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Umoe Schat-Harding, Inc. v. Pt Schneider Electric Manufacturing Batam

United States District Court, S.D. Alabama, Southern Division

April 5, 2018

UMOE SCHAT-HARDING, INC., et al. Plaintiffs,
v.
PT SCHNEIDER ELECTRIC MANUFACTURING BATAM, et al., Defendant.

          ORDER

          WILLIAM H. STEELE UNITED STATES DISTRICT JUDGE

         This matter is before the Court on the defendant's motion to dismiss for lack of personal jurisdiction. (Doc. 23). The parties have submitted briefs and evidentiary materials in support of their respective positions, (Docs. 23, 26, 27), and the motion is ripe for resolution.[1] After careful consideration, the Court concludes the motion to dismiss is due to be granted in part and denied in part.

         BACKGROUND

         The plaintiff in the underlying admiralty action (“Istre”), which was filed in the Eastern District of Louisiana, sued the plaintiffs herein (“UMOE”), and others, including his employer (“Montco”) for injuries he sustained when a rescue boat being hoisted aboard a work vessel (“the Vessel”) fell and struck him. The Vessel was built for Montco at a Bayou La Batre shipyard; UMOE supplied the davit system for the Vessel. Istre claimed the davit's cable snapped due to UMOE's employment of an improper limit switch (“the Switch”). UMOE filed a third-party demand against the defendant herein (“Batam”), the manufacturer of the Switch. Batam successfully pursued a motion to dismiss for lack of personal jurisdiction.

         Once all other claims were resolved in Louisiana, Istre and UMOE had their remnant of the action transferred to this District. Without objection, the Court severed UMOE's newly re-asserted third-party claim against Batam and opened this separate civil action, after UMOE predicted that service of process would consume more than a year.

         DISCUSSION

         “A plaintiff seeking to establish personal jurisdiction over a nonresident defendant bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction.” Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013) (internal quotes omitted). “When a defendant challenges personal jurisdiction by submitting affidavit evidence in support of its position, the burden traditionally shifts back to the plaintiff to produce evidence supporting jurisdiction, ” unless “the defendant's affidavits contain only conclusory assertions that the defendant is not subject to jurisdiction.” Id. (internal quotes omitted). “Where the plaintiff's complaint and supporting evidence conflict with the defendant's affidavits, the court must construe all reasonable inferences in favor of the plaintiff.” Meier ex rel. Meier v. Sun International Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002); accord Diamond Crystal Brands, Inc. v. Food Movers International, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010).

         An evidentiary hearing on a motion to dismiss for lack of personal jurisdiction is discretionary, not mandatory. E.g., Snow v. DirecTV, Inc., 450 F.3d 1314, 1317 (11th Cir. 2008). Because the parties have not requested an evidentiary hearing, the Court exercises its discretion not to conduct one. Absent such a hearing, the plaintiff's burden is to present enough evidence, construed most The facts regarding the Switch, according to UMOE, are as follows. Batam is an Indonesian subsidiary of Schneider Electric (“Schneider”), which is a global enterprise with hundreds of related companies. Batam manufactured the Switch, a Telemecanique XS7C40FP260, in Indonesia. Batam produces many such limit switches, which bear stamps reflecting international and United States ratings for sealing effectiveness.

         Batam individually packaged and bulk shipped over a thousand of these limit switches, including the Switch, to a Schneider subsidiary's international distribution center in France. (Doc. 26-4). The Switch and others were then shipped to a different Schneider subsidiary's regional distribution center in Hungary. (Doc. 26-3 at 7-8). This entity sold a dozen limit switches, including the Switch, to Q-Electrik, (Doc. 26-5), a retailer apparently located in the Czech Republic and unaffiliated with Schneider.

         Meanwhile, UMOE issued drawings for construction of the davit system, which specified use of Telemecanique XS7C40FP260 limit switches. In the Czech Republic, an entity related to UMOE (“UMOE As”) issued a purchase order for same to a Czech supplier (“ABB”), (Doc. 26-8), which acquired two limit switches, including the Switch, from Q-Electrik. The limit switches were invoiced and delivered to another UMOE entity in the Czech Republic (“UMOE s.r.o.”), (Doc. 26-9), which then shipped the davit system, along with the limit switches in their original packaging, to the shipyard in Bayou La Batre. (Doc. 26-10). There the switches were incorporated into the davit system and the davit system into the Vessel.[2]

         UMOE relies on additional evidence to establish personal jurisdiction over Batam. Schneider through its subsidiaries maintains two international distribution centers, one in France and the other in Singapore. The international distribution center in France (to which the Switch was shipped by Batam) receives products from various Schneider subsidiary manufacturing locations and redistributes them among a number of Schneider subsidiary regional distribution centers around the world, including those of a Schneider subsidiary (“Schneider USA”) in Texas, Ohio and Pennsylvania. (Doc. 26-3 at 9-12). Batam also ships some limit switches directly to Schneider USA. (Doc. 23-1 at 2). Schneider through unidentified subsidiaries maintains two sales offices in Alabama and services southeast Alabama through a third office located in Panama City, Florida. (Doc. 26-12). UMOE has not conducted jurisdictional discovery to determine the volume of actual sales in Alabama, but while the action was pending in the Eastern District of Louisiana, UMOE conducted such discovery as to Louisiana and learned that over 200 Telemecanique XS7C40FP260 limit switches manufactured by Batam were sold to Louisiana retailers between 2008 and 2012. (Doc. 26-11 at 9, 24, 37, 50, 61).

         A forum state's personal jurisdiction over a defendant may be either general or specific. “A court may assert general jurisdiction … to hear any and all claims against [foreign entities] when their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011) (internal quotes omitted). That is, if general jurisdiction exists, the foreign entity is subject to suit in the forum state even if the cause of action asserted against it is wholly unrelated to its activities in the state. Walden v. Flore, 134 S.Ct. 1115, 1121 n.6 (2014). “But only a limited set of affiliations with a forum will render a defendant amenable to general jurisdiction in that State.” Bristol-Myers Squibb Co. v. Superior Court, 137 S.Ct. 1773, 1780 (2017) (internal quotes omitted). The “at home” limitation means the defendant's contacts with the forum must be such that it is “comparable to a domestic enterprise in that State.” Daimler AG v. Bauman, 134 S.Ct. 746, 758 n.11 (2014). Faced with this daunting burden, UMOE prudently confines its argument to specific jurisdiction. (Doc. 26 at 13-25).

         “[A] State may authorize its courts to exercise personal jurisdiction over an out-of-state defendant if the defendant has certain minimum contacts with the State such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Goodyear Dunlop, 564 U.S. at 923. That is, “[a] defendant is constitutionally amenable to a forum's specific jurisdiction if it possesses sufficient minimum contacts with the forum to satisfy due process requirements, and if the forum's exercise of jurisdiction comports with traditional notions of fair play and substantial justice.” Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1545 (11th Cir. 1993) (internal quotes omitted). The first question is thus whether Batam has sufficient minimum contacts with Alabama to support the exercise of specific jurisdiction over it in this forum.

         “To constitute constitutionally minimum contacts, the defendant's contacts with the applicable forum must satisfy three criteria. First, the contacts must be related to the plaintiff's cause of action or have given rise to it.” Vermeulen, 985 F.2d at 1546. “Second, the contacts must involve some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum ..., thus invoking the benefits and protections of its laws.” Id. (internal quotes omitted). ‚ÄúThird, the defendant's ...


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