High Plains Constr., Inc. v. Gay

• Decision Date: 21 December 2011
• Docket Number: No. 4:11–cv–00245–JEG.,4:11–cv–00245–JEG.
• Parties: HIGH PLAINS CONSTRUCTION, INC., Plaintiff, v. Paul GAY, Rob Rollins, and Aerostar, Inc., Defendants.
• Court: U.S. District Court — Southern District of Iowa

831 F.Supp.2d 1089

HIGH PLAINS CONSTRUCTION, INC., Plaintiff,

v.Paul GAY, Rob Rollins, and Aerostar, Inc., Defendants.

No. 4:11–cv–00245–JEG.

United States District Court,

S.D. Iowa,

Central Division.

Dec. 21, 2011.

David Alan Morse, Rosenberg & Morse, Des Moines, IA, for Plaintiff.

Joseph A. Cacciatore, Graham Ervanian & Cacciatore, LLP, Des Moines, IA, for Defendants.

ORDER

JAMES E. GRITZNER, Chief Judge.

Now before the Court is a Motion to Dismiss for Lack of Personal Jurisdiction and/or Improper Venue, or in the alternative, for Transfer of Venue filed by Defendants Paul Gay (Gay), Rob Rollins (Rollins), and Aerostar, Inc. (Aerostar), (collectively, Defendants). Plaintiff High Plains Construction, Inc. (Plaintiff or High Plains), resists. The Court held a hearing on the motion on November 10, 2011. Attorney David Alan Morse appeared on behalf of High Plains, and attorney Joseph A. Cacciatore represented Defendants. At the hearing, the Court granted High Plains leave to file supplemental briefing, which it timely provided. The matter is now complete and ready for disposition.

I. BACKGROUND¹

On March 10, 2009, High Plains, an Iowa corporation, entered into a written dealership agreement (Dealership Agreement) with Aerostar, a corporation that manufactures, among other things, wind turbines and is organized under the laws of the Commonwealth of Massachusetts, with its principal place of business in Westport Point, Massachusetts. Under this Dealership Agreement, High Plains was authorized as an independent contractor to sell, install, and maintain certain Aerostar wind turbines. The Dealership Agreement governing the relationship of the parties provides, in relevant part as follows:

GOVERNING LAW—JURISDICTION. This agreement shall be governed by, construed and interpreted according to the laws of the Commonwealth of Massachusetts. Any dispute arising under or in connection with this agreement or related to any matter which is the subject of this agreement shall be subject to the exclusive jurisdiction of the state and/or federal courts located in Massachusetts.

Dealership Agreement 5, Ex. A to Defs.' Br., ECF No. 7–1.

High Plains, as an authorized dealer, benefitted from a lower “dealer price” in its purchase of Aerostar's turbines and associated equipment. During the course of the parties' relationship, High Plains ordered, and received, a number of wind turbines from Aerostar. In December of 2009, High Plains ordered ten additional 30 KW turbine units from Aerostar for $47,960 per unit and timely tendered the requisite $317,000 down payment. Aerostar accepted the order and repeatedly affirmed its intention to deliver the requested units in the spring and summer of 2010. Reporting design and manufacturing issues, Aerostar postponed delivery, promising shipment by the end of 2010. To date, Aerostar has yet to deliver the ten turbines and has refused to refund High Plains its down payment.

Gay and Rollins, both residents of Massachusetts, were acting, at all times relevant to this dispute, as authorized agents of Aerostar. Gay is both the vice president of engineering and general counsel to Aerostar; Rollins is the vice president of sales and operations for Aerostar. On April 18, 2011, at the invitation of High Plains, Gay and Rollins visited a number of High Plains' customers in Iowa who were expecting the delivery of Aerostar turbines. High Plains alleges that during those visits, while in full knowledge of the existing contractual relationship between Plaintiff and these customers, Gay and Rollins made false, defamatory, and slanderous statements about High Plains in regard to its turbine projects. High Plains contends that these false statements, in connection with their attempts to solicit said customers to buy directly from Aerostar, constitute an intentional interference with a contractual relationship.

On April 29, 2011, Plaintiff filed its petition in the Iowa District Court for Polk County alleging tortious interference with a business contract against Defendants, breach of contract against Aerostar, and requesting injunctive relief enjoining Defendants from contacting Plaintiff's customers. Defendants removed the case to this Court on May 26, 2011, based on diversity jurisdiction. In May of 2011, Aerostar, pursuant to the forum selection clause contained in the Dealership Agreement, brought suit against Plaintiff in Massachusetts alleging breach of contract, misrepresentation, unfair and deceptive trade practices, negligence, breach of covenant of good faith and fair dealing, and fraud and deceit, and requesting injunctive relief.

On July 1, 2011, Defendants filed the motion now before the Court.

II. DISCUSSIONA. Rule 12(b)(2)—Lack of Personal Jurisdiction

1. Due Process

“To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must make a prima facie showing that personal jurisdiction exists, which is accomplished by pleading sufficient facts to support a reasonable inference that the defendant[s] can be subjected to jurisdiction within the state.” K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 591–92 (8th Cir.2011) (internal quotation marks and citation omitted). “If the defendant controverts or denies jurisdiction, the plaintiff bears the burden of proving facts supporting personal jurisdiction.” Wells Dairy, Inc. v. Food Movers Int'l, Inc., 607 F.3d 515, 518 (8th Cir.2010). “The plaintiff's prima facie showing must be tested, not by the pleadings alone, but by the affidavits and exhibits presented with the motions and in opposition thereto.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir.2004) (internal quotation marks and citation omitted). “[The court] must view the evidence in the light most favorable to the plaintiff and resolve all factual conflicts in its favor in deciding whether the plaintiff made the requisite showing.” K–V Pharm. Co., 648 F.3d at 592.

“The Due Process Clause protects an individual's liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties, or relations.’ ” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471–472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). “A federal court in a diversity action may assume jurisdiction over nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.” Dever, 380 F.3d at 1073 (quoting Morris v. Barkbuster, Inc., 923 F.2d 1277, 1280 (8th Cir.1991)). When, as Iowa's long-arm statute provides, a state's personal jurisdiction is as broad as is consistent with due process, the Court need only consider whether the exercise of personal jurisdiction comports with the Due Process Clause. See Wells Dairy, 607 F.3d at 518.

To conform with constitutional requirements, there must exist “minimum contacts between the nonresident defendant and the forum state such that the assertion of personal jurisdiction is consistent with traditional notions of fair play and substantial justice.” Id. (citing World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291–92, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). “Sufficient contacts exist when the defendant's conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court there.” Id. (alteration in original) (internal quotation marks and citations omitted). This requires “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, 471 U.S. at 475, 105 S.Ct. 2174 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)).

To determine that personal jurisdiction conforms with this standard, the Eighth Circuit Court of Appeals has instructed courts to consider five factors:

(1) the nature and quality of the contacts with the forum state; (2) the quantity of the 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.

Land–O–Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir.1983) (internal quotation marks and citation omitted). Of these factors, the first three factors are of primary importance. Id. The Eighth Circuit Court of Appeals has determined that the third factor “distinguish[es] between specific and general jurisdiction.” Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir.1996) (citations omitted). “Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state while general 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.” Id. at 1103 (internal quotation marks and citation omitted).

It is apparent from the record before the Court that Aerostar is not subject to this Court's general jurisdiction. Aerostar has not maintained the requisite continuous and systematic contacts as the company is not incorporated in Iowa, does not maintain an office or keep employees in Iowa, and has no registered agent in Iowa. See Wells Dairy, 607 F.3d at 519 (finding insufficient contacts for general jurisdiction when “the company is not licensed to do business in Iowa, it does not maintain employees or a registered agent there, it does not own or lease property in Iowa, and its employees have not traveled to Iowa to conduct [defendant's] business”). The record further reflects that Gay and Rollins, who are sued not individually but in their capacity as representatives of Aerostar, are not subject to this Court's general jurisdiction as neither Gay nor Rollins maintain...