Reid v. Tenant Tracker, Inc.Reid v. Tenant Tracker, Inc.
This matter is before the Court on the motion of the defendants, Tenant Tracker, Inc. (“Tenant Tracker“) and TT Marketing, Inc. (“TT Marketing“) (collectively, “Defendants“) to dismiss the complaint for lack of personal jurisdiction, pursuant to
I. BACKGROUND
Plaintiff Amber Reid filed this action against Defendants and a third entity, Transworld Systems, Inc., for violations of the Fair Credit Reporting Act (“FCRA“),
Reid is a Kentucky resident, and Tenant Tracker and TT Marketing are Texas corporations not registered to do business in Kentucky. Id. at 1-3. Reid alleges that “all or most of the relevant events . . . occurred in Hardin County, Kentucky.” Id. at 2.
Reid rented an apartment from Lake Crest Apartments in Elizabethtown, Kentucky. Id. at 3. Reid moved out of the apartment at the termination of her lease. Id. Lake Crest Apartments retained Reid‘s security deposit and claimed Reid owed an additional fee of $330 for cleaning costs. Id.
On July 14, 2022, Reid sent a dispute letter to Tenant Tracker. Id. at 4. On July 20, 2022, TT Marketing responded with a letter which stated: “this account has been validated by the property and referred to another collection agency.” Id. at 4-5.
Defendants Tenant Tracker and TT Marketing now move to dismiss the complaint for lack of personal jurisdiction under
Clifton states that both Tenant Tracker and TT Marketing: (1) have never leased or owned property in Kentucky, (2) have no employees in Kentucky; (3) do not maintain company files in Kentucky; (4) have not conducted company meetings in Kentucky; (5) are not registered or licensed to do business in Kentucky; (6) do not have agents for service of process in Kentucky; (7) do not pay taxes or maintain bank accounts in Kentucky; (8) do not engage in advertising in Kentucky or other marketing activities in Kentucky targeting Kentucky consumers; (9) maintain no internet presence which solicits business from Kentucky consumers or engages in internet based commerce in Kentucky. Id. at 41. Clifton states that “[a]ny business which either [TT Marketing] or [Tenant Tracker] may have conducted in Kentucky is significantly limited and highly irregular and not related in any way to Plaintiff‘s claims.” Id. Clifton states that Defendants’ “only contacts with the Plaintiff in Kentucky were in response to written inquiries initiated by the Plaintiff and the responses were informational only.” Id. at 42. Clifton states that Southwind acted as the manager of Lake Crest Apartments. Id. at 41. He states that TT Marketing was engaged by Southwind to collect the balance due for the apartment damage and cleaning expenses from Plaintiff (id.) in November 2019, and that TT Marketing referred the collection action to Transworld Systems, Inc. Id. at 43-44. Clifton states that “[Tenant Tracker] reported this debt to [Credit Reporting Agencies] Trans Union and Equifax in December 2019. [TT Marketing] reported this debt to Experian in December 2019. Any reports were generated and completed in Texas and forwarded to the credit bureaus’ data operations center via the internet in Texas.” Id. at 43.
In her response to the motion to dismiss, Reid produced two letters, the first dated November 22, 2019, and the second March 17, 2020. DN 9-1. These letters were sent by TT Marketing to Reid regarding the alleged Lake Crest Apartment debt. These letters do not appear in Reid‘s complaint. In Defendants’ reply, they produced a second Clifton declaration in response to these letters. DN 10-1. In his second declaration, Clifton states that Tenant Tracker entered into an agreement with Southwind to provide services along with its affiliates. Id. at 139. “The terms of
II. LEGAL STANDARD
In all questions of personal jurisdiction, “the constitutional touchstone remains whether the defendant purposefully established ‘minimum contacts’ in the forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (quoting Int‘l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). When a forum to seeks to exercise “specific jurisdiction over an out-of-state defendant who has not consented to suit there,” due process requires that a defendant must have “purposely directed his activities at residents of the forum,” and that the litigation must result from “alleged injuries that arise out of or relate to those activities.” Id. at 472-73 (citations and internal quotation marks omitted).
“When a federal court has ‘federal question [jurisdiction], personal jurisdiction over a defendant exists if the defendant is amenable to service of process under the [forum] state‘s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant[] due process.‘” Cmty. Tr. Bancorp, Inc. v. Cmty. Tr. Fin. Corp., 692 F.3d 469, 471 (6th Cir. 2012) (quoting Bird, 289 F.3d at 871). When interpreting the state‘s long-arm statute, the interpretation of the state‘s highest court is dispositive. Touchcom, Inc. v. Bereskin & Parr, 574 F.3d 1403, 1409-10 (Fed. Cir. 2009).
When a court considers a 12(b)(2) motion, the “plaintiff bears the burden of establishing the existence of jurisdiction.” Air Prod. & Controls, Inc. v. Safetech Int‘l, Inc., 503 F.3d 544, 549 (6th Cir. 2007). Neither Plaintiff nor Defendants have requested an evidentiary hearing or suggested a need for discovery on the issue of personal jurisdiction. When a district court relies on written submissions and affidavits to resolve a Rule 12(b)(2) motion, rather than holding an evidentiary hearing, the plaintiff is only required to make “a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” Id. at 549 (quoting Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). The plaintiff must establish “with reasonable particularity sufficient contacts between [the defendant] and the forum state to support jurisdiction.” Neogen Corp. v. Neo Gen Screening, Inc., 282 F.3d 883, 887 (6th Cir. 2002) (quoting Provident Nat. Bank v. California Fed. Sav. & Loan Ass‘n, 819 F.2d 434, 437 (3d Cir. 1987)). “[T]he pleadings and affidavits submitted must be viewed in a light most favorable to the plaintiff, and the district court should
III. DISCUSSION
In Caesars Riverboat Casino, LLC v. Beach, the Kentucky Supreme Court held that Kentucky‘s long-arm statute,
Reid‘s complaint does not identify which provision of
A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from the person‘s:
1. Transacting any business in this Commonwealth;
2. Contracting to supply services or goods in this Commonwealth;
3. Causing tortious injury by an act or omission in this Commonwealth; . . .
See DN 9, at PageID # 101.
A. Transacting Business in Kentucky
The Kentucky Court of Appeals has explained: “To invoke
In Hall v. Rag-O-Rama, LLC, the Eastern District of Kentucky reviewed case law interpreting
Reid argues that TT Marketing‘s furnishing of her “credit information to the CRAs” in an attempt to collect the Lake Crest Apartments debt constitutes transacting business in Kentucky but does not cite to caselaw demonstrating that such conduct falls under
Reid points to letters sent by TT Marketing dated November 22, 2019, and March 17, 2020, regarding the alleged debt addressed to Reid. DN 9, at PageID #103. Reid argues that these were dunning letters attempting to collect the debt, and that mailing the letters “constitutes transacting business in the Commonwealth.” DN 9, at PageID # 103. To support this conclusion Reid relies on nonbinding case law applying the long-arm statutes of other states.
Defendants maintain that “[a]ny business which either [TT Marketing] or [Tenant Tracker] may have conducted in Kentucky is significantly limited and highly irregular and not related in any way to Plaintiff‘s claims.” DN 4-1, at PageID # 41. Clifton declares that TT Marketing‘s November 2019 letter “was merely a notice of the referral of the Southwind claim, the amount of the claim, notification of Plaintiff‘s right to dispute the debt and was a request for Plaintiff to provide her ‘side of the situation.‘” DN 10-1, at PageID# 139. He declares that the March 2020 letter “was a status letter and again was merely a notice as it listed the amount of the claim. This letter was triggered by a Credit Verification Dispute (“CDV“) filed by Plaintiff with Trans Union to which [TT Marketing] was statutorily required to respond.” Id. Clinton states that TTM‘s July 20, 2022, letter was sent in response to Plaintiff‘s letter “disputing the accuracy of the delinquent account.” DN 4-1, at PageID # 42.
Defendants argue the facts of this case follow Thompson v. Koko, No. 3:11-CV-648-H, 2012 WL 374054 (W.D. Ky. Feb. 3, 2012). In that case, the Court found that a bank sending emails, letters, and account statements to a Kentucky resident did not amount to transacting business in Kentucky. Id. at *2 (“The limited communications between [the defendant] and [the plaintiff]—confirming receipt of a wire, sending account statements, and responding to a demand letter—do not amount to transacting business as that statutory category has been applied in other cases.“).
“[T]he key inquiry in personal jurisdiction cases concerns the activities of the defendant, not the plaintiff.” Spectrum Scan, LLC v. AGM CA, No. 3:07-CV-72-H, 2007 WL 2258860, at *3 (W.D. Ky. Aug. 2, 2007), adhered to on denial of reconsideration sub nom. Spectrum Scan, LLC v. AGM California, 519 F. Supp. 2d 655 (W.D. Ky. 2007); See also Eitel v. PNC Bank, N.A., 3:20-CV-12-RGJ, 2021 WL 4487609, at *7 (W.D. Ky. Sep. 30, 2021) (finding that communications responding to a plaintiff‘s requests “do not satisfy the requirements of transacting business in the Commonwealth“). Of the TT Marketing letters identified by Reid, all but the 2019 letter were mailed in response to queries from Reid. Therefore, only the 2019 letter could be considered transacting business in Kentucky.
The Sixth Circuit has found that mailing a letter may constitute transacting business in a forum state sufficient to confer personal jurisdiction over a foreign defendant, but only when that conduct “form[s] the bas[is] for the action.” Rice v. Karsch, 154 F. App‘x 454, 460 (6th Cir. 2005). Even if the 2019 letter was sufficient to constitute transacting business in Kentucky, we must conclude that Reid‘s claims do not “‘arise[] from’ the statutory provision upon which long-arm jurisdiction is predicated.” Caesars, 336 S.W.3d at 58. In defining “arising from,” Caesars held that there must be “a reasonable and direct nexus between the wrongful acts alleged in the complaint and the statutory predicate for long-arm-jurisdiction.” Id. at 59. In Reid‘s complaint, it is not TT Marketing‘s 2019 letter, but the 2022 letter that forms the basis for this action. Because there is a more than two-year period between the 2019 letter and the actions alleged in the complaint, the Court finds that there is no reasonable and direct nexus between the statutory predicate for long-arm jurisdiction and the wrongful acts alleged.
Accordingly, the Court finds Reid has failed to make a prima facie showing that TT Marketing or Tenant Tracker‘s conduct falls under
B. Contracting to Supply Services in Kentucky
Reid next argues that personal jurisdiction is proper pursuant to
Reid‘s complaint does not allege that TT Marketing contracted to supply services in Kentucky. Reid argues that TT Marketing “contracted with a Kentucky corporation to supply debt collection services in the Commonwealth.” DN 9, at PageID # 102. Reid points to the Clifton affidavit as evidence of the contract between TT Marketing and Southwind. Id. However, the provision Reid points to is silent as to where the services will be performed. See DN 4-1, at PageID # 41. The second Clifton declaration states that services under the contract were to be performed in Texas. DN 10-1, at PageID # 139. Reid has not submitted affidavits or specific facts to show that this was a contract to provide services in Kentucky. Therefore, Reid has not met her burden to demonstrate TT Marketing‘s conduct falls within
Similarly, Reid‘s complaint contains no allegations that Tenant Tracker contracted
C. Causing Tortious Injury by an Act in Kentucky
However, the Sixth Circuit has come to a different conclusion:
In Pierce, the [Kentucky Court of Appeals] held that
KRS 454.210(2)(a)(3) was not satisfied when the conduct alleged was an out-of-state defendant‘s mailing of a letter to a Kentucky resident, containing allegedly tortious information about another Kentucky resident. While the letter caused a consequence in Kentucky, it was ‘clear’ that the defendant ‘ha[d] not acted in the Commonwealth of Kentucky.’
Blessing v. Chandrasekhar, 988 F.3d 889, 902 (6th Cir. 2021) (quoting Pierce v. Serafin, 787 S.W.2d 705, 706 (Ky. Ct. App. 1990)) (internal citation omitted). The Sixth Circuit went on to state that
Because Defendants’ alleged wrongful act was not committed within the Commonwealth, the Court finds that Reid has failed to state a prima facie case of jurisdiction over Tenant Tracker or TT Marketing under
D. Jurisdiction Under the Fair Credit Reporting Act
Reid next argues that jurisdiction is proper under the FCRA because TT Marketing and Tenant Tracker “furnished credit information about Ms. Reid and the Lake Crest Apartments debt at issue in this case to the CRAs in an attempt to
Reid similarly argues that jurisdiction is proper because the credit information furnished by Defendants to the CRAs was defamatory, and that Defendants’ knowledge that the information “would be republished in Kentucky and harm [Reid] in the Commonwealth makes jurisdiction proper in this Court.” DN 9, at PageID # 114. Reid fails to point to which provision of the Kentucky long-arm statute this conduct would fall under and does not cite to caselaw decided after Caesars to support long-arm jurisdiction under this theory.
Because Reid has failed to make a showing that TT Marketing and Tenant Tracker‘s conduct falls under one of the Kentucky long-arm statute‘s enumerated categories, “in personam jurisdiction may not be exercised,” and the personal jurisdiction inquiry ends. Caesars, 336 S.W.3d at 57.
IV. CONCLUSION
Because the Court finds that Reid has failed to make a prima facie showing that Defendants are amenable to service of process under Kentucky‘s long-arm statute, she has failed to make a necessary showing for the Court to exercise personal jurisdiction over Defendants. See Cmty. Tr. Bancorp, Inc. v. Cmty. Tr. Fin. Corp., 692 F.3d 469, 471 (6th Cir. 2012). Therefore, the Court concludes it lacks personal jurisdiction over Defendants, and it need not reach the federal due process analysis.
For these reasons, the Court will grant Defendants’ motion by separate order.
August 2, 2023
Charles R. Simpson III, Senior Judge
United States District Court