Csx Transp., Inc. v. Preussag Intern. Steel Corp.

• Decision Date: 23 April 2002
• Docket Number: No. CIV.A. 01-D-1092-E.,CIV.A. 01-D-1092-E.
• Citation: 201 F.Supp.2d 1228
• Parties: CSX TRANSPORTATION, INC., Plaintiff, v. PREUSSAG INTERNATIONAL STEEL CORPORATION, et al., Defendants.
• Court: U.S. District Court — Middle District of Alabama

201 F.Supp.2d 1228

CSX TRANSPORTATION, INC., Plaintiff, v. PREUSSAG INTERNATIONAL STEEL CORPORATION, et al., Defendants.

No. CIV.A. 01-D-1092-E.

United States District Court, M.D. Alabama, Eastern Division.

April 23, 2002.

Morris Wade Richardson, Jacquelyn A. Gonzales, Melanie K. Dotson, Lange, Simpson, Robinson & Somerville, Birmingham, for CSX Transportation, Inc., plaintiffs.

James B. Carlson, Stephen R. Geisler, Sirote & Permutt, P.C., Birmingham, C. Gordon Starling, Jr., Gelpi Sullivan Carroll, New Orleans, John D. Gleissner, Rogers & Associates, Birmingham, for Preussag International Steel Corp., Stevedore's, Inc., Intraha Shipping Inc., defendants.

MEMORANDUM OPINION AND ORDER

DE MENT, District Judge.

Before the court is a Motion To Dismiss which was filed by Defendant Stevedores, Inc. ("Stevedores") on January 28, 2002. (Doc. No. 22.) In its Motion, Defendant challenges the court's exercise of personal jurisdiction in the present matter. Plaintiff CSX Transportation, Inc. ("CSX") filed a Response to said Motion on February 1.3 (Doc. No. 27), and, after the court permitted limited discovery on the issue, CSX filed a Supplemental Response on March 15. (Doc. No. 31.) Stevedores filed a Reply on March 22. After careful consideration of the arguments of counsel, the relevant law, and the record as a whole, the court finds that Defendant's Motion is due to be denied.

I. FACTS

Plaintiff filed the present diversity action under various contract and tort theories after one of its cargo trains derailed shortly before reaching its destination of Auburn, Alabama. The alleged cause of the derailment was related to the "improper loading, fastening, stowing and/or securing of ... steel coils in and onto Plaintiff's" rail cars. (Compl. ¶ 14.) At the time of the derailment, Plaintiff was transporting the cargo of steel coils on behalf of Defendant Preussag International Steel Corporation ("Preussag"). In addition to Preussag, the present action also seeks legal remedies from Defendant Stevedores, the corporation responsible for loading the cargo in question, and from Defendant Intraha Shipping, Inc., the corporation serving as the intermediary between Stevedores and Preussag. (Id. at 8-14.) None of the parties are Alabama citizens. Indeed, arguing that Alabama's interests are minimal, Stevedores has filed the present Motion asserting that the court's exercise of jurisdiction would exceed the limits inherent in the Due Process Clause.

CSX and Stevedores have stipulated to the following series of facts in support of their competing arguments as to the propriety of the court's exercise of jurisdiction. (Doc. No. 39.) For many years, Stevedores has engaged in the business of unloading cargo from ships in the Port of New Orleans and then loading such cargo onto trains. (Id. at 1-2.) Prior to accepting a particular assignment, Stevedores receives documentation detailing the cargo's destination and its means of transport. (Id. at 4.) Stevedores does not decline work on the basis of this information; rather it accepts the work in accordance with the various different laws that might apply. (Id. at 3.) Recognizing that improper workmanship could lead to tort liability, Stevedores has procured liability insurance whose coverage applies to defense of claims in Alabama. (Id. at 6-7.) Indeed, when Stevedores agreed to load cargo onto Plaintiff's Alabama-bound train, it did so knowing that the work would involve neither the first nor the last cargo it handled that would pass through Alabama. (Id. at 2-4.)

Nonetheless, Stevedores points out that it is a Louisiana corporation registered to conduct business in New Orleans. (Doc. No. 24 at ¶ 1.) It owns no property in Alabama, has no agents in Alabama, and did no work in Alabama insofar as the present accident is concerned. (Id. at 2-4.) Moreover, Stevedores did not contract with any Alabama citizen in the underlying actions of the present lawsuit. (Id. at 5.) Indeed, all the work and the negotiating leading up to that work took place in the State of Louisiana. (Id. at 6.) Based on the foregoing facts, the court must determine whether Stevedores' awareness that "if it failed to perform its work properly, it could be sued by those who suffered injury or damage," in conjunction with its awareness that the cargo was destined for Alabama, constitutes a sufficient nexus with the State of Alabama so as to require Stevedores to defend itself in the present forum. For reasons to be discussed, the court answers the question in the affirmative.

II. DISCUSSION

The court's power over one's person derives from positive law and constitutional law. The Alabama long-arm statute authorizes personal jurisdiction to the fullest extent permitted by the United States Constitution. See Martin v. Robbins, 628 So.2d 614, 617 (Ala.1993). Accordingly, CSX's burden of establishing a prima facie case of jurisdiction is satisfied to the extent that it demonstrates that the court's exercise of jurisdiction would not offend due process.¹ The Due Process Clause protects one's liberty interests by shielding the individual from binding judgments in a forum with which it has established no meaningful contacts, ties or relations.² Jurisdiction may be exercised over a defendant only where that Defendant has purposefully established minimum contacts within the forum state, and where the exercise of jurisdiction would comport with traditional notions of fair play and substantial justice. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

A. Minimum Contacts

Stevedores' only contacts with Alabama is the occasional passage of cargo it loads onto trains. The Eleventh Circuit follows a three-part test in analyzing whether such contacts with a given forum are sufficient to permit the assertion of jurisdiction:

First, the contacts must be related to the plaintiff's cause of action or have given rise to it. Second, the contacts must involve "some act whereby the defendant purposely avails itself of the privilege of conducting activities within the forum ..., thus invoking the benefits and protections of its laws." Third, the defendant's contacts with the forum must be "such that [the defendant] could reasonably anticipate being haled into court there."

Vermeulen v. Renault U.S.A., Inc., 985 F.2d 1534, 1546 (11th Cir.1993) (internal citations omitted). It is undisputed that Stevedores loaded onto the CSX train the particular cargo which gave rise to the present cause of action. A more difficult question is whether handling such cargo with the knowledge that it will find its way into Alabama constitutes purposeful availment of the forum so as to invoke the benefits of Alabama law. Closely related to this discussion is whether Stevedores could have reasonably anticipated a lawsuit in Alabama on the basis of such contacts.

Courts have addressed these issues in cases involving the stevedore industry to conflicting results. Compare, e.g., Logwood v. Apollo Marine Specialties, No. 89-4785 Section "N", 1992 WL 124812, 1992 U.S. Dist. LEXIS 7972 (E.D. La. June 4, 1992) (asserting jurisdiction over foreign stevedore) with Couch v. Cro-Marine Transp., 769 F.Supp. 285 (C.D.Ill. 1991) (same).³ To a large extent, the fulcrum upon which the aforementioned stevedore cases turn is the response the respective courts took to the splintered opinions in Asahi Metal Industries Co. v. Superior Court of California, Solano County, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987), the most recent Supreme Court decision to address personal jurisdiction in the present context.⁴

In the Asahi case, the victim of a motorcycle accident in California filed a tort claim against the Taiwanese manufacturer of the bike's tire tube, claiming the tube's alleged defect proximately caused plaintiff's damages. Id. at 105-06, 107 S.Ct. 1026. The tube manufacturer sought to indemnify the Japanese manufacturer of the tube's valve stem, even though the Japanese company had no contacts with California beyond the "awareness that some of the components [it delivered to the Taiwanese company] would eventually find their way to California." Id. at 108, 107 S.Ct. 1026. Shortly after the litigation commenced, the plaintiff settled and dismissed all his claims. Id. at 106, 107 S.Ct. 1026. Accordingly, as the question of personal jurisdiction over the Japanese company worked its way up the appellate system, the only remaining substantive claim was the indemnification claim between two foreign companies. Id.

Although the Justices unanimously agreed that the exercise of jurisdiction "would offend traditional notions of fair play and substantial justice" given the burden on the Japanese defendant and the minimal interest of California in the indemnification dispute,⁵ no more than four Justices could agree on the appropriate framework from which to examine whether minimum contacts exist. Id. at 113, 107 S.Ct. 1026. (internal quotations omitted). While the court has previously discussed at length the three differing opinions in Asahi, see Marbury v. Am. Truetzschler, 111 F.Supp.2d 1281 (M.D.Ala.2000) (DeMent, J.); Huey v. Am. Truetzschler, 47 F.Supp.2d 1342 (M.D.Ala.1999) (Thompson, J.), a brief discussion of the disparate theories offered therein is helpful to provide a lens through which to view the issues before the court.

Justice O'Connor observed that in the lower courts there existed two alternative interpretations of the Court's previous decision in World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), and set out, ironically enough, to dispel the confusion below. Asahi, 480 U.S. at 110-11, 107 S.Ct. 1026. As to the issue of purposeful availment, the World-Wide Volkswagen Court had observed that, while foreseeability that a product might enter a particular market is not sufficient by itself to demonstrate that a defendant has purposefully availed itself of the benefits of that...