Elliott Auto Supply Co., Inc. v. Fisher Auto Parts, Inc.

Background

Elliott Auto Supply Co., doing business as Factory Motor Parts (FMP), sued Fisher Auto Parts in a diversity case. FMP alleged that Fisher used confidential information obtained during a bankruptcy asset auction in Texas to hire FMP employees and take business from FMP locations in Ohio, Virginia, Pennsylvania, and New York. FMP asserted claims for common-law tortious interference with prospective and ongoing economic advantage, misappropriation of trade secrets or confidential information under Minnesota law, and common-law tortious interference with existing and prospective business relations.

Fisher is incorporated under Virginia law and has its principal place of business in Staunton, Virginia. The opinion states that Fisher has no employees, stores, warehouses, or offices in Minnesota, is not registered to do business there, does not regularly ship or deliver products there, and has not solicited customers, directed marketing efforts, or recruited employees there.

Motion and Legal Standard

Fisher moved to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction and under Rule 12(b)(3) for improper venue. Fisher alternatively sought transfer to the United States District Court for the Western District of Virginia.

Personal jurisdiction is a court’s authority over a defendant. The plaintiff bears the burden of showing that jurisdiction exists. The court evaluated whether Fisher had sufficient minimum contacts with Minnesota to satisfy constitutional due process, considering the nature and quality of Fisher’s contacts, their quantity, the relationship between those contacts and FMP’s claims, Minnesota’s interest in providing a forum, and convenience to the parties. Because the parties submitted evidence beyond the pleadings and the court relied on that evidence, the court treated the jurisdiction motion as equivalent in substance to a summary-judgment motion and viewed the evidence in the light most favorable to FMP.

The court also considered the effects test for intentional torts. Under that test, the plaintiff must show that the defendant acted intentionally, expressly aimed its conduct at the forum state, and caused harm that was principally suffered in that state and was known likely to be suffered there.

Personal Jurisdiction Analysis

The court rejected FMP’s argument that Fisher’s Minnesota contacts supported jurisdiction. FMP identified three telephone calls in which Fisher representatives asked about potentially purchasing locations FMP had acquired through the bankruptcy auction, and a brief 2017 visit by Bo Fisher to FMP’s Minnesota headquarters. The court found that the telephone calls had no demonstrated Minnesota connection: the record did not show that FMP’s participants were in Minnesota during the calls, and no evidence showed that Fisher asked about Minnesota locations. The opinion states that Fisher’s unrebutted position was that it was not interested in purchasing Minnesota locations and that the subject was never discussed.

The court found that the 2017 visit did not support jurisdiction because it occurred years before the events in dispute, was made on behalf of a separate Virginia-based entity, concerned whether FMP might join that entity’s buying group and distribution network, and lasted less than six hours. At most, Fisher had four Minnesota contacts, which the court found was not a substantial number. The court also found no meaningful relationship between those contacts and FMP’s claims, which arose from Fisher’s auction activity in Texas, Virginia-based business activity, and actions involving FMP’s operations in Ohio, Pennsylvania, Virginia, and New York.

The court further held that Minnesota’s interest in providing a forum for an entity based in Minnesota and the convenience of a Minnesota forum could not make up for the absence of minimum contacts. It concluded that the alleged conduct was not expressly aimed at Minnesota. The fact that Fisher allegedly knew FMP was located in Minnesota and knew FMP might suffer injury there amounted only to effects in Minnesota, which was insufficient to establish personal jurisdiction.

Transfer and Disposition

The court explained that transfer can be appropriate when a court lacks personal jurisdiction and the plaintiff seriously intends to pursue its claims. Fisher requested transfer to the Western District of Virginia, where it is incorporated and has its principal place of business. The court declined to transfer the case because FMP had defended its right to proceed in Minnesota but had not identified a preferred alternative district, and its objections to Virginia created doubt about whether it would continue the case if Virginia were the only available venue.

The court therefore granted Fisher Auto Parts, Inc.’s motion to dismiss for lack of jurisdiction and improper venue, or alternatively to transfer or change venue. The court ordered that the action be dismissed without prejudice for lack of personal jurisdiction. The dismissal left FMP the option to recommence the case in a forum of its choosing, subject to any later objections concerning personal jurisdiction or venue.