Lee v. Walworth Valve Company

• Citation: 482 F.2d 297
• Decision Date: 02 August 1973
• Docket Number: No. 72-2360.,72-2360.
• Parties: Janie R. LEE, Executrix of the Estate of Stanley Lee, Deceased, et al., Appellees, v. WALWORTH VALVE COMPANY, Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

482 F.2d 297 (1973)

Janie R. LEE, Executrix of the Estate of Stanley Lee, Deceased, et al., Appellees, v. WALWORTH VALVE COMPANY, Appellant.

No. 72-2360.

United States Court of Appeals, Fourth Circuit.

Argued March 7, 1973.

Decided August 2, 1973.

Thomas E. Byrne, Jr., Philadelphia, Pa. (William H. Grimball, Grimball & Cabaniss, Charleston, S. C., John C. Detweiler and Krusen, Evans & Byrne, Philadelphia, Pa., on brief), for appellant.

B. Allston Moore, Jr., Charleston, S. C. (Buist, Moore, Smythe & McGee, Charleston, S. C., William G. Symmers and Symmers, Fish & Warner, New York City, on brief), for appellee, Lockheed Shipbuilding and Const. Co.

Arnold S. Goodstein, Charleston, S. C. (David G. Jennings, Charleston, S. C., on brief), for appellee, Janie R. Lee.

Before HAYNSWORTH, Chief Judge, and BOREMAN and BRYAN, Senior Circuit Judges.

HAYNSWORTH, Chief Judge:

There was a rupture of a steam valve in the engine room of the USS Trenton, while she was cruising on the high seas off Guantanamo Bay, Cuba. A chief petty officer, on watch at the time in the engine room, was killed by escaping steam. He was a citizen of South Carolina, and he left his widow and executrix, who is a citizen and resident of that State. As executrix, she filed this action for wrongful death in the District Court for the District of South Carolina against Lockheed Shipbuilding and Construction Co., the builder of the Trenton, and against Walworth Valve Co., the manufacturer of the valve. Walworth filed a motion to quash the service upon it upon the ground that its contacts with South Carolina are insufficient to make it amenable to suit in that State.¹

The District Court denied the motion; we think properly so.

The Trenton was built for the Navy by Lockheed in its yards at Seattle, Washington. The valve involved was manufactured by Walworth at its plant in Pennsylvania and shipped by it from Pennsylvania to Lockheed at Seattle, where Lockheed installed the valve in the Trenton's engine room. The Trenton, upon completion and delivery to the Navy, left Seattle, but until the fatal injury of Stanley Lee it had not touched port in South Carolina and was not based there.

Lockheed is qualified to do business in South Carolina. It makes no objection to the maintenance of the action against it in that State. It has joined plaintiff in her efforts to hold Walworth answerable there, and it has sought affirmative relief in a third party complaint against the United States.

Walworth and its two wholly owned subsidiaries are manufacturers of industrial valves. They maintain no place of business in South Carolina. They own no property in that State and have no bank accounts there. There is no resident salesman or other agent in South Carolina, but, with some degree of regularity, salesmen headquartered elsewhere call upon South Carolina customers. These include a miscellany of industries, utilities, mill supply houses, and the Charleston Navy Yard. Together, several salesmen spent eighty days soliciting business in South Carolina in 1969, eighty-seven days in 1970, and seventy-five days in 1971. Additionally, some orders were obtained elsewhere for the shipment of pumps to consignees in South Carolina. Aggregate sales of Walworth and its two wholly owned subsidiaries to South Carolina customers in 1969 were $245,713.56; in 1970, they were $399,485.15, and in 1971, they were $179,607.30. During the first five months of 1972, their South Carolina sales aggregated $155,623.59.

In addition to the sales solicitation activity conducted by Walworth and its subsidiaries in South Carolina, it occasionally sent engineers into the state to deal with engineering problems. One of the engineers spent two days in that State in 1970, and, in 1971, an engineer made two separate trips into the state, spending, altogether, nine days there.

Almost all of Walworth's activity in South Carolina was the solicitation of orders which resulted in the shipment of pumps in interstate commerce. Once such activity was thought an impermissible predicate for the assertion of in personam jurisdiction.² Though the considerations of the Commerce Clause may still be appropriate in consideration of local regulation and taxation, it is clearly no longer relevant to an appraisal of the state's power to exercise in personam jurisdiction.³

Walworth's activity in South Carolina was neither isolated nor casual. The data show that Walworth's salesmen called upon customers in South Carolina with regularity. They were not always present, but seventy-five to eighty-five days a year is a substantial proportion of the total number of working days in a year. The volume of business resulting represented but a small percentage of Walworth's total sales, but sales of pumps aggregating several hundred thousand dollars a year cannot be labeled insubstantial.

Under the doctrine of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, the power to exercise in personam jurisdiction over a foreign corporation is to be determined by an appraisal of the quality of the corporation's contacts with the forum state and the fairness, under the circumstances, of holding it answerable there. Walworth's substantial activity in South Carolina in the solicitation of orders was far from minimal. This case would present absolutely no problem if the controversy arose out of the purchase or use in South Carolina of one of the pumps Walworth had shipped into that State.⁴

The difficulty in the case arises out of the fact that the cause of action did not grow out of any of Walworth's activity in South Carolina. The cause of action did not even arise in that State, for the injury occurred on the high seas. On the other hand, it is relevant to note that the cause of action did not arise in any other state whose courts might provide a more likely forum. This means that there probably are only two states in the United States with any interest in the controversy, the state of Walworth's domicile, and South Carolina, the residence of the decedent and of his widow and executrix. The interest of South Carolina is substantial, however, for it has a paternal interest in the recovery by one of its citizens of appropriate compensation, if there is a substantive cause of action. To the extent that Mrs. Lee, or she and her dependents, deprived of the support of her husband, might become a public charge, or charges, South Carolina has an immediate interest in her vindication of any private right of action she may have for the wrongful death of her husband.

In Ratliff v. Cooper Laboratories, Inc., 4 Cir., 444 F.2d 745, we recently considered a somewhat similar case with one significant difference. There, citizens of other states than South Carolina sought to maintain tort actions in the District Court for that State against two pharmaceutical houses for personal injuries sustained in other states, allegedly as a result of the use of defendant's products. We held that the actions could not be maintained, though the sale solicitation activity of the defendants there was comparable to the in-state activity of Walworth here. Our holding in Ratliff was dictated by...