Robert L. Dever v. Hentzen Coatings , 380 F.3d 1070 ( 2004 )

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 03-3695
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Robert L. Dever, *
*
Plaintiff-Appellant, *
* Appeal from the United States
v. * District Court for the Western District
* of Arkansas.
Hentzen Coatings, Inc.; Sherwin *
Williams Company; W.M. Barr & *
Company; LHB Industries., Inc.; *
Hill Manufacturing Company, *
Inc.; Niles Chemical Paint Company, *
Inc.; and Chase Products Company; *
*
Defendants-Appellees. *
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Submitted: May 10, 2004
Filed: August 23, 2004
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Before MORRIS SHEPPARD ARNOLD, McMILLIAN, and MELLOY, Circuit
Judges.
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MELLOY, Circuit Judge.
Robert Dever (“Dever”) claims that he developed a brain tumor as the result
of his exposure to chemical products produced by Hentzen Coatings, Inc. (“Hentzen”),
Sherwin Williams Company (“Sherwin Williams”), W.M. Barr & Company (“W.M.
Barr”), LHB Industries, Inc. (“LHB”), Hill Manufacturing Company, Inc. (“Hill”),
Niles Chemical Paint Company, Inc. (“Niles”), and Chase Products Company (“Chase
Products”). The district court granted defendants’ motions to dismiss for lack of
personal jurisdiction. We affirm in part, reverse in part, and remand for further
proceedings.
I.
Dever, a resident and citizen of Kentucky, worked as a civilian employee at the
Fort Knox Army Base in Fort Knox, Kentucky. He claims that he developed a brain
tumor as a result of his occupational exposure to chemical agent resistant coating
(“CARC”) paint products. After the one-year statute of limitations ran in Kentucky,
Dever brought this tort action in the United States District Court for the Western
District of Arkansas. Dever alleged that defendants manufactured, sold, or distributed
the CARC products to which he was exposed in Kentucky. None of the defendants
are incorporated or have principal places of business in Arkansas.
II.
We review personal jurisdiction questions de novo. Burlington Indus., Inc. v.
Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996). To survive a motion to
dismiss for lack of personal jurisdiction, a plaintiff “must state sufficient facts in the
complaint to support a reasonable inference that [the defendants] can be subjected to
jurisdiction within the state. Once jurisdiction ha[s] been controverted or denied, [the
plaintiff] ha[s] the burden of proving such facts.” Block Indus. v. DHJ Indus., Inc.,
495 F.2d 256, 259 (8th Cir. 1974) (internal citation omitted). The plaintiff’s “‘prima
facie showing’ must be tested, not by the pleadings alone, but by the affidavits and
exhibits presented with the motions and in opposition thereto.” Id. at 260. See also
Davis v. St. Johns Health Sys., Inc., 71 S.W.3d 55, 57 (Ark. 2002) (“If the complaint
does not allege sufficient facts on which personal jurisdiction can rest, then the
complaint is factually deficient. Mere conclusory statements devoid of a factual
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foundation do not suffice in this inquiry.”) (internal citation omitted); Jet Charter
Serv., Inc. v. W. Koeck, 907 F.2d 1110, 1112 (11th Cir. 1990) (“When a defendant
raises through affidavits, documents or testimony a meritorious challenge to personal
jurisdiction, the burden shifts to the plaintiff to prove jurisdiction by affidavits,
testimony or documents.”); Taylor v. Portland Paramount Corp., 383 F.2d 634, 639
(9th Cir. 1967) (“We do not think that the mere allegations of the complaint, when
contradicted by affidavits, are enough to confer personal jurisdiction of a nonresident
defendant. In such a case, facts, not mere allegations, must be the touchstone.”).
“A federal court in a diversity action may assume jurisdiction over nonresident
defendants only to the extent permitted by the long-arm statute of the forum state and
by the Due Process Clause.” Morris v. Barkbuster, Inc., 923 F.2d 1277, 1280 (8th Cir.
1991). Because the long-arm statute of Arkansas confers jurisdiction to the fullest
constitutional extent, see Davis, 71 S.W.3d at 58, our inquiry is limited to whether the
exercise of personal jurisdiction comports with due process. Id. See also Bell Paper
Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 818 (8th Cir. 1994).
“Due process requires ‘minimum contacts’ between [a] non-resident defendant
and the forum state such that ‘maintenance of the suit does not offend traditional
notions of fair play and substantial justice.’” Burlington Indus., 97 F.3d at 1102(quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92 (1980)).
The Supreme Court has set forth two theories for evaluating minimum contacts,
general jurisdiction and specific jurisdiction. Under the theory of general jurisdiction,
a court may hear a lawsuit against a defendant who has “continuous and systematic”
contacts with the forum state, even if the injuries at issue in the lawsuit did not arise
out of the defendant’s activities directed at the forum. Helicopteros Nacionales de
Columbia, S.A. v. Hall, 466 U.S. 408, 415-16 (1984). In contrast, specific jurisdiction
is viable only if the injury giving rise to the lawsuit occurred within or had some
connection to the forum state. Id. at 414. See also Bell Paper Box, 22 F.3d at 819
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(identifying two types of personal jurisdiction—specific jurisdiction and general
jurisdiction—and noting that the former “refers to jurisdiction over causes of action
arising from or related to a defendant’s actions within the forum state,” while the latter
“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”).
Both theories of personal jurisdiction require “some act by which the defendant
purposely avails itself of the privilege of conducting activities within the forum State,
thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S.
235, 253 (1958). If a court determines that a defendant has minimum contacts with
the forum state, it may then consider “whether the assertion of personal jurisdiction
would comport with ‘fair play and substantial justice.’” Burger King Corp. v.
Rudzewicz, 471 U.S. 462, 476 (1985) (quoting International Shoe Co. v. Washington,
326 U.S. 310, 320 (1945)).
Based on the foregoing, we have instructed courts to consider the following
factors when resolving a personal jurisdiction inquiry: “(1) the nature and quality of
[a defendant’s] 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) [the] convenience of the parties.”
Burlington Indus., 97 F.3d at 1102. Significant weight is given to the first three
factors. See id. (“[T]he first three factors [are] of primary importance.”). However,
the fact that the cause of action is not linked to the defendant’s contacts with the forum
state does not necessarily preclude a finding of personal jurisdiction. See
Helicopteros, 466 U.S. at 414-15 (explaining general personal jurisdiction).
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III.
Dever does not argue that the district court had the power to exercise specific
personal jurisdiction. We agree with the district court that no basis for specific
personal jurisdiction exists, as the alleged injury arose outside of Arkansas. The issue
is whether there is a basis for the district court to exercise general personal jurisdiction
over the defendants.
• Chase Products, Niles, & Hentzen
Chase Products, Niles, and Hentzen are incorporated and have principal places
of business outside of Arkansas. Each of these defendants challenged the exercise of
personal jurisdiction below. Chase Products and Niles averred that they are not
registered to do business in Arkansas and have no offices, inventory, bank accounts,
real estate, personal property, employees, or agents in the state. Niles further alleged
that its products are sold to three military depots only, none of which are located in
Arkansas. In its motion to dismiss, Hentzen generally averred that it lacked sufficient
contacts with Arkansas to establish personal jurisdiction. On appeal, Hentzen admits
that it transacts business in Arkansas but maintains that its business transactions there
are de minimis.
After defendants challenged the exercise of personal jurisdiction, Dever failed
to rebut their assertions with testimony, affidavits, or other documents. Instead, he
rested on the conclusory allegations in his complaint to establish minimum contacts.
Where the assertions in a plaintiff’s complaint are contested, this is not enough. See
Block Indus., 495 F.2d at 260; Jet Charter Serv., 907 F.2d at 1112; and Taylor, 383
F.2d at 639. Because Dever failed to make a prima facie showing that these
defendants had “continuous and systematic” contacts with the forum state, the district
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court had no basis to exercise general personal jurisdiction over them. Helicopteros,
466 U.S. at 416.1
• W.M. Barr
W.M. Barr is incorporated and has its principal place of business in Tennessee.
W.M. Barr manufactures chemicals, but it is undisputed that W.M. Barr does not
manufacture, distribute, or sell CARC products. In its motion to dismiss, Barr averred
that it is not registered to do business in Arkansas and that it has no offices, inventory,
real estate, employees, bank accounts, personal property, or agents in the state. Unlike
Chase Products and Niles, W.M. Barr conceded that its products are sold in Arkansas.
However, W.M. Barr maintained, and Dever did not dispute, that W.M. Barr “sells its
product[s] from Memphis[, Tennessee] to various retailers and specialty industries
who in turn sell them to consumers or use them in commercial applications.”
Dever argues that the district court had the power to exercise general personal
jurisdiction over W.M. Barr because W.M. Barr placed its products in the stream of
commerce. We disagree. The mere fact that W.M. Barr’s non-CARC products are
found in Arkansas is insufficient to support a finding of general personal jurisdiction
under a stream-of-commerce theory. See Falkirk Mining Co. v. Japan Steel Works,
Ltd., 906 F.2d 369, 376 (8th Cir.1990) ("[P]lacement of a product into the stream of
commerce, without more, does not constitute an act of the defendant purposefully
directed toward the forum State."); Guinness Import Co. v. Mark VII Distribs., Inc.,
153 F.3d 607, 614-15 (8th Cir. 1998) (finding that a Jamaican brewer, whose beer was
1
We reject Dever’s argument that the district court abused its discretion in
denying him the opportunity to conduct jurisdictional discovery. See Carefirst of
Maryland, Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 402 (4th Cir. 2003)
(“When a plaintiff offers only speculation or conclusory assertions about contacts
with a forum state, a court is within its discretion in denying jurisdictional
discovery.”).
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distributed in Minnesota, did not have sufficient minimum contacts with Minnesota
for the exercise of personal jurisdiction; the plaintiff failed to show that the brewer
exercised control over distributors once beer left the foreign country; plaintiff further
failed to show that the brewer was licensed to do business in the state, had employees
or agents in the state, or maintained bank accounts, phone numbers, or mailing
addresses in the state). Moreover, nothing in the record suggests that W.M. Barr
“‘pour[ed] its products’ into a regional distributor with the expectation that the
distributor [would] penetrate [the Arkansas market].” Vandelune v. 4B Elevator
Components Unlimited, 148 F.3d 943, 948 (8th Cir. 1998) (quoting Barone v. Rich
Bros. Interstate Display Fireworks Co., 25 F.3d 610, 615 (8th Cir. 1994). We
therefore find that Dever failed to generate a prima facie showing of personal
jurisdiction with regard to W.M. Barr.
• Sherwin Williams
Sherwin Williams is incorporated and has its principal place of business in
Cleveland, Ohio. Sherwin Williams admitted that it operates retail stores in Arkansas
and has a registered agent for service of process there. Sherwin Williams further
admitted it sells CARC products to the military; however, Sherwin Williams
maintained that it sells only residential products (not CARC products) to the public
in its retail stores.
We find that Sherwin Williams has sufficient contacts with the state of
Arkansas to meet the requirements of the Due Process Clause. Although the parties
do not reside in Arkansas and Dever’s alleged injury took place in Kentucky, the fact
remains that Sherwin Williams conducts continuous business in Arkansas; it employs
workers, owns and leases property, and has designated an agent for service of process
in the state. Sherwin Williams “purposefully avail[ed] itself of the privilege of
conducting activities within the forum state,” Hanson v. Denckla, 357 U.S. at 253, and
its contacts were not “random, fortuitous, or attenuated.” Burger King, 471 U.S. at
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475 (internal quotations omitted). Giving due weight to the nature, quality, and
quantity of its connections, we find that Sherwin Williams could “reasonably
anticipate being haled into court” in Arkansas. World-Wide Volkswagen, 444 U.S.
at 297. See Davis, 71 S.W.3d at 61 (finding that although the parties resided outside
the forum state and the alleged injury took place outside the forum state, minimum
contacts were met because defendant conducted substantial business in the forum
state, had substantial property and employees in the forum state, and designated an
agent for service of process there).
• LHB & Hill
LHB and Hill did not file motions to dismiss for lack of personal jurisdiction.
Instead, they filed motions for summary judgment on the merits of Dever’s tort claim,
alleging that they never manufactured, distributed, or sold CARC products. The
district court dismissed all defendants on personal jurisdiction grounds and did not
rule on these defendants’ motions for summary judgment. On appeal, LHB and Hill
now contend that they have insufficient contacts with Arkansas to establish personal
jurisdiction. However, neither has denied that they transacted business or derived
substantial economic benefit in Arkansas.
At this stage of the litigation we are compelled to accept uncontested
allegations as true and to view them in the light most favorable to Dever. See
Vandelune, 148 F.3d at 948. Doing so, we assume that the quantity, quality, and
nature of these defendants’ contacts with Arkansas are significant and find that Dever
made a prima facie showing of general personal jurisdiction. See Burger King, 471
U.S. 475-76 (“[W]here the defendant ‘deliberately’ has engaged in significant
activities within a State, or has created ‘continuing obligations’ between himself and
residents of the forum, he manifestly has availed himself of the privilege of conducting
business there, and because his activities are shielded by ‘the benefits and protections’
of the forum’s laws it is presumptively not unreasonable to require him to submit to
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the burdens of litigation in that forum as well.”). Although a more fully developed
record may ultimately reveal that minimum contacts are lacking, at this point, we
cannot say there is no basis to exercise personal jurisdiction over these defendants.2
Based on the foregoing, we affirm the district court’s finding that it lacked
personal jurisdiction over Chase Products, Niles, Hentzen, and W.M. Barr. We
reverse the district court’s finding that it lacked personal jurisdiction over LHB, Hill,
and Sherwin Williams and remand for further proceedings.3
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2
LHB and Hill denied Dever’s assertion that they manufactured, distributed, or
sold CARC products. While this may be dispositive in a motion for summary
judgment on the merits of Dever’s tort claim, it does not necessarily preclude a
finding of general personal jurisdiction. As noted above, a court may hear a lawsuit
against a defendant who has “continuous and systematic” contacts with the forum
state, even if the injuries at issue in the lawsuit did not arise out of the defendant’s
activities directed at the forum. Helicopteros, 466 U.S. at 416.
3
The district court denied Dever’s motion to amend his original complaint,
finding that it added “nothing more to the jurisdictional equation.” Because we
reverse the district court’s finding that it lacked personal jurisdiction over LHB, Hill,
and Sherwin Williams, we also vacate the district court’s order denying Dever’s
motion to amend. Upon remand, the district court should reconsider whether to grant
Dever leave to amend his original complaint. We express no opinion as to whether
such leave should be granted. We also express no opinion as to whether venue is
proper in the Western District of Arkansas, an issue raised by the parties below.
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