Speten et al v. Sharda USA LLC et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NORTH DAKOTA
Nathan Speten et al.,
Plaintiffs,
vs.
Sharda USA LLC et al.,
Defendant.
Case No. 1:25-cv-00105
ORDER DENYING MOTIONS TO DISMISS
[¶ 1] 	THIS MATTER comes before the Court on a Motion to Dismiss for Lack of Personal
Jurisdiction filed by Defendant Outsource Logistics, LLC (“Outsource”) on September 4, 2025.
Doc. No. 60. Plaintiffs filed a Response on October 9, 2025. Doc. No. 73. Outsource replied on
October 23, 2025. Doc. No. 76. The motion and the entire case were stayed on November 4, 2025,
to allow for jurisdictional discovery. Doc. No. 77. Additionally, Defendant CJB Industries, Inc.
(“CJB”) filed a motion to dismiss for lack of jurisdiction on January 16, 2026. Doc. No. 82.
Plaintiffs filed a Response on February 6, 2026. Doc. No. 86. Sharda USA LLC (“Sharda”) filed
a Response on February 13, 2026. Doc. No. 92. CJB replied on February 19, 2026. Doc. No. 93.
By leave of Magistrate Judge Hochhalter, Plaintiffs filed an additional memorandum in opposition
on February 24, 2026. Doc. Nos. 91, 95–97. CJB replied on February 27, 2026. Doc. No. 99.
Plaintiffs then filed their report on jurisdictional discovery on March 2, 2026. Doc. Nos. 100–01.
Outsource filed an amended surreply on March 20, 2026. Doc. No. 107. For the reasons set forth
below, both motions are DENIED.
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[¶ 2] 	In 2024, Plaintiffs purchased a herbicide called Compensa from Wholesale Ag Products in
Carrington, North Dakota. Plaintiffs applied the product, which they allege damaged their fields
and crops. The product label stated it used the active ingredient of imazethapyr, a selective
herbicide. Plaintiffs allege it actually included imazapyr, a non-selective herbicide. Plaintiffs sued
CJB, Outsource, and Sharda as manufacturers of Compensa on June 30, 2025. Doc. No. 18.
I. 	Outsource Motion
[¶ 3] 	Outsource argues the Court lacks personal jurisdiction over it because shipping product to
North Dakota was directed by Sharda and Outsource did not have sufficient contacts with North
Dakota. Plaintiffs argue Outsource could have denied the shipment, the contract between Sharda
and Outsource does not set up an agent relationship, and Outsource labeled the product for
shipping.
[¶ 4] 	“Personal jurisdiction over a defendant represents the power of a court to enter ‘a valid
judgment imposing a personal obligation or duty in favor of the plaintiff.’” Viasystems, Inc. v.
EMB-Papst St. Georgen GmbH & Co., KG, 646 F.3d 589, 592–93 (8th Cir. 2011) (quoting Kulko
v. Sup. Ct. of Cal., 436 U.S. 84, 91 (1978)). In a motion to dismiss for lack of personal jurisdiction,
the plaintiff bears the burden of proof. Creative Calling Sols., Inc. v. LF Beauty Ltd., 799 F.3d
975, 979 (8th Cir. 2015). The action will survive a motion “if the evidence, viewed in the light
most favorable to [plaintiff], is sufficient to support a conclusion that the exercise of personal
jurisdiction over [defendant] is proper.” Id.
[¶ 5] 	“A federal court may assume jurisdiction over a defendant in a diversity action if the forum
State’s long-arm statute permits the exercise of personal jurisdiction and that exercise is consistent
with the Due Process Clause of the Fourteenth Amendment.” Id. The North Dakota Supreme Court
has held the state’s long-arm statute “authorizes North Dakota courts to exercise personal
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jurisdiction over nonresident defendants to the fullest extent permitted by due process.” Hansen v.
Scott, 2002 ND 101, ¶ 16, 645 N.W.2d 223. When a state statute “is coextensive with constitutional
limits, we need only determine whether the assertion of jurisdiction over this defendant offends
due process.” Johnson v. Woodcock, 444 F.3d 953, 955 (8th Cir. 2006).
[¶ 6] 	“Due process requires minimum contacts between [a] non-resident defendant and the
forum state such that maintenance of the suit does not offend the traditional notions of fair play
and substantial justice,” Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir. 2004),
and a defendant could “reasonably anticipate being haled into court there.” Epps v. Stewart Info.
Servs. Corp., 327 F.3d 642, 648 (8th Cir. 2003).
[¶ 7] 	Minimum contacts can be general (continuous and systematic) or specific (related to the
lawsuit). See Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 415–16 (1984)
(discussing general and specific personal jurisdiction). The Eighth Circuit has a five-factor test to
determine if there are minimum contacts or a “substantial connection” between the forum state
and the defendant: (1) quality of contact; (2) quantity of contact; (3) how closely related the lawsuit
is to the contact; (4) forum state’s interest; and (5) party convenience. Id. The first three factors
receive “significant weight.” Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (quoting
Dever, 380 F.3d at 1073–74). “The Eighth Circuit’s five-part test essentially ‘blends’ the test for
general and specific jurisdiction.” JMAC Energy Srvs., LLC v. Badger Mining Corp., Case No.
1:24-cv-080, 2024 WL 565 1829, at *4 (D.N.D. Dec. 12, 2024).
[¶ 8] 	After jurisdictional discovery, viewing the record in the light most favorable to Plaintiffs,
see Creative Calling, 799 F.3d at 979, the Court finds there are sufficient minimum contacts to
establish specific jurisdiction.
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[¶ 9] 	Outsource shipped Sharda products to North Dakota since at least 2019. Doc. No. 101-2,
pp. 1–2 (noting that Sharda only sent information since 2019). At least 29 shipments came from
Outsource to North Dakota between 2019 and 2024. Doc. No. 101-3. The process, generally, starts
with another warehouse sending ingredients to Outsource along with the labeling information and
Outsource affixes descriptive labels to the product as it is stored. See Doc. No. 101-27, p. 318–21.
When an order is placed, another label comes from the third-party shipping company, Outsource
pulls the ingredients and sends them to CJB for mixing, which then sends back a finished product.
See id. Outsource packages and labels the finished product for shipping. See id.
[¶ 10] At some point on a site visit, a Sharda employee found mislabeled pallets that were
specifically the ingredients at issue in this case. Doc. No. 101-29. The incorrect identification was
also on the inventory lists. Id. The discrepancy was obvious, and (since the Court views the
evidence in the light most favorable to the plaintiff) it is a reasonable inference that Outsource
knew the product was mislabeled and would have known it was sending the wrong product to be
mixed by CJB. Outsource also knew the returned mixed product with the wrong ingredient would
eventually end up in North Dakota.
[¶ 11] North Dakota has a special interest in protecting the interests of its citizens and holding
companies accountable for sending faulty products into the state, especially agricultural products,
that cause damage to land in North Dakota. While litigating in North Dakota will be inconvenient
for Outsource, Georgia would be even more inconvenient for Plaintiffs. And Plaintiff’s damaged
farmland cannot be moved to Georgia.
[¶ 12] Outsource points the Court to TJS Brokerage & Co. v. Mahoney, a Pennsylvania case
where the court found no jurisdiction over a warehouse that shipped product for others. 940 F.
Supp. 784, 791 (E.D. Pa. 1996). However, in that case, the court found no general personal
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jurisdiction and granted the motion for jurisdictional discovery to determine if there was specific
personal jurisdiction.
[¶ 13] Therefore, after considering the entire record and taking all evidence in a light most
favorable to the Plaintiffs, the Court finds there is specific personal jurisdiction over Outsource.
Outsource’s Motion to Dismiss is DENIED.
II. 	CJB Motion
[¶ 14] Plaintiffs argue CJB waived the defense by not asserting it in its answer. CJB argues
denying jurisdiction was enough to preserve the defense without raising it affirmatively.
[¶ 15] CJB filed an Answer to the Second Amended Complaint on July 14, 2025, in which CJB
denied jurisdiction, but did not raise it as an affirmative defense. Doc. No. 21. Sharda filed an
Answer on July 31, 2025, which included crossclaims against CJB and Outsource. Doc. No. 33.
CJB answered Sharda’s crossclaim on August 21, 2025, in which it did not raise lack of jurisdiction
as an affirmative defense. Doc. No. 48.
[¶ 16] The right to raise motions to dismiss can be waived explicitly by failing to raise them or
implicitly by participating in the lawsuit. See Fed. R. Civ. P. 12 (motions must be raised before
filing or within a responsive pleading); Yeldell v. Tutt, 913 F.2d 533, 539 (8th Cir. 1990)
(argument waived by participation in lawsuit). However, the argument can survive even with
participation if it is reraised throughout litigation. See Aly v. Hanzada for Import & Export Co.,
864 F.3d 844, 848–49 (8th Cir. 2017).
[¶ 17] CJB relies on Fabara v. GoFit, LLC, which held that denying the paragraph in the
Complaint which asserts personal jurisdiction is enough because lack of personal jurisdiction is
not an affirmative defense. 308 F.R.D. 380, 398–400 (D.N.M. 2015). The court found persuasive
that lack of personal jurisdiction is not listed as an affirmative defense in Federal Rule of Civil
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Procedure 8 or in any treatise it consulted. Id. The court relied on a framework used by a magistrate
judge from Iowa for deciding whether a defense is an affirmative defense, which looked at: burden
of proof, if it would provide relief should the rest of the complaint be proven true, and need for
notice to avoid surprise. Id. Based on that criteria, and three other district cases from New York
and Massachusetts, the court concluded that denial of the paragraphs was sufficient, and the
defense was not waived. Id.
[¶ 18] The Court does not find this out-of-circuit reasoning persuasive. In Fabara, the motion to
dismiss was filed less than three months after the answer was filed. Id. at 384. The Massachusetts
case followed a similar timeline. See McDermott v. FedEx Ground Sys., Inc., 520 F. Supp. 2d 254,
255 (D. Mass. 2007). The plaintiff in Boss Products Corp. v. Tapco Intern. Corp. asked for
declaratory judgment on waiver of the defense a month after the answer was filed. See Case No.
1:00-cv-00689, Doc. No. 7 (W.D.N.Y. Oct. 2, 2000). In Phat Fashions, LLC. v. Phat Game
Athletic Apparel, Inc. even though the motion to dismiss was filed ten months after the answer,
defendant told plaintiff multiple times of the intent to file a motion based on lack of personal
jurisdiction. Case No. 00CIV0201 (JSM), 2001 WL 1041990, at *4 (S.D.N.Y. Sept. 7, 2001). In
all of these cases, there was relatively quick notice to the plaintiffs that the defense would be raised,
in addition to the denial of the jurisdictional paragraphs in the Answer.
[¶ 19] Within the Eighth Circuit, Vallone v. CJS Sols. Grp., LLC held that a defendant does not
need to use any specific words to give notice. 9 F. 4th 861, 864–65 (8th Cir. 2021). The defendant
listed as an affirmative defense a violation of Due Process rights, but not specifically “lack of
personal jurisdiction,” and the court stated the defendant adequately pled the defense and did not
waive it. Id.
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[¶ 20] In contrast, in the present case, Outsource filed its Motion to Dismiss for Lack of
Jurisdiction and amended its complaint to include the affirmative defense, in early September
2025. Doc. Nos. 60, 62. The case was stayed to allow for jurisdictional discovery until January
2026. Doc. No. 77. At no time did CJB indicate it would challenge jurisdiction on the same grounds
until after discovery had largely finished. The blanket statement in the initial answer, “Paragraphs
14-16 of the Second Amended Complaint are legal conclusions to which no response is required.
To the extent a response is required, CJB denies . . . ,” is not sufficient notice that CJB would rely
on this defense and file a motion six months after its answer and four months after Outsource relied
on the same grounds. Doc. No. 21. Therefore, the Court finds CJB has waived the defense of lack
of personal jurisdiction by not adequately preserving it within its first responsive pleading or a pre-
pleading motion. See Fed. R. Civ. P. 12. CJB’s Motion to Dismiss is DENIED.
CONCLUSION
[¶ 21] For the foregoing reasons, Outsource’s Motion to Dismiss for Lack of Personal Jurisdiction
(Doc. No. 60) and CJB’s Motion to Dismiss for Lack of Personal Jurisdiction (Doc. No. 82) are
DENIED.
[¶ 22] IT IS SO ORDERED.
DATED May 14, 2026.
_______________________________
Daniel Mack Traynor, District Judge
United States District Court
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