Opinion
Master File No. 1:00-1898, MDL 1358 (SAS), M21-88.
June 24, 2005
Alan J. Hoffman, Esq., Laurence S. Shtasel, Esq., Blank Rome LLP, Philadelphia, PA, Counsel for Lyondell Chemical Co.
Robert Gordon, Esq., Robin Greenwald, Esq., C. Sanders McNew, Esq., Weitz Luxenberg, P.C., New York, NY, Liaison Counsel for Plaintiffs.
Peter John Sacripanti, Esq., James A. Pardo, Esq., Stephen J. Riccardulli, Esq., McDermott, Will Emery LLP, New York, NY, Liaison Counsel for Defendants.
OPINION AND ORDER
I. INTRODUCTION
Plaintiffs bring this action seeking relief from the actual or threatened contamination of their groundwater with the gasoline additive methyl tertiary butyl ether ("MTBE"). Defendant Lyondell Chemical Company ("Lyondell") moves to dismiss for lack of personal jurisdiction in two cases originally filed in New Hampshire. For the reasons that follow, Lyondell's motion is denied.
II. LEGAL STANDARD
Pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure, a court is obligated to dismiss an action against a defendant over which it has no personal jurisdiction. Plaintiffs bear the ultimate burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the defendant. However, "[p]rior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith . . . legally sufficient allegations of jurisdiction, i.e., by making a prima facie showing of jurisdiction." Plaintiffs "can make this showing through [their] own affidavits and supporting materials, containing an averment of facts that, if credited . . ., would suffice to establish jurisdiction over the defendant." "In the absence of an evidentiary hearing on the jurisdictional allegations, or a trial on the merits, all pleadings and affidavits are construed in the light most favorable to plaintiff, and where doubts exist, they are resolved in the plaintiff's favor."
See Fed.R.Civ.P. 12(b)(2); see also In re Ski Train Fire in Kaprun, Austria on November 11, 2000 (Siemens Austria), 230 F. Supp. 2d 403, 406 (S.D.N.Y. 2002).
See Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2d Cir. 1999); Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir. 1994).
Jazini v. Nissan Motor Co., 148 F.3d 181, 184 (2d Cir. 1998) (quotation marks and citations omitted); see also Koehler v. Bank of Berm., Ltd., 101 F.3d 863, 865 (2d Cir. 1996).
Whitaker v. American Telecasting Inc., 261 F.3d 196, 208 (2d Cir. 2001) (quotation marks and citations omitted).
Id.
The determination of whether a federal court has personal jurisdiction over a defendant is a two-step process. First, the court must determine whether the plaintiff has shown that the defendant is subject to personal jurisdiction under the forum state's laws. In multi-district litigation, the law of the state where the action was first filed governs. Second, the court must evaluate whether its assertion of jurisdiction comports with the requirements of due process.
See Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997); Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996).
See In re Ski Train Fire in Kaprun, Austria on November 11, 2000 (Waagner), 257 F. Supp. 2d 717, 723 (S.D.N.Y. 2003); In re Sterling Foster Co. Sec. Litig., 222 F. Supp. 2d 289, 300 (E.D.N.Y. 2002) ("In a multi-district litigation, the transferee court must apply the law of the transferor forum in determining issues of personal jurisdiction.") (citing Van Dusen v. Barrack, 376 U.S. 612, 639-40 (1964)).
See Bensusan Rest. Corp., 126 F.3d at 27; Met Life, 84 F.3d at 567.
III. DISCUSSION
New Hampshire's long-arm statute provides:
Any person who is not an inhabitant of this state and who, in person or through an agent, transacts any business within this state, commits a tortious act within this state, or has the ownership, use, or possession of any real or personal property situated in this state submits [itself], or [its] personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from or growing out of the acts enumerated above.
N.H. Rev. Stat. § 510:4 (2004).
The New Hampshire Supreme Court construes this long-arm statute "as permitting the exercise of jurisdiction to the extent permissible under the Federal Due Process clause." Therefore, the jurisdictional analysis collapses into a single inquiry — whether New Hampshire's exercise of jurisdiction over Lyondell comports with due process.
Lyme Timber Co. v. DSF Investors LLC, 150 N.H. 557, 842 A.2d 115, 118 (2004). Accord Metcalf v. Lawson, 148 N.H. 35, 37 (2002); Alacron, Inc. v. Swanson, 145 N.H. 625, 628 (2000).
The constitutional due process analysis consists of two parts: the "minimum contacts" test and a "reasonableness" inquiry. In order for a court to have personal jurisdiction over a defendant, the Due Process Clause of the Fourteenth Amendment requires that the defendant "have 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." Jurisdiction can be "general," where the defendant's forum-based contacts are "continuous and systematic," or it can be "specific," where the cause of action arises out of or relates to the defendant's contacts with the forum state. Once "minimum contacts" have been established, it becomes defendant's burden to "present a compelling case that the presence of some other considerations would render jurisdiction unreasonable." In the Second Circuit, courts consider the following factors in assessing reasonableness:
International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (quotation marks and citation omitted).
See Helicopteros Nacionales de Columbia v. Hall, 466 U.S. 408, 414 nn. 8, 9 (1984).
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 477 (1985).
(1) the burden that the exercise of jurisdiction will impose on the defendant; (2) the interests of the forum state in adjudicating the case; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of the controversy; and (5) the shared interest of the states in furthering substantive social policies.
Bank Brussels Lambert v. Fiddler Gonzalez Rodriguez, 305 F.3d 120, 129 (2d Cir. 2002).
A. Minimum Contacts
In an Opinion and Order dated January 18, 2005 ("January 18 Opinion"), I held that the Court has specific jurisdiction over Lyondell for cases filed in Florida, Indiana, Iowa, Kansas, Massachusetts, Vermont, and West Virginia (collectively, "Forum States"), because plaintiffs' claims arise out of or relate to Lyondell's contacts with each of the Forum States. Based on World-Wide Volkswagen Corp. v. Woodson, I found that Lyondell's multi-million dollar sales of MTBE to customers across the country and its direct sales to customers in the Forum States constitute sufficient minimum contacts to exercise jurisdiction in each of the forum states. Furthermore, I held that the exercise of jurisdiction was reasonable because the Forum States had significant interests in the litigation, and Lyondell had not shown that it would bear any unique burden in proceeding in those states.
See In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., No. 1:00-1898, M21-88, 2005 WL 106936, at *9 (S.D.N.Y. Jan. 18, 2005) ( "MTBE I").
444 U.S. 286 (1980).
See MTBE I, 2005 WL 106936, at *9.
See id. at *10.
The reasoning of my January 18 Opinion applies with equal force here. Lyondell is one of the world's largest (if not the largest) producers of MTBE. In 2003, the company sold more than $640 million worth of MTBE in North America alone. Until 1992, Lyondell sold MTBE directly to customers in New Hampshire, and it continues to sell MTBE to refiners and large distributors, such as ExxonMobil Corporation. Lyondell purposefully availed itself of the New Hampshire market because it knew its product would be distributed and sold nationally, and it stood to profit handsomely from those sales. Plaintiffs' causes of action arise from or relate to Lyondell's sales of MTBE because plaintiffs claim that their property and drinking water wells are contaminated with MTBE. Thus, Lyondell's contacts with New Hampshire are sufficient to permit the exercise of specific jurisdiction.
See id. at *9.
See id.
See Affidavit of Karen M. Bowling, Lyondell Business Manager ("Bowling Aff.") ¶ 9, Ex. A to Brief in Support of Defendant Lyondell Chemical Company's Motion to Dismiss for Lack of Personal Jurisdiction.
See MTBE I, 2005 WL 106936, at *9 ("Lyondell has done more than introduce a few of its products into the stream of commerce — it primed and then pumped its product into the stream."); Brothers Records, Inc. v. HarperCollins Publishers, 141 N.H. 322, 327-28 (1996) (defendants in libel action who were directly responsible for content of book "deliberately exploited the New Hampshire market" because their "ultimate goals regarding the book included nationwide distribution and sale").
See City of Portsmouth Third Amended Complaint ¶¶ 1, 5; City of Dover Third Amended Complaint ¶¶ 1, 5.
Lyondell argues that it did not concede through its manager's affidavit that it directly sold or delivered MTBE to customers in New Hampshire because its sales transactions are made only on a "free on board" basis at its sites in Texas and New Jersey. This means that Lyondell moves MTBE via pipeline from its production facilities to storage terminals in Texas and New Jersey, where its customers then take title to the product. According to Lyondell, its "concession" that it sold MTBE to New Hampshire "merely" refers to customers whose invoice addresses are in New Hampshire. However, Lyondell itself attributes its MTBE sales to the state where the purchasing entity is located. Moreover, the fact that title initially passes to a party outside of New Hampshire does not undermine the degree of contacts that Lyondell has with that state. Lyondell does not contend that an invoice address could never be the site of delivery. It is reasonable to infer that defendant's MTBE made its way to New Hampshire based on Lyondell's sales records, and also because some mixing of gasoline occurs within the pipelines during transport to New Hampshire.
Reply in Further Support of Defendant Lyondell Chemical Company's Motion to Dismiss for Lack of Personal Jurisdiction, at 6.
See Bowling Aff. ¶ 12 (historical sales data maintained by Lyondell reflect invoicing addresses for its customers).
See Kaplan v. DaimlerChrysler, A.G., 99 F. Supp. 2d 1348, 1352 (M.D. Fla. 2000) (fact that title to car passed to distributor in Germany rather than in the United States did not affect determination of minimum contacts).
See In re Methyl Tertiary Butyl Ether Prods. Liab. Litig., 341 F. Supp. 2d 386, 395 (S.D.N.Y. 2004) (describing "transmix," "interface," and how adjacent batches of petroleum products mix with each other at the boundaries between batches).
Furthermore, it is not material that Lyondell's sales of MTBE to New Hampshire terminated in 1992, because (as defendant acknowledges), "MTBE may not biodegrade as promptly as other gasoline constituents and may require additional and more costly remediation procedures." Hence, Lyondell's actions in 1992 could have caused plaintiffs' injury in 2003, when these actions were filed. Lyondell's contacts with New Hampshire are sufficient to permit the exercise of personal jurisdiction.
Lyondell MTBE Product Safety Bulletin, Ex. C to Memorandum of Law in Support of Plaintiffs' Response to Defendants' Motion to Dismiss New Hampshire Cases.
B. Reasonableness Inquiry
The exercise of jurisdiction over Lyondell is fair and reasonable given the interests of plaintiffs and the forum state. Plaintiffs are water providers that are concerned about the safety of the water supply in their respective areas. New Hampshire has an interest in compensating its citizens for injuries caused by defective products. These interests would be best served by the exercise of jurisdiction because the witnesses and evidence concerning contamination will be located in New Hampshire. Lyondell has failed to show that the burden imposed on it by litigating in New Hampshire reaches constitutional magnitude. Accordingly, the exercise of jurisdiction over Lyondell comports with due process.
IV. CONCLUSION
For the reasons set forth above, Lyondell's motion to dismiss for lack of personal jurisdiction is denied. The Clerk of the Court is directed to close this motion. A conference is scheduled for 10:00 a.m. on September 9, 2004, in Courtroom 15C.
SO ORDERED.