Black v. Carey Canada, Inc.

• Decision Date: 03 April 1990
• Docket Number: S89-0510(G),S89-0468(G),S89-0466(G),S89-0465(G),S89-0464(G).,Civ. A. No. S89-0470(G),S89-0511(G),S89-0509(R)
• Parties: Stanley BLACK, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants. AIRPORT FREEWAY CENTER, Plaintiff, v. CAREY CANADA, INC., et al., Defendants. CALIFORNIA FEDERAL BANK, Plaintiff, v. CAREY CANADA, INC., et al., Defendants. (Three Cases) MUIR PARTNERS, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants. 5300 JOINT VENTURE, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants. CAL-AMERICAN INCOME PROPERTY FUND VI, Plaintiff, v. CAREY CANADA, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of Mississippi

791 F. Supp. 1120

Stanley BLACK, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants.

AIRPORT FREEWAY CENTER, Plaintiff, v. CAREY CANADA, INC., et al., Defendants.

CALIFORNIA FEDERAL BANK, Plaintiff, v. CAREY CANADA, INC., et al., Defendants. (Three Cases)

MUIR PARTNERS, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants.

5300 JOINT VENTURE, et al., Plaintiffs, v. CAREY CANADA, INC., et al., Defendants.

CAL-AMERICAN INCOME PROPERTY FUND VI, Plaintiff, v. CAREY CANADA, INC., et al., Defendants.

Civ. A. Nos. S89-0470(G), S89-0468(G), S89-0509(R), S89-0510(G), S89-0511(G), S89-0465(G), S89-0466(G), S89-0464(G).

United States District Court, S.D. Mississippi, S.D.

April 3, 1990.

Samuel M. Millette, Jr., Richard F. Scruggs, P.A., Pascagoula, Miss., Michael F. Brandis, Caren R. Neilsen, Gilbert L. Purcell, Sayre, Moreno, Purcell & Boucher, Los Angeles, Cal., for Stanley Black, Joyce Black and K Associates.

Douglas Gunn, Jackson, Miss., for GAF Corp.

Ronald D. Collins, Jackson, Miss., for Owens-Illinois.

Rhesa H. Barksdale, Jackson, Miss., for Eagle-Picher Ind.

Polly J. Kellar, James H. Crosby, Donald G. Beebe, Richard Crump, Mobile, Ala., for Owens-Corning Fiberglas.

Thomas D. McNeese, Steve Pittman, Columbia, Miss., for W. R. Grace.

Roy C. Williams, Pascagoula, Miss., Thomas B. Kenworthy, Philadelphia, Pa., for U.S. Gypsum.

AMENDED MEMORANDUM OPINION

GEX, District Judge.

These causes come before this Court on the Motions to Dismiss of the Defendants, Kaiser Gypsum Co., Inc., Fibreboard Corporation, Pittsburgh-Corning Corporation, Owens-Illinois, Keene Corporation, Carey-Canada, Inc., and U.S. Mineral Products Co. (the named defendants). The Court has duly considered the record in these actions, in addition to the briefs of counsel, and being fully advised in the premises, concludes as follows:

Facts

The plaintiffs in these actions are all residents¹ of the State of California. The plaintiffs' complaints allege that they have suffered damages as a result of the presence of asbestos-containing materials in their buildings. These buildings are not located in Mississippi. The plaintiffs also allege that the defendants manufactured, supplied, or distributed these materials. Further, the plaintiffs contend that the defendants have conducted business activities in Mississippi and have committed the torts of fraud and conspiracy in Mississippi. The defendants are not incorporated in Mississippi nor are they qualified to do business in Mississippi. The plaintiffs attempted service of process on the named defendants by mailing process to Mississippi's Secretary of State.

Discussion

The defendants contend that there are several grounds for dismissal of these actions.

I. Personal Jurisdiction/Insufficiency of Service of Process.

The defendants contend that this Court lacks personal jurisdiction. A district court can exercise personal jurisdiction over a defendant if a state court could properly do so. Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir.1985) (citations omitted). The burden of establishing the district court's jurisdiction over the defendants is on the plaintiffs. DeMelo v. Toche Marine, Inc., 711 F.2d 1260, 1270 (5th Cir.1983).

A Mississippi court could have personal jurisdiction over these defendants if they were incorporated in Mississippi or were qualified to do business in Mississippi because both actions would make the defendants residents and, thus, citizens of Mississippi under this state's law. Obviously, a nonresident may sue a resident of Mississippi in a Mississippi court. Another method by which a Mississippi court could have personal jurisdiction over these nonresident defendants is if the plaintiffs were allowed to use Mississippi's long-arm statute to obtain service of process on the defendants.

The Mississippi long-arm statute provides in pertinent part as follows:

Any ... foreign or other corporation not qualified under the constitution and laws of this state as to doing business herein, who shall make a contract with a resident of this state to be performed in whole or in part by any party in this state, or who shall commit a tort in whole or in part in this state against a resident or nonresident of this state, or who shall do any business or perform any character of work or service in this state, shall by such act or acts be deemed to be doing business in Mississippi. Such act or acts shall be deemed equivalent to the appointment by such nonresident of the secretary of state of the State of Mississippi ... to be the true and lawful attorney or agent of such nonresident upon whom all lawful process may be served in any actions or proceeding accrued or accruing from such act or acts, or arising from or growing out of such contract or tort, or as an incident thereto, by any such nonresident or his, their or its agent, servant or employee.

Miss.Code Ann. § 13-3-57 (Supp.1989).

One basis for personal jurisdiction under the statute exists if a nonresident makes a contract with a resident to be performed in whole or in part in Mississippi. The plaintiffs do not attempt to argue personal jurisdiction based on this portion of the statute since they are not residents of Mississippi.

A second basis for personal jurisdiction over a nonresident exists if the nonresident has been doing business in Mississippi. The plaintiffs allege that the defendants have conducted extensive business activities in Mississippi. The defendants contend that any business activities conducted in Mississippi are irrelevant because a nonresident plaintiff may not use the "doing business" portion of the long-arm statute. Indeed, although the Mississippi Supreme Court has yet to rule on this precise issue, the Fifth Circuit and the district courts of this state have always held that a nonresident plaintiff may not use the "doing business" provision of the Mississippi long-arm statute. See Smith v. DeWalt Products Corporation, 743 F.2d 277, 279 (5th Cir. 1984); Golden v. Cox Furniture Manufacturing Co., Inc., 683 F.2d 115, 117 (5th Cir.), reg'h denied, 685 F.2d 1385 (5th Cir. 1982); Washington v. Norton Manufacturing, Inc., 588 F.2d 441, 444-45 (5th Cir. 1979), cert. denied, 442 U.S. 942, 99 S.Ct. 2886, 61 L.Ed.2d 313 (1979); Breeland v. Hide-A-Way Lake, Inc., 585 F.2d 716, 720 (5th Cir.1978) (including list of all previous cases); Mills v. Dieco, Inc., 722 F.Supp. 296 (N.D.Miss.1989); Shover v. Cordis Corporation, Inc., No. J89-0443(W) 1989 WL 303549 (S.D.Miss.1989); Acker v. Armstrong World Industries, Inc., No. S89-0563(L), 1989 WL 268344 (S.D.Miss. December 1, 1989).

The final basis for using the Mississippi long-arm statute to gain personal jurisdiction over a nonresident defendant requires a tort to have been committed in whole, or in part, in Mississippi. The plaintiffs' complaints fail to allege that any part of the torts, committed against them, occurred in Mississippi. In their responses to the defendants' motions, the plaintiffs contend that the defendants committed conspiracy and fraud in Mississippi when the defendants sold their asbestos-containing products in Mississippi and misrepresented the consequences of exposure to such products. The Mississippi Supreme Court has interpreted the tort prong of the long-arm statute to mean that Mississippi will extend personal jurisdiction to a nonresident who commits any part of a tort in Mississippi. See Smith v. Temco, Inc., 252 So.2d 212, 216 (Miss.1971) (injury occurred in Mississippi).

A cause of action for fraud (or deceit) is recognized in Mississippi and its elements are:

(1) a representation; (2) its falsity; (3) its materiality; (4) the speaker's knowledge of its falsity or ignorance of its truth; (5) his intent that it should be acted upon by the person and in the manner reasonably contemplated; (6) the hearer's ignorance of its falsity; (7) his reliance on the truth; (8) his right to rely thereon; (9) his consequent proximate injury.

Whittington v. Whittington, 535 So.2d 573, 585 (Miss.1988); Breeland, 585 F.2d 716. In other words, "fraud" involves a knowing and intentional misrepresentation of a material fact which causes a party to reasonably and justifiably rely thereon and suffer injuries as consequence. Simply put, it consists of the misrepresentations, the listener's reliance, and the damages. In the present cases, the plaintiffs allege that the defendants made misrepresentations about their products in Mississippi. For the defendants' alleged misrepresentations to have caused the plaintiffs' injuries, the plaintiffs would be required to show that they (or their predecessors) knew of the defendants' representations in Mississippi and justifiably and reasonably relied on those particular representations when they purchased the defendants' products. The plaintiffs fail to allege these essential facts but seem to allege that the defendants' misrepresentations have injured citizens of Mississippi. The plaintiffs may not sue on causes of action of others nor may they use torts allegedly committed against other parties as the basis for the plaintiffs' use of the Mississippi long-arm statute. Also, plaintiffs obviously were not injured (damaged) in Mississippi since their injuries were sustained where their property is located.

The Mississippi Supreme Court has held that a cause of action for "deceit accrues upon the completion of the sale induced by such false representation, or upon the consummation of the fraud." Dunn v. Dent, 169 Miss. 574, 153 So. 798 (1934).² It follows that a cause of action for fraud would also accrue where the sale was completed or where the fraud was completed. The defendants' alleged fraud was thus completed where the products were sold to the plaintiffs (or their predecessors) (i.e., where the buildings are located).

The plaintiffs also allege that the defendants conducted a nationwide conspiracy to misrepresent the effects of long-term exposure to asbestos products and...