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Estate of Moore v. Carroll

United States District Court, D. South Dakota, Southern Division

February 3, 2016

ESTATE OF CHERYL R. MOORE and PHILLIP MOORE, Plaintiffs,
v.
KEITH R. CARROLL, MACFARLANE PHEASANTS, INC., and JOHN DOE, Defendants and Third-Party Plaintiffs,
v.
DOUBLE D SERVICES, INC. and BLOCK DIESEL REPAIR, INC., Third-Party Defendants.

MEMORANDUM OPINION AND ORDER DENYING THIRD-PARTY DEFENDANT'S MOTIONS TO DISMISS AMENDED COMPLAINT AND THIRD-PARTY COMPLAINT

LAWRENCE L. PIERSOL, UNITED STATES DISTRICT JUDGE.

Before the Court is Third-Party Defendant Block Diesel Repair, Inc.'s ("Block Diesel") Federal Rule of Civil Procedure 12(b)(2) motion to dismiss for lack of personal jurisdiction MacFarlane Pheasants, Inc.'s ("MacFarlane") Third-Party Complaint. On June 30, 2015, Block Diesel filed the motion ("First Motion"). The First Motion was fully briefed and, on September 25, 2015, the Court issued an Order denying Block Diesel's motion to dismiss, Doc. 29. The Court intended to issue a memorandum opinion at a later date. Plaintiffs, Estate of Cheryl R. Moore and Phillip Moore, filed an amended complaint on November 12, 2015, Doc. 40. Then, on November 18, 2015, Block Diesel filed a subsequent motion ("Second Motion") to dismiss for lack of personal jurisdiction, but this time arguing that the Plaintiffs' Amended Complaint should be dismissed for lack of personal jurisdiction, Doc. 42. In the Second Motion, Block Diesel referenced and incorporated the documents filed in support of the First Motion. Block Diesel asserted neither new argument nor filed new documents in the Second Motion that were not originally asserted or filed in the First Motion. Neither Plaintiffs nor Third-Party Plaintiffs filed a response to the Second Motion. Therefore, the two motions will be treated as one for purposes of this Memorandum Opinion and Order. For the following reasons, both motions are denied.

BACKGROUND

Plaintiff Cheryl Moore was a South Dakota resident at the time of the alleged injury. In November 2012, she was injured when she rear-ended a vehicle being driven by Defendant and Third-Party Plaintiff Keith R. Carroll (Carroll) on U.S. Interstate 90 in Aurora County, South Dakota. The vehicle was owned by Defendant and Third-Party Plaintiff MacFarlane, a Wisconsin company in the business of raising and transporting pheasants. Plaintiffs filed suit in this Court for negligence and loss of consortium against MacFarlane and Carroll. According to Plaintiffs' Amended Complaint, MacFarlane's taillights were malfunctioning and difficult to see, which ultimately caused Moore to collide with MacFarlane's vehicle.

MacFarlane filed a Third-Party Complaint[1] against Double D Services, Inc., the seller of the vehicle who is not a part of this motion, and Block Diesel for indemnity and contribution should MacFarlane be found liable for damages. MacFarlane argues that, under federal law, reflective tape must be attached to the rear of a vehicle such as MacFarlane's. According to MacFarlane, in June 2012, five months prior to the accident with Plaintiffs, Block Diesel performed a federal DOT inspection on the MacFarlane vehicle in issue.[2] When performing the inspection, Block Diesel failed to detect either the damaged taillights or the absence of reflective tape. According to the affidavit of Bill MacFarlane, Block Diesel has been performing these federal inspections for MacFarlane for ten to fifteen years and that Block Diesel is aware of the extensive amount of travel MacFarlane does into South Dakota. Affidavit of Bill MacFarlane, [3] Doc. 26-1, at 2.

Block Diesel is, like MacFarlane, a Wisconsin company. The business provides tractor trailer repair services through two shops, one in Janesville, Wisconsin and the other in Toman, Wisconsin. Block Diesel is incorporated in Wisconsin and its only places of business are there. It is not registered to do business in South Dakota as a foreign corporation and does not have any physical presence there. Block Diesel has no offices, shareholders, officers, directors, or employees in South Dakota and owns no property in South Dakota. In addition, Block Diesel does not directly market, manufacture, deliver, distribute, or sell products into South Dakota. In sum, Block Diesel does not directly engage in any relationship with South Dakota or its citizens.

STANDARD OF REVIEW

To withstand a motion to dismiss for lack of personal jurisdiction, "a plaintiff 'must state sufficient facts in the complaint to support a reasonable inference that [the defendants] can be subjected to jurisdiction within the state.'" Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (quoting Block Indus, v. DHJ Indus, Inc., 495 F.2d 256, 259 (8th Cir. 1974)) (alteration in original). Once a defendant controverts personal jurisdiction, the plaintiff bears the burden of proving it exists. Id. (quoting Block Indus., 495 F.2d at 259). See Procedural Aspects of Personal Jurisdiction, 4 Fed. Prac. & Proc. Civ. § 1067.6 (4th ed.) ("If the district court has not conducted a discretionary evidentiary hearing on a nonresident defendant's motion to dismiss for lack of jurisdiction, under Rule 12(b)(2), the plaintiff has the burden of establishing a prima facie case of personal jurisdiction over that defendant."). In carrying that burden, the plaintiffs prima facie showing is tested through the pleadings as well as affidavits and exhibits presented in opposition to the defendant's motion to dismiss. Dever, 380 F.3d at 1072 (quoting Block Indus., 495 F.2d at 260). For purposes of the prima facie showing, the evidence, taken as true, is viewed in the light most favorably to the plaintiff. Digi-Tel Holdings, Inc. v. Proteq Telecommunications (PTE), Ltd., 89 F.3d 519, 522 (8th Cir. 1996) (citing Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)).

DISCUSSION

'"A federal court in a diversity action may assume jurisdiction over nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause'" of the United States Constitution. Dever, 380 F.3d at 1073 (quoting Morris v. Barkbuster, Inc., 923 F.2d 1277, 1280 (8th Cir. 1991)). South Dakota construes its long-arm statute to the fullest extent of the Due Process Clause. Larson Mfg. Co. of South Dakota v. Connecticut Greenstar, Inc., 929 F.Supp.2d 924, 926 (D.S.D. 2013) (citing Dakota Indus, v. Ever Best Ltd., 28 F.3d 910, 915 (8th Cir. 1994)). Thus, personal jurisdiction analysis collapses into a single inquiry: federal due process. Id. See Fed. Prac. & Proa, supra, at § 1068 ("A state's judicial interpretations of the reach of its jurisdictional statutes are binding on the federal courts.").[4]

"Due Process requires 'minimum contacts' between [a] non-resident defendant and the forum state such that 'maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996) (quoting World-Wide Volkswagon Corp. v. Woodson, 444 U.S. 286, 291-92, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). In evaluating minimum contacts, the Supreme Court has promulgated two theories: general jurisdiction and specific jurisdiction.[5] Dever, 380 F.3d at 1073. Under general jurisdiction, a federal court has personal jurisdiction over a defendant who has "continuous and systematic" contacts with the forum state, even if the plaintiffs cause of action does not arise from those "continuous and systematic" contacts. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). If a court has general jurisdiction over a defendant, it is said the defendant's affiliations with the forum State "in which suit is brought are so constant and pervasive 'as to render [the defendant] essentially at home in the forum State.'" Daimler AG v. Bauman, ___U.S.___, 134 S.Ct. 746, 751, 187 L.Ed.2d 624 (2014) (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, ___U.S. ___, 131 S.Ct. 2846, 2851, 180 L.Ed.2d 796 (2011)). Alternatively, "specific jurisdiction is viable only if the injury giving rise to the lawsuit occurred within or had some connection to the forum state." Dever, 380 F.3d at 1073 (citation omitted). For personal jurisdiction under a theory of specific jurisdiction to exist, therefore, the cause of action must arise or relate to the defendant's actions within the forum state. Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir. 1994).

Under either theory of personal jurisdiction, it is required that '"some act [be shown] by which the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws."' Dever, 380 F.3d at 1073 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). Upon concluding that a defendant has minimum contacts with the forum State, a court "may then consider 'whether the assertion of personal jurisdiction would comport with fair play and substantial justice.'" Id. (quoting Burger King Corp. v. Rudzewicz, 477 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)) (internal citation omitted).

Combining the foregoing, the Eighth Circuit has instructed its district courts to apply a five-factor test when assessing personal jurisdiction over an out-of-state defendant: '"(1) the nature and quality of [a defendant's] contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) [the] convenience of the parties.'" Id. at 1073-74 (quoting Burlington Indus., 97 F.3d at 1102). See Stanton v. St. Jude Medical, Inc., 340 F.3d 690, 694 (8th Cir. 2003) ("We apply a five factor test in analyzing the constitutional [due process] requirements needed for personal jurisdiction."); Pangaea, Inc. v. Flying Burrito LLC, 647 F.3d 741, 746 n. 4 (8th Cir. 2011) (reaffirming the five-factor test's viability but noting that it is not to be "mechanically applied"). The first three factors carry significant weight, while the final two are of less importance. Dever, 380 F.3d at 1074. The Eighth Circuit has further stated that the third factor is meant to draw a distinction between specific jurisdiction and general jurisdiction. Burlington Indus., 97 F.3d at 1102. Because of the interrelationship of the factors, the Eighth Circuit has regularly considered them, especially the first three factors, together. See Id. at 1102-03; Land-O-Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir. 1983); Dever, 380 F.3d at 1073-74; Guinness Import Co. v. Mark VII Distribs., Inc., 153 F.3d 607, 614 (8th Cir. 1998). In fact, the five factors "do not provide 'a slide rule by which fundamental fairness can be ascertained with mathematical precision[, ]'" Land-O-Nod, 708 F.2d at 1340 (quoting Toro Co. v. Ballas Liquidating Co., 572 F.2d 1267, 1269 (8th Cir. 1978)), and should not be mechanically applied. Pangaea, 647 F.3d at 764 n. 4. See Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 596 (8th Cir. 2011) (quoting Anderson v. Dassault Aviation, 361 F.3d 449, 452 (8th Cir. 2004)) ("To be sure, we have emphasized that determining whether personal jurisdiction exists in a given case 'involves applying principles of fairness and reasonableness to a distinct set of facts, and the determination is not readily amenable to rigid rules that can be applied across the entire spectrum of cases.'"). "No one factor is determinative, and the Court's decision is based on the totality of the circumstances." Marine Innovations Warranty Corp. v. American Marine Holdings, Inc., No. Civ. 03-4646JRTFLN, 2004 WL 234398, at *2 (D. Minn. Feb. 4, 2004) (citing Northup King Co. v. Compania Productora Semillas Algondoneras Selectas, S.A., 51 F.3d 1383, 1388 (8th Cir. 1995)). If the court has doubts as to its jurisdiction over the defendant, those should be resolved in favor of retaining jurisdiction. Id. (citations omitted). Ultimately, when applying these factors, the central inquiry should always remain the '"relationship among the defendant, the forum, and the litigation.'" Guinness, 153 F.3d at 614 (quoting Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977)).

There is no dispute that Block Diesel lacks the traditional types of contacts with South Dakota that would normally subject it to jurisdiction here. That is to say, Block Diesel is not a South Dakota business, has never done or applied to do business in South Dakota, and has no employees, agents, property, or other contacts in South Dakota. It is situations such as this that the United States Supreme Court has placed less emphasis on the territorial jurisdiction of each state and, instead, focused on the actions of the defendant and the corresponding impact on the forum State. As a result, two theories of specific jurisdiction have emerged: the "effects" test, Colder v.Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984); Walden v.Fiore, ___U.S. ___, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014), and the "stream of commerce" theory, J.Mclntyre Machinery, Ltd v.Nicastro, ___U.S. ___, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011); Asahi Metal Industry Co., Ltd v. Superior ...


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