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Johnson v. Chrysler Can. Inc.

United States District Court, N.D. Alabama, Eastern Division

June 5, 2014

WILLIE JAMES JOHNSON, as Personal Representative of the Estate of Louis Blackmon, Plaintiff,
v.
CHRYSLER CANADA INC., Defendant

For Willie James Johnson, as Personal Representative of the Estate of Louis Blackmon, Plaintiff: Mary Leah Miller, LEAD ATTORNEY, LAW OFFICES OF THOMAS P WILLINGHAM PC, Birmingham, AL; Thomas P Willingham, LEAD ATTORNEY, LAW OFFICES OF THOMAS P. WILLINGHAM PC, Birmingham, AL; George A Monk, ATTORNEY AT LAW, Anniston, AL.

For Chrysler Canada Inc, Defendant: Rachel M Lary, Wesley B Gilchrist, LIGHTFOOT FRANKLIN & WHITE LLC, Birmingham, AL.

OPINION

Page 1119

MEMORANDUM OPINION AND ORDER

VIRGINIA EMERSON HOPKINS, United States District Judge.

This is a civil action filed by the plaintiff, Willie James Johnson, as personal representative of the estate of Lois Blackmon, deceased. The complaint alleges that Blackmon was driving a 2006 Chrysler 300 (LX) " designed, developed, manufactured, tested, marketed, distributed, and sold" by defendant Chrysler Canada, Inc. (" Chrysler Canada" )[1], when she was killed after the vehicle " was struck on the driver's side by a tractor trailer." (Doc. 1 at 3). The complaint alleges that the defendant is liable under the Alabama Extended Manufacturer's Liability Doctrine (the " AEMLD" ) (Count One). It also alleges liability based on theories of negligence (Counts Two and Three), wantonness (Counts Four and Five), and breach of warranty (Count Six).

The case comes before the court on the defendant's motion to dismiss for lack of personal jurisdiction, filed pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. (Doc. 10). For the reasons stated herein the motion will be DENIED.

I. STANDARD

" A plaintiff seeking the exercise of personal jurisdiction over a nonresident

Page 1120

defendant bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction." United Technologies Corp. v. Mazer (Mazer), 556 F.3d 1260, 1274 (11th Cir. 2009). " Where . . . the defendant challenges jurisdiction by submitting affidavit evidence in support of its position, the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction. Mazer, 556 F.3d at 1274 (internal quotations and citations omitted). " A prima facie case is established if the plaintiff presents affidavits or deposition testimony sufficient to defeat a motion for judgment as a matter of law." PVC Windoors, Inc. v. Babbitbay Beach Constr., N.V., 598 F.3d 802, 810 (11th Cir. 2010). " The district court must resolve the challenge--on the pleadings, if possible, or following an evidentiary hearing before the bench or, depending on the circumstances, at trial." Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1224 n. 19 (11th Cir. 2009) (citing 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1373 (3d ed. 2004)). In resolving the challenge the court notes that

where the evidence presented by the parties' affidavits and deposition testimony conflicts, the court must construe all reasonable inferences in favor of the non-movant plaintiff. If such inferences are sufficient to defeat a motion for judgment as a matter of law, the court must rule for the plaintiff, finding that jurisdiction exists.

PVC Windoors, 598 F.3d at 810 (quotes and citations omitted). " It goes without saying that, where the defendant challenges the court's exercise of jurisdiction over its person, the plaintiff bears the ultimate burden of establishing that personal jurisdiction is present." Oldfield, 558 F.3d at 1217.

II. FACTS

The facts of this case are straightforward and undisputed. On or about September 22, 2011, the plaintiff's decedent, Lois Blackmon, died after the 2006 Chrysler 300 (LX) vehicle she was driving was involved in an accident. The complaint alleges that Chrysler Canada " designed, developed, manufactured, tested, marketed, distributed, and sold" the vehicle. (Doc. 1 at 3). The plaintiff claims " that his decedent's fatal injuries would have been reduced or eliminated had the subject vehicle been reasonably crashworthy, been equipped with side curtain airbags and side impact protection, including side/torso airbags." (Doc. 28 at 4).

Chrysler Canada is a Canadian corporation with its headquarters in Windsor, Ontario, Canada. (Doc. 1 at 2; doc. 10 at 2). It has never been licensed to do business in Alabama, and has not

-- transacted any business in Alabama;

-- been involved in any business activities in Alabama;

-- paid any taxes to Alabama;
-- made any contracts with Alabama;
-- owned, used, or possessed any real estate situated in Alabama;
-- maintained any offices, manufacturing plants, or equipment in Alabama;
-- had any directors, officers, employees, or agents based in Alabama;
-- had a bank account in Alabama;
-- had a telephone number, mailing address, or Employee Identification Number (" EIN" ) based in Alabama; or
-- directed any advertizing or marketing efforts to residents or business in the United States, including Alabama.

(Doc. 10-1 at 3).

Chrysler Canada is an indirect wholly owned subsidiary of Chrysler Group LLC. (Doc. 10-1 at 3; doc. 29-3 at 5). Previously

Page 1121

it was an indirect wholly owned subsidiary of Chrysler LLC (now bankrupt), formerly DaimlerChrysler Company LLC, formerly DaimlerChrysler Corporation, formerly Chrysler Corporation. (Doc. 10-1 at 3). The defendant refers to Chrysler LLC, DaimlerChrysler Company LLC, DaimlerChrysler Corporation, and Chrysler Corporation collectively as " Chrysler United States." The court will as well.

Chrysler Canada manufactured/assembled [2] the vehicle Blackmon was driving. (Doc. 10-1 at 4). The vehicle was assembled at the defendant's Brampton, Ontario, Canada facility. (Doc. 10-1 at 4; doc. 28 at 4). Chrysler Canada does not receive orders or payment from Alabama dealers, nor does it advertise, sell, or ship vehicles to Alabama or anywhere else in the United States. (Doc. 10-1 at 4, 5). Chrysler United States would instruct Chrysler Canada on the number and configuration of vehicles bound for the United States market, and Chrysler Canada would assemble the vehicles to those specifications. (Doc. 10-1 at 4). Each vehicle bound for the United States was built to the specific requirements of the United States market. (Doc. 30-9 at 1). Thereafter

[a]ll vehicles assembled by Chrysler Canada that are destined for the United States market, including the [plaintiff's decedent's] . . . vehicle, are sold to Chrysler United States while the vehicle is still in Canada. The titles to all such vehicles are transferred in Canada. Chrysler United States takes possession of those vehicles while those vehicles are still in Canada. Chrysler United [S]tates imports vehicles it already owns into the United States.

(Doc. 10-1 at 4).

Blackmon's vehicle was one of the vehicles built by Chrysler Canada for the United States market. It was sold by Chrysler United States to Crown Dodge Chrysler Plymouth, in Gadsden, Alabama. (Doc. 29-5 at 2). At the time the vehicle was built, Chrysler Canada knew that Chrysler United States, through its dealer network, had a nationwide distribution channel in the United States. (Doc. 29-3). Further, as to each particular vehicle it manufactured, including Blackmon's, Chrysler Canada knew that vehicle's ultimate destination in the United States by virtue of the " sales code" or " dealer code" assigned to each vehicle. (Doc. 29-4 at 33, 106-107; doc. 29-5 at 11; doc. 29-3 at 4).[3] Chrysler Canada knew that a majority of the vehicles that it manufactured were sold in the United States. (Doc. 29-2 at 48-50; 29-3 at 16). It " expected that at least some of the vehicles it assembled would likely be sold in the [S]tate of Alabama." (Doc. 29-3 at 17; doc. 33 at 2). When it built Blackmon's vehicle, Chrysler Canada knew that it was bound for Alabama. It receives an income for all vehicles, including Blackmon's vehicle, which it manufactures, including those which are sold in the United States. (Doc. 29-2 at 67-68; doc. 33 at 2).

III. ANALYSIS

The Eleventh Circuit has noted:

A federal court sitting in diversity undertakes a two-step inquiry in determining

Page 1122

whether personal jurisdiction exists: the exercise of jurisdiction must (1) be appropriate under the state long-arm statute and (2) not violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution.

Mazer, 556 F.3d at 1274. In this case, " the two inquiries merge, because Alabama's long-arm statute permits the exercise of personal jurisdiction to the fullest extent constitutionally permissible." Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 925 (11th Cir. 2007) (citing Ala. R. Civ. P. 4.2(b); Sieber v. Campbell, 810 So.2d 641, 644 (Ala.2001)). The Due Process Clause requires that the defendant have: 1) certain minimum contacts with the forum state, 2) such that the exercise of jurisdiction over the defendant does not offend " traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The court will examine each part of the International Shoe analysis as it applies to the facts of this case.

A. Minimum Contacts

1. Specific Versus General Jurisdiction

There are two types of personal jurisdiction, specific and general. " Specific jurisdiction refers to 'jurisdiction over causes of action arising from or related to a defendant's actions within the forum.'" PVC Windoors,, 598 F.3d at 808 (emphasis added) (quoting Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1220 n. 27 (11th Cir.2009)). " In contrast, general jurisdiction refers to the power of the forum state to exercise jurisdiction in any cause of action involving a particular defendant, regardless of where the cause of action arose." PVC Windoors, 598 F.3d at 810 n. 8 (emphasis added) ( citing Oldfield, 558 F.3d at 1220 n. 27).[4] The plaintiff alleges that there is specific personal jurisdiction over the defendant.[5] (Doc. 28 at 9).

Referring to specific jurisdiction as a " more limited" basis of jurisdiction, the Supreme Court has noted:

Where a defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws, it submits to the judicial power of an otherwise foreign sovereign to the extent that power is exercised in connection with the defendant's activities touching on the State. In other words, submission through contact with and activity directed at a sovereign may justify specific jurisdiction in a suit arising out of or related to the defendant's contacts with the forum.

J. McIntyre Mach., Ltd. v. Nicastro, __ U.S. __, 131 S.Ct. 2780, 2787-88, 180 L.Ed.2d 765 (2011) (internal quotations and citations omitted). In this case, Chrysler Canada lacks a presence within, and seems to lack direct contacts with, the State of Alabama. However, the plaintiff contends that Chrysler Canada has purposefully availed itself of the privilege of conducting activities in Alabama and has directed contact towards Alabama, by placing the vehicles it assembles into the so-called " stream of commerce." Chrysler Canada argues that the Supreme Court has held that this basis for specific personal jurisdiction is no longer valid. For the

Page 1123

reasons set out herein, the court disagrees. While the parameters of the " stream of commerce" basis for specific personal jurisdiction are not yet clearly defined, it is clear, under the facts of this case, that this court has specific personal jurisdiction over Chrysler Canada.[6]

2. The " Stream of Commerce" Theory In the Supreme Court

As noted by the Third Circuit Court of Appeals,

[i]n many products-liability cases . . . the seller does not come in direct contact with the forum state but does so through intermediaries such as retailers or distributors. In response to this phenomenon, courts have developed the " stream of commerce" theory by which specific jurisdiction is asserted over a nonresident defendant which injected its goods, albeit indirectly, into the forum state and either " derived [a] substantial benefit from the forum state or had a reasonable expectation of [deriving a substantial benefit from it]."

Pennzoil Products Co. v. Colelli & Associates, Inc., 149 F.3d 197, 203 (3d Cir. 1998) ( quoting Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 300 (3d Cir. 1985)). The Supreme Court has addressed this theory in three cases: World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Asahi Metal Industry Co. v. Superior Court of Cal., Solano Cty., 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); and J. McIntyre Mach., Ltd. v. Nicastro, 131 S.Ct. 2780, 180 L.Ed.2d 765 (2011).

a. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)

In World-Wide Volkswagen, Harry and Kay Robinson had purchased a new Audi automobile from a company named Seaway Volkswagen, Inc. (Seaway), in Massena, N.Y., in 1976. The next year, the Robinson family left New York for a new home in Arizona. While driving through the State of Oklahoma, their Audi was struck in the rear by another car. The resulting fire severely burned Robinson and her two children.

The Robinsons subsequently brought a products-liability action in Oklahoma state court claiming that their injuries resulted from defective design and placement of the Audi's gas tank and fuel system. They joined as defendants the automobile's manufacturer, Audi NSU Auto Union Aktiengesellschaft (Audi); its importer Volkswagen of America, Inc. (Volkswagen); its regional distributor, World-Wide Volkswagen Corp. (World-Wide); and its retail dealer, Seaway, from which the Robinsons had purchased the vehicle, in Massena, N.Y., in 1976. Seaway and World-Wide entered special appearances, claiming that Oklahoma's exercise of jurisdiction over them would offend the limitations on the state's jurisdiction imposed by the Due Process Clause of the Fourteenth Amendment.

Page 1124

Justice White, writing for the majority, noted:

The facts presented to the District Court showed that World-Wide is incorporated and has its business office in New York. It distributes vehicles, parts, and accessories, under contract with Volkswagen, to retail dealers in New York, New Jersey, and Connecticut. Seaway, one of these retail dealers, is incorporated and has its place of business in New York. Insofar as the record reveals, Seaway and World-Wide are fully independent corporations whose relations with each other and with Volkswagen and Audi are contractual only. Respondents adduced no evidence that either World-Wide or Seaway does any business in Oklahoma, ships or sells any products to or in that State, has an agent to receive process there, or purchases advertisements in any media calculated to reach Oklahoma. In fact, as respondents' counsel conceded at oral argument . . . there was no showing that any automobile sold by World-Wide or Seaway has ever entered Oklahoma with the single exception of the vehicle involved in the present case.

World-Wide Volkswagen, 444 U.S. at 288-89.

The Court first " reaffirmed" that " a state court may exercise personal jurisdiction over a nonresident defendant only so long as there exist 'minimum contacts' between the defendant and the forum State." Id. at 291 ( citing International Shoe, 326 U.S. at 316). It also noted that " the Due Process Clause 'does not contemplate that a state may make binding a judgment in personam against an individual or corporate defendant with which the state has no contacts, ties, or relations.'" Id. at 294 ( quoting International Shoe, 326 U.S. at 319). It then found

a total absence of those affiliating circumstances that are a necessary predicate to any exercise of state-court jurisdiction. [World-Wide and Seaway] carry on no activity whatsoever in Oklahoma. They close no sales and perform no services there. They avail themselves of none of the privileges and benefits of Oklahoma law. They solicit no business there either through salespersons or through advertising reasonably calculated to reach the State. Nor does the record show that they regularly sell cars at wholesale or retail to Oklahoma customers or residents or that they indirectly, through others, serve or seek to serve the Oklahoma market. In short, respondents seek to base jurisdiction on one, isolated occurrence and whatever inferences can be drawn therefrom: the fortuitous circumstance that a single Audi automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma.

Id. at 295.

The plaintiffs in World-Wide Volkswagen argued that " because an automobile is mobile by its very design and purpose it was 'foreseeable' that the Robinsons' Audi would cause injury in Oklahoma." Id. at 296. In response, the court wrote that " 'foreseeability' alone has never been a sufficient benchmark for ...


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