Opinion
Case No. 1:01-CV-591
November 27, 2001
Peter R. Tolley, FOR PLAINTIFF(S)
Gary A. Maximiuk/Christopher J. Spataro, FOR DEFENDANT(S)
OPINION
Plaintiff, Barbara Siebelink, brought this product liability action against Defendants, Rollison Airplane Company, Inc. ("Rollison"), an Indiana corporation, and Cyclone Airsports Ltd., d/b/a Pegasus Aviation ("Pegasus"), a corporation organized under the laws of the United Kingdom. Plaintiff claims that the decedent, her husband, Scott Siebelink, died in an accident while operating an ultra-light aircraft manufactured by Pegasus and sold by Rollison.
Defendant Pegasus now moves this Court to dismiss Plaintiff's complaint pursuant to Fed.R.Civ.P. 12(b)(2), arguing that this Court lacks personal jurisdiction.
Facts
Pegasus, a corporation organized under the laws of the United Kingdom, designs and manufactures ultra-light aircraft and hang gliders. (Sherlock Aff. ¶¶ 2-3, Def.'s Br. Supp. Ex. A.) Pegasus does not have offices, employees, agents, distributors, or property in Michigan. (Id. ¶ 6.) Pegasus has never completed a direct sale in Michigan. (Id. ¶ 7.) Rollison, an Indiana corporation, is the only distributor of Pegasus products in the United States. (Id. ¶ 8.) Rollison purchases the products wholesale on a non-exclusive basis. (Id.)
Plaintiff, the personal representative of her husband's estate, is a resident of Michigan. (Compl. ¶ 2.) Decedent, Scott Siebelink, purchased a Pegasus ultra-light aircraft from Rollison. (Id. ¶ 8.) On October 16, 2000, Scott Siebelink died in an accident while operating the aircraft. (Id. ¶ 12.) Plaintiff subsequently brought this action alleging defective product design and manufacture, negligence, and misrepresentation. (Id. ¶¶ 17, 22, 30-35.) The Court's subject matter jurisdiction is based upon complete diversity of citizenship. (Id. ¶ 7.)
Standard
Since a defendant has challenged the Court's jurisdiction, Plaintiff now bears the burden of establishing the existence of personal jurisdiction. Int'l Tech. Consultants, Inc. v. Euroglas S.A., 107 F.3d 386, 391 (6th Cir. 1997). Plaintiff may not rest on the pleadings but must set forth specific facts showing that this Court has jurisdiction. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Pleadings and affidavits are viewed in the light most favorable to the plaintiff.Serras v. First Tenn. Bank Nat. Ass'n, 875 F.2d 1212, 1214 (6th Cir. 1989). The Court will not consider facts proffered by the defendant that conflict with those offered by the plaintiff. Theunissen, 935 F.2d at 1459.
The Court has determined that neither further discovery nor an evidentiary hearing are necessary to resolve this issue and will make its decision based on the pleadings and affidavits submitted. Id. at 1458.
Analysis
Federal courts sitting in diversity must apply the law of the forum state when considering whether the exercise of personal jurisdiction is proper. Welsh v. Gibbs, 631 F.2d 436, 439 (6th Cir. 1980). Plaintiff contends that the Court has limited personal jurisdiction over Pegasus pursuant to M.C.L. § 600.715(2), which provides,
The existence of any of the following relationships between a corporation or its agent and the state shall constitute a sufficient basis of jurisdiction to enable the courts of record of this state to exercise limited personal jurisdiction over such corporation and to enable such courts to render personal judgments against such corporation arising out of the act or acts which create any of the following relationships:
. . .
(2) The doing or causing any act to be done, or consequences to occur, in the state resulting in an action in tort.
Plaintiff contends that because Pegasus' allegedly defective product caused her husband's injuries and, thus, because a tort action arose in Michigan, this Court has jurisdiction over Pegasus under the statute. Pegasus does not challenge the applicability of the statute; rather, the debate centers on whether the exercise of personal jurisdiction would violate the requirements of due process.
Constitutional concerns of due process limit the application of state long-arm statutes. Theunissen, 935 F.2d at 1459 (citing Welsh, 631 F.2d at 439). The exercise of jurisdiction, even if authorized by statute, must comport with "`tradition notions of fair play and substantial justice.'" Int'l Shoe Co. v. Wash., 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343 (1940)). The Sixth Circuit has set forth three criteria that must be met before a court will exercise personal jurisdiction:
First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state. Second, the cause of action must arise from the defendant's activities there. Finally, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.Kerry Steel, Inc. v. Paragon Indus., Inc., 106 F.3d 147, 150 (6th Cir. 1997) (quoting So. Mach. Co. v. Mohasco Indus., 401 F.2d 374, 381 (6th Cir. 1968)). Michigan state courts undertake the same analysis. See Jeffrey v. Rapid Am. Corp., 448 Mich. 178, 186, 529 N.W.2d 644, 649 (1995) (quoting Modzy v. Lopez, 197 Mich. App. 356, 359, 494 N.W.2d 866, 868 (1992)).
The Court must first determine whether Pegasus purposefully availed itself of the privilege of conducting business or causing consequences in Michigan. This requirement "ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts, or of the `unilateral activity of another party or a third person.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183 (1985) (citations omitted). As one court has explained,
A "purposeful availment" is something akin either to a deliberate undertaking to do or cause an act or thing to be done in Michigan or conduct which can be properly regarded as a prime generating cause of the effects resulting in Michigan, something more than a passive availment of Michigan opportunities. The defendant will have reason to foresee being "haled before" a Michigan court.Khalaf v. Bankers Shippers Ins. Co., 404 Mich. 134, 153-54, 273 N.W.2d 811, 819 (1978). The purposeful availment requirement is essential to the exercise of personal jurisdiction. LAK, Inc. v. Deer Creek Enters., 885 F.2d 1293, 1300 (6th Cir. 1989).
Plaintiff argues that the sale of a Pegasus product to a Michigan resident and the resulting accident in Michigan allegedly caused by the defective product give Pegasus reason to foresee being haled into a Michigan court. Alternatively, Plaintiff argues that the maintenance of an "interactive website" can satisfy the purposeful availment requirement.
Pegasus avers, and Plaintiff does not contest, that Rollison, an Indiana corporation, is its only distributor in the United States. Pegasus has never completed a sale directly to a Michigan resident. It is foreseeable that Pegasus' product could ultimately cause injury in Michigan, but this is not enough to permit the exercise of this Court's jurisdiction. In World Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559 (1980), the Supreme Court reviewed the exercise of jurisdiction over a New York automobile seller by an Oklahoma court. The Court concluded that even though it was foreseeable that a car sold by the retailer could end up in Oklahoma and be involved in an accident, this was insufficient for the Oklahoma court's jurisdiction. Id. at 295, 100 S.Ct. at 566. In a later case, Justice O'Connor, writing for a plurality, made clear that the mere act of placing a product into the stream of commerce is not a "purposeful availment" where there is no other indication that the defendant was taking advantage of the privilege of conducting business in the forum state. Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 112, 107 S.Ct. 1026, 1032 (1987). There must be something more, such as specific design, advertisement, or marketing directed to the forum state. Id. Thus, the fact that a Pegasus product was sold to a Michigan resident and caused an accident in Michigan is not enough to meet the purposeful availment requirement.
Plaintiff's factual allegations regarding jurisdiction are not like those of the plaintiff in Theunissen. Plaintiff has relied solely on the injury resulting in Michigan and Pegasus' internet contacts as the basis for this Court's jurisdiction. In Theunissen, the defendant, like Pegasus, had submitted an affidavit disclaiming any contacts with Michigan, the forum state. Theunissen, 935 F.2d at 1456-57. The defendant, a sole proprietor operating a lumber yard in Windsor, Ontario, claimed that he did not hold property, did not employ any person, and conducted no business in Michigan. The plaintiff responded by submitting evidence indicating that the defendant maintained an address in Michigan and had entered into contracts for sale of lumber in Michigan. The district court granted the defendant's motion to dismiss for lack of jurisdiction. On appeal, the Sixth Circuit held that it was error for the district court to ignore the proofs submitted by the plaintiffs and to rely solely on the defendant's "uncontroverted" affidavit. Id. at 1459. Undertaking its own analysis, the court concluded that, assuming the plaintiff's allegations were true, the defendant had maintained a residence in Michigan and contracted with Michigan businesses. This alone was sufficient to establish jurisdiction, and the causal relationship between the plaintiff's injury and the defendant's contacts with Michigan further supported that conclusion. Id. at 1460-61. In the instant case, Plaintiff has presented no such affidavit or other evidence indicating a connection to Michigan outside of the injury and Pegasus' web site on the internet. Assuming the allegations in Plaintiff's complaint are true, as the Court must, there is not enough to establish jurisdiction.
Plaintiff's claim against Pegasus is factually similar to a recent case from the Michigan Court of Appeals. In Vargas v. Hong Jin Crown Corp., No. 222374, 2001 WL 1002705 (Mich.App. Aug. 31, 2001), the father of a boy killed in a motorcycle accident sued the manufacturer of the helmet the decedent was wearing at the time of the accident. The manufacturer, a South Korean company, had distributors in California, Massachusetts, and Wisconsin. The manufacturer did not design, manufacture, assemble, or sell its products directly in Michigan. It did not have any officer, agent, employee, or property in Michigan. The plaintiff had bought the helmet from a retailer in Michigan that had purchased it from the manufacturer's Wisconsin distributor. Reversing the trial court's decision to exercise jurisdiction, the court of appeals held that foreseeability was not sufficient grounds to exercise jurisdiction. Id. at *9. The existence of a distribution agreement with a neighboring state was not enough to establish that the South Korean manufacturer had purposefully availed itself of the privilege of conducting business in Michigan. Id. at *8. Even though the manufacturer could foresee its product causing an injury in Michigan, this was, without evidence showing more than "attenuated contacts" and "passive availment", insufficient for the exercise of jurisdiction. Id. at *8-9.
Plaintiff looks to the acts of Pegasus on the internet as an alternative contact with Michigan that can serve as the basis for personal jurisdiction. Plaintiff cites Sports Authority Michigan, Inc. v. Justballs, Inc., 97 F. Supp.2d 806 (E.D.Mich. 2000), as one example of a court justifying the exercise of jurisdiction at least in part on the defendant's commercial activity on its web site. In Sports Authority, the district court determined that an out-of-state defendant's maintenance of an interactive web site, through which it sold the majority of its products via its "virtual store", was one factor favoring the exercise of jurisdiction. Id. at 812-14. The court noted three categories of cases involving internet contacts with a forum state: (1) those with defendants clearly conducting business over the internet through web sites that enable a consumer to download or transmit information and complete an on-line contract of sale, (2) defendants with "passive" web sites that merely provide information about the company and its products but do not allow the transaction of business, and (3) a middle category of defendants engaging in some intermediate level of interaction but not directly selling their products over the internet. Id. at 812-13. The court found that the defendant's website fell into the first category since consumers could browse through the site for specific products, place items in a "virtual shopping cart", purchase items directly from the site with a credit card, and track the shipment of their purchases. Id. at 814. This amount of internet contact between a defendant and a plaintiff had been sufficient for other courts to exercise personal jurisdiction. Id. at 813-14 (relying primarily on Stomp, Inc. v. NeatO, LLC, 61 F. Supp.2d 1074, 1078 (C.D.Cal. 1999)).
Plaintiff asserts that Pegasus' web site is similar to the web site analyzed in Sports Authority and that this Court should likewise exercise personal jurisdiction over the out-of-state defendant. It alleges that some Pegasus products are available for direct purchase on the internet, thus placing Pegasus in the same category as other defendants doing more than merely advertising or exchanging information through its website. This Court does not agree. The information concerning Pegasus' web site submitted by both parties indicates that some information about Pegasus products is available on the site, while more detailed information is available by contacting the company by phone, fax, or e-mail. (See Pl.'s Br. Opp'n Exs. A, B; 2d Sherlock Aff. ¶ 4, Def.'s Reply Br. Ex. C.) Pegasus products cannot be purchased directly from the site. (See Pl.'s Br. Opp'n Exs. A, B; 2d Sherlock Aff. ¶ 3.) There is no "virtual shopping cart" or credit card purchase available. Rather, the site contains hyperlinks which connect the consumer to other company's web sites, such as Amazon.com, for the purchase of those products. (See Pl.'s Br. Opp'n Ex. B.) This type of low-level interactivity between Pegasus and the consumer is not sufficient to satisfy the purposeful availment requirement. Pegasus' web site is more akin to those in Mink v. AAAA Development LLC, 190 F.3d 333 (5th Cir. 1999), and S. Morantz, Inc. v. Hang Shine Ultrasonics, Inc., 79 F. Supp.2d 537 (E.D.Pa. 1999), cited by the court in Sports Authority, in which exchanging information with consumers by e-mail and fax, without providing the ability to purchase products on-line, was not enough contact to support the exercise of personal jurisdiction.
Pegasus is different from the defendant in Sports Authority in one other important respect. The district court in Sports Authority did not rely solely on the defendant's internet contacts to justify the exercise of personal jurisdiction. The defendant had sold products specifically targeted to Michigan consumers such as Detroit Lions, Detroit Tigers, and University of Michigan memorabilia. Sports Authority, 97 F. Supp.2d at 812, 814. This satisfied the requirement that the defendant intend to avail itself of business opportunities in Michigan. Such is not the case with Pegasus. Plaintiff has failed to submit any evidence indicating that Pegasus specifically solicited business from Michigan residents. There is no evidence showing that Pegasus directed its business efforts to Michigan or designed its products for market in Michigan, which could, if shown, indicate the requisite intent to avail itself of Michigan business opportunities. See Asahi Metal, 480 U.S. at 112, 107 S.Ct. at 1032.
Conclusion
Plaintiff has not met its burden of establishing that Pegasus did something more than merely place its product into the stream of commerce. Therefore, Pegasus will be dismissed as a defendant for lack of personal jurisdiction.
ORDER
IT IS HEREBY ORDERED that Defendant Pegasus Aviation's Motion to Dismiss (docket no. 5) is GRANTED.
Plaintiff's claims against Defendant Pegasus Aviation are DISMISSED.