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Everett v. Leading Edge Air Foils, LLC

United States District Court, E.D. Wisconsin

July 7, 2017

GREGORY EVERETT, Plaintiff,
v.
LEADING EDGE AIR FOILS, LLC, Defendant.

          DECISION AND ORDER

          LYNN ADELMAN, United States District Judge

         The plaintiff, Gregory Everett, suffered serious injuries when a small plane he was piloting crashed. He claims that the crash was caused by a defective Rotax engine that he purchased at a popular airshow in Oshkosh, Wisconsin. Everett filed this suit, alleging negligence and strict products liability, in the Eastern District of Wisconsin against four companies that he alleges were involved in the design, manufacture, distribution, and sale of the engine.

         This case was initially assigned to Judge Rudolph T. Randa. While the case was pending before Judge Randa, three of the four defendants filed motions to dismiss on the ground that they are not subject to personal jurisdiction in Wisconsin. These three defendants are Bombardier Recreational Products, Inc.; BRP-Rotax GmbH & Co KG (formerly known as BRP-Powertrain GmbH & Co KG); and Kodiak Research, Ltd. I will refer to these defendants, respectively, as “BRP Inc., ” “BRP-Rotax, ” and “Kodiak.” The plaintiff opposed the motions to dismiss and also requested leave to conduct discovery relating to personal jurisdiction. Judge Randa denied the plaintiff's request for jurisdictional discovery and granted the defendants' motions to dismiss. See Dec. & Order of Sept. 9, 2015, ECF No. 33. A short time later, the plaintiff filed a motion for reconsideration of these decisions, which Judge Randa denied. See Dec. & Order of January 20, 2016, ECF No. 45. The case then proceeded against the fourth defendant, Leading Edge Air Foils, Inc., or “LEAF, ” on the merits. At about this time, Judge Randa became unable to preside over cases, and the case was reassigned to me.

         LEAF is a small Wisconsin company that sold the Rotax engine to the plaintiff at the airshow in Oshkosh, Wisconsin. After taking some discovery from LEAF, including the deposition of LEAF's owner, William Read, the plaintiff settled its claims against this defendant. During the deposition, the plaintiff's lawyer extensively questioned Read about the previously dismissed defendants' contacts with Wisconsin. Believing that Read's testimony gives rise to a stronger basis for exercising personal jurisdiction over these other defendants, the plaintiff filed a second motion to reconsider Judge Randa's order dismissing those defendants and denying his request for jurisdictional discovery. After the plaintiff filed this motion, he and LEAF entered into a stipulation agreeing to the entry of an order dismissing LEAF from this case with prejudice. I entered such an order on May 4, 2017. Below, I address the plaintiff's motion for reconsideration of Judge Randa's order dismissing the other three defendants and denying him leave to conduct jurisdictional discovery.

         I. FACTUAL BACKGROUND

         During the life of this case, the parties have filed several motions relating to personal jurisdiction over BRP Inc., BRP-Rotax, and Kodiak, and the factual materials relevant to the plaintiff's motion for reconsideration are scattered throughout the record. For convenience, I have identified the relevant materials, and where they may be found in the record, in the margin.[1] Because neither Judge Randa nor I held a hearing on the question of personal jurisdiction, I resolve any conflicts in the parties' affidavits or other supporting materials in the plaintiff's favor. See, e.g., Purdue Research Found. v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 782-83 (7th Cir. 2003).

         The product at issue in this case is a Rotax 582 Model 99 DCDI engine. The plaintiff, who is a resident of Missouri, purchased this engine from LEAF at an airshow in Oshkosh, Wisconsin. This airshow is known as the EAA AirVenture Oshkosh, which is sponsored by the International Experimental Aircraft Association. This is one of the largest airshows in the world, and each year more than half a million people and hundreds of manufacturers of airplane products attend. Read Dep. at 10:8-10:12, 13:4-13:7; see also https://www.eaa.org/en/airventure/about-eaa-airventure- oshkosh/overview (last viewed July 7, 2017). After the plaintiff purchased the engine, he presumably transported it to his home in Missouri, where it was installed in his personal aircraft. He alleges in his complaint that, during a flight in Missouri, the engine overheated and stalled, which caused the plane to crash. The plaintiff suffered a fractured spine and other injuries that left him paralyzed below the waist.

         The engine at issue was designed and manufactured by BRP-Rotax. This company is organized under the laws of Austria and has its principal place of business in Gunskirchen, Austria. Oslinger Aff. ¶ 3. The engine itself was designed and manufactured at BRP-Rotax's facilities in Austria. Id. ¶ 4. BRP-Rotax does not directly transact business in the United States, but it sells products in the United States through its independent distributor, Kodiak Research, Ltd. Id. ¶ 11; Ronveaux Aff. ¶ 5. Kodiak is organized under the laws of the Bahamas and has its only place of business in Nassau, Bahamas. Ronveaux Aff. ¶ 3. Kodiak distributes Rotax products to retailers in the United States. Id. ¶¶ 4, 10-16. Kodiak sold the engine at issue in this case to LEAF, a Wisconsin limited liability company, through a transaction in which title to the engine passed to LEAF while the engine was still in the Bahamas, and in which LEAF was responsible for getting the engine from the Bahamas to Wisconsin. Read Dep. at 67:21-68:4. In business terms, LEAF's purchase of the engine from Kodiak was “F.O.B. Bahamas.” Id.; Ronveaux Aff. ¶ 10.

         The evidence in the record establishes that both BRP-Rotax and Kodiak are aware that LEAF purchases Rotax products from Kodiak with the intent to resell those products to customers from its location in Wisconsin. According to William Read, Kodiak has designated LEAF as an “independent service center” for Rotax engines. Read Dep. at 8:16-9:2. This means that Kodiak has granted LEAF permission to sell Rotax branded parts and use Rotax logos in its marketing materials. Id. at 9:3-9:7. Also, as a designated independent service center, LEAF attends an annual meeting at Kodiak's facility in the Bahamas. Id. at 31:14-31:25. Pascal Ronveaux, Kodiak's president, knows that LEAF is one of its independent service centers and that LEAF is located in Wisconsin. Ronveaux Dep. at 34:1-34:24; Read Dep. at 25:11-25:15. Further, Kodiak has a website that includes a map that identifies the locations of its independent service centers. See ECF No. 37-2. The map identifies LEAF as an independent service center located in Wisconsin. Id. As for BRP-Rotax, its own website has a “dealer locator” feature that identifies LEAF as a place to purchase Rotax products in Wisconsin. ECF No. 37-1.

         The remaining defendant, BRP Inc., is the parent company of BRP-Rotax. See St-Arnaud Aff. ¶ 6. BRP Inc. is organized under the laws of Canada and has its principal place of business in Valcourt, Quebec. Id. ¶ 3. According to one of BRP Inc.'s officers, BRP Inc. was not involved in the design, manufacture, or sale of the Rotax engine at issue in this case. Id. ¶ 5. Rather, the chain of events that led to the plaintiff's purchasing the engine in Wisconsin began with BRP-Rotax as the designer and manufacturer, passed through Kodiak as the distributor, and ended with LEAF as the retailer. In his complaint, the plaintiff alleges that BRP Inc. was involved in the design and manufacture of the engine. Am. Compl. ¶ 13, ECF No. 46. However, the plaintiff has not submitted evidence to contradict BRP Inc.'s affidavit stating that it was not involved in the design or manufacture of the engine. See Purdue Research, 338 F.3d at 782 (“once the defendant has submitted affidavits or other evidence in opposition to the exercise of jurisdiction, the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction”). Nor has the plaintiff offered any colorable grounds for believing that BRP Inc. was in fact involved in the design and manufacture of the engine, such that further discovery on this topic would be warranted. See Central States, Se. & Sw. Areas Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 946 (7th Cir. 2000) (stating that jurisdictional discovery against a defendant is warranted only if plaintiff establishes a “colorable or prima facie showing of personal jurisdiction”). Thus, for purposes of determining whether BRP Inc. is subject to personal jurisdiction in Wisconsin, I assume that it was not involved in the design or manufacture of the engine.

         II. DISCUSSION

         As noted, the issue of personal jurisdiction arises in the context of the plaintiff's second motion to reconsider Judge Randa's original order granting BRP Inc.'s, BRP-Rotax's, and Kodiak's motions to dismiss. The plaintiff, in his motion for reconsideration, characterizes the motion as one filed under Federal Rule of Civil Procedure 60(b), and the defendants contend that, under the legal standards applicable to Rule 60(b) motions, the plaintiff's motion is untimely. However, Rule 60(b) applies only when a party seeks relief from a final judgment, order, or proceeding. Judge Randa's order dismissing the three defendants for lack of personal jurisdiction was not final because (a) it did not dispose of the plaintiff's claims against LEAF and (b) Judge Randa did not direct the entry of final judgment as to the dismissed parties only. See Fed. R. Civ. P. 54(b). Under Rule 54(b), Judge Randa's order may be “revised at any time before the entry of a judgment adjudicating all the claims and all the parties' rights and liabilities.” Id.; see also Cameo Convalescent Center, Inc. v. Percy, 800 F.2d 108, 110 (7th Cir. 1986) (pre-judgment orders may be reconsidered at any time). This court has not yet entered a judgment adjudicating all of the claims and all of the parties' rights and liabilities, and thus Judge Randa's earlier order dismissing some of the defendants for lack of personal jurisdiction remains nonfinal.[2] Accordingly, the legal standards applicable to a motion under Rule 60(b) do not apply to the plaintiff's motion for reconsideration. I will therefore treat the plaintiff's motion as a motion to reconsider a nonfinal order. Moreover, because the deposition of William Read introduces new facts into the personal-jurisdiction analysis, I conclude that it is appropriate to revisit whether this court has personal jurisdiction over the three dismissed defendants. I address this question below.

         In cases in which a federal court's subject-matter jurisdiction is based on diversity of citizenship, the court will have personal jurisdiction over a defendant only if the state in which the court sits would have such jurisdiction. Kipp v. Ski Enter. Co. of Wis., 783 F.3d 365, 697 (7th Cir. 2015). Judge Randa concluded that Wisconsin's long-arm statute, Wis.Stat. § 801.05, confers jurisdiction to the fullest extent allowed under the Due Process Clause of the Fourteenth Amendment, ECF No. 33 at p.4, and no party asks me to address the long-arm statute. Thus, I will not discuss the long-arm statute but will proceed to the question of whether exercising personal jurisdiction over BRP Inc., BRP-Rotax, and Kodiak is consistent with due process.

         The Due Process Clause authorizes personal jurisdiction over an out-of-state defendant when the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.'” Kipp, 783 F.3d at 697 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Another prerequisite to a court's exercising personal jurisdiction over a defendant is that the defendant must have “purposefully availed” itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws. J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873, 880 (2011) (quoting Hanson v. Denckla, 564 U.S. 873 (1958)). Courts recognize two types of personal jurisdiction: general and specific. Kipp, 783 F.3d at 697 (quoting Daimler AG v. Bauman, __ U.S. __, 134 S.Ct. 746, 751 (2014)). General jurisdiction is “all-purpose”; it exists only “when the [party's] affiliations with the State in which suit is brought are so constant and pervasive as to render it essentially at home in the forum State.” Id. at 697-98 ...


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