Ace Am. Ins. Co. v. Oyster Harbors Marine, Inc.
Opinion
BURROUGHS, District Judge.
Plaintiff Ace American Insurance Co. ("Ace"), as subrogee of Eric Slifka, initiated this action against Oyster Harbors Marine, Inc. ("Oyster Harbors") concerning a vessel that was sold by Oyster Harbors to Slifka and later sustained fire damage. Additional parties have since joined the case, including the vessel's manufacturer, Regulator Marine, Inc. ("Regulator"), the distributor and installer of the vessel's bow thruster, Florida Bow Thrusters, Inc. ("Florida Bow"), and the manufacturer of the bow thruster, Vetus Maxwell, Inc. ("Vetus Maxwell"). Currently pending before the Court are Florida Bow's motions to dismiss Vetus Maxwell's crossclaims against it for lack of personal jurisdiction and improper venue [ECF No. 52] and for failure to state a claim [ECF No. 56]. For the reasons that follow, the Court GRANTS the motion to dismiss for lack of personal jurisdiction and improper venue [ECF No. 52] and DENIES the motion to dismiss for failure to state a claim as moot. [ECF No. 56].
I. BACKGROUND
In June 2011, Oyster Harbors, located in Massachusetts, agreed to purchase a 34-foot yacht later named "E=mc2" (the "Vessel") from Regulator, the Vessel's manufacturer. [ECF No. 7 at ¶¶ 6-8] ("Complaint"). The sale included the installation of a Vetus Maxwell brand bow thruster on the Vessel. Compl. ¶ 17; [ECF No. 65-6 at ¶¶ 6-8]. Regulator engaged Florida Bow, a distributor of Vetus Maxwell products, to perform the installation, which was completed prior to the Vessel being transported to Massachusetts. [ECF No. 45 at 15-16]; [ECF No. 53-1 at ¶¶ 20-21]; [ECF No. 65-6 at ¶¶ 6, 8, 15]. Shortly after completing the purchase of the Vessel, Oyster Harbors sold the Vessel to Slifka. Compl. ¶¶ 6-7. A few years later, on or around July 11, 2014, Slifka was operating the Vessel in the Nantucket Harbor when a fire ignited onboard. Id. ¶¶ 9-10. After noticing a burning odor and seeing smoke near the Vessel's center console, *300Slifka moored the Vessel, turned off the battery, and boarded another boat that was passing by. Id. ¶¶ 10-12. Although the fire severely burned the Vessel, no other person or property appears to have been injured or damaged. Id. ¶ 13.
Ace, as subrogee of Slifka, brought the initial lawsuit against Oyster Harbors pursuant to this Court's admiralty and maritime jurisdiction,
II. LEGAL STANDARD
Where, as here, a party asserts grounds for dismissal that are based both on the merits and on jurisdictional deficiencies, the jurisdictional questions must be resolved prior to reaching the merits. See Bell v. Hood,
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BURROUGHS, District Judge.
Plaintiff Ace American Insurance Co. ("Ace"), as subrogee of Eric Slifka, initiated this action against Oyster Harbors Marine, Inc. ("Oyster Harbors") concerning a vessel that was sold by Oyster Harbors to Slifka and later sustained fire damage. Additional parties have since joined the case, including the vessel's manufacturer, Regulator Marine, Inc. ("Regulator"), the distributor and installer of the vessel's bow thruster, Florida Bow Thrusters, Inc. ("Florida Bow"), and the manufacturer of the bow thruster, Vetus Maxwell, Inc. ("Vetus Maxwell"). Currently pending before the Court are Florida Bow's motions to dismiss Vetus Maxwell's crossclaims against it for lack of personal jurisdiction and improper venue [ECF No. 52] and for failure to state a claim [ECF No. 56]. For the reasons that follow, the Court GRANTS the motion to dismiss for lack of personal jurisdiction and improper venue [ECF No. 52] and DENIES the motion to dismiss for failure to state a claim as moot. [ECF No. 56].
I. BACKGROUND
In June 2011, Oyster Harbors, located in Massachusetts, agreed to purchase a 34-foot yacht later named "E=mc2" (the "Vessel") from Regulator, the Vessel's manufacturer. [ECF No. 7 at ¶¶ 6-8] ("Complaint"). The sale included the installation of a Vetus Maxwell brand bow thruster on the Vessel. Compl. ¶ 17; [ECF No. 65-6 at ¶¶ 6-8]. Regulator engaged Florida Bow, a distributor of Vetus Maxwell products, to perform the installation, which was completed prior to the Vessel being transported to Massachusetts. [ECF No. 45 at 15-16]; [ECF No. 53-1 at ¶¶ 20-21]; [ECF No. 65-6 at ¶¶ 6, 8, 15]. Shortly after completing the purchase of the Vessel, Oyster Harbors sold the Vessel to Slifka. Compl. ¶¶ 6-7. A few years later, on or around July 11, 2014, Slifka was operating the Vessel in the Nantucket Harbor when a fire ignited onboard. Id. ¶¶ 9-10. After noticing a burning odor and seeing smoke near the Vessel's center console, *300Slifka moored the Vessel, turned off the battery, and boarded another boat that was passing by. Id. ¶¶ 10-12. Although the fire severely burned the Vessel, no other person or property appears to have been injured or damaged. Id. ¶ 13.
Ace, as subrogee of Slifka, brought the initial lawsuit against Oyster Harbors pursuant to this Court's admiralty and maritime jurisdiction,
II. LEGAL STANDARD
Where, as here, a party asserts grounds for dismissal that are based both on the merits and on jurisdictional deficiencies, the jurisdictional questions must be resolved prior to reaching the merits. See Bell v. Hood,
Vetus Maxwell, as the crossclaim plaintiff, "has the burden of establishing that *301jurisdiction over the defendant lies in the forum state." Ferrara v. Voyport II, LLC, No. 16-12024,
III. DISCUSSION
A. Jurisdictional Facts
Florida Bow is a family-owned corporation organized and existing under the laws of the State of Florida with its principal office in Florida. [ECF No. 53-1 at ¶¶ 2, 5]. It has never had an office in Massachusetts; been registered to do business in Massachusetts; maintained a registered agent for service of process in Massachusetts; listed a mailing address or telephone number in Massachusetts; owned or leased property in Massachusetts; held corporate meetings in Massachusetts; or had an officer or director who was a resident of Massachusetts while holding such position. Id. at ¶¶ 6-16.
Florida Bow acknowledges, however, that it ships to and installs some products in Massachusetts. According to Vetus Maxwell, between May 2009 and May 2017, Florida Bow shipped "various parts and products" to Massachusetts on 84 separate occasions, some of which included product installations performed by its employees for whom Florida Bow had obtained nationwide liability insurance. [ECF No. 65 at 5-6, 9, 14]. Florida Bow also admits that its website advertises its installation and servicing of bow thrusters nationwide, and that it occasionally participates in boating trade shows in Massachusetts. [ECF No. 68 at 1]. Vetus Maxwell adds that Florida Bow's website displays at least one customer testimonial written by a Massachusetts resident, and that it suggests that Florida Bow attends trade shows in other New England states that market to Massachusetts residents. [ECF No. 65 at 6].
With regard to the sale of the Vessel, Regulator contracted Florida Bow for the purchase and installation of the Vetus Maxwell bow thruster for the price of $6,000. [ECF No. 53-1 at ¶¶ 20-23]. A work order, which identified Oyster Harbors and its Massachusetts address as the customer and shipping destination, was affixed to the Vessel at the time that Florida Bow installed the bow thruster. [ECF No. 65-6 at ¶ 9-11]. On or around June 27 or 28, 2011, Florida Bow performed the installation *302at Regulator's facility in Edenton, North Carolina but Florida Bow was not involved in transporting the Vessel to Oyster Harbors. [ECF No. 53-1 at ¶¶ 20-24]. The Vessel was one of three Regulator yachts on which Florida Bow installed a bow thruster for sale to Oyster Harbors in 2011. [ECF No. 65-6 at ¶ 15].
B. Personal Jurisdiction Generally
In an admiralty case, "the personal jurisdiction analysis includes a twist not present in diversity cases, although ultimately there is no practical difference in the way in which the Court proceeds towards its determination." Bohnenberger,
Notwithstanding the Court's broad jurisdictional reach under the Fifth Amendment, the Court's power over a defendant is limited by the requirement that a defendant "must be served pursuant to a federal statute or a Civil Rule." Zeus Projects Ltd.,
"In Massachusetts, a court may exercise personal jurisdiction over a foreign defendant if such jurisdiction is authorized by state statute and its exercise does not offend the Due Process Clause of the Fourteenth Amendment."
*303There are two types of personal jurisdiction: general and specific. See United Elec. Workers,
C. General Jurisdiction
"When a court 'exercises personal jurisdiction over a defendant in a suit not arising out of or related to the defendant's contacts with the forum [State], the [forum State] has been said to be exercising 'general jurisdiction' over the defendant.' " Fed. Home Loan Bank of Bos. v. Moody's Corp.,
Here, general jurisdiction hinges on Florida Bow's shipment to and installation of marine products in Massachusetts and attendance at trade shows in Massachusetts. Florida Bow is incorporated under Florida law and maintains its principal place of business in Florida. As stated above, it has never had an office in Massachusetts, registered to do business in Massachusetts, maintained a registered agent in Massachusetts, or owned or leased *304property in Massachusetts. According to Vetus Maxwell, Florida Bow has made 84 shipments of marine products over the eight-year period between May 2009 and May 2017. [ECF No. 65 at 9, 17-18]. The supporting evidence, however, does not establish the dates of these shipments, the types of products shipped or their value, or that a Florida Bow employee performed any related installations. [ECF No. 65-3]. This small number of intermittent shipments of unspecified products, and Florida Bow's attendance at an occasional trade show, do not in any way suggest that Florida Bow is "essentially at home" in Massachusetts or otherwise demonstrate that this is an exceptional case for finding general jurisdiction. See Presby Patent Trust v. Infiltrator Sys., Inc., No. 14-542,
D. Specific Jurisdiction
The Court applies the following three-part test to determine whether it may exercise specific jurisdiction:
[f]irst, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's court foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.
Pritzker,
1. Relatedness
The relatedness inquiry examines whether " 'the claim underlying the litigation ... directly arise[s] out of, or relate[s] to, the defendant's forum-state activities.' " Astro-Med, Inc. v. Nihon Kohden America, Inc.,
It is undisputed that Florida Bow installed the bow thruster on the Vessel in North Carolina, did not participate in transporting the Vessel to Massachusetts, and was not a party to the chain of transactions that brought the Vessel to Massachusetts. There is no evidence that Florida Bow's website, attendance at trade shows, or shipment or installation of other marine products in Massachusetts bear any connection to the claims relating to the Vessel. See Old United Cas. Co. v. Flowers Boatworks, No. 15-43,
The Court recognizes, however, that where the alleged defective product or installation caused an injury in the forum State, the Court may consider "whether [defendant's] contacts with Massachusetts relate to the sale or marketing of the product causing [plaintiff's] injury." Lewis v. Dimeo Const. Co., No. 14-10492,
The affidavit of Vetus Maxwell's Chief Financial Officer and the accompanying exhibit show, at most, that Florida Bow shipped "marine equipment" to Massachusetts at various points in time between May 2009 and May 2017. [ECF Nos. 65, 65-3]. The evidence does not show the date of any shipment, the type, volume, or value of the marine equipment, or whether a Florida Bow employee traveled to Massachusetts to perform related services. Thus, Vetus Maxwell has not shown the existence of any relationship between its claims and Florida Bow's contacts with Massachusetts. The Court will nonetheless proceed to the purposeful availment prong.6
*3062. Purposeful Availment
"The purposeful availment requirement ensures that jurisdiction is not premised on 'random, isolated, or fortuitous' contacts with the forum [S]tate." Katz,
"The First Circuit has refined the purposeful availment test where jurisdiction is premised on a stream-of-commerce theory," by adopting the stream-of-commerce "plus" standard of the plurality opinion in Asahi Metal Industry Company v. Superior Court of California,
Here, satisfaction of the purposeful availment prong rests on Florida Bow's shipment of marine equipment to Massachusetts on 84 separate occasions over eight years, occasional attendance at trade shows in Massachusetts and neighboring states, the display of at least one Massachusetts customer's testimonial on its website, maintenance of nationwide liability insurance coverage, and that, based on a work order posted on the Vessel at the time of the bow thruster installation, Florida Bow knew that Regulator intended to sell the Vessel to a buyer in Massachusetts. Florida Bow analogizes this case to *307World-Wide Volkswagen Corp. v. Woodson,
Florida Bow overlooks several facts that are relevant to the purposeful availment analysis. In World-Wide Volkswagen,
Vetus Maxwell nevertheless cannot carry its burden through broadly worded allegations and imprecise evidence. Florida Bow has shipped some marine equipment to Massachusetts, but as discussed above, the lack of detail about these shipments prevents the Court from drawing any inference that they were significant or numerous, that they included similar products to the bow thruster at issue, or that Florida Bow employees traveled to Massachusetts to install or service the equipment. In Katz v. Spiniello Companies,
Similarly, proof of shipments to Massachusetts of some amount of marine equipment on undisclosed dates is insufficient to demonstrate that Florida Bow's contacts were purposeful, rather than isolated. Florida Bow's advertising of nationwide services on its website and nationwide liability coverage are also not suggestive of *308any effort to specifically cultivate a market in Massachusetts.7 Vetus Maxwell culled one customer testimonial written by a Massachusetts resident on Florida Bow's website, but the website itself generally does not display the location or residence of the featured customers, and, importantly, did not identify this particular customer as hailing from Massachusetts [ECF No. 65-4]. Such evidence does not demonstrate an attempt to advertise directly to Massachusetts residents, so much as it shows that Florida Bow performed services for a Massachusetts resident at some unspecified point in time. Finally, the work order posted to the Vessel, at most, made Florida Bow aware that the Vessel had been sold to a Massachusetts customer, but mere 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 into an act purposefully directed toward the forum State." Asahi,
After having parsed the unsubstantiated allegations, all that remains in support of specific jurisdiction is Florida Bow's attendance at trade shows in Massachusetts and neighboring states. The evidence does not show how often Florida Bow attended or participated in trade shows. Other than Florida Bow's own admission of occasional attendance at such events, Vetus Maxwell relies on irrelevant evidence showing that Florida Bow anticipated attending trade shows in 2017, long after this case was filed. Although attendance at trade shows in the forum State is one factor that supports a finding purposeful availment, standing alone, the occasional trade show suggests isolated rather than purposeful contact.
In sum, Vetus Maxwell's allegations and proof lack the "something more" required under the stream-of-commerce plus standard and therefore fail to establish purposeful availment. Asahi,
3. Reasonableness
Because Vetus Maxwell "failed to satisfy the first two prongs of the due process inquiry, its argument for specific *309jurisdiction fails." A Corp. v. All Am. Plumbing, Inc.,
(1) the defendant's burden of appearing; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.
Pritzker,
Here, the gestalt factors generally favor Massachusetts or no particular jurisdiction. Massachusetts has an interest in obtaining jurisdiction over Florida Bow, considering that Florida Bow's installation of the bow thruster allegedly caused damage in Massachusetts. See, e.g., Bohnenberger,
Ultimately, the relative convenience and efficiency of litigating in Massachusetts cannot outweigh Vetus Maxwell's failure to meet its burden on the first two prongs. Vetus Maxwell has therefore failed to establish that this Court has specific jurisdiction over Florida Bow.9
*310IV. CONCLUSION
Because the Court lacks personal jurisdiction over Florida Bow, the motion to dismiss for lack of personal jurisdiction and improper venue [ECF No. 52] is GRANTED, and the motion to dismiss for failure to state a claim [ECF No. 56] is DENIED as moot.10
SO ORDERED.
Footnotes
310 F. Supp. 3d 295 (Ace Am. Ins. Co. v. Oyster Harbors Marine, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.