VICKI MILES-LaGRANGE, District Judge.
Before the Court is defendant Valley Ditch Witch, Inc.'s ("defendant") Motion to Dismiss Plaintiff's Original Complaint Pursuant to FRCP 12(B)(2) & (3) & (6) and 12(C), filed September 24, 2013. On October 14, 2013, plaintiff filed its response, and on October 21, 2013, defendant filed its reply. Based upon the parties' submissions, the Court makes its determination.
The Charles Machine Works, Inc. ("plaintiff") is in the business of manufacturing and selling Ditch Witch® utility tractor parts and equipment through a worldwide network of independent dealers. Plaintiff is an Oklahoma corporation with its principal place of business in Oklahoma, where its manufacturing facilities and company headquarters are located. Plaintiff and defendant, a Texas corporation, entered into an agreement allowing defendant to establish a dealership in Texas and sell plaintiff's parts and equipment within certain regions in Texas. This relationship continued for decades and was subject to contract renewals throughout.
The dispute underlying this litigation emanates from the last Dealership Agreement the parties signed in 2010, which was in effect until June 30, 2013. The Dealer Agreement referenced a separate document ("the Standard Provision"), which included choice of law and forum clauses and a provision allowing for non-renewal without cause. On May 29, 2013, plaintiff issued a letter to defendant stating that it does not intend to renew the Dealer Agreement. The parties disagreed on whether plaintiff may not renew without cause and/or if plaintiff had cause not to renew. As a result, plaintiff filed this instant action seeking declaratory relief.
Defendant contends that this Court lacks personal jurisdiction over it. When a court's jurisdiction is contested, the plaintiff has the burden of proving that jurisdiction exists. See ASAT Sports Sci., Inc. v. CLF Distrib. Ltd., 514 F.3d 1054, 1056 (10th Cir. 2008). "Where a district court considers a pre-trial motion to dismiss for lack of personal jurisdiction without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction to defeat the motion." Id. at 1056-57.
Intercon, Inc. v. Bell Atl. Internet Solutions, Inc., 205 F.3d 1244, 1247 (10th Cir. 2000) (internal citations omitted).
Id. (internal quotations and citations omitted). In the case at bar, plaintiff asserts that this Court has specific jurisdiction over defendant.
Benton v. Cameco Corp., 375 F.3d 1070, 1075 (10th Cir. 2004) (internal quotations and citations omitted). "A defendant's contacts are sufficient if the defendant purposefully directed its activities at residents of the forum, and . . . the plaintiff's claim arises out of or results from actions by the defendant himself that create a substantial connection with the forum state." Id. at 1076 (internal quotations and citation omitted) (emphasis in original). Further, whether a defendant has the required minimum contacts must be decided on the particular facts of each case. See id.
Having carefully reviewed plaintiff's complaint, as well as the parties' submissions, the Court finds that it does have personal jurisdiction, particularly specific personal jurisdiction, over defendant. Specifically, the Court finds that defendant maintained a relationship with plaintiff, an Oklahoma resident, for over thirty (30) years serving as a dealer of parts and equipment that defendant manufactured in Oklahoma, defendant purchased these Oklahoma manufactured products totaling in the amount of millions of dollars over the years, and the terms of the Dealer Agreement granted plaintiff some oversight of defendant's operations (such as requiring plaintiff's approval for any change in ownership of defendant's business). In addition, review of the record shows that defendant's personnel have made several trips over the years to Oklahoma for training and conferences in furtherance of this business relationship. Accordingly, the Court finds defendant has sufficient minimum contacts with the State of Oklahoma.
Additionally, the Court finds that exercising specific personal jurisdiction over defendant does not offend traditional notions of fair play and substantial justice. In reaching this conclusion, the Court has considered the following five factors: (1) the burden on defendant, (2) Oklahoma's interest in resolving the dispute, (3) plaintiff's interest in receiving convenient and effective relief, (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the several states in furthering the fundamental substantive social policies. See Intercon, Inc., 205 F.3d at 1249. After reviewing the first factor carefully, the Court finds defendant will not be unduly burdened. While defendant will have to travel to Oklahoma in order to appear before the Court, with modern day technology, the majority of the work in pursuing this litigation can be done from Texas. Second, the Court finds that Oklahoma has a manifest interest in resolving the instant dispute. Defendant has engaged in a long term contractual business relationship with an Oklahoma entity to sell Oklahoma manufactured products worth millions of dollars over the years. The Court finds that clearly Oklahoma would have an important interest in providing a forum in which its residents can seek redress for disputes that arise from such relationship. Third, the Court finds plaintiff's interest in receiving convenient and effective relief would not be impacted. This factor, therefore, weighs in favor of defendant as plaintiff has provided no reason why it could not receive convenient and effective relief in Texas. Fourth, in terms of efficiency, the Court finds that this factor does not weigh in favor of either party. Plaintiff and defendant's witnesses are located in Oklahoma and Texas; the products sold were manufactured in Oklahoma by an Oklahoma entity and sold in Texas by a Texas entity; and the parties' dispute whether Oklahoma or Texas law applies. Accordingly, the Court finds that this factor is neutral and does not favor either party. Finally, the Court finds no reason why Oklahoma exercising jurisdiction in this case would impact the substantive policy issues of other states. Thus, the Court finds that exercise of personal jurisdiction over defendant is reasonable and would not offend traditional notions of fair play and substantial justice.
Accordingly, the Court has personal jurisdiction over the defendant.
Defendant also moves the Court to dismiss or, in the alternative, transfer the case to Texas
Chrysler Credit Corp., 928 F.2d at 1516 (citation and internal quotation marks omitted). "The presence of a forum-selection clause . . . will be a significant factor that figures centrally in the district court's calculus." Stewart, 487 U.S. at 29. "[T]he venue mandated by a choice of forum clause rarely will be outweighed by other 1404(a) factors." Pendleton Enters., Inc. v. Iams Co., 851 F.Supp. 1503, 1504 (D. Utah 1994) (quoting In re Ricoh Corp., 870 F.2d 570, 573 (11th Cir.1989)) (internal quotation marks omitted).
In the case at bar, the Court finds that defendant has failed to meet its burden of establishing that a transfer is warranted. While it is true that defendant's sales and services took place in Texas, it is also true that these products were manufactured in Oklahoma, that defendant purchased these items from Oklahoma for many years, that it attended several training sessions in Oklahoma, and that the Dealer Agreement gave plaintiff some control over defendant's business decisions. Further, while defendant contends the forum clause is not included in the Dealer Agreement
Defendant moves the Court to dismiss plaintiff's request for declaratory relief pursuant to Federal Rule of Civil Procedure 12(b)(6) and 12(c). When reviewing a motion for judgment on the pleadings under Rule 12(c), the Court applies the same standard that applies to a Rule 12(b)(6) motion. Park Univ. Enters., Inc. v. Am. Cas. Co. of Reading, PA, 442 F.3d 1239, 1244 (10th Cir. 2006).
Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal quotations and citations omitted).
"In a case of actual controversy within its jurisdiction . . . any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration[.]" 28 U.S.C. § 2201(a).
Cox v. Phelps Dodge Corp., 43 F.3d 1345, 1348 (10th Cir. 1994).
Under Oklahoma
Having carefully reviewed the parties' submissions, the Court finds that defendant's request to dismiss all three of plaintiff's requests for declaratory relief should be denied. Plaintiff asserts that it is authorized under Oklahoma law and the Dealer Agreement to not renew the contract without cause, or in the alternative, did not renew the contract for cause and, thus, is not liable. Defendant vehemently disagrees. This disagreement affects plaintiff's potential current liability to defendant. The Court, thus, finds there is an actual case or controversy at issue present in this case. The Court also finds that whether plaintiff had cause is still at issue. However, the Court finds that plaintiff's request for declaratory relief under (b) should be dismissed because the Act clearly requires that a decision of non-renewal must be for cause. In addition, the Act prohibits plaintiff from requiring defendant to assent to a waiver of liability under the Act. Thus, the language in the Dealer Agreement that attempts to waive this right is a violation of the express provision of the business code and, consequently, amounts to an unlawful provision that is unenforceable under Oklahoma law.
Defendant moves the Court, in the alternative, to decline to exercise its remedial powers under the Declaratory Judgment Act. A court may decline to exercise its jurisdiction under the Act after considering several factors including:
St. Paul Fire & Marine Ins. Co. v. Runyon, 53 F.3d 1167, 1169 (10th Cir. 1995) (quoting State Farm Fire & Cas. Co. v. Mhoon, 31 F.3d 979, 983 (10th Cir. 1994)).
Hickey v. O'Connor & Drew, P.C., CIV-09-349-C, 2009 WL 2163499, at *1 (W.D. Okla. July 10, 2009) (internal footnote omitted).
Having carefully reviewed the record and the parties' submissions, the Court finds that it should exercise its remedial powers under the Declaratory Judgment Act. The first and second factors clearly favor plaintiff as the declaratory action would settle the controversy of which state law applies, what the parties' rights and obligations are under the Dealership Agreement and the applicable state law, and whether the parties carried out their respective obligations. Although not quite clear cut, the third factor slightly favors defendant as it appears from the record that before plaintiff filed this action, both parties disputed their rights and liabilities under the Dealership Agreement, both parties retained lawyers to address the dispute, and the nature of the correspondence letters between the parties, when all viewed together, indicate that litigation was brewing. The fourth and fifth factors favor plaintiff as the Texas court has already transferred defendant's second filed related suit to this Court. Thus, both cases are now pending before this Court, and as such, based on these facts and the Court's findings set forth above, the Court finds that there is no alternative remedy which is better or more effective. The Court is also not convinced that use of a declaratory action under these facts would increase friction between our federal and state courts and improperly encroach upon state jurisdiction. Accordingly, after carefully weighing the listed factors, the Court denies defendant's request.
Accordingly, the Court DENIES in part and GRANTS in part Defendant's Motion to Dismiss Plaintiff's Original Complaint Pursuant to FRCP 12(B)(2) & (3) & (6) and 12(C) [docket no. 10] as follows:
Compl. 6-7.
Bob Montgomery Chevrolet, Inc. v. Dent Zone Cos., 409 S.W.3d 181, 189 (Tex. App. 2013) (internal citations omitted). The Court finds that the Standard Provision, which includes the forum and choice of law clauses, is clearly referenced in the Dealer Agreement, which plaintiff signed. In addition, plaintiff provided and referenced this same document to defendant as recent as 2002 in their thirty (30) plus year long business relationship. See Pl.'s Resp. in Opp. to Def.'s M. to Dismiss Ex. 5. Accordingly, the Court finds that the Standard Provision is incorporated by reference into the Dealer Agreement and, thus, is applicable.
Pre-Paid Legal Servs., Inc. v. Worre, CIV-05-0875-F, 2006 WL 3227903, at *2 (W.D. Okla. Nov. 3, 2006). The Standard Provision, which the Court has already found should be incorporated into the Dealer Agreement, included a choice of law clause establishing that Oklahoma law should govern the parties' rights and duties. Because defendant has not shown the law of the chosen state would be contrary to a fundamental policy of the State of Oklahoma, the Court applies Oklahoma law.
