Lundeen v. Krucial Staffing, LLC

Background

Eleven plaintiffs sued Krucial Staffing, LLC and Brian M. Cleary V. They alleged claims under the Family and Medical Leave Act, the Emergency Paid Sick Leave Act, and state law. According to the First Amended Complaint, Krucial is a disaster-relief staffing agency that hires healthcare workers for temporary assignments. The plaintiffs were recruited by Krucial and sent to hospitals in Louisiana and Texas. None alleged that Krucial deployed them to a New York hospital.

Krucial is organized under Kansas law and headquartered in Kansas. Its members are domiciled in Kansas, South Dakota, and Nevada. Cleary is a Kansas resident. Two plaintiffs are New York residents; the others are domiciled in Missouri, Oklahoma, Alaska, Wisconsin, Florida, California, and Hawaii.

Motion and arguments

The defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(6) for failure to state a claim. Personal jurisdiction is a court’s authority to exercise legal power over a defendant.

The plaintiffs argued that New York had general personal jurisdiction over Krucial because Krucial did business in New York, allegedly was registered to do business there, and had previously filed a lawsuit against an insurer in New York. They also alleged that Krucial’s first nurse deployment was to New York hospitals and that Krucial made substantial money there. The plaintiffs did not argue that New York had specific jurisdiction over Krucial or general or specific jurisdiction over Cleary.

Court’s analysis

The court explained that general jurisdiction allows a court to hear any and all claims against a company only when the company’s connections with the state are so continuous and systematic that the company is essentially at home there. A company is ordinarily considered at home where it is incorporated or organized and where it has its principal place of business. Ordinary or continuous business activity in a state is not enough to allow that state to hear unrelated claims.

The court held that Krucial’s New York contacts were insufficient. Krucial was not headquartered or organized in New York, and none of its members were New York residents. The plaintiffs also did not show that Krucial’s New York contacts were materially different from its contacts with other states where it had deployed nurses. The court therefore concluded that Krucial was not subject to general jurisdiction in New York.

Disposition

The court granted the defendants’ motion to dismiss the First Amended Complaint. It directed the Clerk of Court to close the motion and the case. The opinion does not separately state a ruling on the defendants’ Rule 12(b)(6) arguments after granting dismissal for lack of personal jurisdiction.