Opinion
CIV 01-4078
August 22, 2002
MEMORANDUM OPINION AND ORDER
This is a patent infringement case brought by Plaintiff Roger D. Kooima, d/b/a Triple K Industries ("Kooima") in which he alleges that Defendants Zacklift International, Inc. and Stanley E. Zackovich have infringed two of his patents: U.S. Patent No. 5,823,735 ("the `735 patent") and U.S. Patent No. 6,036,428 ("the `428 patent"). The parties have filed numerous motions. In this Order the Court will address Defendants' motion to bifurcate the issue of damages from liability, their motion to dismiss Stanley Zackovich for lack of jurisdiction and their motion to stay the case pending a decision on the motions for summary judgment. (Docs. 25, 32, 93.)
I. Motion for Separate Trial on Damages and Liability
"District courts possess broad discretion to bifurcate issues for purposes of trial" O'Dell v. Hercules, Inc., 904 F.2d 1194, 1201-02 (8th Cir. 1990). Rule 42(b) of the Federal Rules of Civil Procedure provides that
[t]he court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any claim, . . . or of any separate issue . . . always preserving inviolate the right of trial by jury as declared by the Seventh Amendment to the Constitution or as given by a statute of the United States.
"In exercising discretion, district courts should consider the preservation of constitutional rights, clarity, judicial economy, the likelihood of inconsistent results and possibilities for confusion." O'Dell, 904 F.2d at 1202.
As in any case, the decision whether to bifurcate a patent case is left to the discretion of the trial court. See, e.g., Fuji Mach. Mfg. Co. v. Hover-Davis, Inc., 982 F. Supp. 923, 924 (W.D.N.Y. 1997). The burden is on the party moving for bifurcation to demonstrate that it is justified. Id. Defendants correctly point out that some patent cases are particularly amenable to bifurcation. However, courts have noted that, even in patent cases, bifurcation is the exception and not the rule. Id.; Hewlett-Packard Co. v. Genrad, Inc., 882 F. Supp. 1141, 1158 (D. Mass. 1995) (although liability and damages are distinct and separate issues and damage calculation is likely to be difficult and complex. separating liability and damages would delay final resolution of the case).
Defendants claim that Kooima is unlikely to prevail on liability and that it would be "unfortunate" to put the parties, the Court and the jury through the task of determining damages in this weak liability case. Kooima strenuously opposes bifurcation, arguing that bifurcation is unnecessary in this "routine" patent case involving only two patents relating to a "simple" wheel lift apparatus and only one infringing device. Kooima asserts that the damages issues are also relatively simple. He contends that two trials with two different juries would waste time and resources. He points out that some of the evidence in this case will relate to both liability and damages. Kooima alleges that bifurcation would prejudice him by delaying his ability to recover damages and to obtain injunctive relief Defendants respond that Kooima has unnecessarily complicated the issues in this case by refusing to give information in discovery. The Court, however, does not believe that Kooima's alleged failure to provide information in discovery makes this case well suited for bifurcation. Cf. Intellectual Property Dev. Corp. v. UA-Columbia Cablevision of Westchester. Inc., 34 U.S.P.Q.2d 1605 (S.D.N.Y. 1995) (bifurcation appropriate where allowing discovery on the damages issue would require defendant to disclose privileged attorney-client communications or to forgo the advice-of-counsel defense to willful infringement); Acme Resin Corp. v. Ashland Oil, Inc., 689 F. Supp. 751, 753 (S.D. Ohio 1987) (bifurcation ordered where neither party had requested a jury trial); Mag Instrument Inc., v. J. Baxter Brinkmann Int'l Corm, 123 F.R.D. 543, 545 (N.D. Tex. 1988) (bifurcation appropriate where discovery on damages was already completed and damages could be tried before same jury which determines liability).
Although the parties might avoid the time and expense of conducting an analysis of damages, this consideration is outweighed by the expense of picking two juries and of holding two trials. Other than alleging that Kooima has refused to clarify or narrow the damages issues, Defendants have not shown that the damage issues in this case are more difficult or time consuming than those presented in other cases. Johns Hopkins University v. Cellpro, 160 F.R.D. 30, 35 (D. Del. 1995). Additionally, discovery on the question of damages is likely to educate the parties regarding the risks associated with going to trial; thus, full discovery may facilitate settlement in this matter. Id. at 33. The Court will exercise its discretion to deny Defendants' motion to bifurcate in this case.
II. Motion to Stay Proceedings
Defendants make essentially the same arguments in support of their motion to stay proceedings pending a decision on the motions for summary judgment, i.e., that it would conserve the time and resources of the parties and the Court. Kooima opposes a stay. For the same reasons discussed above, the Court will exercise its discretion and deny the motion to stay in order to expedite resolution of the entire case.
III. Motion to Dismiss of Stanley Zackovich
Kooima claims that he brought this action against Stanley E. Zackovich ("Zackovich") as the "moving force" behind defendant Zacklift international, Inc. Zackovich designed the 5th Wheeler towing device manufactured by Zacklift now accused of infringing Kooima's patents. Zackovich has filed a motion to dismiss for lack of jurisdiction and for summary judgment as to all claims against him individually. (Doc. 32.) Zacklift has not challenged jurisdiction.
To survive the motion to dismiss, Kooima must make a prima facie showing of personal jurisdiction. See Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). Where the court does not hold an evidentiary hearing, but instead relies upon the pleadings, exhibits, and affidavits filed by the parties, as the Court does here, the Court must view the facts in the light most favorable to Kooima, the non-moving party. See id., In Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir. 1984), the Third Circuit set out the respective burdens on pates litigating a motion to dismiss for lack of personal jurisdiction.
Once the [personal jurisdiction] defense has been raised, then the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence. . . . [T]herefore, at no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction. Once the motion is made, plaintiff must respond with actual proofs, not mere allegations.Id. at 66-67, n. 9.
With regard to jurisdiction over corporate employees, the Supreme Court has made clear that the employee's contacts are not to be judged by the corporation's activities in the forum; rather, the court must look at the degree to which the employee personally participated in the alleged wrongdoing. Calder v. Jones, 465 U.S. 783, 790, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) (citing Rush v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980)); see Keeton v. Hustler Magazine Inc., 465 U.S. 770, 781 n. 13, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984) ("[J]urisdiction over an employee does not automatically follow from jurisdiction over the corporation which employs him."); see also Simkins Corp. v. Gourmet Resources International, Inc., 601 F. Supp. 1336 (E.D.Pa. 1985) (plaintiff seeking to establish personal jurisdiction over individual corporate officer on basis of tort committed in exercise of corporate duties must prove by preponderance of the evidence that the non-resident officer has independent sufficient forum-related contacts).
Zackovich submitted an affidavit in support of his motion to dismiss. The following is a summary of the assertions in the affidavit. Zackovich resides in Cle Elum, Washington. He is the President and a semi-retired employee of defendant Zacklift International, a Washington corporation. As of 1999, Zackovich gave up all but .026% of his ownership interest in Zacklift. He is no longer as involved in the day-to-day operations of the company, but he assists with marketing and other tasks as requested. In 1995 through 1997, Zackovich designed the allegedly infringing tow-lifts manufactured by Zacklift. Until being served with the summons and complaint against him in this case, Zackovich did not know or believe that Kooima had a patent and he was surprised to find out about the patent Kooima had on the towing devices. He has never made, sold, offered for sale, used or an any way placed into commerce any product related to the towing industry except as an officer or employee of Zacklift or its predecessor corporation. Regarding his contacts with South Dakota, Zackovich asserts that: he does not reside in South Dakota; he is not registered to do business in South Dakota; he does not have any agent, employee, or place of business in South Dakota; he does not advertise, service, manufacture or sell goods in South Dakota; he does not maintain an internet Web site; he does not pay taxes to the State of South Dakota; he does not hold any bank or other financial accounts in South Dakota; he does not maintain any address or possess any real estate in South Dakota; he does not maintain a telephone number in South Dakota; he does not manufacture a product covered by the patents-in-suit; he has no licensees or distributors who conduct business in South Dakota for him; he has not conducted any activity whatsoever in relation to the tow-lift industry in his individual capacity, i.e., other than as an employee of Zacklift, International. (Doc.34, Zackovich Affidavit.)
Once Zackovich contested personal jurisdiction it became Kooima's burden to prove that he has sufficient ties to South Dakota. Kooima does not dispute the assertions made in Zackovich's affidavit. As evidence in opposition to the motion to dismiss, Kooima submitted a copy of a Dunn Bradstreet report dated June 30, 2000 showing Zackovich as President and an officer of Zacklift and stating that 100% of capital stock is owned by the officers. Kooima also submitted a copy of a photograph of a "patent pending" sign on a tow-lift device (purportedly Kooima's patented device on display at a trade show) with someone represented to be Zackovich standing in the background. Finally, Kooima filed copies of "web pages which have been printed out" exulting Zackovich as the "Idea Man" and the "Man Behind Zacklift." Kooima's arguments that Zackovich has sufficient ties to South Dakota include that he designed the 5th Wheeler and thus he induced Zacklift's infringement; that he was the President and CEO of Zacklift when infringement began on October 20, 1998; that he was listed as the majority stockholder as of December 28, 2001; and that he was the "idea man" and the "moving force" that resulted in the design and manufacture of the accused device. In addition, Kooima asserts that "Zackovich must have fully expected the product he designed would end up in South Dakota" because "Zacklift is a nationwide and international business." (Doc. 42, p. 4.) Without citing to the record, Kooima states that Zackovich "clearly made all decision relative to design, manufacturing, and sales of the accused devices," and that Zackovich "is responsible for placing the infringing device in the stream of commerce, including South Dakota." (Doc. 42, p. 4.)
Some cases have held that, when deciding questions of personal jurisdiction in patent cases, district courts should apply the law of the Federal Circuit. See, e.g, Akro Corp. v. Luker, 45 F.3d 1541 (Fed. Cir. 1995). The Federal Circuit's analysis looks to the pertinent state's long-arm statute and considers due process principles, just as the Eighth Circuit does in a non-patent case. Therefore, the law of the Eighth Circuit is in keeping with the law of the Federal Circuit. See Zumbro, Inc. v. California Natural Prods., 861 F. Supp. 773, 777-78 n. 9 (D.Minn. 1994) (applying Eighth Circuit law because it does not deviate from Federal Circuit patent law in any material respect). Because Kooima's claims of patent infringement challenge federally-created rights, the Court must evaluate due process concerns in light of the Fifth Amendment, not the Fourteenth Amendment, which a district court normally applies when sitting in diversity. See id. at 777 n. 8. The standards under both amendments, however, are the same. Dakota Indus., Inc., 946 F.2d at 1389 n. 2.
The determination of whether the Court has personal jurisdiction over a defendant is normally a two-step analysis. Genetic Implant Sys., Inc. v. Core-Vent Corp., 123 F.3d 1455, 1458 (Fed. Cir. 1997); Northrup King Co. v. Compania Productora Semillas Algodoneras Selectas, S.A., 51 F.3d 1383, 1387 (8th Cir. 1995). First, the applicable state long-arm statute, here SDCL § 15-7-2, must be satisfied and second, the Court's exercise of jurisdiction must comport with due process. Id. In South Dakota, the analysis collapses into one step: the due process analysis. See Bell Paper Box, Inc. v. Trans Western Polymers, Inc., 53 F.3d 920, 921 (8th Cir. 1995) ("South Dakota applies its long-arm statute to the fullest extent permissible under due process"). Due process allows a Court to exercise personal jurisdiction over a nonresident defendant only if doing so is consistent with traditional notions of fair play and substantial justice and if the defendant has sufficient "minimum contacts" with the forum state. World-Wide Volkswagen, Corp. v. Woodson, 444 U.S. 286, 291, 100 S.Ct. 559, 564 (1980); International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945). The contacts are sufficient if the defendant "should reasonably anticipate being haled into court there," World-Wide Volkswagen Corp., 444 U.S. at 297, 100 S.Ct. at 567, because he has performed "`some act by which the defendant purposefully avails [himself] of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240 (1958)). The inquiry is whether the defendants have directed their activities toward residents of the forum and whether the litigation arises out of those activities. Burger King, 471 U.S. at 472, 105 S.Ct. at 2182; Northrup King Co., 51 F.3d at 1387.
To evaluate personal jurisdiction under the due process clause, the Court must consider five factors: (1) the nature and quality of the defendant's contacts with South Dakota; (2) the quantity of his contacts with this state; (3) the relation of the cause of action to the contacts; (4) the interest of South Dakota in providing a forum for its residents; and (5) the convenience of the parties. Burlington Indus., Inc. v. Maples Indus., Inc., 97 F.3d 1100, 1102 (8th Cir. 1996); Northrup King Co., 51 F.3d at 1387-88; Land-O-Nod Co. v. Bassett Furniture Indus., Inc., 708 F.2d 1338, 1340 (8th Cir. 1983). The latter two issues are secondary and of less importance than the first three factors. Id. Because the first three factors are closely interrelated, the Court may consider them together. Id. The Court should consider the defendants' contacts with the forum in the aggregate; the Court should look at the totality of the circumstances. Id. The third factor (the relationship of the cause of action to the contacts) draws a distinction as to whether the jurisdiction is specific or general. EFCO Corp. v. Aluma Systems, USA, Inc., 983 F. Supp. 816, 820 (S.D.Iowa 1997). "`Specific jurisdiction refers to jurisdiction over causes of action arising from or related to a defendant's actions within the forum state,' while `[g]eneral jurisdiction . . . refers to the power of a state to adjudicate any cause of action involving a particular defendant, regardless of where the cause of action arose.'" Bell Paper Box, Inc. v. U.S. Kids. Inc., 22 F.3d 816, 819 (8th Cir. 1994) (quoting Sondergard v. Miles, Inc., 985 F.2d 1389, 1392 (8th Cir.), cert. denied, 114 S.Ct. 63 (1993)). See also Burlington Indus., Inc., 97 F.3d at 1102-03. Kooima's arguments in favor of personal jurisdiction seem to fall under the category of specific, rather than general, jurisdiction. Where the Court considers whether it has specific jurisdiction over nonresident defendants, due process is satisfied if the defendants purposefully directed their activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities. Wessels, Arnold Henderson v. National Medical Waste, Inc., 65 F.3d 1427, 1432 (8th Cir. 1995).
It is not clear, but it appears that Kooima contends this Court has personal jurisdiction over Zickovich under either the "effects test" or the "stream of commerce" theory. The Court disagrees.
Koouna has not argued or presented any evidence showing that the Court should pierce the corporate veil in order to assert jurisdiction over Zackovich. Cf. Lakota Girl Scout Council, Inc. v. Havey Fund-Raising Mgmt., Inc., 519 F.2d 634, 637-38 (8th Cir. 1975) (finding that the chief executive officer of a corporation was subject to in personam jurisdiction based on the corporation's activities in the forum state when the evidence indicated that the corporation was merely the alter ego of the chief executive officer).
The effects test theory of personal jurisdiction is derived from Calder v. Jones, 465 U.S. 783, 104 S. Ct 1482, 79 L.Ed.2d 804 (1984). The plaintiff in Calder was an entertainer who lived and worked in California. She brought suit in California, claiming that she had been libeled by an article written in Florida and published in the National Enquirer, a newspaper published in Florida with a large circulation in California Two of the defendants in the case, the editor of the paper and the reporter who wrote the story, moved for dismissal for lack of personal jurisdiction on the ground that they lacked physical contacts with California. Calder, 465 U.S. at 784-85, 104 S.Ct. at 1484-85. The Court held that because "California [was] the focal point both of the story and of the harm suffered" id at 789, 104 S.Ct. at 1486-87, "[j]urisdiction over [the defendants was] . . . proper in California based on the `effects' of their Florida conduct in California." Id. The Court emphasized that the defendants had not engaged in "untargeted negligence" but instead had "expressly aimed" their tortious actions at a California resident. Id. at 789, 104 S.Ct. at 1487. In determining that the actions were "expressly aimed" at the forum state, the Court considered the totality of the circumstances surrounding the events. Id. at 788, 104 S.Ct. at 1486. The allegedly libelous article "concerned the California activities of a California resident," id. at 788, 104 S.Ct. at 1486, and the "article was drawn from California sources." Id. at 798, 104 S.Ct. at 1486. The Court concluded defendants knew that the brunt of the harm would be suffered in California because they knew the plaintiff lived and worked in California and the negative effect on her reputation would primarily be felt there, and because defendants knew that the National Enquirer had a large circulation in California. Id. at 789-90, 104 S.Ct. at 1487. "Under these circumstances," the Court decided, the defendants "must [have] reasonably anticipat[ed] being haled into court" in California. Id. at 790, 104 S.Ct. at 1487.
Courts have interpreted the effects test as requiring a plaintiff to show "that the defendant's acts (1) were intentional, (2) were `uniquely' or expressly aimed at the forum state, and (3) caused harm, the brunt of which was suffered—and which the defendant knew was likely to be suffered—there." Zumbro, 861 F. Supp. at 782-783. In Dakota Indus., supra, the Eighth Circuit relied on the effects test to reverse the district court's holding that a South Dakota court lacked personal jurisdiction over the nonresident defendant in a trademark infringement case. 946 F.2d at 1391. The defendant corporation, Sportswear, argued that it had no contacts with South Dakota and that the marketing of its products in that state resulted exclusively from the unilateral actions of others. Id. at 1390. Plaintiff came forward with evidence that Sportswear knowingly and intentionally infringed plaintiffs trademark. In finding that the actions were "uniquely aimed at the forum," the Eighth Circuit relied on evidence that Sportswear sold to chains with retail outlets in South Dakota, that some of the `passing off' occurred in South Dakota, and that Sportswear may have directly shipped products with the infringing mark into South Dakota. Id. at 1391. Noting that the facts differed from those in Calder and indicating that the case did not fit squarely within the effects test, the Eighth Circuit applied the effects test and held that the defendant "must `reasonably anticipate being haled into court'" in South Dakota because the defendant's actions were "uniquely aimed at the forum state" and that "the brunt of the injury" would be felt there. Id. at 1391 (citing Calder, 465 U.S. at 790, 104 S.Ct. at 1487).
Less than a year after its decision in Dakota Industries, the Eighth Circuit, in a per curiam decision, affirmed a district court's order dismissing a case for failure to satisfy the Calder effects test. See Hicklin Engineering Inc. v. Aidco, Inc., 959 F.2d 738, 739 (8th Cir. 1992). The plaintiff corporation's principal and only place of business was in Des Moines, Iowa. The defendant was a Michigan corporation with its principal place of business in Michigan. The plaintiff alleged intentional interference with prospective business advantage, interference with contractual relations, and libel. Plaintiff filed suit in Iowa. The claims arose out of several letters sent to some of plaintiffs customers. After discussing Calder, but not Dakota Industries, the Eighth Circuit stated:
Gilder is inapposite to the present case. Assuming Hicklin's allegations to be true, Aidco sent correspondence containing defamatory statements to several of Hicklin's customers and interfered with its business. None of the correspondence, however, was published in Iowa. Nor can we say that Aidco's actions were targeted to have an effect in Iowa. When a business seeks to promote its products and solicit the customers of its competitors, it necessarily wishes to have customers believe that its products are superior and to place its competitor's products in a less favorable light. Although this promotion and solicitation may have an effect on a competitor, absent additional contacts, this effect alone will not be sufficient to bestow personal jurisdiction.Id. at 739 (citation omitted).
Dakota Industries and Hicklin show that the Calder effects test requires more than an intentional act by the defendant; it requires that the non-resident defendant purposefully and deliberately directed his act toward the forum state. Viewing the facts most favorably for Kooima, the Court assumes that Zackovich was aware of Kooima's patents and was aware that Zacklift's sales of its 5th Wheeler infringed on the patents. The Court further assumes that the brunt of the harm would be felt in South Dakota because Kooima is a South Dakota resident. However, because there is no showing that Zackovich expressly aimed his conduct at South Dakota, the Court declines to exercise jurisdiction over him under the effects test See e.g., Remick v. Manfredy, 238 F.3d 248, 259 (3rd Cir. 2001) (concluding Pennsylvania was not focal pint of tortious conduct where defamatory material was published not just in Pennsylvania but throughout the national boxing community and there was no showing of a unique relationship between that community and Pennsylvania).
The stream of commerce theory typically applies in product liability actions to sustain jurisdiction over a non-resident manufacturer who made a deliberate decision to market its product in the forum state, then placed that product in the stream of commerce. Mere foreseeability that a product will enter a forum does not establish minimum contacts. World-Wide Volkswggen Corp. v. Woodson, 444 U.S. at 297, 100 S.Ct. at 567. "The foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum state. Rather, it is that the defendant's connections with the forum state are such that he should reasonably anticipate being haled into court there." Id. A defendant must have "purposefully availed" itself of the privilege of conducting activities in the forum. Hanson v. Denckla, 357 U.S. at 253, 78 S.Ct. at 1239.
The Supreme Court addressed the stream of commerce theory in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). In Asahi, a California resident injured in a motorcycle accident in that state alleged that the cause was a defect in a tire. He sued the Taiwanese manufacturer and a California retailer in a California state court. The Taiwanese company sought indemnity from Asahi, the Japanese manufacturer of the valve assembly in the tire. Asahi contested the court's jurisdiction as it never directly placed its product into California. Asahi had no office, agents, employees or property in California; did not advertise or solicit business there; had not created or controlled the distribution system by which its valves were brought into California; and! had not designed its product for the forum state market. Id. at 112-13, 107 S.Ct. at 1032. The Court found that the exercise of jurisdiction over Asahi would exceed the limits of due process. In the plurality opinion, Justice O'Connor specified that the key focus of a jurisdictional inquiry is the relationship between the defendant, the forum and the litigation. See Asahi, 480 U.S. at 113, 107 S.Ct. at 1033. Addressing the stream of commerce rationale, the plurality opinion states:
The placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant's awareness that the stream of commerce may or will sweep the product into the forum state does not convert the mere act of placing the product into the stream of commerce into an act purposefully directed toward the forum State.Asahi, 480 U.S. at 112, 107 S.Ct. at 1032.
In Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994), the Federal Circuit adopted and applied the stream of commerce theory in determining whether a federal district court had personal jurisdiction over an out-of-state corporation accused of patent infringement. In Beverly Hills Fan the out-of-state defendant's continuous shipment into the forum state (Virginia) through an established distribution channel (Builder's Square) resulted in an inference that the alleged infringer had derived substantial revenue from sales in the forum state, thus satisfying federal due process requirements. See id. at 1568.
Although Kooima asserts that Zackovich is responsible for placing the 5th Wheelers into the stream of commerce, there is no evidence that Zackovich has an established distribution channel to indirectly sell the devices in the forum like the defendants in those cases in which the Eighth Circuit and the Federal Circuit have found personal jurisdiction. See e.g., Beverly Hills Fan, 21 F.3d at 1565; Dakota Indus., supra; Viam Corp. v. Iowa Export-Import Trading Co., 84 F.3d 424, 429 (Fed. Cir. 1996)("[The defendant] knowingly and intentionally exploited the California market through its exclusive distributor's advertising in California, and by establishing channels for providing regular advice in California. [The distributor] advertised and sold, and is presently advertising and selling, [the defendant's] products, including the subject of the `386 patent, in California, and [the defendant] provided [the distributor] numerous sales aids which [the defendant] knew would be used in California for selling [the defendant's] products there."). The importance of the established distribution channel is that due process requires the nonresident defendant's contacts be purposefully directed toward the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. at 472-74. The purposeful shipment through an established distribution channel evinces the required purposeful contact. See Beverly Hills Fan, 21 F.3d at 1565. With no evidence that Zackovich created, controlled or employed any sort of distribution system at all, let alone one that brought the accused devices to South Dakota, the Court cannot conclude Zackovich knowingly shipped the products into South Dakota such that his ties to South Dakota are sufficient for this Court to exercise jurisdiction over him. It is not the duty of this Court to scour the voluminous record in this case for evidence supporting Kooima's position. See Little v. Cox's Supermarkets, 71 F.3d 637, 641 (7th Cir. 1995). For purposes of the motion to dismiss, the Court need only consider the documentation submitted in regard to the motion. In opposing the motion to dismiss, Kooirna has not presented evidence of even one sale of a Zacklift 5th Wheeler device in South Dakota or to South Dakota customers. Cf. Clune v. Alimak AB, 233 F.3d 538, 543-44 (8th Cir. 2000) (personal jurisdiction in Missouri over Swedish corporation that designed and manufactured construction hoist off which plaintiff fell was appropriate in part because evidence showed between 20 and 40 of 700 construction hoists ended up in Missouri). Standing alone, the allegation that Zackovich could foresee that the Zacklift 5th Wheeler devices might make their way to South Dakota is too attenuated to constitute purposeful availment of South Dakota's laws and protections. See Gould v. P.T. Krakatau Steel, 957 F.2d 573, 576 (8th Cir. 1992) (that foreign manufacturer could foresee product may enter Arkansas through independent United States purchaser-distributor insufficient to support jurisdiction). Consistent with Asahi and the other cited decisions, the court concludes that personal jurisdiction cannot be premised on a stream of commerce theory in the absence of absent some deliberate forum-directed conduct by Zackovich.
Because the third factor for evaluating personal jurisdiction has not been met (the relation of the cause of action to the contacts), the Court need not address whether maintenance of the suit against Zackovich offends traditional notions of fair play and substantial justice. Accordingly,
IT IS ORDERED:
(1) that Defendants' Motion to Bifurcate the Issue of Damages from Liability (Doc.25) is denied;
(2) that Defendant Stanley F. Zackovich's Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 32) is granted;
(3) that Defendant Stanley E. Zackovich's Motion for Summary Judgment of Dismissal of all Claims Against him is (Doc. 32) is moot in light of his dismissal for lack of personal jurisdiction;
(4) that Defendants' Motion to Stay Proceedings Pending Decision on Motions for Summary Judgment (Doc. 93) is denied.