Gourdine v. Karl Storz Endoscopy-Am., Inc.

Decision Date02 May 2016
Docket NumberCivil Action No. 2:14–4839–RMG
CourtU.S. District Court — District of South Carolina
Parties Romona Yvette GOURDINE and Randolph Gourdine, Jr., Plaintiffs, v. KARL STORZ ENDOSCOPY–AMERICA, INC., a California corporation, and Karl Storz GmbH & Co. KG, organized in Germany, Defendants.

Carmen Sessions Scott, Motley Rice, Mt. Pleasant, SC, Meghan Johnson Carter, Motley Rice, Charleston, SC, for Plaintiffs.

Duke Raleigh Highfield, Stephen L. Brown, Joseph J. Tierney, Victoria Leigh Anderson, Young Clement Rivers and Tisdale, Charleston, SC, for Defendants.

ORDER

Richard Mark Gergel, United States District Court Judge

This matter is before the Court on Defendant Karl Storz GmbH & Co KG's ("KST") motion to dismiss for lack of personal jurisdiction. For the reasons set forth below, the Court denies the motion to dismiss.

I. Background

This is a product liability action brought within the Court's diversity jurisdiction. Plaintiff Romona Yvette Gourdine underwent a supra-cervical hysterectomy

on December 28, 2011. (Compl. ¶ 12, Dec. 23, 2014, Dkt. No. 1.) The surgeon removed fibroids from her uterus and broad ligament using a device known as a morcellator. (Id. ) Plaintiffs allege that the use of the morcellator potentially disseminated cancerous cells throughout Ms. Gourdine's abdomen, worsened her prognosis, and forced her to undergo radiation therapy. (Id. ¶¶ 13, 16.) Plaintiffs further allege that Defendants knew or should have known of this risk and failed to communicate the risks to physicians and patients. (Id. ¶¶ 12–25.) Defendant KST, a German company, allegedly manufactured the morcellator used. Defendant Karl Storz Kndoscopy–America, Inc. ("KSEA"), a California company, is a subsidiary of KST that markets and distributes the devices within the United States. Plaintiffs bring claims for negligence, defective manufacturing, design defect, failure to warn, strict liability, breach of implied warranty, personal injury, breach of express warranty, negligent misrepresentation, fraudulent misrepresentation, fraud by concealment, and loss of consortium. (Id. ¶¶ 26–124.) The parties dispute the Court's jurisdiction over KST, but the Court's jurisdiction KSEA is uncontested.

KST moved for dismissal for lack of personal jurisdiction on July 13, 2015. (Def.'s Mot. to Dismiss, Dkt. No. 25.) Jurisdictional discovery took place from about that time until September 18, 2015. (Order, Aug. 20, 2015, Dkt. No. 31.) On November 6, 2015, the Court granted the motion in part and denied it in part. (Order, Dkt. No. 42.) The Court denied the motion to dismiss without prejudice, and ordered further jurisdictional discovery to be completed by January 4, 2016, followed by a renewed motion to dismiss for lack of personal jurisdiction, to be filed by February 4, 2016. (Id. )

On February 4, 2016, KST its renewed motion to dismiss. (Def.'s Mot. to Dismiss, Dkt. No. 51.) Thereafter, the Court allowed a final deposition, jurisdictional discovery closed, and briefing on KST's renewed motion to dismiss for lack of personal jurisdiction completed. (Order, Feb. 23, 2016, Dkt. No. 55.)

II. Legal Standard

When a court's personal jurisdiction is challenged, the burden is on the plaintiff to establish that a ground for jurisdiction exists. Combs v. Bakker , 886 F.2d 673, 676 (4th Cir. 1989). When the court resolves the motion on written submissions (as opposed to an evidentiary hearing), the plaintiff need only make a "prima facie showing of a sufficient jurisdictional basis." Id. However, the plaintiff's showing must be based on specific facts set forth in the record. Magic Toyota, Inc. v. Se. Toyota Distribs., Inc. , 784 F.Supp. 306, 310 (D.S.C. 1992). The Court may consider the parties' pleadings, affidavits, and other supporting documents but must construe them "in the light most favorable to plaintiff, drawing all inferences and resolving all factual disputes in his favor, and assuming plaintiff's credibility." Sonoco Prods. Co. v. ACE INA Ins. , 877 F.Supp.2d 398, 404–05 (D.S.C. 2012) (internal quotation and alteration marks omitted); see also Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc. , 334 F.3d 390, 396 (4th Cir. 2003) ("In deciding whether the plaintiff has made the requisite showing, the court must take all disputed facts and reasonable inferences in favor of the plaintiff."). However, a court "need not credit conclusory allegations or draw farfetched inferences." Sonoco , 877 F.Supp.2d at 405 (internal quotation marks omitted).

KST argues that the completion of jurisdictional discovery should raise the legal standard, requiring Plaintiffs to prove that personal jurisdiction is appropriate by a preponderance of the evidence, rather than requiring only a prima facie showing. (Dkt. No. 51–1 at 6–7.) This Court was presented with an identical argument in Schreiner v. Patriarch Partners, LLC , where it observed that the Fourth Circuit distinguishes between personal jurisdiction decisions based on motion papers and those based on an evidentiary hearing without stating whether jurisdictional discovery makes a district court's consideration more like an evidentiary hearing and so changes the burden of proof. Civ. No. 2:14-220-RMG, 2014 WL 11034777, at *3 (D.S.C. Nov. 7, 2014). In Schreiner , the Court did not need to answer that question. The Court now reaches the question and concludes that the completion of jurisdictional discovery requires Plaintiffs to prove personal jurisdiction by a preponderance of the evidence. That conclusion is the most logical reading of Combs . The Fourth Circuit distinguished between a court determining jurisdiction "on the basis only of motion papers, supporting legal memoranda and the relevant allegations of a complaint," when it "must construe all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most favorable inferences for the existence of jurisdiction," and a court determining jurisdiction by considering evidence on "disputed factual questions," when the plaintiff must "prove the existence of a ground for jurisdiction by a preponderance of the evidence," Combs , 886 F.2d at 676. By "motion papers," the Fourth Circuit clearly means legal arguments regarding assumed facts—e.g. , the method by which parties argue Rule 12(b)(6) motions. The purpose of jurisdictional discovery is to give the parties the opportunity to prove facts. It would be illogical for the Court to allow extended discovery of jurisdictional facts and then to rule on jurisdiction based on allegations and assumptions rather than facts supported by discovered evidence. Cf. Brown v. Geha–Werke GmbH , 69 F.Supp.2d 770, 774 (D.S.C. 1999) ("Although this court decided the issue of personal jurisdiction without an evidentiary hearing ... the parties have engaged in jurisdictional discovery and offered evidence beyond the pleadings and affidavits. Consequently, the jurisdictional information before the court is more like that presented at an evidentiary hearing... [therefore] Plaintiff must establish personal jurisdiction by a preponderance of the evidence.").

However, "[i]f the jurisdictional facts ‘are so intertwined with the facts upon which the ultimate issues on the merits must be resolved,’ then " ‘the entire factual dispute is appropriately resolved only by a proceeding on the merits.’ " United States ex rel. Vuyyuru v. Jadhav , 555 F.3d 337, 348 (4th Cir. 2009) (quoting Adams v. Bain , 697 F.2d 1213, 1219–20 (4th Cir. 1982)) (citation omitted) (regarding subject-matter jurisdiction). In such case, a district court may assume jurisdiction, reserve the question of jurisdiction, and determine relevant jurisdictional facts on a motion going to the merits or at trial. See United States v. North Carolina , 180 F.3d 574, 580 (4th Cir. 1999) (regarding subject-matter jurisdiction).

To meet their burden, Plaintiffs must show (1) that South Carolina's long-arm statute authorizes jurisdiction, and (2) that the exercise of personal jurisdiction complies with the constitutional due process requirements. E.g., Christian Sci. Bd. of Dirs. of First Church of Christ, Scientist v. Nolan , 259 F.3d 209, 215 (4th Cir. 2001). South Carolina has interpreted its long-arm statute to extend to the constitutional limits of due process. See S. Plastics Co. v. S. Commerce Bank , 310 S.C. 256, 423 S.E.2d 128, 130–31 (1992). Thus, the first step is collapsed into the second, and the only inquiry before the court is whether the due process requirements are met. ESAB Group, Inc. v. Centricut, LLC , 34 F.Supp.2d 323, 328 (D.S.C. 1999) ; Sonoco Prods. Co. v. Inteplast Corp. , 867 F.Supp. 352, 352 (D.S.C. 1994).

Due process requires that a defendant have sufficient "minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " Int'l Shoe Co. v. Washington , 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer , 311 U.S. 457, 463, 61 S.Ct. 339, 85 L.Ed. 278 (1940) ). This standard can be met in two ways: "by finding specific jurisdiction based on conduct connected to the suit or by finding general jurisdiction." ALS Scan, Inc. v. Digital Serv. Consultants, Inc. , 293 F.3d 707, 711–12 (4th Cir. 2002) (citing Helicopteros Nacionales de Colombia, S.A. v. Hall , 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ). Plaintiffs do not claim that the Court has general personal jurisdiction over KST. (Pls.' Resp. Mot. Dismiss 11, Mar. 15, 2016, Dkt. No. 56.) To determine whether specific jurisdiction exists, the Court considers "(1) the extent to which the defendant has purposefully availed itself of the privilege of conducting activities in the state; (2) whether the plaintiffs' claims arise out of those activities directed at the state; and (3) whether the exercise of personal jurisdiction would be constitutionally ‘reasonable.’ " Carefirst of Md. , 334 F.3d at...

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