Metropolitan Life Ins. Co. v. Robertson-Ceco Corp.

• Decision Date: 22 May 1996
• Docket Number: D,ROBERTSON-CECO,No. 663,663
• Citation: 84 F.3d 560
• Parties: METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff-Appellant, v.CORP., Defendant-Appellee, UNITED DOMINION INDUSTRIES, INC., Defendant. ocket 95-7370.
• Court: U.S. Court of Appeals — Second Circuit

Page 560

84 F.3d 560

64 USLW 2769

METROPOLITAN LIFE INSURANCE COMPANY, Plaintiff-Appellant, v. ROBERTSON-CECO CORP., Defendant-Appellee UNITED DOMINION INDUSTRIES, INC., Defendant.

No. 663, Docket 95-7370.

United States Court of Appeals, Second Circuit.

Argued Dec. 20, 1995.

Decided May 22, 1996.

Patrick E. Gaas, Houston, Texas (J. Mark Brewer, Brewer & Pritchard, P.C., Houston, Texas, David W.M. Conard, Samuel H. Press, Portnow, Little & Cicchetti, P.C., Burlington, Vermont, on the brief), for plaintiff-appellant.

Michael B. Clapp, Burlington, Vermont (Gary T. Carr, Bryan Cave, St. Louis, Missouri, Philip C. Woodward, Shapleigh Smith, Jr., Dinse, Erdmann & Clapp, Burlington, Vermont, on the brief), for defendant-appellee.

Before WINTER, WALKER and CABRANES, Circuit Judges.

JOSE A. CABRANES, Circuit Judge:

We address here, among other things, the limits of a district court's "general" jurisdiction over an out-of-state defendant where federal subject matter jurisdiction is premised solely on diversity of citizenship. In this instance, the plaintiff-appellant Metropolitan Life Insurance Company ("Met Life") filed suit in Vermont against defendant-appellee Robertson-Ceco Corporation ("Robertson")--based on alleged acts and omissions unconnected to the State of Vermont--in an apparent attempt to benefit from Vermont's arguably more generous statute of limitations. Met Life appeals from an Amended Opinion and Order of the United States District Court for the District of Vermont (Franklin S. Billings, Jr., Judge ), filed August 5, 1994, granting Robertson's motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2).

I. BACKGROUND AND JURISDICTIONAL FACTS

On August 31, 1993, Met Life filed a complaint against Robertson and United Dominion Industries, Ltd. ("United Dominion") ¹ in the United States District Court for the District of Vermont alleging, inter alia, state breach of contract and negligence claims. Robertson is a Delaware corporation with its principal place of business in Pennsylvania and is the successor to the 1989 merger of the H.H. Robertson Company and the Ceco Corporation. Met Life is a New York corporation with its principal place of business in New York.

This litigation involves the design, manufacture, and installation of a "curtain wall system"--the glass and steel or aluminum exterior walls commonly found on modern office buildings--by Robertson's Cupples Products Division, an unincorporated division located in St. Louis, Missouri. ² According to Met Life, Robertson made various misrepresentations and supplied faulty curtain walls for the construction of the Flagship Banking Building in Miami, Florida, now owned by Met Life. ³ In its complaint, Met Life alleges that the stainless steel "face sheets" of the building's curtain wall system were "delaminating and deteriorating aesthetically and in structural integrity"--that is, buckling and falling off the building--causing damage to the building and surrounding property.

On February 15, 1994, Robertson moved to dismiss the suit for lack of personal jurisdiction, defects in service of process, and failure to state a claim upon which relief can be granted. Regarding the question of personal jurisdiction, Robertson argued that there was no allegation that Met Life's claims arose out of any business conducted by Robertson in Vermont, or that Robertson had a substantial and continuous presence in Vermont justifying the exercise of personal jurisdiction. Met Life responded by filing a notice of intent to depose a corporate representative of Robertson on forty-nine topics relating to Robertson's business activities in Vermont. The notice directed Robertson to produce all relevant documents without any date restrictions or limitations. On March 30, 1994, Robertson filed a motion for a protective order under Rule 26(c), ⁴ arguing that the scope of Met Life's proposed areas of inquiry was overly broad, burdensome, and not limited to the relevant time period. Robertson requested that discovery be limited to matters concerning Robertson's business contacts with Vermont in 1993, the year the suit was filed. On April 20, 1994, the district court found Met Life's discovery request overbroad and issued a protective order requiring Met Life to limit the scope of its deposition to the years 1987 through 1993.

The parties filed memoranda on the personal jurisdiction question. According to Robertson, the acts and omissions alleged in Met Life's complaint occurred in St. Louis, Missouri; Houston, Texas; Dallas, Texas; and the building site in Miami, Florida. It is undisputed that none of the activities that served as the basis for Robertson's complaint took place in Vermont. Although the record is incomplete, it appears that Met Life filed suit in Vermont based on its belief that Vermont has a more favorable statute of limitations period than other available jurisdictions. ⁵ Thus, Met Life argues that the district court in Vermont has personal jurisdiction over Robertson on a theory of "general jurisdiction"--that is, Robertson's general business contacts with Vermont were sufficiently "continuous and systematic" to justify subjecting it to suit within the jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16 & n. 9, 104 S.Ct. 1868, 1872-73 & n. 9, 80 L.Ed.2d 404 (1984) ("Helicopteros ").

Based on its extensive discovery of Robertson's sales and employment records, Met Life claimed in its memorandum to the district court that Robertson had significant general business contacts with Vermont between 1987 and 1993, including: (1) nearly $4 million dollars in sales of its wall panel systems and other products between 1987 and 1993 and $226,319 in sales in 1993 alone to shipment addresses in Vermont; ⁶ (2) Robertson's relationship with five Vermont dealers of its "Star Building Systems" line of products and its contracts with four Vermont building companies that were "authorized builders" for its "Ceco Building Systems" line of products; (3) the "support" offered by Robertson to Vermont dealers and builders in the form of engineering and product data manuals, "800" phone service, training video tapes, computer software, marketing materials, and the right to use company-owned trademarks; (4) national advertising in various catalogs and direct mail campaigns reaching Vermont, as well as direct marketing of Robertson products to at least three Vermont architectural firms; (5) the fact that Robertson is registered to do business in Vermont, has a Vermont sales identification number, and has filed Vermont income and sales tax returns; (6) visits to Vermont by at least eight of Robertson's sales employees and engineers on over 150 occasions between 1987 and 1993; and (7) the fact that a Robertson employee resided and maintained an office in Vermont between 1989 and 1990.

Robertson, on the other hand, argued that 1993--the year that Met Life filed its suit--was the only year relevant to the determination of personal jurisdiction. According to an affidavit submitted by Robertson's vice president and controller, John Sills, Vermont sales of Robertson's Star and Ceco product lines were less than .07% of Robertson's total sales in that year. Furthermore, it argued that the sale of Robertson products to Vermont businesses through independent contractors and dealers, occasional visits to Vermont by Robertson employees, and the fact that Robertson's national advertising campaigns may have reached Vermont, were not sufficient to establish general personal jurisdiction.

On July 29, 1994, the district court adopted Robertson's argument and granted its motion to dismiss based on the absence of personal jurisdiction. Met Life moved for reconsideration because the district court had erroneously stated that Met Life had not filed a memorandum in opposition to Robertson's motion. The district court subsequently issued an Amended Opinion and Order on August 5, 1994. It held that 1993 was the relevant year for analyzing Robertson's contacts with Vermont. Noting what it deemed to be Robertson's limited Vermont sales and the fact that Robertson "maintained no office or agents in Vermont, owned no property in Vermont, and exercised no control over its independent dealers," the district court held that "[s]uch de minimis business contacts do not rise to the continuous and systematic level sufficient to justify assertion of general personal jurisdiction in this suit." Furthermore, applying the two-tiered test for personal jurisdiction set forth in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 113-16, 107 S.Ct. 1026, 1032-34, 94 L.Ed.2d 92 (1987), it held that even if Met Life had shown that Robertson had continuous and systematic contacts with Vermont, jurisdiction would still be precluded on the ground that its exercise would be "neither fair nor reasonable" under governing case law: "[Vermont] [h]aving no interest in either the litigation or the parties, this Court concludes that the exercise of general jurisdiction over Robertson-Ceco would be improper." The court denied Met Life's motion for reconsideration of the amended order on September 16, 1994.

Met Life filed its notice of appeal on April 12, 1995, challenging the court's April 20, 1994, order limiting the scope of discovery on the personal jurisdiction question to the years 1987-93 and its August 5, 1994, amended order granting Robertson's motion to dismiss. ⁷

II. DISCUSSION

A. The Legal Standards

On a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of showing that the court has jurisdiction over the defendant. Robinson v. Overseas Military Sales Corp., 21 F.3d 502, 507 (2d Cir.1994). Prior to discovery, a plaintiff may defeat a motion to dismiss based on legally sufficient allegations of jurisdiction. Ball v. Metallurgie Hoboken-Overpelt, S.A., 902 F.2d 194, 197 (2d Cir.),...