Becnel v. Lamorak Insurance Company

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

JAMES BECNEL ET AL CIVIL ACTION

VERSUS NO. 19-14536

LAMORAK INSURANCE COMPANY ET AL SECTION “B”(5)

ORDER AND REASONS

Before the Court are Defendant National Automotive Parts

Association LLC’s (“NAPA”) motion for summary judgment (Rec. Doc.

360), Plaintiffs’ opposition to the motion (Rec. Doc. 521),

Defendant Huntington Ingalls Incorporated’s (“Avondale”)

opposition to NAPA’s motion for summary judgment (Rec. Doc 527),

and NAPA’s reply in support (Rec. Doc. 597). For the following

reasons,

IT IS HEREBY ORDERED that the motion is DENIED.

FACTS AND PROCEDURAL HISTORY

The facts of this case have been laid out in greater detail

in previously issued Orders and Reasons and are adopted by

reference herein.

On September 12, 2019, National Auto Parts Association

(“NAPA”) filed a Declinatory Exception of Lack of Personal

Jurisdiction in state court prior to this matter being removed.

See Rec. Doc. 360-3 (NAPA Declinatory Exception of Lack of Personal

Jurisdiction). The Exception was overruled. See Rec. Doc. 360-4

(Judgment on NAPA Declinatory Exception of Lack of Personal

Jurisdiction).

On April 26, 2022, NAPA filed a motion for summary judgment

asserting similar, if not identical, arguments from its previously

denied declinatory exception. Rec. Doc. 360-1. Plaintiff filed an

opposition to NAPA’s motion on May 17, 2022. Rec. Doc. 521. On May

17, 2022, Defendant Avondale also filed an opposition to NAPA’s

motion for summary judgment. Rec. Doc. 527. Subsequently, on May

25, 2022, NAPA filed a reply to both Plaintiff and Avondale’s

oppositions. Rec. Doc. 597.

LAW AND ANALYSIS

A. Summary Judgment Standard

Pursuant to Federal Rule of Civil Procedure 56, summary

judgment is appropriate when “the pleadings, depositions, answers

to interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment

as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322

(1986) (quoting Fed. R. Civ. P. 56(c)). A genuine issue of

material fact exists if the evidence would allow a reasonable

jury to return a verdict for the nonmoving party. Anderson v.

Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). As such, the court

should view all facts and evidence in the light most favorable to

the non-moving party. United Fire & Cas. Co. v. Hixon Bros. Inc.,

453 F.3d 283, 285 (5th Cir. 2006).

When the movant bears the burden of proof, it must

“demonstrate the absence of a genuine issue of material fact”

using competent summary judgment evidence. Celotex, 477 U.S. at

323. However, “where the non-movant bears the burden of proof at

trial, the movant may merely point to an absence of evidence.”

Lindsey v. Sears Roebuck & Co., 16 F.3d 616, 618 (5th Cir. 1994).

Should the movant meet its burden, the burden shifts to the non-

movant, who must show by “competent summary judgment evidence”

that there is a genuine issue of material fact. See Matsushita

Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586

(1986); Lindsey, 16 F.3d at 618. However, “a party cannot defeat

summary judgment with conclusory allegations, unsubstantiated

assertions, or only a scintilla of evidence.” See Sec. & Exch.

Comm’n v. Arcturus Corp., 912 F.3d 786, 792 (5th Cir. 2019).

B. Whether NAPA is Entitled to Summary Judgment on Grounds

of Lack of Personal Jurisdiction

NAPA contends its motion for summary judgment should be

granted because this Court lacks personal jurisdiction. Rec. Doc.

360. NAPA cites the Louisiana Long-Arm statute, an affidavit from

a corporate witness, as well as several cases in support of its

claim. NAPA’s main assertion is it lacks sufficient contacts with

the state of Louisiana to justify this Court’s exercise of personal

jurisdiction. Plaintiffs rebut NAPA’s argument that it did not

transact business in the state and assert that it is indeed a

manufacturer under Louisiana law and has conducted sufficient

business transactions within Louisiana to be hauled into court in

this state.

In two seminal decisions, Goodyear Dunlop Tires Operations,

S.A. v. Brown, 131 S. Ct. 2847, 2853-54 (2011), and Daimler AG v.

Bauman, 134 S. Ct. 746, 757 (2014), the United States Supreme Court

held that the exercise of general personal jurisdiction over a

corporation is justified when the corporation is either

incorporated in the forum state or has its principal place of

business there. The decisions in Daimler and Goodyear also apply

equally to limited liability corporations. See Daimler, 134 S. Ct.

at 761 (looking to MBUSA’s place of incorporation and principal

place of business to determine whether general jurisdiction

existed, even though MBUSA was an LLC.)

Here, defendant NAPA is a limited liability company with its

principal place of business in Atlanta, Georgia. Rec. Doc. 360.

Thus, NAPA is a citizen of Atlanta and its place of incorporation.

NAPA was not incorporated in Louisiana, nor does it have any

corporate offices in this state. Therefore, this corporation is

not at home in Louisiana for this Court to exercise general

personal jurisdiction over this defendant. Given NAPA is a non-

resident defendant, the Court must go further to determine whether

we can nevertheless exercise personal jurisdiction over it as a

non-resident defendant.

A court has specific personal jurisdiction over a nonresident

defendant when: (1) the forum state's long-arm statute confers

personal jurisdiction over that defendant; and (2) the forum

state's exercise of jurisdiction complies with the Due Process

Clause of the Fourteenth Amendment. Gross v. RSJ Int'l, LLC, No.

CIV.A. 11-73, 2012 WL 729955 (E.D. La. Mar. 6, 2012) (citing

Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir.1999)). Because

Louisiana's long-arm statute, La. R.S. § 13:3201, et seq., extends

jurisdiction to the full limits of due process, the Court's focus

is solely on whether the exercise of its jurisdiction in this case

satisfies federal due process requirements. Dickson Marine Inc. v.

Panalpina, Inc., 179 F.3d 331, 336 (5th Cir.1999) (citing La. R.S.

§ 13:3201(B)).

The exercise of personal jurisdiction over a nonresident

defendant satisfies due process when (1) the defendant has

purposefully availed himself of the benefits and protections of

the forum state by establishing “minimum contacts” with that state,

and (2) exercising personal jurisdiction over the defendant does

not offend “traditional notions of fair play and substantial

justice.” Latshaw, 167 F.3d at 211 (citing Int'l Shoe Co. v. Wash.,

326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). This Circuit

follows a three-step analysis for specific jurisdiction. Seiferth

v. Helicopteros Atuneros, Inc., 472 F.3d 266, 274–75 (5th

Cir.2006).

First, the Court must determine “whether the defendant has

minimum contacts with the forum state, i.e., whether it purposely

directed its activities toward the forum state or purposefully

availed itself of the privileges of conducting activities there.”

Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841 (5th

Cir.2000). Second, the Court considers “whether the plaintiff's

cause of action arises out of or results from the defendant's

forum-related contacts.” First Inv. Corp. of the Marshall Islands

v. Fujian Mawei Shipbuilding, Ltd. of People's Republic of China,

858 F. Supp. 2d 658 (E.D. La.), aff'd sub nom. First Inv. Corp. of

Marshall Islands v. Fujian Mawei Shipbuilding, Ltd., 703 F.3d 742

(5th Cir. 2012), as revised (Jan. 17, 2013). The proper focus of

the personal jurisdiction analysis is on the “relationship among

the defendant, the forum, and the litigation.” Stroman Realty,

Inc. v. Wercinski, 513 F.3d 476, 487 (5th Cir.2008). Lastly, “[i]f

the plaintiff successfully satisfies the first two prongs, the

burden shifts to the defendant to defeat jurisdiction by showing

that its exercise of jurisdiction would be unfair or unreasonable.”

Seiferth, 472 F.3d at 271 (citing Burger King Corp. v. Rudzewicz,

471 U.S. 462, 482 (1985)).

i. NAPA Purposefully directed activities at the

forum state

Here, Plaintiffs and Avondale have offered substantial

evidence that NAPA’s activity satisfies the requirement of minimum

contacts with Louisiana. Plaintiffs point to the deposition

testimony of the decedent who testified that while working in the

Becnel Garage from 1958 to 1963, and again from 1967 to 2008, he

obtained replacement parts, and specifically Rayloc brakes, from

Pope’s Parts in Thibodeaux, Louisiana. Rec. Doc. 521-6 (Discovery

Deposition of James Becnel at pp. 336, 461, 465-66, 491, 555-56).

The decedent also testified that Pope’s Parts was a NAPA-branded

distributor, and the brakes and clutches he ordered came in in

boxes brandishing the NAPA logo. Id. Plaintiffs also attached a

printout of the NAPA website, confirming and identifying Pope’s

Parts as a NAPA store. Rec. Doc. 521-11 (NAPA Website Printout).

The decedent further testified that he obtained parts from the

NAPA store located in New Orleans, Louisiana. Rec. Doc. 521-6

(Discovery Deposition of James Becnel at pp. 414); Rec. Doc. 521-

5 (Perpetuation Deposition of James Becnel at p. 98). Mr. Becnel

also testified that he attended mechanic classes once a year that

were held by NAPA in Thibodaux, Louisiana. Rec. Doc. 521-6

(Discovery Deposition of James Becnel at pp. 334-35, 428-29).

Plaintiffs also point to the testimony of Thomas L. D’Aquin,

Jr. (“D’Aquin”), a former employee of Genuine Parts Company

(“GPC”), who confirmed that the parts the decedent claimed to have

purchased from the New Orleans, LA distribution center would have

been obtained from that location. Rec. Doc. 521-12 (Deposition of

Thomas L. D’Aquin, Jr. at pp. 48-49). D’Aquin also testified that

the various NAPA stores in the area would be serviced by the New

Orleans distribution center. Id. at p. 52.

Plaintiffs also offered testimony from Byron Frantz

(“Frantz”), a corporate representative of GPC. Rec. Doc. 521-10

(Deposition of Byron Frantz). Frantz testified that NAPA owned the

Rayloc trademark and licensed it to GPC, and that Rayloc brakes

were marketed under the NAPA name. Id. at pp. 273-75. He also

confirmed that GPC only sold Rayloc products through NAPA

distribution centers from 1960 through the 1990s and that the NAPA

name was on the Rayloc product boxes. Id.

Plaintiffs also offered testimony from Gaylord Spencer

(“Spencer”), a NAPA corporate representative. Rec. Doc. 521-8

(Deposition of Gaylord Spencer). Spencer provided testimony about

the relationship between Pope’s Parts and NAPA. See Id. He

testified that NAPA maintains at least sixty distribution centers

around the country and that NAPA branded stores, like Pope’s Parts,

have access to parts from distribution centers. Id. at pp. 7-8,

32-33. He also stated that NAPA provides marketing and advertising

services to member companies like GPC and Pope’s Parts. Id. at pp.

28.

Similarly, Avondale points to the deposition testimony of

Pope’s Parts corporate representative, Gregory Diez. Diez

testified that to use the NAPA logo, sell NAPA products, and

participate in NAPA’s national advertising campaign, Pope’s was

required to pay an annual fee to NAPA. Rec. Doc. 527-8 (Deposition

of Gregory Diez at pp. 41-44). Diez also confirmed that the

products sold by Pope’s Parts contained the “NAPA Quality of

Assurance” logo and the NAPA logo appeared on product boxes, in

the store, on the building itself, and on employee uniforms. Rec.

Doc. 521-13 (Deposition of Gregory Diez at pp. 34-35, 78-79).

NAPA argues that it merely allows its members to operate

automotive part distribution centers with the NAPA logo and

trademark. Rec. Doc. 360. Additionally, defendant contends that it

does not operate wholesale or retail businesses, nor does it

manufacture, sell, or distribute any automotive parts. NAPA points

to the affidavit of its former Director of Loyalty, Whitney

Swingle, for support. Rec. Doc. 360-8 (Affidavit of Whitney

Swingle). Swingle stated that “NAPA does not manufacture, design,

distribute, supply, or sell automotive parts or otherwise place

automotive parts into the stream of commerce.” Id. She further

asserted that NAPA does not distribute parts; instead, it functions

as a trade association for its members, who are themselves

distributors. Id.

Nonetheless, this Court finds that plaintiffs and Avondale

have presented significant evidence to the contrary, including

evidence showing that NAPA distributed Rayloc brakes and other

automotive parts through its distribution centers in this state.

Considering the evidence presented in its entirety, not only does

it seem that NAPA is distributing products in Louisiana by having

local distribution centers brandishing its logo, but it also

provided services in this state by conducting mechanic classes.

Viewing this in the light most favorable to plaintiffs, they have

made a showing that NAPA: (1) distributed, supplied, marketed, and

benefitted from the sale of its Rayloc brakes; (2) expressly aimed

at, marketed, sold, and distributed in Louisiana, and (3) caused

harm that it knew was likely to be suffered in Louisiana. See

United Fire & Cas. Co. v. Hixon Bros. Inc., 453 F.3d 283, 285 (5th

Cir. 2006) (stating the court should view all facts and evidence

in the light most favorable to the non-moving party). Accordingly,

they have provided sufficient support that NAPA purposefully

availed itself of the privilege of conducting activities in

Louisiana, thereby invoking the benefits and protections of its

laws.

ii. Plaintiffs’ claims arise out of NAPA’s activity

Having determined that the defendant has the requisite

minimum contacts required to exercise personal jurisdiction, this

Court must now consider whether the plaintiffs’ cause of action

arises out of or results from NAPA's forum-related contacts. To

determine whether a suit arises out of or relates to a defendant's

specific contacts with the forum state, this Courts will utilize

a “but for” test. See Benson v. Rosenthal, 116 F. Supp. 3d 702

(E.D. La. 2015) (stating that the Fifth Circuit would subscribe to

a “but for” analysis); Trinity Indus., Inc. v. Myers & Associates,

Ltd., 41 F.3d 229 (5th Cir.1995) (utilizing “but for” test and

finding that plaintiff’s claims arose out of defendant’s contacts

with Texas).

Therefore, the issue here is: but for NAPA's contacts with

Louisiana, would plaintiffs’ claims against NAPA have arisen? NAPA

argues that they cannot satisfy the but for test because it “does

not manufacture, sell, supply, or hold itself out to be the

manufacturer of any automotive products.” Rec. Doc. 360 at 3.

Plaintiffs, however, have offered sufficient evidence that their

claims against NAPA would not have arisen but for NAPA's contacts

in Louisiana, and specifically, NAPA’s distribution, marketing,

and sale of automotive parts and alleged asbestos containing Rayloc

brakes. See Section B(i), supra. In essence, plaintiffs provide

that but for NAPA’s distribution, marketing, sale, and quality

assurance of Rayloc brakes in Louisiana, the decedent would not

have purchased the brakes and thereby would not have been exposed

to asbestos from that product. See Rec. Doc. 521. Therefore,

plaintiffs have provided sufficient support that their claims

arise out of NAPA's Louisiana-related activities.

iii. This Court’s exercise of jurisdiction is

reasonable

Finally, this Court must consider whether the exercise of

jurisdiction over Defendant would be fair and reasonable.

In determining whether or not exercise of jurisdiction

is fair and reasonable, defendants bear the burden of

proof and it is rare to say the assertion [of

jurisdiction] is unfair after minimum contacts have been

shown. In this inquiry we examine five factors: (1) the

burden on the nonresident defendant, (2) the forum

state's interests, (3) the plaintiff's interest in

securing relief, (4) the interest of the interstate

judicial system in the efficient administration of

justice, and (5) the shared interest of the several

states in furthering fundamental social policies.

McFadin v. Gerber, 587 F.3d 753, 759–60 (5th Cir.2009) (internal

quotations omitted); Benson v. Rosenthal, 116 F. Supp. 3d 702, 713

(E.D. La. 2015).

The exercise of jurisdiction here would be reasonable. NAPA

did not assert in its motion that it would be a great burden to be

hauled into court in Louisiana. Defendant simply maintained that

this Court’s exercise of jurisdiction is inappropriate due to it

being a membership organization, lacking minimum contacts with

this state. Although the burden on NAPA would be high given its

out of state citizenship, the interest of the plaintiffs and the

forum state outweigh it. Plaintiffs have a greater interest in

obtaining convenient and effective relief. Likewise, the forum

state has a high level of interest in this case because the alleged

asbestos exposure occurred in this jurisdiction. Furthermore, the

products that caused the decedent’s alleged injury were

distributed and sold in Louisiana. Thus, the exercise of

jurisdiction over this defendant does not violate the traditional

notions of fair play or substantial justice. Accordingly, NAPA’s

motion for summary judgment is DENIED.

New Orleans, Louisiana this 16th day of August, 2022

___________________________________

SENIOR UNITED STATES DISTRICT JUDGE