JUDGE