Banks v. Takkt America Holding, Inc. et al

Filing 61

OPINION & ORDER denying 39 Motion to Dismiss Amended Complaint for Lack of Jurisdiction; denying 42 Motion to Amended Complaint Dismiss for Lack of Jurisdiction; denying 47 Motion to Dismiss for Lack of Jurisdiction Cross-Claim; denying 49 Motion to Dismiss for Lack of Jurisdiction Cross-Claim. Signed by District Judge Henry C. Morgan, Jr and filed on 9/28/17. (tbro)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF VIRGINIA
Norfolk Division

KATRINA MICHELLE BANKS,

Plaintiff,
V.

Civil Action No. 2:16cv542

TAKKT AMERICAN HOLDING, INC. et al.,
Defendants.

OPINION & ORDER

This matter is before the Court pursuant to four (4) Motions to Dismiss. For clarification
purposes, the Parties to this action are as follows: Plaintiff Katrina M. Banks ("Plaintiff'),

Defendant and Crossclaim Plaintiff Hubert Company, LLC ("Hubert"),' Defendant and
Crossclaim Defendant Barclay Trading, LLC ("Barclay"), Defendant and Crossclaim Defendant
Placetech Co., Ltd. ("Placetech"), Defendant and Crossclaim Defendant Prospace International
Co., Ltd. ("Prospace"), Defendant and Crossclaim Defendant Protrend Co., Ltd. ("Protrend"),
Defendant and Crossclaim Defendant Protrend Living Co., Ltd. ("Protrend Living"), and
Defendant and Crossclaim Defendant Protrend Metal & Plastic Co., Ltd ("Protrend Metal &

Plastic").^ For ease of reference, the Court will refer to Prospace, Protrend, Protrend Living, and
Protrend Metal & Plastic collectively as "Protrend Group."
Plaintiff commenced this personal injury action against Hubert and Barclay in state court
on July 25, 2016. Doc. 1, Ex. A. Hubert removed the case to this Court on September 13, 2016.

Doc. 1.

Barclay filed a Third Party Complaint against Placetech and Protrend Group on

' Hubert notes in its Notice of Removal, Doc. 1, that it was improperly named intheoriginal Complaint as Takkt
America Holding, Inc. d/b/a Hubert Company, LLC. The Court will refer to this entity as Hubert.

^Protrend Metal & Plastic has yetto make an appearance in this case.

September 30, 2016. Doc. 10. On January 25, 2017, Plaintiff was given leave to add Placetech
and Protrend Group as Defendants and to file an amended complaint. Doc. 17. After Plaintiff
filed her Amended Complaint, Doc. 18, Hubert filed a Crossclaim against Barclay, Doc. 21, and
a separate Crossclaim against Placetech and Protrend Group, Doc. 22. Placetech and Protrend

Group^ then filed the four (4) Motions to Dismiss at issue here:
1.

Placetech's Motion to Dismiss for Lack of Personal Jurisdiction as to Plaintiffs

Amended Complaint, Doc. 39;
2.

Placetech's Motion to Dismiss for Lack of Personal Jurisdiction as to Hubert's

Crossclaim, Doc. 47;

3.

Protrend Group's Motion to Dismiss for Lack of Personal Jurisdiction as to
Plaintiffs Amended Complaint, Doc. 42; and

4.

Protrend Group's Motion to Dismiss for Lack of Personal Jurisdiction as to
Hubert's Crossclaim, Doc. 49.

For the reasons set forth herein, the Court FINDS that this Court has personal jurisdiction

over Defendants Placetech and Protrend Group. Accordingly, the Court DENIES all four (4)
Motions to Dismiss.

I.

A.

BACKGROUND

Factual Allegations

This action arises out of an accident during which one of the casters on a linen cart

operated by Plaintiff broke, causing the cart to fall on top of and injure Plaintiff. Doc. 18

22-

23. Plaintiff states that upon information and belief the cart was manufactured by one or more of

Placetech and the Protrend Group, id. ^ 15, although the cart manufacturer has not been

^The filings referenced here as made byProtrend Group do notinclude Protrend Metal & Plastic, asthis entity has
not yet made an appearance in this action.

definitively identified,

Doc. 40 at 3. Plaintiff alleges that after manufacture, the cart was

distributed through Barclay, purchased by Hubert, and subsequently sold to Plaintiffs employer,
Aramark/Old Dominion University ("Aramark"). Compl.
B.

16-18.

Procedural History

Plaintiff filed a Complaint against Hubert and Barclay in state court on July 25, 2016.
Doc. 1, Ex. A. On September 12, 2016, Hubert filed its Answer as well as a Crossclaim against
Barclay. Docs. 2, 4. Hubert removed the case to this Court on September 13, 2016. Doc. 1.
Barclay filed its Answer to the Complaint and Consent to Removal on September 16, 2016.
Docs. 6, 8. Barclay filed a Third Party Complaint against Placetech and Protrend Group on

September 30, 2016. Doc. 10. Barclay filed its Answer to Hubert's Crossclaim, Doc. 4, on

November 22, 2016. Doc. 12. On January 25, 2017, Plaintiff was given leave to add Placetech
and Protrend Group as Defendants and to file an Amended Complaint. Docs. 17, 18. Barclay
filed an Answer to Plaintiffs Amended Complaint on February 13, 2017. Doc. 19. On February
14, 2017, Hubert filed an Answer to the Amended Complaint, Doc. 20, a Crossclaim against
Barclay, Doc. 21, and a separate Crossclaim against Placetech and Protrend Group, Doc. 22.
Barclay filed an Answer to Hubert's Crossclaim, Doc. 21, on February 21, 2017. Doc. 23.

On June 8, 2017, Placetech and Protrend Group each filed a Motion to Dismiss for Lack
of Personal Jurisdiction as to the Amended Complaint.

Docs. 39 (Placetech), 42 (Protrend

Group). On June 12, 2017, Placetech and Protrend Group each filed a Motion to Dismiss for
Lack of Personal Jurisdiction as to Hubert's Crossclaim, Doc. 21. Docs. 47 (Placetech), 49

(Protrend Group).

On June 22, 2017, Plaintiff filed a Memorandum in Opposition to

Defendants' Motion to Dismiss, regarding both Placetech's and Protrend Group's Motions to
Dismiss the Amended Complaint. Doc. 51. Placetech and Protrend Group each filed a Reply to

Plaintiffs Response on June 28, 2017. Docs. 52 (Placetech), 53 (Protrend Group). Hubert did
not file a response to either Motion to Dismiss its Crossclaim, Docs. 47, 49.
C.

Jurisdictional Facts

Plaintiff directs her jurisdictional argument at Placetech only, as Placetech "appears to be
the correct defendant." Doc. 51 at 3 n.3.

However, Plaintiff "contends that the arguments

against other members of the Protrend Group would be similar, and jurisdiction would be proper

against any ofthe Protrend Group defendants who actually manufactured the Cart."'^ Id.
Plaintiff observes from publicly available data that Placetech has made 281 shipments
into the United States since the beginning of 2015, including a small number of shipments into
Norfolk, VA. ^

id, Exs. B, E, F, G. Plaintiff alleges that "Placetech's most frequent customer

during this time appears to be LG Sourcing, Inc.[J a wholly owned subsidiary of Lowe's." Id at
3. Lowe's is a large retailer with 10 stores in the Hampton Roads region of Virginia. Id
Plaintiff also notes that the Protrend Group (which Plaintiff alleges encompasses

Placetech) "operates a website accessible in Virginia." Id at 4. The website allows Virginians

to "find information about Protrend Group's products" and "to contact Protrend Group for more
information." Id The website displays a graphic announcing that 45% of Protrend Group's
business comes from "America" and invokes Protrend Group's relationships with major
American retailers such as Lowe's, Home Depot, Wal-Mart, Target, Sears, Sam's Club, and
Costco. Id; s^ Ex. N. The News Release page of the website "indicates that [Protrend Group]
participated in the International Home + Housewares Show in Chicago in 2016." Id; ^

Ex. M.

'* Inthesame way that arguments M exercising personal jurisdiction apply similarly to both Placetech and the
Protrend Group, arguments against exercising personal jurisdiction apply equally well to both. Nor does the
analysis change for the jurisdictional challenge to Hubert's Crossclaim. Accordingly, although the following
analysis will focus on the Parties' arguments regarding Placetech and Plaintiffs Amended Complaint, the findings
and conclusions drawn from such analysis may be applied to all four (4) Motions to Dismiss.

It appears to be the position of Placetech and Protrend Group that if any of the

Defendants who are parties to the Motions to Dismiss had any contact with the product at issue,
it would be Placetech.

Doc. 40 at 3-4; Doc. 43 at 2-4.

Placetech states that upon

information and belief, the casters were manufactured by Protrend Metal & Plastic. Doc. 40 at

3-4. Placetech contends that any contact it had with the product was limited to selling and
delivering the casters from Protrend Metal & Plastic to VNI, LLC, for subsequent shipment to
Hubert in Harrison, Ohio. Id Placetech "did not enter into any contract to supply such products

to anyone in Virginia," "communicate with Hubert, . . . Aramark, or Plaintiff regarding the
product at issue prior to the incident," or "perform any activities in Virginia with respect to the
product" Id. at 4.

Placetech and Protrend Group further assert that they maintain only a passive website that

is neither specific to the United States nor one through which customers in the United States can
directly purchase any product. S^ Doc. 52 at 9; Doc. 43 at 3-4.
II.

A.

LEGAL STANDARDS

Rule 12(b)(2)

To survive a motion to dismiss under Federal Rule of Civil Procedure 12(b)(2), the

plaintiff ultimately bears the burden of proving grounds for personal jurisdiction by a
preponderance of the evidence. S^ Gravson v. Anderson. 816 F.3d 262, 269 (4th Cir. 2016);
Carefirst of Md.. Inc. v. Carefirst Pregnancv Ctrs.. Inc.. 334 F.3d 390, 396 (4th Cir. 2003) (citing

Mvlan Labs.. Inc. v. Akzo. N.V.. 2 F.3d 56, 59-60 (4th Cir. 1993)). However, where the court

decides the issue "on the basis only of motion papers, supporting legal memoranda and the
relevant allegations of a complaint," without a hearing, "the burden on the plaintiff is simply to

make a prima facie showing of a sufficient jurisdictional basis to survive" the motion to dismiss.

New Wellington Fin. Corp. v. Flagship Resort Dev. Corp.. 416 F.3d 290, 294 (4th Cir. 2005)
(quoting Combs v. Bakker. 886 F.2d 673, 676 (4th Cir. 1989)).

"In deciding whether the

plaintiff has made the requisite showing, the court must take all disputed facts and reasonable
inferences in favor of the plaintiff." Carefirst. 334 F.3d at 396.
"A court's exercise of personal jurisdiction over a non-resident defendant is consistent
with due process if the defendant has sufficient 'minimum contacts' with the forum such that

requiring the defendant to defend its interests in the forum does not 'offend traditional notions of
fair play and substantial justice.'" AESP. Inc. v. Signamax. LLC. 29 F. Supp. 3d 683, 689 (E.D.
Va. 2014) (quoting Int'l Shoe Co. v. Washington. 326 U.S. 310, 316 (1945)). There are two

types of personal jurisdiction: general jurisdiction and specific jurisdiction. Plaintiff in this case
seeks to assert specific personal jurisdiction. Doc. 51 at 6.

In determining the existence of

specific jurisdiction, the Fourth Circuit generally considers:

(1) the extent to which the defendant has purposefully availed itself of the privilege of
conducting activities in the state; (2) whether the plaintiffs' claims arise out of those
activities directed at the state; and (3) whether the exercise of personal jurisdiction would
be constitutionally "reasonable."
Carefirst. 334 F.3d at 396 (citing ALS Scan. Inc. v. Digital Serv. Consultants. Inc.. 293 F.3d 707,
711-12 (4th Cir. 2002).

Plaintiff invokes an alternative personal jurisdiction test based on the "stream of
commerce" theory of personal jurisdiction.

See, e.g.. World-Wide Volkswagen Corp. v.

Woodson. 444 U.S. 286, 297-98 (1980). Under this test, "[t]he forum State does not exceed its
powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that

delivers its products into the stream of commerce with the expectation that they will be
purchased by consumers in the forum State." Id. Subsequent divided Courts have disagreed as
to how much this test requires. S^ Asahi Metal Indus. Co. v. Superior Court of Cal.. 480 U.S.

102 (1987); see also J. Mclntvre Mach.. Ltd. v. Nicastro. 564 U.S. 873 (2011). One position,

held by Justice O'Connor and joined by three others, requires not only the knowledge or
expectation that a product placed into the stream of commerce could wind up in the forum state,

but also some evidence that the placement was "purposefully directed at the forum State."
Asahi. 480 U.S. at 112. By contrast, an opinion written by Justice Brennan and joined by three

others asserts that the Due Process Clause does not require a showing of purposefulness for
personal jurisdiction to attach. S^ id at 117 ("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.").

The Fourth Circuit has not taken a definitive position on this question. On the one hand,
the Court's opinion in Lesnick v. Hollingsworth & Vose. Co.. 35 F.3d 939 (4th Cir. 1994),

appears to favor Justice O'Connor's approach. S^ AESP. 29 F. Supp. 3d at 690. In Lesnick.
the Court concluded that "[t]he touchstone of the minimum contacts analysis remains that an outof-state person have engaged in some activity purposefully directed toward the forum state."
Lesnick. 35 F.3d at 945. However, the Lesnick Court's approach was directly motivated by
federalism concerns and the Court's desire to preserve the sovereignty of individual States. S^

id. ("To permit a state to assert jurisdiction over any person in the country whose product is sold
in the state simply because a person must expect that to happen destroys the notion of individual
sovereignties inherent in our system of federalism.").

Thus, it is unclear to what extent the

Fourth Circuit's analysis would change in the case of a non-U.S. defendant.
A number of more recent cases have adopted something closer to Justice Brennan's

interpretation of minimum contacts.

These cases offer what might be called a "national

contacts" or "national market" test, whereby a defendant who places its products into the stream

of commerce with the intent to serve the United States as a whole is subject to personal

jurisdiction in any individual State. See, e.g., Ainsworth v. Moffett Engineering. Ltd.. 716 F.3d
174 (5th Cir. 2013) (holding that non-U.S. defendant was subject to personal jurisdiction in
Mississippi because defendant entered into distribution agreement that defined sales territory "as
the entire United States," id, at 177); Emerson Elec. Co. v. Suzhou Cleva Elec. Appliance Co..
Ltd.. No. 4:13cv01043, 2014 WL 2986685, at *9 (E.D. Mo. July 1, 2014) ("[Defendants']

decisions to sell their products to nationwide retailers with outlets in Missouri provide strong

evidence of their intent and purpose to reach Missouri customers."); Estes v. Midwest Products.

Inc.. 24 F. Supp. 2d 621 (S.D. W.Va. 1998) (finding personal jurisdiction over defendant who
sold most of its products through national retailers Wal-Mart and Kmart). As one court
explained:

Manufacturers of finished products which purposely and intentionally direct them into
the state through national retailers that combine the functions of advertiser, wholesaler,
distributor, and retailer must expect to be haled into court in West Virginia when one of
their products is implicated in the wrongful injury of a party here. This is so because a
manufacturer that sells its products through such a national retailer completely manifests
its direct purpose and intent to sell its product in this sovereign state.
Estes. 24 F. Supp. 2d at 632.

"Under this 'relatively expansive' theory, only 'mere foreseeability' that a defendant

might be haled into court because it purposely availed itself of the benefits of the forum state is
required." Jackson v. Tanfolgio Giuseppe. S.R.L.. 615 F.3d 579, 585 (5th Cir. 2010) (citing
Nuovo Pienone. SpA v. STORMAN ASIA MA^. 310 F.3d 374, 381 n.8 (5th Cir. 2002)).

Finding this line of cases persuasive, this Court adopts the "national contacts" test for
personal jurisdiction in the following analysis.

III.

ANALYSIS

Plaintiff asserts that "this Court can not [sic] seriously entertain the idea that Placetech

did not know or intend that its products would be distributed to customers and users in Virginia,"
because Placetech "sells and markets to major retailers with presence in every state, including

Virginia." Doc. 51 at 10. Placetech's importers include major American retailers such as
Lowe's and the Home Shopping Network.

id, Exs. C, F. Placetech's website indicates that

the company does business with numerous other American retailers as well, including Wal-Mart,
Target, The Home Depot, Sears, and Menards, and that 45% of its business comes from the
United States.

Ex. N.

Plaintiffhas alleged that Defendants Placetech and Protrend Group placed their products,

including the product at issue in this case, into the stream of commerce, with the knowledge and
intent that those products would be sold through national retailers to consumers throughout the
United States. It is clear from these alleged facts that Placetech and Protrend Group delivered

their products "into the stream of commerce with the expectation that [the products] would be
purchased by or used by consumers in [Virginia.]" Ainsworth, 716 F.3d at 177 (quoting Bearrv
V. Beech Aircraft Corp.. 818 F.2d 370, 374 (5th Cir. 1987)). Accordingly, the Court FINDS that
the Court has personal jurisdiction over Defendants Placetech and Protrend Group.
IV.

CONCLUSION

For the reasons set forth herein, the Court FINDS that it has personal jurisdiction in this

matter over Defendants Placetech and Protrend Group. Thus, the Court DENIES Defendants

Placetech's and Protrend Group's Motions to Dismiss as to Plaintiffs Amended Complaint,
Docs. 39,42, and Hubert's Crossclaim, Docs. 47, 49.

The Clerk is REQUESTED to deliver electronically a copy of this Order to all counsel

of record.
It is so ORDERED.

Is!

Henry Coke Morgan, Jr.

Senior United Slates District Judge^
HENRY COKE MORGAN, JR.
SENIOR UNITED STATES DISTRICT UDGE

Norfolk, VA
September

, 2017

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