This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2002).
STATE OF MINNESOTA
IN COURT OF APPEALS
a Delaware Corporation, et al.,
Lone Star Technologies, Inc.,
a Delaware Corporation, et al.,
Filed February 4, 2003
Hennepin County District Court
File No. CT0118740
Thomas Tinkham, Perry M. Wilson, III, Shelley L. Parnell, Dorsey & Whitney, LLP, 50 South Sixth Street, Suite 1500, Minneapolis, MN 55402-1498 (for respondents)
Jeffrey J. Keyes, Robin Caneff Gipson, Briggs and Morgan, P.A., 2400 IDS Center, 80 South Eighth Street, Minneapolis, MN 55402; and George C. Lamb III, 2001 Ross Avenue, Suite 600, Dallas, TX 75201-2980 (for appellants)
Considered and decided by Peterson, Presiding Judge, Willis, Judge, and Forsberg, Judge.
U N P U B L I S H E D O P I N I O N
Appellants challenge the district court’s order that concluded that (1) the forum-selection clause in the parties’ purchase and sale agreement did not require this action to be brought in a Delaware court and (2) a Minnesota court may properly exercise personal jurisdiction over appellants. Because we conclude that the forum-selection clause is permissive and that appellants are subject to personal jurisdiction in Minnesota, we affirm.
This appeal involves a breach-of-contract action commenced by respondents Cargill, Inc., North Star Steel Company, and Universal Tubular Services, Inc. (collectively “Cargill”) against appellants Lone Star Technologies, Inc. and Star Seamless, Inc. (collectively “Lone Star”). Lone Star entered into an agreement with Cargill to purchase two steel-pipe production facilities owned by Cargill.
Lone Star is a Delaware corporation with its principal place of business in Texas. It claims to have no offices, employees, sales representatives, property, or operations in Minnesota. Lone Star also maintains that it does not conduct business in Minnesota, but its wholly owned subsidiary, Lone Star Steel Company (“LSS”), has conducted business in this state.
Before the parties signed the agreement at issue in this action, they had at least four face-to-face meetings in Minnesota, at which Lone Star’s CEO was present, to negotiate the agreement’s terms. The parties executed the agreement on or about August 16, 2001, with Lone Star’s representatives signing the agreement in Texas. After the agreement was executed, representatives of the parties held at least two additional face-to-face meetings in Minnesota, at which Lone Star’s CEO was again present, concerning the transaction. The meetings before and after the agreement was executed occurred over a seven-month period, from April to November 2001. There were, additionally, numerous interstate communications between the parties by telephone, facsimile, and e-mail. Furthermore, the parties agreed that closing would take place in Minnesota, and Cargill agreed to transfer to Lone Star records located in Minnesota concerning the steel-pipe production facilities.
The agreement provides that
[e]ach party hereto irrevocably agrees that the courts of the State of Delaware or the United States of America for the District of Delaware are to have jurisdiction to settle any claims, differences or disputes which may arise out of or in connection with this Agreement.
(Emphasis added.) The parties also agreed that the agreement’s “terms may not be construed against any of the parties by reason of the fact that it was prepared by one of the parties.” Finally, the parties decided that the agreement “shall be governed by and construed and enforced in accordance with the internal laws of the State of Delaware,” without giving effect to Delaware’s conflict-of-laws rules.
The purchase of the steel-pipe operations was not consummated, and Cargill commenced this breach-of-contract action against Lone Star in Minnesota. Lone Star moved the district court to dismiss the action, arguing that (1) the agreement’s forum-selection clause gave the courts of Delaware exclusive jurisdiction to hear the action and (2) the district court lacked personal jurisdiction over Lone Star.
The district court denied Lone Star’s motion, concluding that (1) the forum-selection clause was permissive and did not preclude Minnesota courts from hearing the case and (2) Lone Star was subject to personal jurisdiction in Minnesota. Lone Star appeals.
D E C I S I O N
Lone Star argues that the district court erred by concluding that Delaware was not the exclusive forum for disputes arising from the agreement. We review de novo the district court’s interpretation of the agreement’s forum-selection clause. See Alpha Sys. Integration, Inc. v. Silicon Graphics, Inc., 646 N.W.2d 904, 907-08 (Minn. App. 2002). By the terms of the agreement, Delaware law governs this issue.
A Delaware court will enforce a forum-selection clause unless doing so “would, under the circumstances then existing, seriously impair the plaintiff’s ability to pursue [its] cause of action.” Elia Corp. v. Paul N. Howard Co., 391 A.2d 214, 216 (Del. Super. Ct. 1978) (citation omitted). Here, there is no issue regarding whether the forum-selection clause impairs Cargill’s ability to pursue its cause of action. Instead, the parties disagree over whether the forum-selection clause in the agreement is “mandatory,” requiring that any and all breach-of-contract actions be brought in a Delaware court, or “permissive,” meaning that the parties have waived objections to the exercise of jurisdiction by a Delaware court.
We conclude that under Delaware law the parties’ forum-selection clause is permissive in light of the decision in Eisenbud v. Omnitech, C.A. No. 14695-NC, 1996 WL 162245 (Del. Ch. Mar. 21, 1996). There, the Delaware Court of Chancery stated that
parties must use express language clearly indicating the forum selection clause excludes all other courts before which those parties could otherwise properly bring an action. * * * [A]bsent clear language, a court will not interpret a forum selection clause to indicate the parties intended to make jurisdiction exclusive.
Id., at *1 (citations omitted). Here, the language of the forum-selection clause does not clearly exclude other courts from having jurisdiction to hear this case; rather, it only provides that Delaware courts “are to have jurisdiction” to hear the case, a proposition that Cargill does not dispute. Thus, we are persuaded that under Delaware law this forum-selection clause is permissive.
We follow Eisenbud even though it is an unpublished decision by a Delaware trial court. First, we find the reasoning in Eisenbud persuasive. In that case, the court of chancery considered and adopted the reasoning concerning interpretation of forum-selection clauses found in an earlier Delaware court opinion, Brastor Mercantile, Ltd. v. Cent. Citrus S/A, C.A. No. 89C-FE-109, 1989 WL 70971, at *5 (Del. Super. Ct. June 6, 1989). Eisenbud, 1996 WL 162245, at *1. Second, Eisenbud has been cited with approval in a subsequent published decision of the court of chancery. Dura Pharm., Inc. v. Scandipharm, Inc., 713 A.2d 925, 929-30 (Del. Ch. 1998). Finally, we note that Delaware “has long been recognized as the fountainhead of American corporations and that its Courts of Chancery are known for their expert exposition of corporate law.” In re Ivan F. Boesky Sec. Litig., 129 F.R.D. 89, 97 (S.D.N.Y. 1990). We further recognize the court of chancery’s expertise in a case such as the one before us, involving an interstate sale of corporate assets.
Application of traditional contract-law principles also supports the district court’s conclusion here. “Under Delaware law, courts must first determine whether the contractual language in question is ambiguous.” True N. Communications Inc. v. Publicis S.A., 711 A.2d 34, 38 (Del. Ch. 1997) (citation omitted). But the assertion of mutually exclusive interpretations “does not render otherwise clear [contract] terms ambiguous.” Universal Studios Inc. v. Viacom Inc., 705 A.2d 579, 589 (Del. Ch. 1997) (citation omitted). If a contract is unambiguous, a court must follow the plain meaning of its terms. See Lipson v. Anesthesia Servs., P.A., 790 A.2d 1261, 1278 (Del. Super. Ct. 2001). But “[c]ontract interpretation that adds a limitation not found in the plain language of the contract is untenable.” Emmons v. Hartford Underwriters Ins. Co., 697 A.2d 742, 746-47 (Del. Super. Ct. 1997) (citation omitted).
Here, the agreement states that Delaware courts “are to have” jurisdiction. The plain meaning of the forum-selection clause supports the district court’s conclusion that Delaware is a proper forum but not necessarily the sole forum. Also, because the agreement explicitly states that it is the “entire agreement and understanding of the parties,” we decline to consider Lone Star’s arguments based on precontract negotiations between the parties. See Cont’l Ins. Co. v. Rutledge & Co., 750 A.2d 1219, 1228 (Del. Ch. 2000) (stating that courts will uphold privately negotiated terms of final integrated writings and will not look behind the terms of an unambiguous contract).
Thus, the district court did not err by concluding that the forum-selection clause did not confer exclusive jurisdiction on the courts of Delaware.
We next address the argument that the district court erred by concluding that Lone Star was subject to personal jurisdiction in Minnesota. Whether personal jurisdiction exists is a question of law, which we review de novo. Griffis v. Luban, 646 N.W.2d 527, 531 (Minn. 2002). “When jurisdiction is challenged, the plaintiff bears the burden of proving that sufficient contacts exist with the forum state to support personal jurisdiction.” V.H. v. Estate of Birnbaum, 543 N.W.2d 649, 653 (Minn. 1996) (citation omitted). The plaintiff’s allegations in support of jurisdiction should be taken as true, and doubts should be resolved in favor of retention of jurisdiction. Id.
For a Minnesota court to exercise personal jurisdiction over a nonresident defendant, the defendant must come within the reach of the long-arm statute, Minn. Stat. § 543.19 (2002), and the exercise of jurisdiction must comport with constitutional due-process requirements. V.H., 543 N.W.2d at 654. Because the legislature intended the long-arm statute “to have the maximum extraterritorial effect allowed under the due process clause,” id. (quotation omitted), “[i]f the personal jurisdiction requirements of the federal constitution are met, the requirements of the long-arm statute will necessarily be met also,” Valspar Corp. v. Lukken Color Corp., 495 N.W.2d 408, 411 (Minn. 1992). “Thus, when analyzing most personal jurisdiction questions, Minnesota courts may simply apply the federal case law.” Id.
A state court can exercise personal jurisdiction over a nonresident defendant consistent with due process only if the defendant has “minimum contacts” with the forum state so that “maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (quotation omitted). A court can exercise such “specific jurisdiction” if a claim arises from defendant’s contacts with the forum state. Valspar, 495 N.W.2d at 411. But if the nonresident defendant has “continuous and systematic” contacts with the forum state, the court can exercise “general jurisdiction” over the defendant even if the claim is unrelated to the defendant’s contacts with the forum state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S. Ct. 1868, 1872 (1984) (quotation omitted). Here, Cargill argues that the district court may properly exercise both general and specific jurisdiction over Lone Star.
Cargill contends that because a Minnesota court could exercise general jurisdiction over LSS, Lone Star’s subsidiary, it could constitutionally exercise general jurisdiction over Lone Star. Even assuming that Cargill correctly states the law, its assertions with respect to LSS do not establish that LSS has “continuous and systematic” contacts with Minnesota. Cargill maintains that Lone Star “is a holding company, conducting business through its subsidiaries” such as LSS, but it cites no evidence in the record demonstrating that LSS has continuous and systematic contacts with Minnesota. Lone Star admits that LSS has conducted business with Minnesota firms “from time to time over the last four years,” but without more we cannot conclude that these contacts are continuous and systematic. See id. at 417, 104 S. Ct. at 1874 (concluding defendant corporation’s purchases in and related trips by its representative to the forum state are not, “standing alone,” a sufficient basis for the assertion of general jurisdiction). Thus, there is no basis for the district court’s exercise of general jurisdiction here.
To decide whether there are sufficient minimum contacts to justify the exercise of specific jurisdiction, this court examines five factors: (1) the quantity of the contacts with the forum state, (2) the nature and quality of the contacts, (3) the source and connection of the cause of action with the contacts, (4) the interest of the state in providing a forum, and (5) the convenience of the parties. V.H., 543 N.W.2d at 657. “[T]he first three factors are primary in the jurisdiction analysis, while the other two factors are secondary.” Id. (citation omitted).
A. Quantity of contacts
A “single, isolated transaction between a nonresident defendant and a resident plaintiff can be a sufficient contact to justify exercising personal jurisdiction under due process standards.” Marquette Nat’l Bank of Minneapolis v. Norris, 270 N.W.2d 290, 295 (Minn. 1978) (citing McGee v. Int’l Life Ins. Co., 355 U.S. 220, 223, 78 S. Ct. 199, 201 (1957)). Here, all of Lone Star’s contacts with Minnesota involved negotiations for the single transaction with Cargill. Where jurisdiction is based on “a single transaction contact,” the nature and quality of that contact become dispositive. Id.
B. Nature and quality of the single-transaction contact
The contact must demonstrate that the defendant purposefully availed itself of the privilege of conducting activities within the forum state, Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 1240 (1958), or “purposefully directed” its efforts at the citizens of the forum state, Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S. Ct. 2174, 2184 (1985). The defendant’s contact with the forum state must be such that it “should reasonably anticipate being haled into court there.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 567 (1980).
Here, representatives of Lone Star traveled to Minnesota on at least six occasions over seven months to conduct face-to-face negotiations with Cargill. Lone Star does not dispute that all in-person negotiations concerning the transaction took place in Minnesota. Furthermore, at least part of the parties’ agreement was to be performed in Minnesota because Cargill was obligated to transfer to Lone Star business records maintained here. Thus, we conclude that the nature and quality of the single-transaction contact favor the exercise of personal jurisdiction.
C. Remaining factors
The remaining three factors also favor the exercise of personal jurisdiction over Lone Star. First, the source of Cargill’s cause of action is a contract negotiated almost exclusively in Minnesota. The cause of action is therefore directly connected to the single-transaction contact. Second, Cargill has its principal place of business in Minnesota and the state thus has an interest in providing a forum for Cargill’s cause of action. United Barge Co. v. Logan Charter Serv., Inc., 237 F. Supp. 624, 629-30 (D. Minn. 1964) (concluding Cargill was a “resident[ ] of Minnesota” because it had its principal place of business as well as “permanent offices and employees” in the state), cited in Hunt v. Nev. State Bank, 285 Minn. 77, 104 n.28, 172 N.W.2d 292, 308 n.28 (1969). Finally, Lone Star does not argue that Minnesota is an inconvenient forum, and we see no reason to decide otherwise.
We therefore conclude that the district court did not err by exercising personal jurisdiction over Lone Star.
FORSBERG, Judge (dissenting)
I respectfully dissent. As stated by the majority, the question is whether the agreement that in part states that the courts are to have jurisdiction to settle any claims in Delaware, is mandatory or permissive. The majority has interpreted the phrase to be permissive because it does not include the word “exclusive.” However, it does not include the words “or any other court.” I believe the phrase “are to have jurisdiction to settle any claims” unambiguously confers exclusive jurisdiction on Delaware. (Emphasis added.)
In Babcock & Wilcox Co. v. Control Components, Inc., 614 N.Y.S.2d 678, 680 (Sup. Ct. 1993), the court held the following forum-selection clause to be mandatory: “The Purchaser * * * and Seller each hereby [ ] agree to submit to the jurisdiction of the Supreme Court of the State of New York * * *.” There seems to be no discernable difference between “submit to jurisdiction” and “are to have jurisdiction.”
The negotiation indicates a clear intent to select a neutral site. Cargill first proposed that all disputes be resolved in Minnesota; Lone Star refused and proposed New York as the site. The parties agreed on a neutral site, Delaware, as stated in the final version of the agreement. If, in fact, after agreeing to the neutral site, Cargill could select any site, there would be absolutely no purpose in having any forum-selection clause at all.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 North Star Steel is a wholly owned subsidiary of Cargill, and Universal Tubular Services is a wholly owned subsidiary of North Star Steel.
 Star Seamless is a corporation created for the sole purpose of acquiring the assets expected to be transferred under the agreement at issue here.