Dangerfield v. Bachman Foods, Inc., Civ. No. A2-80-92.

• Decision Date: 26 June 1981
• Docket Number: Civ. No. A2-80-92.
• Parties: David E. DANGERFIELD, d/b/a Dangerfield Potato Company, Plaintiff, v. BACHMAN FOODS, INC., a corporation, Defendant.
• Court: U.S. District Court — District of South Dakota

515 F. Supp. 1383

David E. DANGERFIELD, d/b/a Dangerfield Potato Company, Plaintiff, v. BACHMAN FOODS, INC., a corporation, Defendant.

Civ. No. A2-80-92.

United States District Court, D. North Dakota, Northeastern Division.

June 26, 1981.

COPYRIGHT MATERIAL OMITTED

Patrick W. Fisher, Shaft, McConn, Fisher & Thune, Ltd., Grand Forks, N. D., for plaintiff.

Robert Vaaler, Vaaler, Gillig, Warcup, Woutat, Zimney & Foster, Grand Forks, N. D., for defendant.

MEMORANDUM AND ORDER

BENSON, Chief Judge.

In the above entitled diversity action removed from state court, defendant has moved for dismissal of the case for lack of personal jurisdiction or, in the alternative, a dismissal on the basis of forum non conveniens or a transfer of venue pursuant to 28 U.S.C. § 1404(a). In his complaint, plaintiff, a North Dakota resident, alleges that he contracted with defendant, a Delaware corporation with its principal place of business in New York, in November, 1978, to deliver 15,000 hundredweight of bulk chipping potatoes, and that defendant breached the contract by making underpayments for potatoes delivered, and failing to take delivery for all the potatoes contracted for.

PERSONAL JURISDICTION

Plaintiff's complaint contains no factual allegations supporting personal jurisdiction over defendant, a nonresident corporation. However, on a motion to dismiss for lack of personal jurisdiction it is proper for this court to examine affidavits and depositions to establish the jurisdictional facts. Data Disc, Inc. v. Systems Tech. Assoc., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977); Top Form Mills v. Sociedad Nationale Ind., Etc., 428 F.Supp. 1237, 1241 (S.D. N.Y.1977); See 5 Wright & Miller, Federal Practice and Procedure: Civil § 1351; 2A Moores Federal Practice ¶ 12.14.

Plaintiff bears the burden of proving defendant has maintained the minimum contacts necessary to enable the forum state to obtain personal jurisdiction over defendant. Block Industries v. DHJ Industries, Inc., 495 F.2d 256, 259 (8th Cir. 1974); Red River Transport, Etc. v. Custom Airmotive, Inc., 497 F.Supp. 425 (D.N.D.1980). When the determination is made from affidavits and discovery materials, the burden imposed upon the plaintiff in order to avoid a dismissal is to make a prima facie showing of jurisdictional facts. See Data Disc, Inc. v. Systems Tech. Assoc. Inc., supra at 1286 n.2; United States Ry. Equip. Co. v. Port Huron & Detroit R. Co., 495 F.2d 1127, 1128 (7th Cir. 1974). In determining whether such a showing has been made, the facts contained in plaintiff's affidavit are assumed to be true, and any dispute in the facts will be resolved in favor of plaintiff. O'Hare International Bank v. Hampton, 437 F.2d 1173, 1176 (7th Cir. 1971); School District of Kansas City, Mo. v. State of Missouri, 460 F.Supp. 421, 432 (W.D.Mo.1978), appeal dismissed, 592 F.2d 493 (8th Cir. 1979).¹

Applying the above standards, the following facts are adduced from the pleadings, the affidavits filed, and plaintiff's deposition.

Plaintiff is a potato broker residing and doing business in North Dakota. As a broker he buys potatoes from area farmers and for a profit arranges to resell them to third parties. Defendant is in the snack food business, and is a Delaware corporation with its principal place of business in New York. Defendant is not doing business in North Dakota nor is it authorized to do so. For two to four years prior to November, 1978, plaintiff and defendant conducted business together dealing with open market potatoes. Defendant had also purchased potatoes from at least two other businesses in North Dakota. Between the years of 1975 and 1978 defendant had a buyer who visited North Dakota on a number of occasions and who had met with plaintiff. Earlier in 1978, plaintiff had shipped some open market potatoes to defendant. Defendant telephoned plaintiff, informing him that it was pleased with the quality of potatoes it had received, and that it wished to enter into a contract. Defendant requested price quotations. As a result of the phone conversation plaintiff agreed to meet with defendant at defendant's offices in New Jersey on November 6, 1978. At the meeting the parties entered into an oral agreement for shipment of potatoes. When plaintiff returned to North Dakota he sent to defendant by mail a confirmation of the agreement. Defendant in turn mailed plaintiff a purchase order for 6 to 10 truckloads of potatoes to be shipped to defendant in Phoenixville, Pennsylvania. Plaintiff sent out four or five loads of potatoes from North Dakota before defendant refused to accept additional shipments. Further communication between plaintiff and defendant was accomplished by telephone or mail. Defendant had no representatives in North Dakota between November, 1978 and June, 1979, although in the fall of 1979, two of defendant's employees visited the area, looking at potatoes and meeting with growers.

Whether defendant is subject to the jurisdiction of this court involves a two-fold question. First, a determination must be made whether defendant is amenable to service of process under North Dakota's long-arm statute. This is a question of state law. Pioneer Insurance Co. v. Gelt, 558 F.2d 1303, 1309 (8th Cir. 1977); Caesar's World, Inc. v. Spencer Foods, Inc., 498 F.2d 1176, 1179 (8th Cir. 1974). Secondly, the court must determine whether an assertion of jurisdiction under the long-arm statute is offensive to due process requirements. This question is one of federal law. Arrowsmith v. United Press International, 320 F.2d 219, 222-23 (2d Cir. 1963); Vasquez v. Falcon Coach Co., Inc., 376 F.Supp. 815, 817 (D.N.D.1974).

North Dakota's long-arm rule is adopted from the Uniform Interstate and International Procedure Act. It provides in relevant part as follows:

(2) Personal jurisdiction based upon contacts. A court of this state may exercise personal jurisdiction over a person who acts directly or by an agent as to any claim for relief arising from the person's having such contact with this state that the exercise of personal jurisdiction over him does not offend against traditional notions of justice or fair play or the due process of law, under one or more of the following circumstances:

(A) transacting any business in this state;

....

(3) Limitation on jurisdiction based upon contacts. If jurisdiction over a person is based solely upon paragraph (2) of this subdivision, only a claim for relief arising from bases enumerated therein may be asserted against him.

N.D.R.Civ.P. 4. Even before Rule 4 was amended to include the constitutional due process standard within the words of the rule, the North Dakota Supreme Court had held that the rule was to be interpreted to permit the state courts to exercise personal jurisdiction to the fullest extent permitted by due process. Hebron Brick Co. v. Robinson Brick & Tile Co., 234 N.W.2d 250, 255 (N.D.1975).

The phrase in the rule, "transacting any business in this state," has received little, if any, attention from North Dakota courts. However, in the Hebron Brick decision, the court held that in defining the scope of Rule 4, it was guided by the rulings of the Michigan courts considering that state's long-arm statute which is the origin of the uniform act from which North Dakota's rule was derived. Therefore, this court is also so guided. In reviewing the decisions from that jurisdiction, the court notes that the concept of "transacting any business" includes "each" and "every" business transaction. Sifers v. Horen, 385 Mich. 195, 188 N.W.2d 623, 624 n.2 (1971). It requires no more than a single act of purchasing. Crane v. Rothring, 27 Mich.App. 189, 183 N.W.2d 434, 435 (1970). Furthermore, one need not be physically present in the state to "transact business within the state," and a contract consummated by telephone and the mails will suffice. Stan Sax Corp. v. Siefen Compounds, Inc., 68 Mich.App. 768, 243 N.W.2d 724, 725 (1976).

The all expansive reach of the phrase "transacting any business" is well illustrated in Kiefer v. May, 46 Mich.App. 566, 208 N.W.2d 539 (1973). There, defendant, an Arizona resident, placed an advertisement in a national publication circulated in Michigan for the sale of a 1931 Cadillac. Plaintiff, a resident of Michigan, responded by calling defendant in Arizona. In the phone conversation defendant represented the automobile to be complete and the agreement to purchase the car was reached. Plaintiff sent part payment to defendant by wire, and later sent a truck to Arizona to pick up the vehicle. When the automobile arrived in Michigan, plaintiff found it to be not as represented and brought suit in Michigan. Under these facts, and applying the Michigan cases previously cited, the court found that defendant transacted business within the state.

This court concludes that on the basis of the record before the court, a North Dakota court would find defendant to have transacted business within the state for purposes of the long-arm rule if such a result would comply with due process requirements.

In determining whether application of North Dakota's long-arm statute to the facts of this case offends due process, it is necessary to inquire whether the nonresident defendant has sufficient minimum contacts with the forum state so as to comply with traditional notions of fair play and substantial justice, see International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945); whether defendant has invoked the benefits and protections of North Dakota laws by its activities there, see Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958); and, because the case involves a contract dispute, whether the contract has substantial connection with the forum state. See McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957); Caesar's World, Inc. v. Spencer Foods, Inc., supra at 1180.

The courts have not been uniform in...