923 F.2d 1277 (8th Cir. 1991), 89-5261, Morris v. Barkbuster, Inc.

Docket Nº:89-5261.
Citation:923 F.2d 1277
Party Name:David MORRIS, Appellant, v. BARKBUSTER, INC. Isanti Engineering, Inc. Diversified Industries, Inc., F.W. and Associates, Inc. Fred W. Wagenhals, Individually, Ed Fochtman, Jr., Individually, Appellees.
Case Date:January 09, 1991
Court:United States Courts of Appeals, Court of Appeals for the Eighth Circuit
 
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Page 1277

923 F.2d 1277 (8th Cir. 1991)

David MORRIS, Appellant,

v.

BARKBUSTER, INC. Isanti Engineering, Inc. Diversified

Industries, Inc., F.W. and Associates, Inc. Fred

W. Wagenhals, Individually, Ed Fochtman,

Jr., Individually, Appellees.

No. 89-5261.

United States Court of Appeals, Eighth Circuit

January 9, 1991

Submitted Sept. 10, 1990.

Page 1278

Charles E. Moore, Owensboro, Ky., for appellant.

Robert W. Kettering, Jr., Minneapolis, Minn., for appellees.

Before McMILLIAN, Circuit Judge, BRIGHT, Senior Circuit Judge, and BOWMAN, Circuit Judge.

BOWMAN, Circuit Judge.

This is a product liability suit. Federal subject matter jurisdiction is based on diversity of citizenship. Plaintiff David Morris appeals from the order of the District Court 1 granting the motion of defendants F.W. and Associates, Inc. (FWA), Fred W. Wagenhals, and Ed Fochtman, Jr. for dismissal for lack of personal jurisdiction. We affirm.

Page 1279

I.

FWA is an Ohio corporation with its principal place of business in Arizona. 2 From 1976 to 1978 FWA developed and marketed a log splitter powered by tractor power takeoff. This log splitter was sold under the trade name Barkbuster through a number of distributors including Diversified Distributing, Inc. (DDI), a Minnesota corporation, which handled the largest volume. 3 On December 5, 1978, FWA sold the Barkbuster log splitter product line to DDI. This sale was negotiated and executed in Arizona.

At that same time Wagenhals and Fochtman, both residents of Arizona and co-owners of FWA, entered into a separate consultation agreement with DDI. This agreement obligated Wagenhals and Fochtman to assist DDI in the engineering, production, and marketing of log splitters, and required DDI to pay royalties to Wagenhals and Fochtman upon the sale of the devices. This, too, was negotiated and executed in Arizona.

Pursuant to the contract for the sale of the Barkbuster product line, FWA shipped twenty-one truckloads of material, including some completed units, to DDI at its place of business in Minnesota. Shortly thereafter, FWA sent five employees to Minnesota to assist DDI in conducting a physical inventory of this material. In addition, either Wagenhals or Fochtman attended a dinner and cocktail party in Minnesota to help facilitate the transfer to DDI of the goodwill associated with the Barkbuster line. 4 Finally, following a default by DDI in its payments to FWA, both Wagenhals and Fochtman made a trip to Minnesota to investigate DDI's failure to make its payments. DDI never called upon Wagenhals or Fochtman to provide consultation services, nor did either of them ever provide such services to DDI. DDI failed to make all its contractually required payments to Wagenhals and Fochtman.

On January 7, 1984, David Morris, a citizen of Kentucky, lost both of his arms in an accident in Kentucky involving a Barkbuster log splitter manufactured and distributed by DDI. He subsequently filed suit for damages in the federal district court for the Western District of Kentucky naming FWA as one of the defendants. 5 That court found personal jurisdiction over FWA lacking and therefore granted FWA's motion dismissing it from the action. Morris then filed the present action in the District Court of Minnesota and moved the District Court in Kentucky to hold the action in that court in abeyance pending the outcome of his Minnesota action. Kentucky v. Morris, No. 88-H-003 (December 20, 1988). In his Minnesota action Morris charges FWA with having designed the log splitter negligently and having failed to warn DDI, as well as the previous and potential users of the log splitter, of the dangerous condition of the device. Plaintiff's Complaint at 7-8, Morris v. Barkbuster, Inc., No. 4-87-108 (D.Minn. Filed Feb. 23, 1987). He also charges Wagenhals and Fochtman with "manufacturing, designing, selling and promoting" defective log splitters, failing to "redesign, render safe, or recall" the devices, and failing to warn DDI as well as present and potential users of the log splitter, of its dangerous condition. Id. at 8-9. In an unreported opinion the District Court concluded that the Minnesota contacts of these defendants did not give rise to any of the plaintiff's claims, that the defendants did not have continuous and systematic contact with Minnesota, and therefore that, under the Due Process Clause, the court lacked personal jurisdiction over FWA, Wagenhals, and Fochtman and therefore dismissed Morris's claims against these defendants. Morris v. Barkbuster, No. 4-87-108 (D.Minn. July 20,

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1988) (order granting motion to dismiss). Morris appeals from that order. 6

II.

A federal court in a diversity action 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. Falkirk Mining Co. v. Japan Steel Works, 906 F.2d 369, 372-73 (8th Cir.1990). Here the District Court went directly to the constitutional question without first giving any apparent consideration to the question whether the Minnesota long-arm statute would provide a threshold basis for jurisdiction over the FWA defendants. Because we agree with the District Court that it would be inconsistent with due process to require the FWA defendants to litigate this case in Minnesota, we need not and do not pause to analyze the Minnesota long-arm statute. Instead, like the District Court, we go directly to the constitutional analysis.

III.

Under the Due Process Clause of the Fourteenth Amendment, jurisdiction over the person of an out-of-state defendant is proper only if the defendant has "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278 (1940)). Minimum contacts exist where the defendant has "purposefully avail[ed] [himself] of the privilege of conducting activities within the forum State." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958). The minimum contacts test is satisfied where "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).

When the plaintiff's claims "arise out of or are connected with the [defendant's] activities within the [forum] state," International Shoe, 326 U.S. at 319, 66 S.Ct. at 160, maintenance of the action within the forum state generally does not offend "traditional notions of fair play and substantial justice," id. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. at 463, 61 S.Ct. at 343), as in these circumstances the defendant ordinarily "should reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567. Conversely, when the plaintiff's claims do not relate to the defendant's forum-state activities, jurisdiction is likely to be improper since the defendant has "no reason to expect to be haled before [the forum state's] court[s]." Toro Co. v. Ballas Liquidating Co., 572 F.2d 1267, 1271 (8th Cir.1978) (quoting Shaffer v. Heitner, 433 U.S. 186, 216, 97 S.Ct. 2569, 2586, 53 L.Ed.2d 683 (1977)). Where a court premises jurisdiction over a defendant upon the relationship between the plaintiff's claims and the defendant's forum state activities, it has been said that...

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