United States District Court, D. Montana, Billings Division
FINDINGS AND RECOMMENDATION OF U.S. MAGISTRATE
TIMOTHY J. CAVAN UNITED STATES MAGISTRATE JUDGE
Signal Peak Energy, LLC (“Signal Peak”) filed
this action against Generon IGS, Inc.
(“Generon”), Sullair, LLC,
(“Sullair”) and Power Service, Inc. (“Power
Service”) seeking damages related to a fire that broke
out at its Roundup, Montana coal mine on November 14, 2014.
(Doc. 4.) Generon has also filed a Crossclaim against Sullair
and Power Service. (Doc. 19.)
before the Court are Sullair's Motions to Dismiss the
Complaint and the Crossclaim for lack of personal
jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), and for
failure to state a claim pursuant to 12(b)(6). (Docs. 13,
considered the parties' submissions, the Court
RECOMMENDS Sullair's Motion to Dismiss
for lack of personal jurisdiction be
“In ruling on a motion to dismiss for lack of personal
jurisdiction, a court may consider declarations, discovery
materials, and uncontroverted allegations in the
complaint.” Nationwide Agribusiness Ins. Co. v.
Buhler Barth GmbH, 2015 WL 6689572, *3 (E.D. Cal. Oct.
30, 2015) (citing ADO Fin., AG v. McDonnell Douglas
Corp., 931 F.Supp. 711, 714 (C.D. Cal. 1996)).
Therefore, for purposes of the instant motion, the Court
accepts as true the uncontroverted facts from Plaintiff's
Complaint. Schwarzenegger v. Fred Martin Motor Co.,
374 F.3d 797, 800 (9th Cir. 2004).
Peak is a Delaware corporation with its principal place of
business in Columbus, Ohio. (Doc. 4 at ¶ 1.) It owns a
coal mine located at 100 Portal Drive in Roundup, Montana
(the “Mine”), where the events giving rise to
this lawsuit occurred. (Id. at ¶ 8.)
is an Indiana limited liability company that maintains its
principal place of business in Michigan City, Indiana.
(Id. at ¶ 3.) Sullair manufactures and sells
air compressors and related equipment. (Doc. 14-2 at ¶
4.) Sullair has three channels or divisions through which it
operates. (Id.) The first and largest is
“Commercial and Industrial, ” which sells
compressors for use in industrial manufacturing facilities.
(Id.) The second channel is “Rental and
Infrastructure, ” which sells portable air compressors
used in construction, mining and other large-scale
operations. (Id.) The third channel is
“Original Equipment Manufacture Solutions” or
“OEM Solutions Group, ” which sells compressor
components that are incorporated into a finished product.
(Id.) One of the products the OEM Solutions Group
sells is a compressor component called an “oil/air
separator.” (Id.) Sullair states that it does
business globally, generally by selling its products to
independent distributors or equipment rental centers. (Doc.
14-2 at ¶ 5.) Sullair admits that from “time to
time, ” it sells products to independent distributors
and rental centers in Montana. (Id.)
here, Sullair manufactured and sold various compressor
components, including an oil/air separator, to an independent
distributor in Houston, Texas. (Doc. 4 at ¶ 19; Doc.
14-2 at ¶ 6.) The Houston distributor in turn resold the
compressor components to Generon, which is a Delaware
Corporation, with its principle place of business in Houston,
Texas. (Doc. 4 at ¶ 2; Doc. 14-2 at ¶ 6.)
then incorporated the compressor components, including the
oil/air separator, into a “containerized nitrogen
generating plant” (the “Plant”). (Doc. 4 at
¶¶ 9, 10, 19.) Generon sold the Plant to Signal
Peak, and installed the various components of the Plant at
the mine in stages from August, 2012 through April, 2013.
(Id. at ¶¶ 9, 43, 44.)
November 24, 2014, mine employees discovered smoke escaping
from one of the Plant's compressor units. (Doc. 4 at
¶ 12.) Further inspection revealed a fire within the
compressor unit, which spread to other equipment and caused
extensive damage. A subsequent expert investigation revealed
the fire originated in the oil/air separator manufactured by
Sullair. (Id. at ¶ 18.)
Peak alleges that Generon improperly installed the compressor
unit containing Sullair's oil/air separator.
(Id. at ¶¶ 18, 21.) Specifically, Generon
allegedly installed the compressor unit's oil pressure
switch and temperature switch, which are safety devices, with
the incorrect setting. (Id. at ¶ 22.) Rather
than installing the switches with the correct setting, Signal
Peak claims Generon employees wired or “jumped”
around them, rendering them totally ineffective.
(Id. at ¶ 24.) Signal Peak asserts the failure
to install the switches correctly caused and/or contributed
to the damage. (Id. at ¶ 25.) As a result of
the fire, Signal Peak alleges it incurred damages totaling
$2, 355, 271.00. (Id. at ¶ 17.)
August 15, 2016, Signal Peak filed a complaint in state court
alleging claims against Sullair and the other Defendants for
negligence, breach of warranty, and strict products
liability. (Doc. 4 at ¶¶ 49-66.) The action was
removed to this Court on May 18, 2017. (Doc. 1.) Thereafter,
Sullair filed the instant motion to dismiss. (Doc. 13.)
November 16, 2017, Generon filed a Crossclaim for
contribution and/or indemnity against Sullair and Power
Service. (Doc. 19.) Sullair has also moved to dismiss the
Crossclaim. (Doc. 20.)
seeks dismissal of the Complaint on two grounds. First,
Sullair argues this Court lacks personal jurisdiction over
it, and therefore moves to dismiss Signal Peak's claims
pursuant to Fed.R.Civ.P. 12(b)(2). Second, Sullair argues
that even if there is personal jurisdiction, Signal Peak
cannot satisfy the necessary elements of its negligence,
breach of warranty, or strict products liability claims, and
therefore, moves to dismiss Signal Peak's claims pursuant
to Fed.R.Civ.P. 12(b)(6). Sullair further argues that
Generon's crossclaim should be dismissed for the same
Motion to Dismiss for Lack of Personal Jurisdiction Under
Federal Rule of Civil Procedure 12(b)(2)
defendant moves to dismiss a claim for lack of personal
jurisdiction, the plaintiff bears the burden of proving that
personal jurisdiction exists. Learjet, Inc. v. Oneok,
Inc. (In re W. States Wholesale Nat. Gas Antitrust
Litig.), 715 F.3d 716, 741 (9th Cir. 2013) (internal
citations omitted). Where the motion is based on written
materials rather than an evidentiary hearing, the plaintiff
need only make a prima facie showing of jurisdictional facts.
Schwarzenegger, 374 F.3d at 800. A court's duty
is to inquire into whether the plaintiff's pleadings and
affidavits make a prima facie showing of personal
jurisdiction, accepting the plaintiff's allegations as
true. Id. Although the plaintiff cannot simply rest
on the bare allegations of its complaint, uncontroverted
allegations in the complaint must be taken as true. Conflicts
between the parties over statements contained in affidavits
must be resolved in the plaintiff's favor. Id.
exercise personal jurisdiction over a non-resident defendant
in a diversity case, a federal court must make the following
determinations: (1) whether an applicable state rule or
statute confers personal jurisdiction over the defendant; and
(2) whether assertion of jurisdiction comports with
constitutional principles of due process. Data Disc Inc.
v. Systems Tech. Assocs., Inc., 557 F.2d 1280, 1286 (9th
Cir. 1977). With respect to the first inquiry, this Court is
bound to look to Montana law. Haywood v. Travelers Indem.
Co. of Am., 2006 WL 2860588, at *2 (D. Mont. October 3,
2016) (citations omitted).
Montana Supreme Court has articulated a similar two-part test
to determine the existence of personal jurisdiction: (1) the
court must ascertain whether personal jurisdiction exists
pursuant to Montana Rule of Civil Procedure 4(b)(1),
Montana's long-arm statute; and (2) the court must assess
whether asserting such jurisdiction is consistent with
“traditional notions of fair play and substantial
justice embodied in the due process clause.”
Cimmaron Corp. v. Smith, 67 P.3d 258, 260 (Mont.