United States District Court, W.D. Virginia, Lynchburg Division
Eugene L. Reed, Plaintiff,
Beverly Hills Porsche, ET AL., Defendants.
K. MOON SENIOR UNITED STATES DISTRICT JUDGE
This diversity case is before the Court on the question of
personal jurisdiction over Defendant Beverly Hills Porsche
(Beverly Hills). Plaintiff Eugene Reed alleges claims of
breach of contract, violation of Virginia's Consumer
Protection Act, and fraud stemming from his purchase of a
Porsche from Beverly Hills. Plaintiff initially contacted
Beverly Hills through its website, kicking off remote
negotiations by phone, email, and text message. Beverly Hills
sent an agreement to Plaintiff in Virginia, which he signed.
The contract calls for the application of California law, and
Plaintiff's agent picked up the car directly from the
dealership in California. Beverly Hills only rarely sells
cars to Virginia residents, it has no physical presence in
the Commonwealth, it does not advertise specifically there,
and both its dealership agreement and website indicate that
California is its primary area of responsibility. Based on
these and other facts, personal jurisdiction is lacking, so
the Beverly Hills' motion to dismiss will be granted.
standard of review for personal jurisdiction issues
“varies according to the posture of the case and the
evidence that has been presented to the court.”
Grayson v. Anderson, 816 F.3d 262, 268 (4th Cir.
2016). “When a district court considers a question of
personal jurisdiction based on the contents of a complaint
and supporting affidavits, the plaintiff has the burden of
making a prima facie showing in support of its
assertion of jurisdiction.” Universal Leather, LLC
v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014);
see id. at 560. In conducting its analysis,
“the district court must construe all relevant pleading
allegations in the light most favorable to the plaintiff,
assume credibility, and draw the most favorable inferences
for the existence of jurisdiction.” Id. at
558. The parties presume that this standard governs here, but
it does not.
plaintiff has the ultimate burden to “establish facts
supporting jurisdiction over the defendant by a preponderance
of the evidence.” Grayson, 816 F.3d at 268.
When “the parties engaged in full discovery on the
jurisdictional issue and fully presented the relevant
evidence to the district court, ” the court uses the
preponderance of the evidence standard. Id. at 265.
This process requires an “evidentiary hearing, ”
but the Fourth Circuit has explained that such a
requires only that the district court afford the parties a
fair opportunity to present both the relevant jurisdictional
evidence and their legal arguments. Once the court has
provided that opportunity, it must hold the plaintiff to its
burden of proving facts, by a preponderance of the evidence,
that demonstrate the court's personal jurisdiction over
Id. The district court has “broad
discretion” to determine how to structure the hearing
and may consider evidence through depositions,
interrogatories, answers, admissions, exhibits, and other
appropriate methods. Id. at 269. There is no
“hard and fast rule” about the proceeding's
contours. Id. But once this process has run its
course, the district sits as finder of fact unless there are
disputes of fact overlapping with the substantive issues.
See Id. at 267.
case, the parties sought and received permission to engage in
jurisdictional discovery, which lasted three months and
included document productions, interrogatories, and
depositions. They then filed supplemental briefs in which
they presented their arguments and evidence to the Court.
Lastly, the Court afforded the parties an opportunity to be
heard at oral argument. Given this procedural history, the
Grayson preponderance of the evidence standard
applies. Moreover, neither party suggests that there are any
material jurisdictional facts both in dispute and intertwined
with the merits, so the Court itself sits as finder of the
jurisdictional facts. The Court thus finds the following
jurisdictional facts by a preponderance of the evidence.
began searching for a car in the fall of 2016; he sought a
used car with a certified pre-owned warranty. (Dkt. 15-1
¶ 3). He had purchased Porsche vehicles previously, and
from his experience was aware of the “Porsche Approved
Certified Pre-Owned Vehicle warranty.” (Id.
¶ 2). He accessed the website of Defendant Porsche Cars
North America, Inc. (PCNA) and entered specifications for the
kind of car he desired. (Id. ¶ 3). Over time,
PCNA would then generate emails to Plaintiff informing him of
Porsche dealerships possessing vehicles that met his
specifications. (Id.). PCNA's emails invited
Plaintiff to contact the relevant dealership(s) and provided
contact information for them. (Id.). It was through
this process Plaintiff learned of the car owned by Defendant
Beverly Hills, a PCNA dealership. When Beverly Hills has a
car, it uploads the car's specifications into PCNA's
database, which then “populates” the information
on both PCNA's and Beverly Hills' websites, both of
which are designed by PCNA. (Dkt. 41 at 23-24).
Hills does not have offices, agents, or employees in
Virginia, has never owned or leased property in Virginia, and
does not advertise specifically within Virginia. (Dkt. 8-1
¶ 4). Relatedly, the standard provisions of PCNA's
dealership agreement provide that a dealership has a
“Primary Area of Responsibility, ” i.e.,
a geographical area determined solely by PCNA. (Dkt. 41 at
48-49; dkt. 42 at ECF 37). A dealership, though,
“may” sell products outside of that area provided
that (1) it satisfies other best-practice-type requirements
and (2) “such sales are within the 50 United
States.” (Dkt. 42 at ECF 12).
Hills' primary area of responsibility is the greater Los
Angeles area. (Dkt. 8-1 ¶ 6; dkt. 42-1 at 2). This
affects, among other things, where Beverly Hills is permitted
to advertise. For instance, the “2017 Porsche Dealer
Marketing Covenant & PDMS Guidelines, ” which are
issued by PCNA and applicable to Beverly Hills, provide that
“[d]ealers are to place their marketing, irrespective
of the message, only within their Primary Area of
Responsibility.” (Dkt. 43-1 at ECF 9). The Guidelines
state that “[a]dvertising language promoting nationwide
delivery . . . is not permitted.” (Id. at ECF
8). Furthermore, the Guidelines apply to Internet
advertising, “including [the observance of] rules of
Geographic Market Areas and Primary Areas of
Representation.” (Id. at ECF 10-11).
one of PCNA's emails, Plaintiff learned that Beverly
Hills had a car fitting his desired specifications. (Dkt.
15-1 ¶ 4). PCNA's email directed Plaintiff to
contact Beverly Hills if he was interested in the car, which
he did by filling out a form on the dealership's website.
(Dkt. 8-1 ¶ 8; dkt. 41 at 39). Beverly Hills'
website is www. Beverly hill sporsche.com. The website
contains information about cars and can be used to initiate
contact with Beverly Hills, but it cannot be used to transact
business. (Dkt. 8-1 ¶ 7). On the whole, the website
conveys an emphasis on serving the greater Los Angeles area.
The bottom left-hand side of the webpage states that Beverly
Hills is a “local source” for Porsche products
and is “centrally located” to Los Angeles. The
parties have not directed the Court to any portion of the
website that refers to Virginia or any other state besides
mainstay tab in the upper right-hand corner has an
“email” link, which then generates fields for
entry. Plaintiff used this form, providing his name, email
address, and phone number, and indicating he was
“interested in further details” about the car in
question. (8-1 ¶ 8.). Submission of the online form
generated a notification to Beverly Hills, who then assigned
a salesman to Plaintiff's inquiry. (dkt. 8-1 ¶ 8;
dkt. 8-2 ¶ 2).
salesman responded to Plaintiff email on May 1, 2017,
thanking Plaintiff for his interest. (Dkt. 8-2 ¶¶
2-3; dkt. 15-1 at ECF 8-9). The two men then began
negotiating- exchanging phone calls, text messages, and
approximately 20 emails-but they never met in person. (Dkt.
8-2 ¶ 3; dkt. 15-1 at ECF 8-19). Indeed, Plaintiff
informed the salesman early in their negotiations that he
could not visit the dealership because he lived in central
2, 2017, the salesman had Beverly Hills prepare the sales
contract and overnight it to Plaintiff in Virginia. (Dkt 8-2
¶ 4). Plaintiff signed the contract in Virginia and sent
it back, at which point Beverly Hills signed it.
(Id.). The contract states that “[f]ederal law
and California law apply to this contract.” (Dkt. 8-2
at ECF 7).
salesman, at Plaintiff's request, provided Plaintiff with
instructions on how to wire funds to Beverly Hills' bank.
(Dkt. 8-2 ¶ 5). Despite being told that Beverly Hills
could deliver across the country, (dkt. 15-1 ¶ 4),
Plaintiff made independent arrangements with a local
California towing company to transport the car; the company
picked up the vehicle from Beverly Hills and delivered it to
Plaintiff in Virginia. (Id. ¶ 6; dkt. 8-1
¶ 9). After the salesman and Plaintiff had reached an
understanding regarding the purchase, Plaintiff wrote to
request a “Beverly Hills Porsche lic[ense] plate
frame” and “a mug or cup” because the car
was “gonna b[e] a big deal in Forest[, ] VA.”
(Dkt. 15-1 at ECF 18). When the car arrived in Virginia, it
allegedly did not meet the promised specifications, so
Plaintiff's wife contacted Beverley Hills and PCNA to
demand a refund, to no avail. (Dkt. 15-1. ¶ 5;
id. at ECF 19).
the “vast majority” of Beverly Hills' sales
are to local California residents, when the opportunity
arises the dealership is “not reluctant to sell a
vehicle in California to someone who lives in
Virginia.” (Dkt. 42-1 at 4; dkt. 41 at 27, 36; see
id. at 38-39). Between 2013 and 2017, Beverly Hills sold
five cars to Virginia customers, with none in 2014 and 2016.
(Dkt. 42-1. at 5). The total amount of these five sales was
approximately $440, 000, equating to roughly 0.1% of combined
sales for the 2013, 2015, and 2017. (Id.). From
January 2000 to July 2017, Beverly Hills sold over 22, 000
cars, only nine of which (0.0402%) were sold to Virginia
buyers. (Dkt. 8-1 ¶ 5). It has never leased cars to any
Virginia resident. (Id.).
personal jurisdiction inquiry consists of, first, determining
whether that state's long-arm statute reaches the
defendant and, second, whether that reach is consistent with
the Due Process Clause. Base Metal Trading, Ltd. v. OJSC
“Novokuznetsky Aluminum Factory”, 283 F.3d
208, 212 (4th Cir. 2002).
Virginia's Long-Arm Statute
advances two grounds under the state long-arm statute that he
claims support jurisdiction. (Dkt. 15 at ECF 2-4; dkt. 39 at
6-7). The first fails but the second succeeds.
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