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Operation Bass, Inc. v. Johnston: US District Court : CIVIL PROCEEDURE - no personal jurisdiction over defendant in UDTP action; dismissal

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 07-4819(DSD/SRN)
Operation Bass, Inc., doing
business as FLW Outdoors,
Plaintiff,
v. ORDER
Perry Johnston,
Defendant.
Alain M. Baudry, Esq., Jerome B. Simon, Esq, Sarah
Horstmann, Esq. and Maslon, Edelman, Borman & Brand, 90
South Seventh Street, Suite 3300, Minneapolis, MN 55402,
counsel for plaintiff.
Kristina B. Heebner, Esq., Thomas J. Shroyer, Esq. and
Moss & Barnett, 90 South Seventh Street, Suite 4800,
Minneapolis, MN 55402, counsel for defendant.
This matter is before the court on defendant’s amended motion
to dismiss or alternatively to transfer venue. After a review of
the file, record and proceedings herein, and for the following
reasons, defendant’s motion is granted.
BACKGROUND
Defendant Perry Johnston (“Johnston”) is a professional
fisherman and resident of North Carolina. Plaintiff Operation
Bass, Inc., d/b/a FLW Outdoors (“FLW”), is a Kentucky corporation
that organizes fishing tournaments. This federal diversity action
arises out of Johnston’s participation in those tournaments.
1 FLW identifies FLW’s Executive Vice President and Chief
Operating Officer as the individual with whom Johnston left the
message. (Compl. ¶ 20.) Based upon other documents in the record,
the court understands that this refers to Fennell. (See Heebner
Aff. Ex. H; Johnston Aff. ¶ 12.)
2
Beginning in 2005, FLW organized the Wal-Mart FLW Kingfish
Tour (“Tour”) - a saltwater fishing tournament with four qualifying
events and a championship event in which the top fifty finishers
from the qualifying events participate. Between 2005 and 2007, FLW
held Tour events in Florida, Louisiana, Mississippi, North Carolina
and South Carolina. Johnston participated in the Tour all three
years and qualified for the championship event each year.
After the second day of the 2006 tournament, the top five
teams competed for 0,000. Johnston’s team came in sixth place,
and Johnston lodged an unsuccessful protest with the tournament
director alleging that the fifth-place team finished the day
without its captain on board in violation of the Official Kingfish
Tour Rules. In response to his unsuccessful protest, Johnston
communicated his dissatisfaction on various occasions by telephone
to FLW’s Executive Vice President and Chief Operating Officer Kathy
Fennell (“Fennell”), who was located in Kentucky.
After finishing in the top fifty in the 2007 tournament,
Johnston alleged that FLW failed to award his cash prize. As a
result, on November 9, 2007, Johnston left a voicemail message with
Fennell1 threatening to sue FLW and all of the Tour’s sponsors
unless FLW met his demands. Johnston specifically stated that:
2 Irwin Jacobs (“Jacobs”) is FLW’s Chairman and a Minnesota
resident.
3
[W]e’ll see how all your sponsors react when
they get served with a lawsuit for a fishing
tournament. I am sure they will be
ecstatically happy .... [W]e are going to turn
it over to the Associated Press and let them
know that the FLW has been sued . . . [and] I
will guarantee you that [unintelligible] when
[your sponsors] get sued, I think they will
drop any sponsorship.
(Compl. ¶ 20.) Johnston also made blog postings on November 10,
2007, and November 12, 2007, stating that he was going to sue FLW
and the Tour’s sponsors, speculating about how the sponsors would
react and indicating that he was “looking forward to seeing the
GREAT AND OMINOUS IRWIN JACOBS2 ON THE STAND.” (Id. ¶¶ 18, 19.)
Moreover, in addition to his contacts with Fennell and the blog
postings, Johnston sent at least six e-mails, mailed one package
and made at least one telephone call to Jacobs in Minnesota
regarding his grievances with FLW. In response, FLW informed its
sponsors, including Land O’Lakes, a Minnesota-based cooperative
with its principal place of business in Minnesota, about the
possibility of being named defendants in a lawsuit.
On December 13, 2007, FLW filed a complaint in the United
States District Court for the District of Minnesota seeking “a
judicial declaration that FLW has not engaged in any fraud or false
advertising, and that Johnston has no claim against FLW arising out
of his participation in the FLW 2006 and 2007 Kingfish tournament,”
4
and asserting a claim for tortious interference with prospective
business advantage. On December 28, 2007, Johnston filed suit
against FLW and Wal-Mart Stores, Inc., in North Carolina state
court, alleging breach of contract, breach of fiduciary duty and
unfair and deceptive trade practices. FLW removed the North
Carolina action to the United States District Court for the Eastern
District of North Carolina on January 30, 2008. Johnston now moves
to dismiss this action for lack of personal jurisdiction or in the
alternative to transfer venue to the Eastern District of North
Carolina.
DISCUSSION
To survive a motion to dismiss for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2),
a plaintiff must establish a prima facie case that the forum state
has personal jurisdiction over the defendant. See Stevens v.
Redwing, 146 F.3d 538, 543 (8th Cir. 1998). In the absence of an
evidentiary hearing, a court “must look at the facts in the light
most favorable to the nonmoving party and resolve all factual
conflicts in favor of that party.” Dakota Indus., Inc. v. Dakota
Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991) (citations
omitted). A federal court may assume jurisdiction over a
nonresident defendant “only to the extent permitted by the long-arm
statute of the forum state and by the Due Process Clause.” Romak
5
USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (quotations
omitted). Because the Minnesota long-arm statute “confers
jurisdiction to the fullest extent permitted by the Due Process
Clause,” the court need only consider due process requirements.
Coen v. Coen, 509 F.3d 900, 905 (8th Cir. 2007) (citation omitted).
To satisfy due process, a defendant must have “sufficient
minimum contacts” with the forum state such that maintaining the
suit “does not offend traditional notions of fair play and
substantial justice.” Romak, 384 F.3d at 984. “Sufficient
contacts exist when [a] defendant’s conduct and connection with the
forum state are such that he should reasonably anticipate being
haled into court there.” Coen, 509 F.3d at 905 (citation and
quotation omitted). A defendant should reasonably anticipate being
haled into court in a forum state within which he “purposefully
avail[ed] [him]self of the privilege of conducting activities, ...
thus invoking the benefits and protections of its laws.” Id.
(citation omitted) A court considers five factors to measure
minimum contacts: “(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.” Dever v. Hentzen
Coatings, Inc., 380 F.3d 1070, 1073-74 (8th Cir. 2004). The court
gives significant weight to the first three factors. See id.
6
Minimum contacts can establish personal jurisdiction in a
forum state under two theories: general and specific jurisdiction.
General jurisdiction is present when a defendant has “continuous
and systematic contacts with the forum state,” even if the injuries
at issue did not arise out of an action directed at the forum
state. Id. at 1073 (quotations omitted). However, because FLW
does not assert general jurisdiction, the court considers only
whether Minnesota has specific jurisdiction. A forum state has
specific jurisdiction when the cause of action “arise[s] out of” or
“relate[s] to” a defendant’s activities within that state. Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). Therefore, a
court focuses on the first and third factors discussed above. See
Coen, 509 F.3d at 905.
Over the past ten years, Johnston has only visited Minnesota
three times, and never to fish professionally. Johnston maintains
no office or staff in Minnesota, does not advertise in Minnesota
and has no sponsors located in Minnesota. Rather, Johnston’s
relevant Minnesota contacts are limited to those with Jacobs.
Although related to FLW’s claims, standing alone, such minimal
contacts are insufficient to establish personal jurisdiction in
Minnesota. See Digi-Tel Holdings, Inc. v. Proteq Telecomm., Ltd.,
89 F.3d 519, 523 (8th Cir. 1996) (no personal jurisdiction despite
numerous letters, faxes and telephone calls related to cause of
action); Red Wing Shoe Co. v. Hockerson-Halberstadt, Inc., 966 F.
7
Supp. 833, 837 (D. Minn. 1997) (“Correspondence such as letters,
facsimiles, and telephone conversations alone do not establish
personal jurisdiction.” (citation omitted)), aff’d, 148 F.3d 1355
(Fed. Cir. 1998). Further, the final two factors do not affect the
court’s determination. FLW, however, maintains that jurisdiction
is appropriate under Calder v. Jones, 465 U.S. 783 (1984), because
it alleges an intentional tort against Johnston.
When a plaintiff alleges an intentional tort, a court
evaluates additional factors to determine whether the alleged
tortfeasing defendant could “‘reasonably anticipate being haled
into court’” in the forum state. Id. at 790 (quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980)); Dakota
Indus., 946 F.2d at 1391 (“Calder requires the consideration of
additional factors when an intentional tort is alleged.”).
Specifically, a court considers whether the alleged tortfeasor
expressly aimed his intentional tortious conduct at the forum state
and “knew that the brunt of th[e] injury would be felt” by the
plaintiff in the forum state. Calder, 465 U.S. at 789-90; see also
Steinbuch v. Cutler, 518 F.3d 580, 586 (8th Cir. 2008) (alleged
tortfeasor must know plaintiff would feel brunt of injury in forum
state); Dakota Indus., Inc., 946 F.2d at 1390-91.
In this case, FLW alleges that by “issuing improper and
unlawful threats against FLW and its sponsors, [Johnston] has
wrongfully and without justification interfered with FLW’s
8
reasonable expectation of economic advantage or benefit with its
sponsors by disrupting those relationships.” (Compl. ¶ 27.)
Further, FLW argues that it feels the brunt of the harm from
Johnston’s alleged tortious conduct in Minnesota because its
principal place of business is in Minnesota and one of its sponsors
is located in Minnesota. The parties dispute whether FLW’s
principal place of business is Minnesota or Kentucky. However,
even if the court assumes that FLW’s principal place of business is
Minnesota and that as a result FLW feels the brunt of the harm
caused by Johnston’s alleged conduct in Minnesota, the record does
not establish that Johnston knew FLW would feel the brunt of the
harm in Minnesota.
Johnston’s primary contacts with FLW outside of the Tour venue
states was in Kentucky, and FLW promotes to the public and Tour
participants that it is from Kentucky. Specifically, every check
that FLW paid to Johnston came from a bank in Kentucky, Johnston
registered for part of the 2006 Tour over the phone with an FLW
representative in Kentucky and many of Johnston’s complaints
regarding the 2006 Tour were directed at Fennell in Kentucky.
Moreover, FLW’s website lists Kentucky as its main contact, the
2006 Tour advertising materials identify FLW as being located in
Kentucky, the 2006 Tour’s Captain’s Entry Form required checks to
be mailed to FLW in Kentucky and individuals interested in joining
FLW were instructed to send membership forms to Kentucky. The only
9
evidence suggesting that Johnston knew FLW had any relationship
with Minnesota is his contact with Jacobs. However, even viewing
the facts in a light most favorable to FLW, when compared to the
volume of evidence indicating that FLW is from Kentucky, Johnston’s
limited contacts with Jacobs do not establish that Johnston knew
that the brunt of the harm caused by his allegedly tortious conduct
would be felt in Minnesota. Therefore, Johnston could not
reasonably anticipate being haled into court in Minnesota, and the
court lacks personal jurisdiction.
Anticipating this result, FLW requests the opportunity to
conduct jurisdictional discovery because it “has had no opportunity
to seek discovery about Johnston’s contacts with Minnesota.” (Pl.
Br. at 14.) FLW seeks discovery specific to Johnston’s contacts
with Land O’Lakes but offers only the conclusory assertion that
such discovery “is necessary to a determination of jurisdiction in
Minnesota.” (Id.) Without more, the court cannot conclude that
jurisdictional discovery would be helpful or appropriate.
Therefore, the court denies FLW’s request. See Dever v. Hentzen
Coatings, Inc., 380 F.3d 1070, 1074 n.1 (8th Cir. 2004) (“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.”(quotation omitted)).
Where a court lacks personal jurisdiction, it may either
dismiss the matter or, in the interest of justice, transfer it “to
10
any other such court in which the action ... could have been
brought at the time it was filed.” 28 U.S.C. § 1631; Superior Edge
Inc. v. Maricopa County Cmty. Coll. Dist., 509 F. Supp. 2d 786, 795
(D. Minn. 2007). Here, litigation involving the same or similar
facts and issues has been stayed in the Eastern District of North
Carolina pending issuance of this order. Therefore, because FLW
can pursue its claims against Johnston in that action, the interest
of justice does not require transfer to another court.
Accordingly, the court dismisses this action.
CONCLUSION
Based on the above, IT IS HEREBY ORDERED that defendant’s
amended motion to dismiss plaintiff’s complaint or alternatively to
transfer venue [Doc. No. 7] is granted, and this action is
dismissed without prejudice for lack of personal jurisdiction.
LET JUDGMENT BE ENTERED ACCORDINGLY
Dated: April 18, 2008
s/David S. Doty
David S. Doty, Judge
United States District Court
 

 
 
 

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