Owens v. Superfos a/S

• Citation: 170 F.Supp.2d 1188
• Decision Date: 31 August 2001
• Docket Number: No. Civ.A. 00-D-1098-S.,Civ.A. 00-D-1098-S.
• Parties: Charles E. OWENS, et al., Plaintiffs, v. SUPERFOS A/S, Defendant.
• Court: U.S. District Court — Middle District of Alabama

Page 1188

170 F.Supp.2d 1188

Charles E. OWENS, et al., Plaintiffs, v. SUPERFOS A/S, Defendant.

No. Civ.A. 00-D-1098-S.

United States District Court, M.D. Alabama, Southern Division.

August 31, 2001.

Henry Clay Barnett, Jr., Bruce Johnson Downey, III, Capell Howard PC, Montgomery, AL, for plaintiffs.

Phillip B. Dye, Jr., Vinson & Elkins, L.L.P., Houston, TX, Barry V. Frederick, Spencer A. Kinderman, Johnston, Barton, Proctor & Powell, LLP, Birmingham, AL, for defendant.

MEMORANDUM OPINION AND ORDER

DE MENT, District Judge.

Before the court is Defendant Superfos A/S's ("Defendant" or "Superfos") Motion to Dismiss Or, In The Alternative, For More Definite Statement ("Motion"), filed on October 6, 2000. In its Motion, Defendant challenges the court's personal jurisdiction over it or, in the alternative, asks the court to dismiss the case on grounds of forum non conveniens. The court permitted limited discovery on the issue of personal jurisdiction. Having conducted limited discovery, Plaintiffs Charles Owens and Alan Palmer (individually "Owens" and "Palmer," collectively "Plaintiffs") filed a Response In Opposition ("Response") on April 30, 2001, supported in part by Plaintiffs' affidavits. Defendant filed a Reply on May 10, 2001, wherein it objected to numerous portions of Plaintiffs' affidavits. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that Defendant's Motion is due to be denied and that Defendant's objections to Plaintiffs' affidavits are due to be overruled.

I. FACTS

This diversity action arises out of a contract between Defendant, a holding company incorporated in Denmark, and Plaintiffs, who are Alabama citizens. At the time the contract was formed, Palmer was the Chief Financial officer of Superfos Construction, Inc. ("SCUS"), a wholly owned subsidiary of Defendant headquartered in Dothan, Alabama. Owens served as the President of SCUS and was also a member of the Superfos Group Management Board, an entity overseeing the business affairs of Defendant's subsidiaries and affiliates. (Moeller Aff. at 4; Owens Aff. at 95-96, 102.)

In August of 1999, a time when outside investors were expressing interest in acquiring SCUS, Defendant, through its President and Chief Executive Officer Peter Hojland, asked Plaintiffs to promote the value to interested parties so that a higher price could be obtained in the event of an actual sale. (Moeller Aff. at 4-5; Owens Aff. at 147-53.) Toward this end, at the behest of Hojland and with funds authorized by Defendant's Board of Directors, Plaintiffs worked on a Management Buyout Proposal. (Owens Aff. at 162-63, 173-78.) Substantial compensation had been assured Plaintiffs for their activities insofar as they risked retaliation by any eventual purchaser who was forced to pay an inflated price for SCUS. (Id. at 164-67.) Indeed, Hojland provided Plaintiffs with Success Fee Agreements under which a commission was guaranteed should the sale price of SCUS exceed a stipulated value. (Moeller Aff. at 4.)

SCUS did eventually change hands, and it is in the present action that Plaintiffs seek a remedy for the alleged breach of the Success Fee Agreements. (Id. at 6.) Superfos contends, however, that as a Danish corporation, it lacks sufficient contacts with the state of Alabama such that the court's exercise of jurisdiction would violate Due Process. In the alternative, it moves that the court dismiss this case on grounds of forum non conveniens.

II. DISCUSSION

Personal Jurisdiction

When no evidentiary hearing on a motion to dismiss is conducted, a plaintiff must establish a prima facie case of personal jurisdiction over a non-resident defendant. Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990). A prima facie case is established if the evidence presented is sufficient to withstand a motion for judgment as a matter of law. Id. In considering the motion, the court construes the uncontroverted allegations in the complaint as true, and, where the parties' affidavits conflict, the court makes reasonable inferences in favor of the plaintiff. Id.¹

The court's power over one's person derives from positive law and constitutional law. The Alabama long-arm statute authorizes personal jurisdiction to the fullest extent permitted by the United States Constitution. See Martin v. Robbins, 628 So.2d 614, 617 (Ala.1993). Federal courts are "bound by state law concerning the amenability of a person or corporation to suit, so long as state law does not exceed the limitations imposed by the Due Process Clause of the Fourteenth Amendment." Pesaplastic C.A. v. Cincinnati Milacron Co., 750 F.2d 1516, 1521 (11th Cir.1985).

The Due Process Clause protects one's liberty interests by shielding the individual from binding judgments in a forum with which he has established no meaningful contacts, ties or relations. The nature and quality of the contacts varies depending on whether the type of jurisdiction being asserted is general or specific. Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir.2000). General jurisdiction exists whenever the defendant's connection with the forum state is "continuous and systematic" — there need be no nexus between the forum and the litigation. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). On the other hand, a court can assert specific jurisdiction over a person with a more attenuated connection to the forum when there is a sufficient nexus between the forum and the matter at issue. Id. at 414, n. 8, 104 S.Ct. 1868. Plaintiffs argue that the court can assert either kind of jurisdiction over Defendant; because the facts demonstrate a straightforward case of specific jurisdiction, the court sees no reason to address the issue of general jurisdiction.²

The court has specific jurisdiction over a party when a defendant has purposefully established minimum contacts within the forum state, provided the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). The Eleventh Circuit has developed a three-part test for minimum contacts:

First, the contacts must be related to the plaintiff's cause of action or have given rise to it. Second, the contacts must involve "some act whereby the defendant purposely avails itself of the privilege of conducting activities within the forum ..., thus invoking the benefits and protections of its laws." Third, the defendant's contacts with the forum must be "such that [the defendant] could reasonably anticipate being haled into court there."

Vermeulen v. Renault U.S.A., Inc., 985 F.2d 1534, 1546 (11th Cir.1993) (internal citations omitted).

The contacts must be intentional; courts have no power over one whose contacts with the jurisdiction are random, fortuitous, or attenuated. Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174. As such, Defendant's reliance upon Future Technology Today, Inc. v. OSF Healthcare Systems, 218 F.3d 1247 (11th Cir. 2000), is misplaced. In that case, a defendant non-profit with no prior connection to Florida hired plaintiff, upon recommendation, to upgrade its computer system in anticipation of the Y2K hoax. Id. at 1249. Assuming a one-time obligation, the defendant intended to have no continuing connection with the forum. Id. at 1251. In fact, it had little connection with the forum to begin with, having formed a contract in a single phone call and never visiting Florida until after the alleged breach. Id. Consequently, the Eleventh Circuit found minimal contacts lacking. Id.

Undoubtedly a single contract by itself is insufficient to establish minimum contacts in a party's forum, but when the parties' prior course of business bears a "substantial connection" to the forum in question, a finding of minimum contacts is justified. Burger King Corp., 471 U.S. at 478-79, 105 S.Ct. 2174. In the present matter, Defendant was the parent corporation of an Alabama corporation which was the subject matter of the contract. (Moeller Aff. at 3-4.) As parent corporation, Defendant exercised considerable control over SCUS,³ and as such, Defendant's C.E.O. Hojland and other agents regularly contacted Plaintiffs. (Owens Aff. at 81-85; Owens Supp.Aff. at 2.) Communications between Hojland and Plaintiffs increased in frequency in the summer of 1999 when outside parties began to express interest in purchasing SCUS. (Owens Aff. at 134-46, 193.) It is through these communications that the Success Fee Agreements materialized. (Id. at 147-55, 165-67, 182-86.) The present litigation, then, bears significant relation to Defendant's contacts in Alabama, and, indeed, arose out of them.

These facts also support a finding that Defendant has purposefully availed itself of the benefits and protections of Alabama law such that it is "not unreasonable to require [it] to submit to the burdens of litigation" here. Burger King Corp., 471 U.S. at 476, 105 S.Ct. 2174. Not only has Defendant "deliberately ... engaged in significant activities within" Alabama, but it has also "created continuing obligations between" itself and Alabama citizens. Id. (internal quotations removed). It was the direct parent of SCUS from 1996 to 1999, all the time maintaining contact with Plaintiffs. (Palmer Aff. at 17-18; Owens Supp. Aff. at 2). Nothing in the record suggests that this relationship would not have continued had the corporation never changed hands. In short, there is nothing "random" or "fortuitous" about Defendant's contacts with Alabama. Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174.

Furthermore, a "direct solicitation by a foreign defendant of the business of a forum resident has been held to be `purposeful availment' in cases where ... some inforum performance on the part of the plaintiff was contemplated." Sea Lift, Inc. v. Refinadora Costarricense de Petroleo,...