JOEL H. SLOMSKY, District Judge.
Plaintiffs, family members of Joanne Rodriguez and the administrator of her estate, bring this action charging various entities and persons with the death of Joanne and the posthumous birth of her son, Xavier, born with brain damage. (Doc. No. 33.) Paramedics had transported Joanne to Temple University Hospital by ambulance, whose rear door temporarily became stuck in the locked position upon arrival, trapping her and her unborn son inside for a matter of minutes. (
On July 24, 2014, Plaintiffs Eriberto Rodriguez, Joanne's husband, and Daisy Morales, Xavier's maternal grandmother, commenced this suit in the Philadelphia Court of Common Pleas and included as a Defendant TriMark Corporation ("TriMark"), the supplier of the locking mechanism used in the ambulance that transported Joanne ("Medic Unit 22").
On December 22, 2014, TriMark filed a Third Party Complaint against distributors HMI Group; HMI USA, Inc.; HMI, LTD.; and HMI Sources, Ltd. (hereinafter collectively "HMI"), with which TriMark contracted for the purchase of actuators
On December 21, 2015, TriMark amended its Third Party Complaint, adding as Third Party Defendants Tesor Plus Corporation ("Tesor") and Pilock Corporation ("Pilock"), which were identified by HMI as manufacturers of the actuator at issue that was supplied to HMI before being used by TriMark. (Doc. No. 75 ¶ 9.) On August 19, 2016, Tesor and Pilock filed a Motion to Dismiss the Amended Third Party Complaint pursuant to Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction. (Doc. No. 90.) On February 17, 2017, this Court entered an Order affording the opportunity for jurisdictional discovery and denying Tesor and Pilock's Motion to Dismiss without prejudice. (Doc. No. 119.)
On June 1, 2017, Tesor and Pilock again filed a Motion to Dismiss the Amended Third Party Complaint pursuant to Rule 12(b)(2). (Doc. No. 126.) On June 15, 2017, TriMark filed a Response in Opposition to Tesor and Pilock's Motion.
On October 1, 2012, paramedics from the Philadelphia Fire Department Emergency Medical Services responded to a 911 call for Joanne prompted by an accidental fall at her parent's home. (Doc. No. 33 ¶¶ 1, 84.) Joanne was 24 years old, around 36 weeks pregnant, and under treatment for deep vein thrombosis. (
Joanne was trapped inside the ambulance for three to four minutes before hospital personnel were able to open the door. (
An investigation following the events of October 1, 2012 ultimately determined that Medic Unit 22's door lock system was defective. (
TriMark is a privately owned corporation that maintains a principal place of business in New Hampton, Iowa, and conducts business in several states, including Pennsylvania. (Doc. No. 75 ¶ 1.) It supplies door hardware systems for emergency transportation vehicles like the one used in Medic Unit 22. (
HMI has a marketing brochure that describes how the company "manages the entire supply chain for you, from development to delivery." (Doc. No. 135-11 at 3.) Under a section called "Quality Assurance," it notes that HMI helps its "Asian vendors . . . better understand your quality requirements" and that its engineers "engage in an ongoing dialogue with you and the manufacturer to arrive at acceptable and achievable quality standards." (
Among the foreign companies that worked with HMI to supply actuators to TriMark were Tesor and Pilock. (Doc. No. 75 ¶ 9.) Both corporations are incorporated in the Republic of China, with principal and business headquarters in Taiwan. (
Contrary to Lobo Chen's assertion, Michael Chen, a salesperson for Tesor and Pilock who reports directly to Lobo, explained in an e-mail from 2010 to Dave Magner, an engineer for TriMark, "Tesor and Pilock are the same company" and "have two different name[s] to service different countries." (Doc. No. 135-7 at 10;
Tesor and Pilock conducted business only with HMI's facility in Taiwan ("HMI Taiwan"), and Lobo Chen testified that until 2016, he was unaware HMI had any facilities in the United States. (Doc. No. 69:2-19.) Lobo Chen asserts that he never knew where HMI ultimately sold Tesor's products. (
Two other Tesor employees, Rita Hu and Lin YanKun, testified about their lack of knowledge that Tesor's products were being shipped to the United States as well as their lack of knowledge about TriMark in general. Hu and YanKun are Tesor's former and current domestic sales representative, respectively. (Doc. No. 126-8; Doc. No. 126-9.) Both reside and work in Taiwan, speak and read Taiwanese and Mandarin, and have a minimal understanding of the English language. (Doc. No. 126-8 ¶¶ 1-3; Doc. No. 126-9 ¶¶ 1-3.)
Hu received a purchase order from HMI Taiwan in 2011, which was written in English and regarded shipment of actuators. (Doc. No. 126-4 at 55:13 to 56:12, 57:9-13, 65:22 to 66:3.) Hu and YanKun testified that Tesor does not prepare HMI Taiwan's purchase orders and that HMI Taiwan makes all shipping arrangements for products bought from Tesor, and pays for and provides the shipment information on Tesor purchases. (Doc. No. 126-8 ¶¶ 5-6, 10; Doc. No. 126-9 ¶¶ 5-6, 10.) Further, neither is familiar with TriMark, and because their understanding of English is minimal, they both understood the term "Tri/Mark" on the purchase order to mean "shipping mark," which is the label provided by HMI Taiwan. (Doc. No. 126-8 ¶¶ 7-8; Doc. No. 126-9 ¶¶ 7-8.) They also did not know what the word "Minneapolis" on the purchase order meant; and there was no other indicator on the purchase order that the products were being shipped to somewhere in the United States. (Doc. No. 126-8 ¶ 11; Doc. No. 126-9 ¶ 11.)
Tesor's actuators were manufactured for use in vehicles. (
Lobo Chen attends a yearly Consumer Electronics Show in Las Vegas, Nevada, and either he or another representative of Tesor and Pilock has attended trade shows in Florida and Louisiana. (Doc. No. 135-6 at 93:12 to 94:15;
Aside from the trade shows, the only person who travels on behalf of Tesor or Pilock to the United States for business trips is Lobo Chen. (Doc. No. 126-4 at 111:21 to 112:2.) He has taken three business-related trips to the United States, one to Detroit, Michigan, and two others to California, to meet potential customers. (
Tesor maintains two English-language websites, one at tesorplus.com and the other through the Alibaba website, but contends that they are for informational purposes only; and while customers can send inquiries to Tesor through its tesorplus.com website, neither website permits direct ordering. (Doc. No. 135-6 at 98:11 to 101:2.) Tesor's online presence also includes an eight minute, twenty-five second YouTube video promoting the company, which was uploaded on December 24, 2012. (
While TriMark at all times before the accident purchased Tesor's actuators from HMI and not Tesor or Pilock, there is some evidence in the record that might suggest there was a business relationship among TriMark and Tesor and Pilock. In 2001, Lobo Chen was identified in an e-mail between Dave Magner of TriMark and Jerry Lin of HMI as a contact person and the one who "will be handling Tri/Mark's projects from now on." (Doc. No. 135-7 at 12.) In 2008, Magner contacted Lin to inform him that he would be in Taipei, Taiwan, and wanted to meet to discuss "any new products that might be available from Pilock or others," and "to make sure all is going well with Pilock or others." (Doc. No. 135-9 at 4.) Magner's "main topic of interest" was "electronics or motorize[d] products that would be in a door or vehicle." (
The two arranged a visit to Pilock, during which Magner reviewed the assembly area. (
Magner also communicated directly with Michael Chen in 2010 to inquire about Tesor's actuators after Magner visited Tesor's Global Source website, which it no longer operates. (Doc. No. 135-7 at 13.) The two exchanged e-mails for a period between June 8, 2010 and July 28, 2010. (
Magner also e-mailed Michael Chen in September 2012 to inform him that Magner and another TriMark employee would like to visit Tesor or Pilock, and Michael Chen responded to state that he remembered Magner but was away on business. (Doc. No. 135-10 at 3-5.) Another Tesor employee then offered to schedule a meeting on October 22 or 23, 2012. (
In two different shipments in June and September of 2015, Tesor sold directly to TriMark an approximate total of 6,000 actuators. (Doc. No. 126-4 at 16:9 to 17:12, 113:12-19; Doc. No. 126-6 ¶ 15.) This constituted approximately one-percent of Tesor's sales in 2015. (Doc. No. 126-4 at 16:9 to 17:12, 113:12-19; Doc. No. 126-6 ¶ 15.)
According to Scott Perkins, Senior Vice President of TriMark, TriMark purchased actuators manufactured by Tesor or Pilock for use in motor vehicle locking systems "on a yearly basis" from late 2002 "until the time of this accident on October 1, 2012 and beyond. Prior to the accident, TriMark purchased over a million locking system actuators, hundreds of thousands of which were the same model number of that installed in [Medic Unit 22]." (Doc. No. 135-8 ¶ 4.)
HMI records show that the actuator found in Medic Unit 22 was produced in June 2011. (Doc. No. 136-8 at 2.) The shipment was delivered to TriMark in New Hampton, Iowa through Minneapolis, Minnesota. (Doc. No. 136-2.) The Purchase Contract between HMI and Tesor also indicates that the actuators were being shipped from Taiwan to TriMark in Minneapolis. (Doc. No. 136-12.)
As noted, Tesor's actuators were used in 75 ambulances in Philadelphia's fleet and in unknown quantities in three other fleets in Pennsylvania, and three of which in Philadelphia's fleet, including the one used in Medic Unit 22, were defective. (Doc. No. 33 ¶ 96.) Aside from that, Tesor's and Pilock's contacts with the forum state are limited. Tesor and Pilock do not conduct business in Pennsylvania, maintain offices or property in Pennsylvania, or interact with the local government. (Doc. Nos. 126-3, 126-6.) They do not advertise or market any of their products to any customers located in Pennsylvania. (Doc. No. 126-3 ¶6; Doc. No. 126-6 ¶ 6.) Lobo Chen is the only person who travels on behalf of Tesor or Pilock to the United States for business trips aside from attending trade shows, and, as noted, he has been to Pennsylvania only once, when a friend drove him through part of Pennsylvania on a social visit over 20 years ago. (Doc. No. 126-4 at 111:21 to 112:2, 117:16 to 118:8.)
Plaintiff bears the burden of establishing with reasonable particularity that personal jurisdiction exists when the defendant has made a motion under Rule 12(b)(2), Federal Rules of Civil Procedure, to dismiss for lack of personal jurisdiction.
When defending against a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, a plaintiff must do more than rely on the pleadings alone. Indeed, the Third Circuit explains that once a motion has been made, "the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence."
Under Federal Rule of Civil Procedure 4(e), a federal court may exercise personal jurisdiction "over a nonresident of the state in which the court sits to the extent authorized by the law of that state."
The Due Process Clause of the Fourteenth Amendment requires that nonresident defendants have "certain minimum contacts within the [forum state]" so that defending the suit "does not offend traditional notions of fair play and substantial justice."
Courts have articulated two types of personal jurisdiction: general jurisdiction and specific jurisdiction.
To determine whether specific jurisdiction exists, a court must engage in a three-part inquiry: (1) the defendant must have purposefully directed its activities at the forum state; (2) the litigation must arise out of or relate to at least one of those activities; and (3) if the first two requirements have been met, a court may consider whether the exercise of jurisdiction otherwise comports with fair play and substantial justice.
The first prong of this inquiry involves determining whether a defendant has the requisite minimum contacts within the forum state. To satisfy this prong, the defendant must have "purposefully avail[ed] itself of the privilege of conducting activities within the forum state."
Courts have relied on the stream-of-commerce theory to find personal jurisdiction over a nonresident defendant that has placed goods into the forum state indirectly by way of the "stream of commerce."
In
Asahi contested jurisdiction because, like Tesor and Pilock in this case, it had not solicited any business in the forum and had no offices, agents or property there.
The Supreme Court reversed that ruling after all the Justices agreed that the exercise of personal jurisdiction over Asahi would offend traditional notions of "fair play and substantial justice."
Writing for a four-Justice plurality, Justice O'Connor explained that the insertion of a good into the stream of commerce must be accompanied by some "[a]dditional conduct of the defendant [that] may indicate an intent or purpose to serve the market in the forum State."
Justice Brennan, however, disagreed that such additional conduct was necessary.
The third opinion, that of Justice Stevens, espoused that purposeful availment should be determined by examining a number of factors, including the volume and hazardous character of the product entering the stream of commerce.
When evaluating specific jurisdiction under a stream of commerce theory, some courts of appeals have endorsed Justice O'Connor's "stream-of-commerce plus" theory.
Twenty-four years after the Supreme Court decided
Justice Kennedy wrote for the plurality, and found the fact that it was foreseeable defendant's products might be distributed in one or all of the 50 states was not enough, but rather there must be evidence that the out-of-state defendant had "targeted" the forum state in some way.
Justice Breyer authored the concurring opinion, and explained that the Court's precedents demonstrate that "a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place."
Justice Breyer explained why the record was not sufficient to establish personal jurisdiction over the British manufacturer:
When, as in
The Third Circuit has yet to issue an opinion addressing the impact of
In view of these other circuit courts' opinions, this Court will proceed on the basis that McIntyre Machine did not change the Supreme Court's jurisdictional framework. This entails heeding the Third Circuit's instruction to follow both the O'Connor and Brennan formulations from Asahi.
In this case, the record establishes that Tesor's contacts with Pennsylvania are that its actuators were used in 75 ambulances in Philadelphia's fleet, three of which contained the actuator defect found in Medic Unit 22, and unknown quantities of its actuators were used in affected fleets owned by three other Pennsylvania municipalities. (Doc. No. 33 ¶ 96; Doc. No. 136-6 at 14.) TriMark contends that jurisdiction over Tesor and Pilock is proper because the record establishes "more than a fortuitous appearance of a single actuator manufactured by [Tesor and Pilock] in Pennsylvania," and because the two companies "engaged in conduct that made it foreseeable that they should have reasonably anticipated being haled into a Pennsylvania Court." (Doc. No. 133 at 17.) Tesor and Pilock submit that they do not have constitutionally sufficient minimum contacts with the forum required for specific jurisdiction, (Doc. No. 126 at 30), and that exercising personal jurisdiction over Tesor or Pilock would not comport with "fair play and substantial justice," (
Under Justice O'Connor's stream-of-commerce plus theory, it is apparent that this Court does not have jurisdiction over Tesor or Pilock. Justice O'Connor articulated that the placement of a product in the stream of commerce must be accompanied by some "[a]dditional conduct of the defendant [that] may indicate an intent or purpose to serve the market in the forum State."
While Justice Brennan's approach is narrower than Justice O'Connor's, even under his approach, TriMark has not shown that this Court can exercise personal jurisdiction over Tesor or Pilock. Justice Brennan wrote that if there is a "regular and anticipated flow of products from manufacture to distribution to retail sale" and the defendant is aware that the final product is being marketed in the forum state, no additional conduct on the defendant's part need be shown to establish minimum contacts.
The Third Circuit in following this approach has stated that "[e]ven under Justice Brennan's view, the mere knowledge or awareness that one's products will end up in the forum state without some regularity of shipment would not be enough. The contact must be purposeful, rather than incidental, because the stream of commerce does not refer to `unpredictable currents or eddies.'"
TriMark has not shown that Tesor's or Pilock's contacts with Pennsylvania were anything more than incidental. There is nothing in the record to suggest any sort of targeting of Pennsylvania at all. The contacts with the state were minimal: Lobo Chen had driven through Pennsylvania once over 20 years ago; and Tesor's actuators were used in 75 ambulances in Philadelphia's fleet, three of which contained the actuator defect found in Medic Unit 22.
TriMark also submitted that Tesor's actuators were used in affected fleets owned by three other Pennsylvania municipalities. (Doc. No. 33 ¶ 96; Doc. No. 136-6 at 14.) But it is unknown how many of Tesor's actuators were found in those other fleets, and over what period of time these actuators came into Pennsylvania. While it is the job of TriMark to provide these figures, even assuming that the three other fleets contained another 75 vehicles with Tesor's model actuator, the total would amount to 300 of Tesor's actuators that ended up in Pennsylvania.
According to a 2012 correspondence from Dave Magner of TriMark, HMI sells over 100,000 actuators a year to TriMark alone, which it buys from Tesor. (Doc. No. 135-10 at 4.) Therefore, even if 300 actuators were sold into Pennsylvania in one year, this would amount to a miniscule percentage of HMI's and Tesor's yearly sales. Importantly, there is no evidence that 300 of Tesor's actuators were found in Pennsylvania, but rather 75 in one fleet and an unknown amount in three other fleets.
In comparing these numbers to those in Asahi, the distributor there alleged that 20 percent of its sales in the United States were in California. Justice Brennan refused to find that a California court could exercise jurisdiction over the out-of-state manufacturer, Asahi, without offending traditional notions of fair play and substantial justice. Despite that, he found that Asahi's "regular and extensive sales"—100,000 annually—"to a manufacturer it knew was making regular sales of the final product in California were sufficient to establish minimum contacts with California."
Here, there is no evidence that Tesor or Pilock was aware its products were being sold in Pennsylvania. Nor is there evidence that a sizable percentage, such that would constitute "regular sales" as contemplated by Brennan, of either their sales or HMI's sales were made in Pennsylvania. Therefore, these facts show much less contact with the forum by Tesor and Pilock than by Asahi in
In arguing that personal jurisdiction over Tesor and Pilock would be appropriate, TriMark offered evidence to demonstrate that the companies had knowledge their products were entering the United States. Specifically, it points to HMI's marketing brochure, which notes that HMI helps its "Asian vendors . . . better understand your quality requirements" and that its engineers "engage in an ongoing dialogue with you and the manufacturer to arrive at acceptable and achievable quality standards." (Doc. No. 135-11 at 9.) TriMark contends that this language suggests a dialogue involving the manufacturer and the client together, thus the identity of HMI's client as TriMark, an Iowa Corporation that does business in several states in the United States, including Pennsylvania, would be divulged to Tesor and Pilock. However, the language can also be read as describing different dialogues without HMI divulging the identity of its clients. (The latter would be better business practice for a distributor.)
Other evidence also suggests that HMI did not reveal to Tesor or Pilock that TriMark was its client. For example, the brochure also states that HMI "manages the entire supply chain for you, from development to delivery." (
There is however evidence tending to show that Tesor and Pilock were aware that their actuators were being sold to TriMark. Namely, there is evidence that Lobo Chen was identified in an e-mail in 2001 between Dave Magner of TriMark and Jerry Lin of HMI as a contact person and the one who "will be handling Tri/Mark's projects from now on." (Doc. No. 135-7 at 12.) Then in 2005 and 2008, engineers from TriMark actually visited Tesor's or Pilock's facility and met with employees of Tesor or Pilock to discuss projects, including the same actuator model that was used in Medic Unit 22. (Doc. No. 135-8 ¶ 7.)
Further, Dave Magner of TriMark also communicated directly with Michael Chen of Tesor and Pilock through e-mail for a period between June 8, 2010 and July 28, 2010, and then again briefly in September 2012. (Doc. No. 135-7 at 13, Doc. No. 135-10 at 3-5.) During the course of this conversation, Michael Chen made statements characterizing Tesor or Pilock's relationship with TriMark, such as "I guess the last work partnership was [a] really long time ago," "we are going into a partnership with [TriMark] and HMI," and "you are [a] longtime customer of us or actually HMI since your order is handle[d] by them." (Doc. No. 135-7 at 8, 10.) He also discussed problems between his employer and HMI, and suggested a company to replace HMI, Creative Works, although Dave Magner did not respond favorably to the idea. (
Then in two different shipments in June and September of 2015, Tesor sold directly to TriMark an approximate total of 6,000 actuators, which constituted approximately one-percent of Tesor's sales in 2015. (Doc. No. 126-4 at 16:9 to 17:12, 113:12-19; Doc. No. 126-6 ¶ 15.)
TriMark also offers as evidence of Tesor or Pilock's knowledge that its products were being sold in the United States that shipping marks on orders from HMI Taiwan, which were written in English, had United States cities on them. However, Hu and YanKun testified that Tesor does not prepare HMI Taiwan's purchase orders and that HMI Taiwan makes all shipping arrangements for products bought from Tesor and pays for and provides the shipment information on Tesor purchases. (Doc. No. 126-8 ¶¶ 5-6, 10; Doc. No. 126-9 ¶¶ 5-6, 10.)
They further testified that they were not familiar with TriMark, and because their understanding of English is minimal, they both understood the term "Tri/Mark" on the purchase order to mean "shipping mark." (Doc. No. 126-8 ¶¶ 7-8; Doc. No. 126-9 ¶¶ 7-8.) They also did not know what the word "Minneapolis" on the purchase order meant; and there was no other indicator on the purchase order that the products were being shipped somewhere in the United States. (Doc. No. 126-8 ¶ 11; Doc. No. 126-9 ¶ 11.)
In light of this evidence, it is unclear what level of awareness can be attributed to Tesor and Pilock that its actuators were being sold into the United States or that TriMark was its client. There was direct contact with TriMark prior to the accident through Michael Chen, a sales representative who reported directly to Lobo Chen, and then Tesor sold directly to TriMark three years after the accident in 2015. Further, there were multiple visits by TriMark engineers to Tesor's facility. That said, Lobo Chen and two other employees testified that they never knew their products were being sold into the United States. But regardless of whether they were aware, there is still the fundamental problem that targeting a national market does not amount to purposeful availment of the privilege of conducting activities in a specific state.
TriMark also relies on Tesor's online presence, consisting of Tesor's websites and the YouTube video promoting the company, as evidence of availment of the forum. (Doc. No. 135-6 at 98:11 to 101:2.) Under the test laid out in
TriMark contends that while direct orders cannot be made on either Tesor's website or the Alibaba website, customers can send inquiries to Tesor through its tesorplus.com website, and it should therefore be considered active or interactive. (Doc. No. 135-6 at 98:11 to 101:2.) This Court has found that such activity amounts to an insufficiently interactive website to justify the exercise of personal jurisdiction.
In light of the above, TriMark has failed to make the required showing of minimum contacts needed for this Court to exercise personal jurisdiction over Tesor or Pilock.
Because TriMark has failed to establish that Defendants purposefully directed their activities at the Commonwealth of Pennsylvania, it is not necessary to address the fairness element. Specific jurisdiction does not exist.
For the foregoing reasons, Defendants Tesor and Pilock's Motion to Dismiss for Lack of personal jurisdiction will be granted.