Opinion
2:03CV00597TC.
July 28, 2004
ORDER
Plaintiff EDO Corporation brought this intellectual property action against Defendant Technip-Coflexip, a French corporation. The case is before the court on Technip-Coflexip's Motion to Dismiss for lack of personal jurisdiction. For the reasons set forth below, the court grants Technip-Coflexip's motion.
Background
This is a dispute over ownership of intellectual property used in offshore oil production. Through its EDO Fiber Science division, which is based in Salt Lake City, Utah, Plaintiff EDO Corporation ("EDO") manufactures tanks and tubes used in the aerospace, defense, medical, and marine industries. In 1998, EDO entered into contracts with Aker Maritime, Inc. ("Aker"), which later changed its name to Technip Offshore, Inc. ("Technip Offshore"). Aker was a wholly owned subsidiary of Coflexip, S.A., a French corporation. A company named Technip became a majority shareholder of Coflexip, S.A. in 2001, and the resulting entity became the Defendant, Technip-Coflexip.
EDO and Aker worked together to develop and sell buoyancy modules used to keep offshore oil well platforms floating. During related litigation in Texas, EDO deposed Mr. Rodney Burley. Mr. Burley testified that as the "intellectual property coordinator," for Coflexip, S.A., he controlled the intellectual property of, and made the intellectual property decisions for Aker. Based on these statements by Mr. Burley, EDO sued Technip-Coflexip on July 3, 2003, in Utah — the present case. EDO sued for violations of the Lanham Act, and also asserted several state law claims.
On October 6, 2003, Technip-Coflexip moved to dismiss the present action arguing that this court could not exercise personal jurisdiction over it.
Analysis
1. Motion to Dismiss.
Technip-Coflexip argues that this lawsuit must be dismissed because the court lacks personal jurisdiction over it. EDO responds that Coflexip, S.A., which was owned by, and is now merged into, Technip-Coflexip, directed the intellectual property decisions that form the basis of the parties' dispute. Therefore, EDO argues that personal jurisdiction exists because Technip-Coflexip has harmed EDO's intellectual property rights, centered here in Utah.
A. Legal Standard — Motion to Dismiss for Lack of Personal Jurisdiction.
Personal jurisdiction requirements are satisfied if, "after reviewing the defendant[s'] interactions and connections with the forum state, the court can conclude" that defendants "purposefully availed [themselves] of the protection and benefits of the laws" of Utah, the forum state. United States v. Botefuhr, 309 F.3d 1263, 1272 (10th Cir. 2002) (quotation omitted). "[T]he mere foreseeability of causing injury in another state" is insufficient to establish the required contacts. Trierweiler v. Croxton Trench Holding Corp., 90 F.3d 1523, 1534 (10th Cir. 1996) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985)).
The plaintiff bears the burden of establishing personal jurisdiction over the defendant. OMI Holdings, Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). For the purposes of deciding whether the court has personal jurisdiction over the defendant, the court "resolve[s] all factual disputes in favor of [the] Plaintiff." Id. Importantly, "[w]hen a district court rules on a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing . . . the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion."Id. The plaintiff makes a "prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant."Id. To defeat a prima facie showing, the defendant "must present a compelling case . . . 'that the presence of some other considerations would render jurisdiction unreasonable.'" Id. (quoting Burger King, 471 U.S. at 477 (1985)).
B. Personal Jurisdiction.
Because no federal long-arm statute applies, the law of the forum state, Utah, controls the question of whether there is personal jurisdiction. Omni Capital Int'l, Ltd. v. Rudolf Wolff Co., 484 U.S. 97, 111 (1987); Edmond v. U.S. Postal Serv. Gen. Counsel, 949 F.2d 415, 424 (D.C. Cir. 1991); Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 F.3d 1114, 1123 (9th Cir. 2002); see also Carefirst of Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396-98 (4th Cir. 2003) (analyzing personal jurisdiction in trademark case under law of forum state).
There are two types of personal jurisdiction. The Utah Supreme Court explained:
General personal jurisdiction permits a court to exercise power over a defendant without regard to the subject of the claim asserted. For such jurisdiction to exist, the defendant must be conducting substantial and continuous local activity in the forum sate. In contrast, specific personal jurisdiction gives a court power over a defendant only with respect to claims arising out of the particular activities of the defendant in the forum state. For such jurisdiction to exist, the defendant must have certain minimum local contacts.Arguello v. Indus. Woodworking Mach. Co., 838 P.2d 1120, 1122 (Utah 1992). EDO does not contend that the court has general personal jurisdiction over Technip-Coflexip, but rather that Technip-Coflexip's actions are sufficient for the court to exercise specific personal jurisdiction.
1. Specific Jurisdiction.
"The evaluation of specific jurisdiction in Utah mandates a three-part inquiry: (1) the defendant's acts or contacts must implicate Utah under the Utah long-arm statute; (2) a nexus must exist between the plaintiff's claims and the defendant's acts or contacts; and (3) application of the Utah long-arm statute must satisfy the requirements of federal due process." Soma Med. Int'l v. Standard Chartered Bank, 196 F.3d 1292, 1298 (10th Cir. 1999). Utah's long-arm statute provides:
Any person . . . who in person or through an agent does any of the following enumerated acts, submits himself . . . to the jurisdiction of the courts of this state as to any claim arising out of or related to: (1) the transaction of any business within this state; (2) contracting to supply services or goods in this state; (3) the causing of any injury within this state whether tortuous or by breach of warranty.
Utah Code Ann. § 78-27-24. "Because the [Utah] long-arm statue is construed liberally so as to allow jurisdiction to the full extent permitted by due process, we proceed directly to the constitutional issue." OMI Holdings, 149 F.3d at 1090 (internal quotation and citation omitted); see also Utah Code Ann. § 78-27-22 (Utah's long-arm statute should be "applied so as to assert jurisdiction to the fullest extent permitted by the due process clause"). Accordingly, the first and third parts of the inquiry essentially become one — an analysis of whether asserting personal jurisdiction violates due process.
The first part of the due process test is "whether the defendant has such minimum contacts with [Utah] 'that he should reasonably anticipate being haled into court'" here. OMI Holdings, 149 F.3d at 1091 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1979)). Within this first part of the due process test, a court must determine (a) whether the "defendant purposefully directed its activities at residents of the forum," and (b) whether "the plaintiff's claim arises out of or results from 'actions by the defendant himself that create a substantial connection with the forum state'" — the "nexus" requirement. Id. at 1091 (quoting Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 109 (1987)). This nexus requirement is satisfied "only where a non-resident defendant has engaged in some conduct within the state and the plaintiff's claims against the defendant specifically arise from that conduct." First Mortgage Corp. v. State Street Bank and Trust Co., 173 F. Supp.2d 1167, 1176 (D. Utah 2001) (internal quotation and citation omitted).
Second, if the first part of the due process test is satisfied, a court must determine whether exercising personal jurisdiction "over the defendant offends 'traditional notions of fair play and substantial justice.'" OMI Holdings, 149 F.3d at 1091 (quotingAsahi, 480 U.S. at 113).
a. Minimum Contacts.
i. Activities Directed at Utah.
Technip-Coflexip argues that personal jurisdiction would be improper because it is a French holding company headquartered in Paris, France, that has no offices, physical assets, phone listings, bank accounts, or employees in Utah. (Picard Aff. at ¶¶ 5-7.) Further, Technip-Coflexip is not registered to do business in Utah, does not advertise or solicit business in Utah, has never sold products in Utah, and has never entered into a contract with EDO. (Id. at ¶¶ 8-13.) EDO relies on the fact that Mr. Rodney Burley, who was employed by Coflexip, S.A., made the intellectual property decisions of Aker that form the basis of EDO's complaint in this lawsuit. EDO argues that Technip-Coflexip's ownership of Coflexip, S.A. grants the court personal jurisdiction over Technip-Coflexip because (1) Technip-Coflexip was the owner of Coflexip, S.A., which made the intellectual property decisions that EDO complains of here, and (2) that Technip-Coflexip's actions had the effect of injuring a resident of Utah. Both theories are analyzed below.Technip-Coflexip's ownership of Coflexip, S.A.
EDO's argument is that because Mr. Burley made the intellectual property decisions for Aker while employed by Coflexip, S.A., the court has jurisdiction over Technip-Coflexip as the parent corporation to Coflexip, S.A., and ultimately Aker. EDO relies onPhone Directories Co., Inc. v. Contel Corp., 786 F. Supp. 930 (D. Utah 1992), for the proposition that personal jurisdiction over a parent corporation based on the actions of the subsidiary is proper if the parent exercises "significant influence" over the subsidiary.
EDO's reliance on Phone Directories is misplaced for two reasons. First, the parent at issue in Phone Directories, Contel Corp., was only one level above its subsidiary, Contel of the West, Inc., with no intervening companies in between. Phone Directories, 786 F. Supp. at 932. Here, EDO argues that Aker's decisions were made by Mr. Burley, who was employed by Coflexip, S.A. But EDO did not sue Coflexip, S.A., the immediate parent of Aker; it sued Technip-Coflexip, which is two levels of corporate governance removed from Aker. EDO essentially wants the court to treat Technip-Coflexip and Coflexip, S.A. as the same company, but it has not shown Technip-Coflexip's connection to the present dispute. In other words, EDO has not shown that Mr. Burley worked for Technip-Coflexip, or that Technip-Coflexip controlled the decisions of either Coflexip, S.A. or Mr. Burley.
Second, and more importantly, EDO's reliance on Phone Directories fails because the parent corporation in that case exercised almost complete control of a large portion of the subsidiary's business. In fact, in Phone Directories the parent corporation so tightly controlled the subsidiary's phone directory business that it even directed prices of the phone directories and the billing and advertising procedures. Id. at 940. Here, in contrast, the evidence does not show that Coflexip or Technip-Coflexip controlled Aker's business decisions, such as setting prices, selecting advertising, or setting billing procedures.
Hollander v. Sandoz Pharmaceuticals Corp., 289 F.3d 1193 (10th Cir. 2002), more closely resembles the present case. InHollander, the plaintiff sued the defendant foreign corporation and its wholly owned American subsidiary claiming that she was injured by one of the their medicines. The Tenth Circuit held that the district court correctly found that it did not have personal jurisdiction over the foreign parent corporation. The court pointed out that the foreign parent corporation was merely a holding company that had no facilities, bank account, telephone number, or employees in the forum, and it did no advertising in the forum. Hollander, 289 F.3d at 1216; see also Britton v. D.A. Stuart Co., 2003 WL 23139327 (N.D. Ill. 2003) (parent company's "day-to-day" control of subsidiary's operations demonstrated that parent "actually control[led] the activities of the subsidiary" sufficient to support personal jurisdiction) (internal citation and quotation omitted). Accordingly, EDO has not shown that Technip-Coflexip has the necessary activities directed at Utah to support personal jurisdiction.
Effects of Technip-Coflexip's Actions in Utah.
EDO also claims that personal jurisdiction is proper here because Mr. Burley, while an employee of Coflexip, S.A., Mr. Burley made decisions that caused harm to EDO in Utah. But the Tenth Circuit has made clear that allegations of injury to a forum resident will not establish jurisdiction over a non-resident defendant unless the defendant has additional contacts with the forum. Far West Capital, Inc. v. Towne, 46 F.3d 1071, 1079-80 (10th Cir. 1995); see also Patriot Systems, Inc. v. C-Cubed Corp., 21 F. Supp.2d 1318, 1321 (D. Utah 1998) (mere allegations of injury to Utah business not enough to establish personal jurisdiction).
Here, EDO has failed to point to any additional facts that would support finding personal jurisdiction over Technip-Coflexip.
ii. Nexus With Utah.
The second part of the minimum contacts test — the nexus requirement — requires that "the plaintiff's claim arises out of or results from 'actions by the defendant himself that create a substantial connection with the forum state.'" OMI Holdings, 149 F.3d at 1091. Technip-Coflexip has no contacts with Utah, let alone those sufficient enough to create the necessary nexus. As noted above, Technip-Coflexip is a French holding company that has no offices, physical assets, phone listings, bank accounts, or employees in Utah. Technip-Coflexip is not registered to do business in Utah, or advertise or solicit business in Utah, and it has never sold products in Utah, or entered a contract with EDO.
Accordingly, EDO has not demonstrated any actions on the part of Technip-Coflexip that would create the necessary nexus with EDO's claims to satisfy the minimum contacts requirement for personal jurisdiction.
b. Due Process — Fair Play and Substantial Justice.
The second part of the due process personal jurisdiction test requires that the court decide whether exercising personal jurisdiction "over the defendant offends 'traditional notions of fair play and substantial justice.'" OMI Holdings, 149 F.3d at 1091 (quoting Asahi, 480 U.S. at 113)). Because Technip-Coflexip lacks the minimum contacts necessary to support personal jurisdiction, there is no need to determine if exercising personal jurisdiction over it would "offend traditional notions of fair play and substantial justice.".
3. Jurisdiction Under Federal Rule of Civil Procedure 4(k)(2).
Additionally, EDO argues that the court has personal jurisdiction over Technip-Coflexip based on service of process through Federal Rule 4(k)(2). Federal Rule 4(k)(2) provides:
If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.
Fed.R.Civ.P. 4(k)(2). Rule 4(k)(2) "makes it unnecessary to traipse through the 50 states, asking whether each could entertain the suit." ISI Int'l, Inc. v. Borden Ladner Gervais L.L.P., 256 F.3d 548, 552 (7th Cir. 2001). Rather, it gives effect to the "Supreme Court's suggestion that the rules be extended to cover persons who do not reside in the United States, and have ample contacts with the nation as a whole, but whose contacts are so scattered among the states that none of them would have jurisdiction." Id. at 551. Accordingly, "[i]f . . . the defendant contends that he cannot be sued in the forum state and refuses to identify any other where suit is possible, then the federal court is entitled to use Rule 4(k)(2)." Id.
Rule 4(k)(2) has three requirements: "1) the plaintiff's claim must be one arising under federal law; (2) the putative defendant must be beyond the jurisdictional reach of any state court of general jurisdiction; and (3) the federal courts' exercise of personal jurisdiction over the defendant must not offend the Constitution or other federal law." United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 38 (1st Cir. 1999). Here, EDO's argument that Rule 4(k)(2) establishes jurisdiction over Technip-Coflexip fails under the second and third prongs of the test. Under the second prong, EDO has not demonstrated that Technip-Coflexip cannot be subject to personal jurisdiction in any other forum.
Under the third prong, EDO has not advanced any contacts — even "scattered" contacts among several states — by Technip-Coflexip with the United States as a whole on which to base personal jurisdiction. In other words, EDO has failed to produce evidence of contacts by Technip-Coflexip with the United States on which Rule 4(k)(2) jurisdiction could properly rest. In ISI Int'l, the Seventh Circuit held that scattered contacts such as sending a letter to California and engaging a United States law firm to apply for, and then abandon, a patent in Washington D.C. sufficed to establish personal jurisdiction in Illinois under Rule 4(k)(2). Id. at 551-52. EDO has failed to allege any such contacts by Technip-Coflexip. It does argue that Mr. Burley's actions in Texas in directing the intellectual property decisions of Aker are enough to create jurisdiction. EDO's argument fails for the same two reasons it failed above under the traditional due process analysis: (1) Mr. Burley worked for Coflexip, S.A., not Technip-Coflexip, so at most these facts would support jurisdiction over Coflexip, S.A.; and (2) EDO has not shown any actions by Technip-Coflexip that have any connection to its claims. Accordingly, EDO has not alleged facts sufficient to establish personal jurisdiction over Technip-Coflexip under Rule 4(k)(2).
Conclusion
Based on the foregoing, Technip-Coflexip's Motion to Dismiss is GRANTED, and this action by EDO against Technip-Coflexip is dismissed without prejudice.
SO ORDERED.