Rush v. STIHL, Inc.
| Decision Date | 17 March 2020 |
| Docket Number | CIVIL ACTION NO. 3:17-CV-915-DPJ-FKB |
| Parties | MELVIN RUSH PLAINTIFF v. STIHL, INC., ET AL. DEFENDANTS |
| Court | U.S. District Court — Southern District of Mississippi |
Plaintiff Melvin Rush sued several STIHL entities in this products-liability case involving a 26-year-old chainsaw that allegedly exploded while he was using it. The STIHL entities are part of a family of companies that perform various tasks in the design, manufacture, distribution, and sale of STIHL-branded products, such as the subject chainsaw. For the second time in this case, four of those defendants challenge personal jurisdiction: ANDREAS STIHL AG ("ANDREAS STIHL"), STIHL Holding AG ("STIHL Holding"), STIHL AG, and STIHL International GMBH ("STIHL International").1
This Order addresses those motions to dismiss and eight related motions. For the following reasons, ANDREAS STIHL's motion to dismiss [102] is denied without prejudice, and the German Defendants' motion to dismiss [104] is granted. Rush's motion for jurisdictional discovery as to ANDREAS STIHL [121] is granted; his motion for discovery as to all moving Defendants [124] is granted to the extent it too seeks discovery from ANDREAS STIHL but is otherwise denied. Defendants' motion to stay [107] is denied as moot. Rush's motion for leave to file a sur-reply [139] is denied. Rush's motions to file restricted-status attachments [134, 141] are granted. The remaining motions to file under restricted status [130, 132] are denied as moot.
The injuries in this case are horrific. In May 2017, Rush suffered third-degree burns over most of his body after the STIHL-brand chainsaw he was using allegedly exploded. Pl.'s 2d Am. Compl. ("SAC") [91] ¶ 21. Approximately six months later, Rush filed suit in state court, and Defendant STIHL, Inc., removed the case to this Court. The Court denied Rush's remand motion and determined that Rush made a prima facie showing of personal jurisdiction over STIHL, Inc. See Order [28] at 5, 9.
Now, ANDREAS STIHL and the German Defendants seek dismissal claiming lack of personal jurisdiction. Rush says he has made a preliminary showing of personal jurisdiction and requests jurisdictional discovery to "more fully develop[ the] evidentiary record[.]" Pl.'s Resp. [120] at 1. Specifically, Rush argues that the SAC is sufficient because he alleges that the entities were all involved in some way in designing, manufacturing, distributing, or selling the chainsaw. Alternatively, Rush relies on an "alter ego" theory. See SAC [91] ¶¶ 9-16.
ANDREAS STIHL and the German Defendants seek dismissal under Rule 12(b)(2) in separately filed motions. This is the second time these Defendants have challenged personal jurisdiction. The first occurred when Rush sought leave to amend his Complaint and add them as defendants. ANDREAS STIHL and the German Defendants responded in opposition arguing futility for lack of personal jurisdiction. The Court rejected the jurisdictional arguments—as then presented—finding that Rush was at least entitled to discovery.
Although no discovery specific to these Defendants has occurred, they are back asserting the same jurisdictional defense. But this time, they seek dismissal under Rule 12(b)(2), offering different—and frankly better—legal arguments. The scope of review—i.e., what the Court mayconsider—is different under Rule 12(b)(2) than under a futility test for Rule 15(a), which applies Rule 12(b)(6). And under Rule 12(h)(1), Defendants would have waived the personal-jurisdiction issue if not raised by motion or in a responsive pleading to the SAC. So, despite duplicative efforts, the Court will consider the jurisdictional issues ANDREAS STIHL and the German Defendants now offer.
"When a nonresident defendant challenges personal jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the defendant." Mink v. AAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999). If, however, a "district court rules on a motion to dismiss for lack of personal jurisdiction 'without an evidentiary hearing, the plaintiff may bear his burden by presenting a prima facie case that personal jurisdiction is proper.'" Quick Techs., Inc. v. Sage Grp. PLC, 313 F.3d 338, 343 (5th Cir. 2002) (quoting Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994)).
In such an analysis, courts must accept the plaintiff's "uncontroverted allegations" as true and resolve any factual conflicts in the plaintiff's favor. Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000). Nonetheless, a district court "may consider the contents of the record before the court at the time of the motion, including 'affidavits, interrogatories, depositions, oral testimony, or any combination of the recognized methods of discovery.'" Quick Techs., Inc., 313 F.3d. at 344 (quoting Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)).
Finally, "[t]he prima-facie-case requirement does not require the court to credit conclusory allegations." Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 869 (5th Cir. 2001). Nor may the plaintiff rely on the allegations in a complaint that are"contradicted by affidavits." Wyatt v. Kaplan, 686 F.2d 276, 283 n.13 (5th Cir. 1982) ().
"Generally, a federal court may assert personal jurisdiction if the state long-arm statute permits jurisdiction and the exercise of such jurisdiction would not violate due process." Conn Appliances, Inc. v. Williams, 936 F.3d 345, 347 (5th Cir. 2019). Here, ANDREAS STIHL relies on due process, whereas the German Defendants say Rush fails to meet either test.
This Order focuses on due process and will not address the Mississippi long-arm statute. Under the due-process prong, courts conduct a three-step analysis, considering:
(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.
Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006) (quoting Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374 (5th Cir. 2002)). The analysis here begins and ends with the minimum-contacts question.
Minimum contacts can give rise to either general or specific personal jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th Cir. 1994). Rush asserts only specific jurisdiction based primarily on the stream-of-commerce test. He alternatively argues that ANDREAS STIHL and the German Defendants can be brought into this Court based on "agency, alter ego, and/or successor [l]iability theories." Pl.'s Resp. [120] at 19. This Order first addresses the stream-of-commerce issue as to each Defendant and then considers the agency, alter-ego, and successor-liability arguments.
"In cases involving a product sold or manufactured by a foreign defendant," the Fifth Circuit utilizes a "'stream-of-commerce' approach to personal jurisdiction, under which the minimum contacts requirement is met so long as the court finds that the defendant delivered the product into the stream of commerce with the expectation that it would be purchased or used by consumers in the foreign state." Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013) . Such an inquiry "is more 'realistic' than 'mechanical,' turning on matters of 'substance' rather than 'form.'" In re Depuy Orthopaedics, Inc., Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 779 (5th Cir. 2018) (footnotes omitted).2
ANDREAS STIHL asserts that it merely designed a product that others manufactured and sold under non-exclusive licensing agreements. ANDREAS STIHL's Mem. [103] at 3. Hailingit into court in Mississippi would therefore violate due process because it never placed this product in the stream of commerce.
In the SAC, Rush offers the following relevant averments regarding ANDREAS STIHL's alleged contacts in Mississippi.
ANDREAS STIHL AG & Co. KG ("ANDREAS STIHL") is a privately-held company organized and existing under the laws of the Federal Republic of Germany. . . . On information and belief, Defendant ANDREAS STIHL supervises and directs STIHL Subsidiaries and distributors, and designs products exclusively for manufacturing, distribution and sale by STIHL International GmbH, STIHL Holding AG & Co. KG, STIHL, AG, STIHL, Inc. and STIHL Southwest. At all times relevant to this lawsuit, ANDREAS STIHL has conducted business in Kemper County by way of manufacture, design, delivery, and sale of its gas-powered chainsaws to residents of Kemper County, Mississippi, placing these chainsaws into the stream of commerce with the intent that the chainsaws would be sold or used within Mississippi, and thus is subject to personal jurisdiction pursuant to the Mississippi long-arm statute.
SAC [91] ¶ 4.
To begin, these allegations lack underlying factual support and are like the conclusory allegations rejected in Ashcroft v. Iqbal, 556 U.S. 662, 680-81 (2009) (). The Court does not credit...
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