KUHAR et al v. PETZL COMPANY et al
Filing
234
OPINION. Signed by Judge Jerome B. Simandle on 8/6/2018. (rtm, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
NICHOLAS KUHAR, et al.,
HONORABLE JEROME B. SIMANDLE
Plaintiffs,
Civil Action
No. 16-395 (JBS/JS)
v.
PETZL COMPANY, d/b/a PETZEL;
PETZL AMERICA, INC. d/b/a
PETZL; BAILEY’S CORPORATION;
UNLIMITED XYZ CORPORATIONS;
UNLIMITED JOHN DOES; UINTAH
FASTENER & SUPPLY; THOMPSON
MANUFACTURING; PORTEOUS
FASTENER COMPANY; BRIGHTONBEST; QUALITY PLATING;
Defendants.
APPEARANCES:
Brett Schneider, Esq.
Kevin P. McCann, Esq.
Matthew Weng, Esq.
Shanna McCann, Esq.
CHANCE & MCCANN LLC
201 West Commerce St.
Bridgeton, NJ 08302
Attorneys for Plaintiffs
James D. Burger, Esq.
Robert Devine, Esq.
WHITE & WILLIAMS, LLP
Libertyview
457 Haddonfield Road, Suite 400
Cherry Hill, NJ 08002
Attorneys for Petzl Defendants
C. Scott Toomey, Esq.
Daniel J. Kain, Esq.
LITTLETON PARK JOYCE UGHETTA & KELLY LLP
201 King of Prussia Road, Suite 220
OPINION
Radnor, PA 19087
Attorneys for Defendant Thompson Manufacturing
SIMANDLE, District Judge:
INTRODUCTION
This is a personal injury case with allegations of a
defective climbing harness manufactured or sold by Defendants.
This matter is before the Court on the motion of Defendant
Thompson Manufacturing (“Defendant,” “Thompson” or “TMI”) to
dismiss Plaintiffs Nicholas Kuhar (“Kuhar” or “Plaintiff”) and
Julie Kuhar’s (collectively, “Plaintiffs”) Second Amended
Complaint [Docket Item 103] for lack of personal jurisdiction
over TMI. [Docket Item 128.] This motion renews TMI’s previous
motion [Docket Item 56], which the Court previously denied
without prejudice before allowing jurisdictional discovery
[Docket Items 84 & 85], which has now been completed. Defendant
Petzl America (“Petzl”) submitted a response brief in opposition
[Docket Item 142], in which Plaintiffs joined [Docket Item 144].
TMI submitted a reply [Docket Item 145], as well as a letter
alerting the Court to supplementary authority [Docket Item 168],
to which Petzl responded [Docket Item 177]. For the reasons set
forth below the Court will GRANTxxx the motion to dismiss.
BACKGROUND
As the Court has previously stated, “[o]n December 24,
2013, Plaintiff Nicholas Kuhar was cleaning gutters at a house
in Alloway when the ‘Micrograb’ wire core flip-line safety
harness with which he had secured himself failed, causing him to
fall thirty-seven feet onto the concrete below[,]” whereupon he
sustained several serious injuries. [Docket Item 84 at 2.]
The Second Amended Complaint alleges that Plaintiff was an
end-user who was injured by a defective “safety harness”
containing a “carabiner” (also referred to as a “rope-grab” or
the “MicroGrab” in the briefing [Docket Item 128-3 at 6 n.3])
that was “manufactured, designed, produced, advertised,
promoted, sold, distributed and otherwise introduced into the
stream of commerce by the specifically named defendants.”
[Docket Item 103 at 1 ¶ 1.] Plaintiffs allege that the safety
harness “failed to prevent personal injury to its user through a
defective carabiner and bolt; [f]ailed to adequately warn its
user of the dangers inherent with the safety harness; [f]ailed
to adequately warn its user of the risks involved with using the
safety harness; and [o]therwise completely failed to perform in
the manner as advertised.” Id. at 1-4 ¶¶ 2-9 (allegations
referred to collectively as “the Defects”). With regard to TMI
specifically, Plaintiffs allege that TMI “advertised, promoted,
sold, distributed, and otherwise introduced into the stream of
commerce the safety harness. . . . including all of its
components[.]” Id. at 2 ¶ 5.
The Second Amended Complaint also states that TMI is “a
corporation organized and existing under the laws of the State
of Utah, with its principal place of business located in
Clearfield, Utah.” Id. at 4 ¶ 8.
As the Court previously stated in its Opinion denying
without prejudice TMI’s earlier motion to dismiss pursuant to
Fed. R. Civ. P. 12(b)(2):
[TMI] produced and sold a component part to [Petzl]
that was allegedly used [in] the Petzl Micrograb
device that is the subject of the present lawsuit. TMI
was incorporated in and maintains its principal place
of business in the State of Utah, where its corporate
offices and manufacturing facilities are also located.
TMI’s President, Travis Lane, affirms that TMI does
not own, rent, lease, occupy or maintain any property
in the State of New Jersey; does not employ anyone or
conduct any operations in the State of New Jersey;
does not sell, advertise, market or deliver its
products to, or derive revenue from sales of its
products from, the State of New Jersey; has not paid
income, property or any other tax to the State of New
Jersey, nor is it registered or licensed to conduct
business in the state, nor has it authorized anyone to
act as its agent in the state; and does not and has
never obtained banking, accounting or legal services
from companies located in the State of New Jersey.
[Docket Item 84 at 6-7 (internal citations omitted).] The Court
also noted Plaintiffs’ and Petzl’s contentions (and supportive
documentation) that
a related company, Rock Exotica, sells similar or
identical products in the State of New Jersey, and
that therefore TMI must be aware that its products are
incorporated into devices that are sold in New
Jersey[;] . . . that the climbing devices shown on
Rock Exotica’s website . . . are the same as those
purchased by Petzl from TMI[;] . . . that Rock
Exotica’s website directs consumers to two authorized
dealerships in New Jersey where they can purchase Rock
Exotica products[;] . . . that TMI and Rock Exotica
share a founder and owner, Rock Thompson[;] . . . that
the two companies’ manufacturing facilities appear to
be located at the same Freeport Center in Clearfield,
Utah[;] . . . that the two companies apparently share
a phone number and website[;] . . . and that a number
of employees represent online that they are affiliated
with both companies[.]
[Docket Item 84 at 7-8 (internal citations omitted).]
The parties, having completed jurisdictional discovery
[Docket Item 128-3 at 11 n.5], allege the following additional
relevant facts 1:
The item Plaintiff bought in New Jersey was purchased from
Defendant Bailey’s in January of 2006, and was a “flipline kit”
consisting of “several components: 1) a wire core
flipline/lanyard (i.e., a rope with a core made of wire); 2) an
oval screw link; and 3) a Petzl rope grab.” [Docket Item 128-3
at 8, 6.] The rope grab contains a spring-loaded cam, which
(when not under pressure from the tension of an arborist’s body
weight) “rotates on an ‘axle’ consisting of a nut and shoulder
bolt. Plaintiffs here claim the shoulder bolt fractured,
1
The factual allegations stated herein are supported, if not
otherwise noted, by appropriate citations to the record
developed during jurisdictional discovery and attached as
exhibits to the motions and papers presently before the Court.
Those citations are largely omitted from this Opinion.
apparently causing the flipline to lose tension and allowing Mr.
Kuhar to fall.” Id. at 7-8. Bailey’s put together the kit by
compiling the separate components and marketing the combination
“as a Bailey’s flipline kit.” Id. at 8. Bailey’s purchased the
rope grab from Defendant Petzl America. Id. Petzl America
“obtained [the rope grab] from TMI, who assembled it at Petzl
America’s request. . . . TMI manufactured the body and the cam
of the Micrograb. TMI did not manufacture the shoulder screw or
bolt that allegedly fractured or the nut that secured it.
Rather, TMI purchased the nut and bolt as finished products from
co-defendant Uintah Fastener & Supply[.]” Id. (internal
citations omitted).
With regard to TMI itself, TMI states:
Since its inception in 1991, TMI has maintained
and still maintains its principal place of business in
Utah. TMI’s corporate offices and manufacturing
facilities are located in Utah. TMI never had offices,
manufacturing facilities or places of business within
New Jersey. It never owned, leased, rented, occupied
or maintained any real property within New Jersey. It
has never maintained a telephone listing or post
office box within New Jersey. In short, TMI has never
had any physical connection to the State of New
Jersey.
TMI has never employed anyone within New Jersey.
TMI has never sold products to customers in New
Jersey. It has never had distributors within the state
and has never delivered products to or within New
Jersey. TMI has never derived revenue from sales to
customers located in New Jersey. TMI has never
advertised or marketed in, nor has it directed any
advertising or marketing towards, New Jersey
residents. TMI has never entered into any contracts in
New Jersey. TMI has never exercised any control over
any person, firm or corporation located within the
state.
TMI may have purchased aluminum on two occasions
in 2013-4 from a metals broker who had an address in
New Jersey but may have been physically located in
Europe. Other than those two transactions and the
possibility that products purchased from websites like
Amazon or McMaster have unknown origins that
conceivably could have included New Jersey, TMI has
never even sourced or purchased materials for its
business from companies located in New Jersey.
[Docket Item 128-3 at 12-14.] TMI also again alleges that it has
never had any financial or legal relationships with the State of
New Jersey or any person or entity residing in New Jersey. Id.
at 14.
In its Motion, TMI describes its “[c]orporate [h]istory and
[r]elationship [w]ith Rock Exotica, LLC” as follows:
TMI was incorporated in 1991 pursuant to the laws
of the State of Utah. A Petzl-related entity called
Spirit of St. Luis was TMI’s original majority
shareholder. TMI was formed to be a contract
manufacturer for Petzl France[] and its American
distributor. TMI remained an exclusive contract
manufacturer for Petzl France and its American
distributor until 2002-[0]3. In approximately 1998,
TMI began manufacturing rope grabs for Petzl. The
Micrograb was one of the rope grabs TMI manufactured
exclusively for Petzl.
In 2002-[0]3, Rock Thompson purchased the
outstanding shares of TMI and became the sole
shareholder. TMI remained a contract manufacturer for
Petzl but also began to act as a contract manufacturer
for other customers. TMI has never and does not sell
any products to end users. It does not own any
intellectual property.
Mr. Thompson remained the sole shareholder until
TMI’s stock was purchased by Rock Exotica, LLC when it
came into existence on December 24, 2012. Through that
transaction, TMI became a wholly owned subsidiary of
Rock Exotica, LLC. TMI remains a wholly owned
subsidiary of Rock Exotica, LLC today.
Id. at 14-15.
The nature of the relationship between parent corporation
Rock Exotica and subsidiary TMI is the subject of much dispute
between the parties. As noted below, at the time of Plaintiff’s
purchase of this equipment in January, 2006, TMI and its related
corporation, Rock Exotica Equipment, LLC, existed. Later, Rock
Exotica Equipment was merged into a new entity, Rock Exotica,
LLC, in 2012. For general jurisdiction, the activities of TMI
and Rock Exotica Equipment, LLC and Rock Exotica, LLC (and
whether TMI is the alter ego of either or both entities) will be
relevant. For specific jurisdiction, on the other hand, the
activities of TMI and Rock Exotica Equipment, LLC, pertaining to
the 2006 sale of the climbing harness to Mr. Kuhar in New Jersey
will be relevant, as Rock Exotica, LLC, did not exist in 2006.
As Rock Exotica Equipment’s successor, however, Rock Exotica may
be liable to the same extent as Rock Exotica Equipment would
have been.
TMI depicts two companies that share certain commonalities
(as discussed supra and in the Court’s earlier Opinion) but are,
in the main, separate: Rock Exotica (unlike TMI) has no
employees, id. at 15; unlike TMI, Rock Exotica “does not
manufacture products” but rather “is a marketing and
distribution company for products used in the fall protection
industry[,]” id., and “markets its products to smaller nonexclusive distributors” of such products, with 1-3 of its
distributors (since 2012) being located in New Jersey, although
it “does not have dealership or financing agreements with any
distributor of its products[,]” including the New Jersey
distributors. Id. at 15-16. TMI asserts that Rock Exotica, LLC
and TMI “run their business [sic] separately and keep completely
separate books. . . . TMI has customers other than Rock Exotica,
LLC and Rock Exotica, LLC sources products from vendors other
than TMI” 2; the two companies use their own separate enterprise
computer systems. Id. at 16. Sales and purchase transactions
between the two companies are logged and put into effect without
2
Of the two citations to the evidentiary record in support of
the contention that Rock Exotica, LLC sources products from
vendors other than TMI (namely, Exhibit M, Docket Item 128-17,
at 10-11; and Exhibit O, Docket Item 128-19, apparently in its
entirety), the Court notes that one does not discuss Rock
Exotica, LLC’s product sourcing, and the other contains only a
conclusory statement to that effect in TMI’s responses to
interrogatories. The Court notes that TMI, in its Reply, again
asserts that it sells its products to Rock Exotica, LLC; Petzl
America; and MSA; and that Rock Exotica “likewise sources its
products from other entities.” [Docket Item 145 at 11.] Again,
however, the Court has carefully scrutinized the citations to
the record that TMI provided in support of the latter part of
that assertion, i.e., that Rock Exotica offers for sale products
not manufactured by TMI and does not find evidence in the record
to support that beyond TMI’s response to initial interrogatories
stating, “Rock Exotica LLC is a marketing and distribution
company that, among other things, purchases products and
services in arms-length transactions from various sources, one
of which is TMI.” [Docket Item 128-19 at 4.]
special consideration that the seller/buyer is one with which
there is a corporate relationship rather than an unrelated
seller/buyer. Id.
TMI notes that, while it is TMI employees who provide
“various administrative services to Rock Exotica, LLC” (as,
again, Rock Exotica, LLC has no employees of its own), this
occurs “pursuant to an administrative services agreement” that
TMI characterizes as “unwritten but arms-length[,]” covering 12
TMI employees at present, who accordingly devote “a portion of
[their] work time” to “serve [the] marketing and distribution
business” needs of Rock Exotica, LLC, (e.g., accounting,
creating sales orders and invoices, and shipping activities).
Id. at 17. In exchange for these services, Rock Exotica, LLC
“makes monthly payments to TMI[,]” the amount of which “is
adjusted on an annual basis and is calculated based on the
number and nature of the individuals whose services are needed,
their roles and responsibilities, and the amount of their time
needed by TMI [sic] 3.” Id. at 17-18.
Petzl [Docket Item 142 at 8-18] and Plaintiffs [Docket Item
144] depict the relationship between Rock Exotica, LLC and TMI
3
See Commonwealth v. Johnson, 700 N.E.2d 270, 272 n.5 (Mass.
App. Ct. 1998)(“A ‘Freudian slip’ has been defined as a
‘[m]isstatement theorized to reveal unconscious thought or a
conflict or desire of the speaker.’ Redden and Beyer, Modern
Dictionary for the Legal Profession (2d ed. 1996).”).
differently. They point to the following facts in support of
finding that the two companies are alter egos:
•
•
•
•
•
4
“The president of TMI, Travis Lane, who is also an owner of
Rock Exotica, testified that the products TMI manufactures
for Rock Exotica are marketed in New Jersey. . . . [and]
that Rock Exotica has [two] authorized dealers who sell the
TMI[-]manufactured products in New Jersey” as well as the
Rock Exotica website, which “sells climbing products
nationwide, including into New Jersey,” in contrast to TMI,
which has no website [Docket Item 142 at 11, 13];
“Rock Exotica LLC is owned by Rock Thompson (20%) and JPL
[I]ndustries (80%). Rock Exotica owns 100% of TMI” such
that the two corporations therefore “have common
ownership[,]” and “the business decisions for both
companies are made by the same three people[:] . . . Travis
Lane, Brandon Lane and Rock Thompson.” id. at 11-12;
“Rock Exotica Equipment, LLC was merged into Rock Exotica,
LLC in 2012, however both entities traded/trade as ‘Rock
Exotica,’” and one or the other entity, using that as its
trade name, “has been selling products for 28 years, which
includes the early 2006 time period when the subject
Micrograb was sold” and “at all times relevant to this
case[,]” id. 4;
“Rock Exotica has no employees. All work of Rock Exotica is
performed by TMI employees” who “are issued a paycheck by
TMI” for this work; moreover, “TMI employees even determine
what type [of] work should be done for Rock Exotica”
including “having a TMI employee determine whether Rock
Exotica needs to have TMI manufacture more products to sell
under the Rock Exotica name[,]”; Petzl argues that “Rock
Exotica exists only through the actions of TMI employees
who are paid via TMI paycheck for the work. . . . In this
regard TMI exerts so much control over Rock Exotica that
Rock Exotica does not meaningfully exist as a separate
entity . . . [because it] acts . . . exclusively through
TMI employees,” id. at 12;
Travis “Lane, who is president of TMI and denies any
employment relationship with Rock Exotica, refers to Rock
Exotica as ‘us’ when describing [Rock Exotica’s] sales
Petzl argues that “TMI’s argument that Rock Exotica did not
exist until 2012 is incorrect. Rather Rock Exotica LLC, formed
in 2012, merged with the existing Rock Exotica brand, which has
existed continuously for 28 years.” Id. at 12.
•
•
process [to a New Jersey customer or authorized dealer,]”
id. at 13, citing Lane Dep., Docket Item 128-17, at 35
(“They call us up. And they say we would like to buy your
product” (emphasis added)); refers to the Rock Exotica
website as “our website”; and has an email address ending
in “@rockexotica.com” [Docket Item 142 at 13];
TMI sells its products “to only three customers: Petzl
America, MSA, and Rock Exotica” with less than 1% going to
MSA, 5% going to Petzl America, and the remainder going to
(or “through,” id.) Rock Exotica, “showing that Rock
Exotica is a mere conduit for TMI to sell the products it
manufacture[s,]” id.;
When asked, if Rock Exotica, LLC has no employees but still
places orders for items with TMI for TMI to manufacture,
who exactly it is that “the orders from [Rock Exotica] come
from,” Lane answered as follows:
So, the orders come from the customers of
Rock Exotica. So, we carry an inventory. Say
we might have a hundred products at Rock
Exotica. And so, the customers of Rock
Exotica will come in, and they’ll place
orders for it. And, you know, you sell out
your inventory, then you know that
automatically triggers you that you need to
make more.
So, we have a shipping individual that works
for Thompson Manufacturing. And he’ll
recognize that. And he’ll say to the person
responsible for placing the orders, you
know, look. We are out. We need to get some
more. Can you order some more from Thompson
for us.
•
[Docket Item 128-17 at 14]. Mr. Lane added that a Rock
Exotica customer will, for instance, place an order on the
Rock Exotica website, but the employee who processes that
order will be a TMI employee working for Rock Exotica, LLC
under the administrative services agreement, id. at 15;
The two corporations “are insured under one insurance
policy” with TMI paying Rock Exotica’s premium for that
policy and TMI “also pay[ing] the lease for the space where
Rock Exotica exists, to the extent a company with no
employees can be said to occupy a space[,]” [Docket Item
142 at 13-14];
•
•
Although Travis Lane “testified that TMI would ‘ship’
products to Rock Exotica, . . . he later admitted that
there is no ‘shipping’, the product is just moved within
the warehouse [where TMI simply stores the products TMI
manufactures bearing the Rock Exotica trade name] (by a TMI
employee) and shipped to the purchaser (also by a TMI
employee)[,]” id. at 14;
With regard to the alleged “unwritten but arms-length
administrative services agreement,” for which Rock Exotica
apparently pays TMI $90,000 a month, “TMI does not even
bill Rock Exotica for the alleged ‘administrative
services’[,]” perhaps because “TMI and Rock Exotica do not
track the work TMI employees perform on behalf of Rock
Exotica. Rather, a TMI employee with access to Rock Exotica
funds transfers funds from Rock Exotica to TMI[,]” id., and
that Travis Lane described the “alleged ‘arm’s length’
agreement as follows:
Q: Okay. So, going back to the administrative
services agreement, can you tell me what the
terms of that agreement are?
A: The terms of the agreement are that Rock
Exotica will pay for any services performed by a
Thompson Manufacturing employee.
Q: Are there any other terms or conditions that
you are aware of?
A: No.
(citing Lane Dep. At 17:3-11), id.) 5;
5
Petzl further argues that Lane’s testimony about the amount of
time TMI employees devote to performing “administrative
services” for Rock Exotica is not credible. Id. at 15. In his
deposition, Lane testified that, pursuant to the agreement,
twelve TMI employees spend between 10 and 60% of their workweeks doing work for Rock Exotica, with only “three actually
devoting up to 60% of their time.” Id. Petzl submits that, even
if all twelve worked 60% of their time for Rock Exotica, “this
arrangement would mean that Rock Exotica is paying
administrative workers at a rate of $150,000 per year, each
[given a monthly rate of $90,000],” and submits that, given that
most of the twelve TMI employees do not devote 60% of their
weeks to Rock Exotica, the annual rate that Rock Exotica pays
TMI per administrative worker is even higher. Id. at 15, 15
nn.13-14. Petzl submits that Lane’s testimony that Rock Exotica
is “a small company” that cannot afford to hire its own
employees is belied by its “outlay of over a million dollars a
•
•
•
“[T]here is no separation or distinction for TMI workers
doing work for Rock Exotica. The TMI employees do not
account for time spent doing Rock Exotica work. Mr. Lane
even admitted that Rock Exotica pays the same amount to TMI
each month regardless of how much or little work was done
by TMI employees for Rock Exotica in that month[,]” and
that TMI employees do work for Rock Exotica in “the same
location[,]” at the direction of their TMI-employed
managers, id. at 16;
“Mr. Lane’s testimony indicates he views these companies as
one and the same[,]” given instances in his testimony
described above, and his repeated use of the word “we” when
discussing the business operations of Rock Exotica 6
(although he denied employment with Rock Exotica and was
produced for his deposition “pursuant to a Fed. R. Civ. P.
30(b)(6) deposition notice” to TMI), and explicitly
described “pooling resources,” id. at 17-18.
As far as the specific MicroGrab at issue in this case, TMI
asserts that it assembled it and sold it in Utah “to codefendant Petzl America” and delivered it to Petzl America
in Utah in November of 2005, before it passed from Petzl
America to Bailey’s, where it was subsequently incorporated
into the flipline kit Plaintiff bought. [Docket Item 128-3
at 18.] TMI states:
year, purportedly for warehouse/administrative work.” Id. at 1516.
TMI disputes that Petzl’s calculations about the rate of
pay it collects for the administrative services agreement with
Rock Exotica, LLC (and its urged conclusion that the high rate
of pay should militate in favor of a finding that no such
agreement actually exists) constitute “evidence” that would
support a finding that the corporations are alter egos:
“Examining counsel’s calculation of the value of the services
rendered or investigating whether Rock Exotica LLC is getting
fair value might be an interesting exercise. But the exercise
merely underscores that Rock Exotica LLC does pay for the
services it obtains. In other words, the evidence proves the
companies do observe corporate formalities and distinctions.”
[Docket Item 145 at 10.]
6 See, e.g. Lane Dep., Docket Item 128-17 at 12 (“Q: How does an
employee know when they need to do services for Rock Exotica,
LLC, an employee of Thompson Manufacturing know? A: So, we keep
two separate books. And we have two separate ERP systems . . .
.”).
After delivery, TMI would have no contact with or
control over any relevant part or product. TMI
had no control over to whom or where Petzl
America may have sold or shipped products it
owned. TMI knew that Petzl America was in the
business of selling products throughout the
United States, but there is no evidence TMI had
any more specific knowledge of Petzl’s customer
base or their location.
Id. (internal citations omitted).
The parties, as shown above, have devoted much attention
and effort to the relationships between TMI and Rock Exotica,
LLC, its parent since 2012. This will indeed be relevant to
assessing whether general jurisdiction may be asserted as to TMI
when the complaint herein was filed in 2016. Almost nothing has
been discovered as to the Rock Exotica Equipment entity that
existed in 2006, when Plaintiff purchased the equipment by mail
order in New Jersey, which is the connection relevant to
specific jurisdiction arising from the 2006 purchase. It appears
that TMI manufactured and sold its Micrograb component to Petzl
in a Utah transaction in November, 2005, without going through
Rock Exotica Equipment. Defendant Petzl America is alleged to be
a wholly-owned subsidiary corporation of Petzl Company, a
limited liability corporation of the French Republic, with its
principal place of business in Crolles, France. Petzl America is
alleged to have its principal place of business in West Valley
City, Utah. (Second Amended Complaint, ¶¶ 3 & 4.) Petzl America
distributed the equipment to Defendant Bailey’s Corporation, a
California corporation with its principal place of business in
Woodland, California. (Id. ¶ 5.) TMI’s Micrograb was
incorporated by Bailey’s into the flipline kit, which Bailey’s
sold to Mr. Kuhar by mail order shipped to Bridgeton, New
Jersey, in 2006. It does not appear from these facts that either
Rock Exotica Equipment or TMI had any connection to New Jersey
in the 2006 transaction of the allegedly defective flipline kit,
as discussed below. [Bailey’s Invoice, Jan. 18, 2006, at Toomey
Decl, Ex. C (Docket Item 128-7).]
STANDARD OF REVIEW
To defeat a motion to dismiss for lack of personal
jurisdiction under Rule 12(b)(2), Fed. R. Civ. P., “the
plaintiff bears the burden of establishing with reasonable
particularity sufficient contacts between the defendant and the
forum state to support jurisdiction.” Provident Nat. Bank v.
Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 437 (3d Cir. 1987).
Ultimately, to meet its burden to demonstrate that the exercise
of jurisdiction over the parties would be proper, the plaintiff
must proffer evidence of jurisdiction through sworn affidavits
or other competent documents. See Metcalfe v. Renaissance
Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009); IMO Indus., Inc.
v. Kiekert AG, 155 F.3d 254, 257 (3d Cir. 1998); In re Nazi Era
Cases Against Ger. Defendants Litig., 320 F. Supp. 2d 204, 21415 (D.N.J. 2004).
Where no evidentiary hearing is held, a plaintiff need only
establish a prima facie case of personal jurisdiction and is
“entitled to have [his] allegations taken as true and all
factual disputes drawn in [his] favor.” O’Connor v. Sandy Lane
Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007)(quoting Miller
Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004)). See
also Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir.
2002)(“in reviewing a motion to dismiss under Rule 12(b)(2), we
‘must accept all of the plaintiff’s allegations as true and
construe disputed facts in favor of the plaintiff.’ Carteret
Sav. Bank, FA v. Shushan, 954 F.2d 141, 142 n.1 (3d Cir.
1992).”).
DISCUSSION
Federal Rule of Civil Procedure 4(e) allows a district
court to assert personal jurisdiction over a non-resident
defendant to the extent permitted by the law of the state where
the district court sits. See Fed.R.Civ.P. 4(e). New Jersey law
permits the exercise of jurisdiction to the extent allowed by
the Constitution, making the current inquiry whether the Court
can exercise jurisdiction without offending the Due Process
Clause of the Fifth Amendment. Miller Yacht Sales, Inc. v.
Smith, 384 F.3d 93, 97 (3d Cir. 2004).
The Due Process clause requires that Plaintiff establish
that the Corporate Defendants have “certain minimum contacts
with [New Jersey] such that the maintenance of the suit does not
offend traditional notions of fair play and substantial
justice.” Int’l Shoe v. Washington, 326 U.S. 310, 316 (1945);
Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002).
A plaintiff must establish either that “the cause of action
arose from the defendant’s forum-related activities (specific
jurisdiction) or that the defendant has ‘continuous and
systematic’ contacts with the forum state (general
jurisdiction).” Mellon Bank (EAST) v. DiVeronica Bros., 983 F.2d
551, 554 (3d Cir. 1993).
The Court reiterates its earlier discussion of personal
jurisdiction in the Opinion of June 9, 2017 [Docket Item 84]:
The personal jurisdiction inquiry traditionally
requires an examination of whether its exercise over a
defendant is permissible under both the state’s longarm statute and the Due Process Clause of the
Constitution. But if the state’s personal jurisdiction
statute permits the exercise of jurisdiction to the
fullest limits of due process, as is the case here in
New Jersey, the two jurisdictional inquiries in this
case collapse into one: whether the exercise of
jurisdiction comports with due process. Imo Indus.,
Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998);
DeJames v. Magnificence Carriers, Inc., 654 F.2d 280,
284 (3d Cir. 1981).
As has often been repeated, the Due Process
Clause of the Constitution permits the exercise of
personal jurisdiction when there are “minimum
contacts” between a non-resident defendant and the
forum state such that “maintenance of the suit does
not offend traditional notions of fair play and
substantial justice.” J. McIntyre Machinery, Ltd. V.
Nicastro, 131 S. Ct. 2780, 2787 (2011) (quoting Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). A
court may exercise either general jurisdiction or
specific jurisdiction over a defendant as long as it
is consistent with that principle. General
jurisdiction may be asserted over a foreign
corporation even when the cause of action has no
relation to those contacts if the defendant’s contacts
with the forum are so “continuous and systematic” as
to render them essentially “at home” in the forum
state. Daimler AG v. Bauman, 134 S. Ct. 746, 754
(2014); Goodyear Dunlop Tires Operations, S.A. v.
Brown, 131 S. Ct. 2846, 2851 (2011); Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408,
414 (1984). If an out-of-state defendant’s contacts
with the forum are insufficiently substantial to
establish general jurisdiction, a court may still
assert specific jurisdiction if the suit “aris[es] out
of or relate[s] to the defendant’s contacts with the
forum.” Helicopteros, 466 U.S. at 414, n.8. The
inquiry here becomes whether the defendant has
“purposefully directed” his activities at residents in
the forum state, Burger King Corp. v. Rudzewicz, 471
U.S. 462, 472 (1985), or whether there was “some act
by which the defendant purposefully avail[ed] itself
of the privilege of conducting activities within the
forum State, thus invoking the benefits and
protections of its laws.” Hanson v. Denckla, 357 U.S.
235, 253 (1958).
[Docket Item 84 at 4-6.] To assert specific jurisdiction a
plaintiff must establish that (1) the defendants “purposely
directed [their] activities at New Jersey; (2) the
litigation “arise[s] out of or relate[s] to” at least one
of the defendants’ activities in New Jersey; and (3) the
exercise of jurisdiction comports with traditional notions
of “fair play and substantial justice.” O’Connor, 496 F.3d
at 316 (citing Burger King, 471 U.S. at 472).
The Court continues to adhere to its previously-stated
position that Plaintiffs have not carried their burden to
establish that New Jersey would have general jurisdiction
over TMI directly. [Docket Item 84 at 7-8.] The Court
previously granted jurisdictional discovery with regard to
the question of whether New Jersey would have specific
jurisdiction over TMI. Id. at 8-11.
As the Court previously stated:
Even where a corporation does not come into direct
contact with the forum state, “minimum contacts” may
exist and specific jurisdiction may lie where the
corporation “delivers its products into the stream of
[commerce] with the expectation that they will be
purchased by consumers in the forum state.” World-Wide
Volkswagen, 444 U.S. at 298. In the absence of a clear
directive as to what level of engagement the
corporation must have with the forum state in order to
rise to the level of constitutionally adequate
“minimum contacts” under the stream of commerce
theory, the Third Circuit Court of Appeals instructs
courts to consider the standards enunciated in the
plurality opinions by Justices O’Connor and Brennan in
Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102
(1987). See Pennzoil Prods. Co. v. Colelli & Assocs.,
Inc., 149 F.3d 197, 205 (3d Cir. 1998). In practice,
this means that courts first look for “the placement
of a product into the stream of commerce . . .
accompanied by some additional conduct of the
defendant that may indicate an intent or purpose to
serve the market in the forum State,” such as
“designing the product for the market in the forum
State . . . [or] establishing channels for providing
regular service to customers in the forum State.”
Pennzoil, 149 F.3d at 206 (citing Asahi Metal, 480
U.S. at 112 (O’Connor, J.)). In the alternative,
courts then apply Justice Brennan’s standard, which
finds minimum contacts where the “defendant . . . has
placed goods in the stream of commerce [and] benefits
economically from the retail sale of the final product
in the forum State, and indirectly benefits from the
State’s laws that regulate and facilitate commercial
activity.” Pennzoil, 149 F.3d at 207 (citing Asahi
Metal, 480 U.S. at 117 (Brennan, J., concurring)).
[Docket Item 84 at 8-9.]
The parties have pointed the Court’s attention toward the
recent case of Shuker v. Smith and Nephew, PLC, 885 F.3d 760 (3d
Cir. 2018) [Docket Items 168 & 177]. In that case, the Third
Circuit discussed the “stream of commerce theory” of specific
personal jurisdiction, defining it as a theory finding specific
personal jurisdiction “over a non-resident defendant when that
defendant ‘has injected its goods into the forum state
indirectly via the so-called stream of commerce,’ rendering it
foreseeable that one of the defendant’s goods could cause injury
in the forum state.” Shuker, 885 F.3d at 780 (citing D’Jamoos ex
rel. Estate of Weingeroff v. Pilatus Aircraft Ltd., 566 F.3d 94,
104 (3d Cir. 2009)).
Looking at the recent and less-recent Supreme Court
precedents of J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873,
877-85 (2011)(plurality opinion) and Asahi Metal, 480 U.S. at
108-13 (plurality opinion), the Third Circuit stated:
A plurality of Supreme Court Justices has twice
rejected the stream-of-commerce theory . . . stating,
in a manner consistent with our own case law, that
plaintiffs must instead rely on ‘some act by which the
defendant purposefully avails itself of the privilege
of conducting activities within the forum State, thus
invoking the benefits and protections of its laws,’
Asahi, 480 U.S. at 109; see D’Jamoos, 566 F.3d at 10203. Indeed, the Supreme Court has recently held that
“[t]he bare fact that [a non-resident defendant]
contracted with a [resident] distributor is not enough
to establish personal jurisdiction in the State.”
Bristol-Myers Squibb Co. v. Superior Court, --- U.S. --, 137 S.Ct. 1773, 1783 (2017). We thus have no cause
to revisit our Court’s precedent on this issue, and we
decline to adopt the Shukers’ stream-of-commerce
theory of specific personal jurisdiction.
Shuker, 885 F.3d at 780. The Court went on to hold that the
allegations that the defendant undertook efforts “to exploit a
national market” that “necessarily included Pennsylvania” were
insufficient to establish “our Circuit’s requirement of
purposeful availment: ‘what is necessary is a deliberate
targeting of the forum,’ O’Connor, 496 F.3d at 317[.]” Shuker,
885 F.3d at 780.
However, the court in Shuker went on to order
jurisdictional discovery on an “alter ego” theory of personal
jurisdiction where the plaintiffs’ “allegations” “suffice[d] to
make a prima facie showing of personal jurisdiction” in that
they
paint[ed] a plausible picture of control by PLC over
Smith & Nephew: the two companies’ decisionmaking is
integrated, PLC has authority over Smith & Nephew’s
strategic business decisions, PLC pays for the
development of Smith & Nephew’s products, and
executives from both companies work together to make
decisions regarding Smith & Nephew’s hip systems, as
shown in a 2012 Smith & Nephew press release that
directed investor and media inquiries not to Smith &
Nephew employees, but to PLC executives. Given that no
party disputes that personal jurisdiction exists over
Smith & Nephew as PLC’s subsidiary in Pennsylvania,
the Shukers’ allegations, taken as true and in
isolation, would suffice to show that PLC controlled
Smith & Nephew, that Smith & Nephew was PLC’s agent,
and that personal jurisdiction must exist over both
Smith & Nephew and PLC in Pennsylvania.
Shuker, 885 F.3d at 781. Recognizing that many of these facts
were in dispute, the Third Circuit remanded for jurisdictional
discovery and stated that, “[i]f evidence adduced from such
discovery supports the conclusion that personal jurisdiction is
proper as to PLC, then the Shukers may seek leave under Federal
Rule of Civil Procedure 15(a)(2) to amend their Third Amended
Complaint to join PLC as a co-defendant.” Id. at 782 n.21.
Similarly, this Court previously ordered jurisdictional
discovery because Plaintiffs and Petzl adduced evidence
“connecting Defendant TMI with non-party Rock Exotica”: namely,
“that the parties share a founder, a phone number, and a
website, appear to be located at the same place, and may share
employees and common ownership[.]” [Docket Item 84 at 9-10.] The
Court cautioned that this was “not enough to establish personal
jurisdiction over TMI by a preponderance of the evidence, even
if there would be enough evidence of connections with the state
of New Jersey to establish personal jurisdiction over Rock
Exotica[,]” id. at 10, even where Petzl and Plaintiffs adduced
evidence showing that “Rock Exotica[] sells similar or identical
products in the State of New Jersey, and that therefore TMI must
be aware that its products are incorporated into devices that
are sold in New Jersey” where “the climbing devices shown on
Rock Exotica’s website . . . are the same as those purchased by
Petzl from TMI, and that Rock Exotica’s website directs
consumers to two authorized dealerships in New Jersey where they
can purchase Rock Exotica products,” id. at 7-8. As the Court
cautioned:
Even where a subsidiary corporation may have
sufficient contacts with the forum state to establish
personal jurisdiction, a plaintiff must show “more
than mere ownership” in order to impute those contacts
to the parent company. Seltzer v. I.C. Optics, Ltd.,
339 F. Supp. 2d 601, 609 (D.N.J. 2004); Pfundstein v.
Omnicom Group, Inc., 666 A.2d 1013, 1016 (N.J. App.
Div. 1995). “The activities of a parent company are
imputed to the subsidiary only if the subsidiary is
the parent’s agent or alter ego so that the
independence of the separate corporate entities was
disregarded.” Fisher v. Teva PFC SRL, 212 F. App’x 72,
76 (3d Cir. 2006)(citing Lucas v. Gulf & Western
Indus., Inc., 666 F.2d 800, 806 (3d Cir. 1981)).
[Docket Item 84 at 10.]
With this overview in mind, the Court turns to the parties’
specific arguments.
Petzl (in whose opposition [Docket Item 142] Plaintiffs
join [Docket Item 144]) advances three major streams of argument
in support of a conclusion that TMI has sufficient contacts with
New Jersey such that TMI’s motion to dismiss should be denied. 7
First, Petzl argues that TMI itself has sufficient minimum
contacts with New Jersey that would give rise to specific
personal jurisdiction. [Docket Item 142 at 19-21.] Second, Petzl
argues that TMI is subject to specific personal jurisdiction
under a stream-of-commerce theory. [Docket Item 142 at 21-29.]
Finally, Petzl argues that TMI is subject to jurisdiction in New
Jersey because Rock Exotica, its alter ego, is subject to
jurisdiction in New Jersey. [Docket Item 142 at 8-18.]
A. TMI’s direct contacts
Petzl argues that TMI’s contacts with New Jersey are enough
to confer specific personal jurisdiction in this action. The
Court disagrees.
Petzl cites the fact that TMI has sourced aluminum from a
New Jersey-based supplier on two occasions (both occurring years
after Plaintiff purchased the kit containing the rope grab), and
the fact that TMI may have sourced other parts or supplies from
7
Petzl also argues that TMI waived its personal jurisdiction
challenge by producing Rock Thompson for a deposition but then
instructing him not to answer questions relating to personal
jurisdiction. [Docket Item 142 at 29-31.] While TMI disputes
both this characterization and Petzl’s proposed consequences,
the Court ultimately concludes that imputing jurisdiction based
on this alleged failure would not be appropriate, especially
where the answers Thompson would or could have provided do not
appear, to this Court, to alter the crux of the Court’s analysis
regarding the relationship of Rock Exotica, LLC to the claims at
issue here. See Section IV.C., infra.
companies located in (or with ties to) New Jersey (including,
e.g., Amazon).
These contacts are unrelated to the claims, transactions,
and injuries at issue in this case, as is necessary for specific
jurisdiction to be established. See O’Connor, 496 F.3d at 318
(“Identifying some purposeful contact with the forum is but the
first step in the specific-jurisdiction analysis. The
plaintiffs’ claims must also ‘arise out of or relate to’ at
least one of those contacts.” (citations omitted)).
B. Stream-of-commerce theory
Petzl next argues that, based on the line of cases
beginning with World-Wide Volkswagen, specific personal
jurisdiction over TMI is appropriate because it placed the ropegrab into the stream of interstate commerce from Utah. [Docket
Item 142 at 21-28.]
As stated previously, controlling precedent indicates that
simply placing an item into the stream of commerce, even where
it is foreseeable that the item will end up in the forum state,
is not enough to establish the “purposeful availment” required
to establish the requisite minimum contacts for specific
jurisdiction. See Shuker, 885 F.3d at 780; O’Connor, 496 F.3d at
317 (citing Burger King, 471 U.S. at 472, and Hanson, 357 U.S.
at 253).
In Shuker, the Third Circuit rejected as insufficient to
establish the requisite “purposeful availment” or “deliberate
targeting of the forum” the allegation that “PLC sold its
products through Smith & Nephew in Pennsylvania as part of its
efforts to sell products in the United States generally--not in
Pennsylvania specifically.” Shuker, 885 F.3d at 780. That is
more than what is presently alleged in this case, specific to
Kuhar’s claims, which amounts to only the allegation that TMI
expected (or reasonably should have expected) that Petzl would
sell the rope grab TMI manufactured at Petzl’s request wherever
Petzl chose, a universe that could logically include New Jersey.
Accordingly, the Court finds that TMI did not itself have
the requisite minimum contacts with New Jersey to rise to the
level of purposeful availment of the benefits of doing business
in New Jersey; nor did TMI deliberately target New Jersey when
it manufactured and sold the rope grab to Petzl in 2005, which
is the transaction that ultimately led to the claims Kuhar
brings.
C. Alter ego of Rock Exotica
Finally, Petzl argues that jurisdiction is appropriate over
TMI because jurisdiction would be appropriate over Rock Exotica,
which is TMI’s alter ego. Petzl argues that “Rock Exotica is
subject to personal jurisdiction 8 in New Jersey because it
markets to consumers in New Jersey, has an interactive website
where New Jersey residents can purchase products from Utah,
interacts with retailers/wholesalers in New Jersey to whom it
ships products for retail sale, and has two authorized dealers
within New Jersey to sell its products at retail” [Docket Item
142 at 8], and that TMI and Rock Exotica are alter egos.
TMI advances several distinct arguments in opposition: the
first is that the “alter ego” doctrine only applies to exercise
jurisdiction over a parent corporation when jurisdiction already
exists over a subsidiary corporation, and does not apply in the
reverse situation to exercise jurisdiction over a subsidiary
where jurisdiction exists over the parent. [Docket Item 168 at
2, citing Shuker, 885 F.3d at 780.] Next, TMI argues that Rock
Exotica and TMI are not sufficiently related for the “alter ego”
doctrine to apply. [Docket Items 128-3 at 35-40; 145 at 9-11;
168 at 2.] Finally, TMI argues that even if TMI and Rock Exotica
are alter egos, there is no basis for New Jersey jurisdiction in
this action over Rock Exotica either, and accordingly, none can
be imputed to TMI. [Docket Items 128-3 at 40-41; 145 at 6-8; 168
at 2.] On this last point, TMI argues that the Court need not
8
Petzl does not specify whether it argues that Rock Exotica is
subject to general personal jurisdiction in New Jersey or
specific personal jurisdiction in New Jersey in this matter, as
TMI notes. [Docket Item 145 at 6.]
engage in a full analysis of whether Rock Exotica, LLC and TMI
are alter egos, because the Court would not have personal
jurisdiction over Rock Exotica, LLC. With regard to general
jurisdiction, TMI argues, “Rock Exotica, LLC is a Delaware
Corporation that came into existence in 2012 and that has always
maintained its principal place of business in Utah. Rock
Exotica, LLC is in no way ‘at home’ in New Jersey and,
therefore, is not subject to general jurisdiction there. See
Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014).” [Docket Item
145 at 6 n.6.] TMI similarly argues that specific jurisdiction
would not exist as against Rock Exotica, LLC, because Kuhar’s
claims do not arise out of or relate to Rock Exotica, LLC’s
contacts with New Jersey, and because it would be inappropriate
to treat Rock Exotica, LLC and its alleged “brand” predecessor,
Rock Exotica Equipment, as the same company. Id. at 9.
It is this last argument that the Court finds persuasive
and, ultimately, dispositive. The Court finds that, regardless
of whether TMI and Rock Exotica, LLC ought to be considered
alter egos, jurisdiction would need to exist over Rock Exotica,
LLC, in order for it to be imputed to TMI, and the Court cannot
fairly say that Plaintiffs have carried their burden of
demonstrating that Rock Exotica, LLC would be subject to
personal jurisdiction in New Jersey in this case. Accordingly,
the nature of the relationship between those two companies will
not serve to extend jurisdiction to TMI. Thus, it is not
decisive that the Court finds compelling several of the factors
advanced by Petzl in favor of finding that TMI and Rock Exotica,
LLC are alter egos, as Rock Exotica, LLC, appears to be no more
than the marketing, distribution, and sales arm of TMI’s
manufacturing business and the two companies have more in common
than not. 9
9
See Petzl Br., Docket Item 142 at 16, 18 (“While there may be
transfer of money from Rock Exotica to TMI, that transfer
[pursuant to the alleged unwritten administrative services
agreement] may accomplish nothing more than shifting funds from
a company that transacts nationwide business to a business that
claims it transacts business only within the state of Utah. . .
. [T]he overwhelming evidence [shows] that Rock Exotica is
simply a mere conduit for TMI to sell 94% of all items it
manufactures, which is accomplished entirely by TMI employees. .
. . [O]nly TMI employees create, receive and then process the
orders [between the two companies] . . . . Rock Exotica exists
for the exclusive purpose of selling TMI manufactured products.
Rock Exotica only sells products manufactured by TMI, and 94% of
products manufactured by TMI are sold by Rock Exotica. TMI
exerts so much control that the two companies do not exist
separately, and the independence of Rock Exotica is totally
disregarded.”).
Furthermore, the Court notes that TMI asserts, without
substantial evidentiary support, that Rock Exotica “sources its
products from other entities [than TMI].” [Docket Item 145 at
11.] See n.2, supra. Under the circumstances, where the rest of
the record suggests that Rock Exotica, LLC exists to sell the
products manufactured by TMI, perhaps because TMI no longer
serves as a “contract manufacturer” for Petzl, this evidence is
de minimis and would not support a finding that the two
companies are not alter egos, contrary to TMI’s argument that
the alleged existence of “separate and distinct chains of
distribution involving each company (but not both) “leave[s] no
room for doubt that the two companies operate independently”
regardless of “[w]hether each chain of distribution is
financially large or small.” [Docket Item 145 at 11.]
The Court will, therefore, for purposes of this Motion,
assume that Plaintiff can demonstrate that TMI and Rock Exotica
are alter egos.
D. General and Specific Jurisdiction over TMI and Rock
Exotica, LLC
As stated above, jurisdiction over a non-resident defendant
must be either general or specific. General jurisdiction over a
corporation lies where the corporation is “essentially at home”
in the forum state because its affiliations with that state are
“so ‘continuous and systematic[.]’” Daimler, 571 U.S. at 754
(citing Goodyear Dunlop Tires Ops., S.A. v. Brown, 564 U.S. 915,
919 (2011)). The undisputed evidence suggests that Rock Exotica,
LLC is “at home” in Utah and would be subject to general
personal jurisdiction there. Rock Exotica, LLC’s base of
operations is in Utah--one of its many commonalities with TMI-and the work that is done by it (or on its behalf by TMI
employees) is done in Utah. Cf. Daimler, 571 U.S. at 129-30
(discussing Perkins v. Benguet Consol. Mining Co., 342 U.S. 437,
448 (1952), which held that Ohio had general jurisdiction over
the defendant ‘without offending due process” “because Ohio was
the corporation’s principal, if temporary, place of business”
(internal citations omitted)). “For an individual, the paradigm
forum for the exercise of general jurisdiction is the
individual’s domicile; for a corporation, it is an equivalent
place, one in which the corporation is fairly regarded as at
home.” Goodyear, 564 U.S. at 924. Where a “foreign subsidiary[y
is] ‘in no sense at home in [the forum state],’” the Supreme
Court has held that that subsidiary “could not be required to
submit to the general jurisdiction of that State’s courts.”
Daimler, 571 U.S. at 757 (quoting Goodyear, 564 U.S. at 929).
Here, it appears effectively beyond question that neither TMI
nor Rock Exotica, LLC, is “at home” in New Jersey, and that
Plaintiffs have not demonstrated that personal jurisdiction over
either entity is appropriate in New Jersey.
Turning, then, to specific jurisdiction, an essential
element is that the claim at issue in the instant case must
arise from (or relate to) the “minimum contacts” the nonresident defendant has or had with the forum state. Here, Rock
Exotica, LLC likely (or at least arguably) has such minimum
contacts, as it maintains an official relationship with more
than one New Jersey “authorized dealer” and markets the products
it sells (and that TMI manufactures) to end-users in New Jersey
(as well as other states). However, this case does not arise
from those contacts, although those contacts are analogous and
similar to the contacts that did lead to the claims in this
case, involving (as they do) the sale to New Jersey residents of
fall-prevention gear manufactured by TMI through an
intermediary. And had such gear, manufactured by TMI and sold or
marketed by Rock Exotica, LLC, failed and injured a New Jersey
consumer, perhaps specific jurisdiction would exist over Rock
Exotica, LLC, and, by extension, TMI (on the basis of its “alter
ego” status), given that shipping the product to New Jersey for
use by a New Jersey resident would constitute sufficient
“minimum contacts” to assert specific jurisdiction. See Columbia
Metal Culvert Co. v. Kaiser Indus. Corp., 526 F.2d 724, 729 (3d
Cir. 1975) (holding that “[a] single shipment is sufficient to
subject a foreign individual or corporation to personal
jurisdiction.”); One World Botanicals, 987 F. Supp. at 324
(“defendant’s consummation of a business transaction [where it
shipped a product into New Jersey] bars it from now arguing that
it has not purposefully availed itself of the privilege of doing
business in New Jersey,”); see also Spelling Goldberg
Productions v. Bodek & Rhodes, 452 F. Supp. 452, 454 (E.D.Pa.
1978)(finding that in personam jurisdiction over non-resident
defendants was proper in a trademark infringement action where
defendants shipped allegedly infringing merchandise into
Pennsylvania.).
The critical difference here is that Rock Exotica, LLC did
not sell, vend, or otherwise interact with the product that Mr.
Kuhar bought. In fact, Rock Exotica, LLC undisputedly did not
exist at the time when Mr. Kuhar bought the kit that included
the TMI-manufactured rope grab in 2006.
Petzl contends that the Court should, effectively, compress
not merely two corporations (TMI and Rock Exotica, LLC), but
actually three--essentially combining, for jurisdictional
purposes, TMI (the Utah-only manufacturer), Rock Exotica, LLC
(the Utah seller with minimum contacts to New Jersey), and Rock
Exotica Equipment, a corporation in Utah that Petzl alleges is,
effectively, the precursor to Rock Exotica, LLC, and that may or
may not have shared the same or similar minimum contacts with
New Jersey.
However, even if the Court were to compress all three
corporate entities in this fashion, specific jurisdiction still
would not lie in this case. This is so because Kuhar’s rope grab
was not delivered into his hands in 2006 by or through the
actions of Rock Exotica, LLC, Rock Exotica Equipment, or TMI. It
is undisputed that the kit Kuhar purchased and subsequently used
in New Jersey, containing the TMI-manufactured rope grab, came
into his hands by way of co-defendants Bailey’s (of California)
and Petzl (of France and Utah), and not by way of any
transaction or contacts that TMI or any related entity had or
may have had with any person or entity in the state of New
Jersey. See D’Jamoos, 566 F.3d at 106 (“[T]he fact that other
Pilatus planes have followed a certain path to Pennsylvania and
other states cannot provide the necessary connection between
Pilatus and Pennsylvania to support specific jurisdiction in
this case, because the aircraft involved here reached
Pennsylvania by a series of fortuitous circumstances independent
of any distribution channel Pilatus employed. If we held
otherwise, we impermissibly would remove the ‘arising from or
related to’ requirement from the specific jurisdiction test and
unjustifiably would treat the stream-of-commerce theory as a
source of general jurisdiction.”)(emphasis in original).
Accordingly, the facts that give rise to the claims at
issue in this case cannot fairly be said, upon consideration of
the jurisdictional record, to arise out of any contacts that
TMI, Rock Exotica, LLC, Rock Exotica Equipment, or any other
sufficiently TMI-related entity had with the state of New
Jersey. See Grimes v. Vitalink Comms. Corp., 17 F.3d 1553, 1559
(3d Cir. 1994)(“Unlike establishing general jurisdiction where
the party must be shown to have ‘maintained continuous and
substantial forum affiliations,’ establishing specific
jurisdiction, at a minimum, requires only that a party be shown
to have committed at least one act in the relevant forum which
is substantially related to the claim being
adjudicated”)(internal citations omitted; emphasis added);
O’Connor, 496 F.3d at 318-23 (“The causal connection can be
somewhat looser than the tort concept of proximate causation . .
. but it must nonetheless be intimate enough to keep the quid
pro quo [of the non-resident defendant’s enjoyment of the
benefits of its contacts with the forum state] proportional and
personal jurisdiction reasonably foreseeable”); see also Gehling
v. St. George’s Sch. of Med., Ltd., 773 F.2d 539, 544
(intentional infliction of emotion distress claim based on
alleged misrepresentation of cause of death “arises out of”
contact with Pennsylvania, where defendant allegedly made the
misrepresentation). Nor can it fairly be said, under these
circumstances, that the claims are sufficiently “related to” the
contacts Rock Exotica, LLC; Rock Exotica Equipment; or TMI had
or have with the state of New Jersey. See D’Jamoos, 566 F.3d at
104 (plane-crash-related claims do not “arise out of or relate
to at least one of Pilatus’s purposeful contacts with the forum”
of “sending two employees to Pennsylvania to view displays at a
potential supplier, and . . . purchasing $1,030,139 in goods or
services from suppliers in Pennsylvania during the five-year
period preceding this litigation”); Helicopteros, 466 U.S. at
418 (“mere purchases, even if occurring at regular intervals,
are not enough to warrant a State’s assertion of in personam
jurisdiction over a nonresident corporation in a cause of action
not related to those purchase transactions”). See also Formula
One Licensing BV v. Valentine, No. 14-5812, 2016 WL 7175591, at
*6 (D.N.J. Dec. 8, 2016)(“To establish specific jurisdiction,
contacts with the proposed forum must not only meet or exceed
constitutionally minimum contacts, they must also be related to
the cause of action.”)(citing Reliance Steel Products Co. v.
Watson, Ess, Marshall & Enggas, 675 F.2d 587, 588 (3d Cir.
1982)(“The initial determination that must be made is whether
the claim or cause of action which is being pursued arises from
the defendant’s forum related activities or from non-forum
related activities”)); O’Connor, 496 F.3d at 322-24 (finding
both: that cause of action would not have arisen but for
defendant’s contacts with forum state; and that “a meaningful
link exists between a legal obligation that arose in the forum
and the substances of the plaintiffs’ claims[,]” “justif[ying]
the exercise of specific jurisdiction as a quid pro quo for
Sandy Lane’s enjoyment of the right to form binding contracts in
Pennsylvania”).
For that reason, the Court finds that Plaintiffs have not
met their burden of demonstrating that specific jurisdiction can
be imputed to TMI on the basis of an alter ego relationship with
Rock Exotica, LLC (or an alleged predecessor corporation of Rock
Exotica, LLC--i.e., Rock Exotica Equipment--using the same
“brand”). Having already dispensed with the proposition that
Plaintiffs can demonstrate Rock Exotica, LLC’s susceptibility to
general personal jurisdiction in New Jersey, the Court therefore
finds that jurisdiction may not be extended to TMI on the basis
that it is an alter ego of Rock Exotica, LLC, related to the
transaction at issue in this case.
Accordingly, the Court does not reach the question of
whether exercising jurisdiction over TMI would comport with
traditional notions of fair play and substantial justice. See
Int’l Shoe, 326 U.S. at 316.
Because Plaintiffs have not established that TMI meets the
required minimum contacts to establish specific jurisdiction, is
“at home” in New Jersey to establish general jurisdiction, or is
the “alter ego” of a company over which general or specific
jurisdiction could be asserted in this action, TMI’s motion to
dismiss pursuant to F.R.C.P. 12(b)(2) is granted.
CONCLUSION
For the reasons set forth in the preceding discussion the
Court finds that it lacks personal jurisdiction over Defendant
TMI, and TMI’s motion to dismiss shall be granted. The
accompanying Order will be entered.
August 6, 2018
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge
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