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Ex parte Aladdin Manufacturing Corp.

Supreme Court of Alabama

December 20, 2019

Ex parte Aladdin Manufacturing Corporation et al.
v.
3M Company et al. In re: The Water Works and Sewer Board of the Town of Centre Ex parte Milliken & Company In re: The Water Works and Sewer Board of the Town of Centre
v.
3M Company et al. Ex parte Textile Rubber and Chemical Company, Inc. In re: The Water Works and Sewer Board of the Town of Centre
v.
3M Company et al. Ex parte Mohawk Industries, Inc., et al. In re: The Water Works and Sewer Board of the City of Gadsden
v.
3M Company et al. Ex parte Dorsett Industries, Inc. In re: The Water Works and Sewer Board of the City of Gadsden
v.
3M Company et al. Ex parte Indian Summer Carpet Mills, Inc. In re: The Water Works and Sewer Board of the City of Gadsden
v.
3M Company et al. Ex parte Oriental Weavers USA, Inc. In re: The Water Works and Sewer Board of the City of Gadsden
v.
3M Company et al. Ex parte Kaleen Rugs, Inc. In re: The Water Works and Sewer Board of the City of Gadsden
v.
3M Company et al.

          Cherokee Circuit Court, CV-17-900049

          Etowah Circuit Court, CV-16-900676

          PETITION FOR WRIT OF MANDAMUS

          STEWART, Justice.

         These mandamus petitions present the question whether the Cherokee Circuit Court and the Etowah Circuit Court (hereinafter referred to collectively as "the trial courts") can properly exercise personal jurisdiction over the petitioners, out-of-state companies (hereinafter referred to collectively as "the defendants"), in actions filed against them by the Water Works and Sewer Board of the Town of Centre ("Centre Water") and the Water Works and Sewer Board of the City of Gadsden ("Gadsden Water"). Centre Water and Gadsden Water allege that the defendants discharged toxic chemicals into industrial wastewater from their plants in Georgia, which subsequently contaminated Centre Water's and Gadsden Water's downstream water sources in Alabama. After moving unsuccessfully in the trial courts to have the actions against them dismissed, the defendants have filed petitions for writs of mandamus seeking orders from this Court directing the trial courts to dismiss the actions against them based on a lack of personal jurisdiction. We have consolidated all the petitions for the purpose of issuing one opinion.

         I. Facts and Procedural History

         A. The Cherokee County Case

         On May 15, 2017, Centre Water filed an action in the Cherokee Circuit Court seeking injunctive relief and damages and asserting claims of negligence, wantonness, nuisance, and trespass against the following companies, among others, located in Dalton, Georgia: Aladdin Manufacturing Corporation, Mohawk Industries, Inc., Mohawk Carpet, LLC, Shaw Industries, Inc., Arrowstar, LLC, Engineered Floors, LLC, J&J Industries, Inc., MFG Chemical, Inc., The Dixie Group, Inc., Milliken & Company, and Textile Rubber and Chemical Company, Inc. ("the Cherokee County defendants"). In the complaint, Centre Water alleged that the Cherokee County defendants, who are carpet manufacturers or chemical manufacturers, had released "toxic chemicals, including perfluorinated compounds ('PFCs'), including, but not limited to perfluorooctanoic acid ('PFOA'), perfluorooctane sulfonate ('PFOS'), precursors to PFOA and PFOS, and related chemicals" (hereinafter referred to collectively as "PFC-containing chemicals") from their manufacturing facilities and that those chemicals had contaminated Centre Water's water-intake site. The Cherokee County defendants moved to dismiss the action against them, asserting lack of personal jurisdiction, and Centre Water filed responses in opposition.

         On May 15, 2018, the Cherokee Circuit Court entered a detailed order denying the Cherokee County defendants' motions to dismiss, stating, in pertinent part:

"The most illustrative cases cited by the parties relative to this issue are: (1) Horne v. Mobile Area Water & Sewer Sys., 897 So.2d 972');">897 So.2d 972 (Miss. 2004), and (2) Pakootas v. Teck Cominco Metals, Ltd., [905 F.3d 565] (E.D. Wash. 2004).
"In both of these cases, there was a question of whether the plaintiffs satisfied the issue of whether the out-of-state defendants had engaged in 'express aiming' or 'purposefully directing' activities toward the forum state. In both cases, the court held that the plaintiffs had satisfied their burdens on this issue.
"In Horne, property owners in Mississippi sued various defendants, including the Water and Sewer System of Mobile, Alabama ('the System'), in state court in Mississippi. The System had, in Alabama, released a significant amount of water in anticipation of an oncoming hurricane. The water that had been released damaged and/or destroyed real and personal property downstream in Mississippi. The Supreme Court of Mississippi held that '[t]here is no question that [the defendants] knew the water would flow into Mississippi ....' [897 So.2d] at 979. This act and this knowledge was sufficient for the court to find that the System in Alabama had 'minimum contacts' with Mississippi such that the exercise of personal jurisdiction was appropriate.
"In Pakootas, the plaintiffs were citizens of the State of Washington that filed a suit under the federal Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) against a Canadian corporation that operated a shelter ten miles north of the US-Canada border. The allegation was that the defendants discharged harmful substances into the waters that flowed downstream to the plaintiffs and caused damage. The court held the facts as set out above and as alleged by the plaintiffs did satisfy the legal tests for personal jurisdiction.
"In drawing a distinction between those cases and the present case, TRCC [Textile Rubber and Chemical Company] points out that it did not dispose of anything directly into any water source and that the distance from the defendants in those two cases and the forum jurisdiction was not as great as the distance in this case.
"'"In considering a Rule 12(b)(2), Ala. R. Civ. P., motion to dismiss for want of personal jurisdiction, a court must consider as true the allegations of the plaintiff's complaint not controverted by the defendant's affidavits, Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir. 1996), and Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir. 1990), and 'where the plaintiff's complaint and the defendant's affidavits conflict, the ... court must construe all reasonable inferences in favor of the plaintiff.' Robinson, 74 F.3d at 255 (quoting Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)). 'For purposes of this appeal [on the issue of in personam jurisdiction] the facts as alleged by the ... plaintiff will be considered in a light most favorable to him [or her].' Duke v. Young, 496 So.2d 37, 38 (Ala. 1986)."'
"Corp. Waste Alternatives, Inc. v. McLane Cumberland, Inc., 896 So.2d 410, 413 (Ala. 2004).
"The Plaintiff's complaint alleges that the 'chemicals [complained of by the Plaintiff and allegedly used/manufactured by the Defendants] resist degradation during processing at Dalton Utilities' wastewater treatment center and contaminate the Conasauga River.' Complaint, ¶ 3, ¶ 50. The Plaintiff's complaint alleges that studies have been conducted and that regulations from the Environmental Protection Agency ('EPA') have been published relative to the health risks of the chemicals at issue. Complaint, ¶¶ 51-59. Those studies and regulations allegedly gave notice to the Defendants of the adverse health risks of the chemicals. The Plaintiff's complaint alleges that the Defendants are responsible for these chemicals being present in the Plaintiff's raw water source through the disbursement of the Defendants' wastewater into the Conasauga River and eventually into the Coosa River. Complaint, ¶¶ 2-5, 49-50, 64.
"In considering the facts in the light most favorable to the Plaintiff and in construing all reasonable inferences in favor of the Plaintiff where the complaint and the Defendants' evidentiary submissions conflict, the Court finds that the Plaintiff has demonstrated that the Defendants have conducted activity directed at Alabama and that that activity is not 'random,' 'fortuitous,' or 'attenuated,' or the 'unilateral activity of another party or a third person.'
"As shown in the Horne and Pakootas cases, the actions of an entity that result in harmful substances being placed into a water source can result in harm downstream in a foreign jurisdiction and it is reasonable for the entity causing those substances to be placed into the water to expect that their downstream harm could cause them to be hauled into court in that foreign jurisdiction. Thus, an entity causing chemicals to enter the Conasauga River should expect that since [the Conasauga] River is a tributary of the Coosa River then the chemicals can enter the Coosa River. Once those chemicals enter the Coosa River, the entity should expect that those chemicals will reach downstream to Alabama once the Coosa River crosses the state line. Therefore, the act of causing the chemicals to enter the Conasauga River is an act directed at Alabama.
"The Defendant[s] cannot, at this stage in the litigation, avail themselves of the defense that Dalton Utilities is the entity responsible and that its actions constitute the 'unilateral activity of another party or a third person.' As alleged by the Plaintiff, and, again, considering the facts in the light most favorable to the Plaintiff and resolving factual disputes in its favor, the chemicals at issue 'resist degradation during the treatment process utilized by Dalton Utilities and increase in concentration as waste accumulates in the [Land Application System].' Complaint, ¶ 50. In other words, the chemicals sent to Dalton Utilities by the Defendants cannot be treated and removed from the environment by Dalton Utilities. Therefore, the Plaintiff alleges, the Defendants have not properly disposed of the chemicals by sending them to Dalton Utilities; thus, the actions complained of are not the 'unilateral activity of another party or a third person.'
"Given this finding, the Court also finds that: (1) there is 'a "relationship among the defendant, the forum, and the litigation."' That is, as set out by TRCC, '[t]he defendant's activities [are] related to the "operative facts of the controversy"' and (2) that the exercise of personal jurisdiction would 'comport[] with fair play and substantial justice.'"

         The Cherokee County defendants timely filed their petitions for a writ of mandamus, which this Court consolidated ex mero motu.

         B. The Etowah County Case

         On September 22, 2016, Gadsden Water filed an action in the Etowah Circuit Court seeking injunctive relief and damages based on claims of negligence, wantonness, nuisance, and trespass on the same factual basis as that contained in the complaint in the Cherokee County case. Gadsden Water named the following companies located in Dalton, Georgia, among others, as defendants: Mohawk Industries, Inc., Mohawk Carpet, LLC, Shaw Industries, Inc., J&J Industries, Inc., MFG Chemical, Inc., Lexmark Carpet Mills, Inc., The Dixie Group, Inc., Dorsett Industries, Inc., Indian Summer Carpet Mills, Inc., Oriental Weavers USA, Inc., and Kaleen Rugs, Inc. ("the Etowah County defendants"). The Etowah County defendants each moved to dismiss the action against them, asserting, among other grounds, a lack of personal jurisdiction. Gadsden Water filed a response in opposition to each Etowah County defendant's motion to dismiss.

         On August 13, 2018, the Etowah Circuit Court entered an order substantially similar to the one entered by the Cherokee Circuit Court, employing the same reasoning. The Etowah County defendants timely filed their petitions for a writ of mandamus, which this Court consolidated ex mero motu.[1]

         II. Standard of Review

"A writ of mandamus is an extraordinary remedy which requires a showing of (a) a clear legal right in the petitioner to the order sought, (b) an imperative duty on the respondent to perform, accompanied by a refusal to do so, (c) the lack of another adequate remedy, and (d) the properly invoked jurisdiction of the court. Ex parte Bruner, 749 So.2d 437, 439 (Ala. 1999)."

Ex parte McInnis, 820 So.2d 795, 798 (Ala. 2001).

"'[A] petition for a writ of mandamus is the proper device by which to challenge the denial of a motion to dismiss for lack of in personam jurisdiction. See Ex parte McInnis, 820 So.2d 795 (Ala. 2001); Ex parte Paul Maclean Land Servs., Inc., 613 So.2d 1284, 1286 (Ala. 1993). "'An appellate court considers de novo a trial court's judgment on a party's motion to dismiss for lack of personal jurisdiction.'" Ex parte Lagrone, 839 So.2d 620, 623 (Ala. 2002) (quoting Elliott v. Van Kleef, 830 So.2d 726, 729 (Ala. 2002)). Moreover, "[t]he plaintiff bears the burden of proving the court's personal jurisdiction over the defendant." Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st Cir. 2002).'
"Ex parte Dill, Dill, Carr, Stonbraker & Hutchings, P.C., 866 So.2d 519, 525 (Ala. 2003)."

Ex parte Covington Pike Dodge, Inc., 904 So.2d 226, 229 (Ala. 2004).

         III. Discussion

         The defendants have sought review of the trial courts' denial of their motions to dismiss. Alabama courts use the following established procedure for treatment of motions to dismiss based on a lack of personal jurisdiction under Rule 12(b)(2), Ala. R. Civ. P.

"'"In considering a Rule 12(b)(2), Ala. R. Civ. P., motion to dismiss for want of personal jurisdiction, a court must consider as true the allegations of the plaintiff's complaint not controverted by the defendant's affidavits, Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253 (11th Cir. 1996), and Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d 829 (11th Cir. 1990), and 'where the plaintiff's complaint and the defendant's affidavits conflict, the ... court must construe all reasonable inferences in favor of the plaintiff.' Robinson, 74 F.3d at 255 (quoting Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990))."'
"Wenger Tree Serv. v. Royal Truck & Equip., Inc., 853 So.2d 888, 894 (Ala. 2002) (quoting Ex parte McInnis, 820 So.2d 795, 798 (Ala. 2001)). However, if the defendant makes a prima facie evidentiary showing that the Court has no personal jurisdiction, 'the plaintiff is then required to substantiate the jurisdictional allegations in the complaint by affidavits or other competent proof, and he may not merely reiterate the factual allegations in the complaint.' Mercantile Capital, LP v. Federal Transtel, Inc., 193 F.Supp.2d 1243, 1247 (N.D. Ala. 2002)(citing Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000)). See also Hansen v. Neumueller GmbH, 163 F.R.D. 471, 474-75 (D. Del. 1995)('When a defendant files a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(2), and supports that motion with affidavits, plaintiff is required to controvert those affidavits with his own affidavits or other competent evidence in order to survive the motion.') (citing Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984))."

Covington Pike Dodge, 904 So.2d at 229-30.

         A. Evidentiary Burdens

         At the outset, before we address the merits of the mandamus petitions, we must determine whether the defendants made prima facie evidentiary showings in support of their motions to dismiss that required Centre Water and Gadsden Water to substantiate the jurisdictional allegations in their complaints. See Ex parte Güdel AG, 183 So.3d 147, 156 (Ala. 2015).

         In the Cherokee County action, Aladdin Manufacturing Corporation, Mohawk Industries, Inc., Mohawk Carpet, LLC, and The Dixie Group, Inc., did not support their motions with any evidentiary submissions.[2] Shaw Industries, Inc., Engineered Floors, LLC, and J&J Industries, Inc., each filed a separate motion to dismiss supported with an affidavit from an executive of each company in which each executive testified, among other things, that his or her company was organized under the laws of Georgia and was located in Georgia. ArrowStar, LLC, and MFG Chemical, Inc., each attached to their motions to dismiss affidavits of their respective chief executive officers that indicated that each company was organized under Georgia laws and was located exclusively in Georgia and, in addition, that all the wastewater discharges from each company were transferred to Dalton Utilities, rather than directly into the Conasauga River. In support of its motion, Textile Rubber and Chemical Company, Inc., submitted an affidavit from its chief financial officer in which he testified, among other things, that Textile Rubber and Chemical was a Georgia corporation, that it was not licensed or registered to do business in Alabama, that it owned no property in Alabama, and that it had no employees in Alabama. None of the aforementioned defendants supported ...


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