Rdo Foods Co. v. United Brands Intern., Inc.
| Decision Date | 19 March 2002 |
| Docket Number | No. A2-01-088.,A2-01-088. |
| Citation | 194 F.Supp.2d 962 |
| Parties | RDO FOODS CO., Plaintiff, v. UNITED BRANDS INTERNATIONAL, INC., James A. Osgood, and Matthew Osgood, Defendants. |
| Court | U.S. District Court — District of North Dakota |
John J. Petrik, H. Patrick Weir, Sr., Michael T. Andrews, Vogel Law Firm, Bismarck, ND, for plaintiff.
Edward F. Klinger, Bernard E. Reynolds, Gunhus Grinnell Klinger Swenson & Guy, Moorhead, MN, Kenneth C. Howell, Hawley Troxwell Ennis & Hawley, Boise, ID, for defendants.
The Court has before it two motions. First, defendant Matthew Osgood has moved this court to dismiss the action against him for lack of personal jurisdiction (doc. # 5). Plaintiff RDO Foods Co. ("RDO") opposes dismissal (doc. # 21). The Court has reviewed the motion, the supporting and opposing briefs and affidavits, along with the entire file. For the reasons set forth below, the Court finds that RDO Foods Co. has made a prima facie showing of jurisdiction against Matthew Osgood, and the motion is therefore DENIED (doc. # 5).
Second, also before the Court is a motion by RDO to dismiss the counterclaims of defendants James A. Osgood and United Brands International, Inc. ("UBI"), and/or for summary judgment with respect to these claims (doc. # 32). Defendants oppose the motion (doc. # 42). As explained further below, this motion is GRANTED IN PART, and DENIED IN PART. (doc. # 32).
Plaintiff RDO Foods Co.("RDO") is a North Dakota corporation. It operates a dehydrated potato flake plant in Grand Forks, North Dakota. On September 20, 1990, RDO and James Osgood entered into a management agreement by which Osgood would perform certain management responsibilities for RDO. The agreement provides for a management fee to be paid to Osgood via yearly payments at the end of each fiscal year, equal to 5% of the yearly net profit of RDO. The agreement further provides that any disputes with regard to the agreement will be governed by North Dakota law.
RDO also entered into a sales agency agreement with UBI on September 20, 1990. This agreement provided that UBI would serve as the agent for the worldwide sales of potato flake produced by the Grand Forks potato dehydrating facility. UBI is located in Idaho. James Osgood, a third defendant, owns and controls UBI. Matthew Osgood, a resident of Idaho, is the son of James Osgood and is employed by UBI.
Around February 2000, the relationship between James Osgood and RDO soured. As a result, RDO ceased doing business with UBI. RDO contends that after February 2000, Matthew Osgood solicited RDO's customers to purchase potato flake from other sources by exposing RDO's trade secrets and making untrue statement to RDO's customers.
Also around February 2000, RDO contacted the U.S. Attorney's Office for the District of North Dakota and the FBI, contending that UBI and James Osgood were skimming profits from it by failing to remit all proceeds from the sales of potato flake. An investigation was then commenced against UBI, James Osgood, and Matthew Osgood. No charges have been filed with respect to this investigation.
In March 2000, James Osgood brought suit against RDO in the District of Idaho, alleging breach of contract for amounts unpaid to him under the management agreement. He subsequently amended his complaint to include various tort-based claims, which generally allege harm to his business reputation as a result of the FBI investigation.
RDO then brought suit in July 2001 against UBI, James Osgood, and Matthew Osgood in the District of North Dakota. RDO's suit against Matthew Osgood is based on its claim that he had disclosed RDO's trade secrets and tortiously interfered with RDO's business relationships.1 In addition to the claims against Matthew Osgood, RDO alleges several claims against James Osgood and UBI, none of which are at issue here. James Osgood then interposed seven counterclaims; these counterclaims are identical to his claims in the District of Idaho. UBI interposed four counterclaims. Upon a motion by RDO, Osgood's Idaho claim has been transferred to this Court.
Matthew Osgood has moved for dismissal for lack of subject matter jurisdiction. RDO has moved for dismissal under Rule 12(b)(6), and alternatively for summary judgment on the counterclaims interposed by James Osgood and UBI.
The Court will begin by addressing Matthew Osgood's motion to dismiss for lack of personal jurisdiction. Matthew Osgood ("Osgood") argues that he is not subject to jurisdiction here, claiming that: (1) he had no contacts with North Dakota during the time period alleged in the Complaint; and (2) he has not directed his allegedly tortious conduct towards North Dakota. RDO claims, however, that Osgood is subject to jurisdiction because he had sufficient contacts with North Dakota prior to termination of the sales agency agreement, and further, his conduct was sufficient to satisfy the Calder effects test.
"To survive a motion to dismiss for lack of personal jurisdiction, [RDO] need only make a prima facie showing of personal jurisdiction over [Osgood]." Digi-Tel Holdings, Inc. v. Proteq Telecomm., Ltd., 89 F.3d 519, 522 (8th Cir.1996). In examining the prima facie showing, this Court must view the evidence in the light most favorable to RDO, and it must resolve all factual conflicts in RDO's favor. Id.
This Court may assert personal jurisdiction over Matthew Osgood if: (1) North Dakota's long-arm statute is satisfied and (2) the exercise of jurisdiction does not violate the due process clause of the Fourteenth Amendment. Guinness Import Co. v. Mark VII Distrib., Inc., 153 F.3d 607, 613-14 (8th Cir.1998). North Dakota's long-arm statute has been interpreted to permit the exercise of personal jurisdiction to the fullest extent permitted by due process. Hebron Brick Co. v. Robinson Brick & Tile Co., 234 N.W.2d 250, 255-56 (N.D.1975). Thus, this Court is constrained only by the dictates of due process.
The due process clause limits the ability of a forum state to assert personal jurisdiction over a nonresident defendant. Falkirk Mining Co. v. Japan Steel Works, Ltd., 906 F.2d 369, 373 (8th Cir.1990). Before the exercise of personal jurisdiction is proper, due process requires that Osgood have "minimum contacts" with North Dakota such that the exercise of jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Guinness Import, 153 F.3d at 614 (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). "The nonresident defendant's conduct and connection with the forum state must be such that `he should reasonably anticipate being haled into court there.'" Id. (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). In examining "minimum contacts," it is essential that "there be some act by which the defendant purposefully avails itself of the privilege of conducting activities with the forum State, thus invoking the benefits and protections of its laws." Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)). Above all, the "minimum contacts" must not be random, fortuitous, attenuated, or the result of unilateral activity of a third party. See id.
After it is determined that the defendant purposefully established minimum contacts with the forum state, it must still be determined whether the exercise of personal jurisdiction over the defendant comports with "fair play and substantial justice." Id. As set out by the Eighth Circuit, the factors to consider include: "(1) the nature and quality of contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties." Id. The first three factors are of primary importance, and the last two are of secondary importance. Id. In the Eighth Circuit, the "minimum contacts" determination and the "fair play and substantial justice" determination have been collapsed into one, with the five-factor analysis answering both inquiries. See, e.g., Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, 51 F.3d 1383, 1388-89 (8th Cir.1995); Drayton Enters., L.L.C. v. Dunker, 142 F.Supp.2d 1177, 1183-86 (D.N.D.2001).
The first two factors, the nature and quality of the contacts and the quantity of the contacts, weigh in favor of jurisdiction. The undisputed facts, as presented by RDO, tend to show that Osgood was actively engaged with the business operations of RDO Foods. He traveled to the RDO plant in Grand Forks one to two times per year beginning in 1996; he called Carl Johnson, plant manager of the Grand Forks plant, several times; his assistant spoke to Ron Miller, RDO operation manager, almost daily on Osgood's behalf; and "[h]e directed production at the plant as it related to certain RDO Foods customers." (Johnson Aff. at 2.) These contacts demonstrate that Osgood purposefully availed himself of the privilege of conducting activities within North Dakota.
The third factor, which is the relationship of the cause of action to the contacts, is not only a factor in determining whether there is jurisdiction, but it also determines whether jurisdiction is specific or general. Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1432 n. 4 (8th Cir.1995). "Specific jurisdiction refers to jurisdiction over causes of action arising from or related to defendant's actions within the forum state while general jurisdiction refers to the power of a state to adjudicate any cause of action involving a particular defendant regardless...
To continue reading
Request your trial
-
Kuhn v. Chesapeake Energy Corp.
...have adopted the view that "a corporation, acting through its agents may not be liable for conspiracy." RDO Foods Co. v. United Brands Int'l, Inc., 194 F. Supp. 2d 962, 975 (D.N.D. 2002) (citations omitted). However, "a conspiracy may be established against agents of the corporation when th......
-
Kaufman v. Chesapeake Energy Corp.
...have adopted the view that "a corporation, acting through its agents may not be liable for conspiracy." RDO Foods Co. v. United Brands Int'l, Inc., 194 F. Supp. 2d 962, 975 (D.N.D. 2002) (citations omitted). However, "a conspiracy may be established against agents of the corporation when th......
-
Neuromonitoring Assocs. v. Centura Health Corp.
...refusal to defend insureds constituted series of breaches and limitations period ran with each breach); RDO Foods Co. v. United Brands Int'l, Inc., 194 F.Supp.2d 962, 971 (D.N.D.2002) (separate wrong occurred each time defendant failed to pay management fee as determined by formula in manag......
-
Clinic v. Hamann
...under the Fair Labor Standards Act accrue each time an employer fails to pay proper overtime wages); RDO Foods Co. v. United Brands Int'l, Inc., 194 F.Supp.2d 962, 971 (D.N.D.2002) (concluding that a separate wrong occurred each time an employer “failed to pay the management fee as determin......