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Global Power Supply LLC v. Acoustical Sheet Metal Inc.

United States District Court, D. Colorado

November 8, 2018

GLOBAL POWER SUPPLY LLC, a California limited liability company, Plaintiff,
v.
ACOUSTICAL SHEET METAL INCORPORATED, a Virginia corporation, Defendant.

          RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

          KATHLEEN M TAFOYA UNITED STATES MAGISTRATE JUDGE

         This case comes before the court on Defendant's “Motion to Dismiss for Lack of Personal Jurisdiction” (Doc. No. 11, filed 11/24/2018) to which Plaintiff filed a Response (Doc. No. 19, filed 9/24/2018) and to which Defendant filed a Reply (Doc. No. 21 filed 10/9/2018).

         Factual Background

         The following facts are taken from the Plaintiff's Complaint and the parties' submissions with respect to this Recommendation. Plaintiff Global Power Supply, LLC (“GPS”) is a California company that sells, rents and services electrical power generation systems. (Doc. No. 3, ¶¶ 1, 4.) Defendant Acoustical Sheet Metal Inc. (“ASI”) is a Virginia company (Doc. No. 11 at 1) that creates enclosures for power generation systems (Doc. No. 3, ¶ 4). GPS contends that it entered into a contract with ASI for the fabrication and assembly of metal enclosures for use on a construction site in El Paso County, Colorado. (Id. at ¶ 6.) According to GPS, ASI was obligated to prepare the enclosures for shipping so that no damage would occur while being shipped, but failed to properly prepare one generator that was ultimately damaged. (Id. at ¶ 8- 11.) GPS brought the present lawsuit against ASI in which GPS alleges a breach of contract. (Id. at 2.) ASI subsequently filed a motion to dismiss for lack of personal jurisdiction. (Doc. No. 11.) In its motion, ASI contends that it has no connections to Colorado other than the single shipment of enclosures that GPS arranged to have shipped to Colorado after purchase. (Id. at 7- 10.)

         Legal Standard

         Federal Rule of Civil Procedure 12(b)(2) provides that a defendant may move to dismiss a complaint “for lack of jurisdiction over the person.” Fed.R.Civ.P. 12(b)(2). Plaintiff bears the burden of establishing personal jurisdiction over the defendant. OMI Holdings, Inc. v. Royal Ins. Co., 149 F.3d 1086, 1091 (10th Cir. 1998). In the preliminary stages of litigation, Plaintiff's burden is light. Wenz v. Memery Crystal, 55 F.3d 1503, 1505 (10th Cir. 1995). Where, as here, there has been no evidentiary hearing, and the motion to dismiss for lack of personal jurisdiction is decided on the basis of affidavits and other materials, Plaintiff need only make a prima facie showing that jurisdiction exists. Id.

         Plaintiff “has the duty to support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading.” Pytlik v. Prof'l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989). The allegations in Plaintiff's complaint “‘must be taken as true to the extent they are uncontroverted by [Defendant's] affidavits.'” Wenz, 55 F.3d at 1505 (quoting Doe v. Nat'l Med. Servs., 974 F.2d 143, 145 (10th Cir. 1992)). If the parties present conflicting affidavits, all factual disputes must be resolved in Plaintiff's favor, and “[P]laintiff's prima facie showing is sufficient notwithstanding the contrary presentation by the moving party.” Id. (citation omitted). Only well-pleaded facts, as opposed to mere conclusory allegations, must be accepted as true. Id.

         To determine whether a federal court has personal jurisdiction over a nonresident defendant in a diversity action, the court looks to the law of the forum state. Taylor v. Phelan, 912 F.2d 429, 431 (10th Cir. 1990). In Colorado, the assertion of personal jurisdiction must both: (1) satisfy the requirements of the long-arm statute; and (2) comport with due process. Id.; Doering v. Copper Mountain, Inc., 259 F.3d 1202, 1209 (10th Cir. 2001); Classic Auto Sales, Inc. v. Schocket, 832 P.2d 233, 235 (Colo. 1992). Colorado's long-arm statute subjects a defendant to personal jurisdiction for engaging in-either in person or by agent-the “commission of a tortious act within the state, ” or the “transaction of any business within this state.” Colo.Rev.Stat. §§ 13-1-124(1)(a)-(b)(2007). To comport with due process, a defendant must have minimum contacts with the forum state such that maintenance of the lawsuit would not offend “traditional notions of fair play and substantial justice.” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Colorado's long-arm statute is a codification of the “minimum contacts” principle required by due process. See Lichina v. Futura, Inc., 260 F.Supp. 252, 255 (D. Colo. 1966). Accordingly, under Colorado Law, a court may assert jurisdiction to the fullest extent permitted by the Due Process Clause of the Fourteenth Amendment. See OMI Holdings, Inc., 149 F.3d at 1090; Scheuer v. Dist. Ct., 684 P.2d 249 (Colo. 1984).

         ANALYSIS

         Defendant asserts it is not subject to this court's personal jurisdiction because the court does not have general or specific jurisdiction over Defendant. (Doc. No. 11 at 1-2.) More specifically, Defendant contends that it does not have any employees, offices, agents or distributors in Colorado, or marketing in or directed toward Colorado. With the exception of a single product shipment at Plaintiff's direction, Defendant claims to have no contacts with the state of Colorado. (Id. at 2.) Plaintiff contends that this court may exercise jurisdiction over Defendant because Defendant contracted to assemble and sell generator enclosures to Plaintiff that Defendant knew Plaintiff would ship to Colorado. (Doc. No. 19 at 3-4.)

         1. Minimum Contacts

         To determine whether personal jurisdiction is proper under the Constitution, a court first looks to find minimum contacts with the forum state. See Int'l Shoe Co., 326 U.S. at 316. To establish minimum contacts with the forum state, it is “essential . . . that there be some act by which the defendant[s] purposefully avail[] [themselves] of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U.S. 235, 253 (1958). Where defendants have “purposefully directed” their activities at residents of the forum state, they have had “fair warning” that a particular activity may subject them to the jurisdiction of a foreign sovereign. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985). “The purposeful availment requirement also assures that a defendant will not be subject to the laws of a jurisdiction ‘solely as a result of random, fortuitous, or attenuated contacts, or of the unilateral activity of another party or a third person.'” AST Sports Sci., Inc. v. CLF Distribution Ltd., No. 06-1157, 2008 WL 217722, at *3 (10th Cir. Jan. 18, 2008) (quoting Benally v. Amon Carter Museum of W. Art, 858 F.2d 618, 625 (10th Cir. 1988)).

         The minimum contacts standard can be met in two ways. Id. A court may either assert specific jurisdiction over a nonresident defendant if the defendant has “purposefully directed” its activities at residents of the forum and the litigation results from the alleged injuries that arise out of or relate to those activities, Burger King Corp., 471 U.S. at 472, or, where a court's jurisdiction does not directly arise from a defendant's forum-related activities, the court may maintain general jurisdiction over the defendant based on the defendant's general business contacts within the forum state. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 415 (1984). In assessing minimum contacts in a breach of contracts case, pertinent factors include prior negotiations, contemplated future consequences, the terms of the contract and the parties' course of dealing. Benton v. Cameco Corp., 375 F.3d 1070, 1077 (10th Cir. 2004).

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