Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-arwd-5_05-cv-05126/USCOURTS-arwd-5_05-cv-05126-0/pdf.json

Nature of Suit Code: 195
Nature of Suit: Contract Product Liability
Cause of Action: 28:1332 Diversity-Product Liability

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Blue Bird is a non-resident corporation not registered to do 1

 business in the State of Arkansas. See Blue Bird’s Brief in Support of 

 Motion to Dismiss Exhibit B.

 Bleakley is a non-resident corporation not registered to do 2

business in the State of Arkansas, See Bleakley’s Motion to Dismiss

para.2.

 Plaintiff is an Arkansas corporation with its principal place of 3

business in Springdale, Arkansas. See Complaint para. 1.

 Rule 12(b)(2)&(3) of the Federal Rules of Civil Procedure states, 4

in part, "... [e]very defense, in law or fact, to a claim for relief in

any pleading, whether a claim, counterclaim, cross-claim, or third-party

claim, shall be asserted in the responsive pleading thereto if one is

required, except that the following defenses may at the option of the

pleader be made by motion: ...(2) lack of jurisdiction over the person,

(3)improper venue. . . .”

 

 IN THE UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF ARKANSAS

FAYETTEVILLE DIVISION

CAR TRANSPORTATION

BROKERAGE COMPANY, INC. PLAINTIFF

v. Civil No. 05-5126

BLUE BIRD COMPANY and

JOHN BLEAKLEY R.V. CENTER, INC.,

d/b/a JOHN BLEAKLEY MOTOR HOMES DEFENDANTS

MEMORANDUM OPINION

This matter is before the Court on motions by separate

Defendant, Blue Bird Company (“Blue Bird”) and separate 1

Defendant, John Bleakley R.V. Center, Inc. (“Bleakley”) to 2

dismiss Plaintiff's, Car Transportation Brokerage Company,

Inc. (“Car”) , complaint against them for lack of personal 3

jurisdiction under Federal Rule of Civil Procedure 12(b)(2);

Blue Bird also moves to dismiss the Complaint for improper

venue under Federal Rule of Civil Procedure 12(b)(3) . (Docs. 4

3, 13.) 

The Plaintiff seek to revocate the contract for the sale

of a Blue Bird motor coach because of fraud. The Plaintiff

alleges that the motor coach is unmerchantable and that

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Defendants fraudulently represented that the vehicle had not

previously been owned and concealed known defects in the

vehicle. Plaintiff seeks a revocation of the sale, the refund

of $650,000.00, plus interest, and attorney’s fees and costs

pursuant to Title 15 U.S.C. 2310. Plaintiff further seeks

punitive, incidental and consequential damages.

The issue is whether there are sufficient "minimum

contacts" with the State of Arkansas to subject the nonresident Defendants to the jurisdiction of this Court. Should

the Court find that there are sufficient "minimum contacts"

for personal jurisdiction over Defendants, venue would be

proper in this Court. However, should the Court find that

there are insufficient "minimum contacts" and that personal

jurisdiction over Defendants is not proper, the action should

be dismissed.

Discussion

In a diversity action, a federal court may assume

jurisdiction over non-resident defendants only to the extent

permitted by the long-arm statute of the forum state, and by

the due process clause of the Fourteenth Amendment. Bell

Paper Box, Inc. V. U.S. Kids, Inc., 22 F.3d 816, 818 (8 Cir. th

1994). The Arkansas long-arm statute authorizes jurisdiction

over foreign corporations to the fullest extent allowed by

constitutional due process. Mountaire Feeds, Inc. V. Argo

Impes, S.A., 677 F.2d 651, 653 (8 Cir. 1982). In order to th

avoid dismissal of its case, the plaintiff must present a

prima facie case of personal jurisdiction over the defendant.

Northrup King Co. v. Compania Productora Semillas Algondoneras

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Selectas, S.A., 51 F.3d 1383 (8 Cir. 1995). th

Personal jurisdiction refers to jurisdiction over a cause

of action arising from or related to a defendant's actions

within the forum state. See Helicopteros Nacionales de

Colombia v. Hall, S.A., 466 U.S. 408, 414 (1984); Sondergard

v. Miles, Inc., 985 F.2d 1389 (8 Cir. 1993). Due process th

requires “minimum contacts” between the non-resident defendant

and the forum state such that maintenance of the suit does not

offend traditional notions of fair play and substantial

justice. World Wide Volkswagen Corp. V. Woodson, 444 U.S.

286, 291 (1980). Specifically, a defendant must have

committed “some act by which the defendant purposefully avails

itself of the privilege of conducting activities within the

forum State, thus invoking the benefits and protections of its

laws.” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070,

1073(8 Cir. 2004)(quoting Burlington Industries, Inc. V. th

Maples Industries, Inc., 97 F.3d 1100, 1102 (8 Cir. 1996)). th

“[T]he defendant’s conduct and connection with the forum State

[must be] such that he should reasonably anticipate being

haled into court there.” World Wide Volkswagen Corp., 444

U.S. at 297. 

The Court will consider actions or conduct that have

bearing on the five factors stated by the Eighth Circuit to be

determinative of whether the exercise of jurisdiction is

consistent with due process, with “the first three factors

being of primary importance. . . .” Burlington Industries,

Inc., 97 F.3d at 1102. The factors are: (1) "the nature and

quality of defendant's contacts with the forum state; (2)

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quantity of contacts; (3) source and connection of the cause

of action with those contacts; and, to a lesser pedigree, (4)

the interest of the forum state in providing a forum for its

residents; and (5) the convenience of the parties." Northrup

King Co., 51 F.3d at 1387-88 (citing Land-O-Nod v. Bassett

Furniture Industries, Inc., 708 F.2d 1338, 1340 (8 Cir. th

1983)) (additional citation omitted). Courts have elaborated

on the third factor, i.e. the relationship of the cause of

action to the contacts, to distinguish between specific and

general jurisdiction. Bell Paper Box, 22 F.3d at 819 (citing

Helecopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S.

408 (1984)). 

When a plaintiff’s cause of action arises out of or is

related to a defendant’s contacts with the forum state, the

exercise of personal jurisdiction is one of specific

jurisdiction. Helecopteros Nacionales de Columbia, S.A., 466

U.S. at 414. If a plaintiff’s cause of action is unrelated to

the defendant’s contacts with the forum state, the exercise of

personal jurisdiction is one of general jurisdiction. Id. at

415 n.9. 

After reviewing the parties' pleadings and applying the

standard cited above, the Court finds the following facts are

undisputed:

* Blue Bird, a nonresident, is a Georgia corporation;

* Blue Bird honored portions of a warranty regarding

work performed in Georgia on the motor coach at

issue;

* Bleakley, a nonresident, is a Georgia corporation;

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* Plaintiff, a resident, traveled to Georgia and

purchased a Blue Bird motor coach from Bleakley;

* Plaintiff took delivery of the motor coach in

Georgia;

* While in Georgia, Plaintiff presented the motor

coach to Bleakley for repair after mechanical

problems troubles occurred; 

* There are no allegations by Plaintiff that the

purchase or repairs of the motor coach occurred due

to either Defendants’ contacts with Arkansas; 

* At no time did the Defendants enter into the State

of Arkansas; and

* The Plaintiff caused the motor coach to be in

Arkansas by driving it to Arkansas. 

Plaintiff’s cause of action clearly occurred in the state

of Georgia, not Arkansas. The cause of action is not related

to either of the Defendants’ alleged contacts with Arkansas.

Therefore, there is no basis for specific personal

jurisdiction, as the alleged cause of action arose outside of

Arkansas. The Court then must analyze whether personal

jurisdiction under a theory of general jurisdiction is proper.

General jurisdiction may be proper if a non-resident

defendant has “continuous and systematic” contacts with the

forum state. Id. (citing Helicopteros Nacionales de Columbia,

S.A., 466 U.S. at 415-16). "Merely entering into a contract

with a forum resident does not provide the requisite contacts

between a (nonresident) defendant and the forum state."

Mountaire Feeds, Inc., 677 F.2d at 655 (quoting Iowa Electric

Light & Power Co. v. Atlas Corp., 603 F.2d 1301, 1303 (8th

Cir. 1979)). The Court in Mountaire also commented that "[i]t

is a defendant's contacts with the forum state that are of

interest in determining if in personam jurisdiction exists,

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not its contacts with a resident." 677 F.2d at 655 (quoting

Aaron Ferer & Sons Co. v. Atlas Scrap Iron & Metal Co., 558

F.2d 450, 455 n.6 (8th Cir. 1977)). When multiple defendants

are involved, each defendant’s contacts with the forum state

must be assessed individually. Rush v. Savchuck, 444 U.S.

320, 332 (1980).

Separate Defendant Blue Bird.

The facts found by the Court on Plaintiff’s claim that

this Court has personal jurisdiction over separate defendant

Blue Bird are as follows:

* Blue Bird is neither registered nor licensed to do

business in Arkansas;

* Blue Bird does not have an agent for service of

process in Arkansas;

* Blue Bird manufactured the motor coach in question

in Georgia;

* Blue Bird honored portions of a warranty repairs on

the motor coach, which took place in Georgia;

* Blue Bird’s buses are sold in Arkansas, by an

independent distributer, Central States Bus Sales;

* Central States Bus Sales is not a subsidiary,

representative, or alter-ego of Blue Bird;

* United Engines is a Blue Bird factory authorized

maintenance center, doing business in Arkansas; and

* United Engines is not a subsidiary, representative,

or alter ego of Blue Bird.

See Complaint (Doc. 1); Blue Bird’s Motion to Dismiss (Doc.

3). 

Plaintiff contends that Blue Bird has had “minimum

contacts” with Arkansas through an independent distributor of

Blue Bird School buses, Central States Bus Sales, and an

independent factory-authorized maintenance facility, United

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Engines, both located in and doing business in Arkansas. See

Plaintiff’s Response and Brief to Response to Motion Dismiss.

(Docs. 10-11.) 

When evaluating a defendant’s contacts with the forum

state, the court may consider contacts made with the forum

state which were made by other parties on behalf of the

defendant when the defendant has directed those activities.

Digi-Tel Holdings v. Proteq Telcoms, 89 F.3d 519, 524 (8 Cir. th

1996). A plaintiff must show that the defendant purposely

directed its activities at the third-party for the Due Process

Clause to be satisfied. Guinness Import Co. v. Mark VII

Distributors, Inc., 153 F.3d 607, 615 (8 Cir. 1998) (citing th

Burlington Industries, Inc., 97 F.3d at 1103). Merely placing

a product in the stream of commerce is not enough to satisfy

the “minimum contacts” requirement. Guinness Import Co., 153

F.3d at 615. 

Blue Bird cites Burlington Industries, Inc. v. Maples

Industries, Inc., 97 F.3d 1100 (8 Cir. 1996), for the th

proposition that it does not have "minimum contacts" with the

State of Arkansas and that the Plaintiff is unable to meet the

burden to show a prima facie case of personal jurisdiction

over the defendant. In Burlington, the Court reversed the

district court's finding of personal jurisdiction over a

nonresident defendant through its commercial contracts to sell

goods through non-parties in Arkansas. The defendant in

Burlington had no place of business in Arkansas, was not

registered to do business in Arkansas, had no offices,

inventory, bank accounts, real estate, personal property,

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employees or agents in Arkansas. Id. at 1103. 

In Burlington, the Court found it significant that the

non-resident defendant had no office or agent in Arkansas and

that no sales representative or other employee ever entered

Arkansas in connection with the sales contracts at issue. The

Court dismissed the trade secret claims due to lack of

personal jurisdiction, even though the items in question were

built and shipped from Arkansas (by a third-party contracted

by the non-resident defendant) and the defendant sold its

products to national retailers. The Court concluded that the

defendant had insufficient contacts with Arkansas even though

the defendant’s 

products were sold to Arkansas retailers, including

Wal-Mart, and Defendant’s officers have traveled to

Arkansas to obtain the Wal-Mart account.

Defendant’s space-dye machines were used to dye

yarn incorporated into products sold, either retail

sales or by catalogue, in Arkansas. Such facts,

however simply mean that [Defendant] functions as a

manufacturer/merchant which sells goods through

non-parties in the state of Arkansas. Simple

commercial contacts, unrelated to Burlington’s

trade secret claims are insufficient to establish

personal jurisdiction.

Id. (emphasis added). 

In the present case, Blue Bird is a Georgia corporation,

while Central States Bus Sales and United Engines are both

companies registered to do business in Arkansas. The

Plaintiff contends that personal jurisdiction over Blue Bird

exists and that venue in this Court is proper as Blue Bird has

sufficient “minimum contacts” with Arkansas through the

contacts of third-parties, Central States Bus Sales and United

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 Plaintiff’s Response to Motion to Dismiss (Doc. 10); Declaration 5

of Clifford Riggins, Jr. (Doc. 12).

 See Plaintiff’s Brief in Support of Response to Motion to Dismiss 2 6

(Doc. 11).

 See Plaintiff’s Motion to Dismiss 2 (Doc. 10). 7

 The Plaintiff directs the Court to a mission statement appearing 8

on Central States Bus Sales website, stating “In 1997 Blue Bird approached

Gary Deekan about additional sales territory for the rest of Missouri and

the state of Arkansas.” Exhibit B, 2 (Doc. 12). However, this is

insufficient to show that Blue Bird had any control over the distribution

network or how the distribution network is set up. 

9

Engines. Plaintiff states that Blue Bird sells school buses

through its “sales representative,” Central States Bus Sales.5

Based on the number of Blue Bird school buses found in

Arkansas, Plaintiff contends that Blue Bird’s contacts with

Arkansas are substantial. Plaintiff further contends that 6

Blue Bird’s contacts with Arkansas are shown by Blue Bird’s

name appearing in an advertisement in a Little Rock, Arkansas

phonebook. 

7

However, Plaintiff fails to present sufficient evidence

that Blue Bird has any control over Central States Bus Sales ,

8

a distributor of Blue Bird school buses in Arkansas, or United

Engines, a factory-authorized repair facility for Blue Bird

motor coaches. Additionally, the existence of Blue Bird’s

name in an Arkansas phonebook advertisement for Central States

Bus Sales fails to shed any light on whether Central States

Bus Sales has an adequate relationship with Blue Bird to

support a finding of personal jurisdiction over Blue Bird.

The Plaintiff has failed to show what, if any, activities or

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conduct of Blue Bird caused the products and advertisement to

be in Arkansas. 

The existence of Blue Bird products in Arkansas “is

insufficient to support a finding of general personal

jurisdiction under a stream-of-commerce theory.” See Dever v.

Hentzen Coatings, Inc., 380 F.3d 1070, 1075 (8 Cir. 2004). th

While it is clear that Blue Bird school buses are in Arkansas,

there is no evidence as to how they came to be in the forum

State. “It is foreseeable that the purchasers of automobiles

sold by [a defendant] may take them to [the forum State]. But

the mere ‘unilateral activity of those who claim some

relationship with a nonresident defendant cannot satisfy the

requirement of contact with a the forum State.’” World-Wide

Volkswagen Corp. Et Al., 444 U.S. at 298 (quoting Hanson v.

Denckla, 357 U.S. 235, 253 (1958)). The Court has not been

provided with sufficient evidence that Blue Bird created,

controlled, or employed the distribution system that brought

Blue Bird products to Arkansas, nor is there evidence that

Blue Bird employees ever visited Arkansas or had any

connection to Central States Bus Sales or United Engines. It

follows that Blue Bird did not purposefully direct its

activities toward Arkansas residents. Therefore, the Court

finds that contacts of Central States Bus Sales and United

Engines with Arkansas were not made on behalf of Blue Bird.

Blue Bird’s actions, as they pertain to this cause of action,

are insufficient "minimum contacts" for the Plaintiff to

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establish a prima facie case of personal jurisdiction over

Blue Bird. 

Even if the Court could find Blue Bird had sufficient

“minimum contacts” with Arkansas through alleged business

relationships with either Central States Bus Sales or United

Engines, the facts of this case would not warrant the Court’s

exercise of personal jurisdiction over Blue Bird. 

While purposeful availment by the defendant is a necessary

condition for the exercise of personal jurisdiction, it is not

always sufficient. In certain unusual cases, the “minimum

requirements inherent in the concept of ‘fair play and

substantial justice’ may defeat the reasonableness of

jurisdiction even [though] the defendant has purposefully

engaged in forum activities.’” Falkirk Mining Co. v. The

Japan Steel Works, Limited, 906 F.2d 369, 374 (8 Cir. 1990) th

(quoting Burger King Corp. V. Rudzewicz, 471 U.S. 462, 477-78

(1985)) (additional cites omitted). In addition to applying

the five factors articulated in Land-of-Nod, the Supreme Court

also looked at 

the burden on the defendant, the interests of the

forum state in adjudicating the dispute, the

plaintiff’s interest in obtaining convenient and

effective relief, the interstate judicial system’s

interest in obtaining the most efficient resolution

of controversies, and the shared interest of the

several states in furthering fundamental

substantive social policies.

Falkirk Mining Co., 906 F.2d at 374 (citing Asahi metal

Industry Co. V. Superior Court, 480 U.S. 102, 113 (1987) (a

plurality of the Court found that the defendant’s intentional

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12

act of placing tire components in the stream of commerce,

coupled with the knowledge that some of its components would

end up in the forum state was not a sufficient basis for

personal jurisdiction)). In Asahi, “[a] unanimous Court ‘held

that the substantial burden on the nonresident defendant, when

weighted against the relatively lesser interest of the

plaintiff and the forum state, precluded the exercise of

jurisdiction consistent with due process.’” Id. at 375

(citation omitted).

The burden on Blue Bird to defend this case in Arkansas

would be significant, as the evidence and witnesses related to

Plaintiff’s claim are located in Georgia, as are Blue Bird’s

offices and employees. Furthermore, Blue Bird would be forced

to defend Plaintiff’s claims in a state where it has no

offices, agents, property, or employees. The State of

Arkansas’ interest over this case is minimal at most, as the

contract for sale was created and executed in the State of

Georgia, both the legal and physical transfer of the motor

coach took place in Georgia, the initial alleged mechanical

difficulties occurred outside Arkansas, and repairs on the

motor coach took place in Georgia.

The reasonableness of finding personal jurisdiction over

Blue Bird through “minimum contacts” made by an independent

distributer and/or a factory-authorized service center would

be defeated by fair play and substantial justice. Such a

finding, on the basis of a remote relationship between Blue

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13

Bird and an independent distributor or an authorized service

center, would not comport with fair play when the item giving

rise to the present cause of action is a motor coach (not a

school bus) purchased and received in Georgia and where the

mechanical difficulties involving the said motor coach were

addressed in Georgia. To hold otherwise would violate the

holding in Asahi, as the interests of Plaintiff and the State

of Arkansas are outweighed by the substantial burden on the

nonresident defendant, Blue Bird. 

The Court agrees with Blue Bird that the Court does not

have personal jurisdiction over Blue Bird. There are

insufficient "minimum contacts" for the Court to exercise

personal jurisdiction over Blue Bird. Additionally, personal

jurisdiction over Blue Bird would not comport with fair play

and substantial justice. Upon due consideration, Blue Bird’s

Motion to Dismiss is GRANTED.

Separate Defendant Bleakley.

The facts found by the Court on Plaintiff’s claim that

this Court has personal jurisdiction over separate defendant

Bleakley are as follows:

* Bleakley is not licensed to transact business in

Arkansas;

* Bleakley is a Georgia corporation;

* Bleakley does not have an agent for service of

process in Arkansas;

* All transactions regarding the motor coach in

question were conducted in Georgia, to include the

sale and delivery of the motor coach; and

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* Bleakly performed repairs on the motor coach in

Georgia.

See Bleakley’s Motion to Dismiss (Doc. 13); Complain (Doc. 1).

The Plaintiff does not assert that the Court has personal

jurisdiction over Bleakley based on Bleakley’s contacts with

Arkansas. The Plaintiff contends that the Court has personal

jurisdiction over Bleakley due to Bleakley being Blue Bird’s

“dealer, representative, agent and alter-ego,” thereby relying

upon the Court’s exercise of personal jurisdiction over Blue

Bird. See Plaintiff’s Brief in Support of Response to Motion

to Dismiss 1 (Doc. 21). Plaintiff cites In re North Dakota

Personal Injury Asbestos Litigation No. 1, 737 F.Supp. 1087

(N.D. 1990), for the proposition that personal jurisdiction is

proper over a defendant not physically present in the forum

state if another with sufficient contacts is acting as its

alter ego. 

To establish the propriety of personal jurisdiction over

Bleakley, Plaintiff clearly relies upon the relationship

between Bleakley and Blue Bird, and the contention that Blue

Bird has sufficient “minimum contacts” with Arkansas for this

Court to find the existence of personal jurisdiction over Blue

Bird. However, this Court has found that there are

insufficient contacts with Arkansas to find personal

jurisdiction over Blue Bird. Therefore, Plaintiff’s assertion

that the Court has personal jurisdiction over Bleakley must

likewise fail. Further, the Court declines to determine

whether Bleakley is an alter ego for Blue Bird, as the issue

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15

is moot with the finding that Blue Bird does not have

sufficient contacts with Arkansas. Upon due consideration,

Bleakley’s Motion to Dismiss is GRANTED.

Conclusion.

The Court finds that the Plaintiff has not met its burden

as the moving party to clearly establish that the Court has

personal jurisdiction over the Defendants. There is

insufficient evidence that either Defendant had “minimum

contacts” with Arkansas that would form the basis for personal

jurisdiction, nor is there sufficient evidence that either

Defendant committed an act by which they purposely availed

themselves of the privilege of conducting activities within

Arkansas–thus reaping the benefits and protections of its

laws. 

Upon due consideration, separate Defendants’, Blue Bird

and Bleakley, motions to dismiss for lack of personal

jurisdiction are GRANTED and Plaintiff’s complaint is hereby

DISMISSED WITHOUT PREJUDICE pursuant to Federal Rule of Civil

Procedure 12(b)(2). As the Plaintiff's action has been

dismissed, the Court need not address the issue of venue. The

parties shall bear their own respective costs and attorneys

fees. 

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IT IS SO ORDERED this 30 day of November 2005. th 

 /S/ Robert T. Dawson 

Robert T. Dawson

United States District Judge

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