Opinion
2:02-cv-0256-LJM
March 31, 2003
ORDER ON DEFENDANT'S MOTION TO DISMISS
This cause is now before the Court on defendant's, AC Hydraulics A/S ("AC"), Motion to Dismiss this action pursuant to Federal Rule of Civil Procedure 12(b)(2) ("Rule 12(b)(2)"). AC asserts that this Court lacks personal jurisdiction over it pursuant to both the Indiana long-arm statute and the Due Process Clause of the Fourteenth Amendment. The plaintiffs, Pamela J. Jennings ("Mrs. Jennings") and the Estate of James R. Jennings (collectively "Jennings"), asserts that specific jurisdiction over AC is appropriate under the circumstances of this case.
For the foregoing reasons, the Court finds that AC's Motion to Dismiss should be GRANTED.
I. FACTUAL PROCEDURAL BACKGROUND
Mrs. Jennings, an Indiana resident, individually and as personal representative of the Estate of James R. Jennings, her husband, filed this suit on August 26, 2002, in Vermillion County, Indiana. The complaint alleges violations of Indiana's product liability law, negligence and breach of warranty with respect to a floor jack allegedly manufactured by AC. The complaint alleges that on or about September 5, 2002, Mr. Jennings was installing and repairing a starter on a forklift at the premises of his employer, Red and White Grocery, in Cayuga, Indiana. The forklift was supported by an FJ40 floor jack, bearing serial number 063766, which was allegedly manufactured by AC. The complaint alleges that Mr. Jennings was under the forklift when the floor jack slipped out, causing the forklift to fall upon Mr. Jennings. Mr. Jennings allegedly sustained severe injuries, which resulted in his death.
The defendants, Stertil-Koni, USA Inc. and AC, removed the case to this Court on October 3, 2002. On December 11, 2002, AC filed the instant Motion to Dismiss for lack of personal jurisdiction.
At all relevant times to this action, AC was a manufacturer of hydraulic and other jacks. AC has its principal place of business in Viborg, Denmark. AC asserts that it is not an Indiana corporation nor is it licensed to do business in the state. Christensen Aff. ¶ 6. Further, AC is not required to maintain nor does it maintain a personal registered agent for service of process in Indiana. Id. Furthermore, AC contends that it has never engaged in business in the State of Indiana, it does not maintain an office in Indiana, it does not have a telephone listing, bank account, assets, property, facilities, employees, servants or agents in the state. Id. ¶ 7. In addition, AC does not send representatives to Indiana to conduct business on behalf of AC nor does AC advertise products or services in Indiana. Id. ¶ 9.
However, in the past, AC has sold jacks to Steril-Koni, USA, Inc., and ESCO Equipment Supply Co., both located in Florida. Id. ¶ 10. Those businesses sell AC's product to customers in other states. Id. AC avers that it does not control and has never controlled the use of its products or distribution of its products in the United States. Id. Furthermore, AC maintains a website that includes listings for U.S. distributors for AC's products. Fernandes Aff. ¶ 3. At the website www.ac-hydraulics.com, AC states that more than 80% of its total distribution is done in the world of export markets. Id. Exh. 1.
II. STANDARDS
Because AC has challenged personal jurisdiction, Jennings has the burden of demonstrating that such jurisdiction exists. RAR, Inc. v. Turner Diesel, Ltd., 107 F.3d 1272, 1276 (7th Cir. 1997). The Court will assume as true for purposes of this motion any affidavits or other specific evidence Jennings offers, and will construe any disputed facts in its favor. Id. at 1275.
Jurisdiction exercised on the basis of a federal statute that does not authorize national service of process requires a federal district court to determine if a court of the state in which it sits could have personal jurisdiction. Search Force, Inc. v. Dataforce Int'l, Inc. 112 F. Supp.2d 771, 774 (S.D.Ind. 2000). The Indiana Supreme Court recently explained that a two-step analysis is required to determine whether an Indiana state court may exercise personal jurisdiction over a nonresident defendant. See Anthem Ins. Co. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000). The Court must first determine whether AC's conduct falls within Indiana's long-arm statute. If it does, the Court must then determine if AC's contacts with Indiana satisfy federal due process analysis. Id.
Ind. Trial Rule 4.4(A) performs the same function as a long-arm statute. Although technically a trial rule, the Court will refer to it throughout this opinion as the "long-arm statute."
Under the familiar due process analysis enunciated by the Supreme Court in International Shoe Co. v. Washington, a court must determine whether a nonresident defendant has sufficient "minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" 326 U.S. 310, 316 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). See also Wilson v. Humphreys (Cayman) Ltd., 916 F.2d 1239, 1243 (7th Cir. 1990), cert. denied, 499 U.S. 947 (1991). These minimum contacts must be established by a defendant's purposeful acts. As the Supreme Court explained in Hanson v. Denckla:
The unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State. The application of that rule will vary with the quality and nature of the defendant's activity, but is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protection of its laws.357 U.S. 235, 253 (1958). In short, exercising jurisdiction over a defendant will comply with due process only if the defendant "reasonably should have anticipated `being haled into court' in Indiana" and "purposefully . . . availed itself of the `privilege of conducting activities' in Indiana.'" Wilson, 916 F.2d at 1244 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980) and Hanson, 357 U.S. at 253). Once minimum contacts have been established, a court must "determine whether the assertion of personal jurisdiction would comport with `fair play and substantial justice.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Int'l Shoe, 326 U.S. at 320).
The Supreme Court has recognized two separate forms of personal jurisdiction that will satisfy this "minimum contacts" requirement: general and specific. See RAR, Inc., 107 F.3d at 1277. "General jurisdiction" allows a court to exercise its jurisdiction over a defendant who has had such "continuous and systematic" contacts with the forum state that the court's exercise of jurisdiction over the defendant is reasonable and just, even if those contacts bear no relation to the underlying controversy. Id. The standard for establishing general jurisdiction is fairly high. See Wilson, 916 F.2d at 1245.
By contrast, "specific jurisdiction" exists where the defendant has had only "minimum contacts" with the forum state but the cause of action arises from those contacts. RAR, 107 F.3d at 1277. "[T]he defendant's conduct and connection with the forum state [must be] such that he should reasonably anticipate being haled into court there" to answer for his conduct. World-Wide Volkswagen, 444 U.S. at 297. See also RAR, 107 F.3d at 1277 (stating that the court must consider "whether, by traditional standards, [a defendant's contacts with the forum] would make personal jurisdiction reasonable and fair under the circumstances"). Random, fortuitous or attenuated contacts will not suffice to support a finding of specific personal jurisdiction. See Burger King, 471 U.S. at 475; RAR, 107 F.3d at 1277-78 (discussing what constitutes "purposeful availment" such that litigating in the forum is foreseeable to the defendant).
III. DISCUSSION A. DOES INDIANA'S LONG-ARM STATUTE REACH AC'S CONDUCT?
Jennings contends that AC's conduct falls squarely within a particular provision of Indiana's long-arm statute. Jennings' Resp. Br. at 3-4. The relevant portion of the statute provides as follows:
Acts serving as a Basis for Jurisdiction. Any person or organization that is a nonresident of this state, a resident of this state who has left the state, or a person whose residence is unknown, submits to the jurisdiction of the courts of this state as to any action arising from the following acts committed by him or her or his or her agent:
* * *
(3) causing personal injury or property damage in this state by an occurrence, act or omission done outside the state if he regularly does or solicits business or engages in any other persistent course of conduct, or derives substantial revenue or benefit from goods, materials, or services used, consumed or rendered in this state.
T.R. 4.4(A)(3). Jennings argues that AC derived substantial revenue or benefits from goods used or consumed in Indiana because it advertises on the internet, a medium which is freely accessible by consumers worldwide, including within the State of Indiana. Jennings' Resp. Br. at 3-4. Although there are no services in this case, the jack at issue in the instant case was actually "used" or "consumed" in Indiana. See id. at 1. Thus, AC arguably derived revenue from goods in this state and would be covered by this section of the statute. Assuming, without deciding, that Indiana's long-arm statute would cover AC's conduct, the Court must now determine whether AC's contacts with Indiana satisfy federal due process analysis. See Anthem, 730 N.E.2d at 1232.
B. DID AC HAVE SUFFICIENT CONTACTS WITH INDIANA?
The Court must now consider whether AC had sufficient contacts with Indiana to allow specific jurisdiction over any incidents related to those contacts. To be subject to personal jurisdiction in Indiana, AC must have purposefully established contact with Indiana and the basis of the lawsuit must arise out of these contacts. See id. at 1235 (citing Burger King, 471 U.S. at 472). Things to consider when evaluating AC's contacts with Indiana are: (1) whether Jennings's claim arises from AC's contacts; (2) the overall contacts of AC or its agent with Indiana; (3) the foreseeability of being haled into court in Indiana; (4) who initiated the contacts; and (5) whether AC expected or encouraged contacts with Indiana. See Anthem, 730 N.E.2d at 1236. Furthermore, defendants should reasonably anticipate being subject to suit in any state if they are aware of their product's destination into that state. See Nelson v. Park Indus., Inc., 717 F.2d 1120, 1126 (7th Cir. 1983) (emphasis added) (stating that a Hong Kong manufacturer and distributor should have reasonably anticipated being haled into court because they knew that their product was specifically destined for retail sale in Woolworth stores, located in various states throughout the U.S.). "In sum, when evaluating issues of specific personal jurisdiction, the court must examine the quality and nature of the activities taking place within the state to determine if they are related to the basis of the lawsuit and the result of deliberate conduct by the defendant." Anthem, 730 N.E.2d at 1236.
Indeed, there was no attempt by AC to initiate or direct its activities toward Indiana in a manner that suggests that it "purposely availed" itself of the benefits of Indiana law. AC is not an Indiana corporation, nor is it licensed to do business in the state. Christensen Aff. ¶ 6. Furthermore, AC contends that it has never engaged in business in the State of Indiana, it does not maintain an office in Indiana, it does not have a telephone listing, bank account, assets, property, facilities, employees, servants or agents in the state. Id. ¶ 7. In addition, AC does not send representatives to Indiana to conduct business on behalf of AC nor does AC advertise products or services in Indiana. Id. ¶ 9. Moreover, there is no evidence that AC ever expected or encouraged contacts with Indiana such that AC would have reasonably anticipated being haled into court here. See RAR, 107 F.3d at 1277 ("Crucial to the minimum contacts analysis is showing that the defendant `should reasonably anticipate being haled into court [in the forum state]' because the defendant has `purposefully avail[ed] itself of the privilege of conducting activities there.'") (internal citations omitted).
In addition, unlike the defendants in Nelson, AC had no knowledge that the particular jack at issue was destined for Indiana. See Nelson, 717 F.2d. at 1126. AC sold its jacks to Steril-Koni, USA, Inc., and ESCO Equipment Supply Company, in Florida. Christensen Aff. ¶ 10. But AC contends that "[t]hose two separate entities independently distribute AC[`s] . . . products within the United States." Id. (emphasis added). AC also claims that it "does not control and has never controlled Steril-Koni, USA, Inc.'s or ESCO Equipment Supply's distribution of AC products in the United States." Id. The Court finds that, on the record established, Jennings' allegations are insufficient to establish a prima facie showing that AC had full knowledge of the product's distribution scheme, as explained in Nelson. See 717 F.2d at 1127.
The Court concludes that AC lacked the necessary contacts with Indiana to establish specific jurisdiction. Exercising specific jurisdiction over AC based upon its lack of contacts with Indiana would be unreasonable, unfair, and would not comport with due process.
IV. CONCLUSION
The Court concludes that exercising personal jurisdiction over defendant AC does not withstand federal due process analysis. Accordingly, the Court GRANTS AC's motion to dismiss for lack of personal jurisdiction.