Quality Air Servs., L.L.C. v. Milwaukee Valve Co.

• Decision Date: 21 July 2008
• Docket Number: Civil Action No. 08-690 (ESH).
• Citation: 567 F.Supp.2d 96
• Parties: QUALITY AIR SERVICES, L.L.C., Plaintiff, v. MILWAUKEE VALVE COMPANY, INC. d/b/a/ Hammond Valve Company, Defendants.
• Court: U.S. District Court — District of Columbia

Page 96

567 F.Supp.2d 96

QUALITY AIR SERVICES, L.L.C., Plaintiff, v. MILWAUKEE VALVE COMPANY, INC. d/b/a/ Hammond Valve Company, Defendants.

Civil Action No. 08-690 (ESH).

United States District Court, District of Columbia.

July 21, 2008.

COPYRIGHT MATERIAL OMITTED

Kevin E. Byrnes, Grad, Logan & Klewans, P.C., Falls Church, VA, for Plaintiff.

Valerie L. Tetro, Jeffrey C. Seaman, Whiteford, Taylor & Preston, LLP, Washington, DC, for Defendant.

MEMORANDUM OPINION AND ORDER

ELLEN SEGAL HUVELLE, District Judge.

Plaintiff has brought this product liability suit alleging that defendant's product, which plaintiff has installed throughout the D.C. metropolitan area, was improperly designed and/or manufactured. Defendant has filed a motion to dismiss the complaint. For the reasons stated herein, defendant's motion will be granted in part and denied in part.

BACKGROUND

Plaintiff Quality Air Services is a Maryland limited liability company with its principal place of business in Rockville, Maryland. (Compl. ¶ 1.) Plaintiff is in the business of installing and repairing heating, ventilation, and air conditioning ("HVAC") units. (Id.) It specializes in the restoration, maintenance, and replacement of fan coil units (convectors) for residential condominiums and rental units within multi-family housing buildings in the District of Columbia, Maryland, and Northern Virginia. (Id. ¶¶ 1-2.)

Defendant Milwaukee Valve Company, which does business as Hammond Valve Company, is a Wisconsin corporation with its offices in New Berlin, Wisconsin. (Id. ¶ 3; Def.'s Ex. 1 [Affidavit of Geoff McLaughlin] ¶ 4.) Defendant manufactures and sells valves which are used in HVAC systems in multi-family housing buildings. (Compl. ¶ 4.) It has no representatives, offices, or agents located in Washington D.C. (Def.'s Ex. 1 ¶ 10), but sells its products through distributors and wholesalers rather than directly to service companies such as plaintiff. (Id. ¶ 8.) None of defendant's distributors or wholesalers is located in the District of Columbia. (Id. ¶ 9.) Approximately 15 times per year over the last 10 years, defendant has shipped valves directly to a job site in the District of Columbia at the request of one of its distributors. (Id. ¶ 12.) These sales account for no more than .0025% of defendant's annual sales. (Id. ¶ 13.) None of these shipments have included the 8911 valve. (Id. ¶ 14.) Defendant is not registered to do business in the District of Columbia, and has never paid taxes in the District. (Id. ¶¶ 5, 16, 17.)

Between late 2004 and early 2007, plaintiff purchased 13,320 of the 8911 valves and installed them in buildings in Maryland, Virginia, and the District of Columbia. (Compl. ¶ 8.) Plaintiff purchased these valves from a Virginia branch of Noland Company, a wholesale distributor of mechanical equipment and supplies. (Id. ¶ 14; Def.'s Mot. at 3.) Plaintiff alleges that these valves are defective. (Id. ¶ 9.) As of the time when the complaints was filed, approximately 15 of these valves have failed and are causing leaks and flooding in the homes in which they were installed. (Id. ¶ 24.) Plaintiff alleges that at least one of these failures occurred in the District of Columbia. (See Pl.'s Opp'n at 1.)

On April 22, 2008, plaintiff brought this suit alleging that defendant has breached its express and implied warranties with respect to the sale of the 8911 valves; sold a defective and unreasonably dangerous product; and violated the District of Columbia Consumer Protection Act, D.C.Code § 28-3904(d) and (e). (Compl. ¶¶ 30, 35, 39, 45, 51.) Plaintiff further alleges that defendant's action were so "malicious and egregious" as to "constitute fraud and deceit." (Id. ¶ 59.) Plaintiff requests compensatory and punitive damages, as well as a declaratory judgment holding defendant liable for all losses and damages, including attorneys' fees, incurred by plaintiff as a result of any future lawsuits against it based on its installation of these valves. (Id. at 13-14.)

Defendant has moved to' dismiss the complaint for lack of personal jurisdiction. (Def.'s Mot. 2.) Defendant further asserts that plaintiff has failed to state a claim for relief under the D.C. Consumer Protection Act and that plaintiff has failed to plead fraud with specificity. (Id. 30, 32.) Finally, defendant argues that the possibility of future claims against plaintiff does not present an justiciable controversy and therefore requests dismissal of plaintiffs declaratory judgment claim. (Id. 20.) The Court will address each of the defendant's arguments in turn.

ANALYSIS

I. The Court Has Personal Jurisdiction Over Defendant

"If a defendant does not reside within or maintain a principal place of business in the District of Columbia, then the District's long-arm statute, D.C.Code § 13-423, provides the only basis [o]n which a court may exercise personal jurisdiction over the defendant." Savage v. Bioport, 460 F.Supp.2d 55, 60 (D.D.C.2006) (citing Deutsch v. United States Dep't of Justice, 881 F.Supp. 49, 52 (D.D.C.1995), aff'd, 93 F.3d 986 (D.C.Cir.1996)). This statute provides, in relevant part:

(a) A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's—

(1) transacting any business in the District of Columbia; ...

(4) causing tortious injury in the District of Columbia by an act or omission outside of the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia....

D.C. CODE. § 13-423 (2001). The statute further provides that "[w]hen jurisdiction over a person is based solely upon this section, only a claim for relief arising from acts enumerated in this section may be asserted against him." Id. at § 13-423(b).

Plaintiff relies on sections (a)(1), the "transacting business" prong of the long-arm statute and (a)(4), the "tort without, injury within" prong of the long-arm statute. (See Pl.'s Mot. 4, 8.)¹ Plaintiff argues that by placing its products into the stream of commerce with the knowledge that they would be installed in the District, and by shipping its valves into the District itself, defendant has transacted business in the District sufficient to subject it to this Court's jurisdiction. (Id. 5-6.) Defendant contends that it did not purposefully direct any business towards the District of Columbia, relying primarily on its lack of presence in the District, either through its own offices or through those of its network of authorized distributors and wholesalers. The Court finds defendant's position unpersuasive.

The "transacting any business" prong of the District of Columbia long-arm statute permits the exercise of personal jurisdiction to the full extent authorized by the Due Process Clause of the Constitution. See Jackson v. Loews Washington Cinemas, 944 A.2d 1088, 1092 (D.C.2008). Thus, "the appropriate inquiry is whether [defendant has] the requisite `minimum contacts' with the District so that the exercise of personal jurisdiction would not offend `traditional notions of fair play and substantial justice.'" Material Supply Int'l Inc. v. Sunmatch Industrial Co., Ltd., 62 F.Supp.2d 13, 19 (D.D.C.1999) (citing Mitchell Energy Corp. v. Mary Helen Coal Co., 524 F.Supp. 558, 563 (D.D.C.1981) (citation omitted)). Even "`a single act may be sufficient to constitute transacting business,' so long as that contact is Voluntary and deliberate, rather than fortuitous.'" Jackson, 944 A.2d at 1093 (quoting Mouzavires v. Baxter, 434 A.2d 988, 992, 995 (D.C.1981)) (internal citation omitted). Therefore, as the D.C. Court of Appeals has recently explained, the Court's minimum contacts inquiry should be guided by "a search for meaningful acts reflecting `purposeful affirmative activity within the District of Columbia.'" Id. (quoting Bueno v. La Compania Peruana de Radiodifusion, S.A., 375 A.2d 6, 8 (D.C.1977) (citation omitted)). "When such a connection to the forum state is established, due process is satisfied because the defendant should `reasonably anticipate being haled into court there.'" Id. at 1093-94 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)).

Although defendant has no physical presence in the District nor did it direct its advertising specifically at the District, defendant's network of authorized distributors includes companies both in Maryland and Virginia which indisputably, given their geographic proximity, target contractors like plaintiff who serve the Washington metropolitan area. Moreover, defendant was well aware that it was accessing and benefiting from the D.C. market through its sales to distributors in Virginia and Maryland, as evidenced by its compliance with its distributors' regular requests over the last ten years that it ship its products directly to job sites in the District. See Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 613-14 (8th Cir.1994) (personal jurisdiction proper over foreign defendant that made sales in forum through regional distributor).² Finally, defendant placed advertisements in trade journals with a national audience, which would presumably include customers of its products in the District.³ Given defendant's awareness and encouragement of its distributors' sales into the District, defendant should reasonably have been on notice that it could be "haled into court" here based on suits arising out of the sale of its product in the District.⁴

This case is controlled by the D.C. Circuit's decision in Stabilisierungsfonds Fur Wein v. Kaiser-Stuhl, 647 F.2d 200 (D.C.Cir.1981). The defendants in Kaiser-Stuhl were an Australian corporation that produced wine and its wholly-owned Australian subsidiary, its two United States distributors (based in San Francisco in New...