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Stewart v. Jayco, Inc.

United States District Court, D. Maryland

January 18, 2017

JAMES STEWART, et al. Plaintiffs,
v.
JAYCO, INC. Defendant.

          MEMORANDUM OPINION

          ELLEN L. HOLLANDER, UNITED STATES DISTRICT JUDGE

         Plaintiffs James Stewart and Kelly Goodman brought suit against defendant Jayco, Inc. (“Jayco”) (ECF 2), alleging, inter alia, violations of the Magnuson-Moss Warranty Act, as amended, 15 U.S.C. §2301 et seq., and breach of warranty. The suit arises out of “non-stop problems” that plaintiffs claim to have had with their Jayco motorhome. Id. at 2-4. Plaintiffs appended several exhibits to the Complaint. See ECF 26-1 through ECF 26-3.[1]

         Pursuant to Fed.R.Civ.P. 12(b)(2), Jayco has filed a motion to dismiss for lack of personal jurisdiction (ECF 16), supported by a memorandum of law. ECF 16-1 (collectively, the “Motion”). Plaintiffs oppose the Motion (ECF 19, “Opposition”) and submitted several exhibits with their Opposition. ECF 19-2 through ECF 19-8. Defendant replied (ECF 20, “Reply”) and also submitted an exhibit. ECF 20-1. Then, plaintiffs filed a “Motion to Allow Plaintiff [sic] to File Sur Response to Defendant's Reply” (ECF 22, “Motion for Surreply”), which defendant opposes. ECF 23. Plaintiffs subsequently docketed their proposed Surreply. ECF 24.[2]

         The motions have been fully briefed and no hearing is necessary to resolve them. See Local Rule 105.6. For these reasons that follow, I shall grant plaintiffs' Motion for Surreply and defendant's Motion to Dismiss.

         I. Factual Background

         Plaintiffs are “residents” of Maryland. ECF 2 ¶ 1. Jayco is a “‘final stage manufacturer' and distributor of recreational vehicles incorporated and headquartered in Indiana . . . .” ECF 16-1 at 1; see also ECF 20-1 (Declaration of Craig Newcomer, Consumer Affairs Manager for “Jayco Motorhome Group”), ¶ 2. Plaintiffs allege that Jayco does business in Maryland “through its three dealers in the State of Maryland.” Id. ¶ 2.[3]

         On August 29, 2015, plaintiffs purchased a “2016 Jayco Seneca motor home” (the “Motorhome”) from Camping World RV Super Center (“Camping World”), a dealer located in Fountain, Colorado. ECF 2 ¶¶ 3, 5; see ECF 26-1 (Camping World Buyers Order and Invoice) at 1. According to plaintiffs, Camping World is an “authorized agent and dealer of the Defendant.” See ECF 2 ¶ 3. Plaintiffs paid $153, 081.90 for the Motorhome. ECF 2 ¶ 4; see ECF 26-1 at 1.

         Plaintiffs claim that the Motorhome has “been plagued by non-stop problems arising from defects in manufacturing of the vehicle.” Id. ¶ 5. According to plaintiffs, “the vehicle is constantly and regularly having to be repaired with non-stop continuing problems.” Id. ¶ 8. They also assert: “The Plaintiffs have requested that the Defendant address the issues, but to no avail.” Id. ¶ 9.

         In its Motion, Jayco contends that this Court lacks personal jurisdiction over Jayco. In this regard, Jayco submitted the Declaration of Craig Newcomer, Consumer Affairs Manager of “Jayco Motorhome Group.” See ECF 20-1. He avers that Jayco does not maintain an office in Maryland; does not have any employees in Maryland; does not own any real estate in Maryland; has no bank accounts in Maryland; and “does not directly advertise in Maryland.” ECF 20-1 ¶¶ 4, 5, 7, 8, 9; see also ECF 16-1 at 1-2. Further, he states that although Jayco maintains a website accessible to residents of Maryland, by which they can “review product and warranty information and locate dealers, Jayco does not sell its vehicles on its website.” ECF 20-1 ¶ 10. In the Motion, Jayco also asserts that it is not licensed to do business in Maryland and does not “directly” pay any taxes in Maryland. ECF 16-1 at 1-2.[4]

         According to Newcomer, Jayco has dealers throughout the United States and in 15 other countries. ECF 20-1 ¶ 11. Newcomer avers that the “dealers are independently owned and operated.” Id. Furthermore, Newcomer states, id.: “Neither Jayco nor any of Jayco's affiliates owns any part of them. Jayco does not control, supervise, or direct the day-to-day operations of the independently owned and operated dealers.”

         Additionally, Newcomer avers that “Maryland sales represent only a small percentage of Jayco's total motor home sales.” Id. ¶ 12. Notably, he also asserts: “There is only one dealer in Maryland (Chesaco)”, which has three locations in Maryland: Frederick, Joppa, and Gambrills. Id. Moreover, Newcomer states that Chesaco sells products of various manufacturers, and “is not an exclusive Jayco dealer.” Id.

         Further, Newcomer points out that plaintiffs did not enter into a contract to purchase the Motorhome in Maryland or with Jayco. Id. ¶ 13. He avers, id: “None of Jayco's employees communicated with Plaintiffs during Plaintiffs' negotiations leading up to their purchase of the motor home.” And, Newcomer states that after the purchase “the motor home [was] serviced by Camping World RV Sales in Hanover, Pennsylvania and Camping World RV Super Center in Fountain, Colorado.” Id. ¶ 14. In addition, plaintiffs submitted their purchase agreement with Camping World, which provides: “Seller and Purchaser are the sole parties to this Order . . . .” ECF 26-1 at 2.

         In their Opposition, plaintiffs point out that Jayco maintains a website with “a direct link to the Defendants [sic].” ECF 19 ¶ 2. They also claim that there are at least three “Jayco RV dealers operating within the State of Maryland.” Id. ¶ 3. And, according to plaintiffs, the website directs customers to dealers operating within Maryland. Id. ¶¶ 2-3; see also ECF 19-2 and ECF 19-3 (print-outs of Jayco website pages). Thus, they maintain that Jayco is “transacting business in Maryland and contracting to supply manufactured products in Maryland by selling them to their dealers.” ECF 19 ¶ 12. In their view, it is irrelevant that plaintiffs did not buy the Motorhome in Maryland. Id. ¶ 13.

         The exhibits submitted by plaintiffs from the Jayco website (ECF 19-3) identify one dealer, Chesaco RV. They also show that Chesaco has three locations in Maryland. ECF 19-4; ECF 19-6.

         Additional facts are included in the Discussion.

         II. Motion for Surreply

         Local Rule 105.2(a) provides that a party is not permitted to file a surreply without permission of the court. “Allowing a party to file a sur-reply is within the Court's discretion, see Local Rule 105.2(a), but they are generally disfavored.” EEOC v. Freeman, 961 F.Supp.2d 783, 801 (D. Md. 2013), aff'd in part, 778 F.3d 463 (4th Cir. 2015); see also, e.g., Chubb & Son v. C & C Complete Servs., LLC, 919 F.Supp.2d 666, 679 (D. Md. 2013). A surreply may be permitted when the party opposing the underlying motion “would be unable to contest matters presented to the court for the first time in the [movant's] reply.” Clear Channel Outdoor, Inc. v. Mayor & City Council of Baltimore, 22 F.Supp.3d 519, 529 (D. Md. 2014) (quotations and citations omitted). Conversely, a surreply is not permitted when the reply merely responds to an issue raised in the opposition to the underlying motion. See Khoury v. Meserve, 268 F.Supp.2d 600, 605-06 (D. Md. 2003). In that posture, the party had the opportunity to support its arguments in the opposition to the underlying motion. Id. at 606.

         In the Motion for Surreply, plaintiffs did not explain why a surreply is necessary or appropriate. ECF 22. Plaintiffs only requested the Court allow them to “file a brief one page response to the Defendant's Reply . . . .” Id.

         In its opposition to the Motion for Surreply, defendant argues that the Court should not grant plaintiffs' request. ECF 23. According to defendant, “Jayco's Reply Brief did not raise any new legal arguments; nor do Plaintiffs assert that they were unable to respond to Jayco's arguments in their Brief in Opposition.” Id. at 1. Defendant argues: “To permit Plaintiffs to file a surreply under these circumstances would be prejudicial as it would leave Jayco without an opportunity to respond.” Id. at 2.

         In my view, plaintiff is entitled to file the Surreply because defendant introduced facts in its Reply that it had not previously cited. For example, defendant argued for the first time that the relevant repairs were performed in Pennsylvania. ECF 20 at 1, 3. And, defendant submitted the “Declaration of Craig Newcomer.” See ECF 20-1. Although Newcomer's averments are largely consistent with the allegations in the Motion, the Declaration constitutes evidence, to which plaintiffs have the right to respond. Therefore, I shall grant the Motion for Surreply.

         III. Motion to Dismiss

         A. Standard of Review

         Defendant's motion to dismiss for lack of personal jurisdiction is predicated on Fed.R.Civ.P. 12(b)(2). “[A] Rule 12(b)(2) challenge raises an issue for the court to resolve, generally as a preliminary matter.” Grayson v. Anderson, 816 F.3d 262, 267 (4th Cir. 2016). Under Rule 12(b)(2), the burden is “on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989); see Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014).

         “If the existence of jurisdiction turns on disputed factual questions the court may resolve the [jurisdictional] challenge on the basis of a separate evidentiary hearing, or may defer ruling pending receipt at trial of evidence relevant to the jurisdictional question.” Combs, 886 F.2d at 676. A court may also, in its discretion, permit discovery as to the jurisdictional issue. See Mylan Laboratories, Inc. v. Akzo, N.V., 2 F.3d 56, 64 (4th Cir. 1993). Plaintiffs note that a plaintiff may develop facts supporting jurisdiction through discovery. ECF 19 ¶ 14. However, they have not asked the Court for any opportunity to conduct discovery. Id. In any event, neither discovery nor an evidentiary hearing is required to resolve a motion under Rule 12(b)(2). See generally 5B C. Wright & A. Miller, Federal Practice & Procedure § 1351 at 274-313 (3d ed. 2004, 2011 Supp.).

         “The plaintiff's burden in establishing jurisdiction varies according to the posture of a case and the evidence that has been presented to the court.” Grayson, 816 F.3d at 268. The district court may address the question of personal jurisdiction as a preliminary matter, ruling solely on the basis of motion papers, supporting legal memoranda, affidavits, and the allegations in the complaint. Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009); see Grayson, 816 F.3d at 268. In that circumstance, the “plaintiff need only make ‘a prima facie showing of personal jurisdiction to survive the jurisdictional challenge.'” Grayson, 816 F.3d at 268 (quoting Combs, 886 F.2d at 676).

         “When determining whether a plaintiff has made the requisite prima facie showing, the court must take the allegations and available evidence relating to personal jurisdiction in the light most favorable to the plaintiff.” Grayson, 816 F.3d at 268; see Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). But, “district courts are not required . . . to look solely to the plaintiff's proof in drawing those inferences.” Mylan Laboratories, 2 F.3d at 62. And, “‘[a] threshold prima facie finding that personal jurisdiction is proper does not finally settle the issue; plaintiff must eventually prove the existence of personal jurisdiction by a preponderance of the evidence, either at trial or at a pretrial evidentiary hearing.'” New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 n. 5 (4th Cir. 2005) (emphasis in original) (citation omitted).

         B. Discussion

         1.

         Fed. R. Civ. P. 4(k)(1)(A) authorizes a federal district court to exercise personal jurisdiction over a defendant in accordance with the law of the state in which the district court is located. Carefirst of Maryland, 334 F.3d at 396. Therefore, in Maryland, “to assert personal jurisdiction over a nonresident defendant, two conditions must be satisfied: (1) the exercise of jurisdiction must be authorized under the state's long-arm statute; and (2) the exercise of jurisdiction must comport with the due process requirements of the Fourteenth Amendment.” Id.; accord Carbone v. Deutsche Bank Nat'l Trust Co., No. CV RDB-15-1963, 2016 WL 4158354, at *5 (D. Md. Aug. 5, 2016).

         Maryland's long-arm statute is codified at Md. Code (2013 Repl. Vol., 2016 Supp.), § 6- 103(b) of the Courts & Judicial Proceedings Article. It authorizes “personal jurisdiction ...


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