motion to dismiss — Atwood Vacuum Machine Co. v. Ford Motor Co.

SS Ly uf —_—

Oitice Supreme Cou, U.S.

ZIiLED

i MAY 8 198!

No. 80-1694 ALEXANDER L. STEVAS,

IN THE

Supreme Court of the United States

OctToBER TERM, 1980

Arwoop Vacuum MacHInE Company, Appellant,

V.

Forp Moror Company, Appellee.

——

On Appeal from the Supreme Court of Florida

APPELLEE'S MOTION TO DISMISS

AND IN THE ALTERNATIVE TO AFFIRM

Monroz E. McDoNnaLp

Sanpers, McEwan, Mims & McDonaup

108 East Central Blvd.

P. O. Box 753

Orlando, Florida 32802

Telephone: (305) 423-8571

Attorneys for Appellee

Pauses er Brnow 8. Apams Purine, Inc., WasHineton, D. C.

TABLE OF CONTENTS

Page

Counterstatement of the Question Presented by the

ME ka seh dC Sky aha dD Race hed Nd one hee 1

Atwood’s Appeal Raises No Substantial Federal Ques-

‘tion And Should Be Dismissed; In The Alterna-

tive, The Decision of the Florida Court Was Clear-

ly Correct And Should Be Summarily Affirmed... 2

TABLE OF AUTHORITIES

CasEs :

Gray v. American Radiator Standard Sanitary Corp.,

22 Ill. 2d 432, 176 Ne. 2d 761 (1961) .............

Oswalt v. Scripto, 616 F.2d 191 (1980) .............. 4,5

World-Wide Volkswagen v. Woodson, 44 U.S. 286

Se IRR OA Grae es Ey Prey ea 2,3

No. 80-1694

IN THE

Supreme Court of the United States

OcToBER TERM, 1980

Atwoop VacuuM MACHINE Company, Appellant,

V.

Forp Motor Company, Appellee.

On Appeal from the Supreme Court of Florida

APPELLEE’S MOTION TO DISMISS

AND IN THE ALTERNATIVE TO AFFIRM

Counterstatement of the Question Presented by the Appeal

Where the manufacturer of a component part sells

its product to an automobile manufacturer, knowing

that automobiles in which the component part is in-

stalled will be distributed and sold in Florida, where

such an automobile is in fact sold in Florida, and

where the component part causes injury in Florida,

does due process preclude an action against the com-

ponent part manufacturer in Florida?

2

Atwood’s Appeal Raises No Subs‘antial Federal Question And

Should Be Dismissed: In The Alternative, The Decision of the

Florida Court Was Clearly Correct And Should Be Summarily

Affirmed.

The appellant in this case, Atwood Vacuum Ma-

chine Company, has never denied that it sells door

hinge assemblies to Ford Motor Company for installa-

tion in Ford automobiles, and that automobiles con-

taining the assemblies are distributed nationally by

Ford. Indeed, as the Florida Supreme Court noted,

Atwood has never denied that it knew that Ford ve-

hicles containing assemblies would -be shipped to

Florida and sold in that state. Nevertheless, Atwood

asks this Court to hold that the Federal Constitution,

particularly the Fourteenth Amendment, forbids the

state of Florida from exercising jurisdigtion over At-

wood merely because Atwo.d does not directly do

business in Florida.

A consideration of the only case cited by Atwood,

World-Wide Volkswagen v. Woodson, 444 U.S. 286

(1980), demonstrates the lack of substance to At-

wood’s argument. The defendant distributor in that

case distributed vehicles to only three states, and the

retail dealer sold vehicles only in New York. The

fortuitous circumstances that one vehicle sold by these

defendants happened to pass through Oklahoma was

an isolated occurrence which was insufficient to per-

mit the state of Oklahoma to exercise jurisdiction. In

contrast, the fact that an automobile containing a part

manufactured by Atwood was sold to an individual in

Florida was no isolated occurrence or fortuitous cir-

cumstance. Rather, it was the inevitable result of

Atwood’s decision to sell its product to a national cor-

poration.

3

That a manufacturer which intentionally, albeit in-

directly, distributes its products to a state on a con-

sistent basis could properly be subjected to the juris-

diction of that state was expressly recognized in

World-Wide Volkswagen:

‘‘Hence if the sale of a product of a manufacturer

or distributor ... is not simply an isolated occur-

rence, but arises from the efforts of the manufac-

turer or distributor to serve, directly or indirectly,

the market for its product in other States, it is

not unreasonable to subject it to suit in one of

those States if its alle y defective merchandise

has there been a source of injury to its owner or

to others. The forum State does not exceed tts

powers under the Due Process Clause if it asserts

ersonal jurisdiction over a corporation that de-

ivers its products into the stream of commerce

with the expectation that they will be purchased

by consumers in the forum State.”’ ( U.S. at

——) (Emphasis supplied)

By selling its door hinge assemblies to Ford Motor

Company for incorporation into vehicles which were

intended for national distribution, Atwood clearly de-

livered its product into the stream of commerce with

the expectation that it would be purchased by consumers

in Florida, as well as in the various other states. The

fact that the assemblies were first shipped to Ford

in Michigan or elsewhere does not alter the fact that

latches were intended for ultimate distribution through-

out the country.

Atwood erroneously states, on page 5 of its juris-

dictional statement, that Ford’s argument is based

solely on the fact that the presence of an Atwood as-

sembly in Florida is ‘‘foreseeable.’’ That is not the

case. Indeed, the Florida Supreme Court did not rest

4

its decision on ‘‘foreseeability,’’ but on the fact that

Atwood elected to do business with Ford Motor Com-

pany, and manufactured, sold and delivered to Ford

essential components to be incorporated in motor ve-

hicles which Atwood knew for a certainty would be

sold in the state of Florida. By these actions, Atwood,

in effect, elected to do business in the state of Florida,

and knowingly and intentionally subjected itself to

potential liability in Florida if Florida residents were

injured by defects in Atwood’s products.

The Fifth Circuit Court of Appeals recently reached

a similar conclusion in Oswalt v. Scripto, Inc., 616 F.2d

191 (1980). In that case, a Japanese corporation,

Tokai-Seiki, agreed that Scripto would have the ex-

clusive right to distribute its cigarette lighters in the

United States. Scripto purchased the lighters from

Tokai-Seiki and placed them in commerce for sale in

the United States. At least one Scripto customer had

‘‘national retail outlets.”’

Tokai-Seiki was ultimately sued in Texas for an in-

jury which occurred in that state. The Fifth Circuit

upheld the application of the Texas long-arm statute

to Tokai-Seiki even though Tokai-Seiki had never

done any direct business in Texas and had never done

any other business in the United States.

‘‘Tokai-Seiki delivered millions of the lighters to

Scripto with the understanding that Scripto would

be the exclusive distributor for the United States

and that Scripto would be selling the lighters to

a customer with national retail outlets. There is

nothing in this record to indicate that Tokai-Seiki

attempted in any way to limit the states in which

the ge could be sold. To the contrary, the

record shows that Tokai-Seiki had every reason

to believe that its product would be sold to a

5

nationwide market, that is, in any or ail states.

Moreover, the record shows that Texas was one

of the states in which the lighters were in fact

marketed, the distribution chain including a Texas

wholesaler and a Texas retail store. Given this

distributorship arrangement, Tokat-Setki’s con-

duct in connection with Texas are such that it

should reasonably anticipate being haled into court

=" al (616 F.2d at 199-200) (Emphasis sup-

p

Similarly, in this case, Atwood had every reason to

believe its product would be sold in any or all states,

including Florida. By utilizing Ford’s distribution net-

work, Atwood ‘thas made efforts to serve indirectly

the market for its product’? in Florida. Oswalt v.

Scripto, 616 F.2d at 200. See also Gray v. American

Radiator Standard Sanitary Corp., 22 Ill. 2d 432, 176

Ne. 2d 761 (1961) (where component part is sold in

contemplation of use in Illinois, [Illinois court have

in personam jurisdiction).

Atwood’s position is apparently that it is unfair to

require it to defend an action in Florida, or in any

other state in which its product causes injuries, simply

because Atwood does not do business or ship its product

directly to any states other than Illinois and Michigan.

If Atwoods’ position were adopted, it would force any -

individual purchaser injured by Atwood’s defective

products to bring an action in Illinois or Michigan.

The unjustified burden this would place upon injured

consumers is apparent. Atwood, knowing that its prod-

ucts will be used in any and all states, cannot in fair-

ness be allowed to compel persons injured by its product

to litigate in a far-away forum.

The fact that the instant controversy arises in the

context of a third party action is of no significance. The

crucial fact is that Atwood distributes its products to

Florida and can therefore expect to be sued in Florida.

The burden upon it is no greater simply because Ford

Motor Company, subrogated to the rights of the in-

jured Florida resident, is now the nominal plaintiff.

The legal principles involved, and their application,

would be identical if Mrs. Westerling had elected to

bring an action directly against Atwood. It is mere

happenstance that the issue of the constitutionality of

this provision of Florida’s long-arm statute comes be-

fore this Court in this posture.

The simple fact is that Florida, and not Illinois or

Michigan, is the most appropriate location for this

litigation. The only contact with the state of Illinois

has with this litigation is that Atwood is incorporated

there and the defective product may have been manu-

factured there. Michigan is merely the location of some

of Ford’s activities, and perhaps the state in which the

vehicle was manufactured.

Florida’s interest in this case is far more substantial.

The injured person resided in the state of Florida at

the time of the accident; she and her husband pur-

chased the vehicle in Florida; she was injured and

received all of her medical treatment in Florida; all

witnesses to the accident resided in Florida; and nu-

merous depositions were taken in Florida. To move

the litigation to Illinois or Michigan at this time would

serve no purpose except to burden the courts of an-

other state with a controversy in which they have little

interest and which they are relatively ill-equipped to

handle.

7

The appeal should be dismissed for want to a sub-

stantial federal question. In the alternative, the deci-

sion of the Florida Supreme Court is clearly correct,

and should be affirmed.

Respectfully submitted,

Monrok E. McDona.p

Sanpers, McEwan, Mims & McDonaLp

108 East Central Blvd.

P. O. Box 753

Orlando, Florida 32802

Telephone: (305) 423-8571

Attorneys for Appellee