Block Industries v. DHJ Industries, Inc.

• Decision Date: 10 April 1974
• Docket Number: No. 73-1764.,73-1764.
• Citation: 495 F.2d 256
• Parties: BLOCK INDUSTRIES, a corporation, Appellant, v. DHJ INDUSTRIES, INC., a corporation, et al., Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

495 F.2d 256 (1974)

BLOCK INDUSTRIES, a corporation, Appellant, v. DHJ INDUSTRIES, INC., a corporation, et al., Appellees.

No. 73-1764.

United States Court of Appeals, Eighth Circuit.

Submitted February 15, 1974.

Decided April 10, 1974.

Murray Ogborn, Aberdeen, S. D., for appellant.

Mart R. Vogel, Fargo, N. D., for appellees.

Before GIBSON, STEPHENSON and WEBSTER, Circuit Judges.

WEBSTER, Circuit Judge.

In this appeal, Block Industries, defendant in a personal injury action below, seeks reversal of an order of the District Court dismissing four foreign corporations which Block had attempted to join as third-party defendants. We affirm.

Larry Allen Ham, plaintiff below, filed a complaint in the United States District Court for the District of South Dakota seeking $750,000 in damages for personal injuries suffered when a shirt, manufactured by Block, was ignited, causing severe burns. The accident occurred in South Dakota, plaintiff's residence. Block is a North Carolina corporation, and jurisdiction was based upon diversity of citizenship. 28 U.S.C. § 1332.

Thereafter, Block filed a third-party complaint, naming as third-party defendants four fabric manufacturers, all nonresidents of South Dakota and all having their principal places of business outside that state: DHJ Industries, Inc.; Klopman Mills; Spring Mills and Greenwood Mills, Inc. The third-party complaint alleged that any negligence proximately causing the injury to plaintiff was "that of the Third-Party Defendants who designed, manufactured and placed into the stream of commerce the fabric and material used in the manufacture of the shirt referred to in Plaintiff's Complaint." Alternatively, Block alleged breaches of express and implied warranties by the third-party defendants.

Each third-party defendant, either by motion to dismiss or by answer, challenged the in personam jurisdiction of the court, asserted under South Dakota's long-arm statute, SDCL § 15-7-2 (1967).¹ In extensive affidavits, the third-party defendants averred that they had never conducted business in South Dakota and that their contacts with the state were so negligible as not to satisfy the requirements of due process. In its resistance to the motions to dismiss, Block contended that "one or more of the Third Party Defendants, depending upon the facts as they may develop in the course of the trial of this case, manufactured material and put the same in the stream of commerce of ultimate distribution in the State of South Dakota, which allegedly caused a tortious injury within the State of South Dakota."

The District Court found that "the record as a whole fails to show contacts minimal or otherwise", and that South Dakota's long-arm statute therefore could not be used to acquire personal jurisdiction.² We affirm the results reached by Judge Beck, but for somewhat different reasons.

In search of indemnity, Block has asserted long-arm jurisdiction over four fabric manufacturers. While its third-party complaint asserts joint tort liability on the part of all third-party defendants, it is obvious, and Block concedes on oral argument, that it has no knowledge or information upon which to base such allegations. Block obviously hoped to ascertain, by means of interrogatories, which, if any, of the fabric manufacturers did indeed produce the fabric which was incorporated in the shirt worn by the plaintiff. Such tactics are not unusual in day-to-day negligence litigation. Nothing in the federal rules precludes the naming of multiple defendants, only one of whom may prove to have been responsible. Rule 20, Federal Rules of Civil Procedure, provides that "* * * All persons * * * may be joined in one action as defendants if there is asserted against them jointly, severally, or in the alternative, any right to relief in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact, common to all defendants will arise in the action." The purpose of alternative joinder is thus explained by Professors Wright and Miller:

The need for alternative joinder of defendants typically arises when the substance of plaintiff\'s claim indicates that he is entitled to relief from someone, but he does not know which of two or more defendants is liable under the circumstances set forth in the complaint.

7 C. Wright & A. Miller, Federal Practice and Procedure § 1654, at 278 (1972).

While permissive joinder and alternative pleading is thus liberally construed in federal practice, personal jurisdiction must in each case be tested by the requirements of Rule 4, Federal Rules of Civil Procedure. See Mississippi Publishing Corp. v. Murphree, 326 U. S. 438, 66 S.Ct. 242, 90 L.Ed. 185 (1946); 7 J. Moore, Moore's Federal Practice ¶ 82.02 1, at 82-3 (1974). In this case, service was obtained by means of the procedure authorized by the South Dakota long-arm statute and made applicable to federal litigation by Fed.R.Civ.P. 4(e). The validity of such service in any particular case depends ultimately upon the jurisdictional facts contained in the record, together with the requirements of the forum's longarm statute and any limitations imposed thereon by the due process clause of the Fourteenth Amendment.

The Supreme Court of South Dakota has expressed its belief that "the legislature by enacting the `long arm' statute intended to provide South Dakota residents with maximum protection of South Dakota courts from damages and injuries occasioned them through the acts or omissions, both contractual and tortious, of a nonresident when that nonresident has had the necessary minimal contacts with the state to comply with federal due process." Ventling v. Kraft, 83 S.D. 465, 161 N.W.2d 29, 34 (1968); see also Kulm v. Idaho First National Bank, 428 F.2d 616 (8th Cir. 1970).

In this circuit, personal jurisdiction under long-arm statutes must meet due process requirements governed by the following general guidelines: (1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum state; (3) the relation of the cause of action to the forum state; (4) the interest of the forum state in providing a forum for its residents; (5) the convenience of the parties. Electro-Craft Corp. v. Maxwell Electronics Corp., 417 F.2d 365, 368 (8th Cir. 1969). See also International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); Aftanase v. Economy Baler Co., 343 F.2d 187 (8th Cir. 1965).

In this appeal, Block has elected to let its case stand or fall upon the accrual of a tort in South Dakota, SDCL § 15-7-2(2) (1967); in oral argument it rightly abandoned its alternative claim of personal jurisdiction based upon the fabric manufacturers' alleged transaction of business within that state, SDCL § 15-7-2(1) (1967). When a plaintiff seeks to bring a defendant into court under a long-arm statute, he must state sufficient facts in the complaint to support a reasonable inference that such defendant can be subjected to jurisdiction within the state. Williams v. Vick Chemical Co., 279 F.Supp. 833 (S.D. Iowa 1967). Once jurisdiction had been controverted or denied, Block had the burden of proving such facts. McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 56 S.Ct. 780, 80 L.Ed. 1135 (1936); Midwest Packaging Corp. v. Oerlikon Plastics, Ltd., 279 F.Supp. 816 (S.D.Iowa 1968). Although a plaintiff seeking to predicate long-arm jurisdiction on the accrual of a tort action within the forum state need not make a full showing on the merits that the nonresident defendant committed the tort, a prima facie showing is required to defeat a motion to dismiss for want of jurisdiction. Fisher v. First National Bank of Omaha, 338 F.Supp. 525 (S.D. Iowa). Appeal dismissed, 466 F.2d 511 (8th Cir. 1972); Midwest Packaging Corp. v....