Romak Usa, Inc. v. Rich

Citation384 F.3d 979
Decision Date24 September 2004
Docket NumberNo. 03-3074.,03-3074.
PartiesROMAK USA, INC., a Kansas Corporation, Appellant, v. Marc RICH; Marc Rich & Co., Holding GMBH, a Swiss Corporation, formerly known as Marc Rich & Co. Holding AG, Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

Appeal from the United States District Court for the Western District of Missouri, Fernando J. Gaitan, Jr., J.

COPYRIGHT MATERIAL OMITTED

Norman M. Krivosha, argued, Omaha, NE (Robert M. Slovek, on the brief), for appellant.

Bernad Joseph Rhodes, argued, Kansas City, MO (R. Kent Sellers, on the brief), for appellee.

Before WOLLMAN, McMILLIAN and RILEY, Circuit Judges.

MCMILLIAN, Circuit Judge.

Romak USA, Inc., a Kansas corporation, appeals from a final judgment of the District Court for the Western District of Missouri1 dismissing its claims against Marc Rich, a citizen of Switzerland and Israel, because of lack of personal jurisdiction and dismissing with prejudice its claims against Marc Rich & Co., Holding GmbH, a Swiss corporation (Rich & Co. Holding). We affirm.

BACKGROUND

For the purposes of this appeal, we view the evidence and all reasonable inferences therefrom in the light most favorable to Romak USA. In so viewing, the evidence is as follows.2 In the early 1980s Dr. Milan Sladek formed Romak SA, a grain trading firm in Geneva, Switzerland. Romak SA was the parent company, sole shareholder, and credit guarantor of Romak USA, a grain trading company incorporated in Kansas, with its principal place of business in Kansas City, Missouri.

In May 1997, after Romak SA suffered losses on grain sales, its banker recommended that Sladek sell Romak SA and its subsidiaries, including Romak USA. The banker suggested Rich & Co. Holding, another Swiss trading firm, as a potential buyer. Sometime that month, Sladek met in Switzerland with representatives of Rich & Co. Holding, including Marc Rich. Sladek invited Rich & Co. Holding officials to conduct a due diligence audit of all Romak companies. Romak USA and Rich & Co. Holding agreed that any contact with Romak employees would be for the sole purpose to determine whether Romak SA and its subsidiaries were candidates for acquisition. In June 1997, Sladek told Romak USA's president, Stephen Wilde, about the possible sale of Romak SA to Rich & Co. Holding.

Negotiations continued throughout the summer of 1997. In August 1997, Marc Rich had a telephone conversation with Romak USA's vice-president, Albert Conway. Marc Rich told Conway about the negotiations and about his interest in establishing a grain trading company in the United States. From the conversation, Conway understood that if he wanted a position with the new Marc Rich company, he should stay at Romak USA.

By memo dated August 27, 1997, Wilde informed Romak USA employees that he spoke to Sladek on August 25 and Sladek had informed him that the Romak companies were being "sold and reorganized into the Marc Rich group of companies." Wilde also informed the employees that Romak USA would begin to shut down.

Also, in the summer of 1997, Rich & Co. Holding was negotiating to acquire Glibro Trading Holding and affiliated entities (Glibro). Frank Gleeson was one of the owners of Glibro. On August 21, 1997, Glibro and Rich & Co. Holding began integrating. After the sale closed in October 1997, the new venture was known as Novarco Agricultural Limited (Novarco), a subsidiary of Rich & Co. Holding. Donald Novotny was the president of the United States branch of Novarco. Gleeson became the chief executive officer of Marc Rich Agricultural and, after six months, chief executive officer of Marc Rich Investment. Some time after August 21, 1997, at the request of Marc Rich, Gleeson participated in the negotiations between Romak SA and Rich & Co. Holding.

On September 15, 1997, Gleeson called Wilde to tell him that the negotiations between the "Marc Rich Group" and Romak SA were not going well. On that date, Wilde terminated a trader, Paul Frick, who began working for Glibro. On September 18, 1997, Gleeson again telephoned Wilde to inform him that the "Marc Rich Group" was not going to buy Romak SA, but instead would buy the assets of Romak USA. During the conversation Gleeson also told Wilde that "Sladek had given the Marc Rich Group the authority to negotiate directly with Romak USA employees regarding their employment with the anticipated Marc Rich venture in America" and that Romak USA employees would be hired by the new venture.

In a September 19, 1997, fax, Wilde informed Sladek that he was prepared to liquidate Romak USA. On September 25, 1997, based on Gleeson's representations and a September 18, 1997, fax by Sladek, Wilde terminated himself and Conway. On October 3, 1997, Sladek informed Wilde that Romak USA should not be liquidated. However, Wilde continued to "negotiate with the Marc Rich Group regarding [its new] American venture." In early October 1997, Gleeson and Novotny traveled to Kansas City, Missouri, and offered Wilde and Conway employment with Novarco. Eventually, Novarco bought Romak USA assets.

In March 1998, Romak USA filed a lawsuit in Missouri state court against Wilde, Conway, and Frick, alleging breach of fiduciary duty and conspiracy. The complaint asserted that because of the defendants' actions Romak SA was forced to sell Romak USA "to the Marc Rich Group at a significantly reduced price." Romak USA later dismissed the action.

In October 2001, Romak USA filed this diversity action in federal district court against Marc Rich and Rich & Co. Holding. Specifically, the complaint alleged that during August and September 1997, "Marc Rich individually, and Rich & Co. Holding, through its agents Marc Rich and Gleeson," made false representations to Romak USA and that "Marc Rich, individually, and Rich & Co. Holding, through its agents Marc Rich and Gleeson," had tortiously interfered with Romak USA's business and contractual relationships with its employees. The complaint also alleged that "Marc Rich, individually, and Rich & Co. Holding" conspired to tortiously interfere with contractual and business relationships.

In February 2002, Marc Rich filed a motion to dismiss for lack of personal jurisdiction. Among other things, he submitted Conway's affidavit, in which Conway stated:

In August 1997, while I was still employed by Romak USA, Mr. Marc Rich let me know he was having discussions with Romak S.A. about his interests in establishing a grain trading company and having an office in the United States. I understood from our conversation that I should stay at Romak U.S.A. and this would position me to have an opportunity to work for the new Marc Rich grain company in the United States.

Romak USA opposed the motion, asserting that Marc Rich and his agents, Gleeson and Novotny, had sufficient contacts with Missouri to satisfy the state's long-arm statute and federal due process requirements, submitting deposition excerpts and affidavits from the dismissed state case.

In August 2002, the district court granted Marc Rich's motion to dismiss. The district court held that Romak USA had failed to produce evidence that Marc Rich had sufficient minimum contacts with Missouri to satisfy due process. The district court also held that Romak USA failed to present evidence that Gleeson and Novotny were the personal agents of Marc Rich.

In August 2002, the district court granted Rich & Co. Holding's motion to strike Romak USA's expert witness reports on lost profits. In June 2003, Romak USA moved to dismiss its claims against Rich & Co. Holding without prejudice. However, in its motion, Romak USA stated that it did not "intend to pursue Rich & Co. Holding in any future litigation." The district court dismissed the claims against Rich & Co. Holding, but did so with prejudice. This appeal follows.

DISCUSSION

We review the personal jurisdiction issue de novo. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.2004) (Dever). As Romak USA points out, "[t]o defeat a motion to dismiss for lack of personal jurisdiction, the nonmoving party need only make a prima facie showing of jurisdiction[,]" and may do so by affidavits, exhibits, or other evidence. Epps v. Stewart Info. Serv. Corp., 327 F.3d 642, 647 (8th Cir.2003) (Epps). Although we must view the evidence in the light most favorable to Romak USA and resolve factual conflicts in its favor, as "[t]he party seeking to establish the court's in personam jurisdiction[,][it] carries the burden of proof, and the burden does not shift to the party challenging jurisdiction." Id.

In a diversity action, "[a] federal 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." Dever, 380 F.3d at 1073. As relevant here, the Missouri long-arm statute provides for personal jurisdiction over "[a]ny person ... who in person or through an agent ... commi [ts] a tortious act within the state[,]" as to a cause of action arising from the commission of the act. Mo.Rev.Stat. § 506.500.1(3).

Because "the Missouri long-arm statute authorizes the exercise of jurisdiction over non-residents to the extent permissible under the due process clause, we turn immediately to the question whether the assertion of personal jurisdiction would violate the due process clause." Porter v. Berall, 293 F.3d 1073, 1075 (8th Cir.2002) (internal quotation omitted); see also Dever, 380 F.3d at 1073 ("Because the long-arm statute of Arkansas confers jurisdiction to the fullest constitutional extent, our inquiry is limited to whether the exercise of personal jurisdiction comports with due process.") (internal citation omitted).3 To satisfy due process a defendant must have sufficient minimum contacts with the forum state "such that `maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Id., at 1073 (quoting Burlington Indus.,...

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