C-Innovation, LLC v. Norddeutsche Seekabelwerke GmbH

Filing 42

ORDER AND REASONS. ORDERED that 9 Motion to Dismiss for Lack of Jurisdiction is DENIED. Signed by Judge Carl Barbier on 11/1/2011. (clm, )

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

C-INNOVATION, LLC

CIVIL ACTION

VERSUS

NO: 10-4441

NORDDEUTSCHE SEEKABELWERKE
GMBH

SECTION: "J” (5)

ORDER AND REASONS
Before the Court is Defendant Norddeutsche Seekabelwerke
GmbH (“NSW”)’s Motion to Dismiss for Lack of Personal
Jurisdiction (Rec. Doc. 9), Plaintiff’s Opposition (Rec. Doc.
37), and Defendant’s Reply (Rec. Doc. 41), on supporting
memoranda without oral argument.

Having considered the motion

and legal memoranda, the record, and the applicable law, the
Court finds that Defendant NSW’s Motion to Dismiss for Lack of
Personal Jurisdiction (Rec. Doc. 9) should be DENIED.
PROCEDURAL HISTORY AND BACKGROUND FACTS
This case arises from the sale of allegedly defective
umbilical cables used in underwater oil and gas exploration.
Plaintiff C-Innovation, LLC (“C-Innovation”) is in the business

1

of operating underwater robots referred to as remotely operated
vehicles (“ROV’s”), which are used in oil and gas drilling
operations.

The umbilical cables at issue serve to tether and

connect ROV’s to mother ships.

Plaintiff alleges that it

purchased a total of 17 umbilical cables that were manufactured
by Defendant, 12 of which Plaintiff directly purchased from
Defendant.

Plaintiff alleges that it paid roughly $3 million to

Defendant for the direct purchases.

Plaintiff’s complaint

alleges that the cables are defective and fail regularly during
their use off the Louisiana shore.

The alleged failures require

the cables to be cut and re-terminated.

Plaintiff is a Louisiana

limited liability company, and Defendant is a German company.
Defendant moved to dismiss for lack of personal jurisdiction.
The parties conducted jurisdictional discovery pursuant to this
Court’s order regarding Plaintiff’s motion to compel.
Although the precise nature and sequence of events of the
sales of cables made by NSW to C-Innovation are unclear, the
following jurisdictional facts are either undisputed or not
subject to reasonable dispute.1

At least several years prior to

1

“To decide whether a prima facie case exists, we must accept as true
[Plaintiff’s] ‘uncontroverted allegations, and resolve in [its] favor all
conflicts between the facts contained in the parties’ affidavits and other
documentation.” Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378
(5th Cir. 2002) (citation omitted).

2

Plaintiff’s first purchase of cables from Defendant, Defendant
did some degree of sales and promotion of its products in
Louisiana and the Gulf of Mexico region.2

Plaintiff’s employee

Norman Robertson contacted Defendant’s employee Angus Wing, who
at the time worked out of an office in Aberdeen, Scotland.
Robertson expressed to Wing Plaintiff’s interest in purchasing
cables.

Wing communicated this interest to Defendant’s office in

Germany.
Over the subsequent months, Defendant sent 10 separate
quotations to Plaintiff, presumably to its Louisiana location.3
During this time period that quotations were made, Wing made at
least one trip to Louisiana.4
C-Innovation.

He thereafter made two visits to

The precise nature of these visits is unclear.

One of them was in response to the alleged problems that CInnovation encountered with the cables.

Wing asserts that there

was no discussion of sales during these visits, but the visits

2

See Rec. Doc. 37-26, at 6 (Sauerbier Deposition, at 23, ll. 9-10) (in
the context of NSW employees’ visits to conferences in Louisiana where NSW set
up a booth and handed out brochures, NSW corporate representative Ralf
Sauerbier stating, “Of course we go to this show to generate sales, yes.”).
3

Rec. Doc. 37-4, at 19 (Wing Deposition, at 73-74) (stating that these
quotations were given to the Plaintiff).
4

Rec. Doc. 37-4, at 17 (Wing Deposition, at 65-67).

3

pertained to official NSW business.5

Plaintiff placed orders

with Defendant, and Defendant then delivered the cables.
the cables were shipped to Texas, not Louisiana.

Most of

However, the

invoices issued by NSW and the bills of lading were shipped to
Mandeville, Louisiana, at Plaintiff’s mailing address.6

Further,

two of the bills of lading produced in discovery indicate that
there was a direct shipment of cables to Mandeville, not Texas.7
Finally, Plaintiff paid for the cables.
After Plaintiff experienced problems with the cables, there
was additional contact between NSW in Germany and C-Innovation in
Louisiana.

This contact consisted of e-mails between Plaintiff

and Defendant, a visit by NSW technician Martin Kaufman to a
vessel not owned by Plaintiff, and a visit by Mr. Wing.
Eventually, Plaintiff filed the instant suit alleging a cause of
action for redhibition under state law, and alternative claims
for products liability and breach of warranty.

Defendant filed

the instant motion to dismiss for lack of personal jurisdiction.

5

Rec. Doc. 37-4, at 17 (Wing Deposition, at 65-68) (Wing admitting that
the visits to Mandeville were for the purpose of promoting cables and building
relationships).
6

Rec. Doc. 37-9 (invoices); Rec. Doc. 37-10 (bills of lading).

7

Rec. Doc. 37-10, at 14-15 (listing both “consignee” and “notify party”
as C-Innovation, and place of delivery as “Mandeville, LA”).

4

THE PARTIES’ ARGUMENTS
Defendant argues that it is a German company that does not
have the requisite contacts with Louisiana for this Court to
assert personal jurisdiction over it.

It initially argues that

the Court lacks general personal jurisdiction because it is a
German company that has never maintained an office; a post office
box; a telephone number; facilities; or any other substantial,
continuous, and systematic contacts in or with the state of
Louisiana.

Defendant chiefly argues that specific personal

jurisdiction is absent.

It was Plaintiff’s employee, Norman

Robertson, who reached out to Defendant’s employee, Angus Wing,
in Scotland.

The sale quote and negotiations occurred between

Robertson and NSW personnel in Germany.

NSW had no knowledge

regarding whether its products would be used in Louisiana.

The

cables were shipped “CIF Houston,” meaning that risk of loss and
title transferred to C-Innovation upon shipment from Germany.
NSW had no knowledge of where the cables would be used upon their
arrival in Houston.

Plaintiff’s unilateral action in reaching

out to NSW does not establish jurisdiction.

The mere exchange of

communications between the forum and Germany in consummating and
executing a sale does not establish jurisdiction, either.
Defendant also argues that Plaintiff’s cause of action does

5

not arise out of Defendant’s contacts with the forum.

It frames

its contacts with Louisiana as limited to a business relationship
between C-Innovation and Mr. Wing.

Mr. Wing made several visits

to Louisiana at C-Innovation’s request to develop business.
However, the cause of action does not arise from any event that
occurred during these three trips.

No sales were initiated or

finalized during Mr. Wing’s visits to C-Innovation in Louisiana.
Thus these contacts do not give rise to Plaintiff’s claim for
redhibition.
Plaintiff’s opposition avers that NSW had no fewer than 101
significant business contacts with Louisiana, including
quotations, invoices, bills of lading, order confirmations,
purchase orders, an on-site service call, and visits to Louisiana
from Mr. Wing.

With regard to the sale of cables to Plaintiff,

Defendant markets in Louisiana through advertising, attendance at
trade shows, and one-on-one relationship building.

These

contacts are alleged to support a finding of specific personal
jurisdiction.

Plaintiff argues that the “CIF Houston” shipping

term does not defeat the foreseeability of the products finding
their way to Louisiana because the cables were only shipped to
Texas to facilitate spooling onto winches, with the cables’
eventual arrival in Louisiana.

Defendant has purposefully

6

availed itself of the benefits of the forum through targeting
Plaintiff as a customer, targeting other companies in Louisiana
and the Gulf region, and communicating extensively with
Plaintiff’s employees in Louisiana.

Additionally, the mere act

of entering into the sale of the cables with Plaintiff is
sufficient contact, especially where Defendant knew that the
cables purchased by Plaintiff would be shipped to a Texas
consignee and then would end up in Louisiana.

The invoices

showed that the cables would end up there, and Defendant sent its
employees to Louisiana to work on the sale transaction.
Plaintiff argues that there is also general personal
jurisdiction because Defendant does business in Louisiana:

sales

call visits, advertising, attendance at trade shows that market
to Louisiana companies, entertaining clients in New Orleans,
selling cables to companies with Louisiana operations, and
sending engineers to Louisiana to inspect and repair cables.
These contacts are sufficiently continuous and systematic to
invoke general personal jurisdiction.

Finally, Plaintiff argues

that Defendant has refused to produce all relevant jurisdictional
documents, including expense reports, marketing budgets, invoices
pertaining to other of Defendant’s Louisiana customers, and other
pertinent information.

7

In reply, Defendant argues that its alleged acts giving rise
to Plaintiff’s claim all occurred outside of Louisiana.

Its only

arguably purposeful contacts with Louisiana were the visits to CInnovation after the purchase request had been made; attendance
of a world-wide conference in New Orleans for two days at a time
where no Louisiana customers were entertained and no sales made;
sending a worker through New Orleans to board another company’s
vessel; and occasional visits to a Louisiana office of another
company.
issue.

None of these contacts gave rise to the claims at

All of the communications between Plaintiff and Defendant

concerning sale of the ROV cables occurred abroad.

The mere

foreseeability that the cables would end up in Louisiana is not
sufficient for jurisdiction.

Defendant’s closing point is that

if NSW was haled into this Court, it would be due to the
unilateral act of C-Innovation in initiating a contract and
ordering cables from NSW.
DISCUSSION
A.

Legal Standard
The Fifth Circuit has stated the legal standard by which a

district court must adjudicate a motion to dismiss for lack of
personal jurisdiction:
Where a defendant challenges personal jurisdiction, the
party seeking to invoke the power of the court bears
8

the burden of proving that jurisdiction exists. Wyatt
v. Kaplan, 686 F.2d 276, 280 (5th Cir.1982). The
plaintiff need not, however, establish jurisdiction by
a preponderance of the evidence; a prima facie showing
suffices. Id. This court must resolve all undisputed
facts submitted by the plaintiff, as well as all facts
contested in the affidavits, in favor of jurisdiction.
Id.
The Due Process Clause of the Fourteenth Amendment
guarantees that no federal court may assume
jurisdiction in personam of a non-resident defendant
unless the defendant has meaningful “contacts, ties, or
relations” with the forum state. Int’l Shoe Co. v.
Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed.
95 (1945). Jurisdiction may be general or specific.
Where a defendant has “continuous and systematic
general business contacts” with the forum state,
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 415, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984),
the court may exercise “general” jurisdiction over any
action brought against that defendant. Id. at 414, 104
S.Ct. 1868 n. 9. Where contacts are less pervasive, the
court may still exercise “specific” jurisdiction “in a
suit arising out of or related to the defendant’s
contacts with the forum.” Id. at 414, 104 S.Ct. 1868 n.
8. This case presents only the question of specific
jurisdiction.
A federal court may satisfy the constitutional
requirements for specific jurisdiction by a showing
that the defendant has “minimum contacts” with the
forum state such that imposing a judgment would not
“offend traditional notions of fair play and
substantial justice.” Int’l Shoe, 326 U.S. at 316, 66
S.Ct. 154. In Nuovo Pignone v. STORMAN ASIA M/V, 310
F.3d 374 (5th Cir.2002), we consolidated the personal
jurisdiction inquiry into a convenient three-step
analysis: “(1) whether the defendant ... purposely
directed its activities toward the forum state or
purposely availed itself of the privileges of
conducting activities there; (2) whether the
plaintiff’s cause of action arises out of or results
from the defendant’s forum-related contacts; and (3)
9

whether the exercise of personal jurisdiction is fair
and reasonable.” Id. at 378 (citing Burger King Corp.
v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85
L.Ed.2d 528 (1985)). The forum state may create, and
this court would be bound to apply, additional
jurisdictional restrictions by statute, Adams, 220 F.3d
at 667, but Louisiana’s “long-arm” statute extends
jurisdiction to the constitutional limit, La. R.S.
13:3201(B), so the two inquiries in this case fold into
one.
Luv N’ Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir.
2006), cert. denied, 548 U.S. 904 (2006) (footnotes omitted).
B.

Jurisdictional Analysis
In accordance with the test set forth above, the Court first

proceeds to determine whether Defendant has maintained the
requisite contacts with Louisiana such that it purposefully
availed itself of the privilege of conducting activities in the
forum.

Only if those contacts meet the constitutional minimum

will the Court proceed to the other two steps in the
jurisdictional analysis.
1.

Minimum Contacts
a.

Nature of Contacts

As to whether Defendant established the requisite minimum
contacts with the forum, the Court addresses a characterization
quandary.

One viewpoint is that this is a case where a

manufacturer has sent its product into the forum with the

10

foreseeability that the product would arrive in the forum.
is the “stream-of-commerce” paradigm.

This

On the other hand, one

could view this case as more of a “one-shot deal”:

NSW did not

place its product into the stream of commerce—such that it
eventually came into the hands of Plaintiff—but Defendant merely
responded to Plaintiff’s order of cables.

Still, at least as to

five of the cables, there was an intermediate seller between
Defendant and Plaintiff, such that a stream-of-commerce analysis
may be suitable.
Superficially, the adoption of a “one-transaction” or a
“stream-of-commerce” paradigm would not seem to matter for a
minimum contacts analysis in this case.

Even as to the “one-

time” sale of 12 cables directly to C-Innovation, because NSW was
not only the seller, but also the manufacturer of the cables, a
“stream-of-commerce” approach suggests that it was more than
foreseeable that the cables would make their way into the forum.
However, Fifth Circuit jurisprudence shows that the choice of one
paradigm instead of another can lead to a diametrically opposite
result.

In a case involving a defendant who places a product

into the stream of commerce, the plaintiff has a much easier time
proving jurisdiction based on the Fifth Circuit’s “mere
foreseeability” test.

See Luv N’ Care, 438 F.3d 465.

11

However,

where sales into the forum are characterized as isolated or
sporadic, the Fifth Circuit has concluded jurisdiction would not
be proper.

See Stuart v. Spademan, 772 F.2d 1185, 1187 (5th Cir.

1985); Charia v. Cigarette Racing Team, Inc., 583 F.2d 184 (5th
Cir. 1978).
In the stream-of-commerce context, the court in Luv N’ Care
recognized that the Fifth Circuit “has consistently held 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.’”

438 F.3d at 470.

The “mere

foreseeability” test is “more relaxed” than the approach
suggested by the Asahi Metal Industry Co. v. Superior Court, 480
U.S. 102 (1987) plurality—which required additional action beyond
placing a product into the stream of commerce.
F.3d at 470.

Luv N’ Care, 438

The court found that the stream-of-commerce

principle applies mainly to products liability cases, but
extended the principle in Luv N’ Care to a copyright and
trademark infringement case where a non-resident defendant sold
the product at issue to Wal-Mart, which in turn sold the product
in Louisiana.

Id. at 468.

The court rejected the non-resident

manufacturer’s argument that retailer Wal-Mart had complete

12

control over the ultimate destination of the goods, where the
invoices to Wal-Mart listed Louisiana distribution centers.
at 470-71.

Id.

Under the Luv N’ Care analysis, NSW should have

foreseen the cables finding their way into the forum because NSW
directly sent the invoices to C-Innovation’s Mandeville,
Louisiana location.

Such an analysis would lead to a finding for

Plaintiff.
On the other hand, if one characterizes this case not as a
stream-of-commerce issue, but as a matter of NSW establishing a
relationship with the forum via a contract of sale, Plaintiff’s
argument for jurisdiction is arguably weaker.

The mere fact that

a non-resident contracts with a forum resident is not sufficient
to establish the forum’s jurisdiction.

Colwell Realty

Investments, Inc. v. Triple T Inns of Arizona, Inc., 785 F.2d
1330, 1334 (5th Cir. 1986).

Where a contract is alleged to be a

“contact,” the court must look to prior negotiations,
contemplated future consequences, contractual terms, and the
parties’ actual course of dealing.

Burger King Corp. v.

Rudzewicz, 471 U.S. 462, 479 (1985).
In Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773 (5th Cir.
1986), cert. denied, 481 U.S. 1015 (1987), the court held that
under the facts presented, where the contract was performed

13

outside the forum and communications into the forum were due to
the mere fortuity of the plaintiff’s residence there, the
defendant’s contacts were insufficient to establish specific
personal jurisdiction.

The suit arose out of the alleged breach

of a joint operating agreement regarding an oil and gas drilling
venture.

Id. at 776.

The non-resident defendant’s only contacts

with the forum were (1) a contract with a resident corporation;
(2) the defendant sent a final revised agreement to the forum
state; (3) the defendant sent three checks into the forum in
partial performance of contractual obligations; and (4) the
defendant engaged in extensive telephonic and written
communications with the plaintiff in the forum.

Id. at 777-78.

The court held that specific personal jurisdiction was absent
because the exchange of communications between the forum and the
defendant’s state of residence owed to the mere fortuity of the
plaintiff’s residence in the forum.

Id. at 778.

Additionally,

performance of the contract was centered outside the forum.

Id.

In Stuart, 772 F.2d 1185, the court held that under the
facts presented, jurisdiction was absent because the mere
shipment of goods into the forum and communications in
development of the contract were not sufficient.

The plaintiffs

were forum residents who contracted with a non-resident; they

14

assigned patent rights to the non-resident defendant in exchange
for the promise of payments.

Id. at 1188.

Relevant to the

breach of contract action, the defendant had several contacts
with the forum:

a contract with forum residents; the defendant

shipped into the forum ski bindings that were the subject of a
modification to be patented; the defendant exchanged phone calls
and letters into the forum regarding the patent assignment; the
agreement had a forum choice-of-law provision; the defendant’s
company advertised in and shipped its products to the forum; and
the defendant’s company marketed the patented ski bindings in the
forum.

Id. at 1192.

The court found specific personal

jurisdiction absent because the mere shipment of goods into the
forum at the instigation of a resident plaintiff is not enough,
the exchange of communications between a resident and a nonresident in development of a contract is insufficient, and the
agreement at issue did not contemplate the long-term relationship
and continuing obligations necessary for jurisdiction.

Id. at

1193-94.
If Harvey and Stuart apply, they present formidable hurdles
for C-Innovation to overcome.

One of Plaintiff’s main arguments

is that there is a high volume of contacts with the forum related
to consummation and execution of the contract, or contracts, to

15

sell the umbilical cables, such that jurisdiction is proper.
Namely, Plaintiff points to an alleged 11-step process involving
quotations, purchase decisions, order placement, order
confirmation, delivery, invoicing, and payment.

However, under

Harvey and Stuart, the mere happenstance that the exchange of
communications involves a forum resident does not lead to a
finding of jurisdiction.

Although Harvey can be distinguished to

the extent the contract therein was to be performed outside the
forum, Stuart is more on point.

Under Stuart, the exchange of

communications between Defendant and Plaintiff and the shipment
of goods that eventually arrived in Louisiana—by themselves—are
insufficient contacts.
Even more factually similar is Charia, 583 F.2d 184.

In

Charia, a Louisiana plaintiff sued a non-resident defendant in
redhibition based upon an alleged defect in a boat shipped from
Florida.

The court listed the pertinent contacts with Louisiana

as follows:

the sale of a product to a forum resident; telephone

and mail negotiations between a non-resident defendant and a
resident plaintiff; national advertising; the defendant’s receipt
of the plaintiff’s checks drawn on a forum bank; the defendant’s
knowledge that the boat would be ported in the forum; the
defendant’s arrangement for shipping to the forum; the sale of

16

three other boats to forum residents; and the allegation of a
personal injury in addition to the redhibition claim.
185.

Id. at

The court found that the “locus of the contract” was

Florida, where the face-to-face discussions and product
manufacture took place.

Id. at 188.

It also found that where

title and risk of loss passed to the plaintiff upon shipment, and
because the stream-of-commerce theory was not applicable, the
court lacked in personam jurisdiction over the defendant.

Id. at

189-90.8
Charia is factually similar to the present case.
involve the sale of a product into the forum state.

Both cases

Both involve

a series of communications between the non-resident defendant
outside the forum and the resident plaintiff in the forum,
although some of the communications in the present case were by
e-mail rather than phone or mail.

In both cases, which raised

redhibition claims, it was the plaintiff/forum resident who
initiated the contact that ultimately led to the sale.

Perhaps

most importantly, the Charia court held that even where the nonresident defendant knew that its sale to a forum resident would
lead to the product entering the forum, there was no personal

8

The Court discusses infra the validity of the Charia court’s
distinction based on shipping terms under subsequent case law, as well as the
applicability of the court’s stream-of-commerce reasoning to the present case.

17

jurisdiction.

To the extent Charia is binding, therefore,

irrespective of whether NSW reasonably could have foreseen that
the cables would be sent into Louisiana, there would be no
specific personal jurisdiction.
Additionally, the breach-of-contract cases cited by
Plaintiff are not binding because they are distinguishable.
Plaintiff argues that the court’s decision in Quasha v. Shale
Development Corp., 667 F.2d 483 (5th Cir. 1982), stands for the
proposition that sending an offer into the forum is sufficient
for jurisdiction and that a fortiori, in the present case,
sending a product into the forum pursuant to a completed contract
is sufficient.

However, the Quasha finding of jurisdiction was

based on the fact that performance was to be rendered in
Louisiana.

Id. at 489.

Additionally, reliance on Southern

Investors II v. Commuter Aircraft Corp., 520 F. Supp. 212 (M.D.
La. Aug. 18, 1981) is misplaced.

There, the court found

jurisdiction where there was not only a loan agreement of $38
million, but also a continuing relationship established by loan
servicing obligations.

Id. at 216.

In contrast, the present

case involves a contract of sale that did not entail obligations
to be performed over a long period of time.

Therefore, clearly,

under breach-of-contract cases like Charia, it is harder for a

18

plaintiff to prove that the mere sale of a product into the forum
establishes jurisdiction.

However, where a stream-of-commerce

analysis akin to that performed in Luv N’ Care applies, the
relaxed “mere foreseeability” test is much easier for a plaintiff
to meet.
b.

Application

As noted, the facts of this case present elements similar to
the Charia, Harvey, and Stuart

cases, which involved an exchange

of communications that ultimately led to a shipment into the
forum state.

Under this jurisprudence, Plaintiff would need to

point to additional contacts to establish jurisdiction.

However,

as previously stated, there are also “stream-of-commerce” aspects
of this case.

Although 12 of the cables at issue were directly

sold from NSW to C-Innovation, 5 others manufactured by NSW were
sold by intermediary companies to C-Innovation.

Thus at least as

to 5 of the 17 cables, this case presents a stream-of-commerce
paradigm.

Although NSW was not the immediate seller, based on

its promotion of umbilical cables to other Louisiana companies
like Oceaneering,9 it should have reasonably foreseen that the
cables would make their way into the forum.

9

And under Fifth

Rec. Doc. 37-4, at 8 (Wing Deposition, at 30, ll. 14-15) (“I’ve sold
nothing in Louisiana except to Oceaneering.”); see also id. at 17 (Wing
Deposition, at 68, ll. 20-23).

19

Circuit precedent, this is all that is required for an assertion
of personal jurisdiction.
Even if the Court, instead, were to view this case under the
Charia “one-time sale” paradigm, Plaintiff could establish the
requisite contacts.

Some federal courts using this paradigm have

found jurisdiction in cases like the one at bar.

The court in

the recent case of SouthCo, Inc. v. Fivetech Technology Inc.,
2011 WL 71440, at *10 (E.D. Pa. Jan. 10, 2011) cited case law
stating that the one-time sale of a product into the forum by a
non-resident defendant is sufficient contact to establish
personal jurisdiction, even where, as in this case, “the
plaintiff had ‘reached out’ to the defendant to consummate the
sale.”

Id. (citing Precimed S.A. v. Orthogenesis, Inc., 2004 WL

2630596 (E.D. Pa. Nov. 17, 2004)); see also Osteotech, Inc. v.
Gensci Regeneration Sciences, Inc., 6 F. Supp. 2d 349, 354
(D.N.J. May 4, 1998); cf. Austin v. N. Amer. Forest Products, 656
F.2d 1076, 1090-91 (5th Cir. 1981) (holding that a non-resident
defendant manufacturer was subject to personal jurisdiction where
it knew that doors it sold would be used in the forum state and
sent a written representation of the doors’ quality into the
forum).

Even if this case presents a one-time sale, that sale

was an involved one.

Defendant prepared 10 quotations over a

20

period spanning over one year and made several shipments of cable
to Plaintiff.

Discovery produced two purchase orders and four

order confirmations.

Defendant mailed a number of separate

invoices to Plaintiff at its Mandeville location.10
The touchstone of the analysis is “whether the defendant ...
purposely directed its activities toward the forum state or
purposely availed itself of the privileges of conducting
activities there.”

Luv N’ Care, 438 F.3d at 470.

The Court

agrees with Defendant that some of the contacts mentioned by
Plaintiff do not indicate an intentional availment of the
protection and benefits of doing business in Louisiana.

For

example, the mere fact of promotion of cables to companies with a
presence in Louisiana may not constitute purposeful availment
where such cables are not to be used in the forum, but rather
somewhere offshore—whether that be off the Louisiana coastline or
elsewhere.

NSW’s technician, Martin Kaufman, visited New Orleans

in connection with Plaintiff’s report of defective cables, but
his flight into Louisiana can be seen as coincidental to the

10

The Court acknowledges that “[a]n exchange of communications in the
course of developing and carrying out a contract” is not enough, by itself, to
invoke jurisdiction. Moncrief Oil Int’l Inc. v. OAO Gazprom, 481 F.3d 309,
312 (5th Cir. 2007). However, in this case the prolonged nature of the
communications over several months and the volume of effort that Defendant put
into the sale is a factor weighing in favor of a finding of jurisdiction.

21

extent that he merely needed to travel to a location from which
he could then travel by boat to an offshore location where the
cables were in use.

Other of Plaintiff’s jurisdictional

allegations find scant support, such as allegations concerning
certain of Wing’s alleged trips through Louisiana, the purposes
thereof, and that Defendant advertised in the forum.
However, there are enough supported facts to prove that
based on its conduct, Defendant should have reasonably expected
to be haled into court in Louisiana should its cables
malfunction.

The sales to C-Innovation were more than a “one-

shot deal.”

Although Defendant emphasizes that the three trips

by Mr. Wing to visit with C-Innovation in Louisiana did not lead
to a sale or involve negotiations, the Court is not persuaded
that the visits are not probative.

Wing admitted that the visits

were related to promotion of the cables.11

The first visit in

2007 was the result of Robertson’s invitation, and Wing asserts
that the visit was about general relationship building.12
However, he also implied that he made the trip because of the

11

Rec. Doc. 37-4, at 17 (Wing Deposition, at 65, ll. 21-25).

12

Rec. Doc. 37-4, at 17 (Wing Deposition, at 66-67).

22

quotations that NSW had made concerning cable prices.13

Thus the

visit was likely to seal the deal, but at least was intended to
maintain a relationship with this Louisiana customer for future
sale opportunities.

As to the second visit in 2008, Wing

indicated that the impetus was to meet with a C-Innovation
employee who was C-Innovation’s new purchasing supervisor.14

As

to the third visit, NSW sent Mr. Wing to Louisiana to investigate
the alleged problems with the cables; it also sent an engineer to
investigate problems encountered with the cables in the Gulf
generally.15

This suggests an intention to remedy any perceived

wrongs via a customer service initiative directly in the forum
that would maintain the goodwill NSW had with current Louisiana
clients and leave open the door for future sale opportunities in
the forum.
The nature of the product sold into the forum is notable.
Each cable sold for several hundreds of thousands of dollars, and
due to its high-profile nature as an expensive component of

13

Rec. Doc. 37-4, at 17 (Wing Deposition, at 67, ll. 10-12) (“Sales is
part of everything we do. If I felt that it was relevant to go there -- after
all, we had quoted -- I would go.”) (emphasis added).
14

Rec. Doc. 37-4, at 17 (Wing Deposition, at 67, ll. 21-24).

15

Rec. Doc. 37-4, at 17 (Wing Deposition, at 67, line 23 through 68,
line 9); Rec. Doc. 37-4, at 28 (Wing Deposition, at 110-11); Rec. Doc. 37-4,
at 30 (Wing Deposition, at 120).

23

costly undersea exploration, it should reasonably be expected
that some ongoing relationship would exist between the seller and
a buyer like C-Innovation.

Even though Defendant apparently sold

no cables directly into Louisiana to this Plaintiff, the
product’s known use in the Gulf region is also significant.

Even

as to the sales to the intermediaries from whom Plaintiff
purchased 5 cables, and as to the 12 cables sold into Texas, it
was reasonably foreseeable that the product would be used by a
Louisiana entity that could suffer injury there.
The mere fact that Plaintiff’s employee, Norman Robertson,
“fired the first shot,” expressing interest in NSW’s product,
does not mean that subsequent actions by Defendant could not
constitute the requisite contacts.16

If Defendant had responded

to Mr. Robertson’s inquiry with a mere quotation, or a mere
shipment of goods, the result might be different.

But Defendant

continued a relationship with Plaintiff in the forum that
constituted more than closing a one-time sale.

As to the 12

cables sold directly to C-Innovation, without the benefit of a
stream-of-commerce paradigm, it may be a close call.

16

In fact, in spite of the not insubstantial discovery in the record,
it is still unclear to the Court as to how Plaintiff found out that Defendant
manufactured cables, whether through word of mouth, trade shows, or some other
means. However, it seems that due to Mr. Robertson’s and Mr. Wing’s prior
acquaintance, Mr. Robertson reached out to Mr. Wing, who was working in
Scotland for NSW at the time.

24

Nonetheless, based on NSW’s conduct and connection with
Louisiana, it should have reasonably anticipated being haled into
court here.

See World-Wide Volkswagen Corp. v. Woodson, 444 U.S.

286, 297 (1980).
The Court finds that Charia does not bar the result reached
today.

First, the Fifth Circuit noted that “Charia was decided

before several important Supreme Court cases, including
World-Wide Volkswagen, 444 U.S. 286, 100 S.Ct. 559, and Burger
King, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528, had been
decided.”

Nuovo Pignone, 310 F.3d at 380 n.4.

Second, the court

premised its decision not to apply the “‘stream-of-commerce’
theory” on the fact that four sales into the forum in five years
were isolated and sporadic sales.

Charia, 583 F.2d at 189.

In

the present case, over a relatively short time span, Defendant
shipped 12 cables to Plaintiff.

Third, the Charia court found

that the locus of the contract was Florida, partly due to the
fact that the forum resident had made several trips to the nonresident defendant’s state of residence to negotiate the sale.
Id. at 188.

Lastly, the court concluded that the “FOB Miami”

shipping term, with title passing and risk of loss transferring
to the plaintiff in Florida, weighed against a finding of
purposeful availment of the forum.

25

Id. at 189.

In this case,

Defendant relies on a similar argument concerning the “CIF
Houston” shipping term.17

However, the Fifth Circuit has since

made clear that jurisdiction “does not depend on the
technicalities of when title passes,” and that a shipping term
does not necessarily prevent a court from exercising personal
jurisdiction.

Luv N’ Care, 438 F.3d at 471-72.

And here, where

the cables were sent to Houston to be spooled onto winches, and
then inevitably shipped to where Plaintiff resided, it was
foreseeable despite the shipping term that the cables would be
available for use in the forum.
2.

Relationship of Contacts to Cause of Action

The second requirement is that the plaintiff’s cause of
action must arise out of or be related to the defendant’s
contacts with the forum state.

The Court first acknowledges

several contacts cited by Plaintiff that cannot satisfy the
“arising out of” test.

Defendant’s entertainment expenses in the

forum were not for C-Innovation, and Defendant’s corporate
representative Ralf Sauerbier testified that the trade shows are
about networking—Sauerbier has never made a sale at a show.18

17

Defendant argues that this term, which stands for “Cost, Insurance,
and Freight,” indicates that title passed and risk of loss transferred upon
the shipment from Germany; and that this weighs against jurisdiction.
18

Rec. Doc. 38-1, at 7 (Sauerbier Deposition, at 21, ll. 1-6); at 31-32
(Sauerbier Deposition, at 48, line 13 through 49, line 3).

26

The mere fact that trade show attendance was intended to generate
sales does not change the fact that there is no causal
relationship between these trade shows and C-Innovation’s
purchase of cables, which was initiated by Robertson.

However,

the Court has found that the relevant contacts are the sale and
the various visits by Mr. Wing and Mr. Kaufman to cement the
customer relationship with C-Innovation.

Without these contacts,

Plaintiff would not have obtained umbilical cables that are
allegedly dysfunctional.

Thus the cause of action arises from

Defendant’s contacts with Louisiana.
The Plaintiff’s alternative claims for products liability
and redhibition are directly causally related to the Defendant’s
sale of umbilical cables that Defendant should reasonably have
foreseen entering the forum.

To the extent the “minimum

contacts” include visits made by Mr. Wing to cement the business
relationship and to inquire into the alleged product failures,
the claims at issue are at the least “related to” these contacts
because Plaintiff’s decision to prosecute its claims in federal
court necessarily results from a failure of Wing’s and Kaufman’s
visits to satisfy Plaintiff’s desire for functional cables.

See

Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
414, 414 n.8 (1984) (stating that specific personal jurisdiction

27

involves a controversy “related to” or arising out of the
defendant’s contacts with the forum).
3.

Fairness Factors

Because C-Innovation’s cause of action arises out of and is
related to NSW’s contacts with the forum, an exercise of
jurisdiction would only be unconstitutional if it did not comport
with “traditional notions of fair play and substantial justice.”
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
Because Plaintiff has established a prima facie case of personal
jurisdiction, “the burden of proof shifts to the defendant to
show that the assertion of jurisdiction is unfair and
unreasonable.”

Nuovo Pignone, 310 F.3d at 382.

considers the “fairness factors”:

Thus the Court

“(1) the burden on the

nonresident defendant; (2) the interests of the forum state; (3)
the plaintiff’s interest in obtaining relief; (4) the interstate
judicial system’s interest in the most efficient resolution of
controversies; and (5) the shared interests of the several states
in furthering fundamental social policies.”

Id.

The Court finds that the factors weigh in favor of an
exercise of personal jurisdiction.
is not unseemly.

The burden on the Defendant

The Defendant regularly promotes its products

to customers in the Louisiana market, and even more so to the

28

general ROV market in the Gulf region.

The regular visits made

by NSW employees to entertain and otherwise maintain contact with
customers in Louisiana demonstrate that it is not beyond
Defendant’s means to travel to the forum for the purpose of
defending a lawsuit.

Louisiana has an interest in permitting its

resident to seek redress of alleged harm.

Additionally, if

Plaintiff were unable to litigate its claims here, it is not
immediately apparent where else the claims could be brought other
than in Germany.

The witnesses who would testify about the

cables’ performance or lack thereof are presumably mainly located
in or near the forum.

Maintenance of this suit in this forum

comports with due process.
Because the Court finds that it has specific personal
jurisdiction over NSW as to C-Innovation’s claims in this case,
it does not reach the issue of whether general personal
jurisdiction is also present.

Plaintiff has made a prima facie

showing of personal jurisdiction, which Defendant has not
rebutted.
For the foregoing reasons, IT IS ORDERED that Defendant
NSW’s Motion to Dismiss for Lack of Personal Jurisdiction (Rec.
Doc. 9) is DENIED.

29

New Orleans, Louisiana this 1st day of November, 2011.

____________________________
CARL J. BARBIER
UNITED STATES DISTRICT JUDGE

30