Opinion
Case No. 8:02CV3014
July 31, 2002
ORDER
This matter is before the Court on Defendant Michael Curran's Motion to Dismiss for lack of personal jurisdiction pursuant to Federal Rules of Civil Procedure, Rule 12(b)(2) (Filing No. 8). The Plaintiff, Capital Tower Communications, Inc. ("CTC"), opposes this motion. Both parties have briefed the issue and presented evidence to support their arguments.
CTC, a Nebraska corporation, alleges subject matter jurisdiction in this Court on the basis of diversity of parties and the amount in controversy. CTC filed suit against a corporation, PTS, Inc. ("PTS") and two individuals: Gregory J. Cislo and Michael Curran. Curran claims that this Court may not exercise personal jurisdiction over him in this case. Curran argues that the Court cannot exercise personal jurisdiction over him because 1) he lacks minimum contacts with Nebraska, 2) his contacts with Nebraska as Chief Executive Officer of PTS are irrelevant, 3) he has not purposefully availed himself of jurisdiction in Nebraska; and 4) by asserting personal jurisdiction over him, this Court would not be comporting with notions of fair play and substantial justice.
APPLICABLE LAW
In order to survive Curran's motion to dismiss for lack of personal jurisdiction, CTC need only make a prima facie showing of personal jurisdiction over Curran. Digi-tel Holdings, Inc. v. Proteq Telecommunications (PTE), Ltd., 89 F.3d 519, 522 (8th Cir. 1996). Further, this court must view the evidence in the light most favorable to the Plaintiff and must resolve all factual conflicts in its favor. Id.
In determining whether this Court has personal jurisdiction over a nonresident defendant, two issues are presented: (1) whether the requirements of the Nebraska long-arm statute are satisfied and (2) whether the exercise of jurisdiction over this Defendant will violate the Due Process Clause of the Fourteenth Amendment. Minnesota Mining Mfg. Co. v. Nippon Carbide Indus. Co., Inc., 63 F.3d 694, 696-97 (8th Cir. 1995), cert. denied, 516 U.S. 1184 (1996). Nebraska's long-arm statute, Neb. Rev. Stat. § 25-536 (Michie 1995), has been interpreted to extend jurisdiction over nonresident defendants to the fullest degree allowed by the Due Process Clause of the United States Constitution. Wagner v. Unicord Corp., 247 Neb. 217, 221, 526 N.W.2d 74, 77 (1995). Thus, constitutional limits will dictate whether jurisdiction over Curran is proper.
The Nebraska long-arm statute provides:
A court may exercise personal jurisdiction over a person:
(1) Who acts directly or by an agent, as to a cause of action arising from the person:
(a) Transacting any business in this state;
(b) Contracting to supply services or things in this state;
(c) Causing tortious injury by an act or omission in this state;
(d) Causing tortious injury in this state by an act or omission outside this state if the person regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this state;
(e) Having an interest in, using, or possessing real property in this state; or
(f) Contracting to insure any person, property, or risk located within this state at the time of contracting; or
(2) Who has any other contact with or maintains any other relation to this state to afford a basis for the exercise of personal jurisdiction consistent with the Constitution of the United States.
Neb. Rev. Stat. § 25-536 (Michie 1995).
In order to exercise personal jurisdiction over a nonresident defendant, due process requires that such defendant have "minimum contacts" with the forum state such that maintenance of a suit against that defendant does not offend "`traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). The nonresident defendant's conduct and connection with the forum state must be such that "he should reasonably anticipate being haled into court there," World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980), and it is essential that "`there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). "Purposeful availment" means that the defendant's contacts with the forum state must not be random, fortuitous, attenuated, or the result of unilateral activity of a third person or another party. Id.
Once it has been determined that the nonresident defendant purposefully established minimum contacts with the forum state, such contacts must be analyzed in light of other factors to determine whether the exercise of personal jurisdiction over the nonresident defendant comports with "fair play and substantial justice." Id. at 476. The factors, as articulated by the Eighth Circuit Court of Appeals, are: "(1) the nature and quality of contacts with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of action to the contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) convenience of the parties." Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996). The fourth and fifth factors are of secondary importance and not determinative. Land-O-Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir. 1983). In applying these factors, the central inquiry is the "`relationship among the defendant, the forum, and the litigation.'" Id. (quoting Shaffer v. Heitner, 433 U.S. 186, 204 (1977)).
It is the third element of the above test — the relationship between the cause of action and the contacts — which gives rise to the distinction between specific and general jurisdiction. Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within a forum state, while general jurisdiction refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose. Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir. 1994) (citing Sondergard v. Miles, Inc., 985 F.2d 1389, 1392 (8th Cir.), cert. denied, 510 U.S. 814 (1993)).
In U.S. Kids, the defendant, a Michigan corporation, was contacted by a South Dakota box manufacturer, Bell Paper Box, Inc., about the manufacturing of portfolios and portfolio displays. The defendant, U.S. Kids, requested price quotations which Bell provided, and soon manufacturing began. Correspondence between the parties occurred by mail and fax, and the employees of each company remained in their respective states. When the final product was shipped from South Dakota to Michigan, U.S. Kids rejected the order. At that point, several Bell employees traveled from South Dakota to Michigan to see if the problem could be resolved. No employee of U.S. Kids ever visited South Dakota regarding this transaction, nor had U.S. Kids ever transacted any business in South Dakota other than the business with Bell. After the visit by Bell representatives, U.S. Kids made three payments which totaled approximately half of the amount owed.
Bell sued U.S. Kids in state court in South Dakota for the rest of the contract amount. U.S. Kids removed the action from state court to federal court in South Dakota, and then moved to dismiss for lack of personal jurisdiction. The district court granted that motion, but the Eighth Circuit Court of Appeals reversed, concluding that the activities of U.S. Kids in South Dakota, which were specifically related to the events giving rise to the breach of contract litigation, subjected U.S. Kids to the jurisdiction of the South Dakota court.
The Eighth Circuit was persuaded by the fact that the subject matter of the dispute occurred entirely in South Dakota; that is, the products were manufactured in South Dakota and the final product was shipped from South Dakota to Michigan. The court said all that is required to establish the minimum contacts required by due process is that a commercial actor must purposefully direct its efforts toward residents of the forum state, and that physical presence in the state or physical contacts with the state are not necessary as a component of "minimum contacts." U.S. Kids, 22 F.3d at 820 (citing Burger King v. Rudzewicz, 471 U.S. at 476). In short, if specific jurisdiction is asserted, as it is here, "due process is satisfied if the defendant has purposely directed its activities at forum residents, and the litigation results from injuries arising out of, or relating to, those activities." Burlington Indus., Inc., 97 F.3d at 1103.
ANALYSIS
In CTC's complaint (Filing No. 1), the third cause of action alleges, among other things, that Curran operated the PTS corporation as his alter ego and that, under this corporate veil, Curran provided for transfers and conveyances for his own personal benefit and to the detriment of the corporation's creditors, specifically in this action, CTC. The Court considers CTC's claims as implicating special jurisdiction over Curran. Therefore, the Court must consider Curran's actions in relation to CTC's cause of action.
There is a dispute between the parties regarding the level to which Curran was personally involved in the negotiation and execution of the agreements between CTS and PTS which led to the alleged injury to CTC. Evidence provided by CTC in support of its opposing brief supports the allegations that Curran was personally involved in negotiating an agreement with CTC in order to guarantee that CTC would release construction liens against PTS. (Filing No. 11, Firley Aff., Reed Aff., Ex. A, B, C D) CTC has also presented evidence that Curran had negotiated for some of his personal property to serve as partial reimbursement to CTC, although Curran refutes this allegation. (Filing No. 11, Firley Aff., Reed Aff., Ex. C; Filing No. 14, Curran Supp. Aff., Ex. 2) CTC's evidence also suggests that Curran may still have retained control of PTS when its checking account was closed and CTC was left holding a check for more than $70,000 on which it could not collect. (Filing No. 17, Firley Second Aff.)
Viewing the alleged facts in the light most favorable to CTC, the Court is persuaded that Curran's contacts with Nebraska residents, although limited, were purposefully directed toward CTC, a Nebraska corporation, and that Curran has purposefully availed himself of the privilege of doing business within the State of Nebraska. The Court also finds that this action relates to alleged injuries arising out of, or relating to, Curran's contacts with residents of this forum. Therefore, in accordance with the doctrine of specific jurisdiction outlined in U.S. Kids and Burger King v. Rudzewicz above, the Court holds that Defendant Michael Curran's Motion to Dismiss for lack of personal jurisdiction must be denied.
IT IS ORDERED:
Defendant Michael J. Curran's Motion to Dismiss (Filing No. 8) is denied.