Opinion
Civil Action Nos. 03-4822, 04-4253.
April 28, 2005
MEMORANDUM ORDER
Presently before the Court is Defendant Locatum A.B.'s ("Locatum") Renewed Motion to Dismiss Plaintiffs' Amended Complaint and Defendant Interforest Terminal UMEA AB's ("Interforest") Crossclaim for Lack of Personal Jurisdiction. (Doc. No. 23.) For the following reasons, Defendant Locatum's Motion will be granted.
Defendant files the instant Motion pursuant to Federal Rule of Civil Procedure 12(b)(2).
Unless otherwise noted, all references to docket entries are to Civil Action Number 03-4822.
I. BACKGROUND
On or about September 8, 2002, Plaintiff Robert Revak, a longshoreman employed by JH Stevedoring, Inc., assisted in discharging a draft of lumber from the M/V Morraborg, a ship owned by Wagenborg Shipping B.V. ("Wagenborg"), at the port of Philadelphia. (Second Am. Compl. ¶ 8.) The lumber was secured to a crane on the M/V Morraborg and was wrapped with two "endless polyester slings." ( Id. ¶¶ 8-9.) While the lumber was secured to the crane, one of the slings came apart, allowing the lumber to fall on Plaintiff Revak. ( Id. ¶ 10.) As a result of the accident, Plaintiff sustained: injuries to his head, including a skull fracture and multiple scalp lacerations; injuries to his cervical, thoracic, and lumbar spine, including herniated cervical discs; multiple fractures of the pelvis; fractures and severe lacerations of the left lower extremity; multiple lacerations of the left upper extremity; orthopedic, neurological, and internal injuries; arthritic and vascular changes; and severe shock and injury to his nerves and nervous system. ( Id. ¶ 25.)
Defendant Wagenborg, a company with a principal place of business in the Netherlands, "owned, managed, operated, possessed, controlled and/or chartered the M/V Morraborg in foreign commerce." (Compl. ¶¶ 2, 4, No. 04-CV-4253.)
Defendant Marling Leek, Ltd. ("Marling Leek"), a company with a principal place of business in the United Kingdom, manufactured the sling at issue. ( Id. ¶¶ 4, 14.) Defendant W. Giertsen AS ("Giertsen"), a company with a principal place of business in Norway, sells polyester slings that are manufactured by Defendant Marling Leek. ( Id. ¶¶ 5, 13.) Defendant Locatum, a company with a principal place of business in Sweden, supplied the sling in question to Defendant Interforest. ( Id. ¶¶ 2, 16.) Defendant Interforest, a company with a principal place of business in Sweden, inspected the sling and wrapped it around the draft of lumber that fell on Plaintiff. ( Id. ¶¶ 3, 17-18.)
Plaintiffs' Second Amended Complaint incorrectly spells Giertsen's name. (Doc. No. 30 at 1 n. 1.)
At the time of Plaintiff Robert Revak's accident, Locatum leased slings for use in the loading, transportation, and discharge of cargo aboard ships. (Axelsson Supp. Decl. ¶ 4.) On or about August 15, 2002, Wagenborg asked Defendant Locatum to provide it with cargo slings for the transportation of timber. While Wagenborg told Locatum that the vessel would enter the port of Philadelphia, Locatum had no financial interest in Wagenborg's schedule or discharge port. ( Id. ¶ 7.) Wagenborg is Locatum's only customer that has used its slings in the United States. (Doc. No. 25 Ex. 2 at unnumbered 8.)
On February 10, 2004, Plaintiffs filed an Amended Complaint against Defendants Locatum and Interforest. (Doc. No. 12.) Defendant Locatum filed a motion to dismiss the Amended Complaint for lack of personal jurisdiction. (Doc. No. 14.) We dismissed Locatum's motion without prejudice and permitted Plaintiffs to engage in jurisdictional discovery. (Doc. No. 17.) On July 1, 2004, Plaintiff filed a Second Amended Complaint against Locatum, Interforest, Marling Leek, and Giertsen. (Doc. No. 20.) In the Second Amended Complaint, Plaintiff Robert Revak asserts negligence and strict products liability claims against all Defendants, and Plaintiff Margaret Revak asserts a loss of consortium claim against all Defendants. ( Id.) Defendant Locatum filed the instant Motion to Dismiss the Second Amended Complaint for lack of personal jurisdiction. (Doc. No. 23.)
Plaintiff also filed a Complaint against Wagenborg alleging negligence under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950. (Doc. No. 1, No. 04-CV-4253.) This action was consolidated with Civil Action Number 03-4822 on April 5, 2005. (Doc. No. 35.)
II. LEGAL STANDARD
When a defendant raises a jurisdictional defense under Federal Rule of Civil Procedure 12(b)(2), the plaintiff must show contacts with the forum state that are sufficient to give the court in personam jurisdiction over the defendant. BP Chems. Ltd. v. Formosa Chem. Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000); Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984). "The plaintiff may not rest on the bare pleadings, but rather must establish these jurisdictional facts by sworn affidavit, deposition, or other competent evidence." Thypin Steel Co. v. Murmansk Shipping Co., Civ. A. No. 96-1799, 1997 U.S. Dist. LEXIS 4454, at *5 (E.D. Pa. Apr. 3, 1997) (citing Time Share Vacation Club, 735 F.2d at 66 n. 9). Any factual disputes should be resolved in favor of the plaintiff. Western Equities, Ltd. v. Hanseatic, Ltd., 956 F. Supp. 1232, 1238 (E.D. Pa. 1997).
III. LEGAL ANALYSIS
Plaintiffs aver that their claims against Defendant Locatum arise under this Court's admiralty jurisdiction. (Second Am. Compl. ¶ 6.) Both parties agree that this Court may only exercise jurisdiction over Plaintiffs' claims if they can satisfy the requirements of Federal Rule of Civil Procedure 4(k)(2), which governs the territorial limits of effective service. (Doc. No. 23 at 4-5; Doc. No. 25 at 7.) According to Federal Rule of Civil Procedure 4(k)(2),
In their initial Complaint, Plaintiffs averred that this Court had jurisdiction over their claims based on the diversity of citizenship. (Compl. ¶ 4.) After Defendant Locatum filed its first motion to dismiss, Plaintiffs amended their Complaint to assert that Plaintiffs' claims against Defendants arise under this Court's admiralty jurisdiction. (Am. Compl. ¶ 4.)
If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service is also effective, with respect to claims arising under federal law, to establish personal jurisdiction over the person of any defendant who is not subject to the jurisdiction of the courts of general jurisdiction of any state.
Rule 4(k)(2) thus sanctions personal jurisdiction over foreign defendants for claims arising under federal law when the defendant has sufficient contacts with the nation as a whole to justify the imposition of United States' law but without sufficient contacts to satisfy the due process concerns of the long-arm statute of any particular state. BP Chems. Ltd., 229 F.3d at 258 (quotation omitted). In order to invoke Rule 4(k)(2), Plaintiffs must demonstrate that: (1) a claim arises under federal law; (2) the defendant is beyond the jurisdictional reach of any state court of general jurisdiction; and (3) the defendant has sufficient contacts with the United States to satisfy the due process requirements of the Constitution or other federal law. Saudi v. Acomarit Maritimes Servs., 114 Fed. Appx. 449, 455 (3d Cir. 2004) (citing BP Chems. Ltd., 229 F.3d at 262; United States v. Swiss Am. Bank, Ltd., 191 F.3d 30, 38 (1st Cir. 1999)).
Rule 4(k)(2) was intended to "correct a gap in the enforcement of federal law." Fed.R.Civ.P. 4(k)(2) advisory committee's note. Prior to the enactment of Rule 4(k)(2), a federal court could not exercise jurisdiction over a non-resident defendant who had sufficient contacts with the United States "to justify the application of United States law and to satisfy federal standards of forum selection," but who did not have sufficient contacts "to support jurisdiction under state long-arm legislation or meet the requirements of the Fourteenth Amendment limitation on state court territorial jurisdiction." Id.
The only issue before us is whether Plaintiff has produced sufficient competent evidence of Defendant Locatum's contacts with the United States to satisfy the due process requirements of the Constitution. See Smith v. SS Dundalk Eng'g Works, Ltd., 139 F. Supp. 2d 610, 622 (D.N.J. 2001). A court may exercise personal jurisdiction based on the defendant's specific contacts with the forum. Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). Specific jurisdiction may exist when the cause of action arises from the defendant's forumrelated activities. North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 690 (3d Cir. 1990); see also Gen. Elec. Co., 270 F.3d at 150 ("A nexus between the defendant, the forum and the litigation is the essential foundation of in personam jurisdiction."). We apply a two-part test to determine whether specific jurisdiction exists. IMO Indus. v. Keikert AG, 155 F.3d 254, 259 (3d Cir. 1998); Creative Waste Mgmt., Inc. v. Capitol Envtl. Servs., No. 04-1060, 2004 U.S. Dist. LEXIS 21497, at *8 (E.D. Pa. Oct. 22, 2004). First, "[t]he constitutional touchstone of due process analysis is 'whether the defendant purposely established minimum contacts in the forum,'" BP Chems. Ltd., 229 F.3d at 259 (quoting Burger King Corp., 471 U.S. at 474)), such that it could "'reasonably anticipate being haled into court there.'" Pennzoil Prods. Co. v. Colelli Assocs., 149 F.3d 197, 201 (3d Cir. 1998) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). Second, a federal court may only exercise personal jurisdiction over a foreign defendant if "the assertion of personal jurisdiction would comport with 'fair play and substantial justice.'" Burger King Corp., 471 U.S. at 476 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)).
The parties agree that Rule 4(k)(2) applies to admiralty claims. (Doc. Nos. 23 at 5 n. 3, 25 at 7); see also West Africa Trading Shipping Co. v. London Int'l Group, 968 F. Supp. 996, 1000 (D.N.J. 1997). Furthermore, Defendant does not challenge Plaintiffs' ability to show that Locatum is beyond the jurisdictional reach of any state court of general jurisdiction. (Doc. No. 23 at 5 n. 3.)
Plaintiffs "do not rely on the concept of 'general jurisdiction.'" (Doc. 25 at 8 n. 17.) See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 415 n. 9, 416 (1984).
This second prong "need only be applied at a court's discretion." Pennzoil Prods. Co., 149 F.3d at 201.
A defendant's "minimum contacts must have a basis in 'some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'" Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 109 (1987) (O'Connor, J., plurality opinion) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985)). In determining whether Plaintiff has established sufficient minimum contacts between Defendant Locatum and the forum, we apply Asahi.
In Asahi, the Supreme Court sought to delimit the jurisdiction of federal courts over a defendant that places items in the stream of commerce. While it approved the "stream of commerce" theory of personal jurisdiction, the Asahi Court failed to produce a majority opinion as to how the stream of commerce test is satisfied. Justice O'Connor, joined by three other Justices, concluded 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 not sufficient to subject the defendant to personal jurisdiction in that state. Asahi, 480 U.S. at 112. Rather, to subject a defendant to jurisdiction in the forum, Justice O'Connor required "[a]dditional conduct of the defendant [that] may indicate an intent or purpose to serve the market in the forum State." Id. Justice Brennan, writing for another plurality of four Justices, argued that the minimum contacts required by due process were satisfied so long as there is a "regular and anticipated flow of [the defendant's] products" into the forum and the defendant "is aware that the final product is being marketed in the forum," finding the additional conduct described by Justice O'Connor unnecessary. Id. at 117. Justice Stevens, the ninth vote, stated that whether or not a defendant's conduct satisfies the minimum contacts test "is affected by the volume, the value, and the hazardous character of the components [placed in the stream of commerce.]" Id. at 122.
Examples of such additional conduct include "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 distributer who has agreed to serve as the sales agent in the forum State." Asahi, 480 U.S. at 112.
Since the Supreme Court's decision in Asahi, the Third Circuit has avoided taking a position regarding the three tests discussed in Asahi. See, e.g., Pennzoil, 149 F.3d at 207 n. 13; Renner v. Lanard Toys, Ltd., 33 F.3d 277, 283 (3d Cir. 1994) (declining to adopt any of the three Asahi tests and remanding case to district court so that plaintiff could conduct jurisdictional discovery). In Renner, plaintiff was injured while using a toy manufactured by the defendant, Lanard Toys, Ltd. ("Lanard"), a company based in Hong Kong. Renner had purchased the toy at a store in Pennsylvania. The store bought the toy from a buying agent who had purchased it from Lanard in Hong Kong. Lanard moved to dismiss the complaint for lack of personal jurisdiction and submitted an affidavit showing that it was a Hong Kong-based company with no assets or employees in Pennsylvania. Id. at 278. The affidavit also showed that Lanard had no exclusive distributors, and no way of knowing or controlling where its distributors marketed its products. Though the Third Circuit declined to adhere to any one of the three stream of commerce tests stated in Asahi, the court ruled that the record before it did not "show the type of 'purposeful availment' by Lanard in Pennsylvania that would satisfy the requisite minimum contacts." Renner, 33 F.3d at 283. Instead of dismissing the complaint, however, the court remanded the case to the district court so that the plaintiff could conduct jurisdictional discovery. Id.
In the instant case, we are satisfied that jurisdiction over Defendant Locatum is foreclosed by the Third Circuit's opinion in Renner. Plaintiffs in this case have had an opportunity to conduct jurisdictional discovery, but the record they have produced no more establishes the minimum contacts required by due process than the record before the court in Renner. As in Renner, the record in this case shows that Locatum is a foreign-based entity that has never sold or leased goods that were specifically for use in the United States, and has never sold or leased goods to customers in the United States. (Axelsson Supp. Decl. ¶¶ 10-11.) Defendant Locatum has never had an affiliate, parent, or subsidiary operating in the United States, has never owned or leased real property in the United States, and has never been incorporated or licensed to do business in the United States. ( Id. ¶¶ 12-14.) Locatum has never had a United States office, mailing address, telephone number, or bank account, and Locatum employees have never worked in the United States. ( Id. ¶ 16.) Defendant also has never advertised, undertaken marketing activities, or solicited business in the United States. ( Id. ¶ 21.)
Locatum relies on Portella v. Life-Time Truck Products, Inc., 127 F. Supp. 2d 652 (E.D. Pa. 2000), to argue that we should adopt Justice O'Connor's Asahi plurality opinion in deciding its Motion. (Doc. No. 23 at 8.) In Portella, another court in this district adopted Justice O'Connor's stream of commerce test and applied it in dismissing a complaint for lack of personal jurisdiction. Id. at 658-59. A truck driver in Portella sued the truck manufacturer, Ford, for injuries he sustained when a ladder attached to the side of his truck broke. Id. at 654. Ford brought a third-party complaint against the installer of the ladder, Manning Truck Modification, Inc. ("Manning"). Manning, which did all of its business in Kentucky and had no customers other than Ford, moved to dismiss the complaint for lack of personal jurisdiction. The court granted Manning's motion on the grounds that it lacked direct sales, business contacts, and customers (other than Ford) in Pennsylvania, as well as the "additional conduct" described by Justice O'Connor. Id. at 658. Adoption of Justice O'Connor's stream of commerce-plus test is not necessary for our decision.
The only apparent contact that Defendant Locatum has with the United States arises from its leasing of cargo slings to other companies. However, because Locatum receives lease payments based on the duration of the lease, it derives no financial benefit from a specific vessel's schedule or discharge port. ( Id. ¶¶ 7-8.) Locatum has no economic incentive to ensure that the slings it leases enter the United States, and does not direct any vessel that uses cargo slings it supplies to enter a United States port. ( Id. ¶ 9.) The unilateral activities of third parties cannot constitute a basis for jurisdiction over Locatum. DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 285-86 (3d Cir. 1981); see also Conner v. Bouchard Transp. Co., Inc., Civ. A. No. 93-450, 1993 U.S. Dist. LEXIS 13786, at *9, *11-13 (E.D. Pa. Oct. 1, 1993) (applying DeJames to conclude that vessel owner did not purposefully avail itself of the privileges of conducting business in the forum because it did not control the destination of the vessel); Nicolaisen v. Toei Shipping Co., Ltd., 722 F. Supp. 1162, 1165 (D.N.J. 1989), aff'd, 887 F.2d 262 (3d Cir. 1989) (applying DeJames to conclude that port calls over which defendant had no control could not establish jurisdiction over defendant). We conclude that Locatum's contacts with the forum are indistinguishable from those described as insufficient in Renner. Accordingly, we lack jurisdiction over Defendant Locatum.
An appropriate Order follows.
Because we conclude that Defendant Locatum's contacts to the forum are insufficient to establish jurisdiction, it is not necessary to discuss whether the assertion of personal jurisdiction over Defendant comports with fair play and substantial justice. However, we observe that if we were to conduct this analysis and balance the relevant factors, see Asahi, 480 U.S. at 113, we would conclude that it would be unreasonable to subject Defendant Locatum to jurisdiction in the United States.
ORDER
AND NOW, this 28th day of April, 2005, upon consideration of Defendant Locatum A.B.'s ("Locatum") Renewed Motion to Dismiss Plaintiffs' Amended Complaint and Defendant Interforest Terminal UMEA AB's Crossclaim for Lack of Personal Jurisdiction (Doc. No. 23, Nos. 03-CV-4822, 04-CV-4253), and all papers submitted in support thereof and in opposition thereto, it is ORDERED that Defendant Locatum's Motion is GRANTED.IT IS SO ORDERED.