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Canadian company can’t be sued in Minnesota

An internet advertisement for a Canadian company that was viewed in Minnesota does not suffice to give the state personal jurisdiction over the foreign company, the Court of Appeals held Dec. 5 in Husky Construction, Inc. v. Gestion G. Thibault Inc., a/k/a E2SH.

The plaintiff, Minnesota-based Husky Construction, purchased a hydroseeder and truck from the defendant, Canada-based Gestion G. Thibault Inc.

The company’s contacts with Minnesota leading up to and surrounding the accrual of the cause of action did not mean that the Canadian company should anticipate being “haled” into court here, the court said, reversing the District Court’s denial of the defendant’s motion to dismiss. The defendant sought interlocutory review. Judge Jennifer Frisch wrote the opinion, joined by Judge Peter Reyes and Judge Randall Slieter.

The defendant published an advertisement in the magazine Machinery Trader, which also published the ad on a website. Husky called a phone number in the ad on the internet. Phone calls and emails ensued. Funds were wired to defendant in May 2020 and the equipment was delivered, without the assistance of defendant’s employees. The opinion refers to repairs that were made to the equipment during the time of the transaction.

Plaintiff alleges that the equipment immediately malfunctioned and was not as represented by the defendant. Plaintiff also asserted that it spent $81,857 for repairs on the allegedly defective hydroseeder.

Long arm jurisdiction

As the U.S. Supreme Court set out in the iconic Internal Shoe Co. case in 1945, “A nonresident defendant has the requisite ‘minimum contacts’ with [a jurisdiction] if it ‘purposefully availed’ itself of the privilege of conducting business in [a jurisdiction] such that it ‘should reasonably anticipate being haled into court there,’” Frish wrote. The court referred to specific personal jurisdiction, the issue before it.

The court followed the factors set out in caselaw: quantity of contacts, quality of contacts, connection of those contacts to the cause of action, the interest of the state is providing a forum and the convenience of the parties.

“We focus on ‘the relationship among the defendant, the forum, and the litigation’ and consider whether the ‘defendant’s suit-related conduct’ creates ‘a substantial connection with the forum State’ in determining the existence of minimum contacts for purposes of determining specific personal jurisdiction,” the court said.

Minimum contacts

The contacts required for due process are more than entering a contract with a forum resident, the court said. “We have previously determined that similar, limited contacts associated with a single, internet-based purchase are insufficient to establish the quantity of contacts favoring the exercise of specific personal jurisdiction.”

When the quantity of contacts is minimal, the nature of the contacts becomes dispositive, the court continued. Minimum contacts exist where the nonresident defendant engages in purposeful and active solicitation of Minnesota customers, the court said.

“The fortuity of a Minnesota company viewing and acting upon such an internet advertisement is the type of random event that does not give rise to specific personal jurisdiction,” Frisch wrote.

Defendant did nothing to “purposefully [avail] itself” of the laws and protections of Minnesota and the delivery of equipment did not contradict that, said the court.

Contacts after the sale do not confer jurisdiction, the court continued.

It also noted that a federal case was handed down in 2019 when a Minnesota company sued a Texas company arising out of a purchase on the Machinery Trader website, the same publication as involved here, with facts nearly identical to Husky. The plaintiff here offered no principled reason for  a different result, the court said.

Connection between cause of action and forum

“We have previously determined that an asserted connection to Minnesota based on a misrepresentation in an advertisement published in a national trade magazine was insufficient to connect the nonresident defendant to the cause of action in Minnesota, said the court, citing the 1986 case of  Now Foods Corp. v. Madison Equip. Co.

This factor did not satisfy due process, the court said.

Furthermore, providing a forum for an injured resident is not enough to override the first three factors, the court said, and the convenience of the parties is a neutral factor.

Based on the parties’ negotiations, and the lack of contemplated future consequences, [defendant] did not have the requisite minimum contacts with Minnesota to support the exercise of specific personal jurisdiction, the court concluded.

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