Opinion
Civil Action No. 03-2211, SECTION "C" (1).
December 6, 2004
ORDER AND REASONS
Before the Court is third-party defendant Bridgeport Wire Chain, Ltd.'s ("Bridgeport") Motion to Dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, alleging that this Court lacks personal jurisdiction over it. For the reasons set forth below, Bridgeport's motion is DENIED.
I. Factual History and Procedural Background
James Laird filed suit against Ashton Marine, LLC, ("Ashton Marine") for personal injuries allegedly sustained while working at the Ashton Marine facility on or about May 21, 2003. Ashton Marine then filed a third-party complaint against Bridgeport, alleging that Bridgeport manufactured a faulty strap that caused the injury. The third-party summons was issued to Bridgeport on May 3, 2004, but was not served on Bridgeport until September 20, 2004. Bridgeport now asserts that this Court does not have personal jurisdiction over it consistent with constitutional due process.
Bridgeport is a Canadian company incorporated in Nova Scotia with its principle place of business in Dartmouth, Nova Scotia, Canada. Bridgeport's business is manufacturing and distributing wire ropes, straps, and other supplies to companies and supply yards, primarily in Canada. Bridgeport sold products by both retail and wholesale methods, with innumerable retail buyers and approximately 15 wholesale customers in the Canadian Maritime Provinces (Rec. doc. 91, Ex. A, p. 2). At the time of the incident, Bridgeport did not have any marketing, sales, or distribution contracts with any companies in Louisiana, nor did it have distribution contracts with its wholesale customers in Canada that would limit the jurisdictions to which they could sell Bridgeport's products. (Id.). Nevertheless, Bridgeport manufactured its products to meet international and American quality assurance standards (Rec. doc. 117, Ex. 1, deposition of Chris Giannou, p. 15). Bridgeport also has a website, on which it provides product information, advertises, and distributes its catalog to anywhere in the world.
II. Law and Analysis
A. Applicable Law on Personal Jurisdiction
When a defendant files a motion to dismiss for lack of personal jurisdiction, the party who attempts to invoke jurisdiction of the court bears the burden of establishing merely a prima facie case of personal jurisdiction over the defendant. D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 545 (5th Cir. 1985). As regards an issue of fact, "uncontroverted allegations in the plaintiff's complaint must be taken as true, and conflicts between the facts contained in the parties' affidavits must be resolved in the plaintiff's favor." Id. at 546.
In determining whether personal jurisdiction is proper, a district court sitting in diversity applies the law of the forum state in which it sits. Fed.R.Civ.P. 4(e). The Louisiana Long-Arm Statute provides that this Court may exercise personal jurisdiction over any nonresident as long as the basis for such jurisdiction is consistent with the Constitution of the United States. La.Rev.Stat. Ann. § 13.3201 (2003). Consequently, the limits of the Louisiana Long-Arm Statute are coextensive with the limits of constitutional due process. Petroleum Helicopters, Inc. v. Avco Corp. 513 So.2d 1188, 1192 (La. 1987).
Two requirements must be met in order to satisfy constitutional due process. Burger King v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). First, the nonresident corporation must have purposefully established "minimum contacts" with the forum state such that "it enjoys the benefits and protection of the laws of that state." International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In making this determination, there must be "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.ed.2d 1283 (1958). Second, the exercise of jurisdiction over the nonresident must not "offend traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 320. Some of the factors that may be considered under this second "reasonableness" requirement include "the burden on the defendant" of litigating in the forum as well as the "plaintiff's interest in obtaining convenient and effective relief." World-Wide Volkswagon Corp. v. Woodson, 44 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980).
In order to establish minimum contacts, the court may assert either "general" or "specific" jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). If a defendant has sufficient "continuous and systematic" contacts with the state, See Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 446, 72 S.Ct. 413, 96 L.Ed. 485 (1952), the forum may exercise general personal jurisdiction over the defendant for "a cause of action [that] does not arise out of or relate to the [defendant's] activities in the forum state." Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d. 404 (1984). Ashton Marine does not contend that general personal jurisdiction exists in this case.
Specific personal jurisdiction may be invoked by a forum state over an out-of-state defendant who has not consented to suit there if the defendant has "purposefully directed" his activities at residents of the forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 79 L.Ed.2d 790 (1984), and the litigation results from alleged injuries that "arise out of or relate to" those activities. Helicopteros Nationales de Colombia, S.A., 473 U.S. at 414 (1984). In other words, specific jurisdiction is invoked when (1) the cause of action arises out of (2) the defendant's contacts with the forum (3) such that the defendant should reasonably anticipate being haled into court there. World-Wide Volkswagen, 444 U.S. at 297.
B. Minimum Contacts
Bridgeport argues that its contacts to Louisiana are analogous to World-Wide Volkswagen. In World-Wide Volkswagen, the Supreme Court found that a dealer who sold an allegedly defective automobile in New York which then traveled to Oklahoma was not subject to personal jurisdiction in Oklahoma. Though it was foreseeable that the automobile could travel to Oklahoma, the dealer did not sell or distribute its autos outside New York, New Jersey, and Connecticut, and therefore the stream of commerce extended only this far. The auto reached Oklahoma through the "unilateral activity" of the buyer rather than through the stream of commerce, and this "cannot satisfy the requirement of contact with the forum State." World-Wide Volkswagen Corp., 444 U.S. at 298. By contrast, the Court found that personal jurisdiction is proper when asserted "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. The Fifth Circuit has embraced and continues to revisit this stream of commerce standard set forth in World-Wide Volkswagen. See Irving v. Owens-Corning Fiberglass Corp., 864 F.2d 383, 386 (5th 1989), see also Bean Dredging Corp. v. Dredge Technology Corp., 744 F.2d 1081, 1083 (5th Cir. 1984).
Ruston Gas Turbines, Inc. v. Donaldson Co. Inc. has elaborated on the stream of commerce standard put forth in World-Wide Volkswagen. "The Fifth Circuit is among the circuits that have interpreted World-Wide Volkswagen to hold that 'mere foreseeability or awareness [is] a constitutionally sufficient basis for personal jurisdiction if the defendant's product made its way into the forum state while still in the stream of commerce.'" 9 F.3d 415, 419 (5th Cir. 1993), citing Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 111, 107 S.Ct. 1026, 1031, 94 L.Ed.2d 92 (1987) (emphasis added). "'Foreseeability' alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause." World-Wide Volkswagen Corp., 444 U.S. at 295.
Bridgeport asserts that jurisdiction must fail pursuant to World-Wide Volkswagen and Ruston because it had no expectation that its products would be distributed in Louisiana (Rec. doc. 91, p. 8). More precisely, Bridgeport argues that the stream of commerce ends with the foreseeable purchaser or user in the jurisdiction of distribution, which, according to Bridgeport, was limited to Canada. In other words, Bridgeport's stream of commerce reaches only as far as its products are distributed, which was the local site of the retail sale itself, or the "'middle men' in the Canadian Maritime Provinces of Nova Scotia, New Brunswick, and Newfoundland." (Rec. doc. 121, pp. 4-5). Its product, Bridgeport essentially argues, did not enter Louisiana while in the stream of commerce because it was not sold into a distribution system that includes Louisiana or even the United States. Instead, Bridgeport's product entered Louisiana through "unilateral activity" on the part of Ashton Marine. (Rec. doc. 121, p. 3).
Bridgeport attempts to distinguish its situation from that in Bean Dredging, in which the Fifth Circuit further explained the stream of commerce theory set forth in World-Wide Volkswagen. Bean Dredging, 744 F.2d at 1085. In Bean Dredging, the Fifth Circuit held that a component manufacturer in Washington state had sufficient contacts with Louisiana to establish personal jurisdiction because it sold the components to a California manufacturer to create a product ultimately sold in Louisiana. Id. See also Irving, 864 F.2d at 386. This was despite the component manufacturer's lack of knowledge of where the components would ultimately be used or what product they would be incorporated into. Id. Further, the manufacturer never sold directly to any Louisiana company nor did it ever solicit business in Louisiana. Id. As noted in Irving, the Court in Bean Dredging stressed that the Washington component manufacturer "sought to reach as broad a market as possible" and that it "placed no limit on the states in which its (components) could be sold and used." Id. Bean Dredging shows 1) that the stream of commerce extends to the end of the distribution system, and 2) that the distribution system ends in the jurisdiction where it is reasonably foreseeable that the product could be sold. A producer need not originate the system or control it, but simply, in the words of World Wide-Volkswagen, deliver its products "into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." See Weinmann v. North American Fiberglass Corp., 1996 WL 229820 (E.D.La.), citing World-Wide Volkswagen, 444 U.S. at 297-98.
Bridgeport claims that the instant facts are distinguishable. As characterized by Bridgestone, the defendant in Bean Dredging was a manufacturer of parts that were placed "at the start of a distribution system that purposefully made its products available in as many forums as possible," while Bridgeport is more akin to the retail dealer in World-Wide Volkswagen which operated on a relatively local scale. (Rec. doc. 121, p. 4).
The Court does not agree that the stream of commerce ended in Canada, as Bridgeport asserts, nor does it find that Bean Dredging is distinguishable. This is not to say that the stream of commerce did in fact lead to Louisiana in this instance. Indeed, neither party can assert with any certainty that Bridgeport's strap was distributed to a buyer in Louisiana, or that the strap instead arrived in Louisiana through the unilateral activity of a purchaser from a different jurisdiction. Rather, "the question to be answered in determining whether 'minimum contacts' has been satisfied is whether 'the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Gulf Consolidated Services, Inc. v. Corinth Pipeworks, S.A., 989 F.2d 1071, 1074 (5th Cir. 1990), citing World-Wide Volkswagen, 444 U.S. at 295. Bridgeport, by its own admission, sold its products to wholesale distributors, or "middle men" in the Maritime Provinces of Canada. (Rec. doc. 121, p. 4). Further, it is undisputed that Bridgeport made its catalog available on its website, enabling parties from any jurisdiction to purchase its products at retail either directly from Bridgeport or from its wholesaler customers. (Rec. doc. 117, p. 9). As in Bean Dredging, Bridgeport placed no restrictions on the jurisdictions to which the wholesalers could sell its products, nor did it place restrictions on those who could order products directly from Bridgeport. These acts demonstrate Bridgeport's desire to reach a broad market. Given such distribution methods, Bridgeport should reasonably anticipate being haled into court in jurisdictions outside Canada; although most of Bridgeport's products were likely distributed to the Canadian Maritime Provinces, Bridgeport could have foreseen that the stream of commerce could reach a buyer in any North American port city, if not the world. Thus, the Court finds that Bridgeport purposefully availed itself in Louisiana.
Bridgeport argues that its contacts are more akin to World-Wide Volkswagen. The distinction, however, is that the defendants there were wholesalers and retailers, not manufacturers, and they restricted the stream of commerce of its automobiles to a particular area. They neither attempted nor permitted the stream of commerce to extend beyond New York, New Jersey, and Connecticut. Bridgeport's contacts to Louisiana, rather, are like those of the Washington component manufacturer in Bean Dredging, in which "[the company] did place the [steel castings] in and move them along a stream of commerce." As in Bean Dredging, "the manufacturer here evidenced no attempt to limit the states in which its (products) would be sold and used." Bean Dredging, 744 F.2d at 1085.
Accordingly, minimum contacts exist as to Bridgeport.
C. Reasonableness
Upon a showing of minimum contacts, the court must determine whether exercising jurisdiction over the nonresident defendant would offend "traditional notions of fair play and justice." International Shoe, 326 U.S. at 320. An otherwise valid exercise of personal jurisdiction is presumed to be reasonable. Ballard v. Savage, 65 F.3d 1495, 1500 (9th Cir. 1995). Thus, once the court finds purposeful availment, it is the defendant's burden to present a compelling case that the exercise of jurisdiction would be unreasonable. Burger King Corp., 471 U.S. at 477. The Court is not persuaded that jurisdiction in Louisiana would be burdensome due to Bridgeport's unfamiliarity with the American legal system (rec. doc. 91, p. 9) because Bridgeport now has local counsel as well as a facility in Boston. Bridgeport, therefore, has not met its burden of demonstrating that jurisdiction would be unreasonable.
Accordingly, Bridgeport's motion to dismiss pursuant to Rule 12(b)(2) is DENIED.