O'Brien v. Comstock Foods, Inc., 389

• Decision Date: 01 October 1963
• Docket Number: No. 389,389
• Citation: 123 Vt. 461,194 A.2d 568
• Parties: Ursula O'BRIEN v. COMSTOCK FOODS, INC.
• Court: Vermont Supreme Court

Page 568

194 A.2d 568

123 Vt. 461

Ursula O'BRIEN v. COMSTOCK FOODS, INC.

No. 389.

Supreme Court of Vermont.

Oct. 1, 1963.

Lisman & Lisman, Rosenberg & Rosenberg, Burlington, for plaintiff.

Black, Wilson & Hoff, Burlington, for defendant.

Before HULBURD, C. J., and HOLDEN, SHANGRAW, BARNEY and SMITH, JJ.

HOLDEN, Justice.

This cause has been certified here before trial to settle a jurisdictional question. The action is one of four suits instituted by the plaintiff and her husband against Comstock Foods, Inc. a New York corporation. All of the actions are products liability cases in which the particular claimants seek to recover for personal injuries claimed to have been sustained by the plaintiff from the presence of a piece of glass in a can of beans prepared and packed by the defendant in Newark, New York.

How the product came to be distributed in Vermont does not appear. The complaint tells us only that the commodity was 'placed--in the stream of commerce' in New York state. It was purchased by the plaintiff's husband in Burlington, Vermont, where she became injured when eating part of the contents of the can.

Service was made by delivery of copies to the Secretary of State for Vermont as provided in 12 V.S.A. § 855:

'If a foreign corporation makes a contract with a resident of Vermont to be performed in whole or in part by either party in Vermont, or if such foreign corporation commits a tort in whole or in part in Vermont against a resident of Vermont, such acts shall be deemed to be doing business in Vermont by such foreign corporation and shall be deemed equivalent to the appointment by such foreign corporation of the secretary of the state of Vermont and his successors to be its true and lawful attorney upon whom may be served all lawful process in any actions or proceedings against such foreign corporation arising from or growing out of such contract or tort. The making of such contract or the committing of such tort shall be deemed to be the agreement of such foreign corporation that any process against it which is so served upon the secretary of state shall be of the same legal force and effect as if served on the foreign corporation at its principal place of business in the state or country where it is incorporated and according to the law of that state or country.'

12 V.S.A. § 856 requires the secretary of state and the plaintiff as well, to mail copies of the process to the defendant corporation by registered mail, directed to its principal place of business.

The defendant moved to dismiss the actions, claiming that on the facts alleged, service of process under section 855 failed to achieve jurisdiction of the person of the corporate defendant. The defendant further contends that the application of the statute on the facts alleged would constitute a denial of due process of law as secured to it by the Fourteenth Amendment to the United States Constitution. Dismissal was denied and we are called upon to review that ruling.

The broadened scope of permissible state jurisdiction over the person of absent foreign corporations is not without limitation. The 'certain minimal contacts' which will permit the acquisition of personal jurisdiction within the concept of International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, must afford a 'substantial connection' with the state of the forum. McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, 226; Hanson v. Denckla, 357 U.S 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283, 1297.

The majority, in the Hanson case, held that the exercise, in Florida, of a power of appointment under a trust, of itself, did not give that state sufficient affiliation to acquire jurisdiction of the nonresident trustees by constructive service. The opinion of the Court expressed by Chief Justice Warren cautions that 'it is a mistake to assume that this trend (away from the rigid rule of Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, to the flexible standard of International Shoe Co. v. Washington, supra,) heralds the eventual demise of all restrictions on personal jurisdiction of state courts. Those restrictions are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. However minimal the burden of defending in a foreign tribunal, a defendant may not be called upon to do so unless he has had the 'minimal contacts' with that State that are a prerequisite to its exercise of power over him (citations omitted).' Hanson v. Denclka, supra, 357 U.S. 235, 78 S.Ct. 1228, at 1238, 2 L.Ed.2d at 1296.

The basic requirements of due process were fulfilled in the application of 12 V.S.A. § 855 to the jurisdictional facts which prevailed in Smyth v. Twin State Improvement Corp., 116 Vt. 569, 577, 80 A.2d 664, 25 A.L.R.2d 1193. There the foreign corporate defendant came into Vermont by way of its employees to perform the business which gave rise to the claim of negligence. The Court, in a careful opinion by the late Justice Blackmer, took the pains to point out that it limited itself to the precise problem presented. This was the circumstance of a foreign corporation which commits a single tort against a resident of Vermont, wholly within the territorial limits of this state.

It was held that the corporate defendant established substantial contact with Vermont by bringing its presence within our boundaries in the person of its employees to perform the work which gave rise to the cause of action. The Court went on to explain.

'No sound reason appears to exist why foreign corporations may not be held responsible in Vermont for wrongful acts done in Vermont. If a foreign corporation voluntarily elects to act here, it should be answerable here and under our laws. The consequences imputed to it lie within its own control, since it need not act within this state at all, unless it so desires.' Smyth v. Twin State Improvement Corp., supra, 116 Vt. at 575, 80 A.2d at 668.

The vital factor in the statute is the intentional and affirmative action on the part of the non-resident defendant in pursuit of its corporate purposes within this jurisdiction. A single act, purposefully performed here, will put the actor within the reach of the sovereignty of this state, as in the Smyth case. So will active participation in the Vermont market, either by direct shipment, or by way of transmittal through regular distributors presently serving the Vermont marketing area.

The jurisdictional power to deal personally with a non-resident defendant in transitory actions of this type must be generated by the defendant's intentional participation here. Thus when a plaintiff seeks to reach a foreign corporate defendant in personam by service on our secretary of state, it is incumbent upon the claimant to plead sufficient facts to demonstrate that the defendant is causally responsible for the presence of the injuring agency within the State of Vermont. Without such a presentation in the record there is no justification for the conclusion that the defendant has yielded to the jurisdiction of our courts by its own volition within the concept of Smyth v. Twin State Improvement Corp., supra, 116 Vt. at 575, 80 A.2d at 668.

To require less than this in the construction of the statute would present serious constitutional objections. 'Full faith and credit' would become a matter of conjecture. See, Deveny b. n. f. Jamieson v. Rheem Manufacturing Co., C.C.A. 2, 1963, 319 F.2d 124; Leflar, The Converging Limits of State Jurisdictional Powers, 9 Journal of Public Law 282 (1960); Sobeloff, Jurisdiction Over Non-Residents in Our Federal Jurisdiction, 43 Cornell L.Q. 196 (1957); Cf., Cardozo, The Reach of the Legislature and the Grasp of Jurisdiction, 42 Cornell L.Q. 210 (1957); Cleary, The Length of the Long Arm, 9 Journal of Public Law 293 (1960). See also, Uniform Interstate and International Procedure Act, Art. I, Section 1.03(a)(4); Handbook of the National Conference of Commissioners on Uniform State Laws, 1962, pp. 221-223.

The bare allegation that the defendant at Newark, New York put its product 'into the stream of commerce', without more, is insufficient to show a voluntary contact or an intentional participation in Vermont. The fact that the can of beans was ultimately purchased and consumed here does not cure the defect.

The place where the final harm is done may control for purposes of making a choice of law. But considerations important to this area of the law are sometimes insubstantial for purposes of asserting jurisdiction over a non-resident defendant. Hanson v. Deckla, ...