Peerless Insurance Company v. A.O. Smith Corporation

UNITED STATES DISTRICT COURT

FOR THE

WESTERN DISTRICT OF NEW YORK

PEERLESS INSURANCE COMPANY, as _ )

Subrogee of JAMESTOWN’S RENTAL )

PROPERTIES LLC, )

)

Plaintiff, )

)

V. ) Case No. 1:19-cv-1699

)

BROAN-NUTONE, LLC, NUTONE, INC., _ )

A.O. SMITH CORPORATION, and )

REGAL BELOIT CORPORATION, )

)

Defendants. )

ORDER ON MOTION TO DISMISS FOR LACK OF JURISDICTION

(Doc. 8)

In this product liability case removed from Chautauqua County Supreme Court, Plaintiff

Peerless Insurance Company—~as subrogee of its insured Jamestown’s Rental Properties LLC—

sues the above-captioned defendants on theories of strict liability, negligence, and breach of

warranty arising out of a fire at a commercial property. Defendants A.O. Smith Corporation and

Regal Beloit Corporation (collectively, the “Component Manufacturer Defendants”) have filed a

motion to dismiss for lack of personal jurisdiction. (Doc. 8.) Plaintiff opposes the motion

(Doc. 11) and the Component Manufacturer Defendants have filed a reply (Doc. 16). The court

held a telephone status conference on May 18, 2020. (Doc. 25.)

Background

The parties have stipulated to the following facts that are material to the pending motion.

(See Docs. 26, 27.) On December 19, 2016, a Mayville, New York commercial building insured

by Plaintiff Peerless Insurance Co. was damaged in a fire, with direct fire damage confined

largely to the restroom. The restroom was ventilated by a fan manufactured by defendants

Broan-Nutone, LLC, Nutone, Inc. (collectively, “Broan”), or a Broan predecessor in interest.

Plaintiff alleges that the fire originated in the exhaust fan, which Plaintiff asserts was not altered

or modified prior to or during its use. Plaintiff attributes fault to Broan as the manufacturer of

the fan. Plaintiff also sues defendant A.O. Smith Corporation and its alleged successor,

defendant Regal Beloit Corporation, as the manufacturers of the component fan motor. The

court will refer to A.O. Smith Corporation and Regal Beloit Corporation as the “Component

Manufacturer Defendants.”

Defendants deny that the exhaust fan and the fan motor were defective or the cause of the

fire.

Broan is one of the principal manufacturers of residential and commercial ventilation

products in the United States. These products include exhaust fans of the type at issue in this

case. Broan’s products are sold in every state, including New York State.

A.O. Smith is best known for the manufacture of hot water heaters, boilers, and other

plumbing equipment. Prior to 2011, it manufactured fan motors for resale to manufacturers like

Broan, which incorporated these into their finished products.

The Component Manufacturer Defendants played no part in the marketing and

distribution of Broan products. Based on Broan’s reputation as a national-level manufacturer of

exhaust fans and similar products, the Component Manufacturer Defendants knew that the fan

motors it supplied would be used to make fans sold in all states, including New York State.

In addition to the facts stipulated above, the court notes as follows. In support of their

motion to dismiss, the Component Manufacturer Defendants have supplied affidavits from

representatives of both companies. Wendy Grant from A.O. Smith states that the company is

incorporated in Delaware, has its principal place of business in Wisconsin, and does not have any

manufacturing facilities or administrative offices in New York. (Doc. 8-3 at 3.) Ms. Grant

further states that A.O. Smith did not design, develop, or manufacture any of the electric motor

component parts sold to Broan-NuTone in the State of New York. A.O. Smith also has no record

of any shipments of motors being made to Broan-NuTone within the State of New York. Ud.)

Scott Scarpelli of Regal Beloit Corporation states that the company is incorporated and

has its principal place of business in Wisconsin. (Doc. 8-4 at 2-3.) Mr. Scarpelli further states

that the company has no manufacturing facilities, administrative offices, or employees in New

York. (Id. at 3.) According to Mr. Scarpelli: “At any time material to this case, Regal has never

designed, manufactured, or sold any products in the State of New York, nor has it ever sold any

product to Broan-Nutone, LLC that could have been incorporated into any product of Broan-

Nutone, Inc. that may have been distributed into or used in the State of New York.” (/d.)

In opposition to the motion to dismiss, Plaintiff relies on the following. Paragraph 18 of

the Complaint states: “At all times material hereto, products designed, manufactured, distributed

and sold by the defendants were placed in the stream of commerce and sold in the State of New

York and Chautauqua County New York in significant numbers.” (Doc. 1-1 18.) In addition,

Plaintiff refers to statements on the Component Manufacturers’ websites. (See Doc. 11-4

(statement that A.O. Smith obtained exclusive supply status for water treatment products at

Lowe’s home improvement stores nationwide); Doc. 11-6 (statement that A.O. Smith is a leading

manufacturer of water heaters and boilers, with $3.2 billion in sales in 2018, approximately

16,300 employees in the United States and other countries, and with products sold to and utilized

nationwide and worldwide); Doc. 11-7 (“Regal” website listing distributors in New York

carrying products under Regal’s brands); Doc. 11-8 (“Regal” “eCommerce” webpage).)

There is no allegation by any party that the Broan exhaust fan was manufactured in New

York State or that the Component Parts Manufacturers shipped the fan motor into New York

State. The record before the court indicates that the Broan exhaust fan was manufactured in a

state other than New York.

Analysis

L Rule 12(b)(2) Standard

The court may determine a Rule 12(b)(2) motion to dismiss for lack of personal

jurisdiction on the basis of pleadings and affidavits alone, or it may permit discovery or conduct

an evidentiary hearing. Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 84 (2d Cir.

2013) (per curiam).! Where a court determines the motion on the basis of pleadings and

affidavits, the plaintiff's burden is to “‘make a prima facie showing that jurisdiction exists.””

Inre Terrorist Attacks on Sept. 11, 2001, 714 F.3d 659, 673 (2d Cir. 2013) (quoting Penguin

Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 34 (2d Cir. 2010)). The pleadings and affidavits

must be construed in the light most favorable to the plaintiff, with all doubts resolved in the

plaintiff's favor. Id. at 85. However, the court need not draw “argumentative inferences” in the

plaintiffs favor, nor should the court “‘accept as true a legal conclusion couched as a factual

allegation.” In re Terrorist Attacks, 714 F.3d at 673 (quoting Jazini v. Nissan Motor Co.,

148 F.3d 181, 185 (2d Cir. 1998)).

“The lawful exercise of personal jurisdiction by a federal court requires satisfaction of

three primary requirements.” Licci ex rel. Licci v. Lebanese Canadian Bank, SAL, 673 F.3d 50,

! As the reference to affidavits, discovery, and an evidentiary hearing suggests, “[a] court

may take into account factual materials outside the pleadings when considering a motion to

dismiss based upon an asserted lack of personal jurisdiction ....” Haidon v. Budlong &

Budlong, LLC, 318 F. Supp. 3d 568, 572 n.1 (W.D.N.Y. 2018).

59 (2d Cir. 2012). “First, the plaintiff's service of process upon the defendant must have been

procedurally proper.” Jd. “Second, there must be a statutory basis for personal jurisdiction that

renders such service of process effective.” Jd. “Third, the exercise of personal jurisdiction must

comport with constitutional due process principles.” Jd. at 60.

The Component Manufacturer Defendants do not argue that service of process upon them

was improper. The court accordingly begins with the statutory requirements for personal

jurisdiction. See Licci, 673 F.3d at 61 (“Where, as here, the plaintiffs premise their theory of

personal jurisdiction upon the New York long-arm statute, we first consider whether the

requirements of the statute have been satisfied before proceeding to address whether the exercise

of jurisdiction would comport with the Due Process Clause.”). The parties agree that the only

basis asserted for the exercise of personal jurisdiction over defendants A.O. Smith and Regal

Beloit is specific jurisdiction through the New York long-arm statute, N.Y. C.P.L.R. § 302(a).

Plaintiff makes no claim of general jurisdiction under N.Y. C.P.L.R. § 301 2

I. Statutory Requirements for Personal Jurisdiction—CPLR § 302(a)(3)

Plaintiff relies on C.P.L.R. § 302(a)(3), a section of New York’s long-arm statute that

provides, in pertinent part:

(a) As to a cause of action arising from any of the acts enumerated in this section,

a court may exercise personal jurisdiction over any non-domiciliary, or his executor

or administrator, who in person or through an agent: . ..

3. commits a tortious act without the state causing injury to person or property

within the state, ... if he

2 The parties and the court refer to New York law because “[t]he breadth of a federal

court’s personal jurisdiction is determined by the law of the state in which the district court is

located.” Thomas v. Ashcroft, 470 F.3d 491, 495 (2d Cir. 2006); see also Wilderness USA, Inc.

vy. DeAngelo Brothers LLC, 265 F. Supp. 3d 301, 305 (W.D.N.Y. 2017) (“In general, a district

court’s personal jurisdiction is determined by the law of the state in which the court is located.”

(internal quotation marks omitted)).

(i) 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 the state, or

(ii) expects or should reasonably expect the act to have consequences in the

state and derives substantial revenue from interstate or international commerce ....

N.Y. C.P.L.R. § 302(a)(3). For either subsection of § 302(a)(3) to apply, “(1) a defendant must

have committed a tortious act outside New York, (2) the cause of action must arise from that

tortious act, and (3) the act must have caused injury to a person or property within New York.”

Albino v. Glob. Equip. USA, Ltd., No. 6:14-cv-06519(MAT), 2018 WL 3537060, at *7

(W.D.N.Y. July 23, 2018) (quoting Doe v. Delaware State Police, 939 F. Supp. 2d 313, 325-26

(S.D.N.Y. 2013)). The Component Manufacturer Defendants do not challenge the sufficiency of

the Complaint’s allegations as to those three elements. The court accordingly turns to the

specific requirements of the subsections of § 302(a)(3), beginning with subsection (a)(3)(ii).

Section 302(a)(3)(ii) requires consideration of two conjunctive prongs: the reasonable

foreseeability of consequences in New York, and the derivation of substantial revenue from

interstate or international commerce. The Component Manufacturer Defendants do not

challenge the sufficiency of Plaintiff’s allegations as to the latter prong. The court accordingly

focuses on the former (“foreseeability”) prong. The court has in mind that the foreseeability

prong is an objective test. Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 241 (2d Cir. 1999).

Plaintiff asserts that it has adduced sufficient facts on the foreseeability prong. (Doc. 11-

11 at 7.) Plaintiff relies on paragraph 18 of the Complaint. (Doc. 1-1 4 18 (At all times

material hereto, products designed, manufactured, distributed and sold by the defendants were

placed in the stream of commerce and sold in the State of New York and Chautauqua County

New York in significant numbers.”).) Plaintiff also refers to the statements on the Component

Manufacturers’ websites described above.

Plaintiff argues that McDonough v. Cycling Sports Group, Inc., 392 F. Supp. 3d 320

(W.D.N.Y. 2019), is instructive. The plaintiff in that case was injured when the “cycling fork”

on his Cannondale bicycle failed. He sued Cannondale, Cannondale’s parent company (“CSG”),

and the Taiwanese manufacturer of the cycling fork, Advanced International Multitech Co. Ltd.

(“AIM”). Before factual discovery began, AIM sought summary judgment for lack of personal

jurisdiction. AIM submitted evidence that it was aware that the third party to which it sold the

cycling fork was distributing that component in the U.S., but that AIM had no assets or

advertising in New York and did not generate any revenue from any sale of its products to retail

customers in New York. Plaintiffs submitted evidence that AIM directly shipped components to

CSG and that AIM’s website described it as a “worldwide corporation.” There was also

evidence that CSG employees worked directly with AIM employees in designing and testing

cycling forks for CSG bicycles. Jd. at 323-24.

Ruling on the summary judgment motion, the McDonough court concluded that the

plaintiffs had made a sufficient showing to proceed with jurisdictional discovery. Id. at 327.

Analyzing the requirements of § 302(a)(3)(ii), the court reasoned that the evidence in the light

most favorable to the plaintiffs indicated that AIM “worked closely with CSG to design and

manufacture cycling forks, knowing that those cycling forks would be incorporated into bicycles

that would be sold by CSG within the state of New York.” Jd. at 328. The court further

reasoned that “the evidence submitted by Plaintiffs and CSG demonstrates that AIM’s products

are sold worldwide, rendering it likely that AIM in fact has substantial revenues from

international commerce.” Jd. The court also found it significant that, “in moving for summary

judgment prior to any discovery having been taken, AIM has not presented any evidence

regarding its revenues from which the Court could conclude that it does not derive substantial

revenue from interstate or international commerce.” Jd.

The Component Manufacturer Defendants assert that McDonough is distinguishable

because “it has not been established here that the actual product here was sold by Broan-NuTone

to Plaintiff's subrogor in New York.” (Doc 16 at 2.) According to the Component Manufacturer

Defendants, “[i]t is very plausible that the subject product may have been sold to the end

consumer in another jurisdiction, such as Pennsylvania.” (Jd. at 2~3.) But the Component

Manufacturer Defendants cite no authority holding that such traceability is required.

To the contrary, the foreseeability requirement “relates to forum consequences generally

and not to the specific event which produced injury within the state.” Candelario v. Bobst N.

Inc., No. 18-CV-6281 CJS, 2019 WL 4112179, at *5 (W.D.N.Y. Aug. 29, 2019) (quoting

Fantis Foods, Inc. vy. Standard Importing Co., 49 N.Y.2d 317, 326 n.4 (N.Y. 1980)). Thus in

Candelario, even though the foreign manufacturer of the machine at issue sold it to a company in

Ohio before the plaintiff's New York employer purchased it as used equipment, the court

concluded that the manufacturer could have foreseen the potential for consequences in New

York. Jd. That was because the manufacturer sold four of its machines (deriving revenue of

more than $8 million) knowing that they would enter the New York market. See id. The court

concluded that “[bly selling machines to the New Jersey corporation chargeable with the

knowledge that one or more of them would end up in New York, Bobst Lyon, SAS, could have

foreseen the potential for consequences in New York.” Jd. The fact that the particular machine

involved in the plaintiff's workplace injury took a more circuitous route to New York did not

alter that conclusion.

Likewise in this case, even if the particular fan or motor involved in the December 19,

2016 fire was not sold in New York, the allegations and evidence considered in the light most

favorable to Plaintiff are that the Component Manufacturer Defendants sold numerous other

component fan motors with knowledge that they would be used to make fans sold in all states,

including New York.? As Candelario suggests, then, the distinction upon which the Component

Manufacturer Defendants rely is no basis for distinguishing McDonough.

The court concludes that Plaintiff has made a sufficient showing at this stage that

Component Manufacturer Defendants could have foreseen the potential consequences in New

York. Similar to AIM in McDonough, the Component Manufacturer Defendants knew that their

component fan motors would be incorporated into a great quantity of products that would be sold

within New York. Thus, as in Candelario, “it appears that personal jurisdiction is available

under (a)(3)(ii).” Candelario, 2019 WL 4112179, at *5; see also McDonough, 392 F. Supp. 3d

at 328 (“Under these circumstances, the Court cannot find as a matter of law that the

requirements of CPLR 302(a)(3)(ii) are not met.”).*

But that does not end the analysis. “[T]he simple likelihood or foreseeability ‘that a

defendant’s product will find its way into New York does not satisfy this element[;] . . .

3 The court recognizes Mr. Scarpelli’s declaration that the Regal Beloit Corporation

“Injever sold any product to Broan-Nutone, LLC that could have been incorporated into any

product of Broan-Nutone, Inc. that may have been distributed into or used in the State of New

York.” (Doc. 8-4 98.) But even assuming that is true, Plaintiffs theory is that the Regal Beloit

Corporation is responsible for the motor at issue as the legal successor in interest of A.O. Smith.

(See Doc. 1-1 917.) The court is not ruling on any issue of successor liability here, but assumes

for present purposes that the personal jurisdiction analysis is the same for both of the Component

Manufacturer Defendants. Indeed, the parties have agreed that “with regard to the personal

jurisdiction question pending before the Court on this motion, the decision will apply to both of

The Component Manufacturer Defendants.” (Doc. 27 at 2.)

4 Tt is therefore unnecessary to reach Plaintiff's argument for jurisdiction under

§ 302(a)(3)().

purposeful availment of the benefits of the laws of New York such that the defendant may

reasonably anticipate being haled into New York court is required.” Kernan, 175 F.3d at 241

(quoting In re DES Cases, 789 F. Supp. 552, 570-71 (E.D.N.Y. 1992)); see also Chatwal Hotels

& Resorts LLC y. Dollywood Co., 90 F. Supp. 34.97, 107 (S.D.N.Y. 2015) (“New York courts

require some discernable effort by the defendant to directly or indirectly serve the New York

market.” (quoting Parker Waichman Alonso LLP y. Orlando Firm, P.C., No. 09 Civ. 7401(CM),

2010 WL 1956871, at *10 (S.D.N.Y. May 14, 2010))); Capitol Records, LLC v. VideoEgg, Inc.,

611 F. Supp. 2d 349, 363-64 (S.D.N.Y. 2009) (“Stated differently, the foreseeability requirement

is not satisfied unless there are tangible manifestations showing that the nondomiciliary

defendant . . . either should have known where [its product was] destined or was attempting to

reach a New York market.” (alterations in original; internal quotation marks omitted)).° The

court accordingly considers this requirement below.

If. Constitutional Due Process

“To comport with due process, a forum state may exercise jurisdiction over an out-of-

state corporate defendant only if the defendant has certain minimum contacts with [the State]

such that the maintenance of the suit does not offend traditional notions of fair play and

substantial justice.” U.S. Bank Nat’l Ass’n v. Bank of Am. N.A., 916 F.3d 143, 149 (2d Cir.

2019) (alteration in original; internal quotation marks omitted); see also McDonough,

5 ‘The law is arguably unsettled as to whether “purposeful availment” is part of the

§ 302(a)(3) analysis or if it is solely a part of the constitutional due process determination.

See Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 127 n.3 (2d Cir.

2002); see also Zanotti v. Invention Submission Corp., No. 18-cv-5893 (NSR), 2020 WL

2857304, at *15 n.8 (S.D.N.Y. June 2, 2020). The court need not resolve that question because

“purposeful availment” is necessary under the constitutional analysis, which the court considers

below.

10

392 F. Supp. 3d at 328 (same). “The Supreme Court has set out three conditions for the exercise

of specific jurisdiction over a nonresident defendant.” U.S. Bank Nat’l Ass'n, 916 F.3d at 150.

First, the defendant must have purposefully availed itself of the privilege of

conducting activities within the forum State or have purposefully directed its

conduct into the forum State. Second, the plaintiff’s claim must arise out of or

relate to the defendant’s forum conduct. Finally, the exercise of jurisdiction must

be reasonable under the circumstances.

Id. (internal quotation marks and citations omitted). The first two conditions correspond to the

“minimum contacts” prong of the due process analysis, and the third condition corresponds to

the “fair play and substantial justice” prong. See Polar Electro Oy v. Suunto Oy, 829 F.3d 1343,

1348 (Fed. Cir. 2016).

It appears from Plaintiff's filings (¢.g., Doc. 1-1 at 13, 4 18; Doc. 11-11 at 2) and from

Plaintiff's reliance on McDonough that Plaintiff is relying on a “stream of commerce” theory for

personal jurisdiction. “[M]inimum contacts sufficient to support the existence of specific

jurisdiction ‘can be established through a stream of commerce theory.’” McDonough,

392 F. Supp. 3d at 328 (quoting RegenLab USA LLC v. Estar Techs. Ltd., 335 F. Supp. 3d 526,

543 (S.D.N.Y. 2018)). But “the precise requirements of that theory are unsettled.” RegenLab,

335 F. Supp. 3d at 544 (internal quotation marks omitted). “In Asahi Metal Industry Co. v.

Superior Court of California [480 U.S. 102 (1987)], ‘the Supreme Court was evenly divided

over whether the mere awareness of a nonresident defendant that its products would foreseeably

reach the forum state in the stream of commerce constitutes minimum contacts with the forum.’”

Id. (quoting Polar Electro, 829 F.3d at 1348).

Although J. McIntyre Machinery, Ltd. y. Nicastro provided an “opportunity to provide

greater clarity,” 564 U.S. 873, 879 (2011) (Kennedy, J., plurality opinion), there was no majority

opinion in that case. The controlling law is therefore the narrowest opinion from that case—

Justice Breyer’s concurrence—‘“which made no substantive changes to the Supreme Court’s

11

precedent.” McDonough, 392 F. Supp. 3d at 328. Notably, Justice Breyer’s concurrence “did

not foreclose the possibility that a court might exercise jurisdiction where there is a ‘regular

course of sales’ of defendant’s goods in the forum state, or ‘something more, such as special

state-related design, advertising, advice, marketing or anything else.” UTC Fire & Sec.

Americas Corp. v. NCS Power, Inc., 844 F. Supp. 2d 366, 376 (S.D.N.Y. 2012) (quoting

Nicastro, 564 U.S. at 889 (Breyer, J., concurring)).

Plaintiff asserts that the Component Manufacturer Defendants “intentionally reached out

to New York by marketing and selling their products to New York customers, via partnerships

with retailers in New York and via operation of interactive websites permitting New York

customers to order products directly or via New York distributors.” (Doc. 11-11 at 9.) The

Component Manufacturer Defendants maintain that the activities to which Plaintiff refers relate

to A.O. Smith’s water products division (which they say is unrelated to the alleged electric motor

component at issue). They also assert that the websites to which Plaintiff refers (Docs. 11-7, 11-

8) are “unconnected to the Regal entity sued herein.” (Doc. 16 at 3.)

Regarding “partnerships” with New York retailers, the court has considered the evidence

that A.O. Smith obtained exclusive supply status for water treatment products at Lowe’s home

improvement stores nationwide (including Lowe’s stores in New York). (See Docs. 11-4, 11-5.)

But apart from the fact that A.O. Smith makes water treatment products and also made fan

motors at the relevant times, there is no evidence that the product lines are related. It is too far a

stretch to hold that Plaintiffs claim concerning an allegedly defective fan motor arises out of or

relates to A.O. Smith’s success in landing the Lowe’s account for water treatment products.

See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 930 n.6 (2011) (“[E]ven

12

regularly occurring sales of a product in a State do not justify the exercise of jurisdiction over a

claim unrelated to those sales.”).

The court has also considered the evidence from the “Regal” website indicating that a

variety of distributors in New York carry “Regal” products (Doc. 11-7) and also indicating that

Regal has an “eCommerce” offering (Doc. 11-8). The Component Manufacturer Defendants

assert that the website reflected in Documents 11-7 and 11-8 is “unconnected to the Regal entity

sued herein”—i.e., Regal Beloit Corporation. (Doc. 16 at 3.) Although the website appears to be

branded simply with the word “Regal” in a purple parallelogram, the website URL is

“regalbeloit.com.” (Doc. 11-8 at 2.) The same website includes a copyright notice with

reference to “Regal Beloit Corporation.” For present purposes, the court rejects the Component

Manufacturer Defendants’ suggestion that the website is unconnected to Regal Beloit

Corporation. But as discussed below, the statements on the websites are insufficient to support

minimum contacts.

The Regal website identifies New York “distributors” that carry Regal brands, which the

court presumes includes brands that cover the type of component motor at issue in this case.

See https://www.regalbeloit.com/brands/Fasco/About (last visited July 20, 2020) (“Regal has

delivered the world’s most complete line of custom fractional horsepower motors, draft inducers

and blowers for over 100 years under the Fasco® Brand.”). But assuming that the Fasco brand

or other Regal brands include the electric motor business acquired from A.O. Smith, Regal’s

contracts with New York distributors is still insufficient. Indeed: “To meet the minimum

contacts requirement, ‘the defendant’s suit-related conduct must create a substantial connection

with the forum State’—that is, the ‘defendant /it/self must create those contacts, and those

contacts must be with the ‘forum State itself,’ not simply with persons who reside there.”

13

U.S. Bank Nat’l Ass’n, 916 F.3d at 150 (alteration in original) (quoting Walden v. Fiore,

571 U.S. 277, 284-85 (2014)). “Thus, although a defendant’s contacts with the forum state may

be ‘intertwined with [its] transactions or interactions with the plaintiff or other parties . . . [,] a

defendant’s relationship with a... third party, standing alone, is an insufficient basis for

jurisdiction.” Jd. (alterations in original) (quoting Walden, 571 U.S. at 286, and citing Bristol-

Myers Squibb Co. v. Superior Court of Calif, San Francisco Cty., 137 8. Ct. 1773, 1783 (2017)).

Plaintiffs reliance on the “eCommerce” portion of Regal Beloit Corporation’s website is

also insufficient for personal jurisdiction. The Second Circuit has stated that the “spectrum” of a

website’s interactivity as discussed in Zippo Manufacturing Co. v. Zippo Dot Com, Inc.,

952 F. Supp. 1119 (W.D. Pa. 1997), “may .. . be helpful in analyzing whether jurisdiction is

permissible under due process principles.” Best Van Lines, Inc. v. Walker, 490 F.3d 239, 252

n.13 (2d Cir. 2007). The court has reviewed the eCommerce page as it appears online.

See https://www.regalbeloit.com/tools-resources/ecommerce (last visited July 20, 2020).

The Regal website appears to fall in the “middle ground” of the Zippo spectrum.

See Mrs. U.S. Nat’ Pageant, Inc. v. Miss U.S. Org., LLC, 875 F. Supp. 2d 211, 221 (W.D.N.Y.

2012) (“This middle ground covers a wide range of websites, including those where a user can

purchase products online, establish an online account, communicate with the owner of the site or

its representatives, or download order forms or other documents.”). The website includes both

“passive” components that simply make information available, plus the “eCommerce” page. The

main eCommerce page contains links to a number of other pages (apparently tailored by region

or brand) where users with accounts can enter orders.

Considering the “level of interactivity and the commercial nature of the exchange of

information” on the Regal eCommerce page, Zippo, 952 F. Supp. at 1124, the court concludes

14

that the webpage is an insufficient basis for personal jurisdiction. It is difficult to evaluate the

precise level of interactivity of the eCommerce page without creating an account. But the

eCommerce page appears to constitute only a portion of a much broader, largely passive,

website. Moreover, the nature of Regal’s business weighs against concluding that the

eCommerce page targets every state or New York. At least with respect to the products at issue

here, Regal is a component manufacturer—it operates in the “business-to-business” space, not

the “business-to-consumer” space. Cf Mrs. U.S. Nat’l Pageant, 875 F. Supp. 2d at 223 (nature

of beauty pageant’s business was to obtain applications from every state to select a national

winner; distinguishing situation where defendants “simply solicit[] business nationwide, in a

general sense”); Qwest Commce’ns Int’l, Inc. v. Sonny Corp., No. C06-20P, 2006 WL 1319451,

at *2 (W.D. Wash. May 15, 2006) (company that used its website to advertise, sell, and ship its

product to customers’ Washington homes purposefully availed itself of Washington;

distinguishing situation, as in Asahi, where a company sells component parts to others that may

assemble or distribute them through their own unilateral activity).

The only other facts that Plaintiff has advanced regarding the Component Manufacturer

Defendants’ contacts with New York relate to A.O. Smith’s current or prior registrations with the

New York Department of State’s Division of Corporations. It appears that A.O. Smith was

registered as a New York domestic business corporation between 1916 and 1986. See New York

Dep’t of State, Div. of Corporations, State Records, & UCC,

https://www.dos.ny.gov/corps/bus_entity_search-html (search all status types for “A.O. Smith”)

(last visited July 20, 2020). But Plaintiff merely notes that fact as “Ti|jnteresting[]” (Doc. 11-11

at 2), and the Component Manufacturer Defendants correctly observe that the prior business

registration is not relevant to the events at any time in this case. A.O. Smith is currently

15

registered as an active foreign business corporation in New York. (See Doc. 11-2.) But that is

an insufficient basis for asserting specific personal jurisdiction. See Wilderness USA, Inc. v.

DeAngelo Brothers LLC, 265 F. Supp. 3d 301, 305 n.3 (W.D.N.Y. 2017) (no specific jurisdiction

over defendant that was registered to do business as a foreign corporation in New York State).

Since the above alleged contacts with New York are insufficient, the only remaining

contact to consider is the presence in New York of the allegedly defective fan motor in this case

and presumably many other fan motors from the Component Manufacturer Defendants. The

potential volume of sales makes the question in this case somewhat closer. See Eternal Asia

Supply Chain Mgmt. (USA) Corp. v. Chen, No. 12 Civ. 6390(JPO), 2013 WL 1775440, at *7

(S.D.N.Y. Apr. 25, 2013) (potential volume of sales of the defendant’s electronics products made

for a “close question” because New York is a major market for electronics goods). Nevertheless,

the allegations and evidence in this case fail to establish a “regular course” of sales in New York

or anything “more” to indicate targeting the New York forum.

IV. Whether to Grant Jurisdictional Discovery

Plaintiff requests jurisdictional discovery, arguing that such discovery would likely reveal

that:

A.O. smith and Regal contracted to supply fan motors to Broan-Nutone

affirmatively knowing that Broan-Nutone’s fans were sold and utilized pervasively

throughout the State of New York; A.O. Smith and Regal’s motors end up in

thousands (or more) of buildings in New York every year; and Defendants each

obtain substantial revenue from the sale and distribution of their products in New

York.

(Doe. 11-11 at 9.) The Component Manufacturer Defendants maintain that there is no need for

jurisdictional discovery.

“{J]urisdictional discovery is permitted where a plaintiff has ‘made a sufficient start

toward establishing personal jurisdiction,’ such that it appears there may be a colorable

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jurisdictional claim.” McDonough, 392 F. Supp. 3d at 329 (quoting Hollins v. U.S. Tennis Ass'n,

469 F. Supp. 2d 67, 70 (E.D.N.Y. 2006)). Failure to make out a prima facie case does not

necessarily bar jurisdictional discovery. Ehrenfeld v. Mahfouz, 489 F.3d 542, 550 n.6 (2d Cir.

2007). But the court should deny jurisdictional discovery where the plaintiff offers “only

speculations or hopes . . . that further connections to [the forum] will come to light in discovery.”

Eternal Asia, 2013 WL 1775440, at *10 (alterations in original) (quoting Rosenberg v.

PK Graphics, No. 03 Civ. 6655(NRB), 2004 WL 1057621, at *1 (S.D.N.Y. May 10, 2004)). For

the reasons discussed above, none of the evidence that Plaintiff has presented suggests that there

may be a colorable jurisdictional claim. Plaintiff's assertions about what jurisdictional discovery

might reveal add nothing to the analysis above.

Conclusion

A.O. Smith Corporation and Regal Beloit Corporation’s Motion to Dismiss (Doc. 8) is

GRANTED.

ot

Dated this) day of July, 2020.

ae)

Geoffrey W. Crawford, Judge

United States District Court

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