359 F. Supp. 3d 499
E.D. Ky.2019Background
- Plaintiff Sally Hall, a Kentucky resident, worked for Rag-O-Rama (an Ohio LLC) as a remote Area Manager from June 2016 to January 2017 and alleges multiple common-law claims including wrongful termination and breach of contract.
- Rag-O-Rama recruited Hall, sent an executed employment contract to her in Kentucky, and knew she would perform the majority of her duties from her home in Falmouth, Kentucky; it supplied equipment and reimbursed travel when she visited Ohio.
- Hall signed and returned the June 2016 employment agreement from Kentucky and was terminated by letter sent to her Kentucky address effective January 10, 2017.
- Rag-O-Rama moved to dismiss for lack of personal jurisdiction under Kentucky’s long‑arm statute and for improper venue, arguing it has no physical presence or revenue in Kentucky and that Hall’s work primarily advanced Ohio/Georgia operations.
- The court treated plaintiff’s affidavits as true for the 12(b)(2) review, found Rag-O-Rama transacted business in Kentucky, and denied the motion to dismiss; venue in the Eastern District of Kentucky was held proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendant “transacted any business” in Kentucky under Ky. Rev. Stat. § 454.210(2)(a)(1) | Hall: Rag‑O‑Rama recruited, contracted with, communicated with, and furnished equipment to Hall in Kentucky — constituting transacting business | Rag‑O‑Rama: No physical presence or sales in Kentucky; work directed at Ohio/Georgia only | Court: Defendant transacted business in Kentucky (recruitment, contracting, continuing relationship) |
| Whether Hall’s claims “arise from” defendant’s Kentucky contacts (long‑arm § 454.210(2)(b)) | Hall: Claims flow from the employment relationship negotiated, signed, and performed in Kentucky | Rag‑O‑Rama: Disputes relevance since operations served other states | Court: “Arising from” requirement satisfied — reasonable, direct nexus to in‑state contacts |
| Whether exercising personal jurisdiction satisfies federal due process (specific jurisdiction; purposeful availment) | Hall: Defendant purposefully availed itself by recruiting, negotiating, sending contract and equipment, and maintaining ongoing communications knowing Hall worked from Kentucky | Rag‑O‑Rama: Contacts are unilateral/convenience of employee and relate to out‑of‑state operations | Court: Purposeful availment met (continuing relationship, defendant reached out, contract performed in Kentucky); Mohasco test satisfied |
| Whether venue is proper or case should be transferred | Hall: Venue in Eastern District of Kentucky proper because defendant resides where subject to personal jurisdiction | Rag‑O‑Rama: Southern District of Ohio is proper forum; sought dismissal for improper venue | Court: Venue proper in E.D. Ky.; defendant did not properly move to transfer and dismissal not warranted |
Key Cases Cited
- Theunissen v. Matthews, 935 F.2d 1454 (6th Cir. 1991) (plaintiff bears burden to make prima facie showing of personal jurisdiction on a 12(b)(2) motion)
- Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883 (6th Cir. 2002) (prima facie standard for jurisdictional showing when no evidentiary hearing)
- Air Prods. & Controls, Inc. v. Safetech, Int'l, Inc., 503 F.3d 544 (6th Cir. 2007) (forum long‑arm analysis followed by federal due process; purposeful availment in contract settings)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (U.S. 1985) (contacts showing ‘substantial connection’ and purposeful availment create reasonable expectation of being haled into court)
- Southern Machine Co. v. Mohasco Indus., Inc., 401 F.2d 374 (6th Cir. 1968) (three‑part specific jurisdiction test: purposeful availment, arising from, and reasonableness)
- Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51 (Ky. 2011) (Kentucky long‑arm statute does not reach the full extent of federal due process; ‘‘arising from’’ requirement explained)