Daley v. Greystar Management Services LP

District Court, E.D. Washington·Decided July 24, 2019·No. 2:18-cv-00381·Unknown

Opinion

FILED IN THE U.S. DISTRICT COURT EASTERN DISTRICT OF WASHINGTON Jul 24, 2019

UNITED STATES DISTRICT COURT SEAN F. MCAVOY, CLERK EASTERN DISTRICT OF WASHINGTON RYAN DALEY, an individual; and No. 2:18-cv-00381-SMJ ISAAK CURRY, an individual, each on behalf of himself and all others ORDER DENYING DEFENDANT similarly situated, GREYSTAR REAL ESTATE PARTNERS LLC’S MOTION TO Plaintiffs, DISMISS FOR LACK OF PERSONAL JURISDICTION v.

PARTNERS LLC, a Delaware limited liability company; GREYSTAR MANAGEMENT SERVICES LP, a Delaware corporation; and GREYSTAR RS WEST LLC, a Delaware limited liability company,

Defendants.

Before the Court, without oral argument, is Defendant Greystar Real Estate Partners LLC’s (“GREP”) Motion to Dismiss for Lack of Personal Jurisdiction, ECF No. 36. Plaintiffs Ryan Daley and Isaak Curry oppose the motion. ECF No. 37. Having reviewed the pleadings and the file in this matter, the Court is fully informed and denies the motion because Plaintiffs have demonstrated facts that, if true, would support exercising specific jurisdiction over GREP. The complaint alleges that Plaintiffs and a putative class applied to rent units

in Spokane, Washington apartment complexes owned or managed by Defendants individually and collectively. ECF No. 35 at 9. Plaintiffs paid Defendants nonrefundable prospective tenant screening fees and Defendants obtained

prospective tenant screening reports on Plaintiffs. Id. at 9–10. Each application and screening process occurred on the internet. Id. at 9. Defendants’ standard disclosures listed four consumer reporting agencies from which they might possibly obtain screening information about Plaintiffs. Id. at

10. But Defendants ultimately obtained such information from additional or alternative sources not disclosed to Plaintiffs before they paid screening fees. Id. at 10–11. Further, Defendants failed to disclose whether they would accept

comprehensive reusable prospective tenant screening reports on Plaintiffs. Id. at 11. The complaint asserts causes of action for violations of the Residential Landlord-Tenant Act of 1973, chapter 59.18 of the Revised Code of Washington; and unjust enrichment. Id. at 11–15.

GREP is a limited liability company incorporated in Delaware with its principal place of business in South Carolina. ECF No. 19 at 1. GREP is “a parent corporation with subsidiaries,” id., including Defendants Greystar Management

Services LP and Greystar RS West LLC, ECF No. 35 at 5–6. The complaint alleges GREP’s subsidiaries are its agents and all acts they perform are done on its behalf and at its direction. Id. Further, the complaint alleges GREP does not distinguish

between itself and its subsidiaries in materials it makes available online or in print. Id. at 7. Indeed, GREP represents to the public that it is a manager of residential properties in Washington. Id. In a 2015 lawsuit over property management practices

in Washington, specifically tactics used to collect charges from former tenants after they moved out, one of GREP’s subsidiaries, also involved as a defendant here, had answered the complaint stating the correct defendant was “Greystar Real Estate Partners, LP.” Id. at 6. Defendants have not materially altered the scope of their

functions and responsibilities since 2015. Id. at 7. The complaint alleges Defendants maintain websites for all their rental properties. Id. at 14. These websites advertise Defendants’ rental properties and

provide information for prospective tenants. Id. Despite local property managers operating their own websites, prospective tenants were directed to GREP’s website—greystar.com—for application and payment processing. Id. at 4. GREP owned or operated that website until sometime around February 2019, when title

vested in Greystar Worldwide LLC. Id.; ECF No. 30 at 2. Thus, GREP controlled the disclosures provided to prospective tenants on that website. ECF No. 35 at 8. In this context, the complaint alleges the following key points relevant here:

// • GREP is “engaged in the business of managing rental properties in Washington State,” id. at 3; ECF No. 37 at 3; • GREP “and its agents and employees are in the business of renting or leasing residential real estate in Washington State,” ECF No. 35 at 3; ECF No. 37 at 3; • GREP “uses its website for online leasing of residential properties in Washington State,” ECF No. 35 at 4; ECF No. 37 at 3; • GREP is “an owner, lessor, sublessor, or the designated representative of the owner, lessor, or sublessor, or an agent, resident manager, or a designated property manager for multiple dwelling units, or the property of which the dwelling unit is a part, throughout Washington State,” ECF No. 35 at 4; ECF No. 37 at 3; and • GREP “substantially controls its subsidiary’s activities by engaging in property management and corresponding services for all its subsidiary’s properties nationwide, including instituting uniform procedures for property management and tenant relations,” ECF No. 35 at 4; ECF No. 37 at 3.

On a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of showing the Court has jurisdiction over the defendant. Wash. Shoe Co. v. A-Z Sporting Goods Inc., 704 F.3d 668, 671 (9th Cir. 2012). Where, as here, the Court holds no evidentiary hearing, the plaintiff “need only make a ‘prima facie showing of jurisdictional facts to withstand the motion to dismiss.’” Id. at 671–72 (quoting Pebble Beach Co. v. Caddy, 453 F.3d 1151, 1154 (9th Cir. 2006)). To make this showing, the plaintiff “need only demonstrate facts that if true would support jurisdiction over the defendant.” Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd., 328 F.3d 1122, 1129 (9th Cir. 2003) (quoting Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001)). Further, the Court “resolves all disputed facts in favor of the plaintiff.” Wash. Shoe, 704 F.3d at 672.

“Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014). “Washington’s long-arm statute extends jurisdiction over a defendant to the fullest

extent permitted by the Due Process Clause of the Fourteenth Amendment.” Wash. Shoe, 704 F.3d at 672 (citing Wash. Rev. Code § 4.28.185). Therefore, the relevant issue is whether exercising personal jurisdiction over a defendant in Washington satisfies due process principles. See id.

Due process principles require that a defendant “have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington,

326 U.S. 310, 315 (1945) (internal quotation marks omitted); accord BNSF Ry. Co. v. Tyrrell, 137 S. Ct. 1549, 1558 (2017). Elaborating on this guide, the Supreme Court has distinguished between “general or all-purpose jurisdiction” and “specific or case-linked jurisdiction.” BNSF Ry., 137 S. Ct. at 1558.

A. General jurisdiction The Court may assert general jurisdiction over a foreign corporate defendant if its affiliations with the forum state are so “continuous and systematic” as to render

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