Alers-Rodriguez v. National Insurance

Opinion

USCA1 Opinion

UNITED STATES COURT OF APPEALS
                            UNITED STATES COURT OF APPEALS

                                FOR THE FIRST CIRCUIT
                                FOR THE FIRST CIRCUIT

                              _________________________



          No. 96-2170



                           ERNESTO ALERS RODRIGUEZ, ET AL.,



                                Plaintiffs, Appellees,



                                          v.



                            FULLERTON TIRES CORP., ET AL.,



                   Defendants, Third-Party Plaintiffs, Appellants,



                                          v.



                      CUSTOM METAL SPINNING CORPORATION, ET AL.,



                          Third-Party Defendants, Appellees.

                               ________________________



                     APPEAL FROM THE UNITED STATES DISTRICT COURT



                           FOR THE DISTRICT OF PUERTO RICO



                   [Hon. Salvador E. Casellas, U.S. District Judge]
                                               ___________________



                              _________________________



                                        Before



                                Selya, Circuit Judge,
                                       _____________



                            Coffin, Senior Circuit Judge,
                                    ____________________



                              and Lynch, Circuit Judge.
                                         _____________



                              _________________________



               Jaime  E. Morales Morales  and Pinto-Lugo &  Rivera on brief
               _________________________      ____________________

          for appellant (third-party plaintiff).

               Alfredo  Fernandez  Martinez and  Martinez-Alvarez, Menendez
               ____________________________      __________________________

          Cortada & LeFranc Romero, PSC on brief for appellees (third-party
          _____________________________

          defendants).



                              _________________________



                                     June 9, 1997



                              _________________________



SELYA,   Circuit  Judge.    Defendant  and  third-party
                    SELYA,   Circuit  Judge.
                             ______________



          plaintiff  Fullerton  Tires  Corp.  (Fullerton)  appeals  from  a



          district court order dismissing its third-party complaint against



          Custom Metal Spinning  Corporation (CMSC) for want of in personam
                                                                __ ________



          jurisdiction.1   Using the  parlance of  the trade,  Fullerton is



          spinning its wheels.



                    This  case  had  its genesis  in  or  before 1989  when



          Ernesto Alers  Rodriguez (Rodriguez), a resident  of Puerto Rico,



          purchased two sand track tires from a Puerto Rican dealer who had



          seen the tires advertised in a pamphlet distributed by  Fullerton



          and had ordered a supply of them.  Some five years later, one  of



          the  purchased tires  exploded  while being  inflated.   The  rim



          snapped, severely injuring Rodriguez.



                    Invoking  diversity  jurisdiction,  28  U.S.C.     1332



          (1994),  Rodriguez  sued  Fullerton   in  Puerto  Rico's  federal



          district court.  Fullerton  filed a third-party complaint against



          CMSC  (the manufacturer of the rim used in Fullerton's sand track



          tires).  In due course, CMSC moved to dismiss the claim, alleging



          lack of personal  jurisdiction.   See Fed. R.  Civ. P.  12(b)(2).
                                            ___



          The  court obliged.  Rodriguez  v. Fullerton Tires  Corp., 937 F.
                               _________     ______________________



          Supp.  122 (D.P.R. 1996).  After the court certified the judgment



                              
          ____________________



               1Fullerton Tires, Inc., an affiliated corporation, joined in

          filing the third-party complaint.  That pleading named CMSC;  its

          principals, Walter and Marianne Jenkins; and other individuals in

          privity with  them as  third-party defendants.   For simplicity's

          sake,  we treat the  appeal as  if only  Fullerton and  CMSC were

          parties.  Because the jurisdictional argument is weaker as to the

          individuals, our  decision disposes completely  of the  Fullerton

          entities' attempts to sue CMSC and its privies in Puerto Rico.



                                          2



in accordance with Fed. R. Civ. P. 54(b), this appeal ensued.



                    We  need  not linger.    The  district court's  opinion



          captures  the essence  of  the case  and applies  the controlling



          legal  principles in an irreproachable  manner.  Hence, we affirm



          the judgment primarily on the basis of the opinion below.  We add



          six comments.



                    First:     Fullerton   bemoans  the   district  court's
                    First:
                    _____



          treatment of CMSC's  motion to  dismiss as a  motion for  summary



          judgment.  We are unmoved by this jeremiad.



                    Motions to dismiss come under the aegis of Fed. R. Civ.



          P. 12(b).  The rule states that  if "matters outside the pleading



          are  presented to and  not excluded by  the court, the  [Rule 12]



          motion  shall be treated as one for summary judgment and disposed



          of  as provided in  Rule 56."  The  proper approach to conversion



          under  this rule is functional rather than mechanical.  See Vega-
                                                                  ___ _____



          Rodriguez v.  Puerto Rico Tel. Co.,  110 F.3d 174, 177  (1st Cir.
          _________     ____________________



          1997); Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, 958 F.2d
                 _____________________________    _______________



          15,  18-19 (1st  Cir. 1992).   Here, CMSC attached  to its motion



          several declarations ostensibly made under penalties of  perjury.



          Given the specific language of Rule 12(b), the inclusion of these



          materials with the motion  put the nonmovant, Fullerton, squarely



          on notice that the court had the option of treating the motion as



          one for summary judgment.



                    Of course,  a motion  cannot be  converted  to one  for



          summary judgment  unless the  adverse party is  given "reasonable



          opportunity  to present  all material  made  pertinent to  such a


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motion by Rule 56."   Fed. R. Civ. P. 12(b).  Here, however, that



          requirement was satisfied.  CMSC  filed its dispositive motion on



          April 29, 1996.  Fullerton did not file its opposition until July



          10,  1996.  During that  interval Fullerton, had  it chosen to do



          so, could have served counter-affidavits, made other  evidentiary



          submissions,  or sought leave to defer its response to the motion



          until it had conducted jurisdictional discovery.  It pursued none



          of these  alternatives.   Instead, it filed  an opposition  which



          tried  to meet  the  motion head-on.    The district  court  then



          considered  the  declarations   in  its   determination  of   the



          jurisdictional issue.   See  Rodriguez, 937  F. Supp.  at 124-25.
                                  ___  _________



          Since  Fullerton  had  ample  opportunity  to  present  pertinent



          materials  in  opposition  to  CMSC's  motion,  as  well  as  the



          incentive to do so,  we think that the court  acted appropriately



          in  impliedly  converting  the motion  to  a  motion  for summary



          judgment.   See American Express Int'l,  Inc. v. Mendez-Capellan,
                      ___ _____________________________    _______________



          889  F.2d 1175, 1178 (1st  Cir. 1989) (finding  that the district



          court's conversion  of a Rule 12(b)(2) motion to a Rule 56 motion



          was proper); see also Vega-Rodriguez, 110 F.3d at 177 (explaining
                       ___ ____ ______________



          that  when extrinsic  materials  are proffered  and are  actually



          considered by the nisi prius court, conversion is proper).



                    To  be sure,  we  can envision  circumstances in  which



          fairness might  require  special notice  of a  court's intent  to



          exercise the  conversion privilege.  See, e.g., Ohio v. Peterson,
                                               ___  ____  ____    _________



          Lowry,  Rall,  Barber &  Ross, 585  F.2d  454, 455-57  (10th Cir.
          _____________________________



          1978).   But this  is not such  a situation.   The district court


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never  indicated that  it  would eschew  conversion or  otherwise



          refuse  to  consider  the  proffered  exhibits.    Moreover,  the



          district  court continued to apply the  prima facie standard, see
                                                                        ___



          infra, not  some more  grueling standard  indigenous to Rule  56.
          _____



          Last, but not  least, Fullerton  to this day  does not  challenge



          CMSC's  account  of  the  relevant  circumstances,  but,  rather,



          attacks the  legal significance of certain  facts without seeking



          to contradict  them.   Consequently, the application  of Rule  56



          produced no perceptible unfairness here.



                    Second:  It is the plaintiff's burden to establish that
                    Second:
                    ______



          the  forum court  has jurisdiction  over the  person of  the sued



          defendant.  See Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.
                      ___ ________    _______



          1995); Foster-Miller, Inc.  v. Babcock &  Wilcox Canada, 46  F.3d
                 ___________________     ________________________



          138,  145 (1st Cir.  1995).  There  are several  standards that a



          court  can use  in determining  whether the exercise  of personal



          jurisdiction is lawful.  These include  the prima facie standard,



          the  preponderance standard,  and the  likelihood standard.   See
                                                                        ___



          Boit  v. Gar-Tec  Prods., Inc.,  967 F.2d  671, 675-78  (1st Cir.
          ____     _____________________



          1992).    We  have no  occasion  today  to  delineate either  the



          differences among  these approaches  or  the considerations  that



          influence a  court's  choice  to  use one  standard  rather  than



          another at a particular stage of the litigation.



                    For present purposes, it suffices to say that the least



          taxing of  these standards from a plaintiff's standpoint, and the



          one  most commonly employed in the early stages of litigation, is



          the prima  facie standard.  Under it, a suitor, in order to stave


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off defeat, "must  make the showing as to  every fact required to



          satisfy both  the forum's  long-arm statute  and the  due process



          clause of the Constitution."   Id. at 675 (citation  and internal
                                         ___



          quotation marks  omitted).    When it  employs  the  prima  facie



          standard, a district  court does not act as a  factfinder; to the



          contrary, it  ascertains only  whether the facts  duly proffered,



          fully credited,  support the  exercise of personal  jurisdiction.



          See  id.  Because this is a quintessentially legal determination,
          ___  ___



          appellate  review is  plenary.   See  Ticketmaster-N.Y., Inc.  v.
                                           ___  _______________________



          Alioto, 26 F.3d 201, 204 (1st Cir. 1994).
          ______



                    In the  case at  hand, the  district court  purposed to



          apply the prima facie  standard and made a determination  that it



          did  not have in personam jurisdiction over CMSC.  See Rodriguez,
                        __ ________                          ___ _________



          937 F.  Supp.  at 124-25.   Citing  Foster-Miller, the  appellant
                                              _____________



          complains  that the court erred because it failed to give advance



          notice as  to which of  the three  standards it would  utilize in



          resolving the jurisdictional issue.



                    This protest  distorts the rationale  of Foster-Miller.
                                                             _____________



          There,  we vacated  a  dismissal  when  the trial  court,  having
                                                                     ______



          advised counsel  that it  would apply  the prima  facie standard,
          ________________________________________________________________



          shifted  gears  without  warning  and  applied  a  more  rigorous



          standard.  46 F.3d at 143.  We said in that context that  a trial
                                              __ ____ _______



          court  should "alert  the  parties in  advance  to the  level  of



          scrutiny  that it will apply to the pending motion [to dismiss]."



          Id. at 151.
          ___



                    But the instant  case is at a considerable  remove from


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Foster-Miller.   Here, the  signals remained constant;  the court
          _____________



          steered  a steady  course and  forthrightly applied  the baseline



          standard.   We  believe  that all  litigants  effectively are  on



          notice that motions  to dismiss for want of personal jurisdiction



          will  be adjudicated under  the prima  facie standard  unless the
                                                                 ______



          court informs them in advance that it will apply a more demanding



          test.  Thus, the court below was under no obligation  to give the



          appellant special notice that it would conduct business as usual,



          any  more  than a  court,  before passing  upon  a  motion for  a



          directed verdict,  would have  to  give advance  warning that  it



          intended to apply the customary complex of legal rules.



                    The  appellant  tries  to  avoid  this  conclusion   by



          insisting  that the  lower  court, despite  using the  vocabulary



          associated  with prima  facie showings,  actually required  it to



          pass a higher level of scrutiny.2   Were the court guilty of such



          tergiversation, the appellant would  have a legitimate grievance.



          See Foster-Miller, 46 F.3d at 150-51.
          ___ _____________



                    But the accusation  here is merely bombast;  we find no



          support for it  in the lower court's opinion or  elsewhere in the



          record.    CMSC's  assertions  anent  jurisdictional  facts  were



          buttressed by  declarations made on personal knowledge; Fullerton



                              
          ____________________



               2In Boit, we noted that "an opinion using the terminology of
                   ____

          `prima facie'  showing may fairly be read as requiring a bit more

            e.g.,  that the plaintiff present plausible evidence tending to
            ____

          show that the court has jurisdiction."  Boit, 967 F.2d at 675 n.2
                                                  ____

          (citation and internal quotation  marks omitted).  To  the extent

          (if  any) that Judge Casellas' opinion  falls into this category,

          we do not deem  it to have deviated in any  material way from the

          prima facie standard.



                                          7



did  nothing to  rebut or dispute  these facts,  despite abundant



          time  to do  so; and  the lower  court therefore  had  the right,



          consistent  with the prima facie standard, to take these facts as



          true.  The court's opinion plainly indicates that it reviewed the



          materials  presented  and  passed  upon  them  without   essaying



          credibility  judgments,  resolving   evidentiary  conflicts,   or



          otherwise  making findings of fact.  See, e.g., Rodriguez, 937 F.
                                               ___  ____  _________



          Supp. at 124-25.   In short, Fullerton's claim that  the district



          court  surreptitiously   applied  a  more  stringent   degree  of



          perscrutation than that typically associated with the prima facie



          standard is totally unsubstantiated.



                    Third:   Taking as true  the specific averments  of the
                    Third:
                    _____



          third-party   complaint,  as  supplemented  by  the  declarations



          attached to CMSC's motion, the factual scenario is not in serious



          dispute.   CMSC sold rims to Fullerton (presumably in California,



          where both corporations  maintained their headquarters),  knowing



          that Fullerton would  incorporate them into tires and  offer them



          for  sale in distant markets.  Fullerton, in turn, sent brochures



          to  Puerto  Rico  among  other  places,  advertised  in  national



          publications which  were disseminated  in  the Commonwealth,  and



          filled  orders  emanating  from  there.    The  record  confirms,



          however, that CMSC  never conducted any  business in Puerto  Rico



          (either  directly  or  through  agents),  never  applied  for  or



          obtained  authorization to  do business  there, and  never owned,



          leased,  or otherwise  used an  office or  other property  in the



          Commonwealth.   Based on  these facts, the  district court  found


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that  CMSC was not amenable to suit  in Puerto Rico.3  See id. at
                                                                 ___ ___



          128.



                    In this venue, Fullerton argues, as it did  below, that



          CMSC, by  placing  its  product into  the  stream  of  interstate



          commerce,  transacted  business  in  Puerto  Rico  sufficient  to



          satisfy the minimum contacts requirement.  This argument will not



          wash.   In Asahi Metal Indus.  Co. v. Superior Ct.,  480 U.S. 102
                     _______________________    ____________



          (1987), the Supreme Court  held that 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," and,



          thus,   is  insufficient   to   support  a   claim  of   personal



          jurisdiction.   Id. at 112  (plurality opinion).   Even  assuming
                          ___



          that  CMSC had  specific knowledge  that the  stream  of commerce



          would move  its tire rims into Puerto Rico   and there is neither



          evidence  nor allegation  to that  effect   this  awareness alone



          would not be enough to constitute  the purposeful availment which



          is necessary for a showing  of minimum contacts.  See id.   Asahi
                                                            ___ ___   _____



          is still  good law, see Boit,  967 F.2d at  681-83, and Fullerton
                              ___ ____



          has  failed to direct us to any persuasive authority supporting a



          contrary view.



                    Fourth:   The appellant's  next argument deserves  high
                    Fourth:
                    ______



                              
          ____________________



               3The lower court determined that the appellant  had not made

          the requisite  jurisdictional showing  under  either the  federal

          Constitution,  see  Ticketmaster, 26  F.3d at  204-12 (describing
                         ___  ____________

          constitutional minima), or Puerto  Rico's long-arm statute,  P.R.

          Laws Ann. tit. 32, App. III, Rule 4.7(a)  (1989).  See Rodriguez,
                                                             ___ _________

          937 F.  Supp. at 124.  Although we agree with both aspects of the

          district  court's holding,  we  couch our  ensuing discussion  in

          terms of the constitutional requirement.



                                          9



marks  for ingenuity, but otherwise  rates a failing  grade.  The



          argument features a suggestion that the specific nature of CMSC's



          product   tire rims designed for use with sand track tires   made



          it  foreseeable that  CMSC could  be amenable  to suit  in Puerto



          Rico,  an  island  ecosystem  containing an  abundance  of  sandy



          beaches  ideal for  dune buggies  and other  sandworthy vehicles.



          This argument proves too much.



                    Sand, a  loose granular material that  results from the



          disintegration  of  rocks,  consists of  particles  smaller  than



          gravel  but larger than silt.   The earth's  land mass (excluding



          the ice  caps of  Greenland and  Antarctica) totals  32.1 billion



          acres.   See  Richard  Jackson  & Lloyd  Hudman,  World  Regional
                   ___                                      _______________



          Geography  50 (2d  ed. 1986).   This  total includes  4.2 billion
          _________



          acres of desert and 1.7 billion acres of soil comprised primarily



          of  sand.  See id.  at 51.   Put another way, roughly  18% of the
                     ___ ___



          world's land surface is covered with sand.4



                    Subjecting a manufacturer to suit in Puerto Rico merely



          because its  product is designed for use in sand would offend the



          constitutional  principles  that  limit  a  state's  authority to



          exercise jurisdiction.   Under such  a regime, a  manufacturer of



          life  preservers automatically would be subject  to suit in every



          jurisdiction  whose  boundaries included  an  ocean,  a river,  a



                              
          ____________________



               4This  figure is not static  as many of  the world's regions

          are experiencing desertification, a process commonly described as

          the slow encroachment of fertile lands by arid  soils.  See David
                                                                  ___

          Hastings, GIS  Techniques Using  NOAA Data Improve  Monitoring of
                    _______________________________________________________

          Desertification (visited May 12, 1997)           seg/globsys/gisdes.html>.



                                          10



stream, a lake, a pond, or a swimming pool.  By the same token, a



          manufacturer  of  air  conditioners  would  be  subject  to  suit



          worldwide.   This surely is not the law.   See Asahi, 480 U.S. at
                                                     ___ _____



          109-12  (imposing  reasonableness   requirement  in  respect   to



          foreseeability).



                    Fifth:    Following  the  granting  of  CMSC's  motion,
                    Fifth:
                    _____



          Fullerton  sought  reconsideration,  Fed.   R.  Civ.  P.   59(e),



          proffering a  copy of a  Dun and  Bradstreet credit report.   The



          district court refused reconsideration,  and Fullerton asks us to



          reverse this ruling.  This ground of appeal lacks force.



                    A district court's ruling on  a motion to reconsider is



          reviewable only for  abuse of  discretion.  See  Cotto v.  United
                                                      ___  _____     ______



          States, 993 F.2d  274, 277  (1st Cir. 1993);  Appeal of Sun  Pipe
          ______                                        ___________________



          Line Co.,  831 F.2d 22, 25  (1st Cir. 1987).   The "new" document
          ________



          that Fullerton proffered   the Dun and Bradstreet report   hardly



          qualifies  as newly  discovered evidence.   More  importantly, it



          indicates only that  CMSC serves a market comprising  the "United



          States, primarily  California."    That sort of  broad generality



          has very little bearing on whether a defendant's activities  have



          been  directed  to  a  particular  place  in  a  jurisdictionally



          significant fashion.



                    In essence, then, the belatedly proffered report did no



          more than confirm what the court already knew   that CMSC  placed



          its  product into the stream of interstate commerce.  Under these



          circumstances,  the  court's  rejection  of the  motion  did  not



          constitute an abuse of discretion.


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Sixth:  The appellant's motion for reconsideration also
                    Sixth:
                    _____



          requested  that the lower court  delay the entry  of judgment and



          permit  discovery on  the  jurisdictional issue.   This  request,



          which  had  not been  made earlier,  was  untimely.5   See, e.g.,
                                                                 ___  ____



          Whittaker  Corp. v. United  Aircraft Corp.,  482 F.2d  1079, 1086
          ________________    ______________________



          (1st Cir.  1973).  Therefore,  the district court did  not err in



          declining to honor it.


Affirmed.
          Affirmed.
          ________


____________________



               5Fullerton entered  its appearance in the  district court on

          March  27, 1995.  It brought a third-party complaint against CMSC

          on December 27, 1995.  CMSC did not file its Rule 12(b)(2) motion

          until April of 1996 and Fullerton did not respond until July.  As

          this timetable  illustrates, the appellant had  ample opportunity

          to initiate discovery before the district court acted upon CMSC's

          motion.



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