Domtar, Inc. v. Niagara Fire Insurance Co. , 518 N.W.2d 58 ( 1994 )

LANSING, Judge

(dissenting).

I respectfully dissent. The evidence is undisputed that two years before Canadian General first decided to insure Domtar, a Canadian company, Domtar had sold its Minnesota plant and no longer conducted operations in Minnesota. Because Canadian General directed no contacts toward Minnesota, the exercise of jurisdiction violates longstanding jurisdictional principles and disregards the enhanced jurisdictional burden that applies when the defendant is a foreign national.

The United States Supreme Court distinguishes between general and specific jurisdiction. General jurisdiction is measured by the existence or extent of “continuous and systematic” contacts with the forum state. Helicopteros Nacionales v. Hall, 466 U.S. 408, 416, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984); see also Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 411 (Minn.1992) (general jurisdiction exists when “a defendant conducts so much business within a state that it becomes subject to the jurisdiction of that state’s courts for any purpose”). Specific jurisdiction may be based on only a few contacts with the forum state, but the case must arise out of or relate to one of those specific contacts. Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1872; Valspar, 495 N.W.2d at 411.

As the majority implicitly recognizes, general jurisdiction is not available over Canadian General. Although Canadian General had some contacts with Minnesota in the 1970s and 1980s, when it provided bonds to another Canadian company for a Minnesota medical center, these contacts are not the type of “continuous and systematic” contacts that would support an exercise of jurisdiction. See Helicopteros, 466 U.S. at 416, 104 S.Ct. at 1872; see also Valspar, 495 N.W.2d at 411.

Neither is specific jurisdiction available. This is a declaratory judgment action brought by Domtar against Canadian General in Minnesota. Domtar has not provided any concrete evidence of Canadian General directing contacts toward Minnesota by insuring Domtar. See Hardrives, Inc. v. City of LaCrosse, 307 Minn. 290, 293, 240 N.W.2d 814, 816 (1976) (when a defendant challenges jurisdiction, the plaintiff has the burden of proving a prima facie case supporting jurisdiction). Although a defendant need not be present within a state to be subject to jurisdiction, the defendant must have “purposely directed” efforts toward residents of the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 2184, 85 L.Ed.2d 528 (1985).

According to the parties, Domtar’s Duluth plant was sold in 1955. Domtar alleges in its complaint that Canadian General first insured it in October 1956. The evidence varies slightly from the allegation and shows that Canadian General likely first insured Domtar in 1957. Domtar submitted evidence demonstrating that its contacts with the Duluth site extended to April 1956. Whichever evidence is accurate, there is no evidence that Domtar had any connection with Minnesota at the time Canadian General first insured it.

Canadian General submits evidence stating that it never insured Domtar’s Minnesota operations and this evidence is consistent with the information Domtar provides. Although Canadian General may have considered Domtar’s past presence in Minnesota when deciding whether to insure Domtar, no underwriting records exist to show that such consideration took place. Even if these records did exist, however, it is unlikely that Canadian General would have foreseen that it would be haled into a Minnesota court based on its act in insuring a Canadian company, which at the time the insurance policy was first issued, did not own property in Minnesota or have any contacts with Minnesota. Cf. McGee v. International Life Ins., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957) (finding jurisdiction over insurance company when contract was delivered in forum state, premiums were mailed from forum state, and insured was a resident of forum state at time of death).

Domtar, in this action, is seeking coverage from sixteen insurers. Although pragmatic considerations favor allowing Domtar to resolve all coverage questions in one action, these pragmatic concerns cannot override longstanding jurisdictional principles, particularly when the principles are applied to a foreign national. See Asahi Metal Indus. v. Superior Court of Cal., 480 U.S. 102, 115, 107 S.Ct. 1026, 1034, 94 L.Ed.2d 92 (1987) (courts must exercise great care and reserve when extending notions of personal jurisdiction into the international field). Canadian General has not purposefully availed itself of the “privilege of conducting activities within the forum state, thus invoking the benefits and protection of its law.” See Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283 (1958).

Minnesota has a strong interest in holding parties responsible for environmental harm. But Minnesota clearly has jurisdiction over Domtar, the party that is liable for response costs. Domtar’s suit against Canadian General is basically for indemnification, and although Minnesota has an interest in Canadian General’s indemnification of Domtar, this interest cannot create jurisdiction. See As-ahi, 480 U.S. at 114-15, 107 S.Ct. at 1033 (recognizing that California had only minimal interests in an indemnification suit between two foreign nationals). Domtar is free to proceed against Canadian General in Canadian courts.

A defendant must have minimum contacts with the forum state “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Canadian General’s contacts with Minnesota are insufficient to establish either general or specific jurisdiction, and I would reverse.