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JOHNSON-TANNER v. FIRST CASH FINANCIAL SERVICES

January 2, 2003

MONIQUE JOHNSON-TANNER, PLAINTIFF,
V.
FIRST CASH FINANCIAL SERVICES, INC., AND FAMOUS PAWN, INC. DEFENDANTS.



The opinion of the court was delivered by: Paul L. Friedman, District Judge.

  OPINION AND ORDER

This action was filed under 42 U.S.C. § 1981, as amended by the Civil Rights Act of 1991, seeking injunctive relief and monetary damages for allegedly unlawful employment discrimination based on race. Plaintiff alleges that First Cash Financial Services, Inc. and its wholly owned subsidiary, Famous Pawn, Inc., refused to laterally transfer the plaintiff, allegedly causing her constructive discharge. This matter comes before the Court on defendants' motions to dismiss for lack of personal jurisdiction, improper venue and failure to state a claim.*fn1 For the reasons that follow, this Court denies defendants' motions to dismiss.

I. BACKGROUND

From June 1997 to September 1998, plaintiff Monique Johnson-Tanner, a resident of the District of Columbia and an African American female, was employed as a salesperson by First Cash and/or by Famous Pawn. Plaintiff was originally hired to work at a pawn shop in Georgetown in the District of Columbia but, after several transfers, she ended up working at a Silver Spring, Maryland pawn shop. After being twice denied a transfer back to the Georgetown store, allegedly because of her race, plaintiff filed her Amended Complaint on May 8, 2001.

First Cash is a Delaware Corporation with its principal place of business in Arlington, Texas. Famous Pawn is a Maryland Corporation that operates pawn shops in Maryland, Virginia and the District of Columbia. First Cash previously was the subject of a similar employment discrimination suit, the testimony from which plaintiff relies on heavily in the instant case.*fn2

II. PERSONAL JURISDICTION

District of Columbia law controls the extent to which the Court may exercise personal jurisdiction over a nonresident defendant. See Crane v. Carr, 814 F.2d 758, 762 (D.C.Cir. 1987). D.C.Code Section 13-423(a)(1) provides that the Court "may exercise personal jurisdiction over a person, who acts directly or as an agent, as to a claim for relief arising from the person's . . . transacting any business in the District of Columbia." This long-arm provision allows for jurisdiction to the fullest extent permissible under the Due Process Clause of the United States Constitution. See Crane v. New York Zoological Soc'y, 894 F.2d 454, 455 (D.C.Cir. 1990). Due Process is satisfied where a defendant has "minimum contacts" with the District of Columbia such that the exercise of personal jurisdiction will not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Such minimum contacts are established where a defendant "purposefully avails" itself of the privilege of conducting activities within the forum jurisdiction such that the defendant "should reasonably anticipate being haled into court" there. Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). The plaintiff bears the burden of proving a prima facie case of personal jurisdiction by alleging specific acts linking a defendant with the forum. See Crane v. New York Zoological Soc'y, 894 F.2d at 456; United States v. Philip Morris, Inc., 116 F. Supp.2d 116, 121 (D.C. 2000). In deciding whether a basis for personal jurisdiction exists, factual discrepancies in the record must be resolved in the plaintiff's favor. See United States v. Philip Morris, Inc., 116 F. Supp.2d at 121.

In an effort to establish that First Cash transacts business in the District of Columbia and possesses the necessary minimum contacts, plaintiff lists numerous facts indicating that Famous Pawn is "not its own business, but that of the parent corporation [First Cash]." Plaintiff's Opposition at 6 ("Pl.Opp."). In opposition, First Cash argues that it and Famous Pawn are in fact separate companies maintaining all corporate formalities. First Cash further states that it owns no property in the District of Columbia, is not licensed to do business in the District and transacts no business in the District. This Court finds no genuinely separate identity between First Cash and Famous Pawn, and the Court therefore has personal jurisdiction over First Cash (not just over Famous Pawn).

A. Alter Ego Analysis

Ordinarily, a defendant corporation's contacts with a forum may not be attributed to affiliated corporations. See El-Fadl v. Central Bank of Jordan, 75 F.3d 668, 675-76 (D.C.Cir. 1996); Shapiro, Lifschitz & Schram, P.C. v. Hazard, 90 F. Supp.2d 15, 22 (D.C. 2000); Material Supply Int'l, Inc. v. Sunmatch Indus. Co., 62 F. Supp.2d 13, 19 (D.C. 1999). An exception exists, however, when the party contesting jurisdiction is found to be nothing more than the alter ego of an affiliated corporation over which the court does have jurisdiction; in that case the affiliated corporation's jurisdictional contacts may be extended to reach the other corporate entity. See El-Fadl v. Central Bank of Jordan, 75 F.3d at 676 ("if parent and subsidiary `are not really separate entities,' . . . or one acts as an agent of the other, . . . the local subsidiary's contacts can be imputed to the foreign parent"); Material Supply Int'l, Inc. v. Sunmatch Indus. Co., 62 F. Supp.2d at 20 (same, where parent corporation so dominates subsidiary as "to negate its separate personality"). "In such cases, the foreign parent will be found to be transacting business in the forum state through the activities of its subsidiary." Color Sys., Inc. v. Meteor Photo Reprographic Sys., Inc., 1987 WL 11085, *4 (D.C. 1987). Whether one corporation is the alter ego of another is a question of law to be decided by the court. See Shapiro, Lifschitz & Schram, P.C. v. Hazard, 90 F. Supp.2d at 22; Material Supply Int'l, Inc. v. Sunmatch Indus. Co., 62 F. Supp.2d at 19-20.

The defendants concede that the Court has personal jurisdiction over Famous Pawn which admittedly operates pawn shops in the District of Columbia. The question is whether the Court also has personal jurisdiction over First Cash as the alter ego of Famous Pawn. To determine whether Famous Pawn is a separate corporate entity distinct from First Cash or merely the alter ego of First Cash, the Court must evaluate: (1) whether there is such a unity of interest and ownership that the separate personalities of First Cash and Famous Pawn effectively no longer exist; and (2) whether an inequitable result would follow if the Court treats Famous Pawn's allegedly wrongful acts as those of Famous Pawn alone and not also those of First Cash. See Shapiro, Lifschitz & Schram, P.C. v. Hazard, 90 F. Supp.2d at 23; Material Supply Int'l, Inc. v. Sunmatch Indus. Co., 62 F. Supp.2d at 20. Ultimately, the question is whether the parent corporation "so dominated the [subsidiary] corporation as to negate its separate personality," making the exercise of jurisdiction over the absent parent fair and equitable. Material Supply Int'l, Inc. v. Sunmatch Indus. Co., 62 F. Supp.2d at 20 (quoting Hart v. Department of Agriculture, 112 F.3d 1228, 1231 (D.C.Cir. 1997)).

1. Unity of Interest and Ownership

First, First Cash and Famous Pawn share at least three key common officers and directors: Rick Powell, Alan Barron and Rick Wessel. See Pl. Opp., Exhibit 22, First Cash Responses to Plaintiff's Interrogatories at 6, 8.*fn3 Rick Powell is both Chairman/CEO of First Cash and a Director of Famous Pawn. Alan Barron serves as the Chief Operating Officer of First Cash and as the President of Famous Pawn. Rick Wessel handles the duties of Chief Financial Officer for both First Cash and Famous Pawn; he also fills the roles of Director, Secretary and Treasurer of First Cash. Sharing officers between the parent and the subsidiary or the presence of "interlocking directorates" are indicative of common corporate ownership and control. See Color Sys., Inc. v. Meteor Photo Reprographic Sys., Inc., 1987 WL 11085 at ** 5, 6 (finding alter ego test satisfied in part where parent and subsidiary shared two of three members of board of directors and where one co-manager of parent was also president of subsidiary); Shapiro, Lifschitz & Schram, P.C. v. Hazard, 90 F. Supp.2d at 26 (suggesting operational nexus where two seemingly ...


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