Huffy Corp. v. Overload Industries

• Decision Date: 24 February 2003
• Docket Number: No. CV-S-02-1308PMP(RJJ),CV-S-02-1308PMP(RJJ)
• Citation: 246 F.Supp.2d 1093
• Parties: HUFFY CORPORATION, Plaintiff, v. OVERLORD INDUSTRIES; and (Ballistic) by U.S. International Co., Ltd.,<SMALL><SUP>1</SUP></SMALL> Defendants.
• Court: U.S. District Court — District of Nevada

246 F.Supp.2d 1093

HUFFY CORPORATION, Plaintiff, v. OVERLORD INDUSTRIES; and (Ballistic) by U.S. International

Co., Ltd.,¹ Defendants.

No. CV-S-02-1308PMP(RJJ)

United States District Court, D. Nevada.

February 24, 2003.

Joseph P. Hardy, Beckley Singleton, Chtd. (LV), Las Vegas, NV, Benjamin A. Kahn, Brownstein, Hyatt & Farber, Denver, CO, Peter J. Korneffel, Brownstein, Hyatt & Farber, Denver, CO, Dan R. Waite, Beckley Singleton, Chtd. (LV), Las Vegas, NV, for Huffy Corporation, Plaintiff.

Johnny C. Chiu, Miller & Chevalier Chartered, Washington, DC, Stephen L. Morris, Morris Pickering & Sanner, Las Vegas, NV, Matthew T. Reinhard, Miller & Chevalier Chartered, Washington, DC, Anthony J. Trenga, Miller & Chevalier Chartered, Washington, DC, for (Ballistic) By U.S. International Co., Ltd. Overlord Industries, Defendant.

ORDER

PRO, Chief Judge.

Presently before this Court is a Motion to Dismiss. Defendant Overlord Industries ("Overlord") filed a Motion to Dismiss (Doc. # 9) on November 19, 2002. Plaintiff Huffy Corporation ("Huffy") filed Response in Opposition to Overlord's Motion to Dismiss (Doc. # 12) on December 13, 2002. Huffy also filed Supplement of Original Signature to David B. Duffs Affidavit in Support of Defendant's [sic] Response to Overlord's Motion to Dismiss (Doc. # 18) on December 24, 2002. Overlord filed a Reply (Doc. # 19) on January 6, 2003.

I. BACKGROUND

Plaintiff Huffy, a bicycle manufacturer, is an Ohio corporation with its principal place of business in Ohio. (Compl.¶ 4.) Defendants Overlord and U.S. International Co. ("US International") are allegedly Taiwanese corporations with their principal places of business in Taiwan. (Id. ¶¶ 6-7.)

Huffy contends that Overlord designs, manufactures, assembles, and distributes bicycle and bicycle components, and that U.S. International designs, manufactures, assembles, and distributes bicycles and bicycle components for Overlord. (Compl.¶ ¶ 6-7.) Huffy alleges that its predecessor-in-interest, Royce Union Bicycle Co. ("Royce"), contracted with Overlord to purchase bicycles and/or bicycle component parts from Overlord. (Id. ¶ ¶ 5, 9.) Huffy alleges that either Overlord or U.S. International produced bicycles or bicycle component parts that were deficient and then sold the deficient parts to Royce or Huffy. (Id. ¶ 12.) Huffy also alleges that the contracts between Overlord and Royce and between Overlord and Huffy provided that Overlord would indemnify Huffy and Royce for any injuries or claims that arose from the bicycles or bicycle parts. (Id. ¶ 14.) Huffy further contends that, through similar contracts, U.S. International agreed to indemnify Overlord. (Id. ¶ 15.)

According to Huffy, eighteen people have brought claims against Huffy for alleged damages stemming from use of equipment that contained Overlord and U.S. International component parts. (Compl.¶¶ 19-36.) As a result, Huffy has brought the present diversity action against Overlord and U.S. International for contract breach, breach of the implied covenant of good faith and fair dealing, indemnification, and declaratory relief. (Id. ¶ ¶ 40-61.)

II. LEGAL STANDARD

Under the Federal Rules of Civil Procedure, a court may dismiss an action for "lack of jurisdiction over the person." Fed.R.Civ.P. 12(b)(2). If a court lacks personal jurisdiction over the parties, the court's judgment is rendered void. Pennoyer v. Neff, 95 U.S. 714, 726-28, 24 L.Ed. 565 (1877); Veeck v. Commodity Enters., Inc., 487 F.2d 423, 426 (9th Cir. 1973). Once a defendant challenges personal jurisdiction, the plaintiff bears the burden of establishing that a court has personal jurisdiction over the defendant. Butcher's Union Local No. 498 v. SDC Inv., Inc., 788 F.2d 535, 538 (9th Cir. 1986) (citing KVOS v. Associated Press, 299 U.S. 269, 278, 57 S.Ct. 197, 81 L.Ed. 183 (1936)). Typically, federal courts have personal jurisdiction over defendants to the same extent as the state courts "in the state in which the [federal] district court is located." See Fed.R.Civ.P. 4(k)(1)(A). In Nevada, courts "may exercise jurisdiction over a party to a civil action on any basis not inconsistent with the constitution of this state or the Constitution of the United States." Nev.Rev.Stat. 14.065(1).

The courts have interpreted the Due Process Clauses of the Constitution to require that the defendant "have certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940)). See also Burger King v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) ("Once it has been decided that a defendant purposefully established minimum contacts within the forum State, these contacts may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.' ") (citing International Shoe, 326 U.S. at 320, 66 S.Ct. 154). Further, whether a defendant "should reasonably anticipate being haled into court" in the forum state is "critical to due process analysis." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).

Courts may exercise general or specific personal jurisdiction over a defendant. "For a defendant to be subject to general in personam jurisdiction, it must have such continuous and systematic contacts with the forum that the exercise of jurisdiction does not offend traditional notions of fair play and substantial justice." Reebok Int'l Ltd. v. McLaughlin, 49 F.3d 1387, 1391 (9th Cir.1995) (citing Core-Vent v. Nobel Indus. AB, ¶ F.3d 1482, 1485 (9th Cir. 1993)). See also Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). If a court cannot exercise general personal jurisdiction over a defendant, a court may still have specific personal jurisdiction if a three-part test is met:

(1) The nonresident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws;

(2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and

(3) the exercise must comport with fair play and substantial justice; i.e. it must be reasonable.

Reebok Int'l, 49 F.3d at 1391 (citing Core-Vent, ¶ F.3d at 1485).

III. DISCUSSION

Defendant Overlord has moved to dismiss the present action on the ground that this Court lacks personal jurisdiction over Overlord. Huffy responds that the Nevada long-arm statute confers jurisdiction over Overlord. Because this court "acts on a defendant's motion to dismiss under Rule 12(b)(2) without holding an evidentiary hearing, the plaintiff need make only a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995) (citing sources). To establish a prima facie case, "the plaintiff need only demonstrate facts that if true would support jurisdiction over the defendant." Id. at 1498 (citing Data Disc, Inc. v. Systems Technology Assocs., 557 F.2d 1280, 1285 (9th Cir.1977)).

A. Nevada's Long-Arm Statutes

Huffy contends that both Nevada Revised Statute 14.065(1) and Nevada Revised Statute 14.080 give this Court jurisdiction over Overlord.

1. Nevada Revised Statute 14.080

According to Nevada Revised Statute 14.080:

Any company, firm, partnership, corporation or association created and existing under the laws of any other state, territory, foreign government or the Government of the United States, which manufactures, produces, makes, markets or otherwise supplies directly or indirectly any product for distribution, sale or use in this state may be lawfully served with any legal process in any action to recover damages for an injury to a person or property resulting from such distribution, sale or use in this state by mailing to the last known address of the company, firm, partnership, corporation or association, by registered or certified mail return receipt requested, a copy of the summons and a copy of the complaint. Nev.Rev.Stat. 14.080(1) (emphasis added).

In interpreting 14.080, the Nevada Supreme Court² has held that 14.080 can be used to assert personal "jurisdiction over a foreign manufacturer of a product which it reasonably may expect to enter interstate commerce, which does enter interstate commerce, and because of an alleged defect, causes injury in Nevada to the plaintiff." Metal-Matic, Inc. v. Eighth Judicial Dist. Court, 82 Nev. 263, 415 P.2d 617, 619 (1966). The Nevada Supreme Court has repeatedly and uniformly limited 14.080 to service of process over foreign defendant corporations whose products allegedly caused tortious injury to plaintiffs in Nevada. See id. at 619. See also Judas Priest v. Second Judicial Dist. Court, 104 Nev. 424, 760 P.2d 137, 139 n. 2 (1988); Wilmack, Inc. v. Second Judicial Dist. Court, 97 Nev. 547, 635 P.2d 296, 298 (1981); Jacobsen v. Ducommun, Inc., 87 Nev. 240, 484 P.2d 1095, 1096 (1971); Drew Rentals v. First Judicial Dist. Court, 84 Nev. 201, 438 P.2d 253, 253 (1968); Jeppeson & Co. v. Eighth Judicial Dist. Court, 83 Nev. 329, 431 P.2d 260, 261 (1967); Gambs v. Morgenthaler, 83 Nev. 90, 423 P.2d 670, 672 (1967).

Nevada Revised Statute 14.080 is inapplicable to the case at bar for two reasons. First, Huffy does not allege in its Complaint that any of the claimants who have asserted personal injury claims against Huffy are either Nevada residents or were in Nevada at the time of their alleged injuries. Injury in Nevada is a prerequisite to proper service of process pursuant to 14.080....