Nomad Glob. Commc'n Sols., Inc. v. Hoseline, Inc.

NOMAD GLOBAL COMMUNICATION SOLUTIONS, INC., Plaintiff, v. HOSELINE, INC., Defendant.

HOSELINE, INC., Third-Party Plaintiff, v. TUTCO, INC., Third-Party Defendant.

CV 20-138-M-DLC

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MONTANA MISSOULA DIVISION

April 14, 2021

ORDER

Before the Court is Third-Party Defendant Tutco, Inc.'s¹ motion to dismiss Defendant Hoseline, Inc.'s Third-Party Complaint (Doc. 5) for lack of personal jurisdiction and Plaintiff Nomad Global Communication Solutions, Inc.'s motionto amend. (Docs. 18; 21.) For the following reasons, the Court grants Tutco's motion to dismiss and denies Nomad's motion to amend.

BACKGROUND²

This controversy arises from a fire that occurred in Ohio on or about December 19, 2017, when a National Guard unified command suite, referred to by the parties as a "Unified Command Suite B2 Custom Made Shelter" ("UCSb2"), ignited. (Doc. 4 at 3, 7.) The UCSb2 was assembled in Montana by Nomad, a Montana corporation, using HVAC units created by Hoseline, a Florida corporation. (Id. at 2, 5.) After the fire, Nomad furnished Hoseline with expense reports for its incurred and expected damages related to the fire remediation and filed this action against Hoseline on August 5, 2020, claiming strict products liability, breach of contract, and breach of warranty for allegedly delivering faulty HVAC components. (Id. at 9-12.)

On September 4, 2020, Hoseline answered Nomad's complaint and impleaded Tutco, a Pennsylvania limited liability company with its principal place of business in Tennessee. (Docs. 5 at 19; 25 at 2.) Nomad asserts claims against Tutco for products liability, negligence, breach of warranty, and contribution and indemnity. (Doc. 5 at 22-26.)

Tutco manufactured the open coil heater component that was eventually incorporated into the Hoseline HVAC unit alleged to have caused the fire within the UCSb2. (Doc. 5 at 19-20.) Tutco sold the open coil heater to Hoseline, and Hoseline then sold the HVAC unit to Nomad. (Id. at 20.) Tutco advertises its products nationally through its website, sells its products in Montana both directly and indirectly, and derives a portion of its annual revenue from Montana. (Id.)

In support of its motion, Tutco has filed the declaration of Richard Farrell, Tutco's former National Sales Manager. (Doc. 19-1 at 2.) Mr. Farrell's declaration states, while "Tutco has customers that may have locations in Montana," it does not "design any products specifically for use in Montana, does not market any product specifically to [or for use in] Montana . . . and does not direct any advertising specifically into Montana." (Doc. 19-1 at 2.)

Mr. Farrell also states that in 2018 and 2019, Tutco's sales to Montana businesses only accounted for .002% of its annual sales, and, as of December 11, 2020, Tutco had not made any sales to Montana businesses during the year. (Id. at 2-3.) Otherwise, according to Mr. Farrell, Tutco has little to no contacts with Montana and had no knowledge that Hoseline was selling its products to "Nomad in Montana or elsewhere." (Id. at 3-4.) Neither Hoseline nor Nomad have filed supporting affidavits or declarations opposing Tutco's motion to dismiss.

LEGAL STANDARD

Tutco's challenge is brought pursuant to Federal Rule of Civil Procedure 12(b)(2), which allows for dismissal for lack of personal jurisdiction. "[I]n ruling on a motion to dismiss for lack of personal jurisdiction, a court may consider declarations, discovery materials, and uncontroverted allegations in the complaint." Buckhorn Energy Oaks Disposal Servs., LLC v. Clean Energy Holding Co., 2017 WL 1247863, at *1 (D. Mont. Mar. 24, 2017) (CV 16-141-BLG-TJC). Importantly, Hoseline bears the burden of proving this Court has personal jurisdiction over Tutco. Schwarzenegger, 374 F.3d at 800. But because this motion is based on written filings, as opposed to an evidentiary hearing, Hoseline need only make a prima facie showing of personal jurisdiction. Id. In determining whether personal jurisdiction exists, this Court takes all uncontroverted evidence in the complaint as true and resolves conflicts between the parties regarding statements in affidavits in Hoseline's favor. Id.

DISCUSSION

I. Tutco's Motion to Dismiss (Doc. 18)

The Fourteenth Amendment's Due Process Clause limits a state court's power to exercise jurisdiction over a defendant. Ford Motor Co. v. Mont. Eighth Judicial Dist. Ct., 141 S. Ct. 1017, 1024 (2021). Personal jurisdiction may either be general or specific. Id. General jurisdiction exists "only when the defendant isessentially 'at home' in the State" and may involve claims unrelated to the forum state or the defendant's activities there. Id. (citing Goodyear-Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Specific jurisdiction exists where a defendant purposefully avails itself of the privilege of conducting activities within the forum state and an affiliation exists between the forum and the underlying controversy. Id. at 1024-25.

For personal jurisdiction to be proper, under either the general or specific frameworks, two requirements must be met: (1) the law of the forum must allow for personal jurisdiction, and (2) the exercise of jurisdiction must be constitutional. Schwarzenegger, 374 F.3d at 800. Where, as is true in this case, there is "no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which [it] sits." Id. Montana Rule of Civil Procedure 4(b)(1) serves as Montana's long-arm statute. King v. American Family Mut. Ins. Co., 632 F.3d 570, 578 (9th Cir. 2011). Critical to the adjudication of this motion, Montana's long-arm statute permits the exercise of personal jurisdiction over any person "found within the state" or who commits "any act resulting in accrual within Montana of a tort action." Mont. R. Civ. P. 4(b)(1)(B).

Tutco argues it is subject to neither general nor specific jurisdiction in Montana. (Doc. 19.) Hoseline counters that Tutco is subject to personal jurisdiction in Montana, under both the general and specific jurisdiction analyses.(Doc. 23.) Nomad, on the other hand, argues only in favor of the exercise of specific jurisdiction. (Doc. 22.) Alternatively, Hoseline and Nomad assert the Court should permit the parties to conduct jurisdictional discovery, which, they contend, is likely to yield additional relevant jurisdictional facts. (Docs. 22 at 25; 23 at 16.)

Ultimately, the Court finds that it cannot exercise personal jurisdiction over Tutco. The Court further finds that jurisdictional discovery is unlikely to yield any additional facts that would alter this conclusion. Finally, because Nomad seeks to amend its complaint only for the purpose of naming Tutco as a defendant, the amendment would be futile and its motion to amend will be denied.

A. General Jurisdiction

Tutco argues it is not subject to general jurisdiction in Montana because, under Daimler AG v. Bauman, 571 U.S. 117 (2014), its contacts with Montana are not "so constant and pervasive as to render [it] essentially 'at home' in Montana." (Doc. 19 at 6.) Hoseline maintains Tutco's business with Montana is indeed constant and pervasive because, as a world leading manufacturer of open coil heating elements, Tutco's products are constantly sold to Montana, both directly and indirectly through local distributors. (Doc. 23 at 12-13.) Hoseline further contends Tutco's annual sales estimate of .002% is misleading because it fails to consider the percentage of sales to Montana in prior years—most notably, the yearof the accident that gave rise to this lawsuit—and could still be equal to many millions of dollars. (Id.) The Court rejects Hoseline's arguments and finds general jurisdiction is lacking in this case.

Montana's long-arm statute permits a court to exercise general jurisdiction when a party is "found within the state of Montana." Milky Whey, Inc. v. Dairy Partners, LLC, 342 P.3d 13, 17 (Mont. 2015) (citing Mont. R. Civ. P. 4(b)(1)). Similarly, the due process requirement of general jurisdiction is always satisfied when a defendant is found within the forum state. Daimler, 571 U.S. at 137 ("For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home."). In this respect, Montana's long-arm statute is coextensive with the constitutionality of personal jurisdiction, and "the jurisdictional analyses under state law and federal due process are the same." King, 632 F.3d at 578-79; see also Milky Whey, 342 P.3d at 17.

A corporation is "at home" in its "place of incorporation and principal place of business." Daimler, 571 U.S. at 137. In Daimler, the Supreme Court noted a corporation might be subject to general jurisdiction somewhere other than its state of incorporation and principal place of business, but only in "an exceptional case." Id. at 139 n.19. Such an exceptional case exists "only when the corporation's affiliations with the [state] in which suit is brought are so constant and pervasive asto render it essentially at home in the forum [state]." Id. at 122 (citing Goodyear, 564 U.S. at 919).

The Supreme Court in Daimler offered Perkins v. Benguet Consol. Min. Co., 342 U.S. 437 (1952) as an example of an exceptional case. 571 U.S. at 129, 139 n.19. In Perkins, the Court found an Ohio court could exercise general jurisdiction over Benguet, a Philippines corporation with all its operations in the Philippines. Id. at 129. Benguet's only connection to the forum state was that its president moved to Ohio, where he maintained the company's files and oversaw its activities, during the Japanese occupation of the Philippines in World War II. Id. Thus, the Court held, "Ohio was the corporation's principal, if temporary, place of business." Id. at 129-30.

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