Blum v. Kawaguchi, Ltd.

• Decision Date: 20 August 1971
• Docket Number: Civ. No. 71-0-192.
• Citation: 331 F. Supp. 216
• Parties: Paul BLUM, an individual, and Airlite Plastics Company, a corporation, Plaintiffs, v. KAWAGUCHI, LTD., a limited partnership, and Toyomenka, Inc., a corporation, Defendants.
• Court: U.S. District Court — District of Nebraska

331 F. Supp. 216

Paul BLUM, an individual, and Airlite Plastics Company, a corporation, Plaintiffs, v. KAWAGUCHI, LTD., a limited partnership, and Toyomenka, Inc., a corporation, Defendants.

Civ. No. 71-0-192.

United States District Court, D. Nebraska.

August 20, 1971.

William J. Riedmann, of Kennedy, Holland, DeLacy & Svoboda, Omaha, Neb., for plaintiffs.

Stephen Olson, and John Boyer, of Fraser, Stryker, Marshall & Veach, Omaha, Neb., for Kawaguchi, Ltd.

John R. Douglas, of Cassem, Tierney, Adams & Henatsch, Omaha, Neb, for Toyomenka, Inc.

MEMORANDUM AND ORDER

ROBINSON, Chief Judge.

This matter comes before the Court upon defendant's Kawaguchi, Ltd motion to dismiss or in lieu thereof to quash the return of service of summons. Filing #11.

According to the pleadings and defendants' answers and interrogatories a Kawaguchi KS 350-27 Plastic Injection Molding Machine, Serial No. 3392 was manufactured by defendant Kawaguchi, Ltd. and shipped from Japan on March 25, 1969, for sale to defendant Toyomenka, Inc. and was shipped directly from Los Angeles to plaintiff Airlite Plastics Company in Omaha, Nebraska. Although the shipment was direct, defendant Toyomenka, Inc. first sold said machine to Machine Sales, Inc., 8410 K Street, Omaha, Nebraska, not a party to this action. Machine Sales, Inc. then sold it to plaintiff Airlite Plastics Company.

According to the plaintiffs' complaint an employee of plaintiff, Airlite Plastics Company, Inc. suffered a guillotine traumatic amputation of his left forearm while operating said machine. The employee, Paul Blum, is a co-plaintiff and prays for judgment in the amount of $242,880. Plaintiff, Airlite Plastics Company, is a party on the basis of subrogation due to payments made pursuant to the Nebraska Workmen's Compensation Act.

The plaintiffs allege in the complaint that the injuries were inflicted by the Kawaguchi KS 350-27 Injection Machine because of defective design and construction which existed from the time of its origin; that both defendants knew or had reason to know the particular purpose for which said machine was to be used but that the machine was not free from defects nor fit for the intended purpose; that defendant, Kawaguchi, Ltd. was negligent in failing to exercise ordinary care in the design, manufacture and inspection of said machine; and that defendant Toyomenka, Inc. was negligent in failing to inspect and warn the plaintiff of the dangers of said machine.

Defendant Toyomenka has answered Filing #6 and only defendant, Kawaguchi, Ltd. is connected with the pending motion.

Defendant, Kawaguchi, Ltd. asserts it has not been properly served with process of this action under the provisions as set out in Nebraska Statute R.R.S. §§ 25-535 to 25-541 Supp.1969. § 25-540 is pertinent and provides in part:

"1 When the law of this state authorizes service outside this state, the service, when reasonably calculated to give actual notice, may be made: * * * c By any form of mail addressed to the person to be served and requiring a signed receipt * * *."

A copy of the Complaint, summons and Interrogatories were sent by registered mail to defendant Kawaguchi at its Tokyo, Japan office Filing #4. This clearly satisfies the statutory requirements.

The inquiry must now be directed to whether defendant Kawaguchi, Ltd. was properly subject to service of process. There are two standards to be considered, federal and state.

Mr. Justice Blackmun, then Circuit Judge, stated in Aftanase v. Economy Baler Company, 343 F.2d 187, 189-190 8th Cir. 1965:

"This court has already observed and held, and recently, that whether due process requirements have been met, so far as jurisdiction in a diversity case over a foreign corporation is concerned, is a question of federal law; that the `more recent federal cases have greatly relaxed the due process limitations on personal jurisdiction'; that if a foreign corporation's business activity in a state is sufficiently extensive by federal standards it is amenable to suit there so far as federal law is concerned, and even upon a cause of action arising outside the state; that the state, however, may impose limitations, beyond those of due process, upon a foreign corporation's amenability to suit in her courts; and that a federal court sitting in a state should observe these further limitations * * *."

Several recent decisions have held that federal due process and state requirements were satisfied under nearly parallel factual situations. In Duple Motor Bodies, Ltd. v. Hollingsworth, 417 F.2d 231 9th Cir. 1969 the defendant, Duple Motor Bodies, Ltd., manufactured coach bodies, shipped the product to another manufacturer who shipped the completed vehicle to a Hawaii dealer who then sold to an Hawaii Tour concern. The bus overturned and the roof caved in due to the alleged negligent manufacture, and the plaintiff, apparently a passenger, brought suit. The Court stated:

"In our judgment the presence of Duple's Coach bodies in Hawaii, brought about by Duple's sale to Vauxhall with knowledge that the product was destined for Hawaii, was sufficient contact with Hawaii to meet the requirements of due process. * * * If it is clearly foreseeable as a result of trade with a foreign state that injury from a defective product if it occurs would occur in that state, the hardship of defending the product in that state in our judgment must be assumed as an attribute of foreign trade."

Another recent case, Benn v. Linden Crane Co., 326 F.Supp. 995 E.D.Penn. 1971 held that extension of jurisdiction over a Swedish Corporation would not violate due process when the Swedish manufacturer "indirectly" sold a crane to a Pennsylvania concern and the product allegedly caused injuries due to a malfunction caused by negligent manufacturing. The Court in part stated:

"Economic and business reasons dictate that goods will pass through any number of people in a distributive chain before they reach the ultimate consumer. It is the movement of goods through this distributive chain that in this case constitutes an `indirect shipment'. Linden-Alimak def manufactured and sold a crane f. o. b. Swedish port to a purchaser also a co-defendant * * * Linden-Alimak had reason to know that the crane would be resold for ultimate use and operation in the United States."

The parallel factual situation of the present action also supports a conclusion that the machinery was shipped "indirectly" with the knowledge that the machinery would be resold for use in the United States, and that federal standards are satisfied.

The question now is whether the Nebraska long-arm statute in question has imposed more stringent requirements than the federal standards under the present circumstances.

R.R.S.Neb. 1943 1969 Am.Supp. § 25-536 provides:

"Jurisdiction over a person. 1 A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's:

a Transacting any business in this state;

b Contracting to supply services or things in this state;

c Causing tortious injury by an act or omission in this state d Causing tortious injury in this state by an act or omission outside this state if he regularly does or solicits business, or engages in any other

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