Creative Calling Solutions, Inc. v. LF Beauty Ltd.
2015 WL 4978774
8th Cir.2015Background
- Creative Calling (Iowa corp.) contracted with LF Beauty (Hong Kong corp.) after LF solicited business from Creative Calling in Iowa; CEO Unger traveled to Hong Kong to sign the contract in 2012.
- Contract required LF Beauty to oversee production in China, produce pre-production and production samples, ship samples to Creative Calling in Iowa, and remit customer payments to Creative Calling (less deductions).
- LF Beauty managed Creative Calling’s supply chain, communicated extensively by e-mail/phone for nearly two years, shipped thousands of samples to Iowa (per plaintiff affidavit), and forwarded substantial payments to Creative Calling in Iowa.
- Creative Calling sued in Iowa for breach of contract, alleging defective/contaminated/mispackaged samples; LF Beauty removed to federal court and moved to dismiss for lack of personal jurisdiction under Rule 12(b)(2).
- The district court granted dismissal after considering affidavits and the contract; the Eighth Circuit reviews the dismissal de novo and treats the motion as a summary-judgment-type inquiry because the parties submitted affidavits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Iowa has specific personal jurisdiction over LF Beauty | LF Beauty purposefully availed itself of Iowa by soliciting business there, negotiating with and communicating frequently with an Iowa company, shipping thousands of samples to Iowa, and remitting payments to Iowa | Contacts are incidental or fortuitous (samples not made by LF, some shipped from China directly); contract alone insufficient to create jurisdiction; forum clauses favor Hong Kong | Held: Yes — sufficient minimum contacts for specific jurisdiction given solicitation, sustained communications, contractual terms requiring sample shipment, actual shipments, and payment remittances |
| Whether LF Beauty’s shipment of samples to Iowa is a sufficient contact | Thousands of samples were shipped pursuant to the contract and thus constitute purposeful, significant contacts with Iowa | Shipping was incidental; Digi-Tel suggests sample shipments can be casual contacts | Held: Shipment of thousands of contractually contemplated samples is a significant, purposeful contact supporting jurisdiction |
| Whether contractual forum-selection and choice-of-law clauses preclude Iowa jurisdiction | Plaintiff contends non-exclusive Hong Kong forum clause does not preclude Iowa jurisdiction | LF Beauty argues forum-selection and Hong Kong-law choice show Iowa is inappropriate | Held: Forum-selection (non-exclusive) and choice-of-law are relevant but not dispositive; they do not defeat personal jurisdiction here |
| Whether exercising jurisdiction would be unreasonable or offend fair play and substantial justice | Plaintiff: Iowa has strong interest; samples and some witnesses are in Iowa; litigation in Hong Kong would burden plaintiff | Defendant: Litigation in Iowa burdens a foreign defendant; key witnesses located in Hong Kong | Held: Exercise of jurisdiction is reasonable — forum and plaintiff interests favor Iowa and burdens on LF do not overcome jurisdiction given contacts and witness distribution |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (framework for purposeful availment and evaluating contractual contacts)
- Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (standard for general jurisdiction: essentially at home)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (minimum contacts requirement)
- Digi-Tel Holdings, Inc. v. Proteq Telecomm. (PTE), Ltd., 89 F.3d 519 (8th Cir. 1996) (analysis of sample shipments and casual/fortuitous contacts)
- K-V Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588 (8th Cir. 2011) (plaintiff burden and use of communications in jurisdictional analysis)
- Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102 (1987) (reasonableness factors and international jurisdiction caution)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (1945) (foundational due process standard for personal jurisdiction)