Little et al v. hhgregg Inc et al
ORDER granting 35 Motion to Dismiss for Lack of Jurisdiction; terminating as moot 36 Motion to Strike. Ordered by Judge C. Ashley Royal on 7/18/12 (lap)
IN THE UNITED STATES DISTRICT COURT FOR THE
MIDDLE DISTRICT OF GEORGIA
SAVALAS M. LITTLE, SHARON
No. 5:11‐cv‐218 (CAR)
HHGREGG, INC., HAIER AMERICA :
TRADING, LLC, NINGBO HICON
INTERNATIONAL INDUSTRY CO., :
ORDER ON DEFENDANT’S MOTION TO DISMISS AND
PLAINTIFFS’ MOTION TO STRIKE
Before the Court is Defendant Ningbo Hicon International Industry Co., Ltd.,’s
(“Ningbo Hicon”) Motion to Dismiss for Lack of Personal Jurisdiction [Doc. 35] and
Plaintiffs Savalas and Sharon Little’s Motion to Strike [Doc. 36]. After carefully
considering the parties’ Motions, the relevant law, and their responses and replies
thereto, Defendant Ningbo Hicon’s Motion to Dismiss for Lack of Personal Jurisdiction
[Doc. 35] is GRANTED, and Plaintiffs’ Motion to Strike [Doc. 36] is TERMINATED as
This is a products liability action brought by Georgia residents Savalas and
Sharon Little against hhgregg, Inc. (“hhgregg”), Haier America Trading, LLC,
(“Haier”), and Ningbo Hicon. Plaintiffs allege that a Haier chest freezer (the
“Freezer”), manufactured by Ningbo Hicon, distributed by Haier, and sold by
hhgregg to Plaintiffs, caused a fire in their home. Hhgregg is a Delaware corporation
that is authorized to do business in Georgia and maintains a retail store in Macon,
Georgia. Haier, a New York limited liability corporation, distributes freezers and
refrigerators manufactured by Ningbo Hicon throughout the United States, including
Georgia. Ningbo Hicon is a manufacturing company formed under the laws of the
People’s Republic of China and has its principle place of business in China. Ningbo
Hicon has no offices, distribution centers, or personnel in Georgia, its employees have
never traveled to Georgia to conduct business, and Ningbo Hicon does not advertise
or market in Georgia.
Ningbo Hicon manufactures a variety of electrical appliances that are sold
internationally by retailers such as hhgregg, Home Depot, and Wal‐Mart. Many of its
products are designed for use in the United States and “some [are] even certified to the
Energy Star and NSF of USA.” [Doc. 26‐1]. Ningbo Hicon relies, in part, on its
independent distributor, Haier, to distribute a large number of its products. Ningbo
Hicon also does business on its own with various American retailers. There is no
evidence that it ever did any direct business with hhgregg.
In doing business with Haier and retailers, Ningbo Hicon ships its products to
various destinations including Savannah, Georgia. The international shipping data
compiled by the United States Department of Homeland Security indicates that, since
2006, Ningbo Hicon, identified as “Shipper,” shipped a total of 2,647 shipments to the
United States, of which 44 were shipped directly to Savannah. Particular
“Consignees” (or recipients) of these American shipments include Haier with a total of
631 shipments, two of which were shipped to Savannah; Wal‐Mart with a total of 52
shipments, one of which was shipped to Savannah; and Home Depot with one total
shipment to Savannah. In all instances, the customers arrange for and accept delivery
from Ningbo Hicon, F.O.B. China. These customers then resell the products to their
own customers or to the public. There is no indication in the record that Ningbo
Hicon is aware where its products will eventually be sold as retail.
Between October 31, 2010, and November 1, 2011, hhgregg retailers in Georgia
sold 999 Haier home appliances manufactured by Ningbo Hicon, including 708 chest
freezers and 291 compact refrigerators. This resulted in $326,850.00 of in‐state revenue
for hhgregg. Plaintiffs are unable to identify the amount of Ningbo Hicon’s in‐state
wholesale manufacturing revenue generated from hhgregg’s total sales or Ningbo
Hicon’s total revenue generated by its manufactured products.
With respect to the instant case, Ningbo Hicon sold and shipped the Freezer to
Haier F.O.B. China for distribution. Haier then sold the Freezer to hhgregg for resale
in Georgia.1 Plaintiffs purchased the Freezer from hhgregg on June 4, 2007, in Macon.
On November 6, 2010, Plaintiffs’ home caught on fire as an alleged result of the
negligent design, manufacture, inspection, and testing of the Freezer by Defendants.
On June 2, 2011, Plaintiffs filed the instant products liability action against
Defendants, asserting over $280,000 in compensatory damages. Plaintiffs allege
several counts against Ningbo Hicon, including negligence and failure to warn, breach
of contract and implied warranties, and strict liability. On October 27, 2011, Ningbo
Hicon filed the instant Motion to Dismiss for Lack of Personal Jurisdiction. Plaintiffs
and Defendants Haier and hhgregg filed a joint response in opposition.2 On December
As noted earlier, there is no evidence that Ningbo Hicon has any role or knowledge as to
where Haier ships its products.
2 To avoid confusion, the Court will refer to this response brief and the arguments therein as
submitted by Plaintiffs.
8, 2011, the Court granted Plaintiffs’ request to file a sur‐reply, and on March 15, 2012,
the Court granted Plaintiffs’ request to conduct jurisdictional discovery. On June 22,
2012, jurisdictional discovery concluded without the benefit of any additional
On June 29, 2012, at the request of the Court, Defendant Ningbo Hicon refiled
the instant Motion. However, as noted by Plaintiffs in their subsequent Motion to
Strike and their refiled response to Defendant’s Motion, Ningbo Hicon’s “refiled”
Motion to Dismiss is far more substantial than its original Motion. As a result,
Plaintiffs filed the instant Motion to Strike as well as a revised response to Defendant’s
Motion to Dismiss. In their Motion to Strike, Plaintiffs argue that Ningbo Hicon’s
Affidavit and any other jurisdictional defenses should be struck.3
Where a defendant claims lack of personal jurisdiction, a plaintiff must
establish a prima facie case of jurisdiction to survive a motion to dismiss. Francosteel
Corp. v. M/V Charm, 19 F.3d 624, 626 (11th Cir. 1994). In evaluating if personal
jurisdiction exists, “[t]he court construes the allegations in the complaint as true to the
The Court acknowledges that Defendant Ningbo Hicon has not filed a Response to Plaintiffs’
Motion and the time to do so has not yet expired. However, in light of the Court’s instant ruling, the
Court concludes that a response from Ningbo Hicon’s is unnecessary.
extent that they are uncontroverted by defendantʹs evidence.” Paul, Hastings,
Janofsky & Walker v. City of Tulsa, Okla., 245 F. Supp. 2d 1248, 1253 (N.D. Ga. 2002)
(citations omitted). Where the defendant challenges the allegations of the complaint
through affidavits, “the burden shifts back to the plaintiff to produce evidence
supporting personal jurisdiction, unless the defendant’s affidavits contain only
conclusory assertions that the defendant is not subject to jurisdiction.” Stubbs v.
Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006).
Where the plaintiff’s complaint and supporting affidavits and defendant’s affidavits
conflict, the district court must “construe all reasonable inferences in favor of the
plaintiff.” Id. Evidence that a plaintiff can use to contradict a defendantʹs declaration
includes press releases, statements on websites, and government filings. Meier v. Sun
Intʹl Hotels, Ltd., 288 F.3d 1264, 1268–69 (11th Cir. 2002).
A plaintiff who brings state‐law claims and asserts personal jurisdiction over a
non‐resident Defendant, as is the case here, must surmount two obstacles. Robinson
v. Giarmarco & Bill, P.C., 74 F.3d 253, 256 (11th Cir. 1996). The exercise of personal
jurisdiction first must be appropriate under Georgia’s long‐arm statute, and second
cannot violate the Due Process Clause of the Fourteenth Amendment.4 Id.
Plaintiffs argue that Ningbo Hicon is subject to personal jurisdiction under
subsection (3) of the Georgia long‐arm statute based on hhgregg’s total retail sales
revenue from selling Ningbo Hicon’s products. The Court will thus focus its analysis
on this portion of the subsection only. Subsection (3) permits the exercise of personal
jurisdiction over a non‐resident who commits a tortious injury in Georgia caused by
an act or omission outside of Georgia most relevantly if the tortfeaser “derives
substantial revenue from goods used or consumed” in Georgia. O.C.G.A. § 9‐10‐91(3)
Plaintiffs contend that Ningbo Hicon derives substantial revenue from Georgia
based on hhgregg’s total in‐state retails sales of Ningbo Hicon’s products. Ningbo
Hicon argues that hhgregg’s retail sales revenue does not establish that Ningbo Hicon
Plaintiffs assert that this first step (Georgia’s long‐arm statute) has been absorbed into the
second step (due process), thereby reducing the two‐step analysis to only one due process step.
However, as the Eleventh Circuit recently clarified, “the Georgia long‐arm statute does not grant courts
in Georgia personal jurisdiction that is coextensive with procedural due process.” Diamond Crystal
Brands, Inc. v. Food Movers Int’l, Inc., 593 F.3d 1249, 1259 (11th Cir. 2010); Innovative Clinical &
Consulting Servs., LLC v. First Nat’l Bank of Ames, Iowa, 279 Ga. 672, 674, 620 S.E.2d 353, 353 (2005).
Accordingly, the Court will determine personal jurisdiction using the requisite two‐part analysis.
derived any revenue from Georgia, much less that it derived substantial revenue from
Georgia as is required by the statute. In other words, Ningbo Hicon argues that
simply because hhgregg, a client of its own client, Haier, derives substantial revenue
from Georgia, it does not necessarily follow that Ningbo Hicon itself derives any
revenue from Georgia.
Before a court can determine if a non‐resident defendant’s in‐state revenue is
substantial, a court must make the preliminary finding that the defendant derives
some revenue from Georgia. See Cont’l Research Corp. v. Reeves, 204 Ga. App. 120,
123, 419 S.E.2d 49, 51 (1992) (holding that retail revenue between $30,000‐$45,000
constituted “substantial revenue” under § 9‐10‐91(3)); see also Original Appalachian
Artworks, Inc. v. Wormser, No. C80‐195A, 1980 WL 1143, at *3 (N.D. Ga. Sept. 15,
1980) (rejecting venue challenge on ground that “sales of $270.00 in this district, while
arguably not substantial, are nevertheless more than miniscule”).
In support of its argument that personal jurisdiction is too tenuous under
subsection (3), Ningbo Hicon relies on Exceptional Marketing Group, Inc. v. Jones, 749
F. Supp. 2d 1352, 1364 (N.D. Ga. 2010). In Exceptional Marketing, a Georgia marketing
corporation brought suit against its former employee and his current employer, a
Massachusetts marketing company, alleging that the former employee disclosed its
trade secrets and solicited its Georgia client while working for the Massachusetts
marketing company. Id. at 1356. In concluding that the plaintiff company did not
have personal jurisdiction over the Massachusetts company under subsection (3) of the
long‐arm statute, the district court found that there was no evidence that the company
had performed work in Georgia or that the company had any presence within
Georgia. Id. at 1364. Finding that the revenue of the defendant Massachusetts
company’s client was insufficient to establish personal jurisdiction, the court stated,
“[a]lthough [defendant company’s] clients may derive substantial revenue from
Georgia, [Plaintiff] has produced no evidence that [defendant company] derives
substantial revenue from Georgia.” Id.
Plaintiffs argue that the holding in Exceptional Marketing is inapplicable here
because, unlike the Massachusetts company’s client’s in‐state revenue, hhgregg’s
revenue is directly related to Ningbo Hicon’s manufactured products. Although
Plaintiffs present a notable distinction, the Court nevertheless finds the inherent
premise within Exceptional Marketing persuasive: indirect and attenuated in‐state
revenue cannot be used as a basis for personal jurisdiction under subsection (3) of the
Georgia long‐arm statute.
Here, Plaintiffs acknowledge that Ningbo Hicon’s “piece of the $326,850.00 pie
is not currently known,” but, in emphasizing that hhgregg sales figures are
“continuing,” Plaintiffs argue that it can be “reasonably presumed that [Ningbo
Hicon’s] piece was sufficiently substantial.” [Doc. 26, p. 9] (quotation omitted)
(emphasis in original). The Court declines to make such a consequential presumption
based on such an attenuated connection.
Plaintiffs are unable to identify the portion of Ningbo Hicon’s revenue that it
derives from Georgia and are unable to demonstrate whether this amount, when
compared to Ningbo Hicon’s entire revenue (also unknown), is substantial. See Sol
Melia, SA v. Brown, 301 Ga. App. 760, 688 S.E.2d 675 (2009) (finding a 0.1% revenue to
not be substantial under § 9‐10‐91(3)). Without such a figure, the Court cannot
conclude that Ningbo Hicon’s revenue is substantial. Additionally, there is nothing in
the record that indicates that Ningbo Hicon’s revenue is somehow correlated or
dependent on hhgregg’s retail sales. See Reeves, 204 Ga. App. at 123, 419 S.E.2d at 51
(finding personal jurisdiction under subsection (3) in part because defendant‐
company’s amount of income was dependent on the sale of its products in Georgia).
Indeed, the record indicates that Ningbo Hicon’s revenue from Haier is substantially
removed and distinct from hhgregg’s revenue. This lack of evidence is in large part
due to the tenuous connection between hhgregg and Ningbo Hicon: hhgregg receives
Ningbo Hicon’s manufactured products from Haier, not from Ningbo Hicon itself.
The Court cannot, therefore, conclude that the revenue that Ningbo Hicon
derives is substantial without any indication as to the amount of that revenue.
Plaintiffs have pointed to no authority, and the Court can find none, in which a
company’s derived in‐state revenue was unknown, but nevertheless presumed to be
substantial. See Crane v. Home Depot, No. 06C‐03‐034‐RFS, 2008 WL 2231472, at *4
(Del. Super. Ct. May 30, 2008) (concluding that similar “substantial revenue” standard
could not be satisfied because of unknown sales and royalties).
Thus, the Court cannot conclude, without more, that Ningbo Hicon’s “piece of
the pie” is substantial revenue under Georgia’s long‐arm statute.5 Accordingly,
Plaintiffs have failed to carry their burden of proof that Ningbo Hicon is subject to
personal jurisdiction under Georgia’s long‐arm statute. It is therefore unnecessary to
consider whether jurisdiction comports with the Due Process Clause of the Fourteenth
Based on the foregoing, the Court concludes that personal jurisdiction is not
proper under Georgia’s long‐arm statute. Accordingly, Defendant Ningbo Hicon’s
Motion to Dismiss for Lack of Personal Jurisdiction [Doc. 35] is GRANTED, and
Plaintiffs’ Motion to Strike [Doc. 36] is TERMINATED as MOOT. The stay of
discovery and proceedings in this case previously issued by the Court is hereby
SO ORDERED, this 18th day of July, 2012.
In reaching this conclusion, the Court did not rely on any portion of Defendant’s affidavit to
which Plaintiffs now object. Instead, the Court concludes that Plaintiffs’ Complaint and even the
additional submitted evidence is insufficient to properly plead personal jurisdiction over Ningbo Hicon
under Georgia’s long‐arm statute. Accordingly, Plaintiffs’ Motion to Strike [Doc. 36] is TERMINATED
S/ C. Ashley Royal
C. ASHLEY ROYAL
UNITED STATES DISTRICT JUDGE
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