A.T. v. Craig Edward Hahn, & Good Will Instrument Co.
A.T. v. Craig Edward Hahn, & Good Will Instrument Co.
Opinion of the Court
Pending before the Court is a motion to dismiss for lack of personal jurisdiction filed by defendant Good Will Instrument Co., Ltd. (#7) under Federal Rule of Civil Procedure 12(b)(2). Upon consideration of the pleadings, motions, relevant exhibits, and applicable law, the motion is GRANTED . Plaintiffs' Complaint (#1-2) is DISMISSED against Good Will Instrument Co., Ltd., without prejudice. Furthermore, defendant Craig Edward Hahn is also DISMISSED for the reasons already set forth in A.T. v. Newark Corp.,
I. FACTUAL BACKGROUND
A. The Parties and Their Prior Litigation History
On November 11, 2014, Marreo Travis was electrocuted and died while using a *1033Tenma AC Power Source 72-7675 at his place of employment. Decedent, a Missouri resident, worked at Ferro Magnetics Corporation. His mother, Denise Travis, and daughter, A.T., bring this wrongful death case. Defendant Good Will Instrument Co., Ltd, a Taiwanese company, has been named in this case as the manufacturer of the product. Also named in this case is Craig Edward Hahn, decedent's direct supervisor at Ferro.
This case was originally filed in the Circuit Court of St. Louis County, but Good Will removed it to this Court on the basis of diversity jurisdiction. This case runs parallel to A.T. v. Newark Corp., Case No. 4:16-cv-00448-SNLJ,
Hahn-like plaintiffs-is a Missouri resident, and upon finding plaintiffs could not establish a negligence claim against him, this Court dismissed him as a defendant in the parallel case under the fraudulent joinder doctrine.
Good Will was dismissed in the parallel case for a different reason. This Court found that plaintiffs failed to serve Good Will with process. Id. Plaintiffs did, however, serve Instek America Corp.-Good Will's domestic subsidiary located in California-arguing Instek was Good Will's agent. Id. at *2. This Court determined Instek was not Good Will's agent and that Good Will would, therefore, have to be independently served under Rule 4 of the Federal Rules of Civil Procedure. Id. at *4. Plaintiffs state as part of their briefing in this case that they were up against a deadline under the relevant statute of limitations when this Court dismissed Good Will for lack of service of process in the parallel case; so, under a time crunch, they "immediately filed a new action against Good Will in state court-rather than spending the time to seek leave to refile against Good Will in this Court." As noted, Good Will then removed that state court action on the basis of diversity jurisdiction. Thus, there are now two cases pending before this Court regarding the same decedent and product making up plaintiffs' wrongful death claims. Neither party argues about service-of-process-related issues in their briefings currently before the Court-that particular issue appears to have been resolved.
B. Good Will's Current Motion to Dismiss
i. The Parties' Arguments
Good Will filed its pending motion to dismiss arguing this Court lacks personal jurisdiction over it. In Good Will's view, it has "no connection to the State of Missouri"-having merely sold products to third-parties in Asia that, by no act of its own, eventually ended up in Missouri.
*1034Good Will also argues abatement, colloquially known as the pending action doctrine, should apply here and result in the dismissal of this action because the parallel case, still pending before this Court, involves the same subject-matter, the same parties, and was first to be filed.
Plaintiffs vigorously disagree. Invoking the "stream of commerce" theory, plaintiffs argue "Good Will targets Missouri through [a] robust distributor scheme." In plaintiffs' view, "it is only reasonable for Good Will, who sent defective products into Missouri through regional distributors, to anticipate being haled into court by [p]laintiffs in Missouri." As for the abatement issue, plaintiffs counter by pointing out that Good Will is not a "party" to the parallel action and, therefore, it cannot be said that it involves the same subject-matter and the same parties .
ii. Specific Facts Relevant to the Parties' Jurisdictional Arguments
The following facts are undisputed. Good Will is a Taiwanese business entity registered in Taiwan with its principle place of business in Taiwan. It has no offices, property, employees, bank accounts, advertisements, agents, or licensures in Missouri. It has never directly shipped any products into Missouri, and in fact is not a retailer and does not sell directly to consumers. Goodwill designed the product-the Tenma AC Power Source 72-7675-in Taiwan as an original design manufacturing item for Newark Corporation. Good Will manufactures the product, including the particular product that was involved in Decedent's death, in Suzhou, China. In 2012, Newark, doing business as element14 Asia Pte Ltd., placed an order with Good Will for multiple Tenma AC Power Source 72-7675 in Singapore. That deal, which included the specific product-at-issue responsible for decedent's death, was finalized in China. Good Will fulfilled Newark's order by shipping the products from the Port of Shanghai, China, to the Port of Dayton, Ohio, in the care of Gaffney RDC Warehouse located in Gaffney, South Carolina. In selling Tenma-branded products, Good Will does not affix its own names or logos to the products, but instead uses the Tenma private label as requested by Newark. Good Will has only sold Tenma-branded products to Newark, and has never sold Tenma-branded products to any other company.
It is here where the parties' view of the facts sharply diverge. Good Will alleges, by way of a declaration through Helena Wang (Manager of the Overseas Sales Department of Good Will), that Newark is not a distributor of Good Will, but is instead an independent third-party purchaser. Good Will points to the Global Supply Agreement between them where Good Will is referred to as a "seller" and Newark (and its associated companies) are referred to as "purchasers." Good Will declares there is no distribution agreement between it and Newark. Good Will declares that it does not encourage Newark to sell any of its products to a particular state or area. Good Will further declares Newark does not need to obtain approval before selling or shipping products to any particular location within the United States; moreover, Newark is not required to and does not tell Good Will what it does with any products once they are shipped from China. The relevant purchase order described above indicates only that the products are for resale in Illinois, South Carolina, and California. Good Will concludes that the products at issue, including the particular Product responsible for decedent's death, left its possession, control, and ownership when they were shipped from Good Will's manufacturing plant in China.
On the other hand, plaintiffs point to the same Global Supply Agreement between *1035Good Will and Newark in which it is stated "Purchaser is purchasing the Products with the intent to distribute them under the SPC Technology, or TENMA, or Multicomp name in North America." (emphasis in original). They refer to a website operated by "GW Instek" suggesting GW Instek is the alter-ego of Good will.
II. ANALYSIS
A. Personal Jurisdiction
i. Legal Standard
To survive a motion to dismiss for lack of personal jurisdiction, the non-moving party need only make a prima facie showing of jurisdiction; that is, the "plaintiff must state sufficient facts in the complaint to support a reasonable inference that defendants may be subjected to jurisdiction in the forum state." Steinbuch v. Cutler ,
In a diversity action such as this one, the Court "may assume jurisdiction over the nonresident defendants only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause." Romak USA, Inc. v. Rich ,
The Missouri Supreme Court has held that the legislature intended the Missouri *1036long-arm statute "to provide for jurisdiction, within the specific categories enumerated in the statutes, to the full extent permitted by the due process clause of the Fourteenth Amendment." State ex rel. Metal Serv. Ctr. of Ga., Inc. v. Gaertner ,
Good Will does not argue, nor can it argue, that Missouri's long-arm statute does not extend to negligence and strict liability claims. See, e.g., State ex rel. William Ranni Assocs., Inc. v. Hartenbach ,
Personal jurisdiction under the Due Process Clause comes in two varieties: general and specific. Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County , --- U.S. ----,
"Specific jurisdiction is very different. In order for a state court to exercise specific jurisdiction, 'the suit' must 'aris[e] out of or relat[e] to the defendant's contacts with the forum.' "
ii. The Current State of the "Stream of Commerce" Theory under the Framework of Specific Jurisdiction
Plaintiffs' argument lies in the "stream of commerce" theory, which maintains generally that a company subjects itself to specific personal jurisdiction by the mere fact of placing its products into the so-called stream of commerce (usually through a distributorship with third parties) with some basic level of awareness that these products will end up in the forum state. See World-Wide Volkswagen Corp. v. Woodson ,
But, in 2017, the Supreme Court decided Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County , --- U.S. ----,
The Eighth Circuit has yet to weigh in on the stream-of-commerce theory since Bristol-Myers . It appears that the only federal appellate court to consider the stream-of-commerce theory in light of Bristol-Myers is the Third Circuit, which indicated an unwillingness to continue applying it moving forward. See Shuker v. Smith & Nephew, PLC,
Nonetheless, in urging the application of the stream-of-commerce theory, plaintiffs point to Good Will's Global Supply Agreement with Newark in which it is stated that Newark, as purchaser of Good Will's products, "inten[ds] to distribute them." Plaintiffs add that the purchase order between Good Will and Newark specifically mentioned the products were for resale in Illinois, South Carolina, and California-with Illinois being a border state to the forum state, Missouri. They note that a company named "GW Instek," which plaintiffs claim is a subsidiary of Good Will, specifically mentions Newark under a "where to buy" tab on the company's website and they highlight that GW Instek re-tweeted Newark, at some point, *1038regarding an unrelated product. Finally, plaintiffs assert Good Will has twelve distributors around the United States that are "strategically placed coast to coast" in California, New York, New Jersey, Massachusetts, Texas, Pennsylvania, and Illinois.
None of these allegations can overcome Bristol-Myers ' admonishment not to apply specific jurisdiction solely on the basis of "a defendant's relationship with a third party." Bristol-Myers ,
In fact, not even Barone -a case heavily relied upon by plaintiffs-can reasonably be said to apply here. Barone narrowly held that jurisdiction is proper over a foreign manufacturer that "pours its products into a regional distributor with the expectation that the distributor will penetrate a discrete, multi-State trade area ." Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., KG ,
Finally, it is significant that Good Will affirmed by way of affidavit (which plaintiffs did not challenge) that it does not tell Newark where to sell its product, does not encourage Newark to sell to a particular location or trade area, and does not require Newark to obtain approval before selling or shipping products to any particular location within the United States. Simply put, Good Will does not control Newark's actions-another jurisdictional hallmark of Bristol-Myers missing here. See Bristol-Myers ,
Because there is no indication in the record before this Court to suggest Good Will, itself , took action to target Missouri, and because there is no indication that Good Will controlled Newark in its distribution efforts (either through the principles of agency or alter-ego), this Court finds Good Will has not subjected itself to the specific personal jurisdiction of Missouri. To the extent plaintiffs' stream-of-commerce theory purports to attach specific personal jurisdiction on the basis of mere foreseeability related to a defendant's relationships with third parties, without any attention paid to a defendant's own discrete efforts to target a specific forum, the Court finds that such a theory *1039is inapplicable in light of Bristol-Myers ,
B. Fraudulent Joinder of Hahn
As noted, this Court has already dismissed defendant Hahn from the first case, being a non-diverse person without an actionable negligence claim against him. See A.T. v. Newark Corp.,
III. CONCLUSION
Finding plaintiffs' stream-of-commerce theory does not comport with the requirements of the Due Process Clause of the Fourteenth Amendment, and finding the record does not support a finding that defendant Good Will establish sufficient contacts in Missouri for which to support a finding of specific jurisdiction over it, this Court will dismiss Good Will for lack of personal jurisdiction. Because of this, the Court need not reach the issue of abatement.
Accordingly,
IT IS HEREBY ORDERED that defendant Good Will Instrument Co., Ltd.'s motion to dismiss (#7) is GRANTED . Good Will is hereby DISMISSED from this case without prejudice.
IT IS FURTHER ORDERED that defendant Craig Edward Hahn is DISMISSED for the reasons set forth above and it accordance with this Court's prior order.
So ordered this 24th day of October 2018.
From the exhibit, alone, it is not altogether clear that Good Will Instruments Co., Ltd, and GW Instek are the same company, or whether they might have a parent-subsidiary relationship. That said, it is noted that Good Will is mentioned several times on the website-including information related to copyright protections.
The fact of re-tweeting is, apparently, a sign to plaintiffs that Good Will actively and directly promotes Newark to consumers in America.
Reference
- Full Case Name
- A.T., THROUGH Her Duly Appointed Guardian, Denise TRAVIS, and Denise Travis v. Craig Edward HAHN, and Good Will Instrument Co., Ltd.
- Cited By
- 7 cases
- Status
- Published