Butler v. JLA Industrial Equipment, Inc.

845 N.W.2d 834, 2014 WL 1516591, 2014 Minn. App. LEXIS 44
CourtCourt of Appeals of Minnesota
DecidedApril 21, 2014
DocketNo. A13-1448
StatusPublished
Cited by4 cases

This text of 845 N.W.2d 834 (Butler v. JLA Industrial Equipment, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Butler v. JLA Industrial Equipment, Inc., 845 N.W.2d 834, 2014 WL 1516591, 2014 Minn. App. LEXIS 44 (Mich. Ct. App. 2014).

Opinion

OPINION

HOOTEN, Judge.

Appellant challenges the district court’s denial of its motion for summary judgment, arguing that the district court erred by concluding that it had personal jurisdiction over appellant. Because appellant had sufficient minimum contacts with Minnesota and because litigating in Minnesota would not be unfair or unreasonable, we affirm.

FACTS

Respondent Douglas Butler is a former employee of Aspen Waste Systems. In April 2006, Butler was washing his garbage truck with a pressure washer when the washer’s water hose burst. Hot water burned Butler’s hand, thigh, and shoulder. Butler and his wife brought a products-liability suit against appellant Schieffer-[838]*838Magam Industries, Ltd. (SMI),1 respondent Schieffer Co. International, LC (Schieffer), respondent JLA Industrial Equipment, Inc., d/b/a Hotsy Equipment of Minnesota (Hotsy), Alfred Karcher, Inc., d/b/a/ Karcher North America (Karcher), and C-Tech Industries (C-Tech) (together, defendants).2 Butler alleged that the defendants were engaged “in the manufacture, distribution and/or sale of industrial products including specifically pressure washers and their attendant parts and components.”

SMI, an Israeli corporation with its principal place of business in Israel, moved to dismiss, arguing that Minnesota courts lack personal jurisdiction. The district court reserved the motion so that the parties could conduct discovery regarding jurisdictional issues. Upon completion of discovery, the district court considered the motion as one for summary judgment.

Discovery revealed the following facts. SMI manufactures hydraulic hoses. SMI and Schieffer are two of three subsidiaries of a German parent company. Between 2000 and 2011, SMI sold hydraulic hoses in bulk to Schieffer, a company based in Iowa. Schieffer manufactured the hoses into finished products and distributed them nationwide, including to Hotsy, a Minnesota company.

Between 2001 and 2011, SMI sold approximately 71,015,269 feet of hose to four U.S. customers in Georgia, New Jersey, Texas, and Iowa. This constituted about $1.3 to 4 million in annual sales to U.S. customers, or about 21 to 32% of its total sales. During this same time period, SMI sold to Schieffer between $1 and 3.5 million worth of hose annually, approximately 87% of SMI’s total U.S. sales. Based on its submission of more than 50 invoices, Schieffer represented that, between 2004 and 2007, it sold approximately 28,000 feet of SMI-manufactured hose to Hotsy.

SMI asserted that it is a separate corporation from Schieffer, does not manufacture a finished product but simply provides bulk hoses on large spools, and has no distribution contracts or licensing arrangements with Schieffer or any Minnesota or U.S. companies. It does not advertise in, ship products to, or attend trade shows in Minnesota, or sell its products directly to Minnesota customers. It has no employees, bank accounts, real estate, or offices in the U.S. SMI has no written distribution contracts, agreements, or licensing arrangements with U.S. manufacturers or distributors. SMI also claimed that it had no contact with or knowledge of Schieffer’s customers, including its customers in Minnesota.

Jeffrey D. Theis, managing member and president of Schieffer, testified by affidavit that Schieffer and SMI had common shareholder ownership at the time of Butler’s accident. He stated that SMI shareholders and personnel from Israel visited Schieffer’s facility regularly on at least an annual basis for the purpose of supporting Schieffer’s “development of the market through product and pricing aimed at the entire United States’ market.” According to Theis, “[SMI] was aware that Schieffer ... sold hoses manufactured by [SMI] to [839]*839customers across the United States, including customers located in Minnesota,” “[SMI] did not attempt to limit the territory in which Schieffer ... sold its products,” and “[SMI] encouraged sales of its products throughout the entire United States.”

The district court denied SMI’s motion for summary judgment, concluding that SMI had sufficient minimum contacts with Minnesota and that litigating the suit in Minnesota was not unreasonable or unfair. This appeal follows.

ISSUE

Did the district court err by concluding that Minnesota courts may constitutionally exercise personal jurisdiction over SMI?

ANALYSIS

An order denying a motion for summary judgment for lack of personal jurisdiction is immediately appealable as a matter of right. Marshall v. Inn on Madeline Island, 610 N.W.2d 670, 673 (Minn.App.2000). We review de novo a district court’s summary-judgment decision. Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170 (Minn.2010). In doing so, we determine whether there are genuine issues of material fact and whether the district court erred in its application of the law. Osborne v. Twin Town Bowl, Inc., 749 N.W.2d 367, 371 (Minn.2008).

Whether personal jurisdiction exists is a question of law reviewed de novo. Juelich v. Yamazaki Mazak Optonics Corp., 682 N.W.2d 565, 569 (Minn.2004). In order for a Minnesota court to exercise personal jurisdiction over a foreign corporation, Minnesota’s long-arm statute, MinmStat. § 543.19 (2012), must be satisfied and there must be minimum contacts between the defendant and Minnesota to satisfy the due process clause of the Fourteenth Amendment. Stanek v. A.P.I., Inc., 474 N.W.2d 829, 832 (Minn.App.1991), review denied (Minn. Oct. 31, 1991). “[T]he legislature designed the long-arm statute to extend the personal jurisdiction of Minnesota courts as far as the Due Process Clause of the federal constitution allows.” Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410 (Minn.1992). “If the personal jurisdiction requirements of the federal constitution are met, the requirements of the long-arm statute will necessarily be met also. Thus, when analyzing most' personal jurisdiction questions, Minnesota courts may simply apply the federal case law.” Id. at 411.

“Due process requires that the defendant have ‘certain minimum contacts’ with the forum state and that the exercise of jurisdiction over the defendant does not offend ‘traditional notions of fair play and substantial justice.’ ” Juelich, 682 N.W.2d at 570 (footnote omitted) (quoting Bum-ham v. Superior Court of Cal., 495 U.S. 604, 618, 110 S.Ct. 2105, 2115, 109 L.Ed.2d 631 (1990)). At the pretrial stage, the plaintiff bears the burden of proving that sufficient contacts exist to support personal jurisdiction. V.H. v. Estate of Birnbaum, 543 N.W.2d 649, 653 (Minn.1996).

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845 N.W.2d 834, 2014 WL 1516591, 2014 Minn. App. LEXIS 44, Counsel Stack Legal Research, https://law.counselstack.com/opinion/butler-v-jla-industrial-equipment-inc-minnctapp-2014.