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Ruff v. Strategic Contract Brands Inc.

United States District Court, D. South Carolina

August 12, 2016

Kristine M. (“Kristy”) Ruff, Plaintiff
Strategic Contract Brands, Inc., d/b/a Automotive Facilities and AutoStone Floor Systems Defendant.


          Bruce Howe Hendricks United States District Judge

         This matter is before the Court on Defendant’s motion to dismiss or, in the alternative, to transfer venue. (ECF No. 4.) For the reasons set forth below, the motion is DENIED.


         Plaintiff Kristine M. Ruff (“Plaintiff”), a resident of South Carolina, is a former employee of Defendant Strategic Contract Brands, Inc. (“Defendant”), a corporation organized and existing pursuant to the laws of Texas, with its principal place of business in Dallas County, Texas. (Compl. No. 1-1 ¶ 2.) Plaintiff began working for Defendant on or about December 3, 2013 as its National Sales Manager and South East Regional Account Manager on a salary plus commission basis-she entered into a written Employment Agreement with Defendant on January 3, 2014. (Id. ¶ 5-7; ECF No. 4-3.) The Employment Agreement contains a choice of law and forum selection clause stating: “This Agreement is drawn to be effective in and shall be construed in accordance with the laws of the state of Texas. Venue for any dispute arising out of or in any way related to this Agreement shall be in a court of competent jurisdiction in Dallas County, Texas.” (ECF No. 4-3 at 7.)

         According to Plaintiff, “Defendant unilaterally attempted to change Plaintiff’s commission structure approximately six times throughout the course of her employment with Defendant, in an effort to reduce Plaintiff’s commissions, without providing advanced, written notice of changes.” (Compl. ¶ 9.) Plaintiff alleges that after she complained about these changes in the fall of 2014, Defendant’s executives made various promises regarding her base salary and commissions to convince her not to leave Defendant’s employment. (Id. ¶ 12.) Plaintiff further alleges she turned down another job opportunity based on these promises. (Id.) She alleges that Defendant’s executives did not follow through with their promises, however, so she again voiced her concerns in the summer and fall of 2015. (Id. ¶ 13.) According to Plaintiff, she was terminated by a letter dated October 2, 2015, without cause and without any advance notice. (Id. ¶ 14.) Plaintiff filed this action against Defendant on November 5, 2015, bringing claims for violation of the South Carolina Payment of Wages Act (“SCPWA”), breach of contract, wrongful discharge in violation of public policy, promissory estoppel, equitable accounting, and fraud/fraud in the inducement.

         On or about December 18, 2015, Defendant filed an action against Plaintiff in the District Court for Dallas County, Texas, alleging breach of contract. Strategic Contract Brands, Inc. d/b/a Automotive Facilities and AutoStone Floor Systems v. Kristine M. (“Kristy”) Ruff, Case No. DC-15-15252, which was filed in the 134th Judicial District Court, Dallas County, Texas, on December 18, 2015. After removing the case to federal court, Plaintiff moved to dismiss the action for lack of personal jurisdiction and for improper venue. On May 16, 2016, the United States District Court for the Northern District of Texas denied the motion and enforced the forum selection clause (“Texas Order”). (ECF No. 25-2.)

         On December 18, 2015, Defendant also moved to dismiss Plaintiff’s Complaint in this Court, asserting that the United States District Court for the District of South Carolina lacks personal jurisdiction in this case. (ECF No. 4-1 at 1.) In the alternative, Defendant asks that the Court transfer venue in this case to the Northern District of Texas, the forum the parties selected for litigation in the Employment Agreement. (Id.) Plaintiff filed a response on January 7, 2015 (ECF No. 12), to which Defendant replied on February 8, 2016 (ECF No. 16). Defendant also filed a motion asking the Court to allow it to file the above mentioned Texas Order on May 18, 2016. (ECF No. 25.) Plaintiff filed a response on June 17, 2016 (ECF No. 26), to which Defendant replied on June 22, 2016 (ECF No. 27). The Court has reviewed the briefing and the applicable law, and now issues the following ruling.


         A. Personal Jurisdiction

         When a court’s personal jurisdiction is challenged, the burden is on the plaintiff to establish that a ground for jurisdiction exists. Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). When the court resolves the motion on written submissions (as opposed to an evidentiary hearing), the plaintiff need only make a “prima facie showing of a sufficient jurisdictional basis.” Id. However, the plaintiff’s showing must be based on specific facts set forth in the record. Magic Toyota, Inc. v. Southeast Toyota Distributors, Inc., 784 F.Supp. 306, 310 (D.S.C. 1992). The court may consider the parties’ pleadings, affidavits, and other supporting documents but must construe them “in the light most favorable to plaintiff, drawing all inferences and resolving all factual disputes in his favor, and assuming plaintiff’s credibility.” Sonoco Prods. Co. v. ACE INA Ins., 877 F.Supp.2d 398, 404-05 (D.S.C. 2012) (internal quotations omitted); see also Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (“In deciding whether the plaintiff has made the requisite showing, the court must take all disputed facts and reasonable inferences in favor of the plaintiff.”). However, a court “need not credit conclusory allegations or draw farfetched inferences.” Sonoco, 877 F.Supp.2d at 205 (internal quotations omitted).

         To meet his burden, Plaintiff must show (1) that the exercise of jurisdiction is authorized by the long-arm statute of the state and (2) that the exercise of personal jurisdiction complies with the constitutional due process requirements. E.g., Christian Science Bd. Of Directors of First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). South Carolina has interpreted its long-arm statute to extend to the constitutional limits of due process. See Southern Plastics Co. v. Southern Commerce Bank, 423 S.E.2d 128, 130-31 (S.C. 1992). Thus, the first step is collapsed into the second, and the only inquiry before the Court is whether the due process requirements are met. ESAB Group, Inc. v. Centricut, LLC, 34 F.Supp.2d 323, 328 (D.S.C. 1999).

         Due process requires that a defendant have sufficient “minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This standard can be met in two ways: “by finding specific jurisdiction based on conduct connected to the suit or by finding general jurisdiction.” E.g., ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711-12 (4th Cir. 2002) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 (1984)).

         A court can assert general jurisdiction over business entities only when the “continuous corporate operation within a state is thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.” Nichols v. G.D. Searle & Co., 991 F.2d 1195, 1199 (4th Cir. 1993); see also Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S.Ct. 2846, 2853-54 (2011) (holding that the “paradigm forum for the exercise of general jurisdiction” of a corporation is “one in which the corporation is fairly regarded as at home”). Thus, general jurisdiction requires a showing that “the defendant’s activities in the state” were “continuous and systematic.” Carefirst, 334 F.3d at 397 (quotation marks and citation omitted).

         To determine whether specific jurisdiction exists, the Court considers “(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiffs’ claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.’” Id. (citing ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 711-12 (4th Cir. 2002), cert. denied, 537 U.S. 1105 (2003)). This three-part test is designed to protect a defendant from having to litigate a suit in a forum where it should not have anticipated being sued. See Consulting Eng’rs Corp. v. Geometric Ltd., 561 F.3d 273, 277-78 (4th Cir. 2009).

         B. Venue

         Defendant moves to transfer this case to the District of Texas, Dallas Division, pursuant to 28 U.S.C. § 1404(a). Section 1404(a) provides: “For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” Pursuant to 28 U.S.C. § 1391(a), a civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there ...

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