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J.D. Heiskel Holdings, LLC v. Trans Coastal Supply Co., Inc.

United States District Court, D. Nebraska

February 20, 2015

J.D. HEISKEL HOLDINGS, LLC, Plaintiff,
v.
TRANS COASTAL SUPPLY CO., INC., Defendant.

MEMORANDUM AND ORDER

LAURIE SMITH CAMP, Chief District Judge.

This matter is before the Court on the Motion to Dismiss (Filing No. 14) filed by Defendant Trans Coastal Supply Co., Inc. For the reasons stated below, the Motion will be granted, and this case will be dismissed for lack of personal jurisdiction.

FACTUAL BACKGROUND

A. Nature of the Dispute

This case arises out of a dispute over contracts between J.D. Heiskel Holdings, LLC ("JDH") and Trans Coastal Supply Co., Inc. ("Trans Coastal") for the sale of an ethanol by-product known as dried distiller's grain with soluables ("DDGS"). (Compl., Filing No. 1 ¶¶ 6-14.) JDH is a Nebraska limited liability company with its principal place of business in Tulare, California, and its chief trading office in Elkhorn, Nebraska. (Id. ¶ 1.) JDH is engaged in the grain and commodity trading business and conducts a livestock feed manufacturing operation. (Id. ¶ 6.) JDH has regularly sold and distributed DDGS to companies throughout the United States, including Trans Coastal. (Id. ) Trans Coastal is an Illinois corporation with its principal place of business in Decatur, Illinois. (Id. ¶ 2.) Trans Coastal is engaged in the agribusiness industry as an exporter of agricultural commodities including DDGS. (Id. ¶ 7.)

On or about December 11, 2013, JDH and Trans Coastal entered into Contract 185052 for the sale and shipment of approximately 4, 200 tons of DDGS. (Id. ¶ 8.) The following year, on or about July 22, 2014, JDH and Trans Coastal entered into Contract 83114 wherein the parties agreed that JDH would ship and sell approximately 20, 000 tons of DDGS to Trans Coastal. (Id. ¶ 9.) After completing the shipments, JDH sent Trans Coastal an A/R Customer Acknowledgement form to collect the balance due under Contract 83114 and Contract 185052. (Id. ¶¶ 10-11.) Payment under Contract 83114 in the amount of $420, 375.00 was due on August 31, 2014. (Id. ¶ 10.) Payment under Contract 185052 for $232, 500.00 was also due on August 31, 2014. (Id. ¶ 11.) (Contract 185052 and Contract 83114 will be referred to collectively in this Memorandum and Order as the "Contracts".) JDH alleges that Trans Coastal failed to make timely payment to JDH under the Contracts. (Id. ) JDH alleges both Contracts are in breach and seeks $653, 025.65 in damages. (Id. ¶ 19.)

B. Interaction Between the Parties and the State of Nebraska

Trans Coastal is not registered to do business in Nebraska, and does not have a registered agent in Nebraska. (Moses Aff., Filing No. 16-1 ¶¶ 14-15.) Trans Coastal has never owned or leased real or personal property in Nebraska and has never maintained an office there. (Id. ¶¶ 16-18.) All of Trans Coastal's employees reside and work in Illinois, Kansas, Missouri, or Minnesota, and Trans Coastal has never maintained an office in Nebraska. (Id. ¶¶ 17-18.) None of Trans Coastal's shareholders resides in Nebraska, nor has it ever derived income from Nebraska. (Id. ¶¶ 19-20.) Trans Coastal has never advertised for business in Nebraska and maintains that it has never initiated any communications with anyone in Nebraska, including JDH.[1] (Id. ¶¶ 22-26.)

The Contracts in this case were brokered in locations outside Nebraska, including Houston, Texas; Bangor, Maine; Kansas City, Missouri; and McMinnville, Oregon. (Moses Aff., Filing No. 16-1 ¶¶ 31-32.) All DDGS purchased by Trans Coastal from JDH was delivered to Channahon, Illinois; Elwood, Illinois; or Kansas City, Kansas. (Id. ¶ 34; see also Filing No. 16-3.) To purchase the DDGS, Trans Coastal applied for and received credit from JDH. The credit application and approval were conducted in Nebraska and Trans Coastal used its credit to purchase large quantities of DDGS from JDH. (Filing No. 18 at 3.) However, the applications for credit state that the terms and conditions of the parties' credit agreements were to be carried out in Tulare, California. (Trans Coastal Credit App., Filing No. 25-3 at ECF 1, 2, 3.) The parties do not dispute that Trans Coastal has purchased up to 3.9 million dollars' worth of DDGS from JDH over the past two years. (Filing No. 25-2 ¶ 8.)

STANDARD OF REVIEW

To survive a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), "the plaintiff must state sufficient facts in the complaint to support a reasonable inference that defendants may be subjected to jurisdiction in the forum state." Steinbuch v. Cutler, 518 F.3d 580, 585 (8th Cir. 2008). When jurisdiction has been challenged, "the plaintiff has the burden of proving facts supporting personal jurisdiction, " Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1090 (8th Cir. 2008), but a plaintiff need only "establish[] a prima facie case" that personal jurisdiction exists. Steinbuch, 518 F.3d at 585. The plaintiff's showing is "tested, not by the pleading alone, but by the affidavits and exhibits presented" in support of and in opposition to the motion to dismiss for lack of personal jurisdiction. Coen v. Coen, 509 F.3d 900, 904-05 (8th Cir. 2007) (internal quotations omitted). When considering these evidentiary materials, the Court must view the facts in the light most favorable to the plaintiff and resolve all factual conflicts in the plaintiff's favor. Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991).

In determining whether this Court has personal jurisdiction over a nonresident defendant, two issues are presented: (1) whether the requirements of the Nebraska long-arm statute are satisfied and (2) whether the exercise of jurisdiction over this Defendant will violate the Fourteenth Amendment Due Process Clause. Coen, 509 F.3d at 905. Because Nebraska's long-arm statute, Neb. Rev. Stat. § 25-536, [2] has been interpreted to extend jurisdiction over nonresident defendants to the fullest degree allowed by the Due Process Clause of the United States Constitution, Wagner v. Unicord Corp., 526 N.W.2d 74, 77-78 (Neb. 1995), the Court need only determine whether the assertion of jurisdiction offends constitutional limits.

In order to exercise personal jurisdiction over a nonresident defendant, due process requires that the defendant have "minimum contacts" with the forum state such that maintenance of a suit against that defendant does not offend "traditional notions of fair play and substantial justice.'" Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). A defendant's minimum contacts with the forum state "must exist either at the time the cause of action arose, the time the suit is filed, or within a reasonable period of time immediately prior to the filing of the lawsuit." Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558, 562 (8th Cir. 2003).

"The Supreme Court has recognized two theories for evaluating personal jurisdiction: general and specific jurisdiction." Steinbuch, 518 F.3d at 586 (citing Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984)). "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." Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir. 2004) (quoting Helicopteros, 466 U.S. at 415-16); see also Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir. 1994) (alteration in original) (quoting Sondergard v. Miles, Inc., 985 F.2d 1389, 1392 (8th Cir. 1993)) ("[g]eneral jurisdiction... 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.'") On the other hand, under the theory of specific jurisdiction, "the injury giving rise to the lawsuit [must have] occurred within or had some connection to the forum state." Dever, 380 F.3d at 1073 (citing Helicopteros, 466 U.S. at 414; Bell Paper Box, Inc. v. U.S. Kids, Inc., 22 F.3d 816, 819 (8th Cir. 1994)). In other words, a court will have specific jurisdiction over a cause of action "arising from or related to a defendant's actions within the forum state." Bell Paper Box, 22 F.3d at 819 (quoting Sondergard, 985 F.2d at 1392) (internal marks omitted).

Under either theory, the defendant must have committed "some act by which the defendant purposely avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Dever, 380 F.3d at 1073 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958) (internal marks omitted)); see also Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985) (citing Hanson, 357 U.S. at 253). The defendant's "purposeful availment must be sufficient to provide the defendant with fair warning that his activities might result in his being haled into court in that jurisdiction." Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006) (citing Porter v. Berall, 293 F.3d 1073, 1075 (8th Cir. 2002)). In other words, the defendant's contacts with the forum state must not be "random, " "fortuitous, " "attenuated, " or the result of the "unilateral activity of another party or a third person." Burger King, 471 U.S. at 475 (quotations and citations omitted). Once it has been determined that the nonresident defendant purposefully established minimum contacts with the forum state, such contacts must be analyzed in light of other factors to determine whether the exercise of personal jurisdiction over the nonresident defendant comports with "fair play and substantial justice." Id. at 476 (quotations and citation omitted).

Keeping the foregoing principles in mind, the Eighth Circuit instructs courts to consider the following factors to determine whether jurisdiction comports with due process: "(1) the nature and quality of the contacts with the forum state; (2) the quantity of those 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." Coen, 509 F.3d at 905 (quotations and citation omitted).[2] The third factor-the relation of the cause of action to the contacts-refers to the distinction between specific and general jurisdiction. Id. In applying these factors, the central inquiry is the "relationship among the defendant, the forum, and the litigation." Land-O-Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir. ...


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