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Cagle v. Rexon Industrial Corp., Ltd.

United States District Court, W.D. Oklahoma

May 2, 2019

EARNEST CAGLE, Plaintiff,
v.
REXON INDUSTRIAL CORP., LTD., Defendant.

          ORDER

          DAVID L. RUSSELL UNITED STATES DISTRICT JUDGE.

         Before this Court is Defendant Rexon Industrial Corp., Ltd.'s (“Rexon” or “Defendant”) Motion to Dismiss (Doc. 3). The matter is fully briefed and at issue. See Docs. 3, 9-10, 13. For the reasons stated herein, the Court GRANTS Defendant's motion.

         I. Background

         Plaintiff brings a products liability claim against Defendant. Doc. 1-2, at 2-4. Plaintiff alleges that Defendant “designe[d], manufacture[d], teste[d], supplie[d], s[old], and/or distribut[ed] . . . a Craftsman portable table saw, Model No. 137.415030 . . . .” Id. Plaintiff purchased the Craftsman table saw (“Saw”) in 2014. Id. On November 24, 2014, Plaintiff-“us[ing] the . . . Saw in a reasonably foreseeable manner and as intended”- suffered severe injuries. Id. These injuries were caused by a defect in the Saw that “rendered it unreasonably dangerous when used in ordinary and foreseeable ways.” Id. The defect “existed when the . . . Saw left the possession of Defendant, ” and Defendant acknowledged its existence “by issuing a ‘Recall Letter' to all purchasers in March of 2017.” Id.

         Defendant moves to dismiss Plaintiffs complaint for lack of personal jurisdiction, insufficient service of process, and failure to state a claim. See Doc. 3, at 8 (citing Fed.R.Civ.P. 12(b)(2), (5)-(6)). As the Court dismisses this suit because it lacks personal jurisdiction over Defendant, it will focus on the jurisdictional facts alleged by both parties.

         According to its motion, Defendant is a Taiwanese corporation with its principal place of business in Taichung, Taiwan (Republic of China). See Doc. 3, at 9; Doc. 3-1, at 1.[1] Defendant avers that it

• has no offices, employees, or property in Oklahoma; .has no bank or financial accounts in Oklahoma;
• has never targeted Oklahoma as part of a marketing effort;
• has never entered into a contract in Oklahoma or contracted with any company incorporated in or organized under the laws of Oklahoma;
• pays no Oklahoma state taxes;
• has no authorized agent for service of process in Oklahoma; and
• has not registered to do business in Oklahoma.

See Doc. 3, at 9-10; Doc. 3-1, at 1-2. Significantly, “Rexon has not shipped any products directly to . . . Oklahoma, ” including the Saw, during any relevant time period. Doc. 3-1, at 2. Defendant sold the Saw to Sears, Roebuck, and Co. on October 9, 2014; it was delivered to the port in Shanghai, China, and shipped “free on board” to a location that Sears specified. Id. at 3; see also Doc. 3, at 10-11. Title to the Saw transferred from Defendant to Sears before it left China, with Sears assuming risk of loss and assuming responsibility for the Saw's transport and its final distribution location. Id. “No units of [the Saw] were ever sold by Rexon in Oklahoma or delivered by Rexon to Oklahoma, ” and “Rexon d[id] not dictate to Sears where Sears should sell products.” Id.

         Plaintiff does not contest many of Defendant's jurisdictional allegations, but he nonetheless insists that this Court has personal jurisdiction over Defendant. See generally Doc. 9. According to Plaintiff, “Rexon manufactures, distributes, and sells its power tools to ‘big-box' retailers like Sears and Lowes throughout the U.S.” Id. at 6. Defendant also advertises over the internet in the United States, maintains a customer service telephone number, and “indemnifies U.S. retailers for product defects.” Id. Moreover, Plaintiff cites numerous suits in which Rexon was a defendant and either consented to personal jurisdiction or was unable to successfully challenge it. See id. at 11-24.

         II. Personal Jurisdiction: Legal Standards

         This Court must have personal jurisdiction over Defendant to adjudicate Plaintiff's claim against it. See Walden v. Fiore, 571 U.S. 277, 283 (2014) (“The Due Process Clause of the Fourteenth Amendment constrains a State's authority to bind a nonresident defendant to a judgment of its courts.”); Montgomery v. Airbus Helicopters, Inc., 2018 OK 17, ¶ 15, 414 P.3d 824, 828 (“In personam jurisdiction is the power to render a binding judgment against a defendant.”). Plaintiff bears the burden of establishing personal jurisdiction. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1069 (10th Cir. 2008). In the absence of an evidentiary hearing, Plaintiff must only make a prima facie showing of personal jurisdiction to defeat Defendant's motion. Old Republic Ins. Co. v. Continental Motors, Inc., 877 F.3d 895, 903 (10th Cir. 2017). Plaintiff “may make this prima facie showing by demonstrating, via affidavit or other written materials, facts that if true would support jurisdiction over the defendant.” OMI Holdings Inc. v. Royal Ins. Co. of Canada, 149 F.3d 1086, 1091 (10th Cir. 1998). The complaint's well-pled factual content “must be accepted as true if uncontroverted by the defendant's affidavits, ” and “factual disputes . . . must be resolved in the plaintiff's favor when the parties present conflicting affidavits.” FDIC v. Oaklawn Apartments, 959 F.2d 170, 174 (10th Cir. 1992). But Plaintiff must “support jurisdictional allegations in a complaint by competent proof of the supporting facts if the jurisdictional allegations are challenged by an appropriate pleading.” Pytlik v. Prof'l Res., Ltd., 887 F.2d 1371, 1376 (10th Cir. 1989).

         “To obtain personal jurisdiction over a nonresident defendant in a diversity action, a plaintiff must show that jurisdiction is legitimate under the laws of the forum state and that the exercise of jurisdiction does not offend the due process clause of the Fourteenth Amendment.” Employers Mut. Cas. Co. v. Bartile Roofs, Inc., 618 F.3d 1153, 1159 (10th Cir. 2010) (internal quotation marks and citation omitted); see also Fed. R. Civ. P. 4(k)(1)(A); Old Republic, 877 F.3d at 903 (“The law of the forum state and constitutional due process limitations govern personal jurisdiction in federal court.”). Because Oklahoma's long-arm statute authorizes personal jurisdiction to the limits of the Due Process Clause, see 12 O.S. § 2004(F), the Court simply asks whether “the exercise of jurisdiction ‘comports with the limits imposed by federal due process.'” Walden, 571 U.S. at 283 (quoting Daimler AG v. Bauman, 571 U.S. 117, 125 (2014)); see also Monge v. RG Petro-Mach. (Grp.) Co., Ltd., 701 F.3d 598, 613 (10th Cir. 2012) (“As Oklahoma's long-arm statute permits the exercise of any jurisdiction that is consistent with the United States Constitution, the personal jurisdiction inquiry under Oklahoma law collapses into the single due process inquiry.” (internal quotation marks and citation omitted)).

         Plaintiff argues that this Court has personal jurisdiction over Defendant based on Defendant's contacts with Oklahoma. Contacts-based personal jurisdiction comes in two flavors: general or specific. See Old Republic, 877 F.3d at 903. Plaintiff does not argue that this Court may exercise general jurisdiction over Defendant, which requires that Defendant's “affiliations” with the forum state be “so continuous and systematic as to render [it] essentially at home” there. BNSF Ry. Co. v. Tyrrell, 137 S.Ct. 1549, 1558 (2017) (internal quotation marks and citation omitted).[2] Thus, this Court's analysis shall focus on “specific personal jurisdiction-i.e., jurisdiction specific to this dispute-and its attendant ‘minimum contacts' test.” Newsome v. Gallacher, 722 F.3d 1257, 1264 (10th Cir. 2013).

         This Court may exercise specific personal jurisdiction over the out-of-state Defendant if it 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 Tires Operations, S.A. v. Brown, 564 U.S. 915, 923 (2011) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)) (brackets, additional quotation marks, and additional citations omitted).[3] Applying this principle as an analytic framework, the Court asks three questions: (1) did Defendant reach out to Oklahoma?; (2) does Plaintiff's injury arise from or relate to Defendant's Oklahoma contacts (i.e. Defendant's acts of reaching out)?; and, if (1) and (2) are answered affirmatively, (3) would exercising personal jurisdiction over Defendant offend traditional notions of fair play and substantial justice? See Newsome, 722 F.3d at 1264.[4]

         The threshold inquiry for specific jurisdiction is whether Defendant reached out to the forum-that is, whether Defendant “purposefully directed its activities at residents of the forum state.” Dudnikov, 514 F.3d at 1071 (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)); see also Bell Helicopter Textron, Inc. v. Heliqwest Int'l, Ltd., 385 F.3d 1291, 1296 (10th Cir. 2004) (“To support specific jurisdiction, there must be ‘some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.'” (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958))).[5] For tort claims, like Plaintiff's, “purposeful direction has three elements: “‘(a) an intentional action . . . that was (b) expressly aimed at the forum state . . . with (c) knowledge that the brunt of the injury would be felt in the forum state . . . .'” Newsome, 722 F.3d at 1264-65 (ellipsis original) (quoting Dudnikov, 514 F.3d at 1072); see also Old Republic, 877 F.3d at 904-08 (providing an exhaustive accounting of “frameworks” used for analyzing “purposeful direction”).

         Moreover, as it relates to products liability,

[t]he requirement of purposeful availment . . . precludes personal jurisdiction as the result of random, fortuitous, or attenuated contacts. Although it is foreseeable that a product might travel to a forum state, such foreseeability is not a sufficient benchmark for personal jurisdiction under the Due Process Clause. 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.

Monge, 701 F.3d at 613 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295 (1980) (quotation marks, additional citations, and brackets omitted)); see also Bell Helicopter, 385 F.3d at 1296 (“Generally speaking, specific jurisdiction must be based on actions by the defendant and not on events that are the result of unilateral actions taken by someone else.”); Rambo v. Am. S. Ins. Co., 839 F.2d 1415, 1420 (10th Cir. 1998) (“Purposeful availment analysis turns upon whether the defendant's contacts are attributable to his own actions or solely to the actions of the plaintiff and generally requires affirmative conduct by the defendant which allows or promotes the transaction of business within the forum state.” (internal quotation marks, citations, brackets, and ellipses omitted)).[6]

         But purposeful availment alone is not enough to satisfy due process; Plaintiff must, additionally, show that his claim arises from or relates to Defendant's purposeful availment. See Bartile Roofs, 618 F.3d at 1160 (“Under the specific-jurisdiction requirement, a plaintiff satisfies the minimum-contacts standard by showing that (1) the defendant has purposefully availed itself of the privilege of conducting activities or consummating a transaction in the forum state, and (2) the litigation results from alleged injuries that arise out of or relate to those activities.” (internal quotation marks and citations omitted)); see also Monge, 701 F.3d at 617 (“For specific jurisdiction, [plaintiff's] injuries must arise out of or relate to activities that [defendant] purposefully directed at residents of the forum.”). If there is no “affiliation between the forum and the underlying controversy . . . . specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State.” Bristol-Myers Squibb Co. v. Superior Court of Cal., 137 S.Ct. 1773, 1781 (2017) (internal quotation marks and citations omitted). Plaintiffs in this circuit may establish that their claims arise out of or relate to a defendant's forum contacts through either the “proximate cause” approach or the “but-for causation” approach. Express Servs., Inc. v. King, No. CIV-15-1181-R, 2016 WL 3172911, at *9 (W.D. Okla. June 6, 2016) (citing Newsome, 722 F.3d at 1269). Under the but-for approach, “‘any event in the causal chain leading to the plaintiff's injury is sufficiently related to the claim to support the exercise of specific jurisdiction.'” Newsome, 722 F.3d at 1269 (quoting Dudnikov, 514 F.3d at 1078). The proximate-cause approach, by comparison, “‘is considerably more restrictive and calls for courts to examine whether any of the defendant's contacts with the forum are relevant to the merits of the plaintiff's claims.'” Id. at 1269-70 (quoting Dudnikov, 514 F.3d at 1078). But despite their differences, both approaches require a “true causal element” between a defendant's forum contacts and ...


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