Akbar v. Bangash

A. NISAR AKBAR, et al., Plaintiffs, v. SHAUKAT BANGASH, et al., Defendants.

Case No. 15-cv-12688

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION

July 29, 2016

HON. MARK A. GOLDSMITH

OPINION AND ORDER DENYING DEFENDANTS SHAUKAT BANGASH AND GLOBAL HEALTH SERVICES LIMITED'S MOTION TO DISMISS (Dkt. 36)

This matter is before the Court on Defendants Shaukat Bangash and Global Health Services Limited's motion to dismiss (Dkt. 36). The issues have been fully briefed, and a hearing was held on March 23, 2016. For the reasons explained below, the Court denies the motion.

I. BACKGROUND¹

Defendant Dr. Shaukat Bangash, a dual citizen of the United States and Pakistan, is the Chief Executive Officer of Defendant Global Health Services Limited ("GHS"), as well as its director of investments and investor relations. Am. Compl. ¶¶ 30, 37 (Dkt. 10). GHS is a limited company headquartered in Pakistan. Id. ¶ 34. Bangash also resides in Pakistan. Id. ¶¶ 30, 38.

According to Plaintiffs, Bangash, along with other Defendants in this case, "directed numerous promotional communications, including telephone calls, written correspondence and others to Plaintiff [Amin] Khan," id. ¶ 83, the purpose of which was to solicit Khan's investment in the building of hospital facilities for Defendant Quaid-e-Azam International Hospital ("QIH") in Islamabad, Pakistan, see id. ¶¶ 40, 85-87. More specifically, on June 14, 2007, Bangash called Khan's home and left a message for Khan to call Bangash back. Id. ¶ 84. Three days later, on June 17, 2007, Bangash visited Khan's home in Troy, Michigan, to solicit Khan's investment. Id. ¶ 85. After conducting meetings in Troy, Khan entered into an investment agreement with Defendants and "sent a check to [Bangash] to invest in shares in GHS." Id. ¶¶ 86, 89.

Khan now claims that he, along with other Plaintiffs, received shares in GHS, but those shares were "worthless." Id. ¶ 90. This action followed. See Compl. (Dkt. 1). After Plaintiffs filed an amended complaint (Dkt. 10), Bangash and GHS (collectively, for purposes of this opinion, "Defendants") filed a motion to dismiss (Dkt. 36).

II. ANALYSIS

Defendants raise three arguments in their motion: (i) the Court lacks personal jurisdiction over them; (ii) the action should be dismissed on forum non conveniens grounds; and (iii) Plaintiff Shakeel Ahmed's claims should be dismissed under the first-to-file rule. The Court considers each argument in turn.

A. Personal Jurisdiction

When presented with a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), a district court has three procedural options: (i) decide the motion on the basis of written submissions and affidavits alone; (ii) permit discovery in aid ofthe motion; or (iii) conduct an evidentiary hearing on the merits of the motion. Serras v. First Tenn. Bank Nat'l Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989); see also August v. Manley Toys, Ltd., 68 F. Supp. 3d 722, 725 (E.D. Mich. 2014) (citing Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991)). The lack of statutory direction on how to proceed leaves the option for determining personal jurisdiction up to the district court's discretion. Serras, 875 F.2d at 1214 (quoting Gibbs v. Buck, 307 U.S. 66, 71-72 (1939)). Regardless of which course of action is chosen, "[t]he party seeking to assert personal jurisdiction bears the burden of demonstrating that such jurisdiction exists." Schneider v. Hardesty, 669 F.3d 693, 697 (6th Cir. 2012).

When the district court chooses the first option and rules on the basis of affidavits alone, the plaintiff's "relatively slight" burden consists of a prima facie showing that personal jurisdiction exists. Estate of Thomson ex rel. Estate of Rakestraw v. Toyota Motor Corp. Worldwide, 545 F.3d 357, 360 (6th Cir. 2008); Schneider, 669 F.3d at 697. Importantly, "the plaintiff may not stand on his pleadings, but must show the specific facts demonstrating that the court has jurisdiction." Miller v. AXA Winterthur Ins. Co., 694 F.3d 675, 678 (6th Cir. 2012). The plaintiff may make a prima facie showing of jurisdiction by "establishing with reasonable particularity sufficient contacts between [the defendant] and the forum state to support jurisdiction." Lexon Ins. Co. v. Devinshire Land Dev., LLC, 573 F. App'x 427, 429 (6th Cir. 2014). The district court views the pleadings and affidavits in the light most favorable to the plaintiff, Miller, 694 F.3d at 678, and does "not weigh the controverting assertions of the party seeking dismissal," Estate of Thomson, 545 F.3d at 360; Serras, 875 F.2d at 1214 ("If [the plaintiff] meets [the prima facie] burden the motion to dismiss should be denied, notwithstanding any controverting presentation by the moving party."). This prevents a defendant "from regularly avoiding personal jurisdiction simply by filing an affidavit denying all jurisdictionalfacts." CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1262 (6th Cir. 1996). Dismissal is only appropriate "if all the specific facts which the plaintiff [ ] alleges collectively fail to state a prima facie case for jurisdiction." Id.

A defendant may seek to invoke the court's discretion to hold an evidentiary hearing to determine personal jurisdiction. An evidentiary hearing may be conducted "if the district court concludes that the written submissions have raised issues of credibility or disputed issues of fact which require resolution." Am. Greetings Corp. v. Cohn, 839 F.2d 1164, 1169 (6th Cir. 1988); Serras, 875 F.2d at 1214 ("If the written submissions raise disputed issues of fact or seem to require determinations of credibility, the court retains the power to order an evidentiary hearing."). If an evidentiary hearing is held, the burden rises and the plaintiff would be required to establish personal jurisdiction by a preponderance of the evidence. Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003); Schneider, 669 F.3d at 697 (explaining that "this rule prevents a defendant from defeating personal jurisdiction merely by filing a written affidavit contracting jurisdictional facts alleged by the plaintiff while simultaneously allowing a defendant to invoke the court's discretion to order a pretrial evidentiary hearing and thereafter apply the more-exacting standard when a plaintiff's jurisdictional allegations are wholly unfounded"). A court should be mindful that, "where the disputed jurisdictional facts are intimately intertwined with the parties' dispute on the merits, . . . [j]udicial resources may be more efficiently deployed if the court holds but one hearing on the contested facts." Serras, 875 F.2d at 1215. Thus, "a district court may find sound reasons to rule, on the basis of written submissions, that the plaintiff has made her prima facie showing that the court has personal jurisdiction over a defendant, and to reserve all factual determinations on the issue for trial." Id.

A denial of a 12(b)(2) motion does not mean the defendant proceeds to trial having waived the defense. Stated differently, a "threshold determination that personal jurisdiction exists does not relieve the plaintiff at the trial of the case-in-chief from proving the facts upon which jurisdiction is based by a preponderance of the evidence." Id. at 1214; see id. at 1215 ("[T]he party asserting jurisdiction must carry throughout the litigation the burden of showing that he is properly in court.").

Defendants' motion does not attempt to invoke the Court's discretion in holding an evidentiary hearing. And the disputed jurisdictional facts — namely, whether Bangash visited Khan in Michigan to solicit Khan's investment in QIH — is intimately intertwined with the parties' dispute on the merits. Therefore, the Court chooses the first course of action and decides Defendants' motion on the basis of written submissions and affidavits alone.

"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. Trust Bancorp. v. Cmty. Trust Fin. Corp., 692 F.3d 469, 471 (6th Cir. 2012).² Plaintiffs contend that there is limited personal jurisdiction over Defendants under Michigan'slong-arm statute, and that the exercise of specific personal jurisdiction would not deny Defendants of due process. For the reasons discussed below, the Court agrees and finds that Plaintiffs have established a prima facie showing of personal jurisdiction.

1. Michigan's Long-Arm Statute

Michigan's long-arm statute was the Michigan Legislature's attempt "to expand its full potential limited personal jurisdiction of Michigan courts over non residents," Sifers v. Horen, 188 N.W.2d 623 (Mich. 1971) (emphasis in original), and the Sixth Circuit "historically has understood Michigan to intend its long-arm statute to extend to the boundaries of the [F]ourteenth [A]mendment," Theunissen, 935 F.2d at 1462. Put another way, Michigan's long-arm statute has been construed "to bestow the broadest possible grant of personal jurisdiction consistent with due process." Audi AG & Volkswagen of Am., Inc. v. D'Amato, 341 F. Supp. 2d 734, 741 (E.D. Mich. 2004); see also Green v. Wilson, 565 N.W.2d 813, 816-817 (Mich. 1997) (Michigan's "long-arm statute is coextensive with due process insofar as the statute is limited by due process, and, therefore, the statute and due process share the same outer boundary").

The long-arm statute extends both general and limited jurisdiction over nonresident individuals and corporations. See Mich. Comp. Laws § 600.701 (general, individuals); Mich. Comp. Laws § 600.705 (limited, individuals); Mich. Comp. Laws § 600.711 (general, corporations); Mich. Comp. Laws § 600.715 (limited, corporations). While general jurisdiction enables a court in Michigan to exercise jurisdiction "regardless of whether the...