This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Hennepin County District Court
File No. CT 05-002388
Richard G. Jensen, Scott A. Johnson, Fabyanske, Westra, Hart & Thomson, P.A., 800 LaSalle Avenue, Suite 1900, Minneapolis, MN 55402 (for appellant)
Jessica R.F. Grassley, Faegre & Benson L.L.P., 2200 Wells Fargo Center, 90 South Seventh Street, Minneapolis, MN 55402 (for respondent)
Considered and decided by Hudson, Presiding Judge; Wright, Judge; and Worke, Judge.
Appellant challenges the district court’s dismissal of appellant’s complaint for lack of personal jurisdiction over respondent, arguing that Minnesota courts have specific and general personal jurisdiction and that the district court erred in declining to continue the matter to permit jurisdictional discovery. We affirm.
Appellant VIAD Corp. is a Delaware corporation authorized to do business in Minnesota. VIAD, which has offices in Brooklyn Park, designs, produces, and installs tradeshow exhibits. Respondent McCormick International USA, Inc. is an Iowa corporation. Its global corporate headquarters are in Doncaster, England, and its principal offices are in Pella, Iowa. McCormick manufactures and sells tractors and other heavy farm equipment.
During August and September 2003, VIAD and McCormick entered into three written agreements for the performance of work by VIAD. The first agreement provided that VIAD would design a tradeshow-exhibit marketing environment and create a tent structure. The second and third agreements required VIAD to install and dismantle the tent structure at tradeshows in Grand Island, Nebraska, and Henning, Illinois. In exchange for VIAD’s performance, McCormick agreed to pay an estimated total of $113,206.
The tent structure was manufactured in
VIAD sued McCormick in Hennepin County District Court for breach of contract and unjust enrichment. McCormick moved to dismiss VIAD’s claims under Minn. R. Civ. P. 12.02(b) for lack of personal jurisdiction. Following a hearing, the district court granted the motion to dismiss, concluding that Minnesota lacked both specific and general personal jurisdiction over McCormick. This appeal followed.
D E C I S I O N
VIAD contends that the
district court erred by dismissing the matter for lack of specific and general personal
jurisdiction. Whether personal jurisdiction exists is a question of law,
which we review de novo. Nw. Airlines, Inc. v. Friday, 617 N.W.2d
590, 592 (
A Minnesota court can exercise
personal jurisdiction over a nonresident defendant when personal jurisdiction
is authorized by the Minnesota long-arm statute, Minn. Stat. § 543.19
(2004), and the nonresident defendant has certain “minimum contacts” with the
forum state as required by constitutional due-process guarantees. Domtar,
Inc. v. Niagara Fire Ins. Co.,
533 N.W.2d 25, 29 (
Due-process standards are
met by a plaintiff’s showing that a nonresident defendant’s “minimum contacts”
with the forum state are such that prosecution of the lawsuit in the selected
forum does not offend “traditional notions of fair play and substantial
justice.” Int’l Shoe Co. v. Washington, 326
General personal jurisdiction
exists when the nonresident defendant has “continuous and systematic” contacts
with the forum state. Helicopteros Nacionales, 466
In order to establish a prima facie case of
specific personal jurisdiction over McCormick, VIAD must show that the contracts
between VIAD and McCormick had a substantial connection with Minnesota. Dent-Air, Inc. v.
Neither the negotiation of the contracts nor the performance pursuant to them was connected to Minnesota. During the negotiation, representatives from McCormick sent correspondence to VIAD and had telephone conversations with VIAD employees in Minnesota. But McCormick’s representatives did not travel to Minnesota to negotiate or sign the contract. The tent structure, which was the subject of the first contract, was manufactured in Canada by a Canadian company and shipped directly from Canada to Nebraska for the tradeshow. VIAD performed work under the two installation contracts in Nebraska and Illinois.
Because the circumstances of the negotiation and performance under the contracts between VIAD and McCormick had so little connection with Minnesota, specific personal jurisdiction over McCormick cannot be established here. Accordingly, the district court did not err by concluding that it lacked specific personal jurisdiction over McCormick.
VIAD also argues that the district
court has general personal jurisdiction over McCormick based on McCormick’s contacts
with Minnesota. General personal
jurisdiction exists when a nonresident defendant performs acts “by which the
defendant purposefully avails itself of the privilege of conducting activities
within the forum [s]tate, thus invoking the benefits and protections of its
laws.” Hanson v. Denckla, 357
Minnesota courts consider
the following five factors to determine whether the exercise of general personal
jurisdiction is proper: (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 these
contacts, (4) the interest of the state in providing a forum, and (5) the
convenience of the parties. Vikse v.
Flaby, 316 N.W.2d 276, 282 (
VIAD argues that McCormick’s
contacts with Minnesota were sufficient to confer general personal jurisdiction.
For this factor, we consider “whether [McCormick’s] incursions into the state
were casual and sporadic, or whether they evinced an intent to do business on a
regular and systematic basis here.” Hardrives, 307
The facts do not support a
finding that McCormick solicited or conducted business in Minnesota on a
continuous and systematic basis for the purpose of general personal
jurisdiction. McCormick is a privately-held
McCormick has ten authorized dealer locations in Minnesota. But McCormick does not keep any inventory in Minnesota; rather, it sells its products directly to its authorized dealers. An estimated $3.5 million of sales in Minnesota account for less than one percent of McCormick’s total sales volume.
Sales to the State of Minnesota are a portion of McCormick’s sales in the state. On December 10, 2003, and February 4, 2005, McCormick replied to the state’s request for bid for the purchase of tractors. As a result, McCormick was awarded two contracts—the first covering the period of January 28 to November 30, 2004, and the second covering the period of March 17, 2005, to January 31, 2006.
VIAD argues that, by
submitting these bids to the state, McCormick actively solicited business in
Minnesota. But these sales to the state
are included in the $3.5 million of Minnesota sales. We decline to treat sales to the state
differently from the other sales that taken together constitute less than one
percent of McCormick’s total sales. VIAD
has not established that either the dollar or percentage value of these sales
represents continuous and systematic contact with
Citing an unpublished
federal district court decision, VIAD argues that such sales figures would be
sufficient to establish minimum contacts in the instant case. 3M
VIAD also argues that McCormick’s website is sufficiently interactive to contribute to a finding of general personal jurisdiction. Indeed, under certain circumstances, a forum state may exert general personal jurisdiction over a defendant based on an interactive website. Lakin v. Prudential Secs., Inc., 348 F.3d 704, 710-11 (8th Cir. 2003). Courts use the so-called Zippo-test to determine if the level of interactivity of a website is sufficient to confer general personal jurisdiction:
At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information on an Internet Web site which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise [of] personal jurisdiction. The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.
McCormick’s website is interactive in that it allows a user to enter a Zip Code to find nearby McCormick dealerships. But the website does not permit users to purchase products online or to enter into contracts with McCormick. Rather, all sales-related inquiries are directed to the local authorized dealers. Thus, although the website has some interactivity, the commercial nature of that interactivity as it relates to McCormick is minimal.
The record establishes that McCormick has some contacts with Minnesota. But those contacts are not sufficiently “continuous and systematic” to weigh in favor of exercising general personal jurisdiction over McCormick.
We next consider whether the
nature and quality of McCormick’s contacts with the forum state established
that McCormick purposefully availed itself of the privilege of conducting
activities here, including the benefits and protections of Minnesota law. Dent-Air, 332 N.W.2d at 907. “When
a defendant deliberately engages in significant activities in a state or
creates continuing obligations between itself and residents of the state, the
defendant ‘purposefully avails’ itself of the protections of the law, as
required to support the exercise of personal jurisdiction under the Due Process
Here, the nature of the contacts weighs against exercising general personal jurisdiction over McCormick in a Minnesota court. A VIAD representative initiated the contact that led to the contracts at issue here, and VIAD representatives traveled to Iowa to negotiate the deal. McCormick’s representative signed the contracts in Iowa and subsequently faxed them to VIAD in Minnesota. The tent structure, which is the subject of the first contract, was manufactured in Canada by a Canadian company and shipped directly to the Nebraska tradeshow. The obligations under the second and third contracts relate to VIAD’s installation of the tent structure in Nebraska and Illinois.
Even when combined with McCormick’s other contacts with Minnesota, the nature and quality of these activities are not significant enough to create the continuing obligations that would signal McCormick’s purposeful availment of a Minnesota forum and its laws. Thus, this factor also weighs against exercising general personal jurisdiction over McCormick.
The third factor is the source and connection of the cause of action with the contacts. “[I]n contract cases, the contract must have a substantial connection with the state.” Dent-Air, 332 N.W.2d at 907. Here, the cause of action arises from the contracts between VIAD and McCormick, which were signed in Iowa for performance in Canada, Nebraska, and Illinois. VIAD’s presence in Minnesota is insufficient on its own to create a connection between McCormick and the breach-of-contract action at issue here.
VIAD argues that Viking
Engineering & Devevlopment, Inc. v. R.S.B. Enterprises., Inc., 608
N.W.2d 166 (Minn. App. 2000), review
VIAD next argues that Minnesota has a strong interest in providing a forum for
this litigation, and, therefore, this factor should weigh in its favor. Indeed,
Minnesota has an interest in providing a forum for resident corporations that
have been wronged, but such an interest is not a substitute for the minimum contacts
necessary to establish general personal jurisdiction. Schuck v. Champs
Food Sys., Ltd., 424 N.W.2d 567, 571 (
“[W]henever minimum contacts
are present[,] jurisdiction should be exercised unless the court finds that
VIAD argues that Minnesota is a convenient location because the “evidence and most of the witnesses, such as experts, are located in Minnesota.” Because minimum contacts are not present, the convenience of the parties is not a dispositive factor in determining whether exercising general personal jurisdiction over McCormick is proper.
Because VIAD failed to establish a prima facie case that McCormick had continuous and systematic contacts with Minnesota such that the exercise of general personal jurisdiction would be proper, the district court correctly granted McCormick’s motion to dismiss for lack of general personal jurisdiction.
VIAD also contends that the
district court erred by declining to order additional jurisdictional
discovery. “[T]he trial judge has wide discretion to issue discovery
orders and, absent clear abuse of that discretion, normally its order with
respect thereto will not be disturbed.” Shetka v. Kueppers, Kueppers,
Von Feldt & Salmen, 454 N.W.2d 916, 921 (
Although jurisdictional discovery generally is permitted before a district court rules on a motion to dismiss for lack of personal jurisdiction, such discovery is not mandatory. Id. Moreover, such discovery is unnecessary when it is unlikely to lead to facts establishing jurisdiction. Id. As the Behm court reasoned under similar circumstances, it is evident from the district court’s decision and our examination of the record that the district court examined the filed materials and concluded that supplementation of the record would have been unproductive. Id.
Although the district court’s order refers to areas in which the record could be further developed, the district court was able to conclude from the existing facts that personal jurisdiction did not exist. VIAD did not make a formal motion for jurisdictional discovery or a proffer of what it expected additional discovery to produce. Based on the record before us, we cannot conclude that the district court’s decision to proceed on the evidentiary record as presented by the parties was an abuse of discretion.