Nat'l Union Fire Ins. Co. of Pittsburgh, PA v. Aspen Custom Trailers, Inc.
| Decision Date | 28 February 2022 |
| Docket Number | Case No. 3:21-cv-00077-TMB |
| Citation | 587 F.Supp.3d 904 |
| Parties | NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA, as subrogee of Specialized Transport & Rigging, LLC, Plaintiff, v. ASPEN CUSTOM TRAILERS, INC., Defendants. |
| Court | U.S. District Court — District of Alaska |
Clayton H. Walker, Jr., Alaska Law Office, Anchorage, AK, for Plaintiff.
David Karl Gross, Birch Horton Bittner & Cherot, Anchorage, AK, for Defendants.
ORDER ON DEFENDANT ASPEN CUSTOM TRAILERS, INC.’S MOTION TO DISMISS (DKT. 4)
Before the Court is Defendant Aspen Custom Trailers, Inc.’s ("Aspen") Motion to Dismiss (the "Motion").1 Plaintiff National Union Fire Insurance Company of Pittsburgh, PA ("National Union") opposes the Motion.2 For the reasons discussed below, the Court finds it lacks personal jurisdiction over Aspen and GRANTS the Motion on that basis.
Plaintiff National Union is a Pennsylvania insurance company registered to do insurance business in Alaska.3 National Union brings this lawsuit as a subrogee of Specialized Transport & Rigging, LLC ("Specialized"), an Alaska company.4 Defendant Aspen is a Canadian company with its principal place of business in Alberta, Canada.5 Aspen has no offices, employees, or facilities in Alaska and is not registered to do business in Alaska.6
The facts underlying this lawsuit are as follows. In 2014, Specialized purchased a custom heavy-duty trailer assembly from Aspen and purchased insurance coverage for the trailer from National Union.7 National Union and Specialized claim that this trailer, informally called the "Bomb Cart," broke in 2019 while traveling on the Elliot Highway.8 A few days later, Specialized submitted an insurance claim for damages with National Union.9 According to National Union, it paid Specialized $36,362.00 for preliminary repairs and $26,005.08 for towing charges and offered Specialized a claim settlement of $184,228.00 on the loss of the trailer, which Specialized rejected.10 Specialized then filed a lawsuit against both National Union and Aspen in this Court, raising claims for casualty loss and lost profits against National Union and for breach of contract and breach of implied warranty of fitness for a particular purpose against Aspen.11 Specialized asserts in that lawsuit that the Bomb Cart was defective.12 With Specialized's lawsuit pending against National Union and Aspen, National Union separately filed this lawsuit against Aspen. National Union raises claims against Aspen for product liability, breach of implied warranty for fitness for a particular purpose, and common law indemnification.13
In this Motion, Aspen argues National Union's Complaint should be dismissed either (1) under Federal Rule of Civil Procedure ("Rule") 12(b)(4) and/or Rule 12(b)(5) because National Union served the wrong entity, (2) under Rule 12(b)(2) because the Court lacks personal jurisdiction over Aspen, or (3) under Rule 12(b)(6) because National Union fails to state a claim upon which relief can be granted.14 As discussed below, the Court concludes it lacks personal jurisdiction over Aspen and, consequently, finds it unnecessary to address Aspen's remaining arguments for dismissal.
Pursuant to Rule 12(b)(2), a defendant may move to dismiss a case on the basis that the Court lacks personal jurisdiction over them.15 On a motion to dismiss under Rule 12(b)(2), the plaintiff bears the burden of demonstrating that the court has jurisdiction.16 In evaluating the defendant's motion, "[t]he court may consider evidence presented in affidavits to assist it in its determination."17 Where, as here, the court bases its decision on written materials instead of holding an evidentiary hearing, "the plaintiff need only make a prima facie showing of jurisdictional facts."18
"There are two independent limitations on a court's power to exercise personal jurisdiction over a nonresident defendant: the applicable state personal jurisdiction rule, and constitutional principles of due process."19 Here, Alaska law authorizes courts within the state to exercise jurisdiction to the fullest extent permitted by federal due process.20 Thus, the Court need only examine whether exercising jurisdiction in this case comports with due process.21
A court may exercise personal jurisdiction over a defendant consistent with due process only if the defendant has " ‘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.’ "22 "Unless a defendant's contacts with a forum are so substantial, continuous, and systematic that the defendant can be deemed to be ‘present’ in that forum for all purposes," i.e., that the defendant is subject to "general" jurisdiction in the forum, "a forum may exercise only ‘specific’ jurisdiction—that is, jurisdiction based on the relationship between the defendant's forum contacts and the plaintiff's claim."23 National Union argues primarily that the Court has specific jurisdiction over Aspen.
A court has specific jurisdiction over a non-resident defendant only when three requirements are met: "(1) the defendant either ‘purposefully direct[s]’ its activities or ‘purposefully avails’ itself of the benefits afforded by the forum's laws; (2) the claim ‘arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction [ ] comport[s] with fair play and substantial justice, i.e., it [is] reasonable.’ "24 The plaintiff bears the burden to prove the first two requirements.25 "If the plaintiff succeeds in satisfying both of the first two [requirements], the burden then shifts to the defendant to ‘present a compelling case’ that the exercise of jurisdiction would not be reasonable."26
"For part one of this three-part test," courts "typically analyze[ ] cases that sound primarily in contract"—as this case does—"under a ‘purposeful availment’ standard."27 "To have purposefully availed itself of the privilege of doing business in the forum, a defendant must have ‘performed some type of affirmative conduct which allows or promotes the transaction of business within the forum state.’ "28 Courts evaluate "the quality and nature" of the defendant's contacts with the forum.29 "Merely random, fortuitous, or attenuated contacts are not sufficient."30
While the United States Supreme Court has rejected a "mechanical" test to evaluate purposeful availment,31 it has recognized two concepts that are particularly helpful here. First, "the formation of a contract with a nonresident defendant is not, standing alone, sufficient to create jurisdiction."32 A plaintiff must show something more, such as "a contractual relationship that ‘envisioned continuing and wide-reaching contacts’ in the forum State,"33 efforts by the defendant to "continuously and deliberately exploit[ ]" the forum state's market through salespeople or advertising,34 examples of the defendant closing sales or performing services in the forum state,35 or a choice-of-law provision selecting the law of the forum state.36 In contrast, a contract does "not give rise to specific jurisdiction in the forum" where "the business relationship between the parties was fleeting or its center of gravity lay elsewhere."37 As the United States Supreme Court has said, the defendant's contacts with the forum "must show that the defendant deliberately ‘reached out beyond’ its home—by, for example, ‘exploi[ting] a market’ in the forum State or entering a contractual relationship centered there."38 Thus, when evaluating whether a contract gives rise to jurisdiction, courts consider the parties’ "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties’ actual course of dealing."39
Second, " ‘foreseeability’ alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause."40 For example, the United States Supreme Court has explained, "[i]n Hanson v. Denckla , ... it was no doubt foreseeable that the settlor of a Delaware trust would subsequently move to Florida and seek to exercise a power of appointment there; yet we held that Florida courts could not constitutionally exercise jurisdiction over a Delaware trustee that had no other contacts with the forum State."41
The Court concludes it does not have personal jurisdiction over Aspen in this case.
As an initial matter, the Court finds Aspen is not subject to general personal jurisdiction in Alaska. Aspen is neither incorporated in Alaska nor has its principal place of business in Alaska.42 And National Union provides no evidence that Aspen is otherwise "essentially at home" in Alaska.43
Next, the Court concludes it also lacks specific jurisdiction over Aspen because National Union has not established the first requirement of the Ninth Circuit's three-part test: that Aspen "purposefully avail[ed]" itself "of the privilege of conducting activities" in Alaska.44
To begin, the underlying contractual relationship between Specialized and Aspen is centered in Canada, not Alaska: Aspen neither executed the at-issue contract nor performed any obligations stemming from the contract in Alaska.45 It is undisputed that, consistent with Aspen's "general business practice,"46 Aspen executed the contract in its office in Alberta, Canada; Aspen manufactured the Bomb Cart in Alberta; no Aspen employee or representative traveled to Alaska for business related to the sale and manufacture of the Bomb Cart; and Specialized picked up the Bomb Cart in Alberta for transport back to Alaska.47 The record indicates, therefore, that aside from contracting with an Alaska company, Aspen had virtually no contact with Alaska in connection with the underlying deal.
Despite this apparent disconnect between the underlying deal and the forum, National Union...
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