Hill by Hill v. Showa Denko, K.K.

Citation188 W.Va. 654,425 S.E.2d 609
Decision Date17 December 1992
Docket NumberNo. 20904,20904
CourtSupreme Court of West Virginia
Parties, Prod.Liab.Rep. (CCH) P 13,428 Sylvia HILL, By Her Committee, Donald HILL; and Donald Hill, Committee for Sylvia HILL, Plaintiff Below, Appellants, v. SHOWA DENKO, K.K., a Japanese Corporation; Showa Denko America, Inc., a New York Corporation; P. Leiner Nutritional Products, Inc., of Delaware, a Delaware Corporation; P. Leiner Nutritional Products Corp., a California Corporation; Rite Aid Corporation, a Delaware Corporation; Rite Aid of West Virginia, Inc., a West Virginia Corporation, Defendants Below, Showa Denko, K.K., a Japanese Corporation, Appellee.

Syllabus by the Court

1. "The standard of jurisdictional due process is that a foreign corporation must have such minimum contacts with the state of the forum that the maintenance of an action in the forum does not offend traditional notions of fair play and substantial justice." Syllabus Point 1, Hodge v. Sands Manufacturing Company, 151 W.Va. 133, 150 S.E.2d 793 (1966).

2. Personal jurisdiction "premised on the placement of a product into the stream of commerce is consistent with the Due Process Clause" and can be exercised without the need to show additional conduct by the defendant aimed at the forum state. Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 117, 107 S.Ct. 1026, 1034, 94 L.Ed.2d 92 (1987).

Marvin W. Masters and Barbara H. Lupton, Masters & Taylor, Charleston, for appellants.

P. Michael Pleska, Fazal A. Shere, Bowles, Rice, McDavid, Graff & Love, Charleston, Richard W. Hulbert, Cleary, Gottlieb, Steen & Hamilton, New York City, and Richard deC. Hinds, Sara D. Schotland, and Matthew D. Slater, Cleary, Gottlieb, Steen & Hamilton, Washington, DC, for appellee, Showa Denko K.K.

BROTHERTON, Justice:

This case involves the appeal of Sylvia and Donald Hill from the June 18, 1991, order of the Circuit Court of Kanawha County in which Showa Denko K.K. (SDK) was dismissed from a lawsuit filed by the Hills against SDK and several other parties. In that order, Judge Hey found that West Virginia could not exercise personal jurisdiction over SDK.

On December 22, 1988, Sylvia Hill became ill while taking a drug L-tryptophan for a sleep disorder, on the advice of her physician. It was eventually discovered that she had developed a rare blood disorder, Eosinophilia-Myalgia Syndrome (EMS). Mrs. Hill is currently in a nursing home and unable to walk, sit up, or care for herself. On August 22, 1990, the appellants filed suit against the appellees in Kanawha County Circuit Court.

Through discovery, it was elicited that L-tryptophan is an essential amino acid which was until recently sold over the counter, and commonly used to help with insomnia, premenstrual syndrome, weight control, pain relief, and depression. In November, 1989, the FDA issued a recall of products containing L-tryptophan after hearing reports of at least 1500 EMS cases, including twenty-seven deaths, in which the only factor common to those cases was that those who contracted the disease had taken products containing L-tryptophan. It was subsequently discovered that it was not the L-tryptophan itself which caused the disease, but rather a contaminated L-tryptophan product. According to a New England Journal of Medicine article, the contaminated L-tryptophan was traced to SDK. The article determined that the contamination occurred when SDK converted to a less expensive method of manufacturing L-tryptophan, and apparently omitted some of the purification process.

Also named in the suit was Rite-Aid Pharmacies, from whom Mrs. Hill obtained her prescription of L-tryptophan. Rite-Aid received their supply of L-tryptophan from P. Leiner Nutritional Products, an American processor and distributor of drug and health food products. In 1988, Leiner obtained its supply of raw L-tryptophan from four suppliers. One of them was Showa Denko America, Inc. (SDA), a wholly owned subsidiary of SDK and SDK's sole American distributor for the raw materials it manufactures. In 1989 Leiner obtained all of its bulk raw L-tryptophan from SDA.

SDK owns 100% of SDA stock. One of SDA's three corporate directors is an employee of SDK. SDA's principal business is the purchase, importation, and resale of SDK's products for sale in the United States, and maintains warehouses in California and New Jersey. In 1989, SDA purchased over $10.1 million of products from SDK for resale in the United States. SDK is a Japanese corporation with its headquarters in Tokyo. The corporation's stock is traded only on the Japanese stock exchanges and not in the United States. All of their manufacturing and research facilities are in Japan, and they have no offices or places of business in the State of West Virginia or in the United States. SDK states that it owns no real property in the United States and does not file tax returns with the United States Internal Revenue Service or the West Virginia Tax Department. SDK's business falls into three general categories: (1) petrochemicals, (2) ceramics and materials, and (c) chemicals and carbon. The sales of L-tryptophan fall into the third category.

In its discovery responses, the appellants point out that SDA admitted that when it learned of the possible link between their product and the disease EMS, it immediately notified SDK. After investigation, SDK ordered SDA to "cease immediately any further sales of L-tryptophan."

On October 9, 1990, SDK filed a motion to dismiss the claim against it on grounds of lack of personal jurisdiction and insufficiency of service of process. 1 On April 5, 1991, a hearing was held on the motion to dismiss. The parties submitted proposed findings of fact and conclusions of law on the issue of whether there was sufficient personal jurisdiction over SDK. On June 18, 1991, Judge John Hey found that there was not sufficient personal jurisdiction over SDK and thus, SDK was dismissed from the suit. The appellants filed this petition for appeal from that final ruling and urge this Court to adopt the stream of commerce theory of establishing personal jurisdiction.

Our analysis of personal jurisdiction must begin with a review of the United States Supreme Court's decision in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). In International Shoe, the Supreme Court first set forth the elements necessary to subject a nonresident defendant to the jurisdiction of the forum state:

[I]n order to subject a defendant to a judgment if he be not present within the territory of the forum, he [must] have certain minimum contacts with it such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."

Id. at 316, 66 S.Ct. at 158. The Court noted that "the quality and nature of the activity in relation to the fair and orderly administration of the laws" is the critical element rather than the volume of the activity. Id. at 319, 66 S.Ct. at 159. Defining "minimum contacts" has been an ongoing process for the Court, made especially complex in recent years by the increase in international trade.

In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Supreme Court further defined the concept of minimum contacts and ruled that jurisdiction cannot be asserted over a defendant with which a state has no contacts, no ties, and no relations. Id. at 294, 100 S.Ct. at 565. In order to satisfy due process, the Court held that "the defendant's conduct in connection with the forum State [must be] such that he should reasonably anticipate being haled into court there." Id. at 297, 100 S.Ct. at 567. In setting the limits necessary to establish reasonable contacts, the Supreme Court commented that:

The relationship between the defendant and the forum must be such that it is "reasonable ... to require the corporation to defend the particular suit which is brought there." (Citations omitted.) Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum state's interest in adjudicating the dispute, see McGee v. Inter. Life. Ins. Co., 355 U.S. 220, 223, 2 L.Ed.2d 223, 78 S.Ct. 199 (1957), the plaintiff's interest in obtaining convenient and effective relief, see Kulko v. California Superior Court, supra, [436 U.S. 84, 98 S.Ct. 1690, 56 L.Ed.2d 132 (1978) ], at least when that interest is not adequately protected by the plaintiff's power to choose the forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211 n. 37, 53 L.Ed.2d 683, 97 S.Ct. 2569 [2583 n. 37] (1977), the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies, see Kulko v. California Superior Court, [436 U.S. at 93, 98, 98 S.Ct. 1690, 1700, 56 L.Ed.2d 132, 142, 145 (1978) ].

Id. at 292, 100 S.Ct. at 564. 2

The appellant urges this Court to adopt the stream of commerce theory for establishing minimum contacts as defined in Keckler v. Brookwood Country Club, 248 F.Supp. 645 (N.D.Ill.1965):

When a manufacturer voluntarily chooses to sell his product in a way in which it will be resold from dealer to dealer, transferred from hand to hand and transported from state to state, he cannot reasonably claim that he is surprised at being held to answer in any state for the damage the product causes.

Id. at 649. The appellants contend that a number of states have adopted this theory and urge this Court to adopt it as well. 3

The United States Supreme Court addressed the stream of commerce theory of personal jurisdiction in Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). Asahi...

To continue reading

Request your trial
16 cases
  • State ex rel. Bell Atlantic-West Virginia, Inc. v. Ranson
    • United States
    • West Virginia Supreme Court
    • 17 July 1997
    ...Point 1,Hodge v. Sands Manufacturing Company, 151 W.Va. 133, 150 S.E.2d 793 (1966).' Syllabus Point 1, Hill by Hill v. Showa Denko, K.K., 188 W.Va. 654, 425 S.E.2d 609 (1992), cert. denied, U.S. , 113 S.Ct. 2338, 124 L.Ed.2d 249 (1993)." Syl. pt. 1, Norfolk Southern Ry. Co. v. Maynard, 190 ......
  • J. McIntyre Mach., Ltd. v. Nicastro
    • United States
    • U.S. Supreme Court
    • 27 June 2011
    ...to show that Defendant intended to market it in any state, group of states, or all states? We conclude that only the latter is necessary."). Hill by Hill v. Showa Denko, K. K., 188 W.Va. 654, 661, 425 S.E.2d 609, 616 (1992) (products liability suit against the Japanese manufacturer of a sle......
  • State ex rel. Ford Motro Co. v. McGraw
    • United States
    • West Virginia Supreme Court
    • 18 May 2016
    ...play and substantial justice.” Syllabus Point 1, Hodge v. Sands Manufacturing Co., 151 W.Va. 133, 150 S.E.2d 793 (1966).’ Syllabus Point 1, Hill by Hill v. Showa Denko, K.K., 188 W.Va. 654, 425 S.E.2d 609 (1992), cert. denied, , 113 S.Ct. 2338, 124 L.Ed.2d 249 (1993).” Syl. pt. 1, Norfolk S......
  • Easterling v. American Optical Corp.
    • United States
    • West Virginia Supreme Court
    • 24 March 2000
    ...notions of fair play and substantial justice." Syl. pt. 1, Hodge v. Sands Mfg. Co., 151 W.Va. 133, 150 S.E.2d 793 (1966). Accord Syl. pt. 1, Hill by Hill v. Showa Denko, K.K., 188 W.Va. 654, 425 S.E.2d 609 (1992); Hinerman v. Levin, 172 W.Va. 777, 781, 310 S.E.2d 843, 847 (1983); Syllabus, ......
  • Request a trial to view additional results
1 firm's commentaries
1 books & journal articles

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT