Court Opinion

ID: 3020737
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:23:25.418542+00
Date Added: 2024-06-11T11:47:24.678035
License: Public Domain

United States Court of Appeals

                                             FOR THE EIGHTH CIRCUIT

          97-3707EMSL

In re: Federal Fountain, Inc.,                         *
                                                       *
          Debtor.             *
                                                       * Appeal from the United States
-----------------------------------------------        * District Court for the
                                                       * Eastern District of Missouri
David A. Warfield, Trustee of the Estate               *
of Federal Fountain, Inc.,                             *
                                                       *
          Appellant,                                   *
                                                       *
v.                                                     *
                                                       *
KR Entertainment, Inc., *
                                                       *
          Appellee.                                    *

                                                ORDER
        On the Court's own motion, the opinion and judgment dated May 5, 1998 are vacated. The attached
opinion is being filed in its stead.

                                                       May 11, 1998

Order Entered at the Direction of the Court:

Clerk, U.S. Court of Appeals, Eighth Circuit
                    United States Court of Appeals
                          FOR THE EIGHTH CIRCUIT

No.   97-3707EMSL

In re: Federal Fountain, Inc.,  *
                                *
     Debtor.                    *
                                *       Appeal from the United States
------------------------------  *       District Court for the
                                *       Eastern District of Missouri
David A. Warfield, Trustee of   *
the Estate of Federal Fountain, *
Inc.,                           *
                                *
     Appellant,                 *
                                *
v.                              *
                                *
KR Entertainment, Inc.,         *
                                *
     Appellee.                  *

                              ORDER
     On the Court's own motion, the opinion and judgment dated
May 5, 1998 are vacated. The attached opinion is being filed in
its stead.

                                    May 11, 1998

Order Entered at the Direction of the Court:

Clerk, U.S. Court of Appeals, Eighth Circuit
                      United States Court of Appeals
                                FOR THE EIGHTH CIRCUIT
                                      ___________

                                      No. 97-3707
                                      ___________

In re Federal Fountain, Inc.,         *
                                      *
             Debtor.                  *
___________________________           *
                                      *
David A. Warfield, Trustee of the     *
Estate of Federal Fountain, Inc.,     *
                                      * Appeal from the United States
             Appellant,               * District Court for the Eastern
                                      * District of Missouri.
       v.                             *
                                      *
KR Entertainment, Inc.,               *
                                      *
             Appellee.                *
                                  ___________

                                Submitted: April 16, 1998

                                    Filed: May 11, 1998
                                      ___________

Before WOLLMAN, BEAM, and MORRIS SHEPPARD ARNOLD, Circuit Judges.
                           ___________

MORRIS SHEPPARD ARNOLD, Circuit Judge.

      Federal Fountain, Inc. (represented by its trustee in bankruptcy, David A.
Warfield), and KR Entertainment, Inc., entered into a contract under which Federal
Fountain agreed to design and install certain equipment necessary for the operation of
KR's water entertainment show in the Riviera Hotel in Las Vegas, Nevada. While
involved in bankruptcy proceedings, see 11 U.S.C. §§ 701-766, Federal Fountain filed
suit to collect the balance due on the contract. KR moved to dismiss for lack of
personal jurisdiction and the district court1 granted the motion. Federal Fountain
appealed. We affirm.

       Fed. R. Bankr. P. 7004(d) provides that "[t]he summons and complaint and all
other process except a subpoena may be served anywhere in the United States."
Several appellate courts have held that this provision, and similar ones that provide for
national service of process, will not offend the Constitution in a particular case if there
are certain minimum contacts between the defendant and the United States of
America. See, e.g., Busch v. Buchman, Buchman & O'Brien, 11 F.3d 1255, 1258 (5th
Cir. 1994); Diamond Mortgage Corp. v. Sugar, 913 F.2d 1233, 1244 (7th Cir. 1990),
cert. denied, 498 U.S. 1089 (1991); and Mariash v. Morrill, 496 F.2d 1138, 1143,
1143 n.7 (2nd Cir. 1974).

       We have, however, adopted a different view. We have held instead that
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), requires " 'in every
case' " that there be minimum contacts between the defendant and the state in which
the defendant is expected to answer. South Dakota v. Kansas City Southern
Industries, Inc., 880 F.2d 40, 44 n.10 (8th Cir. 1989), cert. denied, 493 U.S. 1023
(1990), quoting Reynolds Metals Co. v. Columbia Gas System, Inc., 694 F. Supp.
1248, 1250 (E.D. Va. 1988) (emphasis in Reynolds). After stating this principle, we
proceeded to consider the defendant's contacts with the state of South Dakota to
determine whether personal jurisdiction over the defendant was properly acquired.
Kansas City Southern, 880 F.2d at 44 n.10. We have thus squarely held that service
of process outside the forum state under a national service of process statute confers
personal jurisdiction over

      1
        The Honorable Catherine D. Perry, United States District Judge for the Eastern
District of Missouri.

                                           -4-
a defendant only if that defendant has the requisite minimum contacts with the forum
state.

        Federal Fountain asks us to interpret Kansas City Southern differently. It
contends first that in that case we were simply interpreting the Clayton Act and that
the phrase "in every case" refers to every case that arises under that act. Federal
Fountain also seems to argue that our analysis of the defendant's contacts with the
forum state in Kansas City Southern had to do with the issue of venue, that is, with
the question of whether the defendant there was "transact[ing] business" in the forum
state, and not with the issue of personal jurisdiction. See 15 U.S.C. § 22. We reject
both of these contentions.

       The principle applied in Kansas City Southern, 880 F.2d at 44 n.10, as the
court plainly stated, was that personal jurisdiction may not be established over a
defendant unless that defendant has certain minimum contacts with the state in which
the federal court is sitting. It is true that in determining that jurisdiction was proper,
we relied on facts that the district court found in deciding that there was proper venue.
Id. But there is no indication there that we were inquiring into the venue issue for its
own sake. Indeed, it is clear that we were not.

       Nor have we ever approved the approach taken by the Fourth and Eleventh
Circuits, under which a court that applies a statute permitting national service of
process first inquires whether the proposed forum puts the defendant at a " 'severe
disadvantage' " in defending the action. See, e.g., Republic of Panama v. BCCI
Holdings, 119 F.3d 935, 948 (11th Cir. 1997), quoting McGee v. International Life
Insurance Co., 355 U.S. 220, 223 (1957); see also ESAB Group, Inc. v. Centricut,
Inc., 126 F.3d 617, 627 (4th Cir. 1997), cert. denied, 118 S. Ct. 1364 (1998). If so,
the court then performs a "balancing" test, weighing the inconvenience to the
defendant against something called the "federal interests" in litigating the matter in the
particular forum. Republic of Panama, 119 F.3d at 946; see also ESAB Group, Inc.,
126 F.3d

                                          -5-
at 627. Kansas City Southern, in any case, forecloses our resort to this way of
deciding the matter, even if we were inclined to do so.

      Because Federal Fountain "adduced no evidence indicating what contacts, if
any, [KR] has with the State of Missouri," In re Federal Fountain, Inc., 212 B.R.
960, 962 (E.D. Mo. 1997), the district court properly dismissed the case for lack of
personal jurisdiction. We therefore affirm the judgment of the district court.

BEAM, Circuit Judge, concurring specially, with whom MORRIS SHEPPARD
    ARNOLD, Circuit Judge, joins, concurring.

      I concur in the opinion of the court because South Dakota v. Kansas City
Southern Industries requires the result we reach. However, in my view, Kansas City
Southern was wrongly decided for reasons advanced by the Second, Fifth and Seventh
Circuits and, to a lesser extent, the Fourth and Eleventh Circuits as well.

      A true copy.

             Attest:

                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

                                         -6-