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Montana Trucks, LLC v. UD Trucks North America, Inc.

United States District Court, D. Montana, Missoula Division

December 20, 2016



          Donald W. Molloy, District Judge

         Defendant UD Trucks Corp. f/k/a Nissan Diesel Motor Co, Ltd ("UD Japan") seeks to dismiss the Second Amended Complaint (Doc. 71) on the grounds that Plaintiff Montana Trucks LLC's ("Montana Trucks") claims lack personal jurisdiction, or, in the alternative, fail to state a claim. (Doc. 105). That motion is granted. Montana Trucks fails to show that UD America was the agent or alter ego of UD Japan and that the exercise of personal jurisdiction over UD Japan directly is appropriate.

         Factual Background

         This case arises from a contract dispute between Montana Trucks and UD Trucks North America, Inc., f/k/a Nissan Diesel America Inc. ("UD America"). (Doc. 118.) In 2003, UD America and Montana Trucks entered into a dealer agreement ("the Contract") in which UD America agreed to supply UD3300 model trucks to Montana Trucks. (Id.) In 2008, an independent brake testing company discovered that the brakes in two vehicles did not comply with Federal Motor Vehicle Safety Standard ("FVMSS") 121, but UD America denied that the brakes were non-compliant. (Id. at 3.) In 2009, during the pendency of another lawsuit, UD America terminated the Contract with Montana Trucks and refused to repurchase the faulty vehicles. (Doc. 106 at 4.) On February 1, 2010, the President of UD America testified that the compliance certificates that accompanied the UD3300 trucks were false. (Doc. 81 at 4.) Both parties maintain that this date is the last possible date that the claims in the Second Amended Complaint, (Doc. 71), could have arisen. (Doc 81. at 5.)

         UD Japan manufactures trucks, engines, and vehicle components in Japan. (Doc 106 at 2.) Its facilities are located in Japan, with its headquarters in Ageo, Japan. (Id.) It has no business operations in Montana, is not registered to do business with the Montana Secretary of State, does not own or rent any real property in Montana, has no employees working in Montana, and does not place advertising in media outlets or have a telephone listing in Montana. (Id. at 2-3.)

         At the time of its business dealings with Montana Trucks, UD America was the product of a joint venture between UD Japan, Marubeni America Corporation, and Marubeni Co. Ltd. (Doc 118 at 4.) Under the joint venture agreement, UD Japan controlled the board of directors by appointing a majority of its members and appointed the president of UD America. (Id.) In June 2008, the joint venture was dissolved and UD Japan bought out the Marubeni interests. (Id.) Currently, UD America is a wholly-owned subsidiary of UD Japan. (Id.) At all times relevant to the Second Amended Complaint, the relationship of UD America and UD Japan was governed by a Distributor Agreement, which outlined the annual number of trucks UD America would distribute. (Doc. 106 at 3.) The Distributor Agreement disclaims any agency relationship between the companies and represents that UD America was the non-exclusive distributor of trucks and parts manufactured by UD Japan. (Id. at 3-4.)

         Procedural Background

         On February 15, 2012, Montana Trucks filed an action against UD America alleging breach of contract, fraud, and punitive damages. (Doc. 1.) UD America moved for summary judgment. (Doc. 30.) While that motion was pending, Montana Trucks filed a Second Amended Complaint, adding a constructive fraud claim and UD Japan as a defendant. (Doc. 71.) On August 12, 2013, this Court granted UD America's motion for summary judgment, concluding that the Contract's Limitation of Remedies clause barred the breach of contract claim, and Montana's two-year statute of limitations barred the fraud claim and the punitive damages claims. (Doc. 81 at 23.) The Court initially reserved judgment on the newly-asserted constructive fraud claim, (id. at 25-26), but on October 9, 2013, granted summary judgment on the grounds the claim was also barred by the Montana statute of limitations, (Doc. 88 at 5).

         This Court applied its summary judgment grant to UD Japan as well. (Doc. 92.) Montana Trucks and UD Japan entered into a stipulation allowing Montana Trucks to reserve its claims against UD Japan while allowing UD Japan to reserve the position that this Court lacks personal jurisdiction. (Doc. 90. at 2.) This Court considered the stipulation and dismissed the case with prejudice. (Doc. 91.) Montana Trucks appealed, and on July 28, 2016, the Ninth Circuit affirmed-in-part, reversed-in-part, and remanded-in-part. (Doc. 96.) The Ninth Circuit partially agreed with this Court's conclusion on the contract claim, remanding "insofar as the plaintiff seeks damages for the loss resulting in the ordinary course of events from the seller's breach." (Id. at 2-3.) Citing the recent Montana Supreme Court decision in Masters Group International, Inc. v. Comerica Bank, 352 P.3d 1101 (Mont. 2015), the court reversed the fraud claim, finding that the Contract's choice-of-law provision applied to tort claims against UD America, which in turn meant that Texas' four-year statute of limitations for fraud applied as to UD America. (Id. at 4.) Relevant here, the court remanded the fraud claim against UD Japan to address "[UD Japan's] post-Masters Group argument that since it was not a party to the contract, Montana Trucks' claims against it are barred by the Montana statute of limitations." (Id.)


         "Where a defendant moves to dismiss a complaint for lack of personal jurisdiction, the plaintiff bears the burden on demonstrating that jurisdiction is appropriate." Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004). "Where, as here, the motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts." Id. (internal quotation marks omitted.) "Although the plaintiff cannot simply rest on the bare allegations in the complaint, uncontroverted allegations in the complaint must be taken as true unless they are contradicted by affidavit, in which case factual disputes are resolved in the plaintiffs favor." Mont. Silversmiths, Inc. v. Taylor Brands, LLC, 850 F.Supp.2d 1172, 1181 (D. Mont. 2012) (internal quotation marks omitted).

         "Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons." Picot v. Weston, 780 F.3d 1206, 1211 (9th Cir. 2015) (quoting Daimler AG v. Bauman, ___ U.S. ___, 134 S.Ct. 746, 753 (2014)). With respect to Montana, the Ninth Circuit has "recognized that Mont. R. Civ. P. 4(b)(1), which serves as the state's long-arm statute, permit[s] the exercise of personal jurisdiction over nonresident defendants to the maximum extent permitted by federal due process." King v. Am. Fam. Mut. Ins. Co., 632 F.3d 570, 578-79 (9th Cir. 2011). However, in 2015, the Montana Supreme Court outlined a two-step test to determine whether the exercise of specific jurisdiction is proper:

[Courts] first determine whether personal jurisdiction exists under M.R. Civ. P. 4(b)(1). Personal jurisdiction may exist under Rule 4(b)(1) in one of two ways: a party may be found within the state of Montana and subject to general jurisdiction, or the claim for relief may arise from any of the acts listed in Rule 4(b)(l)(A-G) and create specific jurisdiction for the purpose of litigating that particular claim. If personal jurisdiction exists under the first step of the test, [a court] then determine[s] whether the exercise of personal jurisdiction conforms with the traditional notions of fair play and substantial justice embodied in the due process clause. If personal jurisdiction does not exist under the first part of the test, further analysis under the second part of the test is unnecessary.

Milky Whey, Inc. v. Dairy Partners, 342 P.3d 13, 17 (Mont. 2015) (internal quotations and citations omitted); see also Techmanski v. Quanta Field Service,LLC, 2015 WL 7005617 (D. Mont. 2015) (applying the Milky Whey test in federal district court). While neither party addressed the Milky Whey test, it is the controlling test in Montana for the exercise of ...

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