KUHAR et al v. PETZL COMPANY et al

Filing 84

OPINION FILED. Signed by Judge Jerome B. Simandle on 6/9/17. (js)

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, et. al.,

OPINION
Defendant.

APPEARANCES:
Brett Cody Schneider, Esq.
Kevin P. McCann, Esq.
Matthew Weng, Esq.
Shanna McCann, Esq.
CHANCE AND MCCANN
201 West Commerce Street
Bridgeton, NJ 08302
Attorney for Plaintiffs
James D. Burger, Esq.
Robert George Devine, Esq.
WHITE & WILLIAMS LLP
457 Haddonfield Road, Suite 400
Cherry Hill, NJ 08002-2220
Attorney for Defendants Petzl America, Big Bang SAS and
Zedel SAS
C. Scott Toomey, Esq.
LITTLETON JOYCE UGHETTA PARK & KELLY LLP
201 King of Prussia Road
Suite 220
Radnor, PA 19010
Attorney for Defendant Thompson Manufacturing

SIMANDLE, District Judge:

INTRODUCTION
This products liability action concerns an allegedly
defective safety harness which caused serious injury to Nicholas
Kuhar when it snapped. Plaintiffs Nicholas and Julie Kuhar bring
claims against the manufacturers and sellers of the Micrograb
harness. This case comes before the Court on motions brought by
three Defendants – Thompson Manufacturing, Zedel SAS and Big
Bang SAS – to dismiss the Amended Complaint for lack of personal
jurisdiction pursuant to Rule 12(b)(2), Fed. R. Civ. P. [Docket
Items 56 & 57]. For the reasons that follow, the Court will
grant Zedel and Big Bang’s motion, and will deny Thompson
Manufacturing’s motion without prejudice to their right to renew
their motion after jurisdictional discovery has taken place.
BACKGROUND
On 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. (Amended Complaint [Docket Item 45] at Factual
Allegations ¶ 4.) Mr. Kuhar sustained serious injuries from the
fall including, but not limited to, a fractured hip, pelvis,
thumb, and three vertebrae, and a burst fracture of his spinal
cord. (Id.) Plaintiffs allege that the harness in question was
designed, produced, and sold by Defendants Petzl Company, Petzl
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America, Bailey’s Corporation, Big Bang SAS, Zedel SAS, Thompson
Manufacturing, and Uintah Fastener & Supply. (See id. at Summary
of the Action ¶¶ 2-8.) Those Defendants who have answered the
Amended Complaint have asserted cross-claims for contribution
and indemnification against all other Defendants. (See Defendant
Bailey’s Corporation Answer [Docket Item 47], Defendant Uintah
Fastener & Supply Answer [Docket Item 53] and Defendant Petzl
America, Inc. Petzl Company’s Answer [Docket Item 61].)
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).

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The Court of Appeals for the Third Circuit directs district
courts to permit “jurisdictional discovery” unless the
plaintiff’s jurisdictional claims appear “clearly frivolous.”
Toys “R” Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir.
2003) (quoting Mass. School of Law at Andover, Inc. v. American
Bar Ass’n, 107 F.3d 1026, 1042 (3d Cir. 1997)). Indeed, if “a
plaintiff presents factual allegations that suggest ‘with
reasonable particularity’ the possible existence of the
requisite ‘contacts between [the party] and the forum state,’
the plaintiff’s right to conduct jurisdictional discovery [must]
be sustained.” Id. (internal citations omitted). Jurisdictional
discovery should not, however, serve as a “fishing expedition”
into the underlying merits, all while “under the guise of
jurisdictional discovery.” LaSala v. Marfin Popular Bank Public
Co., Ltd., 410 Fed. Appx. 474, 478 (3d Cir. 2011).
DISCUSSION
A. Personal Jurisdiction Generally
The personal jurisdiction inquiry traditionally requires an
examination of whether its exercise over a defendant is
permissible under both the state’s long-arm 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
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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
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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).
B. Thompson Manufacturing
Thompson Manufacturing, Inc. (“TMI”) produced and sold a
component part to Petzl America, Inc. (“Petzl”) that was
allegedly used the Petzl Micrograb device that is the subject of
the present lawsuit. (Affidavit of Travis Lane (“Lane Aff.”) ¶
19.) 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. (Id. ¶ 2.) 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
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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. (Id. ¶¶ 215.) On the basis of these representations, TMI argues that it
is not subject to general jurisdiction in New Jersey, when its
activities (or lack thereof) in the state are measured against
Daimler, 134 S. Ct. 746, and that exercising specific
jurisdiction in New Jersey would be inappropriate because the
company had no knowledge that its products would reach New
Jersey through the stream of commerce, World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286, 298 (1980), and because it has
not “purposefully directed” any of its business activities at
the state, Burger King, 471 U.S. at 472.
Both Plaintiffs and Defendant Petzl oppose TMI’s motion to
dismiss, arguing that there is evidence 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. Plaintiffs and Petzl represent that the climbing devices
shown on Rock Exotica’s website (see Exhibit C to Petzl’s
Opposition Brief) are the same as those purchased by Petzl from
TMI, and that Rock Exotica’s website directs consumers to two
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authorized dealerships in New Jersey where they can purchase
Rock Exotica products (Ex. D). To support their proposition that
Rock Exotica may be “a mere alter ego of TMI, and that TMI may
control and/or direct sales” from Rock Exotica (Petzl Opp. Br.
at 2), these parties point to evidence that TMI and Rock Exotica
share a founder and owner, Rock Thompson (Ex. B at 1, 2 & 5);
that the two companies’ manufacturing facilities appear to be
located at the same Freeport Center in Clearfield, Utah (compare
Ex. C with Ex. E); that the two companies apparently share a
phone number and website (id.); and that a number of employees
represent online that they are affiliated with both companies
(see Ex. F).
It is plain that Plaintiffs have not alleged facts
sufficient to find that an exercise of general jurisdiction over
TMI would comport with due process, but whether specific
jurisdiction exists is a closer question that warrants
jurisdictional discovery. 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 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
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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., Ltd. v. Superior Court of Cal., Solano Cnty, 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)).
The evidence adduced by Plaintiffs and Petzl at this stage
connecting Defendant TMI with non-party Rock Exotica – that the
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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 - is 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. 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 Fed.
Appx. 72, 76 (3d Cir. 2006) (citing Lucas v. Gulf & Western
Indus., Inc., 666 F.2d 800, 806 (3d Cir. 1981)).
Here, Plaintiffs’ and Petzl’s position that Rock Exotica
may be the alter ego of TMI is not “clearly frivolous,” and the
parties have presented facts “with reasonable particularity”
that suggest the possible existence of TMI’s requisite contacts
with New Jersey through its relationship with Rock Exotica. Toys
“R” Us, 318 F.3d at 456. Plaintiffs and Petzl are entitled to
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jurisdictional discovery in order to flesh out the contours of
the relationship between TMI and Rock Exotica, and the
companies’ activities in New Jersey. Defendant TMI’s motion to
dismiss for lack of personal jurisdiction will be denied without
prejudice to renewal following the opportunity for
jurisdictional discovery.
C. Zedel SAS and Big Bang SAS
Zedel SAS (“Zedel”) and Big Bang SAS (“Big Bang”) are
French companies; Zedel represents that it assisted Petzl
America, Inc. in designing the Micrograb device at issue in this
case from its location in Crolles, France, and Big Bang
represents that it “has absolutely no connection to the
product.” (Defendants Zedel & Big Bang’s Motion to Dismiss at
11; see also Affidavit of Bernard Bressoux (“Bressoux Aff.”) and
Affidavit of Paul Petzl (“Petzl Aff.”).) Both companies were
incorporated under the laws of France and maintain their sole
locations in Crolles, France. (Bressoux Aff. ¶ 2; Petzl Aff. ¶
2.) Representatives of both companies affirm that neither Zedel
nor Big Bang sell the Micrograb device; that neither company
owns, leases, possess or uses real 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 the State of New Jersey, by either mail or in
person, or generate revenue from the State of New Jersey; has
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never filed tax returns or administrative reports with any
agency in the State of New Jersey; has never purchased products,
supplies or raw materials within the State of New Jersey; does
not maintain any agents, employees, subsidiaries, or officers
within the State of New Jersey, 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. (Id. ¶¶ 2-16.) On the basis
of these representations, Zedel and Big Bang assert that they
are subject to neither general nor specific personal
jurisdiction in New Jersey.
Plaintiffs oppose the French companies’ motion to dismiss,
arguing that there is evidence that a sufficient corporate
parent/subsidiary relationship between Zedel and Petzl and
between Big Bang and Petzl may exist to render the exercise of
specific jurisdiction proper. Plaintiffs point to Petzl America,
Inc.’s corporate disclosure statement in this case certifying
that “its ownership rests 100% with Big Bang S.A.S., a French
domiciled holding company” and two certificates purportedly
filed with the European Commission on behalf of “Zedel trading
as Petzl.”1 (See attachments to Plaintiffs’ Opposition Letter
Brief.)

1

Defendants assert that Plaintiffs either misrepresent or
misunderstand the corporate entities in this case, and that only
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Unlike the first motion to dismiss, above, where Plaintiffs
and Petzl presented details from which a court could find that
TMI and Rock Exotica may share more than common ownership,
Plaintiffs in this instance have come forward with nothing, let
alone allegations with “reasonable particularity,” that suggest
that these French companies are in an alter ego or agency
relationship with Petzl. Plaintiffs’ position that a
sufficiently close corporate relationship exists based only on
(i) an admission that Big Bang is the 100% owner of Petzl
America, Inc. and (ii) foreign certificates of indeterminate
origin and significance borders on “clearly frivolous.” None of
these facts suggest that “the independence of the separate
corporate entities was disregarded” such that Petzl’s New Jersey
contacts could be fairly imputed to the French companies. Lucas,
666 F.2d at 806. Plaintiffs will not be permitted to pursue
jurisdictional discovery against these parties, and their motion
to dismiss for lack of personal jurisdiction will be granted.

“Petzl America, Inc.” is a valid legal entity: “Petzl Company”
and “Petzl,” according to Defendants, do not exist. (Defendants
Zedel & Big Bang’s Reply Brief at 1.) For the purposes of the
instant motion, the Court need not decide whether “Zedel trading
as Petzl” refers to Petzl America, Inc. because even if that is
assumed true, that would not necessarily mean, or even logically
imply, that Zedel and Petzl America, Inc. are alter ego
corporations and that a Court could fairly impute Petzl America,
Inc.’s New Jersey contacts onto Zedel for the purposes of
exercising personal jurisdiction.
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CONCLUSION
An accompanying Order will be entered.

June 9, 2017
Date

s/ Jerome B. Simandle
JEROME B. SIMANDLE
U.S. District Judge

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