In re Perrier Bottled Water Litigation

• Decision Date: 09 November 1990
• Docket Number: MDL No. 844 (TFGD).
• Citation: 754 F. Supp. 264
• Parties: In re PERRIER BOTTLED WATER LITIGATION.
• Court: U.S. District Court — District of Connecticut

754 F. Supp. 264

In re PERRIER BOTTLED WATER LITIGATION.

MDL No. 844 (TFGD).

United States District Court, D. Connecticut.

November 9, 1990.

Michael J. Pucillo, Greenfield & Chimicles, West Palm Beach, Fla., C. Oliver Burt, III, Greenfield & Chimicles, Haverford, Pa., William E. Hoese, Dianne M. Nast, Kohn, Savett, Klein & Graf, P.C., Philadelphia, Pa., David Berger, Harold Berger, Berger & Montague, P.C., Philip P. Kalodner, Gerald J. Rodos, Barrack, Rodos & Bacine, Philadelphia, Pa., William E. Haggerty, Morgan, Hallgren, Crosswell & Kane, P.C., Lancaster, Pa., Phyllis C. Kaufman, Bernard M. Gross, Warren Rubin, Gross & Metzger, P.C., Philadelphia, Pa., Harvey Greenfield, Law Firm of Harvey Greenfield, New York City, Richard A. Fuchs, Koskoff, Koskoff & Bieder, P.C., Bridgeport, Conn., Gerald D.W. North, North & Barron, Phoenix, Ariz., Howard Z. Rosen, Posner & Rosen, Margot A. Metzner, Hufstedler, Kaus & Beardsley, Albert Cary Plotkins, Graiwer & Goldbert, Inc., Los Angeles, Cal., David B. Zabel, Cohen and Wolf, P.C., Bridgeport, Conn., Wayne A. Graves, George J. Levin, Jr. Assoc., Philadelphia, Pa., for plaintiffs.

Douglas E. Lee, Pine City, N.Y., pro se.

James J. Hagan, Jay S. Handlin, Robert A. Bourque, John J. Kenney, Simpson Thacher & Bartlett, New York City, for defendants.

RULING ON DEFENDANT'S MOTION TO DISMISS

DALY, District Judge.

These lawsuits were precipitated by the February 14, 1990 public announcement that quantities of benzene, a petro-chemical and possible carcinogen, had been identified in a widely consumed, sparkling mineral water. See Malone Decl. at Exh. A. Plaintiffs filed suits in various districts around the country, asserting claims relating to defendants' marketing representations that Perrier water was "naturally pure." Defendants in actions filed in this District, and in the Eastern District of Pennsylvania, are Source Perrier S.A. ("Source Perrier"), a French corporation, Perrier Group, and Perrier Group of America, Inc. Defendants in an action filed in the Central District of California include entities referred to as "Perrier, Inc., a French corporation", and "Perrier, Inc."

In the interests of the just and efficient conduct of this litigation, and to best serve the convenience of the parties and the witnesses, the Judicial Panel on Multidistrict Litigation ordered that many of the cases filed in the United States were to be transferred to and consolidated for pretrial purposes in this District.¹See Order of Panel (6/13/90). Defendant Source Perrier has filed a motion to dismiss plaintiffs' claims, asserting that none of the jurisdictions in which complaints were filed may exercise personal jurisdiction over it, and that the Court should dismiss claims against several of the defendants named in the complaint filed in the Central District of California, as these entities simply do not exist. For the reasons described below, this motion is denied.

FACTS

The relevant facts, as alleged by the plaintiffs, are as follows:

(1) Source Perrier, in conjunction with the other defendants, markets mineral water produced from a spring in Vergeze, France. Malone Decl. at Exh. D.

(2) Perrier Group of America, Inc. is a majority-owned subsidiary of Source Perrier. Malone Decl. at ¶ 2.

(3) Defendant Great Waters of France, Inc. shares a common address with Perrier Group of America, Inc., and has virtually identical officers and directors.² Malone Decl. at Exhs. B & C.

(4) Defendants sold over $119,000,000 worth of bottled water in the United States in 1989. See Complaint at ¶ 21.³ Perrier water is available in all fifty states. Malone Decl. at Exh. D.

(5) Source Perrier designed containers of Perrier water specifically for U.S. markets, bearing liquid ounce markings, rather than metric measures. Malone Decl. at Exh. H.

(6) The containers' design is the subject of U.S. registered trademarks. Malone Decl. at Exh. H.

(7) Source Perrier, in part, created the distribution chain for U.S. sales. Malone Decl. at Exh. D.

(8) In February, 1990, defendants recalled all Perrier water in the United States because of benzene contamination. Source Perrier played a role in controlling both this recall, and the subsequent remarketing effort. Malone Decl. at Exh. G.

(9) Source Perrier had a role in providing information in response to customer inquiries relating to the recall. Malone Decl. at Exh. G.

DISCUSSION

1 Personal Jurisdiction

Source Perrier claims that exercising personal jurisdiction in any of the districts in which plaintiffs have filed these cases would contravene the Due Process Clause of the United States Constitution.⁴ A two-step analysis is used when determining whether the exercise of personal jurisdiction would offend Due Process: (1) does the defendant have minimum contacts with the forum;⁵ and, if so, (2) does the assertion of jurisdiction comport with traditional notions of fair play and substantial justice. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) ("Volkswagen"). Although this test is easily stated, application of at least the first prong—minimum contacts—has proven quite complex. Kulko v. Superior Court, 436 U.S. 84, 92, 98 S.Ct. 1690, 1697, 56 L.Ed.2d 132 (1978) ("this determination is one in which few answers will be written in black and white. The greys are dominant and even among them the shades are innumerable.").

Some general guideposts and principles, however, can be gleaned from a brief review of certain cases more recently decided by the Supreme Court. In Volkswagen, two New York residents filed a product liability suit in Oklahoma against several defendants, including a New York retailer who sold their auto (which was the subject of the litigation), the distributor for the New York region, the national importer, and the international manufacturer. Plaintiff's car had caught fire on an Oklahoma freeway on which they were traveling en route to a new residence in Arizona. The Supreme Court held that the Oklahoma Court's assertion of jurisdiction over the retailer and distributor violated Due Process.

In so holding, the Court deemed the fact that the retailer and distributor might be able to foresee the entry of the car into Oklahoma insufficient to establish the requisite minimum contacts with the forum. Id., 444 U.S. at 295-99, 100 S.Ct. at 566-68 (foreseeability alone, without "affiliating circumstances" by which a defendant avails himself of the privileges and benefits of the forum state's laws cannot support jurisdiction). The Court noted that the car's presence in Oklahoma was a result of plaintiff's unilateral activity, not the defendants' efforts. Id. at 298, 100 S.Ct. at 567.

The propriety of asserting jurisdiction over the national importer, or the international manufacturer was not presented for review in Volkswagen. The Court indicated, however, that exercising jurisdiction over these defendants was consistent with Due Process. Id. at 297-98, 100 S.Ct. at 567-68. The Court suggested that if a defendant purposefully caters to a national market, distributing its product across the country through its own efforts or through the efforts of middlemen, jurisdiction may be asserted over that defendant in virtually any state in which it is claimed the product malfunctioned. Id. at 297, 100 S.Ct. at 567. Thus, in order to support the exercise of jurisdiction in such a case, the Court must find some purposeful conduct either by direct acts of the defendant in the forum state or by conduct outside the state that, because of its character, the defendant should have foreseen could result in a suit in the forum.

The Court revisited this topic in Asahi Metal Indus. Co. v. Superior Court of California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). Asahi Metal Indus. Co. ("Asahi") manufactured tire valve assemblies in Japan, and sold them to several tire manufacturers, including Cheng-Shin Rubber Indus. Co. ("Cheng-Shin") in Taiwan. Cheng-Shin incorporated Asahi's product into finished tires, which it sold worldwide. Cheng-Shin bought such tire valve assemblies from numerous suppliers. Approximately twenty percent of Cheng-Shin's U.S. sales took place in California.

In 1979, a products liability suit arising from a motorcycle accident claimed to have resulted from a defect in a Cheng-Shin tire was brought in California. Cheng-Shin, named as a defendant, filed a cross-claim seeking indemnification from Asahi.

A plurality of the Supreme Court concluded that the state court's exercise of personal jurisdiction over Asahi contravened Due Process. The Court addressed both prongs of the Due Process analysis, finding insufficient minimum contacts, 480 U.S. at 113, 107 S.Ct. at 1032, and finding that requiring Asahi to defend in California would be unfair. Id. at 116, 107 S.Ct. at 1034. As to the first prong, the Court wrote "the substantial connection between the defendant and the forum State necessary for a finding of minimum contacts must come about by an action of the defendant purposefully directed toward the forum state." Id. at 112, 107 S.Ct. at 1032. The Court wrote that "the placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State." Id. The Court noted that further conduct which indicates an intent or purpose to serve the market in the forum state is needed for the exercise of jurisdiction. Id. Such conduct might include designating the product for the market in the forum state, advertising in the forum state, establishing channels for providing regular advice to customers in the forum state, or marketing the product through a distributor who has agreed to serve as the sales agent in the forum state. Id. In the Asahi case, however, the Court found specifically that "there is no evidence that Asahi designed its product in anticipation of sales in California." Id. at 113, 107 S.Ct. at 1032.

With this background in...