Hamilton v. Garlock, Inc.

• Decision Date: 29 December 1998
• Docket Number: No. 94 CIV. 4397(RWS).,94 CIV. 4397(RWS).
• Parties: Linda HAMILTON, Individually and as Executrix of the Estate of George Hamilton, Plaintiff, v. GARLOCK, INC., et al., Defendants.
• Court: U.S. District Court — Southern District of New York

31 F.Supp.2d 351

Linda HAMILTON, Individually and as Executrix of the Estate of George Hamilton, Plaintiff, v. GARLOCK, INC., et al., Defendants.

No. 94 CIV. 4397(RWS).

United States District Court, S.D. New York.

December 29, 1998.

COPYRIGHT MATERIAL OMITTED

Levy Phillips & Konigsberg, New York, NY (Moshe Maimon, Chris Romanelli, of Counsel), for Plaintiff.

Barry, McTiernan & Moore, New York, NY (Roger P. McTiernan, of Counsel), for Defendant Atlas Turner, Inc.

OPINION

SWEET, District Judge.

Defendant Atlas Turner Inc. ("Atlas") has brought a trio of post-trial motions in response to a jury verdict entered in favor of plaintiff Linda Hamilton ("Plaintiff") in an asbestos action. First, Atlas has moved for judgment as a matter of law pursuant to Rule 50(b) of the Federal Rules of Civil Procedure, or in the alterative for a new trial pursuant to Rule 59(a). Second, Atlas seeks reconsideration of this Court's November 5, 1998 order that set aside the jury verdict regarding the issue of allocation of fault. Finally, Atlas has renewed its motion pursuant to Rule 12(b) for an order dismissing the complaint for lack of personal jurisdiction. For the reasons set forth below, Atlas' motion to dismiss for lack of personal jurisdiction is granted, and thus the motions for reconsideration and for judgment or a new trial need not be considered.

Parties

Plaintiff was married to George Hamilton ("Hamilton"). During his lifetime, Hamilton worked as a boilerman in the United States Navy.

Atlas was at all relevant times to this action a Canadian Corporation. It has never been authorized to conduct business in the State of New York.

Prior Proceedings and Facts

The prior proceedings and facts in this action have been set forth in a prior opinion of this Court, familiarity with which is assumed. See Hamilton v. AC and S, Inc., No. 94 Civ. 4397, 1998 WL 651049 (S.D.N.Y. Sept. 23, 1998) [hereinafter Hamilton I]. Those facts and prior proceedings relevant to the instant motion are set forth below.

Plaintiff's asbestos claim, naming several defendants including Atlas, was filed in federal court on June 15, 1994. An amended complaint was filed on December 14, 1995. This action is one of many that has been supervised by the Multidistrict Litigation Panel ("MDL") for discovery and pretrial purposes. It was originally filed in the Southern District of New York and subsequently transferred by order of the MDL to the Honorable Charles R. Weiner of the Eastern District of Pennsylvania. The action was transferred back to this Court on December 13, 1997, and thereafter consolidated by opinion dated May 7, 1998, with four other asbestos cases for trial.

Prior to the commencement of trial, Atlas brought a motion to dismiss for lack of personal jurisdiction, or in the alternative for summary judgment. The motion for summary judgment was denied, and the jurisdictional motion was denied with leave to renew upon a fuller record. See Hamilton I, 1998 WL 651049.

The claims in this action were brought by Linda Hamilton, the widow of George Hamilton. Hamilton was diagnosed with a pleural effusion in January of 1992, and with mesothelioma in January of 1993. He died from the cancer on November 4, 1994, at the age of 54. He was survived by his widow, Linda and eight children, ages 32 to 4. Testimony established that Hamilton was exposed to asbestos when he served as a boilerman in the United States Navy from 1959 to 1961. He was stationed at the Norfolk Virginia Shipyard and served in the boiler room of the U.S.S. John W. Weeks (the "Weeks").

Trial commenced on September 23, 1998. On October 20, the jury returned a verdict for Plaintiff. Judgment in the amount of $4,288,427.47 was entered on November 6, 1998. The instant motions were filed November 23, 1998. Oral arguments were held December 14, 1998, at which time Atlas' post-trial motions were deemed fully submitted.

Discussion

I. The Holding in Hamilton I

On August 3, 1998, Atlas filed a motion pursuant to Rule 12(b), dismissing the action against it for lack of personal jurisdiction. Alternatively, it moved for summary judgment. In Hamilton I, the summary judgment motion was denied as was the motion to dismiss for lack of jurisdiction. However, the denial of the jurisdictional motion was not absolute. Rather, it was "denied at this time," with leave to renew upon a fuller record. Hamilton I, 1998 WL 651049, at *3.

Equitable concerns prompted the denial of Atlas' motion in September. This Court acknowledged that Plaintiff had made a "meaningful argument for waiver," id. at *2, and that neither side had provided facts from which it could be ascertained that Atlas was "doing business" in New York at the relevant time. Given the circumstances, including the fact that the instant case had been consolidated with four other cases for trial and that in the interests of justice the cases had moved together, it seemed prudent to deny Atlas' motion until discovery was complete on the issue and the record supported a meaningful finding that jurisdiction did or did not exist over Atlas.

The trial having been completed and all the evidence having been presented, Atlas' motion to dismiss for lack of personal jurisdiction must now be granted because Plaintiff has failed to meet her burden of establishing that this Court may exercise jurisdiction over Atlas. It is significant that in Hamilton I, Plaintiff was required to make only a prima facie showing that personal jurisdiction existed. See Marine Midland Bank, N.A. v. Miller, 664 F.2d 899, 904 (2d Cir.1981); Roth v. El Al Israel Airlines, Ltd., 709 F.Supp. 487, 489 (S.D.N.Y.1989); see also Welsh v. Servicemaster Corp., 930 F.Supp. 908, 910 (S.D.N.Y.1996); Houbigant, Inc. v. ACB Mercantile, Inc., 914 F.Supp. 964, 980 (S.D.N.Y.1995). However, the burden at this juncture is greater. Plaintiff must establish personal jurisdiction by a preponderance of the evidence. See, e.g., Marine Midland, 664 F.2d at 904; Houbigant, 914 F.Supp. at 980. She has not done so.

II. This Court Lacks Jurisdiction Over Atlas

In considering a 12(b)(2) motion to dismiss for lack of personal jurisdiction, a district court must construe the facts from the pleadings and affidavits in the light most favorable to the plaintiff. See Hoffritz for Cutlery, Inc. v. Amajac, 763 F.2d 55, 57 (2d Cir.1985); Cosmetech Int'l, LLC v. Der Kwei Enter. and Co., Ltd., 943 F.Supp. 311, 314 (S.D.N.Y.1996). Implicit is the understanding that a plaintiff bears the burden of establishing jurisdiction over a defendant; however, until "a full evidentiary hearing or a trial on the merits is held, [a plaintiff] need only set forth prima facie evidence of personal jurisdiction." Beacon Enters., Inc. v. Menzies, 715 F.2d 757, 768 (2d Cir.1983). As a trial has been held in this action, "`plaintiff must establish jurisdiction by a preponderance of the evidence.'" Kowalski-Schmidt v. CLS Mortgage, Inc., 981 F.Supp. 105, 108 (E.D.N.Y.1997) (quoting Marine Midland, 664 F.2d at 904); see Roth, 709 F.Supp. at 489.

Since this action is one based on diversity of citizenship, the law of New York will dictate whether this Court may exercise personal jurisdiction over Atlas. See Hoffritz, 763 F.2d at 57; see also Crouch v. Atlas Van Lines, Inc., 834 F.Supp. 596, 599 (N.D.N.Y. 1993). Accordingly, assessment of whether New York's Civil Practice Law and Rules ("CPLR") provides for jurisdiction must be made. See N.Y. C.P.L.R. §§ 301, 302 (McKinney 1990). A two-fold inquiry is required. First, a determination must be made as to whether New York law provides a basis for exercising personal jurisdiction over the defendant. If jurisdiction is proper as a result of this analysis, the second inquiry ascends to a constitutional level, which requires an assessment of whether exercising jurisdiction over the defendant would offend due process. See International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945); see also Twine v. Levy, 746 F.Supp. 1202, 1204 (E.D.N.Y.1990). In light of the determination below that Atlas is not subject to personal jurisdiction under New York law, the due process analysis need not be conducted.

A. "Doing Business" Pursuant to § 301

CPLR § 301 tersely states that a New York court "may exercise jurisdiction over persons, property, or status as might have been exercised heretofore." The statute incorporates all grounds of jurisdiction previously recognized at common law. See Penny v. United Fruit Co., 869 F.Supp. 122, 125 (E.D.N.Y.1994). Pursuant to § 301, a foreign corporation will be subject to personal jurisdiction in New York if it is present or is "doing business" in the state. A corporation's activity rise to the level of "doing business" only when it is engaged in "such a continuous and systematic course of activity that it can be deemed present in the state of New York." Klinghoffer v. S.N.C. Achille Lauro, 937 F.2d 44, 50-51 (2d Cir.1991) (quoting Laufer v. Ostrow, 55 N.Y.2d 305, 434 N.E.2d 692, 694, 449 N.Y.S.2d 456, 458 (1982) (citations omitted)); see Mareno v. Rowe, 910 F.2d 1043, 1046 (2d Cir.1990); Frummer v. Hilton Hotels Int'l, Inc., 19 N.Y.2d 533, 536, 227 N.E.2d 851, 853, 281 N.Y.S.2d 41, 43 (1967). Under § 301 of the CPLR, a corporation's presence in New York is determined based on the time the lawsuit is filed, not when the claim arose. Penny, 869 F.Supp. at 125.

Indeed, without any physical presence in New York, a foreign corporation may be subjected to the jurisdiction of New York if the corporation conducts, or purposefully directs, business "`not occasionally or casually, but with a fair measure of permanence and continuity.'" Landoil Resources Corp. v. Alexander & Alexander Servs., 77 N.Y.2d 28, 34, 565 N.E.2d 488, 490, 563 N.Y.S.2d 739, 741 (1990) (quoting Tauza v. Susquehanna Coal Co., 220 N.Y. 259, 267, 115 N.E. 915, 917 (1917)). The test, a "simple pragmatic one," Bryant v. Finnish Nat. Airline, 15 N.Y.2d 426, 432, 208 N.E.2d 439, 441, ...