White v. Yax Ecommerce LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

ROGER WHITE CIVIL ACTION

VERSUS NO. 23-3847

YAX ECOMMERCE, LLC SECTION: D (1)

ORDER AND REASONS

Before the Court is a Motion to Dismiss for Lack of Jurisdiction or, in the

Alternative, Motion to Compel Arbitration filed by the Defendant, Yax Ecommerce

LLC.1 The Plaintiff, Roger White, filed a response in opposition to the Motion.2 After

careful consideration of the parties’ memoranda, the record, and the applicable law,

the Court GRANTS the Motion.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff Roger White brings suit in this Court against Defendant Yax

Ecommerce LLC d/b/a Wealth Assistants LLC (“Defendant”) on a claim of breach of

contract.3 Plaintiff alleges that on or about December 19, 2022, he and the Defendant

entered into a contract wherein the Defendant agreed to manage the Plaintiff’s online

“seller ID/merchant token” on the Amazon ecommerce platform.4 According to the

Plaintiff, the contract obligated the Defendant to “focus on customer satisfaction and

other customer metrics such as reliably meeting customer demands and quality

control, including but [sic] limited to Host account health parameters such as order

1 R. Doc. 9.

2 R. Doc. 11.

3 R. Doc. 6.

4 Id. at ¶ 11.

defect rate, cancellation rate, late dispatch rate, on-time delivery, and return

dissatisfaction rate,” and to “fine tune the Plaintiff store’s reputation and position[]

operations for a successful store.”5 Plaintiff claims that Defendant failed to perform

any of these obligations and responsibilities despite Plaintiff paying Defendant

$55,000.00 on or about December 28, 2022.6 Plaintiff contends that he has suffered

damages, including financial losses and missed investment opportunities, as a result

of the Defendant’s breach.7

Shortly after Plaintiff filed his initial Complaint, this Court ordered the

Plaintiff to file an amended Complaint properly establishing the citizenship of the

Defendant to ensure that this Court may exercise diversity jurisdiction in this

matter.8 The Plaintiff timely filed an Amended Complaint with the requisite

citizenship information of the Defendant.9 Accordingly, all references to Plaintiff’s

Complaint are to the First Supplemental and Amended Complaint for Breach of

Contract (“Amended Complaint”).

In the instant Motion, Defendant asks the Court to either dismiss the

Plaintiff’s Amended Complaint in its entirety due to the Court’s lack of personal

jurisdiction over the Defendant or, alternatively, to compel arbitration of this

dispute.10 The Defendant argues that this Court lacks jurisdiction over it because

the Defendant does not have sufficient minimum contacts with Louisiana to establish

5 Id. at ¶ 12.

6 Id. at ¶¶ 14–16.

7 Id. at ¶ 17.

8 R. Doc. 5.

9 R. Doc. 6.

10 R. Doc. 9.

specific jurisdiction and because the requirements of general jurisdiction are not

satisfied.11 The Defendant contends that it does not have any offices, registered

agents, bank accounts, employees, or property in Louisiana, that it does not advertise

in Louisiana, that it does not sell or market any goods, services, or products in

Louisiana, and does not pay any taxes in Louisiana.12 According to the Defendant,

its only contact with Louisiana—the contract it made with the Plaintiff—is

insufficient to establish specific jurisdiction.13 Similarly, Defendant argues that

general jurisdiction is also improper because it is not “at home” in Louisiana.14

Accordingly, the Defendant moves the Court to dismiss this action for lack of personal

jurisdiction. The Defendant also argues, in the alternative, that the Court should

compel the parties to arbitrate this matter pursuant to the arbitration provision in

the parties’ contract.15

The Plaintiff filed a brief response in opposition to the Motion, contending that

this Court does have personal jurisdiction over the Defendant because the “plaintiff

believes that the Defendant has sufficient minimum contacts with Louisiana.”16 The

Plaintiff argues that the “Defendant’s business activities, including the contract with

the Plaintiff, have effects within this state” sufficient to constitute minimum

contacts.17 Regarding arbitration, the Plaintiff concedes that there is a binding

arbitration clause in the contract with the Defendant and contends that he has

11 Id.

12 R. Doc. 9-1 at p. 5.

13 Id. at p. 4.

14 Id. at p. 5.

15 Id. at pp. 6–8.

16 R. Doc. 11 at p. 1.

17 Id.

previously demanded arbitration of this matter.18 The Plaintiff argues that the

Defendant’s Motion to Dismiss is premature given that the Plaintiff has demanded

arbitration and asks the Court to stay the proceedings pending arbitration.19

II. LEGAL STANDARD

“Personal jurisdiction, [like subject matter jurisdiction], is ‘an essential

element of the jurisdiction of a district . . . court,’ without which the court is ‘powerless

to proceed to an adjudication.’”20 Because personal jurisdiction is a “threshold

ground[] for denying audience to a case on the merits,” a court must address the

threshold personal jurisdiction claim before reaching a claim on the merits.21

Therefore, to the extent that the Defendant styles its Motion in the alternative as a

Motion to Compel Arbitration, the Court first takes up the jurisdictional matter of

whether this Court has personal jurisdiction over the Defendant.

When a nonresident defendant moves to dismiss for lack of personal

jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the burden of establishing

jurisdiction belongs to the plaintiff.22 A plaintiff, however, “need only present a prima

facie case of personal jurisdiction to satisfy that burden[;] ‘[p]roof by a preponderance

of the evidence is not required.’” 23 The Court takes all uncontroverted allegations in

18 Id. at pp. 1–2.

19 Id. at p. 2.

20 Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (second alteration in original) (quoting

Emps. Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937)).

21 Id. at 584–85; accord Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 232 (5th

Cir. 2012).

22 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)).

23 Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co., 921 F.3d 522, 539 (5th Cir. 2019)

(citing Stripling v. Jordan Prod. Co., LLC, 234 F.3d 863, 869 (5th Cir. 2000) and quoting Johnston v.

Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008)).

the complaint as true and resolves conflicts in the plaintiff’s favor.24 The Court may

consider affidavits, interrogatories, depositions, or any combination of the recognized

methods of discovery.25 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.26 Because the limits of Louisiana’s long-

arm statute are co-extensive with the limits of constitutional due process, the inquiry

is simply whether this Court’s exercise of jurisdiction over the defendant would offend

due process.27

The Due Process Clause protects an individual’s liberty interest in not being

subject to the binding judgments of a forum with which he has established no

meaningful “contacts, ties, or relations.”28 As explained by the U.S. Supreme Court,

“where individuals ‘purposefully derive benefit’ from their interstate activities, it may

well be unfair to allow them to escape having to account in other States for

consequences that arise proximately from such activities; the Due Process Clause

may not readily be wielded as a territorial shield to avoid interstate obligations that

have been voluntarily assumed.”29 Accordingly, under federal due process

requirements, the Court analyzes whether the nonresident defendant has certain

24 Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994).

25 Jobe v. ATR Marketing, Inc., 87 F.3d 751, 752 (5th Cir. 1996).

26 Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 270 (5th Cir. 2006).

27 See In re Chinese-Manufactured Drywall Products Liability Litigation, 753 F.3d 521, 547 (5th Cir.

2014).

28 International Shoe Co. v. Washington, 326 U.S. 310, 319 (1945).

29 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 479 (1985).

minimum contacts with the forum state, “such that the maintenance of the suit does

not offend traditional notions of fair play and substantial justice.”30

There are two types of jurisdiction: general jurisdiction and specific

jurisdiction. “‘[G]eneral’ or ‘all purpose’ jurisdiction . . . permits a court to assert

jurisdiction over a defendant based on a forum connection unrelated to the underlying

suit (e.g., domicile).”31 General jurisdiction is proper where a defendant’s “affiliations

with the [forum] State are so ‘continuous and systematic’ as to render [it] essentially

at home in the forum State.”32 In contrast, “specific jurisdiction focuses on the

relationship among the defendant, the forum, and the litigation,” and requires that

“the defendant’s suit-related conduct . . . create a substantial connection with the

forum State.”33 The Fifth Circuit applies a three-step analysis for the specific

jurisdiction inquiry:

(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.34

Jurisdiction is proper where the contacts proximately result from actions by

the defendant himself that create a “substantial connection” with the forum State.35

30 Daimler AG v. Bauman, 571 U.S. 117, 126 (2014) (internal citation and quotation marks omitted).

31 Walden v. Fiore, 571 U.S. 277, 283 n.6 (2014).

32 Bauman, 571 U.S. at 139 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915,

919 (2011)).

33 Id. (quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 775 (1984)) (cleaned up).

34 Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006) (quoting Nuovo Pignone,

SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)).

35 McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223 (1957); see also Kulko v. California Superior Court,

436 U.S. 84, 94 (1976).

Thus, where the defendant “deliberately” has engaged in significant activities within

a state, or has created “continuing obligations” between himself and residents of the

forum, he manifestly has availed himself of the privilege of conducting business there,

and because his activities are shielded by “the benefits and protections” of the forum

state’s laws, it is presumptively reasonable to require him to submit to the burdens

of litigation in that forum as well.36

III. ANALYSIS

For the reasons set forth above, the Court begins its inquiry narrowly focused

on Defendant’s Motion to Dismiss for Lack of Jurisdiction. This Court may only

exercise personal jurisdiction over the Defendant if the Defendant has

sufficient contacts with Louisiana to satisfy the requirements of either specific

or general jurisdiction. To resolve that inquiry, the Court considers whether

Defendant’s contract with Plaintiff, a Louisiana citizen, constitutes sufficient

minimum contacts with Louisiana to comport with the requirements of due

process. Because the Court finds that Plaintiff has not established a prima facie

case of personal jurisdiction, the Court lacks both specific and general jurisdiction

over the Defendant and therefore grants the Defendant’s Motion to Dismiss.

A. The Court Lacks General Jurisdiction Over the Defendant

The Court first addressees whether it may exercise general jurisdiction over

the Defendant. General jurisdiction is appropriate only where a defendant is

36 Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 784 (1984); Travelers Health Assn. v. Virginia, 339

U.S. 643, 648 (1950).

essentially “at home” in the forum State.37 For a business entity, the “paradigm

forum for the exercise of general jurisdiction” are the entities’ “place of incorporation,

and principal place of business.”38 Here, the Defendant is a Wyoming-registered

limited liability company39 with a principal place of business in Texas.40 Further, the

members of the Defendant are themselves citizens of Texas and Florida.41 The

Defendant has no office, employees, or agents in Louisiana and is not registered to do

business in Louisiana.42

The Court finds that the Defendant lacks the “continuous and systematic”

connections sufficient to render the Defendant essentially “at home” in Louisiana.43

The Defendant’s limited contacts with the state do not satisfy the requirements for

the exercise of general jurisdiction. Moreover, the Plaintiff does not contest the

Defendant’s assertion that the requirements of general jurisdiction are not met here.

B. The Court Lacks Specific Jurisdiction Over the Defendant

The Defendant argues that this Court cannot exercise specific jurisdiction over

it because it does not have sufficient minimum contacts with Louisiana. Although

the Defendant recognizes that it contracted with Plaintiff, a citizen of Louisiana, the

37 Bauman, 571 U.S. at 139 (quoting Goodyear, 564 U.S. at 919).

38 Id. at 137 (quoting Goodyear, 564 U.S. at 924).

39 In Frank v. P N K (Lake Charles) L.L.C., 947 F.3d 331 (5th Cir. 2020), the Fifth Circuit explained

that the “at home” analysis for general jurisdiction is not dependent on entity type and applies to

limited liability companies as well as corporations. Thus, the Court considers the Defendant’s domicile

and principal place of business in analyzing whether it is “at home” in Louisiana.

40 See R. Doc. 9-3, Declaration of Ryan Carroll, at ¶ 5; R. Doc. 6 at ¶ 3.

41 See R. Doc. 6 at ¶¶ 6–9.

42 See R. Doc. 9-3, Declaration of Ryan Carroll, at ¶¶ 6–15.

43 Bauman, 571 U.S. at 139 (quoting Goodyear, 564 U.S. at 919).

Defendant contends that that connection, standing alone, is insufficient to meet the

requirements for a court to exercise specific personal jurisdiction.44 The Court agrees.

The Court again notes that it is Plaintiff’s burden to establish a prima facie

case that the Court may exercise personal jurisdiction over the Defendant. Here, the

Plaintiff has only articulated one contact between the Defendant and the forum

State—the contract between the parties to manage an ecommerce platform. Although

the Plaintiff summarily states in his Opposition brief that it “believes that the

Defendant has sufficient minimum contacts with Louisiana,” and contends that

“Defendant’s business activities . . . have effects within” Louisiana, the Plaintiff has

not provided any evidence or specific facts to the Court of any contact by the

Defendant with Louisiana other than the contract here.45 Accordingly, the Court only

considers that singular contact in its analysis.

The Supreme Court has explained that merely contracting with a party located

in a state does not by itself establish sufficient minimum contacts with that state.46

“[I]t is now well settled that ‘an individual’s contract with an out-of-state party alone

[cannot] automatically establish sufficient minimum contacts in the other party’s

home forum.’”47 Only where a contractual relationship “envision[s] continuing and

wide-reaching contacts” in the forum state are the requirements of minimum contacts

44 R. Doc. 9-1 at p. 14.

45 R. Doc. 11 at p. 1.

46 See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 478 (1985).

47 Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 222–23 (5th Cir. 2012) (quoting

Burger King, 471 U.S. at 478); accord Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co.,

921 F.3d 522, 544 (5th Cir. 2019) (explaining that a contract alone is not sufficient to constitute

minimum contacts).

met.48 A court must evaluate whether the “prior negotiations and contemplated

future consequences, along with the terms of the contract and the parties’ actual

course of dealing” demonstrate that a defendant purposefully established minimum

contacts with the forum.49

Examining the contract at issue here, the Court does not find that it

contemplates the sort of “continuing and wide-reaching contacts” with Louisiana

sufficient to constitute minimum contacts with the state. Other than the Plaintiff’s

physical presence in the state, the contract bears no connection to Louisiana and only

concerns services rendered for Plaintiff’s web-based Amazon ecommerce store.50

There is no evidence that the contract was either negotiated in Louisiana or that it

required performance in Louisiana.51 Indeed, the Court is unaware of any ties the

Defendant has with the state of Louisiana. Plaintiff has pointed to no evidence that

any of the services contemplated in the contract will be performed in Louisiana or

that the contract envisions future purposeful contacts with Louisiana. The fortuitous

and attenuated connection between the Defendant and Louisiana is insufficient to

satisfy Plaintiff’s burden in establishing specific jurisdiction over the Defendant.

48 Burger King, 471 U.S. at 480; accord Pervasive Software Inc., 688 F.3d at 224.

49 Pervasive Software Inc., 688 F.3d at 223 (quoting Burger King, 471 U.S. at 478–79).

50 See R. Doc. 9-2. Louisiana is not mentioned anywhere in the contract.

51 See, e.g., Halliburton, 921 F.3d at 544 (collecting cases and examining considerations courts look to

in determining minimum contacts); see also Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 433 (5th

Cir. 2014) (“We have previously explained that a defendant does not have minimum contacts with a

state when it does not have a physical presence in the state; it did not conduct business in the state;

and the contract underlying the business transaction at issue in the lawsuit was not signed in the

state and did not call for performance in the state.” (citing Seiferth v. Helicopteros Atuneros, Inc., 472

F.3d 266, 272 (5th Cir. 2006))).

Because the requirements of general jurisdiction are likewise not established, the

Court must dismiss this action for lack of personal jurisdiction.®

IV. CONCLUSION

Because this Court lacks personal jurisdiction over the Defendant,

IT IS HEREBY ORDERED that the Motion to Dismiss for Lack of

Jurisdiction or, in the Alternative, Motion to Compel Arbitration®? is GRANTED.

IT IS FURTHER ORDERED that Plaintiffs claims against the Defendant

are DISMISSED WITHOUT PREJUDICE due to the Court’s lack of personal

jurisdiction over the Defendant.

New Orleans, Louisiana, November 6, 2023.

WENDY B. bib

United States District Judge

52 Because the Court finds it proper to dismiss this action on personal jurisdiction grounds, the Court

does not address Defendant’s alternative argument that the Court should compel arbitration in this

matter.

53 R, Doc. 9.