Konys v. Krause - Werk GmbH & Co. KG

CourtDistrict Court, E.D. Missouri
DecidedSeptember 2, 2020
Docket4:19-cv-03262
StatusUnknown

This text of Konys v. Krause - Werk GmbH & Co. KG (Konys v. Krause - Werk GmbH & Co. KG) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Konys v. Krause - Werk GmbH & Co. KG, (E.D. Mo. 2020).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

JOHN KONYS, ET AL., ) ) Plaintiffs, ) ) v. ) Case No. 4:19-CV-3262 ) KRAUSE-WERK GMBH & CO. KG, ) ET AL., ) ) ) Defendants. )

MEMORANDUM AND ORDER

This matter is before the Court on Defendant Krause-Werk GmbH & Co. KG’s (Krause- Werk) motion to dismiss pursuant to Fed R. Civ. P. 12(b)(2) for lack of personal jurisdiction. [ECF No. 22] Plaintiffs John and Julia Konys (Plaintiffs) oppose the motion. [ECF No. 33] I. Background This product liability action arises from injuries Plaintiff John Konys sustained when he fell from a Krause-Werk Multi-Matic ladder, which he had purchased at a Home Depot store in Missouri. Plaintiffs, residents of O’Fallon, Missouri, filed a petition against Krause-Werk and Home Depot USA, Inc. (Home Depot) in the Circuit Court of St. Charles County. [ECF No. 5] Home Depot, a Georgia corporation headquartered in Atlanta, Georgia, removed the case to this Court on the basis of diversity jurisdiction pursuant to 28 U.S.C. § 1441. [ECF Nos. 1, 32 at ¶ 4] The facts, as alleged in the first amended complaint, are as follows: Krause-Werk is a German company with corporate headquarters located in Alsfeld, Germany. [ECF No. 32 at ¶ 2] Krause-Werk “designed, developed, and patented a foldable ladder it named ‘Multi-Matic.’” [Id. at ¶ 14] In the mid-1980s, Krause-Werk formed Krause, Inc., a wholly-owned subsidiary, for the purpose of distributing its ladders in the United States. [Id. at ¶ 21] Krause, Inc. was an Illinois corporation with its principal place of business in Rosco, Illinois. [Id.] Krause-Werk was the sole provider of all start-up capital for Krause, Inc., owner of corporate stock in Krause, Inc., and owner of the patents and trademarks for the Multi-Matic ladders. [Id. at ¶¶ 22, 38] Krause, Inc. later began manufacturing the Multi-Matic ladder at its facility in Illinois.

[Id. at ¶ 23] Krause, Inc.’s ladders “bore the same name, emblem and insignia [as those] placed on Krause-Werk’s ladders manufactured and sold in Europe.” [Id. at ¶ 15] Following Krause Inc.’s formation, Gunther Krause, Krause-Werk’s founder and president, became the president and sole director of Krause, Inc., serving both companies simultaneously. [Id. at ¶¶ 37-39] Mr. Krause received regular reports regarding Krause, Inc.’s operations and finances. [Id. at 40] Krause-Werk sent its employees from Germany to the United States to design and install manufacturing equipment at Krause, Inc., train Krause, Inc. employees, “perform managerial functions” at Krause, Inc., and assist in bookkeeping and accounting for Krause, Inc. [Id. at 42]

Krause-Werk and Krause, Inc. entered a license agreement in 1995, granting Krause, Inc. an exclusive license to manufacture and sell Multi-Matic ladders in the United States. [Id. at ¶ 46] Pursuant to the licensing agreement, Krause-Werk received royalty payments from Krause, Inc. and both entities were obligated to share technical information about the Multi-Matic ladders. [Id. at ¶¶ 47, 47] In 1997, in response to complaints of injuries, Krause-Werk ordered Krause, Inc. to redesign the Multi-Matic ladders. [Id. at ¶ 28] Krause, Inc. changed the material and coating used for the locking bolt, and Krause-Werk tested and approved the changes. [Id. at ¶¶ 29, 32] Claims and lawsuits for injuries and deaths related to the Multi-Matic ladder increased after the redesign, and “a number of Krause[, Inc.] Multi-Matic ladder models” were recalled in 1998. [Id. at ¶ 31] Krause, Inc. filed for bankruptcy in 2000 and “was dissolved involuntarily” in 2003. [Id. at ¶¶ 33, 45] Krause-Werk “still designs, manufactures, markets and distributes ladders and other climbing and scaffolding products from its production and marketing facilities located in Germany, Poland, Hungary, Russia, and Switzerland.” [Id. at ¶ 34]

Mr. Konys was using a Multi-Matic ladder at his home in November 2014 when the ladder “broke, collapsed, buckled, or otherwise malfunctioned, causing [him] to fall from a significant height and sustain bodily injuries.” [Id. at ¶ 7] Plaintiffs filed a complaint seeking monetary relief under theories of negligence, strict liability for defective design/manufacture and failure to warn, and loss of consortium. [Id.] They allege that Krause-Werk is subject to personal jurisdiction in Missouri because “Krause-Werk itself, and through its alter ego, joint venture partner, and/or agent Krause, Inc., has conducted business, made contracts, and committed tortious acts in the State of Missouri.” [Id. at ¶ 3] Krause-Werk moves to dismiss for lack of personal jurisdiction. [ECF No. 22]

II. Legal Standard To survive a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of making a prima facie showing that personal jurisdiction exists by pleading facts sufficient to support a “reasonable inference that the defendant[] may be subjected to jurisdiction in the forum state.” Fastpath, Inc. v. Arbela Tech. Corp., 760 F.3d 816, 820 (8th Cir. 2014) (quoting Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir. 2008)). “If the defendant controverts or denies jurisdiction, the plaintiff bears the burden of proving facts supporting personal jurisdiction.” Wells Dairy, Inc. v. Food Movers Int’l, Inc., 607 F.3d 515, 518 (8th Cir. 2010). See also Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004). A plaintiff's prima facie showing “must be tested, not by the pleadings alone, but by the affidavits and exhibits supporting or opposing the motion.” K–V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588, 592 (8th Cir. 2011) (internal quotation marks and citation omitted). Although a court must view evidence in the light most favorable to the plaintiff and resolve factual conflicts in the plaintiff’s favor, the party seeking to establish the court’s personal jurisdiction carries the burden of proof and that burden

does not shift to the party challenging jurisdiction. Viasystems, Inc. v. EBM–Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 592 (8th. Cir. 2011); Epps v. Stewart Info. Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003). III. Discussion Krause-Werk argues that it is not subject to the Court’s personal jurisdiction because Krause-Werk did not manufacture, sell, or distribute the allegedly defective ladder and “has never had any business activities in Missouri.” [ECF No. 23 at 3] Krause-Werk further contends that Plaintiffs’ efforts to base personal jurisdiction on an alter ego theory likewise must fail because: (1) Plaintiffs demonstrated nothing more than a typical parent/subsidiary relationship between

Krause-Werk and Krause, Inc.; and (2) even if Krause, Inc. were Krause-Werk’s alter ego, Plaintiffs’ allegations do not establish that Krause, Inc. is subject to personal jurisdiction in Missouri. Plaintiffs counter that Krause-Werk “sufficiently availed itself [of] the forum and possessed the necessary contacts with the forum to be subject to this Court’s jurisdiction.” [ECF No.

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Konys v. Krause - Werk GmbH & Co. KG, Counsel Stack Legal Research, https://law.counselstack.com/opinion/konys-v-krause-werk-gmbh-co-kg-moed-2020.