Soo Line R. Co. v. Hawker Siddeley Canada, Inc.

• Decision Date: 02 December 1991
• Docket Number: 91-1206,Nos. 91-1201,s. 91-1201
• Citation: 950 F.2d 526
• Parties: SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellant, v. HAWKER SIDDELEY CANADA, INC., a Canadian corporation, Appellee. SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellee, v. HAWKER SIDDELEY CANADA, INC., a Canadian corporation, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 526

950 F.2d 526

60 USLW 2420

SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellant, v. HAWKER SIDDELEY CANADA, INC., a Canadian corporation, Appellee.

SOO LINE RAILROAD COMPANY, a Minnesota corporation, Appellee, v. HAWKER SIDDELEY CANADA, INC., a Canadian corporation, Appellant.

Nos. 91-1201, 91-1206.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 16, 1991.

Decided Dec. 2, 1991.

Arthur S. Beeman, Minneapolis, Minn., argued (Terrence E. Bishop and Susan M. Kramer, on brief), for appellant Soo Line R. Co.

Raymond A. Hayward, Minneapolis, Minn., argued (Peter W. Sipkins, on brief), for appellee Hawker Siddeley Canada, Inc.

Before McMILLIAN, Circuit Judge, and FLOYD R. GIBSON and HENLEY, Senior Circuit Judges.

FLOYD R. GIBSON, Senior Circuit Judge.

Soo Line Railroad Company ("Soo Line") appeals the district court's grant of summary judgment in favor of Hawker Siddeley Canada, Incorporated ("Hawker Siddeley"). Hawker Siddeley cross appeals the district court's determination that Hawker Siddeley was subject to the district court's jurisdiction. We vacate the judgment of the district court and remand with instructions to dismiss this suit for lack of personal jurisdiction over the defendant. We also dismiss Soo Line's appeal as moot.

I. BACKGROUND

Hawker Siddeley, a Canadian corporation with its principal place of business in Canada, manufactures railroad cars. It has no offices or agents in Minnesota, though it did have a business arrangement with Unity Railway Supply Company ("Unity"), an Illinois corporation. Hawker Siddeley employed Unity to promote Hawker Siddeley's products in the United States and to refer potential customers to Hawker Siddeley's Canadian offices. Unity did not have authority to enter or bid on contracts or quote prices on behalf of Hawker Siddeley. Unity did not refer any Minnesota customers to Hawker Siddeley; in fact, Hawker Siddeley has made only one sale (worth less than $1,000) to a Minnesota purchaser in the last fifteen years. Although there is no precise evidence on this point, Hawker Siddeley concedes it is quite likely that many of its railcars (and wheels) have travelled on tracks in Minnesota.

Hawker Siddeley's cars and wheels are manufactured in compliance with standards established by the Association of American Railroads ("AAR"). ¹ All cars used in the interchange service market must comply with AAR standards. "Interchange service" refers to the capacity for railcars to be transferred from one railroad to another. The AAR's standards promote interchange by establishing requirements relating to both standardization and quality of equipment. The market covered by the AAR interchange service agreement is rather large; almost all railroads in Mexico, Canada, and the forty-eight contiguous United States are either members of, or signatories to, the AAR agreement.

In 1979, Hawker Siddeley sold a railcar to a Canadian division of North American Car Corporation ("North American") in Canada. In 1983, North American entered a management and services agreement with General Electric Railcar Services Corporation ("GERASCO"), a Canadian corporation whose principal place of business is in Alberta, Canada, that allowed GERASCO to lease the car on North American's behalf. In June 1984, GERASCO leased the car to Potash Company of America ("PCA"), a Canadian Corporation whose principal place of business is in Connecticut.

PCA used the railcar to transport potash. On February 1, 1986, while Soo Line was transporting the railcar on its tracks for PCA, the train derailed near Winona, Minnesota and damaged railcars, track, and freight. From post-accident investigations, Soo Line determined that the accident was caused by a defective wheel on PCA's railcar. In June 1989, Soo Line filed suit against Hawker Siddeley under the theories of strict product liability and negligence. The district court denied Hawker Siddeley's motion for dismissal due to lack of personal jurisdiction, but later granted its motion for summary judgment. ² Soo Line appeals the grant of summary judgment and Hawker Siddeley cross-appeals the denial of the motion to dismiss.

II. DISCUSSION

A two-step inquiry is employed when determining whether a federal court has jurisdiction over a non-resident party: "(1) whether the facts presented satisfy the forum state's long-arm statute, and (2) whether the nonresident has 'minimum contacts' with the forum state, so that the court's exercise of jurisdiction would be fair and in accordance with due process." Wines v. Lake Havasu Boat Mfg., 846 F.2d 40, 42 (8th Cir.1988). The Minnesota long-arm statute extends jurisdiction to the fullest extent permitted by the due process clause, Rostad v. On-Deck, Inc., 372 N.W.2d 717, 719 (Minn.) (en banc), cert. denied, 474 U.S. 1006, 106 S.Ct. 528, 88 L.Ed.2d 460 (1985); consequently, we only need to determine whether the district court's assertion of jurisdiction over Hawker Siddeley is consistent with the due process clause. See Toro Co. v. Ballas Liquidating Co., 572 F.2d 1267, 1269 (8th Cir.1978).

The due process clause requires there be "minimum contacts" between the defendant and the forum state before the forum state may exercise jurisdiction over the defendant. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980). Sufficient contacts exist when "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there," id. at 297, 100 S.Ct. at 567, and when "maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. 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, 342, 85 L.Ed. 278 (1940)). In assessing the defendant's "reasonable anticipation," there must be " 'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.' " Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958)).

Consistent with these principles, we must evaluate "(1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum state; (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." Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir.1977). The analysis does not permit a mechanical application of these factors; for instance, the latter two factors "are only 'secondary factors' to be considered and are not determinative." Aaron Ferer & Sons Co. v. American Compressed Steel Co., 564 F.2d 1206, 1210 n. 5 (8th Cir.1977).

Soo Line contends Hawker Siddeley had significant contact with Minnesota by virtue of its compliance with AAR standards and requirements. In order to receive AAR approval, Hawker Siddeley had to submit its plans, products, and premises to testing and inspection. Soo Line argues that Hawker Siddeley identified and purposefully targeted a discrete market, and thus it could reasonably expect to be haled into court anywhere within the interchange service market. ³

We cannot accept Soo Line's arguments for a variety of reasons. Soo Line's analysis, if correct, would subject Hawker Siddeley to suit anywhere its customers use its railcars. The Supreme Court, critical of an...