KG v. Texport, Inc.

• Decision Date: 20 June 2013
• Docket Number: Civil Action No. 7:12–cv–00083–MGL.
• Court: U.S. District Court — District of South Carolina
• Parties: HAMBURG SUDAMERIKANISCHE DAMPFSCHIFFAHRTS–GESELLSCHAFT KG, Plaintiff, v. TEXPORT, INC., Defendant. Texport, Inc., Defendant/Third–Party Plaintiff, v. Industrial Wiper & Supply, Inc. and Textile Buff & Wheel Company a/k/a Textile Waste Supply Company, LLC, Third–Party Defendants. Industrial Wiper & Supply, Inc., Third–Party Defendant/Fourth–Party Plaintiff, v. Fab–Tech, Inc. and Peerless Materials Company, Fourth–Party Defendants.

954 F.Supp.2d 415

HAMBURG SUDAMERIKANISCHE DAMPFSCHIFFAHRTS–GESELLSCHAFT KG, Plaintiff,

v.TEXPORT, INC., Defendant.

Texport, Inc., Defendant/Third–Party Plaintiff,

v.Industrial Wiper & Supply, Inc. and Textile Buff & Wheel Company a/k/a Textile Waste Supply Company, LLC, Third–Party Defendants.

Industrial Wiper & Supply, Inc., Third–Party Defendant/Fourth–Party Plaintiff,

v.Fab–Tech, Inc. and Peerless Materials Company, Fourth–Party Defendants.

Civil Action No. 7:12–cv–00083–MGL.

United States District Court,

D. South Carolina,

Spartanburg Division.

June 20, 2013.

Adriane Malanos Belton, Womble Carlyle Sandridge and Rice, Charleston, SC, Charles P. Neely, Frank P. Degiulio, Palmer Biezup and Henderson, Philadelphia, PA, for Hamburg Sudamerikanische Dampfschiffahrts–Geselleschaft KG.

Douglas Franklin Patrick, Covington Patrick Hagins Stern and Lewis, Greenville, SC, for Texport Inc.

S. Scott Bluestein, Bluestein Law Firm, Justin Simon Kahn, Kahn Law Firm, Charleston, SC, for Industrial Wiper & Supply Inc.

Edward D. Buckley, Jr., Young Clement Rivers, Joshua Paul Cantwell, Hood Law Firm, Charleston, SC, for Fab–Tech Inc.

Jackson Hall Daniel, III, R. Michael Ethridge, Carlock Copeland Semler and Stair, Charleston, SC, for Textile Buff & Wheel Company.

Jesse A. Boyd, Jason J. Curliano, Buty and Curliano, Oakland, CA, Michael A. Timbes, Thurmond Kirchner Timbes and Yelverton, Charleston, SC, for Peerless Wiping Materials Co.

OPINION AND ORDER

MARY G. LEWIS, District Judge.

This civil action involves the shipment of goods identified as “textile rags and remnants” from the United States to Brazil in 2011 by Defendant Texport, Inc. (“Texport”) and/or its agents, servants, subcontractors and/or employees. (ECF No. 1.) Pending before this court are Third–Party Defendant Textile Buff & Wheel Company a/k/a Textile Waste Supply Company, LLC's (“Textile Waste”) Motion to Dismiss (ECF No. 82) pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure and Fourth–Party Defendant Peerless Materials Company's (“Peerless”) Amended Motion to Dismiss Pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure. (ECF No. 102.) For the reasons set forth below, the court GRANTS both Motions to Dismiss (ECF No. 82 & ECF No. 102), finding personal jurisdiction lacking as to both Textile Waste and Peerless and dismisses all claims asserted against these defendants accordingly.

FACTUAL AND PROCEDURAL BACKGROUND

This admiralty case involves the September/October 2011 shipment of two containers of goods identified as textile rags and remnants on behalf of South Carolina Corporation Texport. Plaintiff Hamburg Sudamerikanische Dampfschiffahrts–Gesellschaft KG (“Plaintiff”) entered a contract with Texport whereby Plaintiff agreed to carry certain goods from South Carolina to Brazil on behalf of Texport. Brazilian authorities refused the shipment upon delivery because it was determined that the contents of the goods consisted of used contaminated sheets. The Brazilian government imposed a $1.2 million fine on Plaintiff. Consequently, on January 9, 2012, Plaintiff sued Texport for damages related to the fine, detention of the cargo, and the inability to use the containers in which the allegedly defective goods were transported. (ECF No. 1.) Additional claims have been filed against other parties involved in the shipment, sale and transfer of the goods prior to the transport to Brazil.

On March 5, 2012, Texport filed an answer and Third–Party Complaint alleging that Texport contracted with Industrial Wiper & Supply, Inc. (“Industrial Wiper”) to provide the allegedly defective textile goods in secure bales suitable for exporting and delivery to Brazil. (ECF No. 11.) Texport further alleged that Industrial Wiper obtained some of the textile goods from Textile Waste who packaged the goods into bales for international shipping. (ECF No. 11.) On April 19, 2012, Industrial Wiper filed an Answer, Cross–Claim against Third–Party Defendant Textile Waste, and Fourth–Party Complaint against Fab–Tech, Inc. (“Fab–Tech”) and Peerless wherein Industrial Wiper sought to recover damages from Textile Waste, Fab–Tech, and Peerless relating to the allegedly defective goods. (ECF No. 19.) Thereafter, on June 25, 2012, Fourth–Party Defendant Fab–Tech filed a cross-claim against Textile Waste and Peerless wherein Fab–Tech sought to recover damages from Textile Waste and Peerless relating to the allegedly defective goods. (ECF No. 48.)

On March 26, 2012, Textile Waste filed a Motion to Dismiss for lack of personal jurisdiction. (ECF No. 12.) Plaintiff, Industrial Wiper, and Textile Waste reached an agreement and filed a joint proposed scheduling plan which provided for an extended period in which to consolidate jurisdictional motions, have limited discovery, and then file the appropriate replies. (ECF No. 24.) The court granted the consent motion on May 4, 2012 (ECF No. 27) and the court subsequently granted another consent motion which allowed for the filing of an amended motion to dismiss following the conclusion of jurisdictional discovery on September 14, 2012. (ECF Nos. 37 & 38.) Peerless filed a Motion to Dismiss for lack of personal jurisdiction on July 9, 2012. (ECF No. 53.) Plaintiff and Industrial Wiper sought to engage in discovery on personal jurisdiction and Peerless's contacts with the state of South Carolina. (ECF No. 58, 59 & 65.) This court ordered Peerless to respond to discovery requests as to personal jurisdiction as set forth in its September 25, 2012 order and allowed for the filing of an amended motion to dismiss after the conclusion of jurisdictional discovery. (ECF No. 81.) Textile Waste filed its amended Motion to Dismiss on October 15, 2012 (ECF No. 82) and Peerless filed its amended Motion to Dismiss on January 11, 2013. (ECF No. 102) This court heard arguments on these pending motions on May 21, 2013. (ECF No. 120.) ¹

STANDARD OF REVIEW

Upon a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff has the burden of showing that jurisdiction exists. See In re Celotex Corp., 124 F.3d 619, 628 (4th Cir.1997); Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.2003). Generally, when a district court decides a pre-trial motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction and the court is to construe the pleadings, affidavits and other supporting documents presented to the court in the light most favorable to plaintiff by assuming credibility and drawing all inferences and resolving all factual disputes in the plaintiff's favor. See Masselli & Lane, PC v. Miller & Schuh, PA, No. 99–2440, 2000 WL 691100, at *1 (4th Cir. May 30, 2000) (unpublished opinion); Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir.1993); Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989). In doing so, however, the court need not “ ‘credit conclusory allegations or draw farfetched inferences.’ ” Masselli, 2000 WL 691100, at *1 (quoting Ticketmaster–New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir.1994)). Where the parties have engaged in jurisdictional discovery, however, the plaintiff must establish personal jurisdiction by a preponderance of the evidence.²Brown v. Geha–Werke GmbH, 69 F.Supp.2d 770, 774 (D.S.C.1999) (“Although this court decided the issue of personal jurisdiction without an evidentiary hearing, it did not do so on the pleadings and affidavits alone. Instead, the parties have engaged in jurisdictional discovery and offered evidence beyond the pleadings and affidavits. Consequently, the jurisdictional information before the court is more like that presented at an evidentiary hearing and less like the jurisdictional allegations of a complaint.”); see also Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.1989).

I. Minimum Contacts

In determining whether personal jurisdiction exists over a non-resident defendant, the court must perform a two-step analysis. The court must first determine whether the South Carolina (forum state) long-arm statute provides a basis for asserting jurisdiction over the defendant. See Young v. FDIC, 103 F.3d 1180, 1191 (4th Cir.1997). Then, the court must determine that the exercise of personal jurisdiction does not violate the Due Process Clause of the Fourteenth Amendment of the United States Constitution. Anita's New Mexico Style Mexican Food, Inc. v. Anita's Mexican Foods Corp., 201 F.3d 314, 317 (4th Cir.2000). South Carolina's long-arm statute has been construed to extend to the outer limits allowed by the Due Process Clause. Foster v. Arletty 3 Sarl, 278 F.3d 409, 414 (4th Cir.2002). Thus, the dual jurisdictional requirements collapse into a single inquiry as to whether the defendant has “certain minimum contacts” with the forum, such that “maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ ” Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal citations omitted).

The analytical framework for determining whether minimum contacts exist differs according to which species of personal jurisdiction—general or specific—is alleged. See generally ESAB Group v. Centricut, 126 F.3d 617, 623–24 (4th Cir.1997). When a cause of action arises out of a defendant's contacts with the forum, a court may seek to exercise specific jurisdiction over that defendant if it purposefully directs activities toward the forum state and the litigation results from alleged injuries that arise out of or relate to those activities. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). When the cause of action does not arise out of the defendant's contacts with the forum, however, general jurisdiction may be exercised upon a showing that the defendant's contacts are of a “continuous and systematic” nature. Id. at 415–416, ...