Doucet v. FCA US LLC
| Decision Date | 10 January 2020 |
| Docket Number | Civil Action No. 19-cv-10514-ADB |
| Parties | AMY DOUCET and DENISE SUTTON as Co-Guardians of PAUL GREGORY DOUCET, Plaintiffs, v. FCA US LLC, f/k/a CHRYSLER GROUP, LLC, SUDBAY CHRYSLER DODGE, INC., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
BURROUGHS, D.J.
This products liability action originated in Suffolk County Superior Court when Plaintiffs Amy Doucet and Denise Sutton filed a complaint in their capacity as court-appointed guardians on behalf of Paul Doucet ("Doucet"). [ECF No. 1-3 ("Compl." or "Complaint") ¶ 1]. Doucet alleges that he suffered severe and debilitating injuries due to defects in the design and production of a Chrysler Sebring convertible that was involved in a car accident in May 2015. [Compl. ¶ 10-31]. Defendant FCA US LLC ("FCA") removed the action to federal court, asserting jurisdiction pursuant to 28 U.S.C. §§ 1332 and 1334(b). [ECF No. 1 at 1-2].
Before the Court are FCA's motion to dismiss, [ECF No. 9], and Doucet's motion for remand to state court, [ECF No. 14]. FCA opposed Doucet's Motion for Remand on May 2, 2019, [ECF No. 19], and Doucet opposed FCA's Motion to Dismiss on June 27, 2019, [ECF No. 38]. For the following reasons, FCA's Motion to Dismiss, [ECF No. 9], is DENIED, and Doucet's Motion for Remand, [ECF No. 14], is GRANTED. Doucet's Motion for Jurisdiction Discovery, [ECF No. 38], is therefore DENIED as moot.
For purposes of this motion, the facts are drawn from the Complaint and evidence the parties have proffered in support of their jurisdictional arguments. In April 2009, Chrysler LLC filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York. [Compl. ¶ 6; ECF No. 10 at 4; ECF No. 37 at 4]. On June 1, 2009, the Bankruptcy Court approved the sale of certain Chrysler assets to Defendant FCA.1 [Compl. ¶ 7; ECF No. 10 at 5; ECF No. 37 at 4]. The sale closed on June 10, 2009, [Compl. ¶ 7], and the bankruptcy estate was closed as fully administered on March 1, 2016, [ECF No. 1 ¶ 24]. The terms of the sale approved by the Bankruptcy Court are memorialized in a "Master Transaction Agreement" ("MTA"), which permitted the sale of assets to FCA "free and clear of all Claims except for Assumed Liabilities." [ECF No. 10. at 4-5; ECF No. 37 at 4; ECF No. 1-5 at 3-4].
Though the MTA originally limited "Assumed Liabilities" to claims arising from products that were manufactured before the bankruptcy sale date and sold after the bankruptcy sale, [ECF No. 10 at 5; ECF No. 37 at 4; ECF No. 1-4 ("MTA") at 19-20], the terms were later amended by the parties and approved by the Bankruptcy Court, [Compl. ¶ 8; ECF No. 10 at 6; ECF No. 37 at 4-5; ECF No. 1-6 at 2; ECF No. 1-7 at 4, 6]. In relevant part, that amendment expanded the definition of "Assumed Liabilities" to include product liability claims that arise from Chrysler products sold before the bankruptcy sale date, so long as those claims:
(A) arise directly from motor vehicle accidents occurring on or after [the bankruptcy sale closing date], (B) are not barred by any statute of limitations, (C) [do not relate] to any alleged exposure to [asbestos] or any other Hazardous Material and (D) do not include any claim for exemplary or punitive damages.
[ECF No. 10 at 6; ECF No. 37 at 4; ECF No. 1-6 at 2]. Product liability claims include any claims:
arising out of, or otherwise relating to in any way in respect of claims for personal injury, wrongful death or property damage, product recalls, defective material claims, merchandise returns and/or any similar claims, or any other claim or cause of action, whether such claim is known or unknown or asserted or unasserted with respect to, Products or items purchased, sold, consigned, marketed, stored, delivered, distributed or transported by [Chrysler, other debtors, or subsidiaries] . . . .
[ECF No. 37 at 5; ECF No. 1-4 at 104].
The 2004 Chrysler Sebring convertible at issue in this case was designed and manufactured by Old Chrysler. [ECF No. 10 at 4; ECF No. 10-2 ¶ 2]. On April 7, 2003, Old Chrysler "invoiced and shipped" the convertible to a Chrysler dealership in Rhode Island. [Id.]. The Rhode Island dealership then transferred the vehicle to Defendant Sudbay Chrysler Dodge, Inc. ("Sudbay"), which leased the vehicle to a resident of Needham, Massachusetts on May 8, 2003, [ECF No. 10-2 ¶ 3], before selling the vehicle to a resident of Gloucester, Massachusetts on July 27, 2006, [ECF No. 10-2 ¶ 4]. The vehicle subsequently changed hands in private sales. [ECF No. 10-2 ¶¶ 5-7]. In June 2013, Doucet purchased the vehicle in a private sale from a New Hampshire resident. [Compl. ¶ 22; ECF No. 10-2 ¶ 7].
In May 2015, Doucet was riding in the front passenger seat when the vehicle was involved in a moderate frontal collision in Hudson, New Hampshire. [Compl. ¶¶ 10-11]. During the collision, Doucet sustained a traumatic brain injury when the vehicle's passenger side A-pillar, which supported the vehicle's roof and windshield, struck Doucet. [Id. ¶¶ 11-13].Doucet alleges that defects in the vehicle or its component parts caused his injuries, [Id. ¶¶ 25, 30, 31], and asserts negligence and breach of warranty claims against FCA, [Compl. ¶¶ 32-48], and against Sudbay, [Id. ¶¶ 49-60].
Though Doucet first filed the Complaint in New Hampshire Superior Court, [ECF No. 10 at 3; ECF No. 37 at 3], FCA removed the case to the United States District Court for the District of New Hampshire, [ECF No. 10 at 3]. The district court dismissed the case for lack of personal jurisdiction over FCA, finding that Doucet had not demonstrated the constitutionally required "relatedness" of his claim to FCA or Old Chrysler's New Hampshire activities. See Doucet v. FCA US LLC, No. 18-cv-00627, 2018 WL 4854632 at *6 (D.N.H. Oct. 5, 2018).
Doucet then filed the Complaint in Massachusetts Superior Court. [ECF No. 10 at 3; ECF No. 37 at 3]. FCA once again removed to federal court, invoking diversity jurisdiction under 28 U.S.C. § 1332, as well as jurisdiction over cases arising in, arising under, or relating to cases under title 11 ("Bankruptcy Code"), pursuant to 28 U.S.C. § 1334(b). [ECF No. 1 ¶¶ 25-26].
Doucet bears the burden of demonstrating that the Court may exercise personal jurisdiction over FCA and Sudbay. A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016) (citing Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26 (1st Cir. 2008)). "Under the prima facie standard, plaintiffs must proffer 'evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction.'" Packs v. Bartle, No. 18-cv-11496, 2019 WL 1060972, at *3 (D. Mass. Mar. 6, 2019) (quoting A Corp., 812 F.3d at 58)). "[P]laintiffs may not rely on unsupported allegations in their pleadings," and are "obliged to adduce evidence of specific facts." Platten v. HG Berm. Exempted Ltd., 437 F.3d 118, 134 (1st Cir. 2006) (). "The Court takes as true whatever properly documented facts plaintiffs proffer, construes those facts in the light most favorable to the plaintiffs, and considers facts put forward by defendants to the extent they are uncontradicted." Packs, 2019 WL 1060972, at *3 (citing Phillips, 530 F.3d at 26; Platten, 437 F.3d at 134).
"In determining whether a non-resident defendant is subject to its jurisdiction, a federal court exercising diversity jurisdiction is the functional equivalent of a state court sitting in the forum state." Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 51 (1st Cir. 2002) (quoting Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.1995)). "The Due Process Clause of the Fourteenth Amendment allows a state court to exercise jurisdiction over a non[-]resident only where the exercise of jurisdiction 'does not offend traditional notions of fair play and substantial justice.'" Packs, 2019 WL 1060972, at *3 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Thus, "[t]o establish personal jurisdiction in a diversity case, a plaintiff must satisfy both the forum state's long-arm statute and the Due Process Clause of the Fourteenth Amendment." C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014) (citing Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 204 (1st Cir. 1994)).
Though FCA did not produce the vehicle at issue in this case, it purchased many of the former assets of Old Chrysler, which did produce the vehicle at issue here. See [ECF No. 10 at 4-5]. "Under generally accepted corporate law principles, the purchaser of the assets of anothercorporation does not assume the debts and liabilities of the transferor." Devine & Devine Food Brokers, Inc. v. Wampler Foods, Inc., 313 F.3d 616, 618 (1st Cir. 2002) (quoting Dayton v. Peck, Stow, & Wilcox Co., 739 F.2d 690, 692 (1st Cir. 1984)). Most jurisdictions, including Massachusetts and the First Circuit, however, recognize exceptions to this general rule and find purchasers liable in instances where "the purchasing corporation expressly or impliedly agrees to assume the selling corporation's liabilities." Devine & Devine, 313 F.3d at 618; Dayton, 739 F.2d at 692 ( Massachusetts law); Milliken & Co. v. Duro Textiles, LLC, 887 N.E.2d 244, 254-55 (Mass. 2008).
"A corporation's contacts with a forum may be imputed to its successor if forum law would hold the successor liable for the actions of its predecessor." McClary v. Erie Engine & Mfg. Co., 856 F. Supp. 52, 57 (D.N.H. 1994) (quoting Williams v. Bowman Livestock Equip. Co., 927 F.2d 1128, 1132 (10th Cir. 1991)); Mesiti v. Microdot, Inc., 739 F....
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