Intermatic, Inc. v. Taymac Corp.

• Citation: 815 F. Supp. 290
• Decision Date: 03 March 1993
• Docket Number: No. IP 92-1059-C.,IP 92-1059-C.
• Parties: INTERMATIC, INC., Plaintiff, v. TAYMAC CORPORATION, Michael Shotey, Clifford Engineering & Sales Company, Inc., Ron Clifford, F.W. Baetzel Company, and F. William Baetzel, Defendants.
• Court: U.S. District Court — Southern District of Indiana

815 F. Supp. 290

INTERMATIC, INC., Plaintiff, v. TAYMAC CORPORATION, Michael Shotey, Clifford Engineering & Sales Company, Inc., Ron Clifford, F.W. Baetzel Company, and F. William Baetzel, Defendants.

No. IP 92-1059-C.

United States District Court, S.D. Indiana, Indianapolis Division.

March 3, 1993.

David H. Badger, Daniel L. Boots, Katherine L. Tabor, Willian Brinks Olds Hofer Gilson & Lione, Indianapolis, IN, for plaintiff.

Robert P. Johnstone, Barnes & Thornburg, Indianapolis, IN, for defendant Taymac Corp.

Alex L. Rogers, Steers, Sullivan, McNamar & Rogers, Indianapolis, IN, for defendants Clifford Engineering & Sales Co., Inc. and Ron Clifford.

James W. Riley, Jr., Riley, Bennett & Egloff, Indianapolis, IN, for defendants Clifford Engineering & Sales Co., Inc., Ron Clifford, F.W. Baetzel Co. and F. William Baetzel.

Randall C. Helmen, Hume, Smith, Geddes & Green, Indianapolis, IN, for defendant Ron Clifford.

David M. Haskett, Locke Reynolds Boyd & Weisell, Indianapolis, IN, for defendants F.W. Baetzel Co. and F. William Baetzel.

ORDER ON MOTIONS TO DISMISS FOR LACK OF PERSONAL JURISDICTION

McKINNEY, District Judge.

Defendants Michael Shotey ("Shotey") and F. William Baetzel ("Baetzel") have both filed motions requesting dismissal for lack of personal jurisdiction. Intermatic Incorporated ("Intermatic"), Shotey, and Baetzel have filed their briefs and the issues are ready to be resolved. For the reasons discussed below, this Court DENIES Shotey's motion to dismiss and GRANTS Baetzel's motion to dismiss.

I. FACTUAL & PROCEDURAL BACKGROUND

Intermatic is a Delaware corporation with its principal place of business in Illinois. Taymac Corp. ("Taymac") is an Arizona corporation with its principal place of business in Arizona. Shotey is a resident of Arizona and is the president of Taymac. Intermatic and Taymac both sell electrical outlet box covers for use in outdoor locations.

Baetzel is an officer of F.W. Baetzel Co., Inc. ("Baetzel Inc."). Baetzel Inc. is a Kentucky corporation with its principal place of business in Kentucky. It has a sales agreement with Taymac under which it is the exclusive sales agent for Taymac in six Indiana counties.

Intermatic claims that Taymac, through Shotey, sent letters and memoranda containing false and defamatory information concerning Intermatic's products to Taymac's Indiana sales representatives. Intermatic also claims that in these communications Shotey encouraged Taymac's sales representatives to share the information with their distributors. On August 4, 1992, Intermatic brought this diversity action seeking recovery based on theories of product defamation and disparagement and intentional interference with prospective business relations.¹ Intermatic also seeks a declaratory judgment that it has not infringed a patent held by Taymac.

On October 14, 1992, Shotey filed his motion to dismiss for lack of personal jurisdiction. On October 21, 1992, Baetzel filed his motion to dismiss for lack of personal jurisdiction. Intermatic responded to both motions and Shotey filed a reply.

II. PERSONAL JURISDICTION STANDARDS

If a defendant moves for dismissal for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), the burden is on the plaintiff to demonstrate a basis for personal jurisdiction. Simpson v. Quality Oil Co., 723 F.Supp. 382, 386 (S.D.Ind.1989). The plaintiff can shift this burden by establishing a prima facie case that jurisdiction is proper. Id. To determine whether the exercise of personal jurisdiction is proper, a court may receive and consider affidavits and other documentary evidence. Curtis Management Group v. Academy of Motion Picture Arts, 717 F.Supp. 1362, 1364 (S.D.Ind.1989). All facts and reasonable inferences are to be viewed in a light most favorable to the nonmoving party, Simpson, 723 F.Supp. at 386, and all factual disputes are to be resolved in favor of the nonmoving party. Curtis Management Group, 717 F.Supp. at 1364.

In a diversity case, a district court has jurisdiction over a non-resident defendant only if a court of the state in which the district court sits would have jurisdiction. Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1415, 113 L.Ed.2d 468 (1991). For a court to have jurisdiction, both the state long-arm statute and the constitutional guarantee of due process must allow the court to exercise jurisdiction over the person. Wilson, 916 F.2d at 1243. In Indiana, however, the state long-arm statute extends personal jurisdiction to the limit of the due process clause, and thus, the only consideration is whether an exercise of jurisdiction complies with due process. Id.

Due process requires that a defendant have minimum contacts with the forum so that maintaining the suit does not offend "traditional notions of fair play and substantial justice." Wilson, 916 F.2d at 1243 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)). These minimum contacts must be established by a defendant's purposeful acts. Id.

There are two types of personal jurisdiction that can be established by a defendant's minimum contacts with a forum: specific and general. Id. at 1244. Specific jurisdiction is present if the defendant has contacts from which the cause of action arises, and which constitute at least the minimum level of contact with the forum that allows the exercise of jurisdiction to be reasonable. Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984); see also 4 Wright & Miller, supra, at 296. General jurisdiction, on the other hand, is present if the defendant's overall activity in the state is sufficiently "continuous and systematic" that the court's exercise of jurisdiction over the defendant is reasonable and just, even though the plaintiff's cause of action does not arise from and is not related to the defendant's contacts with the forum. Helicopteros Nacionales de Columbia, 466 U.S. at 414-15, 104 S.Ct. at 1872-73; see also 4 Charles A. Wright & Arthur R. Miller, Federal Practice & Procedure 296. In practice, the standard for establishing general jurisdiction is fairly high. Wilson, 916 F.2d at 1245.

III. DISCUSSION

A. Shotey's Motion to Dismiss

1. Fiduciary Shield Doctrine

Shotey argues that none of his contacts with Indiana can support this Court exercising personal jurisdiction over him because the contacts occurred as a result of Shotey acting in his capacity as an officer of Taymac. He invokes the fiduciary shield doctrine, which precludes a state from exercising jurisdiction over an individual sued in his or her personal capacity if the only basis for jurisdiction is his or her contacts with the forum in which he or she was acting solely as a fiduciary of a corporation. See Ryan v. Chayes Virginia, Inc., 553 N.E.2d 1237 (Ind. Ct.App.1990); see also Thomas H. Sponsler, Jurisdiction Over the Corporate Agent: The Fiduciary Shield, 35 Wash. & Lee L.Rev. 349 (1978).

Although courts previously have questioned whether the fiduciary shield doctrine exists as an element of federal due process, or as a state law doctrine, see, e.g., Columbia Briargate Co. v. First Nat'l Bank in Dallas, 713 F.2d 1052, 1055-57 (4th Cir.1983), cert. denied sub nom., Pearson v. Columbia Briargate Co., 465 U.S. 1007, 104 S.Ct. 1001, 79 L.Ed.2d 233 (1984), it is presently viewed as a state law doctrine which functions as a tool for courts to apply in determining the scope of state long-arm statutes. See Calder v. Jones, 465 U.S. 783, 788-790, 104 S.Ct. 1482, 1486-1487, 79 L.Ed.2d 804 (1984) (holding that defendants' status as employees does not somehow insulate them from jurisdiction and implicitly rejecting due process-based fiduciary shield doctrine); Cantrell v. Extradition Corp. of Am., 789 F.Supp. 306, 309 (W.D.Mo.1992) ("The fiduciary shield doctrine is not a constitutional principle, but is rather a doctrine based on judicial inference as to the intended scope of the long-arm statute."); Thomas McKinnon Sec. v. Hamiltonian Indus., Inc., 610 F.Supp. 5, 7 (D.C.N.Y.1985) (holding that although Calder rejects the fiduciary shield doctrine as an aspect of due process, the doctrine still may be used in equitably construing the reach of state long arm statutes); see also Keeton v. Hustler Magazine, 465 U.S. 770, 780-81 n. 12 & 13, 104 S.Ct. 1473, 1480-81 n. 12 & 13, 79 L.Ed.2d 790 (1984) (discussing Calder); Robert A. Koenig, Note, Personal Jurisdiction and the Corporate Employee: Minimum Contacts Meet the Fiduciary Shield, 38 Stan.L.Rev. 813, 832-33 (1986) (discussing Calder's rejection of due process-based fiduciary shield doctrine); but see Rollins v. Ellwood, 141 Ill.2d 244, 152 Ill.Dec. 384, 396-401, 565 N.E.2d 1302, 1314-19 (1990) (reviewing the doctrine as applied as a component of Illinois law and adopting the doctrine as a requisite under the Illinois due process clause); Jennifer Babbin, Note, The Fiduciary Shield Doctrine: Minimum Contacts in a Special Context, 65 B.U.L.Rev. 967, 994 (1985) (arguing that the fiduciary shield doctrine should be maintained and recognized as "an expression of the due process minimum contacts standard in a special context"). Therefore, prior to determining whether under the circumstances in this case Shotey may invoke the fiduciary shield doctrine to defeat personal jurisdiction, this Court must determine whether the doctrine has been adopted in Indiana.

In determining the law of Indiana, this Court looks to the Supreme Court of Indiana. See Erie R.R. v. Tomkins, 304 U.S. 64, 78, 58 S.Ct. 817, 822, 82 L.Ed. 1188 (1938); Brooks v. Chicago Downs Assoc. Inc., 791 F.2d 512, 514 (7th Cir.1986). However, the Supreme Court of Indiana has not addressed the issue of whether the fiduciary shield doctrine has been adopted in Indiana. Therefore, this Court must consider whether the Supreme Court of Indiana, if faced with the issue, would hold...