Benitez-Allende v. Alcan Aluminio do Brasil, S.A., BENITEZ-ALLENDE

• Decision Date: 10 June 1988
• Docket Number: BENITEZ-ALLENDE,Nos. 87-2111,88-1089,s. 87-2111
• Parties: 26 Fed. R. Evid. Serv. 1293, Prod.Liab.Rep.(CCH)P 11,926 Lercy D., et al., Plaintiffs, Appellees, v. ALCAN ALUMINIO DO BRASIL, S.A., et al., Defendants, Appellants. Lercy D., et al., Plaintiffs, Appellants, v. ALCAN ALUMINIO DO BRASIL, S.A., et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 26

857 F.2d 26

26 Fed. R. Evid. Serv. 1293, Prod.Liab.Rep.(CCH)P 11,926

Lercy D. BENITEZ-ALLENDE, et al., Plaintiffs, Appellees, v. ALCAN ALUMINIO DO BRASIL, S.A., et al., Defendants, Appellants.

Lercy D. BENITEZ-ALLENDE, et al., Plaintiffs, Appellants, v. ALCAN ALUMINIO DO BRASIL, S.A., et al., Defendants, Appellees.

Nos. 87-2111, 88-1089.

United States Court of Appeals First Circuit.

Heard June 10, 1988.

Decided Sept. 20, 1988.

Rehearing and Rehearing En Banc Denied Oct. 24, 1988.

Federico Lora Lopez, Hato Rey, P.R., for plaintiffs, appellees.

Lawrence A. Salibra, II, Sr. Counsel, with whom Eugenio C. Romero and Goldman & Antonetti, Santurce, P.R., were on brief, for defendants, appellees.

Before BOWNES and BREYER, Circuit Judges, and CAFFREY, ^* Senior District Judge.

BREYER, Circuit Judge.

The three plaintiffs in these diversity cases claimed that Alcan Aluminio do Brasil, S.A. (Alcan/Brasil) manufactured defective pressure cookers, which injured them. All three won jury verdicts (based on negligence or strict liability) against Alcan/Brasil; one plaintiff also obtained a verdict against Manuel Diaz, Alcan/Brasil's Puerto Rican "sales representative." All parties appeal. We deny the defendants' claims and, with one exception, the plaintiffs' claims as well.

I The Facts

After reading the record and drawing appropriate inferences favorable to the plaintiffs, Gray v. New England Telephone and Telegraph Co., 792 F.2d 251, 253 (1st Cir.1986), we believe the jury could have found the following basic facts:

1. Alcan/Brasil manufactures the Rochedo pressure cooker. It is a pot with a tight-fitting lid that seals food and water inside. The water, turning to steam when heated, creates pressure that helps cook the food. To prevent the pot from exploding, the Rochedo cooker (like many others) has two safety devices. The first is a heavy piece of metal that sits in a small valve on the cooker's lid. When steam pressure inside the cooker is low, the weight seals the valve shut; when steam pressure builds up, it lifts the metal piece, releasing steam, so that the pot will not explode. Second, the cooker contains in that part of the handle attached to the pot a "fusible seal," a piece of solid material (such as lead) that will melt should heat and pressure inside the cooker become too high. Once the seal melts, the steam can safely escape through the hole that the seal previously filled. Alcan deliberately makes the cooker very difficult to open until it is cool and the build-up of pressure has subsided; otherwise, a person who opened one might find its contents (or its top) propelled by the remaining pressure out into the room.

2. The three plaintiffs were hurt as follows: (a) On July 29, 1983, Lercy Benitez Allende was cooking gizzards in a Rochedo cooker. She set it in the sink to cool. When she removed the top, the hot meat and liquid flew out, burning her. (b) On February 6, 1984, Ramonita Andino Rosa put meat and water in the cooker, put the cooker on the stove, and left the room. Her daughter Ramonita Garcia Andino saw the cooker "move sideways" and she saw some steam came out of the plug. The cooker then exploded; the top came off; and the hot contents burned her. (c) On November 11, 1983, Carmen Cruz Diaz put beans and water in a Rochedo cooker and put it on the stove. The safety valve initially let off steam; but evidently not enough, for the lid flew off and hit her.

3. Alcan/Brasil made the cookers so that a user could open them by applying 25 pounds of force to the handle, even when the pressure inside the cooker was dangerously high. (Underwriters' Laboratories says that cookers should seal so tightly that it takes 100 pounds of force to open them when there is steam pressure inside them.) Alcan/Brasil made the "fusible seal" so that it would not melt until the inside pressure was about four times the "maximum operating pressure." (Underwriters' Laboratories says it should melt once the pressure rises to twice the "maximum operating pressure.")

On the basis of these facts, the jury concluded that each cooker was defective, apparently because, in the case of Benitez Allende, it opened too easily under pressure, and, in the "exploding cooker" cases of Andino and Cruz Diaz, because the second safety device didn't work quickly enough. It also concluded that the defect caused the injuries (apparently in the case of the "exploding cookers" because the second safety device didn't let off steam in time). Also since it found the plaintiffs who used the cookers "contributorily negligent," it may have thought they had not put the lids on as tightly as they said that they had.

We turn now to the legal claims on appeal.

II The Defendants' Appeal

A. Jurisdiction

1. Alcan/Brasil, conceding that Puerto Rico's "long arm" jurisdictional statute, Rule 4.7(a)(1) of the Puerto Rico Rules of Civil Procedure, stretches "up to the point allowed by the Constitution," Industrial Siderurgica v. Thyssen Steel Caribbean, Inc., 114 D.P.R. 548, 558 (1983) (footnote omitted), says that its contacts with Puerto Rico are so few that it does not comport with "traditional notions of fair play and substantial justice," International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945), to subject it to jurisdiction in Puerto Rico. It says that it made cookers for sale "FOB Brazil;" it did not directly advertise in the United States; it simply filled orders sent by American wholesale buyers to Brazil; it was the decision of Alcan/Brasil's buyers, not Alcan/Brasil, to ship the cookers to Puerto Rico and to sell them there. In its view, because these contacts are so slim, the Constitution forbids assertion of jurisdiction. Asahi Metal Industry Co., Ltd. v. Superior Court of California, Solano County, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987); World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958).

We think the following facts sufficient to show that jurisdiction is, constitutionally speaking, permissible. First, Alcan/Brasil manufactured thousands of Rochedo cookers that, in fact, were sold in the United States. It sold 300,000 Rochedo cookers that Americans bought between 1977 and 1981; of that number, Puerto Ricans bought 240,000. Second, Alcan/Brasil knew that Americans would use its cooker in commerce in America, and it intended that result. Third, Alcan/Brasil took active steps to sell its cookers in Puerto Rico. In 1972 it hired an "export advisor," Erich Schmid, to travel to Puerto Rico to meet an American, defendant Manuel Diaz. Schmid and Diaz discussed how Alcan/Brasil could sell cookers in Puerto Rico. They agreed that Diaz could solicit orders for Rochedo cookers from Puerto Rican wholesalers and retailers: he would send orders to Alcan in Brazil; title would pass in Brazil; and the buyers would pay for transportation from Brazil to Puerto Rico. Diaz, who called himself Alcan/Brasil's "sales representative," lived in Florida, but travelled to Puerto Rico to sell Rochedo cookers and other products, at least four times a year. (In 1983, Diaz formed "Group Brazil, Inc.," a corporation, which carried on the work he previously had done on his own.)

As we read the latest opinion of the Supreme Court on the subject, Asahi, supra, the views of the majority are such that Alcan/Brasil's knowledge and intent of the sale of its cookers in Puerto Rico, and the number of cookers actually sold, provide a sufficient basis for the assertion of jurisdiction. In Asahi, supra, the Court considered whether the Constitution permitted a California court to assert jurisdiction over a Japanese firm that made tire valves, and sold them to a tire company in Taiwan, which, in turn, inserted them into tires sold (for motorcycle use) in California. Four justices would have found the "minimum contacts" ordinarily sufficient to make jurisdiction constitutional in the fact that the Japanese company "was aware" that significant amounts of its product would be sold in California and that it would benefit from those sales. They pointed out that the firm "deliver[ed] its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." Asahi, 107 S.Ct. at 1037 (Brennan, J., concurring in part and in the judgment) (quoting Woodson, 444 U.S. at 297-98, 100 S.Ct. at 567). Their appearance in California was not because "a consumer ... took them there," Asahi, 107 S.Ct. at 1037 (quoting Woodson, 444 U.S. at 306-07, 100 S.Ct. at 584); nor was that appearance "one isolated occurrence." Asahi, 107 S.Ct. at 1036 (quoting Woodson, 444 U.S. at 295, 100 S.Ct. at 566). A fifth justice added that he "would be inclined to conclude that a regular course of dealing that results in deliveries of over 100,000 units annually over a period of several years would constitute 'purposeful availment' [of the benefits of the forum state] even though the item delivered to the forum State was a standard product marketed throughout the world." Asahi, 107 S.Ct. at 1038 (Stevens, J. concurring in part and concurring in the judgment).

The opinion of the remaining four justices indicates that, once the factor of the meetings between Schmid and Diaz is taken into account, all nine justices would find the assertion of jurisdiction constitutional. These four justices state that:

The "substantial connection," ... between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum State.

Asahi, 107 S.Ct. at 1033 (plurality opinion) (emphasis in original) (citations omitted). Although they say that "[t]he placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State," they immediately go on to say that:

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