Shaw v. American Cyanamid Co.

• Decision Date: 12 March 1982
• Docket Number: Civ. No. M-80-670.
• Parties: Ralph H. SHAW and Barbara Shaw v. AMERICAN CYANAMID COMPANY, et al.
• Court: U.S. District Court — District of Connecticut

534 F. Supp. 527

Ralph H. SHAW and Barbara Shaw v. AMERICAN CYANAMID COMPANY, et al.

Civ. No. M-80-670.

United States District Court, D. Connecticut.

March 12, 1982.

Shereen F. Edelson, Danaher, Lewis & Tamoney, Hartford, Conn., for defendant and third-party plaintiff Lyndal Chemical.

Jacob H. Channin, Hyman, Asbel, Channin & Harding, Hartford, Conn., for third-party defendant Delarich Chemical Corp.

RULING ON THIRD-PARTY DEFENDANT DELARICH'S MOTION TO DISMISS

BLUMENFELD, Senior District Judge.

This case is a products liability action in which the plaintiffs, Ralph H. Shaw and Barbara Shaw, seek damages for injuries allegedly caused by Ralph Shaw's 25 years of exposure to formaldehyde fumes emitted from a resin used in the manufacture of cloth. Federal jurisdiction is based upon diversity of citizenship. 28 U.S.C. § 1332. The original five defendants impleaded as third-party defendants numerous suppliers of formaldehyde and formaldehyde-based products seeking indemnification for any liability they may incur as a result of this litigation. Presently before the court is the motion of third-party defendant Delarich Chemical Corporation (Delarich) to dismiss the third-party complaint filed against it by Lyndal Chemical Division, Millmaster Onyx Group, Keewanee Industries, Inc. (Lyndal) on the grounds that Delarich is not subject to the in personam jurisdiction of this court.

Delarich is a foreign corporation with its principal place of business in Clifton, New Jersey. It is in the business of buying, transporting and reselling heavy chemicals and has periodically sold and delivered formaldehyde to Lyndal and Lyndal's predecessor company at the Lyndal plant in Lyndhurst, New Jersey.

Delarich asserts that it does not solicit nor regularly transact business in the State of Connecticut and that all of its conduct relevant to this action occurred outside Connecticut, and that it therefore does not have sufficient contact with Connecticut to enable this court to assert jurisdiction over it.

Lyndal alleges in its complaint that the Third-Party Defendant, Delarich Corporation is a foreign corporation with a principal place of business at Clifton, New Jersey,

Third-Party Complaint of Lyndal Chemical Division, ¶ 3.I., and that

the above corporations, at all relevant times, were authorized to do business in the State of Connecticut and/or were actually doing business in the State of Connecticut and the above corporations produced, manufactured or distributed formaldehyde or formaldehyde products with the reasonable expectation that they would be used or consumed in the State of Connecticut and such products were so used or consumed in this state.

Id. at ¶ 3.M. In addition, Lyndal has filed an affidavit with the court in which its vice-president states that "between 1955 and 1978 the Lyndhurst New Jersey site of Lyndal (Refined Onyx) purchased formaldehyde and UF85 from Delarich Chemical Corporation." Affidavit of John A. Komninos. This is the extent of Lyndal's allegations or proof on the issue of Delarich's contacts with Connecticut.

In response to a motion to dismiss for lack of personal jurisdiction under Rule 12(b)(2) of the Federal Rules of Civil Procedure the party asserting jurisdiction must do more than rely on merely conclusory allegations like those pleaded in paragraph 3.M. of Lyndal's complaint. Unlike a motion to dismiss for failure to state a claim under Rule 12(b)(6), a motion to dismiss under Rule 12(b)(2) is a test of the plaintiff's actual proof and, therefore, the court will consider affidavits submitted by the parties as well as the pleadings. Bowman v. Grolsche Bierbrouwerij B. V., 474 F.Supp. 725, 728 (D.Conn.1979). The question of personal jurisdiction can be determined by affidavit without the need for oral testimony. See cases cited at 2A Moore's Federal Practice ¶ 12.093 n.21 at 2299. "The motion will be denied only where the plaintiff can establish prima facie conduct by defendant sufficient to justify the exercise of in personam jurisdiction." Bowman v. Grolsche Bierbrouwerij B. V., 474 F.Supp. at 728.

Lyndal, therefore, cannot defeat Delarich's motion to dismiss by merely asserting that its allegations raise issues of fact. See Exchange National Bank of Chicago v. Touche, Ross & Co., 544 F.2d 1126, 1131 (2d Cir. 1976) (Rule 12(b)(1) motion).¹ Delarich has submitted an affidavit contradicting Lyndal's allegations concerning Delarich's contacts with Connecticut. Delarich states under oath that it does not do business in Connecticut on a regular basis and that from 1978 until 1981 it made only one isolated sale in Connecticut which was unrelated to this litigation.² Since Lyndal has not in its affidavit contradicted the facts presented by Delarich's affidavit,³ the resolution of the personal jurisdiction issue will be based on the facts as presented by Delarich and those allegations in Lyndal's complaint uncontradicted by Delarich's affidavit.

Whether in personam jurisdiction exists in a diversity action is determined by reference to the law of the state in which the district court sits. Arrowsmith v. United Press International, 320 F.2d 219, 231 (2d Cir. 1963). "This requires a two-tiered consideration of (1) whether the appropriate state statute reaches the foreign corporation and (2) whether such statutory reach exceeds the constitutional `minimum contacts' test required by due process." McFaddin v. National Executive Search, Inc., 354 F.Supp. 1166, 1168 (D.Conn.1973). The dispositive question, therefore, is whether Delarich falls within the reach of Connecticut's long-arm statute, Connecticut General Statutes § 33-411, and if so, whether this application of the state's long-arm jurisdiction is consistent with the requirements of due process as established by International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945) and its progeny. These matters are considered separately.

I. The Long-Arm Statute

The Connecticut long-arm statute under which Lyndal asserts jurisdiction over Delarich provides, in relevant part, that:

(b) Every foreign corporation which transacts business in this state in violation of section 33-395 or 33-396 shall be subject to suit in this state upon any cause of action arising out of such business.

(c) Every foreign corporation shall be subject to suit in this state, ... whether or not such foreign corporation is transacting or has transacted business in this state and whether or not it is engaged exclusively in interstate or foreign commerce, on any cause of action arising as follows: (1) Out of any contract made in this state or to be performed in this state; or (2) out of any business solicited in this state by mail or otherwise if the corporation has repeatedly so solicited business ... or (3) out of the production, manufacture or distribution of goods by such corporation with the reasonable expectation that such goods are to be used or consumed in this state and are so used or consumed, regardless of how or where the goods were produced, manufactured, marketed or sold ... or (4) out of tortious conduct in this state, whether arising out of repeated activity or single acts, and whether arising out of misfeasance or nonfeasance.

Conn.Gen.Stat. § 33-411.

A. Conn.Gen.Stat. § 33-411(b)

Jurisdiction over Delarich cannot be sustained under Conn.Gen.Stat. § 33-411(b) because Lyndal does not allege that this cause of action arose out of the minimal business which Delarich transacted in Connecticut.⁴ Section 33-411(b) requires that a cause of action in which jurisdiction is asserted over a foreign corporation arise out of the business which the defendant transacted within the state. See McFaddin v. National Executive Search, Inc., 354 F.Supp. at 1168; Bross Utilities Service Corp. v. Aboubshait, 489 F.Supp. 1366, 1371 (D.Conn.), aff'd without opinion, 646 F.2d 559 (2d Cir. 1980). Since the one shipment which Delarich has made to Connecticut is totally unrelated to this litigation it cannot be the basis of jurisdiction under section 33-411(b).

B. Conn.Gen.Stat. § 33-411(c)

Lyndal contends that Conn.Gen.Stat. § 33-411(c) provides two grounds on which this court can base its jurisdiction over Delarich. It argues (1) that Delarich transacts sufficient business in Connecticut to sustain jurisdiction under section 33-411(c) and (2) that Delarich distributed goods to Lyndal with the expectation that some of its products would be used or consumed in Connecticut and that, therefore, jurisdiction can be asserted under section 33-411(c)(3).

Lyndal is apparently under the misconception that Conn.Gen.Stat. § 33-411(c) provides a basis for jurisdiction over any party transacting business within Connecticut regardless of whether the cause of action arises out of such business. Its brief suggests that the clause "whether or not such a foreign corporation is transacting or has transacted business in this state," contained within section 33-411(c), constitutes a basis of jurisdiction for any corporation doing business in Connecticut without regard to whether the cause of action arose out of those circumstances specifically enumerated in subsections (1) through (4). This construction is not supported by either the language of the statute or the case law which requires that the cause of action arise out of the defendant's Connecticut-related conduct. E.g. McFaddin v. National Executive Search, Inc., 354 F.Supp. at 1168.

Lyndal's assertion that jurisdiction exists specifically under section 33-411(c)(3) is based upon its allegation that Delarich had a reasonable expectation that its products would be used or consumed in Connecticut. Lyndal does not, however, contest the statements made by Delarich in its affidavit concerning the extent of Delarich's contacts with Connecticut. Read as a whole, Delarich's affidavit leaves no basis for an inference that it had reason to believe that its goods would be used or consumed in Connecticut. Lyndal cannot rest...