Ainsworth v. Cargotec USA Inc. et al

Filing 125

MEMORANDUM OPINION AND ORDER granting 100 Motion to Amend/Correct; granting 100 Motion for Leave to Certify for Interlocutory Appeal. The Court certifies that its 9/23/11 Memorandum Opinion and Order 86 involves a controlling question of law a s to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of this litigation. Further, these proceedings are stayed until the Fifth Circuit has either rejected the application or completed the appeal process. Signed by District Judge Keith Starrett on 12/15/11 (scp)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
HATTIESBURG DIVISION

MARY AINSWORTH, Widow and Personal
Representative of JAMES T. AINSWORTH, Deceased,
Individually, and on Behalf of ALL Wrongful Death
Beneficiaries, including Minor Children S. A., D. A.,
and M. A., for whom Mary P. Ainsworth is Mother
and Next Friend
v.

PLAINTIFFS

CIVIL ACTION NO. 2:10-CV-236-KS-MTP

CARGOTEC USA, INC. f/k/a HIAB, INC.
f/k/a CARGOTEC, INC.; and MOFFETT
ENGINEERING, LTD.

DEFENDANTS

MEMORANDUM OPINION AND ORDER
For the reasons stated below, the Court grants Moffett Engineering, Ltd.’s Motion to Certify
for Interlocutory Appeal [100].

I. BACKGROUND
This is a wrongful death and product liability case. Plaintiffs are the survivors of a
Mississippi resident who was struck and killed by a forklift designed and manufactured by Defendant
Moffett Engineering, Ltd. (“Moffett”). Moffett is an Irish corporation, and its principal place of
business is in Dundalk, County Louth, Ireland. Moffett has never maintained a physical presence in
Mississippi. It does not own, possess, or use any property in Mississippi. It has never had any
officers, employees, or agents stationed in Mississippi, and it has never sent any of its employees to
Mississippi for business purposes. It has never sought authority from the Mississippi Secretary of

State to conduct business in Mississippi. It has never directly shipped or sold any of its products to
customers here, and it has never directly solicited business from any company located in Mississippi.
Moffett sells all of its products to Defendant Cargotec USA, Inc. (“Cargotec”), who then
markets and sells Moffett’s products throughout the United States. Cargotec has the exclusive right
to market and sell Moffett’s products pursuant to a contract which specifically defines the United
States of America as Cargotec’s sales territory. Cargotec sells or markets Moffett products in all fifty
states. Moffett does not attempt to limit the territory in which Cargotec sells its products. Further,
Moffett does not communicate with the end-purchasers of its products in any fashion, and it is not
aware of their identities or locations. Cargotec takes orders from customers and relays the
specifications to Moffett. According to the evidence currently before the Court, Moffett remains
wholly unaware of who the purchaser is or where they are located throughout the process.
Cargotec directs its marketing efforts at two particular industries: the drywall industry and
the poultry industry. The record is unclear as to the extent to which Moffett was aware that Cargotec
focused its marketing efforts on these two industries. However, Moffett personnel travel to the
United States two or three times a year to discuss sales forecasts with Cargotec personnel. During
these meetings, they discuss whether there are particular issues with a product line that might affect
sales and whether certain improvements to Moffett’s designs might increase sales. Additionally,
Moffett personnel periodically travel to the United States for trade shows.
Since 2000, Moffett has shipped over 254,000,000.00 worth of forklifts into the United
States. From 2000 through September, 2010, Moffett sold 13,073 forklifts to Cargotec. Cargotec sold

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203 of those forklifts to customers in Mississippi.1 Therefore, customers in Mississippi have
accounted for at least 1.55 % of Moffett’s United States sales over the last decade, or roughly
3,950,000.00.
The Court previously denied Moffett’s Motion to Dismiss for lack of personal jurisdiction.
Ainsworth v. Cargotec USA, Inc., No. 2:10-CV-236-KS-MTP, 2011 U.S. Dist. LEXIS 49665, at *21
(S.D. Miss. May 9, 2011). The Court held that Moffett was subject to personal jurisdiction in this
Court because 1) it had entered into a sales and distribution agreement which specifically defined
Cargotec’s sales territory as the entire United States, 2) it was aware that Cargotec marketed its
product’s throughout the entire United States, and 3) it made no attempt to limit the scope of
Cargotec’s marketing efforts. Id. at *8-*16. Therefore, pursuant to the Fifth Circuit’s decision in
Bean Dredging Corporation v. Dredge Technology Corporation, 744 F. 2d 1081 (5th Cir. 1984),
the Court found that Plaintiffs had satisfied the minimum contacts prong of the due process analysis
because they presented evidence that Moffett placed its product in the stream of commerce destined
for sale throughout the United States, and it was foreseeable that they would be subject to suit in
Mississippi. Ainsworth, 2011 U.S. Dist. LEXIS 49665 at *16.
After the Court’s decision, the Supreme Court of the United States issued its opinion in J.
McIntyre Machinery, Ltd. v. Robert Nicastro, 131 S. Ct. 2780, 180 L. Ed. 2d 765 (2011). Moffett
subsequently filed a Motion for Reconsideration [59, 65], arguing that the McIntyre decision governs
this dispute, and that the Court should reconsider its earlier decision. On September 23, 2011, the
Court entered a Memorandum Opinion and Order [86] denying Moffett’s Motion for

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Of course, this number excludes any forklifts sold to third-party retailers who then sold
them in Mississippi.
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Reconsideration. See Ainsworth v. Cargotec USA, Inc., No. 2:10-CV-236-KS-MTP, 2011 U.S. Dist.
LEXIS 109255 (S.D. Miss. Sept. 23, 2011). The Court observed that the McIntyre decision was
fragmented; no opinion enjoyed the assent of five Justices. Id. at *16. Therefore, in applying the
case, the Court must consider Justice Breyer’s concurring opinion as the holding of the Court, as he
concurred in the judgment on the narrowest grounds. Id.
Justice Breyer expressly declined to address the Supreme Court’s split in Asahi Metal Indus.
Co. v. Superior Court of California, 480 U.S. 102, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987), as to
whether mere foreseeability is a constitutionally sufficient basis for the exercise of personal
jurisdiction under the stream-of-commerce theory. McIntyre, 131 S. Ct. at 2792. Instead, he
considered Mcintyre’s facts according to each side of the Asahi split and concluded that the record
contained insufficient evidence to justify the exercise of personal jurisdiction under either analysis.
McIntyre, 131 S. Ct. at 2792.
In the present matter, this Court concluded that Justice Breyer’s McIntyre opinion was only
applicable to cases presenting the same factual scenario as that case. Ainsworth, 2011 U.S. Dist.
LEXIS 109255 at *19. In McIntyre, the record only showed that a single machine manufactured by
the foreign defendant had been sold and shipped to the forum state. McIntyre, 131 S. Ct. at 2792. In
the present case, the record contains evidence that 203 Moffett machines have been sold to customers
in Mississippi over the past decade, accounting for 1.55 % of Moffett’s United States sales during
that time period. Ainsworth, 2011 U.S. Dist. LEXIS 109255 at *19-*20. The Court held that
difference was enough to remove the present case from the scope of McIntyre’s applicability. Id. at
*20. Accordingly, the Court declined to depart from the Fifth Circuit precedents holding that mere
foreseeability is a constitutionally sufficient basis for the exercise of personal jurisdiction under the
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stream-of-commerce theory and denied Moffett’s Motion for Reconsideration. Id. at *19-*20 (citing
Choice Healthcare, Inc. v. Kaiser Found. Health Plan, 615 F.3d 364, 373 (5th Cir. 2010); Luv n’
Care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 471 n. 9 (5th Cir. 2006); Ruston Gas Turbines, Inc. v.
Donaldson Co., 9 F.3d 415, 420 (5th Cir. 1993)).

II. DISCUSSION
On October 24, 2011, Moffett filed a Motion to Amend and Certify [100]. First, Moffett
requests that the Court amend its September 23, 2011, order to grant the Motion for Reconsideration
and dismiss Plaintiff’s claims as to it for lack of personal jurisdiction. Second, Moffett requests that
the Court certify its September 23, 2011, order for interlocutory appeal.
A.

Motion to Amend
The Court denies Moffett’s Motion to Amend the Court’s September 23, 2011, Memorandum

Opinion and Order [86]. “The federal rules do not provide for a motion requesting a reconsideration
of a denial of a reconsideration. Were such motions permitted, it is conceivable that a dissatisfied
litigant could continually seek reconsideration and prevent finality to the judgment.” Benson v. St.
Joseph Reg’l Health Ctr., 575 F.3d 542, 547 (5th Cir. 2009).
B.

Motion to Certify for Interlocutory Appeal
Moffett also requests that the Court certify its September 23, 2011, Memorandum Opinion

and Order for interlocutory appeal. This Court may certify an interlocutory order for immediate
appeal if it is “of the opinion that such an order involves a controlling question of law as to which
there is substantial ground for difference of opinion and that an immediate appeal from the order may
materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). The Fifth Circuit
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strictly construes the requirements of Section 1292(b). Ala. Labor Council v. Alabama, 453 F.2d
922, 924 (5th Cir. 1972). Interlocutory appeals under Section 1292(b) are only granted in
“exceptional cases.” United States v. Garner, 749 F.2d 281, 286 (5th Cir. 1985). “They are permitted
only when there is a substantial difference of opinion about a controlling question of law and the
resolution of that question will materially advance, not retard, ultimate termination of the litigation.”
Clark-Dietz & Assocs.-Engrs, Inc. v. Basic Constr. Co., 702 F.2d 67, 69 (5th Cir. 1983).
The Court’s September 23, 2011, Memorandum Opinion and Order involved a controlling
question of law: whether the United States Supreme Court’s McIntyre decision alters the Fifth
Circuit’s adherence to the stream-of-commerce theory of personal jurisdiction outlined in Justice
Brennan’s Asahi opinion.2 The determination of this issue plainly controls the outcome of the case
with respect to Moffett. If the Court has jurisdiction over Moffett, it may consider Plaintiff’s claims
as to Moffett. If it doesn’t, Plaintiff’s claims as to Moffett must be dismissed. Accordingly, the
Court’s order involved a controlling question of law.
Additionally, the resolution of the question will materially advance the litigation. Another
court in this Circuit has rephrased this element: “A . . . key concern . . . is whether permitting an
interlocutory appeal will speed up litigation.” Ryan v. Flowserve Corp., 444 F. Supp. 2d 718, 723
(S.D. Tex. 2006) (punctuation omitted). “Stated another way, § 1292(b) is designed to minimize
burdens ‘by accelerating or . . . simplifying trial court proceedings.’” Id. (quoting 16 Charles Alan
Wright & Arthur R. Miller, Federal Practice and Procedure § 3930 (2d. ed. 1996)). As the Court
already noted, the resolution of the question of law addressed in the Court’s September 23, 2011,

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Asahi Metal Indus. Co., 480 U.S. at 116-17, 107 S. Ct. 1026 (Brennan, J., concurring in
part and in the judgment).
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Memorandum Opinion and Order determines whether Plaintiff’s claims as to Moffett may proceed.
Furthermore, the issue may control the outcome of Plaintiff’s entire case. The Mississippi Products
Liability Act contains a provision intended to “immunize innocent sellers who are not actively
negligent, but instead are mere conduits of a product.” MISS. CODE. ANN. § 11-1-63(h). This issue
has not been presented to the Court, and the Court has no preconceived idea as to how it would play
out. Nonetheless, it is possible that the question of law addressed in the Court’s previous orders
could effectively determine the outcome of this entire case.
Finally, the Court must determine whether the controlling question of law at issue in this
case is one for which there is a substantial ground for difference of opinion. Phrased differently, the
Court must consider whether it is a “question about which reasonable jurists can . . . debate.” See
Castellanos-Contreras v. Decatur Hotels, LLC, 622 F.3d 393, 399 (5th Cir. 2010). The Fifth Circuit
Court of Appeals has not determined what effect, if any, McIntyre has on the application of the
stream-of-commerce theory of personal jurisdiction. However, other district courts in this Circuit
have addressed the issue.
In one decision, the United States District Court for the Southern District of Texas explained
McIntyre’s various opinions, but ultimately declined to choose among the various analyses. Powell
v. Profile Design LLC, No. 4:10-cv-2644, 2011 U.S. Dist. LEXIS 121189, at *21 (S.D. Tex. Oct.
17, 2011) (observing that party failed to show that the foreign third-party defendant had “purposely
availed itself of the privilege of conducting activities in Texas, or delivered its goods into the stream
of commerce with the intention that they would be purchased by Texas users.”). The United States
District Court for the Eastern District of Texas reached the same substantive conclusion as this one
– that the “mere foreseeability” test continues to apply in this Circuit, and McIntyre’s applicability
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is limited by its facts. Brooks & Baker, L.L.C. v. Flambeau, Inc., No. 2:10-cv-146-TJW-CE, 2011
U.S. Dist. LEXIS 112568, at *9-*11 (E.D. Tex. Sept. 30, 2011). However, a different decision out
of the Eastern District of Texas employed the stricter analysis from Justice Kennedy’s plurality
opinion in McIntyre – a conclusion contrary to the one reached by this Court. Keranos, LLC v.
Analog Devices, Inc., No. 2:10-CV-207-TJW, 2011 U.S. Dist. LEXIS 102618, at *29-*30 (E.D. Tex.
Sept. 12, 2011).
There have been a few other district court decisions in this Circuit that have cited or
addressed McIntyre, but it is not necessary to discuss them. The cases cited above are at least
sufficient to show that there exists room for debate as to whether the courts of this Circuit may
continue to apply Justice Brennan’s “mere foreseeability” analysis. Obviously, the undersigned
believes that this Court’s previous analysis is correct, and that McIntyre has little to no precedential
value. Nonetheless, the Fifth Circuit Court of Appeals has not weighed in on the issue, and at least
one other district court in this Circuit reached a contrary conclusion. In this Court’s opinion, that is
sufficient to show that there exists substantial ground for a difference of opinion – particularly in
light of the dearth of cases addressing the issue in this Circuit.

III. CONCLUSION
For all the reasons stated above, the Court grants Defendant Moffett Engineering Ltd.’s
Motion to Certify for Interlocutory Appeal [100]. Pursuant to the discretionary authority granted by
28 U.S.C. § 1292(b), the Court certifies that its September 23, 2011 Memorandum Opinion and
Order [86] involves a controlling question of law as to which there is substantial ground for
difference of opinion and that an immediate appeal from the order may materially advance the
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ultimate termination of the litigation.
Moffett further requested that this matter be stayed pending the resolution of its appeal. In
the event that Moffett applies for an interlocutory appeal, the Court shall enter an order staying these
proceedings until the Fifth Circuit has either rejected the application or completed the appeal
process.
SO ORDERED AND ADJUDGED this 15th day of December, 2011.
s/ Keith Starrett
UNITED STATES DISTRICT JUDGE

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