Layne Christensen Company v. Mill Man Steel, Inc.
Filing
45
ORDER denying Defendant Lincoln Manufacturing, Inc's 27 Motion to Dismiss for Lack of Personal Jurisdiction by Judge Robert E. Blackburn on 12/7/2012. (klyon, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Case No. 12-cv-00519-REB-KLM
MILL MAN STEEL, INC., a Colorado corporation,
Plaintiff,
v.
LINCOLN MANUFACTURING, INC., a Texas corporation,
Defendant.
ORDER DENYING DEFENDANT LINCOLN MANUFACTURING, INC.’S
MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION
Blackburn, J.
The matter before me is Third-Party Defendant[1] Lincoln Manufacturing,
Inc.’s Motion To Dismiss for Lack of Personal Jurisdiction [#27],2 filed May 31,
2012. I deny the motion.
I. JURISDICTION
I putatively have subject matter jurisdiction of this action pursuant to 28 U.S.C. §
1332 (diversity of citizenship).
1
Defendant was previously designated as a third-party defendant. This case was recaptioned
and the parties realigned following a settlement between the original plaintiff and Mill Man Steel, Inc.
(See Order of Dismissal of Plaintiff Layne Christensen Company’s Claims Against Defendant Mill
Man Steel, Inc. [#43], filed July 23, 2012.)
2
“[#27]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s electronic case filing and management system (CM/ECF). I use this
convention throughout this order.
II. STANDARD OF REVIEW
Defendant moves to dismiss plaintiff’s claims on the ground that defendant does
not have sufficient minimum contacts with Colorado to warrant the exercise of personal
jurisdiction over it in this forum. The assumption of personal jurisdiction over a nonresident defendant in a case based on diversity of citizenship involves a two-step
inquiry. First, the defendant must be amenable to service of process under the forum
state's long-arm statute. See Wenz v. Memery Crystal, 55 F.3d 1503, 1056-07(10th
Cir. 1995); Dart International, Inc. v. Interactive Target Systems, Inc., 877 F.Supp.
541, 543 (D. Colo. 1995). Second, the exercise of jurisdiction must comport with due
process. Wenz, 55 F.3d at 1507; Custom Vinyl Compounding Inc. v. Bushart &
Associates, Inc., 810 F.Supp. 285, 287 (D. Colo. 1992). Because the Colorado longarm statute extends personal jurisdiction within the state as far as the federal
constitutional requirements of due process permit, Keefe v. Kirschenbaum &
Kirschenbaum, P.C., 40 P.3d 1267, 1270 (Colo. 2002), the analysis collapses into a
single inquiry as to whether the requirements of due process are satisfied.
Due process for jurisdictional purposes consists of two elements. First, the
defendant must have sufficient "minimum contacts" with the forum state. International
Shoe Co. v. State of Washington, Office of Unemployment Compensation &
Placement, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); Kuenzle v.
HTM Sport-Und Freizeitgeräte AG, 102 F.3d 453, 455 (10th Cir. 1996). "Minimum
contacts" may be analyzed in terms of specific jurisdiction or general jurisdiction.
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct.
2
1868, 1872, 80 L.Ed.2d 404 (1984); Trierweiler v. Croxton & Trench Holding Corp.,
90 F.3d 1523, 1532 (10th Cir. 1996). Specific jurisdiction exists when the defendant’s
contacts with the forum state arise from, or are directly related to, the plaintiff’s cause of
action. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85
L.Ed.2d 528 (1985); Kuenzle, 102 F.3d at 455. General jurisdiction is proper when the
defendant has other "continuous and systematic" contacts with the forum, even if those
contacts are unrelated to the pending litigation. Helicopteros Nacionales de
Columbia, 104 S.Ct. at 1872; Trierweiler, 90 F.3d at 1533.
Second, if sufficient minimum contacts exist, I then must determine whether the
exercise of personal jurisdiction over the non-resident defendant “would comport with
‘fair play and substantial justice.’” Burger King Corp., 105 S.Ct. at 2184. Stated
differently, I must determine whether assuming personal jurisdiction over the defendant
is “‘reasonable’ in light of the circumstances surrounding the case.” OMI Holdings, Inc.
v. Royal Insurance Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). Factors
relevant to that analysis include
(1) the burden on the defendant, (2) the forum state's
interest in resolving the dispute, (3) the plaintiff's interest in
receiving convenient and effective relief, (4) the interstate
judicial system's interest in obtaining the most efficient
resolution of controversies, and (5) the shared interest of the
several states in furthering fundamental social policies.
Trujillo v. Williams, 465 F.3d 1210, 1221 (10th Cir. 2006) (quoting Pro Axess, Inc. v.
Orlux Distribution, Inc., 428 F.3d 1270, 1279-80 (10th Cir. 2005)). “[T]he weaker the
plaintiff's showing on minimum contacts, the less a defendant need show in terms of
unreasonableness to defeat jurisdiction.” Id. (quoting Pro Axess, 428 F.3d at 1280).
3
I have discretion to resolve the motion on affidavits and other written material.
Behagen v. Amateur Basketball Association, 744 F.2d 731, 733 (10th Cir. 1984),
cert. denied, 105 S.Ct. 1879 (1985). Plaintiff has the burden to establish a prima facie
case of personal jurisdiction. Id. I must accept the well-pleaded allegations of the
complaint as true. Wenz, 55 F.3d at 1505; Behagen, 744 F.2d at 733. However,
plaintiff has “the duty to support jurisdictional allegations in a complaint by competent
proof of the supporting facts if the jurisdictional allegations are challenged by an
appropriate pleading." Pytlik v. Professional Resources, Ltd., 887 F.2d 1371, 1376
(10th Cir. 1989).
III. ANALYSIS
This lawsuit involves a series of contracts related to the construction of a series
of wells for the U.S. military in Afghanistan. Layne Christensen Company, the original
plaintiff in this case (see supra note 1), contracted with DynCorp International, Inc., to
construct the wells. It then submitted a purchase order to plaintiff for lengths of pipe
with welded collars for the casings of the wells. Plaintiff, in turn, submitted a purchase
order to defendant to supply the pipe collars and weld the collars to the pipe provided by
plaintiff. When the welds between the collars and the pipe allegedly failed during
construction of the wells, this lawsuit followed.
Defendant is a Texas corporation, with facilities in Texas and Ohio. It has no
offices, agents, or representatives in the state of Colorado, did not visit the state of
Colorado in connection with the transaction made the basis of this suit, and completed
all the work for the project at one of its Texas facilities. The completed products were
4
not shipped to Colorado, but instead, were sent directly to a local airport for shipment
overseas. Given these facts, defendant alleges that it lacks minimum contacts with this
forum sufficient to warrant the assumption of personal jurisdiction over it by this court.
I disagree. Contrary to the picture defendant attempts to paint by its motion, the
purchase order in this case was not sui generis. Instead, it was submitted pursuant to a
ten-year Manufacturing Agreement between the parties, which agreement had been in
effect since 2007. Under that contract, plaintiff transferred to defendant certain
proprietary information relating to manufactured products in plaintiff’s fields of expertise
and agreed to permit defendant a reasonable opportunity to manufacture all products
related to those fields. Putting aside the question whether defendant has the type of
continuous and systematic contacts with Colorado that would authorize the assumption
of general jurisdiction over defendant in this state, see Helicopteros Nacionales de
Colombia S.A., 104 S.Ct. at 1873, it is clear that this contract creates specific
jurisdiction over defendant in this forum.
A federal court may assume specific jurisdiction over a non-resident defendant
which "’purposefully avails itself of the privilege of conducting activities within the forum
State, thus invoking the benefits and protections of its laws.’" Benally v. Amon Carter
Museum of Western Art, 858 F.2d 618, 625 (10th Cir. 1988) (quoting Hanson v.
Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958)). The
purposeful availment requirement "ensures that a defendant will not be haled into a
jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the
unilateral activity of another party or a third person.” Id. (quoting Burger King Corp.,
5
105 S.Ct. at 2183) (internal citations and quotation marks omitted). The contacts with
the forum state must be such that "it is foreseeable that the defendant should
reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).
Of course, merely entering into a contract with a Colorado resident is insufficient
in itself to confer specific jurisdiction in this forum. See SGI Air Holdings II LLC v.
Novartis International, 192 F.Supp.2d 1195, 1202 (D. Colo. 2002). A broader picture
of the parties’ contractual relationship is necessary, and “relevant factors for assessing
minimum contacts include prior negotiations and contemplated future consequences,
along with the terms of the contract and the parties' actual course of dealing." Benton
v. Cameco Corp., 375 F.3d 1070, 1077 (10th Cir. 2004), cert. denied, 125 S.Ct. 1826
(2005) (citation and internal quotation marks omitted).
These considerations plainly point to the propriety of the assumption of personal
jurisdiction over defendant in Colorado. The manufacturing agreement contemplated a
long-term, ongoing relationship between the parties. Plaintiff provided defendant with
proprietary information and gave defendant priority in manufacturing products related to
that information. Under the contract, the parties engaged in 981 separate transactions
totaling in excess of $6 million between 2007 and 2012. The fact that these figures
represent but a small percentage of defendant’s total business is irrelevant. The law
requires only that the contracts be substantial in relation to this plaintiff and these facts.
Defendant’s contacts with plaintiff and this forum are not “random, fortuitous, or
attenuated,” Burger King Corp., 105 S.Ct. at 2183, making the assumption of
6
jurisdiction in this forum appropriate.
Further, and relatedly, I find that it would not contravene traditional notions of fair
play and substantial justice to subject defendant to personal jurisdiction in Colorado. Id.
at 2184. Defendant presents neither argument nor evidence on this prong of the test,
and thus there is nothing to suggest that the burden on defendant of litigating in this
forum is more than marginal. AST Sports Science, Inc. v. CLF Distribution Ltd., 514
F.3d 1054, 1061 (10th Cir. 2008) (noting that “modern transportation and
communications have made it much less burdensome for a party sued to defend himself
in a State where he engages in economic activity”) (citation and internal quotation
marks omitted). None of the other considerations relevant to the inquiry clearly indicate
that it would be unreasonable to assume personal jurisdiction over defendant in this
forum. See Trujillo, 465 F.3d at 1221; see also OMI Holdings, Inc., 149 F.3d at 1091.
IV. ORDERS
THEREFORE, IT IS ORDERED that Third-Party Defendant Lincoln
Manufacturing, Inc.’s Motion To Dismiss for Lack of Personal Jurisdiction [#27],
filed May 31, 2012, is DENIED.
Dated December 7, 2012, at Denver, Colorado.
BY THE COURT:
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?