Schmidt v. Navistar, Inc.

Filing 24

MEMORANDUM OPINION AND ORDER by District Judge Kenneth J. Gonzales denying 3 Defendant's Amended Motion to Dismiss for Lack of Jurisdiction. (tah)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW MEXICO
D. MARIA SCHMIDT, as the Personal Representative of the
Wrongful Death Estate of RUBEN GUERRA QUINONES,
Deceased,
Plaintiff,
vs.

18cv321 KG/KBM

NAVISTAR, INC.,
Defendant.
MEMORANDUM OPINION AND ORDER
This matter comes before the Court on Defendant Navistar, Inc.’s (Navistar) Amended
Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction, filed April 5, 2018. (Doc.
3). Plaintiff D. Maria Schmidt, as the Personal Representative of the Wrongful Death Estate of
Ruben Guerra Quinones, Deceased (Schmidt), filed her Response on May 7, 2018, opposing the
Motion, and, in the alternative, seeking limited jurisdictional discovery. (Doc. 17). Navistar
filed its Reply on June 4, 2018. (Doc. 20). Schmidt subsequently filed two notices of
supplemental authority, on August 7, 2018, and January 11, 2019, respectively. (Docs. 22, 23).
Having considered the briefing, the record, and the applicable law, the Court denies Navistar’s
Amended Rule 12(b)(2) Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 3).
I.

Background and Procedural History
This lawsuit arises from the March 25, 2015, single-vehicle rollover and subsequent

death of Ruben Guerra Quinones (Guerra), who was driving a 2009 International 9200i,
“designed,” “manufactured,” “assembled and tested” by Navistar. (Doc. 4) at ¶¶ 6-10. Guerra
is survived by his adult daughter, Ylzay Guerra Caballero (Cabellero), and two other children.

(Doc. 17) at 7.
Navistar registered to do business in the State of New Mexico and received authority to
do business in New Mexico on January 24, 1966. (Doc. 17-11) (Navistar corporate information
from the New Mexico Secretary of State). Navistar appears to have had a manufacturing or
assembly plant in New Mexico at some point but has not had such a plant in New Mexico since
before 2005. (Doc. 3) at 27 (Affidavit of Roy Zeitlow at ¶ 10).
Caballero filed a complaint against Navistar and Guerra’s employer, Black River
Trucking and Hotshop Services, LLC, on June 27, 2017, in the Fifth Judicial District Court for
the State of New Mexico. (Doc. 3) at 29. Navistar filed a motion to dismiss for lack of
personal jurisdiction, to which Caballero ultimately withdrew her objection. Id. at 41. The
stipulated order dismissing the Caballero case, filed November 9, 2017, states that Navistar
“shall be dismissed from this matter for lack of personal jurisdiction. This dismissal is without
prejudice to [Caballero’s] ability to refile claims against Navistar, Inc. in a forum outside of New
Mexico that has personal jurisdiction over Navistar, Inc. and according to the rules and laws of
that forum.” Id.
Schmidt, who was appointed as the Personal Representative of Guerra’s wrongful death
estate on February 23, 2018, filed this lawsuit pursuant to the WDA on February 28, 2018, in the
First Judicial District Court in Santa Fe, New Mexico. Id. Schmidt contends that Guerra
suffered fatal injuries during the crash because the vehicle “violated several crashworthiness
principles and . . . failed to protect him.” Id. at ¶ 12. She brings the following claims against

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Navistar: Count 1, Strict Products Liability; Count 31, Negligence, and Count 4, Breach of
Implied Warranty of Merchantability. See id. Schmidt styles her claims for wrongful death
damages and punitive damages as separate “counts.” Id. Schmidt adequately served Navistar’s
registered agent in New Mexico. (Doc. 4) at 19-20 (return of service). Although there is
substantial overlap between Schmidt’s complaint and Caballero’s complaint, including content
and counsel, Caballero asserted in her lawsuit claims for her own pain and suffering, emotional
distress, mental anguish, and loss of consortium. (Doc. 3) at 38. Caballero did not assert
claims on behalf of Guerra or his estate, or on behalf of any other beneficiaries under the New
Mexico Wrongful Death Act (WDA), NMSA 1978 § 41-2-1 et seq.
Navistar removed the case to federal court on April 5, 2018, asserting diversity
jurisdiction pursuant to 28 U.S.C. § 1332. (Doc. 1). Schmidt resides in Santa Fe, New Mexico.
(Doc. 4) at ¶ 1. Navistar is a Delaware corporation with its principal place of business in
Illinois. (Doc. 1) at ¶ 3. Navistar appropriately asserts that the amount in controversy
reasonably exceeds the jurisdictional threshold of $75,000.00. Id. at 2.
Navistar now moves to dismiss the case based on issue preclusion because Caballero
stipulated that there is no personal jurisdiction over Navistar in New Mexico and, alternatively,
on lack of personal jurisdiction. (Doc. 3).
II.

Discussion
A. Issue Preclusion
“The preclusive effect of a judgment is defined by claim preclusion and issue preclusion,

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The Complaint does not contain a “Count 2.”
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which are collectively referred to as ‘res judicata.’” Taylor v. Sturgell, 553 U.S. 880, 892
(2008). Claim preclusion means that “a final judgment forecloses ‘successive litigation of the
very same claim, whether or not the relitigation of the claim raises the same issues as the earlier
suit.’” Id. (quoting New Hampshire v. Maine, 432 U.S. 742, 748 (2001)). Issue preclusion bars
“‘successive litigation of an issue of fact or law actually litigated and resolved in a valid court
determination essential to the prior judgment,’ even if the issue recurs in the context of a
different claim.” Id. (quoting New Hampshire, 432 U.S. at 748-49). By “preclud[ing] parties
from contesting matters that they have had a full and fair opportunity to litigate,” these
preclusion doctrines protect against “the expense and vexation attending multiple lawsuits,
conserv[e] judicial resources, and foste[r] reliance on judicial action by minimizing the
possibility of inconsistent decisions.” Montana v. United States, 440 U.S. 147, 153-54 (1979).
“In the case of a judgment entered by confession, consent, or default, none of the issues is
actually litigated [and subject to preclusion]. Therefore, the rule of this Section [describing
issue preclusion’s domain] does not apply with respect to any issue in a subsequent action.”
Arizona v. California, 530 U.S. 392, 414 (2000) (alterations in original) (quoting Restatement
(Second) of Judgments § 27, comment e, at 257). Courts recognize that “[a] judgment entered
with the consent of the parties may involve a determination of questions of fact and law by the
court.” Id. at 415 (quoting United States v. International Building Co., 345 U.S. 502, 505-06
(1953)). “But unless a showing is made that that was the case, the judgment has no greater
dignity, so far as [issue preclusion] is concerned, than any judgment entered only as a
compromise of the parties.” Id. at 415-16 (quoting International Building Co., 345 U.S. at 50506).
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“A person who was not a party to a suit generally has not had a ‘full and fair opportunity
to litigate’ the claims and issues settled in that suit.” Taylor, 553 U.S. at 892. The general rule
that “one is not bound by a judgment in personam in a litigation in which he is not designated as
a party or to which he has not been made a party by service of process,” Hansberry v. Lee, 311
U.S. 32, 40 (1940), reflects the “deep-rooted historic tradition that everyone should have his own
day in court,” Richards v. Jefferson County, 517 U.S. 793, 798 (1996). Here, Schmidt was not a
party to the Caballero lawsuit.
Nevertheless, there are six exceptions to this general rule. Taylor, 553 U.S. at 893-95.
Navistar contends that two exceptions apply to this case, specifically: 1) “a party bound by a
judgment may not avoid its preclusive force by relitigating through a proxy”; and 2) “in certain
limited circumstances, a nonparty may be bound by a judgment because she was adequately
represented by someone with the same interests who [wa]s a party to the suit.” Id. (alterations
in original) (quotations and citations omitted); (Doc. 3) at 4-5.
Navistar’s argument rests on the premise that Caballero actually litigated the issue of
personal jurisdiction over Navistar in her state case. However, the record is clear that Caballero
“withdrew her opposition to [Navistar’s motion to dismiss for lack of personal jurisdiction] and
the court entered an agreed order granting Navistar’s motion.” (Doc. 3) at 2 (emphasis added).
Navistar submitted no evidence showing that the legal question of personal jurisdiction
was determined by the state court through anything other than a consent judgment. As such, the
stipulated order entered by the state court was not “actually litigated” and has no preclusive
effect in this case.
Furthermore, Caballero brought only individual claims. She did not have standing to
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bring wrongful death claims on behalf of Guerra’s estate. Schmidt, as the personal
representative, has standing to bring these wrongful death claims and has brought only claims on
behalf of the estate. While the factual predicates to both lawsuits necessarily overlap, the claims
are different. Caballero did not, and could not, represent Guerra’s estate. Schmidt represents
Guerra’s estate, and not Caballero individually. As such, Navistar’s two exceptions to the
general rule that issue preclusion does not apply to a party not present in the initial lawsuit does
not pertain to this case. Schmidt is, therefore, not bound by Caballero’s stipulation.
The stipulated order in Caballero’s case does not bind Schmidt and has no preclusive
effect in this case.
B. Personal Jurisdiction
“The validity of an order of a federal court depends upon that court’s having jurisdiction
over . . . the parties.” Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee,
456 U.S. 694, 701 (1982). Federal courts sitting in diversity have personal jurisdiction over
nonresident defendants to the extent permitted by the law of the forum, in this case, New
Mexico, and by constitutional due process. Intercon, Inc. v. Bell Atl. Internet Solutions, Inc.,
205 F.3d 1244, 1247 (10th Circuit 2000). The personal jurisdiction requirement flows from the
Due Process Clause and protects an individual’s liberty interest. Compagnie des Bauxites, 456
U.S. at 702.
The plaintiff has the burden of establishing that personal jurisdiction exists. See Kuenzle
v. HTM Sport-Und Freizeitgeräte AG, 102 F.3d 453, 456 (10th Cir. 1996). When a court
decides a Rule “12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an
evidentiary hearing, as in this case, the plaintiff need only make a prima facie showing of
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personal jurisdiction to defeat the motion.” OMI Holdings, Inc. v. Royal Ins. Co. of Canada,
149 F.3d 1086, 1091 (10th Cir. 1998).
The plaintiff must show two things: “first, that the exercise of jurisdiction is sanctioned
by the state’s long-arm statute; and second, that it comports with the due process requirements of
the Fourteenth Amendment.” Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir.
2011). New Mexico’s long-arm statute, NMSA 1978 § 38-1-16, “is coextensive with
constitutional limitations imposed by the Due Process Clause.” Trujillo v. Williams, 465 F.3d
1210, 1217 (10th Cir. 2006); see also Tercero v. Roman Catholic Diocese of Norwich, Conn.,
2002-NMSC-018, ¶ 8, 132 N.M. 312. Personal jurisdiction over a nonresident defendant
satisfies due process if there are sufficient “minimum contacts between the defendant and the
forum State.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980)
(quotations omitted); Intercon, 205 F.3d at 1247. The “limits on the State’s adjudicative
authority principally protect the liberty of the nonresident defendant—not the convenience of
plaintiffs or third parties.” Walden v. Fiore, 571 U.S. 277, 284 (2014).
“Depending on their relationship to the plaintiff’s cause of action, an out-of-state
defendant’s contacts with the forum state may give rise to either general (all-purpose)
jurisdiction or specific (case-linked) jurisdiction.” Old Republic Ins. Co. v. Continental Motors,
Inc., 877 F.3d 895, 903 (10th Cir. 2017) (citing Intercon, 205 F.3d at 1247). “A person may
submit to a State’s authority in a number of ways. There is, of course, explicit consent.” J.
McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 880 (2011) (J. Kennedy, plurality). “The
primary focus of [the] personal jurisdiction inquiry is the defendant’s relationship to the forum
State.” Bristol-Myers Squibb Co. v. Super. Ct. of Cal., S.F. Cty., --- U.S. ---, 137 S. Ct. 1773,
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1779 (2017); see World-Wide Volkswagen, 444 U.S. at 294 (“[T]he Due Process Clause does not
contemplate that a state may make binding a judgment in personam against an individual or
corporate defendant with which the state has no contacts, ties, or relations.” (internal quotation
marks and citations omitted)).
A foreign corporation’s registration to do business or designate an agent in the forum
state constitutes consent as determined by reference to the state statute governing such issues and
case law construing those statutes. See Robert Mitchell Furniture Co. v. Selden Breck Constr.
Co., 257 U.S. 213, 216 (1921) (“Unless the state law either expressly or by local construction
gives to the appointment a larger scope, we should not construe it to extend to suits in respect of
business transacted by the foreign corporation elsewhere. . . .”). Indeed, the Supreme Court has
held that “consent by registration” statutes passed constitutional muster under the Due Process
Clause. Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co.
243 U.S. 93, 96 (1917).
And the Tenth Circuit historically has followed this practice. For example, in Budde v.
Kentron Hawaii, Ltd., the Court held under Colorado law that a foreign corporation’s registration
to do business in that state constituted consent to general personal jurisdiction. 565 F.2d 1145
(10th Cir. 1977). In so holding, the Court distinguished an earlier case filed by the same
plaintiff in New Mexico in which the federal district court concluded it did not have general
personal jurisdiction. Id. at 1148 (citing Budde v. Ling-Temco-Vought, Inc., 511 F.2d 1033,
1036 (10th Cir. 1975)). The Tenth Circuit in Kentron Hawaii clarified that New Mexico law
provided no authority for the exercise of general personal jurisdiction. See id. (stating that
“result reached in the appeal from the judgment of dismissal by the federal district court in New

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Mexico was dictated by a lack of New Mexico law on the particular matter”). The Court in
Kentron Hawaii determined a different result because Colorado provided such authority. Id.
(“We believe Colorado Law exists which dictates a result different from the one reached by us in
the New Mexico case.”).
Subsequent to the Budde decisions, the New Mexico Court of Appeals issued its decision
in Werner v. Wal-Mart Stores, Inc., 1993-NMCA-112, 861 P.2d 270. In that case, the Court
reviewed the New Mexico Business Corporation Act, § 53-17-1 et seq., (NMBCA) and
concluded that the legislature intended § 53-17-11 to grant authority for state courts to exercise
personal jurisdiction over foreign corporations authorized to transact business in New Mexico.
1993-NMCA-112, ¶ 11, 861 P.2d at 273. In doing so, the court read § 53-17-11 in conjunction
with § 53-17-2, which provides that a foreign corporation registered to do business in New
Mexico “is subject to the same duties, restrictions, penalties and liabilities now or hereafter
imposed upon a domestic corporation of like character.” The court reasoned that because the
“legislative intent expressed in Section 57-13-2 appears to have been to equalize foreign and
domestic corporations operating within New Mexico,” a foreign corporation’s act of registering
to transact business in New Mexico constituted consent to New Mexico personal jurisdiction.
Werner, 1993-NMCA-112, ¶ 10, 861 P.2 at 272-73.
Werner thus supplied the authority for New Mexico courts to exercise general personal
jurisdiction over foreign corporations registered to transact business in New Mexico that the
Tenth Circuit found lacking when it decided Budde v. Ling-Temco-Vought, Inc. nearly twenty
years earlier. Fireman’s Fund Ins. Co. v. Thyssen Mining Construction of Canada, Ltd., 2011
WL 13085934, *3 (D.N.M. July 29, 2011) vacated on other grounds by Fireman’s Fund Ins. Co.
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v. Thyssen Mining Construction of Canada, Ltd., 703 F.3d 488 (10th Cir. 2012). The court in
Fireman’s Fund explained that, post-Werner, “New Mexico case law appears to allow general
personal jurisdiction over foreign corporations that are registered to do business within the state .
. . and that are served through their agent for service of process within the state[.]” Id. at *2.
The Fireman’s Fund court applied New Mexico law and concluded that it could exercise general
personal jurisdiction over a defendant who was registered to do business in New Mexico and
whose registered agent was served with process in New Mexico. Id. at *3.
In the time since the Werner and Fireman’s Fund cases were decided, the United States
Supreme Court decided Daimler AG v. Bauman, 571 U.S. 117 (2014). Daimler heralded a
narrowing of general personal jurisdiction and held that “[w]ith respect to a corporation, the
place of incorporation and principal place of business are paradigm bases for general
jurisdiction” because “[t]hose affiliations have the virtue of being unique—that is, each
ordinarily indicates only one place—as well as easily ascertainable.” 571 U.S. at 137 (omission,
alteration, internal quotation marks, and citations omitted). The Court explained the “exercise
of general jurisdiction in every State in which a corporation engages in a substantial, continuous,
and systematic course of business . . . is unacceptably grasping.” Id. at 138 (internal quotation
marks omitted). The Court further explained that “the inquiry . . . is not whether a foreign
corporation’s in-forum contacts can be said to be in some sense ‘continuous and systematic,’ it is
whether that corporation’s ‘affiliations with the State are so continuous and systematic’ as to
render [it] essentially at home in the forum State.” Id. at 138-39 (quoting Goodyear Dunlap
Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). The Court emphasizes that its
holding did not rest on the quantity of in-forum contacts alone, explaining its holding was based
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on “an appraisal of a corporation’s activities in their entirety, nationwide and worldwide[.]”
“[A] corporation that operates in many places can scarcely be deemed at home in all of them.
Otherwise, ‘at home’ would be synonymous with ‘doing business’ tests framed before specific
jurisdiction evolved in the United States.” Id. at 139 n.20. The Daimler Court “substantial[ly]
curb[ed] the exercise of general jurisdiction” by limiting the types of contacts adequate to satisfy
due process. Bristol-Myers, --- U.S. ---, 137 S. Ct. at 1784 (Sotomayor, J., dissenting).
As the New Mexico Court of Appeals noted in December 2018, Daimler neither cited
Pennsylvania Fire nor addressed its holding. Rodriguez v. Ford Motor Co., --- P.3d ---, 2018
WL 6716038, *5 (Dec. 20, 2018). Daimler does not address cases or situations in which a
defendant or foreign corporation has consented to personal jurisdiction in the forum state.
Daimler, 571 U.S. at 129 (“The Court’s 1952 decision in Perkins v. Benguet [Consolidated]
Mining Co., [342 U.S. 437 (1952),] remains the textbook case of general jurisdiction
appropriately exercised over a foreign corporation that has not consented to suit in the forum.”
(emphasis added) (alteration, internal quotation marks, and citation omitted)). As a result, it has
no bearing on the long-standing principle that a defendant may consent to such jurisdiction.
Moreover, neither Daimler nor any other case has overruled Pennsylvania Fire, so it remains
binding.
The New Mexico Court of Appeals also reaffirmed in Rodriguez that Werner constitutes
good law and reaffirmed that a foreign corporation registered to transact business in New Mexico
consents to general personal jurisdiction in the State. --- P.3d ---, 2018 WL 6716038, *7-11.
That court followed Werner and held foreign corporations were on notice that “registration . . .
and continued compliance with [the NMBCA’s] reporting requirements[] indicates consent to
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general jurisdiction.” Id. at *9.
Notably, the NMBCA attempts to limit the circumstances under which a foreign
corporation must register to transact business in New Mexico. NMSA 1978, § 53-17-1(A)-(K)
(2001 Repl. Pamp.) (listing kinds of activities that do not constitute “transacting business” for
purposes of registration requirements). Furthermore, the NMBCA specifically provides for the
withdrawal of a foreign corporation should it no longer wish to “transact business,” as that term
is used in the Act. NMSA 1978, § 53-17-15 (2015 Cum. Supp.).
Navistar registered to transact business in New Mexico in 1966. It has continued to
comply with the reporting requirements of the NMBCA since that time and has maintained a
registered agent in this State. At no time did Navistar exercise its statutory option to withdraw
from New Mexico.
Navistar cites cases outside of the Tenth Circuit, and outside of New Mexico, for the
proposition that “consent by registration” statutes are unconstitutional. (Doc. 20) at 2-6.
However, Navistar acknowledges that the Tenth Circuit has not addressed this issue in the
context of Daimler. Navistar further acknowledges that the Circuits have split: the Third and
Eighth Circuits have held that consent by registration statutes comport with due process
requirements, while the First, Fourth, Fifth, Seventh, and Eleventh Circuits have held that these
statutes violate due process. Id. at 3 nn. 1 and 2 (collecting cases).
While Navistar may be correct that consent by registration conflicts with the spirit of
Daimler. Nevertheless, these statutes were specifically endorsed in Pennsylvania Fire and in
the Budde cases as a constitutional means of exercising general personal jurisdiction over foreign
corporations. It is even possible that the Tenth Circuit or the Supreme Court will at some point
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deem consent by registration statutes, including the one in New Mexico, unconstitutional. But
until that happens, a lower court should not, “on its own authority . . . take[] the step of
renouncing [Supreme Court precedent].” Rodriguez de Quijas v. Shearson/Am. Express, Inc.,
490 U.S. 477, 484 (1989). “If a precedent of [the Supreme] Court has direct application in a
case, yet appears to rest on reasons rejected in some other line of decisions, the [lower court]
should follow the case which directly controls, leaving to [the Supreme] Court the prerogative of
overruling its own decisions.” Id.
This Court is bound to follow Pennsylvania Fire and Werner, and the conclusion is
inexorable: Navistar consented to general personal jurisdiction in New Mexico by registering to
transact business in New Mexico and by maintaining its registration under the NMBCA and
consent by registrations remains constitutionally valid under Pennsylvania Fire.
III.

Conclusion
The doctrine of issue preclusion does not apply to this case, and New Mexico’s consent

by registration statute remains valid and constitutionally sound. Navistar consented to general
personal jurisdiction in New Mexico by registering to transact business in New Mexico.
Accordingly, the Court has general personal jurisdiction over Navistar in this matter by virtue of
Navistar’s consent to the same, as described above.
IT IS, THEREFORE, ORDERED that Navistar’s Amended Rule 12(b)(2) Motion to
Dismiss for Lack of Personal Jurisdiction (Doc. 3) is denied.
__________________________________
UNITED STATES DISTRICT JUDGE

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