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Luvata Grenada, LLC v. Danfoss, LLC

United States District Court, N.D. Mississippi, Greenville Division

June 2, 2015



SHARION AYCOCK, District Judge.

Plaintiff Luvata Grenada initiated this action against Danfoss, LLC ("Danfoss US") and Danfoss Industries S.A. de C.V. ("Danfoss Mexico"), alleging various contract and tort causes of action pursuant to the United Nations Convention for the International Sale of Goods ("CISG") and Mississippi law. Defendants have filed a Motion to Dismiss for Lack of Jurisdiction [12]. Upon consideration of the motion, responses, rules, and authorities, the Court finds as follows:

Facts and Procedural History

The present suit arises from a series of commercial transactions concerning the sale, manufacture, and shipment of allegedly defective products, known as refrigerant distributors ("RDs"), which are incorporated into coils used in the manufacture of heating and cooling systems.

The Defendants, Danfoss U.S. and Danfoss Mexico, which are subsidiaries of a Danish entity Danfoss A/S, both manufacture and sell various products, including RDs. Danfoss Mexico is incorporated under Mexican law, maintains its principal place of business in Apodaca, Mexico, and is not registered to do business in Mississippi. Danfoss U.S. is incorporated in Delaware, maintains its principal place of business in Baltimore, Maryland, and is registered with the Mississippi Secretary of State to do business in Mississippi. Danfoss U.S. additionally acts as a sales agent for other Danfoss entities.

Plaintiff Luvata Grenada LLC ("Luvata Grenada") is engaged in the manufacture of heat transfer products, including the aforementioned coils used in commercial heating and cooling units. Luvata Grenada is organized under Delaware law and operates solely in Grenada, Mississippi. Luvata Juárez S. de R.L. de C.V. ("Luvata Mexico"), an affiliate of Luvata Grenada, is incorporated in Mexico and maintains its principal place of business in Ciudad Juárez, Mexico. Luvata Mexico has not been named as a party to the instant proceedings.

In August 2012, Robert Martin, the material manager for Luvata Mexico, contacted Bruce Busby, a regional account manager for Danfoss U.S. seeking to purchase a new type of RD. Busby provided a price and a drawing of the proposed RD design to Martin. Danfoss Mexico then manufactured and delivered several prototype RDs and delivered them to Luvata Mexico in Mexico free of charge.

From then until March 2013, a series of orders were placed with Danfoss Mexico for the RDs. The purchase orders appear on Luvata Grenada letterhead, but the buyers named on the orders are two employees of Luvata Mexico. The RDs were manufactured by Danfoss Mexico in Mexico and shipped to Luvata Mexico in Mexico, but Danfoss Mexico mailed invoices for the RDs to Luvata Grenada, [1] and Luvata Grenada asserts that it remitted payment for the RDs.

Luvata Grenada alleges that in March 2013, it received reports from its customer Thermo King that the heating and cooling units were failing and that, upon investigation, such failure was caused by improper design of the RDs manufactured by Danfoss Mexico. Luvata Grenada then initiated this action against Danfoss Mexico and Danfoss US, alleging breach of contract, breach of warranties, negligent misrepresentation, and negligent design.[2] Luvata Grenada premises this Court's subject matter jurisdiction on 28 USC § 1331 and 28 USC § 1367. Defendants argue that the Court lacks subject matter jurisdiction over the case and alternately, that the Court lacks personal jurisdiction over Danfoss Mexico.

12(b)(1) and 12(b)(2) Standards of Review

When confronted with a motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1), the Court must ascertain whether it possesses "the statutory or constitutional power to adjudicate the case." Home Builders Ass'n of Miss., Inc. v. City of Madison, 143 F.3d 1006, 1010 (5th Cir. 1998) (citation and quotation omitted). In examining its jurisdiction, the Court is permitted to consider "(1) the complaint alone; (2) the complaint supplemented by undisputed facts in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts." Clark v. Tarrant Cnty., 798 F.2d 736, 741 (5th Cir. 1986) (citation omitted). The burden of proof on a Rule 12(b)(1) motion lies with the party asserting jurisdiction. See Strain v. Harrelson Rubber Co., 742 F.2d 888, 889 (5th Cir. 1986).

Similarly, with regard to a challenge of personal jurisdiction under Rule 12(b)(2), "the party seeking to invoke the power of the court bears the burden of proving that jurisdiction exists." Luv N'care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006) (citing Wyatt v. Kaplan, 686 F.2d 276, 280 (5th Cir. 1982)). Importantly, however, "[t]he plaintiff need not... establish jurisdiction by a preponderance of the evidence; a prima facie showing suffices." Id . In determining whether a prima facie showing of personal jurisdiction has been made, the Court "must resolve all undisputed facts submitted by the plaintiff, as well as all facts contested in the affidavits, in favor of jurisdiction." McFadin v. Gerber, 587 F.3d 753, 758 (5th Cir. 2009) (quoting Luv N'care, , 438 F.3d at 469).

Discussion and Analysis

Subject Matter Jurisdiction

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