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Cascade Corp. v. Hiab-Foco AB

United States Court of Appeals, Ninth Circuit
May 14, 1980
619 F.2d 36 (9th Cir. 1980)

Summary

holding that letters from defendant claiming patent infringement were not enough to invoke personal jurisdiction under Oregon long-arm statute because to do so would offend traditional notions of fair play and substantial justice

Summary of this case from Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co.

Opinion

No. 78-1264.

May 14, 1980.

J. Pierre Kolisch, Kolisch, Hartwell, Dickerson Stuart, Portland, Or., for plaintiff-appellant.

Walter H. Evans, Jr., Evans, Anderson, Hall Grebe, Portland, Or., for defendant-appellee.

Appeal from the United States District Court for the District of Oregon.

Before HUG and FARRIS, Circuit Judges and McNICHOLS, District Judge.

The Honorable Robert J. McNichols, United States District Judge for the Eastern District of Washington, sitting by designation.


The plaintiff commenced this declaratory judgment action in the United States District Court for the District of Oregon seeking a declaration of non-infringement of a patent owned by the defendant. The plaintiff is a manufacturer of hydraulic equipment and material handling equipment with its principal place of business in Oregon and offices in other areas. Defendant is a Swedish corporation which manufactures cranes and other equipment in Sweden. Defendant maintains no offices or personnel in the State of Oregon or in the United States. The defendant markets its equipment in the United States through a wholly-owned subsidiary, Hiab-Foco, Inc., a Delaware corporation. All of defendant's equipment is sold F.O.B. Hudiksvall, Sweden to its American subsidiary and the subsidiary in turn markets the cranes to various independent distributors around the United States, including the State of Oregon.

In 1972, defendant by letter to the plaintiff, contended that the plaintiff was infringing the defendant's patent. There was subsequent correspondence between the parties relating to the infringement issue; however, nothing was resolved. Eventually the plaintiff brought this declaratory judgment action under 28 U.S.C. § 2201. Defendant moved to dismiss contending lack of personal jurisdiction. The only issue is whether the defendant is subject to the jurisdiction of the District Court in Oregon under the provisions of the Oregon longarm statute, ORS 14.035. The trial court ruled that it did not have jurisdiction over the defendant and dismissed the action. We affirm.

Jurisdiction arising out of certain acts in this state. (1) Any person, firm or corporation whether or not a citizen or a resident of this state, who, in person or through an agent, does any of the actions enumerated in this subsection, thereby submits such person and, if an individual, his personal representative to the jurisdiction of the courts of this state, as to any cause of action or suit or proceeding arising from any of the following:
(a) The transaction of any business within this state;
(b) The commission of a tortious act within this state;
(c) The ownership, use or possession of any real estate situated in this state;
(d) Contracting to insure any person, property or risk located within this state at the time of contracting.

In several recent decisions this Court has delineated the circumstances in which personal jurisdiction over a non-resident defendant will be imposed. This Court in Varsic v. U.S. Dist. Ct. For Cent. Dist., Etc., 607 F.2d 245 (9th Cir. 1979), quoting from Data Disc. Inc. v. Systems Technology Assocs., Inc., 557 F.2d 1280, 1287 (9th Cir. 1977), held:

If the nonresident defendant's activities within a state are `substantial' or `continuous and systematic,' there is a sufficient relationship between the defendant and the state to support jurisdiction even if the cause of action is unrelated to the defendant's forum activities.

. . . . .

If, however, the defendant's activities are not so pervasive as to subject him to general jurisdiction, the issue whether jurisdiction will lie turns on an evaluation of the nature and quality of the defendant's contacts in relation to the cause of action. In our circuit, we use the following approach in making this evaluation: (1) The nonresident defendant must do some act or consummate some transaction with the forum 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 results from the defendant's forum-related activities. (3) Exercise of jurisdiction must be reasonable. [citations omitted]

607 F.2d at 249. It is apparent from the record in this case that the defendant's activities within the State of Oregon were not "substantial" or "continuous and systematic". Consequently, the second criteria set forth above must be applied. The activities of the defendant within the State of Oregon are not in substantial dispute:

(1) The defendant has no offices, agents or employees in Oregon.

(2) It owns no property in Oregon and maintains no inventory in Oregon.

(3) Products manufactured by the defendant are sold in Oregon but only through independent distributors who receive them from the defendant's subsidiary, a Delaware corporation.

(4) The defendant advertises in national publications which are available in Oregon.

(5) On two occasions in 1969 and on one occasion in 1975 representatives of defendant visited Oregon to explore distributorship agreements, to evaluate the use of cranes in the lumber industry and for the purpose of calling upon the local distributor.

(6) Starting in 1972 a number of letters were written by the defendant to the plaintiff contending that plaintiff was infringing the defendant's patent.

Although the plaintiff contends that the various activities set forth above constitute a reasonable basis for the court to assert jurisdiction over the defendant, its primary reliance is placed upon the letters from the defendant claiming patent infringement. In that regard plaintiff cites as authority B J Manufacturing Co. v. Solar Industries Inc., 483 F.2d 594 (8th Cir.), cert. denied, 415 U.S. 918, 94 S.Ct. 1417, 39 L.Ed.2d 473 (1973). In reference to that case the Oregon District Court declined to apply it to this case stating:

Assuming that the true holding of B J is that sending threatening infringement letters into the forum district suffices to — succumb to that district's jurisdiction, I respectfully must disagree with the Eighth Circuit . . . . Following such a rule would be incongruous with practicality, the patent statutes and fair play and substantial justice.

Cascade Corp. v. Hiab-Foco AB, No. 76-468 (Dist. of Ore. 1977).

It is true in B J the Eighth Circuit did base its decision in part upon the letters which the defendant sent to the plaintiff threatening patent infringement. The court categorized the letters as a form of transacting business in Minnesota "designed signed to reduce competition." However, on the question of due process the Eighth Circuit in B J concluded that there was no exceptional hardship upon the defendant having to litigate in Minnesota rather than Illinois. The court stated:

. . . and we are satisfied that it is in the best interests of all to have the case heard in Minnesota. Thus, we are convinced that the subjection of the defendant to in personam jurisdiction comports with due process.

B J, supra at 599.

Moreover, the activities of the defendant Hiabo-Foco in the State of Oregon were not as extensive as those of the defendant in the B J case.

We conclude under the facts of this case that to require the defendant to submit to jurisdiction under the Oregon long-arm statute would offend traditional notions of fair play and substantial justice. International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). We therefore find it unnecessary to analyze in this opinion the decisions of the Supreme Court of Oregon construing the Oregon long-arm statute. Our review of those decisions, however, leads us to conclude that the Oregon Court would reach the same result.

Affirmed.

* * * * * *

(3) Service of summons on any person who is subject to the jurisdiction of the courts of this state, as provided in this section, may be made by personally serving the summons and copy of the complaint upon the defendant outside this state, in the manner provided in ORS 15.110. Such service shall have the same force and effect as though summons had been personally served within the state.
(4) Only causes of action or suit or proceedings arising from acts enumerated in this section may be asserted against a defendant in an action or suit or proceeding in which jurisdiction over such defendant is based upon this section.
(5) Nothing contained in this section limits or affects the right to serve any person in any other manner now or hereafter provided by law.


Summaries of

Cascade Corp. v. Hiab-Foco AB

United States Court of Appeals, Ninth Circuit
May 14, 1980
619 F.2d 36 (9th Cir. 1980)

holding that letters from defendant claiming patent infringement were not enough to invoke personal jurisdiction under Oregon long-arm statute because to do so would offend traditional notions of fair play and substantial justice

Summary of this case from Halliburton Energy Servs., Inc. v. Ironshore Specialty Ins. Co.

finding that an ad in a national publication available in the forum state did not establish specific jurisdiction

Summary of this case from Grober v. Mako Prods., Inc.

finding that an ad in a national publication available in the forum state did not establish specific jurisdiction

Summary of this case from Grober v. Mako Prods., Inc.

finding no general jurisdiction in Oregon over Swedish corporation that sells its products F.O.B. in Sweden to a United States subsidiary which markets through an Oregon independent distributor, when only additional contact between defendant and forum were letters and occasional visits

Summary of this case from Kuenzle v. HTM Sport-Und Freizeitgerate AG

finding no specific jurisdiction where defendant advertised in "national publications" circulated in forum, visited forum on two occasions, and mailed accusatory letters to plaintiff in forum

Summary of this case from Bradley v. T-Mobile US, Inc.

finding no specific jurisdiction where defendant patent holder advertised in "national publications" circulated in forum, visited forum on two occasions, and mailed accusatory letters to plaintiff in forum

Summary of this case from Surface Supplied Inc. v. Kirby Morgan Dive Sys., Inc.

rejecting argument that letters claiming patent infringement sent to plaintiff in forum state and defendant's advertisements in national publications were sufficient to establish minimum contacts

Summary of this case from On Your Own LLC v. Meredith Corp.

In Cascade Corp. v. Hiab-Foco AB, 619 F.2d 36 (9th Cir. 1980), commenced in the United States District Court for the District of Oregon, the nonresident patent owner's forum-related activities were far more pervasive than Markwitz's. The nonresident defendant not only mailed letters to the plaintiff charging infringement, but also advertised its product in national periodicals that circulated in Oregon. It addition, on several occasions, the patentee's representatives visited Oregon to explore new distributorships, to assess the usefulness of the patented product in the lumber industry, and to meet with the patentee's local distributor.

Summary of this case from Kransco Mfg., Inc. v. Markwitz

In Cascade Corp. v. Hiab-Foco AB, 619 F.2d 36 (9th Cir. 1980), the Ninth Circuit concluded that it would violate due process to exercise specific jurisdiction over a nonresident defendant who advertised its products in a national publication circulated in the forum state and who sent letters to the plaintiff in the forum state.

Summary of this case from Fernandez v. McDaniel Controls, Inc.

In Cascade Corporation v. Hiab-Foco AB, 619 F.2d 36 (9th Cir. 1980), the Ninth Circuit held that exercising specific personal jurisdiction over a nonresident defendant based solely on a series of cease-and-desist letters sent into the forum state would offend traditional notions of fair play and substantial justice.

Summary of this case from Douglas Furn. Co. of California v. Wood Dimensions

In Cascade, the plaintiff commenced a declaratory judgment action seeking a declaration that the patent in question was invalid in the district court in Oregon.

Summary of this case from Stairmaster Sports v. Pacific Fitness Corp.

subjecting a Swedish corporation to personal jurisdiction in Oregon on the basis of cease and desist letters — where Swedish corporation had no officers, agents or employees in Oregon, and Swedish company's products that were sold in Oregon were sold through an independent distributor — would offend traditional notions of fair play and substantial justice

Summary of this case from Polaroid Corp. v. Feely

In Cascade Corporation v. Hiab-Foco AB, 619 F.2d 36 (9th Cir. 1980), plaintiff brought a declaratory judgment action to seek a declaration of noninfringement of defendant's patent.

Summary of this case from Quikrete Companies, Inc. v. Nomix Corp.
Case details for

Cascade Corp. v. Hiab-Foco AB

Case Details

Full title:CASCADE CORPORATION, PLAINTIFF-APPELLANT, v. HIAB-FOCO AB, A SWEDISH…

Court:United States Court of Appeals, Ninth Circuit

Date published: May 14, 1980

Citations

619 F.2d 36 (9th Cir. 1980)

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