Austin Hardware & Supply, Inc. v. SFI of Tennessee, LLC

Decision Date09 August 2011
Docket NumberCase No. 11-CV-00485-W-FJG
PartiesAUSTIN HARDWARE AND SUPPLY, INC., Plaintiff, v. SFI OF TENNESSEE, LLC, Defendant.
CourtU.S. District Court — Western District of Missouri
ORDER

Currently pending before the Court is defendant SFI of Tennessee LLC's ("SFI") Motion to Dismiss for Lack of Personal Jurisdiction (Doc. # 16).

I. BACKGROUND

In June 2009, SFI, a Tennessee company, contacted Austin Hardware and Supply, Inc. ("Austin Hardware"), a Missouri company, regarding products SFI needed to complete the fabrication of its client's vehicle. Specifically, SFI inquired about a primer coating and adhesive needed to fabricate the Kevlar armor-plating of the United States Military's Mine Resistant Armored Personnel vehicle ("MRAP"). While the primer is manufactured in Europe, Austin Hardware is the exclusive U.S. supplier of this primer. On July 7, 2009, Austin Hardware provided SFI with a quotation for the primer materials. SFI then submitted a credit application to Austin Hardware in order to establish the requisite credit agreement necessary to conduct business with Austin Hardware. SFI proceeded to send various purchase orders to Austin Hardware, including Purchase Order Number P26176 ("P.O. P26176"). Austin Hardware alleges, and SFI disputes that the purchase order constituted a contract. Austin Hardwarealleges that it performed its contractual duties by ordering primer that was specially formulated to meet SFI's needs. The primer was scheduled to be delivered via eight separate, weekly shipments to SFI's Tennessee plant. A third party shipper, hired by SFI, transported the primer "F.O.B. Destination" to SFI in Tennessee. "F.O.B. Destination" meant that Austin Hardware, the shipper, retained title and ownership of the primer until it reached the Tennessee destination, when title passed to SFI. SFI made credit card payments to Austin Hardware upon delivery of each shipment. The credit card payments were processed at Austin Hardware's office in Lee's Summit, Missouri.

On December 2, 2009, SFI revised P.O. P26176 by requesting two additional shipments of specially formulated primer. The revision brought the total number of requested shipments to ten, and the total invoice price of the order to roughly $1 million. On January 12, 2010, after receiving at least six shipments of primer, SFI notified Austin Hardware that it was cancelling any remaining shipments of primer.

Austin Hardware alleges that, by refusing to receive and pay for 960 cases of primer it ordered, SFI wrongfully cancelled the contract it had formed under the revised P.O. P26176. Austin Hardware further alleges that the pricing and volume it quoted SFI was "non-cancellable" and "non-returnable." Upon receiving SFI's cancellation of revised P.O. P26176, Austin Hardware claims that it mitigated its damages by selling 164 cases of the primer to third parties. Thus, 796 cases of primer remain in its inventory. Austin Hardware further alleges that the useful shelf life of these remaining 796 cases has expired; it is thus no longer useful for its designated purpose, cannot be sold to third parties, and must be disposed of in a particular manner at an estimated cost of $45,000.

On March 29, 2011, Austin Hardware filed its petition in state court alleging breach of contract and suit on open account. SFI removed the case to this Court on May 10, 2011 alleging jurisdiction based on diversity of citizenship. SFI contends that this Court does not have jurisdiction. SFI does not concede that it was transacting business in Missouri under the meaning of the Missouri long-arm statute. SFI also alleges it did not form a contract with Austin Hardware. SFI contends that even if the court finds that a contract was formed, a Missouri contract is not dispositive of Missouri's personal jurisdiction since, in this case, jurisdiction would not comport with the principles of Due Process. SFI contends that it has insufficient contacts with the forum state such that it could not reasonably have anticipated being haled into court in Missouri. All communications between SFI and Austin Hardware were by telephone, facsimile, electronic mail and/or U.S. mail. SFI is not authorized to do business in the state of Missouri. SFI has no employees, representatives, nor agents in Missouri. SFI does not own, lease or use any real property in the state of Missouri, and it never had an employee or agent visit Austin Hardware's offices or warehouse in Lee's Summit, Missouri.

II. STANDARD
Personal jurisdiction over a defendant represents the power of a court to enter a "valid judgment imposing a personal obligation or duty in favor of the plaintiff." Kulko v. Super. Ct. of Cal., 436 U.S. 84, 91, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978). Personal jurisdiction can be specific or general. "'Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state,' while '[g]eneral jurisdiction . . . refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.'" Miller v. Nippon Carbon Co., 528 F.3d 1087, 1091 (8th Cir. 2008)(alterations in original)(quoting Bell Paper Box Inc. v. U.S.Kids Inc., 22 F.3d 816, 819 (8th Cir.1994)).

Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG, No. 10-2460, 2011 WL 2899147, at *2 (8th Cir. July 21, 2011).

In order to survive a Fed. R. Civ. P. 12(b)(2) Motion to Dismiss for lack of personal jurisdiction, the non-moving party must state sufficient facts to support a reasonable inference that the moving party can be subjected to jurisdiction, consistent with Due Process, in the forum state. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004), cert. denied, 543 U.S. 1147 (2005). The plaintiff carries the burden of proof at all times; at no time does the burden shift to the party challenging jurisdiction. Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). "The allegations in the Complaint must be taken as true to the extent they are uncontroverted by the defendant's affidavits. If the parties present conflicting affidavits, all factual disputes are resolved in the plaintiff's favor, and the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party." Cantrell v. Extradition Corp. of Am., 789 F.Supp. 306, 308-09 (W.D. Mo. 1992).

III. DISCUSSION

A federal court may assume jurisdiction over a foreign defendant only to the extent permitted by the forum state's long-arm statute and the Due Process Clause of the Constitution. Pecoraro v. Sky Ranch For Boys, Inc., 340 F.3d 558, 561 (8th Cir. 2003). Although cases within the Eighth Circuit collapse these two inquiries out of a belief that the Missouri long-arm statute confers jurisdiction to the fullest extent permissible under the Due Process clause, the Eighth Circuit Court of Appeals has noted that the recent decisions of the Missouri Supreme Court analyze the two questions separately. Viasystems, 2011 WL 2899147, at *7 n.2. Accordingly, the Court considers both questions here.

A. General Jurisdiction

General personal jurisdiction requires that a non-resident defendant's contacts with the forum state be "continuous and systematic." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). The defendant's affiliations with the forum state must be so ongoing, so "as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2851, 79 U.S.L.W. 4696 (U.S. June 27, 2011). Here, the record does not establish that SFI is subject to general jurisdiction in the state of Missouri. Although the full extent of its contacts with Missouri are not fully reflected in the record, Jason Keith, controller at SFI Tennessee, attested to a lack of the systematic, on-going, continuous contacts required to establish general jurisdiction: SFI is not authorized to do business in the state of Missouri; it has no employees, representatives, or agents in Missouri; it does not own, lease or use any real property in the state of Missouri; and, it never had an employee or agent visit Austin Hardware's offices or warehouse in Lee's Summit, Missouri.

B. Specific Jurisdiction

A federal court may assume specific jurisdiction over a foreign defendant to the extent permitted by the forum state's long-arm statute and the Due Process Clause of the Constitution. Pecoraro, 340 F.3d at 561. Specific jurisdiction permits a state to exercise specific jurisdiction over a non-resident defendant in a suit "arising from or related to" the defendant's contacts with the forum. Viasystems, 2011 WL 2899147 at *2.

1. Missouri Long-Arm Statute

Forming a contract in Missouri is one type of conduct which confers specific jurisdiction. Mo. Rev. Stat. § 506.500.1. Under Missouri law, a contract is formed where the last act necessary to form a binding contract, acceptance of the contract, occurs. Primus Corp., 2006 WL 181953, at *3 (citing Johnson Heater Corp. v. Deppe, 86 S.W.3d 114, 120 (Mo.App. 2002)); See also Laser Vision Centers Inc. v. Laser Vision Centers Int'l, SpA, 930 S.W.2d 29, 32 (Mo.App. 1996) (for Missouri personal jurisdiction purposes, acceptance of a contract in Missouri is equivalent to forming a contract in Missouri). After soliciting Austin Hardware's business and submitting a credit application, SFI sent purchase orders to Austin Hardware in Missouri. Austin Hardware received and processed SFI's purchase orders in its Missouri office. In this case, the Court finds that a contract was formed upon Austin Hardware's acceptance of P.O. P26176 in Missouri. See Tiger Mfg. Corp. v. Loadstar Material Handling Equip., Ltd., 341 F.Supp.2d 1107, 1110 (W.D.Mo. 2004) (contract made when plaintiff accepted defendant's purchase orders in the forum state); U.S. Durum Milling, Inc. v....

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