DURAG Inc. v. Kurzawski, Case No. 17-cv-5325 (ECT/HB)
| Decision Date | 04 May 2020 |
| Docket Number | Case No. 17-cv-5325 (ECT/HB) |
| Parties | DURAG Inc., a Minnesota corporation, Plaintiff, v. Thomas Kurzawski, a Minnesota resident, and Lamtec America Inc., a Minnesota Corporation, LAMTEC Meß-und Regeltechnik für Feuerungen GmbH & Co. KG, a foreign corporation, and Ulrich Greul, a foreign citizen, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Christopher P. Renz, Francis J. Rondoni, and Jennifer J. Crancer, Chestnut Cambronne PA, Minneapolis, MN, for Plaintiff DURAG Inc.
Christopher J. Haugen and Joshua A. Hasko, Messerli & Kramer PA, Minneapolis, MN, for Defendants Thomas Kurzawski, Lamtec America Inc., and LAMTEC Meß-und Regeltechnik für Feuerungen GmbH & Co. KG.
Aram V. Desteian and Daniel R. Olson, Bassford Remele, Minneapolis, MN, for Defendant Ulrich Greul.
In this business-tort case, Plaintiff DURAG alleges that Defendants violated federal and Minnesota law when they appropriated and used DURAG's proprietary information and intellectual property. Two Defendants—a German company we'll call "Lamtec Germany"1 and a German citizen named Ulrich Greul—each have moved to dismiss thecase against them for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). In support of their motions, Lamtec Germany and Greul say their contacts with Minnesota are negligible and that the exercise of personal jurisdiction over them here would violate due process. DURAG does not dispute that Lamtec Germany and Greul's own contacts with Minnesota are insufficient. DURAG argues instead that the Minnesota contacts of another Defendant, Thomas Kurzawski, should be attributed to Lamtec Germany and Greul under a conspiracy theory of personal jurisdiction. Because a reasonable fact-finder could conclude that the exercise of conspiracy-based personal jurisdiction over Lamtec Germany and Greul is appropriate, the motions will be denied.
The amended complaint's principal factual allegations are straightforward. DURAG is a Minnesota corporation, and its business "consists of combustion technology, environmental monitoring, data management, and tunnel sensors." Am. Compl. ¶¶ 1, 8 [ECF No. 62]. Kurzawski was DURAG's president and one of its officers from June 1995 "until February 10, 2016." Id. ¶ 9. After resigning these positions, Kurzawski remained a DURAG employee "through June 30, 2016," and during this post-resignation period he "was tasked with assisting and training and/or transitioning his colleagues and successors to ensure a seamless transition and protect the company's endeavors." Id. ¶ 11. Central to its claims, DURAG alleges that Kurzawski—while he remained one of its officers and employees—"actively promot[ed] the interests of competitors to the damage and detriment of DURAG." Id. ¶ 14. DURAG says that these activities included "conspiring" with Lamtec Germany and Greul to "unlawfully use DURAG's proprietary information andproduct designs" and to establish an American subsidiary of Lamtec Germany—Defendant Lamtec America—to compete with DURAG. Id.; see also id. ¶¶ 34(a)-(l) (identifying activities). DURAG asserts eight federal and state-law claims against Kurzawski and Lamtec America. Id. ¶¶ 44-52 (); ¶¶ 53-59 (Count II—Minnesota Deceptive Trade Practices Act); ¶¶ 60-69 (Count III—federal Defend Trade Secrets Act); ¶¶ 70-80 (Count IV—federal Lanham Act); ¶¶ 81-85 (Count V—false advertising under Minn. Stat. § 325F.67); ¶¶ 86-97 (); ¶¶ 98-105 (); and ¶¶ 118-123 (Count X—unjust enrichment). DURAG asserts two claims against Lamtec Germany and Greul together as co-defendants, and the claims arise only under state law. Id. ¶¶ 106-112 (); ¶¶ 113-117 (). DURAG asserts one claim against only Lamtec Germany. Id. ¶¶ 124-127 (Count XI—unjust enrichment).
DURAG filed this case in December 2017 against Kurzawski and Lamtec America. See Compl. [ECF No. 1]. Lamtec Germany and Greul were not made parties until November 2019, see ECF Nos. 85, 86 (certificates of service), after Magistrate Judge Hildy Bowbeer granted DURAG's motion for leave to amend its complaint to add them, Order [ECF No. 61]. Kurzawski and Lamtec America opposed DURAG's motion to amend arguing, among other things, that amendment would be futile because there was not personal jurisdiction over Lamtec Germany and Greul. Id. at 11; see also Mem. in Opp'n to Mot. to Amend at 14-25 [ECF No. 39]. As presented to Magistrate Judge Bowbeer, thepersonal jurisdiction question was narrow. DURAG asserted two grounds for personal jurisdiction over Lamtec Germany and Greul: first, that "they had directed their tortious activities at the state of Minnesota," resulting in personal jurisdiction under Calder v. Jones, 465 U.S. 783 (1984); and second, that they had conspired with Kurzawski and Lamtec America, and this conspiracy provided an "independent basis" for personal jurisdiction. Order at 10. After noting Federal Rule of Civil Procedure 15(a)(2)'s command that leave to amend should be "freely give[n] . . . when justice so requires," id. at 11, Magistrate Judge Bowbeer carefully evaluated DURAG's proposed amended complaint, id. at 25-26, 29-32. She concluded "that the allegations in the [proposed amended complaint were] not sufficient to establish the necessary minimum contacts to support personal jurisdiction—over either Lamtec Germany or Greul—under the Calder effects test." Id. at 26. However, she also concluded that "DURAG's conspiracy-based allegations [were] sufficient to confer personal jurisdiction over" Lamtec Germany and Greul. Id. at 32. Magistrate Judge Bowbeer then granted DURAG's motion for leave to amend. Id. at 34. Neither Kurzawski nor Lamtec America filed objections to Magistrate Judge Bowbeer's order. Lamtec Germany and Greul were not able to file objections to the order because they were not parties when the order was entered and were not made parties within the period for filing objections. D. Minn. LR 72.2(a) (); Certificate of Service [ECF No. 85] (showing Greul was served November 9, 2019); Certificate of Service [ECF No. 86] (showing Lamtec Germany was served November 8, 2019).
DURAG says that Magistrate Judge Bowbeer's order is "law of the case" and that it should prevent "a 'second bite' at the 'apple' of the jurisdictional argument." Mem. in Opp'n to Lamtec Germany's Mot. at 25 [ECF No. 81]. This is not correct. Magistrate Judge Bowbeer's order does not preclude Lamtec Germany and Greul from challenging personal jurisdiction. Lamtec Germany and Greul are not getting a do-over on the threshold question of personal jurisdiction. They were not parties to the case when DURAG sought leave to amend. No doubt Kurzawski and Lamtec America opposed DURAG's motion to amend with arguments like those Lamtec Germany and Greul advance here. But DURAG cites no authority suggesting that Kurzawski and Lamtec America's opportunity to advance these arguments in the context of a motion to amend under Rule 15 bars Lamtec Germany and Greul from exercising their rights to assert a personal jurisdiction defense under Rule 12(b)(2) following service of process on them. Regardless, if it applied here, the law-of-the-case doctrine is not so inflexible as DURAG suggests. "[W]hen a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618 (1983). But absent considerations that are not present here, "[a] court has the power to revisit prior decisions of its own or of a coordinate court in any circumstance[.]" Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988); see also Conrod v. Davis, 120 F.3d 92, 95 (8th Cir. 1997) ( .
"Personal jurisdiction . . . is an essential element of the jurisdiction of a district . . . court, without which the court is powerless to proceed to an adjudication." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) () (citation and internal quotation marks omitted). "When personal jurisdiction is challenged by a defendant, the plaintiff bears the burden to show that jurisdiction exists." Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 820 (8th Cir. 2014) (citations omitted). The plaintiff will not have to prove personal jurisdiction by a preponderance of the evidence "until trial or until the court holds an evidentiary hearing." Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). "To successfully survive a motion to dismiss challenging personal jurisdiction, a plaintiff must make a prima facie showing of personal jurisdiction over the challenging defendant." Id. (citations omitted). "But where, as here, the parties submit affidavits to bolster their positions on the motion, and the district court relies on the evidence, the motion is in substance one for summary judgment." Creative Calling Sols., Inc. v. LF Beauty Ltd., 799 F.3d 975, 979 (8th Cir. 2015) (citation omitted). In this circumstance, a case should not be dismissed for lack of personal jurisdiction "if the evidence, viewed in the light most favorable to [the plaintiff], is sufficient to support a conclusion that the exercise of personal jurisdiction over [the defendant] is proper." Id. (citations omitted).
Here, whether there is personal jurisdiction over Lamtec Germany and Greul boils down to...
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