McGill et al v. Conwed Corporation
ORDER granting 8 Motion to Dismiss/General; denying 18 Motion to Remand to State Court. This case is dismissed without prejudice. (Written Opinion) Signed by Judge Susan Richard Nelson on 10/10/2017. (SMD)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
MICHAEL P. MCGILL AND TATYANA
BOBROVA, as husband and wife,
Civil No. 17-01047 (SRN/HB)
CONWED CORPORATION and its
Michael S. Polk, Michael R. Strom, and Ryan T. Gott, Sieben Polk, PA, 1640 South
Frontage Road, Ste. 200, Hastings, MN 55033 for Plaintiffs.
Michael M. Sawers and Steven J. Kirsch, Briggs & Morgan, PA, 80 South 8th St., Ste.
2200, Minneapolis, MN 55402; Robert D. Brownson and Kristi K. Brownson, Brownson &
Linnihan, PPLP, 225 South Sixth St., Ste. 4800, Minneapolis, MN 55402 for Defendant.
SUSAN RICHARD NELSON, United States District Judge
This matter is before the Court on (1) Defendant’s Motion to Dismiss for lack of
personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), or, in the
alternative, for dismissal under the abstention doctrine of Colorado River Water
Conservation District v. United States, 424 U.S. 800 (1976) [Doc. No. 8]; and (2) Plaintiffs’
Motion to Remand to State Court pursuant to 28 U.S.C. § 1447(c) [Doc. No. 18]. For the
reasons set forth below, the Court denies Plaintiffs’ Motion to Remand to State Court and
grants Defendant’s Motion to Dismiss for lack of personal jurisdiction.
Plaintiffs move the Court to remand this case to Ramsey County District Court
arguing that it was improperly removed because this Court does not have subject matter
jurisdiction. When an action is removed to federal court, “the party seeking removal and
opposing remand” has the “burden of establishing federal subject matter jurisdiction.” In re
Bus. Men’s Assurance Co. of Am., 992 F.2d 181, 183 (8th Cir. 1993) (citing Bor-Son Bldg.
Corp. v. Heller, 572 F.2d 174, 181 n.13 (8th Cir.1978)). “A defendant is not required to
submit evidence establishing federal-court jurisdiction with its notice of removal unless the
plaintiff or the court questions the defendant’s claim of jurisdiction.” Pudlowski v. St. Louis
Rams, LLC, 829 F.3d 963, 964 (8th Cir. 2016) (per curiam) (citing Dart Cherokee Basin
Operating Co., LLC v. Owens, 135 S. Ct. 547, 554 (2014)). But when a plaintiff challenges
jurisdiction on a motion to remand, the district court may consider sworn affidavits
submitted by the parties to resolve whether it has federal subject matter jurisdiction. Id.
If the Court finds that it has subject matter jurisdiction and denies Plaintiffs’ Motion
to Remand, Defendant Conwed Corporation (“Conwed”) moves the Court to dismiss this
action on the grounds that personal jurisdiction cannot be exercised over Conwed in this
forum. When a defendant challenges the existence of personal jurisdiction, the plaintiff
bears the burden of making “a prima facie showing of personal jurisdiction over the
challenging defendant.” Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 820 (8th Cir.
2014). The plaintiff may meet this burden by pleading facts sufficient to support a
reasonable inference that the defendant can be subjected to jurisdiction within the forum
state. See Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004). This
inference is subject to testing not solely on the pleadings and matters embraced by the
pleadings, but “by the affidavits and exhibits presented with the motions and in opposition
thereto.” Dairy Farmers of Am., Inc. v. Bassett & Walker Int’l, Inc., 702 F.3d 472, 475 (8th
Cir. 2012) (citation omitted). Where—as is the case here—the Court has not conducted an
evidentiary hearing, it must view the facts in the light most favorable to the nonmoving
party, and resolve all factual conflicts in favor of that party. Pangaea, Inc. v. Flying Burrito
LLC, 647 F.3d 741, 745 (8th Cir. 2011) (citing Dakota Indus., Inc. v. Dakota Sportswear,
Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)). However, “the party seeking to establish the
court’s personal jurisdiction carries the burden of proof and that burden does not shift to the
party challenging jurisdiction.” Fastpath, 760 F.3d at 820.
With these principles in mind, the Court recites the background of the case
considering not only Plaintiffs’ complaint, but also the affidavits and exhibits presented by
both parties in conjunction with their respective motions.
A. The Parties
Conwed, formerly known as the Wood Conversion Company, was incorporated
under the laws of Delaware in 1921. (See Decl. of Robert E. Crowson, Jr. (“Crowson
Decl.”) at ¶ 3 [Doc. No. 11].) In February of that year, it registered itself in Minnesota as a
foreign corporation. (See Aff. of Michael M. Sawers (“Sawers Aff.”), Ex. C at 1 [Doc. No.
12-3].) From at least 1959 to 1985, Conwed was in the business of manufacturing ceiling
tile, some of which contained asbestos. (Crowson Decl. ¶¶ 6–8.) Specifically, Conwed
produced asbestos-containing ceiling tile from 1959 to 1974. (Id. ¶ 6.) Until 1985, Conwed
manufactured tile in a mill located in Cloquet, Minnesota. (Id. ¶ 7.) That year, however,
Conwed sold its ceiling tile business, including the mill in Cloquet, and it thereafter
ceased manufacturing, selling, and distributing ceiling tile or any other product. (Id. ¶ 7–8.)
During some of the years that Conwed manufactured ceiling tile, Plaintiff Michael P.
McGill (“McGill”) worked as a laborer, carpenter apprentice, and carpenter in Kansas. (Aff.
of Michael Polk (“Polk Aff.”), Ex. A - State Court Complaint (“Compl.”) at 3, ¶ 4 [Doc.
No. 17-1].) Between 1968 and 1975, he worked at his father’s Kansas City interior
construction company, the Jim McGill Company. (Polk Aff., Ex. C at 26–28 [Doc. No. 173].) The Jim McGill Company distributed and installed ceiling tile manufactured by
Conwed, and McGill installed this tile at job sites primarily in Kansas. (Id. at 45–53.)
McGill alleges that during his work installing ceiling tile, he was exposed to the
asbestos-containing products and raw materials manufactured, sold, and/or distributed by
Conwed. (Polk Aff., Compl. at 3–4, ¶¶ 4–5.) McGill further alleges that as a result of
inhaling and ingesting the asbestos fibers contained in these products, he contracted
mesothelioma. (Id. at 3, ¶ 4.) McGill’s mesothelioma was diagnosed in December of 2015.
(See Polk Aff., Ex. B.) After this diagnosis, Plaintiff, along with his wife Tatyana Bobrova
(collectively, “Plaintiffs”), sued Conwed.
B. Procedural History
The first relevant legal action that Plaintiffs brought against Conwed was initiated in
the Missouri Circuit Court, in St. Louis, Missouri, in March of 2016. (Def.’s Mem. in
Support of Mot. to Dismiss (“Def.’s Mem. Mot. Dismiss”) at 5 [Doc. No. 10].) In addition
to Conwed, that action named 13 other defendants. (Id.) Conwed successfully moved to
dismiss that lawsuit for lack of personal jurisdiction. (Id.) On January 19, 2017, the
Missouri Circuit Court dismissed Plaintiffs’ complaint against Conwed without prejudice,
finding, in part, that Conwed was a “Delaware corporation with its principal place of
business in New York.” (Id.) Neither Conwed nor Plaintiffs requested that the Missouri
Circuit Court immediately enter judgment as to Conwed pursuant to Missouri Rule of Civil
Procedure 74.01(b), which operates like Federal Rule of Civil Procedure 54(b). (Id. at 10.)
Following these events, on March 16, 2017, Plaintiffs sued Conwed—as the sole
defendant—in Ramsey County District Court in Minnesota. (See Polk Aff., Compl.) On that
date, Plaintiffs served a summons and the complaint upon C.T. Corporation Systems, Inc.
(“CT Corporation”). (See Polk Aff., Ex. M [Doc. No. 17-13].) CT Corporation is listed as
the “Registered Agent” for Conwed on the Minnesota Secretary of State’s website. (See
Polk Aff., Ex. L [Doc. No. 17-12].) That Minnesota state complaint alleged negligence,
strict liability, and breach of warranty. (See Polk Aff., Compl.) These allegations, according
to Defendant, are nearly identical to those of the Missouri Action. (Def.’s Mem. Mot.
Dismiss at 10.) On April 4, 2017, Conwed removed the case to federal court, invoking
federal diversity jurisdiction per 28 U.S.C. § 1332. (See Notice of Removal ¶ 1, 5 [Doc. No.
Because Plaintiffs’ motion to remand implicates the Court’s subject matter
jurisdiction, the Court will consider it first.
A. Plaintiffs’ Motion to Remand
1. Legal Standard
Plaintiffs move to remand this case to state court pursuant to 28 U.S.C. § 1447(c).
An action brought in state court may be removed to federal court if it could have originally
been filed in federal court. 28 U.S.C. § 1441(a). After removal, a plaintiff may move to
remand the matter back to state court if the federal court lacks subject matter jurisdiction. 28
U.S.C. § 1447(c). The removing party bears the burden of establishing federal jurisdiction
by a preponderance of the evidence. Altimore v. Mount Mercy Coll., 420 F.3d 763, 768 (8th
Cir. 2005). “All doubts about federal jurisdiction should be resolved in favor of remand to
state court.” Junk v. Terminix Int’l Co., 628 F.3d 439, 446 (8th Cir. 2010) (citation omitted).
Here, Defendants removed to federal court invoking the Court’s diversity
jurisdiction. Conwed asserts that it is a citizen of Delaware and New York. (See Notice of
Removal at 2, ¶ 6.) It further contends that because Plaintiffs are both citizens of Kansas,
complete diversity of citizenship exists. (Id.) Plaintiffs disagree, asserting “there is not
complete diversity between Plaintiffs and Defendant Conwed Corporation as required by 28
U.S.C. § 1332” because Conwed is a citizen of Delaware and Minnesota. (See Pls.’ Mot.
Remand at 2 [Doc. No. 18].)
At the outset, the Court notes that even if Defendant were indeed a citizen of
Minnesota, as Plaintiffs allege, there would still be complete diversity of citizenship
between the parties.1 See OnePoint Solutions, LLC v. Borchert, 486 F.3d 342, 346 (8th
It does not appear to be disputed that Plaintiffs are both citizens of Kansas. (See Pls.’
Mem Mot. Remand at 9; Notice of Removal at 2, ¶ 6.)
Cir. 2007) (“Complete diversity of citizenship exists where no defendant holds citizenship
in the same state where any plaintiff holds citizenship.”). To the extent that Plaintiffs argue
that removal was improper, then, the Court will construe their motion to be advanced
under the removal statute, 28 U.S.C. § 1441(b)(2), which provides that if removal is
solely based on diversity of citizenship, as is the case here, removal is prohibited if any
defendant is a citizen of the state in which the action is brought. See Hurt v. Dow Chem.
Co., 963 F.2d 1142, 1145 (8th Cir. 1992) (“Title 28 U.S.C. § 1441(b) makes diversity
jurisdiction in removal cases narrower than if the case were originally filed in federal
court by the plaintiff. A defendant may not remove to federal court on the basis of
diversity if any of the defendants is a citizen of the state where the action was filed.”)
Plaintiffs brought this action in Minnesota, and thus a defendant with Minnesota
citizenship could not remove to federal court. The Court now turns to the question of
2. Location of Conwed’s Principal Place of Business
“The jurisdiction of a federal court under 28 U.S.C. § 1332(a) depends on the
citizenship of the parties at the time the action is commenced.” Chavez-Lavagnino v.
Motivation Educ. Training, 714 F.3d 1055, 1056 (8th Cir. 2013) (citing Grupo Dataflux v.
Atlas Glob. Grp., L.P., 541 U.S. 567, 570–71 (2004)). The definition of when an action is
“commenced” is dependent on state law. See Winkels v. George A. Hormel & Co., 874
F.2d 567, 570 (8th Cir. 1989) (“A federal court must honor state court rules governing
commencement of civil actions when an action is first brought in state court and then
removed to federal court . . . .”) Under Minnesota law, “a civil action is commenced
against each defendant” when “the summons is served upon that defendant.” Minn. R.
Civ. P. 3.01(a).
Consequently, the Court focuses on Conwed’s citizenship as of March 16, 2017,
when it was served with the summons. For purposes of diversity jurisdiction, “a corporation
shall be deemed to be a citizen of every State . . . by which it has been incorporated and of
the State . . . where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). A
corporation’s “principal place of business,” in turn, refers to “the place where a
corporation’s officers direct, control, and coordinate the corporation’s activities.” Hertz
Corp. v. Friend, 559 U.S. 77, 92–93 (2010). This place is often referred to as the “nerve
center” of the corporation. Id. at 93. Moreover, this “‘nerve center,’ usually [a corporation’s]
main headquarters, is a single place. . . . And it is a place within a State.” Id. at 93. “It is not
the State itself.” Id.
Here, although both parties apply Hertz, they argue for different results. Plaintiffs
argue that Conwed is a corporation that exists solely to engage in litigation, and, as such,
Conwed’s “nerve center” is in Minnesota, where outside counsel that Conwed has hired for
its asbestos litigation is located. (Pls.’ Mem. Mot. Remand at 12–15.). Plaintiffs assert that
since selling its business in 1985, Conwed’s primary purpose and “only business activity”
has been “participating in asbestos related litigation.” (Id. at 9; see also Pls.’ Reply Mot.
Remand at 4 (“Since Conwed sold its manufacturing facilities in the mid-1980’s, the
purpose, product, revenue, and costs of the corporation are solely related to litigation.”).)
This is significant to Plaintiffs, as they contend that Minnesota outside counsel who have
worked on Conwed’s asbestos cases since 1986–87 but who are not officers or directors of
the company now “run the company.” (See Pls.’ Mem. Mot. Remand at 14–15.) According
to Plaintiffs, these attorneys are the “individuals who are asserting actual direction, control,
and coordination of Conwed.” (Id. at 14.) They make decisions for “what remains of
“independently-contracted president” on “what to say or sign” for the purposes of litigation.
(Id. at 14–15.) In fact, Plaintiffs assert, “[o]ther than the Conwed asbestos defense lawyers
who are officed in Minnesota, Conwed has never had an office anywhere since 1985 in
which any person could have worked on behalf of Conwed.” (Id. at 13.)
Plaintiffs also accuse Conwed historically of identifying whatever location is most
beneficial to the corporation in a given case as its principal place of business. (See id. at 11.)
Plaintiffs describe two cases, one in 1992 and one in 2009, where Conwed asserted that its
principal place of business was in Minnesota. (See id. at 10–11.) Plaintiffs also point out that
in another case in 2003, Conwed described its principal place of business as being in New
Jersey. (Id. at 11.) According to Plaintiffs, these facts not only reveal that Conwed’s
principal place of business really is in Minnesota, but also demonstrate that the company
has a history of “jurisdictional manipulation.” (Id. at 11–12.) And in any event, Plaintiffs
argue, it is not their burden to identify Conwed’s “nerve center”; rather, it is Conwed’s
burden as the removing party—a burden it has failed to meet. (Id. at 14; Pls.’ Reply Mot.
Remand at 9.)
Conwed disagrees. It contends that it has indeed met its burden of showing that its
principal place of business is in New York. (See Def.’s Opp’n Mem. Remand.) Defendant
describes itself as a dormant corporation which nonetheless maintains a principal place of
business in New York. (Crowson Decl. ¶¶ 4–8.) It identifies Robert E. Crowson, Jr.,
(“Crowson”) as its President—who reports to Conwed’s Board of Directors—and maintains
that his business address is Conwed’s New York office located at 520 Madison Avenue in
New York City. (Def.’s Reply to Pls.’ Opp’n to Mot. to Dismiss (“Def.’s Reply Mot.
Dismiss”) at 6 [Doc. No. 24].) Also located at that address is the office of Conwed’s
Corporate Secretary, who “keeps its current corporate records” there as well. (Second Decl.
of Robert. E. Crowson, Jr. (“Second Crowson Decl.”) at ¶ 4 [Doc. No. 25].) Beyond these
records, some of Conwed’s documents related to asbestos litigation are kept by Conwed’s
products liability counsel in Minnesota and the Minnesota Historical Society (“MHS”) also
owns and maintains some Conwed-related records. (Def.’s Reply Mot. Dismiss at 6–8.)
As additional proof that Conwed’s principal place of business is in New York,
Conwed points to its self-authenticating corporate records, namely, the annual Franchise
Tax Report (“Tax Report”) it is required to disclose annually to the Delaware Secretary of
State. (Def.’s Reply Mot. Dismiss at 6–7.) This Franchise Tax Report names Crowson as
one of Conwed’s corporate officers, and lists Conwed’s corporate office as 520 Madison
Avenue, New York, New York. (Second Crowson Decl., Ex. A [Doc. No. 25-1].)
While Conwed concedes that it had significant contacts with Minnesota during the
time when the company produced ceiling tile, (see Crowson Decl. at ¶ 6–7), it is clear that
Conwed has not conducted business in Minnesota for over 30 years. Conwed highlights that
it has not been authorized to do business in Minnesota since January of 2009, when the
Minnesota Secretary of State revoked Conwed’s Certificate of Authority, “result[ing] in the
automatic cessation of Conwed’s authority to transact business in Minnesota” per Minn.
Stat. § 303.17, subdiv. 5.2 (Def.’s Opp’n Mem. Remand at 6.) As such, it argues that
Conwed’s principal place of business, or “nerve center,” cannot possibly be in Minnesota,
since Conwed does not even have the authority to transact any business whatsoever in the
state. (Def.’s Opp’n Mem. Remand at 5–6.) As for its current connections to the state,
Conwed points only to the active asbestos litigation it has in Minnesota, amounting to 1.6%
of the active cases it has pending in 22 states. (Second Crowson Decl. at ¶ 2.) Finally, as to
claims that it has engaged in jurisdictional manipulation, Defendant argues that Plaintiffs’
focus on Conwed’s 12- to 25-year-old litigation is misplaced, as the Court’s focus in this
litigation must be on where Conwed currently has its principal place of business. (Id. at 6–
Having considered the parties’ arguments, the Court finds that Conwed has met its
burden of showing that its principal place of business is in New York. In a sworn
declaration, Crowson attests that he is the current president of Conwed—employed in that
capacity since 2011—with a business address in New York. (Second Crowson Decl. at ¶ 3.)
Importantly, Crowson further attests that Conwed’s principal place of business is in New
York, and that Conwed’s corporate secretary keeps Conwed’s corporate records in the
company’s New York office. (Id. at 4.) Moreover, the 2016 Tax Report that Conwed
submitted in Delaware also shows this same New York address as the company’s—and
Crowson’s—business address. (Second Crowson Decl., Ex. A.) In the absence of any
This subdivision is titled “Cessation of authority,” and provides that “[u]pon the
issuance of such certificate of revocation, the authority of the corporation to transact
business in this state shall cease.”
evidence contradicting these documents, the Court finds that they establish that Conwed’s
current principal place of business is in New York.
Although it is true that these documents do not, in detail, describe how Crowson or
the other two officers listed in the Delaware Tax Report, “direct, control, and coordinate”
the Corporation’s activities from New York, in this case, that deficiency is not fatal. Both
parties concede that Conwed is an inactive corporation, not currently engaged in the
production, distribution, or sales of any products. Even assuming, as Plaintiffs argue, that
Conwed’s corporate purpose is now solely tied to litigation, it is a tenet of the attorneyclient relationship that the client is ultimately in control of the high-level actions taken by
its retained counsel. See, e.g., Turner v. Burlington N. R.R. Co., 771 F.2d 341, 345 (8th
Cir. 1985) (“[A]n attorney of record may not compromise, settle, or consent to a final
disposition of his client’s case without express authority.”) (quoting Thomas v. Colo.
Trust Deed Funds, Inc., 366 F.2d 136, 139 (10th Cir. 1966)); Hutchinson v. Florida, 677
F.3d 1097, 1104–1109 (11th Cir. 2012) (“[I]n a traditional lawyer-client relationship, a
client hires a lawyer to represent him in a discrete legal matter. . . . [I]t is assumed that
the client has the ability to direct the actions of the lawyer . . . .”). Plaintiffs urge this
Court to find that, to the contrary, outside counsel directs the actions of its client and the
residence of outside counsel should govern the identity of the client’s principal place of
business. Plaintiffs cite no authority for this untenable position and this Court is not
aware of any such authority.
The Court also rejects Plaintiffs’ suggestion that, under Hertz, the documents that
Conwed offers are insufficient to establish New York as Conwed’s principal place of
business. Plaintiffs point to Hertz’s warning against permitting a corporation to manipulate
jurisdiction by merely submitting a tax form and claiming the address listed as the location
of its nerve center. (See Pls.’ Reply. Mot. Remand at 9.) On this point, in the absence of
controlling Eighth Circuit precedent, the Court finds persuasive an unpublished case out of
the Eleventh Circuit that is very much on point. In Annon Consulting, Inc. v. BioNitrogen
Holdings Corp., the court found that evidence very similar to that presented here was
“[c]ompetent evidence” to establish the location of a company’s principal place of business.
650 F. App’x 729, 731 (11th Cir. 2016). There, the plaintiff company offered a “Security
Agreement (identifying [the company] as ‘a corporation organized and existing under the
laws of Canada’) and a sworn declaration by [the company’s] sole director and general
manager (testifying that [the company’s] place of incorporation and principal place of
business [were] both Ontario, Canada).” Id. Along with a bank statement, the court found
these documents sufficient to establish a principal place of business, also noting that the
record evidenced that the company was affiliated with a single address. Id.
Very similar proof is presented here. The record shows that Conwed is currently
affiliated with only one New York City address. Conwed’s president has testified in his
sworn declaration that Conwed’s principal place of business is in New York, and that he
maintains a business address there as well. The Court finds that these documents and
declarations adequately support Conwed’s burden of establishing the location of its
principal place of business.
The Court also rejects Plaintiffs’ contention that, because they have raised a
colorable argument that Conwed’s principal place of business is not in New York, the legal
standard here compels a remand. (See Pls.’ Reply Mot. Remand at 2.) It is true, of course,
that the district court is required to resolve all doubts about jurisdiction in favor of remand.
Junk, 628 F.3d at 446. But the Court has no doubts about the facts that the parties have
asserted here. Nothing here calls into question the documents and declarations offered by
Conwed. Plaintiffs do not point to a Minnesota Conwed office. They do not name Conwed
employees working in Minnesota, or point to some other corporate tie within the state. In
short, Plaintiffs do not point to a “place within” Minnesota where Conwed could have its
principal place of business. See Hertz, 559 U.S. at 93.
Instead, Plaintiffs are left to argue that, despite not having the legal capacity to even
transact business in Minnesota, Conwed should be held to have its principal place of
business here on the sole ground that it retains private counsel within the state to pursue and
defend litigation on its behalf. Again, the Court has found no support in case law or
otherwise for that proposition, and declines to adopt it.
And finally, in the absence of legal precedent supporting a finding of personal
jurisdiction based on the residence of outside counsel, discovery would be futile.
Accordingly, the Court will deny Plaintiffs’ request for limited discovery on this issue.
Having found that Conwed’s principal place of business is in New York, the Court
concludes that removal was proper and that it has subject matter jurisdiction over the case.3
The Court thus turns to Defendant’s Motion to Dismiss for lack of personal jurisdiction.
Because removal was proper, the Court does not consider Plaintiffs’ request for the
attorneys’ fees and costs they incurred in bringing the motion to remand. (See Pls.’ Mem.
Mot. Remand at 15.)
B. Defendant’s Motion to Dismiss for Lack of Personal Jurisdiction
1. Legal Standard
Because Conwed challenges the existence of personal jurisdiction, Plaintiffs bear the
burden of making a prima facie showing that the court’s exercise of personal jurisdiction
over Conwed is proper. Fastpath, 760 F.3d at 820. To make its determination, the Court
may consider affidavits and exhibits submitted by the parties with their respective motions.
See Block Indus., 495 F.2d at 260; see also Jet Charter Serv., Inc. v. W. Koeck, 907 F.2d
1110, 1112 (11th Cir.1990) (“When a defendant raises through affidavits, documents or
testimony a meritorious challenge to personal jurisdiction, the burden shifts to the plaintiff
to prove jurisdiction by affidavits, testimony or documents.”)
Here, Plaintiffs advance three separate arguments for why the Court may exercise
personal jurisdiction over Defendant: (1) consent; (2) general personal jurisdiction; and
(3) specific personal jurisdiction. Each argument is addressed in turn.
2. Consent Jurisdiction
Plaintiffs argue that Conwed consented to jurisdiction by appointing CT
Corporation—whom Plaintiffs served with a state court summons and complaint—as its
registered agent for service within Minnesota. Pointing to Knowlton v. Allied Van Lines, 900
F.2d 1196 (8th Cir. 1990), Plaintiffs argue that “[a] foreign corporation consents to the
jurisdiction of a State when a corporation appoints an agent for service of process within
that State.” (Pls.’ Opp’n Mem. Dismiss at 7.) Defendant disagrees, first claiming that
Knowlton is inapplicable here because it involved a corporation that, unlike Conwed, had
authority to transact business in Minnesota under Minn. Stat. § 303, et seq. (Def.’s Reply
Mot. Dismiss at 8–10.) Second, Defendant argues that, even if the Court were to conclude
that Knowlton applies, the Supreme Court’s recent case of BNSF R. Co. v. Tyrell, 137 S. Ct.
1549 (2017), “implicitly overruled” Knowlton because Knowlton “extends Minn. Stat.
§ 303.13 past the bounds of due process, especially as applied to Conwed.” (See Conwed’s
Suppl. Mem. at 3–4 [Doc. No 34].)
In Knowlton, the Eighth Circuit held that a corporation consents to the jurisdiction of
Minnesota courts—for any cause of action—by registering to do business within the state
and appointing an agent for service of process. 900 F.2d at 1200. In Knowlton, the plaintiff
was driving through Iowa when her car collided with a van operated by an agent of
defendant Allied Van Lines (“Allied”). Id. at 1197. Allied was a Delaware corporation and
had its “principal office” in Illinois. Id. However, the company did business in Minnesota
and as required by Minnesota law, had designated a registered agent within the state to
receive service of process. Id. at 1197–98. The plaintiff filed suit against Allied in
Minnesota. Id. at 1198.
The federal district court held that it did not have personal jurisdiction over Allied,
but the Eighth Circuit reversed on grounds of consent. The Eighth Circuit first recognized
that Minnesota’s long-arm statute would not confer jurisdiction on a Minnesota court under
the facts of the case. Id. at 1199. However, the court explained that “[c]onsent is . . . [a]
traditional basis of jurisdiction” that exists “independently of long-arm statutes.” Id. And
relevant to the case, “[o]ne of the most solidly established ways of giving such consent is to
designate an agent for service of process within the State.” Id. Applying those principles, the
court analyzed Chapter 303 of the Minnesota statutes and held that “appointment of an
agent for service of process under § 303.10 gives consent to the jurisdiction of Minnesota
courts for any cause of action.” Id. at 1200.
The Court agrees with Defendant that Knowlton’s holding is predicated on the
applicability of Chapter 303 to foreign corporations with authority to do business in
Minnesota. See id. at 1198, n.1 (“Minnesota requires that all foreign corporations wishing to
transact business within its boundaries comply with its Foreign Corporation Act, Minn.
Stat. § 303 et seq., which, among other things, requires a foreign corporation to appoint an
agent for service of process.”) (emphasis added). And by its express terms, Chapter 303
does not apply to corporations which do not have the authority to transact business in the
state. See Minn. Stat §§ 303.22 (“[T]his chapter shall be applicable to all foreign
corporations heretofore or hereafter transacting business in this state.”) (emphasis added);
303.03 (requiring a foreign corporation to hold a certificate of authority in order to transact
business); 303.17, subdiv. 5 (providing that the authority of the corporation to “transact
business in this state shall cease” if the secretary of state revokes the certificate of authority).
Here, Conwed has not been authorized to transact business in Minnesota since 2009.
The Minnesota Secretary of State revoked Conwed’s Certificate of Authority in January of
that year, and there is no evidence in the record that Conwed has attempted to get it
reinstated. Moreover, nothing in the record shows that Conwed was in fact transacting any
business within the state when it was served by Plaintiffs.4 Accordingly, the Court
concludes that the strictures of Chapter 303 do not apply to Conwed, and that consequently,
By definition, engaging in litigation does not constitute “transacting business” in
Minnesota. See Minn. Stat. § 303.03.
the holding in Knowlton is inapposite. The Court therefore holds that it does not have
personal jurisdiction over Conwed by virtue of consent.5
3. General and Specific Jurisdiction
Plaintiffs alternatively contend that the Court may exercise general or specific
jurisdiction over Conwed by virtue of Minnesota’s long-arm statute.6 This type of personal
jurisdiction is only appropriate, however, if state and constitutional requirements have been
met. Wessels, Arnold & Henderson v. Nat’l Med. Waste, Inc., 65 F.3d 1427, 1431 (8th Cir.
1995) (citing Wines v. Lake Havasu Boat Mfg., 846 F.2d 40, 42 (8th Cir. 1988)). First, the
contacts alleged must satisfy the state’s long-arm statute. Burlington Indus., Inc. v. Maples
Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996). Second, the exercise of personal
jurisdiction must comply with the Due Process Clause of the Fourteenth Amendment. Id.
Because the Minnesota Supreme Court has interpreted the Minnesota long-arm statute to be
co-extensive with the limits of due process, this Court need only address the second of these
requirements. See Soo Line R.R. Co. v. Hawker Siddeley Canada, Inc., 950 F.2d 526, 528
(8th Cir. 1991) (citing Rostad v. On–Deck, Inc., 372 N.W.2d 717, 719 (Minn. 1985)).
The bounds of due process permit a court to exercise personal jurisdiction over a
non-resident defendant when that defendant has “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, 316 (1945) (quoting
Because the Court has held that Knowlton is inapplicable, it need not reach the
argument advanced in Conwed’s supplemental briefing that Knowlton was overruled by
Here, Minn. Stat. § 543.19.
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Such contacts exist when “the defendant’s
conduct and connection with the forum State are such that he should reasonably anticipate
being haled into court there.” World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,
297 (1980). “In assessing the defendant’s ‘reasonable anticipation,’ there must be ‘some act
by which the defendant purposefully avails itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and protections of its laws.’” Soo Line
R.R. Co., 950 F.2d at 528–29 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
(1985)). The timing of these acts is also important, as “[m]inimum contacts must exist either
at the time the cause of action arose, the time the suit is filed, or within a reasonable period
of time immediately prior to the filing of the lawsuit.” Pecoraro v. Sky Ranch for Boys, Inc.,
340 F.3d 558, 562 (8th Cir. 2003) (citing Clune v. Alimak AB, 233 F.3d 538, 544 n.8 (8th
From these core principles, the Eighth Circuit has distilled a five-factor test to be
used in analyzing the propriety of a court’s exercise of personal jurisdiction over a nonresident defendant. This test considers: (1) the nature and quality of the contacts with the
forum state; (2) the quantity of the contacts with the forum state; (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. See Wells Dairy, Inc. v. Food Movers
Int’l, Inc., 607 F.3d 515, 518 (8th Cir.2010) (citing Bell Paper Box, Inc. v. U.S. Kids,
Inc., 22 F.3d 816, 819 (8th Cir.1994)). “The first three factors are closely related and are
of primary importance, while the last two factors are secondary.” Pecoraro, 340 F.3d 562
(citing Digi–Tel Holdings, Inc. v. Proteq Telecomm. (PTE), Ltd., 89 F.3d 519, 523 (8th Cir.
Moreover, the third factor, the relation of the cause of action to the contacts,
serves to distinguish the appropriate theory of jurisdiction: general or specific. “A court
with general jurisdiction may hear any claim against that defendant, even if all the
incidents underlying the claim occurred in a different State.” Bristol–Myers Squibb Co.
v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773, 1780 (2017)
(emphasis in original). Specific personal jurisdiction, on the other hand, “is very different.”
Id. “In order for a state court to exercise specific jurisdiction, the suit must arise out of or
relate to the defendant’s contacts with the forum.” Id. (citations and alterations omitted).
At the outset, the Court concludes that general or “all-purpose” jurisdiction over
Conwed is clearly lacking. To be subject to general or all-purpose jurisdiction within a
state, the “corporation’s affiliations with the State [must be] be so continuous and
systematic as to render it essentially at home in the forum State.” Daimler AG v. Bauman,
134 S. Ct. 746, 761 (2014) (internal quotations and alterations omitted). Two places that are
“paradigm all-purpose forums” for a corporation are where it is incorporated and where it
has its principal place of business. Id. at 760. And in the “exceptional case,” “a
corporation’s operations in a forum other than its formal place of incorporation or principal
place of business may be so substantial and of such a nature as to render the corporation at
home in that State.” Id. at 761, n.19.
Here, Conwed is not “essentially at home” in Minnesota. See id. at 761. It is
undisputed that Conwed is incorporated under the laws of Delaware. And the Court has
found that Conwed’s principal place of business is in New York. Furthermore, this case is
far from the “exceptional case” where a corporation may be considered “at home” in a
place other than its state of incorporation or where it has its principal place of business.
See id. at 761, n.19. Conwed does not transact business in Minnesota, and there is no
evidence showing that Conwed’s operations here are “so substantial and of such a nature as
to render [it] at home” in this state. Id. As such, the Court may not exercise general
jurisdiction over Conwed, and thus turns to an analysis of specific jurisdiction.
Aside from requiring that Defendant have minimum contacts with the state—which
must exist (1) when the suit is filed, (2) within a reasonable period of time immediately
prior to that, or (3) at the time the cause of action arose, see Pecoraro, 340 F.3d at 562—
Plaintiffs’ suit must “arise out of or relate to” those contacts. Bristol–Myers Squibb, 137 S.
Ct. at 1780 (alterations omitted). In other words, specific jurisdiction demands that there be
“an affiliation between the forum and the underlying controversy, principally, [an] activity
or an occurrence that takes place in the forum State.” Id. at 1781 (alterations in original).
Now considering only specific jurisdiction, the Court turns to the nature, quality, and
quantity of Conwed’s contacts with Minnesota during the legally-relevant time periods, and
those contacts’ relation to Plaintiffs’ suit. First, the Court finds that during two of the three
legally-relevant time periods, Conwed’s contacts with Minnesota were limited to: (1) the
presence of its products liability counsel within the state; (2) the litigation-related
documents that counsel stores in Minnesota; and (3) the Conwed-related documents that the
MHS keeps in the state, though ownership of those documents is disputed.
Such contacts are outside counsel’s contacts, not Conwed’s contacts. Moreover,
these attenuated contacts are clearly not connected to Plaintiffs’ present claims, and “[w]hen
there is no such connection, specific jurisdiction is lacking regardless of the extent of a
defendant’s unconnected activities in the State.” Bristol–Myers Squibb, 137 S. Ct. at 1781.
Here, Plaintiffs bring claims against Conwed for negligence, strict liability, and breach of
warranty. (See Notice of Removal.) The basis of these claims is Conwed’s alleged
“manufacturing, selling, installing, and distributing [of] asbestos-containing products and
raw materials” during the years that McGill allegedly installed ceiling tile, namely, from
1965 to 1975. (See Notice of Removal; Pls.’ Opp’n Mem. Dismiss at 4.) Plaintiffs’ suit does
not “arise out of or relate to” Conwed’s present contacts, i.e. litigation, in Minnesota. See
Bristol–Myers Squibb, 137 S. Ct. at 1780. Accordingly, those contacts may not form the
basis of specific jurisdiction.
This leaves only one remaining time period for examining the relevant contacts—
when the cause of action arose—and the Court again concludes that Conwed’s contacts
during that time do not give rise to specific jurisdiction. It is undisputed that Plaintiffs’
cause of action “arose” in 2015 when McGill was diagnosed with mesothelioma. (See
Def.’s Mem. Mot. Dismiss at 15–17; Pls.’ Opp’n Mem. Dismiss at 18–19.) And in that year
Conwed’s contacts appear to have been equivalent to the contacts already described:
litigation unrelated to the present suit, corresponding documentation, and the MHS
documents. These contacts again cannot give rise to specific personal jurisdiction because
they are too attenuated and are unrelated to Plaintiffs’ claims. In short, the Court holds that
Conwed has no contemporary contacts that could subject it to personal jurisdiction in
Minnesota for the claims asserted here.
Plaintiffs would have the Court reach a contrary conclusion, but, fatal to their
position, they do not point to any contacts in 2015 or 2017 that could subject Conwed to
specific jurisdiction in Minnesota for the claims asserted here. When describing the nature,
quality, and quantity of Conwed’s contacts in Minnesota, Plaintiffs primarily focus on
Conwed’s asbestos-manufacturing activities prior to the 1980’s and highlight the company’s
current asbestos-related ligation. (See Pls.’ Opp’n Mem. Dismiss 12–16.) But as already
explained, under Pecoraro, for personal jurisdiction purposes, Conwed’s activities before
1985 are irrelevant to a cause of action that arose thirty years later—Conwed’s contacts
must be contemporaneous to this lawsuit.7 Similarly, for the reasons set forth above,
Conwed’s current asbestos litigation cannot be considered. In sum, Plaintiffs do not point to
any contacts that could support specific personal jurisdiction in this case.
The Court thus concludes that the three main jurisdictional factors considered by
the Eighth Circuit—the nature, quality, and quantity of the defendant’s contacts with the
forum, and the relation of those contacts to the cause of action—weigh against exercising
specific personal jurisdiction over Conwed. The two remaining, secondary factors—the
interest of the forum and the convenience of the parties—do not alter that determination.
With no party to this case being a Minnesota citizen, it is unlikely that Minnesota would
have a clear interest in providing a forum for this action. And with respect to the
Plaintiffs do not address Pecoraro’s temporal limitation on the jurisdictional analysis.
Instead, they focus on the standard to be used to determine if a plaintiff’s claim arises out of
a defendant’s contact with the forum. But, as already described, even before conducting this
“nexus” analysis, relevant jurisdictional contacts must be identified. For this reason,
Plaintiffs’ discussion of Myers v. Casino Queen, Inc., 689 F.3d 904 (8th Cir. 2012) and Aly
v. Hanzada for Import and Export Co., LTD, 864 F.3d 844 (8th Cir. 2017) is unavailing.
These cases neither cite Pecoraro nor address the temporal limitation imposed by that case.
convenience of the parties, the same considerations ring true. No party here is a
Minnesota citizen, and there is no evidence in the record that any witnesses reside here.
With potential witnesses located elsewhere, the balance of convenience “is in equipoise.”
See Datalink Corp. v. Perkins Eastman Architects, P.C., 33 F.Supp.3d 1068, 1076 (D.
Minn. 2014). All factors thus considered, the Court concludes that it may not
constitutionally exercise specific personal jurisdiction over Conwed in this case.
Accordingly, the Court grants Defendant’s motion to dismiss for lack of personal
jurisdiction, and it does not address Defendant’s alternative argument for dismissal under
the Colorado River abstention doctrine.
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1. Plaintiffs’ Motion to Remand to State Court [Doc. No. 18] is DENIED.
2. Defendant’s Motion to Dismiss for lack of personal jurisdiction pursuant to
Federal Rule of Civil Procedure 12(b)(2) [Doc. No. 8] is GRANTED. This
case is dismissed WITHOUT PREJUDICE.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: October 10, 2017
s/Susan Richard Nelson
SUSAN RICHARD NELSON
United States District Judge
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?