Gardner v. Q. H. S., Inc.

304 F. Supp. 1247, 1969 U.S. Dist. LEXIS 10251
District Court, D. South Carolina·Decided October 13, 1969·No. Civ. A. No. 68-1088·Published·Cited by 3 cases

Opinion

ORDER

HEMPHILL, District Judge.

This is a products liability case presently before the court upon the question of jurisdiction. Defendant, a non-resident of South Carolina, contends that it is not amenable to substituted service of process and thus not subject to the jurisdiction of the courts of South Carolina and of this court.1 It moved to dis[1248] miss the action, or in lieu thereof, to quash the return of service of summons.

The jurisdictional facts are simple. The defendant Q. H. S., Inc., is a New York corporation which produces, in New York, a certain type plastic hair curler. Defendant maintains no office, no sales force or other personnel, and solicits no business, in South Carolina. All of its products which have been marketed in South Carolina were sold to J. M. Fields, Inc., a nationwide chain of retail stores. Approximately fifteen sets consisting of twelve rollers each have been distributed to four J. M. Fields, Inc., stores in South Carolina during the past five years; these goods were transferred in a single sale transaction; their value was less than $300. The sale to J. M. Fields, Inc., stores in South Carolina was made in New York, handled through a New York broker.

Plaintiffs are three North Carolina residents, doing business as a partnership which owns an apartment complex known as Woodmere Apartments in Charleston, S. C. In June of 1968 two young ladies, tenants of plaintiffs’ apartments, purchased a set of defendant’s hair rollers from the J. M. Fields, Inc., store in Charleston. Defendant’s rollers are designed to be heated by being emerged in boiling water. During this process, the rollers allegedly caught fire and the apartment complex was damaged.

The only contact which defendant had with South Carolina was the presence within its boundaries of a number of defendant’s products which defendant placed in interstate commerce in New York. The question before the court is whether South Carolina can exercise in personam jurisdiction over an absent non-resident defendant solely on the basis of alleged tortious injury caused by defendant’s products within the territorial limits of the State.

Defendant was served pursuant to Section 12-23.14 2 of the Code of Laws of South Carolina, 1962.3 That section provides for service of process upon one “doing business” in South Carolina and the phrase, “doing business”, is the key to the reach of the statute.

The problem presented by the effort at personal jurisdiction over an out-of-state, non-resident defendant is twofold. Initially, there must be a state statute or rule of law permitting personal jurisdiction over an absent defendant under the particular circumstances. Additionally, the statute must not violate the limits placed upon a state’s jurisdictional power by the Due Process Clause of the United States Constitution. Stated alternatively, the Due Process limitations of the Constitution, [1249] as interpreted by the Supreme Court, sets the outer limit to which a state’s jurisdictional power may extend. The state’s statute or rule of law may be restrictive or broad; it may or may not extend to the outer constitutional extremities. Determination of jurisdiction, therefore, is a two-step process. The court must first decide whether the statute covers the facts and then whether the statute exceeds the constitutional boundaries. Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952); Bowman v. Curt G. Joa, Inc., 361 F.2d 706 (4th Cir. 1966); Lurie v. Rupe, 51 Ill.App.2d 164, 201 N.E.2d 158, cert. den’d. 380 U.S. 964, 85 S.Ct. 1108, 14 L.Ed.2d 154.

How far does the South Carolina statute reach? Earlier cases gave the statute in question, or its forerunner, a rather restrictive interpretation. As was pointed out by Judge Haynsworth in Shealy v. Challenger Manufacturing Co., 304 F.2d 102 (4th Cir. 1962), South Carolina’s restrictive construction of its present Section 12-23.14 was probably influenced by the constitutional restraints of the past. Since the Supreme Court handed down its 1946 opinion in International Shoe v. State of Washington, infra, the constitutional limitations upon the reach of a state’s personal jurisdiction over a non-resident defendant has been ever shifting, ever expanding. After the decision in International Shoe, the South Carolina Supreme Court evidenced its desire to move with the evolving constitutional doctrine. For an excellent review of the South Carolina cases and analysis of the trend see Shealy v. Challenger Manufacturing Co., supra. In the lattermost, the South Carolina Supreme Court announced in Boney v. Trans-State Dredging Co., 237 S.C. 54, 115 S.E.2d 508 (1960):

No universal formula has been, or is likely to be, devised for determining what constitutes ‘doing business’ by a foreign corporation within a state in such sense as to subject it to the jurisdiction of the courts of that state. The question must be resolved upon the facts of the particular case. Jones v. General Motors Corporation, 197 S.C. 129, 14 S.E.2d 628; State v. Ford Motor Co., 208 S.C. 379, 38 S.E.2d 242.

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Gardner v. Q. H. S., Inc., 304 F. Supp. 1247, 1969 U.S. Dist. LEXIS 10251 (D.S.C. 1969).

304 F. Supp. 1247 (Gardner v. Q. H. S., Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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