Huddlleston v. Fresenius Medical Care North America et al

Filing 71

ORDER granting 34 Motion to Dismiss by Magnum Plastics for Lack of Jurisdiction. Signed by Judge Michael R. Barrett on 3/21/12. (ba1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION

Amanda R. Huddleston,
Plaintiff,
v.

Case No. 1:10cv713

Fresenius Medical Care
North America, et al.,

Judge Michael R. Barrett

Defendants.
ORDER
This matter is before the Court upon Defendant Magnum Plastics, Inc.’s (“Magnum”)
Motion to Dismiss. (Doc. 34.) Plaintiff Amanda R. Huddleston, executor of the Estate of
Jeannie Mae Morgensen, filed a Response in Opposition (Doc. 44), and Magnum filed a
Reply (Doc. 62). In addition, the parties filed supplemental memoranda after the Court
permitted a period of discovery on the issue of personal jurisdiction. (Docs. 69, 70.)
Plaintiff has filed a Stipulation under seal (Doc. 68), upon which she relies in her
supplemental memorandum. This Stipulation is between Plaintiff and Defendant Fresenius
Medical Care North America (“Fresenius”).
Magnum moves to dismiss Plaintiff’s Amended Complaint pursuant to Federal Rule
of Civil Procedure 12(b)(2) for lack of personal jurisdiction.
I.

BACKGROUND
Plaintiff brings claims for wrongful death, product liability, survivorship and punitive

damages on behalf of the decedent’s estate. (Doc. 16, ¶ 1.) The claims arise from the use
of two recalled dialysis devices which allegedly caused the death of the decedent. (Id.)

One of these devices is the Liberty Cycler Home Peritoneal Dialysis Device manufactured
by Defendant Fresenius. (Id., ¶ 2.) Plaintiff alleges that Defendant Magnum “either in its
United States facility of [sic] its Mexican facility manufactured the defective lots of or
components for the LIBERTY® Cycler Sets supplied to Plaintiff’s decedent and later
recalled by Fresenius Medical Care after the death of Plaintiff’s decedent.” (Id., ¶ 15.)
Fresenius’ principle place of business is Waltham, Massachusetts. (Id., ¶ 8.)
Magnum is a Colorado corporation, headquartered in Erie, Colorado that specializes
in complex, high precision injection molded components and assemblies in the medical
component field. (Doc. 34-1, Cathy Cairns Aff., ¶ 2) Magnum is a contract manufacturing
company, meaning it does not sell its products to the general public. (Id., ¶¶ 2, 4.) All of
Magnum’s business operations, including its manufacturing facilities, are located in
Colorado. (Id., ¶ 2.) Magnum does not own property in Ohio. (Id., ¶ 5.) Magnum is not
registered to do business in Ohio with the Secretary of State. (Id., ¶ 3.) Magnum does not
have any customers located in Ohio, and no representative or employee of Magnum has
ever traveled to Ohio on business. (Id., ¶¶ 2, 4.)
Plaintiff’s claims against Magnum are based solely on diversity.1
II.

ANALYSIS
Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of a claim for lack

1

Plaintiff brings statutory product liability claims for defective manufacture and design
pursuant to Ohio law against Fresenius and Magnum. (Doc. 16, at ¶¶65-77.) Plaintiff makes a
statutory claim against Fresenius and Magnum under Ohio law for the alleged failure of the
Liberty Cycler to conform to their respective representations. (Id., ¶¶ 87-91.) Plaintiff makes a
supplier liability claim against Fresenius and Magnum under Ohio law. (Id., ¶¶ 92-96.) Plaintiff
makes Ohio law wrongful death and survivorship claims against all Defendants. (Id., ¶¶
115-121.)

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of jurisdiction over the person. The plaintiff bears the burden of establishing that such
jurisdiction exists. See Youn v. Track, Inc., 324 F.3d 409, 417 (6th Cir. 2003). As the Sixth
Circuit has recently explained:
“[t]he weight of [the] burden . . . depends on whether the trial court chooses
to rule on written submissions or to hear evidence on the
personal-jurisdiction issue. . . .” 875 F.2d 1212, 1214 (6th Cir. 1989). When
the district court “rules on written submissions alone” the burden consists of
“a prima facie showing that personal jurisdiction exists.” Id.
Schneider v. Hardesty, 2012 WL 573321, *3 (6th Cir. Feb. 23, 2012). Here, the Court has
not held an evidentiary hearing, and therefore, under the general rule, the prima facie
standard would apply. However, the Court did permit the parties to conduct discovery on
the issue of jurisdiction. As a result, this Court must question whether this case falls within
the potential exception discussed in dicta in Dean v. Motel 6 Operating L.P., 134 F.3d 1269
(6th Cir. 1998). This exception arises in “those rare instances in which a plaintiff has been
granted all discovery requested and that discovery resulted in an undisputed set of facts
such that an evidentiary hearing would be pointless.” Schneider, 2012 WL 573321, *4.
This Court notes that the exception is not applicable because there are outstanding factual
disputes in this case. The Court also notes that regardless of the standard applied, the
result would be the same because Plaintiff has not met the less-demanding prima facie
standard.
In a diversity case, this Court must first look to the law of the forum state to
determine whether the exercise of jurisdiction is proper under the state's long-arm statute.
See Calphalon Corp. v. Rowlette, 228 F.3d 718, 721 (6th Cir. 2000). Next, this Court must
determine whether the exercise of jurisdiction meets constitutional due process

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requirements. Id. Although the Ohio Supreme Court has ruled that the Ohio long-arm
statute does not extend to the constitutional limits of the Due Process Clause, the central
inquiry is whether minimum contacts are satisfied so as not to offend “traditional notions
of fair play and substantial justice.” Id. (citing Cole v. Mileti, 133 F.3d 433, 436 (6th Cir.
1998)).
Plaintiff claims that this Court has jurisdiction under two prongs of Ohio’s long-arm
statute:
A court may exercise personal jurisdiction over a person who acts directly or
by an agent, as to a cause of action arising from the person's:
...
(4) Causing tortious injury in this state by an act or omission outside this
state if he regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods used
or consumed or services rendered in this state;
(5) Causing injury in this state to any person by breach of warranty expressly
or impliedly made in the sale of goods outside this state when he might
reasonably have expected such person to use, consume, or be affected by
the goods in this state, provided that he also regularly does or solicits
business, or engages in any other persistent course of conduct, or derives
substantial revenue from goods used or consumed or services rendered in
this state;
Ohio Rev.Code Ann. § 2307.382(A). To support her position, Plaintiff relies on the
Stipulation between her and Fresenius, in addition to a complaint filed by Fresenius against
Magnum in the United States District Court for the District of Colorado.2 Specifically,
Plaintiff explains that in 2009, Magnum’s Liberty cassettes were distributed to thirty-two
dialysis clinics and 143 patients in Ohio. (Doc. 68, ¶ 10.) Plaintiff explains further that in

2

Magnum points out the complaint filed by Fresenius against Magnum in the United
States District Court for the District of Colorado contains mere allegations.

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2009, Magnum invoiced Fresenius $731,862.80 for the manufacture and supply of
cassettes. (Id., ¶ 9.)
The Court finds that this evidence is unavailing. Plaintiff only provides numbers for
the year 2009. There is no evidence that Magnum supplied the cassettes to Fresenius any
other year. The most Plaintiff has is an allegation from Fresenius’ Colorado complaint that
from March 15, 2006 to September 15, 2009, Magnum supplied Fresenius with 100% of
its Liberty Cycler Set cassettes. However, there is no allegation or evidence that any of
these cassettes were distributed in Ohio at any other time other than the year 2009. The
Amended Complaint in this case only alleges that Magnum manufactured the defective lots
or components which were supplied to the decedent. (Doc. 16, ¶ 15.) While Plaintiff
claims that the cassettes manufactured by Magnum during the period 2006 to 2009 were
distributed to clinics and patients in Ohio, Plaintiff merely relies on a list which appears to
be those clinics subject to the Fresenius recall in 2010. (Doc. 68, at 36.) This provides
little information as to whether Magnum “regularly does or solicits business” in Ohio.
Furthermore, Plaintiff only provides the total amount Magnum invoiced Fresenius
in 2009–$731,862.80–but does not explain what percentage of this amount was
attributable to sales in Ohio, or whether this amount represents a substantial proportion of
Magnum’s overall revenue.
Also missing from the record are allegations or evidence that Magnum has a
physical presence in Ohio. See Estate of Poole v. Grosser, 731 N.E.2d 226, 229-230
(Ohio Ct. App. 1999) (explaining that “a plaintiff may prove a regular doing or solicitation
of business by showing that a nonresident corporation has maintained an office in Ohio or
employed a sales or service force in Ohio.”). Without this information, the Court is unable
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to conclude that Magnum “regularly does or solicits business, or engages in any other
persistent course of conduct, or derives substantial revenue from goods used or consumed
or services rendered” in Ohio.
Therefore, Plaintiff has failed to carry her burden of establishing that it is proper for
this Court to exercise personal jurisdiction over Magnum under Ohio’s long-arm statute.
Even if Ohio law authorized jurisdiction, Plaintiff has also failed to show that the
exercise of jurisdiction over Magnum comports with due process. To comport with due
process, an exercise of personal jurisdiction requires that a defendant “have certain
minimum contacts such that the maintenance of the suit does not offend ‘traditional notions
of fair play and substantial justice.’” International Shoe Co. v. Washington, 326 U.S. 310,
316 (1945).
Depending on the type of minimum contacts in a case, personal jurisdiction can
either be specific or general. Air Products and Controls, Inc. v. Safetech Intern., Inc., 503
F.3d 544, 549 (6th Cir. 2007), citing Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110,
1116 (6th Cir. 1994).
General jurisdiction is established “when a defendant has continuous and
systematic contacts with the forum state sufficient to justify the state's exercise of judicial
power with respect to any and all claims.” Fortis Corp. Ins. v. Viken Ship Mgmt., 450 F.3d
214, 218 (6th Cir. 2006). For example, in Michigan National Bank v. Quality Dinette Inc.,
888 F.2d 462, 466-67 (6th Cir. 1989), the exercise of general jurisdiction was proper where
the defendants retained an independent sales representative in Michigan, conducted mail
order solicitations in Michigan, and made at least one sale in Michigan each and every
month over the course of a two-year period. Plaintiff has failed to show that Magnum has
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similar “continuous and systematic contacts” with Ohio, and therefore the exercise of
general jurisdiction is not proper in this case.
Specific jurisdiction exists in cases in which the subject matter of the lawsuit arises
out of or is related to the defendant's contacts with the forum. Conti v. Pneumatic Prods.
Corp., 977 F.2d 978, 981 (6th Cir. 1992). Specific jurisdiction may be premised on a single
act of the defendant. McGee v. International Life Ins. Co., 355 U.S. 220, 222 (1957). The
Sixth Circuit has established a three-part test to govern whether a defendant is subject to
specific personal jurisdiction:
First, the defendant must purposefully avail himself of the privilege of acting
in the forum state or causing a consequence in the forum state. Second, the
cause of action must arise from the defendant's activities there. Finally, the
acts of the defendant or consequences caused by the defendant must have
a substantial enough connection with the forum state to make the exercise
of jurisdiction over the defendant reasonable.
Southern Mach. Co., Inc. v. Mohasco Indus., Inc., 401 F.2d 374, 381 (6th Cir. 1968). Each
criterion must be satisfied for a court to find its jurisdiction consistent with due process. Id.
Under the Southern Machine test, this Court first must determine whether Magnum
purposefully availed itself of “the privilege of transacting business” in Ohio. Id. at 382. To
make this determination, the Sixth Circuit has adopted Justice O'Connor's “stream of
commerce ‘plus’” approach, set forth in Asahi Metal Industry Co. v. Superior Court of
California, 480 U.S. 102 (1987). See Bridgeport Music, Inc. v. Still N the Water Publ'g, 327
F.3d 472, 479 (6th Cir. 2003). Under this approach, “placement of a product into the
stream of commerce, without more, is not an act of the defendant purposefully directed
toward the forum State.” Id. (quoting Asahi, 480 U.S. at 112).
The “stream of commerce” theory was recently addressed by the Supreme Court
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in J. McIntyre Machinery, Ltd. v. Nicastro, 131 S.Ct. 2780 (2011). The defendant in J.
McIntyre was a foreign manufacturer who sold its machines to a distributor who agreed to
sell them in the United States. Several of these machines ended up in New Jersey, where
they allegedly caused injuries. The record showed that defendant had displayed its
machine at trade shows in the United States, but not in New Jersey. The defendant had
no office in New Jersey, did not pay taxes in New Jersey, did not own property in New
Jersey, never sent employees to New Jersey, and never advertised in New Jersey.
In the plurality opinion, Justice Kennedy explained that a “defendant's transmission
of goods permits the exercise of jurisdiction only where the defendant can be said to have
targeted the forum; as a general rule, it is not enough that the defendant might have
predicted that its goods will reach the forum State.” Id. at 2788. The plurality decided,
based on the facts, that there was no personal jurisdiction over the defendant because it
did not “engage in any activities in New Jersey that reveal [ed] an intent to invoke or benefit
from the protection of its laws.” Id. at 2791.
However, because no opinion in J. McIntyre commanded five votes, Justice Breyer's
concurrence controls.

Justice Breyer rejected the plurality's holding that mere

foreseeability that goods could wind up in a particular state could never form a
constitutionally sufficient basis for the exercise of personal jurisdiction under the
stream-of-commerce theory. Id. at 2791–93. Instead, Justice Breyer found the specific
facts of the case insufficient to support personal jurisdiction even under the Court's earlier
precedents, emphasizing that the defendant had made only a “single isolated sale” through
an independent distributor into the forum state.

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Id. at 2791–92.

Justice Breyer’s

concurrence did not foreclose the possibility that a court might exercise jurisdiction where
there is a “regular course of sales” of defendant's goods in the forum state, or “something
more, such as special state-related design, advertising, advice, marketing or anything
else.” Id. (internal quotations omitted).
This Court concludes that the facts of this case cannot support a finding of
purposeful availment. The Court finds that it is unnecessary to address the remaining two
prongs of the Southern Machine test because all three prongs of the test must be met in
order for the exercise of personal jurisdiction to be appropriate. Southern Machine, 401
F.2d at 381.
III.

CONCLUSION
Based on the foregoing, Defendant Magnum Plastics, Inc.’s Motion to Dismiss.

(Doc. 34) is hereby GRANTED. Because this Court does not have personal jurisdiction
over Defendant Magnum, it is dismissed as a party from this case. However, dismissal of
the claims against Magnum are WITHOUT PREJUDICE. See Intera Corp. v. Henderson,
428 F.3d 605, 621 (6th Cir. 2005) (dismissals for lack of personal jurisdiction should be
made without prejudice).
IT IS SO ORDERED.
/s/ Michael R. Barrett
Michael R. Barrett, Judge
United States District Court

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