JTV Mfg Inc v. Braketown USA Inc et al

Filing 44

MEMORANDUM OPINION and ORDER: Denying 34 Motion to Dismiss Third Party Complaint for Lack of Personal Jurisdiction: See text of Order for further information. Signed by Magistrate Judge Leonard T Strand on 04/08/15. (kfs)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
WESTERN DIVISION
JTV MANUFACTURING, INC.,
Plaintiff,

No. C14-4003-LTS

vs.
BRAKETOWN USA, INC. d/b/a MACTECH, and ERMAK USA, INC.,

MEMORANDUM OPINION AND
ORDER ON THIRD-PARTY
DEFENDANT’S MOTION TO
DISMISS

Defendants and Third-Party
Plaintiffs,
vs.
ANTIL S.p.A.,
Third-Party Defendant.
____________________
I.

INTRODUCTION

This case is before me on a motion (Doc. No. 34) by third-party defendant Antil
S.p.A. (Antil) pursuant to Federal Rule of Civil Procedure 12(b)(2) to dismiss the thirdparty complaint for lack of personal jurisdiction. The third-party plaintiffs, Braketown
USA, Inc. (Braketown), and Ermak USA, Inc. (Ermak), filed a resistance (Doc. No. 38)
and Antil filed a reply (Doc. No. 40). I heard oral arguments by telephone on March
17, 2015. Dana Oxley appeared for Antil, Jeff Wright appeared for Braketown and
Ermak and William Klinker appeared for plaintiff JTV Manufacturing, Inc. (JTV).1 The
motion is fully submitted and ready for decision.

1

JTV takes no position on Antil’s motion.

II.

PROCEDURAL HISTORY

JTV commenced this action against Braketown and Ermak on November 27, 2013,
by filing a petition (Doc. No. 4) in the Iowa District Court for O’Brien County. On
January 13, 2014, Ermak filed a notice (Doc. No. 1) of removal to this court on the basis
of diversity jurisdiction. Braketown consented to the removal. Doc. No. 1-2. JTV
then filed an amended complaint (Doc. No. 14) on February 10, 2014.
JTV alleges that it is an Iowa corporation with its principal place of business in
Sutherland, O’Brien County, Iowa. Doc. No. 14 at ¶ 1. It contends that Braketown
and Ermak are Illinois corporations, with Braketown being headquartered in Wisconsin
and Ermak being headquartered in Illinois.

Id. at ¶¶ 2-3. JTV alleges that Braketown

does business in Iowa as a sales agent for Ermak and that it has solicited business from
JTV in O’Brien County, Iowa, since 1999. Id. at ¶ 4.
JTV’s claims against Braketown and Ermak arise from JTV’s purchase of a fiber
laser cutting machine (the Machine) which consisted of both (a) an Ermaksan Laser Cutter
(the Cutter) and (b) an automated load and unload system (the Load System) manufactured
by Antil.

JTV alleges that it entered into a contract to purchase the Machine from

Braketown and Ermak in July 2011 and that the Machine was installed at JTV’s facility
in Sutherland, Iowa, on or about March 1, 2012. Id. at ¶¶ 8-12. According to JTV,
the Machine has never operated properly, despite repeated repair efforts by Ermak
employees.

Id. at ¶ 16. JTV asserts claims against Braketown and Ermak for breach

of contract, breach of express warranty, breach of the implied warranty of
merchantability and breach of the implied warranty of fitness for a particular purpose.
Id. at pp. 4-7.
Braketown and Ermak have filed answers (Doc. Nos. 26-27) in which they deny
liability to JTV and raise various defenses. On October 7, 2014, Braketown and Ermak
filed a third-party complaint (Doc. No. 28) against Antil. They allege that Antil is a
2

limited liability company organized under the laws of Italy that manufactures robotics
and automation equipment.

Doc. No. 28 at ¶ 4.

They further allege that Ermak

entered into a contract with Antil under which Antil agreed to supply the Load System
that Ermak would then sell to JTV as part of the Machine.

Id. at 23. Braketown and

Ermak contend that the Load System, as supplied by Antil, is the faulty component that
has prevented the Machine from operating properly at JTV’s facility. Id. at ¶¶ 19-21.
Braketown and Ermak assert claims against Antil for breach of contract, breach of the
implied warranty of merchantability and breach of the implied warranty of fitness for a
particular purpose.

Id. at pp. 4-7.

They seek entry of judgment against Antil “in

contribution for all sums that will be assessed against Third Party Plaintiffs, in favor of
the Plaintiff, JTV Manufacturing, Inc., if any, in such amount that would be
commensurate with the degree of misconduct attributable to the Third Party Defendant,
Antil S.p.A., in causing the aforementioned Plaintiff’s damages, and any such other and
further relief as this Court determines appropriate and just.”

Id. at pp. 6-7.

Antil filed its motion (Doc. No. 34) to dismiss the third-party complaint on
February 2, 2015. All parties, including Antil, have consented to have a United States
Magistrate Judge conduct all proceedings in this case, including trial, the entry of final
judgment and all post-trial proceedings, pursuant to 28 U.S.C. § 636(c). Doc. Nos. 30,
41. As such, this case has been referred to me by the Honorable Donald E. O’Brien,
Senior United States District Judge. Id.
III.

RELEVANT JURISDICTIONAL FACTS

The following facts, which for the most part are set forth in an affidavit (Doc. No.
34-2) supplied by an Antil representative, appear to be undisputed:
Antil is an Italian company that has nearly 50 employees, all of whom live and
work in or near Milan, Italy. As is the situation in this case, Antil typically sells its
3

products and services to machine constructors, who then sell the end products to their
own customers. Antil’s sale market is divided into two regions – Italy and the rest of
the world. It does about half of its business in Italy with most of the rest of its business
occurring in other European countries.
Antil has no offices or facilities in the United States. It does not own or lease
property in the United States. It does not maintain a telephone listing, mailing address,
employees, bank accounts or sales agents in the United States. Antil is not licensed to
do business in any state of the United States.

It pays no taxes to any governmental entity

in the United States and had never previously entered into a contract with any customer
or entity in the United States. Nor does it advertise or otherwise market itself in the
United States.

While Antil’s employees sometimes attend trade shows in various

locations around the world, they have never attended such an event in Iowa. Antil has
never attempted to do business with any entity or individual in Iowa. Before 2011, Antil
had sold one other product for installation in the United States.
Ermak is the United States sales representative of Ermaksan, a manufacturing
company based in Turkey. One of Ermaksan’s products is the Cutter that was sold to
JTV as part of the Machine. Antil developed a business relationship with Ermaksan
and, prior to 2011, made proposals to supply its equipment to Ermaksan for projects in
Europe. Antil became aware of Ermak because of Antil’s relationship with Ermaksan.
In 2011, Ermak asked Antil to provide a quotation for a Load System that Ermak
would then combine with an Ermaksan Cutter and sell to JTV. Antil submitted its offer
to Ermak on June 30, 2011, along with a document entitled “General Sales Conditions.”
When Antil decided to submit an offer, it knew that Ermak’s customer was located in
Iowa and that the Antil Load System would thus be installed in Iowa. Ermak issued a
written purchase order to Antil, based on Antil’s offer, on August 8, 2011.
provided a confirmation of the order in September 2011.
4

Antil

Before Antil submitted its offer, two JTV employees came to Italy and viewed an
Antil Load System that had been installed at another facility. No Antil employee visited
the United States with regard to the transaction until after sale of the Load System to
Ermak was complete. When the Load System was ready for delivery, Antil loaded it
into a shipping container provided by Ermak at Antil’s facility in Milan. The Load
System was then shipped from Antil’s facility on or about February 6, 2012.
Antil’s contract with Ermak provided that Antil would mount and connect the Load
System to the Cutter at JTV’s facility in Iowa and that Antil would provide a one-day
training course at JTV’s facility. And, in fact, Antil employees traveled to JTV’s facility
in March 2012 to install the Load System and provide training. Antil employees made
a second trip to JTV’s facility in Iowa in April 2012 because the Machine was not working
properly. An Antil technician made three additional visits to JTV’s facility between
June 2012 and October 2013 to provide service. Thus, Antil employees were present
in Iowa on five separate occasions in connection with the Machine.
Antil’s General Sales Conditions include a section entitled “Jurisdiction” stating
that Italian law applies to the contract and that the “exclusive jurisdiction for all possible
disputes arising on this contract is that of Milan.” As noted above, Antil included the
General Sales Conditions with its initial offer to Ermak.

Specifically, when Antil

submitted its offer to Ermak via email on June 30, 2011, the message included, as
attachments, both Antil’s offer and the General Sales Conditions. Ermak contends that
it had no knowledge of the General Sales Conditions and believed that all conditions of
Antil’s offer were contained within the offer itself. However, the first page of the offer
includes the following statement:
Attachment:

General Sales Conditions

Doc. No. 34-3 at 1.

5

IV.

APPLICABLE STANDARDS

The Rule 12(b)(2) analysis. Antil contends the third-party complaint must be
dismissed because it is not subject to personal jurisdiction within the state of Iowa.
“Personal jurisdiction over a defendant represents the power of a court to enter ‘a valid
judgment imposing a personal obligation or duty in favor of the plaintiff.’”

Viasystems,

Inc. v. EBM–Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 592–93 (8th Cir.
2011) (quoting Kulko v. Superior Court of Cal., 436 U.S. 84, 91 (1978)). Federal Rule
of Civil Procedure 12(b)(2) permits a pre-answer motion to dismiss for “lack of personal
jurisdiction.” Fed. R. Civ. P. 12(b)(2).
To properly allege personal jurisdiction, “a plaintiff ‘must state sufficient facts in
the complaint to support a reasonable inference that the defendant[ ] can be subjected to
jurisdiction within the state.’”

Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072

(8th Cir. 2004)), cert. denied, 543 U.S. 1147 (2005) (quoting Block Indus. v. DHJ
Indus., Inc., 495 F.2d 256, 259 (8th Cir. 1974)). In resisting a Rule 12(b)(2) motion,
the plaintiff has the burden of proving facts supporting such jurisdiction. Wells Dairy,
Inc. v. Food Movers Int’l, Inc., 607 F.3d 515, 518 (8th Cir.), cert. denied, 131 S. Ct.
472 (2010). The court may consider the allegations of the complaint along with any
affidavits and exhibits submitted by the parties.

Id.

The plaintiff’s burden, in the

absence of an evidentiary hearing, is to make a “minimal” prima facie showing of
personal jurisdiction. K–V Pharm. Co. v. Uriach & CIA, S.A., 648 F.3d 588, 592 (8th
Cir. 2011). The court “must view the evidence in the light most favorable to the plaintiff
and resolve all factual conflicts in its favor in deciding whether the plaintiff has made the
requisite showing.” Id.
In a diversity case, such as this, personal jurisdiction exists “only to the extent
permitted by the long-arm statute of the forum state and by the Due Process Clause.”
Dever, 380 F.3d at 1073 (internal quotation marks omitted).
6

Iowa Rule of Civil

Procedure 1.306 2 authorizes the exercise of personal jurisdiction to the full extent
allowed by the United States Constitution, meaning the court’s inquiry is limited to
whether the exercise of personal jurisdiction comports with due process.

Wells Dairy,

607 F.3d at 518 (citing Hammond v. Fla. Asset Fin. Corp., 695 N.W.2d 1, 5 (Iowa
2005)). Thus, the sole issue presented by Antil’s motion is whether its due process
rights would be violated by forcing it to defend Braketown’s and Ermak’s claims in this
court.
Due Process Standards.

In general, due process requires that a nonresident

defendant have at least “certain minimum contacts” with the forum state to support the
exercise of personal jurisdiction. Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945). Those contacts must be sufficient that requiring the defendant to litigate in the
forum state would not “offend traditional notions of fair play and substantial justice.”
Id. at 316 (internal quotation marks and citation omitted). They “must come about by
an action of the defendant purposefully directed toward the forum State.”

Asahi Metal

Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 112 (1987) (internal citations omitted).
This “‘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 due to “the ‘unilateral activity of another party or a third person.’” Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (citations omitted). If the defendant
made the deliberate choice to “engage[] in significant activities within a State,” or to
create “‘continuing obligations’ between himself and residents of the forum,” then “it is

2

Which provides, in relevant part:
Every corporation, individual, personal representative, partnership or association
that shall have the necessary minimum contact with the state of Iowa shall be
subject to the jurisdiction of the courts of this state.

I.R.C.P. 1.306.
7

presumptively not unreasonable to require him to submit to the burdens of litigation in
that forum as well.” Id. at 475-76 (citations omitted). Thus:
By requiring that individuals have “fair warning that a particular activity
may subject [them] to the jurisdiction of a foreign sovereign,” the Due
Process Clause “gives a degree of predictability to the legal system that
allows potential defendants to structure their primary conduct with some
minimum assurance as to where that conduct will and will not render them
liable to suit[.]”
Id. at 472-73 (1985) (citations omitted).
The Eighth Circuit Court of Appeals applies a five-factor test to determine whether
a defendant’s contacts with the forum state are sufficient to establish personal jurisdiction.
Myers v. Casino Queen, Inc., 689 F.3d 904, 911 (8th Cir. 2012). Those factors are:
(1) the nature and quality of the contacts with the forum state; (2) the quantity of those
contacts; (3) the relationship of those contacts with the cause of action; (4) the forum
state’s interest in providing a forum for its residents; and (5) the convenience or
inconvenience to the parties.

Id. (citing Precision Const. Co. v. J.A. Slattery Co., Inc.,

765 F.2d 114, 118 (8th Cir. 1985)). The first three factors are considered to be of
primary importance. Precision Const., 765 F.2d at 118.
Personal jurisdiction can be either general or specific. General jurisdiction arises
when a nonresident maintains “continuous and systematic” contacts with the forum state.
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984).
Under those circumstances, jurisdiction over the nonresident is appropriate even when
the claims at issue do not arise out of or relate to its activities in the forum state.

Id. at

414-15. Here, no party suggests that Antil has had such continuous and systematics
contacts with Iowa as to be subject to general jurisdiction.
Specific jurisdiction arises “when the defendant purposely directs its activities at
the forum state and the litigation ‘result[s] from injuries ... relating to [the defendant's]
activities [in the forum state.]’”

Myers, 689 F.3d at 912-13 (quoting Steinbuch v.
8

Cutler, 518 F.3d 580, 586 (8th Cir. 2008)).

Specific jurisdiction “requires a

relationship between the forum, the cause of action, and the defendant.

Id. at 912 (citing

Helicopteros Nacionales de Colombia, 466 U.S. at 414). The third factor of the fivefactor test “distinguishes between specific and general jurisdiction.”

Id. at 911 (citing

Johnson v. Arden, 614 F.3d 785, 794 (8th Cir. 2010)).
The Eighth Circuit has rejected the so-called “proximate cause” test for specific
jurisdiction, under which the exercise of jurisdiction is appropriate only if the defendant’s
contacts with the forum was the legal cause of the plaintiff’s injuries.

Id. at 912-13.

Instead, the third factor is satisfied so long as (a) the defendant purposely directed its
activities at the forum state and (b) the litigation results from injuries relating to the
defendant’s activities in the forum state.
V.

Id. (citation and quotation omitted).
DISCUSSION

Antil contends that it has not had sufficient purposeful contacts with the state of
Iowa to justify the exercise of specific jurisdiction in this case. It further alleges that
even if sufficient contacts existed, requiring it to defend this action in Iowa would violate
its due process rights because of the forum-selection clause contained in its General Sales
Conditions. I will address these arguments separately.
A.

Minimum Contacts
1.

The Five-Factor Test

The first factor, the nature and quality of Antil’s contacts with Iowa, weighs in
favor of exercising personal jurisdiction.

Antil did not make contact with Iowa by

accident. It chose to enter into a contract with Ermak with full knowledge that Antil’s
equipment (the Load System) would be installed in Iowa. Nor were the contacts minor
or incidental, such as the exchange of a few phone calls or email messages with an Iowa
9

resident. Instead, Antil made a contractual promise to Ermak that it would send its
employees to Iowa to install the equipment at JTV’s facility and provide training to JTV’s
employees. Antil also provided a written warranty under which it promised to repair or
replace any defective parts during the first 12 months or 2000 hours of operation. Doc.
No. 34-6 at 3. The terms of the warranty expressly contemplated that Antil would send
employees to the site of the installation as necessary to fulfill Antil’s obligations.3 Id.
As noted above, Antil sent its employees to Iowa on five separate occasions in furtherance
of Antil’s contractual obligations to Ermak.

Antil’s contacts with Iowa were neither

unintentional nor incidental.
The second factor, the quantity of the contacts, weighs in Antil’s favor. It is
undisputed that Antil does not have a long history of systematic contacts with Iowa.
Indeed, it is clear that this particular transaction accounts for all of Antil’s contacts with
Iowa or its residents.
The third factor, the relationship of Antil’s contacts with the cause of action,
weighs heavily in favor of exercising jurisdiction. JTV has sued Braketown and Ermak
because, it claims, the Machine does not work as promised. Antil, via its contract with
Ermak, supplied a major component of the Machine. Braketown and Ermak argue that
if the Machine does not operate as anticipated, the fault lies with Antil’s Load System.
And, of course, all of Antil’s contacts with Iowa arise from its installation and servicing
of the Load System. Antil’s contacts with Iowa relate directly to the cause of action.
The fourth factor, Iowa’s interest in providing a forum for its residents, weighs in
Antil’s favor. JTV, the only Iowa resident that is a party to this lawsuit, has no claims
against Antil. This court will provide a forum for JTV’s claims against Braketown and
Ermak regardless of whether Antil is a party. Iowa has little or no interest in providing

3

Specifically: “Costs of travel and accommodation for Antil S.p.A. staff relating to benefits
covered by this warranty, if due, shall be charged by Antil S.p.A.” Doc. No. 34-6 at 3.
10

a forum for three nonresidents (Braketown, Ermak and Antil) to resolve their contractual
dispute.
The final factor, convenience or inconvenience to the parties, weighs in favor of
exercising jurisdiction.

JTV seeks damages from Braketown and Ermak based on

allegations that the Machine does not operate as warranted.

Braketown and Ermak

contend that Antil’s Load System is the cause of any alleged failures. It is clearly more
convenient to all of the parties except Antil to have all of these related claims resolved in
one action. The alternative would be two separate proceedings in two different forums,
with the witnesses and documentary evidence being largely the same in both.
In short, the application of the Eighth Circuit’s five-factor test suggests a finding
that Antil is subject to this court’s personal jurisdiction. This is especially true in light
of the fact that the first three factors are deemed to be of primary importance.

Precision

Const., 765 F.2d at 118. Antil, however, argues that its contacts with Iowa are not
sufficient because (a) the claims against it are contract claims, not tort claims, and (b) it
did not purposely avail itself of the privilege of conducting activities within Iowa. I will
address these additional considerations below.
2.

Other considerations

Antil contends that Braketown and Ermak improperly rely on tort cases to support
the exercise of personal jurisdiction over it.

Antil argues that Iowa’s interest in

adjudicating a tort claim (for example, injuries suffered by an Iowa resident due to a
defect in the Load System) would be far greater than Iowa’s interest in adjudicating a
contribution or indemnity claim by one nonresident against another.

While that is

undoubtedly true, it is hardly dispositive. I have already concluded that the fourth factor
(Iowa’s interest in providing a forum for its residents) weighs in Antil’s favor because

11

the third-party complaint presents a contract dispute between nonresidents. Antil’s “tort
versus contract” theory does not change the outcome.
Antil also argues, despite seemingly undisputed evidence to the contrary, that it
did not purposefully directs its activities toward Iowa. According to Antil, it simply
entered into a contract with an Illinois corporation to build equipment in Italy: “The
contract provided for delivery to Ermak USA in Milan, Italy, and Ermak USA in fact
provided the shipping container at Anti’s Milan facilities and arranged for shipping from
Italy.” Doc. No. 34-1. While this statement is true as far as it goes, it hardly tells the
entire story.

As noted above, Antil made contractual promises to install the Load

System in Iowa, to provide training to Ermak’s customer in Iowa and to provide necessary
warranty service in Iowa.

As a result of these contractual promises, Antil sent its

employees to JTV’s facilities in Iowa on five separate occasions. Antil’s argument that
it did nothing more than supply equipment to Ermak in Milan, Italy, ignores a significant
portion of the contract between Antil and Ermak.
As noted earlier, the Supreme Court has explained that the purposeful availment
requirement provides “a degree of predictability to the legal system that allows potential
defendants to structure their primary conduct with some minimum assurance as to where
that conduct will and will not render them liable to suit.”

Burger King, 471 U.S. at

472-73. It is undisputed that Antil not only knew its product was destined for installation
in Iowa, but bargained for contract terms under which it agreed to provide various
services to Ermak’s customer in Iowa. Antil’s contacts with Iowa were not random or
fortuitous. Antil made a business decision to enter into a transaction that required it to
provide services to an Iowa resident, in Iowa. Antil purposefully directed its activities
toward Iowa. Unless the forum-selection clause (which I will discuss below) compels a
different outcome, exercising personal jurisdiction over Antil is not inconsistent with
principles of due process or fundamental fairness.
12

B.

The Forum-Selection Clause
Antil’s General Sales Conditions provide that the “exclusive jurisdiction” for

disputes arising from the contract is that of Milan, Italy. Doc. No. 34-6 at 4. Based
on this clause, Antil argues that even if personal jurisdiction would otherwise exist, the
exercise of that jurisdiction would violate traditional notions of fair play and substantial
justice. In response, Braketown and Ermak deny that the clause became part of the
parties’ contract and, in any event, contend that it has no impact on the jurisdictional
analysis.
For purposes of Antil’s motion, I will assume that the clause is part of the contract
between Antil and Ermak. Antil has supplied evidence indicating that it included its
General Sales Conditions as an attachment to its offer and there is no evidence that Ermak
objected to its inclusion when Ermak accepted the offer. While this finding is not final,
I conclude that at this stage of the case Antil has made a sufficient showing that the forumselection clause was part of its contract with Ermak.
The question thus becomes what effect, if any, a forum-selection clause that
specifies jurisdiction elsewhere has on the personal jurisdiction analysis. Antil relies
primarily on D’Almeida v. Stork Brabant B.V., 71 F.3d 50 (1st Cir. 1995), cert. denied,
517 U.S. 1168 (1996), a case that is similar in many significant respects. According to
a concurring opinion, the undisputed facts were as follows:
Stork and Gerritse signed a contract in the Netherlands under which
Gerritse would build machines exclusively for Stork. Both companies are
headquartered in the Netherlands. Stork is a large international corporation
that does business all over the world. Under the contract Stork agreed to
purchase the machines manufactured by Gerritse and sell them on the
international market. When the machine was finished to Stork's satisfaction,
Stork supplied Gerritse with a mailing label and arranged to transport the
machine to the buyer. Stork controlled all marketing, sales, and
transportation of the machines.

13

Gerritse had no contacts with Massachusetts. It did know from the order
form furnished it by Stork that the machine was going to Massachusetts. It
was delivered to Shawmut Mills[, Massachusetts]. Subsequent to the
installation of the machine, Roland Dekens, an engineer-employee of
Gerritse, while on a trip to the United States as an agent of Stork, inspected
the machine at Shawmut Mills and submitted a report to both Stork and
Gerritse.
Id. at 52 (concurring opinion). In addition, the contract between Stork and Gerritse
designated Holland as the forum for any litigation.

Id. at 51. In a per curiam opinion

that relied heavily on Asahi, the First Circuit Court of Appeals concluded that a
“minimum contacts” analysis was unnecessary because the exercise of jurisdiction over
Gerritse would not be consistent with traditional notices of fair play and substantial
justice. Id. The court explained:
The sole cause of action against Gerritse is an action by Stork for
indemnification and contribution. The parties must reasonably have
expected that any litigation between them would not take place in
Massachusetts; indeed, their contract included a forum selection clause
designating Holland as the locus of litigation. More important,
Massachusetts' interest in the indemnification and contribution dispute are
extremely limited, the compensation of its citizen not being at stake.
Id. The concurring judge agreed with the outcome but did not agree with the majority’s
decision to skip the “minimum contacts” analysis, concluding: “To apply the ‘fair play
and substantial justice’ doctrine without any ‘minimum contacts’ analysis ignores
established law and flies in the teeth of binding precedent.”

Id. at 52.

Unfortunately, Braketown and Ermak elected to ignore D’Almeida. They argue
as if Antil raised the forum-selection clause as an objection to venue rather than to
personal jurisdiction.

Doc. No. 38 at 8-11.

That is clearly not the case.

Antil’s

motion attacks personal jurisdiction, not venue, and plainly relies on the forum-selection
clause to argue, in accord with D’Almeida, that forcing it to defend itself in Iowa would
14

be inconsistent with fair play and substantial justice. Doc. No. 34-1 at 14-16. I must
consider the effect of D’Almeida with no guidance from Braketown and Ermak.
D’Almeida has been cited by courts only 10 times in the 20 years since it was
decided – and never by the First Circuit. As Antil notes, the District of Massachusetts
applied D’Almeida (which was binding precedent) to hold that a minimum contacts
analysis was unnecessary, as the exercise of personal jurisdiction over an Italian entity
would have been “inconsistent with the precepts of fair play and substantial justice.”
New London County Mut. Ins. Co. v. United Pet Group, Inc., 881 F. Supp. 2d 242, 244
(D. Mass. 2012).

In that case, an insurer filed a products liability action in

Massachusetts against a foreign entity that sold an allegedly-defective aquarium heater.
The defendant then filed a third-party complaint seeking contribution and indemnification
from the Italian manufacturer.

Id. at 243. The contract between the defendant and the

Italian company included a clause designating London, England, as the forum for any
dispute arising out of the contractual relationship.

Id. at 244.

In addressing the third-party defendant’s motion to dismiss for lack of personal
jurisdiction, the court stated:
The First Circuit employs a tripartite analysis to determine whether the
exercise of specific personal jurisdiction comports with the Constitution: 1)
whether the claims arise out of or are related to the defendant's in-state
activities, 2) whether the defendant has purposefully availed itself of the
laws of the forum state and 3) whether the exercise of jurisdiction comports
with fair play and substantial justice.
Id. at 243 (citing Phillips v. Prairie Eye Center, 530 F.3d 22, 27 (1st Cir. 2008)). In
light of D’Almeida, the court found it unnecessary to consider the first two prongs of the
analysis, as the third prong was dispositive. Id. at 243-44. The court concluded that
because of the forum-selection clause, the parties could not have expected that any
litigation between them would occur in Massachusetts.

Id. at 244. Thus, the court

declined to exercise jurisdiction over the third-party defendant.
15

Id.

Antil argues as if D’Almeida and New London recognize a forum-selection clause
exception to the specific jurisdiction analysis; i.e., even if specific jurisdiction would
otherwise exist, it will not be exercised in the face of a contractual provision designating
a different forum.

I disagree.

Indeed, while both opinions may suggest such an

exception, the reality is that specific jurisdiction was plainly lacking over the third-party
defendants in both cases.
Both courts invoked Asahi as dictating a finding of no personal jurisdiction.
D’Almeida, 71 F.3d at 51; New London, 881 F. Supp. 2d at 245. Asahi, of course, is
the Supreme Court’s seminal “stream of commerce” case, teaching that the mere
placement of goods into commerce, without more, does not constitute conduct purposely
directed toward any state in which those goods ultimately land.

Asahi, 480 U.S. at 112.

The case started as a products liability action arising out of the alleged failure of a
motorcycle tire in California. One defendant, Cheng Shin, was a Taiwanese company
that manufactured the tire tube. Id. at 106. Cheng Shin impleaded Asahi, a Japanese
manufacturer of tire valve assemblies that sold those assemblies to various tire tube
manufacturers, including Cheng Shin.
Cheng Shin and Asahi.

Id. at 107.

Id.

Notably, no contract existed between

Thus, there was no forum-selection clause to

consider as part of the jurisdictional analysis.
In determining whether Asahi was subject to personal jurisdiction in California,
the Supreme Court explained:
The placement of a product into the stream of commerce, without more, is
not an act of the defendant purposefully directed toward the forum State.
Additional conduct of the defendant may indicate an intent or purpose to
serve the market in the forum State, for example, designing the product for
the market in the forum State, advertising in the forum State, establishing
channels for providing regular advice to customers in the forum State, or
marketing the product through a distributor who has agreed to serve as the
sales agent in the forum State. But a defendant's awareness that the stream
of commerce may or will sweep the product into the forum State does not
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convert the mere act of placing the product into the stream into an act
purposefully directed toward the forum State.
Id. at 112. Because there was no evidence that Asahi did anything other than place its
products into the stream of commerce, the Court concluded that “the facts of this case do
not establish minimum contacts such that the exercise of personal jurisdiction is consistent
with fair play and substantial justice.” Id. at 116.
As in Asahi, it appears that the third-party defendants in D’Almeida and New
London lacked knowledge that their products were destined for the forum state.4 Thus,
it is understandable that those courts applied Asahi as controlling authority. In both
cases, a foreign entity sold its goods to another foreign entity without purposely directing
any activity towards the forum state. The forum-selection clauses in both cases were
hardly dispositive. Pursuant to Asahi, minimum contacts simply did not exist.
Here, for the reasons set forth in Section V(A), supra, the situation is far different.
Antil did not simply sell its Load System to a distributor that later, by pure chance,
happened to sell it to a customer in Iowa. Antil not only knew its Load System was
destined for installation in Iowa, it entered into a contract through which it promised to
install the system in Iowa, train the end user in Iowa and provide ongoing warranty
service in Iowa. It then sent its employees to Iowa on five separate occasions pursuant
to its contractual obligations. Antil made the business decision to direct its activities
toward Iowa.

As such, it is subject to personal jurisdiction in Iowa regardless of

whether the forum-selection clause became part of its contract with Ermak.
This does not necessarily mean the forum-selection clause is irrelevant. It could
be relevant, for example, if Antil moved to dismiss on grounds of forum non conveniens.
4

The concurrence in D’Almeida states that there was no evidence the third-party defendant was
advised that its product would be delivered to Massachusetts. 71 F.3d at 52. In New London,
the court stated that the relevant facts were “strikingly similar” to those in Asahi and
“indistinguishable” from those in D’Almeida. 881 F. Supp. 2d at 244.
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See, e.g., Atlantic Marine Construction Co. v. U.S. District Court for the Western
District of Texas, 134 S. Ct. 568, 580 (2013) (holding that “the appropriate way to
enforce a forum-selection clause pointing to a state or foreign forum is through the
doctrine of forum non conveniens”). Here, however, Antil seeks dismissal based solely
on an alleged lack of personal jurisdiction pursuant to Rule 12(b)(2). Doc. No. 34.
Because Braketown and Ermak have made a prima facie showing of specific jurisdiction,
the motion must be denied.
VI.

CONCLUSION

For the reasons set forth herein, Antil’s motion (Doc. No. 34) to dismiss for lack
of personal jurisdiction is denied.

IT IS SO ORDERED.
DATED this 8th day of April, 2015.

________________________________
LEONARD T. STRAND
UNITED STATES MAGISTRATE JUDGE

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