Power Invs., LLC v. SL EC, LLC
927 F.3d 914
6th Cir.2019Background
- Michael Becker, a Missouri citizen, sought to buy the Ashley Power Plant through Missouri entities and obtained financing from Power Investments (a Nevada corporation) controlled by Mason Miller, a Kentucky resident.
- Miller/Power Investments advanced loans and arranged third-party financing; Becker communicated with Miller extensively by calls, texts, and emails while obtaining funds and negotiating the purchase.
- The plant sale fell apart; Power Investments agreed to buy out Becker’s controlling interest and became owner of the plant.
- Miller alleged Becker made fraudulent misrepresentations about use of funds and liabilities; Miller sued in Kentucky state court for fraud and unjust enrichment; Becker removed and moved to dismiss for lack of personal jurisdiction in federal court.
- The district court dismissed for lack of personal jurisdiction over Becker; the Sixth Circuit reversed, finding specific jurisdiction based on Becker’s extensive, intentional communications into Kentucky that were central to the fraud claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Kentucky courts (federal court sitting in diversity) have specific personal jurisdiction over Becker | Miller: Becker purposefully directed fraudulent communications into Kentucky to induce loans and benefits, so jurisdiction is proper | Becker: He never entered Kentucky; electronic contacts alone do not establish purposeful availment | Held: Yes — specific jurisdiction exists because Becker’s intentional, repeated communications into Kentucky were the core of the fraud claims and caused harm there |
| Whether plaintiff’s relationship with a Kentucky resident suffices for jurisdiction | Miller: Relationship plus repeated, targeted communications gives defendant his own affiliation with Kentucky | Becker: Relationship alone cannot confer jurisdiction; contacts must be defendant’s acts toward the forum | Held: Relationship plus defendant’s own targeted communications suffice; Neal supports jurisdiction |
| Whether a one-off or remote deal precludes jurisdiction | Miller: Communications were frequent and central, not a single isolated contact | Becker: This was not a continuing, forum-focused contractual relationship | Held: Frequency and centrality of communications made this more than a one-time deal; jurisdiction appropriate |
| Whether asserting jurisdiction would be unreasonable under due process | Miller: It is reasonable because the suit arises from the communications into Kentucky and Becker benefited there | Becker: Asserting jurisdiction over out-of-state defendant would offend fair play and substantial justice | Held: Reasonableness requirement satisfied; exercising jurisdiction is consistent with traditional notions of fair play and substantial justice |
Key Cases Cited
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (defendant contacts must meet due process minimum-contacts test)
- Int'l Shoe Co. v. Washington, 326 U.S. 310 (established minimum contacts framework)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment via intentional, forum-directed activities)
- Walden v. Fiore, 571 U.S. 277 (plaintiff-focused contacts alone insufficient; defendant must have its own forum affiliation)
- Calder v. Jones, 465 U.S. 783 (effects test: intentional torts aimed at forum can support jurisdiction)
- Daimler AG v. Bauman, 571 U.S. 117 (distinction between general and specific jurisdiction)
- Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915 (focus on connection between forum and underlying controversy)
- Miller v. AXA Winterthur Ins. Co., 694 F.3d 675 (6th Cir.) (reiterates purposeful availment and specific-jurisdiction standards)
- Neal v. Janssen, 270 F.3d 328 (6th Cir.) (fraudulent, repeated phone communications into forum supported jurisdiction)