Pope v. Elabo Gmbh

• Decision Date: 04 November 2008
• Docket Number: No. 06-CV-0516(PJS/JJG).,06-CV-0516(PJS/JJG).
• Citation: 588 F.Supp.2d 1008
• Parties: Scott POPE and Travelers Indemnity Co. of America, Plaintiffs, v. ELABO GMBH, Defendant; and Elabo GmbH, Third-Party Plaintiff, v. Tente-Rollen GmbH, Third-Party Defendant.
• Court: U.S. District Court — District of Minnesota

Page 1008

588 F.Supp.2d 1008

Scott POPE and Travelers Indemnity Co. of America, Plaintiffs, v. ELABO GMBH, Defendant; and Elabo GmbH, Third-Party Plaintiff, v. Tente-Rollen GmbH, Third-Party Defendant.

No. 06-CV-0516(PJS/JJG).

United States District Court, D. Minnesota.

November 4, 2008.

COPYRIGHT MATERIAL OMITTED

Cory P. Whalen, Sieben Grose Von Holtum & Carey, Ltd., for plaintiff Scott Pope.

Steven Theesfeld, Yost & Baill, LLP, for plaintiff Travelers Indemnity Company of America.

Tamara L. Novotny, Peter G. Van Bergen, and Sarah L. Showalter, Cousineau McGuire Chartered, for defendant/thirdparty plaintiff Elabo, GmbH.

MEMORANDUM OPINION AND ORDER

PATRICK J. SCHILTZ, District Judge.

Defendant/third-party plaintiff Elabo GmbH ("Elabo") moves for summary judgment on the basis that the Court lacks personal jurisdiction over it. For the reasons that follow, the Court construes Elabo's motion as one to dismiss for lack of personal jurisdiction and denies the motion.

I. BACKGROUND¹

Elabo is a manufacturer of sophisticated testing equipment. Elabo is based in Crailsheim, Germany; the company does not maintain a place of business in the United States, does not own any real or personal property in the United States, and does not employ a distributor or sales representative in the United States. Elabo does, however, occasionally sell products directly to buyers in the United States. This lawsuit relates to an allegedly defective testing machine that Elabo manufactured in Germany and sold directly to Carl Zeiss IMT Corporation in Minnesota ("Carl Zeiss Minnesota").² Carl Zeiss Minnesota manufactures measurement devices used in industry, and it belongs to a family of companies that descended from a business founded in the mid-nineteenth century by the German lens-maker Carl Zeiss.

Carl Zeiss Minnesota has a sister company based in Oberkochen, Germany, named Carl Zeiss IMT GmbH ("Carl Zeiss Germany"). This German sister company contacted Elabo in 1999 to request a price quote on a testing machine. Elabo provided a quote to Carl Zeiss Germany on October 21, 1999. Gerlach Decl. Ex. B.³ Although the first page of the quote is in German, the remaining pages (which describe the machine in detail) are in English, and the first page bears a handwritten notation, "engl. für Zweigwerk USA"—that is, "English for USA branch plant."⁴ Id. at 1. Further, the price quote specifies that the machine will have an "American standard plug." Id. at 2.

Several months later, in April 2000, Carl Zeiss Minnesota sent a purchase order to Elabo for the testing machine described in Elabo's October 1999 price quote. Carl Zeiss Minnesota offered to pay $17,230 for the machine. Gerlach Decl. Ex. C. In mid-May, Elabo sent an order confirmation to Carl Zeiss Minnesota increasing the price to $17,743.36, and Carl Zeiss Minnesota responded with a purchase order accepting the new price. Gerlach Decl. Exs. D, E. Elabo shipped the tester directly to Carl Zeiss Minnesota in July 2000. Gerlach Decl. Ex. F.

Elabo next heard from Carl Zeiss Minnesota three years later, in 2003, when an employee of Carl Zeiss Minnesota inquired about having the tester repaired. Suppl. Gerlach Decl. ¶ 7(b) & Ex. I at 1 [Docket No. 173]; Holmgren Aff. ¶ 3 [Docket No. 160]. Because Elabo had no repair facilities in the United States, Carl Zeiss Minnesota shipped the tester to Elabo in Germany in mid-September, and Elabo returned the tester in mid-October after repairing and calibrating it. Suppl. Gerlach Decl. Ex. I at 21, 31. The repair and calibration, plus customs duties, cost roughly $1,600. Id. at 26.

Carl Zeiss Minnesota next contacted Elabo four years later, in 2007, to purchase replacement parts for the tester. Suppl. Gerlach Decl. ¶ 7(e); Erickson Aff. ¶ 4 [Docket No. 162]. Elabo quoted a price, and Carl Zeiss Minnesota purchased the parts for a total cost, including shipping, of roughly $850. Erickson Aff. Ex. 2.

In addition to Carl Zeiss Minnesota, Elabo has done business with one other Minnesota-based company, Tetra-Pak. It appears that Elabo sold a testing machine to Tetra-Pak (apparently also known as Tetra Rex Packaging) in 1998. Suppl. Whalen Aff. Ex. 3 [Docket No. 189]. In 2004, Elabo sold Tetra-Pak some replacement parts. Theesfeld Aff. Ex. 1 at 4-11 [Docket No. 167]. And in 2005, Elabo calibrated and repaired Tetra-Pak's testing machine (much as Elabo had calibrated and repaired Carl Zeiss's machine in 2003). Id. at 12-20.

II. ANALYSIS

A. Standard of Review and Waiver

Elabo purports to move for summary judgment on the basis that the Court lacks personal jurisdiction over it. The Eighth Circuit has not squarely decided whether the defense of lack of personal jurisdiction may be raised in a summary-judgment motion or whether, by its nature, it must be raised in a motion to dismiss. But this Court agrees with other courts and leading authorities that a motion raising the defense of lack of personal jurisdiction is necessarily a motion to dismiss under Rule 12(b)(2), and not a motion for summary judgment under Rule 56. See, e.g., Robinson v. W. NIS Enter. Fund, No. C97-41, 1999 WL 33656834, 1999 U.S. Dist. LEXIS 23199 (N.D.Iowa Mar. 31, 1999).

As the leading treatise observes, "[i]n general, courts have ruled that summary judgment is an inappropriate vehicle for raising a question concerning ... personal jurisdiction...." 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil § 2713 at 235 & n. 45 (3d ed.1998) (hereinafter Federal Practice and Procedure). This makes sense, as a court that lacks personal or subject-matter jurisdiction does not have power to enter any kind of a judgment—summary or otherwise. See id. at 239 ("If the court has no jurisdiction, it has no power to enter a judgment on the merits and must dismiss the action."). That is why a dismissal for lack of personal or subject-matter jurisdiction is always without prejudice; such a dismissal implies nothing about the merits of the dismissed claims because the court is not empowered to address the merits of the dispute. By contrast, a grant of summary judgment is a ruling on the merits, and thus has preclusive effect. See EF Operating Corp. v. Am. Bldgs., 993 F.2d 1046, 1048-49 (3d Cir.1993) ("A grant of summary judgment and a dismissal for lack of personal jurisdiction, however, are wholly different forms of relief. The latter is a dismissal without prejudice, whereas the former is a ruling on the merits which if affirmed would have preclusive effect.") (citation omitted).

Rule 12 itself provides that motions to dismiss for lack of personal jurisdiction are not transformed into summary-judgment motions even when a court considers matters outside the pleadings. Specifically, Rule 12(d) provides that "[i]f, on a motion under Rule 12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded by the court, the motion must be treated as one for summary judgment under Rule 56." Fed.R.Civ.P. 12(d). Notably, Rule 12(d) does not provide that a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction must be treated as a motion for summary judgment if matters outside the pleadings are presented. In short, a defendant who seeks to challenge personal jurisdiction must do so by moving to dismiss under Rule 12(b)(2), and not by moving for judgment on the pleadings under Rule 12(c) or for summary judgment under Rule 56.

That raises the question of timing. Rule 12(b) provides that a motion asserting any of the defenses listed in that section—including the defense of lack of personal jurisdiction—"must be made before pleading if a responsive pleading is allowed." Fed.R.Civ.P. 12(b). Read literally, Rule 12(b) suggests that if a defendant such as Elabo seeks to challenge the personal jurisdiction of the court, it must do so in a motion brought before it files an answer. See 5C Charles A. Wright &amp Arthur R. Miller, Federal. Practice and Procedure § 1361 at 93 (3d ed. 2004) ("A strict interpretation of the timing provision's language leads to the conclusion that the district judge must deny any Rule 12(b) motion made after a responsive pleading is interposed as being too late.") In this case, Elabo filed an answer before moving to dismiss for lack of personal jurisdiction. Arguably, then, it waived its defense.

The problem is that such a reading of Rule 12(b) is at odds with other sections of Rule 12. For example, Rule 12(b) begins by providing that "[e]very defense to a claim for relief in any pleading must be asserted in the responsive pleading if one is required," but that "a party may assert" any of the defenses described in Rule 12(b) by motion. Fed.R.Civ.P. 12(b). Reading Rule 12(b) to require that the defenses it describes be asserted in a pre-answer motion would be inconsistent with the use of the permissive "may."

Moreover, Rule 12(b) concludes by providing that "[n]o defense or objection is waived by joining it with one or more other defenses or objections in a responsive pleading or in a motion." Id. It is difficult to know what purpose this sentence would serve if Rule 12(b) defenses had to be raised by motion before an answer was filed. If that were the case, the defenses would never appear "in a responsive pleading."

In addition, Rule 12(i) provides that "[i]f a party so moves, any defense listed in Rule 12(b)(1)-(7)—whether made in a pleading or by motion—... must be heard and decided before trial unless the court orders a deferral until trial." Rule 12(i) thus refers to the Rule 12(b) defenses being made in either "a pleading or by motion." Fed.R.Civ.P. 12(i). But again, if Rule 12(b) defenses were waived if not asserted in a pre-answer motion, they would never appear in a pleading.

Finally, Rule 12(h)(1)(B) provides that certain of the Rule 12(b) defenses—including the defense of lack of personal jurisdiction—are waived if a party "fail[s] to either" assert the defense in a Rule 12(b) motion or "include it...