Saraceno v. SC Johnson & Son, Inc.

• Decision Date: 08 July 1980
• Docket Number: No. 78 CIV 1788 (LBS).,78 CIV 1788 (LBS).
• Citation: 492 F. Supp. 979
• Parties: Frances SARACENO and Louis Saraceno, Plaintiffs, v. S. C. JOHNSON AND SON, INC. and Johnson Wax Europlant, B. V., Defendants.
• Court: U.S. District Court — Southern District of New York

492 F. Supp. 979

Frances SARACENO and Louis Saraceno, Plaintiffs, v. S. C. JOHNSON AND SON, INC. and Johnson Wax Europlant, B. V., Defendants.

No. 78 CIV 1788 (LBS).

United States District Court, S. D. New York.

July 8, 1980.

COPYRIGHT MATERIAL OMITTED

Herzfeld & Rubin, P. C., New York City, Herbert Rubin, Daniel V. Gsovski, New York City, for plaintiffs.

Davis, Polk & Wardwell, Lawrence E. Walsh, Ogden N. Lewis, Mark E. Segall, New York City, for Johnson Wax Europlant, B. V.

Simpson, Thacher & Bartlett, Edward C. Mendrzycki, Eugene H. Lieber, New York City, for S. C. Johnson & Son, Inc.

OPINION

SAND, District Judge.

Plaintiffs are New York residents who seek to recover damages for injuries suffered while they were living in Spain. The injuries allegedly resulted from the explosion of a can of "Raid" manufactured in Europe and sold in Spain by the defendant, Johnson Wax Europlant, B. V. ("Europlant"), a Dutch corporation. In an opinion filed May 7, 1979, Saraceno v. S. C. Johnson and Son, Inc. and Johnson Wax Europlant, B. V., 83 F.R.D. 65 (S.D.N.Y.1979) ("Saraceno I"), this Court granted defendant Europlant's motion to dismiss for lack of in personam jurisdiction.¹ The underlying facts and procedural history are set forth in that opinion and will not be repeated in detail here.

Prior to the filing of Saraceno I, plaintiffs attached three insurance policies issued to Europlant by insurance carriers with offices in New York in an attempt to secure an additional jurisdictional basis under the doctrine of Seider v. Roth, 17 N.Y.2d 111, 269 N.Y.S.2d 99 (1966), and its progeny. Plaintiffs subsequently moved to confirm the order of attachment pursuant to N.Y.C. P.L.R. § 6211 (McKinney's 1980). In an opinion dated June 26, 1979, Saraceno v. S. C. Johnson and Son, Inc. and Johnson Wax Europlant, B. V., 78 Civ. 1788 (S.D.N.Y. 1979) (slip op.) ("Saraceno II"), this Court confirmed the order of attachment of Europlant's primary liability policy but vacated the order of attachment of two excess coverage policies. The action against Europlant has thus proceeded to this point solely on the basis of a "Seider-type" attachment.²

On January 21, 1980, while a motion by Europlant to dismiss on the ground of forum non conveniens was pending before this Court, the Supreme Court of the United States rendered its decision in Rush v. Savchuk, 444 U.S. 320, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980). The parties do not dispute that in the aftermath of Rush, jurisdiction over a non-resident may not be based solely on a Seider-type attachment. See Erneta v. Princeton Hospital, 49 N.Y.2d 829, 427 N.Y.S.2d 794, 404 N.E.2d 1335 (1980) (concurring opinion of Jasen, J.), reversing 66 App.Div.2d 669, 411 N.Y.S.2d 13 (1st Dept. 1978) and reinstating an order of the Supreme Court, New York County, which had granted defendant's motion to strike a prior order of attachment and dismissed the complaint for lack of jurisdiction. See also, Morehouse v. Volkswagen, A. G., 427 N.Y.S.2d 514 (App.Div., 1980) (slip op.) (Rush "unquestionably signals the demise of jurisdiction based on Seider v. Roth"). Europlant now seeks an order (1) vacating this Court's prior order of June 26, 1979 which confirmed the attachment of Europlant's primary liability policy and (2) dismissing the complaint against it for lack of jurisdiction. Alternatively, Europlant renews its pending motion for dismissal of the complaint on the ground of forum non conveniens. The defendant S. C. Johnson and Son, Inc. ("Johnson") also renews its motion to dismiss on the ground of forum non conveniens. For the reasons stated herein, Europlant's motion to dismiss for lack of jurisdiction is granted and Johnson's motion to dismiss on the ground of forum non conveniens is denied.

I. Europlant's Motion to Dismiss for Lack of Jurisdiction.

In Rush v. Savchuk, the Supreme Court held that a state may not constitutionally exercise its "quasi-in-rem" jurisdiction over a non-resident defendant solely on the basis of an attachment of the contractual obligation of an insurer licensed to do business in the state to defend and indemnify that defendant. The Court concluded that such an attachment has no jurisdictional significance and that, without more, "the fictitious presence of the insurer's obligation ... does not provide a basis for concluding that there is any contact in the International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 sense . . .." (emphasis by the Court). Since Europlant contends that the only basis for jurisdiction in this case is the attachment confirmed in Saraceno II, it takes the position that Rush mandates a dismissal here on jurisdictional grounds. Plaintiffs deny that jurisdiction in this case is based solely on the attachment. They argue, moreover, that Rush should not in any event be applied retroactively to cases pending at the time it was decided and that, consequently, a Seider-type attachment which preceded Rush is still a valid jurisdictional basis.³

"The general rule of long standing is that judicial precedents normally have retroactive as well as prospective effect." Kremer v. Chemical Construction Corp., 623 F.2d 786, 788 (2d Cir. 1980), quoting National Association of Broadcasters v. Federal Communications Commission, 554 F.2d 1118, 1130 (D.C.Cir.1976). In Chevron Oil Co. v. Huson, 404 U.S. 97, 106-07, 92 S.Ct. 349, 355, 30 L.Ed.2d 296 (1971), the Supreme Court formulated an exception to this general rule which was recently relied on by the Second Circuit in Kremer v. Chemical Construction Corp., supra:

"First, the decision to be applied nonretroactively must establish a new principle of law, either by overruling clear past precedent on which litigants may have relied, or by deciding an issue of first impression whose resolution was not clearly foreshadowed. Second, it has been stressed that `we must ... weigh the merits and demerits in each case by looking to the prior history of the rule in question, its purposes and effect, and whether retrospective operation will further or retard its operation.' Finally, we have weighed the inequity imposed by retroactive application, for `where a decision of this Court could produce substantial inequitable results if applied retroactively, there is ample basis in our cases for avoiding the `injustice or hardship' by a holding of nonretroactivity." (citations omitted).

Before discussing the significance of each of the Huson factors in the context of this case, we note that we are not faced with the question whether Rush should be applied to a case in which a final judgment has been entered and an appeal has been taken or the deadline for an appeal has run. We deal here only with the question whether Rush applies to cases pending at the time it was decided.⁴See Linkletter v. Walker, 381 U.S. 618, 85 S.Ct. 1731, 14 L.Ed.2d 601 (1965) (holding that although Mapp v. Ohio, 367 U.S. 643, 81 S.Ct. 1684, 6 L.Ed.2d 1081 (1961) was applied to cases pending on direct review at the time it was rendered, it would not be applied to state court convictions which had become final before its rendition).

Plaintiffs contend, in essence, that the first of the Huson factors is satisfied, and that they were entitled to rely on the validity of their Seider-type attachment because the Seider "doctrine" had "repeatedly withstood challenge in the state and federal courts." (Plaintiffs' Memorandum in Opposition, p. 20). Indeed, there is considerable support for this position. The Court of Appeals of the State of New York had consistently adhered to Seider, see e. g., Baden v. Staples, 45 N.Y.2d 889, 410 N.Y. S.2d 808, 383 N.E.2d 110 (1978), and the Second Circuit, faced with a challenge to Seider in light of the Supreme Court's decision in Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977), only recently reaffirmed its earlier conclusion that a Seider-type attachment satisfies the standards set forth in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). See O'Connor v. Lee-Hy Paving Corp., 579 F.2d 194, (2d Cir.), cert. denied, 439 U.S. 1034, 99 S.Ct. 639, 58 L.Ed.2d 696 (1978); Minichiello v. Rosenberg, 410 F.2d 106 (2d Cir. 1968), cert. denied, 396 U.S. 844, 90 S.Ct. 69, 24 L.Ed.2d 94 (1969).

Despite this impressive array of pre-Rush case law upholding the constitutionality of Seider-type attachments, it is not at all clear to the Court that Rush overrules "clear past precedent" in the Huson sense. Chevron Oil Co. v. Huson, 404 U.S. at 106-07, 92 S.Ct. at 355. As plaintiff concedes, Seider has long been subject to criticism. More importantly, as Rush notes, Seider-type attachments have been rejected on state law or constitutional grounds by at least nine states and three circuits, and have been adopted as a jurisdictional device in only one state other than New York.⁵Rush v. Savchuk, supra, at n.13. In our view, moreover, after the Supreme Court ruled in Schaffer v. Heitner that "all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny", there was considerable doubt as to the continued viability of Seider, particularly since Shaffer explicitly overruled Harris v. Balk, 198 U.S. 215, 25 S.Ct. 625, 49 L.Ed. 1023 (1905).⁶But see, O'Connor v. Lee-Hy Paving Corp., 579 F.2d 194 (2d Cir.), cert. denied, 439 U.S. 1034, 99 S.Ct. 639, 58 L.Ed.2d 696 (1978); Note, "The Constitutionality of Seider v. Roth after Shaffer v. Heitner", 78 Colum.L.Rev. 409 (1978). Finally, we note that in reaching the conclusion that Seider-type attachments do not comport with due process, the Supreme Court relied on "existing authorities" and gave no indication that it was adopting a "radically new" standard for the exercise of state court jurisdiction. There was no "abrupt and fundamental shift" in constitutional doctrine such that "an entirely new rule ... in effect replaced an older one". See Hanover...