Bernegger v. Thompson, 2015AP2168.
| Decision Date | 21 July 2016 |
| Docket Number | No. 2015AP2168.,2015AP2168. |
| Citation | 371 Wis.2d 565,884 N.W.2d 535 (Table) |
| Parties | Peter BERNEGGER, Plaintiff–Appellant, v. Cara THOMPSON, Jacob Collection Group LLC and State of Mississippi Department of Revenue, Defendants–Respondents. |
| Court | Wisconsin Court of Appeals |
Peter Bernegger appeals an order of the circuit court dismissing his lawsuit against the State of Mississippi Department of Revenue, Cara Thompson (an employee of the Mississippi Department of Revenue), and Jacob Collection Group, LLC.1 Bernegger contends that the court erred in concluding that it did not have personal jurisdiction over the out-of-state defendants and that, even if it had jurisdiction, Bernegger's complaint failed to state a claim upon which relief may be granted. We affirm based on the personal jurisdiction issue. The out-of-state defendants' attempts to collect taxes allegedly owed in Mississippi by Bernegger's Mississippi-based limited liability company by periodically sending tax statements or letters and making phone calls to Bernegger at his Wisconsin residence do not meet the due process requirement of minimum contacts necessary to confer personal jurisdiction over the out-of-state defendants in Wisconsin.
¶ 2 Bernegger filed a complaint, and later an amended complaint, in Waupaca County circuit court alleging multiple causes of action, although the complaint does not always make clear which allegations apply to which defendant or defendants.2 Putting to the side the particular labels that Bernegger assigns to the various causes of action, the complaint at its core alleges that a fraudulent tax lien was filed in Mississippi against Bernegger and his Mississippi-based company, and that the out-of-state defendants improperly attempted to collect on the tax lien.
¶ 3 Of the many submissions filed with the court by the parties, only two are pertinent to our resolution of this appeal: Bernegger's motion to as a defendant; and the answer to the complaint filed on behalf of the Department and Thompson, asserting that the circuit court lacks personal jurisdiction over the defendants in this action.3
¶ 4 The circuit court held a hearing to address these and other submissions, as might be needed, and at the hearing the court made the following statements:
The court subsequently issued a written order memorializing its earlier decision, indicating that the court was dismissing the action, in part because the “Court found there is no jurisdiction for this case in the State of Wisconsin.” Bernegger appeals.5 We include additional pertinent facts in our discussion of the issues below.
¶ 5 Bernegger asks us to review the circuit court's decision that it could not assert personal jurisdiction over the out-of-state defendants in this action. Whether a Wisconsin court has personal jurisdiction over an out-of-state defendant is a question of law that we review de novo. Carlson v. Fidelity Motor Group, LLC, 2015 WI App 16, ¶ 7, 360 Wis.2d 369, 860 N.W.2d 299
(citing Johnson Litho Graphics of Eau Claire, Ltd. v. Sarver, 2012 WI App 107, ¶ 6, 344 Wis.2d 374, 824 N.W.2d 127 ).
¶ 6 “On a question of personal jurisdiction over an out-of-state defendant, the plaintiff bears ‘the minimal burden of establishing a prima facie threshold showing’ that the requirements of both constitutional due process and Wisconsin's long-arm statute, Wis. Stat. § 801.05
(2011–12), are satisfied.” Carlson, 360 Wis.2d 369, ¶ 8, 860 N.W.2d 299 (quoted source omitted). Id. (quoted sources omitted).
¶ 7 Although courts typically engage in the personal jurisdiction inquiry by first reviewing whether the long-arm statute's requirements are met, when it appears likely that the due process requirements have not been met, we may proceed directly to the due process analysis. Id., ¶ 9 (citing Hy Cite Corp. v. Badbusinessbureau.com, L.L.C., 297 F.Supp.2d 1154, 1157 (W.D.Wis.2004)
) (if constitutional due process requirements are not met, a court need not decide if Wis. Stat. § 801.05 is satisfied).
¶ 8 The due process analysis also involves a two-step process: first, we determine whether a non-resident defendant “purposefully established minimum contacts in” Wisconsin; then, if we conclude that the plaintiff has met its burden on the first prong, we examine whether exercising personal jurisdiction “comports with ‘fair play and substantial justice.’ “ Id., ¶ 10 (quoted sources omitted).
¶ 9 As we now explain, we resolve this appeal based on the first prong of the two-step due process test, because even assuming as true all representations Bernegger makes about pertinent allegations, this would be insufficient to show that the out-of-state defendants purposefully established minimum contacts in Wisconsin.
¶ 10 Bernegger alleges that the out-of-state defendants “contacted Bernegger or caused numerous contacts to be made to Bernegger at his home in the state of Wisconsin.” Although his argument is not framed in terms of the due process analysis, Bernegger apparently means to argue that the out-of-state defendants had sufficient minimum contacts with Wisconsin to confer specific personal jurisdiction in Wisconsin courts over them.
¶ 11 More specifically, the only contacts that Bernegger alleges that the out-of-state defendants have had with the state of Wisconsin involved sending letters and/or making phone calls to Bernegger, now a Wisconsin resident, in an attempt to collect on an alleged delinquent Mississippi tax debt. In other words, Bernegger's allegations, if taken as true, would establish only that the out-of-state defendants had a single connection to the state of Wisconsin, namely, their contacts with him alone, arising from transactions initiated within the state of Mississippi. And, under the facts he alleges, these particular contacts strictly involved this alleged delinquent Mississippi tax debt and the contacts spilled over into Wisconsin only as a result of Bernegger's decision to move his residence from Mississippi to Wisconsin.
¶ 12 We rely on recent case law from the United States Supreme Court and this court to support our conclusion. See Walden v. Fiore, ––– U.S. ––––, 134 S.Ct. 1115, 1121, 188 L.Ed.2d 12 (2014)
; Salfinger v. Fairfax Media Ltd., 2016 WI App 17, ¶ 24, 367 Wis.2d 311, 876 N.W.2d 160.
¶ 13 In Walden, the Supreme Court addressed the “minimum contacts” necessary for “a State to exercise jurisdiction consistent with due process.” 134 S.Ct. at 1121
. The Court concluded that a Georgia resident lacked minimum contacts with Nevada, even though the Georgian knew that his allegedly tortious conduct in Georgia could potentially harm the Nevada-resident plaintiffs. Although the contacts that Bernegger alleges differ from those alleged in Walden, what matters to our analysis is that the Court emphasized longstanding due-process jurisdictional principles that included the following: (1) a defendant himself or herself must establish the relationship with the proposed forum state; and (2) a court's analysis of the “minimum contacts” aspect of due process hinges on “the defendant's contacts with the forum state itself, not the defendant's contacts with persons who reside there.” Id. at 1122.
¶ 14 The Walden Court observed that, although it is true that a defendant may have contact with a forum state through “goods, mail, or some other means,” “the plaintiff cannot be the only link between the defendant and the forum.” Id. Rather, “[d]ue process requires that a defendant be haled into court in a forum State based on his own affiliation with the State,” not based solely on his interaction with a person who happens to reside in the State. Id. at 1123
.
¶ 15 Embracing principles set forth in Walden, this court recently upheld a circuit court's dismissal for lack of personal jurisdiction over a Wisconsin action against a non-resident defendant. See Salfinger, 367 Wis.2d 311, 876 N.W.2d 160
. There was evidence in Salfinger that publication of an on-line article by a foreign newspaper with several Wisconsin subscribers and numerous Wisconsin readers potentially damaged the reputation of a Wisconsin resident. See id., ¶¶ 1, 2, 4. We concluded that it would violate due process to confer personal jurisdiction in Wisconsin over the non-resident defendant. See id., ¶ 1. In explaining our decision, we noted that the Walden Court had “recently reiterated that when addressing minimum contacts in the context of specific jurisdiction, the inquiry of whether a state may exercise specific jurisdiction over a nonresident defendant focuses on” the relationships among “the defendant, the forum State, and the litigation.” Id., ¶ 24 (citing Walden, 134 S.Ct. at 1121 ). We further explained, again citing Walden, that the fact that the alleged harm occurred to a plaintiff living in Wisconsin is not dispositive of the question of whether due process permits Wisconsin to exercise jurisdiction over a non-resident defendant. See id. (quoting Walden, 134 S.Ct. at 1122 ) ...
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