Max Daetwyler Corp., a New York Corporation v. R. Meyer, a West German Corporation. Appeal of Rolf Meyer

SLOVITER, Circuit Judge,

dissenting.

I.

I concur in the majority’s conclusion reached in Part II that the district court erred in asserting jurisdiction on the basis of Meyer’s contacts with the United States as a whole. I am unable to join Part II of the majority’s opinion, however, because, in my view, it fails to properly state and apply settled principles of personal jurisdiction. I dissent from Part III of the opinion because it reflects too narrow a view of the scope of personal jurisdiction. Instead of *301 directing dismissal of this action, I would remand to the district court for further findings on Meyer’s contacts with Pennsylvania.

II.

While the majority gives lip service to the steadfast principle of judicial procedure that we reach the constitutional issues only after exhausting the statutory alternatives, Hagans v. Lavine, 415 U.S. 528, 543 , 94 S.Ct. 1372, 1382 , 39 L.Ed.2d 577 (1974); Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 346-47 , 56 S.Ct. 466, 482-83 , 80 L.Ed. 688 (1936) (Brandeis, J., concurring), it fails to apply that principle. Plaintiff sought to predicate jurisdiction on either of two bases, first, the “national contacts” doctrine accepted by the district court, which is essentially a federal basis for jurisdiction, and second, the application of Pennsylvania law. In its discussion of the national contacts theory, I see no reason for the majority’s failure to follow the proper order of analysis and consider the statutory issue before reaching the constitutional issue. The majority’s explanation that it is free to reverse the inquiry because the Pennsylvania statute incorporates the federal due process standard, see Majority typescript opinion at 8, is unconvincing because Pennsylvania law is irrelevant to the national contacts theory. Thus I cannot join Part II of the majority opinion because it fails to address first whether there is statutory authority for service of process and personal jurisdiction, see, e.g., Van Buskirk v. Carey Canadian Mines, Ltd., 760 F.2d 481, 489 (3d Cir.1985), and instead engages in an unnecessary discussion of due process.

I agree, however, with the majority’s conclusion that we cannot sustain jurisdiction over Meyer on the theory of national contacts adopted by the district court. The district court failed to consider whether there was any federal statutory authority for nationwide service of process. Since there is no such authority in a suit for patent infringement, we need not decide whether it would be constitutional to assert personal jurisdiction over an alien defendant solely on the basis of the alien’s national contacts. See Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 416-18 (9th Cir.1977).

In DeJames v. Magnificence Carriers, Inc., 654 F.2d 280 , 286 n. 3 (3d Cir.), cert. denied, 454 U.S. 1085 , 102 S.Ct. 642 , 70 L.Ed.2d 620 (1981), we accepted for purposes of argument that “if service can be made by wholly federal means,” aggregate contacts with the United States might be considered. There we found that the suggested “wholly federal means” of service, a treaty, could not support the service of process. Here, no “wholly federal means” is even suggested. Since the absence of such authorization is dispositive of the application of any national contacts theory in this case, I see no reason why the majority proceeds with its discussion of the constitutional basis for such a theory.

Furthermore, I find certain statements obscure and various parts of the discussion confusing. For example, though the majority disclaims deciding whether there are enough contacts here to satisfy due process under the Fifth Amendment, it nonetheless hints that there are. However, a recent scholarly work suggests that there may indeed be constitutional limits imposed by the Due Process Clause of the Fifth Amendment to unrestricted nationwide personal jurisdiction. See Fullerton, Constitutional Limits on Nationwide Personal Jurisdiction in the Federal Courts, 79 Nw.U.L.Rev. 1 (1984). I believe that we would do better from a jurisprudential standpoint to decide the case before us, relying on the absence of a federal statute authorizing service of process in this situation.

III.

Because there is no statute of the United States prescribing the manner of service, we are remitted under Fed.R.Civ.P. 4(e) to state law, here Pennsylvania’s long-arm statute, to determine Meyer’s amenability to suit.

Initially, I note that this issue goes beyond that which the district court certified under 28 U.S.C. § 1292 (b). In its statement made with respect to certification, the *302 district court stated that the controlling question of law certified “is whether, because defendant is being sued in the Eastern District of Pennsylvania on a claim arising under federal law, in personam jurisdiction in this district is constitutionally supportable on the basis of the defendant’s aggregate contacts with the United States taken as a whole?” Max Daetwyler Corp. v. Meyer, 575 F.Supp. 280, 284 (E.D.Pa.1983). We are, however, not limited by the precise question certified by the district court. In interpreting the scope of our jurisdiction under 28 U.S.C. § 1292 (b), we have held that “once leave to appeal is granted the court of appeals is not restricted to a decision of the question of law which in the district judge’s view was controlling.” Katz v. Carte Blanche Corp., 496 F.2d 747, 754 (3d Cir.) (in banc), cert. denied, 419 U.S. 885 , 95 S.Ct. 152 , 42 L.Ed.2d 125 (1974). See also Struble v. New Jersey Brewery Employees’ Welfare Trust Fund, 732 F.2d 325 , 336 n. 10 (3d Cir.1984); Johnson v. Alldredge, 488 F.2d 820, 822-23 (3rd Cir.1973), cert. denied, 419 U.S. 882 , 95 S.Ct. 148 , 42 L.Ed.2d 122 (1974).

Thus I turn, as did the majority, to the remaining issue of whether jurisdiction can be asserted over Meyer under the Pennsylvania long arm statute. Significantly, under that statute jurisdiction “may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States.” 42 Pa.Cons. Stat.Ann. § 5322(b) (1981) (emphasis added). The Pennsylvania statute does not purport to authorize jurisdiction based on a defendant’s aggregate contacts with the United States. Moreover, even if it did, DeJames commits us to viewing the Pennsylvania statute as limited by the Fourteenth Amendment, precluding the exercise of jurisdiction in the absence of the requisite contacts with the forum state, 654 F.2d at 284 .

The majority holds that the provision of the Pennsylvania long-arm statute authorizing jurisdiction over nonresidents who ship merchandise, albeit indirectly, into Pennsylvania, 42 Pa.Cons.Stat.Ann. § 5322(a)(l)(iii), is inapplicable here. I believe the majority errs in reading the district court’s opinion as holding that Meyer’s contacts are insufficient under this provision. Rather, the district court noted certain factual disputes and stated that it would be “hard pressed” to find the contacts sufficient, Max Daetwyler Corp. v. Meyer, 560 F.Supp. 869, 870 (E.D.Pa.1983), but it never so held definitively. Instead it turned to the national contacts theory, and because it found Meyer’s aggregate contacts with the United States were sufficient to justify the exercise of jurisdiction it never returned to Pennsylvania law. Unless it is clear as a matter of law that Meyer’s contacts are insufficient, the district court should decide the issue in the first instance.

Pennsylvania’s long-arm statute extends the state’s jurisdiction to its constitutional limit. Koenig v. International Bhd. of Boilermakers, 284 Pa.Super. 558, 567 , 426 A.2d 635, 639 (1980). In such a situation, we may proceed directly with the due process inquiry. Carty v. Beech Aircraft Corp., 679 F.2d 1051, 1058 (3d Cir.1982). I. believe the majority erroneously concludes on the basis of the record before us that Meyer’s contacts are constitutionally insufficient. In World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 298 , 100 S.Ct. 559, 567 , 62 L.Ed.2d 490 (1980), the Supreme Court reaffirmed the already well-established principle that a state may assert personal jurisdiction over a defendant “that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State.” The majority opinion distinguishes the present case from a series of “stream of commerce” cases primarily on the grounds that Meyer made no “deliberate decision[ ] to market” his doctor blades in Pennsylvania. Typescript Opinion at 23-24. It also suggests that Meyer had no knowledge or anticipation that his products would be used in Pennsylvania.

Since the district court did not pursue its factual inquiry, I am uncertain on what basis an appellate panel can decide whether or not Meyer had the requisite “expectation” that the product he purposefully marketed in the United States would be pur *303 chased by consumers in Pennsylvania. In neither of Meyer’s affidavits filed in support of his motion to dismiss for lack of personal jurisdiction and improper venue did he disclaim any expectation that the doctor blades he sells in the United States through his American distributor would be purchased by consumers in Pennsylvania. As we recognized in DeJames, 654 F.2d at 285 , the benefit derived by manufacturers who place their products into the stream of commerce is far different from the mere derivative benefit received by distributors and analogous defendants, which was held insufficient in World-Wide Volkswagen and DeJames to support jurisdiction. Here, Meyer is the manufacturer, and his expectation as to distribution, and the reasonableness thereof, are ultimately matters for factual findings that have not been made on this record. I think it is improper for this court to engage in making factual inferences from an incomplete record and thereby foreclose plaintiff from showing that there is jurisdiction under a theory acknowledged as appropriate by the Supreme Court.

Finally, I find it surprising that the district court did not consider whether jurisdiction could be asserted on the basis that Meyer had allegedly caused tortious injury in the state. Since the underlying suit is one for the tort of patent infringement, and the tortious injury may occur wherever the infringing products are sold, see Horne v. Adolph Coors Co., 684 F.2d 255, 260 (3d Cir.1982); Honeywell, Inc. v. Metz Apparatewerke, 509 F.2d 1137 (7th Cir.1975), there may be some plausibility to this theory of jurisdiction pressed by plaintiff. In a similar patent infringement case against an alien, jurisdiction was sustained under the provision of Utah law authorizing out-of-state service upon parties who cause “any injury within this state whether tortious or by breach of warranty.” See Engineered Sports Products v. Brunswick Corp., 362 F.Supp. 722, 725-26 (D.Utah 1973). The Pennsylvania statute is similar, providing for jurisdiction over someone “[cjausing harm or tortious injury in this Commonwealth by an act or omission outside this Commonwealth,” 42 Pa.Cons.Stat.Ann. § 5322(a)(4). Interestingly, the Utah court used the national contacts in addition to the state contacts as the basis for finding that application of the state long-arm statute did not offend due process. Id. at 728-29. See also Centronics Data Computer Corp. v. Mannesmann, A.G., 432 F.Supp. 659, 663-68 (D.N.H.1977). While there may indeed be factual differences between this case and the cases that accepted this theory, as the majority states, I think that the district court should decide in the first instance whether these differences change the result.

Since either the “transacting business” rationale or the “tortious injury” rationale may offer sufficient basis for finding jurisdiction, we should not pretermit the district court’s full consideration. Therefore, I would remand with instructions that the district court make a definitive ruling on whether defendant is subject to jurisdiction based on the Pennsylvania long-arm statute.