Bond v. Octagon Process, Inc.

• Decision Date: 19 September 1990
• Docket Number: No. 87-41-ATH(DF).,87-41-ATH(DF).
• Citation: 745 F. Supp. 710
• Parties: Oliver M. BOND and Herta R. Bond, Plaintiffs, v. OCTAGON PROCESS, INC., Defendant.
• Court: U.S. District Court — Middle District of Georgia

745 F. Supp. 710

Oliver M. BOND and Herta R. Bond, Plaintiffs, v. OCTAGON PROCESS, INC., Defendant.

No. 87-41-ATH(DF).

United States District Court, M.D. Georgia, Athens Division.

September 19, 1990.

E. Freeman Leverett, Heard, Leverett, Adams and Phelps, P.C., Elberton, Ga., for plaintiffs.

Peter J. Anderson, Peterson, Young, Self & Asselin, Atlanta, Ga., Carl R. Woodward, III, Bozonelis and Woodward, Chatham, N.J., for defendant.

FITZPATRICK, District Judge.

This products liability case is before the court for resolution of the defendant's motion to dismiss for lack of personal jurisdiction and, alternatively, for summary judgment based on the plaintiff's failure to state a claim.

I. FACTS

On December 5, 1982, plaintiff Oliver Bond was engaged in active service with the National Guard at the Elberton, Georgia, Armory and was washing an M578 recovery vehicle with a cleaning solvent, MIL-C-11090D, NSN XXXX-XX-XXX-XXXX, manufactured by the defendant. The day was a very cold one and the plaintiff applied the solvent using a brush and bucket without protective gloves and without having read the warning label on the solvent cans. After a short while, his hands started burning, but he continued to wash the vehicles for several hours. The pain in his hands continued through the next day.

After the pain lasted for some time, plaintiff went to see a civilian doctor who diagnosed his problem as Buerger's disease, which is related to smoking. Another doctor, however, diagnosed the plaintiff's condition as Raynaud's phenomenon, the freezing of flesh in such a manner as to damage permanently blood vessels and cut off circulation. In 1986, doctors at Eisenhower Medical Center at Fort Gordon, Georgia, identified the plaintiff's problem as acquired acrosteolysis caused by exposure to chemical solvents and a cold environment. Later, this diagnosis was changed to Raynaud's phenomenon caused by a cold environment and the defatting and evaporative effects of chemical solvents, rather than any toxic effects of the solvent in question itself. In other words, the plaintiff claims his injuries are due to the combination of cold weather and the effect of solvents in such weather of removing the oils on the skin and making it more vulnerable to the cold. Additionally, he claims that the solvent further cools the skin through evaporative cooling, which occurs when body heat is lost in warming the solvent on the skin and converting it from a liquid to a gaseous state. In cold weather, these properties of the solvent mean that any flesh coming into contact with it will cool more quickly than otherwise and be susceptible to freezing. Since the incident, plaintiff has suffered great pain and is in the process of losing his fingers and possibly his hands as the skin tissue slowly dies.

Plaintiff filed his complaint on May 7, 1987, seeking damages for personal injuries, including pain and suffering, permanent and total disability, loss of wages, loss of ability to labor, loss of fingers and for hospital and medical expenses. His wife, Herta Bond, also sued for loss of consortium, including services, society, companionship and affection. Plaintiffs allege that Mr. Bond's injuries were caused by the defendant's failure to provide adequate warnings of the dangers of exposure to solvents at low temperatures.

Octagon Process, the defendant, is a New Jersey corporation with no offices, employees, agents or other personal contacts with Georgia. Octagon has no agent for service of process in Georgia and has never sought approval from the state of Georgia to do business there.

At its plant in New Jersey, the defendant manufactures the solvent in question pursuant to a government contract. The solvent is made according to specifications issued by the government; Octagon did not develop or alter the formula supplied by the government. A government inspector stationed at the defendant's plant supervised the manufacturing process and had the authority to set aside any shipment that failed to conform to the specifications before it left the premises. The solvent was made for sale to the United States only and has never been sold to any private purchaser. At the time of the injury, Octagon was the only approved supplier of the solvent.

On June 14, 1989, Octagon filed its motion for dismissal and summary judgment based on three theories: (1) that there is no personal jurisdiction based on the Georgia long-arm statute; (2) that even if the statute gives this court jurisdiction the defendant will be put to unreasonable hardship if it must defend in Georgia; and (3) that the government contractor defense applies and shields the defendant from liability. After reviewing the applicable law and facts, the court is ready to issue its ruling.

II. PERSONAL JURISDICTION

In a federal diversity suit, there is a two-step process used in determining whether a state jurisdictional statute confers jurisdiction over a non-resident defendant. First, it must be decided whether the defendant is amenable to suit under the state statute, as determined by the law of the state. Next, if the first step is met, the court must decide whether the assertion of jurisdiction over the defendant meets federal due process requirements. Delong Equipment Co. v. Washington Mills Abrasive Co., 840 F.2d 843 (11th Cir.1988); Oswalt v. Scripto, Inc., 616 F.2d 191, 195-96 (5th Cir.1980).

The plaintiff seeks to bring the defendant within the reach of the Georgia long-arm statute, O.C.G.A. § 9-10-91, which reads in pertinent part:

A court of this state may exercise personal jurisdiction over any non-resident or his executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use or possession enumerated in this Code section, in the same manner as if he were a resident of the state, if in person or through an agent, he: ...

(3) Commits a tortious injury in this state caused by an act or omission outside this state if the tort-feasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state;

. . . . .

Plaintiffs must show that the defendant is amenable to suit under this statute before any federal constitutional questions are reached. It has been determined by Georgia courts that the Georgia long-arm statute allows for jurisdiction to be exercised over defendants to the maximum extent allowed by due process. Value Engineering Co. v. Gisell, 140 Ga.App. 44, 230 S.E.2d 29 (1976); Hollingsworth v. Cunard Line, 152 Ga.App. 509, 263 S.E.2d 190 (1979). In order to comply with this section of the long-arm statute, the following test must be satisfied:

(1) The nonresident has purposefully done some act or consummated some transaction with or in the forum (but the actual act or omission resulting in the injury here need not have occurred in this state.) The defendant need not be physically within the forum when this act or transaction occurs and a single such instance may suffice;

(2) The Georgia plaintiff must have a legal cause of action in tort against the nonresident, which arises out of, or results from, the purposeful activity of the defendant involving this state; a resident is the victim of a "tortious act" when he suffers an injury here due to an act or omission of negligence occurring outside this state; and

(3) If the requirements of (1) and (2) are satisfied, the exercise of jurisdiction over the nonresident must be "reasonable."

Shellenberger v. Tanner, 138 Ga.App. 399, 404-05, 227 S.E.2d 266, 273 (1976); cited with approval in Smith v. Smith, 254 Ga. 450, 330 S.E.2d 706, 706 (1985); Delong, 840 F.2d at 849.

The court is not satisfied that the first part of the Shellenberger test has been met in this case. It is undisputed that Octagon has no direct ties with Georgia, as noted above. The deposition of Mr. Lee Leibmann, Octagon's president, indicates that the defendant shipped the solvent in question to various government depots around the country, after which the government sent it to where it was needed. (Depo. pp. 22-24). Thus, the defendant shipped the product to an independent distributor who then controlled where it was ultimately sent. This is the closest contact Octagon has ever had with Georgia, and it simply does not qualify as "a transaction with or in the forum." Shellenberger, 227 S.E.2d at 273. If, for example, Octagon had directly sent the solvent to the National Guard armory in Elberton or consummated a bargain to sell the solvent directly to the Georgia National Guard this would of course satisfy the test, but such is not the case here, and the defendant is thus not amenable to suit under the Georgia long-arm statute.

Even if all three of the Shellenberger requirements had been fulfilled, Octagon would still not be subject to the jurisdiction of this court because federal constitutional due process requirements are not satisfied. The Supreme Court has laid down and developed guiding principles of due process in a series of cases over the past several decades.¹ In International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Court stated the basic two-part test for determining when states may exercise jurisdiction over non-resident defendants: (1) they must have "minimum contacts" with the forum state and (2) the maintenance of the suit must not offend "traditional notions of fair play and substantial justice." 326 U.S. at 316, 66 S.Ct. at 158. (The second part of this test has been rephrased to mean that it must be "reasonable" for a court to exercise jurisdiction over a defendant. Delong, 840 F.2d at 854.) This standard was later clarified to mean that due process requires some purposeful availment by the defendant of the privilege of conducting activities in the forum state and thus invoking the benefits and protections of that state's laws. Hanson v. Denckla, ...