TERRY L. WOOTEN, District Judge.
This matter is currently before the Court on Defendant Ford Motor Company's (hereinafter "Ford") motion to dismiss Plaintiffs' second amended complaint (Doc. # 40); and on Defendant Snow Tire Company's (hereinafter "Snow Tire") motion to dismiss (or transfer) this action. (Doc. # 38). Plaintiffs filed the instant action on July 14, 2009. Plaintiffs filed an amended complaint on August 10, 2009, and a second amended complaint on December 3, 2009, which alleges (1) strict liability claims against both Defendants Ford and Snow Tire; (2) a negligent design claim against Defendant Ford; (3) negligent failure to warn claims against Defendants Ford and Snow Tire; (4) negligence claims against Defendants Snow Tire, Continental General Tire Company and Continental Tire North America, Inc.; (5) claims for breach of the implied warranty of merchantability against Defendants Ford and
A motion to dismiss under Rule 12 tests the sufficiency of the complaint. Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir.1999). In general, a motion to dismiss for failure to state a claim should not be granted unless it appears certain that the plaintiff can prove no set of facts which would support its claim and would entitle it to relief. Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130 (4th Cir.1993). In considering a motion to dismiss, the court should accept as true all well-pleaded allegations and should view the complaint in a light most favorable to the plaintiff. Id. A court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Id. Accordingly, a Rule 12(b) (6) motion should only be granted if, after accepting all well-pleaded allegations in the plaintiff's complaint as true and drawing all reasonable factual inferences from those facts in the plaintiff's favor, it appears certain that the plaintiff cannot prove any set of facts in support of his claim entitling him to relief. Edwards v. City of Goldsboro, 178 F.3d at 231.
The following facts as pled in Plaintiffs' Second Amended Complaint are presumed true for purposes of the instant motions. In the summer of 2007, Plaintiffs, who were members of the band "Bottom of the Hudson," (hereinafter "the Band") were on a ten day concert tour, traveling through the south-east portion of the country in the subject E350 van. The van had retread tires supplied by the Defendant, Snow Tire. On or about July 26, 2007, the right rear tire of the van, purchased from Snow Tire, suffered a "de-tread," and the Band was forced to utilize the spare tire on the vehicle until they could stop. They stopped at Defendant Snow Tire Company in Athens, Georgia where they purchased and had installed a replacement tire. On July 29, 2007, Plaintiff Prince, Plaintiff's Decedent, and others were traveling in the E350 through Sampson County, North Carolina when the left rear tire de-treaded. As the driver responded to the de-treading, the E350 rolled over several times before coming to rest in the right shoulder of the highway. During the roll-over event, two passengers were ejected from the E350, one of whom later died from injuries sustained in the rollover.
The Court will initially address Defendant Ford's motion to dismiss. As to Defendant
South Carolina law provides that the substantive law of the state in which an injury occurs controls a case brought within South Carolina's jurisdiction. "The substantive law governing a tort action is determined by the lex loci delicti, the law of the state in which the injury occurred." Boone v. Boone, 345 S.C. 8, 546 S.E.2d 191, 193 (2001); see also Mizell v. Eli Lilly & Co., 526 F.Supp. 589, 594-95 (D.S.C. 1981); Gattis v. Chavez, 413 F.Supp. 33, 35 (1976); Algie v. Algie, 261 S.C. 103, 198 S.E.2d 529 (1973); Oshiek v. Oshiek, 244 S.C. 249, 136 S.E.2d 303 (1964). "Procedural matters are to be determined in accordance with the law of South Carolina, the lex fori." McDaniel v. McDaniel, 243 S.C. 286, 133 S.E.2d 809, 811 (1963) (noting lex fori to mean the law of the forum). Here, the accident at issue occurred in Sampson County, North Carolina. (Pl.2d Am. Compl. ¶ 18). Accordingly, this Court must apply the substantive law of North Carolina and the procedural law of South Carolina.
Plaintiffs' claims against Defendant Ford are premised on principles of products liability. At the time the instant cause of action accrued, North Carolina had a six-year statute of repose for products liability actions.
North Carolina courts have consistently held this statute to be substantive and not procedural. National Property Investors, III, 950 F.Supp. at 710. (North Carolina's six-year statute of repose for products liability actions is intended to be a substantive definition of rights setting fixed time limits beyond which defendants will not be liable, giving defendants a vested right not to be sued if a plaintiff fails to file within a six-year period); Davidson, 336 S.E.2d at 714 (statute of repose clearly states that no action for recovery of damages for personal injuries shall be brought more than six years after date of initial purchase of product and is intended to be a substantive definition of rights which sets fixed limit after time of the product's manufacture beyond which the seller will not be held liable); see also Bolick, 293 S.E.2d at 415 ("statutes of repose are intended to be substantive definition of rights as distinguished from procedural limitation on remedy used to enforce rights"). Furthermore, the South Carolina Supreme Court has treated North Carolina's statute of repose for products liability actions as substantive law. See e.g. Langley v. Pierce, 313 S.C. 401, 438 S.E.2d 242, 243 (1993) (discussing the distinction between a statute of limitation and a statue of repose). Because North Carolina's statute of repose for products liability actions is substantive law, Plaintiffs' claims against Ford cannot be asserted more than six years after the date of the initial purchase of the E350. The E350 at issue in these proceedings
As discussed above, a federal court sitting in diversity lacks discretion and must follow the choice of law provisions of the forum state, in this case, South Carolina. In applying the South Carolina choice of law provision, this Court must apply the law of the state where the injury occurred — North Carolina — to Plaintiffs' tort-based claims. Rucker v. MGM Mirage, 2008 WL 2717595, at *4 n. 4 (D.S.C. 2008) (citing Klaxon Co. v. Stentor Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)); Mizell v. Eli Lilly & Co., 526 F.Supp. 589; Boone v. Boone, 546 S.E.2d 191; Hughes v. Doe, 281 S.C. 488, 316 S.E.2d 383 (1984). However, there is one exception to this general rule which has been dubbed the "public policy exception," and stands for the proposition that foreign law will not be applied if such law is repugnant to South Carolina's public policy. Thornton v. Cessna Aircraft Co., 703 F.Supp. 1228 (D.S.C.1988) aff'd 886 F.2d 85 (4th Cir.1989). The Court will examine this exception to see if it alters its conclusion as to plaintiff's tort causes of action noted above.
South Carolina law holds that "foreign law may not be given effect ... `if it is against good morals or natural justice.'" Boone v. Boone, 546 S.E.2d at 193-94 (citing Dawkins v. State, 306 S.C. 391, 412 S.E.2d 407, 408 (1991)); Rauton v. Pullman Co., 183 S.C. 495, 191 S.E. 416, 422 (1937) (court will refuse to follow law of lex loci delicti when it is against good morals or natural justice, or "for some other such reason the enforcement of it would be prejudicial to the general interests of our own citizens"). Moreover, "[t]he good morals or natural justice of our State are not violated when foreign law is applied to preclude a tort action for money damages, whether against an individual or the State, even if recovery may be had upon application of South Carolina law." Id. "`[T]he fact that the law of two states may differ does not necessarily imply that the law of one state violates the public policy of the other.'" Id. In a recent South Carolina Court of Appeals case, the court compared South Carolina's statute of repose for alleging defective or unsafe conditions of an improvement to real property and North Carolina's equivalent statute of repose. Nash v. Tindall Corp., 650 S.E.2d at 83-84. North Carolina's statute of repose, as substantive law, was to be applied to the case brought in South Carolina under the principle of lex loci delicti. Id. at 84. However, it was argued that North Carolina's statute violated South Carolina's public policy because of a difference of two years between the two statutes, eight years in South Carolina and six years in North Carolina. Id. The court held that "public policy is not violated by the two year difference" and more importantly, attempting to bring this case under South Carolina's substantive law "constitutes forum shopping, an act which violates public policy." Id. The court also noted South Carolina's policy behind statutes of repose:
In Thornton v. Cessna Aircraft Co., a South Carolina Federal District Court considered and addressed South Carolina's lack of a products liability statute of repose in deciding whether Tennessee's existing products liability statute of repose could apply in a defective airplane claim. Thornton v. Cessna Aircraft Co., 703 F.Supp. 1228 (D.S.C.1988). The Tennessee statute provides in relevant part:
Tenn.Code Ann. § 29-28-103(a).
South Carolina does not have a comparable statute of repose. Id.; see also Mickle v. Blackmon, 252 S.C. 202, 166 S.E.2d 173, 190 (1969) (noting a plaintiff's product liability action is not dependent on a specified time period). However, the court did not interpret this to mean that to impose a statute of repose in a products liability action would violate South Carolina's public policy. Id. at 1232 (citing Rauton v. Pullman, 191 S.E. at 422). Rather, it found that South Carolina courts have "repeatedly adhered to the lex loci delicti rule to apply foreign law that defeated claims which would have survived under South Carolina law." Id. (citing Algie v. Algie, 198 S.E.2d at 529; Rauton, 191 S.E. at 416, Oshiek v. Oshiek, 136 S.E.2d at 303, McDaniel v. McDaniel, 133 S.E.2d at 809). Furthermore, "the enactment of other statutes of repose does indicate compliance with the state's public policy." Id. at 1231-32; (citing Rauton, 191 S.E. at 422); S.C.Code Ann. § 15-3-545 (1976) (requiring all medical malpractice actions to be commenced no later than six years from alleged date of malpractice); S.C.Code Ann. § 15-3-640 (requiring an action based on the defective or unsafe condition of an improvement to real property be brought no later than eight years following "substantial completion" of the improvement). Furthermore, the Thornton Court did not agree with the state court finding that South Carolina public policy requires some sort of notice provision within its statutes of repose. Thornton, 703 F.Supp. at 1232-34. The text of the "medical malpractice" and "improvement to real property" statutes of repose (cited, supra, and discussed, infra) did not indicate the need for notice. Id. Thus, "while the Tennessee statute of repose provides a defense to the plaintiff's claims which is unavailable under South Carolina law ... the statute is not contrary to good morals or natural justice or prejudicial to the state's general interest." Id. at 1232. "To the contrary, the available evidence indicates the statute is entirely consistent with the public policy of South Carolina." Id. Analysis of this matter is similar to the analysis in Thornton. Here, the North Carolina statute of repose for products liability actions uses similar language as the Tennessee statute:
This Court concludes that Thornton controls the legal analysis. Further, this Court finds, consistent with Thornton, that North Carolina's statute of repose does not violate South Carolina's public policy and can therefore be applied to Plaintiffs' claims under the principle of lex loci delicti. Additionally, North Carolina's statute of repose does not violate South Carolina's public policy in that South Carolina's existing statutes of repose are considered to be substantive law, not procedural. Section 15-3-640(6) provides an eight year statute of repose for actions based on defective or unsafe conditions of improvement to real property. S.C.Code Ann. § 15-3-640 (1976). Our courts continue to recognize this statute of repose as creating a substantive right, stating, "[this] statute of repose creates a substantive right in those protected to be free from liability after a legislatively determined period of time." Capco of Summerville, Inc. v. J.H. Gayle Const. Co., Inc., 368 S.C. 137, 628 S.E.2d 38, 41 (2006). Similarly, South Carolina's statute of repose for medical malpractice actions has been recently recognized as substantive law. Kerr v. Richland Memorial Hosp., 383 S.C. 146, 678 S.E.2d 809, 810-11 (2009) ("the statute of repose portion of section 15-3-545(A) is substantive law, unlike a statute of limitations, which is procedural law"); see also S.C.Code Ann. § 15-3-545(A) (1976) ("In any action ... to recover damages for injury to the person arising out of any medical, surgical, or dental treatment, omission, or operation by any licensed health care provider ... acting within the scope of his profession must be commenced within three years from the date of the treatment, omission, or operation ... or three years from date of discovery ... not to exceed six years from date of occurrence."); Nash v. Tindall Corp., 650 S.E.2d at 83 (Ct.App.2007) (reiterating South Carolina's position that statutes of repose are substantive law). Thus, applying North Carolina's statute of repose for products liability actions as substantive law in South Carolina does not violate South Carolina's public policy.
This Court also finds the Plaintiffs' breach of warranty claim to be subject to dismissal, albeit under a slightly different analysis. In reaching this conclusion, the Court again finds the case of Thornton to be instructive. Assuming that the South Carolina Uniform Commercial Code applies to this cause of action, the Code contains a specific conflict of laws rule which provides:
In Thornton, the court found a reasonable, and therefore appropriate, relationship to South Carolina existed because Plaintiff was a resident of South Carolina, purchased the airplane in South Carolina, and permanently stored and maintained the airplane in South Carolina. Id. at 1234. Accordingly, the Fourth Circuit affirmed the district court's analysis that these contacts established the "most significant relationship." Thornton v. Cessna Aircraft Co., 886 F.2d 85, 90 (4th Cir.1989) (citing In re Merritt Dredging Co., Inc., 839 F.2d 203 (4th Cir.1988) (noting that a
After careful review of the record in this case and all claims asserted, accepting the factual allegations in the complaint as true and drawing all reasonable inferences that can be drawn from those allegations to the benefit of Plaintiffs, this Court concludes that Defendant Ford is entitled to dismissal from this suit because Plaintiffs have asserted products liability claims that are barred by the North Carolina statute of repose for products liability actions, which bars claims that arise more than six years after the initial date of purchase. Plaintiffs have presented no facts that this Court could reasonably interpret to bring their claims within six years of the E350's initial purchase for use or consumption. Thus, in accordance with the Federal Rules of Civil Procedure Rule 12(b)(6) standard, Ford is entitled to dismissal of all claims asserted against it in this matter.
The Court will now address Defendant Snow's motion to dismiss, or in the alternative, to transfer this case for improper venue. Defendant Snow asserts as a primary argument that venue in the District of South Carolina is improper, requiring dismissal of this action or transfer to federal district court in either North Carolina
To grant a motion to dismiss under Rule 12(b)(3) of the Federal Rules of Civil Procedure, the court must find that the venue is improper. See Fed.R.Civ.P. 12(b)(3). When a defendant objects to venue under Rule 12(b)(3), plaintiff bears the burden of establishing that venue is proper. See Motley Rice, LLC v. Baldwin & Baldwin, LLP, 518 F.Supp.2d 688 (D.S.C.2007) (plaintiff bears the burden of establishing venue).
A case filed in an incorrect venue must be dismissed, or, if in the interests of justice, transferred to a district in which it could have been brought. 28 U.S.C. § 1406. Venue in this case is governed by 28 U.S.C. § 1391(a), which provides as follows:
In addressing 28 U.S.C. § 1391(a)(1), the court finds this section to be inapplicable as it cannot conclude that all of the Defendants reside in South Carolina. Specifically, the Court concludes that Defendant Snow does not reside in South Carolina. As the Complaint itself alleges, Snow is a Georgia corporation with its principal place of business in Clarke County, Georgia. Its agent for service of process is also located in Georgia. Id. The Complaint does not allege that Snow has ever transacted any business in the State of South Carolina.
For purposes of venue, a corporate defendant may be deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced. 28 U.S.C. § 1391(c).
The Complaint does not allege activities that satisfy any of these enumerated circumstances.
Additionally, under applicable law, this Court concludes that the exercise of jurisdiction would offend due process.
Moreover, a stream of commerce theory cannot supplant the requirement that a defendant in some way purposefully avail itself of forum state law. Id. at 658. Foreseeability alone "has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause." World-Wide Volkswagen, 444 U.S. at 295, 100 S.Ct. 559. If it were, a "seller of chattels would in effect appoint the chattel his agent for service of process" and his "amenability to suit would travel with the chattel." Id. at 296, 100 S.Ct. 559; see also DeJames v. Magnificence Carriers, Inc., 654 F.2d 280, 284-85 (3rd Cir.1981). Accordingly, the placement of a product into the stream of commerce, without
In light of the above analysis and the Court's conclusion that Snow cannot be deemed to reside in South Carolina, as it is not subject to personal jurisdiction here (see 28 U.S.C. § 1391(c)) venue under 28 U.S.C. § 1391(a)(1) is not appropriate as all of the Defendants do not reside in South Carolina.
The Court must next consider whether venue is appropriate in South Carolina under 28 U.S.C. § 1391(a)(2). 28 U.S.C. § 1391(a)(2) provides that venue may be appropriate "in a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated." After consideration of the Complaint and viewing the facts in the light most favorable to the Plaintiffs, the Court concludes that Venue in the District of South Carolina is also improper under 28 U.S.C. 1391(a)(2).
A substantial part of the events giving rise to Plaintiffs' claims did not occur in South Carolina. Plaintiffs have not alleged that any action or omission related to their claims occurred in South Carolina. Instead, Plaintiffs have specifically alleged that the sale of tires by Snow occurred in Georgia, (Sec. Amd. Complaint at ¶ 17), and that the injury occurred in North Carolina. Id. at ¶¶ 18-20. Venue for this action would therefore be proper in either Georgia or North Carolina, but not in South Carolina. This Court concludes that in light of the facts alleged, and the location of the accident occurrence, venue is most appropriate in North Carolina. Accordingly, the Court deems it appropriate to transfer this case to that jurisdiction.
The facts asserted by Plaintiffs, viewed in the light most favorable to them, do not establish that venue in South Carolina is appropriate. Accordingly, this civil action is hereby transferred to the Southern Division of the North Carolina Eastern District Court.
For the foregoing reasons, the undersigned
Finally, S.L. 2009-420, § 3, provides: "This act becomes effective October 1, 2009, and applies to causes of action that accrue on or after that date. This act shall not affect the application of G.S. 1-50(a)(5). Nothing in this act is intended to change existing law relating to product liability actions based upon disease."