Luverne Truck Equipment, Inc. v. Worldwide Equipment, Inc.

Filing 17

Memorandum Opinion and Order denying 7 Motion to Dismiss for Lack of Jurisdiction and Motion to Transfer Venue. Signed by U.S. District Judge Karen E. Schreier on 3/24/2016. (JLS)

UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
LUVERNE TRUCK EQUIPMENT, INC.,
a Minnesota Corporation,
Plaintiff,
vs.
WORLDWIDE EQUIPMENT, INC.,
a Kentucky Corporation,

4:15-CV-04115-KES

MEMORANDUM OPINION
AND ORDER DENYING
MOTION TO DISMISS AND
MOTION TO TRANSFER VENUE

Defendant.
Plaintiff, Luverne Truck Equipment, Inc., filed suit against defendant,
Worldwide Equipment, Inc., asserting claims for trade dress infringement
under 15 U.S.C. § 1125(a), trade dress dilution under 15 U.S.C. § 1125(c), false
designation of origin under 15 U.S.C. § 1125(a), and unfair competition.
Docket 1. Worldwide moves to dismiss the complaint for lack of personal
jurisdiction and improper venue and, alternatively, moves to transfer venue to
the Eastern District of Kentucky. Docket 7. Luverne opposes the motions. For
the following reasons, Worldwide’s motions are denied.
BACKGROUND
Construing the facts in a light most favorable to the non-moving party,
Luverne, the facts are as follows:
Luverne is a corporation organized under the laws of Minnesota, and its
principal place of business is Brandon, South Dakota. Docket 1 at 1. Luverne

conducts business under the trade names of “Luverne Truck” and “Retrac.” It
manufactures and sells automobile and truck accessories. Id.
Worldwide is a corporation organized under the laws of Kentucky, and its
principle place of business is Prestonsburg, Kentucky. Id. Worldwide leases,
sells, and services medium and heavy-duty trucks and truck accessories.
Docket 8 at 2. Worldwide has purchased products from Luverne since 2010.
Docket 12 at 3.
This dispute revolves around a product called the TUFF GUARD. The
TUFF GUARD is a grille guard for mid-sized trucks and semi tractors. Id. at 2.
According to Luverne, Worldwide issued purchase orders for this product and
its accessories on 73 different occasions from March 2012 until July 2015. 1 Id.
at 4. The purchases were made on credit after Worldwide completed Luverne’s
credit application. Id. at 3.
In July 2015, Worldwide began ordering mounting brackets for the TUFF
GUARD without ordering the guard itself. Id. at 5. Luverne alleges that
Worldwide began manufacturing and selling a “copycat” grille guard that is
indistinguishable from the TUFF GUARD. Worldwide allegedly mounted the
copycat grille guard to trucks using TUFF GUARD mounting brackets. This
alleged manufacturing and sales scheme is the foundation of Luverne’s
complaint against Worldwide.

1It

appears that Worldwide contacted Luverne directly to initiate the sales
transaction on roughly 40 occasions, and that Worldwide issued purchase
orders and sent payment through a third party purchasing agent on roughly 30
occasions. See Docket 15 at 5-6.
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STANDARD OF REVIEW
When reviewing a motion under Rule 12(b)(2), the court must view the
facts in a light most favorable to the party opposing the motion. Aaron Ferer &
Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir. 1977) (citing
Block Indus. v. DHJ Indus. Inc., 495 F.2d 256, 259 (8th Cir. 1974)). The party
asserting jurisdiction must make a prima facie showing that personal
jurisdiction exists and that the opposing party can be subjected to jurisdiction
within the forum state. K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588,
591–92 (8th Cir. 2011). The court can consider the pleadings, affidavits,
exhibits, or other evidence when deciding whether a prima facie showing has
been made. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.
2004). “While the plaintiff[] bear[s] the ultimate burden of proof, jurisdiction
need not be proved by a preponderance of the evidence[.]” Epps v. Stewart Info.
Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003) (citing Dakota Indus., Inc. v.
Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991)).
DISCUSSION
I.

The Court has Personal Jurisdiction over Worldwide.
In a diversity action, the court “ ‘may assume jurisdiction over

nonresident defendants only to the extent permitted by the long-arm statute of
the forum state and by the Due Process Clause.’ ” Romak USA, Inc. v. Rich, 384
F.3d 979, 987 (8th Cir. 2004) (quoting Dever, 380 F.3d at 1073). South
Dakota’s long arm statute asserts jurisdiction to the full reach of the due
process clause. See SDCL 15-7-2(14); see also Austad Co. v. Pennie &
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Edmonds, 823 F.2d 223, 225 (8th Cir. 1987). Thus, for the court to assert
jurisdiction over Worldwide, it must determine whether the exercise of
jurisdiction comports with the mandates of the due process clause. See Larson
Mfg. Co. of South Dakota v. Connecticut Greenstar, Inc., 929 F. Supp. 2d 924,
926 (D.S.D. 2013) (citing Dakota Indus., Inc. v. Ever Best Ltd., 28 F.3d 910, 915
(8th Cir. 1994)).
“Due process mandates that jurisdiction be exercised only if [the]
defendant has sufficient ‘minimum contacts' with the forum state, such that
summoning the defendant to the forum state would not offend ‘traditional
notions of fair play and substantial justice.’ ” Digi–Tel Holdings, Inc. v. Proteq
Telecomms., Ltd., 89 F.3d 519, 522 (8th Cir. 1996) (quoting Int'l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)). Analyzing the “minimum contacts”
requirement depends on whether the court's jurisdiction over a party is said to
be specific or general. See Helicopteros Nacionales de Colombia, S.A. v. Hall,
466 U.S. 408, 414–15 (1984). A forum may exercise specific jurisdiction when
the cause of action is “arising out of or related to the defendant's contacts with
the forum[.]” Id. at 414. By contrast, general jurisdiction may be asserted when
a defendant's contacts with the forum are said to be sufficiently “ ‘continuous
and systematic’ as to render [the defendant] at home in the forum State.”
Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851 (2011).
“Both theories of personal jurisdiction require ‘some act by which the
defendant purposely avails itself of the privilege of conducting activities within

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the forum State, thus invoking the benefits and protections of its laws.’ ” Dever,
380 F.3d at 1073 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
The Eighth Circuit Court of Appeals has established a five factor test for
evaluating whether a defendant has minimum contacts with the forum state:
(1) the nature and quality of the contacts with the forum state;
(2) the quantity of those contacts; (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.
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)).
Because the first three factors are interrelated, the court can consider them
together. Northrup King Co. v. Compania Productora Semillas Algodoneras
Selectas, S.A., 51 F.3d 1383, 1388 (8th Cir. 1995). The fourth and fifth factors
are less important in the analysis. Dever, 380 F.3d at 1074. The court finds
that Worldwide does not have contacts with South Dakota to the extent
necessary to assert general jurisdiction over it. Thus, the issue is whether
Worldwide has sufficient contacts with South Dakota that enables the court to
exercise specific jurisdiction over Worldwide.
Worldwide argues that its contacts with South Dakota are well below the
level necessary for the court to exercise specific jurisdiction over it. Because its
contacts are limited to purchasing products from a business located in South
Dakota, Worldwide believes that these commercial transactions are insufficient
grounds upon which a court can exercise specific jurisdiction. Worldwide urges
the court to hold that the assertion of specific jurisdiction requires further
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intentional conduct of the defendant like the defendant’s physical presence in
the forum or the defendant sending materials into the forum to aid the
manufacturing process. Docket 8 at 8-9.
As support for its position, Worldwide cites Bell Paper Box, Inc. v. Trans
Western Polymers, Inc., 53 F.3d 920, 921-22 (8th Cir. 1995). In Bell, the court
found that insufficient contacts to establish jurisdiction existed when an outof-state buyer merely purchased a product and never entered the forum state.
Bell, 53 F.3d at 921. The buyer had entered into a purchase agreement with a
manufacturer and sent films to the manufacturer’s forum state to ensure the
final product was the appropriate color scheme. Id. Despite the fact that the
defendant sent material to the forum state, the Eighth Circuit held that there
were insufficient contacts for specific jurisdiction. Id. at 922. Worldwide argues
that the same rationale applies here because it only purchased products from a
business in South Dakota, and it did so without sending any material to assist
with production.
Worldwide also cites Watlow Electric Manufacturing, Co. v. Patch Rubber
Co., 838 F.2d 999 (8th Cir. 1988), as an example of the level of contacts
necessary for a finding of specific jurisdiction. Docket 8 at 8. The buyer in
Watlow requested a catalogue from the seller, sent raw materials to the forum
state for the manufacturing process, and had a representative of the
corporation attend a meeting and tour the production facility in the forum
state. Id. (citing Watlow, 838 F.2d at 1000). According to Worldwide, the

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combination of contacts exemplified in Watlow is far beyond the contacts that
Worldwide exhibits with South Dakota.
Finally, Worldwide argues that the contacts analyzed by this court must
be limited to Worldwide’s contacts with the forum itself, not a plaintiff located
in the forum. In support of this argument, Worldwide cites Nichols v. MMIC
Insurance Inc., 68 F. Supp. 3d 1067, 1076 (D.S.D. 2014), and Scullin Steel Co.
v. National Railway Utilization Corp., 676 F.2d 309, 314 (8th Cir. 1982). In
Nichols, this court found that a defendant physician had insufficient contacts
with South Dakota for specific jurisdiction. Nichols, 68 F. Supp. 3d at 1078.
The court found insufficient contacts because the alleged medical malpractice
occurred in Nebraska, and the only contacts that the physician exhibited with
South Dakota were achieved through follow-up phone calls to the plaintiff and
phone calls to pharmacies in the state. Id. at 1076-1077. In Scullin, the Eighth
Circuit Court of Appeals found that the process of negotiating and forming a
contract through phone calls and the mail was insufficient for establishing
minimum contacts. Scullin, 676 F.2d at 311. According to Worldwide, Nichols
and Scullin establish that a finding of minimum contacts requires that a
defendant have connections to the forum state that exist outside of its
communication with the plaintiff. Because its only connection to South Dakota
is through communication with Luverne, Worldwide believes that Nichols and
Scullin provide further support for its position that it lacks minimum contacts
with the forum state.

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In response, Luverne asserts that Worldwide’s argument relies upon the
false premise that physical presence is required in the forum as a prerequisite
to specific jurisdiction. Luverne states that the opposite is true and cites an
opinion from the United States Supreme Court, Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 476 (1985), to support its position:
Jurisdiction in these circumstances may not be avoided merely
because the defendant did not physically enter the forum State.
Although territorial presence frequently will enhance a potential
defendant’s affiliation with a State and reinforce the reasonable
foreseeability of suit there . . . So long as a commercial actor’s
efforts are “purposefully directed” toward residents of another
State, we have consistently rejected the notion that an absence of
physical contacts can defeat personal jurisdiction there.
Docket 12 at 11 (quoting Burger King Corp., 471 U.S. at 476).
Luverne argues that Burger King provides sufficient precedent for this
court to determine whether the extensive transactions between Worldwide and
Luverne create sufficient contacts for specific jurisdiction. In support of this
argument, Luverne states that the Eighth Circuit precedent cited by Worldwide
does not contradict Burger King. Luverne claims there is no contradiction
because the precedent cited by Worldwide is much more constrained than what
Worldwide suggests. Luverne cites one section of Bell in particular: “[m]erely
entering into a contract with a forum resident does not provide the requisite
contacts.” Docket 12 at 12 (emphasis in original) (quoting Bell, 53 F.3d at 922).
Luverne’s position is that Bell, and much of the other precedent cited by
Worldwide, establishes that even though one commercial transaction is

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insufficient for specific jurisdiction, the transaction is nonetheless a relevant
link to the forum in the minimum contacts analysis.
With foundation established for the position that a commercial
transaction constitutes a connection to the forum state, Luverne relies heavily
on Wells Dairy, Inc. v. Food Movers International, Inc., 607 F.3d 515 (8th Cir.
2010). In Wells Dairy, the Eighth Circuit found that a California buyer had
sufficient contacts for the court to exercise specific jurisdiction over the
defendant. Id. at 520. The court noted that the buyer initiated the sales
transactions, the buyer faxed more than 100 purchase orders to the seller, and
the buyer purchased the product on credit. Id. at 517. Luverne argues that
Wells Dairy is very similar to the transactions between Luverne and Worldwide
because Worldwide is the entity that initiated the business relationship,
Worldwide issued over 70 purchase orders to Luverne, and Worldwide
completed its purchases on credit. Based on these similarities, Luverne argues
that Wells Dairy provides adequate precedent for the court to assert specific
jurisdiction here. The court finds this argument persuasive.
While Worldwide cites valid case law, it construes the precedent to argue
that the assertion of specific jurisdiction demands that a commercial buyer
have contacts with the forum state that are independent from its telephonic or
electronic contact with the seller. Without a physical presence in the forum or
sending materials to the forum, Worldwide believes specific jurisdiction is
lacking. The court disagrees with this position. Not only has the Supreme
Court consistently dispelled the notion that physical presence in the forum is
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required to establish minimum contacts, see Burger King, 471 U.S. at 476, but
recent Supreme Court precedent also runs contrary to Worldwide’s position.
In Walden v. Fiore, 134 S. Ct. 1115 (2014), the Supreme Court clarified
the proper considerations in a minimum contacts analysis. The Court affirmed
that “[it has] upheld the assertion of jurisdiction over defendants who have
purposefully ‘reach[ed] out beyond’ their State and into another by, for
example, entering a contractual relationship that ‘envisioned continuing and
wide-reaching contacts’ in the forum state.” Id. at 1122 (quoting Burger King,
471 U.S. at 479-80).
The Court also resolved the factors that should be considered when the
plaintiff is the defendant’s only connection to the forum state. Walden, 134 S.
Ct. at 1123. After stating the “plaintiff cannot be the only link between the
defendant and the forum,” the Court cited to Kulko v. Superior Court of
California, 436 U.S. 84, 93 (1978). Walden, 134 S. Ct. at 1123. In Kulko, the
Supreme Court declined to recognize personal jurisdiction over a father
because his only connection to California was through his ex-wife and
daughter who had recently moved there. Kulko, 436 U.S. at 93. The father’s
connection to California was entirely passive. Id. The Court’s citation to Kulko
highlights that a proper minimum contacts analysis must consider whether the
“defendant’s conduct … form[s] the necessary connection with the forum
State[.]” Walden, 134 S. Ct. at 1123. “Due process requires that a defendant be
haled into court in a forum State based on his own affiliation with the State,
not based on the ‘random, fortuitous, or attenuated’ contacts he makes by
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interacting with other persons affiliated with the state.” Id. (citing Burger King,
471 U.S. at 475). As detailed in Walden, proper minimum contacts analysis
considers only the connections created by a defendant’s conscious decision to
reach out to a forum state, including the decision to enter into a contractual
relationship.
Viewing the facts in a light most favorable to Luverne, there is nothing
random, fortuitous, or attenuated about Worldwide’s contacts with South
Dakota. Worldwide reached out to Luverne in South Dakota to purchase the
TUFF GUARD and other products. After submitting a credit application,
Worldwide, or its agents, issued roughly 70 different purchase orders over a
four year period. This factual background and purchasing structure is
strikingly similar to the scenario that the Eighth Circuit found sufficient for
specific jurisdiction over the defendant in Wells Diary.
But in order for this court to exercise specific jurisdiction, it must also
determine that the cause of action arises out of, or is related to, Worldwide’s
contacts with South Dakota. Helicopteros, 466 U.S. at 414. Luverne alleges
that Worldwide initiated an ongoing relationship where it consistently
purchased the TUFF GUARD on credit, and then utilized that product to
manufacture a copycat version. While producing and selling the copycat
product, Luverne also alleges that Worldwide continued to purchase TUFF
GUARD mounting brackets to affix the copycat product to its customer’s
trucks. Worldwide allegedly continued to reach out to the forum as an integral

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step in producing and selling its copycat product. Thus, the cause of action is
related to Worldwide’s contacts with South Dakota.
In the modern business climate, it is no longer necessary for companies
to conduct business in a face-to-face setting. Technology permits businesses to
create business contacts and form new contracts without ever meeting in
person. The four-year business relationship between Luverne and Worldwide
shows as much. Based on the wealth of transactions found in this modern-era
business relationship, and giving consideration to Worldwide’s conscious
decision to reach out to the forum state both before and after production of the
supposed copycat product, the court finds that Luverne has made a prima facie
case that Worldwide has minimum contacts with South Dakota. Thus, the
assertion of specific jurisdiction over Worldwide complies with the mandates of
the due process clause. Worldwide’s motion to dismiss based on a lack of
personal jurisdiction is denied.
II.

The District of South Dakota is a Proper Venue for the Litigation.
Worldwide moves to dismiss the complaint for improper venue and,

alternatively, moves to transfer venue to the Eastern District of Kentucky. In
support of its motion, Worldwide cites the facial invalidity of Luverne’s
complaint as it pertains to venue, and it argues that the District of South
Dakota is an inconvenient venue for this litigation.
A.

Motion to Dismiss the Complaint.

Worldwide urges the court to find that the District of South Dakota is an
improper forum by citing Luverne’s complaint. Luverne’s complaint relies upon
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28 U.S.C. § 1391(b)(3) to establish that venue is proper in this district. Docket
1 at 2. Section 1391(b)(3) is the catch-all provision of the venue statute and
authorizes the bringing of a civil action: “if there is no district in which an
action may otherwise be brought as provided in this section, [in] any judicial
district in which any defendant is subject to the court’s personal jurisdiction
with respect to such action.” 28 U.S.C. § 1391(b)(3). Worldwide contends that
Luverne’s citation to the catch-all provision is not only incorrect but also shows
that South Dakota is an improper forum because the action could easily have
been filed in the Eastern District of Kentucky, where Worldwide resides.
Luverne responds by stating that it should have cited subsection (1) of
section (b) of the venue statute. Section 1391(b)(1) establishes that a civil
action may be brought in “a judicial district in which any defendant resides, if
all defendants are residents of the State in which the district is located.”
28 U.S.C. § 1391(b)(1). Luverne also cites 28 U.S.C. § 1391(c)(2), which
provides the following:
an entity with the capacity to sue and be sued in its common name
under applicable law, whether or not incorporated, shall be
deemed to reside, if a defendant, in any judicial district in which
such a defendant is subject to the court’s personal jurisdiction
with respect to the civil action in question[.]
28 U.S.C. § 1391(c)(2). Therefore, “a defendant is ‘deemed to reside [for venue
purposes] in any judicial district in which it is subject to personal jurisdiction
at the time the action is commenced.’ ” Dakota Sportswear, 946 F.2d at 1392
(8th Cir. 1991) (alterations in original) (quoting 28 U.S.C. § 1391(c)).

13

Because the court finds that it can exercise personal jurisdiction over
Worldwide, it also finds that the District of South Dakota is a proper venue for
this action. Therefore, the issue is whether Luverne’s failure to cite the proper
statute provides a basis for dismissing the complaint. Worldwide has not
offered any authority in support of dismissing the complaint based on the
improper citation.
Luverne argues that its failure to cite the proper statute is immaterial
because the allegation of improper venue is merely an affirmative defense.
Docket 12 at 20. Luverne cites Catholic Order of Foresters v. U.S. Bancorp Piper
Jaffray, Inc., 337 F. Supp. 2d 1148, 1158 (N.D. Iowa 2004), to support this
position. In Catholic Order, the district court stated the following:
[I]n contrast to pleading requirements for jurisdiction, [a] plaintiff
is not required to include in his complaint allegations showing that
venue is proper in the district in which the suit has been brought
. . . Since improper venue is a matter of defense, it is not necessary
for plaintiff to include allegations showing the venue to be proper.
Id. at 1158 (internal citations omitted). The court adopts this rationale. Despite
Luverne’s failure to cite the proper subsection of the venue statute, it has
alleged sufficiently that Worldwide is subject to personal jurisdiction in this
district. Thus, the motion to dismiss the complaint on account of an improper
citation relating to venue is denied.
B.

Motion to Transfer Venue.

Worldwide relies upon 28 U.S.C. § 1404(a) to support its motion. Section
1404(a) provides: “For the convenience of parties and witnesses, in the interest
of justice, a district court may transfer any civil action to any other district or
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division where it might have been brought or to any district or division to which
all parties have consented.” 28 U.S.C. § 1404(a). The Eighth Circuit Court of
Appeals has “declined to offer an ‘exhaustive list of specific factors to consider’
in making the transfer decision[.]” In re Apple, Inc. 602 F.3d 909, 912 (8th Cir.
2010) (quoting Terra Int’l, Inc. v. Miss. Chem. Corp., 119 F.3d 688, 693 (8th Cir.
1997)). Instead, “district courts should weigh any ‘case-specific factors’ relevant
to convenience and fairness to determine whether transfer is warranted.” Id.
(citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). “In general,
federal courts give considerable deference to a plaintiff’s choice of forum and
thus the party seeking a transfer under section 1404(a) typically bears the
burden of proving that a transfer is warranted.” Terra Int’l, 119 F.3d at 695.
Worldwide argues generally that transferring venue to the Eastern
District of Kentucky will be more convenient for witnesses and the parties.
Because this dispute stems from the alleged production and sale of a copycat
grill, Worldwide believes the necessary witnesses will be located in the area
where it sells the product. While there may be necessary witnesses in the areas
where the product is marketed, Worldwide has failed to support this assertion
with any specificity other than offering a limited representation of where it
markets its products. Because Worldwide has failed to provide sufficient
support for its argument, the court should give deference to Luverne’s choice of
forum. Thus, Worldwide’s motion to transfer venue is denied.

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CONCLUSION
Prior to this dispute, Worldwide issued over 70 separate purchase orders
to Luverne over a four year period. These purchases all relied upon Luverne
extending credit to Worldwide. Because this dispute is interrelated with the
wealth of transactions associated with the TUFF GUARD, the court finds that
Worldwide has sufficient contacts with South Dakota for the court to exercise
specific jurisdiction over it.
As to the motion to transfer venue, Worldwide failed to cite sufficient
support to overcome the heavy presumption that a court should give deference
to a plaintiff’s choice of forum. Thus, it is
ORDERED that Worlwide’s motion to dismiss for a lack of personal
jurisdiction (Docket 7) is DENIED. It is
FURTHER ORDERED that Worldwide’s motion to dismiss for improper
venue and, alternatively, to transfer venue is DENIED.
Dated March 24, 2016.
BY THE COURT:

/s/ Karen E. Schreier

KAREN E. SCHREIER
UNITED STATES DISTRICT JUDGE

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