United States District Court, S.D. Indiana, Indianapolis Division
Jane Magnus-Stinson, Chief Judge United States District
pending before the Court is Defendant Judith Shopf's
Motion to Dismiss, in which she alleges that this Court lacks
in personam jurisdiction over her, and that
Plaintiffs Larry Griggers and RC Management Holdings, LLC
(“RC Management”) have failed to state a
claim upon which relief can be granted. [Filing No.
13.] Ms. Shopf seeks to dismiss Plaintiffs' Amended
Complaint for declaratory relief related to the sale of Mr.
Griggers' ownership interests in several Ruth's Chris
restaurants to RC Management. [Filing No. 12.] Ms.
Shopf's Motion is fully briefedand is now ripe for the
Court's review. For the reasons stated herein, the Court
DENIES Ms. Shopf's Motion.
Federal Rule of Civil Procedure 12(b)(2)
defendant moves to dismiss a complaint under Federal Rule of
Civil Procedure 12(b)(2), “[t]he plaintiff bears the
burden of showing that personal jurisdiction over the
defendant exists.” Claus v. Mize, 317 F.3d
725, 727 (7th Cir. 2003). When, as here, the Court
“rules on a defendant's motion to dismiss based on
the submission of written materials, without the benefit of
an evidentiary hearing . . . the plaintiff ‘need only
make out a prima facie case of personal
jurisdiction.'” Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003) (quoting Hyatt Int'l. Corp. v. Coco, 302
F.3d 707, 713 (7th Cir. 2002)). Accordingly, “[o]nce
the defendant has submitted affidavits or other evidence in
opposition to the exercise of jurisdiction, the plaintiff
must go beyond the pleadings and submit affirmative evidence
supporting the exercise of jurisdiction.” Id.
at 782-83. Factual disputes, however, are resolved in the
plaintiff's favor. Id.
federal district court's personal jurisdiction over a
defendant is established in a diversity-jurisdiction case . .
. only so long as the defendant is subject to the
jurisdiction of a court of general jurisdiction in the state
where the district court is located.” Northern
Grain Mktg., LLC v. Greving, 743 F.3d 487, 491 (7th Cir.
2014). Indiana Trial Rule 4.4(A) serves as Indiana's
long-arm provision and expands personal jurisdiction to the
full extent permitted by the Due Process Clause. See
LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 965-66
(Ind. 2006). “Thus, the statutory question merges with
the constitutional one-if [Indiana] constitutionally may
exercise personal jurisdiction over a defendant, its long-arm
statute will enable it to do so.” Northern
Grain, 743 F.3d at 492.
federal constitutional limits of a court's personal
jurisdiction in a diversity case are found in the Fourteenth
Amendment's due-process clause.” Id.
“[F]ederal constitutional law draws a sharp and vital
distinction between two types of personal jurisdiction:
specific or case-linked jurisdiction, and general or
all-purpose jurisdiction.” Abelesz v. OTP
Bank, 692 F.3d 638, 654 (7th Cir. 2012). “If the
defendant's contacts are so extensive that it is subject
to general personal jurisdiction, then it can be sued in the
forum state for any cause of action arising in any place.
More limited contacts may subject the defendant only to
specific personal jurisdiction, in which case the plaintiff
must show that its claims against the defendant arise out of
the defendant's constitutionally sufficient contacts with
the state.” uBID, Inc. v. GoDaddy Group,
Inc., 623 F.3d 421, 425 (7th Cir. 2010).
Federal Rule of Civil Procedure 12(b)(6)
Rule 12(b)(6), a party may move to dismiss a claim that does
not state a right to relief. The Federal Rules of Civil
Procedure require that a complaint provide the defendant with
“fair notice of what the . . . claim is and the grounds
upon which it rests.” Erickson v. Pardus, 551
U.S. 89, 93 (2007) (quoting Bell Atlantic v.
Twombly, 550 U.S. 544, 555 (2007)). In reviewing the
sufficiency of a complaint, the Court must accept all
well-pled facts as true and draw all permissible inferences
in favor of the plaintiff. See Active Disposal
Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir.
2011). A Rule 12(b)(6) motion to dismiss asks whether the
complaint “contain[s] sufficient factual matter,
accepted as true, to ‘state a claim to relief that is
plausible on its face.'” Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (quoting
Twombly, 550 U.S. at 570). The Court will not accept
legal conclusions or conclusory allegations as sufficient to
state a claim for relief. See McCauley v. City
of Chicago, 671 F.3d 611, 617 (7th Cir. 2011). Factual
allegations must plausibly state an entitlement to relief
“to a degree that rises above the speculative
level.” Munson v. Gaetz, 673 F.3d 630, 633
(7th Cir. 2012). This plausibility determination is “a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.”
The Proposed Sale
1994, Larry Griggers has been Chairman and CEO of various
Ruth's Chris entities in Indiana and Missouri, including
Palomar Indy, Inc., (“Palomar”),
Pinnacle Management, Inc., (“Pinnacle”),
Sizzle, LLC, (“Sizzle”), and Bacchus,
LLC, (“Bacchus”), (collectively,
“the Ruth's Chris entities”).
[Filing No. 10 at 2.]
Rans, a member of RC Management, made an offer to purchase
Mr. Griggers' ownership interests in the Ruth's Chris
entities. [Filing No. 10 at 3.] Mr. Rans is also an
existing investor, co-franchisee, and Board member of the
Ruth's Chris entities. [Filing No. 10 at 2.]
The Franchisor's Rights
Griggers' transfer of ownership and management of the
Ruth's Chris entities was subject to preapproval by a
Ruth's Chris franchisor (the
“Franchisor”). [Filing No. 10 at
3.] The transfer was also subject to a right of first
refusal in favor of the Franchisor. [Filing No. 10 at
3.] After Mr. Rans made the offer to purchase Mr.
Griggers' ownership interests in the Ruth's Chris
entities, Mr. Griggers notified the Franchisor of the
prospective sale and the Franchisor elected against
exercising its right of first refusal. [Filing No. 10 at
3.] In addition, the Franchisor approved Mr. Rans as a
successor to Mr. Griggers under certain conditions.
[Filing No. 10 at 3.]
Shareholders' and Unitholders' Rights
Griggers' transfer of ownership and management of the
Ruth's Chris entities was also subject to a right of
first refusal by other shareholders and unitholders of the
Ruth's Chris entities. [Filing No. 10 at 3.]
Each of the Ruth's Chris entities has the following
nearly identical language in its respective governing
Offer for Sale; Notice of Proposed Sale. If any
[Shareholder/Unitholder] (the “Transferring
Party”) desires to Transfer any of his …
[Shares/Units] in any transaction …, such Transferring
Party shall first deliver written notice of such desire to do
so (the “Notice”) to the other
[Shareholders/Unitholders] … [specifying] … (i)
the name and address of the party to whom the Transferring
Party proposes to Transfer the Units (the
“Offeror”), (ii) the number of [Shares/Units] the
Transferring Party proposes to Transfer …, (iii) the
consideration per [Share/Unit] offered by the Offeror to the
Transferring Party for the proposed Transfer, and (iv) all
other material terms and conditions of the proposed
transaction. The Notice shall be accompanied by a copy of the
offer from the Offeror to the Transferring Party or such
other evidence of the offer that is reasonably satisfactory
to the other [Shareholders/Unitholders].
Option to Purchase. (a) The other [Shareholders/Unitholders]
shall have the option to purchase all but not less than all
of the [Shares/Units] Proposed for Transfer. [The
Shareholders/Unitholders] shall have the first option
… to purchase all or any part of the [Shares/Units]
Proposed for Transfer for the consideration per [Share/Unit]
and on the terms and conditions specified in the Notice. The
First Option must be exercised no later than thirty (30) days
after such Notice has been delivered….
[Filing No. 10 at 6.]
of the proposed transfer was sent to the shareholders and
unitholders of the Ruth's Chris entities as follows:
• Palomar's shareholders were provided notice of the
proposed transfer on August 9, 2017 and were provided thirty
days within which to exercise a right of first refusal;
• Pinnacle's shareholders were provided notice of
the proposed transfer on August 9, 2017 and were provided
thirty days within which to exercise a right of first
• Sizzle's eligible unitholders were provided notice
of the proposed transfer on August 9, 2017 and were provided
thirty days within which to ...