United States District Court, D. South Carolina, Columbia Division
Accident Insurance Company, Inc., a South Carolina Corporation, Plaintiff,
U.S. Bank National Association and U.S. Bank Trust N.A., Defendants.
ORDER AND OPINION
matter is before the court pursuant to Defendant U.S. Bank
Trust's (“USBT”) Motion to Dismiss for lack
of personal jurisdiction. (ECF No. 13.) Plaintiff Accident
Insurance Company (“AIC”) opposed USBT's
Motion (ECF No. 43), and filed a Motion for Jurisdictional
Discovery (ECF No. 56). For the reasons set forth below, the
court concludes that USBT is not subject to the court's
personal jurisdiction, GRANTS USBT's
Motion to Dismiss for lack of personal jurisdiction (ECF No.
13), and DENIES AIC's Motion for
Jurisdictional Discovery (ECF No. 56).
FACTUAL AND PROCEDURAL BACKGROUND
22, 2016, AIC filed a Complaint for a jury trial against U.S.
Bank National Association (“U.S.
Bank”) and its affiliate, USBT. (ECF No. 1.) AIC
alleges that USBT breached various duties as trustee of the
Destra Targeted Income Unit Investment Trust (“Destra
UIT”), and asserts claims for breach of fiduciary duty
(Count 4) and negligence/gross negligence (Count
September 9, 2016, USBT filed a Motion to Dismiss for lack of
personal jurisdiction and failure to state a claim. (ECF No.
13.) As to personal jurisdiction, USBT asserted that it was
not subject to general or specific jurisdiction in South
Carolina. (ECF No. 13-1 at 13-19.) It submitted evidence
showing, among other things, that USBT is not “at
home” in South Carolina, and did not perform any of its
obligations with respect to the Destra UIT in South Carolina.
(Id.; see also ECF No. 13-2.)
November 17, 2016, AIC filed a response in opposition to
USBT's Motion, conceding that general jurisdiction was
lacking (ECF No. 43 at 10 n.1), but asserting that specific
jurisdiction existed, primarily because USBT knew or should
have known that units of the Destra UIT would enter a
reinsurance trust account for which AIC was a beneficiary
(Id. at 11-13). Alternatively, AIC asked for leave
to conduct jurisdictional discovery so it could
“supplement” its showing. (Id. at 17.)
December 23, 2016, USBT filed a Reply to AIC's response,
asserting that AIC was not entitled to jurisdictional
discovery because its request was based on speculation and
conclusory assertions. (ECF No. 51 at 8.) USBT also
explained, in part, that this court already rejected
AIC's main theory of personal jurisdiction in a recent
case. (Id. at 2-3) (citing and quoting Companion
Prop. & Cas. Ins. Co. v. U.S. Bank Nat'l Ass'n,
No. 3:15-cv-01300, 2016 WL 6781057, at *10 (D.S.C. Nov. 16,
2016) (holding that specific jurisdiction over USBT did not
28, 2017, AIC renewed its request for jurisdictional
discovery. (ECF No. 56.) AIC sought to “explore,
” among other things, USBT's “involvement in
and approval of the decisions made in South Carolina that
would have a direct impact in South Carolina.” (ECF No.
56-1 at 3.) This discovery would encompass USBT's
business plans, trust agreements, trust asset acquisitions,
contracts, licensing, the “hiring and firing of
management and employees in South Carolina, ” and
marketing. (Id.) Other topics included “the
reporting to, approval, and accountability of South Carolina
employees” and the “internal operations and
corporate structures of U.S. Bank and USBT.”
(Id.) On July 12, 2017, USBT filed a response in
opposition to AIC's Motion, reasserting its position that
AIC is not entitled to jurisdictional discovery. (ECF No.
57.) On July 19, 2017, AIC filed a Reply to USBT's
response, asserting six bases for personal jurisdiction. (ECF
No. 58.) On August 3, 2017, USBT filed a Sur-Reply to
AIC's Reply, asserting that AIC's “new
assertions are baseless and should be rejected.” (ECF
court has jurisdiction over this action pursuant to 28 U.S.C.
§ 1332. AIC is organized and incorporated in the State
of South Carolina, with its principal place of business in
Lexington County, South Carolina. (ECF No. 1 at 1.) U.S. Bank
is a wholly owned subsidiary of U.S. Bancorp, and is a
national chartered bank with its principal place of business
and headquarters in the State of Minnesota. (Id.)
USBT is a wholly owned subsidiary of U.S. Bancorp and an
affiliate of U.S. Bank. (Id.) Its principal place of
business is in Wilmington, Delaware. (Id.) The
amount in controversy in this matter exceeds $75, 000.00.
(Id. at 2.)
federal district court in South Carolina will exercise
personal jurisdiction over a defendant to the maximum extent
permitted by the Due Process Clause of the Fourteenth
Amendment. See S.C. Code Ann. § 36-2-803
(2012); Callum v. CVS Health Corp., 137 F.Supp.3d
817, 834 (D.S.C. 2015). Due process requires that the
defendant have minimum contacts with the forum state
“‘such that the maintenance of the suit does not
offend traditional notions of fair play and substantial
justice.'” Walden v. Fiore, 134 S.Ct.
1115, 1121 (2014) (quoting Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)).
defendant challenges the court's personal jurisdiction
under Federal Rule of Civil Procedure 12(b)(2), the plaintiff
has “the burden of proving” that jurisdiction
exists “by a preponderance of the evidence.”
In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.
1997). There are two paths to personal jurisdiction that
satisfy due process. The first path is “general
jurisdiction.” For general jurisdiction to exist, the
defendant must have contacts so substantial, continuous, and
systematic with the forum that it may be sued there for any
reason. Daimler AG v. Bauman, 134 S.Ct. 746, 761
(2014). The second path is “specific
jurisdiction.” For specific jurisdiction to exist,
“the defendant's suit-related conduct must create a
substantial connection with the forum state.”
Walden, 134 S.Ct. at 1121.
under the Federal Rules of Civil Procedure is broad in scope
and freely permitted. Mylan Labs., Inc. v. Akzo,
N.V., 2 F.3d 56, 64 (4th Cir. 1993). A court has the
discretion to deny jurisdictional discovery if a plaintiff
offers only speculation or conclusory assertions about
defendant's contacts with a forum state. Tuttle Dozer
Works Inc. v. Gyro-Trac (USA), Inc., 463 F.Supp.2d 544,
548 (D.S.C. 2006). When the plaintiff's claim does not
appear to be frivolous, a district court should ordinarily
allow discovery on jurisdiction in order to aid the plaintiff
in discharging the burden of establishing the court's
jurisdiction. Cent. Wesleyan Coll. V. W.R. Grace &
Co., 143 F.R.D. 628, 644 (D.S.C. 1992).