Yeszin et al v. Neolt, S.P.A.

Filing 39

MEMORANDUM OPINION and ORDER DENYING re 5 MOTION to Dismiss for Lack of Personal Jurisdiction Signed by District Judge Lawrence P. Zatkoff. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
KEVIN YESZIN, et al,
Plaintiffs,

CASE NO.: 2:11-cv-10466-LPZ-RSW

vs.

HON. LAWRENCE P. ZATKOFF

NEOLT, S.P.A., an Italian corporation,
Defendant.
__________________________________________/
OPINION AND ORDER
AT A SESSION of said Court, held in the
United States Courthouse, in the City of Port Huron,
State of Michigan, on August 3, 2012
PRESENT: THE HONORABLE LAWRENCE P. ZATKOFF
UNITED STATES DISTRICT JUDGE
I. INTRODUCTION
This matter is before the Court on Defendant’s Motion to Dismiss for Lack of Personal
Jurisdiction [dkt 5]. The parties have fully briefed the Motion, including supplemental briefing
resulting from the Court’s prior order granting limited discovery [dkt 13]. The Court finds that
the facts and legal arguments pertinent to Defendant’s Motion are adequately presented in the
parties’ papers such that the decision process will not be aided by oral arguments. Therefore,
pursuant to E.D. Mich. L. R. 7.1(f)(2), it is hereby ORDERED that Defendant’s Motion be
resolved on the briefs submitted, without this Court entertaining oral arguments. For the reasons
that follow, Defendant’s Motion to Dismiss is DENIED.

II. BACKGROUND

This case involves injuries sustained by Plaintiffs on March 27, 2010. Plaintiffs allege

these injuries were caused by a drafting table (“the Table”) manufactured and designed in Italy
by Defendant Neolt S.P.A. (“Neolt”), an Italian corporation. The Table is of a particular model
series designated “Elite.” According to Plaintiffs, the injury occurred while Plaintiffs were
attempting to move the drafting table from one location in Plaintiff Yeszin’s home to another in
March of 2010. Plaintiffs allege that the table had dangerous spring-loaded support arms that
released unexpectedly during the move and struck both Plaintiffs in the face. Plaintiff Yeszin
suffered a total loss of vision in one eye along with other facial injuries; Plaintiff Harrison
suffered injuries to his face also requiring extensive medical treatment. According to Plaintiffs,
Defendant negligently designed and manufactured the Table, and failed to adequately warn
Plaintiffs of the danger in moving it.
In lieu of filing an answer to Plaintiffs’ Complaint, Defendant filed a Motion to Dismiss
[dkt 5] claiming the Court lacks personal jurisdiction over Defendant. In their Response to
Defendant’s Motion [dkt 7], Plaintiffs requested that the Court permit limited discovery to allow
Plaintiffs to investigate the nature of Defendant’s contacts with the state of Michigan. The Court
granted Plaintiffs’ discovery request [dkt 13], and both parties conducted relevant discovery and
submitted supplemental briefs.
In their supplemental brief [dkt 33], Plaintiffs abandon prior assertions of general
jurisdiction, and rely on a theory of specific jurisdiction. Under this theory, Plaintiffs contend
that personal jurisdiction is established on the basis of Defendants’ business relationship with
Martin Universal Design (“Martin Universal”), a Michigan company, and its predecessor
companies, Northwest Print & Supply Company (“Northwest”) and Martin Instrument Company

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(“Martin”). Plaintiffs offer facts from the deposition of Dennis Kapp (“Kapp”), the current CEO
and chairman of Martin Universal and formerly the CEO of both Northwest and Martin. Both
Northwest and Martin were incorporated in Michigan, headquartered in Michigan, and had
warehouses in Metro Detroit.
Kapp’s deposition reflects his belief that Martin was the exclusive United States
distributor for Neolt products from the beginning of the relationship in the late 1970s until 1985,
possibly even until 1988. Kapp admits that the business relationship between Neolt and Martin
reached a high point in 1982, but dropped off in subsequent years due to the advent of computer
aided design and upon Kapp’s discovery, in 1985, that Neolt was dealing with other U.S.
companies, including Alvin & Company (“Alvin”), a Connecticut-based competitor of Martin.
Additionally, Martin had a warehouse in California around the time period in question (five to
seven years in the late 1970s and into the 1980s) that received direct container shipments of
Neolt products. Recently, between 2000 and 2011, Neolt sold eighty-nine drafting tables to
Martin Universal.
During discovery, Plaintiffs found a previously unseen label which indicated a 1986
manufacture date for the Table. Kapp states that a Neolt drafting table manufactured in 1986 and
subsequently imported to the United States “likely” came through his warehouse in Detroit.
Another label on the Table indicates that it was at some point the property of Comau
Productivity Systems (“Comau”) for an unknown period of time.

Comau is an Italian

corporation that began expanding its presence into North America in 1984 and currently
maintains a presence in Michigan.
It is undisputed that Neolt manufactured the Table in Italy. The exact nature and scope of
the business relationship between Neolt and Martin in the late 1970s and into the 1980s is

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unclear. Based on Kapp’s deposition, there was never a contractual agreement outlining the
relationship. In their supplemental brief [dkt 36] Defendant asserts that none of the evidence
offered by Plaintiffs points to the sale of Neolt drafting tables by Martin to end users in
Michigan. Defendant further asserts that Neolt’s more recent sales of drafting tables to Martin
Universal are outside of the time period relevant to the issue of personal jurisdiction in this case.
III. LEGAL STANDARD
A. PLAINTIFFS’ BURDEN
It is well settled that the plaintiff bears the burden of showing that the Court has personal
jurisdiction. Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) (citing McNutt v.
Gen. Motors Acceptance Corp., 298 U.S. 178, 189 (1936)); accord Am. Greeting Corp. v. Cohn,
839 F.2d 1164, 1168 (6th Cir. 1988); Weller v. Commwell Oil Co., 504 F.2d 927, 929 (6th Cir.
1974).
Once a defendant has filed a properly supported motion for dismissal based on a lack of
personal jurisdiction, a plaintiff “may not stand on . . . [its] pleadings, but must, by affidavit or
otherwise, set forth specific facts showing that the court has [personal] jurisdiction [over
defendant].” Theunissen, 935 F.2d at 1458 (citing Weller, 504 F.2d at 930). Here, Defendant
filed a properly supported motion for dismissal, and both parties submitted documents in support
of their respective positions.
At that point in a proceeding the court may decide the motion upon the affidavits alone; it
may permit discovery in aid of deciding the motion; or it may conduct an evidentiary hearing to
resolve any apparent factual questions. Id. at 1458 (citing Serras v. First Tenn. Bank Nat’l Ass’n,
875 F.2d 1212, 1214 (6th Cir. 1989). The Court has discretion in which method to employ, but
notably “the method selected will affect the burden of proof the plaintiff must bear to avoid

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dismissal.” Id. (citations omitted). When a deciding court permits limited discovery, the plaintiff
must establish that jurisdiction exists by a preponderance of the evidence. Serras, 875 F.2d at
1214.

However, even upon granting discovery, where a court chooses not to conduct an

evidentiary hearing, the plaintiff need only show personal jurisdiction at the minimal prima facie
standard. See Dean v. Motel 6 Operating L.P., 134 F.3d 1269, 1272 (6th Cir. 1998).
B. PERSONAL JURISDICTION
The Court employs a two-step inquiry when determining whether it may properly
exercise personal jurisdiction over Defendant: (1) whether sufficient minimum contacts exist to
find jurisdiction under Michigan’s long-arm statute, and if such contacts are found, (2) whether
the exercise of jurisdiction over Defendant would offend due process. Fed. R. Civ. P. 4(e);
Theunissen, 935 F.2d at 1459 (citation omitted).
III. ANALYSIS
A. PLAINTIFFS’ BURDEN
As an initial matter, the Court will briefly address Plaintiffs’ burden in establishing
jurisdiction. Ordinarily, granting limited discovery on this issue has the effect of heightening
Plaintiffs’ burden to the aforementioned preponderance of the evidence standard. The Court,
however, chose not to hold an evidentiary hearing and Plaintiffs subsequently disputed the scope
of discovery. A prima facie standard thus remains proper in this case. See Dean v. Motel 6
Operating L.P., 134 F.3d 1269, 1272 (6th Cir. 1998). As such, in deciding this motion the Court
considers all evidence gathered though discovery in a light most favorable to Plaintiffs,
independent of any controverting assertions presented by Defendant. Id.
B. PERSONAL JURISDICTION

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Plaintiffs assert that the Court has personal jurisdiction over Defendant by virtue of
specific jurisdiction, but explicitly and voluntarily abandoned any claim in support of general
jurisdiction. In support of specific jurisdiction, Plaintiffs allege that Defendant chose Martin
Universal, a Michigan corporation, as its exclusive national distributor prior to, and potentially
during and after Defendant manufactured the Table.

Plaintiffs also present evidence of

documented sales of drafting tables by Defendant to Martin in Michigan during the period from
2000 to 2008, suggesting those sales constituted purposeful availment by Defendant of the
privileges and protections of Michigan laws by virtue of conducting business there.
Defendant argues that no facts in the record evidence the sale of any drafting table by
Defendant to a Michigan end user. Additionally, Defendant asserts there is nothing in the record
to show that Defendant established minimum contacts directed at Michigan. For the reasons
below, the Court finds that Defendant had sufficient contacts with the State of Michigan to
establish personal jurisdiction.
1. Long-Arm Jurisdiction Under Mich. Comp. Laws § 600.715
Pursuant to Fed. R. Civ. P. 4(e), the Court first looks to the Michigan long-arm statute to
determine whether personal jurisdiction exists in the case at bar. That statute provides that:
The existence of any of the following relationships between an
individual or his agent and the State shall constitute a sufficient
basis of jurisdiction to enable a Court of record of this State to
exercise limited personal jurisdiction over the individual and to
enable the Court to render personal judgments against the
individual or his representative arising out of an act which creates
any of the following relationships:
***
(2) The doing or causing any act to be done, or consequences to occur, in
the state resulting in an action for tort.
Mich. Comp. Laws § 600.715.
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Defendant contests long-arm jurisdiction, arguing that its contacts with Michigan were
not established within the time period purportedly required by Witbeck v. Bill Cody’s Ranch Inn
and its companion case Hapner v. Solis Apparatus Manufactories, Ltd. (collectively “Hapner”),
659 Mich. 680, (1987).

The Court finds this argument both unpersuasive and an incorrect

interpretation of the cases cited. In Hapner, the minimum contacts in question occurred fourteen
years prior to the tortious accident. The court in that case found that minimum contacts need
only exist at any time prior to the injury giving rise to the cause of action for jurisdiction to be
proper. Id. The practical effect of applying Defendant’s contention would absolve negligent
actors from liability as long as they severed contacts with Michigan just prior to the occurrence
of an injury.
By its own admission, Defendant manufactured the Table. If Defendant was negligent in
its manufacture of the Table, then Defendant caused consequences to occur in Michigan,
resulting in an action for tort. Drawing all inferences in favor of Plaintiffs, the Court finds that
jurisdiction over Defendant is proper under Michigan’s long-arm statute. The Court next turns to
the issue of whether jurisdiction offends Due Process.
2. Due Process
The Court’s inquiry does not end with Michigan’s long-arm statute because
“constitutional concerns of due process limit the application of this state law.” Theunissen, 935
F.2d at 1459 (citation omitted). A defect in due-process considerations “would foreclose the
exercise of personal jurisdiction even where a properly construed provision of the long-arm
statute would permit it.” Id. The relevant due-process criteria (the “Mohasco Requirements”)
are:
First, the defendant must purposefully avail himself of the
privilege of acting in the forum state or causing consequence in the
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forum state. Second, the cause of action must arise from the
defendant’s activities there. Finally, the acts of the defendant or
consequences must have a substantial enough connection with the
forum state to make the exercise of jurisdiction over the defendant
reasonable.

Id. at 1460 (quoting LAK, Inc. v. Deer Creek Enter., 885 F.2d 1293, 1299 (6th Cir. 1989) (citing
S. Mach. Co. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968)). If Plaintiffs can satisfy
each of the three Mohasco Requirements, due process will not be offended.
1. Purposeful Availment
The purposeful availment requirement ensures that a defendant will not be haled into a
jurisdiction solely as a result of “random, fortuitous or attenuated contacts.” Burger King, 471
U.S. 462, 475 (1985) (quoting Keeton v. Hustler Magazine, 465 U.S. 770, 774 (1984) and
World–Wide Volkswagen, 444 U.S. 286, 299 (1980)). Essential to purposeful availment analysis
is differentiating between what the Supreme Court in World-Wide Volkswagen calls a mere
“collateral relation to the forum State,” 444 U.S. at 299, and the kind of substantial relationship
with the forum state that invokes, by design, “the benefits and protections of its laws.” Hanson
v. Denckla, 357 U.S. 235, 253 (1958).
The Court finds that Defendant did purposefully avail itself of the privilege of acting in
Michigan through its substantial and documented manufacturer-distributor relationship with
Martin. Defendant conducted business with a Michigan company and injected products into the
Michigan forum. The relationship with Michigan was not random but specific; shipping goods
to a forum is far from attenuated. Defendant’s conduct was exactly the type that properly
invoked the benefits and protections of Michigan laws.
First, while Defendant argues that the record contains no evidence that a contract or
written agreement between Defendant and Martin ever existed, Kapp testified that such an
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agreement did exist—despite the absence of a written contract—and the Court views such
evidence in a light most favorable to Plaintiffs. Nevertheless, the presence or absence of a
contract is not a controlling factor in this case. While contractual relationships may provide for
the foundation of jurisdiction in some instances, here the shipped goods themselves represent
sufficient actions taken by Defendant amounting to a legal submission to jurisdiction of the
Court. See J. McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2788 (2011) (A defendant’s
transmission of goods permits the exercise of jurisdiction where the defendant can be said to
have targeted the forum).
In J. McIntyre, the Supreme Court plurality opinion held that a foreign defendant’s
anticipation that its goods will reach a forum state is insufficient to establish minimum contacts.
131 S. Ct. at 2784. The Supreme Court expressed the principle that in addition to anticipation of
goods reaching a forum, there must also be some type of activity specifically directed towards
the forum. Id. In this case, the shipment of goods from Italy to Michigan constitutes activity
specifically directed towards the Michigan forum.

While the exact nature of the business

transactions between Neolt and Martin is indefinite, it is axiomatic that Defendant chose to ship
products to Michigan, anticipated that its drafting tables would reach Michigan, and enjoyed the
benefits and protections of Michigan laws. Along with those benefits, Defendant had (or at least
should have had) a reasonable expectation of being haled into a Michigan court if an injury
substantially related to those business transactions were to occur in Michigan.
As such, the first Mohasco requirement is satisfied and the Court’s analysis continues
with respect to the two remaining requirements.
2. Cause of Action Relation to Contacts

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To satisfy the second Mohasco Requirement, Plaintiff’s cause of action must arise from
activities directed at Michigan that caused consequences to occur in Michigan. Mohasco, 401
F.3d at 381. An action arises from contacts directed at a forum state if those contacts are related
to the operative facts of the controversy. CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1267
(6th Cir.1996). Notably, this factor “does not require that the cause of action formally ‘arise
from’ defendant's contacts with the forum; rather, this criterion requires only ‘that the cause of
action, of whatever type, have a substantial connection with the defendant's in-state activities.’ ”
Third Nat’l. Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087, 1091 (6th Cir.1989)
(quoting Mohasco, 401 F.2d at 384 n. 27) (emphasis added).
In viewing the evidence presented by Plaintiffs in a light most favorable to Plaintiffs, the
Court finds the requisite substantial connection between the allegedly tortious injuries caused by
the Table and the purposefully availing activity of injecting products of the same type into
Michigan.

In fact, potential injuries sustained by Michigan consumers due to negligently

manufactured products present exactly the type of risk that companies likely contemplate when
selling and shipping products directly to Michigan.
It is true, and Plaintiffs even admit, that it is impossible to state with unequivocal
certainty the exact origin and subsequent history of the Table. Notwithstanding this, the record
demonstrates that prior to and around the time the Table was manufactured, Neolt directed
activity—specifically similar products—at Michigan. Even if years later, if Michigan citizens
are allegedly injured due to possible negligence in the Table’s manufacture, the connection
between the contacts and the operative facts of the controversy is undeniable.

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Defendant argues that Plaintiffs cannot prove their theory as to the definitive origin and
subsequent sale history of the Table, thereby invalidating jurisdiction. At this point, however,
Plaintiffs are not required to prove anything beyond a prima facie standard. For purposes of
establishing personal jurisdiction, it is sufficient that injuries occurred in Michigan, that such
injuries were caused by a table manufactured by Defendant, and that Defendant exported
products of the very same type to Michigan around the time the Table was manufactured. Had
the alleged injury occurred in a State other than one to which Defendant exports products, the
analysis may very well be different. Defendant may not be able to anticipate litigating in many
of the States where its products ultimately end up, but should reasonably expect to litigate in a
state in which Defendant shipped its product and maintained a manufacturer-distributor
relationship.
The Court notes Defendant’s argument that by 1985, a year prior to the Table’s
manufacture date, Defendant had at least one other distribution point in Connecticut. However,
the Court is not persuaded by the argument that other distribution points serve to sever
Defendant’s availment of the Michigan forum. The evidence of further distribution forums does
not alter the Court’s analysis, but rather serves to potentially increase the list of forums in which
Defendant may expect to be sued if future injuries resulting from its products occur in those
forums.
Accordingly, in light of the minimal prima facie standard, Plaintiffs have provided
sufficient evidence to show that Defendant’s contacts with Michigan are substantially related to
the operative facts of the controversy. Therefore, the second Mohasco requirement is satisfied.
3. Substantial and Reasonable

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The third Mohasco Requirement mandates that the acts of Defendant and the
consequences of those acts have a substantial enough connection with Michigan to make the
exercise of jurisdiction over Defendant reasonable. Mohasco, 401 F.3d at 381. In determining
reasonableness, the Court must balance a variety of factors including, “the burden on the
defendant, the interests of the forum State, and the plaintiff’s interest in obtaining relief.” See
Theunissen, 935 F.2d 1454, 1461.
Also helpful in the Court’s analysis of this factor is that, in cases where the first two
Mohasco requirements are met, an inference arises that the third factor is also satisfied. See Bird
v. Parsons, 289 F.3d 865, 875 (6th Cir. 2002); CompuServe, Inc., 89 F.3d at 1268 (noting that “if
we find, as we do, the first two elements of a prima facie case-purposeful availment and a cause
of action arising from the defendant's contacts with the forum state-then an inference arises that
this third factor is also present”).
Here, the connection between Defendant and Michigan is based on the manufacturerdistributor relationship existing during the late 1970s and well into the 1980s. Coupled with the
fact that the alleged injuries occurred in Michigan, the Court finds that Defendant has a
“substantial enough connection” with the State of Michigan to make the exercise of jurisdiction
reasonable.
Additionally, due to the severity of Plaintiffs’ injuries, Plaintiffs have a high interest in
obtaining relief in this case. While a foreign defendant would sustain a significant burden to
litigate in Michigan, the Court finds this burden to be far lighter than what Plaintiffs would have
to undergo if Italy was their only available forum to seek relief. Moreover, Michigan has a
vested interest in efficiently adjudicating the claims of its citizens and providing a system for
potential redress when its citizens sustain injuries from foreign products sent to Michigan for

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sale. Because the Court may infer that that the third Mohasco prong is satisfied upon the first
and second prongs being satisfied, and because reasonableness otherwise weighs in favor of
jurisdiction over Defendant, the third and final prong of Mohasco is met. As such, the Court
finds that it may exercise personal jurisdiction over Defendant in this case.
IV. CONCLUSION
Accordingly, and for the reasons set forth above, Defendant’s Motion to Dismiss for
Lack of Personal Jurisdiction is DENIED.
IT IS SO ORDERED.
Date: August 3, 2012

s/Lawrence P. Zatkoff
LAWRENCE P. ZATKOFF
U.S. DISTRICT JUDGE

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