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Kaliannan v. Liang

United States District Court, D. North Dakota

March 27, 2018

Panircelvan Kaliannan, et. al., Plaintiffs,
EE Hoong Liang, Defendant.


          Daniel L. Hovland, Chief Judge

         Before the Court are several pro se motions to dismiss the Plaintiffs' complaint filed by the Defendant, EE Hoong Liang. See Docket Nos. 13, 18, and 21. For the reasons set forth below, the motions are denied.

         I. BACKGROUND

         The Plaintiffs filed this action in the wake of proceedings filed against North Dakota Developments, LLC (“NDD”), Robert Gavin, Daniel Hogan, and relief Defendants by the United States Securities and Exchange Commission, alleging NDD, Gavin, and Hogan fraudulently raised more than $62 million from investors through the sale of interests in North Dakota man camps. See Case No. 4:15-cv-053 (D.N.D. May 5, 2015). In their complaint, the Plaintiffs allege EE Hoong Liang actively assisted NDD in offering and selling, unregistered, nonexempt, and fraudulent securities from May 2012 to April 2015. See Docket No. 8. Specifically, the Plaintiffs allege claims against EE Hoong Liang, by separate counts, for violations of Section 12(a)(2) of the Securities Act of 1933 (15 U.S.C. § 771(a)(2)); violations of N.D.C.C. § 10-04-17 by offering and selling unregistered securities, selling securities as an unlicensed agent, and making untrue statements and omissions; as well as negligence.

         After filing an answer, Liang filed a motion to dismiss pursuant to Rule 12(b) of the Federal Rules of Civil Procedure on August 17, 2017. See Docket No. 13. Liang filed an amended motion to dismiss on August 29, 2017, and a subsequent motion to dismiss on September 18, 2017. See Docket Nos. 18 and 21. The Plaintiffs filed responses in opposition to Liang's motions on September 1, 2017, and October 10, 2017. See Docket Nos. 19 and 30.


         In the memorandum in support of the motions to dismiss (Docket No. 22), Liang asserts the Court lacks jurisdiction over the matter, the venue of this action is improper, and the complaint fails to state a claim upon which relief can be granted. The Plaintiffs disagree, contending this Court has jurisdiction, the complaint satisfies the Rule 8 pleading requirement, and the venue is proper.

         A. RULE 12(b)(2)

         In the memorandum in support of the motion to dismiss, Liang contends the Court lacks personal jurisdiction over him and the claims against him should be dismissed pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. To defeat a motion to dismiss for lack of personal jurisdiction, the Plaintiffs need only establish a prima facie showing of personal jurisdiction over Liang. Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). The Plaintiffs' prima facie showing is analyzed “not by the pleadings alone, but by the affidavits and exhibits presented with the motions and in opposition thereto.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004). The party seeking to establish that a court has in personam jurisdiction carries the burden of proof, and the burden does not shift to the party challenging jurisdiction. Epps, 327 F.3d at 647.

         This Court may properly exercise personal jurisdiction over a party if a two-step inquiry is satisfied. First, the party must be amenable to service of process under the appropriate long-arm statute. See Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Second, the party challenging personal jurisdiction must have engaged in activities which satisfy the minimum contacts requirement of the Due Process Clause. Id. The jurisdiction of North Dakota courts is governed by the North Dakota long-arm statute set forth in Rule 4(b)(2) of the North Dakota Rules of Civil Procedure. The North Dakota Supreme Court has held that Rule 4(b)(2) “authorizes North Dakota courts to exercise personal jurisdiction over nonresident defendants to the fullest extent permitted by due process.” Hansen v. Scott, 2002 ND 101, ¶ 16, 645 N.W.2d 223. The Eighth Circuit Court of Appeals has held that when a state construes its long-arm statute to grant jurisdiction to the fullest extent permitted by the Constitution, the Court must determine whether the exercise of personal jurisdiction comports with due process. Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006).

         “Due Process requires ‘minimum contacts' between [a] non-resident defendant and the forum state such that ‘maintenance of the suit does not offend traditional notions of fair play and substantial justice.'” Dever, 380 F.3d at 1073 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92 (1980)). A non-resident defendant's contacts with a forum state, for example, must be sufficient to cause the defendant to “reasonably anticipate being haled into court there.” Epps, 327 F.3d at 648. There are two categories of minimum contacts with a state that may subject a defendant to jurisdiction in that forum: general jurisdiction and specific jurisdiction. With respect to general personal jurisdiction over a defendant, “a defendant may be subject to the forum state's exercise of personal jurisdiction if contacts with the state are continuous and systematic.” Id. A state has specific personal jurisdiction over a defendant when the suit arises out of, or is related to, the defendant's contacts with the forum state. Johnson, 444 F.3d at 956.

         The Eighth Circuit has established a five-factor test for measuring minimum contacts for purposes of asserting personal jurisdiction over a defendant:

(1) the nature and quality of a defendant's contacts with a forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties.

Dever, 380 F.3d at 1073-74. In determining whether a defendant has sufficient contacts with the forum state to exercise personal jurisdiction, the court must consider all of the contacts in the aggregate and examine the totality of the circumstances. Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1388 (8th Cir. 1995). However, the Eighth Circuit directs courts to give “significant weight” to the first three factors. Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004). The Eighth Circuit's five-part test essentially “blends” the tests for general and specific jurisdiction. See Northrup King Co., 51 F.3d at 1388.

         Under the test outlined above, the Plaintiffs have the burden of proving facts to support personal jurisdiction. Dever, 380 F.3d at 1072. The Plaintiffs need not prove personal jurisdiction by a preponderance of the evidence until a court holds an evidentiary hearing or until trial. Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). Absent a hearing, the Court will consider the facts in the light most ...

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