Thornton v. Toyota Motor Sales USA Inc.

• Decision Date: 29 May 1975
• Docket Number: Civ. A. No. 18431.
• Citation: 397 F. Supp. 476
• Parties: Reese L. THORNTON et al. v. TOYOTA MOTOR SALES U.S.A. INC., et al.
• Court: U.S. District Court — Northern District of Georgia

397 F. Supp. 476

Reese L. THORNTON et al. v. TOYOTA MOTOR SALES U.S.A. INC., et al.

Civ. A. No. 18431.

United States District Court, N. D. Georgia, Atlanta Division.

May 29, 1975.

Ross & Finch, Atlanta, Ga., for plaintiffs.

N. Forrest Montet and Malcolm P. Smith, Atlanta, Ga., for defendants.

ORDER

HENDERSON, District Judge.

Pursuant to the order of February 21, 1975, the parties filed supplementary briefs on the issue of whether this suit was properly brought in this district pursuant to the provisions of 28 U.S.C. § 1391(a) and (c), and, additionally, whether dismissal or transfer is warranted under either 28 U.S.C. §§ 1404(a) or 1406(a). From those briefs, it is apparent that all parties concur in the conclusion tenatively drawn in the February 21, 1975 order that venue does not lie in this court; and they further agree that the correct forum is in the Southern District of Georgia, Brunswick Division, where the claim arose.

Since venue is improper in this court, transfer under 28 U.S.C. § 1404(a) is foreclosed. 1 Moore's Federal Practice, ¶ 0.145 3.-1; Nizami v. Woods, 263 F.Supp. 124 (S.D.N.Y. 1967); Viaggio v. Field, 177 F.Supp. 643 (D.Md.1959). Therefore, the question now becomes whether the case should be dismissed or transferred under 28 U.S.C. § 1406(a), which provides that:

The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

The first step is to determine if there is another federal district and division in which the instant suit "could have been brought." This phrase has generally been construed to require that the transferee district must have subject matter jurisdiction and proper venue and that the defendants must be amenable to service of process issuing out of that court. Moore's, supra, ¶ 0.1465, cf. ¶ 0.1456.-1; Annotation, 3 A.L.R. Fed. 467, §§ 18-20 (1970); Griffin v. Connally, 127 F.Supp. 203 (S.D.Tex.1955); See also Smith v. Murchison, 310 F. Supp. 1079 (S.D.N.Y.1970); cf. Harry Rich Corporation v. Curtiss-Wright Corporation, 308 F.Supp. 1114 (S.D.N.Y. 1969).

From what has thus far transpired in this case, see order of February 21, 1975, it is clear that both proper venue and subject matter jurisdiction would exist in the Brunswick Division of the Southern District of Georgia. Thus, the availability of 28 U.S.C. § 1406(a) as a vehicle for effectuating transfer of the action to that court turns solely on whether the defendants can be properly served in the transferee district.¹

In their joint brief responding to the order of February 21, 1975, the defendants collectively assert, without elaboration or evidentiary support, that none of them are amenable to service of process in this case by any federal court within the State of Georgia. This allegation is premised upon their further argument that they, as nonresident defendants, were not subject to personal jurisdiction under the Georgia long arm statute, Ga. Code Ann. § 24-113.1, and, therefore, not susceptible to service of process under Rule 4(d) or (e), Fed.R.Civ.P., in conjunction with Ga.Code Ann. § 24-115. However, only one of the defendants, Toyota Motor Company, Ltd., actually moved to quash service of process and for dismissal on those grounds. Consequently, in resolving amenability to process issuing from the Southern District of Georgia, only the contentions of Toyota Motor Company, Ltd., will be considered.²

The complaint, as amended, seeks to recover for personal injuries and consequential damages incurred by the plaintiffs as a result of an automobile accident occurring approximately eight miles south of Baxley, Georgia. The plaintiffs allege that while they were riding in the vehicle, a 1973 Toyota automobile, a mechanical failure caused it to leave the highway and strike a tree. The operative portion of the complaint, insofar as Toyota Motor Company, Ltd., is concerned, avers that:

The aforesaid collision and resulting injuries and damages to plaintiff was sic caused by the negligence of the defendant, Toyota Motor Company, Ltd., in that said defendant negligently designed, manufactured, distributed and sold said automobile with defective brakes.

Amended Complaint, ¶ 15. The complaint also charges the other defendants with negligence for failure to inspect the brakes, and all defendants are charged with failing to warn of the purported defect.

In support of its position that it cannot be validly served by a Georgia federal or state court, the defendant, Toyota Motor Company, Ltd., maintains that it is a corporation organized and existing under the laws of Japan. It further represents:

That TOYOTA MOTOR COMPANY, LTD., is a manufacturer of Toyota automobiles. That all such automobiles are manufactured in the Country of Japan and are sold in the Country of Japan to TOYOTA MOTOR SALES COMPANY, LTD., the exporter and likewise a Japanese corporation in which TOYOTA MOTOR COMPANY, LTD., has a 39.14% ownership interest in the stock. TOYOTA MOTOR COMPANY, LTD., owns 50% of TOYOTA MOTOR SALES, U. S. A., INC., another defendant here which is the national importer of Toyota automobiles, purchasing same from TOYOTA MOTOR SALES COMPANY, LTD. That SOUTHEAST TOYOTA DISTRIBUTORS, INC., another defendant here is an independent corporation in which none of the other defendants have any ownership interest, and SOUTHEAST TOYOTA DISTRIBUTORS, INC., a Florida corporation, is the distributor for Toyota automobiles in the Southeastern part of the United States, which includes the State of Georgia. That none of the defendants in this case have any control, in any form or fashion, over SOUTHEAST TOYOTA DISTRIBUTORS, INC., as to when, where and/or to whom, etc., it may sell a Toyota automobile. That a Toyota automobile manufactured by TOYOTA MOTOR COMPANY, LTD., is sold to TOYOTA MOTOR SALES COMPANY, LTD., and title to such vehicle passes in Japan. That TOYOTA MOTOR SALES, U. S. A., INC., imports Toyota automobiles by purchasing same from TOYOTA MOTOR SALES COMPANY, LTD., and title to such vehicle passes to TOYOTA MOTOR SALES, U. S. A., INC., before or at the time such vehicles reach the United States. That Toyota automobiles which may ultimately reach the State of Georgia are sold into the State of Georgia by an independent distributor company, SOUTHEAST TOYOTA DISTRIBUTORS, INC., who purchases such vehicles from TOYOTA MOTOR SALES, U. S. A., INC., and which vehicles enter the United States through Jacksonville, Florida, at which time title passes to SOUTHEAST TOYOTA DISTRIBUTORS, INC. TOYOTA MOTOR COMPANY, LTD., has never manufactured or produced any product in the United States of America, never had any representative stationed in the State of Georgia, never sent any agent or employee into the State of Georgia on business connected with TOYOTA MOTOR COMPANY, LTD., has never owned real or personal property in the State of Georgia, has never sent representatives into the State of Georgia to solicit business, has never solicited business in the State of Georgia through any agent or employee, has never existed under the laws of the State of Georgia, or under any other laws of the United States of America, and has never been authorized to transact business in the State of Georgia or any other State in the United States of America, has never done business or transacted business within the State of Georgia, has never solicited business in the State of Georgia, and all of its places of business are located without the State of Georgia and always have been, has never been domesticated under the laws of the State of Georgia or any other State in the United States of America, has never maintained a place of business in the State of Georgia, has never had a designated agent within the State of Georgia upon whom service could be effected, or any other agent upon whom service could be effected, has never produced or manufactured any product in the United States of America, and has never dealt directly with any individual or entity located within the State of Georgia.

Brief of Toyota Motor Company, Ltd., filed March 19, 1975, at 3-4. Based upon this recitation of facts, the defendant contends that, as a matter of state and federal constitutional law, it has had insufficient contacts with Georgia to render it amenable to suit here.

In a diversity suit such as this, "a federal district court may exercise in personam jurisdiction over a foreign defendant only if a state court could do so in the proper exercise of state law." Mack Trucks v. Arrow Aluminum Castings Co., 510 F.2d 1029, 1031 (5th Cir. 1975). See also Arrowsmith v. United Press International, 320 F.2d 219 (2nd Cir. 1963). In Georgia, personal jurisdiction over nonresident defendants is obtained pursuant to the Georgia long arm statute, which provides in relevant part that:

A court of this State may exercise personal jurisdiction over any nonresident, or his executor or administrator, as to a cause of action arising from any of the acts, omissions, ownership, use or possession enumerated in this section, in the same manner as if he were a resident of the State, if in person or through an agent, he:

(a) Transacts any business within this State; or

(b) Commits a tortious act or omission within this State, except as to a cause of action for defamation of character arising from the act; or

(c) Commits a tortious injury in this State caused by an act or omission outside this State, if the tortfeasor regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this State . . ..

Ga.Code Ann. § 24-113.1. Although, at first glance, it would appear that the existence of in personam jurisdiction over the foreign defendants in this case is governed by the more stringent standard of subsection (...