Luc v. Krause Werk Gmbh & Co.

• Decision Date: 30 October 2003
• Docket Number: No. CIV.A. 99-2516-GTV.,CIV.A. 99-2516-GTV.
• Parties: Wesley LUC, Plaintiff, v. KRAUSE WERK GMBH & CO., KF Alsfred, Germany, et al., Defendants.
• Court: U.S. District Court — District of Kansas

289 F.Supp.2d 1282

Wesley LUC, Plaintiff, v. KRAUSE WERK GMBH & CO., KF Alsfred, Germany, et al., Defendants.

No. CIV.A. 99-2516-GTV.

United States District Court, D. Kansas.

October 30, 2003.

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Brendan Connor Buckley, James T. Thompson, Jennifer L. Greenstreet, Edelman & Thompson, L.L.C., Kansas City, MO, John H. Thompson, Law Offices of Mark Rudoff, Overland Park, KS, for Plaintiff.

David R. Buchanan, Garrett D. Lambert, Scott A. Hunter, Brown & James, P.C., Barbara Cusick, James C. Morrow, Morrow, Willnauer, & Klosterman, L.L.C., Andrew B. Protzman, Christopher J. Stucky, John W. Cowden, Baker, Sterchi, Cowden & Rice, L.L.C., Kansas City, MO, Todd W. Amrein, Phoenix, AZ, for Defendants.

MEMORANDUM AND ORDER

VanBEBBER, Senior District Judge.

Plaintiff Wesley Luc brings this personal injury/product liability action against Defendants Krause Werk, GmbH & Co. ("Krause Werk"); Krause, Inc.; and Home Depot. Plaintiff claims that he was injured when he fell from a defectively manufactured ladder. Plaintiff initially sued Krause, Inc. as the manufacturer and seller of the ladder, and Home Depot as the retailer of the ladder. After Krause, Inc., filed for bankruptcy, Plaintiff amended his complaint to add claims against Krause Werk. The case has been stayed pending Krause, Inc.'s bankruptcy action.

The case is now before the court on Krause Werk's motion to dismiss for lack of personal jurisdiction (Doc. 102). The court granted the parties time to engage in discovery for the limited purpose of seeking evidence on whether this court has personal jurisdiction over Krause Werk. The motion is now ripe for review. For the following reasons, the court denies the motion.

I. Factual Background

The following facts are taken from the Second Amended Complaint and from the affidavits and exhibits attached to the pleadings filed in connection with Krause Werk's motion to dismiss. The court has accepted allegations in Plaintiff's Second Amended Complaint as true to the extent they are uncontroverted by affidavits and exhibits. See Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir.1995) (citation omitted).

On or about April 13, 1998, Plaintiff purchased a Krause Multi-matic ladder at a Home Depot store in Pompano Beach, Florida. On or about May 29, 1998, while working at his home in Lenexa, Kansas, Plaintiff fell from the ladder when it collapsed. The Multi-matic ladder has hinges and a locking bolt that allow it to be manipulated into different positions. Plaintiff alleges that the locking bolt malfunctioned, causing the ladder to collapse.

Krause Werk is a limited liability company organized under the laws of Germany and its principal place of business is in Germany. Krause Werk manufactures ladders in Germany, Poland, and Hungary for sale throughout Europe. The company does not manufacture, market, or sell its products in Kansas or anywhere else in the United States. It is not licensed to do business in Kansas and has never had an agent for service of process in Kansas. It also has never owned real estate, maintained offices/manufacturing plants/retail outlets, or had employees, agents, post office boxes, or bank accounts in Kansas.

In the mid-1980s, Krause Werk founded and incorporated a wholly-owned subsidiary, Krause, Inc., for the purpose of distributing ladders in the United States. Krause, Inc. is an Illinois corporation with its principal place of business in Roscoe, Illinois. Krause Werk provided the financial capital and original production equipment to form Krause, Inc. Krause Werk was the sole provider of start-up capital and the sole owner of Krause, Inc. corporate stock. Ed Hansen, Director of Operations of Krause, Inc., referred to Krause, Inc. in deposition as Krause Werk's "plant in the United States."

Gunther Krause is the general manager, director, and owner of Krause Werk and the president and sole director of Krause, Inc. When Krause, Inc. was in business, Gunther Krause traveled to the United States two to three times a year.

Krause Werk and Krause, Inc. maintained separate business operations, manufacturing facilities, and headquarters, and also kept separate business records, books, accounts, payrolls, and benefits systems. Krause, Inc.'s officers and employees controlled Krause, Inc.'s day-to-day operations. In 1987, Krause, Inc. was converted to a manufacturing facility and began to manufacture and sell the Krause Multi-matic ladder.

Krause Werk originally designed and patented the hinges on the Multi-matic ladder. Additionally, Krause Werk owns the copyrights for the word "Multi-matic" and the emblem on the ladder that caused Plaintiff's injuries. The same emblem and insignia adorn ladders sold by Krause Werk in Europe. Krause Werk and Krause, Inc. had a licensing agreement under which they had mutual responsibilities to share technical information about the Multi-matic ladder at issue.

In December 1997, Krause, Inc. redesigned, manufactured, and installed the Multi-matic locking bolt. Plaintiff claims that the redesigned bolt is responsible for his injuries. Krause Werk initiated the redesign effort, but did not participate in the redesign process. Ed Hansen testified that "[t]he change was initiated by our parent company in order to strengthen that component [the locking bolt].... So they asked us to investigate the possibility of doing that component in steel." According to Gunther Krause, Krause Werk was informed about which components were redesigned, but did not receive the locking bolts or conduct tests on them until after Krause, Inc. installed them in the ladders. Krause Werk tested the bolts because "tests are performed regularly on materials, components or products that Krause, Inc. — that Krause Werk receives from somebody else."

II. Standards for Judgment

Krause Werk moves the court to dismiss it from the case pursuant to Fed. R.Civ.P. 12(b)(2). In opposing a Rule 12(b)(2) motion, the plaintiff bears the burden of establishing personal jurisdiction over the defendant. OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086, 1091 (10th Cir.1998) (citation omitted). But this burden is "light." Wenz, 55 F.3d at 1505 (citation omitted). The plaintiff need only make a prima facie showing that jurisdiction is proper when the parties submit affidavits and other written material in support of their position. Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir.2000).

In this case, the court permitted the parties to conduct discovery on the issue of whether personal jurisdiction exists. After conducting discovery, the parties submitted evidence in support of their positions. When both parties produce supporting evidence, "the plaintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party." Id. The plaintiff must offer more than conclusory allegations, however. Only the well-pleaded facts of the plaintiff's complaint are accepted as true. Id. (citation omitted); Wenz, 55 F.3d at 1505 (citations omitted).

"To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment." Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1074 (10th Cir.1995) (citation omitted). To determine whether jurisdiction is legitimate under the laws of Kansas, the court looks to the Kansas long-arm statute, K.S.A. § 60-308(b). However, "[b]ecause the Kansas long-arm statute is construed liberally so as to allow jurisdiction to the full extent permitted by due process, [the court] proceed[s] directly to the constitutional issue." Federated Rural Elec. Ins. Corp. v. Kootenai Elec. Coop., 17 F.3d 1302, 1305 (10th Cir.1994) (citing Volt Delta Res., Inc. v. Devine, 241 Kan. 775, 740 P.2d 1089, 1092 (1987)).

The due process clause permits the exercise of jurisdiction over a nonresident defendant "so long as there exist `minimum contacts' between the defendant and the forum State." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The "minimum contacts" standard may be established by either specific jurisdiction or general jurisdiction. In OMI Holdings, Inc., the Tenth Circuit explained the requirements for establishing specific jurisdiction as follows:

Our specific jurisdiction inquiry is two-fold. First, we must determine whether the defendant has such minimum contacts with the forum state "that he should reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559. Within this inquiry we must determine whether the defendant purposefully directed its activities at residents of the forum, Burger King Corp. [v. Rudzewicz], 471 U.S. [462, 472, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)], and whether the plaintiff's claim arises out of or results from "actions by the defendant himself that create a substantial connection with the forum state." Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 109, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987) (internal quotations omitted) (emphasis in the original). Second if the defendant's actions create sufficient minimum contacts, we must then consider whether the exercise of personal jurisdiction over the defendant offends "traditional notions of fair play and substantial justice." Id. at 113, 107 S.Ct. 1026. This latter inquiry requires a determination of whether a district court's exercise of personal jurisdiction over a defendant with minimum contacts is "reasonable" in light of the circumstances surrounding the case. See id.

149 F.3d at 1091.

A court may maintain general jurisdiction over a defendant based on the defendant's general business...