USSC Group Inc v. Kimball Inc

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit

FILED
January 15, 2009

No. 08-60010 Charles R. Fulbruge III
Clerk

USSC GROUP INC, a Pennsylvania corporation

Plaintiff - Appellant
v.

KIMBALL INC, a Delaware corporation; KIMBALL
INTERNATIONAL, a Delaware corporation

Defendants - Appellees

Appeal from the United States District Court
for the Northern District of Mississippi
USDC No. 2:07-CV-30

Before HIGGINBOTHAM, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
This appeal involves the district court’s dismissal for lack of personal
jurisdiction. Because we find no reversible error, we affirm.
I. Background
USSC Group, Inc. (“USSC”) is engaged in the business of manufacturing
and selling seats used in mass transit vehicles. As part of its operations, USSC
sometimes purchased components from Batesville American Manufacturing

*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
 No. 08-60010

Company (“Batesville”), which was located in Batesville, Mississippi, located in
the northern judicial district of Mississippi. In 1991, Kimball, Inc. became the
owner of Batesville through a merger. Kimball, Inc. is a wholly owned
subsidiary of Kimball International.
USSC is incorporated and has its principal place of business in
Pennsylvania. Both Kimball, Inc. and Kimball International (collectively
“Kimball”) are Delaware corporations with their principal places of business in
Indiana. Kimball was registered and qualified to do business in Mississippi at
the time USSC purchased the components at issue in this dispute. In 2002,
Kimball withdrew from transacting business in Mississippi.
This action arose from an order by USSC to Kimball, Inc. in 2001 for a
number of seat frames that were allegedly defective. The seats were installed
in New Jersey Transit rail cars. In 2005, New Jersey Transit declared a “fleet
failure” on the seating and demanded a redesign and fleet-wide replacement of
the seats. USSC sought contribution from Kimball International for the cost of
fixing the seat mechanism defect. In February 2007, after Kimball International
refused to contribute to the costs, USSC brought suit in the district court for the
Northern District of Mississippi against Kimball. USSC effected service of
process on the Mississippi Secretary of State.
Kimball moved to dismiss the complaint (1) based on lack of personal
jurisdiction over either defendant and (2) for failure to state a claim upon which
relief could be granted under Federal Rule of Civil Procedure 12(b)(6). The
district court granted Kimball’s motion to dismiss for lack of personal
jurisdiction. The district court stated that in diversity actions, it “may exercise
personal jurisdiction only to the extent permitted a state court under applicable
state law.” The district court relied on Mississippi’s long-arm statute, which
provides in pertinent part as follows:

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Any nonresident person . . . or any foreign or other corporation not
qualified under the Constitution and laws of this state as to doing
business herein, . . . who shall do any business or perform any
character of work or service in this state, shall by such act or acts be
deemed to be doing business in Mississippi and shall thereby be
subjected to the jurisdiction of the courts of this state.
MISS. CODE ANN. § 13-3-57. The court added, however, that “a nonresident of
Mississippi cannot take advantage of either the contract or the ‘doing business’
prong of the Mississippi long-arm statute.”
The district court rejected USSC’s argument that personal jurisdiction is
conferred pursuant to Mississippi Code § 79-4-15.20 if a non-resident corporation
that was once registered as doing business in Mississippi withdraws and the
lawsuit in question concerns actions occurring during the period the non-
resident corporation was doing business in Mississippi. Section 79-4-15.20
provides in part as follows:
(b) A foreign corporation authorized to transact business in this
state may apply for a certificate of withdrawal by delivering an
application to the Secretary of State for filing. The application must
set forth:
....
(3) That it revokes the authority of its registered agent to
accept service on its behalf and appoints the Secretary of
State as its agent for service of process in any proceeding
based on a cause of action arising during the time it was
authorized to transact business in this state;
....
(c) After the withdrawal of the corporation is effective, service of
process on the Secretary of State under this section is service on the
foreign corporation. Upon receipt of process, the Secretary of State
shall mail a copy of the process to the foreign corporation at the
mailing address set forth in its application for withdrawal.
MISS. CODE ANN. § 79-4-15.20(b)(3) & (c). The court stated that there was no
binding precedent demonstrating that this section alters Fifth Circuit

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jurisprudence regarding the “doing business” prong of Mississippi’s long arm
statute, and that it was unable to find any cases addressing the section.
II. Discussion
We review a district court’s dismissal for lack of personal jurisdiction de
novo. Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309, 311 (5th Cir. 2007)
(citing Central Freight Lines Inc. v. APA Transport Corp., 322 F.3d 376, 380 (5th
Cir. 2003)). The plaintiff bears the burden of demonstrating the district court’s
personal jurisdiction over defendants. Johnston v. Multidata Sys. Int’l Corp.,
523 F.3d 602, 609 (5th Cir. 2008). A“federal court sitting in diversity may assert
jurisdiction if (1) the state’s long-arm statute applies, as interpreted by the
state’s courts; and (2) if due process is satisfied under the [F]ourteenth
[A]mendment to the United States Constitution.” Id. (quoting Cycles, Ltd. v.
W.J. Digby, Inc., 889 F.2d 612, 616 (5th Cir.1989)).

Here, USSC is a non-resident plaintiff, and the Kimball companies are
non-resident defendants. Therefore, USSC may not avail itself of § 13-3-57 to
obtain personal jurisdiction over Kimball. See Delgado v. Reef Resort Ltd., 364
F.3d 642, 644 (5th Cir. 2004) (“This court has, on numerous occasions,
interpreted [Mississippi Code § 13-3-57] to mean that non-residents may not sue
non-resident corporations doing business in Mississippi.”) (citations omitted);
Submersible Sys., Inc. v. Perforadora Cent., S.A., 249 F.3d 413, 418 (5th Cir.
2001).

Next, USSC argues that the district court abdicated its judicial role by
failing to determine how Mississippi courts would interpret the withdrawal
statute. A federal court sitting in diversity cases should decide to the best of its
ability what the state court would hold if the case was before it. Dawkins v.
White Prods. Corp., 443 F.2d 589, 591 (5th Cir. 1971). We have reviewed the
briefs on appeal and the pertinent portions of the record and heard the

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arguments of counsel. Even though the district court did not address the
withdrawal statute, we are not persuaded that reversal is warranted in this
case.

III. Conclusion

Because we find no reversible error, the judgment is AFFIRMED.

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