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JTS, LLC v. Nokian Tyres PLC

United States District Court, D. Alaska

June 23, 2015

JTS, LLC d/b/a JOHNSON'S TIRE SERVICE, LLC, Plaintiff,
v.
NOKIAN TYRES PLC; NOKIAN TYRES, INC.; and NOKIAN TYRES U.S. HOLDINGS INC., Defendants.

ORDER AND OPINION [Re: Motion at Docket 9]

JOHN W. SEDWICK, Senior District Judge.

I. MOTION PRESENTED

At docket 9, defendants Nokian Tyres PLC ("Nokian PLC") and Nokian Tyres U.S. Holdings Inc. ("Nokian Holdings"; collectively "Defendants") move to dismiss the action against them for lack of personal jurisdiction pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, leaving only Nokian Tyres, Inc. ("Nokian North America") as a defendant in the matter. Plaintiff JTS, LLC ("JTS") opposes the motion at docket 13. Defendants' reply is at docket 16. Oral argument was not requested and would not be of assistance to the court.

II. BACKGROUND

JTS, d/b/a Johnson's Tire Service, is an Alaskan Corporation formed in 2006 with its corporate offices in Anchorage, Alaska. It is in the retail tire business. Kelly Gaede is President of JTS. He used to work as Vice President of Marketing and Sales at Nokian North America. He and his father, Dennis Gaede, the former President of Nokian North America, were extensively involved with JTS's purchase of Johnson's Tire Service in 2006 from James Johnson, the former owner.

Nokian PLC is a Finland corporation with its corporate headquarters in Finland. It is a tire manufacturer. Nokian North America is a Delaware Corporation with its head office in Vermont. It is a subsidiary of Nokian PLC and is engaged in the sale and distribution of Nokian-brand tires in North America. It is undisputed that Nokian North America conducts business in the State of Alaska and has conducted business and entered into contracts with JTS. Nokian North America therefore does not dispute the court's exercise of jurisdiction over it. Nokian Holdings is a Delaware Corporation with its head office in Vermont and is also a subsidiary of Nokian PLC. Nokian Holdings does not sell or distribute Nokian-brand tires.

JTS filed a complaint against the three Nokian companies alleging a breach of contract, a breach of the covenant of good faith and fair dealing, and a violation of Alaska's Unfair Trade Practices Act.[1] All three claims primarily sound in contract law. JTS alleges in its complaint that in 1997 Johnson's Tire Service, through then-owner James Johnson, entered into an oral and written agreement with Nokian PLC whereby Nokian PLC agreed to supply Nokian tires on specified terms and at specified prices and agreed that Johnson's Tire Service would be the exclusive representative and distributor of Nokian-brand tires in the State of Alaska. The complaint alleges that at the time the parties entered into the agreement it was understood and agreed that the agreement would automatically renew every year unless changed in writing. While somewhat unclear, the court has gathered from the complaint and Plaintiff's affidavits in support that Plaintiff believes the financial terms of the parties' agreement have been changed over the years and as recently as 2008, but that the exclusive distribution agreement has remained in effect, even after JTS purchased Johnson's Tire Service from James Johnson and has been at least orally reconfirmed. The complaint and affidavits in support allege that the exclusive distribution agreement was negotiated, maintained, and modified the agreement with representatives from all three Nokian companies.

III. STANDARD OF REVIEW

Where a defendant moves to dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, the plaintiff bears the burden of establishing that personal jurisdiction exists.[2] Where the motion is based only upon written materials, rather than an evidentiary hearing, the plaintiff is required only to make a prima facie showing of personal jurisdiction.[6] In determining whether the plaintiff has made such a prima facie showing, "uncontroverted allegations in [the] complaint must be taken as true."[7] However, allegations in the complaint are not entitled to the presumption of validity when contradicted by a declaration or affidavit.[8] Where the plaintiff submits affidavits or declarations in support of its complaint, "conflicts between the facts contained in the parties' affidavits must be resolved in [the plaintiff's] favor for purposes of deciding whether a prima facie case for personal jurisdiction exists."[9]

"Where, as here, there is no applicable federal statute governing personal jurisdiction, the district court applies the law of the state in which the district court sits."[10] Alaska's long-arm statute authorizes the exercise of jurisdiction to the extent permitted by federal due process requirements.[11] Due process requires that the defendant "have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."[12]

There are two types of personal jurisdiction, general and specific.[13] "General jurisdiction exists when a defendant is domiciled in the forum state or his activities there are substantial' or continuous and systematic.'"[14] In the absence of general jurisdiction, the court may exercise personal jurisdiction if specific jurisdiction exists. The Ninth Circuit uses a three-part test to determine whether specific jurisdiction exists:

(1) The non-resident defendant must purposefully direct his activities or consummate some transaction with the forum or resident thereof; or perform some act by which he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws; (2) the claim must be one which arises out of or relates to the defendant's forum-related activities; and (3) the exercise of jurisdiction must comport with fair play and substantial justice, i.e. it must be reasonable.[15]

The party seeking to assert jurisdiction bears the burden of showing the first two prongs are met. If it does so, then the burden shifts to the opposing party to present a "compelling" case that ...


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