89 F.3d 519 (8th Cir. 1996), 95-2853, Digi-Tel Holdings, Inc. v. Proteq Telecommunications (PTE), Ltd.

Docket Nº:95-2853.
Citation:89 F.3d 519
Party Name:DIGI-TEL HOLDINGS, INC., Appellant, v. PROTEQ TELECOMMUNICATIONS (PTE), LTD., Appellee. Brustuen International, Inc., Intervenor.
Case Date:July 11, 1996
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit

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89 F.3d 519 (8th Cir. 1996)




Brustuen International, Inc., Intervenor.

No. 95-2853.

United States Court of Appeals, Eighth Circuit

July 11, 1996

Submitted March 13, 1996.

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David R. Marshall, Minneapolis, MN, argued (Terri A. Georgen, on the brief), for appellant.

Duane W. Krohnke, Minneapolis, MN, argued (Gregory Schaefer, Sidney Spaeth and Robert Magill, on the brief), for appellee.

Before FAGG, BRIGHT, and WOLLMAN, Circuit Judges.

BRIGHT, Circuit Judge.

Digi-Tel Holdings, Inc. (Digi-Tel) appeals the order of the district court 1 dismissing its breach of contract and fraud claims against Proteq Telecommunications (PTE), Ltd. (Proteq) for lack of personal jurisdiction. The district court held that the exercise of personal jurisdiction over Proteq, a Singapore company, was not consistent with due process because Proteq did not have sufficient "minimum contacts" with the State of Minnesota. We affirm.


Proteq, a Singapore company, is a wholly-owned subsidiary of Proteq Technologies PTE, Ltd., a Singapore company, which in turn is a wholly-owned subsidiary of Goldtron, Ltd., also a Singapore company. Since its incorporation on July 16, 1992, Proteq's business has been the research and development of telecommunication products. Proteq does not maintain any offices, have any employees, or own any property in Minnesota.

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There is no evidence that Proteq has ever solicited business or advertised in Minnesota. Proteq is not licensed to do business in Minnesota and has no personnel or agents authorized to accept process within Minnesota.

Major Computer Incorporated (Major), a Minnesota corporation, enlisted the assistance of Brustuen International, Inc., a Minnesota-based international trade consulting firm, in an effort to locate a manufacturing source of cellular telephones. As a result of these efforts, in the summer of 1992, Major entered into an agreement to purchase up to 240,000 cellular phones from Proteq. There were seven face-to-face meetings between Proteq and Major regarding developing and selling the cellular phones, all of which took place in Singapore. On one of these occasions, Major's Vice President obtained a sample cellular phone, and Proteq sent four additional samples to Major in Minnesota. The parties exchanged dozens of letters and faxes and numerous phone calls in connection with the sales agreement.

The Proteq/Major agreement provided that the agreement would be construed and governed by Minnesota law. Under the terms of the contract, Major would assume control of the phones while they were still in Singapore. The sales agreement provided the price as "F.O.B. Singapore." Delivery of the phones was expected to begin sometime late in 1992. The duration of the contract was the later of two years or 240,000 units. In addition, Major had the option to renew under certain conditions.

Proteq encouraged Major to re-sell the phones to Major's customers before they were manufactured. Less than one month after signing its agreement with Proteq, Major contracted to sell these same cellular phones to Digi-Tel.

In December of 1992, Goldtron (the parent company of Proteq) applied to the Minnesota Secretary of State for registration of the trademark "Goldtron." Goldtron obtained a "Certificate of Registration of Mark." 2 The application extended to a range of products including cellular phones and audio and security equipment. Proteq mailed a copy of the trademark certificate to Major shortly after the certificate was obtained. The sample phone which Proteq had sent to Major in July of 1992 bore the mark "Goldtron", and Proteq admits that it considered using "Goldtron" as the trademark on the phone.

Proteq never delivered cellular phones to Major, and Major was unable to fulfill its agreement with Digi-Tel. Digi-Tel filed suit against Major for breach of the Major/Digi-Tel agreement. Major subsequently experienced financial difficulties which resulted in Major's secured creditor foreclosing on its assets.

In December of 1993, an employee of Goldtron and an employee of a Hong Kong subsidiary of Goldtron traveled to Minnesota to meet with representatives of Digi-Tel. At the meeting they discussed the possibility of enlisting Digi-Tel to help in obtaining FCC approval of a cellular phone and for marketing and distributing the phone. The phone was a different model than that envisioned under the Proteq/Major agreement. They delivered samples of the phone to the Digi-Tel representatives. They also offered Digi-Tel $100,000 to resolve Digi-Tel's claims against Proteq. 3 Digi-Tel declined the offer.

Digi-Tel subsequently filed suit against Proteq for fraud and breach of contract. Digi-Tel acquired Major's interest in the Proteq/Major agreement from Major's secured creditor. Digi-Tel commenced the action against Proteq as a third-party beneficiary of the Major/Proteq agreement and as the assignee of Major's rights under that agreement. Digi-Tel served Proteq under Minnesota long-arm statute § 303.13. Following a hearing on June 30, 1995, at which no

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live testimony was presented, the district court granted Proteq's motion to dismiss for lack of personal jurisdiction. The district court determined that the exercise of personal jurisdiction over Proteq would violate due process because Proteq lacked sufficient minimum contacts with the State of Minnesota. Digi-Tel appealed.


To survive a motion to dismiss for lack of personal jurisdiction, the plaintiff need only make a prima facie showing of personal jurisdiction over the defendant. Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1387 (8th Cir.1995); Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 818 (8th Cir.1994); Watlow Elec. Mfg. Co. v. Patch Rubber Co., 838 F.2d 999, 1000 (8th Cir.1988). For the purposes...

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