Simmons v. State

• Decision Date: 17 October 1983
• Docket Number: No. 83-102,83-102
• Citation: 40 St.Rep. 1650,206 Mont. 264,670 P.2d 1372
• Parties: Dan SIMMONS, as Guardian Ad Litem of Breton Simmons, A Minor, Plaintiff and Appellant, v. STATE of Montana and State of Oregon, Defendants and Respondents.
• Court: Montana Supreme Court

Page 1372

670 P.2d 1372

206 Mont. 264

Dan SIMMONS, as Guardian Ad Litem of Breton Simmons, A Minor, Plaintiff and Appellant, v. STATE of Montana and State of Oregon, Defendants and Respondents.

No. 83-102.

Supreme Court of Montana.

Submitted June 10, 1983.

Decided Oct. 17, 1983.

Douglas R. Austin, Missoula, Alan G. Starkoff argued, Starkoff & Starkoff Co., Cleveland, Ohio, for plaintiff and appellant.

Garlington, Lohn & Robinson, Larry E. Riley, Missoula, Pamela L. Abernathy argued, Asst. Atty. Gen., Salem, Or., Boone, Karlberg & Haddon, Tom Boone, Missoula, for defendants and respondents.

GULBRANDSON, Justice.

Plaintiff, acting as guardian ad litem for his minor son, appeals from an order of the District Court of the Fourth Judicial District, Missoula County, granting defendant State of Oregon's motion to dismiss plaintiff's lawsuit on grounds that Oregon did not have sufficient minimum contacts with Montana so as to subject it to this state's jurisdiction, and also that, in any event, considerations of comity warranted dismissal. (The action by plaintiff against the State of Montana is still pending in the District Court). We affirm the District Court on both grounds.

The following pertinent facts are taken from the transcript of proceedings before the District Court, the pleadings, and relevant exhibits. Unless otherwise stated, these facts are not disputed or controverted by the respective parties.

Section 50-19-203, MCA, requires that a test designed to detect inborn metabolic disorders be performed on all children born in Montana. The attending physician or person responsible for birth registration must ensure that a blood sample is taken from each child so that a test can be done. The Montana Department of Health and Environmental Sciences is responsible for either conducting the tests itself or contracting with an approved laboratory to perform the tests. Since 1977, the department has contracted with the Health Division of the Oregon Department of Human Resources to perform the test in its laboratory in Portland. Oregon also performs this service for Idaho, Nevada, and Alaska. Public health officials from all five states apparently decided that it was more cost effective to have the Oregon laboratory conduct the tests for the entire region. Montana, for example, has such a low yearly birth rate that it is cheaper to have the samples sent to the Oregon laboratory for analysis.

Under the terms of the interstate contract, first entered into in June, 1977, Oregon agreed to supply lab screening of all blood samples for metabolic disorders, according to standards set forth in M.A.C. section 16-2.18(6)-S1820 [now A.R.M. section 16.24.201-213]. Analysis was to take place in Oregon. The Montana Department of Health and Environmental Sciences was to be notified by mail or by telephone of any abnormal test results according to the urgency of laboratory findings. Normal test results were to be reported at weekly intervals by mail. Oregon maintained an in-house specialist in metabolic disorders, who would be available for consultation with the State of Montana or the Montana physician who took blood samples. The State of Montana agreed to collect the blood samples for forwarding to Oregon, and agreed to notify hospitals or physicians of significant findings. Montana agreed to pay Oregon $27,000 per year, in four quarterly installments, based on an average of 12,000 tests performed per year. Montana would pay an additional $2.25 for each sample in excess of 12,000. Oregon has argued, and the plaintiff has not disagreed, that the contract fees cover nothing more than the marginal cost of lab testing procedures. Montana does not contribute to the cost of maintaining the laboratory or the establishing of the test procedures. Furthermore, Oregon does not profit from the contractual arrangement. The contract was signed in Montana and Oregon, and finally approved by Oregon budget authorities in 1977.

Breton Simmons was born in Missoula, Montana, on June 22, 1977. Shortly thereafter, a sample of his blood was taken and forwarded to Oregon not long after the interstate contract was signed. For some reason, however, the laboratory failed to detect the presence of a particular metabolic disorder, congenital athyrotic hypothyroidism, the symptoms of which became apparent a few months after Breton was born. Breton did not receive initial treatment for the illness until late September, 1977. As a consequence, the boy has allegedly suffered permanent and irreparable brain and neuromuscular damage.

Dan Simmons, as guardian ad litem for the boy, filed an action in Oregon District Court in August, 1979, alleging negligence on the part of Oregon authorities with respect to conduct of the lab test. Plaintiff's counsel in Oregon did not pursue the case, and it was subsequently dismissed for want of prosecution, although plaintiffs apparently have the option to refile in Oregon within the next few months. This appeal stems from a related suit filed in Montana, naming the State of Montana and the State of Oregon as defendants. Oregon filed a motion to dismiss the suit on grounds that it had not purposely availed itself of the privilege of conducting activities in Montana, and that the assertion of jurisdiction would be unreasonable and contrary to due process. In the alternative, Oregon argued that Montana should decline jurisdiction as a matter of comity. Plaintiff countered that Oregon has sufficient minimum contacts with this State, and that comity did not preclude jurisdiction in this instance.

The trial court granted Oregon's motion to dismiss on both grounds. Plaintiff appealed from the trial court's order, asserting that the trial court erred by not finding that there were sufficient minimum contacts, and that comity did not preclude jurisdiction. This appeal was dismissed because it lacked proper certification under Rule 54(b), M.R.Civ.P. Subsequently, the appeal was properly certified, and plaintiff again asks us to reverse the trial court on the issues of minimum contacts and comity.

In a recent decision, the United States Supreme Court has emphasized that the reasonableness of asserting jurisdiction over a nonresident defendant must be assessed in the context of our federal system of government. See, World-Wide Volkswagen Corp. v. Woodson (1980), 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490. In other words, we are obliged to give serious consideration to the consequences acquiring jurisdiction will have on the maintenance of harmonious relations with other states.

For a Montana court to exercise jurisdiction over a nonresident defendant, two questions must be considered. (1) Does the nonresident defendant come within the provisions of Montana's long-arm jurisdiction statutes; and (2) would exercise of long-arm jurisdiction over the nonresident comport with traditional notions of fair play and substantial justice. May v. Figgins (Mont.1980), 607 P.2d 1132, 37 St.Rep. 493; Haker v. Southwestern Ry. Co. (1978), 176 Mont. 364, 578 P.2d 724. See, generally, International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95. If we find, as a matter of statutory construction, that the nonresident does not engage in any of the several activities enumerated in our long-arm statute, then our analysis ends and we must decline jurisdiction. However, even if the nonresident has done something which potentially confers jurisdiction, we must advance to the due process component which is ultimately determinative of the jurisdictional question.

The relevant statute is Rule 4B(1), M.R.Civ.P., which provides, in pertinent part, that:

"All persons found within the state of Montana are subject to the jurisdiction of the courts of this state. In addition, any person is subject to the jurisdiction of the courts of this state as to any claim for relief arising from the doing personally, through an employee, or through an agent, of any of the following acts:

"...

"(b) the commission of any act which results in accrual within this state of a tort action;

"...

"(e) entering into a contract for services to be rendered or for materials to be furnished in this state by such person;

"...

Oregon cannot be said to be "found within" Montana, so our attention is turned to subsections (b) and (e). Neither plaintiff nor the State of Oregon has devoted much space to this aspect of the statutory question, as both appear to agree that either one or both subsections potentially confers jurisdiction over Oregon. Therefore, we turn our attention to the crucial constitutional inquiry.

The Due Process Clause of the Fourteenth Amendment to the United States Constitution limits the power of a state court to render a valid personal judgment against a nonresident defendant. Due process requires that a state may exercise personal jurisdiction over the nonresident only so long as there exist "minimum contacts" between the defendant and the forum state. See, International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158, 90 L.Ed. at 102. See also, Benham v. Woltermann (Mont.1982), 653 P.2d 135, 39 St.Rep. 2017; Reed v. American Airlines, Inc. (Mont.1982), 640 P.2d 912, 39 St.Rep. 335; May v. Figgins, supra. The concept of "minimum contacts" has undergone development since International Shoe, and the latest phase of that development must be examined here. In World-Wide Volkswagen Corp. v. Woodson, supra, the United States Supreme Court held that an Oklahoma court could not exercise personal jurisdiction over New York wholesale and retail auto dealers who transacted no business in that state and whose only "contact" with Oklahoma consisted of an automobile, purchased in New York by New York residents, that exploded in a collision in Oklahoma. The court rejected any attempt to connect the dealers to the Oklahoma forum on the basis that their product might foreseeably end up in that state and cause injury there. World-Wide Volkswagen, s...