Petition for Writ of Certiorari — Bond v. Octagon Process, Inc.

NO.

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM 1990

OLIVER BOND AND HERTA BOND

Petitioners

VS:

OCTAGON PROCESS, INC.

Respondent

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

E. FREEMAN LEVERETT

COUNSEL OF RECORD FOR

PETITIONERS

HEARD, LEVERETT & PHELPS, P.C.

25 S. THOMAS STREET

P. O. DRAWER 399

ELBERTON, GEORGIA 30635

TEL: 404/283-2651

QUESTIONS FOR REVIEW

(1) Did The Court of Appeals err in

holding that the stream of commerce

theory of in personam jurisdiction as

applied to a manufacturer of a product,

first definitively stated in Gray v.

American Radiator & Standard Sanitary

Corp., 22 Ill. 2d 432, 176 N.E.2d 490

(1980), had been rejected in World-

Wide Volkswagon Corp. v. Woodson, 444

U.S. 286, 100 S. Ct. 559, 62 L. Ed.2d 490

(1980), and Asahi Metal Industry Co.,

Ltd. v. Superior Court of California,

480 U.S. 102, 107 S. Ct. 1026, 94 L.Ed.2d

92 (1987)? Three other Courts of Appeal

have previously held to the contrary.

(2) Did the Court of Appeals err in

upholding the dismissal of petitioners’

complaint under Rule 12(b)(2), FRCP,

rather than directing transfer

to the proper district court in New

~~

Jersey pursuant to 28 USC 1406(a) and

this Court's decision in Goldlawr v.

Heiman, 369 U.S. 463, 466, 82 S. Ct. 913,

8 L.Ed.2d 39 (1962)?

wile

PARTIES TO THE PROCEEDING

All parties to the proceedings in the

District Court and Court of Appeals below

appear in the caption. Petitioners are

not aware that any parent or subsidiary

companies of Respondent exist.

-iii-

TABLE OF CONTENTS

PAGE NO.

QUESTIONS FOR REVIEW.....cceeeeeee i

PARTIES TO THE PROCEEDINGS......-- iii

TABLE OF AUTHORITIES... -ceesseeeee V

REPORTS OF OPINIONS BELOW.....---- 1

JURISDICTION. ..ccccccccccccescseee 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS TNVUUVED ce ccccceessoccsce l

STATEMENT OF THE CASE....ceeeceees 2

REASONS FOR GRANTING THE WRIT..... 6

CO Les 6-06 68 0 eeeeocseeeeeeeees 28

CERTIFICATE OF SERVICE...cecccceee 29

-iv-

TABLE OF AUTHORITIES

CASES PAGE NO.

A.I.M. International, Inc.

v. Battenfeld Extrusion

Systems, Inc., 116 F.R.D.

633, 641 (D.C. Ga. 1987)..... 15

American Greetings Corp. v.

Cohn, 839 F2d 1164, 1167

(6th Gates DT whegseenéeeoen 21

Andel v. Getz Services,

197 Ga. App. 653, 399 SE2d

226 PRs i been ed eae kone & © o @ 24

Asahi Metal Industry Co.,

Ltd. v. Superior Court of

California, 480 U.S. 102,

107 S.Ct. 1026, 94 L.Ed.2d

SS CIPO) acsccceseesceaceeese i, 7, 10

12, 14,

15, 17

Bean Dredging Corp. v.

Dredge Technology Corp.,

744 F2d 1081 (5th Cir.

LORS) cb cic cor ceesecsenseeeces 12, 18,

21

Becker v. Commissioner of

Internal Revenue, 852 F2d

SSG CLESR CEL. BOS) 66 access 27

Bentz v. Recile, 178 F2d

LG26 (SER. CELi BOSS) ccc ceewds 26

Bond v. Octagon Process,

Inc., 745 F. Supp. 710 (D.C.

Ga. EE bck eee ees Wehbe l

Boyle v. United Technologies

Corp., 487 U.S. 500, 108 S.

Ct. 2510, 101 L.Ed.2d 442

(JOSS) wc cvcsccvescesecs eseseee 4

Burton v. Subaru of America,

Inc., 646 F. Supp. 78 (D.C.

Ga. kane eek acne hae oe © 20

Corke v. Sameit M.S. Song

of Norway, 572 F2d 77 (2nd

Giz. Dt 66666068 s 6666660600 26

DeJames v. Magnificience

Carriers, Inc., 654 F2d 280

(3rd Cir. 1981), cert. den.

S56 U.8. 1GG5 (lIPSld ecccccvece 18

Benitez-Allende v. Alcan

Aluminio Do Brasil, S.A.,

857 F2d 26 (lst Cir. (1988).. 18

Dubin v. U.S., 380 F2d 813

(5th Cate fe 26

Goldlawr v. Heiman, 369 U.S.

463, 466, 82 S.Ct. 913, 8

eee 2S CABGCE) cc cccceccccce Si, dhe

22, 27

Gray v. American Radiator &

Standard Sanitary Corp., 22

Ill. 2d 432, 176 N.E.2d 490

(2SSO) cccccccccccccencceccees i, 7, 18

Gulf Consolidated Services

v. Corinth Pipeworkers,S.A.,

898 F2d 1071 (5th Cir. 1990). 17

Haley v. Wright Mfg. Co., 651

F. Supp. 116 (D.C. La. 1986). 19

Hall v. Zambelli, 669 F. Supp.

753 (D.C. W.Va. 1987) ........ 19

Hapaniewski v. City of

Chicago Heights, 883 F2d

576 (7th oy fa : ) rr a 26

-vi-

In re Agent Orange Litigation,

818 F2d 135 (2nd Cir. 1987).. 18

Interfirst Bank Clifton v. “

Fernandez, 844 F2d 279, 282

(Sth Gre « | TG ee ee 21

International Shoe Co. v.

Washington, 326 U.S. 310,

66 S.Ct. 154, 90 L.Ed. 95

SRDS) 0c secs ce eeeessees eaeeees 12

Irving v. Owens-Corning

Fiberglas Corp., 864 F2d

383 (Sth Cir. 1989) .cccccccee 17, 20,

21

Ladwig v. Trust Ins. Exchange,

498 F. Supp. 161 (D.C. Wis.

1980) wcccccccccccccccccccccce 26

Mason v. F. Lli Luigi &

Franco Dal Maschio, 832 F2d

383 (7th Cir, oy 17

Mayo Clinic v. Kaiser,

383 F2d 653, 655 (8th Cir.

DTS 0665666486600 eeeeoeeeee#ee#e#e#e 26

McDaniel v. Johns-Manville

Sales Corp., 487 F. Supp.

714 (D.Ce T11. 1978) ccccsece o° 19

Morris v. SSE, Inc., 843 F2d

See C22E8 CEE. BOSS coc sees “% 15, 2l

National Egg Co. v. Bank

Leumi le-Israel B.M., 504

F. Supp. 305 (D.C. Ga. 1980). 20

Nelson v. Park Industries,

Inc., 717 F2d 1120, 1125-26

(7th Cir. 1983), cert. den. '

S65 GUcGi A2GRe CAS! 0sviceves 11

-vVii-

Omstead v. Brader Heaters,

Ync., 5 Wash. App. 258, 487

P2d 234, 240 (1971)......----.

Oswalt v. Scripto, 616 F2d

191 (5th Cir. 1980)......-.

Panhandle Eastern Pipe Line

Co. v. Federal Power

Commission, 343 F2d 905

(8th Cir. 1965) ...cccccccceee

Payne v. Kristofferson, 631

F. Supp. 39 (D.C. Ga.. 1985).

Pfiffer v. International

Academy, 521 F. Supp. 1331

(D.C. Mo. BOL? o65600066ee008

Porter v. Groat, 840 F2d 255,

258 (4th Cie, |

Ross v. Colorado Outward

Bound School, Inc., 603 F.

Supp. 306 C6. N.Y. 1985) eee

Rowe v. Dorrough, 15C Cal.

App. 3rd 901, 198 Cal.

Rptr. 131 Pan? éee0 see ee

Scott v. Crescent Tool Co.,

296 F. Supp. 147 (D.C. Ga.

| i a

Sells v. International

Harvester Co., 513 F2d 762

(Sth Cir. 1975) reh. den.

S22 PAG LAGS) cccdecccecece

Sinatra v. National Enquirer,

Inc., 854 F2d 1191 (9th Cir.

| ee ee eeeee

~viii-

18

18

27

19

26

26

20

19

18

21

Stoehr v. American Honda

Motor Co., 429 F. Supp. 763

EPute Neb. ogy PPP rrr r rs yer

Tedford v. Grumman American

Aviation Corp., 488 F. Supp.

144 (D.cGi BAGS. THOS? ccovesce<

Thornton v. Toyota Motor

Sales U.S.A., Inc., 397 F.

Supp. 476 (a Ga. 1975) eeee

Tillary v. Idaho Power Co.,

425 F. Supp. 376 (D.C. Wash.

Te & 66k 66Sben eu kewaceeus cer

Value Engineering Co. v.

Gisell, 140 Ga. App. 44,

230 S.B. 24 29 (1976) .ccccces

Westphal v. Mace, 660 F. Supp.

10 oe Ariz. SET? beta wees

World-Wide Volkswagon Corp.

v. Woodson, 444 U.S. 286,

100 S.Ct. 559, 62 L.Ed.2d

490 CLOED) cccccccccccccscccss

STATUTES

Rule 12(b) (2), FRCP........0..

2B USC 1254. cccccccccccccccese

28 USC 1406 (a) ......2e0nne ever

on oe) ean eoeeroee

Constitution of Georgia,

1983, Art. VI, Sec. I, Par.

West 26s 0% eeeees ee rve#eeneense#*#?2s28e#0e28eee#

=e

19

19

26

25

MISCELLANEOUS

63 Am. Jur. 2d 1286, §893..... 20

Maltz, "Unraveling The

Conundrum of the Law of

Personal Jurisdiction: A

Comment On Abahi Metal

Industry Co. v. Superior

Court of California", 1987

Duke L.J. 669, 671 (1987).... ll, 14

Murphy, "Personal Jurisdiction

And The Stream Of Commerce

Theory: A Reappraisal And A.

Revised Approach.” 77 Ky. L.J.

248 (1988-89) ..ccccccccccccces 9, ll,

15

Note, "Personal Jurisdiction:

The Evolution of the Minimum

Contacts Analysis", 20 U. West.

L.A. L.R. 219, 248 (1988-89).. 11

Note, "Personal Jurisdiction

Aftec Asahi: The Other

International Shoe Drops",

55 Tenn. L.R. 41, 92 (1987).. 11

Note, "Jurisdiction, Fair

Play and Foreign Defendants:

Asahi Metal Industry Co. v.

Superior Court", 61 St. John

L.-R. 629, 630 (1987) ..ceeeees 1l

The Supreme Court, 1986 Tern,

101 Harv. L.R. 260, 265

(1987) cccccccccccccccccccoces 15

Van der Creek, “Jurisdiction

Over tthe Person ~ The Progeny

of Pennoyer And The Future of

Asahi", 13 Nova L.R. 1267,

1309 (1969) ccccccccccccccccecs

4 Wright & Miller, Federal

Practice and Procedure,

§1069, at pp. 391-392....... °

_t eo

11

4

REPORTS OF OPINIONS BELOW

The opinion of the District Court is

reported as Bond v. Octagon Process,

Inc., 745 F. Supp. 710 (D.C. Ga. 1990).

The per curiam affirmance of the Court of

Appeals is not reported yet.

JURISDICTION

The decision and judgment of the

Court of Appeals sought to be reviewed

were entered March 28, 1991. Motion for

rehearing was not filed from the per

curiam affirmance. This Court has

jurisdiction of the petition under 28 USC

1254.

CONSTITUTIONAL AND

STATUTORY PROVISIONS INVOLVED

(1) Due Process Clause of the

Fourteenth Amendment to the Constitution

of the United States:

", . .{Nlor shall any state

deprive any person of life, liberty,

Or property, without due process of

law. . .”

(2) 28 USC 1406:

"(a) The district court of a

district in which is filed a case

laying verue in the wrong division

or district shall dismiss, or if it

be in the interest of justice,

transfer such case to any district

or division in which it could have

been brought. * * **

STATEMENT OF THE CASE

Sgt. Oliver Bond was on active duty

at the Elberton, Georgia, National Guard

Armory on December 5, 1982, using a

Cleaning solvent supplied by the

Department of Defense and manufactured by

-2-

respondent Octagon Process, Inc. of

Edgewater, New Jersey. It was 21°F most

of the day, and the combination of the

cold temperature and the defatting and

evaporative cooling of the solvent caused

his hands to contract a disabling

condition known as Raynaud's phenomenon,

which has resulted in the fingers,

particularly on the left hand, to "rot

off". He has now been recognized as

being totally disabled by the Veterans

Administration. Due to initial confusion

1

as to the nature of his condition, this

1. A civilian physician initially

diagnosed the condition as Buerger's

disease, attributed to smoking. This

resulted in Sgt. Bond's being denied any

medical or other benefits for almost 4

years. In late 1985, doctors at

Eisenhower Army hospital reviewed his

case and concluded that the condition was

in fact, service-related, diagnosed as

acquired acrosteolysis-. secondary to

exposure to chemical solvents and cold

environment. This was later changed to

Raynaud's phenomenon.

-3-

diversity of citizenship civil action was

not filed until May 7, 1987. Defendant

Octagon filed Motion to Dismiss, based on

a challenge to jurisdiction over the

person of Octagon by the federal district

court in Georgia, and the governmental

contractor immunity doctrine later

addressed in this Court's decision in

Boyle v. United Technologies Corp., 487

U.S. 500, 108 S.Ct. 2510, 101 L.Ed.2d 442

(1938).

With respect to the challenge to

jurisdiction over the person of

defendant, the evidence showed that

defendant manufactured all of its

products in New Jersey primarily for sale

to the United States, and as to the

solvent in question, all of its

production was for the Defense Logistics

Agency of the Department of Defense. The

solvent was shipped to Department of

Defense depots in Norfolk, Virginia;

-4-

Oakland, California; Mechanicsburg,

Pennsylvania; Columbus, Ohio; Memphis,

Tennessee; Richmond, Virginia; and Ogden,

Utah. No shipments were made by

respondent to Georgia, but as testified

by a contracting officer for the

Department of Defense, "While the

supplying contractors do not know the

ultimate destination of any solvent once

it get3 to a depot, from my experience

all contractors know that the material is

subject to being shipped to Army, Navy

and Air Force bases all over the United

States and its possessions. . .", and to

National Guard Armories. (Ronald L.

Perkinson affidavit). Respondent's

president also indicated knowledge that:

the solvent was distributed by the depots

to other areas. Respondent was the only

manufacturer of the solvent for the

Government during 1982, and one of only

two during 1981.

The district court sustained

respondent's motion to dismiss for lack

of in personam jurisdiction (Appendix 1),

but did not pass upon the governmental

contractor immunity defense.”

The Court of Appeals affirmed per

curiam "on the basis of the district

court's dispositive »~pinion.. ."

(Appendix 2)

REASONS FOR GRANTING THE WRIT

The Court of Appeals has decided an

important question of in personam

jurisdiction contrary to the way in which

the Courts of Appeal for the First, Fifth

and Seventh Circuits have decided it.

2. Petitioner relied upon the exception

recognized by this Court in Boyle, i.e.,

where the "supplier (failed to warn) the

United States about the dangers in the

use of the equipment that were known to

the supplier but not to the United

States” (487 U.S. at 512).

-§-

Under Rule 10 of the Rules of this Court,

that is a reason supporting the grant of

certiorari.

This Court's decision in Asahi Metal

Industry Co. Ltd. v. Superior Court of

California, 480 U.S. 102, 107 S.Ct. 10926,

94 L.Ed.2d 92 (1987), and to a lesser

extent, World-Wide Volkswagon Corp. v.

Woodson, 444 U.S. 286, 100 S.Ct. 559, 62

L.Ed.2d 490 (1980), have created

confusion as to the status of the "stream

of commerce" doctrine of in personam

jurisdiction in products liability ca3es

as applied to manufacturers, first

definitively articulated in Gray v.

American Radiator & Standard Sanitary

Corp., 22 Ill. 2d 432, 176 N.E. 2d 761

3

(1961). "Since Gray v. American

3. "As a general proposition, if a

corporation elects to sell its products

for ultimate use in another State, it is

not unjust to hold it answerable there

for any damage caused by defects in those

-~7-

Radiator & Standard Sanitary Corp.,

American courts have readily asserted

jurisdiction over nonresident

manufacturers and distributors whose

injury-causing products have reached the

products. Advanced means of distribution

and other commercial activity have made

possible these modern methods of doing

business, and have largely effaced the

economic significance of State lines. By

the same token today's facilities for

transportation and communication have

removed much of the difficulty and

inconvenience formerly encountered in

defending lawsuits brought in other

States.

Unless they are applied in

recognition of the changes brought about

by technological and economic progress,

jurisdictional concepts which may have

been reasonable enough in a simpler

economy lose their relation to reality,

and injustice rather than justice is

promoted. Our unchanging principles of

justice, whether procedural or

substantive in nature, should be

scrupulously observed by the courts. But

the rules of law which grow and develop

within those principles must do so in the

light of the facts of economic life as it

is lived today. Otherwise the need for

adaptation may become so great that basic

rights are sacrificed in the name of

reform, and the principles themselves

become impaired." (176 N.E. 2d at 766).

-g-

forum as a result of their purposeful

introduction into the ‘stream of

commerce’. This stream of commerce

concept supports~the forum's exercise of

jurisdiction - although the product's

presence there is the immediate result of

the independent actions and objectives of

intermediaries in the distribution

chain." Murphy, Personal Jurisdiction

And The Stream Of Commerce Theory: A

Reappraisal And A Revised Approach." 77

Ky. L.J. 248 (1988-89).

The Court expressly approved the

doctrine in World-Wide Volkswagon,

supra. Nevertheless, the Court's

4. "The 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. Compare

Gray v American Radiator & Standard

Sanitary Corp., 22 Ill 2d 432, 176 NE2d

761 (1961)." (444 U.S. at 297-298). The

dissenting opinions of Justices Brennan,

-9-

Se

holding in that case (to the effect that

jurisdiction could not be asserted in an

Oklahoma Court against a New York Audi

dealer who had sold a vehicle to a New

York resident who drove the car into

Oklahoma and had a wreck, nor against the

New York-based regional distributor) did

raise uncertainty about the scope of

long-arm jurisdiction, and Asahi, supra,

decided in 1987, raised doubts at least in

£.n. 4 continued... Blackmun and

Marshall obviously agreed with this

proposition. Nevertheless, although

World-Wide involved the different factual

situation of a local car dealer and a

regional distributor and not a

manufacturer, some language of the Court

concerning the "fortuitous circumstance

that a single Audi automobile, sold in

New York to New York residents, happened

to suffer an accident while passing

through Oklahoma" (444 U.S. at 295), and

the discussion of forseeability and a

defendant's "purposefully availing itself

of the privilege of conducting activities

within the forum state .. ." (444 U.S.

at 295-297), generated some doubt as to

jurisdiction.

-10-

che minds of commentators as to the

continued viability of the stream of

commerce theory.”

World-Wide Volkswagon, as the Court

of Appeals for the Seventh Circuit

recognized in Nelson v. Park Industries,

Inc., 717 F2d 1120, 1125-26 (7th Cir.

1983), cert. den. 465 U.S. 1024 (1984),

turned upon the fact that the suit there

was against a retail dealer and regional

5. Murphy, supra; Maltz, "Unraveling The

Conundrum of the Law of Personal

Jurisdiction: A Comment On Asahi Metal.

Industry Co. v. Superior Court of

California", 1987 Duke L.J. 669, 671

(1987); Van der Creek, "Jurisdiction Over

The Person - The Progeny of Pennoyer And

The Future of Asahi", 13 Nova L.R. 1287,

1309 (1989); Note, “Personal Jurisdiction:

The Evolution of the Minimum Contacts

Analysis", 20 U. West. L.A. L.R. 219, 248

(1988-89); Note, “Personal Jurisdiction

After Asahi: The Other International

Shoe Drops", 55 Tenn. L.R. 41, 92 (1987);

Note, "Jurisdiction, Pair Play and Foreign

Defendants: Asahi Metal Industry Co. v.

Superior Court", 61 St. John L.R. 629,

630 (1987) (Observing that the stream of

commerce theory had been recognized bv a

majority of the Circuits).

-ll-

distributor, and not the manufacturer or

a national distributor. See Bean

Dredging Corp. v. Dredge Technolo

ging Sorp. 4g gy

Corp., 744 F2d 1081 (5th Cir. 1984).

Respondent argued below, and the

District Court so held (which was adopted

by the Court of Appeals) Opinion, p. 9

(Appendix 1) that the Court in Asahi

expressly disapproved of the stream of

commerce basis of jurisdiction as applied

to a manufacturer. That clearly is not

correct. Asahi was decided instead on

the second of the two prongs of the

International Shoe Co. v. Washington, 326

U.S. 310, 66 S. Ct. 154, 90 L.Ed 95

(1945) jurisdictional test relating not

to the sufficiency of minimum contacts,

but to the proposition that "the

maintenance of the suit does not offend

traditional notions of fair play and

substantial justice” (326 U.S. at 316).

~12-

Justice O'Connor's opinion for herself

and three other members of the Court did

arguably reject stream of commerce in its

pristine form, although seeming to

recognize a modified version of the

principle.® The factual situation in

6. "The placement of a product into the

stream of commerce, without more, is rot

an act of the defendant purposefully

directed toward the forum State.

Additional conduct of the defendant may

indicate an intent or purpose to serve

the market in the forum State, for

example, designing the product for the

market in the forum State, advertising in

the forum State, establishing channels

for providing regular advice to customers

in the forum State, or marketing the

product through a distributor who has

agreed to serve as the sales agent in the

forum State. But a defendant's awareness

that the stream of commerce may or will

sweep the product into the forum State

does not convert the mere act of placing

the product into the stream into an act

purposefully directed toward the forun

State.” (480 U.S. at 112). The present

case, it is submitted, satisfies this

modified standard, for here defendant

availed itself of the nation-wide and

world-wide distribution system of the

Department of Defense, by manufacturing

the solvent solely for Vefense Logistics

Agency, and shipping it to 7 depots

-1]13-

Asahi dictated the result in that case,

in that there, the damage suit by the

forum based motorcycle driver injured

from a tire blow-out had been settled,

and the only dispute remaining was a

question of contribution between two

defendants, a Taiwanese manufacturer of

the tube and the Japanese manufacturer of

the valve assembly used in the tube,

neither of which had any connection with

the forum, California. An additional

factor in Asahi was the presence of

international commerce and the

implication for foreign relations.

480 U.S. at 114-116; Maltz, supra, 1987

Duke L.J. at 679; The Supreme Court,

1986 Term, 101 Harv. L.R. 260, 265

f.n. 6 continued. .. located in 6

widely separated states, knowing that it

would in turn be shipped all over the

nation and the world.

~14-

(1987); Murphy, supra, 77 Ky. L.R. at 274

(1988-89); A.I.M. International, Inc. v.

Battenfeld Extrusion Systems, Inc., 116

P.R.D. 633, 641 (D.C. Ga. 1987).

In Morris v. SSE, Inc., 843 F2d 489

(llth Cir. 1988), the Eleventh Circuit

observed that the status of the

"stream of commerce” doctrine was

uncertain after Asahi, but proceeded to

hold in that case that jurisdiction was

satisfied under either theory espoused in

Asahi. Now, however, the Court of

Appeals has, by adopting the district

court decision, flatly held that stream

of commerce as applied to a manufacturer

has been discredited by Asahi. It is

submitted that such is not the case.

Justice Brennan with three other justices

in Asahi expressly asserted the continued

vitality of the principle, and Justice

Stevens' special concurrence seems to

-15-

EEE

lean toward the Brennan opinion on this

point by (1) rejecting the linch-pin of

Justice O'Connor's rationalization, i.e.,

the "purposefully availing" requirement

and (2) in his insistence that there is

not necessarily any distinction between

"purposefully availing” and "mere

awareness" (480 U.S. at 122)./

7. The "purposeful availment" twist to

in personam jurisdiction under minimum

contacts was added by Hanson v. Denckla,

357 U.S. 235, 253, 78 S. Ct. 1228, 2

L.Ed.2d 1283 (1958), but Justice

Brennan's opinion for the Court in Burger

King Corp. v Rudewicz, 471 U.S. 462, 168

a: 7° 22 Oa 85 L.£d.2d 528 (1985), makes

Clear that the elements of "stream of

commerce" also satisfy the purposeful

availment gloss. See 471 U.S. at

- , where after referring to a

defendant purposefully directing his

activities toward the forum, Justice

Brennan declares: "Thus ‘(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” and those products

subsequently injure forum consumers.

World-Wide Volkswagon Corp. v. Woodson,

-~l16-

It is respectfully submitted that:

the Courts below erred in refusing to

follow the stream of commerce doctrine

under the facts here, which as stated

previously, satistied even the modified

O'Connor version. On the other hand,

three other Circuits, the Pirst, Pifth

and Seventh Circuits, have held that

"stream of commerce" survives Asahi. As

to the Pifth Circuit, see Irving v.

Owens-Corning FPiberglas Corp., 864 F2d

383 (Sth Cir. 1989); Gulf Consolidated

Services v. Corinth Pipeworkers, S.A.,

898 F2d 1071 (5th Cir. 1990). The

Seventh and First Circuits also have

either upheld or applied the stream of

commerce theory of jurisdiction after

Asahi. Mason v. PF. Lii Luigi & Franco

f,n. 7 continued... supra..." See

also, Justice White's opinion in

World-wide, which says that stream of

commerce satisfies the purposefully

availing requirement. (444 U.S. at 297).

-l7-

a

Dal Maschio, 832 F2d 383 (7th Cir. 1987)

(citing Gray, and Benitez-Ailende v.

Alcan Aluminio Do Brasil, S.A., 857

P2d 26 (lst Cir. 1988) (Approves theory,

but direct marketing by defendant

also was involved). The stream of

commerce doctrine was well-settled prior

to Asahi. Gray v. American Radiator and

Standard Co., supra; In re Agent Orange

Litigation, 818 F2d 145 (2nd Cir. 1987);

Omstead v. Brader Heaters, Inc., 5 Wash.

App. 258, 487 P2d 234, 240 (1971), aff'd

80 Wash 2d 720, 497 P2d 1310, 1972);

Oswalt v. Scripto, 616 F2d 191 (5th Cir.

1980) (Japanese manufacture of cigarette

lighters subject to suit in U.S.); Sells

v. International Harvester Co., 513 F2d

762 (5th Cir. 1975); reh. den. 522 F2d

1280; Bean Dredging Corp. v. Dredge

Technology Corp.; 744 F2d 1081 (5th Cir.

1984); DeJames v. Magnificience Carriers,

Inc., 654 F2d 280 (3rd Cir. 1981), cert.

-18-

——— aS...

den. 454 U.S. 1085 (1981); Pfiffer v.

International Academy, 521 F. Supp. 1331

(D.C. Mo. 1981); Tedford v. Grumman

American Aviation Corp., 488 F. Supp. 144

(D.C. Miss. 1980); Stoehr v. American

Honda Motor Co., 429 F. Supp. 763 (D.C.

Neb. 1977); Haley v. Wright Mfg. Co., 651

P. Supp. 116 (D.C. La. 1986); McDaniel v.

Armstrong World Industries, 603 F. Supp.

1337 (D.C. D.C. 1985); McDaniel v.

Johns-Manville Sales Corp., 487 F. Supp.

714 (D.C. I1l. 1978) (Canadian seller of

asbestos held subject to suit by placing

asbestos in stream of commerce); Hall v.

Zambelli, 669 F. Supp. 753 (D.C. W. Va.

1987) (where manufacturer sells to a

distributor knowing that the product is

to be distributed throughout the United

States, due process is satisfied); Scott

v. Crescent Tool Co., 296 F. Supp. 147

(D.C. Ga. 1968); Payne v. Kristofferson,

-19-

ee

631 F. Supp. 39 (D.C. Ga. 1985); Rowe v.

Dorrough, 150 Cal. App. 3rd 901, 198 Cal.

Rptr. 131 (1984); Irving v. Owens-Corning

Fiberglas Co., 864 F2d 383 (5th Cir.

1989); Value Engineering Co. v. Gisell,

140 Ga. App. 44, 230 S.E.2d 29 (1976);

National Egg Co. v. Bank Leumi le-Israel

B.M., 504 F. Supp. 305 (D.C. Ga. 1980);

Thornton v. Toyota Motor Sales U.S.A.,

Inc., 397 F. Supp. 476 (D.C. Ga. 1975);

Burton v. Subaru of America, Inc., 646 F.

Supp. 78 (D.C. Ga. 1986); 63 Am. Jur. 2d

1286, §893; 4 Wright & Miller, Federal

Practice and Procedure, §1069, at pp.

391-392.

The Court below erred in holding

that the doctrine has been abrogated by

Ashai.

The District Court below also erred

in undertaking to construe the Georgia

long-arm jurisdiction statute because,

having recognized that it had been

-20-

construed by the Georgia Courts as

extending jurisdiction over nonresidents

to the maximum extent allowed by due

process, it is not necessary to consider

or apply state law. Morris v. SSE, Inc.,

843 F2d 489, n. 3 (l1ith Cir. 1988);

Interfirst Bank Clifton v. Fernandez, 844

F2d 279, 282 (5th Cir. 1988); Irving v.

Owens-Corning Fiberglass Corp., 864 F2d

383, 385 (5th Cir. 1989); Bean Dredging

Corp. v. Dredge Technology Corp., 744 F2d

1081, 1083 (5th Cir. 15984); American

Greetings Corp. v. Cohn, 839 F2d 1164,

1167 (6th Cir. 1988); Sinatra v. National

Enquirer, Inc., 854 F2d 1191 (9th Cir.

1988).

THE COURT OF APPEALS ERRED IN

FAILING TO HOLD THAT THE COURT

BELOW SHOULD HAVE TRANSFERRED UNDER

28 USC 1406(a) RATHER THAN DISMISSING

In Goldlawr v. Heiman, 369 U.S. 463,

8Z S. Ct. 913, 8 L.Ed.2d 39 (1962), this

Court held that transfer to an appropriate

venue rather than dismissal was proper

-21-

under 28 USC 1406(a), in a case where

both venue and jurisdiction were lacking,

even where there was no motion to

transfer. In this case, venue was proper

as far as the statute was concerned, but

the District Court and Court of Appeals

held that jurisdiction was lacking.

Here, as in Goldlawr, plaintiffs did not

move for a transfer in the District

Court, and reasonably could not do so

without waiving their contention that

jurisdiction existed under the stream of

commerce theory, but they did enumerate

error in the Court of Appeals on the |

ground that the District Court should

have done so sua sponte independently of

a motion. The Court of Appeals rejected

this enumeration of error. In Goldlawr,

the Court held that transfer rather than

dismissal was proper because "The problem

which gave rise to the enactment of the

section was that of avoiding the

=-23-

Siimmmmmmmmmmenmnemmnescrsess

injustice which had oft:en resulted to

plaintif‘fs from dismissal of their

actions merely because they had made an

erroneous guess with regard to the

existence of some elusive fact of the

kind upon which venue provisions often

turn. Indeed, this case is itself a

typical example of the problem sought to

be avoided, for dismissal here would have

resulted in plaintiff's losing a

substantial part of its cause of action

under the statute of limitations merely

because it made a mistake in thinking

that the respondent corporations could be

"found' or that they ‘transact...

business' in the Eastern Disrict of

Pennsylvania. The language and history

of §1406(a), both as originally enacted

and as amended in 1949, show a

congressional purpose to provide as

effective a remedy as possible to avoid

-23-

precisely this sort of injustice." (369

U.S. at 466).

The same principle is applicable

here. Because a civilian physician

Originally diagnosed petitioner Oliver

Bond's condition as being unrelated to

the chemical exposure, it was not until

amost four years later that he learned

otherwise. This presented no problem

under the Georgia Statute of Limitations

in products liability cases which is to

the effect that the statute starts to run

when the plaintiff discovers the facts of

the case indicating that he has a cause

of action. Andel v. Getz Services, 197

Ga. App. 653, 399 SE2d 226 (1990).

Georgia also has a rule that where a

plaintiff suffers dismissal that is not on

the merits, he may refile within six months

thereafter regardless of whether the

statute of limitations has run in the

interin.

-24-

O.C.G.A. §9-2-61. Georgia law also is to

the effect that when an action is brought

in the wrong venue, whether because of

jurisdiction or otherwise, the Court

should not dismiss, but should transfer

to the proper court. Constitution of

Georgia, 1983, Art. VI, Sec. I, Par.

VIII. -All of these questions are

uncertain under New Jersey law, and it is

doubtful that petitioners could refile in

New Jersey.

The Court of Appeals’ per curiam

affirmance left these questions

unconsidered, but respondent's argument

below was that §1406(a) applies only

where venue is improper, but not where in

personam jurisdiction was lacking. This

distinction is not a valid one, as

observed in Wright & Miller (Vol. 15,

§382), p. 171), and as more particularly

recognized in the decision of the Fifth

-25—

|

Circuit in Dubin v. U.S., 380 FP2d 813

(5th Cir. 1967), and in other cases, such

as Porter v. Groat, 840 F2d 255, 258 (4th

Cir. 1988); Ross v. Colorado Outward

Bound School, Inc., 603 F. Supp.’ 306

(D.C. N.Y. 1985); Tillary v. Idaho Power

Co., 425 F. Supp. 376 (D.C. Wash. 1976);

Westphal v. Mace, 660 F. Supp. 10 (D.C.

Ariz. 1987); Ladwig v. Trust Ins.

Exchange, 498 F. Supp. 161 (D.C. Wis.

1980); Mayo Clinic v. Kaiser, 383 F2d

653, 655 (8th Cir. 1967); Hapaniewski v.

City of Chicago Heights, 883 F2d 576 (7th

Cir. 1989); Corke v. Sameit M.S. Song of

Norway, 572 F2d 77 (2nd Cir. 1978); and

Bentz v. Recile, 778 F2d 1026 (5th Cir.

1985).

As Judge Johnson pointed out for

the Court in Dubin, the statute itself

does not refer to venue, but instead,

uses the terms "district" or "division".

~26-

In Goldlawr v. Heiman, supra both venue

and jurisdiction were lacking, and

Clearly, if transfer is proper when both

are lacking, transfer is equally proper

when only one is lacking.

A Court of Appeals is authorized and

empowered to transfer cases under

§1406(a). Panhandle Eastern Pipe Line Co.

v. Pederal Power Commission, 343 F2d 905

(8th Cir. 1965); Becker v. Commission of

Internal Revenue, 852 F2d 524 (llth Cir.

1988). Here, the Court of Appeals did

not order transfer, so it presumably

adopted respondent's argument that

transfer was not proper because the

Georgia District Court lacked jurisdic-

tion and not just venue. This is

contrary to the law in at least 5 other

circuits. This Court should hold that

(1) Transfer under §1406 is proper when

jurisdiction or venue are lacking; (2)

That the District Court itself should

~2J=

transfer without requiring the plaintiff

to waive his objections to the holding of

no jurisdiction; and (3) The Court of

Appeals on appeal should order transfer

when the District Court fails to do so.

Only in this way can the mass of

confusion evidenced in some district

court decisions be resolved.

CONCLUSION

The writ should be granted.

Respectfully Submitted,

HEARD, LEVERETT & PHELPS, P.C.

st Vite a

E. reeman Leveret

State Bar No. 448000

Counsel of Record for Petitioners

P. O. Drawer 399

Elberton, Georgia 30635

Tel: 404/283-2651

FAX: 404/283-2670

-28-

APPENDIX

I

PER CURIAM OPINION OF THE

COURT OF APPEALS

OLIVER M. BOND and HERTA R. BOND,

Plaintiffs-Appellants,

Vv.

OCTAGON PROCESS, INC.,

Defendant~Appellee.

No. 90-8898.

United States Court of Appeals,

Eleventh Circuit.

March 28, 1991.

Appeal from the United States District

Court for the Middle District of Georcia,

Duross Pitzpatrick, District Judge.

Before TJOFLAT, Chief Judge,

DUBINA, Circuit Judge, and

HENDERSON, Senior Circuit Judge.

PER CURIAM:

The judgment of the district court is

affirmed on the basis of the district

court's dispositive opinion, which is

reported as Bond v. Octagon Process,

Inc., 745 F. Supp. 710 (M.D. Ga. 1990).

AFFIRMED.

II

PER CURIAM OPINION OF

THE COURT OF APPEALS

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF GEORGIA

ATHENS DIVISION

OLIVER M. BOND and HERTA R. BOND,

Plaintiffs,

vs.

OCTAGON PROCESS, iNC.,

Defendant.

CIV. NO. 87-41-ATH (DPF)

Piled at 4:40 P.M., September 19, 1990

Donna N. Phillips, Deputy Clerk,

U.S. District Court

Middle District of Georgia

FITZPATRICK, District Judge

This products liability case is before

the court for resolution of the

defendant's motion to dismiss for lack of

personal jurisdiction and, alternatively,

for summary judgment based on the

plaintiff's failure to state a claim.

A-2

I. FACTS

On December 5, 1982, plaintiff Oliver

Bond was engaged in active service with

the National Guard at the Elberton,

Georgia, Armory and was washing an M578

recovery vehicle with a cleaning solvent,

MIL-C--11090D, NSN 6850-00-224-6665,

manutactured by the defendant. The day

was a very cold one and the plaintiff

applied the solvent using a brush and

bucket without protective gloves and

without having read the warning label on

the solvent cans. After a short while,

his hands started burning, but he

continued to wash the vehicles for

several hours. The pain in his hands

continued through the next day.

After the pain lasted for some time,

plaintiff went to see a civilian doctor

who diagnosed his problem as Buerger's

disease, which is related to smoking.

A-3

OE

Another doctor, however, diagnosed the

plaintiff's condition as Raynaud's

phenomenon, the freezing of flesh in such

“ Manner as to damage permanently blood

vessels and cut off circulation. In

1986, doctors at Eisenhower Medical

Center at Port Gordon, Georgia,

identified the plaintiff's problem as

acguired acrosteolysis caused by exposure

to chemical solvents and a cold

environment. Later, this diagnosis was

changed to Raynaud's phenomenon caused by

cold environment and the defatting and

evaporative effects of chemical solvents,

rather than any toxic effects of the

solvent in question itself. In other

words, the plaintiff claims his injuries

are due to the combination of cold

weather and the effect of solvents in

such weather of removing the oils on the

skin and making it more vulnerable to the

A-4

cold. Additicnally, he claims that the

solvent further cools the skin through

evaporative cooling, which occurs when

body heat is lost in warming the solvent

on the skin and converting it from a

liquid to a gaseous state. In cold

weather, these properties of the solvent

mean that any flesh coming into contact

with it will cool more quickly than

otherwise and be susceptible to freezing.

Since the incident, plaintiff has suffered

great pain and is in the process of

losing his fingers and possibly his hands

as the skin tissue slowly dies.

Plaintiff filed his complaint on May

7, 1987, seeking damages for personal

injuries, including pain and suffering,

permanent and total disability, loss of

wages, loss of ability to labor, loss of

fingers and for hospital and medical

expenses. His wife, Herta Bond, also

A-5

sued for loss of consortium, including

services, society, companionship and

affection. Plaintiffs allege that Mr.

Bond's injuries were caused by the

defendant's failure to provide adequate

warnings of the dangers of exposure to

solvents at low temperatures.

Octagon Process, the defendant, is a

New Jersey corporation with no offices,

employees, agents or other personal

contacts with Georgia. Octagon has no

agent for service of process in Georgia

and has never sought approval from the

state of Georgia to do business there.

At its plant in New Jersey, the

defendant manufactures the solvent in

question pursuant to a government

contract. The solvent is made according

to specifications issued by the

government; Octagon did not develop or

alter the formula supplied by the

A-6

government. A jovernment inspector

stationed at the defendant's plant

supervised the manufacturing process and

had the authority to set aside any

shipment that failed to conform to the

specifications before it left the

premises. The solvent was made for sale

to the United States only and has never

been sold to any private purchaser. At

the time of the injury, Octagon was the

only approved supplier of the solvent.

On June 14, 1989, Octagon filed its

motion for dismissal and summary judgment

based on three theories: (1) that there

is no personal jurisdiction based on the

Georgia long-arm statute; (2) that even

if the statute gives this court

jurisdiction the defendant will be put to

unreasonable hardship if it must deferd

in Georgia; and (3) that the governmert

contractor defense applies and shields

A-7

EO —————

the defendant from liability. After

reviewing the applicable law and facts,

the court is ready to issue its ruling.

II. PERSONAL JURISDICTION

In a federal diversity suit, there is

a two-step process used in determining

whether a state jurisdictional statute

confers jurisdiction over a non-resident

defendant. First, it must be decided

whether the defendant is amenable to suit

under the state statute, as determined by

the law of the state. Next, if the first

step is met, the court must decide

whether the assertion of jurisdiction

over the defendant meets federal due

process requirements. Delong Equipment

Co. v. Washington Mills Abrasive Co., 840

F.2d 843 (llth Cir. 1988); Oswalt v.

Scripto, Inc., 616 F.2d 191, 195-96 (5th

Cir. 1980).

The plaintiff seeks to bring the

defendant within the reach of the Georgia

long-arm statute, 0.C.G.A. § 9-10-91,

which reads in pertinent part:

A court of this state may exercise

personal jurisdiction over any non-

resident or his executor or

administrator, as to a cause of action

arising from any of the acts,

omissions, ownership, use or

possession enumerated in this Code

section, in the same manner as if he

were a resident of the state, if in

person or through an agent, he: ...

(3) Commits a tortious injury in

this state caused by an act or

omission outside this state if the

tort-feasor 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 this state;

Plaintiffs must show that the

defendant is amenable to suit under this

statute before any federal constituticnal

questions are reached. It has been

determined by Georgia courts that the

Georgia long-arm statute allows for

A-9

jurisdiction to be exercised over

defendants to the maximum extent allowed

by due process. Value Engineering Co. v.

Gisell, 140 Ga. App. 44, 230 S.E.2d 29

(1976); Hollingswroth v. Cunard Line, 152

Ga. App. 509, 263 S.E. 2d 190 (1979). In

order to comply with this section of the

long-arm statute, the following test must

be satisfied:

(1) The nonresident has purposefully

done some act or consummated some

transaction with or in the forum (but

the actual act or omission resulting

in the injury here need not have

occurred in this state.) The

defendant need not be physically

within the forum when this act or

transaction occure and a single such

instance may suffice;

(2) The Georgia plaintiff must have a

legal cause of action in tort against

the nonresident, which arises out of,

Or results from, the purposeful

activity of the defendant involving

this state; a resident is the victim

of a “tortious act" when he suffers an

injury here due to an act or omission

of negligence occurring outside this

state; and

A-10

(3) If the requirements of (1) and

(2) are satisfied, the exercise of

jurisdiction over the nonresident must

be "reasonable."

Shellenberger v. Tanner, 138 Ga. App.

399, 404-05, 227 S.E.2d 266, 273 (1976);

cited with approval in Smith v. Smith,

254 Ga. 450, 330 S.E.2d 706, 706 (1985);

Delong, 840 F.2d at 849.

The court is not satisfied that the

first part of the Shellenberger test has

been met in this cse. It is undisputed

that Octagon has no direct ties with

Georgia, as noted above. The deposition

of Mr. Lee Leibmann, Octagon's president,

indicates that the defendant shipped the

solvent in question to various government

depots around the country, after which

the government sent it to where it was

needed. (Depo. pp. 22-24). Thus, the

defendant shipped the product to an

independent distributor who then

controlled where it ws ultimately sent.

A-11

This is the closest contact Octagon has

ever had with Georgia, and it simply does

not qualify as "a transaction with or in

the forum." Shellenberger, 227 S.E.2d at

273. If, for example, Octagon had

directly sent the solvent to the National

Guard armory in Elberton or consummated a

bargain to sell the solvent directly to

the Georgia National Guard this would of

course satisfy the test, but such is not

the case here, and the defendant is thus

not amenable to suit under the Georgia

long~arm statute.

Even if all three of the Shellenberger

requirements had been fulfilled, Octagon

would still not be subject to the

jurisdiction of this court because

federal constitutional due process

requirements are not satisfied. The

Supreme Court has laid down and developed

guiding principles of due process in a

A-12

series of cases over the past several

1

decades. In International Shoe Co. yv.

Washington, 326 U.S. 310, 66 S. Ct. 154,

90 L.Ed. 95 (1945), the Court stated the

basic two-part test for determining when

states may exercise jurisdiction over

non-resident defendants: (1) they must

have “minimum contacts” with the forum

state and (2) the maintenance of the suit

must not offend "traditional notions of

fair play and substantial justice." 326

l. There are two types of personal

jurisdiction: general and specific.

General personal jurisdiction arises from

a party's contacts with the forum state

that are unrelated to the litigation; the

test is whether the party had "continuous

and systematic” general business contacts

with the forum state. Specific personal

jurisdiction is based on a party's

contacts with the forum state that are

related to the litigation. Delong, 849

P.2d at 853 (citations omitted). The

plaintiff in the case at bar has not

alleged that general jurisdiction exists

over the defendant and could not do so

given the facts. the discussion in the

text therefore concerns specific

jurisdiction.

A-13

U.S. at 316, 66 S.Ct. at 158. (The second

part of this test has been rephrased to

mean that it must be “reasonable” for a

court to exercise jurisdiction over a

defendant. Delong, 840 F.2d 854.) This

standard was later clarified to mean that

due process requires some purposeful

availment by the defendant of the

privilege of conducting activities in the

forum state and thus invoking the

benefits and protections of that state's

laws. Hanson v. Denckla, 357 U.S. 235,

253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d

1283 (1958).

A limit on expanding notions of due

process was provided in World-Wide

Volkswagon v. Woodson, 444 U.S. 286, 100

S.Ct. 559, 62 L.Ed.2d 490 (1980), in

| which the Court rejected the notion that

the defendant was amenable to suit simply

because of the "foreseeability” that the

A-14

item it 30ld might enter the forum state.

Instead, the Court decided that due

process was bared on whether the

defendant's cor:duct and connection with

the forum state were such that it could

reasonably anticipate being haled into

court there. 444 U.S. at 297, 100 S.Ct.

at 567. In Burger King Corp. v.

Pudzewicz, 471 U.S. 462, 105 S.Ct. 2174,

€5 L.Ed.2d 528 (1985), the Court stated

chat jurisdiction over a non-resident

defendant was proper if the defendant had

delivered its products into the stream of

commerce with the expectation that they

would be purchased by consumers in the

forum state and those products

subsequently injured forum consumers.

471 U.S. at 473, 105 S.Ct. at 2182.

The Supreme Court greatly narrowed the

application of the stream of commerce

theory in Asahi Metal Ind. v. Superior

A-15

ew

Court of California, Solano County,

U.S. _, 107 S.Ct. 1026, 1033 (1987).

Asahi was a Japanese valve assembly

manufacturer who sold its products to a

~~ tire manufacturer who exported

the completed tires to the United States.

After a products liability suit was filed

because of an accident allegedly caused

by a defective tire, the Taiwanese

defendant filed a cross-claim for

indemnification which became the subject

of the case that reached the Supreme

Court after the underlying action had

been settled and dismissed. The

California Supreme Court had earlier

determined that due process would allow

for the exercise of jurisdiction over

Asahi in California, since the defendant

had intentionally placed its products in

the stream of commerce and knew that some

A-16

of the completed tires containing its

products would be sold in California.

In analyzing whether Asahi had form

(sic) sufficient minimum contacts with

California to justify that state's

exercise of jurisdiction, a plurality of

the Court noted that since its decisicn

in World-Wide Volkswagon, 444 U.S. 286,

100 S.Ct. 559, two versions of the stream

of commerce theory had arisen. Some

courts had read the due process clause as

allowing for jurisdiction based on

nothing more than the defendant's placing

the product in the stream of commerce,

while others had required some action of

the defendant more purposefully directed

at the forum state than mere awareness

that its product would eventually reach

there. The California Supreme Court had

adhered to the former view of due

process. Asahi, 107 S.Ct. at 1032.

A-17

a

The Supreme Court, however, decided

that this was not sufficient and that for

the due process clause to be satisfied

there had to be some act of the defendant

purposefully directed toward the forum

state. Merely placing an item in the

stream of commerce, without more, was

held not to be enough. Furthermore, the

Court stated that even the defendant's

awareness that its product would

eventually reach the forum state via the

stream of commerce did not convert the

act of placing the product into the

stream into an act purposefully directed

toward the forum state. 107 S.Ct. 1033.

Keeping these standards in mind, it is

clear to this court that it cannot

exercise personal jurisdiction over

Octagon. Even assuming that the

plaintiffs are correct when they claim

that Octagon knew its product would

A-18

eventually enter Georgia (Brief on Behalf

of Plaintiffs in Opposition to

Defendant's Motions to Dismiss, for

Pailure to State a Claim, and for Summary

Judgement, pp. 8-9), Asahi has made it

clear that this is simply not enough to

form sufficient minimum contacts so that

Octagon could foresee being haled into

court here. The record reveals no other

act by the defendant seeaiiiiiedty

directed toward Georgia as required by

Asahi. When Octagon sold the solvent to

the Department of Defense, which acted as

an independent distributor, it merely

placed its product into the stream of

commerce, an act which alone will not

allow this court to exercise personal

jurisdiction in Georgia.”

2. The court is aware that this reading

of Asahi will allow defendants to

organize their operations to avoid

selected jurisdictions and their laws.

Cound, FPriedenthal, Miller & sexton,

A-19

Plaintiffs make a valiant, but

unsuccessful, effort to distinguish

Asahi. They correctly point out that

Asahi dealt with a cross-claim for

indemnification after the original suit

involving the injured party had been

settled. While valid, this distinction

is insufficient to overcome the general

jurisdictional rules laid down in the

case. To adopt plaintiff's interpreta-

tion would limit Asahi to cases with

facts practically identical to it,

something which this court declines to

do. Also, plaintiffs claim that one of

the main reasons the Supreme Court found

that there was no jurisdiction over Asahi

in California was because the case

involved two foreign parties and to have

f.n. 2 continued ... Civil Procedure

137 (5th ed. 1989). Nonetheless, the

Supreme Court's ruling compels this

result.

A~20

exercised jurisdiction over the defendant

would have subjected it to the unique

burdens of defending in a foreign legal

system. This is also true, but this

reason concerns the second part of the

International Shoe test (whether

exercising “jurisdiction over the

defendant i3 reasonable), and has nothing

to do with the first part (whether the

defendant has sufficient minimum contacts

with the forum). While it may be

reasonable to exercise jurisdiction over

Octagon in this case, the court still

cannot do so if the defendant lacks

sufficient minimum contacts with the

forum, which, as discussed above, is true

of Octagon.

In addition, the plaintiffs attempt to

distinguish World-Wide Volkswagen, which

itself placed some limits on due process

jurisdiction, by noting that the

A-21

eens

defendant in that case, over whom the

Supreme Court decided that jurisdiction

could not be exercised, was merely a

distributor of the product and not a

manufacturer. Plaintiffs give great

weight to the fact that Justice Blackmun

himself pointed out this distinction, 444

U.S. at 317-318, 100 S.Ct. at 570

(Blackmun, J., dissenting), and claim

that since this suit is against a

manufacturer the court should exercise

its jurisdiction. The court notes,

however, that the defendant in Asahi,

over whom the Supreme Court held there

was no jurisdiction in part because of

insufficient minimum contacts, was also a

manufacturer, and thus the plaintiffs’

Batlectiea = Lette 7 As

Asahi makes clear, the essential question

is whether the defendant, regardless of

his status as a manufacturer or

A-22

Ee

distributor, has done some act purpose-

fully directed toward the forum state 30

as to form sufficient minimum contacts

with that state such that he could

anticipate being haled into court there.

Regarding Octagon, this requirement

simply has not been fulfilled.

Plaintiffs also place great reliance

on Oswalt, 616 F.2d 191, and some similar

cases.> In Oswalt, the plaintiff was

injured when a cigarette lighter mal-

functioned. The lighter had been

manufactured in Japan but distributed in

the United States by Scripto, Inc., an

3. The plaintiffs also cite Bean Dredging

corks Ve predse Fee ae Corp.,

F. th Cir. , and Petroleum

Helicopters, Inc. v. Avco Corp., 804 P.2d

1367 a Cir. 1986). In both cases the

Pifth Circuit held that the defendants

were subject to personal jurisdiction

because they had placed their products in

the stream of commerce with the

expectation or knowledge that the goods

would reach the forum state.

A-23

|

American Corporation. There was no

evidence that the Japanese manufacturer

nad any officers or agents in the United

States or any contacts with the United

States at all except for the distributing

agreement with Scripto. Nonetheless, the

court found that there was personal

jurisdiction over the manufacturer

because it knew that its lighters were

being sold naticnally in the United

States and thus had reason to know that

its products would reach the scene of the

injury. By utilizing the distribution

network established by Scripto, the

Japanese company had established

sufficient minimum contacts so that it

could reasonably expect to be haled into

court in this country. 616 F.2d at

198-200.

Plaintiffs' reliance on Oswalt and

cases with similar holdings is misplaced,

A-24

however, because of changes in the law.

Oswalt was decided in 1980 immediately

after the Supreme Court's decision in

World-Wide Volkswagen and adhered to the

view that merely placing a product in the

stream of commerce without more was

enough to satisfy due process require-

ments. As noted above, the Supreme Court

rejected this line of thinking in Asaki

by holding that due process also requires

some purposeful act by the defendant

directed toward the forum state. Oswalt

and cases like it simply do not speak to

the case at bar.

III. CONCLUSION

After careful consideration of the

facts and law in this case, the court hag

decided that Octagon's motion to dismiss

for lack of personal jurisdiction due to

insufficient minimum contacts between it

A-25

and the forum state should be GRANTED.

Accordingly, the court need not reach the

questions of whether it would be reason-

able to exercise jurisdiction over the

defendant in Georgia or the government

contractor defense. The plaintiffs’ case

is hereby ordered DISMISSED.

SO ORDERED, this 19 day of September,

1990.

/s/ DUROSS PITZPATRICK

D ,

UNITED STATES DISTRICT COURT

A-26

PUBLISHER'S NOTE

THE FOLLOWING PAGES ARE UNAVAILABLE

FOR FILMING:

A-27 & A-28

ee ee SEE lClcerlrl ll ele lr rhc rm ler

CERTIFICATE OF SERVICE

I hereby certify that I have served

copy of the foregoing Petition for Writ

of Certiorari upon Mr. Carl R. Woodward,

Carella, Byrne, Bain, Gilfillan, Cecchi

and Stewart, 6 Becker Farm Road,

Roseland, New Jersey 07068-1739 and upon

Mr. Peter J. Anderson, Peterson, Young,

Self & Asselin, Suite 1100, 230 Peachtree

Street, N.W., Atlanta, Georgia 30303,

Attorneys for Respondent, by mail, duly

addressed and postage prepaid.

A

This <0 - day of April, 1991.

Attorney for Petitioners

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