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Zon Led, LLC v. Power Partners, Inc.

United States District Court, W.D. Oklahoma

September 19, 2017

ZON LED, LLC, Plaintiff,
v.
POWER PARTNERS, INC.; et al., Defendants.

          ORDER

          TIMOTHY D. DEGIUSTI, UNITED STATES DISTRICT JUDGE.

         Before the Court is Defendant Power Partners, Inc.'s Motion to Dismiss Amended Complaint [Doc. No. 43], filed pursuant to Fed.R.Civ.P. 12(b)(2), (b)(6) and (c) and Fed.R.Civ.P. 9(b). As one ground for dismissal, Power Partners, Inc. (“Power Partners”) asserts a lack of personal jurisdiction in this forum because it is a nonresident defendant with insufficient contacts to the State of Oklahoma to satisfy due process. “Jurisdiction is a threshold question that a federal court must address before reaching the merits of a [case], even if the merits question is more easily resolved and the party prevailing on the merits would be the same as the party that would prevail if jurisdiction were denied.” Montoya v. Chao, 296 F.3d 952, 955 (10th Cir. 2002) (citing Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 93-94 (1998)); see Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999) (personal jurisdiction). Thus, the Court must decide the jurisdictional question raised by Power Partners before reaching any merits issues presented by the Motion.[1]

         Plaintiff Zon LED, LLC has filed a response [Doc. No. 51] in opposition to the Motion, and Power Partners has filed a reply brief [Doc. No. 55] and a supplemental exhibit [Doc. No. 60]. The Motion is fully briefed and ripe for decision.[2]

         Factual and Procedural Background

         Plaintiff brings suit to recover damages allegedly caused by the failure of two LED power supply products or “drivers” sold by Power Partners, which is a Massachusetts corporation located in Massachusetts. Power Partners distributes products manufactured by others; the drivers were produced by a Chinese company, Inventronics, Inc., which was a named defendant in this case but was dismissed for lack of service. See 4/28/17 Order [Doc. No. 63]. Plaintiff has also sued Inventronics USA, Inc., which is an Oklahoma corporation located in Oklahoma City and alleged to be the “United States presence” and “a distribution center” for Inventronics, Inc. See Am. Compl. [Doc. No. 37], ¶ 3. Plaintiff is a Michigan limited liability company located in Michigan.[3] Plaintiff asserts claims of common law fraud under Massachusetts law (see id. ¶ 38), and breaches of express and implied warranties under the Uniform Commercial Code, Okla. Stat. tit. 12A, §§ 2-313 to 2-315.[4] Federal subject matter jurisdiction is based on diversity of citizenship under 28 U.S.C. § 1332.

         Power Partners initially moved for dismissal of the action on the same grounds asserted in its present Motion. Upon examination of the Complaint, however, the Court raised sua sponte a lack of sufficient factual allegations to establish the citizenship of certain parties, and directed Plaintiff to amend its pleading. The Amended Complaint both cured this deficiency and added factual allegations regarding shipments of drivers from Inventronics USA, Inc. in Oklahoma to Plaintiff in Michigan. See Am. Compl. [Doc. No. 37], ¶¶ 8, 11. Plaintiff also included as an additional exhibit, a copy of an invoice from Inventronics USA, Inc. dated July 25, 2011. See id. Ex. 9 [Doc. No. 37-9]. Power Partners has renewed its Motion in response to the Amended Complaint.

         Standard of Decision

         Plaintiff “bears the burden of establishing personal jurisdiction over [a] defendant.” Intercon, Inc. v. Bell Atl. Internet Sol., 205 F.3d 1244, 1247 (10th Cir. 2000); see Rockwood Select Asset Fund XI(6)-1, LLC v. Devine, Millimet & Branch, 750 F.3d 1178, 1179 (10th Cir. 2014); Shrader v. Biddinger, 633 F.3d 1235, 1239 (10th Cir. 2011). Where, as here, the issue is presented for decision on the basis of allegations and affidavits or written materials, Plaintiff “need only make a prima facie showing that jurisdiction exists.” Intercon, 205 F.3d at 1247 (internal quotation omitted); see Shrader, 633 F.3d at 1239; Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010); Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). At this stage, the Court must accept “‘as true all well-pled (that is, plausible, non-conclusory, and non-speculative) facts alleged in plaintiff['s] complaint'” and “resolve any factual disputes in the plaintiff's favor.” Shrader, 633 F.3d at 1239 (quoting Dudnikov, 514 F.3d at 1070); see Intercon, 205 F.3d at 1247.

         To establish personal jurisdiction of a nonresident defendant, “a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Employers, 618 F.3d at 1159 (internal quotation omitted). Under Oklahoma law, the personal jurisdiction inquiry is simply the due process analysis. Intercon, 205 F.3d at 1247; see Monge v. RG Petro-Mach. (Grp.) Co., 701 F.3d 598, 613 (10th Cir. 2012). The familiar due process standard requires “minimum contacts” between the defendant and the forum state and a finding that the exercise of jurisdiction comports with “fair play and substantial justice.” See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291, 297 (1980); Intercon, 205 F.3d at 1247.

         Discussion

         A. Minimum Contacts - Legal Standard

         The minimum contacts standard may be satisfied by showing general or specific personal jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011); see also Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S.Ct. 1773, 1179-80 (2017). General jurisdiction refers to a court's power to hear claims against a nonresident defendant whose “affiliations with the State in which suit is brought are so constant and pervasive ‘as to render [it] essentially at home in the forum State.'” See Daimler AG v. Bauman, 134 S.Ct. 746, 751 (2014) (quoting Goodyear, 564 U.S. at 919) (alteration in Daimler).[5] Specific jurisdiction requires that “‘the suit' must ‘aris[e] out of or relat[e] to the defendant's contacts with the forum.'” Bristol-Squibb, 137 S.Ct. at 1780 (quoting Daimler, 134 S.Ct. at 754) (internal quotation omitted and emphasis added in Bristol-Myers). Plaintiff relies solely on specific jurisdiction to establish personal jurisdiction over Power Partners in Oklahoma. See Pl.'s Resp. Br. [Doc. No. 51] at 1 (“specific personal jurisdiction exists . . . as it relates to this transaction”).

         Specific personal jurisdiction “requires, first, that the out-of-state defendant must have ‘purposefully directed' its activities at residents of the forum state, and second, that the plaintiff's injuries must ‘arise out of' defendant's forum-related activities.'” Dudnikov, 514 F.3d at 1071 (quoting Burger King, 471 U.S. at 472); see Intercon, 205 F.3d at 1247; Pro Axess, Inc. v. Orlux Distrib., Inc., 428 F.3d 1270, 1277 (10th Cir. 2005).[6] To satisfy the first prong, Plaintiff must demonstrate that Power Partners “‘purposefully directed' its activities at the forum state . . . or ‘purposely availed' itself of the privilege of conducting activities or consummating a transaction in the forum state.” Dudnikov, 514 F.3d at 1071. Purposeful availment generally requires affirmative conduct by the nonresident defendant that creates a substantial connection to the state; “random, fortuitous, or attenuated contacts” or “the unilateral activity of another party” is insufficient. See Burger King, 471 U.S. at 475 (internal quotations omitted).

         B. Minimum Contacts - Application to ...


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