Everett v. BRP-Powertrain GmbH & Co KG et al
DECISION AND ORDER signed by Judge Lynn Adelman on 7/7/17 that the plaintiff's motion for reconsideration (ECF No. 80 ) is GRANTED IN PART. FURTHER ORDERING that the parties' motions to seal certain portions of the record (ECF Nos. 79 & 89 ) are GRANTED. (cc: all counsel) (gc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
Case No. 14-C-1189
LEADING EDGE AIR FOILS, LLC,
DECISION AND ORDER
The plaintiff, Gregory Everett, suffered serious injuries when a small plane he
was piloting crashed. He claims that the crash was caused by a defective Rotax engine
that he purchased at a popular airshow in Oshkosh, Wisconsin. Everett filed this suit,
alleging negligence and strict products liability, in the Eastern District of Wisconsin
against four companies that he alleges were involved in the design, manufacture,
distribution, and sale of the engine.
This case was initially assigned to Judge Rudolph T. Randa. While the case was
pending before Judge Randa, three of the four defendants filed motions to dismiss on
the ground that they are not subject to personal jurisdiction in Wisconsin. These three
defendants are Bombardier Recreational Products, Inc.; BRP-Rotax GmbH & Co KG
(formerly known as BRP-Powertrain GmbH & Co KG); and Kodiak Research, Ltd. I will
refer to these defendants, respectively, as “BRP Inc.,” “BRP-Rotax,” and “Kodiak.” The
plaintiff opposed the motions to dismiss and also requested leave to conduct discovery
relating to personal jurisdiction.
Judge Randa denied the plaintiff’s request for
jurisdictional discovery and granted the defendants’ motions to dismiss. See Dec. &
Order of Sept. 9, 2015, ECF No. 33. A short time later, the plaintiff filed a motion for
reconsideration of these decisions, which Judge Randa denied. See Dec. & Order of
January 20, 2016, ECF No. 45. The case then proceeded against the fourth defendant,
Leading Edge Air Foils, Inc., or “LEAF,” on the merits. At about this time, Judge Randa
became unable to preside over cases, and the case was reassigned to me.
LEAF is a small Wisconsin company that sold the Rotax engine to the plaintiff at
the airshow in Oshkosh, Wisconsin. After taking some discovery from LEAF, including
the deposition of LEAF’s owner, William Read, the plaintiff settled its claims against this
defendant. During the deposition, the plaintiff’s lawyer extensively questioned Read
about the previously dismissed defendants’ contacts with Wisconsin.
Read’s testimony gives rise to a stronger basis for exercising personal jurisdiction over
these other defendants, the plaintiff filed a second motion to reconsider Judge Randa’s
order dismissing those defendants and denying his request for jurisdictional discovery.
After the plaintiff filed this motion, he and LEAF entered into a stipulation agreeing to the
entry of an order dismissing LEAF from this case with prejudice. I entered such an
order on May 4, 2017. Below, I address the plaintiff’s motion for reconsideration of
Judge Randa’s order dismissing the other three defendants and denying him leave to
conduct jurisdictional discovery.
I. FACTUAL BACKGROUND
During the life of this case, the parties have filed several motions relating to
personal jurisdiction over BRP Inc., BRP-Rotax, and Kodiak, and the factual materials
relevant to the plaintiff’s motion for reconsideration are scattered throughout the record.
For convenience, I have identified the relevant materials, and where they may be found
in the record, in the margin.1 Because neither Judge Randa nor I held a hearing on the
question of personal jurisdiction, I resolve any conflicts in the parties’ affidavits or other
supporting materials in the plaintiff’s favor.
See, e.g., Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782–83 (7th Cir. 2003).
The product at issue in this case is a Rotax 582 Model 99 DCDI engine. The
plaintiff, who is a resident of Missouri, purchased this engine from LEAF at an airshow
in Oshkosh, Wisconsin. This airshow is known as the EAA AirVenture Oshkosh, which
is sponsored by the International Experimental Aircraft Association. This is one of the
largest airshows in the world, and each year more than half a million people and
hundreds of manufacturers of airplane products attend.
Read Dep. at 10:8–10:12,
oshkosh/overview (last viewed July 7, 2017). After the plaintiff purchased the engine,
he presumably transported it to his home in Missouri, where it was installed in his
personal aircraft. He alleges in his complaint that, during a flight in Missouri, the engine
overheated and stalled, which caused the plane to crash.
The plaintiff suffered a
fractured spine and other injuries that left him paralyzed below the waist.
The engine at issue was designed and manufactured by BRP-Rotax.
company is organized under the laws of Austria and has its principal place of business
in Gunskirchen, Austria.
Oslinger Aff. ¶ 3.
The engine itself was designed and
Aff. of Pascal Ronveaux, ECF No. 10-2; Decl. of William Read, ECF No. 110-3; Aff. of
Eric Tucker, ECF No. 10-4; Aff. of Yves St-Arnaud, ECF No. 22; Aff. of Peter Oslinger,
ECF No. 23; Screenshots from BRP-Rotax, Kodiak & LEAF websites, ECF Nos. 37-1,
37-2 & 37-3; Aff. of Colin A. Sommer, P.E., ECF No. 37-4; Dep. of Pascal Ronveaux,
ECF No. 37-5; Dep. of William Read, ECF Nos. 80-1.
manufactured at BRP-Rotax’s facilities in Austria. Id. ¶ 4. BRP-Rotax does not directly
transact business in the United States, but it sells products in the United States through
its independent distributor, Kodiak Research, Ltd. Id. ¶ 11; Ronveaux Aff. ¶ 5. Kodiak
is organized under the laws of the Bahamas and has its only place of business in
Nassau, Bahamas. Ronveaux Aff. ¶ 3. Kodiak distributes Rotax products to retailers in
the United States. Id. ¶¶ 4, 10–16. Kodiak sold the engine at issue in this case to
LEAF, a Wisconsin limited liability company, through a transaction in which title to the
engine passed to LEAF while the engine was still in the Bahamas, and in which LEAF
was responsible for getting the engine from the Bahamas to Wisconsin. Read Dep. at
In business terms, LEAF’s purchase of the engine from Kodiak was
“F.O.B. Bahamas.” Id.; Ronveaux Aff. ¶ 10.
The evidence in the record establishes that both BRP-Rotax and Kodiak are
aware that LEAF purchases Rotax products from Kodiak with the intent to resell those
products to customers from its location in Wisconsin.
According to William Read,
Kodiak has designated LEAF as an “independent service center” for Rotax engines.
Read Dep. at 8:16–9:2. This means that Kodiak has granted LEAF permission to sell
Rotax branded parts and use Rotax logos in its marketing materials. Id. at 9:3–9:7.
Also, as a designated independent service center, LEAF attends an annual meeting at
Kodiak’s facility in the Bahamas.
Id. at 31:14–31:25.
Pascal Ronveaux, Kodiak’s
president, knows that LEAF is one of its independent service centers and that LEAF is
located in Wisconsin.
Ronveaux Dep. at 34:1–34:24; Read Dep. at 25:11–25:15.
Further, Kodiak has a website that includes a map that identifies the locations of its
independent service centers. See ECF No. 37-2. The map identifies LEAF as an
independent service center located in Wisconsin.
As for BRP-Rotax, its own
website has a “dealer locator” feature that identifies LEAF as a place to purchase Rotax
products in Wisconsin. ECF No. 37-1.
The remaining defendant, BRP Inc., is the parent company of BRP-Rotax. See
St-Arnaud Aff. ¶ 6.
BRP Inc. is organized under the laws of Canada and has its
principal place of business in Valcourt, Quebec. Id. ¶ 3. According to one of BRP Inc.’s
officers, BRP Inc. was not involved in the design, manufacture, or sale of the Rotax
engine at issue in this case. Id. ¶ 5. Rather, the chain of events that led to the plaintiff’s
purchasing the engine in Wisconsin began with BRP-Rotax as the designer and
manufacturer, passed through Kodiak as the distributor, and ended with LEAF as the
retailer. In his complaint, the plaintiff alleges that BRP Inc. was involved in the design
and manufacture of the engine. Am. Compl. ¶ 13, ECF No. 46. However, the plaintiff
has not submitted evidence to contradict BRP Inc.’s affidavit stating that it was not
involved in the design or manufacture of the engine. See Purdue Research, 338 F.3d at
782 (“once the defendant has submitted affidavits or other evidence in opposition to the
exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative
evidence supporting the exercise of jurisdiction”).
Nor has the plaintiff offered any
colorable grounds for believing that BRP Inc. was in fact involved in the design and
manufacture of the engine, such that further discovery on this topic would be warranted.
See Central States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230
F.3d 934, 946 (7th Cir. 2000) (stating that jurisdictional discovery against a defendant is
warranted only if plaintiff establishes a “colorable or prima facie showing of personal
jurisdiction”). Thus, for purposes of determining whether BRP Inc. is subject to personal
jurisdiction in Wisconsin, I assume that it was not involved in the design or manufacture
of the engine.
As noted, the issue of personal jurisdiction arises in the context of the plaintiff’s
second motion to reconsider Judge Randa’s original order granting BRP Inc.’s, BRPRotax’s, and Kodiak’s motions to dismiss.
The plaintiff, in his motion for
reconsideration, characterizes the motion as one filed under Federal Rule of Civil
Procedure 60(b), and the defendants contend that, under the legal standards applicable
to Rule 60(b) motions, the plaintiff’s motion is untimely. However, Rule 60(b) applies
only when a party seeks relief from a final judgment, order, or proceeding.
Randa’s order dismissing the three defendants for lack of personal jurisdiction was not
final because (a) it did not dispose of the plaintiff’s claims against LEAF and (b) Judge
Randa did not direct the entry of final judgment as to the dismissed parties only. See
Fed. R. Civ. P. 54(b). Under Rule 54(b), Judge Randa’s order may be “revised at any
time before the entry of a judgment adjudicating all the claims and all the parties’ rights
and liabilities.” Id.; see also Cameo Convalescent Center, Inc. v. Percy, 800 F.2d 108,
110 (7th Cir. 1986) (pre-judgment orders may be reconsidered at any time). This court
has not yet entered a judgment adjudicating all of the claims and all of the parties’ rights
and liabilities, and thus Judge Randa’s earlier order dismissing some of the defendants
for lack of personal jurisdiction remains nonfinal.2
Accordingly, the legal standards
After the plaintiff filed his latest motion for reconsideration of Judge Randa’s order, he
and LEAF entered into a stipulation of dismissal, and I entered an order of dismissal as
to LEAF only. However, after the dismissal of LEAF, neither I nor the clerk entered a
judgment reflecting the termination of the litigation as to all claims and all parties. Thus,
applicable to a motion under Rule 60(b) do not apply to the plaintiff’s motion for
reconsideration. I will therefore treat the plaintiff’s motion as a motion to reconsider a
nonfinal order. Moreover, because the deposition of William Read introduces new facts
into the personal-jurisdiction analysis, I conclude that it is appropriate to revisit whether
this court has personal jurisdiction over the three dismissed defendants. I address this
In cases in which a federal court’s subject-matter jurisdiction is based on diversity
of citizenship, the court will have personal jurisdiction over a defendant only if the state
in which the court sits would have such jurisdiction. Kipp v. Ski Enter. Co. of Wis., 783
F.3d 365, 697 (7th Cir. 2015).
Judge Randa concluded that Wisconsin’s long-arm
statute, Wis. Stat. § 801.05, confers jurisdiction to the fullest extent allowed under the
Due Process Clause of the Fourteenth Amendment, ECF No. 33 at p.4, and no party
asks me to address the long-arm statute. Thus, I will not discuss the long-arm statute
but will proceed to the question of whether exercising personal jurisdiction over BRP
Inc., BRP-Rotax, and Kodiak is consistent with due process.
The Due Process Clause authorizes personal jurisdiction over an out-of-state
defendant when the defendant has “certain minimum contacts with [the state] such that
the maintenance of the suit does not offend ‘traditional notions of fair play and
the order dismissing LEAF as a party did not transform Judge Randa’s earlier order into
a final order. Moreover, although a stipulation of dismissal of an action may terminate
the litigation as to all claims and all parties without a court order, see Fed. R. Civ. P.
41(a)(1)(A)(ii), here the stipulation of dismissal, which was signed by only the plaintiff
and LEAF, was not a Rule 41(a) stipulation of dismissal, as it did not purport to dismiss
the entire action and was not “signed by all parties who have appeared,” as required by
the rule. See Rule 41(a)(1)(A)(ii). So again, the dismissal of LEAF did not transform
Judge Randa’s nonfinal order into a final order.
substantial justice.’” Kipp, 783 F.3d at 697 (quoting Int’l Shoe Co. v. Washington, 326
U.S. 310, 316 (1945)). Another prerequisite to a court’s exercising personal jurisdiction
over a defendant is that the defendant must have “purposefully availed” itself of the
privilege of conducting activities within the forum state, thus invoking the benefits and
protections of its laws. J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 880
(2011) (quoting Hanson v. Denckla, 564 U.S. 873 (1958)). Courts recognize two types
of personal jurisdiction: general and specific. Kipp, 783 F.3d at 697 (quoting Daimler
AG v. Bauman, __ U.S. __, 134 S.Ct. 746, 751 (2014)). General jurisdiction is “allpurpose”; it exists only “when the [party’s] affiliations with the State in which suit is
brought are so constant and pervasive as to render it essentially at home in the forum
State.” Id. at 697–98 (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564
U.S. 915, 919 (2011)). Specific jurisdiction is case-specific; the claim must be linked to
the activities or contacts with the forum. Id. at 698; see also Bristol-Myers Squibb Co. v.
Superior Court of California, __ U.S. __, 137 S.Ct. 1773, 1780 (2017).
In products-liability cases such as this one, it has long been the law that a
manufacturer or distributor of an allegedly defective product is subject to specific
personal jurisdiction in the state in which the product was sold to the plaintiff, so long as
the sale of the product in that state was not an “isolated occurrence” but arose from the
efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its
product in that state. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297
(1980). Put differently, a state “does not exceed its powers under the Due Process
Clause if it asserts personal jurisdiction over a corporation that delivers its products into
the stream of commerce with the expectation that they will be purchased by consumers
in the forum State.” Id. at 298. This is hornbook law. See, e.g., Am. L. of Prods. Liab
3d § 48:85 (Westlaw 2017); see also Dehmlow v. Austin Fireworks, 963 F.2d 941, 946
(7th Cir. 1992) (“This Circuit has repeatedly endorsed the ‘stream of commerce theory’
and has resolved cases on the basis of it.”). More recently, a plurality of the Court has
stated that, under the stream-of-commerce theory, the defendant’s transmission of
goods to a state permits the exercise of jurisdiction where the defendant “can be said to
have targeted the forum” by “engag[ing] in conduct purposefully directed at” the forum
state. J. McIntyre, 564 U.S. at 882, 886 (opinion of Kennedy, J.).3
In the present case, the evidence in the record establishes that both BRP-Rotax,
the manufacturer of the allegedly defective engine, and Kodiak, the distributor of that
engine to LEAF in Wisconsin, are subject to specific personal jurisdiction in Wisconsin
in connection with a claim for personal injuries caused by that engine.
establishes that the sale of the Rotax engine in Wisconsin was not an isolated
occurrence but was part of the regular flow of Rotax products from BRP-Rotax, through
Kodiak, to LEAF in Wisconsin; that both BRP-Rotax and Kodiak expected that that
consumers would purchase Rotax products from LEAF in Wisconsin; and that these
defendants targeted Wisconsin.
I acknowledge that the “stream of commerce” theory still has its unsettled aspects,
particularly as it applies to cases in which a product is brought into the forum through
the isolated actions of third parties of which the manufacturer or distributor is unaware.
See, e.g., J. McIntyre, 564 U.S. at 879 (noting that Court’s separate opinions in Asahi
Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987), created
confusion over scope of stream-of-commerce theory). But in the present case, as
discussed below, both Kodiak and BRP-Rotax knew that LEAF regularly sold Rotax
products in Wisconsin and advertised on their websites that LEAF was an outlet for
Rotax products in Wisconsin. Thus, this case falls within the well-settled core of the
First, the record shows that LEAF was essentially a dealer of Rotax products and
that it has made many sales of Rotax products in Wisconsin. William Read, LEAF’s
owner, testified that LEAF has been selling Rotax products from its location in
Wisconsin since the year 2000. Read Dep. at 8:4–8:8. Kodiak designated LEAF as an
“independent service center,” meaning that it granted LEAF permission to “sell Rotax
branded parts” and to “use the Rotax logo in [its] marketing.” Id. at 8:16–9:7. Read
testified that the only way for new Rotax products to be sold within the United States is
through an independent service center, and that, besides LEAF, there were only two
other such service centers in the United States, one in California and one in Florida. Id.
at 11:19–11:21, 14:3–14:7, 65:18–67:10. These facts show that the sale of a Rotax
engine to the plaintiff in Wisconsin was no isolated occurrence but was part of BRPRotax’s and Kodiak’s regular course of business, which was to introduce products into
the stream of commerce with the expectation that they would be sold by LEAF in
Moreover, the record shows that LEAF’s sales of Rotax products in Wisconsin
arose from the efforts of Kodiak and BRP-Rotax to “serve directly or indirectly” the
market for Rotax products in Wisconsin. See World-Wide Volkswagen, 444 U.S. at 297.
As discussed, Kodiak authorized LEAF to serve as a dealer of Rotax products in
Wisconsin. This included the right to use the Rotax logo in marketing materials in
Although title to the Rotax parts sold by LEAF appears to pass to LEAF in the
Bahamas rather than in Wisconsin, this fact does not defeat personal jurisdiction. See
Am. L. of Prods. Liab. 3d § 48:85 (“Jurisdiction does not depend on the technicalities of
when title passes, because a manufacturer can be subjected to in personam jurisdiction
as a result of a distribution system employing independent wholesalers as well as one
employing its own corporate apparatus.”).
Wisconsin. Kodiak invites LEAF to attend its annual meeting in the Bahamas for the
purpose of educating LEAF on various aspects of the business of selling and servicing
Rotax parts. Read Dep. at 31:14–34:9. Finally, both Kodiak and BRP-Rotax, on their
websites, identify LEAF at its location in Wisconsin as a place to purchase and obtain
http://dealerlocator.flyrotax.com// (BRP-Rotax website, last viewed July 7, 2017);
https://kodiakbs.com/service-and-repair-center (Kodiak website, last viewed July 7,
2017). These defendants thus invite potential Rotax customers to purchase Rotax parts
from LEAF in Wisconsin and therefore “can be said to have targeted [Wisconsin]” by
“engag[ing] in conduct purposefully directed at [Wisconsin].” J. McIntyre, 564 U.S. at
882, 886. Accordingly, both of these defendants are subject to personal jurisdiction in
Wisconsin in connection with the plaintiff’s claim alleging personal injuries caused by a
Rotax engine purchased in Wisconsin.
As for BRP Inc., however, the plaintiff has not shown that there is a colorable
basis for exercising personal jurisdiction over it. The affidavit of BRP Inc.’s officer states
that BRP Inc. was not involved in the design, manufacture, distribution, or sale of any
aircraft engine, much less the Rotax engine that is the subject of this case. The plaintiff
has not offered any reason for thinking that this is false or that further discovery would
show that it is false. Because BRP Inc. did not manufacture or distribute the engine
involved in this case, it is not subject to specific personal jurisdiction in Wisconsin based
on the stream-of-commerce theory discussed above.5
The plaintiff argues that because BRP Inc. is BRP-Rotax’s parent company, it is
subject to personal jurisdiction in any state in which BRP-Rotax is subject to personal
However, the “general rule” is that “the jurisdictional contacts of a
subsidiary corporation are not imputed to the parent.” Abelesz v. OTP Bank, 692 F.3d
638, 658 (7th Cir. 2012); see also Central States, 230 F.3d at 943. The activities of a
subsidiary may suffice to assert jurisdiction over the parent if there is some basis for
piercing the corporate veil, such as the parent’s unusual degree of control over the
subsidiary, but this does not apply in the case of an ordinary parent-subsidiary
relationship that observes corporate formalities.
KM Enters., Inc. v. Global Traffic
Techs., Inc., 725 F.3d 718, 733 (7th Cir. 2013). The plaintiff suggests that BRP-Rotax’s
corporate veil should be pierced because it and BRP Inc. are alter egos. See Mot. for
Reconsideration at 7, ECF No. 80. However, the plaintiff has not offered any colorable
basis for believing that BRP Inc. and BRP-Rotax are alter egos. He merely asserts that
because BRP Inc. is BRP-Rotax’s parent, these two entities are alter egos. See id.
(“[BRP-Rotax] manufactures the Rotax 582 engine and is a wholly-owned subsidiary
corporation owned by [BRP Inc.] These two facts alone establish the basis for the alter
ego theory.”). But to pierce the corporate veil, the plaintiff must do more than show a
The plaintiff must show that the parent and the
subsidiary do not observe corporate formalities or other facts showing that the
Judge Randa in his earlier orders concluded that BRP Inc. is not subject to general
jurisdiction in Wisconsin, and this conclusion is clearly correct. I therefore will not
further discuss the possibility of exercising general jurisdiction over BRP Inc.
subsidiary is a mere shell that does not conduct any business separate from the parent.
See, e.g., Wachovia Sec., LLC v. Banco Panamericano, Inc., 674 F.3d 743, 751–52
(7th Cir. 2012). Here, the plaintiff has offered no reason for thinking that BRP Inc. and
BRP-Rotax are not bona fide separate corporations or that he would find evidence to
support a veil-piercing theory if given leave to conduct jurisdictional discovery.
Therefore, I will not grant the plaintiff leave to conduct such discovery.
conclude that BRP Inc. is not subject to personal jurisdiction in Wisconsin in connection
with this case.
For the reasons stated, IT IS ORDERED that the plaintiff’s motion for
reconsideration (ECF No. 80) is GRANTED IN PART. The motion is granted to the
extent that the dismissal BRP-Rotax and Kodiak from this case for lack of personal
jurisdiction is vacated, and those defendants are reinstated as parties and must respond
to the amended complaint. The motion is denied as to defendant BRP Inc., and as to
the plaintiff’s request for leave to conduct jurisdictional discovery.
IT IS FURTHER ORDERED that the parties’ motions to seal certain portions of
the record (ECF Nos. 79 & 89) are GRANTED. Although the parties have not shown
good cause for removing the sealed materials from the public record, I did not consider
those materials when deciding the motion to dismiss. Thus, the public does not need
access to those documents to understand and evaluate this opinion.
See City of
Greenville, Ill. v. Syngenta Crop Protection, LLC, 764 F.3d 695, 697 (7th Cir. 2014) (the
presumption of public access to materials in the record is limited to materials that affect
Dated at Milwaukee, Wisconsin, this 7th day of July, 2017.
/s Lynn Adelman
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?