Sieg et al v. Sears Roebuck and Company et al
Filing
43
MEMORANDUM and ORDER granting 31 3rd Party Dft Primax Motion to Dismiss.Signed by Honorable James M. Munley on 2/24/12 (sm, )
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
MICHAEL SIEG and
DEANNA SIEG,
Plaintiffs
:
No. 3:10cv606
:
:
(Judge Munley)
:
v.
:
:
SEARS ROEBUCK & COMPANY
:
and LEVITON MANUFACTURING
:
COMPANY,
:
Defendants
:
:
v.
:
:
PRIMAX ELECTRONICS, LTD.,
:
Third-Party Defendant :
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
MEMORANDUM
Before the court is Third-Party Defendant Primax Electronics’ motion to
dismiss Defendant / Third-Party Plaintiff Leviton Manufacturing’s third-party
complaint. (Doc. 31). Primax moves to dismiss pursuant to Rules 12(b)(2)
and 12(b)(6) of the Federal Rules of Civil Procedure. The issues have been
fully briefed and the matter is ripe for disposition. For the following reasons,
the court will dismiss Third-Party Defendant Primax Electronics pursuant to
Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction.
Background
This case arises from a November 17, 2008 fire in Plaintiff Michael Sieg
and Plaintiff Deanna Sieg’s (collectively “plaintiffs”) Schuylkill County
Pennsylvania home. (Doc. 20, Am. Compl. ¶¶ 1, 7). The fire damaged
plaintiffs’ home and both plaintiffs suffered injuries and were treated at the
Good Samaritan Hospital. (Id. ¶¶ 8, 14-15). Plaintiffs filed a complaint in the
Dauphin County Court of Common Pleas against Defendant Sears Roebuck &
Company (hereinafter “Sears”) and Defendant Leviton Manufacturing
(hereinafter “Leviton”). (See Doc. 1-3, Compl.). Plaintiffs allege that a
defective power tap caused the fire. (Doc. 20, Am. Compl. ¶ 7). Plaintiffs
claim to have purchased the allegedly defective power tap from a Sears retail
store in 2008, and that the power tap was either manufactured or distributed
by Leviton. (Id. ¶ 6). Plaintiffs assert that Sears and Leviton are both liable
under theories of strict liability and negligence. (Id. ¶¶ 16-21).
On March 18, 2010, Leviton filed a notice of removal with this court
pursuant to 28 U.S.C. § 1446. (See Doc. 1, Notice of Removal). Plaintiffs
filed an amended complaint against Leviton and Sears on August 27, 2010.
(See Doc. 20). Shortly thereafter, Leviton filed a third-party complaint against
Primax Electronics (hereinafter “Primax”). (See Doc. 22). Primax is a
2
Taiwan-based corporation with manufacturing and research operations in
Taiwan and China. (See Doc. 35-5, Ex. D, Primax Co. Profile). Primax
engages in the design, manufacture and distribution of consumer electronics.
(Id.; Doc. 22, Third-Party Compl. ¶ 2). With its operations overseas, Primax
has no employees, offices, property or other assets in Pennsylvania. (Doc.
34-1, Ex. A, Hwang Decl. ¶¶ 4-6). Primax sells its products Free on Board
(“F.O.B.”) China or Taiwan and claims to be uncertain of where its customers
take its products from there. (Id. ¶ 7). Primax has not paid taxes to
Pennsylvania and it is not registered as a corporation in Pennsylvania. (Id. ¶¶
8-9).
Primax does, however, have a presence in the United States. It opened
its first United States sales office in 1990. (Doc. 35-5, Ex. D, Primax Co.
Profile). Primax has sold thousands of products to Leviton. (See 35-6, Ex. E,
Purchase Order). These products were sent F.O.B. Taiwan and shipped to
California. (Id.) The purchase order indicates a New York billing address and
that Leviton and Primax consented to New York City courts as the forum for
legal dispute. (Id.) Primax also has appeared in lawsuits initiated in the
Courts of Common Pleas of Lehigh and Bucks Counties in 2002 and 2003
respectively. (See Doc. 35-4, Ex. C, Dockets & Pleadings).
3
Leviton contends that Primax was the manufacturer of the power tap at
issue in this case, and that if Leviton is found to be liable, Primax should be
liable over Leviton. (Doc. 22, Third-Party Compl. ¶¶ 4-6). Primax filed a
motion to dismiss the third-party complaint pursuant to Rules 12(b)(2) and
12(b)(6) of the Federal Rules of Civil Procedure. (See Doc. 31). Primax
contends that this court does not have personal jurisdiction to proceed with
the third-party complaint, and, even if this court possesses personal
jurisdiction over Primax, Leviton’s third-party complaint fails to state a claim
for which relief can be granted.
Legal Standard to Establish Personal Jurisdiction
The plaintiff must adduce facts sufficient to satisfy two
requirements–one statutory and one constitutional–to establish personal
jurisdiction. The statutory prong requires that the court assess whether the
defendant’s actions fall within the scope of Pennsylvania’s long-arm statue,
42 PA. CONS. STAT. ANN. § 5322(b). Pennsylvania’s long-arm statute permits
the exercise of personal jurisdiction to the fullest limits of due process as
defined under the Constitution of the United States, as such, federal law
defines the parameters of the Court’s in personam jurisdiction. See id.;
Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147,
4
150 (3d Cir. 1996). Accordingly, in light of Pennsylvania’s long arm statute,
the court’s proper focus will be on whether the exercise of jurisdiction
comports with the United States Constitution’s guarantees of due process.
To determine whether the court has personal jurisdiction under the Due
Process Clause, the court must ask whether the defendant has certain
minimum contacts with the forum state “such that the maintenance of the suit
does not offend traditional notions of fair play and substantial justice.” Int’l
Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotations and
citations omitted). Courts have identified two categories of personal
jurisdiction–general jurisdiction and specific jurisdiction. General jurisdiction
is based on the defendant’s “continuous and systematic” contacts with the
forum. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 416
(1984). General jurisdiction exists even if the cause of action at issue arises
from non-forum activities. See N. Penn Gas Co. v. Corning Natural Gas
Corp., 897 F.2d 687, 690 n.2 (3d Cir. 1990). Specific jurisdiction on the other
hand only exists “only if the plaintiff’s cause of action arises out of a
defendant’s forum-related activities, such that the defendant ‘should
reasonably anticipate being haled into court’ in that forum.” Remick v.
Manfredy, 238 F.3d 248, 255 (3d Cir. 2001) (quoting Vetrotex, 75 F.3d at
5
151). In other words, specific personal jurisdiction is present when the
defendant’s actions at issue in the case amount to sufficient minimum
contacts to satisfy due process requirements. See Helicopteros Nacionales,
466 U.S. at 414-15. The Third Circuit Court of Appeals observed with respect
to specific jurisdiction that “it is entirely possible that a court might have
personal jurisdiction in a particular case over a defendant but not have
jurisdiction over it in other cases.” D’Jamoos ex rel. Estate of Weingeroff v.
Pilatus Aircraft, Ltd., 566 F.3d 94, 102 (3d Cir. 2009).
Courts conduct a three-part inquiry to determine whether there is
personal jurisdiction, which was described by the Third Circuit Court of
Appeals as follows:
First, the defendant must have “purposefully directed [its]
activities” at the forum. Second, the litigation must “arise out of or
relate to” at least one of those activities. And third, if the first two
requirements have been met, a court may consider whether the
exercise of jurisdiction otherwise “comport[s] with ‘fair play and
substantial justice.’”
Id. (internal citations omitted). The first two steps in this three part inquiry
determine whether the defendant has sufficient minimum contacts with the
jurisdiction by assessing whether “‘the defendant purposefully avail[ed] itself
of the privilege of conducting activities within the forum State, thus invoking
the benefits and protection of its laws.’” Burger King Corp. v. Rudzewicz, 471
6
U.S. 462, 475 (1985) (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).
It is not necessary for the purposes of this requirement to show that the
defendant physically entered the forum state. D’Jamoos, 566 F.3d at 103.
Nevertheless, the defendant’s contacts must amount to “‘a deliberate
targeting of the forum.’” Id. (quoting O’Connor v. Sandy Lane Hotel Co., 496
F.3d 312, 317 (3d Cir. 2007)).
If the defendant can be shown to have personally availed itself of the
forum state, then the plaintiff must show that the litigation is related to at least
one of those purposefully directed contacts. To meet this standard, plaintiffs
essentially have to show that the claims would not have arisen in the absence
of the defendants contacts with the forum state. See O'Connor, 496 F.3d at
319. Assuming that there is a showing of purposeful availment and
relatedness, the court must then assess whether its exercise of jurisdiction
would otherwise comport with “‘traditional notions of fair play and substantial
justice.’” Id. at 324 (quoting Int’l Shoe Co., 326 U.S. at 316).
The plaintiff bears the burden of proving that the defendant purposefully
availed himself of the forum state. The plaintiff must normally meet this
burden “through sworn affidavits or other competent evidence.” Time Share
Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984); see
7
also Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001) (“Once it is
challenged, the burden rests upon the plaintiff to establish personal
jurisdiction.”). However, courts treat the plaintiff’s allegations as if they were
true for the purposes of determining personal jurisdiction when no evidentiary
hearing is held on the matter. See O’Connor, 496 F.3d at 316 (citing Miller
Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004)).
Discussion
Primax seeks the dismissal of the third-party complaint on two grounds.
First, Primax contends that this court lacks personal jurisdiction and that the
case must be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2).
Second, Primax avers that the third-party complaint must fail pursuant to
Federal Rule of Civil Procedure 12(b)(6) as it fails to state a claim for which
relief can be granted. Leviton disputes Primax’s claim that this court does not
have personal jurisdiction, and Leviton asserts that specific personal
jurisdiction exists pursuant to the “stream-of-commerce” theory.1 Leviton also
maintains that the third-party complaint adequately states a claim. For the
following reasons, the court finds that Leviton, as the third-party plaintiff, has
failed to meet its burden of establishing personal jurisdiction. The third-party
1
Leviton does not assert that this court has general jurisdiction over
Primax. (Doc. 35, Br. in Opp’n to Mot. to Dismiss Third-Party Compl. at 6).
8
complaint will accordingly be dismissed.2
A. Stream-of-Commerce Theory
The stream-of-commerce theory has been used by courts “to find a
basis for personal jurisdiction over a non-resident defendant, often a
manufacturer or distributor, which has injected its goods into the forum state
indirectly via the so-called ‘stream-of-commerce.’” D’Jamoos, 566 F.3d at
104-05 (citing Pennzoil Prods., Co. v. Colelli & Assocs., 149 F.3d 197, 203
(3d Cir. 1998); Max Daetwyler Corp. v. R. Meyer, 762 F.2d 298-300 (3d Cir.
1985)). In Asahi Metal Industry Company v. Superior Court of California, 480
U.S. 102 (1987), the Supreme Court attempted to clarify the elements of
jurisdiction under the stream-of-commerce theory, but a majority of the Court
was unable to coalesce around a single approach. Two plurality opinions,
each joined by four Justices, emerged. The first plurality opinion, authored by
Justice O’Connor, found that something in addition to placing the product into
the stream of commerce was necessary to establish personal jurisdiction, and
that this additional conduct was needed to demonstrate an intent to serve the
forum market. Id. at 112. Justice O’Connor explained that such “additional
2
The court does not address Primax’s arguments under Federal Rule
of Civil Procedure 12(b)(6) as it is unnecessary to do so in light of the finding
that the court lacks personal jurisdiction over Primax.
9
conduct” could include “designing the product for the market in the forum
State, advertising in the forum state, establishing channels for providing
regular advice to customers in the forum state, or marketing the product
through a distributor who has agreed to serve as the sales agent for the forum
State.” Id.
The second plurality opinion, authored by Justice Brennan, took a less
stringent view of the stream-of-commerce theory than the O’Connor plurality.
Justice Brennan described the stream-of-commerce as follows:
The stream of commerce refers not to unpredictable currents or
eddies, but to the regular and anticipated flow of products from
manufacture to distribution to retail sale. As long as a participant
in this process is aware that the final product is being marketed in
the forum State, the possibility of a lawsuit there cannot come as a
surprise.
Id. at 117 (Brennan, J., concurring). Under the standard espoused by Justice
Brennan, placing goods into the regular flow of product distribution with an
awareness of where those products would ultimately be sold is sufficient for
the courts to constitutionally exercise personal jurisdiction over the out-ofstate party. See id.
Since Asahi, the Third Circuit Court of Appeals has not formally adopt
the approach described in either plurality opinion. See D’Jamoos, 566 F.3d at
105 n.15 (“The two plurality opinions in Asahi, Justice O'Connor's and Justice
10
Brennan's, produced two distinct frameworks for the minimum contacts
analysis as it relates to stream-of-commerce theory, and we have not had
occasion to choose between the O'Connor and Brennan positions.”). Rather,
our circuit court of appeals applies both standards announced in the Asahi
plurality opinions. See, e.g., Pennzoil Prods. Co., 149 F.3d at 207 n.11
(“since we have not manifested a preference for either of the two standards,
the demands of clarity counsel us to apply both standards explicitly”).
Recently, in J, McIntyre Machinery, Ltd. v. Nicastro, 131 S. Ct. 2780
(2011), a plurality of the Supreme Court once again addressed the stream-ofcommerce theory. In Nicastro, Justice Kennedy authored a plurality opinion
that rejected the approach favored by Justice Brennan in Asahi. Id. at 278889. The Nicastro plurality went on to adopt the more stringent view of the
stream-of-commerce theory advanced by Justice O’Connor’s plurality opinion
in Asahi. Id. at 2790.
Justice Breyer’s concurring opinion in Nicastro was decided on much
narrower grounds. Justice Breyer declined to adopt either standard
announced in Asahi. Id. at 2791-92 (Breyer, J., concurring). Instead, Justice
Breyer decided the case based on the Supreme Court’s prior precedents.
See id. at 2792. Although Justice Breyer did not agree with the Nicastro
11
plurality that a stricter rule was necessary, Justice Breyer nonetheless
cautioned against broad stream-of-commerce standards that would allow for
the assertion of “jurisdiction in a products-liability suit against any domestic
manufacturer who sells its products . . . to a national distributor, no matter
how large or small the manufacturer, no matter how distant the forum, and no
matter how few the number of items that end up in the particular forum at
issue.” Id. at 2793 (Breyer, J., concurring).
In light of the failure of a Supreme Court majority to adopt clearly one of
the two Asahi standards, we will continue with the Third Circuit Court of
Appeals’ approach. Thus, we will consider whether Leviton, as the third-party
plaintiff, has met its burden with respect to either of the standards announced
in Asahi.
B. Personal Jurisdiction Over Primax Electronics
Leviton asserts that this court has specific personal jurisdiction over
Primax on the basis that its activities meet the elements needed to establish
jurisdiction via the stream of commerce theory. The court disagrees. Leviton,
as the third-party plaintiff, has failed to meet its burden of establishing that
this court has personal jurisdiction over Primax.3 Therefore, this case will be
3
In assessing whether Leviton established a prima facie case of specific
personal jurisdiction, we examined the documents Leviton attached as
12
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of
personal jurisdiction.
Leviton asserts that it is proper for this court to exercise specific
personal jurisdiction because “Primax knew its products were being shipped
to, sold in, and used by individuals in the Commonwealth of Pennsylvania.”
(Doc. 40, Sur-Reply Br. at 2). In support of this proposition, Leviton alleges
facts and attaches supporting documents regarding Primax’s exploitation of
the United States market as a whole. For instance, Leviton produces
evidence indicating that Primax participated in litigation (both as a defendant
and plaintiff) in California state court as well as the United States Court of
Appeals for the Federal Circuit. (See Doc. 35-4, Ex, C, Dockets & Pleadings).
Leviton also provided evidence that Primax has had a sales office somewhere
in the United States in 1990. (See Doc. 35-5, Ex. D, Primax Co. Profile). This
evidence, although illustrative of Primax’s attempt to cater to the United
States market as a whole, is insufficient in itself to demonstrate that Primax
purposefully availed itself of the Commonwealth of Pennsylvania. See
D’Jamoos, 566 F.3d at 104 (finding that the defendant’s “efforts to exploit a
exhibits in support of its position as well as the allegations Leviton pled. See
Miller, 384 F.3d at 97. The court will not consider statements of legal
conclusions in examining whether personal jurisdiction exists.
13
national market necessarily included Pennsylvania as a target, but those
efforts simply do not constitute the type of deliberate contacts within
Pennsylvania that could amount to purposeful availment of the privilege of
conducting activities in that state.”).
Aside from evidence of Primax’s exploitation of the United States market
as a whole, Leviton proffers that it has produced two pieces of evidence that
are dispositive on the issue of personal jurisdiction. (Doc. 40, Sur-Reply Br.
at 2). The first piece of evidence consists of two docket sheets reflecting
Primax’s participation in litigation in Lehigh and Bucks Counties, in 2002 and
2003 respectively. (See Doc. 35-4, Ex. C, Dockets & Pleadings at 9-19).
Leviton offers these exhibits as proof that “Primax knew its products were
delivered to, sold in, and used by residents in the Commonwealth, and thus
could (and did) lead to lawsuits in the Commonwealth of Pennsylvania.” (Doc.
40, Sur-Reply Br. at 4).
Despite Levinton’s assertions regarding the persuasiveness of the
docket sheets from these prior cases on the issue of specific jurisdiction, the
court is unconvinced. Leviton does not demonstrate, or even allege, how
these older state court cases are actually similar to the instant case. The only
similarity that the court is aware of is Leviton’s allegation that the older cases
14
involved some sort of product that Primax manufactured. The court does not
know what kind of product was at issue in these older case. The court does
not know whether these older cases involved products distributed by Leviton.
The court does not know whether these products were purchased from a
Sears store or from another retailer.4 Most importantly, the court does not
know if the products at issue in these prior cases arrived in Pennsylvania
through the same channel of commerce in which the power tap subject to the
instant litigation arrived in Pennsylvania.
Given their relatively low probative value, the docket sheets attached as
Exhibit C do not establish that Primax was aware that it may be haled into
court in Pennsylvania in the future. Primax’s participation in Pennsylvania
state court litigation nearly a decade ago is not conclusive on the issue of
whether it would anticipate being haled into Pennsylvania again, years later,
for an accident involving unrelated products and a seemingly unrelated
distribution systems. Thus, the court finds that merely attaching
documentation of prior, unrelated litigation in Pennsylvania state court is not
enough, in itself, to establish specific jurisdiction under either Asahi standard
as it provides little information about the product currently at issue.
4
The court notes that neither Sears nor Leviton are named parties in
the state court actions. (See Doc. 35-4, Ex. C, Dockets & Pleadings at 9-19).
15
The second piece of evidence Leviton claims is dispositive on the issue
of jurisdiction is a 2001 Purchase Order between Leviton and Primax. (Doc.
35-6, Ex. E, Purchase Order). The Purchase Order is for 14,600 units of four
different products, which are identified by part numbers alone. (Id.) The
Purchase Order reflects that Leviton has a California shipping address and a
New York billing address. (Id.) Leviton asserts that this Purchase Order
serves as evidence that Primax knew that “its products were being shipped to,
sold in, and used by individuals in the Commonwealth of Pennsylvania.”
(Doc. 40, Sur-Reply Br. at 2).
The court notes, however, that Leviton has not identified which of the
four products identified on the purchase order is the product at issue in this
case. There is no indication whether this was the only order between Leviton
and Primax, nor does the Purchase Order reflect whether products were to be
shipped into Pennsylvania. The Purchase Order, while showing purposeful
availment of the United States market as a whole, does little to demonstrate
that Primax purposefully availed itself of Pennsylvania.
Leviton has not provided evidence or made allegations sufficient to
establish that Primax’s goods regularly flow through the stream-of-commerce
into Pennsylvania. As such, this case is distinguishable from other cases in
16
which the indirect shipment of thousands of products into the forum state was
sufficient to establish personal jurisdiction under the stream-of-commerce
theory. See, e.g., Original Creations, Inc. v. Ready Am., Inc., No. 11 C 3453,
2011 WL 4738268 at *5 (N.D. Ill. Oct. 5, 2011) (finding personal jurisdiction
where the defendant took “advantage of the clearly defined distribution
network offered by” the distributors, which included at least 21 stores in the
forum state); Merced v. Gemstar Grp., Inc., No. 10-3054, 2011 WL 5865964,
at *4 (E.D. Pa. Nov. 22, 2011) (finding evidence that the defendants shipped
products into the forum state on three occasions, and into at least three
neighboring states on other occasions, as sufficient to establish purposeful
availment). In the instant case, Leviton has not alleged or provided evidence
of its clearly defined distribution network into Pennsylvania stores. In fact,
Leviton has not even alleged how the power tap subject to the instant
litigation arrived in Pennsylvania, and evidence that a few products made their
way into the forum state, in itself, is insufficient to establish personal
jurisdiction. See Renner v. Roundo AB, No. 1-08-cv-209, 2010 WL 3906242,
at *12 (W.D. Pa. Sept. 29, 2010).
Leviton has not met its burden of establishing that the subject power tap
was in Pennsylvania as a result of the regular flow, as opposed to an
17
unpredictable flow, of the stream-of-commerce. Leviton’s allegations of fact
and accompanying evidence leave open the possibility that Primax was not
aware that the power tap at issue in this case was sold in Pennsylvania.
Leviton has failed to establish that Primax exploited the Pennsylvania market
through a defined distribution network, as such, the court cannot find that
Primax purposefully availed itself of the Pennsylvania market in a way that is
related to the instant litigation. In fact, ruling that this court can exercise
personal jurisdiction over Primax would amount to the type of broad streamof-commerce rule Justice Breyer cautioned courts to avoid. Nicastro, 131 S.
Ct. at 2793 (Breyer, J., concurring).
Thus, for the above-stated reasons, the court finds that Leviton has not
satisfied its burden with respect to either standard announced in Asahi. In
light of this conclusion, it is not necessary for the court to consider whether
the assertion of personal jurisdiction over Primax “would comport with ‘fair
play and substantial justice.’” See D’Jamoos, 566 F.3d at 106.
18
Conclusion
The court will dismiss the third-party complaint pursuant to Federal Rule
of Civil Procedure 12(b)(2) for lack of personal jurisdiction. Defendant / ThirdParty Plaintiff Leviton Manufacturing Company has failed to satisfy its burden
with respect to establishing that Third-Party Defendant Primax Electronics
purposefully availed itself of the privileges of conducting activities in the
Commonwealth of Pennsylvania. An appropriate order follows.
19
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
MICHAEL SIEG and
DEANNA SIEG,
Plaintiffs
:
No. 3:10cv606
:
:
(Judge Munley)
:
v.
:
:
SEARS ROEBUCK & COMPANY
:
and LEVITON MANUFACTURING
:
COMPANY,
:
Defendants
:
:
v.
:
:
PRIMAX ELECTRONICS, LTD.,
:
Third-Party Defendant :
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER
AND NOW, to wit, this 24th day of February 2012, Third-Party Defendant
Primax Electronics, Ltd’s motion to dismiss (Doc. 31) is hereby GRANTED.
Third-Party Defendant Primax Electronics, Ltd is DISMISSED from the case.
BY THE COURT:
s/ James M. Munley
JUDGE JAMES M. MUNLEY
United States District Court
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