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IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

JOHN W. FERRON,
Plaintiff,

vs.

e360Insight, L.L.C., el al.,
Defendants,

MOTION OF DEFENDANTS TO DISMISS COMPLAINT

NOW COME DEFENDANTS, e360lnsight, LLC and David Linhardt, by and through counsel, and, pursuant to Fed. R. Civ. Proc. 12(b)(2) move this Court to dismiss Plaintiff's Complaint against them. The reasons for this Motion are set forth in the accompanying Memorandum in Support.

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MEMORANDUM IN SUPPORT
I. INTRODUCTION

Plaintiff's Complaint names as defendants both a foreign limited liability company and its President, individually. Pursuant to the complaint, Linhardt is an owner and officer of Defendant e.3601nsight, LLC. e360lnsight, LLC, is an Illinois limited liability company. Linhardt is a resident of the State of Illinois. Pursuant to Ohio's long-ann statute, R.C. 2307382 and Fed. R. Civ. Proc. 12(B)(2), the Court lacks personal jurisdiction over either of the defendants. As such, Plaintiff's Complaint against them must be dismissed.

II. FACTS

Pursuant to Plaintiff's Complaint, Plaintiff received numerous emails allegedly sent by defendants, offering deeply discounted prices for various consumer goods and then providing knock-offs of those items and using the word "free" in a consumer transaction and failing to set forth all of the terms and conditions of the offer in type size half as large as the word, "free." (Complaint, at para. 14-15). The complaint alleges that both the company and Linhardt are suppliers and that both caused to be transmitted the large quantity of emails.

Plaintiff resides in Ohio. Defendant e3601nsight, LLC, is an Illinois limited liability company with its principal place of business in Illinois (see Affidavit of Dave Linhardt, attached hereto). E360Insight has no offices in Ohio (Linhardt Affidavit, at 2). Any contacts with Ohio by e3601nsight are fortuitous and are insufficient to establish minimum contacts under Ohio's long-arm statute. Linhardt is an individual who resides in Illinois (Linhardt Aff., at 4), Linhardt does not own any businesses, conduct any business, or own any real estate in Ohio (Linhardt Aff., at 4).

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III LAW AND ARGUMENT

A. Standard of Review

An appellate court reviews a district court's dismissal for lack of personal jurisdiction de novo. The burden of establishing jurisdiction generally lies with the Plaintiff. American Greetings Corp. v.. Cohn, 839 F. 2d, 1164, 1168 (6th' Cir. 1988). When. jurisdiction is challenged, the plaintiff may not rely solely on the pleadings in the case; rather, he must show by affidavit or other documentary evidence specific facts establishing personal jurisdiction. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6t" Cir. 1991). Jurisdiction may be either general or specific. Bird v. Parsons, 289 F.3d 865, 87.3 (6"' Cir. 2002). General jurisdiction exists over a defendant when his or its "contacts with the forum state are of such a continuous and systematic nature that the state may exercise personal .jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state." Id. (citing Third Nat '1 Bank in Nashville v, WEDGE Group, Inc.., 882 F.2d 1087, 1089 (6"' Cir. 1989)). Specific .jurisdiction exists if the defendant's contacts are related to the case at hand. Here, neither general nor specific, jurisdiction exists and Plaintiff will not be able to meet his burden of proof to establish personal jurisdiction over either defendant.

B. Neither General Nor Specific Jurisdiction Exists.

There is a two-step analysis to determine personal jurisdiction under the laws of Ohio. First, whether the state's long-arm statute and the applicable civil rule confer personal; Jurisdiction; and second, whether granting jurisdiction under the statute and rule would deprive the defendant of the right to due process of law pursuant to the U.S. Constitution. Oasis Corp. v. Judd, 132 F.Supp.2d 612 (S.D. Ohio 2001).
Section 2307.382 of the Ohio Revised Code, provides, in pertinent part:

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(A) A court may exercise personal,jurisdiction over a person who acts directly or by an agent, as to a cause of action arising from the person's:

(1) Transacting any business in this state;
(2) Contracting to supply services or goods in this state;
(3) Causing tortious injury by an act or omission in this state;

(C) When jurisdiction over a person is based solely upon this section, only a cause of action arising from acts enumerated in this section may be asserted against him.

The Sixth Circuit has recognized that Ohio's long-arm statute does not reach the full limits of the federal constitution. Bird, supra, 289 F.3d, at 871.

In the instant case, the complaint against defendants is based upon the Ohio Consumer Sales Practices Act (Revised Code section 1.345.02) and Revised Code Section 2307.64 - a state statute which governs electronic advertisements. While the complaint claims that Defendants sent him numerous emails offering products at discounted prices or advertised them as free in violation of the Ohio Consumer Sales Practices Act, noticeably absent from Plaintiff's complaint is any allegation that Plaintiff entered into any business transactions with Defendants. Moreover, there is no basis under either statute to include David Linhardt as a defendant in the action.

In order for a website or internet activity to create personal jurisdiction, it must satisfy the three-prong test established by the Sixth Circuit in Southern Machine Co. v Mohasco Industries, Inc,, 401 F.2d 374, 381 (6th Cir. 1968). That test is, as follows: (1) whether the website constitutes purposeful availment, (2) whether it is the basis of the cause of action against the defendant, and (3) whether jurisdiction over, the defendant is reasonable.. "The operation of an internet website can constitute the purposeful availment of the privilege of acting in a forum state.. , if the website is interactive to a degree that reveals specifically intended interaction with
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residents of the state." Bird, supra, at 874. There is no allegation that the Defendant, E360Insight's website is interactive, at all, or that its website is specific to interact with residents of the State of Ohio. While Plaintiff's internet service provider's are in Ohio and Plaintiff is a resident of Ohio, Plaintiff can access his email or Defendant's website from anywhere in the country; if not the world. As such, whether Defendant reads his email or accesses the internet while sitting at home in Ohio, on vacation in Florida, on business in New York, or anywhere else is simply irrelevant, The relevant issue is whether Defendants intended to specifically interact with residents of Ohio. The answer is "no." (Lirihardt Aff, at 5). Most email addresses do not divulge the location of the email addressee. For instance, Plaintiff's email address jferron@ferronlaw.com provides no indication where his email address may be. There is, therefore, no revelation that contact with residents of the State of Ohio is intended by Defendants. As such, neither the first nor third prong of Southern Machine is met in the instant case.

C. Personal Jurisdiction Not Consistent With Due Process

If authority exists under Ohio's long-arm statute to exercise jurisdiction over Defendants, which it does not, the Court must also consider whether the jurisdiction granted under the longarm statute is consistent with "traditional notions of fair play and substantial justice." International Shoe Co. v Washington, 326 U.S. 310, 316 (1945). In order to meet the International Shoe standard, defendant must have engaged in "continuous and systematic" conduct in the forum state. Id See also, Nationwide Mut. Ins. Co. v. Tryg Int'l Ins. Co., 91 F.3d 790, 793 6th Cir. 1996). Even if Plaintiff received numerous email messages from Defendant's website, hailing Defendants into Court in Ohio is not reasonable and offends the notions of fair play and substantial justice, This is because the email addresses to which communications are
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sent are automatically sent via internet (interstate commerce), with no specific intent to send advertisements to Ohio residents. When the defendant's alleged contact with the forum state occurs via the internet, the plaintiff faces an initial hurdle in showing where this internet conduct took place for .jurisdictional purposes. The Sixth Circuit holds that the operation of a website that is accessible to anyone over the Internet is insufficient to justify general jurisdiction, even where the website enables the defendant to do business with residents of the forum state, because such activity does not approximate physical presence within the state's borders. The Cadle Company v. Schlichtntann, 123 Fed. Appx. 675, 677. Similarly, the automated emails merely present an opportunity to do business with persons in every state, and, in fact, in different countries; and should not and does not constitute physical presence within the State of Ohio, As is averred by Mr, Linhardt, any contact with Ohio is merely fortuitous and unintended (Linhardt Aff., at 5).

D. Personal Jurisdiction Over Linhardt Does Not Exist.
Even if this Court determines that personal jurisdiction exists over defendant E:360Insight, LLC, there is no personal jurisdiction over David Linhardt and the claims against him must be dismissed. Analyzing jurisdiction relative to Linhardt, there is no allegation or evidence that Linhardt himself transacted business in Ohio, personally caused the Plaintiff injury in Ohio, or any other element listed in Ohio's long-arm statute. In fact, the affidavit of Linhardt reflects that Linhardt does not live, work, transact business, or own real estate in Ohio. He is a resident of Illinois. Based upon Southern Machine, supra, there is no basis to assert personal jurisdiction over Linhardt.

Even if personal jurisdiction exists over Linhardt, which it does not, Plaintiff cannot establish that Linhardt is a supplier under Section 1345.02 of the Revised Code, as alleged by
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Plaintiff. Nor has Plaintiff alleged in his complaint facts sufficient to pierce the corporate veil of E360Insight, LLC and include Linhardt as a Defendant. Without either of these bases, the claims against Linhardt personally must be dismissed.

Revised Code section 1345.01 defines a supplier as:

(C) "Supplier" means a seller, lessor, assignor, franchisor, or other person engaged in the business of effecting or soliciting consumer transactions, whether or not the person deals directly with the consumer. If the consumer transaction is in connection with a residential mortgage, "supplier" does not include an assignee or purchaser of the loan for value, except as otherwise provided in section 1.345.091 of the Revised Code. For purposes of this division, in a consumer transaction in connection with a residential mortgage, "seller" means a loan officer, mortgage broker, or nonbank mortgage lender.

Other than the bare assertion that defendants are suppliers, there is no allegation that Linhardt sent or caused to be sent, on behalf of himself or E360Insight, any communication to Plaintiff.

Even if E360Insight, LLC, is a supplier, which it is not, its member and officer is not necessarily a supplier for purposes of the statute. Nor is a member or officer of a business entity personally liable for the acts of such entity. Thus, assuming personal jurisdiction over E3601nsight exists, and assuming further that E360Insight is a supplier, Plaintiff's complaint still fails to allege facts sufficient to include Lifflhardt personally.

Generally, corporate officers and shareholders are not liable for the debts of their entities. See, eg. Presser, Piercing the Corporate Veil (1991) 1-4. A shareholder or officer of a corporation may be personally liable for violations of the Ohio Consumer Sales Practices Act but only if the Plaintiff can meet the elements necessary to pierce the corporate veil. State ex. Rel. Fisher v. Warren Star Theater, 84 Ohio App.3d 435, 44.3 (Ohio Ct. App_ 1992). In the instant case, the elements to pierce the corporate veil are not present and have not been alleged in Plaintiff's Complaint.

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In the Sixth Circuit, the corporate form may be disregarded and individual shareholders held liable for corporate misdeeds when (1) control over the corporation by those to be held liable is so complete that the corporation has no separate mind, will, or existence of its own, (2) control over the corporation by those to be held liable was exercised in such a manner as to commit fraud or an illegal act against the person seeking to disregard the corporate entity, and (.3) injury or unjust loss resulted to the plaintiff from such control and wrong. Belvedere Condominium Unit Owners' Association v. R.E. Roark Companies, Inc,, 67 Ohio St. 3d 274, 289 (1993).

Here, Plaintiff has not alleged any of the three Belvedere elements and, as such, there is simply no basis for piercing the corporate veil of E360Insight, LLC, to reach Linhardt. There has been no allegation and certainly no evidence presented that E.360Insight is controlled by Linhardt such that the entity has no separate mind, will, or existence of its own, Plaintiff has not made sufficient allegations to warrant piercing the corporate veil, As such, Linhardt is an improper party defendant.

IV. CONCLUSION

For the foregoing reasons, Plaintiff's Complaint Against Defendants must be dismissed.

Respectfully Submitted,
S/Karen S. Hockstad
Karen S. Hockstad (0061.308)
Hockstad Law Office, Ltd.
5003 Horizons Drive, Suite 200 Columbus, Ohio 43220
(614) 360-1048 (telephone) (614) 451-3156 (facsimile)

Lead Attorney to Be Noticed on Behalf of
Defendants E.360Insight, LLC and David Linhardt

Attachment	Date	Size
MotDismissJurisdiction.pdf	01/03/08 6:13 pm	332.96 KB
MotDismissJurisdictionLinhardtAff.pdf	01/03/08 6:13 pm	23.67 KB