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Bellisio Foods, Inc. v. Prodo Pak Corp.: US District Court : CIVIL PROCEDURE - defendant's contacts with Minnesota arose without purposeful availment; suit dismissed

1The facts are largely undisputed. To the extent that any dispute of fact exists, the Court
recounts the facts in the light most favorable to Bellisio.
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
BELLISIO FOODS, INC.,
Plaintiff,
v.
PRODO PAK CORP. and JOHN W.
MUELLER,
Defendants.
Case No. 07-CV-4520 (PJS/JJG)
MEMORANDUM OPINION AND ORDER
George G. Eck and Mariah L. Reynolds, DORSEY & WHITNEY, LLP, for
plaintiff.
Elizabeth A. Mikesell and Bryan R. Battina, BOCK & BATTINA, LLP, for
defendants.
Plaintiff Bellisio Foods, Inc. (Bellisio) brings this breach-of-contract action against
defendants Prodo Pak Corp. (Prodo Pak) and John W. Mueller. Defendants contend that the
Court lacks personal jurisdiction over them and move to dismiss under Rule 12(b)(2) of the
Federal Rules of Civil Procedure. Defendants further contend that if the Court denies their
motion to dismiss, it should transfer venue under 28 U.S.C. 1406(a) to the United States
District Court for the District of New Jersey. For the reasons that follow, the Court grants
defendants motion to dismiss and denies as moot their alternative motion to transfer.
I. BACKGROUND1
Bellisio is a Minnesota company that manufactures prepared foods. Bellisios corporate
headquarters is apparently located in Minneapolis, Minnesota (although the companys Chief
Financial Officer, Thomas W. Knuesel, maintains offices in Duluth, Minnesota). Knuesel Aff.
The documents in the record refer to Bellisios 2 Ohio office as belonging to Michelinas,
Inc. Bellisio and Michelinas are, however, apparently the same corporate entity. Michelinas
changed its name to Bellisio some time after the events underlying this action. Joint Rule 26(f)
Rep. 1(b) [Docket No. 5]. The Court will refer to plaintiff as Bellisio throughout this opinion.
3Muellers affidavit was docketed as the fourth attachment to the affidavit of defendants
counsel, Bryan R. Battina [Docket No. 17]. The Battina affidavit itself, however, does not
indicate that Muellers affidavit is attached. Muellers affidavit also purports to have two
attachments, labeled exhibits A and B. In fact, those two exhibits are referenced by, and attached
only to, the Battina affidavit.
4The quoted text is in all capital letters in the original. Throughout this opinion, the Court
uses upper- and lowercase letters in quotations to improve legibility, regardless of whether the
quoted text appeared in all capital letters in the original.
-2-
3, 7 [Docket No. 24]. An affiliated manufacturing company, Arden International Kitchens,
LLC (Arden), is located in Lakeville, Minnesota. Shoquist Aff. 1-2 [Docket No. 25].
Bellisio also had offices in Ohio during the period relevant to this suit.2
Prodo Pak manufactures packaging machines. Mueller serves as its president. Prodo Pak
is incorporated under Delaware law, but it is located in New Jersey, which is also where Mueller
lives. Mueller Aff. 3, 6 [Docket No. 17-4].3
In 2006, Bellisio was in the market for a new machine that could package sauces and
pastes into portion-sized tubes and packets. In late September 2006, Mueller provided a proposal
to supply such a machine to Mike Banovetz, a vice president of engineering at Bellisio. Battina
Aff. Ex. A, Ex. B at 14 [Docket No. 17]. Mueller addressed the proposal to Banovetz at
Bellisios Ohio location. Battina Aff. Ex. A.
The proposal quoted a total system price, ex works Garfield, New Jersey of about
6,000. Id. at 28.4 The proposals boilerplate likewise said that quoted prices [a]re generally
f.o.b. Garfield, N.J., otherwise as specified in the quotation. Id. at 36. With respect to delivery,
-3-
the proposal did not specify a destination, but instead said: Ex. factory, Garfield, New Jersey
approximately 16 to 20 working weeks from receipt of firm order and down payment. Id. at 34.
And a section of boilerplate titled Acceptance of Orders included this provision:
This agreement and any purchase or sale arising hereunder shall be
governed, construed, and interpreted in all respects in accordance
with the laws of the State of New Jersey. Any litigation
concerning this agreement shall be under the jurisdiction of a state
or federal court located within New Jersey.
Id. at 37.
Mueller had some additional contact with Banovetz in October and November 2006.
Battina Aff. Ex. B at 14. Apparently, though, Bellisio eventually decided not to purchase the
machine quoted in Prodo Paks proposal of September 2006.
In early December, Mueller emailed Banovetz and offered to sell Bellisio a different
machine this one used, rather than new for ,000. Knuesel Aff. Ex. A. Banovetz
responded by email on December 21 and offered to pay ,000. Id. A few hours later, Mueller
replied that he would have to check with the machines owner. (Mueller was acting as a
middleman.) Battina Aff. Ex. B at 9. Mueller also asked Banovetz for his address so that
Mueller could send him a video of the machine. Id. Banovetz replied that afternoon by
providing his address at Bellisios Ohio facility, and Mueller shipped the video to Ohio that day
or the next. Id. at 8.
Later in the afternoon of December 21, Mueller emailed Banovetz to say that the
machines owners would take ,500 for it. Knuesel Aff. Ex. B. The next day, Joel Conner,
Bellisios chairman and CEO, emailed Mueller and offered ,000. Id. This is the first
communication in the record between Conner and Mueller. Although Conner is based in
5The email from Conner has the subject line Re: Fw: Used Prodo-Pak Model PV 215
and the body, in its entirety, reads: Our offer is ,000 and we can execute on Tuesday AM.
Knuesel Aff. Ex. B.
-4-
Minneapolis, his email to Mueller gave no clue about his location or about where the machine
should be delivered. Id.5
Five days later, Mueller accepted Conners ,000 offer by email. Knuesel Aff. Ex. C at
BFI 100002-03. Although Mueller sent his email to Conner, the body of the message was
addressed to Mike that is, to Banovetz. Id. Conner responded by email a few minutes later,
saying Tom Knuesel will coordinate payment . . . . please confirm receipt. Conners signature
block included his phone number, which began with the area code for Minneapolis (612). Id. As
far as the record reflects, this is the first time that Mueller received even a hint that Bellisio might
have operations outside of Ohio, and it was a rather obscure hint at that.
The next day December 27, 2006 Knuesel completed a wire transfer of ,000 to
Prodo Pak. Knuesel Aff. 5; Knuesel Aff. Ex. C at BFI 1000002 (FYI, funds wired today.).
Shortly afterward, Conner told his employees to have the machine shipped to Arden, and later the
same day an employee asked Banovetz, Has someone already made shipping arrangements?
Id. at BFI 1000001.
On the morning of January 3, 2007, Banovetz emailed Mueller to follow up on Bellisios
order for the machine. Knuesel Aff. Ex. D. (Banovetz had apparently been on vacation when
Conner and Mueller were negotiating the final price by email.) Banovetz told Mueller: We will
be shipping [the machine] to Lakeville, Minnesota. Id. Later that afternoon, Banovetz
responded to the December 27 internal email about shipping arrangements to say that he did not
know what arrangements had been made. Knuesel Aff. Ex. C at BFI 1000001. Banovetz copied
-5-
Mueller on this email and included a string of internal emails, including the email in which
Conner directed that the machine be shipped to Arden. Id.
Through these emails on January 3, Mueller learned for the first time that the machine he
had committed to sell to Bellisio, and for which Bellisio had already paid, was intended for
Arden in Lakeville, Minnesota. Knuesel and Daniel Shoquist, a purchaser at Arden, both imply
in their affidavits that Mueller learned the intended place of delivery earlier. Knuesel says: It is
my understanding that Defendants promised to deliver [the machine] to . . . Lakeville, Minnesota,
within four to six weeks from their receipt of the ,000 wire transfer. Knuesel Aff. 5.
Similarly, Shoquist says: It was my understanding that [the machine] would be delivered to . . .
Lakeville, Minnesota within four to six weeks after Defendants received payment from Bellisio
Foods, Inc. Shoquist Aff. 4. But these statements are not competent evidence of when
Mueller knew that the machine was bound for Minnesota, because Knuesel and Shoquist claim to
have only an understanding, and not personal knowledge, of when Mueller agreed to ship the
machine to Arden. Cf. Fed. R. Civ. P. 56(e)(1) (providing, with respect to summary-judgment
motions, that [a] supporting or opposing affidavit must be made on personal knowledge, set out
facts that would be admissible in evidence, and show that the affiant is competent to testify on
the matters stated.). Indeed, implicitly recognizing the weakness of these affidavits, Bellisios
counsel conceded at oral argument that Mueller did not learn of the machines destination until
January 3, 2007.
From January through early March 2007, Shoquist had several phone conversations with
Mueller and his secretary about delivery of the machine. Shoquist Aff. 6. In late February or
early March, however, Mueller told Shoquist that he would be unable to deliver the machine
6Rule 12(b) provides that a motion asserting any of the defenses listed in that section
including the defense of lack of personal jurisdiction must be made before pleading if a
responsive pleading is allowed. Fed. R. Civ. P. 12(b). Rule 12(b) thus suggests that if a
defendant seeks to challenge the personal jurisdiction of the court, the defendant must do so in a
motion brought before it files an answer. See 10A Charles Alan Wright et al., Federal Practice
and Procedure: Civil 1361 at 93 (3d ed. 1998) (A strict interpretation of the timing
provisions language leads to the conclusion that the district judge must deny any Rule 12(b)
motion made after a responsive pleading is interposed as being too late.) In this case,
defendants filed an answer before moving to dismiss. Arguably, then, they waived their
personal-jurisdiction defense.
As this Court has explained elsewhere, though, such a reading of Rule 12(b) is at odds
with other sections of Rule 12, which suggest that a defendant does not have to assert a personaljurisdiction
defense by raising it in a pre-answer motion, but instead can preserve the defense by
including it in the answer. See Pope v. Elabo, GmbH, No. 06-CV-0516 (PJS/JJG), slip op.
(D. Minn. Nov. 4, 2008). Bellisio has not argued that Prodo Pak or Mueller filed its motion too
late, but, even if Bellisio had done so, federal courts have allowed untimely motions if the
defense has been previously included in the answer. 5C Charles Alan Wright et al., Federal
Practice and Procedure: Civil 1361 at 93-94 (3d ed. 2004) (footnote omitted). Prodo Pak and
Mueller included the defense of lack of personal jurisdiction in their answer, see Ans. to Second
Am. Compl. 13 [Docket No. 14], and they have done nothing to waive that defense under Rule
12(h)(1). Thus the Court finds that they are not precluded from asserting the defense.
-6-
because its owner, an Australian company, had sold it to someone else. Id. 7. Mueller
promised to return Bellisios ,000 payment. Id. 8. Knuesel then followed up by email on
March 22 and April 4, asking Mueller to return the ,000 and providing him the bank
information necessary to complete a wire transfer to Bellisio. Knuesel Aff. Ex. E.
Mueller did not refund Bellisios money. In June 2007, Bellisio filed this suit in state
court, and Prodo Pak and Mueller removed it to this Court.
II. ANALYSIS
A. Personal Jurisdiction
1. General Principles
Defendants have moved under Rule 12(b)(2) to dismiss for lack of personal jurisdiction.6
When personal jurisdiction is contested, the plaintiff must ultimately prove, by a preponderance
7The requirement that the exercise of personal jurisdiction must be consistent with the
(continued...)
-7-
of the evidence, facts establishing that the court has personal jurisdiction over the defendant.
Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). But the
plaintiff need not do so until trial or until the court holds an evidentiary hearing. Id. When a
district court considers only affidavits or other written evidence in connection with a Rule
12(b)(2) motion, the plaintiff need only make a prima facie showing of jurisdiction. Block
Indus. v. DHJ Indus., Inc., 495 F.2d 256, 259 (8th Cir. 1974); see also Dever v. Hentzen
Coatings, Inc., 380 F.3d 1070, 1072 (8th Cir. 2004) (citing Block Industries). But the plaintiff
attempting to make this prima facie showing like the defendant seeking dismissal cannot
rely on pleadings alone. Instead, the parties must present affidavits or other evidence outside of
the pleadings. Block Indus., 495 F.2d at 260 (The 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.). In weighing that evidence, the 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., 946 F.2d at 1387 (citation omitted). As long as there is some evidence upon
which a prima facie showing of jurisdiction may be found to exist, the Rule 12(b)(2) motion
will be denied. Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th
Cir. 1977); see also Watlow Elec. Mfg. Co. v. Patch Rubber Co., 838 F.2d 999, 1000 (8th Cir.
1988) (citing Aaron Ferer & Sons).
As a general rule, a federal court sitting in diversity can exercise personal jurisdiction
over a defendant only if doing so comports with both the long-arm statute of the state in which
the federal court is located7 and the Due Process Clause of the Fourteenth Amendment. See
7(...continued)
forum states long-arm statute is imposed by Rule 4(k) of the Federal Rules of Civil Procedure.
Fed. R. Civ. P. 4(k).
-8-
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 463 (1985); Pecoraro v. Sky Ranch for Boys,
Inc., 340 F.3d 558, 561 (8th Cir. 2003); see also Pope v. Elabo, GmbH, No. 06-CV-0516
(PJS/JJG), slip op. at 9 n.7. (D. Minn. Nov. 4, 2008). Because Minnesotas long-arm statute
(Minn. Stat. 543.19) reaches as far as the Constitution allows, the Court need only consider
whether exercising personal jurisdiction over Prodo Pak and Mueller is consistent with due
process. See Minn. Mining & Mfg. Co. v. Nippon Carbide Indus. Co., 63 F.3d 694, 697 (8th
Cir. 1995); Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 410-11 (Minn. 1992).
The Supreme Court held in International Shoe Co. v. Washington that exercising
jurisdiction over a defendant is constitutionally permissible only if the defendant has certain
minimum contacts with [the forum state] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice. 326 U.S. 310, 316 (1945) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This formulation suggests an equivalence between
minimum contacts and fair play and substantial justice that is, it implies that the
minimum level of contacts constitutionally required to support personal jurisdiction equals the
level of contacts called for by traditional notions of fair play and substantial justice.
Subsequent Supreme Court cases, however, have clarified that minimum contacts and
fair play and substantial justice are separate, though related, requirements. Specifically,
Burger King Corp. v. Rudzewicz explained: Once it has been decided that a defendant
purposefully established minimum contacts within the forum State, these contacts may be
considered in light of other factors to determine whether the assertion of personal jurisdiction
-9-
would comport with fair play and substantial justice. 471 U.S. 462, 476 (1985) (emphasis
added; quotations omitted). Put another way, minimum contacts alone will not support personal
jurisdiction if, because of other factors, the exercise of jurisdiction would not comport with fair
play and substantial justice that is, if exercising jurisdiction would be unreasonable. See
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113-16 (1987) (part II-B); Burger King,
471 U.S. at 477-78 ([M]inimum requirements inherent in the concept of fair play and
substantial justice may defeat the reasonableness of jurisdiction even if the defendant has
purposefully engaged in forum activities.); Falkirk Mining Co. v. Japan Steel Works, Ltd., 906
F.2d 369, 374 (8th Cir. 1990).
Thus, a federal court must engage in a two-part analysis in determining whether it has
personal jurisdiction over a defendant in a diversity case. First, the court must determine whether
the defendant has minimum contacts with the forum state. If it does not, the analysis is at an end;
the court cannot exercise jurisdiction. If it does, the court moves to the second step of the
analysis: determining whether the exercise of jurisdiction over the defendant would comport
with fair play and substantial justice. Burger King, 471 U.S. at 476 (quotations omitted). The
first step might be referred to as the minimum contacts analysis, while the second step might
be referred to as the reasonableness analysis.
a. Step One: Minimum Contacts
To determine whether minimum contacts exist, a court must focus on the defendants
actions: [T]he constitutional touchstone remains whether the defendant purposefully
established minimum contacts in the forum State. Id. at 474. A corollary of this principle is
that [t]he unilateral activity of those who claim some relationship with a nonresident defendant
cannot satisfy the requirement of contact with the forum State. Hanson v. Denckla, 357 U.S.
-10-
235, 253 (1958); see also Burger King, 471 U.S. at 474 (quoting Hanson). It follows that even if
it was foreseeable to a defendant that a third partys actions would bring the defendants product
into a foreign state where the product might injure someone, personal jurisdiction in that state
cannot be based solely on such foreseeability. Burger King, 471 U.S. at 474; World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-96 (1980).
Instead, personal jurisdiction arises only if the defendants conduct and connection with
the forum State are such that he should reasonably anticipate being haled into court there.
World-Wide Volkswagen, 444 U.S. at 297; see also Burger King, 471 U.S. at 474. This
statement, however, is nothing more than a conclusion. It provides that personal jurisdiction
arises if the defendant reasonably anticipates being haled into a states courts, but that begs the
question of when a defendant should reasonably anticipate being haled into a states courts.
What is missing is an explanation of what kind of activities create a reasonable expectation of
being haled into court.
That explanation is found in the Courts purposeful availment requirement: [I]t is
essential in each case that there be some act by which the defendant purposefully avails itself of
the privilege of conducting activities within the forum State, thus invoking the benefits and
protections of its laws. Hanson, 357 U.S. at 253; Burger King, 471 U.S. at 475 (quoting
Hanson and discussing purposeful availment requirement). The purposeful-availment
requirement is therefore the key requirement that, if met, establishes that a defendant has
minimum contacts with a forum.
It follows from the purposeful-availment requirement that a defendant will not be haled
into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts, or of the
unilateral activity of another party or a third person. Burger King, 471 U.S. at 475 (citations
-11-
and quotations omitted). The insufficiency of such contacts or activities to support jurisdiction is
not an independent jurisdictional principle. Rather, such insufficiency is a consequence of
that is, a necessary corollary of the purposeful-availment requirement. A defendant whose
contacts with a state are entirely random, fortuitous, or attenuated by definition has not
purposefully availed itself of the benefits and protections of the states laws.
b. Step Two: Reasonableness
Having satisfied itself that the purposeful-availment requirement is met and thus that the
defendant has minimum contacts with the forum state, the court must, in the second step of the
analysis, ask whether the exercise of personal jurisdiction over the defendant would nevertheless
be so unreasonable as to violate the Due Process Clause. The Supreme Court has identified five
factors that are relevant to reasonableness: (1) the burden on the defendant; (2) the forums
interest in adjudicating the dispute; (3) the plaintiffs interest in obtaining convenient and
effective relief; (4) the interstate judicial systems interest in efficient dispute resolution; and
(5) the shared interest of the several States in furthering fundamental substantive social
policies. World-Wide Volkswagen, 444 U.S. at 292; see also Asahi Metal, 480 U.S. at 113
(citing World-Wide Volkswagen). In particular, the first of these factors the burden on the
defendant is to be weighed against the other four in assessing the reasonableness of exercising
personal jurisdiction over the defendant. World-Wide Volkswagen, 444 U.S. at 292.
These five reasonableness factors must then be considered in conjunction with the
defendants contacts with the forum. If the reasonableness factors point toward jurisdiction
for instance, if the burden on the defendant is light while the plaintiffs and forums interests are
substantial then personal jurisdiction will comport with due process even if the defendants
contacts with the jurisdiction are relatively few. Burger King, 471 U.S. at 477. But if the
The Eighth Circuit regularly lists the following 8 five factors to be considered in personaljurisdiction
cases: (1) the nature and quality of the defendants contacts with the forum; (2) the
quantity of those contacts; (3) the relation of the cause of action to the contacts; (4) the forum
states interest in the case; and (5) the convenience of the parties. See, e.g., Romak USA, Inc. v.
Rich, 384 F.3d 979, 984 (8th Cir. 2004); Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE)
(continued...)
-12-
reasonableness factors point strongly away from jurisdiction, this may defeat the reasonableness
of jurisdiction even if the defendant has purposefully engaged in forum activities. Id. at 478.
Instances in which jurisdiction is unreasonable despite purposeful availment by the defendant
will likely be rare, however, because where a defendant who purposefully has directed his
activities at forum residents seeks to defeat jurisdiction, he must present a compelling case that
the presence of some other considerations would render jurisdiction unreasonable. Id. at 477
(emphasis added); see also Asahi Metal, 480 U.S. at 114 (When minimum contacts have been
established, often the interests of the plaintiff and the forum in the exercise of jurisdiction will
justify even the serious burdens placed on the alien defendant.).
It follows from these various rules and principles that whether personal jurisdiction
comports with due process can be analyzed by asking: First, did the defendant purposefully avail
itself of the benefits and privileges of conducting activities in the forum? (This is the minimum
contacts part of the analysis.) If not if the defendants contacts were fortuitous or resulted
from a third partys actions (i.e., were attenuated) then the court lacks personal jurisdiction
over the defendant. But if the purposeful-availment requirement is met, the second question is:
Has the defendant provided a compelling reason why jurisdiction would be unfair that is, has
the defendant shown that the burdens on it far outweigh the interests of the forum, the plaintiff,
and the judicial system? (This is the reasonableness part of the analysis.) If not, then the Due
Process Clause permits the court to exercise personal jurisdiction over the defendant.8
8(...continued)
Ltd., 89 F.3d 519, 522-23 (8th Cir. 1996). The Eighth Circuit has not explained precisely how
these factors relate to the two distinct analyses minimum contacts and reasonableness
required by the Supreme Court, but it has described the first three factors as primary and the
latter two as secondary. See, e.g., Digi-Tel, 89 F.3d at 523.
It appears to this Court that the first two Eighth Circuit factors go primarily to whether
minimum contacts exist between the defendant and the forum. In other words, to determine
as the Supreme Court requires whether a defendant has purposefully availed itself of the
privilege of conducting activities in the forum, a court must look at the quantity and quality of the
defendants contacts with the forum. It also appears that the fourth and fifth factors go to the
reasonableness of exercising jurisdiction. Indeed, these two factors are already subsumed within
the five factors that the Supreme Court has said must be considered in assessing reasonableness.
See World-Wide Volkswagen, 444 U.S. at 292; see also Asahi Metal, 480 U.S. at 113. The third
factor, as the Eighth Circuit has explained, merely distinguishes general from specific
jurisdiction. See, e.g., Digi-Tel, 89 F.3d at 523 n.4.
Because the Eighth Circuits five-factor test simply restates some of the factors identified
by the Supreme Court, the Court will not separately address the Eighth Circuits formulation.
Needless to say, though, as this Court undertakes the analysis dictated by the Supreme Court,
each of the factors identified by the Eighth Circuit will be considered.
-13-
2. Application of General Principles
Bellisio contends that Prodo Pak and Mueller had extensive contacts with Minnesota in
connection with the aborted sale of the packaging machine. But almost all of those contacts took
place after Bellisio and Prodo Pak had already entered into a contract for sale of the machine.
Those post-contract contacts do not show that defendants purposefully availed themselves of the
privilege of doing business in Minnesota.
All of the initial negotiations between Prodo Pak and Bellisio were conducted between
Banovetz, in Ohio, and Mueller, in New Jersey. There is no evidence that Mueller had any idea,
before he committed to sell a used packaging machine to Bellisio and accepted payment for that
machine, that Bellisio had a plant in Minnesota.
Indeed, to the extent that the record discloses defendants expectations about where a
contract of sale might be performed, there is evidence that Prodo Pak intended to perform in New
9A leading treatise on the Uniform Commercial Code explains F.O.B. delivery terms as
follows:
In an important class of cases, the contract will either require or
authorize the seller to ship the goods, but will not require the seller
to deliver them at a particular location. The most common of these
are contracts that include the symbols F.O.B. sellers plant or
F.O.B. sellers city. The place of delivery in such contracts (and
those that include equivalent language) is the place where the
facilities of sellers carrier are located, for the seller must put the
goods into the possession of the carrier. In the jargon of
commercial lawyers, a contract that authorizes the seller to send the
goods to the buyer but does not require that the seller deliver them
at any particular destination is called a shipment contract.
Generally, in shipment contracts, risk of loss passes to the buyer at
the point of shipment, which is also the point of delivery . . . .
1 James J. White and Robert S. Summers, Uniform Commercial Code 3-5 at 207-08 (5th Ed.
2006) (quotation and footnote omitted).
-14-
Jersey. In its initial proposal to Banovetz, Prodo Pak offered to sell the machine to Bellisio
f.o.b. or ex works Garfield, New Jersey. Battina Aff. Ex. A. at 28, 34, 36. Such terms
would have obligated Prodo Pak to deliver the machine in New Jersey, not elsewhere. See, e.g.,
Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819-20 (8th Cir. 1994).9 The machines
ultimate destination was, therefore, a matter of indifference to Prodo Pak under the initial
proposal. Further, the proposal specified that any related litigation would take place in New
Jersey. Although the proposal was not accepted by Bellisio, it provides some evidence about
defendants expectations with respect to the contract that the parties eventually entered.
Specifically, the proposal provides support for the proposition that defendants (at least initially)
did not expect to be haled into court outside of New Jersey, let alone in Minnesota.
Of course, Bellisio did not ultimately agree to buy a new machine manufactured at Prodo
Paks New Jersey plant, but instead agreed to buy a used machine in a deal brokered by Mueller.
The record is not clear whether Mueller expected to have that machine delivered to the New
-15-
Jersey plant or instead directly to Bellisio. But nothing in the record suggests that, at the time
that Mueller entered into the contract with Bellisio, he had reason to believe that the machine
would be delivered to Minnesota. It is true that Conner made his final offer to buy the machine
for ,000 from Minnesota but Mueller did not know this when he accepted the offer. One
does not purposefully avail oneself of the privilege of doing business in Minnesota by negotiating
a contract with someone who is secretly a Minnesota resident.
The very function of the purposeful-availment requirement is to ensure that defendants
are able to decide freely whether to engage in actions that might subject them to jurisdiction in a
foreign forum. This is why the availment must be purposeful rather than fortuitous, random, or
attenuated. As World-Wide Volkswagen held, due-process-based limitations on personal
jurisdiction allow[] potential defendants to structure their primary conduct with some minimum
assurance as to where that conduct will and will not render them liable to suit. 444 U.S. at 297.
In particular, a defendant that purposefully avails itself of the privilege of conducting activities in
a particular state can act to alleviate the risk of burdensome litigation by procuring insurance,
passing the expected costs on to customers, or, if the risks are too great, severing its connection
with the State. Id. And a defendant can entirely avoid the risk of burdensome litigation by
refusing to do business with the states citizens in the first place.
But by the time Mueller learned, on January 3, 2007, that the machine was destined for
Arden in Minnesota, he could not freely choose whether to deliver the machine to a carrier for
shipment to Minnesota. Prodo Pak had agreed to sell the machine to Bellisio for ,000, and
the parties had not specified a delivery term. If Prodo Pak had wanted to avoid any connection
with Minnesota, it could have done so only by breaching its contract to sell the machine to
-16-
Bellisio. In effect, Prodo Pak and Mueller were trapped into doing business with a Minnesota
resident.
This case is therefore very different from Papachristou v. Turbines, Inc., 902 F.2d 685
(8th Cir. 1990), on which Bellisio relies. Bellisio Mem. Opp. Mot. Dism. at 8 [Docket No. 23].
Papachristou involved an agreement between Papachristou and Turbines, Inc. to jointly buy an
airplane engine located in Texas. Papachristou was located in Arkansas, and Turbines was
located in Indiana. They agreed that Turbines would ship the engine from Texas to Arkansas but,
as it turns out, they disagreed over whether some part of it then would be shipped onward to
Indiana. When a Turbines employee tried to drop off part of the engine with Papachristou in
Arkansas, he refused delivery, contending that he should get the whole engine. Id. at 686.
Papachristou then sued Turbines for breach of contract.
The Eighth Circuit held that Turbines single attempted delivery of the engine in
Arkansas was sufficient to support personal jurisdiction over Turbines in Arkansas in
Papachristous breach-of-contract suit. The court said:
The side trip to Marion[, Arkansas], which can hardly be called
accidental, was for the purpose of carrying out the contract that the
parties had previously made. Surely the place of delivery is a
material term of the contract, in this case placing the expense of
delivery on the seller. The contact with Arkansas was on a single
occasion, but the contract in suit was for a single piece of property.
Id. As this passage makes clear, Turbines knew when it contracted with Papachristou that the
engine was to be delivered in Arkansas, and Turbines was responsible for the costs of the
delivery. Accordingly, Turbines purposefully availed itself of the privilege of doing business in
Arkansas.
10At oral argument, Bellisio contended that Mueller, by agreeing and then failing to return
,000 to Bellisio, committed the independent tort of fraudulent misrepresentation. Bellisio
argued that this tort claim provides a basis for jurisdiction over defendants.
Setting aside the dubiousness of such a claim Bellisio could not explain how it relied
to its detriment on Muellers representation about refunding its money Bellisio does not raise
the claim in the amended complaint. The Court therefore need not consider whether a
fraudulent-misrepresentation claim against defendants arising out of contacts that did not occur
until after the contract was breached could support the Courts exercise of personal jurisdiction.
-17-
In this case, by contrast, the place of delivery was not specified when Bellisio and Prodo
Pak entered into their contract of sale, and there is no evidence that Prodo Pak was responsible
for delivery costs. Moreover, as noted, there is no evidence that defendants even knew that
Bellisio had a connection to Minnesota until after defendants had already entered into the
contract and accepted payment for the machine. Defendants connection to Minnesota was
therefore inadvertent, not purposeful; it resulted from the unilateral decision of Bellisio that the
machine should be shipped to Arden. Cf. Scullin Steel Co. v. Natl Ry. Utilization Corp., 676
F.2d 309, 314 (8th Cir. 1982) (The use of interstate facilities (telephone, the mail), the making
of payments in the forum state, and the provision for delivery within the forum state are
secondary or ancillary factors and cannot alone provide the minimum contacts required by due
process.).
The post-contract communications between defendants and Bellisio do not change this
analysis. Those contacts all arose after the initial contract of sale, by which time defendants had
little choice but to deal with Bellisios Minnesota staff. Further, the parties discussions about a
refund of the sale price are analogous to settlement discussions, which are generally not
considered contacts for jurisdictional purposes.10 See Digi-Tel Holdings, Inc. v. Proteq
Telecomms. (PTE) Ltd., 89 F.3d 519, 524 (8th Cir. 1996) ([C]ourts have hesitated to use
unsuccessful settlement discussion as contacts for jurisdictional purposes.); KSTP-FM, LLC v.
11The Court agrees with Bellisio that defendants have not asked for a transfer under 28
U.S.C. 1404(a), which applies when venue is proper in the court in which the case was filed but
the interest of justice support transferring the case to a different district where it could have
been brought.
12Bellisio could have moved for a transfer under 28 U.S.C. 1406(a) or 28 U.S.C. 1631
in the event that it lost on the jurisdictional question. See 14D Charles Alan Wright et al.,
Federal Practice and Procedure: Civil 3827 at 568 (3d ed. 2007) (Section 1406(a) is broad
enough to authorize the transfer of a case whether the court in which it was filed had personal
jurisdiction over the defendants or not.) (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466
(1962). But Bellisio did not do so.
-18-
Specialized Commcns, Inc., 602 N.W.2d 919, 925 (Minn. Ct. App. 1999) ([I]t would be
inappropriate to treat [the defendants] subsequent contacts with Minnesota as a basis for
exerting personal jurisdiction when those contacts occurred solely as part of an effort to settle a
dispute.).
Because defendants did not purposefully avail themselves of the privilege of doing
business in Minnesota, the Court need not consider whether exercising personal jurisdiction over
them might otherwise be reasonable. Without purposeful availment on the part of defendants,
the Due Process Clause does not permit the Court to exercise jurisdiction over them.
B. Venue
Defendants assert that venue is improper and move the Court, if it does not grant their
motion to dismiss, to transfer this action under 28 U.S.C. 1406(a) to the United States District
Court for the District of New Jersey.11 Def. Mem. Supp. Mot. Dism. or Transfer at 2 [Docket
No. 16]. Because the Court grants defendants motion to dismiss, their motion for transfer is
moot.12
-19-
ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1. The motion of defendants Prodo Pak Corp. and John W. Mueller to dismiss for
lack of personal jurisdiction [Docket No. 20] is GRANTED.
2. The alternative motion of defendants Prodo Pak Corp. and John W. Mueller to
transfer [Docket No. 20] is DENIED AS MOOT.
3. Plaintiffs complaint is DISMISSED WITHOUT PREJUDICE for lack of
personal jurisdiction.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: November 4 , 2008 s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge
 

 
 
 

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