Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_05-cv-00203/USCOURTS-caed-1_05-cv-00203-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1330 Breach of Contract

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

BOU-MATIC, L.L.C.,

Plaintiff,

v.

OLLIMAC DAIRY, INC.; TURLOCK

DAIRY AND REFRIGERATION, INC.;

R.J. FULLWOOD AND BLAND,

LIMITED; FUSION ELECTRONICS,

B.V.; LELY RESEARCH HOLDING, AG;

and LELY INDUSTRIES, N.V.,

Defendants.

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1:05-cv-0203 OWW SMS

ORDER DENYING FULLWOOD

DEFENDANTS’ MOTION TO

DISMISS

(F.R.Civ.P. 12(b)(2))

I. INTRODUCTION

Defendants R.J. Fullwood and Bland, Limited, Fullwood,

Limited, and Fusion Electronics, B.V. (collectively, “Fullwood”

or “the Fullwood Defendants”) move to dismiss Plaintiff BouMatic’s Complaint pursuant to Rule 12(b)(2), F.R.Civ.P., for lack

of personal jurisdiction as to the Fullwood Defendants. The

Plaintiff opposes the motion.

II. PROCEDURAL HISTORY

Bou-Matic filed its Complaint on February 14, 2005, seeking

declaratory judgment, pursuant to 28 U.S.C. § 2201, as to its

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rights and liabilities in relation to the named Defendants. BouMatic claimed that 28 U.S.C. § 1332(a)(2) grants the court

subject-matter jurisdiction based on diversity of the parties’

citizenship and satisfaction of the $75,000 requirement for

minimum amount in controversy. 

Fullwood challenge the court’s exercise of personal

jurisdiction over them, on the grounds that their contacts with

California are insufficient to establish general or specific

jurisdiction. 

 

III. BACKGROUND

Bou-Matic is a dairy equipment supplier, distributing

nationwide in the United States through independent local

equipment dealers such as Defendant Turlock Dairy and

Refrigeration, Inc (TDR). One of its products is a robotic

milking system (RMS), which reduces the need for human

involvement in the milking process. Doc. 1, Compl., ¶¶ 3-4.

Through TDR, Bou-Matic supplied an RMS to Ollimac, after

lengthy negotiations, between April 2003 and August 2004. Decl.

of Robert A. Morelli (RAM Decl.), ¶ 7. 

The RMS did not perform to Ollimac’s expectations, and

Ollimac became concerned that the representations allegedly made

by Bou-Matic during the prior negotiations were false. Ollimac

brought these concerns to Bou-Matic, and requested assistance

from Bou-Matic and TDR to ensure that the RMS perform in the

manner which Ollimac claims Bou-Matic’s representations led it to

expect. RAM Decl., ¶¶ 8-12. Bou-Matic then filed the present

action, seeking a declaration of its rights and responsibilities

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regarding the named Defendants, who participated in various

capacities in the development, construction, sale, and

installation of the RMS. Doc. 47, Mem. in Opp., 2. 

IV. LEGAL STANDARD

Plaintiffs bear the burden of establishing that the district

court has personal jurisdiction over each defendant. See Fed.

Deposit Ins. Corp. v. British-American Ins. Co., 828 F.2d 1439,

1441 (9th Cir.1987). "[U]ncontroverted allegations in the

complaint must be taken as true." Dole Food Co. v. Watts, 303

F.3d 1104, 1108 (9th Cir.2002) (citing AT & T v. Compagnie

Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir.1996)). "When a

defendant moves to dismiss for lack of personal jurisdiction, the

plaintiff is 'obligated to come forward with facts, by affidavit

or otherwise, supporting personal jurisdiction.'” Scott v.

Breeland, 792 F.2d 925, 927 (9th Cir.1986) (quoting Amba Mktg.

Sys., Inc. v. Jobar Int'l, Inc., 551 F.2d 784, 787 (9th

Cir.1977)). Any "conflicts between the facts contained in the

parties' [pleadings and] affidavits must be resolved in [the nonmovant's] favor for purposes of deciding whether a prima facie

case for personal jurisdiction exists." AT & T, 94 F.3d at 588

(citations omitted); see also Dole, 303 F.3d at 1108 (finding

that "[c]onflicts between parties over statements contained in

affidavits must be resolved in the plaintiff's favor"). Where,

as here, the district court "relies solely on affidavits and

discovery materials, the plaintiff need only establish a prima

facie case of jurisdiction." See Rano v. Sipa Press, Inc., 987

F.2d 580, 587 n. 3 (9th Cir.1993). 

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Personal jurisdiction over a nonresident defendant is

ordinarily tested by a two-part analysis. First, the exercise of

jurisdiction must satisfy the requirements of the applicable

state long-arm statute. Second, the exercise of jurisdiction

must comport with federal due process. Chan v. Soc'y

Expeditions, Inc., 39 F.3d 1398, 1404-05 (9th Cir.1994).

California's "long-arm" statute, however, "allows courts to

exercise personal jurisdiction over defendants to the extent

permitted by the Due Process Clause of the United States

Constitution.” Harris Rutsky & Co. Ins. Servs. v. Bell &

Clements Ltd., 328 F.3d 1122, 1129 (9 Cir. 2003); see also Data th

Disc, Inc. v. Sys. Tech. Assoc., 557 F.2d 1280, 1286 (9th

Cir.1977); Cal. Civ. Proc. § 410.10 (stating that "[a] court of

this state may exercise jurisdiction on any basis not

inconsistent with the Constitution of this state or of the United

States"). Hence, the court “need only determine whether personal

jurisdiction in this case would meet the requirements of due

process.” Harris Rutsky & Co., 328 F.3d at 1129 (quoting

Brainerd v. Governors of the Univ. of Alberta, 873 F.2d 1257,

1258 (9 Cir. 1989)). 

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For a defendant to be subject to personal jurisdiction in

the forum state, due process requires that the defendant must

have certain minimum contacts with the forum state such that the

maintenance of the suit does not offend "traditional notions of

fair play and substantial justice." Int'l Shoe Co. v. Wash., 326

U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). Due process may

be satisfied by establishing that one of two forms of personal

jurisdiction exists: general jurisdiction or specific

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jurisdiction. See Lake v. Lake, 817 F.2d 1416, 1420-21 (9th Cir.

1987). Plaintiff alleges that the court has specific personal

jurisdiction over the Fullwood Defendants.

To determine whether the district court can exercise

specific jurisdiction over the defendants, courts apply a threepart test: (1) the non-resident defendant must purposefully

direct his activities or consummate some transaction with the

forum or resident thereof, or perform some act by which he

purposefully avails himself of the privileges of conducting

activities in the forum, thereby invoking the benefits and

protections of its laws; (2) the claim must be one which arises

out of or relates to the defendant's forum-related activities;

and (3) the exercise of jurisdiction must comport with fair play

and substantial justice, i.e., it must be reasonable. Harris

Rutsky & Co., 328 F.3d at 1129 (quoting Lake, 817 F.2d at 1421).

Under the first prong, "courts must examine the defendant's

contacts with the forum at the time of the events underlying the

dispute when determining whether they have jurisdiction." Steel

v. United States, 813 F.2d 1545, 1549 (9th Cir.1987). "The

purposeful availment standard requires more than foreseeability

of causing injury in another state." Terracom v. Valley Nat.

Bank, 49 F.3d 555, 560 (9th Cir.1995) (citing Burger King Corp.

v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528

(1985)). "The foreseeability that is critical to due process

analysis ... is that the defendant's conduct and connection with

the forum State are such that he should reasonably anticipate

being haled into court there." Terracom, 49 F.3d at 560 (citing

World- Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100

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S.Ct. 559, 62 L.Ed.2d 490 (1980)). "The purposeful availment

prong prevents defendants from being haled into a jurisdiction

through 'random,' 'fortuitous,' or 'attenuated contacts.'”

Terracom, 49 F.3d at 560 (quoting Burger King, 471 U.S. at 475).

"The second prong of the specific jurisdiction test

(litigation must 'arise out of or relate to those activities') is

met if, 'but for' the contacts between the defendant and the

forum state, the cause of action would not have arisen." 

Terracom, 49 F.3d at 561 (citing Shute v. Carnival Cruise Lines,

897 F.2d 377, 385-386 (9th Cir.1990) (citations omitted), rev'd

on other grounds, 499 U.S. 585, 111 S.Ct. 1522, 113 L.Ed.2d 622

(1991)).

The third prong of the test, reasonableness, is presumed

once the court finds purposeful availment. Ballard v. Savage, 65

F.3d 1495, 1500 (1995) (citing Sher v. Johnson, 911 F.2d 1357,

1364 (9th Cir.1990)("once court finds purposeful availment, it

must presume that jurisdiction would be reasonable")). When such

a presumption operates, the burden of proving unreasonableness

shifts to defendant. Ballard, 65 F.3d at 1500. At this point,

to avoid jurisdiction, the defendant must "present a compelling

case that the presence of some other considerations would render

jurisdiction unreasonable." Ballard, 65 F.3d at 1500 (quoting

Burger King, 471 U.S. at 477).

V. ANALYSIS

The moving parties, the Fullwood Defendants, are foreign

entities. Specifically, Fullwood, Limited, and R.J. Fullwood and

Bland, Limited, are limited liability companies organized under

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the laws of the United Kingdom and have their principal place of

business there. Fusion Electronics, B.V., is organized as a

corporation under Dutch law and has its principal place of

business in The Netherlands. Both Fullwood and Fusion

Electronics are subsidiaries of R.J. Fullwood and Bland. 

Fullwood deny having the contacts requisite to be subject to

personal jurisdiction in the Eastern District:

The Fullwood Defendants play no role in Bou-Matic’s

marketing processes and have no contractual or on-going

relationship with any of Bou-Matic’s customers. None of the

Fullwood Defendants ha[s] ever had any offices in California

or the U.S., nor have they based any of their employees

here. Furthermore, the Fullwood Defendants have never had

any sales representatives based in the U.S. Instead,

Fullwood and Fullwood and Bland both operate out of the

United Kingdom, while Fusion Electronics operates out of The

Netherlands. 

Mot. to Dismiss at 4.

Fullwood concedes, however, that in 2000 it entered into an

agreement granting Bou-Matic exclusive authority to sell and

distribute the Fullwood Defendants’ RMS within the United States. 

Mot. to Dismiss at 3. See Pl.’s Mot. in Opp. to Mot. to Dismiss

at 3.

Plaintiff claims that Fullwood adapted the RMS in two ways

for the California market. First, in consultation with BouMatic, Fullwood modified its RMS specifically to suit the Jersey

cows that predominate in the American, and particularly in the

Californian, dairy market. Secondly, Fullwood designed a new

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software system specifically to meet the needs of Ollimac’s

California operations. Pl.’s Mot. in Opp. to Mot. to Dismiss at

7-8.

In Asahi Metal Industry Co., Ltd. v. Superior Court of

California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987),

four Justices held that neither the “mere foreseeability” that

the defendant’s product would find its way into the forum State

after being placed in the stream of commerce by the defendant,

nor the defendant’s awareness that such an event would occur, 

was a sufficient basis for personal jurisdiction. Asahi, 480

U.S. at 107, 107 S.Ct. at 1031. For these Justices, “[t]he

placement of a product into the stream of commerce, without more,

is not an act of the defendant purposefully directed toward the

forum State,” and is an insufficient basis for the assertion of

personal jurisdiction over the defendant by the forum State.

Asahi, 480 U.S. at 112, 107 S.Ct. at 1032. Four other Justices

cited the rule of World-Wide Volkswagen Corp. v. Woodson, 444

U.S. 286, 100 S.Ct. 559 (1980), holding that such foreseeability

or awareness satisfies the due process requirement of minimum

contacts. Asahi, 480 U.S. at 116ff, 107 S.Ct. at 1034ff. 

Examples of “additional conduct of the defendant” that “may

indicate an intent or purpose to serve the market in the forum

State” include marketing the product through a distributor who

has agreed to serve as the sales agent in the forum State, and

designing the product for the market in the forum State. Asahi,

480 U.S. at 112-13, 107 S.Ct. at 1032; see also Tobin v. Astra

Pharmaceutical Products, Inc., 993 F.2d 528, 544 (6 Cir. 1993) th

(“Duphar cannot deny that by licensing Astra to distribute

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ritodrine in all fifty states it employed the distribution system

that brought ritodrine to Kentucky”). Plaintiff alleges that the

Fullwood Defendants took both these actions prior to the filing

of the instant suit, and no contrary evidence has been provided. 

Rano v. Sipa Press, Inc., 987 F.2d 580, 587 n. 3 (9th Cir. 1993).

Plaintiff’s evidence establishes a prima facie case of

purposeful availment, meeting the first prong of the three-prong

test for specific personal jurisdiction.

Bou-Matic has also made a prima facie case on the second

prong of the test for specific personal jurisdiction. Plaintiff

is the sole U.S. distributor for Fullwood for the RMS product. 

But for Fullwood’s appointment of Plaintiff as its U.S.

distributor, the RMS which gives rise to this dispute and

Plaintiff’s cause of action would not have been sent to Ollimac

in California. Terracom, 49 F.3d at 561. 

The reasonableness of a court’s otherwise valid assertion of

personal jurisdiction is presumed once the plaintiff has made a

prima facie case that the defendant purposefully availed itself

of business opportunities in the forum State. Ballard v.

Savage, 65 F.3d 1495, 1500 (1995). When such a presumption

operates, the burden of proving unreasonableness shifts to the

defendant. Id. To avoid jurisdiction, the defendant must

"present a compelling case that the presence of some other

considerations would render jurisdiction unreasonable." Id. 

In judging reasonableness, the court applies a test which

considers seven factors: (1) the extent of purposeful

interjection; (2) the burden on the defendant to defend the suit

in the chosen forum; (3) the extent of conflict with the

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sovereignty of the defendant's state; (4) the forum state's

interest in the dispute; (5) the most efficient forum for

judicial resolution of the dispute; (6) the importance of the

chosen forum to the plaintiff's interest in convenient and

effective relief; and (7) the existence of an alternative forum. 

Amoco Egypt Oil Co. v. Leonis Nav. Co., Inc., 1 F.3d 848, 851

(9 Cir. 1993). The court is called upon to "balance all seven th

factors, recognizing that none of the factors is dispositive in

itself." Terracom, 49 F.3d at 561 (citation omitted).

Plaintiff’s factual showing establishes that the Fullwood

Defendants have intentionally availed themselves of the

substantial dairy market that exists in California. They have an

exclusive agreement with Bou-Matic to take advantage of BouMatics’s North American distribution network generally and

specifically in California. Fullwood have adapted their product

to market conditions in California. 

The burden which defending this suit in this forum would

place on Fullwood is a cost of doing business here. “The unique

burdens placed upon one who must defend oneself in a foreign

legal system should have significant weight in assessing the

reasonableness of stretching the long arm of personal

jurisdiction over national borders.” Asahi, 480 U.S. at 114.

The Fullwood Defendants are Dutch and British entities. 

“When minimum contacts have been established,” though,

“often the interests of the plaintiff and the forum in the

exercise of jurisdiction will justify even the serious burdens

placed on the alien defendant.” Id. Bou-Matic is a limited

liability corporation incorporated under the laws of Nevada. Its

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principal place of business is Wisconsin. The legitimate

interests of California in this dispute center on its residents

TDR, a dealer for Plaintiff in the RMS, and also on the dairy

which has allegedly suffered loss of business and damages caused

by a defective RMS. Id. California’s interest in the well-being

of its dairy industry, one of the nation’s largest, is also

implicated in this suit. Asahi, 480 U.S. at 114-15.

The RMS was installed, and is allegedly malfunctioning, at

the Ollimac Dairy in Turlock, California. Many of the operative

facts, including but not limited to the representations made to

induce the sale, modifications to the RMS for Plaintiff, and

operation of the RMSs, are in the forum State. Interests of

judicial efficiency and of the Plaintiff’s convenience both favor

California as a proper forum State. 

As to the extent of conflict with the sovereignty of a

foreign state, Fullwood argues, “It is likely that the courts of

both the United Kingdom and The Netherlands would view the

assertion of jurisdiction over the Fullwood Defendants as

conflicting with their national sovereignty, since the Fullwood

Defendants are Dutch and British entities.” Reply Mem. At 8. 

"Great care and reserve should be exercised when extending

our notions of personal jurisdiction into the international

field." Asahi, 480 U.S. at 115, 107 S.Ct. at 1034 (citation

omitted). "[L]itigation against an alien defendant creates a

higher jurisdictional barrier than litigation against a citizen

from a sister state because important sovereignty concerns

exist." Core-Vent Corp. v. Nobel Industries AB, 11 F.3d 1482,

1489 (9 Cir. 1993) (citation omitted). 

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In determining how much weight to give this factor, the

Ninth Circuit has focused on the presence or absence of

connections to the United States in general, not just to the

forum state. Sovereignty concerns weigh more heavily when the

defendants have no United States-based relationships. Sinatra,

854 F.2d 1191 (1988). By entering into an exclusive

distributorship agreement with Bou-Matic, the Fullwood Defendants

sought and obtained extensive and continuous contacts with the

American market and should expect to be haled into U.S. courts. 

The Fullwood Defendants have cited no expression of

sovereign interest in this case on the part of either the Dutch

or British governments. They cite no other foreign policy, law,

or political consideration that would prevent the court from

exercising jurisdiction, beyond the speculative one quoted above. 

See Raffaele v. Compagnie Generale Maritime, 707 F.2d 395, 398

(9 Cir. 1983); Brainerd v. Governors of the University of th

Alberta, 873 F.2d 1257, 1260 (9 Cir. 1989). This factor

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disfavors Fullwood. 

Fullwood have not presented a compelling case against the

reasonableness of the court’s assertion of jurisdiction over

them, and have not overcome the presumption and direct evidence

of their purposeful availment in California of Plaintiff’s

business for their RMS, reasonably justifying assertion of

personal jurisdiction.

 

 

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VI. CONCLUSION

The Fullwood Defendants’ motion to dismiss for lack of

personal jurisdiction is DENIED. 

SO ORDERED. 

DATED: March _15__, 2006

/s/ OLIVER W. WANGER__________

 Oliver W. Wanger

UNITED STATES DISTRICT JUDGE

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