Minnesota Asbestos Litigation, In re
| Decision Date | 12 December 1995 |
| Docket Number | No. C1-95-223,C1-95-223 |
| Citation | 540 N.W.2d 896 |
| Parties | Prod.Liab.Rep. (CCH) P 14,481 In re MINNESOTA ASBESTOS LITIGATION. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
Minnesota courts may exercise personal jurisdiction over a foreign asbestos company when plaintiffs allege that the company placed the injurious asbestos into a stream of commerce, known to reach Minnesota, by: (1) selling the asbestos to a manufacturer that maintains a large, national market that included Minnesota; and (2) taking advantage of and fostering a longstanding business relationship with the manufacturer.
Harvey N. Jones, Michael R. Strom, Sieben, Polk, La Verdiere, Jones & Hawn, P.A., Hastings, James M. Hughes, Ness, Motley, Loadholt, Richardson & Poole, P.A., Charleston, SC, for Appellants.
David F. Herr, Cooper S. Ashley, Mark W. Lee, Maslon, Edelman, Borman & Brand, Minneapolis, for Respondents, CSR, Ltd.
Considered and decided by CRIPPEN, P.J., and KALITOWSKI and DAVIES, JJ.
Appellants challenge the district court's dismissal of their asbestos-related claims for lack of personal jurisdiction. We reverse and remand.
Appellants are 187 plaintiffs who allege that they suffer from various diseases as a result of exposure to asbestos products that were manufactured by the Johns-Manville Corporation (Manville). Some of the asbestos used in the Manville products was mined by Australian Blue Asbestos, Pty., a subsidiary of respondent Colonial Sugar Refining Co, Ltd. (both CSR). CSR, an Australian company, sold the raw asbestos fiber to Manville. The issue on appeal is simply whether, under due process requirements, CSR has had sufficient minimum contacts with Minnesota to permit our courts to exercise personal jurisdiction over it in these suits. The district court dismissed all claims against CSR for lack of personal jurisdiction.
CSR has never had direct contact with Minnesota or its citizens. 1 Appellants argue, however, that CSR had a close business relationship with Manville, took advantage of and fostered Manville's business, and knew that Manville served a national market that included Minnesota. Appellants assert that this indirect contact is sufficient for the exercise of personal jurisdiction.
The business relationship between CSR and Manville started in the 1930s. Between 1948 and 1962, CSR supplied 37,000 tons of raw "blue fiber" asbestos to Manville. The raw asbestos was shipped from Australia to ports on all three coasts of the United States and from there was sent to Manville plants across the country. After processing, the asbestos was used in Transite Pipe, 2 which was sold in Minnesota and throughout the United States. CSR told the Australian Tariff Board that a minimum of 25 percent of the asbestos used in Manville's Transite Pipe was of the "blue fiber" type sold by CSR.
CSR executives visited Manville's research and production facilities numerous times. The evidence suggests that these trips were related to CSR's interest in promoting use of its asbestos in Manville products. For instance, Manville's "liaison man" for the CSR visits testified that CSR's stated purpose
was to find out how they could improve their fibers so we could use it in the products. I think their purpose was also to get information on what products we were making that did use their fiber and blue fiber.
He also testified that, on one occasion, CSR employees spent two months in a Manville plant "learning the business." Deposition testimony indicates that discussions about how CSR asbestos was being used occurred "every time [CSR] came," which was about every year and a half to two years in the 1950s. In a document promoting its "blue fibre" asbestos, CSR stated that
[w]ork done by C.S.R. to prove that blue fibre was satisfactory helped materially to bring about [a price increase] and augmented work by Johns-Manville.
The record contains substantial evidence that CSR knew of Manville's position as a leading manufacturer of building products that were marketed throughout the United States. In a presentation to the Australian Tariff Board, CSR stated that Manville was "one of the largest manufacturers of all types of asbestos cement products." Deposition testimony of a CSR executive indicates its awareness of Manville's "building materials empire." Further, CSR both advertised in and received Asbestos, a trade publication with international circulation. The May 1952 issue of the magazine contained an article on Manville's Transite Pipe, noting that it had been "[u]sed in the water systems of thousands of municipalities in every state in the union." In addition, as early as 1944, CSR reviewed Manville advertisements in Sweets Architectural Catalog and, at that time, requested more brochures on Manville products. 3
Does CSR have sufficient minimum contacts with Minnesota to permit courts of our state to exercise personal jurisdiction over it for purposes of these asbestos-related claims?
Appellants--relying on the stream of commerce theory--seek to establish personal jurisdiction over CSR under Minnesota's long-arm statute, Minn.Stat. § 543.19 (1994). Our supreme court has construed that statute to extend the jurisdiction of our courts as far as permissible under the due process limits of the federal Constitution. Rostad v. On-Deck, Inc., 372 N.W.2d 717, 719 (Minn.1985), cert. denied, 474 U.S. 1006, 106 S.Ct. 528, 88 L.Ed.2d 460 (1985). Due process requires that a defendant have
certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend "traditional notions of fair play and substantial justice."
International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The requirement of "minimum contacts" has been interpreted to mean that "the defendant must have purposefully availed itself of the privilege of conducting activities within the jurisdiction." Rostad, 372 N.W.2d at 719 (citing Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958)).
Minnesota courts consider five factors in determining if the exercise of personal jurisdiction over a defendant meets the "minimum contacts" requirement:
(5) The convenience of the parties.
Id. at 719-20. (quoting Vikse v. Flaby, 316 N.W.2d 276, 282 (Minn.1982)). The first three factors are given more weight in the final determination. Id. (citing Dent-Air, Inc. v. Beech Mountain Air Serv., 332 N.W.2d 904, 907 (Minn.1983)). The plaintiff bears the burden of establishing jurisdiction by making "a prima facie showing of minimum contacts through its complaint and supporting evidence, 'which will be taken as true.' " Johnson Bros. v. Arrowhead Co., 459 N.W.2d 160, 163 (Minn.App.1990) (quoting Hardrives, Inc. v. City of LaCrosse, Wis., 307 Minn. 290, 293, 240 N.W.2d 814, 816 (Minn.1976)). 4
Appellants rely on the "stream of commerce" theory in asserting that the indirect contacts between CSR and Minnesota are sufficient to permit our exercise of personal jurisdiction. Our supreme court has unequivocally adopted the use of this theory:
Hence, if the sale of a product of a manufacturer * * * is not simply an isolated occurrence, but arises from the efforts of the manufacturer * * * to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.
In Rostad, the plaintiff was injured in Minnesota by a weight that flew off a softball bat. Id. at 718. The weight was manufactured by On-Deck, a New Jersey corporation. Id. The only obvious "contact" On-Deck had with Minnesota was that distributors sold its product in this state. Id. at 718-19.
Our supreme court held that the exercise of personal jurisdiction over On-Deck was proper, rejecting On-Deck's claim that "purposeful contacts" under World-Wide Volkswagen requires direct contact. Id. at 720. The court pointed to several indirect contacts between On-Deck and Minnesota that supported the exercise of jurisdiction with respect to the "quantity of contacts" factor: (1) On-Deck "entered into contracts with others to distribute its products throughout North America, * * * a market which specifically includes Minnesota"; (2) On-Deck's executives traveled "the United States extensively marketing their product"; (3) On-Deck made "calculated attempts," through its distribution and marketing, to create a national market that included Minnesota; (4) On-Deck's distributors were very successful in marketing the product in Minnesota and On-Deck profited as a result; and (5) the product was in Minnesota
not by some fortuitous happenstance of a plaintiff bringing the product to the jurisdiction as in World-Wide Volkswagen, but by the purposeful marketing efforts of On-Deck and [its] distributors.
We find CSR's indirect contacts to be similar to those in Rostad, with Manville acting essentially as a distributor for CSR's asbestos. Further, the asbestos is inherently dangerous, rather than being made so by Manville's...
To continue reading
Request your trial
-
Minnesota Asbestos Litigation, In re, C1-95-223
...with Minnesota were sufficient "to satisfy the due process requirements for exercising jurisdiction." In re Minnesota Asbestos Litigation, 540 N.W.2d 896, 902 (Minn.App.1995). In doing so, the court of appeals adopted the plaintiffs' argument that CSR had indirect contacts with Minnesota wh......