Alvarado v. Austrofood S.A.S.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

EIDY ALVARADO, INDIVIDUALLY CIVIL ACTION

AND ON BEHALF OF K.A., A

MINOR

VERSUS NO. 24-2862

WANABANA LLC, ET AL. SECTION “R”

ORDER AND REASONS

Before the Court is defendants Grupo Navis LLC’s1 (“Grupo Navis”)

and Caribbean Produce Exchange LLC’s2 (“CPE”) motion to dismiss based

on lack of personal jurisdiction. Plaintiffs, Eidy Alvarado, individually and

on behalf of K.A., a minor, oppose the motions.3 Plaintiffs also move for

jurisdictional discovery.4 Grupo Navis and CPE oppose the motion for

jurisdictional discovery.5 For the following reasons, the Court grants

plaintiffs’ motion for jurisdictional discovery, subject to a determination of

the permissible scope of the discovery by Magistrate Judge Dossier. The

Court denies defendants’ motions to dismiss without prejudice to its refiling

such a motion once jurisdictional discovery is complete.

1 R. Doc. 17.

2 R. Doc. 15.

3 R. Doc. 30.

4 R. Doc. 24.

5 R. Doc. 30.

I. BACKGROUND

This case arises out of alleged harm stemming from lead-tainted fruit

puree pouches.6 Plaintiffs filed this suit against a number of business entities

that they allege worked to import, distribute, market, advertise, promote,

package, label, and provide for the sale of the fruit puree pouches.7 Two of

those businesses are Grupo Navis and CPE. Grupo Navis and CPE separately

moved to dismiss the claims against them for lack of personal jurisdiction

pursuant to Federal Rule of Civil Procedure 12(b)(2), because they do not

have minimum contacts with Louisiana.8 Plaintiffs oppose the motion.9

Plaintiffs also moved for leave to conduct jurisdictional discovery related to

Grupo Navis and CPE.10

The Court considers the motions below.

II. LEGAL STANDARD

Personal jurisdiction “is an essential element of the jurisdiction of a

district court, without which it is powerless to proceed to an adjudication.”

Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583 (1999) (internal citation

6 R. Doc. 1.

7 Id. at 2.

8 R. Docs. 15 & 17.

9 R. Doc. 13.

10 R. Doc. 24.

omitted). When a nonresident defendant moves the court to dismiss for lack

of personal jurisdiction under Rule 12(b)(2), the plaintiff bears the burden to

show that personal jurisdiction exists. Stuart v. Spademan, 772 F.2d 1185,

1192 (5th Cir. 1985). When the court rules on a motion to dismiss for lack of

personal jurisdiction without holding an evidentiary hearing, as in the

present case, the nonmoving party need only make a prima facie showing.

Godhra v. United States Tobacco Co., Inc., 188 F.3d 619, 625 (5th Cir. 1999).

The allegations of the complaint, except as controverted by opposing

affidavits, must be taken as true, and all conflicts in the facts must be

resolved in favor of plaintiffs. Thompson v. Chrysler Motors Corp., 755 F.2d

1162, 1165 (5th Cir. 1985).

A court has personal jurisdiction over a nonresident defendant if

(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. Latshaw v. Johnson,

167 F.3d 208, 211 (5th Cir. 1999). Because Louisiana’s long-arm statute, La.

Rev. Stat. § 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. Rev. Stat.

§ 13:3201(B)).

The exercise of personal jurisdiction over a nonresident defendant

satisfies due process when (1) the defendant has purposefully availed itself

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. Wa., 326 U.S. 310,

316 (1945)).

There are two ways to establish minimum contacts: specific

jurisdiction and general jurisdiction. Wilson v. Belin, 20 F.3d 644, 647 (5th

Cir. 1994). General jurisdiction will attach, even if the act or transaction sued

upon is unrelated to the defendant’s contacts with the forum state, if the

defendant has engaged in “continuous and systematic” activities in the forum

state. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415

(1984); see also Wilson, 20 F.3d at 647 (same). Contacts between a

defendant and the forum state must be “extensive” to satisfy the “continuous

and systematic” test. Submersible Sys., Inc. v. Perforadora Cent., S.A. de

C.V., 249 F.3d 413, 419 (5th Cir. 2001); see Goodyear Dunlop Tires

Operations, S.A. v. Brown, 131 S.Ct. 2846, 2853–54 (2011) (“For an

individual, the paradigm forum for the exercise of general jurisdiction is the

individual’s domicile; for a corporation it is an equivalent place, one in which

the corporation is fairly regarded as at home.”).

Specific jurisdiction exists when a nonresident defendant “has

purposefully directed its activities at the forum state, and the litigation

results from alleged injuries that arise out of or relate to those activities.”

Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.3d 865, 867

(5th Cir. 2001); Helicopteros, 466 U.S. at 414 n.8. Minimum contacts may

be established by actions, or even just a single act, by the nonresident

defendant that “purposefully avails itself of the privilege of conducting

activities within the forum state, thus invoking the benefits and protections

of its laws.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475 (1985).

“When the cause of action relates to the defendant’s contact with the

forum, the ‘minimum contacts’ requirement is satisfied, and ‘specific’

jurisdiction is proper, so long as that contact resulted from the defendant’s

purposeful conduct and not the unilateral activity of the plaintiff.” Bearry v.

Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir. 1987); see also Hanson v.

Denckla, 357 U.S. 235, 253 (1958) (“The unilateral activity of those who

claim some relationship with a nonresident defendant cannot satisfy the

requirement of contact with the forum State.”). This restriction on the

minimum contacts inquiry ensures that the defendant “purposefully availed”

itself of the benefits of the forum state such that it could “reasonably

anticipate being haled into court there.” Alpine View Co. v. Atlas Copco AB,

205 F.3d 208, 214 (5th Cir. 2000) (quoting Burger King, 471 U.S. at 474);

see also Bearry, 818 F.2d at 375.

III. DISCUSSION

Plaintiffs do not assert that defendants’ activities give rise to general

personal jurisdiction in Louisiana.11 Instead, plaintiffs argue that defendants

are subject to specific jurisdiction because the companies have purposefully

directed their activities at Louisiana and the litigation results from alleged

injuries that arise out of or relate to those activities. See Revell, 317 F.3d at

472 (“For specific jurisdiction we look only to the contact out of which the

cause of action arises.”).

Plaintiffs first argue that Louisiana maintains specific jurisdiction over

Grupo Navis and CPE through a stream of commerce theory. In the Fifth

Circuit, plaintiffs asserting the stream of commerce theory need only make a

prima facie showing that defendants delivered the product that injured them

into the stream of commerce with the expectation that it would be purchased

11 R. Doc. 30 at 5 n.1.

by or used by consumers in the forum state. In re DePuy Orthopaedics, Inc.,

Pinnacle Hip Implant Prod. Liab. Litig., 888 F.3d 753, 779 (5th Cir. 2018)

(quoting Ainsworth v. Moffett Eng’g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013)).

A “nonmanufacturing parent will sometimes lie within the stream” despite

the fact that it does not manufacture or distribute the product. Id. In making

a personal jurisdiction determination, the Court will look to the relationship

between the companies, the forum, and the litigation. Id. The “[m]inimum-

contacts analysis is more realistic than mechanical, turning on matters of

substance rather than form.” Id. (internal quotations omitted). Thus, labels

and titles matter less to the Court’s analysis than the business’s contribution

to the product’s placement in the stream of commerce. Id. A passive

parent-subsidiary relationship is insufficient to support jurisdiction. Id. at

780.

Plaintiffs argue that Grupo Navis and CPE placed a product into the

stream of commerce because their “agent or co-venturers knowingly

distributed the Products to retailers nationwide,” and because the web of

overlapping officers, recordkeeping, and office space between Grupo Navis,

CPE, and various other companies indicates that Grupo Navis and CPE must

have been aware of the products’ nationwide distribution, including

distribution in Louisiana.12

In their complaint, plaintiffs alleged the following corporate structure.

Austrofood S.A.S. manufactured the fruit purees in Ecuador.13 The fruit

pouches were exported to the United States by Wanabana Exchange LLC,

which was the exclusive exporter.14 CPE facilitated the imports into the

United States,15 and Wanabana USA LLC was the exclusive trader of the

produce in the United States.16 Wanabana USA LLC was owned by two

entities: Grupo Navis and Wanabana LLC.17 Grupo Navis also owned CPE.18

Plaintiffs also submitted a number of public statements and statements

from other proceedings which provide that Grupo Navis and CPE were, at a

high level, involved in the importing, distribution, and selling of these

products into the U.S. market.19 But while these statements may make a

12 R. Doc. 30 at 16.

13 R. Doc. 1 at 4.

14 Id. at 5

15 Id. at 8.

16 Id. at 5.

17 Id.

18 Id. at 8.

19 R. Doc. 30-5 at 4 (the chairman of Grupo Navis, the holding company

of CPE, stating that they have a joint venture with Wanabana to

“commercialize a line of 100 percent tropical fruit products in a pouch

in the U.S.”); R. Doc. 30-6 at 4 (a statement from the chairman of

Grupo Navis stating that they created Grupo Navis as a holding

company to enter into joint partnerships); R. Doc. 30-7 at 4 (noting

prima facie showing that defendants knew of the distribution networks or

imports, they do not demonstrate with adequate specificity that defendants

delivered pouches into the stream of commerce with the expectation that it

would be purchased by or used by consumers in Louisiana. Defendants

must reasonably anticipate being haled into court in Louisiana. While a

defendant need not necessarily have specific knowledge of sales in a

jurisdiction, there must be a basis for the reasonable expectation that such

sales would be made. See Ainsworth v. Moffett Eng’g, Ltd., 716 F.3d 174, 179

(5th Cir. 2013). And the basis must be stronger than knowing that the

distributor’s nation-wide network “might lead to those products being sold

in any of the fifty states.” Zoch v. Magna Seating (Germany) GmbH, 810 F.

App’x 285, 292 (5th Cir. 2020) (emphasis in original) (quoting J. McIntyre

Mach., Ltd. v. Nicastro, 564 U.S. 873, 891 (2011) (Breyer, J., concurring));

see, e.g., Allstate Ins. Co. v. Interline Brands, Inc., 997 F. Supp. 2d 501, 508

that Wanabana’s marketing and distribution of fruit pouches is one of

the most successful initiatives that Grupo Navis participated in); R.

Doc. 30-8 at 2, 30 (bankruptcy testimony that the chairman of Grupo

Navis is an officer of Wanabana, that Wanabana’s records are

maintained by Grupo Navis, that Grupo Navis owned some of the

pouch distributors, and that it was aware of the kind of retailers to

which the distributor was selling); R. Doc. 30-13 at 8 (declaration in

another proceeding by a director of Austrofood declaring that Grupo

Navis is responsible for the day to day administration of Wanabana

USA); R. Doc. 30-14 at 2–3 (letter from the FDA stating that CPE

imported Wanabana pouches from the foreign supplier).

(N.D. Tex. 2014) (noting that, in Ainsworth, the Fifth Circuit analyzed a

number of facts to determine that the manufacturer-defendant could have

reasonably anticipated being haled into Mississippi court, including the

quantity of the product sold to the forum, the percent of the total sales to the

form, the relatively large number of potential consumers given the forum’s

market, and the length of the distributor’s relationship with the forum). The

facts that plaintiffs submitted are too minimal and general to support

personal jurisdiction under the stream of commerce theory.

Plaintiffs also assert that many of the businesses involved were “alter

egos” or agents of Grupo Navis and CPE, in order to attribute their actions to

Grupo Navis and CPE. This Circuit requires “proof of control by the parent

over the internal business operations and affairs of the subsidiary in order to

fuse the two for jurisdictional purposes.” Hargrave v. Fibreboard Corp., 710

F.2d 1154, 1160 (5th Cir. 1983). The alter ego analysis is heavily fact-specific

and involves consideration of twelve factors. See United States v. Jon-T

Chemicals, Inc., 768 F.2d 686, 694, 691–692 (5th Cir. 1985) (outlining the

“heavily fact-specific” “laundry list of factors”). These factors include

whether (1) the parent and the subsidiary have common stock ownership;

(2) the parent and the subsidiary have common directors or officers; (3) the

parent and the subsidiary have common business departments; (4) the

parent and the subsidiary file consolidated financial statements and tax

returns; (5) the parent finances the subsidiary; (6) the parent caused the

incorporation of the subsidiary; (7) the subsidiary operates with grossly

inadequate capital; (8) the parent pays the salaries and other expenses of the

subsidiary; (9) the subsidiary receives no business except that given to it by

the parent; (10) the parent uses the subsidiary’s property as its own; (11) the

daily operations of the two corporations are not kept separate; and (12) the

subsidiary does not observe the basic corporate formalities, such as keeping

separate books and records and holding shareholder and board meetings. Id.

Though plaintiffs submitted statements alluding to the crossover between

these business entities,20 plaintiffs failed to submit the evidence necessary to

conduct this analysis, such as specific information about the companies’

ownership, organizational structure, management, operational integration,

financial statements, capitalization, and use of assets. Therefore, the Court

cannot determine if Grupo Navis and CPE are alter egos of the other

companies.

Additionally, there is insufficient evidence to establish agency. “Under

Louisiana law, an agency relationship is created by either express

appointment of a mandatory under Civil Code Article 2985 or by implied

20 See supra note 19; see also R. Doc. 30 at 18–19.

appointment arising from apparent authority.” Richard A. Cheramie

Enters., Inc. v. Mt. Airy Ref. Co., 708 F.2d 156, 158 (5th Cir. 1983). An

agency relationship cannot be presumed; it must be clearly established. Id.

Plaintiffs made no allegations of express agency and submitted no evidence

establishing that Grupo Navis or CPE had express authority over each other

or any other defendants. To establish implied agency, plaintiffs must show

that: (1) a principal made some manifestation to a third party, and (2) the

third party reasonably relied on the agent’s purported authority as a direct

consequence of the principal’s representations. Id. There is no support for

implied agency in the complaint or the record, because plaintiffs allege no

facts and point to no evidence that Grupo Navis or CPE made a manifestation

to any relevant third party or that any third party reasonably relied on the

agent’s authority. Therefore, plaintiffs did not establish an agency

relationship.

Plaintiffs have not demonstrated that the other business entities’

actions should be attributed to Grupo Navis or CPE, or that either company

delivered the pouches into the stream of commerce with the expectation that

they would be used by consumers in Louisiana. In order to produce the

relevant evidence on the issue of personal jurisdiction, plaintiffs moved for

discovery for (1) contracts or agreements with other defendants or entities

involving the manufacture, marketing, distribution, development, sale, or

regulatory affairs related to the defective products; (2) the organizational

structure and membership of CPE and Grupo Navis in relation to other

defendants and entities owned that were involved with the defective

products; (3) the system of distribution of defective products; (4) CPE’s and

Grupo Navis’s knowledge of the distribution of the defective products; (5)

CPE’s and Grupo Navis’s respective control or right to control the

manufacture, marketing, distribution, development, sale, or regulatory

affairs related to the defective products; and (6) CPE’s and Grupo Navis’s

respective control or right to control other defendants’ overall business and

budgetary strategy or to direct their activities, or mandate their course of

action related to the defective products.

The Court has broad discretion over all discovery matters. Wyatt v.

Kaplan, 686 F.2d 276, 283 (5th Cir. 1982). “[T]he district court must give

the plaintiff an opportunity for discovery and for a hearing that is

appropriate to the nature of the motion to dismiss. Thus, some courts have

refused to grant such a motion before a plaintiff has had a chance to discover

the facts necessary to establish jurisdiction.” Williamson v. Tucker, 645 F.2d

404, 414 (5th Cir. 1981) (citing Surpitski v. Hughes-Keenan Corp., 362 F.2d

254 (1st Cir. 1966)); Collins v. N.Y. Cent. Sys., 327 F.2d 880 (D.C. Cir. 1963).

Jurisdictional discovery may be warranted when “the issue of subject matter

jurisdiction turns on a disputed fact.” In re MPF Holdings US LLC, 701 F.3d

449, 457 (5th Cir. 2012) (citing In re Eckstein Marine Serv. L.L.C., 672 F.3d

310, 319–20 (5th Cir. 2012)). “If a plaintiff presents factual allegations that

suggest ‘with reasonable particularity’ the possible existence of the requisite

‘contacts between [the party] and the forum state,’ . . . the plaintiff’s right to

conduct jurisdictional discovery should be sustained.” Toys “R” Us, Inc. v.

Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (quoting Mellon Bank

(East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992)).

“When the lack of personal jurisdiction is clear, discovery would serve no

purpose and should not be permitted.” Wyatt, 686 F.2d at 284.

Here, the lack of personal jurisdiction is not clear, and plaintiffs have

alleged that there are disputed facts related to Grupo Navis’s and CPE’s

direction and control over the sale and distribution of the product in

question. The public comments, though insufficient by themselves to

demonstrate specific personal jurisdiction, do establish with reasonable

particularity the possible existence of the requisite contacts between Grupo

Navis and CPE and Louisiana. While Grupo Navis and CPE argue that

discovery is not necessary because they submitted affidavits swearing that

they did not control or dictate the business operations of the other

defendants in this case,21 that is not the requisite standard. Defendants may

still be found to be alter egos of one another, or they may still be found to

have contributed to placing the defective product into the stream of

commerce with the expectation that it would be purchased by or used by

consumers in Louisiana. Because plaintiffs have not had an opportunity to

discover evidence that would support their personal jurisdiction assertion,

and because they explained the nature of the discovery sought, the Court

grants plaintiffs’ motion for jurisdictional discovery, subject to a

determination of the limits of such discovery. The Court denies defendants’

motions to dismiss without prejudice.

IV. CONCLUSION

For the foregoing reasons, the Court GRANTS plaintiffs’ motion to

conduct jurisdictional discovery subject to a determination by Magistrate

Judge Eva Dossier of limits on the scope of such discovery. Plaintiffs must

file a motion with Magistrate Judge Dossier justifying the discovery by June

3, 2025. Defendants shall respond by June 10, 2025. Jurisdictional

discovery must be completed by August 11, 2025. Defendants’ motions to

21 R. Doc. 32-1 at 2; R. Doc. 31-1 at 2.

dismiss are DENIED WITHOUT PREJUDICE to their refiling such motions

once jurisdictional discovery is complete.

New Orleans, Louisiana, this 27th day of May, 2025.

Varven.

SARAH S. VANCE

UNITED STATES DISTRICT JUDGE

16