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Federated Rural Electric Insurance v. Kootenai Electric Cooperative
Citation: 17 F.3d 1302Docket: No. 93-3044
Court: Court of Appeals for the Tenth Circuit; February 24, 1994; Federal Appellate Court
Plaintiff-appellant Federated Rural Electric Insurance Corporation appeals a district court order dismissing eleven out of sixteen defendants for lack of personal jurisdiction under Fed. R.Civ. P. 12(b)(2). Federated, an insurer for rural electric cooperatives, contends that these cooperatives, located in Washington, Idaho, and Oregon, failed to inform Federated about potential liabilities related to the Washington Public Power Supply System (WPPSS) when obtaining or increasing coverage. After relocating its headquarters from Wisconsin to Kansas in 1982, Federated filed suit in Kansas, fearing bias in Washington due to negative publicity surrounding WPPSS. The defendants moved to dismiss, claiming insufficient contacts with Kansas. The district court granted the motion regarding eleven defendants, leading to the appeal. The appellate court reviews the dismissal de novo, with personal jurisdiction determined by Kansas law in diversity cases. The court assesses whether the Kansas long-arm statute allows jurisdiction and if it complies with due process. The analysis centers on whether defendants had "minimum contacts" with Kansas, indicating they purposefully availed themselves of its laws. Federated identified two types of contacts: advertisements in the Wall Street Journal related to WPPSS bonds and allegations of ongoing fraud in their claims against Federated while it was based in Kansas. The court must also ensure that exercising jurisdiction aligns with notions of fair play and substantial justice. Evidence of merely placing advertisements in widely distributed publications does not constitute the purposeful contact with a forum necessary for establishing personal jurisdiction over an advertiser, as reaffirmed in Williams v. Bowman Livestock Equipment Co. The case of Rambo v. American Southern Ins. Co. illustrates a similar principle regarding insurance claims. In Rambo, Alabama residents filed a claim with a Georgia corporation after relocating multiple times, and the court determined that Oklahoma lacked personal jurisdiction over the defendants due to insufficient contacts with the state, emphasizing that unilateral actions by plaintiffs do not meet the necessary jurisdictional requirements. The court concluded that the relocation of Federated’s headquarters to Kansas did not create the requisite minimum contacts with its insureds, as all relevant transactions occurred while the insured was based in Wisconsin. Consequently, the court affirmed the decision, denying all pending motions.