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Med Flight Air Ambulance, Inc. v. MGM Resorts International

United States District Court, D. New Mexico

May 26, 2017

MED FLIGHT AIR AMBULANCE, INC., Plaintiff,
v.
MGM RESORTS INTERNATIONAL, and UMR, INC., Defendants.

          AMENDED [[1]] OPINION AND ORDER GRANTING IN PART MOTION FOR JURISDICTIONAL DISCOVERY, ESTABLISHING SCOPE OF DISCOVERY, SETTING JURISDICTIONAL DISCOVERY DEADLINES, AND DENYING PREVIOUS MOTION AS MOOT

          KEVIN R. SWEAZEA, UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on Defendant Med Flight Air Ambulance, Inc.'s (“Med Flight”) motion for limited discovery on the issue of personal jurisdiction. [Doc. 24]. Med Flight asserts it needs additional information to combat what it feels is a “one-sided” affidavit Defendant MGM Resorts International (“MGM”) offered in moving to dismiss under Federal Rule of Civil Procedure 12(b)(2) [Doc. 21].[2] MGM has filed a response in opposition to Med Flight's discovery request [Doc. 26], and Med Flight submitted a reply. [Doc. 28]. The Court has considered the parties' submissions and finds that limited discovery is warranted under the circumstances.

         I. PROCEDURAL BACKGROUND

         Med Flight commenced this lawsuit on January 12, 2017 in New Mexico's Second Judicial District Court, alleging MGM, then Defendant Sierra Health Care Options (“Sierra”), and Defendant UMR, Inc. (“UMR”) failed to pay it $189, 500.00 for medically evacuating MGM employee Adrian Hernandez from El Paso, Texas to Las Vegas, Nevada. [Doc. 1-1, Compl., ¶¶ 1-12]. As part of his treatment, Mr. Hernandez assigned Med Flight his benefits under MGM's employee health plan. [Doc. 1-1, ¶9]. According to the complaint, Sierra is an administrator and/or insurer under the plan and UMR another administrator. [Doc. 1-1, ¶¶3-4]. Sierra removed the matter to the United States District Court for the District of New Mexico on February 17, 2017 asserting the case was preempted in its entirety under the Supremacy Clause of the United States Constitution and the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). [Doc. 1].

         Med Flight amended its complaint on March 10, 2017. [Doc. 14, Am. Compl.]. Among other things, Med Flight dismissed Sierra and narrowed its claims to allege causes of action arising solely under ERISA. [See Doc. 14, ¶¶32-48 (averring that by not paying for the medivac, MGM and UMR breached the benefits plan pursuant to 29 U.S.C. § 1132(a)(1)(B) (Count I); Med Flight had to engage lawyers in this matter and is threfore entitled to attorneys under 29 U.S.C. § 1132(g)(1) (Count II); and MGM and UMR violated 29 U.S.C. §1132(c)(1) when they failed on three separate occasions to provide plan documents (Count III))]. MGM moved to dismiss the amended complaint for lack of jurisdiction on March 24, 2017 [Doc. 21]. Med Flight filed the instant motion on April 7, 2017 asking the Court to grant limited discovery to demonstrate MGM may properly be hailed into court in the District of New Mexico [Doc. 24].[3]

         II. STANDARD

         “When a defendant moves to dismiss for lack of jurisdiction, either party should be allowed discovery on the factual issues raised by that motion.” Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033, 1035 (10th Cir. 1975). The decision to grant jurisdictional discovery, however, is discretionary. See Id. Although there is a dearth of reported decisions in the Tenth Circuit on the exercise of that discretion, some guidance exists. See Grynberg v. Ivanhoe Energy, Inc., 490 Fed.Appx. 86, 103 (10th Cir. 2012). First, denying jurisdictional discovery is only error if “the denial results in prejudice to a litigant.” Id. (citing Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d 1320, 1326 (10th Cir. 2002)). In this circumstance, “[p]rejudice is present where pertinent facts bearing on the question of jurisdiction are controverted or where a more satisfactory showing of the facts is necessary.” Id. Second, the Court may properly deny discovery where there is a “very low probability” that discovery will affect the outcome of the issue. See Bell Helicopter Textron, Inc. v. Heliqwest Int'l, Ltd., 385 F.3d 1291, 1299 (10th Cir. 2004). Finally, the party seeking jurisdictional discovery bears the burden of proving legal entitlement to it and demonstrating prejudice if not granted. Grynberg, 490 Fed.Appx. at 103 (citing Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d 1173, 1189 (10th Cir. 2010)).

         The Court recognizes that the guidance above sets a floor, not a ceiling, on permitting discovery. Nonetheless to ensure it acts within the appropriate limits on its discretion, the Court will examine the factual issues raised in MGM's motion to determine the extent to which discovery will assist in resolving the issue of personal jurisdiction.

         III. PERSONAL JURISDICTION UNDER ERISA

         The Court's evaluation necessarily turns on the substantive elements of the personal jurisdiction analysis. When a defendant moves to dismiss for lack of jurisdiction, the plaintiff must make a prima facie showing “by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” Melea, Ltd. v. Jawer SA, 511 F.3d 1060, 1065 (10th Cir. 2007) (citation and quotation marks omitted). The Court must “accept as true any allegations in the complaint not contradicted by the defendant's affidavits, and resolve any factual disputes in the plaintiff's favor.” Id.

         ERISA cases employ a different jurisdictional inquiry than the traditional long-arm statute analysis because ERISA expressly authorizes nationwide service of process. See Peay v. BellSouth Med. Assistance Plan, 205 F.3d 1206, 1210 (10th Cir. 2000) (“When a federal statute provides for nationwide service of process, it becomes the statutory basis for personal jurisdiction.”) (Citation omitted). The initial question therefore is not whether the defendant has satisfied the forum state's long-arm statute or the constitutional minimum-contacts test, but whether the defendant may be found and served in any district of the United States. Compare Id. (citing 28 U.S.C. 29 U.S.C. § 1132(e)(2) with Wenz v. Memery Crystal, 55 F.3d 1503, 1506-07 (10th Cir. 1995) (describing a two-step process in which the Court “initially determine[s] whether the exercise of jurisdiction is sanctioned by the [State's] long-arm statute” and then considers contacts)).

         Although ERISA facially requires only some presence in the United States, the Tenth Circuit has rejected a singular “national contacts” approach as outside due-process bounds. See Peay, 205 F.3d at 1211 (“[D]ue process requires something more” than the ‘national contacts' test, ” which allows “a plaintiff [to] sue a defendant in any federal court in the United States, regardless of the defendant's contacts[.]”). In other words, to pass constitutional muster, “the plaintiff's choice of forum [must] be fair and reasonable to the defendant” and “protect[] individual litigants against the burdens of litigation in an unduly inconvenient forum.” Id. at 1212 (citation omitted).

         The burden, however, is on the defendant “[t]o show that the exercise of jurisdiction in the chosen forum will make litigation so gravely difficult and inconvenient that [it] unfairly is at a severe disadvantage in comparison to [its] opponent.” Id. In assessing inconvenience, a court should consider: (1) the extent of the defendant's contacts with the [forum]”; (2) “the inconvenience” of defending in a forum other than the defendant's place of business or residence, “including (a) the nature and extent and interstate character of the defendant's business, (b) the defendant's access to counsel, and (c) the distance from the defendant to the place where the action was brought”; (3) “judicial economy”; (4) “whether discovery proceedings will take place outside” the defendant's state(s); and (5) “the nature of the regulated activity in question and the extent of impact that the defendant's activities have beyond the borders of his state of residence or business.” Id. (citation omitted).

         In sum, two categories of factual considerations will determine the outcome of the issue and guide the prejudice analysis: (1) facts demonstrating MGM resides or may be found within any district of the United States; (2) facts ...


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