Regal Beloit Am., Inc. v. Broad Ocean Motor LLC
| Decision Date | 30 June 2016 |
| Docket Number | Case No. 4:16-cv-00111-JCH |
| Parties | REGAL BELOIT AMERICA, INC., et al., Plaintiffs, v. BROAD OCEAN MOTOR LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Missouri |
This matter is before the Court on Defendants Broad Ocean Technologies, LLC's ("BOT") and Broad Ocean Motor LLC's ("BOM") (together "Defendants") Motion to Dismiss for Lack of Personal Jurisdiction. (ECF No. 11.) The Motion has been fully briefed and is ready for disposition.
On January 28, 2016, Plaintiffs Regal Beloit America, Inc. and Jakel Motors Incorporated filed this patent-infringement action, seeking damages and injunctive relief, and naming as defendants BOT, BOM, and Zhongshan Broad Ocean Motor Co., Ltd. ("Zhongshan") (collectively, "Broad Ocean"). (ECF No. 1.) In their Complaint, Plaintiffs allege the following.
Plaintiffs are corporations existing under the laws of the state of Wisconsin, and they maintain principal places of business there. Id. ¶¶ 1-2. BOM "is a corporation organized and existing under the laws of the State of Delaware, with an office at 201 E. 5th Street, Washington, Missouri 63090." Id. ¶ 3. BOT "is a Michigan Limited Liability Company, and has purposefully availed itself of the privilege of conducting business with residents of Missouri, inter alia, by registering with the State of Missouri, and as such has established sufficient minimum contacts with the State of Missouri." Id. ¶ 4. "Upon information and belief, Broad Ocean is using, selling, distributing, and offering for sale in the Eastern District of Missouri blowers which infringe patents owned by [Plaintiffs]." Id. ¶ 6.
On May 13, 2016, Zhongshan filed an Answer to the Complaint, admitting therein that "it is doing business in Missouri and has sold, supplied, and imported certain blowers for use on HVAC products into the State of Missouri." (ECF No. 13 ¶ 5.) The same day, Defendants moved to dismiss for lack of personal jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). (ECF No. 11.)
Defendants have attached to their Motion two sworn declarations from Terry Zhang, the General Manager of both companies. (ECF Nos. 12.1, 12.2.) Zhang attests that BOT is "a limited liability company incorporated in Michigan, with its principal place of business [there]," and that BOM is Id. Zhang also attests that Defendants are not involved in the "design, manufacture, importation, offer for sale, sales, or distribution, of any of the accused products" that are described in the Complaint; and that BOT, BOM, and Zhongshan are separate and distinct legal entities. Id. As to BOT, Zhang further attest that "although BOT is registered to do business in Missouri, it has no employees, offices or facilities in Missouri." (ECF No. 12.2 at 2-3.) As to BOM, Zhang attests that while BOM has a technical support office in Washington, Missouri, the office does not provide "any services associated with the manufacture, design, offer for sale, sale, distribution, and/or importation of any of the accused products in this lawsuit." (ECF No. 12.1 at 2-3.)
The Due Process Clause of the Fifth Amendment limits the power of a federal court to exercise personal jurisdiction over a nonresident defendant. See Omni Capital Int'l, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 104 (1987); see also Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1389 n.2 (8th Cir. 1991). In cases involving the substance of patent law, the law of the Federal Circuit governs jurisdictional questions. See Avocent Huntsville Corp. v. Aten Int'l Co., 552 F.3d 1324, 1328 (Fed. Cir. 2008).
Whether the Court can exercise personal jurisdiction over an out-of-state defendant involves a dual inquiry: (1) jurisdiction must be allowed by Missouri's long-arm statute; and (2) the reach of the long-arm statute must comport with due process. See Pennington Seed, Inc. v. Produce Exchange No. 299, 457 F.3d 1334, 1343-44 (Fed. Cir. 2006). Missouri's long-arm statute authorizes personal jurisdiction over defendants who, inter alia, transact business or commit a tort within the State. See Mo. Rev. Stat. § 506.500.1; see also Johnson v. Arden, 614 F.3d 785, 797 (8th Cir. 2010) (). The two requirements essentially collapse into one, as Missouri interprets its long-arm statute in accordance with the limits permitted under the Due Process Clause. See State ex rel. K-Mart Corp. v. Hollinger, 986 S.W2d 165, 168 (Mo. banc. 1999).
Due process requires that the defendant have "minimum contacts with the [forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Avocent, 552 F.3d at 1329 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts exist when "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there."World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) (citations omitted). "Consistent with these principles, the Supreme Court has drawn a distinction between 'specific' jurisdiction and 'general' jurisdiction." Avocent, 552 F.3d at 1330.
A court may assert general jurisdiction to hear "any and all claims against [defendants] only when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State." Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014) (quotations and citations omitted). "To establish specific jurisdiction, a plaintiff must demonstrate that the defendant has purposefully directed his activities at residents of the forum...and the litigation results from alleged injuries that arise out of or relate to those activities." Avocent, 552 F.3d at 1324 (quotations and citation omitted). For both general and specific jurisdiction, "[t]he fundamental inquiry is whether the defendant has 'purposefully availed' itself of the 'benefits and protections' of the forum state." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 482 (1985).
The burden of establishing minimum contacts rests with the plaintiff, while the burden of showing jurisdiction is unreasonable rests with the defendant. See Inamed Corp. v. Kuzmak, 249 F.3d at 1356, 1360 (Fed. Cir. 2001) (citation omitted). At this stage in the proceedings, because the parties have not yet conducted discovery, Plaintiffs need only to make a prima facie showing that Defendants are subject to personal jurisdiction in Missouri. See Avocent, 552 F.3d at 1329. For this reason, the pleadings and affidavits are construed in the light most favorable to Plaintiffs. See id.
Defendants argue that they are not subject to general jurisdiction because neither BOT nor BOM is incorporated in Missouri or has its principal place of business here, and that there isno basis for asserting specific jurisdiction because Plaintiffs cannot demonstrate that their claims arose out of or relate to any activities that either BOT or BOM purposely directed at the state of Missouri. (ECF Nos. 11, 12.)
In opposition to Defendants' Motion, Plaintiffs contend that (1) Defendants are judicially estopped from asserting that this Court lacks personal jurisdiction; (2) that the quality, quantity, and relation of Defendants' contacts to the cause of action all favor the exercise of personal jurisdiction; and (3) that the interests of the forum State in providing a forum for its residents favors the exercise of personal jurisdiction. (ECF No. 17.)
Plaintiffs first contend that Defendants are judicially estopped from asserting that this Court lacks personal jurisdiction because in a previous lawsuit Defendants conceded personal jurisdiction. Plaintiffs specifically refer to, and have attached as an exhibit to their responsive pleading, a June 2015 motion to transfer filed by Defendants in an unrelated patent matter. (ECF No. 17.1.) In their motion to transfer, Defendants sought to transfer the unrelated matter from the Eastern District of Texas to the Eastern District of Missouri, arguing that the action had "significant connections to the Eastern District of Missouri"; that "[a]ll parties have offices and employees in that judicial district"; and that "Defendants all reside [there]." Id. at 6. For support, Plaintiffs cite Bruce Lee Enters., LLC v. A.V.E.L.A., No. 10 Civ. 2333(LTS), 2011 WL 1327137, at *1-3 (S.D.N.Y. Mar. 31, 2011). In Bruce Lee, the defendants were judicially estopped from arguing that the district court lacked personal jurisdiction after they had moved to transfer the litigation to the Southern District of New York.
This Court finds Bruce Lee distinguishable. The defendants in Bruce Lee moved to dismiss for lack of personal jurisdiction after they had already argued, in the same litigation, thattransfer to the Southern District of New York would be proper. The Court in Bruce Lee explained that "[i]n arguing for transfer to the Southern District of New York, Defendants necessarily, although implicitly, argued that this Court had personal jurisdiction over them at the time Plaintiff originally filed suit." Id. at *3 (emphasis added). Defendants here, however, moved to transfer in a prior unrelated patent matter, not in the case at bar.
Without the benefit of on-point case law, this Court is not convinced that general jurisdiction is forever established over Defendants solely because of their admissions in a prior unrelated case, particularly when these admissions did not previously result in an explicit finding of general jurisdiction. In addition, Plaintiffs have not shown that Defendants' prior admissions regarding their operations in Missouri pertain to the accused products in this matter. Plaintiffs also have...
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