Smith v. SMS Group Inc.

CourtDistrict Court, S.D. Illinois
DecidedJune 2, 2023
Docket3:22-cv-01303
StatusUnknown

This text of Smith v. SMS Group Inc. (Smith v. SMS Group Inc.) is published on Counsel Stack Legal Research, covering District Court, S.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. SMS Group Inc., (S.D. Ill. 2023).

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF ILLINOIS

DELANCEY SMITH, ) ) Plaintiff, ) ) vs. ) Case No. 22-cv-1303-DWD ) SMS GROUP, INC., ) SMS GROUP GMBH, ) SMS GMBH, ) ) Defendants. ) ____________________________________) ) SMS GROUP, INC., ) ) Third-Party Plaintiff, ) ) vs. ) ) HEIDTMAN STEEL PRODUCTS, ) INC., ) ) Third-Party Defendant. )

MEMORANDUM AND ORDER

DUGAN, District Judge:

Now before the Court is the Motion to Dismiss for Lack of Jurisdiction filed by Defendants SMS Group GMBH and SMS GMBH (hereinafter referred to collectively as “Defendants” or the “SMS GMBH Defendants”) (Doc. 56). Defendants seek to dismiss the claims against them for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2). Alternatively, they ask the Court to reconsider its prior rulings permitting substituted service on Defendants. For the reasons detailed below, Plaintiff’s claims against Defendants will be dismissed for lack of personal jurisdiction. Background As alleged in Plaintiff’s Amended Complaint (Doc. 29), on November 12, 2020, Plaintiff Delancey Smith was operating and working with a coil slitter at a steel

processing and factory plant in Granite City, Illinois (Doc. 29, ¶ 10). Plaintiff describes the coil slitter as “a Pro-Eco steel coil slitting line, described as GCS3 and identified as S.O. 6690” (Doc. 29, ¶ 1). While operating the coil slitter, its “pusher plate” failed to return to the proper position and Plaintiff became trapped between the coil slitter’s bearing arm and the coil slitter (Doc. 29, ¶¶ 11-14). The bearing arm failed to retract, and the coil

slitter’s power failed, keeping Plaintiff trapped until a total machine reset was performed and causing severe and extensive injuries to Plaintiff (Doc. 29, ¶¶ 15-16). Plaintiff alleges multiple defects in the coil slitter’s design, manufacturing, and marketing and brings strict liability and negligence counts against Defendants (Doc. 29). Plaintiff maintains that the coil slitter involved in his accident was manufactured,

designed, and sold by the entity Pro-Eco Ltd. (“Pro-Eco”) (Doc. 29, ¶ 6(a)). Plaintiff alleges that Pro-Eco dissolved as a business entity sometime after 2000 when it entered into a purchase or merger agreement with the entity SMS Demag, Inc. (Doc. 29, ¶ 6(a)-(d)). Thus, Plaintiff named three entities as Defendants whom he alleges “are the lawful successors of Pro-Eco and assumed certain liabilities of Pro-Eco.” (Doc. 29, ¶ 6). These

entities include Defendants SMS Group, Inc., SMS Group GMBH, and SMS GMBH (Doc. 29). SMS Group, Inc. is a Delaware corporation with its principal place of business in Pennsylvania (Doc. 29, ¶ 3). SMS Group GMBH and SMS GMBH are German corporations with principal places of business located in Germany (Doc. 29, ¶¶ 4-5). According to Defendants’ Fed. R. Civ. P. 7.1 Disclosure Statements, SMS GMBH is the parent corporation of both SMS Group GMBH and SMS Group, Inc. (Docs. 17, 58, 59).

SMS Group GMBH and SMS GMBH dispute that they are successors to Pro-Eco and further move to dismiss Plaintiff’s claims against them for a lack of personal jurisdiction. Defendant SMS Group, Inc. did not join in these motions, but also denies that it is the lawful successor of Pro-Eco (See Doc. 17). In recent filings, Plaintiff and Defendants appear to suggest that Pro-Eco assets were sold to another SMS entity, non- party SMS Concast Canada, Inc., in or about 2013 (Doc. 70, ¶ 8; Doc. 57-1, p.2, ¶ 6). Thus,

the parties speculate that SMS Concast Canada, Inc. may be the proper successor to Pro- Eco. Plaintiff has therefore sought leave to amend his complaint to add SMS Concast Canada, Inc. as a defendant. Legal Standard

When personal jurisdiction is challenged under Fed. R. Civ. P. 12(b)(2), the plaintiff bears the burden of establishing personal jurisdiction over a defendant. Matlin v. Spin Master Corp., 921 F.3d 701, 705 (7th Cir. 2019); Purdue Rsch. Found. v. Sanofi- Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir. 2003). The Court may decide a motion to dismiss based on submitted written materials, and without holding an evidentiary hearing, so long as the Court resolves all factual disputes in Plaintiffs’ favor. Purdue

Research Foundation, 338 F.3d at 783; see also uBID, Inc. v. GoDaddy Grp., Inc., 623 F.3d 421, 423–24 (7th Cir. 2010); Leong v. SAP Am., Inc., 901 F. Supp. 2d 1058, 1062 (N.D. Ill. 2012). If the Court consults only the written materials, the plaintiff need only make a prima facie showing of personal jurisdiction. Matlin, 921 F.3d 701; Purdue Research Foundation, 338 F.3d at 782 (citing Hyatt Int'l Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002)).

Further, where, as here, Defendant has submitted evidence opposing the exercise of personal jurisdiction, “the plaintiff must go beyond the pleadings and submit affirmative evidence supporting the exercise of jurisdiction.” Purdue Research Foundation, 338 F.3d at 783. The Court will accept as true any facts contained in Defendants’ affidavits that remain unrefuted by Plaintiff. See GCIU-Emp. Ret. Fund v. Goldfarb Corp., 565 F.3d 1018, 1020 n.1 (7th Cir. 2009); Joy v. Hay Grp., Inc., No. 02 C 4989, 2003 WL 22118930, at *2

(N.D. Ill. Sept. 11, 2003) (“Once a fact is challenged by an affidavit from the defendant, the plaintiff has an obligation to provide an additional affidavit supporting his or her contention.”). Discussion “As a procedural matter, federal courts look to state law in determining the

bounds of their jurisdiction over a party.” Brook v. McCormley, 873 F.3d 549, 552 (7th Cir. 2017) (citing Fed. R. Civ. P. 4(k)(1)(A)). Because the Illinois long-arm statute permits a court to exercise jurisdiction to the full extent permitted by the Due Process Clause of the Fourteenth Amendment, “the state statutory and federal constitutional requirements merge.” Brook, 873 F.3d at 552 (citing Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir.

2010)). “The Due Process Clause of the Fourteenth Amendment limits the power of a court to render a judgment over nonresident defendants.” Brook, 873 F.3d at 552 (internal citations omitted). Thus, personal jurisdiction is only proper if a defendant has sufficient minimum contacts with the forum state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Id. (quoting Int'l Shoe Co. v. State of Wash., Off. of Unemployment Comp. & Placement, 326 U.S. 310 (1945)). “While the

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Smith v. SMS Group Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-sms-group-inc-ilsd-2023.