United States District Court, D. Maine
BRANDEE A. LEWIS, Plaintiff,
KENNEBEC COUNTY, et al., Defendants.
ORDER ON MOTION TO DISMISS AND MOTION FOR
A. WOODCOCK, JR. UNITED STATES DISTRICT JUDGE
Court affirms a recommended decision of the Magistrate Judge
to dismiss an out-of-state corporate parent of a subsidiary
corporation on the ground that the parent did not have
sufficient minimal contacts with the forum state to justify
jurisdiction. The Court also affirms the Magistrate
Judge's recommendation not to allow jurisdictional
November 7, 2016, Brandee A. Lewis filed a complaint against
Kennebec County, the Kennebec County Sheriff's Office and
its Corrections Division, the Kennebec County Correctional
Facility (KCCF), a number of Kennebec County officials and
employees, Crisis & Counseling Centers, Correctional
Health Partners (CHP), and Kimberly Arlene Vigue, alleging
that while Ms. Lewis was housed in the KCCF, she was
“brutally sexually assaulted and physically assaulted
by a nurse and multiple staff members at the [KCCF].”
Compl. ¶ 1 (ECF No. 1). Ms. Lewis alleged that
at the time of the assault, Nurse Vigue was employed by CHP,
which had its principal place of business in the city of
Denver, state of Colorado. Id. ¶¶ 16-17.
On October 20, 2017, Ms. Lewis filed a motion to amend the
complaint to add as a party defendant Physician Health
Partners, LLC (PHP), CHP's parent company. Pl.,
Brandee A. Lewis's Mot. for Leave to File Amended Compl.
and Add Parties (ECF No. 76); Attach. 3, Am.
Compl. On December 22, 2017, the Magistrate Judge
granted the Plaintiff's motion to amend complaint.
Decision and Order on Pl.'s Mot. to Am. and
Defs.' Mots. to Strike (ECF No. 96). On December 26,
2017, Ms. Lewis filed the amended complaint. First Am.
Compl. (ECF No. 97).
January 31, 2018, PHP filed a motion to dismiss for lack of
jurisdiction. Def. PHP's Mot. to Dismiss (ECF
No. 108) (PHP Mot.). On February 22, 2018, Ms. Lewis
responded in opposition to PHP's motion to dismiss and,
in the alternative, she filed a motion for jurisdictional
discovery. Pl.'s Reply in Opp'n to PHP's Mot.
to Dismiss or, in the Alternative, Mot. for Jurisdictional
Disc. (ECF No. 116) (Pl.'s Opp'n) (ECF
No. 118) (Pl.'s Mot.). On March 6, 2018, PHP
filed its reply to Ms. Lewis' opposition to the motion to
dismiss. Def. PHP Reply in Support of Mot. to
Dismiss (ECF No. 122) (PHP Reply). On March 14,
2018, PHP filed its opposition to Ms. Lewis' motion for
jurisdictional discovery. Def. PHP's Opp'n to
Pl.'s Mot. for Jurisdictional Disc. (ECF No. 123)
(PHP's Opp'n). On March 28, 2018, Ms. Lewis
filed her reply to PHP's response. Pl.'s Resp. to
PHP's Obj. to Pl.'s Mot. for Jurisdictional
Disc. (ECF No. 130) (Pl.'s Reply).
April 23, 2018, the Magistrate Judge issued a recommended
decision on PHP's motion to dismiss and Ms. Lewis'
motion for jurisdictional discovery. Recommended Decision
on PHP's Mot. to Dismiss and Pl.'s Mot. for
Jurisdictional Disc. (ECF No. 131) (Recommended
Decision). On May 6, 2018, Ms. Lewis filed an objection
to the Magistrate Judge's recommended decision and moved
the Magistrate Judge to reconsider the recommended decision.
Pl.'s Mot. to Recons. and Obj. to Recommended
Decision on PHP's Mot. to Dismiss and Pl.'s Req. for
Oral Argument (ECF No. 136) (Pl.'s Obj.);
(ECF No. 137) (Pl.'s Mot. for Recons.). On May
21, 2018, PHP replied to Ms. Lewis' objection to the
Magistrate Judge's recommended decision. Def.
PHP's Resp. in Opp'n to Pl.'s Mot. to Recons. and
Obj. to the Magistrate Judge's Recommended Decision
(ECF No. 142) (Def.'s Resp. to Pl.'s Obj. and
Mot. for Recons.). On June 4, 2018, the Magistrate Judge
denied the motion for reconsideration. Order (ECF
7, 2018, Ms. Lewis filed a renewed objection to the
recommended decision and requested oral argument.
Pl.'s Renewed Obj. to Recommended Decision on
PHP's Mot. to Dismiss and Pl.'s Mot. for
Jurisdictional Disc. and Pl.'s Req. for Oral Argument
Before the District Court Judge (ECF No. 144)
(Pl.'s Renewed Obj. and Req.). On June 11, 2018,
PHP filed a response to Ms. Lewis' renewed objection to
the recommended decision and request for oral argument.
Def. PHP's Resp. in Opp'n to Pl.'s Renewed
Objection to the Recommended Decision (ECF 144) and Req. for
Oral Argument (ECF 145) (ECF No. 146) (Def.'s
THE KEN NIELSEN AFFIDAVIT
support its motion, PHP submitted an affidavit of Ken
Nielsen, the President and Chief Executive Officer of PHP.
Id. Attach. 1, Aff. of Ken Nielsen ¶ 1
(Nielsen Aff.). Mr. Nielsen states that PHP is
“a healthcare management company that was founded in
1996, ” and that CHP “originated as a division of
[PHP] ¶ 2005.” Id. ¶¶ 2-3. He
says that in 2010, CHP “split off as a subsidiary of
[PHP] because [CHP] was engaged in a completely different
business than [PHP].” Id. ¶ 4. PHP, Mr.
Nielsen explained, is “in the business of helping
private medical practice in Colorado deliver primary
care.” Id. ¶ 5. CHP is “a company
that is engaged in the business of providing correctional
healthcare and third party administration services for state
and county correctional facilities.” Id.
¶ 6. Mr. Nielsen asserts that while PHP “is the
parent company of [CHP], the two companies exist as separate
and distinct corporate entities.” Id. ¶
7. He says that PHP and CHP “have different boards of
directors and have different managers”, that PHP
“does not operate or control [CHP] and it does not
dictate the business activities of [CHP], ” and that
PHP and CHP “maintain different bank accounts and the
two companies do not co-mingle their assets in any
way.” Id. ¶¶ 8-10.
Mr. Nielsen states, PHP “only does business in the
State of Colorado.” Id. ¶ 11. Mr. Nielsen
avers that “[n]o employee of [PHP] has ever traveled to
Maine for any reason on behalf of [PHP], ” that PHP
“has never had any contracts for services with
Maine-based clients, and it has never been subject to suit in
Maine, ” and that PHP “has never done any
business in Maine, and it has never advertised or solicited
business in Maine.” Id. ¶¶ 12-14.
Mr. Nielsen states that PHP “is not a party to the
contract that [CHP] has to provide healthcare services at the
Kennebec County Correctional Facility” and that during
the times relevant to this lawsuit, PHP did not “hire,
fire, train, or supervise any employees of [CHP].”
Id. ¶¶ 15-16. Mr. Nielsen says that
“[t]here are no allegations in the Amended Complaint
that involve or implicate anyone employed by [PHP].”
Id. ¶ 17.
THE POSITIONS OF THE PARTIES
PHP's Motion to Dismiss
contends that Ms. Lewis failed to meet her burden of
establishing that PHP has the required “minimum
contacts” with the state of Maine to establish general
or specific jurisdiction over PHP. PHP Mot. at 2.
PHP notes that it is the parent company for CHP and, even
though Ms. Lewis alleges in her amended complaint that PHP
has “substantial affairs” within the state of
Maine, PHP denies that it has sufficient contacts within the
state of Maine to justify the assertion of federal
jurisdiction over it in Maine. Id. at 3.
order to assert jurisdiction over a defendant, the plaintiff
must demonstrate that the defendant has “minimum
contacts” with the forum. Id. at 5 (citing
Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945)). PHP notes that “[i]n keeping with the Due
Process Clause, courts may not exercise personal jurisdiction
‘under circumstances that would offend
‘traditional notions of fair play and substantial
justice.'” Id. (citing Asahi Metal
Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 113
(1987) (quoting Int'l Shoe, 326 U.S. at 316)
(quoting Milliken v. Meyer, 311 U.S. 457, 463
(1940)). In assessing this issue, PHP points to the factors
set out by the First Circuit in United Electrical, Radio
and Machine Workers of America v. 163 Pleasant Street
Corporation, 960 F.2d 1080 (1st Cir. 1992). Id.
at 5 (citing United Elec., 960 F.2d at 1088).
says that if a plaintiff makes a prima facie showing that a
non-resident defendant has sufficient minimum contacts with
the forum state, the burden shifts to the defendant to
convince the court that the “Gestalt factors militate
against the exercise of jurisdiction.” Id. PHP
states that the First Circuit set forth five Gestalt factors:
(1) the defendant's burden of appearing, (2) the forum
state's interest in adjudicating the dispute, (3) the
plaintiff's interest in obtaining convenient and
effective relief, (4) the judicial system's interest in
obtaining the most effective resolution of the controversy,
and (5) the common interests of all sovereigns in promoting
substantive social policies. Id. at 5-6 (quoting
163 Pleasant St., 960 F.2d at 1088).
this background, PHP argues that this Court has neither
general nor specific jurisdiction over it. Id. at
6-10. General jurisdiction, PHP maintains, requires that a
defendant engage in “substantial or systematic and
continuous activity inside the forum state such that the
defendant is essentially at home in the forum state.”
Id. (citing Daimler AG v. Bauman, 134 S.Ct.
746, 755 (2014)). PHP says that there is nothing in the
Plaintiff's Amended Complaint that allows for a
conclusion that this Court has general jurisdiction over it.
Specific jurisdiction, PHP says, allows for jurisdiction over
a nonresident defendant when “the cause of the action
arises directly out of, or relates to, the defendant's
forum-based contacts.” Id. at 8 (quoting
163 Pleasant St., 960 F.2d at 1089). PHP contends
that Ms. Lewis has failed to allege facts that would confer
specific jurisdiction over PHP for her claim. Id. at
Brandee Lewis' Response
response, Ms. Lewis argues that this Court has jurisdiction
over PHP under Federal Rule of Civil Procedure 4(k)(2), which
she says provides that personal jurisdiction is established
with service of process for claims arising under federal law
if “(A) the defendant is not subject to jurisdiction in
any state's courts of general jurisdiction; and (B)
exercising jurisdiction is consistent with the United States
Constitution and laws.” Pl.'s Opp'n at
2 (quoting Fed.R.Civ.P. 4(k)(2)).
Lewis contends that because PHP benefits “by receiving
profits through its subsidiary which come from the State of
Maine, ” Maine taxpayers “cause benefit to PHP
via the services provided by CHP and receiving financial gain
is a substantial contact with the State of Maine.”
Id. at 3. Regarding PHP's forum-state
activities, Ms. Lewis claims jurisdiction because “PHP
is a direct beneficiary of” the contract between CHP
and the Kennebec County Correctional Facility. Id.
at 4. Ms. Lewis points to the Employee Handbook for the
employees of PHP and CHP, which she contends is “one
and the same.” Id. at 5. Ms. Lewis notes that
in his welcome letter, Mr. Nielsen greets new employees to
both PHP and CHP to “our
company!” Id. (quoting Ex. 1 (Welcome
letter to new employees in Employee Handbook)). In effect,
Ms. Lewis says that the employee handbook does not
differentiate between PHP and CHP employees. Id. at
5-6. Next, Ms. Lewis argues that because CHP is a
“wholly owned division” of PHP, this constitutes
sufficient direct evidence that PHP controls CHP's
day-to-day operations. Id. at 6.
Lewis also contends that CHP and PHP have “commingled
staff and personnel.” Id. at 6-7. She notes
that from December 8, 2009, when CHP was created, until
sometime between December 8, 2015 and December 12, 2016, CHP
used the “same exact business address and suite”
as PHP. Id. at 7. Furthermore, the same person,
Joelle Kernitzki, filed the annual reports for both
companies. Id. at 7-8. Ms. Lewis thus contends PHP
and CHP commingled their businesses. Id. at 8. She
also notes that CHP announced in a press release that Dr.
Steve Krebs “is the full-time Chief Medical Officer of
both [CHP] and [PHP]”; that Abby Bookover, the media
contact, worked for CHP but had an email address at PHP; and
that Jeff Archambeau, the current CHP chief executive
officer, was announced as having been with CHP and PHP
“for more than five years.” Id. at 5-8.
Id. Ms. Lewis further maintains that PHP has the
final authority for resolving employee disputes within CHP
and has hiring and firing authority of CHP personnel.
Id. It follows, she argues, that PHP had
“oversight of [CHP] operations within the State of
Maine, to include personnel matters such as Defendant
Vigue's torture of Brandee Lewis.” Id. at
the purposeful availment requirement, Ms. Lewis asserts that
“PHP is the controlling company, overseeing the
business it created to provide medical services to
correctional facilities.” Id. at 8. She
reiterates her earlier arguments concerning the mixture of
personnel, PHP's final hiring and firing authority, and
PHP's role in resolving employee disputes. Id.
Ms. Lewis contends that the Gestalt factors favor this
Court's assertion of jurisdiction over PHP. Id.
reply, PHP disputes Ms. Lewis' contention that Federal
Rule of Civil Procedure 4(k)(2) provides a basis for the
assertion of federal jurisdiction because PHP “is not
subject to jurisdiction in any state's courts of general