Snabel v. Great States Corporation

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF OHIO

EASTERN DIVISION

Phillip J. Snabel, ) CASE NO. 1:19 CV 2052

)

Plaintiff, ) JUDGE PATRICIA A. GAUGHAN

)

vs. )

)

The Great States Corporation d/b/a ) Memorandum of Opinion and Order

American Lawn Mower Company, et al. )

)

Defendant. )

Introduction

This matter is before the Court upon defendant The Great States Corporation d/b/a

American Lawn Mower Company’s Motion to Dismiss Plaintiff’s Amended Complaint (Doc.

16). This is a products liability case alleging injury arising from an accident with an electric

chainsaw. For the following reasons, the motion is granted to the extent that the Court finds

personal jurisdiction is lacking. However, the Court further finds that transfer of venue is

warranted.

Facts

Plaintiff Phillip J. Snabel filed this Amended Complaint against defendants The Great

1

States Corporation d/b/a American Lawn Mower Company (hereafter, Great States); Zhejiang

Yat Electrical Appliance Company, Limited (hereafter, Zhejiang); and John/Jane Does. The

Amended Complaint alleges the following. Plaintiff is a resident of Ohio. In March 2012, he

saw an advertisement for an electric chainsaw while watching a home shopping network on

television at home. He called the phone number and purchased the chainsaw. The order was

fulfilled by ORDERTREE.COM. The chainsaw was designed and manufactured by Great

States, an Indiana corporation. The battery was designed and manufactured by Zhejiang, a

Chinese corporation. In September 2017, plaintiff was using the chainsaw to cut and remove

a tree on his property. The battery power source exploded which resulted in flying shrapnel.

The shrapnel struck plaintiff in the lower calf of his right leg. Plaintiff was transported to the

emergency room. He subsequently underwent several surgeries, and other treatment.

Plaintiff asserts two claims against Great States: Count One alleges statutory products

liability. Count Two alleges punitive damages.

This matter is now before the Court upon Great States’ Motion to Dismiss for lack of

personal jurisdiction and, alternatively, failure to state a claim.

Standard of Review

personal jurisdiction

The plaintiff always bears the burden of establishing that personal jurisdiction exists.

Serras v. First Tennessee Bank National Ass'n, 875 F.2d 1212, 1214 (6th Cir.1989). When a

defendant has filed “a properly supported motion for dismissal, the plaintiff may not stand on

his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the

court has jurisdiction.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991) (citing

2

Weller v. Cromwell Oil Co., 504 F.2d 927, 930 (6th Cir. 1974)). When evaluating a motion to

dismiss for lack of personal jurisdiction, a court has three options: “it may decide the motion

upon the affidavits alone; it may permit discovery in aid of deciding the motion; or it may

conduct an evidentiary hearing to resolve any apparent factual questions.” Carrier Corp. v.

Outokumpu Oyj, 673 F.3d 430, 449 (6th Cir. 2012) (quoting Theunissen, 935 F.2d at 1458).

If a court chooses to rule on a Rule 12(b)(2) motion to dismiss without an evidentiary

hearing, the plaintiff “need only make a prima facie showing of jurisdiction.” Bird v.

Parsons, 289 F.3d 865, 871 (6th Cir. 2002) (quoting Neogen Corp. v. Neo Gen Screening,

Inc., 282 F.3d 883, 887 (6th Cir. 2002)). The plaintiff can make this prima facie showing by

“establishing with reasonable particularity sufficient contacts between [the defendants] and

the forum state to support jurisdiction.” Neogen Corp., 282 F.3d at 887 (quoting Provident

Nat'l Bank v. California Savings & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987)). This

burden is “relatively slight.” Carrier Corp, 673 F.3d at 449. Moreover, the court must

“construe the facts in the light most favorable to the nonmoving party” and “will not consider

facts proffered by the defendant that conflict with those offered by the plaintiff.” Neogen

Corp., 282 F.3d 883, 887 (6th Cir. 2002). Indeed, “because weighing any controverted facts

is inappropriate at this stage, dismissal is proper only if [the plaintiff’s] alleged facts

collectively fail to state a prima facie case for jurisdiction. Carrier Corp, 673 F.3d at 449

(internal quotations and citations omitted).

failure to state a claim

“Dismissal is appropriate when a plaintiff fails to state a claim upon which relief can

be granted. Fed.R.Civ.P. 12(b)(6). We assume the factual allegations in the complaint are true

3

and construe the complaint in the light most favorable to the plaintiff.” Comtide Holdings,

LLC v. Booth Creek Management Corp., 2009 WL 1884445 (6th Cir. July 2, 2009) (citing

Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir.2008) ). In construing

the complaint in the light most favorable to the non-moving party, “the court does not accept

the bare assertion of legal conclusions as enough, nor does it accept as true unwarranted

factual inferences.” Gritton v. Disponett, 2009 WL 1505256 (6th Cir. May 27, 2009) (citing In

re Sofamor Danek Group, Inc., 123 F.3d 394, 400 (6th Cir.1997). As outlined by the Sixth

Circuit:

Federal Rule of Civil Procedure 8(a)(2) requires only “a short and plain statement of

the claim showing that the pleader is entitled to relief.” “Specific facts are not

necessary; the statement need only give the defendant fair notice of what the ... claim

is and the grounds upon which it rests.”Erickson v. Pardus, 551 U.S. 89, 93 (2007)

(quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)). However,

“[f]actual allegations must be enough to raise a right to relief above the speculative

level” and to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at

555, 570. A plaintiff must “plead[ ] factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft

v. Iqbal, 556 U.S. 662, 678 (2009).

Keys v. Humana, Inc., 684 F.3d 605, 608 (6th Cir.2012). Thus, Twombly and Iqbal require

that the complaint contain sufficient factual matter, accepted as true, to state a claim to relief

that is plausible on its face based on factual content that allows the court to draw the

reasonable inference that the defendant is liable for the misconduct alleged. Twombly, 550

U.S. at 570; Iqbal, 556 U.S. at 678. The complaint must contain “more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

Twombly, 550 U.S. at 555.

Discussion

(1) Personal Jurisdiction

4

Neither party submits evidence and, consequently, the plaintiff need only make a

prima facie showing of jurisdiction. In diversity cases, a federal court has personal

jurisdiction over a defendant if jurisdiction is “(1) authorized by the law of the state in which

it sits, and (2) in accordance with the Due Process Clause of the Fourteenth Amendment.”

Neogen Corp., 282 F.3d at 888 (citing Reynolds v. Int'l Amateur Athletic Fed'n, 23 F.3d 1110,

1115 (6th Cir. 1994)). The Sixth Circuit has determined that “Ohio's long-arm statute is not

coterminous with federal constitutional limits,” and has “consistently focused on whether

there are sufficient minimum contacts between the nonresident defendant and the forum state

so as not to offend ‘traditional notions of fair play and substantial justice.’” Bird, 289 F.3d at

871 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Because Ohio’s

long-arm statute does not reach the full limits of the federal constitution, a finding that Ohio’s

long-arm statute allows for jurisdiction does not foreclose the need for Due Process Clause

analysis. See Brunner v. Hampson, 441 F.3d 457, 465 (6th Cir. 2006); Conn v. Zakharov, 667

F.3d 705, 712 (6th Cir. 2012) (“Unlike other jurisdictions, Ohio does not have a long-arm

statute that reaches to the limits of the Due Process Clause, and the analysis of Ohio's

long-arm statute is a particularized inquiry wholly separate from the analysis of Federal Due

Process law.”).

There are two forms of personal jurisdiction to be considered under the Due Process

analysis: general and specific. General jurisdiction is found when a defendant’s “affiliations

with the State are so ‘continuous and systematic’ as to render them essentially at home in the

forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)

(quoting International Shoe Co. v. Washington, 326 U.S. 310, 317 (1945)). The Supreme

5

Court has found that general jurisdiction only occurs in a limited set of circumstances,

holding the “paradigm all-purpose forums for general jurisdiction are a corporation’s place of

incorporation and principal place of business.” Daimler AG v. Bauman, 571 U.S. 117, 119

(2014). The Supreme Court has explained that the benefit of looking to the place of

incorporation and principal place of business is that “each ordinarily indicates only one place”

and is “easily ascertainable.” Id. at 137. Indeed, for a court to find general jurisdiction in a

forum other than a corporate defendant’s place of incorporation or principal place of business

is the “exceptional case.” BNSF Ry. Co. v. Tyrrell, 137 S.Ct. 1549, 1558 (2017) (citing

Daimler, 571 U.S. at 139 n.19).

Specific jurisdiction turns on “the relationship among the defendant, the forum, and

the litigation.” Walden v. Fiore, 571 U.S. 277, 284 (2014) (quoting Keeton v. Hustler

Magazine, Inc., 465 U.S. 770, 775 (1984)). To establish specific jurisdiction over a

defendant, a court must find “(1) purposeful availment of the privilege of acting in the forum

state or causing a consequence in the forum state, (2) a cause of action arising from activities

in the state, and (3) a substantial enough connection with the forum state to make the exercise

of jurisdiction over the defendant reasonable.” Schneider v. Hardesty, 669 F.3d 693, 701 (6th

Cir. 2012) (internal quotations and citations omitted).

Plaintiff asserts statutory products liability and punitive damages against moving

defendant. Defendant maintains that the allegations contained in the Amended Complaint are

insufficient to establish either general or specific jurisdiction.

As for establishing general jurisdiction, defendant points out that the Amended

Complaint alleges that it is an Indiana corporation, and there are no allegations that Great

6

States has such substantial operations in Ohio so as to render it “essentially at home” here.

Plaintiff does not argue that is has established general jurisdiction, but asserts that

Ohio’s long arm statute is satisfied. As discussed above, Ohio does not have a long-arm

statute that reaches to the limits of the Due Process Clause and, therefore, the constitutional

analysis is still necessary. The Court agrees with defendant that the Amended Complaint does

not establish the “exceptional case” to find general jurisdiction in a forum other than the

corporate defendant’s place of incorporation or principal place of business. Great States is an

Indiana corporation and there are no allegations of continuous and systematic affiliations with

Ohio.

As for establishing specific jurisdiction, plaintiff maintains that the allegations of the

Amended Complaint satisfy the three-part test, set forth above. For the following reasons, the

Court disagrees.

Pursuant to Supreme Court precedent, “[t]he forum State does not exceed its powers

under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers

its products into the stream of commerce with the expectation that they will be purchased by

consumers in the forum State.” World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286,

297–98 (1980). Since World-Wide Volkswagen, the Sixth Circuit has adopted a “stream of

commerce ‘plus’ approach,” under which “[t]he placement of a product into the stream of

commerce, without more, is not an act of the defendant purposely directed toward the forum

State.” Bridgeport Music, Inc. v. Still N The Water Publ'g, 327 F.3d 472, 479–80 (6th

Cir.2003) (quoting Asahi Metal Indus. Co., Ltd. v. Superior Court, 480 U.S. 102 (1987)

(O'Connor, J.) (plurality op.)). See also Parker v. Winwood, 938 F.3d 833, 840-841 (6th Cir.

7

2019) (“For a defendant to purposely avail himself of the privilege of acting within a forum

state, he must do more than merely place a product into the stream of commerce”).

Plaintiff points to the following allegations. Plaintiff was watching television at

home in Ohio when he saw the advertisement on a home shopping network for the electric

chainsaw which was designed and manufactured by Great States. Great States “regularly and

continuously sold its landscaping products and equipment, including but not limited to

electric chainsaws, through television advertising.” Great Lakes “regularly transacted

business” in Ohio by selling these products to Ohio residents through television advertising.

Great States “derived substantial revenue” from its sale of the products to Ohio residents.

(Am.Comp. ¶¶ 8-15, 19)

Although plaintiff uses the language “regularly and continuously” or “regularly

transacted,” bare legal conclusions without supporting factual basis linking defendant’s

activities in Ohio to the plaintiff’s injury are insufficient. See Beydoun v. Wataniya

Restaurants Holding, Q.S.C., 768 F.3d 499, 507-508 (6th Cir. 2014) (“[T]he plaintiff’s cause

of action must be proximately caused by the defendant’s contacts with the forum state.”);

Maxitrate Tratamento Termico E Controles v. Super Systems, Inc, 617 F. App’x 406, 408 (6th

Cir. 2015) (“Specific jurisdiction, on the other hand, allows a plaintiff to sue a defendant only

on claims that arise out of the defendant’s activities in the forum state.”).

Moreover, “purposeful availment” requires actions “by the defendant himself that

create a ‘substantial connection’ with the forum State.” Bridgeport, supra (citing

CompuServe, Inc. v. Patterson, 89 F.3d 1257, 1263 (6th Cir.1996)). As defendant points out,

the Amended Complaint does not allege that Great States itself advertised or sold its products

8

in Ohio, but that the home shopping network advertised the chainsaw on its television

program and OVERTREE.COM fulfilled the order. There is no allegation that Great States

owned or directed the shopping network or the website, or that it required these entities to

direct activity to Ohio residents. Plaintiff contends that Great States, through its actions, was

aware that Ohio residents would purchase its chainsaws and that they could injure Ohioans.

(Doc. 18 at 8) But, being “merely aware” that a product might be sold in Ohio is insufficient

to find personal jurisdiction. Bridgeport, 327 F.3d at 480.

Plaintiff fails to make a prima facie showing that Great States purposely availed itself

of acting in Ohio.

Consequently, as there is not a substantial enough connection with Ohio, the exercise

of jurisdiction over Great States would be unreasonable. Plaintiff maintains that the exercise

of personal jurisdiction is reasonable because the burden of litigating in Ohio to Great States

is low given that Ohio and Indiana share a border. But, the Court agrees with defendant that

this is irrelevant, and Indianapolis (defendant’s principal place of business) is more than 300

miles from this courthouse in Ohio. Plaintiff additionally asserts that Ohio has a substantial

interest in exercising jurisdiction over an out-of-state entity which sells defective products

here. And, plaintiff has a substantial interest in obtaining relief. Nor does any other state have

a greater interest in resolving the controversy given that the injury occurred here. As

defendant points out, however, while plaintiff used the product here, the majority of the

operative events did not occur in Ohio. The claim against Great States is for products

liability, alleging defective manufacture, design and formulation, and warning and instruction.

There is no allegation that the design, manufacture, or creation of the warnings occurred in

9

Ohio.

For these reasons, the exercise of jurisdiction is not warranted.

Plaintiff asks, alternatively, that the Court transfer the case to the Southern District of

Indiana pursuant to 28 U.S.C. § 1406(a). Although acknowledging that transfer would be

allowed in this situation1, Great States opposes the request on the basis that plaintiff has filed

two complaints attempting to plead jurisdiction and should not get a third bite of the apple.

This is not a sufficient reason to refuse transfer. Accordingly, this matter will be transferred

to the Southern District of Indiana where venue is proper.

(2) Failure to State a Claim

Having found that the Court lacks personal jurisdiction and that transfer is warranted,

the Court is without jurisdiction to render a ruling on the motion to dismiss for failure to state

a claim.

Conclusion

For the foregoing reasons, defendant The Great States Corporation d/b/a American

Lawn Mower Company’s Motion to Dismiss Plaintiff’s Amended Complaint is granted to the

extent that the Court finds personal jurisdiction is lacking. However, the Court further finds

that transfer of venue to the Southern District of Indiana is warranted.

1 Section 1406 allows a court to transfer venue regardless of whether the court has

jurisdiction over the defendant. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466-67

(1962).

10

IT IS SO ORDERED.

/s/ Patricia A. Gaughan

PATRICIA A. GAUGHAN

United States District Court

Dated: 4/9/20 Chief Judge

11