Wednesday, December 18, 2013

RSRM Associate Tara A. Barnes Successfully Challenges Third Party Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction

In Fitzgerald v. Wal-Mart Stores East, LP,, the United States District Court for the District of Maryland held that it could properly exercise personal jurisdiction over an out-of-state third-party defendant who maintained a business address, a registered agent, and economic activities within the “100-mile bulge” of the district court.  Accordingly, the court denied the third-party’s motion to dismiss for lack of personal jurisdiction.

The case arose from a slip-and-fall that occurred in a Wal-Mart parking lot in Alexandria, Virginia.  At the time of the alleged incident, Wal-Mart had contracted with USM, Inc. to perform general maintenance for the Alexandria Walmart.  USM., Inc. had sub-contracted its snow removal to MCHI, Inc. d/b/a Snow Patrol (“Snow Patrol”).  RSRM Associate Tara A. Barnes represents both USM, Inc. and Wal-Mart in suit.

The Plaintiff filed suit in Prince George’s County, Maryland against Wal-Mart and USM, Inc. (collectively, “the Defendants”).  After the Defendants removed the case to the United States District Court of Maryland on the basis of diversity jurisdiction, USM, Inc. impleaded Snow Patrol as a third-party defendant pursuant to Federal Rule of Civil Procedure (“Rule”) 14.  Snow Patrol thereafter filed a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. 

In their motion, Snow Patrol argued that the federal court, applying the Maryland state long arm statute, could not properly assert personal jurisdiction because Snow Patrol had no ties to Maryland.  USM, Inc., represented by Tara Barnes, opposed Snow Patrol’s motion, arguing that Rule 4(k)(1)(B) expressly provided jurisdiction over those parties who were impleaded by Rule 14 and served within the “100-mile” bulge of the federal court.

The United States District Court of Maryland agreed with USM, Inc., finding that Snow Patrol established the requisite sufficient minimum contacts within the bulge area to satisfy due process.  The court pointed to the fact that Snow Patrol’s business was in Fairfax, Virginia, its registered agent was located in Broad Run, Virginia, and that the location of the accident where Snow Patrol was doing business was located in Alexandria, Virginia; all of these locations were within a 100-mile radius of the federal courthouses in Baltimore and Greenbelt.  Accordingly, Snow Patrol’s motion was denied.

The decision of the United States District Court of Maryland in this case reflects its commitment to apply Rule 4(k)(1)(B) in a manner that does not limit the court’s reach of personal jurisdiction.  So long as this rule is applied accordingly, this will assure that claims against out-of-state third-party defendants in federal courts can be maintained without fear of the third-party defendant being dismissed for personal jurisdiction.

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