Heins v. Wilhelm Loh Wetzlar Optical Machinery GmbH & Co. KG.

• Decision Date: 29 June 1988
• Docket Number: No. 87-193,87-193
• Citation: 522 N.E.2d 989,26 Mass.App.Ct. 14
• Parties: , Prod.Liab.Rep. (CCH) P 11,799 Harold HEINS v. WILHELM LOH WETZLAR OPTICAL MACHINERY GmbH & CO. KG.
• Court: Appeals Court of Massachusetts

Page 989

522 N.E.2d 989

26 Mass.App.Ct. 14, Prod.Liab.Rep. (CCH) P 11,799

Harold HEINS v. WILHELM LOH WETZLAR OPTICAL MACHINERY GmbH & CO. KG.

No. 87-193.

Appeals Court of Massachusetts Worcester.

Argued Jan. 21, 1988.

Decided May 11, 1988.

Further Appellate Review Denied June 29, 1988.

William D. Jalkut, Worcester, for plaintiff.

Patricia L. Kelly, Boston, for defendant.

Before PERRETTA, CUTTER and WARNER, JJ.

WARNER, Justice.

The plaintiff appeals from a judgment entered in the Superior Court, pursuant to Mass.R.Civ.P. 54(b), 365 Mass. 821 (1974), dismissing his action for lack of personal jurisdiction over the defendant. See Mass.R.Civ.P. 12(b)(2), 365 Mass. 755 (1974).

The defendant is a West German corporation which designed and manufactured an optical lens grinding machine purchased by the plaintiff's employer, a Massachusetts corporation. The plaintiff, on theories of negligent design and manufacture and breach of warranty, sought damages for injuries sustained by him while setting up the machine in Sturbridge, Massachusetts.

On the defendant's motion to dismiss under rule 12(b)(2), the parties submitted affidavits, answers to interrogatories and excerpts of the deposition testimony of the plaintiff. After argument, the judge filed a memorandum of decision and order and allowed the motion.

As he did before the Superior Court, the plaintiff argues on appeal that assertion of jurisdiction is authorized by certain provisions of our long arm statute (G.L. c. 223A) and is consistent with basic due process requirements. In particular, as to the statutory ground, the plaintiff says that the exercise of personal jurisdiction over the defendant is proper under either of the following two provisions of G.L. c. 223A, § 3, as amended by St. 1969, c. 623: "A court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a ) transacting any business in this commonwealth; [or] ... (d ) causing tortious injury in this commonwealth by an act or omission outside this commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth."

"General Laws c. 223A, § 3, cannot authorize jurisdiction which is constitutionally unacceptable, even though the fact pattern asserted in support of jurisdiction apparently satisfies the statute's literal requirements. Likewise, G.L. c. 223A, § 3, asserts jurisdiction over the person to the constitutional limit [see "Automatic" Sprinkler Corp. v. Seneca Foods Corp., 361 Mass. 441, 443, 280 N.E.2d 423 (1972) ] only when some basis for jurisdiction enumerated in the statute has been established." Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 6, 389 N.E.2d 76 (1979). The inquiry is twofold. We look first to see whether the plaintiff has satisfied his burden of establishing sufficient facts to support the assertion of personal jurisdiction over the defendant under the long arm statute. See id. at 3, 389 N.E.2d 76; Carlson Corp. v. University of Vermont, 380 Mass. 102, 105, 402 N.E.2d 483 (1980). In resolving the issue, we accept as true only the uncontroverted facts as they appear in the materials which were before the Superior Court judge. See id. at 104 n. 4, 402 N.E.2d 483; C.H. Babb Co. v. A.M. Mfg. Co., 14 Mass.App.Ct. 291, 293, 438 N.E.2d 385 (1982).

1. The plaintiff first contends that his cause of action arises out of the defendant's transaction of business in Massachusetts and, therefore, personal jurisdiction attached under G.L. c. 223A, § 3(a ). The focus of the plaintiff's argument, as well as of the defendant's, is blurred by a mix of considerations relevant to the statutory standard and those relevant to due process requirements. See Good Hope Indus., supra 378 Mass. at 6-7, 389 N.E.2d 76, and cases cited; Bond Leather Co. v. Q.T. Shoe Mfg., Co., 764 F.2d 928, 932 (1st Cir.1985). The inquiry, however, under G.L. c. 223A, § 3(a ), is confined by the statutory language, although the "transacting any business" clause has been construed broadly. See Good Hope Indus., supra; Nova Biomedical Corp. v. Moller, 629 F.2d 190, 193-194 (1st Cir.1980). "General Laws c. 223A, § 3(a ), gives rise to jurisdiction if the defendant either directly or through an agent transacted any business in the Commonwealth, and if the alleged cause of action arose from such transaction of business " (emphasis supplied). Good Hope Indus., supra 378 Mass. at 6, 389 N.E.2d 76.

The facts, as found by the judge and supplemented by uncontroverted statements in the materials before her, which relate to the defendant's transaction of business in Massachusetts are as follows. The defendant is a West German corporation with a principal place of business in West Germany, engaged in the design, manufacture and sale of optical machinery. Sales of the defendant's machines in the United States are accomplished in the following manner. The defendant sells its machines outright to Loh Optikmaschinen, a Swiss corporation with a principal place of business in Switzerland which manufactures and trades in optical machinery. Loh Optical Machinery, Inc. (Loh Optical), an Illinois corporation with a principal place of business in Illinois, is the exclusive distributor of the defendant's machines in the United States. Loh Optical purchases machines directly from Loh Optikmaschinen for resale to United States customers. The defendant has no control over or ownership interest in Loh Optical. The defendant does not have any control over the marketing, price or sales of its machines in the United States. ¹

The plaintiff's employer inquired of Loh Optical regarding purchase of the machine which allegedly caused the plaintiff's injuries. The plaintiff and another employee made the recommendation to purchase the machine after dealing exclusively with one Hans Mack, the president of Loh Optical, who visited Massachusetts to discuss the purchase. The machine was delivered to the plaintiff's employer in Sturbridge in July of 1982. ²

On these facts, the plaintiff has failed to sustain his burden of showing a rational nexus between his cause of action and the transaction of any business in Massachusetts by the defendant within the literal meaning of G.L. c. 223A, § 3(a ). See Good Hope Indus., supra at 6-7, 389 N.E.2d 76. Compare Nichols Associates, Inc. v. Starr, 4 Mass.App.Ct. 91, 96-97, 341 N.E.2d 909 (1976) (plaintiff's choice to do some work in Massachusetts office and occasionally to take deliveries there is not "transacting any business" within meaning of § 3[a ] ); Walsh v. National Seating Co., 411 F.Supp. 564, 569-570 (D.Mass.1976) (sporadic shipment of spare parts into Massachusetts does not meet requirement of a cause of action arising out of "transacting any business" within meaning of § 3[a ] ); Catrone v. Ogden Suffolk Downs, Inc., 647 F.Supp. 850, 858-859 (D.Mass.1986) (plaintiff's injury does not arise out of defendant's contacts with Massachusetts within meaning of § 3[a ] ). ³ Cf. Carlson Corp. v. University of Vermont, 380 Mass. at 105, 402 N.E.2d 483 (signing contract in Massachusetts, if cause of action arises from contract, is literally transacting business under § 3[a ] ); C.H. Babb Co. v. A.M. Mfg. Co., 14 Mass.App.Ct. at 292-293, 438 N.E.2d 385 (transacting business when nonresident defendant actively and purposefully acquires business in Massachusetts); Bond Leather Co. v. Q.T. Shoe Mfg. Co., 764 F.2d at 932 (transacting business when nonresident defendant negotiates by mailing letters and placing call to Massachusetts); Hahn v. Vermont Law School, 698 F.2d 48, 50 (1st Cir.1983) (transacting business when nonresident defendant mails application and acceptance letter to Massachusetts); Nova Biomedical Corp. v. Moller, 629 F.2d at 195-196 (transacting business when nonresident defendant conducts or plans patent related business in Massachusetts); Boston Super Tools, Inc. v. RW Technologies, Inc., 467 F.Supp. 558, 561-562 (D.Mass.1979) (transacting business when foreign corporation sells many products to Massachusetts distributor over more than a year and frequently communicates with distributorship); Little Brown and Co. v. Bourne, 493 F.Supp. 544, 546-548 (D.Mass.1980) (transacting business when nonresident defendant enters into contract with plaintiff publisher and mails chapters to Massachusetts setting in motion complicated series of editing and printing steps); Eatable Greetable Products, Inc. v. Sweet Stop, Inc., 627 F.Supp. 777, 780-782 (D.Mass.1986) (transacting business when nonresident defendant attempts to retake Massachusetts territory from plaintiff).

2. We turn to consideration of the plaintiff's claim that he has established sufficient facts to support personal jurisdiction under G.L. c. 223A, § 3(d ). There is no dispute that the requirement of the first prong of clause (d ) has been met, namely, that the plaintiff has alleged a tortious injury in Massachusetts arising out of the claimed negligent design and manufacture of the optical grinding machine in West Germany.

We recite undisputed facts relevant to the additional statutory conditions which permit assertion of personal jurisdiction in an action for compensation for such an injury, namely, "if [a defendant] regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this commonwealth." G.L. c. 223A § 3(d ). During the seven-year period from 1977 through 1983 (records were not available for prior periods), an employee (three in all) of the defendant made eight visits (in the years 1977, 1978, 1979, 1981 and 1983, covering a total of eleven days) to companies located in Massachusetts. Five of the visits were for the purpose of discussing delivered machines, two...