Stinson, Taylor v. Labofa A/S

• Court: District Court, D. New Hampshire
• Decided: July 31, 1996
• Docket: CV-94-383-B
• Status: Published

Opinion

Stinson, Taylor v . Labofa A/S CV-94-383-B 07/31/96

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Timothy Stinson Steven Taylor and Carolyn Taylor

v. CV-94-383-B

Labofa A/S

O R D E R

Plaintiffs sued Labofa for injuries resulting from the

malfunction of a chair Labofa designed and manufactured, alleging

claims for negligence, failure to warn, loss of consortium, and

strict liability. Labofa moved to dismiss plaintiffs' claims for

lack of personal jurisdiction. Plaintiffs objected to the motion to dismiss and alternatively sought a transfer to the United

States District Court for the District of Columbia if this court

lacks personal jurisdiction. For reasons discussed below,

Labofa's motion to dismiss is granted, and plaintiffs' motion to

transfer is denied. I. STANDARD OF REVIEW When personal jurisdiction is contested, the plaintiff has

the burden of showing that jurisdiction exists. Sawtelle v .

Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). Although challenges

to personal jurisdiction can often be resolved without factfinding by using a prima facie standard of review, a full

evidentiary hearing may be required to resolve disputed

jurisdictional facts. Foster-Miller, Inc. v . Babcock & Wilcox

Canada, 46 F.3d 1 3 8 , 145-46 (1st Cir. 1995). I determined in a

prior order that an evidentiary hearing was required in this

case. See Order dated May 2 0 , 1996. I now resolve any disputed

factual issues using the preponderance of the evidence standard.

Id. at 145.

II. FACTS

A. Undisputed Facts

Timothy Stinson and Steven Taylor were injured while working

as air traffic controllers at the Federal Aviation Administration

("FAA") facility in Nashua, New Hampshire. Both plaintiffs

allege that their injuries were caused by the failure of their

specially designed flight controller chairs.

2 The flight controller chairs were supplied to the FAA by Rudd International Corporation ("RIC") as part of a contract requiring RIC to supply 9,000 flight controller chairs to FAA facilities throughout the United States. RIC arranged for Labofa, a Danish corporation, to design, manufacture, and partially assemble the chairs in Denmark. After Labofa completed its work on the chairs, RIC shipped the partially assembled chairs to the United States, finished assembling the chairs and delivered them to various FAA facilities across the country.

B. Findings Concerning Disputed Facts

Officials at Labofa were aware that the flight controller chairs Labofa was producing for RIC were to be delivered to the FAA. Further, Labofa employees received and reviewed a

"Solicitation, Offer and Award" that RIC submitted to the United States General Services Administration which identifies New Hampshire as a possible destination for the chairs. However, plaintiffs have failed to prove by a preponderance of the evidence that anyone at Labofa was aware that RIC would be shipping any of the chairs to New Hampshire. Nor have plaintiffs proved that Labofa designed the chairs for use in New Hampshire, advertised the chairs in New Hampshire, or ever conducted any business in New Hampshire.

3 III. DISCUSSION

A. Personal Jurisdiction Over Labofa

A court may assert personal jurisdiction over a nonresident

defendant where jurisdiction is based on diversity of citizenship

only if (1) the forum states's long-arm statute confers jurisdiction over the defendant, and (2) the defendant has

sufficient "minimum contacts" with the forum state to ensure that

the court's jurisdiction comports with the requirements of

constitutional due process. Sawtelle,70 F.3d at 1387; Kowalski

v . Doherty, Wallace, Pillsbury & Murphy, Attorneys at Law, 787

F.2d 7 , 8 (1st Cir. 1986).

N.H. Rev. Stat. Ann. § 293-A:15.10 (Supp. 1995) confers

jurisdiction over foreign corporations to the full extent allowed

by the Due Process clause of the Fourteenth Amendment. See

McClary v . Erie Engine & Mfg. Co., 856 F. Supp. 5 2 , 55 (D.N.H. 1994). In general, for the court to properly assert personal

jurisdiction over an absent nonresident defendant, the defendant

must have had "certain minimum contacts with [the forum] such

that the maintenance of the suit does not offend 'traditional

notions of fair play and substantial justice.'" Helicopteros

Nacionales de Colombia, S.A. v . Hall, 466 U.S. 4 0 8 , 413-414

4 (1984) (quoting International Shoe C o . v . State of Wash., Office

of Unemployment, Compensation, and Placement, 326 U.S. 3 1 0 , 316

(1945)); accord, Burnham v . Superior Court of California, 495

U.S. 6 0 4 , 618 (1990). To satisfy this requirement, the

defendant's conduct should bear such a "substantial connection

with the forum [s]tate" that the defendant "should reasonably

anticipate being haled into court there." Burger King Corp. v .

Rudzewicz, 471 U.S. 4 6 2 , 473-75 (1985) (internal quotations

omitted).

Plaintiff argues that this court has specific, as opposed to

general, jurisdiction over Labofa. See Foster-Miller, 46 F.3d at

144 (explaining the difference between specific and general

jurisdiction). The First Circuit applies a tripartite test to

determine whether a court has specific personal jurisdiction over

a defendant: First, the claim underlying the litigation must directly arise out o f , or relate t o , the defendant's in-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 courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

United Elec. Workers, 960 F.2d at 1089.

5 I need not address the first and third prongs of the test,

because I hold that plaintiff has failed to show that Labofa

purposefully availed itself of the privilege of conducting

business in New Hampshire. Plaintiffs' argument for jurisdiction

is essentially the "stream of commerce" theory which a plurality

of the Supreme Court rejected in Asahi Metal Industry C o . v .

Superior Court of California, 107 S.Ct. 1026, 1032 (1987) and the

First Circuit rejected in Boit, see 967 F.2d 6 7 1 , 683.

To understand the significance of Asahi, it is necessary to

understand World-Wide Volkswagen Corp. v . Woodson, 100 S . C t . 559

(1980), its predecessor. The Robinsons were injured in a car

accident while driving through Oklahoma in a car they had

purchased from a New York dealer, who had purchased it from

World-Wide Volkswagen, a regional dealer with no other connection

to Oklahoma. Id. at 562. The Robinsons brought a products

liability suit against World-Wide Volkswagen and others in an

Oklahoma state court. Id. They argued that personal

jurisdiction was proper because World-Wide Volkswagen should have

foreseen, given the mobile nature of cars, that cars it had sold

would pass through Oklahoma. Id. at 566. The Court held that

the Robinsons' unilateral act of driving their car through

6 Oklahoma could not support personal jurisdiction. See id. at

568. It reasoned that foreseeability is not the only requisite

to personal jurisdiction; a defendant must also "purposefully

avail[]" itself of the benefits of doing business in the forum

state. Id., quoting Hanson v . Denckla, 78 S.Ct. 1228, 1240

(1958). Explaining this requirement, the Court stated: . . . if the sale of a product of a manufacturer or distributor such as Audi or Volkswagen is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury . . . The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.

Id. at 567.

In Asahi, Justice O'Connor rejected the "stream of commerce"

theory articulated in World-Wide Volkswagen. See Asahi, 107 S.Ct. at 1030-32. Gary Zurcher sued Cheng Shin Rubber Industrial

Co., Ltd., a Taiwanese corporation in California, claiming that

Cheng Shin manufactured a defective tire tube which caused him to

lose control of his motorcycle and collide with a tractor. 107

S.Ct. at 1029. Cheng Shin then sued Asahi, the Japanese

7 manufacturer of the tube's valve assembly, for indemnification.

Id. All transactions between Asahi and Cheng Shin took place in

Japan or Taiwan, sales to Cheng Shin comprised only a small

percentage of Asahi's total sales, and Cheng Shin bought valves

from other suppliers. Id. Cheng Shin distributed finished tubes

worldwide. Id. Cheng Shin's president submitted an affidavit

stating "'I am informed and believe that Asahi was fully aware

that valve stem assemblies sold to my Company and to others would

end up throughout the United States and in California.'" Id.

Justice O'Connor delivered the Court's unanimous judgment that

California lacked personal jurisdiction over Asahi. In addition,

in Part II-A of her opinion, writing for a plurality of four

(herself, Chief Justice Rehnquist, and Justices Powell and

Scalia), she reasoned: 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. Additional conduct of the defendant may indicate an intent or purpose to serve the market in the forum State, for example, designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State. But a defendant's 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.

8 Id. at 1032 (emphasis added). Accord, Boit, 967 F.2d at 682-83.

An equal number of justices disagreed with Part II-A of

O'Connor's opinion. See id. at 1034. Joined by Justices White,

Marshall, and Blackmun, Justice Brennan stated: The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacture to distribution to retail sale. As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise.

Justice Stevens, with whom Justices White and Blackmun

joined, agreed with the judgment and with Part II-B of O'Connor's

opinion, in which she held that personal jurisdiction would be

unreasonable and unfair, but argued that O'Connor's minimum

contacts analysis was unnecessary to the Court's decision.

Asahi, 107 S.Ct. at 1037. He also argued that O'Connor's

formulation of the minimum contacts test was too restrictive and

rigid. Id. "Whether or not . . . conduct rises to the level of purposeful availment," Stevens reasoned, "requires a

constitutional determination that is affected by the volume, the

value, and the hazardous character of the components." Id.

Although Justice O'Connor was unable to garner a majority

for her narrower view of personal jurisdiction, the First Circuit

9 adopted her position in Boit.1 See 967 F.2d at 682-83. It held

that Maine lacked personal jurisdiction over Gar-Tec Products,

Inc., where the only "contact" plaintiffs alleged Gar-Tec had

with Maine was through selling an allegedly defective paint-

stripping gun to a national distributor, which in turn sold the product to plaintiffs in Maine. See 967 F.2d at 679. Following

O'Connor's reasoning in Asahi, the court held that Gar-Tec's

"'mere awareness'" that its paint-stripping gun might end up in

Maine was insufficient to support personal jurisdiction in Maine.

See id. at 683. As in Asahi, however, the court provided a list

a factors which, added to the defendant's knowledge that its

product would be used in the forum state, might tip the scales in

favor of personal jurisdiction: There is no evidence that Gar-Tec intended to serve the market in Maine. For example, there is no evidence that Gar Tec designed the product for Maine, advertised in Maine, established channels for providing regular advice to customers in Maine, or marketed the product through a distributor who had agreed to serve as a sales agent in Maine.

Id., citing Asahi, 107 S . C t . at 1032.

1 Due to the four-to-four split in Asahi over whether placing a product in the stream of commerce with the knowledge that it will flow to the forum state is a contact sufficient to support personal jurisdiction, other courts continue to follow World-Wide Volkswagen as the only authoritative precedent. See, e.g., Ruston Gas Turbines, Inc. v . Donaldson Co., 9 F.3d 415, 420 (5th Cir. 1993).

10 Applying the preponderance of evidence standard of review, I

credit Rudd's testimony that employees of Labofa would have

received and read the FAA contract which lists New Hampshire as

one of many possible destinations for the chairs. Nevertheless,

I hold that this case is controlled by Boit. There is no

evidence that Labofa designed the chairs for use in New

Hampshire, advertised the chairs in New Hampshire, or availed

itself of the advantages of doing business in New Hampshire in

any way. At most, assuming that the sale of chairs to the FAA

was essentially a joint venture between Rudd and Labofa,

plaintiffs have shown only that Labofa sold the chairs to the FAA

with the barest awareness that some of them might possibly end up

in New Hampshire. This bare awareness does not approach the

level of contact required by Boit. Therefore, plaintiffs have

failed to satisfy the "purposeful availment" requirement, and

this court lacks personal jurisdiction over Labofa. B. Transfer to the District Court for the District of Columbia

Plaintiffs alternatively move that I transfer this case to

the District Court for the District of Columbia pursuant to 28

U.S.C.A. § 1631 (West 1994). In Michael A . Guy v . Rudd

Industries, Inc., et a l . , N o . 95-0865 (D.D.C.), however, the

District Court for the District of Columbia recently held that it

11 lacked personal jurisdiction over Labofa in a substantially

similar case involving an air traffic controller injured by the

allegedly defective chair in Ohio. I find the court's reasoning

in that case persuasive, and plaintiffs have produced no

evidence in this case to warrant a contrary conclusion.

Accordingly, I deny plaintiffs' motion because a transfer to the

District of Columbia would be futile.

IV. CONCLUSION

For the foregoing reasons defendant's motion to dismiss

(document n o . 24) is granted, and plaintiffs' motion to transfer

(document n o . 50) is denied.

SO ORDERED.

Paul Barbadoro United States District Judge July 3 1 , 1996

cc: John P. Griffith, Esq. Thomas Quarles, Jr., Esq. Richard Chesley, Esq.