Chavez et al v. Chiquita Brands LLC, et al

Filing 158

REPORT AND RECOMMENDATIONS re 110 MOTION to Dismiss filed by Occidental Chemical Corporation. Please note that when filing Objections pursuant to Federal Rule of Civil Procedure 72(b)(2), briefing consists solely of the Objections (no longer than ten (10) pages) and the Response to the Objections (no longer than ten (10) pages). No further briefing shall be permitted with respect to objections without leave of the Court. Objections to R&R due by 4/27/2017. Signed by Judge Mary Pat Thynge on 4/10/17. (cak)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
TOBIAS BERMUDES CHAVEZ, ET AL.,
Plaintiffs,
v.
DOLE FOOD COMPANY, INC., ET AL.,
Defendants.

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C. A. No. 12-697-RGA-MPT
(CONSOLIDATED)

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REPORT AND RECOMMENDATION
I. INTRODUCTION
A. Background
Plaintiffs in this consolidated matter are foreign agricultural workers from Central
and South America, who allege American companies misused toxic pesticides on farms
where Plaintiffs worked in the 1960s-80s, causing them injury.1 The underlying litigation
began in Texas state and district courts in 1993 and 1995, respectively.2 Following a
dismissal based on forum non conveniens3 and a much later denial of class
certification,4 the case was filed in the Eastern District of Louisiana5 and the District of

1
2

Chavez v. Dole Food Co., 836 F.3d 205, 209 (3d Cir. 2016) (en banc).
Id. at 211, 212 (citing Delgado v. Shell Oil Co., 890 F. Supp. 1324 (S.D. Tex.

1995)).

3

Delgado, 890 F. Supp. at 1373.
See Carcamo v. Shell Oil Co., No. 93-C-2290 (Tex. Dist. Ct. Brazoria Cty. June
3, 2010). This denial of class certification followed the Texas District Court’s initial
dismissal of the case under the Foreign Sovereign Immunities Act, forum non
conveniens, and subsequent attempts by plaintiffs to bring the action in their home
countries. Pursuant to the return jurisdiction clause in the 1995 Delgado dismissal, the
cases were eventually reinstated in Texas upon remand to state court (see Delgado v.
Shell Oil Co., 322 F. Supp. 2d 798, 816-17 (S.D. Tex. 2004)) (remanding to state court
to decide reinstatement question). Following remand, there was a back-and-forth
4

Delaware6 contemporaneously.7 No court has yet reached the merits of Plaintiffs’
claims.8 The Third Circuit reversed and remanded this court’s dismissal in 2016 based
on the first filed rule.9 Subsequently, all parties answered Plaintiffs’ original complaint
except defendant in the instant motion, Occidental Chemical Corporation
(“Occidental”).10
B. Occidental’s Motion to Dismiss
Presently before the court is Occidental’s motion to dismiss the complaint11
pursuant to FED. R. CIV. P. 12(b)(2) for lack of personal jurisdiction, filed November 23,

between the Texas state and federal courts until the issue was ultimately precluded by
the Carcamo decision in 2010.
5
See Chaverri v. Dole Food Co., 896 F. Supp. 2d 556, 559 (E.D. La. 2012) (“the
instant litigation involves seven consolidated actions filed between May 31, 2011 and
June 2, 2011, in the Eastern District of Louisiana.”).
6
Chavez v. Dole Food Co., Civ. A. Nos. 12-697-RGA through 12-702-RGA, 2012
WL 3600307, at *1 (D. Del. Aug. 21, 2012).
7
Id. (“The plaintiffs in these six related lawsuits filed six lawsuits in the Eastern
District of Louisiana on June 1, 2011. One year later, on June 1, 2012, they filed these
identical (in all material respects) lawsuits in this District.”).
8
The Louisiana District Court dismissed the case. See Chaverri, 896 F. Supp.
2d at 569. The case is currently in the pre-trial phase in this court on remand. See D.I.
142 (Transcript of scheduling conference held on Jan. 4, 2017).
9
See Chavez, 836 F.3d at 234.
10
See D.I. 92-97 (Dole Food Co., Dole Fresh Fruit Co., Standard Fruit Co., and
Standard Fruit and S. S. Co. answers to complaint with jury demand); D.I. 98-103 (same
for Dow Chem. Co.); D.I. 105-09 (same for Del Monte Fresh Produce N.A. Inc.); D.I.
112-17 (same for Chiquita Brands Int’l Inc., Chiquita Brands LLC, and Ciquita Fresh N.
Amer. LLC); D.I. 118-23 (same for Shell Oil Co.); D.I. 128-33 (same for AMVAC Chem.
Corp.). Although on remand the Third Circuit instructed this court to transfer Chiquita
Brands International, Inc. (“CBII”) to the District Court of New Jersey for lack of personal
jurisdiction, by answering the complaint, the defendants noted above voluntarily
submitted to this court’s jurisdiction. See D.I. 113 ¶ 96 (“CBII admits that it is authorized
to do business in Delaware, but denies that it is subject to the personal jurisdiction of
this Court. However, in the interest of judicial efficiency, CBII waives its Rule 12(b)(2)
motion herein and hereby submits to the personal jurisdiction of this Court.”).
11
D.I. 1 (Complaint filed June 1, 2012).
2

2016.12 Plaintiffs filed their answering brief in opposition to the motion on December 21,
2016,13 and Occidental filed a reply brief on January 4, 2017.14 Plaintiffs then submitted
an unopposed motion to file a sur-reply brief, which they filed on January 13, 2017.15
Occidental filed its response to the sur-reply brief on January 31, 2017.16 This Report
and Recommendation is issued pursuant to 28 U.S.C. § 636(b)(1)(B), FED. R. CIV. P.
72(b)(1), and D. DEL. LR 72.1.
II. STANDARD OF REVIEW
Personal Jurisdiction
If a defendant brings a jurisdictional challenge, the plaintiff bears the burden of
establishing that there is personal jurisdiction.17 If, as in this case, the court does not
hold an evidentiary hearing, “the plaintiff[s] need[ ] only establish a prima facie case of
personal jurisdiction” and “are entitled to have [their] allegations taken as true and all
factual disputes drawn in their favor.”18 In its analysis, the court first applies the
Delaware Long Arm Statute19 to determine whether it authorizes jurisdiction since
federal district courts “may assert personal jurisdiction over a nonresident of the state in
which the court sits to the extent authorized by the law of that state.”20 In Delaware, the
long-arm statute has been construed “broadly to confer jurisdiction to the maximum
12

D.I. 110, 111 (Occidental’s motion to dismiss and opening brief in support).
D.I. 135.
14
D.I. 139.
15
D.I. 141.
16
D.I. 147.
17
Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001).
18
Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004).
19
10 Del. C. § 3104.
20
Provident Nt’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 436 (3d Cir.
13

1987).
3

extent possible under the Due Process Clause, so the focus of the inquiry traditionally
rests on the [second] constitutional component.”21
Secondly, the court determines whether jurisdiction will comport with due
process, which requires the out-of-state defendant to have “minimum contacts” with the
forum “such that maintenance of the suit does not offend traditional notions of fair play
and substantial justice.”22 A plaintiff can establish general jurisdiction for a non-resident
defendant, if that defendant has contacts with the forum that “are so constant and
pervasive ‘as to render [it] essentially at home in the forum State.’”23 On the other hand,
to establish specific jurisdiction, a plaintiff must show the defendant “‘purposefully
directed’ [its] activities at residents of the forum,”24 and “the litigation results from alleged
injuries that ‘arise out of or relate to’ those activites.”25
III. ANALYSIS
A. Waiver
Plaintiffs contend that Occidental waived its right to bring a 12(b)(2) motion to
21

AstraZenca AB v. Mylan, No. 14-696-GMS, 2014 WL 5778016 at *2 (D. Del.
Nov. 5, 2014) (internal quotation marks omitted) (citations omitted). But see Novartis
Pharms. Corp. v. Zydus Noveltech Inc., No. 14-cv-1104-RGA, 2015 WL 4720578, at *2
n.4 (quoting Commissaritat A L’Energie Atomique v. Chi Mei Optoelecs. Corp., 395 F.3d
1315, 1322 (Fed. Cir. 2005) (“Delaware law is also unclear as to whether or not the long
arm statute is coextensive with the due process clause.”). Like AstraZenca and
Novartis, the parties here have not challenged the reach of Delaware’s long-arm statute
so this court will focus on the constitutional aspect.
22
Int’l Shoe Co. v. State of Wash., Office of Unemp’t Comp. & Placement, 326
U.S. 310, 316 (1945) (internal quotation marks omitted) (internal citations omitted).
23
Daimler AG v. Bauman, 134 S. Ct. 746, 761 (2014) (quoting Goodyear Dunlop
Tires Ops., S.A. v. Brown, 564 U.S. 915, 919 (2011)).
24
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (quoting Keaton v.
Hustler Magazine, Inc., 465 U.S. 770, 774 (1984)).
25
Id. at 472-73 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 414 (1984)).
4

dismiss and submitted to this court’s jurisdiction “by seeking affirmative relief from this
Court in its August 2012 motion to dismiss” on the first-filed rule.26 Plaintiffs assert
Occidental adopted res judicata arguments that defendant Dole made in its motion to
dismiss and res judicata is an affirmative defense.27 Plaintiffs also argue the motion is
untimely.28 Occidental counters that the Dole motion “expressly disclaimed any res
judicata argument.”29
Additionally, Occidental presents language from the Dole memorandum which
addresses res judicata purely in the context of the possible preclusive effect in
Delaware if the Louisiana federal court had granted any of Dole’s then-pending
motions.30 This court finds that the Occidental and Dole motions did not advance res
judicata arguments, but rather sought dismissal based on the first-filed rule.31 Plaintiffs
do not advance any position regarding waiver under the first-filed rule.32
Plaintiffs, however, argue that Occidental waived its right to challenge personal
jurisdiction by joining other defendants’ res judicata arguments on appeal to the Third
Circuit.33 Occidental responds with language from the Chavez opinion that states only

26

D.I.135 at 1 (citing D.I. 24, dated Aug. 22, 2012).
Id. at 2-3, 5. See also Bel-Ray Co. v. Chemrite (Pty) Ltd., 181 F.3d 435, 443
(3d Cir. 1999); Wyrough & Loser Inc. v. Pelmor Labs., Inc., 376 F.2d 543, 547 (3d Cir.
1967); Rycocline Prod., Inc. v. C & W Unltd., 109 F.3d 883, 886 (3d Cir. 1997); FED. R.
CIV. P. 8(c) (res judicata listed as affirmative defense).
28
D.I. 135 at 5.
29
D.I. 139 at 3-4. See also D.I. 5 (Dole’s memorandum in support of its motion to
dismiss: “This Court, however, need not reach the res judicata issue as Plaintiffs’
duplicative action is subject to dismissal now under the first-filed rule.”).
30
D.I. 139 at 4.
31
See D.I. 5, 24.
32
See generally D.I. 135, 141.
33
D.I. 141 at 7-8 (citing Chavez, 836 F.3d at 224 n.102).
27

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two defendants (Chiquita Brands, L.L.C. and Chiquita Fresh North America, L.L.C.)
raised res judicata,34 and Occidental “moved for dismissal based on the first filed rule.”35
Because Plaintiffs do not present any precedent for associational waiver and Occidental
only raised the first-filed rule, this court finds that Occidental did not waive its right to
bring a 12(b)(2) motion to dismiss.36 Further, Occidental’s present motion is not
untimely.37
B. Personal Jurisdiction
Occidental posits this court lacks both general and specific personal jurisdiction
over it.38 Plaintiffs’ answering brief and surreply do not raise any jurisdictional

34

Chavez, 836 F.3d at 215.
D.I. 147 at 3 (quoting Chavez, 836 F.3d at 214 n.27).
36
See Ciolli v. Iravani, 625 F. Supp. 2d 276 (2009) (“However, it also follows that
the mere filing of a motion does not necessarily constitute a waiver of the personal
jurisdiction defense.”) (citation omitted). Occidental’s motion also does not fall within
the purview of FED. R. CIV. P. 12(h), which states:
(h) Waiving and Preserving Certain Defenses.
(1) When Some Are Waived. A party waives any defense listed in
Rule 12(b)(2)-(5) by:
(A) omitting it from a motion in the circumstances described in
Rule 12(g)(2); or
(B) failing to either:
(i) make it by motion under this rule; or
(ii) include it in a responsive pleading or in an
amendment allowed by Rule 15(a)(1) as a matter of
course.
37
See Molnylcke Health Care AB v. Dumex Med. Surgical Prods. Ltd., 64 F.
Supp. 2d 448, 449 n.1 (E.D. Pa. 1999) (defendant’s motion to dismiss for lack of
personal jurisdiction was not untimely although filed after responding to the complaint
because the answer included this ground). In the instant matter, the Third Circuit issued
its en banc ruling, overturing this court’s dismissal in October 2016, over four years after
the original complaint was filed. In light of these circumstances, the date on which
Occidental filed its present 12(b)(2) motion to dismiss (as its response) does not
constitute bad faith.
38
D.I. 111 at 6.
35

6

arguments or include any additional, relevant facts outside the pleadings.39 Based on
the original complaint, this matter does not “arise out of or relate to” activities directed at
the forum state of Delaware. Therefore, the court holds that it lacks specific jurisdiction
over Occidental.40
Plaintiffs assert in their complaint that Occidental “is a New York corporation with
its principal place of business in Texas, which, at all times pertinent herein, was
authorized to do and was doing business within the jurisdiction of this Honorable
Court.”41 Occidental argues since it is neither incorporated in Delaware nor has its
principal place of business in Delaware, it is not subject to general jurisdiction.42
Consistent with Third Circuit precedent in this matter, this court finds that a company
“not incorporated [in Delaware], does not maintain an office [here], and does not
supervise its business [here]” is not “at home” in the forum state.43 Thus, Occidental is
not subject to general jurisdiction in Delaware, and this court cannot exercise jurisdiction
over it.
C. Transfer of Venue
Plaintiffs’ answering brief requests transfer should this court find it lacks personal

39

See D.I. 111, 139, 147 c.f. D.I. 135, 141; see also Chavez v. Dole Food Co.,
Inc., 947 F. Supp. 2d 438, 441 (D. Del. 2013) (“To meet this burden [of showing
sufficient minimum contacts between defendant and forum state], the plaintiff must
produce ‘sworn affidavits or other competent evidence,’ since a Rule 12(b)(2) motion
‘requires resolution of factual issues outside the pleadings.’”) (quoting Time Share
Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n.9 (3d Cir. 1984)).
40
D.I. 1 ¶ 65.
41
Id.
42
D.I. 111 at 9.
43
Chavez, 836 F.3d at 223.
7

jurisdiction over Occidental.44 Occidental responds that Plaintiffs fail to identify a
specific court to which the action should be transferred and where the action could have
been brought at the time of filing.45 Occidental also asserts there is no “compelling
reason” for this court to “deviate from the standard remedy of dismissal.”46
In their surreply, Plaintiffs request transfer of the action against Occidental to the
New Jersey District Court because it has an office and a manufacturing facility there.
They ask for jurisdictional discovery “[i]f there is any question in the Court’s mind about
the appropriateness of a transfer to the District of New Jersey.”47 Occidental refutes the
existence of an office in New Jersey and states its one jointly-owned facility in the state
operates in products wholly unrelated to the underlying cause of action.48 However,
Occidental does not challenge Plaintiffs’ statement in their complaint that it is “a New
York corporation with its principal place of business in Texas.”49
The Third Circuit, in deciding the issue of personal jurisdiction of co-defendant
CBII, determined that the “interest of justice require[d] transfer rather than dismissal.”50
Under 28 U.S.C. § 1631, a district court “shall, if it is in the interest of justice, transfer
[the case] to any other such court in which the action or appeal could have been
brought at the time it was filed.”51 Even where neither party requests a transfer, a

44

D.I. 135 at 8.
D.I. 139 at 9 (citing Nat’l Mining Ass’n v. Sec’y of Labor, 763 F.3d 627, 635 (6th
Cir. 2014)).
46
Id. at 10.
47
D.I. 141 at 9-10.
48
D.I. 147 at 7.
49
Id. (quoting D.I. 1 ¶ 65).
50
Chavez, 836 F.3d at 224.
51
28 U.S.C. § 1631.
45

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district court may sua sponte order transfer if it is in the interest of justice.52 It follows
that a court’s ability to sua sponte transfer a matter to a jurisdiction that neither party
requests falls squarely within the meaning of 28 U.S.C. § 1631, if that jurisdiction is
easily identifiable.53
The presumption in favor of transfer found in the “interest of justice” language is
based on the concern that “dismissal of an action that could be brought elsewhere is
time-consuming and justice-defeating.”54 In the instant matter, the Third Circuit found
that Plaintiffs acted in good faith when they filed in this court,55 and Occidental has not
rebutted the presumption favoring transfer by showing that it would “unfairly benefit the
proponent,” “impose an unwarranted hardship on the objector,” or “unduly burden the
judicial system.”56
The court finds this matter against Occidental should not be transferred to New
Jersey because it would likely not be subject to personal jurisdiction in that jurisdiction
given its limited contacts with the state. Nonethless, the parties briefed the issue of
52

See QVC, Inc. v. Your Vitamins, Inc., 753 F. Supp. 2d 428, 433 (D. Del. 2010)
(citations omitted) (sua sponte transferring case to Pennsylvania as directed by forum
selection clause); Schrader v. U.S., 103 Fed. Cl. 92, 101 n.10 (2012) (“the transfer
statute language ‘persuasively indicates that transfer, rather than dismissal, is the
option of choice’”) (quoting Britell v. United States, 318 F.3d 70, 73 (1st Cir. 2003)).
53
QVC Inc., 753 F. Supp. 2d at 433; but see Nat’l Mining Ass’n, 763 F.3d at 635
(finding petitioners were trade associations that had too many locations for court to
identify where case could have been brought originally and request under 28 U.S.C. §
1631 was denied when neither party identified proper district court for transfer).
54
Edwards v. Leach Int’l, No. 15-321-LPS, 2015 WL 7295440, at *2 (D. Del. Nov.
18, 2015) (citations omitted).
55
See Chavez, 836 F.3d at 213-14, 222. See also Forest Labs. Inc. v. Cobalt
Labs Inc., No. 08-21-GMS-LPS, 2009 WL 605745, at *13 (D. Del. Mar. 9, 2009)
(explaining good faith in “interest of justice” analysis).
56
Edwards, 2015 WL 7295440 at *2 (quoting D’Jamoos v. Pilatus Aircraft Ltd.,
No. 07-1153, 2009 WL 3152188, at *3 (E.D. Pa. Oct. 1, 2009)).
9

transfer, and Occidental had sufficient opportunity to respond to Plaintiffs’ request for
transfer. Although Occidental only responded by addressing transfer in general and to
New Jersey, it will not “impose an unwarranted hardship” on it for this matter to be
transferred to Occidental’s state of incorporation, New York. The state of incorporation
is one of the two locations identified by Daimler as a “paradigm all-purpose forum[ ].”57
Therefore, jurisdictional discovery is not warranted.58
Occidental never disputed Plaintiffs’ representation that it is incorporated in New
York. As the Third Circuit noted in Chavez, Plaintiffs are simply trying to “find one court,
and only one court, willing to hear the merits of their case.”59 If dismissed, Plaintiffs
would likely be unable to file against Occidental again in any jurisdiction due to the
statute of limitations on personal injury cases, which would be “justice-defeating.” In
light of the particular circumstances of this winding litigation, it is in the interest of justice
to transfer rather than dismiss Plaintiffs’ action against Occidental.
IV.

ORDER AND RECOMMENDED DISPOSITION
Consistent with the findings herein, it is recommended that defendant’s motion to

dismiss Plaintiffs’ complaint for lack of personal jurisdiction under FED. R. CIV. P.
12(b)(2) (D.I.110) be granted in part and denied in part. It is further recommended that
the matter against Occidental be transferred to the Southern District of New York.

57

Daimler AG v. Bauman, 134 S. Ct. 746, 749 (2014) (quoting Goodyear Dunlop
Tires Ops., S.A. v. Brown, 564 U.S. 915, 924 (2011)).
58
See Eurofins Pharma US Holdings v. BioAlliance Pharma SA, 623 F.3d 147,
157 (3d Cir. 2010) (finding a plaintiff must present factual allegations with ‘reasonable
particularity’ of defendant’s contacts with the forum to warrant discovery) (citations
omitted).
59
Chavez, 836 F.3d at 222.
10

Pursuant to 28 U.S.C. § 636(b)(1)(A) and (B), FED. R. CIV. P. 72(b) and D. DEL.
LR 72.1, any objections to the Report and Recommendation shall be filed within
fourteen (14) days limited to ten (10) pages after being served with the same. Any
response is limited to ten (10) pages.
The parties are directed to the court’s Standing Order in Non-Pro Se matters for
Objections Filed under FED. R. CIV. P. 72 dated October 9, 2013, a copy of which is
available on the court’s website, www.ded.uscourts.gov.
Date: April 10, 2017

/s/ Mary Pat Thynge
Chief U.S. Magistrate Judge

11