Smith v. Dainichi Kinzoku Kogyo Co., Ltd.

• Decision Date: 23 February 1988
• Docket Number: Civ. A. No. A-87-CA-275.
• Citation: 680 F. Supp. 847
• Parties: Edwin SMITH, et ux., Plaintiffs, v. DAINICHI KINZOKU KOGYO CO., LTD., Dainichi Machinery, Inc., and Machinery Sales Co., Inc., and Gomiya USA, Defendants.
• Court: U.S. District Court — Western District of Texas

680 F. Supp. 847

Edwin SMITH, et ux., Plaintiffs, v. DAINICHI KINZOKU KOGYO CO., LTD., Dainichi Machinery, Inc., and Machinery Sales Co., Inc., and Gomiya USA, Defendants.

Civ. A. No. A-87-CA-275.

United States District Court, W.D. Texas, Austin Division.

February 23, 1988.

Gordon Gunter, Austin, Tex., for plaintiffs.

Leslie A. Benitez, Clark, Thomas, Winters & Newton, Austin, Tex., for defendants.

ORDER

WALTER S. SMITH, Jr., District Judge.

In this diversity action, Defendants Dainichi Kinzoku Kogyo Co., Ltd., Dainichi Machinery, Inc., and Machinery Sales Co., Inc. move the Court to dismiss the Plaintiffs' cause-of-action against them for lack of personal jurisdiction. They argue, inter alia, failure of the Plaintiffs to effect proper service of process, lack of jurisdiction pursuant to the Texas Long Arm Statute, and lack of jurisdiction under the Due Process Clause of the United States Constitution.

Facts

On April 16, 1985, Plaintiff Edwin Smith suffered injuries to his face when the engine lathe he was using was inadvertently started by a co-worker, causing a metal work-piece to fly from the lathe injuring the left side of Mr. Smith's face. The Plaintiffs filed this cause-of-action alleging strict product liability, and negligence in designing, manufacturing, and selling an engine lathe with a safety mechanism made of plastic rather than a more durable material. Plaintiffs originally filed their complaint in Texas state court in Williamson County, Texas, the accident having occurred in Cedar Park, Williamson County, Texas. There being complete diversity of citizenship of the parties, the Defendants removed the case to this Court. Removal jurisdiction is uncontested.

The lathe at issue was manufactured in Japan by Defendant Dainichi Kinzoku Kogyo Co., Ltd. (Dainichi-Japan) which sold the lathe, in Japan, to a Japanese export company (Gomiya Japan). Gomiya Japan, which is not a party to this suit, then sold it to their American subsidiary Gomiya USA, Inc., to be imported into the United States. Gomiya USA sold the lathe to an American machine tool retailer, Machinery Sales Co., Inc., which is a California corporation that does business exclusively in California, Arizona, and Nevada. Ultimately, Machinery Sales Co. sold the lathe to Martin-Decker, the Plaintiff's employer, in California. Thereafter, Martin-Decker transported the lathe to its machine shop in Cedar Park, Texas where Plaintiff Edwin Smith was injured.

Service of Process

Movants initially argue that this Court lacks personal jurisdiction over them due to the failure by Plaintiffs to properly effect service of process upon them. Defendants Dainichi-U.S. and Machinery Sales Co. argue that service of process was insufficient as to them in that they do not have a registered agent for service of process in Texas and, therefore, have presumably designated the Texas Secretary of State as their agent for service of process. They contend that the Texas Long Arm Statute, specifically Tex.Civ.Prac. & Rem. Code § 17.044(a) (Vernon 1988), and Fed.R. Civ.P. 4(e) "require" service through the Texas Secretary of State rather than directly through the mails. However, the provisions of Section 17.044(a) are for substituted service on the Secretary of State. Section 17.044(a) is not intended to be a mandatory method of service which must be pursued before pursuing the method authorized by Tex.R.Civ.P. 106 and 108. Nothing in the language of Section 17.044(a) requires a party to use substituted service, rather, it is an alternative to the methods for service on non-residents allowed under Tex.R.Civ.P. 108. Here, Plaintiffs elected to serve Defendants Dainichi-U.S. and Machinery Sales Co. directly pursuant to Tex. R.Civ.P. 108 rather than using substituted service under Section 17.044(a). The Court finds it curious that Defendants complain of the use of a method of service which is more direct, reliable, and efficient than substituted service (which often amounts to constructive service) rather than the actual service which was had in this case. Consequently, the Court concludes that since Plaintiffs complied with the requisites of Tex.R.Civ.P. 108 service of process upon Defendants Dainichi-U.S. and Machinery Sales Co. was duly perfected and these defendants were properly served.

Service upon the foreign Defendant Dainichi-Japan presents a different question, however. Dainichi-Japan argues that Plaintiffs were required to comply with provisions of the Convention on the Service Abroad of Judicial And Extrajudicial Documents In Civil Or Commercial Matters, Nov. 15, 1965, 20 U.S.T. 361, 361 T.I.A.S. 6638, 658 U.N.T.S. 163 hereinafter "Hague Convention", to which both the United States and Japan are signatories, and that by mailing the untranslated summons and complaint to Dainichi-Japan's president by registered mail, Plaintiffs failed to perfect service under the Hague Convention.

Article 10 of the Hague Convention provides:

Provided the State of destination does not object, the present Convention shall not interfere with —

(a) the freedom to send judicial documents, by postal channels, directly to persons abroad;

(b) the freedom of judicial officers, officials, or other competent persons of the State of origin to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination;

(c) the freedom of any person interested in a judicial proceeding to effect service of judicial documents directly through the judicial officers, officials or other competent persons of the State of destination.

Convention On the Service Abroad Of Judicial And Extrajudicial Documents In Civil Or Commercial Matters, Nov. 15, 1965, art. 10, 20 U.S.T. 361, 361 T.I.A.S. 6638, 658 U.N.T.S. 163.

Dainichi-Japan argues that since Japan expressly rejected the type of service authorized by Art. 10(b) and (c) which use the words "effect service" and ratified only Art. 10(a) which uses the word "send" that Japan intended to draw a distinction between judicial documents sent through the mails for the purpose of "service" and those for "other" purposes. Plaintiffs concede that they are required to comply with the provisions of the Hague Convention,¹ however, they argue that Art. 10(a) authorizes the "sending" of a complaint and summons directly to a Japanese defendant by registered mail.

Although Dainichi-Japan has cited this Court to two New York state court decisions which appear to have adopted the rather hyper-technical interpretation proposed by Dainichi-Japan,² federal courts which have addressed this issue have consistently concluded that the use of the word "send" rather than "service" in Art. 10(a) "must be attributed to careless drafting." Ackermann v. Levine, 788 F.2d 830, 839 (2nd Cir.1986) (quoting 1 B. Ristau, International Judicial Assistance (Civil and Commercial) §§ 4-10 at 132 (1984)); see also Zisman v. Sieger, 106 F.R.D. 194 (N.D.Ill.1985); Weight v. Kawasaki Heavy Industries, Ltd., 597 F.Supp. 1082, 1085-86 (E.D.Vir.1984); Chrysler Corporation v. General Motors Corporation, 589 F.Supp. 1182, 1206 (D.D.C.1984). Thus, there is no significant distinction to be drawn between the use of "send" in Art. 10(a) and the words "effect service" in Art. 10(b) and (c). Allowing such a distinction to prohibit service of process directly by mail under Art. 10(a) would be to elevate form over substance. This is because "the reference to `the freedom to send judicial documents by postal channels, directly to persons abroad' would be superfluous unless it was related to the sending of such documents for the purpose of service." Ackermann, 788 F.2d at 839 (quoting Shoei Kako v. Superior Court, 33 Cal.App.3d 808, 109 Cal.Rptr. 402 (1973)). Since Japan did not reject Art. 10(a), "Japan has not declared that it objects to service through postal channels." Practical Handbook on the Operation of the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, at 112 (1983). Therefore, this Court is of the opinion that Plaintiffs' service of process directly upon Dainichi-Japan by registered mail was sufficient to comport with Art. 10(a) of the Hague Convention.

Personal Jurisdiction

Defendants also argue that this Court lacks personal jurisdiction over them pursuant to the Texas Long Arm Statute and federal constitutional due process requirements. Initially, it should be noted that while Defendants attempt to argue that the Texas Long Arm Statute, Tex.Civ.Prac. & Rem.Code § 17.042 et seq. (Vernon 1987), has certain requirements which are distinct from and more strict than constitutional due process requirements, it is well-settled that the Texas Long Arm Statute reaches as far as constitutionally allowed and, therefore, the inquiry under the Texas Long Arm Statute collapses into and becomes a part of the constitutional due process inquiry. Bearry v. Beech Aircraft Corp., 818 F.2d 370, 373 (5th Cir.1987); Kawasaki Steel Corp. v. Middleton, 699 S.W.2d 199, 200 (Tex.1985); U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977). Consequently, since the Texas Long Arm Statute extends to the limits of due process, the inquiry here is solely whether the exercise of jurisdiction over the Defendants comports with the constitutional requirements of due process. Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773, 777 (5th Cir.1986).

The first step in analyzing this question is to note that the Plaintiffs bear the burden of establishing that jurisdiction exists over the Defendants. Colwell Realty Investments v. Triple T Inns, 785 F.2d 1330, 1332-33 (5th Cir.1986). However, this burden is met, in this case, by the Plaintiffs making a prima facie showing of the facts upon which jurisdiction is based. Id. In reviewing the jurisdictional facts of this case, the Court has relied on the Plaintiffs' pleadings as well as affidavits submitted by all parti...