Colstrip Energy LP v. JBED Ventures, LLC

CourtDistrict Court, D. Montana
DecidedSeptember 30, 2019
Docket1:18-cv-00138
StatusUnknown

This text of Colstrip Energy LP v. JBED Ventures, LLC (Colstrip Energy LP v. JBED Ventures, LLC) is published on Counsel Stack Legal Research, covering District Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colstrip Energy LP v. JBED Ventures, LLC, (D. Mont. 2019).

Opinion

FILED IN THE UNITED STATES DISTRICT COURT SEP 3.0 2019 FOR THE DISTRICT OF MONTANA J □ □□□□□□□□ Cour BILLINGS DIVISION "District Of Montana : □□□□□□ COLSTRIP ENERGY LP, CV 18-138-BLG-SPW Plaintiff, Vs. ORDER DECLINING TO ADOPT THE MAGISTRATE’S FINDINGS JBED VENTURES, LLC d/b/a AND RECOMMENDATIONS IN CENTURY TURBINE REPAIR, LLC, FULL AND DENYING □ DEFENDANT’S MOTION TO Defendant. DISMISS

On October 26, 2018, defendant JBED Ventures, LLC (JBED) filed a motion to dismiss Colstrip Energy LP’s (Colstrip) amended complaint for lack of personal jurisdiction. (Doc. 23.) On July 8, 2019, Judge Cavan issued findings and recommendations (Doc. 28) and recommended this Court grant JBED’s motion. (Doc. 28 at 12.) Colstrip timely filed objections to the findings and recommendations. (Doc. 29.) JBED then timely filed a reply on August 5, 2019. (Doc. 30.) The Court disagrees with Judge Cavan’s recommendation. For the following reasons, JBED’s motion to dismiss for lack of personal jurisdiction is

denied.! I. Background Colstrip is a Montana limited partnership with its principal place of business in Rosebud County, Montana. (Doc. 22 1.) It owns and operates a waste coal- fired power plant near Colstrip, Montana. (Id.) JBED is a Missouri limited liability company with its principal place of business in Missouri. (/d. at § 2.) JBED does not have facilities, property, or employees in Montana, and it has not provided, advertised, or entered into contracts for services in Montana. (Doc. 24-1 at 4] 10-12.) JBED is a contractor that provides turbine parts and repair services to power plants. (Doc. 22 at 2.) In June 2011, Colstrip entered into a contract with Turbine Generator Maintenance, Inc. (TGM), a Florida company (Doc. 24-1 at J 13), to inspect and repair a rotor from one of Colstrip’s steam turbines. (Doc. 22 at J 5-6.) TGM then entered into a contract with JBED to repair the rotor. (Jd. at ] 6; Doc. 24-1 at 4 13.) Although the plan was originally to repair the rotor onsite, pursuant to a change order, the rotor was shipped to JBED’s facility in Missouri. (Doc. 22 at § 6.)

' JBED initially filed a Motion to Dismiss for Lack of Jurisdiction on September 21, 2018. (Doc. 5.) Subsequently, on October 12, 2018, Colstrip filed an Amended Complaint (Doc. 22), thereby mooting JBED’s initial Motion to Dismiss. Accordingly, JBED’s initial Motion to Dismiss (Doc. 5) is denied as moot.

After completing repairs, JBED shipped the rotor back to Colstrip’s Montana facility, where it was installed back in the steam turbine. (/d. at J 9.) In July 2017, one or more of the rotor’s low-pressure blades broke loose inside the turbine, causing substantial damage. (Jd. at F911, 14, 17-18.) Colstrip attributes this failure to JBED’s earlier repair work on the rotor. (/d. at 711.) Colstrip alleges JBED was negligent because it failed to properly control and monitor heat during its brazing work when repairing the rotor, which caused the rotor blade base material to slightly soften, introduced harmful residual stresses, and led to the low-pressure blades breaking off and causing the turbine’s failure. (Jd. at {7 11-12, 17-18.) Colstrip alleges approximately $9,438,996 in damages. (Jd. at J 19.) Colstrip filed a negligence suit in Montana state court on August 17, 2018, which JBED removed to this Court. (Doc. 1.) JBED later filed the instant motion to dismiss for lack of personal jurisdiction. (Doc. 23.) Judge Cavan concluded the Court lacks general and specific personal jurisdiction over JBED under Montana’s long-arm statute, Mont. R. Civ. P. 4(b). Specifically, he held that even though the rotor JBED repaired failed in Montana, the specific injury-causing event—which he concluded was JBED’s faulty repair— occurred in Missouri. (Doc. 28 at 8-10.) Therefore, he concluded JBED’s actions

did not result in the accrual of a tort action within Montana for purposes of conferring personal jurisdiction under Mont. R. Civ. P. 4(b)(1)(B). Ud.) Judge Cavan further concluded JBED did not transact any business within Montana or enter into a contract for services to be rendered or for materials to be furnished in Montana because it contracted with TGM, not Colstrip directly. (Ud. at 10-12.) Colstrip objects to the Magistrate’s conclusion that its injury-causing event did not occur in Montana. It avers the tort of negligence accrued in Montana because the injury-causing event and damages—the rotor failure and damages to Colstrip’s turbine—occurred in Montana. (Doc. 29 at 5.) JBED responds that Judge Cavan was correct in concluding the tort did not accrue in Montana because all JBED’s repair work on the rotor occurred in Missouri. (Doc. 30 at 9.) Il. Standard of Review “When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction.” Jn re W. States Wholesale Nat. Gas Antitrust Litig., 715 F.3d 716, 741 (9th Cir. 2013). Where the defendant bases its motion on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts. Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). In such cases, the Court only determines whether the plaintiff’s pleadings and affidavits

establish a prima facie showing of personal jurisdiction. Jd. (citing Caruth v. International Psychoanalytical Ass n, 59 F.3d 126, 128 (9th Cir.1995)). The plaintiff cannot “simply rest on the bare allegations of its complaint,” but the Court takes the uncontroverted allegations in the complaint as true and resolves conflicts between the parties over statements contained in affidavits in the plaintiff's favor. Id. (quoting Amba Marketing Systems, Inc. v. Jobar International, Inc., 551 F.2d 784, 787 (9th Cir.1977)). Where there is no applicable federal statute governing personal jurisdiction, this Court applies Montana law. Id.; see Fed. R. Civ. P. 4(k)(1)(A). Montana courts employ a two-part test to determine whether they may exercise personal jurisdiction over a nonresident defendant. Ford Motor Co. v. Montana Eighth Jud. Dist. Ct., 443 P.3d 407, 412 (Mont. 2019). First, the Court determines whether personal jurisdiction exists under Montana’s long-arm statute, M. R. Civ. P. 4(b)(1). Id. If so, then the Court determines “whether exercising personal jurisdiction is constitutional; that is, whether it conforms with ‘the traditional notions of fair play and substantial justice embodied in the due process clause.’” Jd. (quoting Cimmaron Corp. v. Smith, 67 P.3d 258, 260 (Mont. 2003)). Ill. Discussion

A. Montana’s long-arm statute establishes personal jurisdiction over JBED because JBED committed an act resulting in the accrual of a tort within Montana. M. R. Civ. P. 4(b)(1) lists several means of establishing jurisdiction over persons not found within the state. Here, Colstrip objects only to Judge Cavan’s conclusion that the long-arm statute does not establish personal jurisdiction over JBED because it did not commit an act resulting in the accrual of a tort in Montana. M. R. Civ. P. 4(6)(1)(B) (“[A]ny person is subject to the jurisdiction of Montana courts as to any claim for relief arising from the doing personally, or through an employee or agent, of... commission of any act resulting in accrual within Montana of a tort action....”) Specifically, Colstrip objects to Judge Cavan’s conclusion that the negligence Colstrip alleges accrued in Missouri, not Montana.

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Bluebook (online)
Colstrip Energy LP v. JBED Ventures, LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colstrip-energy-lp-v-jbed-ventures-llc-mtd-2019.