DEBEVOISE, Senior District Judge.
This matter comes before the Court on a motion submitted by Defendant Schmidt Manufacturing, Inc. ("Schmidt") for reconsideration pursuant to Federal Rule of Civil Procedure 60(b) of the Court's Opinions and Orders of June 7 and August 17, 2005.
In its pending Motion for Reconsideration, Schmidt contends that the Supreme Court of New Jersey's recent decision in Nicastro v. McIntyre Machinery America,
For the reasons set forth below, the pending Motion for Reconsideration will be denied. First, Schmidt's motion is untimely. The decision on which Schmidt's arguments rely was issued over six months before the company filed its request for reconsideration. Yet despite engaging in multiple communications and appearing in at least one oral argument during that time period, Schmidt made no effort to bring the ruling on which it now relies to the attention of the Court. While such a delay might not be unreasonable under normal circumstances, it was unjustified given the exceptionally protracted history of this case, the delay that would be inherent in reintroducing Sypris to the case, and the potential prejudice Plaintiff would suffer from that delay. Even if Schmidt's motion had been submitted within a reasonable time, it fails to point to any new evidence that was not previously available, an intervening change in law, or the need to prevent manifest injustice. Therefore, Schmidt has not asserted a proper basis for reconsideration. Finally, the portions of Nicastro on which Schmidt bases its request for reconsideration impermissibly expand the jurisdictional scope of the stream of commerce theory beyond the limits enumerated in previous decisions by the Supreme Court of the United States. Therefore, those parts of Nicastro must be disregarded, and the pending Motion for Reconsideration must be denied.
The facts relevant to the pending Motion were set forth at length in the Court's June 7 and August 17, 2005 Opinions. See Leja I, 2005 WL 1366533 at *1-3; Leja II, 2005 WL 2009924 at *1-4. In order to provide context for today's ruling, some of the background discussed in those Opinions will be repeated below.
This matter arises out of an industrial accident. On May 4, 2000, decedent Kazmierz Leja suffered severe injuries when he attempted to open a bulk sandblasting unit ("the machine") manufactured by Schmidt while it was still pressurized. The machine operated by releasing an abrasive stream of gas and liquid, which was propelled by tension built up by pumping air into the "pressure vessel" located at its apex. In order to refill the liquid abrasive materials within the machine, its operator was required to periodically execute a "blow-down" procedure in which the pressure built up inside was released by activating a valve located on its side. The operator would then climb a ladder and open a metal lid at the top of the pressure vessel known as the "camlock closure," which was secured by five T-bolts.
Sylvan leased the machine to L & L Painting Company ("L & L"), a New York company, for use in the removal of paint from the Outerbridge Crossing—a bridge that runs between Staten Island, New York, and Elizabeth, New Jersey. When it proved inadequate for that task, Sylvan took the machine back from L & L and sold it to Mr. Leja's employer, the West Virginia Paint and Tank Company ("WVP").
The day of the accident, Mr. Leja attempted to open the camlock closure without first releasing the pressure inside the machine by activating the blow-down valve. The result was disastrous: pressure stored inside the machine caused an explosion that propelled the lid of the camlock closure and several pieces of shrapnel upward into Mr. Leja's body. The injuries to his right arm were particularly severe, and required that the limb be amputated shortly after the accident.
On August 31, 2001, Mr. Leja and his wife Zofia filed a Complaint against Schmidt in the Superior Court of New Jersey alleging that the May 4, 2000 accident was caused by defects in the machine's design and Schmidt's failure to include proper warnings that would have prevented Mr. Leja from attempting to open the machine while it was still pressurized. Schmidt removed the action to this Court based on diversity of citizenship on October 30, 2001. The Lejas subsequently amended their Complaint to add several companies as Defendants, all of whom later entered settlement agreements and were voluntarily discharged from the proceedings.
On July 13, 2004, Schmidt filed a third-party Complaint in which it alleged that Sypris defectively designed the camlock closure. On the basis of that allegation, Schmidt argued that, if it was found liable to Plaintiffs, it would be entitled to indemnification and contribution from Sypris.
Arguing that it lacked the minimum contacts with New Jersey necessary for this Court to exercise jurisdiction, Sypris moved to dismiss the third-party claims asserted against it by Schmidt pursuant to Federal Rule of Civil Procedure 12(b)(2). Schmidt subsequently sought leave to amend its third-party Complaint. The Court granted that request on December 14, 2004, and Schmidt filed an Amended Third-Party Complaint against Sypris nine days later. Relying on many of the same arguments it articulated in its original request, Sypris filed a renewed Motion to Dismiss for lack of personal jurisdiction on January 7, 2005. After a series of adjournments, Schmidt submitted opposition to that Motion on May 9, 2005. Sypris replied on May 16th, and the Court held oral arguments at which both parties were allowed to articulate their respective positions on May 23, 2005.
In a ruling dated June 7, 2005, the Court held that it lacks personal jurisdiction over
Leja I, 2005 WL 1366533 at *3.
The Court then ruled that it had neither specific nor general personal jurisdiction over Sypris. That ruling was based on an extensive analysis of the contacts between Sypris and New Jersey.
With respect to specific personal jurisdiction, the Court noted that:
Id. at *5.
In deciding that it lacked specific personal jurisdiction over Sypris, the Court explicitly rejected Schmidt's arguments that it could exercise such jurisdiction under the "stream of commerce" theory announced by the Supreme Court of the United States in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), and further discussed in Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). As the Court noted in its June 7, 2005 Opinion, the latter case resulted in two plurality opinions which presented "different conceptions" of the amount and pervasiveness of contacts between a litigant and a given forum necessary to result in "purposeful availment of through the stream of commerce." Leja I, 2005 WL 1366533 at *5 (quoting Pennzoil, 149 F.3d at 204). The first, authored by Justice O'Connor, held that "placement of a product in the stream of commerce must be accompanied by some additional conduct of the defendant that may indicate an intent or purpose to serve the market in the forum State." Id. (citing Asahi, 480 U.S. at 112, 107 S.Ct. 1026). Examples of such conduct include "designing the product for the market in the forum State, advertising in the forum State, establishing channels for providing regular advice to customers in the forum State, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum State." Asahi, 480 U.S. at 112, 107 S.Ct. 1026. The second plurality opinion in Asahi, authored by Justice Brennan, defined the stream of commerce theory more broadly, holding that a "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. at 119-20, 107 S.Ct. 1026 (emphasis in original).
After examining the relevant contacts between Sypris and New Jersey, the Court ruled that it lacked specific personal jurisdiction under either standard. With respect to Justice O'Connor's requirement that a company placing a product in the stream of commerce commit some additional act indicating an intent to avail itself of the forum state's law before being subjected to specific personal jurisdiction, the Court noted that "[t]he record is devoid of such evidence of purposeful availment' during the relevant time period" of 1995-1996—the years in which Sypris manufactured the cam lock enclosure that Schmidt eventually incorporated into the machine at issue in this case. Leja I, 2005 WL 1366533 at *5. Even under Justice Brennan's broader conception of the stream of
Id. at *6.
After addressing specific personal jurisdiction, the Court turned to whether Sypris's contacts with New Jersey were sufficiently "continuous and systematic," Helicopteros, 466 U.S. at 416, 104 S.Ct. 1868, to support the exercise of general personal jurisdiction. Before answering that question in the negative, the Court engaged in an extensive discussion of two categories of activity—sales and solicitation—engaged in by Sypris during the ten-year period from 1995 to 2004 that Schmidt claimed supported general personal jurisdiction.
With respect to sales activity, the Court first outlined the parties' arguments and then applied the decision by the Court of Appeals for the Third Circuit in Provident National Bank v. California Federal Savings & Loan Association, 819 F.2d 434 (3d Cir.1987), stating:
Id. at *7.
Similarly, the Court ruled that Sypris's solicitation activity over the period between 1995 and 2004 was insufficient to support the exercise of general personal jurisdiction. As noted in the June 7, 2005 ruling, Schmidt alleged that (1) "Sypris solicited business in New Jersey by sending the following items to New Jersey: brochures, catalogs, an informational letter to a potential New Jersey customer, a notice of name change, and Christmas cards," (2) "Sypris s[old] to six distributors in New Jersey which [we]re Sypris's de facto sales representatives, and that since 1999 two Sypris employees have traveled to New Jersey, one of which was a sales representative sent to New Jersey in 2002 in response to a service request from New Jersey customer," and (3) "that Sypris has sent and received thousands of pages of facsimile and wire communications concerning its business with New Jersey customers; has over one thousand engineering documents in connection with its work with New Jersey customers, and has prepared hundreds of test reports certifying that its products sold in New Jersey conform with all applicable codes.'" Id. at *8 (quoting (Schmidt's Br. Opp'n to Sypris's Mot. Dismiss 10)).
Based on those allegations and Schmidt's accompanying exhibits, the Court agreed that "Sypris apparently has
Turning to the specific facts of this case, the Court ruled that "Sypris's activity in New Jersey is not central to Sypris's business," and the solicitations it allegedly sent to New Jersey were not sufficiently "substantial and continuous" to meet the "solicitation plus" test. Leja I, 2005 WL 1366533 at *8. Contrary to Schmidt's contention that Sypris's communications with customers in New Jersey were substantial, the Court stated that:
Id.
With respect to Schmidt's contention that Sypris availed itself of New Jersey law by sending sales representatives to that state and selling its products to distributors there, the Court ruled that:
Id.
Finally, the Court held that, while Sypris's communications with individuals and entities in New Jersey weighed in favor of finding general personal jurisdiction, they did not overcome the other factors, stating:
Id. at *9.
Summarizing its ruling, the Court noted that several factors weighed heavily against the exercise of general personal jurisdiction, stating:
Id.
Therefore, the Court held that it lacked either specific or general personal jurisdiction over Sypris, and dismissed Schmidt's third-party claims against that company.
On June 20, 2005, Schmidt moved for reconsideration pursuant to Federal Rule of Civil Procedure 60(b) of the Court's June 7, 2005 ruling. In support of its motion, Schmidt asserted three main arguments—each of which related to general personal jurisdiction rather than specific. See Leja II, 2005 WL 2009924 at *2 ("[T]he June Opinion and Order found that specific personal jurisdiction was lacking.
Leja II, 2005 WL 2009924 at *2.
In its second argument, Schmidt claimed that the Court erred by ruling that the contacts used to justify the exercise of general personal jurisdiction over Sypris must be "extensive and persuasive." See Leja I, 2005 WL 1366533 at *3. Echoing its first argument, Schmidt argued that the case cited in support of that proposition in the Court's June 7, 2005 Opinion, Reliance Steel, 675 F.2d at 589, was inapplicable because it dealt with Pennsylvania law rather than that of New Jersey. The Court rejected that contention, stating:
Leja II, 2005 WL 2009924 at *3.
Finally, Schmidt argued that the Court erred by applying the "solicitation plus"
Leja II, 2005 WL 2009924 at *3 (quoting Leja I, 2005 WL 1366533 at *8).
Arguing that the Supreme Court of New Jersey's recent decision in Nicastro contradicts the Court's analysis in its June 7 and August 15, 2005 rulings that it lacks personal jurisdiction over Sypris, Schmidt now moves for reconsideration of those decisions pursuant to Federal Rule of Civil Procedure 60(b). In doing so, Schmidt relies on Nicastro's holding that:
987 A.2d at 577.
Additionally, Schmidt notes portions of the Nicastro decision which stated that a manufacturer may not escape the jurisdiction of a state in which it knew or should have know that its products were being sold by routing those products through an independent distributor located outside that state. See Id. at 591. Rather, "[a] foreign manufacturer will be subject to [New Jersey's] jurisdiction if it knows or reasonably should know that through its distribution scheme its products are being sold in New Jersey." Id. at 591-92. If a manufacturer distributes its products through a nationwide network, it will be presumed to know that its products are being sold in New Jersey and will be subject to that state's jurisdiction unless it "take[s] some reasonable step to prevent the distribution of its products in th[at] State." Id. at 592.
Based on those statements and the fact that Sypris stipulated during the prior proceedings that it was aware that Schmidt distributed its machines throughout the
"[I]t is well-established in this district that a motion for reconsideration is an extremely limited procedural vehicle." Resorts Int'l v. Greate Bay Hotel & Casino, 830 F.Supp. 826, 831 (D.N.J.1992). As such, a party seeking reconsideration must satisfy a high burden, and must "rely on one of three major grounds: (1) an intervening change in controlling law; (2) the availability of new evidence not available previously; or (3) the need to correct clear error of law or prevent manifest injustice." N. River Ins. Co. v. CIGNA Reins. Co., 52 F.3d 1194, 1218 (3d Cir.1995).
Since the evidence relied upon in seeking reconsideration must be "newly discovered," a motion for reconsideration may not be premised on legal theories that could have been adjudicated or evidence which was available but not presented prior to the earlier ruling. See Id. Local Civil Rule 7.1(i), which governs such motions, provides that they shall be confined to "matter[s] or controlling decisions which the party believes the Judge or Magistrate Judge has `overlooked.'" The word "overlooked" is the dominant term, meaning that except in cases where there is a need to correct a clear error or manifest injustice, "[o]nly dispositive factual matters and controlling decisions of law which were presented to the court but not considered on the original motion may be the subject of a motion for reconsideration." Resorts Int'l, 830 F.Supp. at 831; see also Egloff v. N.J. Air Nat'l Guard, 684 F.Supp. 1275, 1279 (D.N.J.1988); Pelham v. United States, 661 F.Supp. 1063, 1065 (D.N.J. 1987).
A decision suffers from "clear error" only if the record cannot support the findings that led to that ruling. United States v. Grape, 549 F.3d 591, 603-04 (3d Cir.2008) (citations omitted). Thus, a party must do more than allege that portions of a ruling were erroneous in order to obtain reconsideration of that ruling; it must demonstrate that (1) the holdings on which it bases its request were without support in the record, or (2) would result in "manifest injustice" if not addressed. See Grape, 549 F.3d at 603-04; N. River Ins., 52 F.3d at 1218. Mere "disagreement with the Court's decision" does not suffice. P. Schoenfeld Asset Mgmt., LLC v. Cendant Corp., 161 F.Supp.2d 349, 353 (D.N.J.2001).
Schmidt's Motion for Reconsideration must be denied for three distinct and independent reasons. First, it is untimely. Federal Rule of Civil Procedure 60(c)(1) requires that a motion for reconsideration be "made within a reasonable time." What constitutes a "reasonable time" depends on the "circumstances of each case." Delzona Corp. v. Sacks, 265 F.2d 157, 159 (3d Cir.1957). The case on which Schmidt's request relies—Nicastro—was decided on February 2, 2010. Schmidt could have alerted the Court that it intended to seek reconsideration based on that decision at any subsequent time. It failed
Allowing reconsideration of those rulings at this point would cause further unnecessary delay. Until recently, this matter was scheduled for trial beginning on October 12, 2010. At the request of the parties, the Court has adjourned that trial until February 14, 2011. Bringing Sypris back into the case would almost certainly necessitate further adjournments. Moreover, it would result in an inexcusable waste of resources. Over the past six months, Plaintiffs and Schmidt have submitted multiple drafts of a Pretrial Order. They participated in a final pretrial conference before Magistrate Judge Michael A. Shipp on August 5th of this year, and previously submitted several motions in limine, which the Court decided on March 31, 2010. Each of those proceedings would have to be revisited if Sypris were added as a third-party Defendant prior to trial.
More important than the Court's resources are the potential human costs of further delay. The tragic death of Mr. Leja—the individual out of whose injuries this litigation arose and who would have most benefitted from its conclusion—during the long pendency of this case has proven the maxim that "justice delayed is justice denied." The peace of mind that both parties will derive from the final determination of their legal obligations to one another is long overdue, and the Court will not delay it further by revisiting issues that were decided in 2005 on the basis of a case that could have been brought to its attention six months before the pending Motion was filed.
Even if Schmidt had filed its request for reconsideration within a reasonable time, the Nicastro decision cannot form a proper basis for granting that relief. As discussed above, a party seeking reconsideration must demonstrate "(1) an intervening change in controlling law; (2) the availability of new evidence not available previously; or (3) the need to correct clear error of law or prevent manifest injustice." N. River Ins., 52 F.3d at 1218. Schmidt has not pointed to any new evidence, and has not alleged that refusing its request for reconsideration would result in manifest injustice. Rather, its pending
Finally, Schmidt's substantive arguments are inapposite. When assessing the impact of Nicastro on this Court's earlier decisions, it is necessary as a preliminary matter to examine the interplay between New Jersey state court decisions and our federal precedents interpreting the "stream of commerce" test. New Jersey's long-arm statute extends jurisdiction to the extent permissible "consistent with due process of law." Nicastro, 987 A.2d at 589. New Jersey courts have interpreted that rule as allowing the exercise of "jurisdiction over a non-resident defendant `to the uttermost limits permitted by the United States Constitution.'" Id. (quoting Avdel Corp. v. Mecure, 58 N.J. 264, 277 A.2d 207, 209 (N.J.1971)). Thus, the question of whether New Jersey's long-arm statute allows this Court to assert personal jurisdiction over Sypris turns on the interpretation of the United States Constitution—an area that is uniquely the province of the federal courts. See, e.g., Baker v. Carr, 369 U.S. 186, 211, 82 S.Ct. 691, 7 L.Ed.2d 663 (1968) (The Supreme Court of the United States is "the ultimate interpreter of the [United States] Constitution."); Cooper v. Aaron, 358 U.S. 1, 18, 78 S.Ct. 1401, 3 L.Ed.2d 5 (1958) ("[T]he federal judiciary is supreme in the exposition of the law of the [United States] Constitution."). To the extent that Nicastro conflicts with our federal precedents relating to the stream of commerce theory by expanding personal jurisdiction beyond the bounds set by the Supreme Court of the United States in its previous decisions, it would violate the due process clause and must be disregarded. See Cipollone v. Liggett Grp., Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) ("[S]ince our decision in M'Culloch v. Maryland, 17 U.S. 316, 427, 4 Wheat. 316, 4 L.Ed. 579 (1819), it has been settled that state law that conflicts with federal law is `without effect.'").
Schmidt's pending Motion for Reconsideration is based on two statements in Nicastro. In the first, the Supreme Court of New Jersey held that "[a] foreign manufacturer will be subject to [New Jersey's] jurisdiction if it knows or reasonably should know that through its distribution scheme its products are being sold in New Jersey." Nicastro, 987 A.2d at 591-92. The second supplemented that holding by opining that, if a manufacturer distributes its products through a nationwide network, it will be presumed to know that they are being sold in New Jersey unless it takes affirmative steps to prevent them from finding their way to that State. Id. at 592. Thus, the cumulative effect of the portions of Nicastro on which Schmidt relies is to impose specific personal jurisdiction under the stream of commerce theory on any manufacturer who distributes its products into a nationwide network on the grounds
That holding is at odds with the decisions of the Supreme Court of the United States in World-Wide Volkswagen and Asahi. The former ruled that, "the foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World-Wide Volkswagen, 444 U.S. at 297, 100 S.Ct. 559; see also Pennzoil, 149 F.3d at 203 ("[T]he mere foreseeability that a product one sells may end up in the forum state does not render the seller amenable to suit in the forum state.") (citation omitted). Justice Brennan's opinion in Asahi—the less restrictive of the two plurality decisions in that case—included a similar requirement, stating that the stream of commerce theory only creates personal jurisdiction over a foreign manufacturer if it "delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." Asahi, 480 U.S. at 119-20, 107 S.Ct. 1026 (emphasis in original). In doing so, Justice Brennan noted the contrast between "the foreseeability of litigation in a State to which a consumer fortuitously transports a defendant's product (insufficient contacts) [and] the foreseeability of litigation in a State where the defendant's product was regularly sold (sufficient contacts)." Id. at 119, 107 S.Ct. 1026 (emphasis in original); see also Nicastro, 987 A.2d at 594 (Hoens, J., dissenting) ("[T]he majority has effectively substituted any effort by a manufacturer to sell its product anywhere in the nation as the only act needed for assertion of our jurisdiction.").
As discussed at length in the Court's prior rulings, this case falls under the "insufficient contacts" category identified by Justice Brennan in Asahi—the fortuitous series of events by which the machine found its way to New Jersey is illustrative of that point. Sypris, a manufacturer based in Kentucky, sold its products to Schmidt, a company based in Texas. The top closures sold to Schmidt were specifically designed for that company and were not sold in other states. See Leja I, 2005 WL 1366533 at *2. Once received, the enclosure at issue in this litigation was added to a custom-built machine assembled by Schmidt and sold to Sylvan, a machinery distributor headquartered and doing business in New York. Sylvan, in turn leased the machine to L & L, which is also headquartered in New York. It was only after the machine proved inadequate to the task for which it was designed and assembled that it was returned to Sylvan and subsequently sold to WVP, Mr. Leja's employer in New Jersey. In other words, this case deals with a machine component custom-built by Sypris that was not sold to consumers in New Jersey, and found its way to that state only after a fortuitous series of events that included five changes in the company by which it was owned and/or operated. In light of the fact that Sypris custom-built the type of closure at issue in this case according to Schmidt's specifications and did not sell similar closures to other manufacturers, Sypris cannot be said to have introduced those closures "into the stream of commerce with the expectation that they w[ould] be purchased by consumers" in New Jersey. See Asahi, 480 U.S. at 119-20, 107 S.Ct. 1026 (emphasis in original). Therefore, the Court reaffirms its earlier rulings that it lacks specific personal jurisdiction over Sypris, and Schmidt's Motion for Reconsideration of those decisions will be denied.
For the reasons set forth above, Schmidt's Motion for Reconsideration is
