United States District Court, D. Kansas
MEMORANDUM AND ORDER
W. BROOMES UNITED STATES DISTRICT JUDGE.
case comes before the court on Defendant Denali, Inc.'s
(“Denali”) amended motion to dismiss for lack of
personal jurisdiction. (Doc. 35.) The motion has been fully
briefed and is ripe for decision. (Docs. 36, 42, 44.)
Denali's motion is GRANTED for the reasons herein.
Procedural History and Relevant Facts
The Sac and Fox Nation of Missouri in Kansas and Nebraska, is
a federally-recognized Indian tribe. Plaintiff is the owner
and operator of the Sac & Fox Truck Stop (“truck
stop”) in Powhattan, Kansas. The truck stop was built
in 1998 by contractor M.A.C. Corporation
(“M.A.C.”). Defendant Containment Solutions, Inc.
(“CSI”), formerly Fluid Containment, Inc., is in
the business of manufacturing fiberglass composite
underground storage tanks. Denali is the parent company of
Denali is a Delaware corporation with its principal place of
business in Houston, Texas. (Doc. 45 at 5-6.)
original underground storage tank system at the truck stop
contained four tanks. Two of the tanks were CSI's 15,
000-gallon single wall fiberglass underground storage tanks
(the “tanks”). They were designed and
manufactured in 1998 by CSI and then sold to M.A.C. to
install at the truck stop. The tanks were installed according
to CSI's specifications. The tanks had monitoring
equipment as part of its system which would sound an alarm if
there were any monitoring problems. On July 20, 2015, an
alarm on the tanks went off. All pump dispensers were shut
off by the truck stop staff. A video inspection showed a
rupture of the single wall CSI tank used to store gasoline
fuels. Plaintiff made a claim for a limited warranty under
CSI's warranty on the tanks. CSI denied Plaintiff's
warranty claims. (Doc. 45 at 11-14.)
December 2016, the tanks were removed by M.A.C. New double
wall tanks have been installed to replace the failed tanks.
Ongoing remediation is being performed by Plaintiff at the
truck stop. Estimated remediation costs for the failed tanks
exceed $2.5 million. (Doc. 45 at 15-16.)
brought this action against CSI and Denali, alleging various
claims of product liability, breach of warranty, negligence
and fraud. (Doc. 1.) Plaintiff has since filed an
amended complaint. (Doc. 45.) Plaintiff's amended complaint
alleges that Defendants, including Denali, manufactured,
marketed, distributed and sold the tanks to Plaintiff through
M.A.C. Plaintiff further alleges that although Denali is the
parent company of CSI, Denali exerts complete dominion over
CSI and that the creation of CSI as a separate entity is a
“subterfuge designed to defeat public convenience,
justify a wrong, perpetrate a fraud and/or otherwise work an
injustice.” (Doc. 45 at 9.)
moves to dismiss on the basis that this court lacks personal
jurisdiction. (Doc. 35.)
Rule 12(b)(2) motion to dismiss, Plaintiff must make a prima
facie showing that the court has personal jurisdiction over
the defendants. Old Republic Ins. Co. v. Continental
Motors, Inc., 877 F.3d 895, 903 (10th Cir. 2017). If a
defendant challenges the jurisdictional allegations, such as
Denali has done here, Plaintiff “must support the
jurisdictional allegations of the complaint by competent
proof of the supporting facts.” Sunlight Saunas,
Inc. v. Sundance Sauna, Inc., 427 F.Supp.2d 1011, 1014
(D. Kan. 2006) (citing Pytlik v. Prof'l Res.,
Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989)). All factual
disputes must be resolved in Plaintiff's favor and, to
the extent that they are uncontroverted by Denali's
affidavit, “the allegations in the complaint must be
taken as true.” Id. (citing Intercon. Inc.
v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244,
1247 (10th Cir.2000) (only well-pled facts, as distinguished
from conclusory allegations, accepted as true)).
obtain personal jurisdiction over a nonresident defendant in
a diversity action, a plaintiff must show that jurisdiction
is legitimate under the laws of the forum state and that the
exercise of jurisdiction does not offend the due process
clause of the Fourteenth Amendment.” TH Agriculture
& Nutrition, LLC v. Ace European Group, Ltd., 488
F.3d 1282, 1286-87 (10th Cir. 2007). Because the Kansas
long-arm statute is construed liberally to allow jurisdiction
to the full extent permitted by due process, the court
ordinarily proceeds directly to the constitutional issue.
Id. at 1287 (citing OMI Holdings, Inc. v. Royal
Ins. Co. of Canada, 149 F.3d 1086, 1087 (10th Cir.
Due Process Clause protects an individual's liberty
interest in not being subject to the binding judgments of a
forum with which he has established no meaningful
‘contacts ties, or relations.'” Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985).
Therefore a “court may exercise personal jurisdiction
over a nonresident defendant only so long as there exist
minimum contacts between the defendant and the forum
state.” World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 291 (1979). The requisite minimum
contacts may be established under one of two theories:
“specific jurisdiction” or “general
jurisdiction.” If the requisite minimum contacts are
met, the court proceeds to determine whether the
“assertion of personal jurisdiction would comport with
fair play and substantial justice.” Old Republic
Ins. Co., 877 F.3d at 903. General jurisdiction is based
on an out-of-state corporation's “continuous and
systematic” contacts with the forum state. Id.
at 904. Specific jurisdiction exists if the defendant has
“‘purposefully directed' his activities at
residents of the forum, and the litigation results from
alleged injuries that ‘arise out of or relate to'
those activities.” Burger King Corp., 471 U.S.
at 472 (internal citations omitted); See Mitchell v.
BancFirst, No. 17-2036, 2018 WL 338217, at *2 (D. Kan.
Jan. 9, 2018).
contends that the amended complaint establishes both general
and specific jurisdiction in this matter. (Doc. 42.)
jurisdiction arises based on a defendant's business
contacts with Kansas. Hutton & Hutton Law Firm, LLC
v. Girardi & Keese, 96 F.Supp.3d 1208, 1217 (D. Kan.
2015). To establish general jurisdiction, Plaintiff must
“demonstrate the defendant's ...