Hernandez-Denizac v. Kia Motors Corp., Civil No. 15-2625 (GAG/BJM)

• Decision Date: 21 June 2017
• Docket Number: Civil No. 15-2625 (GAG/BJM)
• Parties: LUIS JOHN HERNANDEZ-DENIZAC, et al., Plaintiffs v. KIA MOTORS CORPORATION, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

LUIS JOHN HERNANDEZ-DENIZAC, et al., Plaintiffs v. KIA MOTORS CORPORATION, et al., Defendants.

Civil No. 15-2625 (GAG/BJM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

June 21, 2017

REPORT AND RECOMMENDATION

Luis John Hernandez-Denizac ("Hernandez-Denizac") and three of his family members brought this diversity tort action against Kia Motors Corporation ("Kia") and TRW Automotive US LLC ("TRW"), alleging that Hernandez-Denizac was seriously injured when his vehicle's allegedly defective air bags failed to deploy during a collision. Docket No. 15 ("Am. Compl."). TRW moved to dismiss the amended complaint for lack of personal jurisdiction, Docket Nos. 58, 65, and Hernandez-Denizac opposed. Docket No. 60. This matter was referred to me for a report and recommendation. Docket No. 62.

For the reasons set forth below, TRW's motion to dismiss should be GRANTED.

MOTION TO DISMISS STANDARD

Federal Rule of Civil Procedure 12(b)(2) governs motions to dismiss for lack of personal jurisdiction. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st Cir. 2002). "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.'" Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995) (quoting Ticketmaster-N.Y., Inc. v. Alioto, 26 F.3d 201, 204 (1st Cir. 1994)). When a defendant moves to dismiss per Federal Rule of Civil Procedure 12(b)(2), the plaintiff has "the burden of establishing that jurisdiction over the defendant lies in the forum state." Baskin-Robbins Franchising LLC v. Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016).

To determine whether the "plaintiff has met this burden," the court "may choose from among several methods." See Daynard, 290 F.3d at 50-51. The "prima facie" method, which is the most conventional method, "requires no differential factfinding; rather, this method requires only that a plaintiff proffer evidence which, taken at face value, suffices to show all facts essential to personal jurisdiction." Baskin-Robbins, 825 F.3d at 34; see also Boit v. Gar-Tec Prod., Inc., 967 F.2d 671, 675 (1st Cir. 1992) (prima facie "showing of personal jurisdiction must be based on evidence of specific facts set forth in the record"); Chlebda v. H.E. Fortna & Bro. Inc., 609 F.2d 1022, 1024 (1st Cir. 1979) ("plaintiff must go beyond the pleadings and make affirmative proof"). "For the purpose of examining the merits of such a jurisdictional proffer," the court considers "the facts from the pleadings and whatever supplemental filings (such as affidavits) are contained in the record, giving credence to the plaintiff's version of genuinely contested facts." Baskin-Robbins, 825 F.3d at 34. And the court may also consider "undisputed facts put forth by the defendant." Id.

BACKGROUND

Hernandez-Denizac purchased a 2012 Kia Forte (the "vehicle") in Puerto Rico from Automarca Dealership ("Automarca"), and he was injured in July 2014 when the vehicle's air bags allegedly failed to deploy upon collision. Am. Compl. ¶¶ 8-12. After Hernandez-Denizac's vehicle was manufactured, Kia transferred the vehicle to Motorambar, Inc. ("Motorambar"), and Motorambar imported the vehicle to Puerto Rico for sale in the Puerto Rico market. Docket No. 58-3 at 17. TRW, a Delaware limited liability company headquartered in Michigan, does not conduct business in Puerto Rico or maintain a registered agent for service of process in Puerto Rico, nor has TRW previously done so. Docket No. 58-1 ¶¶ 6(a), 6(c). TRW is not authorized to do business in Puerto Rico, and TRW does not pay any taxes in Puerto Rico; does not file a tax return in Puerto Rico; and does not own, control, lease, possess, or maintain any real or personal property in Puerto Rico. Id. ¶¶ 6(b)-(e). And none of TRW's employees, management personnel, officers, or directors reside, or are located, in Puerto Rico. Id. ¶ 6(f).

TRW designed and calibrated the vehicle's airbag control unit ("ACU"). Docket Nos. 58-1 ¶ 4, 58-3 at 5-6. And TRW also designed and manufactured the vehicle's crash sensors. Docket No. 58-2 ¶¶ 11-12. The ACU and crash sensors were part of a multi-component air bag system installed on Hernandez-Denizac's vehicle. Docket No. 58-2 ¶¶ 4, 5, 11, 12. TRW designed and calibrated the vehicle's ACU in Michigan, with "possible support from Poland or India." Docket No. 58-2 ¶ 7. TRW then licensed the design and calibration of the ACU to the predecessor of MOBIS, a Korean company. Id. ¶ 7. Under this license agreement, MOBIS could manufacture the ACUs only in Korea, and could only sell the ACUs to Kia, Hyundai, or assemblers supplying Kia or Hyundai. Id. ¶¶ 7-9. The license agreement also required TRW to provide various support services to MOBIS, and TRW satisfied this requirement from Michigan, Illinois, or Korea. Id. ¶ 9. None of the ACUs were designed specifically for (or marketed to) the Puerto Rico market, and TRW's license agreement with MOBIS does not specifically identify Puerto Rico. Id. ¶¶ 10, 15.

TRW designed the vehicle's crash sensors in Michigan, and manufactured these crash sensors in Illinois. Id. ¶ 11. TRW sold these crash sensors to MOBIS, and TRW shipped these crash sensors to Korea. Id. ¶ 12. MOBIS then sold these crash sensors to Kia for installation in the vehicle, as well as other 2012 Kia Forte vehicles. Id. ¶ 12. TRW did not design or manufacture any aspect of the crash sensors specifically for the Puerto Rico market, nor did TRW specifically target the Puerto Rico market. Id. ¶¶ 13, 14. And TRW did not help with the sale of the crash sensors to Kia, or with the sale of the vehicle to Hernandez-Denizac. Id. ¶ 13. TRW has not established any customer support services in Puerto Rico for any issues that may arise with the ACUs or the crash sensors. Id. ¶ 16.

DISCUSSION

TRW contends that exercising personal jurisdiction under the circumstances here violates due process because the court cannot assert either general or specific jurisdiction over this particular defendant. Hernandez-Denizac does not suggest that this court has general jurisdiction over TRW, but asserts that this court may exercise specific jurisdiction.

The "Fourteenth Amendment limits the personal jurisdiction of state courts." Bristol-Myers Squibb Co. v. Superior Ct. of Cal., — S. Ct. —, No. 16-466, 2017 WL 2621322, at *6 (U.S. June 19, 2017). "The primary focus of" the Supreme Court's "personal jurisdiction inquiry is the defendant's relationship to the forum State." Id. There are "two types of personal jurisdiction: 'general' (sometimes called 'all-purpose') jurisdiction and 'specific' (sometimes called 'case-linked') jurisdiction." Id. (quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). Hernandez-Denizac does not suggest that this court has general jurisdiction over TRW, and so this court need only address whether TRW is subject to specific jurisdiction. See Baskin-Robbins, 825 F.3d at 35 (plaintiff "asserted only a claim of specific jurisdiction as the basis for the district court's jurisdiction," and First Circuit limited its "appraisal accordingly").

This case arises under the court's diversity jurisdiction, and thus this court "is the functional equivalent of a state court sitting in" Puerto Rico. See Ticketmaster-N.Y., 26 F.3d at 204. A "federal court may assert specific jurisdiction over a defendant only if doing so comports with both the forum's long-arm statute and the Due Process Clause of the United States Constitution." Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011). Because "Puerto Rico's long-arm statute is coextensive with the reach of the Due Process Clause," this court need only address whether exercising specific jurisdiction over TRW comports with the due process requirements of the Federal Constitution. See Carreras, 660 F.3d at 552; see also Negron-Torres v. Verizon Commc'ns, Inc., 478 F.3d 19, 24 (1st Cir. 2007). "This due process test is flexible and fact-specific, 'written more in shades of grey than in black and white.'" Baskin-Robbins, 825 F.3d at 35 (quoting Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d 284, 288 (1st Cir. 1999)).

To exercise specific jurisdiction over a non-resident defendant, "the nonresident generally must have certain minimum contacts . . . such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014) (internal quotations omitted). "The inquiry whether a forum State may assert specific jurisdiction over a nonresident defendant focuses on the relationship among the defendant, the forum, and the litigation." Id. (internal quotations omitted). This inquiry "lends itself to a tripartite analysis." Phillips Exeter, 196 F.3d at 288. The court assesses "(1) whether the claim 'directly arise[s] out of, or relate[s] to, the defendant's forum state activities;' (2) whether the defendant's in-state contacts 'represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable;' and (3) whether the exercise of jurisdiction is reasonable." C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014) (quoting Daynard, 290 F.3d at 60-61). "All three of these elements must be present for specific jurisdiction to attach." Baskin-Robbins, 825 F.3d at 35.

Even if this court assumes that Hernandez-Denizac can satisfy the first element of the tripartite analysis, Rodriguez v. Fullerton Tires Corp., 115 F.3d 81 (1st Cir. 1997), aptly illustrates why Hernandez-Denizac cannot establish that TRW purposefully availed itself of the Puerto Rico market. See Tice v. Taiwan Shin Yeh Enter. Co., 608 F. Supp. 2d 119, 124 (D. Me. 2009) (c...