Bensmiller v. E.I. Dupont de Nemours & Co., State of La.

Decision Date08 February 1995
Docket NumberNos. 1900,s. 1900
Citation47 F.3d 79
PartiesTracie BENSMILLER, Gregg Bensmiller, Beatrice Boudreau, Brian Boudreau, Suzanne Pelletier, Deanna Merriman, Paul Merriman and Cynthia B. Diulio, Plaintiffs-Appellants, v. E.I. DUPONT DE NEMOURS & COMPANY, STATE OF LOUISIANA, doing business as Louisiana State Univ. Medical Center, Defendants, Methodist Hospital, Defendant-Appellee. to 1903, Dockets 93-7923(L), 93-7933, 93-7935, 93-7937 and 94-7221.
CourtU.S. Court of Appeals — Second Circuit

David A. Reif, New Haven, CT (Elizabeth L. McMahon, Susman, Duffy & Segaloff, P.C., of counsel), for plaintiffs-appellants.

James F. Stapelton, Stamford, CT (Edward M. Brown, Day, Berry & Howard, of counsel), for defendant-appellee.

Before: NEWMAN, PIERCE, and LEVAL, Circuit Judges.

PIERCE, Circuit Judge:

Tracie Bensmiller et al., plaintiffs, appeal from a January 27, 1994 judgment of the United States District Court for the District of Connecticut (Alfred V. Covello, Judge ), granting defendant Methodist Hospital's ("MH") motion to dismiss the complaint for lack of personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2). The plaintiffs had brought these tort actions against E.I. Dupont de Nemours & Company ("Dupont"), 1 Louisiana State University Medical Center ("LSU"), and MH (collectively, the "defendants"), arising from injuries allegedly due to defective surgical implants manufactured by Vitek, Inc. ("Vitek"). On appeal, plaintiffs argue that the district court erred in granting MH's motion to dismiss, asserting that the district court did have jurisdiction over MH through the Connecticut long-arm statute for non-stock corporations, Conn.Gen.Stat. Sec. 33-519. Although conceding that MH does not independently have the necessary contacts with Connecticut for the court to extend jurisdiction over MH, plaintiffs argue that the district court nevertheless has jurisdiction over MH because, they assert, Connecticut's long-arm statute reaches all parties to a joint venture, and MH was a participant in a joint venture with the Director of the Prosthesis Research Laboratory ("Lab") at MH's Fondren Center, one Dr. Charles A. Homsy ("Homsy"), over whom the court does have jurisdiction. 2 For the reasons stated below, we reject plaintiffs' contention and we affirm the judgment.

BACKGROUND

MH, the defendant-appellee, is a non-stock corporation licensed as a hospital by the State of Texas. In June, 1966, Homsy left his position with defendant, Dupont, and agreed to serve as director of the Lab, which is located in Texas.

MH agreed to fund Homsy's research of orthopedic prostheses at the Lab and to pay for patent applications. In exchange, Homsy agreed to pay MH royalties from proceeds generated from the manufacture and sale of patentable items developed as a result of research conducted at the Lab. These royalties were not to exceed 140% of the funds MH had provided to Homsy. In addition, Homsy was to pay MH up to $35,000 per annum as repayment for MH's support of the Lab. These agreements between Homsy and MH were later formalized into two written agreements dated November 26, 1968 and November 25, 1970.

In order to design, manufacture and market products developed through his research at the Lab, Homsy agreed to form a separate corporation. Thus, in December, 1969, Homsy formed Vitek, a Texas corporation. Soon thereafter, Homsy invented and patented new prosthetic implants composed of Proplast, a material comprised, in part, of Teflon. Vitek marketed a product called the Proplast Implant ("Implant") throughout the United States. Plaintiffs in this case received the Implants through medical procedures conducted in Connecticut. These Implants are the subject of the present suit.

Plaintiffs commenced separate actions in the Superior Courts of the State of Connecticut alleging that the Implants were defective and caused, inter alia, severe damage to their temporomandibular joints. Defendant Dupont, the supplier of the Teflon used to make the Implant, removed the cases to the district court on November 12, 1992, pursuant to 28 U.S.C. Sec. 1441. 3

Following removal to federal court, MH moved to dismiss plaintiffs' claims for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). In response to MH's motion to dismiss, plaintiffs asserted that personal jurisdiction over MH could be established pursuant to Connecticut's long-arm statute, Conn.Gen.Stat. Sec. 33-519. Conceding that MH did not manufacture, produce or distribute the allegedly defective Implants, plaintiffs argued that MH was involved in a joint venture with either Homsy or Vitek, over both of whom the court did have personal jurisdiction. In so claiming, plaintiffs hoped that the district court would apply a rule that the forum contacts of one co-venturer could be attributed to the other co-venturer for the purposes of personal jurisdiction. See, e.g., Aigner v. Bell Helicopters, Inc., 86 F.R.D. 532, 540 (N.D.Ill.1980); First Nat'l Bank of Minneapolis v. White, 420 F.Supp. 1331, 1335 (D.Minn.1976). But cf. Ytuarte v. Gruner + Jahr Printing & Publishing Co., 935 F.2d 971, 972-73 (8th Cir.1991) (holding that attributing forum contacts of partnership to individual partners or even to managing partner offended due process).

Before addressing the substance of plaintiffs' argument, the district court addressed the issue of which state's substantive law would govern the personal jurisdiction question. 4 The district court applied Connecticut's choice of law principles for the construction of contracts, and found that the substantive law of Texas was applicable to ascertain whether a joint venture existed. Applying the Texas standard, the court determined that neither Homsy nor Vitek were co-venturers of MH. The court concluded that even if Connecticut were to follow Aigner, no joint venture existed herein, and it thus granted MH's motion to dismiss. Plaintiffs filed a timely notice of appeal.

On appeal, plaintiffs reiterate the argument presented to the district court, to wit: (1) a joint venture existed between MH and Homsy, and (2) under Connecticut law, the forum contacts of one co-venturer are attributable to the other co-venturer. Plaintiffs do not dispute the district court's holding that, under Texas law, a joint venture does not exist between Homsy and MH. However, plaintiffs argue that the district court erred by applying Texas instead of Connecticut substantive law to determine whether a joint venture existed, and, that under Connecticut law, the relationship between Homsy and MH amounts to a joint venture. We now turn to the question of whether the district court erred as plaintiffs contend.

DISCUSSION

This case presents a question of personal jurisdiction over a foreign corporation in a diversity suit. "[T]he amenability of a foreign corporation to suit in a federal court in a diversity action is determined in accordance with the law of the state where the court sits...." Arrowsmith v. United Press Int'l, 320 F.2d 219, 223 (2d Cir.1963) (in banc); accord Hoffritz for Cutlery, Inc. v. Amajac, Ltd., 763 F.2d 55, 57 (2d Cir.1985). Connecticut utilizes a familiar two-step analysis to determine if a court has personal jurisdiction. First, the court must determine if the state's long-arm statute reaches the foreign corporation. Second, if the statute does reach the corporation, then the court must decide whether that exercise of jurisdiction offends due process. Greene v. Sha-Na-Na, 637 F.Supp. 591, 595 (D.Conn.1986); Frazer v. McGowan, 198 Conn. 243, 246, 502 A.2d 905 (1986); Lombard Bros., Inc. v. General Asset Management Co., 190 Conn. 245, 250, 460 A.2d 481 (1983).

MH is a Texas non-stock corporation, and the relevant Connecticut long-arm statute is Conn.Gen.Stat. Sec. 33-519(c), which provides:

Every foreign corporation shall be subject to suit in this state by a resident of this state or by a person having a usual place of business in this state, whether or not such foreign corporation is conducting or has conducted affairs in this state on any cause of action arising ... (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold or whether or not through the medium of independent contractors or dealers....

It is undisputed that MH did not itself produce, manufacture, distribute or sell the allegedly defective Implants. Plaintiffs argue, however, that Sec. 33-519(c) reaches MH because MH was engaged in a joint venture relationship with Homsy. 5 Plaintiffs concede that this relationship was not a joint venture under Texas law, the only place where plaintiffs contend that a joint venture was formed. Assuming, arguendo, that the Connecticut legislature intended that Sec. 33-519(c) could be used as a vehicle to reach foreign corporations whose sole contact with Connecticut has been involvement in a joint venture with an entity over which Connecticut does have jurisdiction, a question remains as to whether the rule was intended to apply even when the foreign corporation was not a joint venturer according to the law of the state where the alleged joint venture was formed.

The interpretation of Sec. 33-519(c) is a Connecticut state law question, therefore, we look to Connecticut caselaw interpreting Sec. 33-519(c) to decide the issue presented herein. See Plummer v. Lederle Labs., Div. of Am. Cyanamid Co., 819 F.2d 349, 355 (2d Cir.), cert. denied, 484 U.S. 898, 108 S.Ct. 232, 98 L.Ed.2d 191 (1987); see also Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). A survey of Connecticut state law reveals that this particular jurisdictional question has not been addressed by the Connecticut courts, and, since the law of the state is uncertain on this question, our task is to ...

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