United States District Court, D. South Dakota, Southern Division
OPINION AND ORDER DENYING MOTION TO DISMISS
ROBERTO A. LANGE UNITED STATES DISTRICT JUDGE
Lewis & Clark Regional Water System, Inc. (Lewis &
Clark) sued Defendant/Third-Party Plaintiff Carstensen
Contracting, Inc. (Carstensen), alleging breach of contract.
Doc. 1-1. Carstensen filed a third-party action against
Third-Party Defendant Ameron Water Transmission Group, LLC
(Ameron), alleging breach of contract, breach of warranty,
unjust enrichment, negligence, contractual indemnity, and
legal contribution and indemnity. Doc. 7. Ameron initially
filed a motion to transfer venue to Minnesota under 28 U.S.C.
§ 1404(a), Doc. 13, which this Court denied, Doc. 42. On
the day before the hearing on the motion to transfer venue,
Ameron filed a Motion to Dismiss Claims of Third-Party
Plaintiff Carstensen for Lack of Personal Jurisdiction, Doc.
38, which Lewis & Clark and Carstensen opposed, Docs. 46,
49. For the reasons stated below, Ameron's Motion to
Dismiss Claims of Third-Party Plaintiff Carstensen is denied
at this time.
Facts Pertinent to Motion to Dismiss 
action concerns part of a massive multistate treated water
pipeline system (the System) to bring potable water from the
Missouri River to communities in eastern South Dakota,
southwest Minnesota, and northwest Iowa. Doc. 1 at 1; Doc. 10
at ¶ 7. Lewis & Clark started building the System in
2003, and, when complete, the System will span over 330 miles
of total pipeline. Doc. 17-1 at ¶ 13. Lewis & Clark
is a South Dakota nonprofit 501(c)(4) corporation with its
principal place of business in Tea, South Dakota. Doc. 17-1
at ¶ 3. Lewis & Clark's executive and
administrative staff work in South Dakota. Doc. 17 at ¶
5. The System is funded by federal, state, and local monies.
Doc. 17-1 at ¶ 15.
assist with the System, Lewis & Clark retained Banner
Associates (Banner), an engineering firm headquartered in
Sioux Falls, South Dakota. Doc. 17 at ¶ 6; Doc. 17-3.
Lewis & Clark contracted with Carstensen, a Minnesota
corporation with its principal place of business in the
southwest Minnesota town of Pipestone, Doc. 1 at ¶ 10,
to install approximately ten miles of pipeline for the
System, roughly between Magnolia and Adrian, Minnesota (the
Project). Doc. 10 at ¶ 6. Specifically, the
contract calls for Carstensen to install twenty-inch diameter
steel pipe with a polyurethane exterior coating exhibiting a
minimum adhesion strength of 1, 750 pounds per square inch
(psi) post-installation and 2, 500 psi pre-installation. Doc.
1-1 at 5.
perform the contract with Lewis & Clark, Carstensen
issued a Purchase Order to Ameron to supply the pipes for the
Project, which contains detailed specifications for the
ordered pipes. Doc. 10-2. After the bid for the Project was
awarded, an Ameron representative traveled to South Dakota
and met with, among others, Senior Project Manager Scott
Vander Meulen, the Banner engineer on the Project, over
dinner in Tea, South Dakota, in part to discuss the Project.
Doc. 50 at ¶ 3. Thereafter, Ameron supplied the pipes
for the Project. Doc. 16 at 2.
construction, Ameron representatives had numerous phone
calls, email contacts, and other communications with Banner.
Ameron representatives visited the Project site multiple
times. Doc. 50 at ¶ 5. On those occasions, Ameron
representatives would travel to South Dakota to meet Banner
representatives there, and then would travel to the Project
site just across the border in Minnesota. Doc. 50 at ¶
5. At the end of the day, Ameron representatives would return
to South Dakota and typically would stay overnight there.
Doc. 50 at ¶ 5. While outside South Dakota, Ameron
participated in 29 separate conference calls with Banner and
sent a substantial number of emails regarding the
Project. Doc. 50 at ¶¶ 6-7.
defects with the coating of the Ameron-supplied pipes became
an issue. Doc. 16 at 2. On October 5, 2017, two Ameron
employees-Troy Parrack and David Escamilla- attended a lengthy
meeting in Sioux Falls, South Dakota, at Banner's office
to discuss the problems and potential solutions for the
Project with Lewis & Clark. Doc. 50 at ¶ 3; Doc. 51
at ¶ 4. On March 28, 2018, Banner, on behalf of Lewis
& Clark, notified Carstensen that the pipes were being
rejected because of defective coating. Doc. 17-3. Lewis &
Clark believes that about nine of the ten miles of pipes on
the Project must be replaced. Doc. 16 at 2. Carstensen
maintains that the alleged failure of the pipes to meet the
coating specifications is due to manufacturing problems in
Mexico encountered by Ameron. Doc. 1-1 at ¶7.
is incorporated in Delaware with its principal place of
business in Rancho Cucamonga, California. Doc. 39-1 at
¶¶ 3-4. Ameron does not maintain an office, bank
account, telephone number, or post office box in South
Dakota, nor does it employ anyone in South Dakota. Doc. 39-1
at ¶¶ 9-10. Prior to the Project at issue in this
case, Ameron had previous contacts with South Dakota. Ameron
attended the bid opening at Lewis & Clark's office in
Tea, South Dakota, for one of the System's Minnesota
segments preceding the Project. Doc. 51 at ¶ 3. Sometime
during Ameron and Lewis & Clark's dealings, Ameron
sent Lewis & Clark three sample pipes of different sizes
affixed with the Ameron logo to display in Lewis &
Clark's South Dakota facilities. Doc. 51 at ¶ 2;
Doc. 51-1. Additionally, from March 2017 through April 2017,
Ameron delivered product to Eagle Butte, South Dakota, for an
entirely different job. Doc. 39-1 at ¶ 11. In 2017,
Ameron's sales in South Dakota were $1.6 million of its
$57 million in total sales. Doc. 39-1 at ¶¶ 13-14.
17, 2018, Lewis & Clark commenced this action. Doc. 1-1
at 1. Lewis & Clark seeks to recover: (a) the expense to
remove and replace the allegedly defective pipe; (b)
liquidated damages totaling $1, 350 per day from November 17,
2017, to the date the project is substantially complete; and
(c) consequential damages. Doc. 1-1 at ¶¶ 8-10.
Carstensen filed a third-party action against Third-Party
Defendant Ameron. Ameron filed a Motion to Transfer Venue to
the District of Minnesota under 28 U.S.C. § 1404(a),
Doc. 13, which Lewis & Clark and Carstensen opposed,
Docs. 16, 40. This Court denied Ameron's § 1404(a)
Motion to Transfer Venue. Doc. 42.
motion to dismiss under Rule 12(b)(2) argues that there is no
personal jurisdiction over Ameron in the District of South
Dakota. Docs. 38, 39. The facts used to contest Ameron's
motion come primarily from two affidavits and three exhibits
filed by Lewis & Clark. Docs. 50, 51. Lewis & Clark
and Carstensen argue that Ameron waived any personal
jurisdiction defense argument by not raising the defense
alongside the previous 28 U.S.C. § 1404(a) motion to
transfer for inconvenient forum, or, alternatively, Ameron
has sufficient contacts with South Dakota for this Court to
exercise personal jurisdiction over it. Docs. 46, 49. This
Court first considers the waiver argument to determine
whether it is necessary to address the question of personal
jurisdiction over Ameron in South Dakota.
Waiver of Personal Jurisdiction
& Clark and Carstensen argue that Ameron waived any
personal jurisdiction argument under Rule 12(b)(2) by not
raising the defense with its earlier-filed motion to transfer
venue under 28 U.S.C. § 1404(a). Doc. 46 at 2-3; Doc. 49
at 3-5. The requirement that a court have personal
jurisdiction over the parties is a due process right that in
fact may be waived either explicitly or implicitly. See
Ins. Corp. of Ir. v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 703-05 (1982); E. Coast Test
Prep LLC v. Russ, Civil No. 15-3705, 2018 WL 3795942, *4
(D. Minn. Aug. 9, 2018), appeal docketed. No.
18-3197 (8th Cir. Oct. 15, 2018) ("Although 'waiver
is ordinarily an intentional relinquishment or abandonment of
a known right or privilege,' Johnson v. Zerbst304 U.S. 458, 464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938), a
personal-jurisdictional defense may be unintentionally waived
by failing to raise it in a Rule 12 motion or responsive