United States District Court, D. Minnesota
Peter M. Moloney, Plaintiff,
One Off Effects LLC, Defendant.
ORDER ADOPTING REPORT AND RECOMMENDATION
Wilhelmina M. Wright United States District Judge
matter is before the Court on the July 25, 2019 Report and
Recommendation (R&R) of United States Magistrate Judge
Elizabeth Cowan Wright. (Dkt. 33.) The R&R recommends
granting Defendant One Off Effects LLC's (One Off) motion
to dismiss this case for lack of personal jurisdiction and
denying Plaintiff Peter M. Moloney's requests for
jurisdictional discovery and a settlement conference. Moloney
filed timely objections to the R&R, and One Off
responded. For the reasons addressed below, Maloney's
objections are overruled, the R&R is adopted, and this
case is dismissed.
is a Minnesota resident who designed and patented a vest for
winter recreational use. One Off is a limited liability
company based in California. Moloney and One Off executed a
contract in September 2017, pursuant to which One Off agreed
to design and engineer a prototype of Moloney's patented
vest. Moloney paid One Off an advance payment in September
2017. Moloney terminated the contract in November 2018 and
demanded the return of his advance payment because One Off
had not provided the prototype as required by the contract.
commenced this breach-of-contract lawsuit against One Off in
Ramsey County District Court in January 2019, and One Off
removed the case to this Court based on diversity
jurisdiction. The magistrate judge recommends granting One
Off's motion to dismiss for lack of personal jurisdiction
because One Off has not purposefully availed itself of the
laws of Minnesota and is not subject to personal jurisdiction
in Minnesota. Moloney filed timely objections to the R&R,
which the Court addresses below.
Moloney's Objections to the R&R
district court reviews de novo those portions of an R&R
to which an objection is made and “may accept, reject,
or modify, in whole or in part, the findings or
recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1)(C); accord Fed. R. Civ. P.
72(b)(3); LR 72.2(b)(3). Because Moloney objects to the
R&R's conclusion that this Court lacks personal
jurisdiction over One Off, the Court reviews that conclusion
and the underlying facts de novo.
personal jurisdiction is challenged, the plaintiff asserting
the district court's personal jurisdiction over a
defendant “must make a prima facie showing that
personal jurisdiction exists.” K-V Pharm. Co. v. J.
Uriach & CIA, S.A., 648 F.3d 588, 591-92 (8th Cir.
2011). This showing requires the plaintiff to plead
“sufficient facts to support a reasonable inference
that the defendant[ ] can be subjected to jurisdiction within
the state.” Id. (alteration in original)
(internal quotation marks omitted). Although the evidence
necessary to make this prima facie showing is minimal, such
evidence must withstand testing through competing affidavits
and exhibits that support or oppose the motion. Id.
at 592. Pleadings alone are insufficient. Id. When
deciding whether the plaintiff has succeeded in making this
requisite showing, the district court views the evidence in
the light most favorable to the plaintiff and resolves all
factual conflicts in the plaintiff's favor. Digi-Tel
Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d
519, 522 (8th Cir. 1996).
federal court applies state law when determining the bounds
of personal jurisdiction. Walden v. Fiore, 571 U.S.
277, 283 (2014). Because Minnesota's long-arm statute
extends jurisdiction to the maximum limit permitted by due
process, a federal court in Minnesota must determine only
whether its exercise of personal jurisdiction comports with
due process. Wessels, Arnold & Henderson v. Nat'l
Med. Waste, Inc., 65 F.3d 1427, 1431 (8th Cir. 1995).
process requires a non-resident defendant to have sufficient
minimum contacts with the forum state such that “the
maintenance of the lawsuit does not offend traditional
notions of fair play and substantial justice.”
World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 291-92 (1980) (internal quotation marks omitted).
“[T]he plaintiff cannot be the only link between the
defendant and the forum.” Walden, 571 U.S. at
285. Sufficient minimum contacts exist when a defendant has
engaged in an act “by which the defendant purposely
avails itself of the privilege of conducting activities
within the forum State, thus invoking the benefits and
protections of its laws.” Fastpath, Inc. v. Arbela
Techs. Corp., 760 F.3d 816, 821 (8th Cir. 2014)
(internal quotation marks omitted). The nature of the
defendant's contact with the forum state must be
“such that [the defendant] should reasonably anticipate
being haled into court there.” World-Wide
Volkswagen, 444 U.S. at 297. When, as here, a plaintiff
asserts that a defendant is subject to specific personal
jurisdiction, a district court may adjudicate causes of
action “arising from or related to the defendant's
actions in the forum state.” Wessels, 65 F.3d
at 1432 n.4.
in this Circuit consider five factors to determine the
sufficiency of a defendant's contacts with the forum
state: (1) the nature and quality of contacts, (2) the
quantity of 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. Land-O-Nod Co. v. Bassett Furniture
Indus., Inc., 708 F.2d 1338, 1340 (8th Cir.
1983). The first three factors are given
“primary” importance, whereas the last two are
“secondary.” See Johnson v. Arden, 614
F.3d 785, 794 (8th Cir. 2010); Burlington Indus., Inc. v.
Maples Indus., Inc., 97 F.3d 1100, 1102-03 (8th Cir.
mere existence of a contract between the defendant and a
party in the forum state is inadequate to establish
sufficient minimum contacts. See Creative Calling Sols.,
Inc. v. LF Beauty Ltd., 799 F.3d 975, 980 (8th Cir.
2015). But when the prior contract negotiations, the subject
and purpose of the contract, and the parties' actual
course of dealing all implicate the forum state, these
surrounding circumstances may be sufficient to establish
minimum contacts. See, e.g., id. at 980-81
(finding minimum contacts when defendant actively solicited
business in the forum state, engaged in daily communications
with individuals in the forum state, shipped thousands of
samples to the forum state, and remitted payments to the
primarily objects to the R&R's conclusion that he was
the aggressor in the transaction with One Off. According to
Moloney, One Off's owner and employees
“aggressive[ly] . . . engaged in a three-month
campaign” to secure Moloney's business. As the
R&R correctly recognizes, whether a nonresident defendant
is the aggressor in the disputed transaction is relevant to
assessing whether personal jurisdiction over that defendant
exists. See Datalink Corp. v. Perkins Eastman Architects,
P.C., 33 F.Supp.3d 1068, 1073 (D. Minn. 2014) (citing
Marquette Nat'l Bank of Minneapolis v. Norris,
270 N.W.2d 290, 296 (Minn. 1978)). But, consistent with
Moloney's allegations and arguments, the record reflects
that Moloney sought out and initiated contact with One Off in
the spring of 2017. And it was Moloney who, after several
months of not hearing from One Off, emailed One Off's CEO
the following message: “I just need one prototype. If
you still want to work on the snowball vest send over a
contract and let[']s get started.” This email
prompted One Off shortly thereafter to send Moloney the
contract that is the subject of this lawsuit. Although One
Off clearly expressed interest in transacting with Moloney,
it did so largely in response to Moloney. ...