United States Court of Appeals For the First Circuit

Nos. 18-1550 18-1551

STEPHEN D. KNOX; JEAN KNOX,

Plaintiffs, Appellants,

v.

METALFORMING, INC.,

Defendant, Appellant,

SCHECHTL MASCHINENBAU GMBH,

Defendant, Appellee.

APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS

[Hon. George A. O'Toole, Jr., U.S. District Judge]

Before

Lynch, Stahl, and Barron, Circuit Judges.

Benjamin R. Zimmermann, with whom Stacey L. Pietrowicz and Sugarman and Sugarman, P.C. were on brief, for Stephen and Jean Knox. Javier F. Flores, with whom Eric V. Skelly, Thaddeus M. Lenkiewicz, and Manning Gross & Massenburg LLP, were on brief, for MetalForming, Inc. Frederick W. Reif, with whom Marie E. Chafe, Cornell & Gollub, Debra Tama, and Wilson Elser Moskowitz Edelman & Dicker, LLP, were on brief, for Schechtl Maschinenbau GmbH. January 30, 2019 LYNCH, Circuit Judge. Stephen Knox's hand was badly

injured at his work at Cape Cod Copper (CCC) in October 2016 when

he operated a machine that was manufactured by defendant Schechtl

Maschinenbau GmbH, a German company. The machine had been sold to

CCC by defendant MetalForming, Inc., an American company located

in Georgia and Schechtl's U.S. distributor.

The question on appeal is whether there is personal

jurisdiction over Schechtl, named as a defendant by Knox and as a

cross-claim defendant by MetalForming. The district court

dismissed the claims against Schechtl, finding that Schechtl had

not purposefully availed itself of the privilege of doing business

in Massachusetts. Knox v. MetalForming, Inc.,

(D. Mass. 2018).

We reverse.

I.

A. Background

The district court did not permit jurisdictional

discovery.

. The following facts are undisputed.

In October 2016, Stephen D. Knox, plaintiff here along

with his wife, Jean, was injured while using a Schechtl MAX 310,1

a motor-driven metal-bending machine. The injury occurred at CCC,

1 Although some materials refer to the machine as a "MAX3100 FOLDER," the parties refer to it as a "MAX 310," and we will do the same.

- 3 - Knox's place of employment, located in Lakeville, Massachusetts.

When Knox inadvertently hit the foot pedal of CCC's MAX 310, the

machine activated, crushing his left hand.

Schechtl, the manufacturer of the MAX 310, is

headquartered in Edling, Germany and maintains no operations in

the United States. The company's marketing materials say that

Schechtl manufactures the "most popular architectural sheet metal

folders in the world."

Schechtl sells its machines to United States customers

through MetalForming, a separate and independently owned U.S.

distribution company. Schechtl's distribution agreement ("the

agreement") with MetalForming gives MetalForming the exclusive

right to distribute Schechtl's products in the "Contract

Territory," which comprises Canada, the United States, and Mexico.

The agreement outlines the procedure for selling

Schechtl's machinery. The purchasing end user ("the purchaser")

places an order with MetalForming, which in turn acquires the

machine from Schechtl. MetalForming then sends a purchase order,

naming the purchaser, to Schechtl in Germany. Under the agreement,

MetalForming must include "technical and other data" in the

purchase order, because that information is "of importance for the

ordered product, the supply contract, and its performance."

Schechtl then chooses whether to accept the purchase

order. If it does accept, it issues a written order confirmation,

- 4 - which "govern[s] the product to be delivered, its technical

qualities, the delivery price, the place of delivery, the time of

delivery as well as all other relevant contractual provisions."

Schechtl then manufactures the machine to the

purchaser's specifications. The agreement provides that Schechtl

"reserves the right, in the exercise of its sole discretion, to

discontinue the manufacture or distribution of any Product without

incurring any obligation to [MetalForming]."

When the machine is ready, Schechtl delivers it to a

"freight forwarder or other transport agency" in Germany, at which

point ownership passes to MetalForming. The record does not detail

the ordinary shipment process after that point, but, as we describe

below, it does show how the MAX 310 that injured Knox came to CCC.

Under the agreement, MetalForming is responsible for

installation at the purchaser's site and for training the

purchaser's personnel in the proper use of the machine. The

agreement does, however, provide that it may "become necessary

that installation work be conducted under the direction of a"

Schechtl technician. And there is somewhat different information

as to training contained in the information manual, as noted below.

The agreement also requires that MetalForming "provide

any and all warranty services for the" Schechtl products. Schechtl

provides a one-year warranty "to the end users for all of its

machines, machine parts, tools, spare parts, and accessories."

- 5 - MetalForming must also, under the agreement, "pass along

to customers information received from [Schechtl]" regarding the

products and their proper use. This information is packaged in

with each machine when it is delivered to the purchaser. The

enclosed material includes a declaration that the machine had been

"developed, designed and manufactured in compliance with"

applicable European safety directives. It also includes

instruction manuals and safety instructions for each machine.

The instruction manual includes an "Instruction for

Inquiries and Spare Part Orders," which directs purchasers to

contact Schechtl (and not MetalForming) for inquiries and for

additional machine parts. A later troubleshooting section of that

manual also instructs that operators experiencing a problem

should, "[i]f it is not possible to correct the malfunction with

the aid of the following tables, contact the Schechtl Maschinenbau

GmbH Service department." It does not instruct the

operator/purchaser to contact MetalForming. The manual also

offers that "[t]he operating company may receive extensive machine

training by Schechtl Maschinenbau GmbH upon request . . . at

[Schechtl's] facilities or at the operating company's facilities."

There is no evidence as to whether any Massachusetts purchaser

made such a request.

The materials provided to the purchasers of Schechtl

machines contain Schechtl's direct contact information, including

- 6 - its phone and fax numbers and its mail and email addresses.

Schechtl also operates a website that instructs purchasers of its

machines to contact Schechtl directly for frequently asked

questions, sales, parts, and other information relating to its

machines. See Schechtl, http://www.schechtl.biz/index_e.htm (last

visited Jan. 24, 2019).

Schechtl has provided MetalForming with advertising

materials to market Schechtl products in the United States.

MetalForming has promoted Schechtl machines in national trade

publications and at industry trade shows. There is no record

evidence as to the Massachusetts recipients of those trade

publications. And while the record shows that Schechtl

representatives attended several trade shows in the United States

with MetalForming, there is no evidence that any of those shows

were in Massachusetts.

Between 2000 and September 2017, MetalForming sold 2,639

Schechtl sheet metal machines throughout the United States, at a

value of just over $97 million. Between July 2001 and September

2017, MetalForming sold to purchasers in Massachusetts forty-five

Schechtl machines and 234 Schechtl parts, at a value of nearly

$1.5 million (about $1.3 million for the machines and $176,752 for

the parts). Schechtl's Massachusetts machine sales appear to

constitute 1.35% of its United States machine sales. The record

does not reveal Schechtl's total parts sales in the U.S.

- 7 - Schechtl sold the MAX 310 which injured Knox to

MetalForming in April 2001. MetalForming took delivery in Georgia.

In August, four months after the initial sale, MetalForming shipped

the machine to CCC, with CCC taking ownership of the machine in

Georgia. The respective purchase orders show that MetalForming

purchased the machine from Schechtl for $25,830 and sold it to CCC

for $38,950. The purchase order from MetalForming to Schechtl

identified the purchaser as CCC but did not give CCC's location.

The purchase order from MetalForming to CCC shows that the machine

came with a one-year Schechtl warranty and that the price included

a "Schechtl Installation Charge" and a "Schechtl Freight Charge"

to the purchaser, but no party explains what these last two terms

mean or who receives the payment.

B. Procedural History

The Knoxes sued both Schechtl and MetalForming in

Massachusetts state court. They alleged negligence, breach of

warranty, loss of consortium, and violation of the Massachusetts

consumer protection statute, Mass. Gen. Laws ch. 93A. MetalForming

removed the case to Massachusetts federal district court and filed

crossclaims against Schechtl for indemnification, contribution,

and breach of contract. Schechtl moved to dismiss the claims

against it for lack of personal jurisdiction. Both the Knoxes and

MetalForming opposed Schechtl's motion.

- 8 - The district court, after finding that the terms of

Massachusetts's long-arm statute were "easily . . . satisfied,"

Knox,

, nonetheless granted Schechtl's motion

to dismiss,

. The court reasoned that, even though

"Schechtl ha[d] derived . . . 'substantial revenue' from

MetalForming's sales of Schechtl equipment to Massachusetts

customers,"

, Schechtl had not purposefully availed

itself of the privilege of doing business in Massachusetts,

. The court added that there was "[n]o Massachusetts-specific

'plus' factor," like "'special state-related design, advertising,

advice, marketing,' etc."

at 186 (quoting J. McIntyre Mach.,

Ltd. v. Nicastro,

(2011) (Breyer, J.,

concurring)). The court did not mention either the instructions

or the warranties that Schechtl provided to the purchasers in

Massachusetts.

This appeal followed.

II.

The district court held that MetalForming had not made

a prima facie showing of personal jurisdiction. See id. at 184.

On prima facie review, the plaintiffs' burden is to proffer

evidence "sufficient to support findings of all facts essential to

personal jurisdiction" without relying on unsupported allegations.

A Corp. v. All Am. Plumbing, Inc.,

(1st Cir. 2016).

We construe these facts "in the light most congenial to the

- 9 - plaintiff's jurisdictional claim." Mass. Sch. of Law at Andover,

Inc. v. Am. Bar Ass'n,

(1st Cir. 1998). "Our

review is de novo." LP Sols. LLC v. Duchossois,

(1st Cir. 2018).

In a diversity jurisdiction case like this one, "a

plaintiff must satisfy both the forum state's long-arm statute and

the Due Process Clause of the Fourteenth Amendment." C.W. Downer

& Co. v. Bioriginal Food & Sci. Corp.,

(1st Cir.

2014). Compliance with the terms of the Massachusetts long-arm

statute is not contested here. Schechtl proceeds directly to the

federal constitutional analysis; we will do so as well.

For the exercise of personal jurisdiction to be

constitutional, a defendant must have "certain minimum contacts

with [the forum state] such that the maintenance of the suit does

not offend 'traditional notions of fair play and substantial

justice.'" Int'l Shoe Co. v. Washington,

(1945)

(quoting Milliken v. Meyer,

(1940)). The

constitutional "inquiry is highly 'fact-specific.'" PREP Tours,

Inc. v. Am. Youth Soccer Org., No. 17-1223,

, at *4

(1st Cir. Jan. 8, 2019) (quoting United Elec., Radio & Mach.

Workers of Am. v. 163 Pleasant St. Corp.,

, 1089 (1st

Cir. 1992)). Importantly, the "test is 'not susceptible of

mechanical application; rather, the facts of each case must be

- 10 - weighed.'" Id. (quoting Kulko v. Superior Ct. of Cal.,

(1978)).

The Knoxes and MetalForming have asserted specific

personal jurisdiction over Schechtl, so the constitutional

analysis here has three components: relatedness, purposeful

availment, and reasonableness. Plixer Int'l, Inc. v. Scrutinizer

GmbH,

(1st Cir. 2018). That is, the plaintiffs must

show that (1) their claims directly arise out of or relate to the

defendant's forum activities; (2) the defendant's forum contacts

represent a purposeful availment of the privilege of conducting

activities in that forum, thus invoking the benefits and

protections of the forum's laws and rendering the defendant's

involuntary presence in the forum's courts foreseeable; and

(3) the exercise of jurisdiction is reasonable.

The Knoxes

and MetalForming must meet all three requirements to establish

personal jurisdiction.

We hold that they have.

The district court reached only the issue of purposeful

availment. But at oral argument Schechtl's counsel conceded that

the other two requirements are met. We briefly explain below why

we agree and address the main issue of purposeful availment.

A. Relatedness

To show relatedness, the Knoxes and MetalForming must

demonstrate that their "cause of action either arises directly out

of, or is related to, the defendant's forum-based contacts."

- 11 - Harlow v. Children's Hosp.,

(1st Cir. 2005) (citing

163 Pleasant St., 960 F.2d at 1088-89). This "flexible, relaxed

standard," N. Laminate Sales, Inc. v. Davis,

(1st

Cir. 2005) (quoting Pritzker v. Yari,

(1st Cir.

1994)), requires only that the claim have a "demonstrable nexus"

to the defendant's forum contacts, Mass. Sch. of Law,

. This requirement is easily met here.

B. Purposeful Availment

The case turns on the purposeful availment prong. To

meet this requirement, the Knoxes and MetalForming bear the burden

of demonstrating that Schechtl has "purposefully avail[ed] itself

of the privilege of conducting activities within the forum State,

thus invoking the benefits and protections of its laws." Hanson

v. Denckla,

(1958).

The purposeful availment requirement ensures that the

exercise of jurisdiction is essentially voluntary and foreseeable,

C.W. Downer,

, and is not premised on a defendant's

"random, fortuitous, or attenuated contacts," Carreras v. PMG

Collins, LLC,

(1st Cir. 2011) (quoting Burger

King Corp. v. Rudzewicz,

(1985)). "[T]he Supreme

Court has explained that 'the foreseeability that is critical to

due process analysis . . . is that the defendant's conduct and

connection with the forum State are such that he should reasonably

anticipate being haled into court there.'" PREP Tours, 2019 WL

- 12 - 126221, at *6 (quoting Burger King,

). This

requirement applies equally to foreign defendants. Plixer,

.

Each side asserts that the Supreme Court's decision in

J. McIntyre Machinery, Limited v. Nicastro supports its view. Like

other circuits, we have held that the narrowest, and thus binding,

opinion from the "fragmented Court" in that case was Justice

Breyer's. Plixer,

(quoting Marks v. United States,

, 193 (1977)); accord Williams v. Romarm, SA,

(D.C. Cir. 2014) (finding Justice Breyer's concurring

opinion controlling under Marks); Ainsworth v. Moffett Eng'g,

Ltd.,

, 178 & n.14 (5th Cir. 2013) (same); AFTG-TG,

LLC v. Nuvoton Tech. Corp.,

(Fed. Cir. 2012)

(same). In the end we do not think that this case, on the facts

here, fails the personal jurisdiction tests articulated by either

Justice Breyer's concurring opinion or the plurality opinion in

Nicastro.

The district court found that Schechtl had not

designated Massachusetts "for special attention" and had not

"target[ed] buyers within" Massachusetts. Knox,

. Using those tests, the district court held that Schechtl

had not purposefully availed itself of the privilege of conducting

- 13 - business in the Commonwealth. Id.2 Those, as our Plixer decision

later made explicit, are not the exclusive tests to establish

purposeful availment.

In Plixer we concluded that "Supreme Court precedent

does not establish specific targeting of a forum as the only means

of showing that the purposeful availment test has been met."

(emphasis added). Depending on the facts, a defendant's

"'regular flow or regular course of sale' in the [forum]" could

make the exercise of jurisdiction foreseeable to the defendant.

. And, again depending on the facts, jurisdiction could

be foreseeable based on "something more" than this, evidencing an

intent to serve the forum.

(citing Asahi Metal Indus. Co.,

Ltd. v. Superior Court of Cal.,

(1987)

(opinion of O'Connor, J.)). Justice O'Connor's plurality opinion

in Asahi, endorsed by the plurality opinion in Nicastro, see

(plurality opinion), says that "something more" may

include, "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

2 To be clear, there is no argument that a producer like Schechtl is subject to jurisdiction solely because it knows that its products might be sold in Massachusetts. See Nicastro,

(Breyer, J., concurring) (rejecting such a standard). - 14 - as the sales agent in the forum State." Asahi,

(opinion of O'Connor, J.).

Specific jurisdiction must rest on a defendant's

voluntary contact with the forum and not on "the 'unilateral

activity of another party or a third person.'" Burger King,

(quoting Helicopteros Nacionales de Colombia, S.A. v.

Hall,

(1984)). The argument for jurisdiction

here does not rest on MetalForming's Massachusetts activities. It

rests instead on the totality of Schechtl's activities,

voluntarily undertaken, that connect the German company to

Massachusetts.

These voluntary acts on Schechtl's part led to a "regular

flow or regular course of sales," and more than that, in the

Commonwealth. Over sixteen years, Schechtl, through MetalForming,

sold forty-five machines (an average of close to three machines in

each of those sixteen years). It also provided 234 parts to

purchasers in Massachusetts. Those parts and machines led to

nearly $1.5 million of Massachusetts sales for Schechtl.

We compare this case to Plixer, in which we upheld the

exercise of jurisdiction over a defendant who, over three-and-a-

half years, served 156 forum customers, generating about $200,000

in business. See

; see also

(describing

post-Nicastro rulings upholding the exercise of jurisdiction based

on "a regular course of sales"). And we compare Schechtl to the

- 15 - defendant in Nicastro, who Justice Breyer described as having made

"a single isolated sale" into the forum.

(Breyer,

J., concurring). Schechtl certainly does not fall into the

category of manufacturer, "small" in "shape[] and size[],"

described by Justice Breyer in Nicastro.

(Breyer, J.,

concurring).

Schechtl argues that we should discount its

Massachusetts sales because those sales were part of a nationwide

sales effort. But the question is not whether a defendant sells

its product across the U.S.; it is instead whether a defendant's

forum connection is such "that the exercise of jurisdiction is

essentially voluntary and foreseeable." Plixer,

(citing C.W. Downer,

); see Ainsworth,

(upholding the exercise of jurisdiction based on substantial

in-forum sales, even though the defendant's forum sales

represented only 1.55% of its nationwide sales during the relevant

period). And we note that the use of a nationwide distributor

does not automatically preclude the exercise of jurisdiction. See

Ainsworth,

(upholding the exercise of jurisdiction

over a manufacturer even though the manufacturer employed a

nationwide distributor).

To be clear, we do not hold that the mere volume of

Schechtl's sales in Massachusetts over sixteen years standing

- 16 - alone would suffice (a hypothetical situation we need not address).

There is more here.

Schechtl individually approved and manufactured

according to purchaser-provided specifications each of the nearly

fifty machines it sent to Massachusetts purchasers. See In re

Chinese-Manufactured Drywall Prods. Liab. Litig.,

(5th Cir. 2014) (upholding the exercise of personal

jurisdiction based in part on the defendant's fulfilling product

orders on a "made-to-order basis"); cf. Asahi,

(opinion of O'Connor, J.) (adding that "designing the product for

the market in the forum State" may be "additional conduct"

necessary to make the exercise of jurisdiction constitutional).

Schechtl's relationship with purchasers in Massachusetts

did not end when Schechtl accepted the purchase order and

manufactured the machine. Schechtl required that MetalForming

include, with each machine, materials that instructed that

purchaser to contact Schechtl directly, whether to purchase

replacement parts or to obtain assistance with troubleshooting and

fixing problems. From the fact that hundreds of Schechtl parts

were delivered to Massachusetts, the inference is entirely

plausible that Massachusetts purchasers did use the channels

Schechtl established both as to spare parts and as to

troubleshooting.

- 17 - Schechtl's channels to Massachusetts purchasers

constitute efforts to continue -- and perhaps to expand -- its

relationship with Massachusetts purchasers. Those deliberately

opened channels, kept open over many years and presumably used,

are relevant to the jurisdictional analysis. See Asahi,

(opinion of O'Connor, J.) (noting that "establishing

channels for providing regular advice to customers in the forum

State" may be "something more" in support of jurisdiction). Those

channels established a direct link between Schechtl and its

purchasers. Here that means that Schechtl voluntarily opened at

least forty-five such direct links with Massachusetts purchasers.

Schechtl's long service of purchasers in Massachusetts through at

least its spare parts sales bolsters our conclusion that the

exercise of jurisdiction here is foreseeable.3

Purposeful availment analysis "'will vary with the

quality and the nature of the defendant's activity.'" PREP Tours,

, at *6 (quoting Burger King,

).

This case involves a manufacturer which can direct where its

products go, which sold dozens of expensive products into the forum

3 Schechtl argues that it did not know that CCC was located in Massachusetts. Even if that contention were correct, we would not consider it dispositive given all the other facts here. We do not comment on MetalForming's argument that Schechtl should have known CCC's location. We also do not rest on, or even reach, the argument that Schechtl made no effort to exclude Massachusetts purchasers from its American market. Cf. Ainsworth,

. - 18 - over nearly two decades, and which initiated an ongoing

relationship with its in-forum purchasers. Nicastro, by contrast,

involved a manufacturer which lacked any similar ability to control

the end location of its products, see

(plurality

opinion) (noting that there was "no allegation that the distributor

was under [the defendant's] control"), and which had no other

relationship with the forum, see

. The defendant there

knew only "that its products are distributed through a nationwide

distribution system that might lead to those products being sold

in any of the fifty states."

(internal quotation marks

omitted). None of the opinions from Nicastro require that we

accept Schechtl's arguments on appeal.

Schechtl's only remaining argument is that MetalForming

takes title to the Schechtl products in Germany. First Circuit

law has long found this argument irrelevant to the jurisdictional

analysis. See Benitez-Allende v. Alcan Aluminio do Brasil, S.A.,

(1st Cir. 1988) (Breyer, J.) ("The fact that title

to the [products] passed in [a foreign country] is beside the

point, for '[i]f International Shoe stands for anything, however,

it is that a truly interstate business may not shield itself from

suit by a careful but formalistic structuring of its business

dealings.'" (quoting Vencedor Mfg. Co., Inc. v. Gougler Indus.,

Inc.,

(1st Cir. 1977))). The same is true for

an international business.

- 19 - C. Reasonableness

We explain briefly why we consider the exercise of

jurisdiction to be reasonable under the five "gestalt" factors:

(1) the defendant's burden of appearing [in the forum], (2) the forum state's interest in adjudicating the dispute, (3) the plaintiff's interest in obtaining convenient and effective relief, (4) the judicial system's interest in obtaining the most effective resolution of the controversy, and (5) the common interests of all sovereigns in promoting substantive social policies.

Ticketmaster-N.Y., Inc. v. Alioto,

(1st Cir. 1994)

(citing Burger King,

). Schechtl in its briefs,

but not at oral argument, argues that Massachusetts litigation

would be burdensome because it is a German company with German

employees, and that cross-Atlantic travel and communications would

impose burdens on its employees. That there is some burden on

Schechtl (which can be mitigated) is not enough on the facts here

to make the exercise of jurisdiction unreasonable. See Plixer,

(noting that "'[w]hen minimum contacts have been

established, often the interests of the plaintiff and the forum in

the exercise of jurisdiction will justify even the serious burdens

placed on the alien defendant'" (quoting Asahi,

(opinion of O'Connor, J.)); see also C.W. Downer,

(noting that many of the case's logistical challenges "can be

resolved through the use of affidavits and video devices").

- 20 - III.

We conclude that the exercise of personal jurisdiction

over Schechtl comports with due process. We reverse and remand

for further proceedings consistent with this opinion.

- 21 -