Summary
finding Idaho was not subject to personal jurisdiction in Michigan because none of the enumerated categories in the long-arm statute contemplated suits against states
Summary of this case from Sullivan v. LG Chem, Ltd.Opinion
Docket Nos. 52235, 52786.
Decided February 17, 1982.
Smith Brooker, P.C., for Conida Warehouses, Inc.
Moffatt, Thomas, Barrett Blanton Chartered (by Donald J. Farley), and Fraser, Trebilcock, Davis Foster, P.C. (by Joel E. Dowley), for the State of Idaho.
May the State of Idaho be sued in a Michigan court for negligently inspecting kidney beans grown in Idaho? Two Michigan circuit courts have answered this question differently and appeals from those cases have been consolidated in this Court.
The two cases before this Court on interlocutory appeals arise out of a kidney bean seed growing arrangement in Idaho. Conida Warehouses, Inc., a Connecticut corporation with its principal place of business in Idaho, contracted with C B Cattle Company, an Idaho partnership. Under that agreement, C B grew kidney bean seeds for Conida. While growing, the beans were inspected by the State of Idaho. The bean seeds were shipped to Michigan by Conida and sold to Michigan farmers. Larry Mallory and Nestle Farms, plaintiffs in case no. 52235, are growers who purchased beans from Conida. Michigan Millers Mutual Insurance, plaintiff in case no. 52786, is the subrogee of Breckenridge-Wheeler Co-op, Inc., which purchased beans from Blount Agriculture Division of J.P. Burroughs Son, Inc., which had purchased the beans from Conida. It was discovered that the beans grown by C B, inspected by Idaho, and sold by Conida were infected with halo blight. Idaho was made a party in both cases after Conida filed a third-party action against it.
The record before us indicates that Idaho inspected the beans pursuant to a statutory policy aimed at improving Idaho's national bean business. In addition to inspecting beans, the state had embarked on a small-scale national advertising campaign, which featured the fact that Idaho beans are inspected. There is no evidence in the record that the plaintiffs in this case were aware of the national advertising campaign or had any contact with the campaign at all.
In carefully thought out opinions, two Michigan circuit court judges disagreed over whether Idaho could be sued in Michigan. In case no. 52786, the Saginaw County Circuit Court found that there were insufficient contacts in Michigan and that Idaho had not purposefully availed itself of the privilege of doing business in Michigan. The court held that it had no long-arm jurisdiction over the State of Idaho. The court did not address the questions of sovereign immunity or comity, as they were unnecessary to the disposition of the case.
In case no. 52235, the Gratiot County Circuit Court found that Idaho had caused consequences to occur in Michigan and so was subject to longarm jurisdiction under the statute, that there were sufficient minimum contacts with Michigan to meet the demands of the Due Process Clause of the Fourteenth Amendment, and that there was no bar to the suit under the doctrines of comity or sovereign immunity.
Before any constitutional considerations are considered, it is necessary to determine whether Michigan has a statutory basis for exercising long-arm jurisdiction over the State of Idaho. Long-arm jurisdiction over nonresident tortfeasors is established in Michigan under four statutes. MCL 600.705; MSA 27A.705 permits a Michigan plaintiff to sue an individual or his agent when any of seven circumstances occur. Among those circumstances is "[t]he doing or causing an act to be done, or consequences to occur" in Michigan resulting in an action for tort. MCL 600.705(2); MSA 27A.705(2). Section 715 of the Revised Judicature Act permits suit against a corporation or its agent under most of the same circumstances, including subsection 2. Similarly, § 725 permits long-arm jurisdiction over partnerships for any of the reasons set forth in § 715, and § 735 allows suit in the same circumstances against a partnership association or an unincorporated voluntary association, or an agent thereof, providing any of the same circumstances are involved.
None of these statutes expressly permits a Michigan court to exercise long-arm jurisdiction over another state. A court created by statute, such as the circuit court, has only such jurisdiction that is bestowed by statute. Sheldon v Sill 49 U.S. 441, 449; 12 L Ed 1147 (1850). Where there is an affirmative statutory description of jurisdiction that may be exercised, there is an implication that the court lacks jurisdiction in other cases. Luyk v Hertel, 242 Mich. 445, 447; 219 N.W. 721 (1928).
If this Court is to find that Michigan courts can exercise long-arm jurisdiction over the State of Idaho, we must find that Idaho was acting as the agent of Conida when it undertook the task of inspecting beans. If we so find, then Idaho may be haled into court, under MCL 600.715; MSA 27A.715, unless some other considerations prevent it.
An agent, in the broadest sense of the word, is one who acts for or represents another by his authority. Saums v Parfet, 270 Mich. 165, 170; 258 N.W. 235 (1935). Whether an agency exists is determined by the relations of the parties. Id. The test of whether an agency has been created is whether there is a right to control the actions of the agent. Kircos v Lola Cars, Ltd, 97 Mich. App. 379, 387; 296 N.W.2d 32 (1980), Birou v Thompson-Brown Co, 67 Mich. App. 502, 507; 241 N.W.2d 265 (1976).
In Kircos, supra, this Court examined the relationship between an individual and a corporation for purposes of determining whether there was long-arm jurisdiction and found that, where there was no control of the methods or of the result of the work, no agency existed. Applying the same analysis to the case at bar, we find that no agency relationship exists between Idaho bean growers and the State of Idaho when Idaho undertakes the task of inspecting beans for export to other states.
The Idaho legislature has undertaken the promotion of Idaho beans by establishing the Idaho Bean Commission, which has powers to advertise beans nationally, to encourage research and development of better beans, and to tax bean growers and distributors to fund these tasks. Idaho Code, 22-2911 et seq. Inspection of beans, however, is relegated to a different state agency, the Idaho Department of Agriculture having the duty and power to inspect for plant diseases. Idaho Code 22-103(22). Further, the sale of infected seeds is prohibited. Idaho Code 22-416. It is the sale of beans that allegedly had been faultily inspected that led to these lawsuits.
We do not believe the legislative scheme makes the Idaho Bean Commission or the State of Idaho an agent of Idaho bean growers and dealers. Nothing in the statutory scheme gives the growers or dealers the power to control the state. Indeed, the statutes vest in the Idaho Department of Agriculture the power to regulate and control some of the activities of the growers and dealers.
One reason for extending long-arm jurisdiction to corporations whose agents have caused consequences to occur in Michigan is to prohibit a corporation from escaping responsibility for tortious acts by hiding behind its agent. Here, where the State of Idaho is not an agent of the bean growers but in fact exercises control over them, it would be anomolous to apply similar reasoning and find the State of Idaho liable.
Conida argues, however, that the Michigan Supreme Court has expressed the opinion that the Legislature intended to extend long-arm jurisdiction to the fullest extent possible under the constitution. While it is true that in Sifers v Horen, 385 Mich. 195; 188 N.W.2d 623 (1971), the Court did indicate that the Legislature intended full expansion of long-arm jurisdiction, Sifers was a case that clearly involved an individual, and the only question before the Court was whether one of the statutory criteria was met. In these consolidated cases, however, we must decide whether a sister state was intended to be covered under the provisions for suits against individuals, corporations, partnerships and voluntary associations or their agents.
The State of Michigan, like the State of Idaho, has a bean commission, as well as numerous commissions regulating Michigan agricultural products. We do not believe that the Michigan Legislature intended to subject this state to suit in other states when it established these commissions for the promotion of state products. As a matter of policy, we believe it wise to decline to exercise jurisdiction over another state's similar agencies. For this reason, and for the reasons discussed supra, we do not believe that the Legislature intended, by the enactment of the various longarm jurisdiction statutes, to permit a suit in a Michigan court against a sister state.
The state apple commission, bean commission, cherry commission, and potato council are under the authority of the Michigan Department of Agriculture. MCL 16.283; MSA 3.29(183).
Accordingly, we hold that the State of Idaho is not subject to the long-arm jurisdiction of the Michigan courts under MCL 600.715(2); MSA 27A.715(2). In so doing, we observe that Michigan farmers are not without a remedy. Their actions against C B Cattle Company, the grower, and Conida, the seller of the diseased beans, may be maintained in Michigan. Should C B and Conida, neither of whom are Michigan concerns, desire to sue the State of Idaho in Idaho courts, they are free to do so. Idaho Code § 6-903. We observe that an Idaho forum will be more convenient for the resolution of any issues regarding the inspection, as all acts relevant to inspection occurred in Idaho and Conida and C B Cattle are doing business there.
As we have determined on statutory grounds that Michigan courts lack jurisdiction over the State of Idaho, it is unnecessary to determine whether the facts of this consolidated case meet the "minimum contacts" test of the Due Process Clause of the Fourteenth Amendment which is the necessary prerequisite to the assertion of jurisdiction over an out-of-state defendant, World-Wide Volkswagen Corp v Woodson, 444 U.S. 286; 100 S Ct 559; 62 L Ed 2d 490 (1980), or whether, as a matter of comity and cooperative federalism, the suit should continue. Even if the "minimum contacts" test is met, this being the issue on which the two circuit judges reached opposite conclusions, suit may not be entertained unless the State of Idaho is in fact an agent of the bean seed grower. Lacking the statutory authority to entertain this action, Michigan courts need not consider any constitutional bars to the exercise of jurisdiction.
The determination in case no. 52786 is affirmed. The determination in case no. 52235 is reversed. Both cases are remanded for further proceedings. No costs, a question of public importance being involved.