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Santander Consumer USA Inc. v. Union Pontiac-Gmc Inc

United States District Court, N.D. Texas, Dallas Division

May 31, 2017

SANTANDER CONSUMER USA, INC. Plaintiff,
v.
UNION PONTIAC-GMC, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          BARBARA M. G. LYNN O CHIEF JUDGE

         Before the Court is Defendant Union Pontiac-GMC, Inc.'s Motion to Dismiss for Lack of Personal Jurisdiction, or Alternatively, Motion to Transfer [ECF No. 10]. After carefully reviewing the motions, the Court determines that it lacks personal jurisdiction over the Defendant. However, rather than dismiss for lack of personal jurisdiction, the Court transfers this action to the United States District Court for the District of New Jersey, pursuant to 28 U.S.C. § 1406(a).

         1. Background

         This case involves a contract dispute between Plaintiff Santander Consumer USA, Inc., an Illinois corporation with its principal place of business in Dallas County, Texas, and Union Pontiac-GMC, Inc., a Delaware corporation with its principal place of business in New Jersey. Pl. Pet. [ECF No. 1-3] ¶¶ 2-3. The parties entered into a Non-Recourse Dealer Retail Agreement (the “Agreement”) governing the sale and purchase of retail installment sales contracts in connection with the sale of automobiles. Id. ¶ 7.

         According to the allegations in Plaintiffs Petition, filed in state court prior to removal, Plaintiff is in the business of purchasing automobile retail installment sales contracts from automobile dealers such as Defendant. Id. ¶ 6. Plaintiff alleges that Defendant assigned four separate retail installment contracts (the “Missing Equipment Contracts”) to Plaintiff, in which Defendant misrepresented the condition of the vehicles, and the equipment options included with the vehicles. Id. ¶¶ 9-10. Plaintiff maintains that these misrepresentations violate paragraph 8(J) of the Agreement, which obligated Defendant to repurchase the Missing Equipment Contracts. Id. Further, Plaintiff maintains that Defendant misrepresented customer information in violation of paragraph 8(h) of the Agreement, obligating Defendant to repurchase 102 contracts. Id. ¶ 14. Plaintiff also alleges various other violations of the Agreement, including failure to tender payment for cancelled “Additional Products and Services, ” pursuant to paragraph 4(c) of the Agreement, and failure to pay the value of reserve amounts. Id. ¶¶ 11-13.

         Defendant contends that it is not a Texas business, does not maintain any physical presence or employees in Texas, does not solicit or advertise in Texas, and does not own or lease property in Texas. Defendant also contends that the Agreement was not negotiated or signed in Texas, does not reference Texas, and does not impose any contractual obligations to be performed in Texas.

         On July 26, 2016, Plaintiff filed its Original Petition in the 192nd Judicial District Court in Dallas County, Texas. Defendant timely removed the case to this Court on the basis of diversity jurisdiction. Defendant now moves to dismiss this action for lack of personal jurisdiction or, in the alternative, to transfer the case to the United States District Court for the District of New Jersey.

         2. Legal Standard

         a. Personal Jurisdiction

         When a defendant challenges personal jurisdiction, the plaintiff bears the burden of “mak[ing] a prima facie showing that personal jurisdiction is proper.” Monkton Ins. Servs., Ltd. v. Ritter, 768 F.3d 429, 431 (5th Cir. 2014) (citing Luv N' Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006)). The Court “must accept the plaintiff's uncontroverted allegations, and resolve in [its] favor all conflicts between the facts contained in the parties' affidavits and other documentation.” Monkton, 768 F.3d at 431 (quoting Revell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002)). In reviewing a motion to dismiss for lack of personal jurisdiction, the Court “may consider ‘affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.'” Revell, 317 F.3d at 469 (quoting Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985)).

         The Court has the power to exercise personal jurisdiction over a defendant only if the following conditions are satisfied: “(1) the long-arm statute of the forum state confers personal jurisdiction over that defendant; and (2) exercise of such jurisdiction by the forum state is consistent with due process under the United States Constitution.” In re Chinese-Manufactured Drywall Prods. Liab. Litig., 753 F.3d 521, 535 (5th Cir. 2014) (quoting Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013)). Because “[t]he Texas long-arm statute extends to the limits of the Constitution, ” only the second prong of the test is at issue. Stroman Realty, Inc. v. Antt, 528 F.3d 382, 385 (5th Cir. 2008).

         There are two categories of personal jurisdiction, general and specific. Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014). General jurisdiction exists when a foreign corporation's “affiliations with the State are so ‘continuous and systematic' as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 2846, 2851 (2011) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). For the Court to exercise specific jurisdiction over a nonresident who has not consented to suit in the forum, the nonresident must have contacts with the forum state that “arise from or are directly related to the cause of action.” Marathon Oil Co. v. A.G. Ruhrgas, 182 F.3d 291, 295 (5th Cir. 1999) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)).

         Plaintiff, as the party seeking to invoke the Court's power, bears the burden of establishing the Court's jurisdiction over Defendant. See Pervasive Software Inc. v. Lexware GmbH & Co. KG, 688 F.3d 214, 219 (5th Cir. 2012) (citing cases). If a district court, as here, decides a motion to dismiss without holding an evidentiary hearing, a prima facie case suffices to establish jurisdiction. See Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994) (citing Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)). A court must take uncontroverted allegations in the complaint as true, and it must resolve all factual conflicts favor of the plaintiff. Pervasive Software, 688 F.3d at 220 (citing Freudensprung v. Offshore Technical Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004)). In deciding the motion, a court may consider “affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.” Quick Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 344 (5th Cir. 2002) (citing Thompson, 755 F.2d at 1165).

         3. ...


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