Watterson Construction Co. v. International Door, Inc.

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
WATTERSON CONSTRUCTION
CO.,
Plaintiff,
vs.
INTERNATIONAL DOOR, INC.,
Defendant.
Case No. 3:21-cv-00047-JMK
ORDER GRANTING
MOTION TO DISMISS
Pending before the Court at Docket 7 is Defendant International Door, Inc.’s
(ID), Motion to Dismiss for Lack of Jurisdiction. The motion is fully briefed and the Court
heard oral argument on August 5, 2021.1 For the reasons explained below, ID’s Motion is
GRANTED. The action is dismissed without prejudice.
I. 	BACKGROUND
Plaintiff 	Watterson 	Construction 	Co. 	(Watterson) 	brought 	this 	action
alleging a variety of breach of contract claims against ID in relation to garage doors ID
sold to Watterson for a construction project at Eielson Air Force Base in Fairbanks,
Alaska.2 ID is a door manufacturer located in Canton, Michigan. Watterson contacted ID
1 Docket 21.
2 Docket 1-2.
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in 2017 to request a quote for 32 hangar doors. The quote provided by ID was accepted by
Watterson and Watterson arranged to ship the doors from Michigan to Alaska. ID was not
responsible for installation of the doors, although it did provide “limited field supervision
for the assembly of one door.”3
II. 	STANDARD OF REVIEW
Where, as here, a defendant moves to dismiss an action for lack of personal
jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2), the burden of establishing
the Court’s personal jurisdiction over the defendant falls to plaintiff.4 The Court considers
uncontroverted allegations in plaintiff’s complaint as true, and conflicts between the parties
over statements contained in affidavits are resolved in favor of the plaintiff as well.
Where a case arrives in federal court due to diversity jurisdiction, and no
federal statute governing personal jurisdiction applies, the Court must apply state law.5
Thus, the Court looks to Alaska’s long-arm statute, which authorizes the exercise of
jurisdiction to the extent permitted by federal due process requirements.6 The longstanding
due process requirement remains 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.”7
3 Id.
4 Sher v. Johnson, 911 F.2d 1357, 1361 (9th Cir. 1990).
5 Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004) (citing
Fed. R. Civ. P. 4(k)(1)(A)); Panavision Int’l, L.P. v. Toeppen, 141 F.3d 1316, 1320 (9th Cir.
1998)). 6 Volkswagenwerk, A.G. v. Klippen, GmbH, 611 P.2d 498, 500 (Alaska 1980).
7 Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations omitted).
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III. 	DISCUSSION
ID’s motion alleges that it does not have the minimum contacts with Alaska
necessary to establish either general or specific personal jurisdiction in Alaska District
Court. 	In opposition, Watterson has raised factual allegations that paint a very different
picture of ID’s activities in the State of Alaska. 	ID has provided certain evidence in
response contradicting Watterson’s allegations.
A. 	The Court Does Not Have General Personal Jurisdiction Over ID
Watterson has alleged that ID’s description of its business contacts with the
State of Alaska is misleading, if not entirely inaccurate.8 Watterson alleges first that ID’s
business activities establish general personal jurisdiction. Second, Watterson alleges that
ID is one and the same entity as a company called American Industrial Door, Inc.
(American), which Watterson alleges has significant contacts with the State of Alaska.
American’s business activities, Watterson alleges, should be imputed to ID and should
establish the Court’s general and specific personal jurisdiction over ID in this matter.
The parties are in near complete disagreement about the factual allegations
in Watterson’s Opposition. The facts regarding ID’s business activities provide the basis
for an analysis of the Court’s jurisdiction in this matter; therefore, the Court will address
each of Watterson’s allegations in turn.
8 Docket 9 at 2.
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1. 	ID is distinct from American.
Watterson’s broader arguments about ID’s presence in Alaska stem mainly
from the allegation that ID and American “are de facto, one in the same company.”9
Watterson bases this allegation on business filings for ID and American in Michigan and
Alaska, respectively. 	Those filings reflect the following commonalities between the two
entities that ID does not dispute: (1) the businesses share the same address; (2) the same
individuals own both businesses. 	Beyond these two facts, ID disputes the remainder of
Watterson’s allegations.
Watterson contends that ID and American have the same Michigan Entity
Number, an identifier assigned by the Michigan Department of Licensing and Regulatory
Affairs.10 	ID has provided annual corporate reports from 2020 for ID11 and American12
showing that Watterson is mistaken about the two companies’ entity numbers. ID provided
further explanation by way of filings from 199113 and 199314 that indicate when ID
purchased American, American operated under the assumed name of ID for two years.
Since that time, ID and American have been two distinct businesses serving two different,
yet related markets (ID is a door manufacturer, while American is a door installer).
Watterson has approached this issue from a practical standpoint, based on its
mistaken assertions regarding the entity numbers and corporate filings of the two
9 Id. at 6.
10 Id. at 7.
11 Docket 12-1.
12 Docket 12-4.
13 Docket 12-6.
14 Docket 12-7.
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companies. 	Without providing any legal authority, Watterson merely posits that the two
are the same, and as such should be treated as one for purposes of this litigation. Having
established that some of the facts on which Watterson relied to argue the two companies
are the same for jurisdictional purposes are mistaken, the only remaining question related
to the two entities is whether, due to the common ownership and location of the companies
can American’s activities be imputed to ID to establish general or specific jurisdiction in
the Alaska District Court.
The Court sees no legal basis for determining, based solely on the location
and ownership of the two businesses, that they should be considered the same entity.
Watterson has not provided any theory by which the Court would pierce the corporate veil
of either company, nor has it put forward facts or argument establishing what relationship
the 	companies 	have 	for 	purposes 	of 	the 	Ninth 	Circuit’s 	personal 	jurisdiction
jurisprudence.15 	Thus, the Court will consider whether it may exercise jurisdiction over
ID without consideration of American’s activities in Alaska.
2. 	Watterson has not otherwise established the Court’s general personal
jurisdiction of ID.
Aside from American’s contacts with the State of Alaska, Watterson argues
the Court has general jurisdiction over ID. To exercise general jurisdiction, the Court must
determine that ID’s contacts with Alaska “are so substantial, continuous, and systematic
15 See Ranza v. Nike, Inc., 793 F.3d 1059 (9th Cir. 2015) (discussing at length the “alter
ego” theory of jurisdiction for related entities).
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that the defendant can be deemed to be ‘present’ in that forum for all purposes.”16 	“The
standard for general jurisdiction is high; contacts with a state must ‘approximate physical
presence.’”17
Watterson relies solely on a “Project History/Customer Listing”18 available
on ID’s website to support its contention that ID has, through its business activities,
subjected itself to the general jurisdiction of the Court. 	Specifically, Watterson points to
three entries on the listing, the Red Dog Mine, Alaska Airlines, and the State of Alaska to
show that ID has said sufficient contact with the State of Alaska for this Court to exercise
general jurisdiction. ID has clarified in response to Watterson’s arguments relying on the
project and customer listing that the Alaska Airlines project it provided doors for was
located in Oakland, California, and that the listing stating “State of Alaska” was meant to
note that its doors had been used in Alaska, specifically at the Red Dog Mine in 2009.19
ID has submitted a sworn declaration from its President, John Kaounas, stating that it has
not at any point contracted with the State of Alaska.20
Whether ID has sold doors for projects located in Alaska once or three times
prior to its contract with Watterson, it has not had the kind of continuous and systematic
contact required for this Court to exercise general jurisdiction in this matter.
16 Yahoo! Inc. v. La Ligue Contre Le Racisme Et L’Antisemitisme, 433 F.3d 1199, 1205
(9th Cir. 2006).
17 Tuazon v. R.J. Reynolds Tobacco Co., 433 F.3d 1163, 1169 (9th Cir. 2006).
18 Docket 9-1.
19 Docket 12 at 3.
20 Id.
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B. 	The Court Does Not Have Specific Personal Jurisdiction Over ID.
Watterson relies on Alaska’s long-arm statute, Alaska Stat. § 09.05.015 as a
distinct basis for the Court to exercise specific jurisdiction over ID. Specifically, Watterson
argues that Alaska Stat. §§ 09.05.015(a)(5)(A) and (E) apply to ID’s conduct. Subsection
(A) allows the Court to exercise specific jurisdiction in an action “that arises out of a
promise, made anywhere to the plaintiff or to some third party for the plaintiff’s benefit,
by the defendant to perform services in this state or to pay for services to be performed in
this state by the plaintiff.” 	Subsection (E) provides specific jurisdiction where an action
“relates to goods, documents of title, or other things of value actually received by the
plaintiff in this state from the defendant without regard to where delivery to the carrier
occurred.”
Watterson’s reliance on Alaska’s long-arm statute to the extent it construes
it as distinct from federal due process jurisprudence, is misplaced. Although Alaska Stat.
§ 09.05.015 provides several specific grounds for jurisdiction, the Court’s exercise of
jurisdiction over ID is nonetheless constrained by federal due process. That is, the statute
sets forth situations where the court has jurisdiction over an out-of-state defendant, but
only “to the maximum extent permitted by due process under the federal constitution.”21
“Thus, ‘the statutory and constitutional requirements merge into a single due process test,’
21 Harper v. BioLife Energy Systems, Inc., 426 P.3d 1067, 1071 (Alaska 2018) (internal
quotation marks omitted).
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such that an analysis of [Watterson’s] jurisdictional argument under the federal Due
Process Clause is dispositive.”22
The Ninth Circuit uses a three-part test to determine whether a defendant has
sufficient contacts to be subject to specific personal jurisdiction:
(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.23
“The plaintiff bears the burden of satisfying the first two prongs of the test. If the plaintiff
fails to satisfy either of these prongs, personal jurisdiction is not established in the forum
state.”24 If the plaintiff succeeds, the burden shifts to the defendant to make a compelling
case that exercising jurisdiction over him would be unreasonable.25
Under the first prong of the test, the court engages in a “purposeful
availment” analysis for contract cases. 	The purposeful availment analysis requires the
court to look at whether the non-resident defendant has “performed some type of
affirmative conduct which allows or promotes the transaction of business within the forum
22 Samson Tug & Barge Co., Inc. v. Koziol, 869 F. Supp. 2d 1001, 1008 (D. Alaska 2012)
(quoting Ins. Co. of N. Am. v. Marina Salina Cruz, 649 F.2d 1266, 1269 (9th Cir. 1981)).
23 Morrill v. Scott Fin. Corp., 873 F.3d 1136, 1142 (9th Cir. 2017) (quotation omitted).
24 Id. (quotation omitted).
25 Id.
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state.”26 The existence of a contract alone does not constitute sufficient minimum contacts
for jurisdiction; instead, the Court looks to “prior negotiations and contemplated future
consequences, along with the terms of the contract and the parties’ actual course of
dealing.”27 	Ultimately, the defendant’s contacts with the forum have to be “substantial”
not merely “random, 	fortuitous, 	or attenuated.”28 	The defendant’s actions in and
connections with the forum State must be of a nature that “he should reasonably anticipate
being haled into court there.” 19
Here, ID’s contacts with Alaska amount nearly solely to the contract with
Watterson that is the subject of this lawsuit.29 The contract itself was for the purchase of
doors manufactured by ID in Michigan. Although the doors purchased had to meet certain
requirements for their use in Alaska, ID merely chose the appropriate materials to meet
Watterson’s specifications, it did not custom design a product for Watterson.30 	Perhaps
most notably, ID did not ship the product to Alaska, instead providing it for shipment at
Watterson’s cost.
Watterson also points to the involvement of an American employee hired by
ID to address issues with the doors raised by Watterson during the installation as a basis to
26 Sinatra v. Nat’l Enquirer, Inc., 854 F.2d 1191, 1195 (9th Cir. 1988).
27 Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1958).
28 Id. at 479.
29 There is no indication ID markets its doors to Alaska, and it appears to have only entered
one other contract with an entity located in Alaska prior to its contract with Watterson. 	See
Docket 12.
30 The government’s specifications further support this view of the product as they
requested a “commercially available door” for the project. Docket 12-2 at 1.
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find specific jurisdiction over ID. The Court finds this attempt to assist Watterson, without
more, insufficient to establish purposeful availment in this case.
As to the second prong of the purposeful availment test, the Court considers
whether Watterson’s claims arise out of or relate to the defendant’s forum-related activities.
Watterson’s claims relate largely to allegations of manufacturing defects—all of which
would have to have occurred in a different forum, since the doors were not manufactured
in Alaska. It is well established that the foreseeable harm of items placed into commerce
in another forum cannot by itself support the exercise of personal jurisdiction.31
Based on the foregoing, the Court finds that the exercise of jurisdiction in
this matter would not comport with the notions of fair play and substantial justice at issue
where a defendant has the kind of limited contact with a forum that ID has with Alaska.
ID’s Motion to Dismiss is GRANTED, WITHOUT PREJUDICE.
IT IS SO ORDERED this 27th day of December, 2021, at Anchorage,
Alaska.
/s/ Joshua M. Kindred
JOSHUA M. KINDRED
United States District Judge
31 See Omeluk v. Langsten Slip & Batbyggeri A/S, 52 F.3d 267, 270 (9th Cir. 1995).
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