2:21-cv-11878
E.D. Mich.May 10, 2022Background
- Plaintiff Kenneth Jilson alleges he provided multiple loans and performed operational work for defendants Jeremy Elrod and his Nevada companies (SWORD International, SWORD Manufacturing, and Assured Outcomes Group) beginning in 2017–2018.
- Jilson moved to Michigan in July 2018 but continued extensive communications with Elrod and performed business functions from Michigan, billed through his entities, and received some payments wired to Michigan accounts.
- Between 2017 and 2020 Jilson made four bridge loans (totaling over $200,000), advanced business expenses, and worked for AOG for a promised monthly fee; repayment and equity paperwork were repeatedly delayed or unfulfilled.
- Defendants are Nevada residents and operate principally in Nevada; they moved to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2).
- The district court framed the dispute as whether defendants’ contacts with Michigan (communications, loans made while Jilson resided in Michigan, and business dealings benefiting from his Michigan-based work) satisfy Michigan’s long-arm statute and federal due process.
- The court denied the motion, finding Jilson made a prima facie showing of specific personal jurisdiction based on defendants’ purposeful availment, the nexus between forum contacts and the claims, and reasonableness of exercising jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Michigan court has personal jurisdiction over Nevada defendants | Jilson: defendants solicited loans, communicated repeatedly into Michigan, accepted performance and financial benefit from his Michigan-based work, and committed torts with effects in Michigan | Elrod: defendants lack meaningful Michigan contacts; plaintiff’s move to Michigan is unilateral and cannot create jurisdiction; business mostly in Nevada | Court: Denied dismissal; limited personal jurisdiction exists (specific jurisdiction) |
| Purposeful availment | Jilson: repeated, intentional communications and contracts while he resided in Michigan (loans, unpaid fees, equity promises) | Elrod: contacts are attenuated, predate Jilson’s Michigan move, and are not purposeful contacts with Michigan | Court: Purposeful availment satisfied—defendants solicited funds, initiated and continued communications, and entered agreements creating continuing obligations while Jilson lived in Michigan |
| Nexus/arising-from requirement | Jilson: claims (fraud, breach, unjust enrichment) arise from defendants’ communications into and transactions with Michigan | Elrod: core events occurred elsewhere; any effects in Michigan are incidental to plaintiff’s relocation | Court: Nexus satisfied—operative facts (misrepresentations, loans, unpaid work) flow from defendants’ communications and dealings with Jilson in Michigan |
| Reasonableness / fairness of exercising jurisdiction | Jilson: defendants benefitted financially from conduct directed at Michigan; traditional notions of fair play permit jurisdiction | Elrod: burden of litigating in Michigan would be unreasonable given lack of contacts | Court: Exercise of jurisdiction is reasonable; where first two prongs are met, only unusual cases defeat reasonableness, and this is not one |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (purposeful availment and forum contacts analysis)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (minimum contacts and fair play substantial justice standard)
- Power Invs., LLC v. SL EC, LLC, 927 F.3d 914 (6th Cir. 2019) (fraudulent communications to out-of-state plaintiff supported specific jurisdiction)
- Air Prod. & Controls, Inc. v. Safetech Int'l, Inc., 503 F.3d 544 (6th Cir. 2007) (continuing contractual obligations and repeated contacts support jurisdiction)
- Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883 (6th Cir. 2002) (jurisdictional inquiry focuses on nature of contacts, not percentage of business)
- Calder v. Jones, 465 U.S. 783 (1984) (effects test for intentional torts directed at the forum)
- Walden v. Fiore, 571 U.S. 277 (2014) (plaintiff’s forum contacts cannot be the only link for jurisdiction)
- Theunissen v. Matthews, 935 F.2d 1454 (6th Cir. 1991) (on 12(b)(2) courts accept plaintiff’s allegations and do not weigh controverting affidavits)
- CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996) (’arising from’ nexus standard for specific jurisdiction)