Winn v. Vitesco Technologies GmbH

• Decision Date: 26 September 2022
• Docket Number: A22A0726
• Citation: 365 Ga.App. 442,878 S.E.2d 785
• Parties: WINN v. VITESCO TECHNOLOGIES GMBH.
• Court: Georgia Court of Appeals

365 Ga.App. 442

878 S.E.2d 785

WINN

v.VITESCO TECHNOLOGIES GMBH.

A22A0726

Court of Appeals of Georgia.

September 26, 2022

David A. Bessho, Cozen O'Connor, for Appellant.

Christopher Scott Anulewicz, Balch & Bingham, Christopher Edward Neill, Atlanta, Douglas E. Horelick, Eric D. Ruben, Clyde & Co US, for Appellee.

Doyle, Presiding Judge.

Frank Winn asserted products liability and negligence claims against Vitesco Technologies GmbH ("Vitesco"), a German corporation. Vitesco moved to dismiss the claims for lack of personal jurisdiction, and the trial court granted the motion. Winn appeals, arguing that the trial court erred by ruling that it lacked personal jurisdiction over Vitesco because (a) Vitesco failed to rebut his OCGA § 9-10-91 (3) jurisdictional allegation that Vitesco derives substantial revenue from goods used or services rendered in Georgia and that it committed a tortious injury in Georgia; and (2) the exercise of personal jurisdiction over Vitesco would not violate due process. For the reasons that follow, we affirm.

"A motion to dismiss for lack of personal jurisdiction must be granted if there are insufficient facts to support a reasonable inference that defendant can be subjected to the jurisdiction of the court."¹

A defendant moving to dismiss for lack of personal jurisdiction bears the burden of proving the absence of jurisdiction. To meet that burden, the defendant may raise matters not contained in the pleadings. However, when the outcome of the motion depends on unstipulated facts, it must be accompanied by supporting affidavits or citations to evidentiary material in the record. Further, to the extent that defendant's evidence controverts the allegations of the complaint, plaintiff may not rely on mere allegations, but must also submit supporting affidavits or documentary evidence. When examining and deciding jurisdictional issues on a motion to dismiss, a trial court has discretion to hear oral testimony or to decide the motion on the basis of affidavits and documentary evidence alone pursuant to OCGA § 9-11-43 (b). If the trial court conducts an evidentiary hearing, it may resolve disputed factual issues, and we will show deference to those findings. On the other hand, [if], as here, a motion is resolved based solely upon written submissions, the reviewing court is in an equal position with the trial court to determine the facts and therefore examines the facts under a non-deferential standard, and we resolve all disputed issues of fact in favor of the party asserting the existence of personal jurisdiction.²

Here, the record shows that in September 2016, a fire damaged Winn's home in Douglasville, Georgia. Alleging that the fire was caused by a water pump that had been recently installed in his 2013 BMW X5 vehicle during service by Sons Auto Holdings, LLC, d/b/a BMW of South Atlanta ("BMW-SA"), Winn filed a negligence and products liability action against BMW-SA in Fulton County Superior Court. He later amended his complaint to add as a defendant Vitesco, the German corporation that manufactured the water pump.

As amended, the complaint alleged that Vitesco derives substantial revenue from goods used or consumed or services rendered in Georgia, committed a tort in Georgia, and is subject to personal jurisdiction in the Fulton County court pursuant to Georgia's Long Arm Statute, OCGA § 9-10-91. Vitesco filed a motion to dismiss by way of special appearance in which it sought dismissal of the complaint for lack of personal jurisdiction under OCGA § 9-11-12 (b) (2). The trial court granted the motion, finding that Vitesco's activities are not subject to the Long Arm Statute and that, even if they were, any exercise of jurisdiction over Vitesco under the circumstances would violate due process.³ The trial court granted Winn a certificate of immediate review, and he filed an application for discretionary appeal, which this Court granted. This appeal followed.

A Georgia court may exercise personal jurisdiction over a nonresident defendant where two requirements are met. First, the defendant must have committed some act or engaged in some activity set forth in Georgia's Long Arm Statute, OCGA § 9-10-91. Second, the exercise of jurisdiction over a particular defendant pursuant to the Long Arm Statute must comport with the requirements of due process.⁴

In his second amended complaint, Winn alleged that "Vitesco derives substantial revenue from goods used or consumed or services rendered in this State and, having committed a tortious injury in this State, is subject to personal jurisdiction by this [C]ourt pursuant to OCGA § 9-10-91." In its motion to dismiss, Vitesco argued that it has no contacts with Georgia and that all of its jurisdictionally-relevant conduct (design, manufacture, and sale of the water pump) occurred in Germany. Vitesco submitted the affidavit of Thorsten Eid, Vitesco's Head of Operational Excellence & Claim Management for a water pump product line, averring that Vitesco is a German company, and that it manufactured the subject water pump in Germany and sold the water pump to German company BMW AG in Germany, after which "it had no control or input into how, when, or where BMW AG used, distributed and/or sold it." Eid further averred that Vitesco's products are not designed or manufactured specifically for the Georgia market nor the U. S. market, and it "has no direct knowledge of whether or to what extent any of its products (including its water pumps) were ever sold in, or otherwise ended up in ... Georgia." Vitesco makes no effort to target Georgia for marketing or sales, and it does not track any "revenue share" for sales in Georgia or any other state, country or continent. In response to Winn's discovery requests, Vitesco provided statements that it manufactured the water pump for use exclusively in BMW's N55 engine, that from 2009 to 2019 it sold approximately 1.25 million of the pumps to BMW AG, that approximately 1,392 2013 BMW X5 vehicles like Winn's were sold in Georgia, that 19,251 BMW vehicles with N55 engines were sold in Georgia, and that Vitesco's pumps account for less than 50 percent of the market share of BMWs with N55 engines. It further stated that it knew its products were sold throughout the world, that BMWs were sold in the United States and in Georgia, and that the water pump would be installed in BMW X5 vehicles, such as the one Winn owned. Vitesco also "assume[d]" that its pumps could be sold in every state in the United States where there were BMW vehicles with N55 engines.

1. Winn contends that the court erred by ruling that it lacked personal jurisdiction over Vitesco because Vitesco "assumed" its water pumps would be sold throughout the United States, including Georgia. We disagree. Even assuming that Vitesco is subject to jurisdiction under the Long Arm Statute, constitutional due process still precludes the exercise of personal jurisdiction over it.

Due process requires that individuals have fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign. In evaluating whether a defendant could reasonably expect to be haled into court in a particular forum, courts examine defendant's contacts with the state, focusing on whether (1) defendant has done some act to avail himself of the law of the forum state; (2) the claim is related to those acts; and (3) the exercise of jurisdiction is reasonable, that is, it does not violate notions of fair play and substantial justice. Courts address the first two factors to determine whether the defendant has established the minimum contacts necessary for the exercise of jurisdiction. If such minimum contacts are established, courts then address the third factor to determine if the assertion of jurisdiction is reasonable. Consideration of these three factors helps to ensure that a defendant is not forced to litigate in a jurisdiction solely as a result of random, fortuitous or attenuated contacts.⁵

Applied to this case, therefore, the first issue is whether Vitesco purposefully availed itself of the laws of Georgia.⁶ "Purposeful availment exists in the circumstance where a nonresident purposefully directs its activities toward forum residents."⁷ In the instant case, Vitesco, a German manufacturer, sold the subject water pump to an out-of-state distributor, and the product eventually found its way into Georgia.

The United States Supreme Court addressed a similar scenario in Asahi Metal Indus. Co. v. Superior Court of Cal. ,⁸ in which the Court articulated two tests for finding purposeful availment in similar situations: "stream of commerce" and "stream of commerce plus."⁹ Neither test commanded a majority from the Court, and Georgia has not yet decided which analysis is applicable.¹⁰ Nevertheless, there is no jurisdiction over Vitesco in this case under either analysis.

Stated generally, the "stream of commerce" test confers personal jurisdiction if a defendant corporation "delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum [s]tate."¹¹ The "stream of commerce plus" test imposes the additional requirement that the defendant target the forum state in some manner.¹² Because it is uncontroverted that Vitesco does not target the Georgia market in a manner sufficient to satisfy the "stream of commerce plus" analysis, we consider the "stream of commerce" test only.

As explained in World-Wide Volkswagen Corp. v. Woodson ,¹³

[if] a corporation purposefully avails itself of the privilege of conducting activities within the forum [s]tate, it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the [s]tate. Hence if the sale of a product of a manufacturer or distributor ... is not simply an isolated occurrence, but arises from

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