Personal Jurisdiction Over Foreign Corporation Asserted By Minnesota Court Of Appeals

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[co-author: Miller Jozwiak]

Personal jurisdiction over a foreign corporation was asserted by The Minnesota Court of Appeals in a recent asbestos case. The court found that the company’s former asbestos-tile factory in the state provided sufficient minimum contacts for specific personal jurisdiction.

Backe v. A.W. Kuettel & Sons, Inc, No. A19-1959

Plaintiffs claimed that Gene Backe developed mesothelioma as a result of personal and secondary asbestos exposure from an asbestos-tile factory in Minnesota where he and his family members visited and worked at various times beginning in 1939. The Conwed Corporation operated the factory from 1959 through 1985 and manufactured asbestos-containing ceiling tile there from 1959 to 1974. Conwed sold the factory in 1985 and stopped doing business in Minnesota at that time. Backe was diagnosed with mesothelioma in December 2018. He filed suit against Conwed and other defendants in June 2019. Asserted claims included negligence, strict liability, and breach of warranty.

Conwed moved to dismiss the plaintiffs’ complaint. The company argued that Minnesota lacked personal jurisdiction over the company (a foreign corporation). It had not conducted business in Minnesota since 1985 -more than 30 years before the plaintiffs’ claim accrued. The district court denied the motion and held traditional notions of fair play and substantial justice “favor[ed] the exercise of Minnesota’s jurisdiction notwithstanding the date of the contacts.”

On appeal, Conwed argued that the district court erred by failing to consider the temporal relevance of its contacts with Minnesota before applying the traditional five-factor minimum contacts test. Specifically, Conwed argued for a standard requiring its contacts to be within a “reasonable period of time”. Either immediately prior to when Backe filed the complaint or when he received his cancer diagnosis. But the Minnesota Court of Appeals rejected that standard. It held that Conwed relied only on non-binding, persuasive authority and that arguments for adopting that authority were more appropriate for the Minnesota Supreme Court or the legislature.

Minnesota’s Five-Factor Analysis

Conwed also argued that the traditional five-factor analysis did not support Minnesota exercising personal jurisdiction in the case. As set forth in Hardrives, Inc. v. City of LaCrosse, Minnesota courts consider five factors when determining whether to exercise personal jurisdiction:

  1. quantity of contacts with Minnesota
  2. nature and quality of those contacts
  3. connection of the cause of action with the contacts
  4. Minnesota’s interest in providing a forum
  5. convenience of the parties

With respect to the first three factors, Conwed argued that its contacts were too attenuated in time from the claim to support personal jurisdiction. However, the appellate court rejected this reasoning. It found the first three factors favored exercising personal jurisdiction over Conwed because it had operated a factory in Minnesota during the time that Backe alleged exposure causing his disease. The court then considered the two factors that relate to notions of fair play and substantial justice – Minnesota’s interest in providing a forum and convenience to the parties. The court found that while Conwed may be inconvenienced by litigating in Minnesota, Backe is a Minnesota resident and many of the witnesses are also from Minnesota. Therefore, the state’s interest in providing redress for its citizens favored exercising personal jurisdiction.

The appellate court’s decision not to narrow the minimum-contacts factors falls in line with the recent Minnesota Supreme Court decision in Bandemer v. Ford Motor Co., A17-1182. There, the plaintiff was injured in a car accident in Minnesota in a Ford vehicle; however, the vehicle was not designed, manufactured, or sold in Minnesota. Defendant Ford argued for the court to adopt a “causal” standard under which the defendant’s contacts with Minnesota must have caused the plaintiff’s claims for personal jurisdiction over the defendant to be proper. The Minnesota Supreme Court rejected the causal standard and declined to apply a new, narrower standard.

Beyond Minnesota

While Minnesota courts appear disinclined to narrow the standard for finding specific personal jurisdiction over foreign corporations, the U.S. Supreme Court is expected to weigh in on this issue in the near future in Ford Motor Co. v. Montana Eighth Judicial District Court, No. 19-368, with which Bandemer has been consolidated. On October 7, oral arguments from both sides as to whether defendants’ forum contacts must cause plaintiffs’ claims will be heard. Depending on the outcome, foreign corporations sued in toxic tort litigation may receive additional support in fighting to dismiss suits filed in states where they are not located.

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