Opposition Brief — Bond v. Octagon Process, Inc.

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No. 90-1690 AY 31 1999

OFFICE OF THE CLERK

a

In The

Supreme Court of the United States

——_-

October Term, 1990

OLIVER M. BOND-and HERTA R. BOND,

Petitioners,

VS.

OCTAGON PROCESS, INC.,

Respondent.

On Petition for Writ of Certiorari to the United States Court

of Appeals for the Eleventh Circuit

BRIEF FOR RESPONDENT

CARL R. WOODWARD, III

Counsel of Record

KENWETH L. WINTERS

WALTER G. LUGER

CARELLA, BYRNE, BAIN,

GILFILLAN, CECCHI & STEWART

Attorneys for Respondent

Six Becker Farm Road

Roseland, New Jersey 07068

(201) 994-1700

49!

tz * NJ (201) 257-6850*(800) 3 APPEAL *NY (212) 640-4640*MA (617) 542-1114

© ime. OC (202) 783-7288+PA (215) 925-6500°USA (800) 5 APPEAL

RESTATED QUESTIONS PRESENTED FOR REVIEW

1. Whether the case was properly dismissed for lack of in

personam jurisdiction because petitioners failed to establish the

existence of sufficient contacts between respondent and the forum

State of Georgia.

2. Whether, in the absence of in personam jurisdiction over

the respondent, the case was properly dismissed rather than

transferred pursuant to 28 U.S.C. § 1406(a) where petitioner never

requested or raised the transfer issue to the District Court?

il

LIST OF COMPANIES PURSUANT TO RULE 28.1

Respondent Octagon Process, Inc. (‘“‘Octagon’’) has no parent

company, subsidiaries or affiliates.

iii

TABLE OF CONTENTS

Page

Restated Questions for Review........................ i

List of Companies Pursuant to Rule 28.1 .............. il

a RS Se iii

eee oon rete re bssrccetsvehee. iv

ee lap hb beh b ened eveesee l

EG OD 0. cece cc corcccsveccecs 2

Summary of Octagon’s Opposition to Bonds’ Petition for

RS a 6

Argument:

I. The courts below properly dismissed the case for lack

of in personam jurisdiction because petitioners failed

to establish sufficient contacts between respondent

Octagon and the forum State of Georgia. ....... 6

A. The Georgia Long-arm Statute Provides an

Independent and Adequate Basis for the

Decision of the Lower Courts.............. 7

B. Established Supreme Court Precedent Fully

Supports the Decision of the Lower Courts. . 9

C. The Decision in World-Wide Volkswagen v.

Woodson, 444 U.S. 286 (1980) Is Dispositive of

le gO 11

iv

Contents

Page

D. Asahi Does Not Control the Disposition of this

BS ace vce' Ghee eke eee haT ane habe ene 15

E. There Is No Split of Opinion in the First, Fifth

Bee ING 0.6 6.05 02.0.0 066600400 h0 17

Il. The Eleventh Circuit did not commit error by

dismissing the case rather than transferring the case

to New Jersey pursuant to 28 U.S.C. § 1406(a), where

petitioners never requested or raised the transfer issue

fp 4 2 eS er eee |e re 21

To. a cry eae eee ee ee 2 oe 24

TABLE OF CITATIONS

Cases Cited:

Asashi Metal Industry Co., Ltd. v. Superior Court of

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

NT o0e vos sired cae ee ccacnene een 11, 15, 16, 17, 21

Benitez-Allende v. Alcan Aluminio Do Brasil, S.A., 857 F.2d

26 (Ist Cir. 1988), cert. denied, 489 U.S. 1018, 109 S.

oe. Dee De Ee ee es vo bcc bac s-cacnee 18

Bond v. Octagon Process, Inc., 745 F. Supp. 710 (M.D. Ga.

ere ri erin ate end Riggng es ans bees y ie ee

Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981)

Contents

Page

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct.

reg ee Re ee rere ree free 11

DeLong Equipment Co. v. Washington Mills Abrasive Co.,

& & RF ft Ee ren aren re ‘re

Goldlawr v. Heiman, 369 U.S. 463, 82S. Ct. 913, 8 L. Ed.

re Re errr rer eer ere er p+

Gulf Consol. Services v. Corinth Pipeworks, S.A: 898 F.2d

1071 (Sth Cir.), cert. denied, ___- U.S. __, 111 S. Ct.

re) ee rrr 19

Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed.

ge fee Perr erry TT eer 10, 11, 13

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

104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984) ......... 10, 15

Hormel v. Helvering, 312 U.S. 552, 61 S. Ct. 719, 85 L. Ed.

Be CNN 0 6 96 Foc 8s 6 dndss dad aeeb enna 22

International Shoe Co. v. Washington, 326 U.S. 310, 66S.

ik, ES See ee es I A bee knwe dea ves 9, 10, 16

Irving v. Owens-Corning Fiberglas Corp., 864 F.2d 383 (Sth

Cir.), reh’g. denied, 872 F.2d 423, cert. denied sub nom,

Jugometal Enterprise For Import and Export of Ores

and Metals v. Irving, __ U.S. __, 110 S. Ct. 83, 107

ie SI os ona ss Fb oRRD EER Kee 18

Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 104S. Ct.

gf | Oh Um OU rrr 10

vi

Contents

Page

Kulko v. California Superior Court, 436 U.S. 84, 98S. Ct.

ey en Be Be CEOTOD 0 co vec ccccccwonses 11, 13

Lines v. Falstaff Brewing Co., 233 F.2d 927 (9th Cir.), cert.

denied, 352 U.S. 893, 77S. Ct. 129, 1 L. Ed. 2d 88 (1956)

Madara v. Hall, 916 F.2d 1510 (lith Cir. 1990) ........ 21

Mason v. F. LLI Luigi & Franco Dal Maschio Fu G.B. s.n.c.,

ag 2 Fe fs A | er 19, 20

Morris v. S.S.E., Inc., 843 F.2d 489 (llth Cir. 1988)

NE Cee LL CLL ei dake eee Ree Oe oo hee bereeeeeh el 21

Schellenberger v. Tanner, 138 Ga. App. 399, 227 S.E. 2d 266

Sts 2 a Cute peg gece as Ske Aad oo 8

Smith v. Smith, 254 Gal. 450, 330 S.E. 2d 706 (1985) ... 8

United States v. Wells Fargo Bank, 485 U.S. 351, 108S. Ct.

Sn ee ts Ae OEE 6 koe ceded ée cesses. 7

United States v. Wright Motor Co., Inc., 536 F.2d 1090 (Sth

Cir.), reh’g. denied, 542 F.2d 576 (Sth Cir. 1976)

Re Ee ee eras wee a's oie ode ha Pp wee 23

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

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

DUEL ees ba daaee leks eee 10, 11, 12, 13, 14, 16, 20

LJ)

vil

Contents

Page

Statutes Cited:

ee I 6 0 5.6 6b ce cap esievckeeiédeavess by Bly a

re re 7

United States Constitution Cited:

oh oi ku pos iat news cdedee nese 9

Rule Cited:

Fs ee I bb cbsscceseNesanebebbks ceeapseues 22

Other Authority Cited:

Wright & Miller, Federal Practice and Procedure: Civil 2d

fg GS, Rrra ere aa an mere eee 15

No. 90-1690

In The

Supreme Court of the United States

October Term, !990

OLIVER M. BOND and HERTA R. BOND,

Petitioners,

VS.

OCTAGON PROCESS, INC

Respondent.

On Petition for Writ of Certiorari to the United States Court

of Appeals for the Eleventh Circuit

BRIEF FOR RESPONDENT

OPINIONS BELOW

The opinion of the United States District Court for the Middle

District of Georgia in this case has been published in 745 F. Supp.

710 (M.D. Ga. 1990). On March 28, 1991, the Eleventh Circuit

Court of Appeals affirmed the judgment of the District Court

based upon the reported opinion of the District Court. The opinion

of the Eleventh Circuit has been published in 926 F.2d 1573 (1991).

COUNTERSTATEMENT OF THE CASE

On December 5, 1982, petitioner Oliver M. Bond was on

active duty with the National Guard at the Elberton Armory, in

Georgia. Petitioner claims to have been injured while he was using

a solvent to clean National Guard vehicles at the Armory. The

cleaning solvent used by petitioner was allegedly manufactured

by respondent Octagon Process, Inc. (‘‘Octagon’’), pursuant to

government contract and under government specifications and

supervision.

On May 7, 1987, petitioner Oliver Bond filed his complaint

in the United States District Court for the Middle District of

Georgia seeking damages for personal injuries sustained to his

hands as well as for hospital and medical expenses. His wife, Herta

Bond, also sued for damages per quod. Petitioners alleged ‘‘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.’’ Bond v. Octagon Process, Inc., 745 F. Supp.

710, 711 (M.D. Ga. 1990).'

Octagon is a New Jersey corporation which manufactured

a certain cleaning solvent pursuant to a detailed military

specification (MIL-C-11090D) and government contract therefor.

No contacts or connections between Octagon and the forum State

of Georgia were shown by petitioners nor was any evidence

presented that Octagon ever conducted any business in the State

of Georgia. As succinctly stated by the District Court:

1. It is undisputed that petitioner, Oliver M. Bond, never read the warning

label contained on the solvent labels, which specifically warned against contact

with skin (Dep. of Oliver M. Bond, 9/30/88, pp. 23-20 to 28-24).

Octagon Process, the defendant, is 2 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 government. A

government 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.

Bond v. Octagon Process, Inc. 745 F. Supp. at 711.

On June 14, 1989, Octagon filed a motion to dismiss the

case and/or for summary judgment based on three theories which

included: (1) lack of personal jurisdiction; (2) that even if personal

jurisdiction existed, Octagon would be put to an unreasonable

hardship if it had to defend in Georgia; and (3) that the government

contractor defense applied and shielded Octagon from liability.’

2. The courts below never reacned the second and third issues because of

their decisions on the jurisdictional issue.

4

In a published decision issued on September 19, 1990, the

~~ District Court dismissed petitioners’ case on two grounds. First,

the District Court concluded that Octagon was not amenable to

suit under the Georgia long-arm statute. Second, the District Court

concluded that Octagon could not be subject to suit in Georgia

consistent with federal constitutional due process requirements

because petitioners had failed to establish sufficient minimum

contacts between Octagon and the forum State of Georgia.

The District Court analyzed the Georgia long-arm statute and

concluded that respondent was not subject to the Georgia long-

arm statute. Bond v. Octagon Process, Inc., supra, 745 F. Supp.

at 712. The District Court sta*ed as foliows:

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 was ultimately sent.

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.”’

Id. The District Court concluded that this conduct did not

constitute the purposeful doing of some act or consummation

of some transaction with or in the forum state as required by

the long-arm statute. /d.

The District Court next turned to federal constitutional due

process requirements as an alternative basis for its decision and

concluded that Octagon did not have the requisite ‘‘minimum

contacts’’ with the forum State of Georgia. /d. at 712. The court

undertook a comprehensive review of Supreme Court decisions

regarding ‘‘minimum contacts’’ and concluded that established

Supreme Court precedent required that there be some act of the

defendant purposely directed to the forum state. /d. at 713. The

District Court concluded that it could not exercise personal

jurisdiction over Octagon, and stated that:

Even assuming that the plaintiffs are correct when

they claim that Octagon knew its product would

eventually enter Georgia . . ., 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 purposefully

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.

Id. at 713-714.

Petitioners appealed the District Court’s decision to the

Eleventh Circuit Court of Appeals. The issue of in personam

jurisdiction was briefed at length, as was the newly raised issue

of whether the District Court should have sua sponte transferred

the case to the District of New Jersey. The Court of Appeals heard

oral argument on March 6, 1991 and on March 28, 1991, affirmed

the decision of the District Court based upon the veported opinion

below.

SUMMARY OF OCTAGON’S OPPOSITION TO BONDS’

PETITION FOR CERTIORARI

Petitioners have not presented this Court with any substantial

issue meriting review. The District Court’s dismissal of the case

due to lack of in personam jurisdiction over the respondent

Octagon, was affirmed by the Eleventh Circuit on the basis of

the District Court’s dispositive, reported decision. The District

Court’s decision is in accord with Supreme Court jurisprudence

and does not conflict with any decision by this Court. The decision

below is not in conflict with the decision of any other Circuit

Court of Appeals, and it does not in any other way call for the

exercise of this Court’s supervisory powers. In addition, the courts

below did not err by dismissing this case rather than transferring

the case to New Jersey where petitioners failed to request such

relief from the District Court.

ARGUMENT

THE COURTS BELOW PROPERLY DISMISSED THE

CASE FOR LACK OF IN PERSONAM JURSDICTION

BECAUSE PETITIONERS FAILED TO ESTABLISH

SUFFICIENT CONTACTS BETWEEN RESPONDENT

OCTAGON AND THE FORUM STATE OF GEORGIA.

The evolution of the due process standards that guide courts

in determining whether a defendant is amenable to in personam

jurisdiction in a particular forum has been set forth in the reported

decision of the District Court, and need not be repeated at length

herein. The primary consideration in the jurisdictional inquiry

is that of fundamental fairness to the defendant. As the facts

of this case make clear, the lower courts correctly dismissed this

case because petitioners had failed to establish sufficient, if any,

contacts between Octagon and the forum State of Georgia.

A. The Georgia Long-arm Statute Provides an Independent and

Adequate Basis for the Decision of the Lower Courts.

It is fundamental that the Court need not reach a

constitutional issue where the case can be decided on some other

grounds, such as statutory construction or general law. United

States v. Wells Fargo Bank, 485 U.S. 351, 354, 108 S. Ct. 1179,

99 L. Ed. 2d 368 (1988). The lower courts applied a two-step

analysis in determining whether the Georgia long-arm statute

conferred jurisdiction over Octagon.’

The Georgia long-arm statute, O.C.G.A. § 9-10-91, provides

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

‘

3. **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.’’ Bond v. Octagon Process,

Inc., supra, 745 F. Supp. at 711, citing DeLong Equipment Co. v. Washington

Mills Abrasive Co., 840 F.2d 843 (lith Cir. 1988).

or services rendered in this state;

The lower courts applied a three-element test to determine

if Octagon was subject to the reach of the Georgia long-arm

statute.* This test was set forth in Schellenberger v. Tanner, 138

Ga. App. 399, 404-05, 227 S.E. 2d 266, 273 (1976) and was cited

with approval by the Supreme Court of Georgia. Smith v. Smith,

254 Ga. 450, 330 S. Ed. 2d 706 (1985); see DeLong, 840 F.2d

at 849.

The lower courts concluded that the first element of the

Schellenberger test was not met. The District Court concluded

as follows:

The court is not satisfied that the first part of the

Schellenberger test has been met in this case. It

is undisputed that Octagon has no direct ties with

4. The three elements of the test are as follows:

1. The non-resident 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 occurs and a single

such instance may suffice;

2. The Georgia plaintiff must have a legal cause of action in tort against

the non-resident, 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

\

3. If the requirements of (1) and (2) are satisfied, the exercise of jurisdiction

over the non-resident must be ‘‘reasonable.’’

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 was ultimately sent.

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.’’

Schellenberger, 227 S.E.2d at 273.

Bond v. Octagon Process, Inc., supra, 745 F. Supp. at 712.

Thus, the District Court concluded that the Georgia long-

arm statute did not permit Georgia to assert personal jurisdiction

over Octagon. Based upon this holding, the District Court need

not have gone further to discuss due process requirements. Because

the Georgia long-arm statute furnishes adequate state statutory

grounds for the denial of personal jurisdiction over Octagon, this

Court need not and should not reach the federal constitutional

due process arguments of petitioners.

B. Established Supreme Court Precedent Fully Supports the

Decision of the Lower Courts.

The due process clause of the Fourteenth Amendment protects

an individual’s liberty interest by ensuring that an individual is

not subject to a binding judgment in a forum with which the

individual has established no meaningful ‘‘contacts, ties, or

relations.’’ Jnternational Shoe Co. v. Washington, 326 U.S. 310,

319, 66S. Ct. 154, 90 L. Ed. 95 (1945). The due process clause

“*gives a degree of predictability to the legal system that allows

potentiai defendants to structure their primary conduct with some

10

minimum assurance as to where that conduct will and will not

render them liable to suit.’’ World-Wide Volkswagen Corp. v.

Woodson, 444 U.S. 286, 297, 100 S. Ct. 559, 62 L. Ed. 2d 490

(1980).

In International Shoe Co. v. Washington, supra, 326 U.S.

at 316, the Supreme Court held that:

[D]ue process requires only that in order to subject

a defendant to a judgment in personam, if he be

not present within the territory of the forum, he

have certain [1] minimum contacts with it such that

the maintenance of the suit does not offend [2]

‘*traditional notions of fair play and substantial

justice.’’ quoting Milliken v. Mever, 311 U.S. 457,

463, 61 S.Ct. 339, 85 L.Ed. 278 (1940).

In Hanson v. Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228,

2 L. Ed. 2d 1283 (1958) this Court further refined its due process

analysis by stating that ‘‘it is essential in each case that there be

some act by which the defendant purposefully avails itself of the

privilege of conducting activities within the forum State, thus

invoking the benefits and protections of its laws.’’ The purposeful

availment requirement ensures that a defendant will not be haled

into a distant state solely as a result of ‘‘random, isolated or

fortuitous’’ contacts, Keeton v. Hustler Magazine, Inc., 465 U.S.

770, 774, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984) or because

of the ‘‘unilateral activity of another party or a third person.”’

Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 417,

104 S. Ct. 1868, 80 L. Ed. 2d 404 (1984).

To satisfy the test of minimum contacts, the plaintiff is

obligated to carry the burden of proving that the defendant has

purposefully availed himself of the privilege of conducting activities

within the forum state thereby invoking the benefits and

1]

, protections of its law, and that defendant’s conduct and connection

with the forum state are such that the defendant should anticipate

being haled into the forum court. Hanson v. Denckla, supra, 357

U.S. at 253; Kulko v. California Superior Court, 436 U.S. 84,

97-98, 98 S. Ct. 1690, 56 L. Ed. 2d 132 (1978). This Court has

repeatedly emphasized that the purposeful nature of the

defendant’s conduct targeted or directed at the forum by the

defendant is the determinative factor, rather than mere

foreseeability of the consequence or effect of the defendant’s

conduct. Hanson v. Denckla, supra, 357 U.S. at 253; World-Wide

Volkswagen Corp. v. Woodson, supra, 444 U.S. at 297-98; Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174,

85 L. Ed. 2d 528 (1985); Asahi Metal Industry Co., Ltd. v. Superior

Court of California, 480 U.S. 102, 108-9, 107 S. Ct. 1026, 94

L. Ed. 2d 92 (1987) (plurality opinion of Justice O’Connor).

The petitioners failed to carry their burden in this case. Thus,

the conclusion of the lower courts that Octagon performed no

activity purposely directed toward the forum State of Georgia:

(1) is supported by the record below; (2) complies with established

due process principles; and (3) does not support a grant of

certiorari.

C. The Decision in World-Wide Volkswagen v. Woodson, 444

U.S. 286 (1980) Is Dispositive of this Case.

In World-Wide Volkswagen, supra, two New York residents

brought a products liability suit in an Oklahoma state court against

numerous defendants, including a New York automobile retailer

who sold the plaintiffs an allegedly defective car. The suit arose

following an automobile collision on an Oklahoma highway which

occurred while plaintiffs were travelling to their new home in

Arizona. Plaintiffs based their argument for jurisdiction on the

theory of actual foreseeability. Due to the highly mobile nature

of motor vehicles, the plaintiffs argued that the defendants should

aw

12

have foreseen the possibility that their automobile would be used

in another state and cause injury there.

The Court rejected plaintiffs’ actual foreseeability theory.

The Court clearly and specifically concluded that foreseeability

alone was not a proper basis for personal jurisdiction under the

due process clause, for thus every seller of chattels would in effect

appoint the chattel as his agent for service of process. World-

Wide Volkswagen, supra, 444 U.S. at 296. The Court stated that

although:

foreseeability is [not] wholly irrelevant ... the

foreseeability that is critical to due process analysis

is not the mere likelihood that a product will find

its way into the forum State. Rather, it is that the

defendant’s conduct and connection with the

forum State are such that he should reasonably

anticipate being haled into Court there. (citation

omitted) The Due Process Clause, by ensuring the

‘‘orderly administration of the laws,’’ (citation

omitted) gives a degree of predictability to the legal

system that allows potential defendants to structure

their primary conduct with some minimum

assurance as to where that conduct will and will

not render them liable to suit.

When a corporation ‘‘purposefully avails itself of

the privilege of conducting activities within the

forum State,’’ (citation omitted) it has clear notice

that it is subject to suit there... .°

5. Significantly, the Court noted that absent some ‘‘purposeful availment’’

by the defendant corporation of the ‘* ‘privilege[s] of conducting activities with

the forum State,

** due process does not permit the assertion of personal

(Cont’d)

13

Id. at 297. The Court further explained that foreseeability is

relevant to personal jurisdiction only if the sale of a product of

a manufacturer or distributor arises from the defendant’s

expectation and efforts to serve, directly or indirectly, the market

in the forum rather than from an isolated occurrence of purchase.

Id. Thus, unless a defendant delivers his product into the stream

of commerce with the expectation that it will be purchased by

consumers in the forum, it is unconstitutional and unreasonable

to require that the non-resident defendant be compelled to defend

a suit in the forum. /d.°

World-Wide Volkswagen did not overrule the ‘‘purposeful

availment’’ standard set forth in Hanson v. Denckla. Instead,

the Court refined the scope of the ‘‘minimum contacts’’ due

process analysis by holding that the assertion of personal

jurisdiction requires at least an effort to transact business, either

directly or indirectly, in the forum state. Under World-Wide

Volkswagen, it is such purposeful conduct of the defendant and

not the location of the product which is determinative of the issue.

Thus, World-Wide Volkswagen controls the disposition of this

case because petitioners failed to establish the existence of any

conduct by respondent which rose to the level of any effort to

(Cont'd)

jurisdiction over nonresident defendants based on the ‘‘unilateral activity’’ of

plaintiffs over which defendants exercise no control. /d. at 297 quoting Hanson

v. Denckla, 357 U.S. at 253. There was a “‘total absence of those affiliating

circumstances that are a necessary predicate to any exercise of state-court

jurisdiction.”’ Jd. at 295.

6. The Court also rejected the argument that jurisdiction could be supported

by the fact that the defendant enjoyed certain indirect benefits such as earning

revenues from goods used in the forum state. World-Wide Volkswagen, 444

U.S. at 298-299. ‘*[F]inancial benefits accruing to the defendant from a collateral

relation to the forum state will not support jurisdiction’’ unless they stem from

a ‘‘constitutionally cognizable contact’’ with that state. /d. at 299 quoting Kulko

v. California Superior Court, 436 U.S. at 94-95.

14

transact any business, directly or indirectly, in the forum State

of Georgia.

Although Octagon manufactured a solvent for the

Department of Defense pursuant to government contract, and

under the government’s specifications anc supervision, the record

is devoid of any conduct of Octagon directed toward Georgia,

either directly or indirectly. The record is absolutely clear that

Octagon did not have any expectation or make any efforts,

whatsoever, to market directly or indirectly the solvent in Georgia.

Manifestly, the record demonstrates that Octagon did not deliver

its product into the ‘‘stream of commerce’’ with the expectation

that the solvent would be purchased by consumers in the State

of Georgia. Accordingly, petitioner’s reliance on the ‘‘stream of

commerce’’ theory is misplaced under the facts of this case.

Although World-Wide Volkswagen explicitly rejected the

concept that ‘‘mere foreseeability’’ was enough to subject a non-

resident corporation to personal jurisdiction in the forum state,

petitioners vainly seek to employ the ‘‘foreseeability’’ concept,

albeit under the rubric of the ‘‘stream of commerce’’ theory, to

attempt to subject Octagon to in personam jurisdiction in Georgia.

The petitioners’ argument is equivalent to the proposition that

one’s product becomes one’s agent for service of process, a

proposition squarely rejected by World-Wide Volkswagen.

Simply stated, petitioners are in error and World-Wide

Volkswagen compels the conclusion that the case was properly

dismissed for lack of personal jurisdiction. The lower courts

focused upon Octagon’s conduct and connection with Georgia

and properly concluded that Octagon was not amenable to suit

in Georgia. Further, because this case does not involve a sale of

a product to a consumer, World-Wide Volkswagen also compels

the conclusion that Octagon is not subject to personal jurisdiction

in the State of Georgia. Moreover, the unilateral conduct of the

15

United States government in controlling the destination of the

product defeats petitioners’ allegation of personal jurisdiction over

Octagon. Helicopteros Nacionales, supra.

D. Asahi Does Not Control the Disposition of this Case.

Petitioners rely heavily upon the case of Asahi Metal Industry

Co. v. Superior Court, 480 U.S. 102, 107 S. Ct. 1026, 94 L. Ed.

2d 92 (1987). In Asahi, a Japanese supplier sold tire valves to

a Taiwanese manufacturer, knowing that some of the valves would

be assembled in Taiwan into tires bound for sale in the United

States. The plaintiff suffered injury from a defective tire and filed

suit in California against the tire manufacturer. The manufacturer

cross-claimed against the Japanese supplier for indemnification.

Although the Supreme Court was unabie to agree on the

appropriate parameters of ‘‘minimum contacts’’ under the facts

of the case, the Court unanimously agreed that it would be

unreasonable to hold the Japanese supplier amenable to personal

jurisdiction in California under the second prong (i.e., the

reasonableness of exercising jurisdiction) of the /nternational Shoe

test. In Wright & Miller, Federal Practice and Procedure: Civil

2d § 1067 at 289 (1987), the authors succinctly analyze the voting

split of the Asahi Court as follows:

Although the Supreme Court agreed unanimously

on other grounds that the California court’s

exercise of jurisdiction was unreasonable [under

the second prong of the /nternational Shoe test],

Justice O’Connor, in a portion of her opinion for

the Court that was joined only by the Chief Justice

and Justices Powell and Scalia, also argued that

jurisdiction could not be justified under the stream

of commerce theory. She took the position that

‘*{t]he placement of a product into the stream of

16

commerce, without more, is not an act of the

defendant purposefully directed toward the forum

state.’’ Rather, ‘‘additional conduct’’ indicating

‘‘an intent or purpose to serve the market in the

forum state’’ also is necessary.’

Justice Brennan, joined by Justices Blackmun,

Marshall, and White, disagreed, arguing that a

defendant properly may be subject f9 jurisdiction

whenever ‘‘the regular and anticipated flow of

products,’’ as opposed to ‘‘unpredictable currents

or eddies,’’ leads the product to be marketed in

the forum state.

In Asahi the Court decided the case based upon the second

prong of the /nternational Shoe two-part test, and arguably never

had to reach the first prong of the /nternational Shoe test (i.e.,

minimum contacts). What is clear from Asahi, however, is that

the mere fact that one’s product finds its way into the forum

State is insufficient in and of itself to sustain an assertion of in

personam jurisdiction. Although Justice Brennan, joined by

Justices White, Marshall and Blackmun was more willing to

embrace a ‘‘stream of commerce’’ theory, he was unwilling to

totally abandon the requirement that there be some transaction

of business in the forum state. Justice Brennan’s opinion was

based upon the statement in World-Wide Volkswagen that

jurisdiction might be proper where products are delivered into

commerce ‘‘with the expectation that they will be purchased by

consumers in the forum State.’’ Justice Brennan focused on

whether the defendant ‘‘is aware that the final product is being

marketed in the forum State’’ because such a defendant ‘‘benefits

economically from the retail sale of the final product in the forum

—

This position comports with traditional Supreme Court jurisprudence

and was adopted by the lower courts in this case

17

State, and indirectly benefits from the State’s laws that regulate

and facilitate commercial activity.’’ Asahi, 480 U.S. at 117. Thus,

the difference of opinion in Asahi, was largely whether due process

requires that the defendant have somehow actively engaged,

directly or indirectly, in commercial activity in the forum state

or whether passive indirect benefits from a commercial transaction

of others within the forum state are enough for the assertion of

jurisdiction.

In applying Asahi to the present matter, it is clear that neither

Justice O’Connor’s plurality opinion nor Justice Brennan’s

concurring Opinion support an assertion of in personam

jurisdiction over Octagon because there was no commercial

transaction in the forum State of Georgia.

E. There Is No Split of Opinion in the First, Fifth and Seventh

Circuits.

Petitioners assert in conclusory fashion, and without

explanation, that the Eleventh Circuit decision in this case is in

conflict with certain decisions of the First, Fifth and Seventh

Circuits. There is no ‘‘intolerable conflict’’ in either principle or

outcome between the Eleventh Circuit’s decision in this case and

the decisions in the First, Fifth and Seventh Circuits cited by

petitioners. The Circuit cases cited by petitioners consist of entirely

different facts wherein the defendants (all alien corporations)

maintained sufficient activities in or in connection with the forum

State to support a finding of personal jurisdiction. In addition,

these cases all involved sales of products by a manufacturer which

were purposely directed to the forum state, unlike this case where

the solvent was manufactured pursuant to government contract,

specifications and supervision. Thus, all of the Circuit cases relied

upon by petitioners are absolutely distinguishable, non-controlling

and inapposite to this case.

18

Petitioners cite Benitez-Allende v. Alcan Aluminio Do Brasil,

S.A., 857 F.2d 26 (Ist Cir. 1988), cert. denied, 489 U.S. 1018,

109 S.Ct. 1135, 103 L.Ed.2d 196 (1989), while conceding that

the facts involved direct marketing by the defendant in the forum

State (Pb at 18). The First Circuit held that a Brazilian

manufacturer of pressure cookers was subject to personal

jurisdiction in Puerto Rico. The First Circuit found that the

Brazilian manufacturer sold hundreds of thousands of pressure

cookers to persons in the United States and Puerto Rico; that

the manufacturer knew and intended that Americans would use

its cooker in commerce in America; and most importantly, that

the manufacturer had taken active steps to directly market and

sell its product in Puerto Rico, including the retention of a Florida

‘sales representative’’ who travelled to Puerto Rico to sell cookers

at least four times a year. /d. at 29.

In Irving v. Owens-Corning Fiberglas Corp., 864 F.2d 383

(Sth Cir.), reh’g denied, 872 F.2d 423, cert. denied sub nom.,

Jugometal Enterprise For Import and Export of Ores and Metals

v. Irving, ___ U.S. ___, 110 S. Ct. 83, 107 L. Ed. 2d 49 (1989),

the Fifth Circuit ruled that a Yugoslavian asbestos distributor

was subject to the exercise of personal jurisdiction in Texas under

the state’s long-arm statute. The Fifth Circuit held that the asbestos

distributor was subject to personal jurisdiction in Texas where

it held itself out as a seller in a contract to supply asbestos to

an American company-broker in Texas; conveyed the asbestos

to a freight forwarder for shipment to Texas; shared the cost of

quality control testing done by a Texas laboratory; received debits

for the shipping bag-cleaning charges of another Texas company;

and accepted payments for the asbestos and stored it in Texas.

Id. at 386. The Fifth Circuit concluded that these direct and

substantial actions by the Yugoslavian asbestos distributor with

the forum State of Texas satisfied the minimum contacts prong

of the due process test, and thus subjected the Yugoslavian asbestos

manufacturer to personal jurisdiction in Texas. /d.

19

In Gulf Consol. Services v. Corinth Pipeworks, S.A., 898

F.2d 1071 (Sth Cir.), cert. denied, ___ U.S. ___., 111 S. Ct.

256, 112 L. Ed. 2d 214 (1990), the Fifth Circuit, in a 2 to 1 decision,

held that a Greek oil field casing manufacturer, which directly

marketed its product in Texas, was subject to personal jurisdiction

in Texas. The majority opinion concluded that, ‘‘a Greek oil field

casing manufacturer, licensed by a Texas-based organization which

allows the [Greek] manufacturer to warrant conformity with

certain set [American Petroleum Institute (‘‘API’’)] standards,

was properly haled into court in Texas to answer a claim that

its products failed to conform to those standards.’’ /d. at 1072.

The Fifth Circuit concluded that the exercise of personal

jurisdiction was appropriate where the Greek manufacturer sold

and shipped oil casings to a Texas importer; the Greek

manufacturer had a license agreement with another Texas

organization to sell API specification pipe; the Texas importer

relied on the Greek manufacturer’s warranty that the casing was

manufactured in accordance with API specification; the Greek

manufacturer’s sole market was Texas; the Greek manufacturer’s

representatives frequently called on customers in Texas; and the

Greek manufacturer, ‘‘was the charterer of the vessels which

carried the casing shipments from Greece to Houston.”’ /d. at

1074. Circuit Judge Rearley dissented and expressed the opinion

that in the subject contract case, the Greek manufacturer had

not attempted to exploit the Texas market and that the Texas

courts did not have personal jurisdiction under either prong of

the personal jurisdiction test.

In Mason v. F. LLI Luigi & Franco Dal Maschio Fu G.B.

5.n.c., 832 F.2d 383 (7th Cir. 1987), the Seventh Circuit held that

an Italian partnership that manufactured a broom flagging

machine which injured a worker, was subject to personal

jurisdiction in Illinois under the state’s long-arm statute. The

machine was manufactured by an Italian partnership, F. Lli Luigi

—v—— oo

20

and Franco Dal Maschio Fu G.B. s.n.c. (‘Dal Maschio’’), in Italy.

The machine was sold by Dal Maschio to Werner Petzold & Co.

(‘‘Petzold’’) in Maryland. In turn, Petzold sold the machine to

the Libman Broom Company in Illinois, where the worker was

injured. The Seventh Circuit concluded that Dal Maschio had

had sufficient minimum contacts to subject it to personal

jurisdiction in Illinois:

In this case, Dal Maschio made the machine

involved in the accident and similar machines

especially for Libman, and one of its employees

visited Libman in Illinois several times to show

how to set up, operate and service the machines

and to teach its personnel. Dal Maschio knew that

the machines were custom-made for an Illinois

manufacturer, viz., Libman, even though shipped

and billed to Werner Petzold & Co. in Maryland.

Werner Petzold was in fact its export manager

rather than an independent distributor. The injury

occurred to an Illinois resident in Illinois, and

Illinois has an interest in having that injury fully

rectified.

Id. at 386.°

The Circuit cases cited by petitioners do not present a conflict

with the decision of the Eleventh Circuit in this case. All of the

8. The Seventh Circuit stated that,‘‘[l]ike the example used in World-Wide

Volkswagen to show where personal jurisdiction would be proper, this defendant

delivered its products into the stream of commerce with the expectation that

they will be purchased by consumers in the forum state. 444 U.S. at 297-98,

100 S.Ct. at 567-68. In addition, it purposely availed itself of the privileges

of conducting activities within the forum state through its own employee and

also its export manager Werner Petzold.’’ See 444 U.S. at 297, 100 S. Ct. at

587. Mason, 832 F.2d at 386.

21

re Circuit cases cited by petitioners involved direct and purposeful

acts taken by foreign manufacturers to avail themselves of a

defined market within the United States. Petitioners’ aliegation

of a conflict among the Circuits is therefore meritless.’

THE ELEVENTH CIRCUIT DID NOT COMMIT ERROR

BY DISMISSING THE CASE RATHER THAN

TRANSFERRING THE CASE TO NEW JERSEY PURSUANT

TO 28 U.S.C. § 1406(a), WHERE PETITIONERS NEVER

REQUESTED OR RAISED THE TRANSFER ISSUE TO THE

DISTRICT COURT.

Petitioners assert that the lower courts erred by dismissing

this case, rather than sua sponte transferring the case to the District

Court for New Jersey. Petitioners claim error for their self-inflicted

failure to raise and present the transfer issue to the District Court.

Significantly, petitioners never raised this issue to the District Court

by motion, opposition brief, pleading or otherwise. Petitioners

noted the issue for the first time before the Eleventh Circuit after

their ‘‘all or nothing’’ tactic before the District Court proved to

be unsuccessful. The Court of Appeals declined to find error based

on the record before it.

The exercise of discretion by the courts beiow is not an issue

which merits the grant of a writ of certiorari. It does not effectuate

a change in the law which will have an impact on other litigants,

nor does it present an issue which calls for a pronouncement from

9. Petitioners’ conclusory allegation in their Petition for Writ of Certiorari

that the decision in this case is contrary to Morris v. S.S.E. Inc., 843 F.2d

489 (llth Cir. 1988) is without merit. The Eleventh Circuit has consistently

applied the Asahi ‘‘purposeful availment’’ plurality standard. See, Morris v.

S.S.E., Inc. supra; Madara v. Hall, 918 F.2d 1510 (11th Cir. 1990) (not cited

by petitioners) and Bond v. Octagon Process, Inc., supra.

ee

22

the Supreme Court of the United States. The decision of the

District Court has already been reviewed by the Eleventh Circuit

and found to have been proper.

Petitioners first raised the issue of transfer in their appeal

to the Eleventh Circuit. The Eleventh Circuit declined to reverse

the District Court because petitioners had failed to raise the issue

below. See Hormel v. Helvering, 312 U.S. 552, 556, 61 S. Ct.

719, 85 L. Ed. 1037 (1941) (‘‘Ordinarily an appellate court does

not give consideration to issues not raised below.’’). Similarly,

petitioners’ reliance on Goldlawr v. Heiman, 369 U.S. 463, 82

S. Ct. 913, 8 L. Ed. 2d 39 (1962) was apparently deemed misplaced

by the Eleventh Circuit, in view of petitioners’ failure to raise

the issue with the District Court, despite ample opportunity to

do so.'°

Petitioners also rely on 28 U.S.C. § 1406(a), which provides

that:

The district court of a district in which is filed a

case laying venue 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 . .

10. Petitioners’ argument that they would have lost their right to appeal

the personal jurisdiction issue by moving before the District Court for transfer

of the case is incorrect. Petitioners could have preserved their right to appeal

the personal jurisdiction issue by, inter alia, seeking the alternative relief of

a transfer and a stay of that transfer pending the outcome of appellate review

on the personal jurisdiction issue. In the alternative, after the District Court

decided the personal jurisdiction issue, petitioner could have sought

reconsideration on the issue of transfer or sought relief pursuant to F. R. Civ.

P. 60. They elected to pursue only this appeal, and should not be heard to

complain when their election was unwise. The lack of a transfer was thus

petitioners’ error, not the District Court’s error.

23

The statute directs a District Court to dismiss a case as the

primary form of relief. There are no facts in the record below

indicating that transfer as opposed to dismissal is in the interests

of justice. Since petitioners never raised the issue of transfer to

the District Court, the District Court did not commit any error

or abuse of discretion by applying the plain language of the statute.

See United States v. Wright Motor Co., Inc., 536 F.2d 1090,

1093-94 (Sth Cir.), reh’g. denied, 542 F.2d 576 (Sth Cir. 1976)''

{‘‘If reasonable men could differ as to the propriety of the action

taken by the trial court, then it cannot be said that the trial court

abused its discretion.’’ quoting Lines v. Falstaff Brewing Co.,

233 F.2d 927, 933 (9th Cir.), cert. denied, 352 U.S. 893, 77 S.

Ci. 129, 1 L. Ed. 2d 88 (1956)]. Indeed, none of the cases cited

by petitioners supports the proposition that a failure to transfer,

sua sponte, constitutes error of any sort. For these reasons, the

lower courts did not err in dismissing the case.

11. In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981),

(en banc), the Eleventh Circuit adopted as binding precedent all decisions of

the former Fifth Circuit handed down prior to October |, 1981.

24

CONCLUSION

For the reasons presented herein, it is respectfully urged that

the Petition for Writ of Certiorari be denied.

Respectfully submitted,

CARL R. WOODWARD, III

Counsel of Record

KENNETH L. WINTERS

WALTER G. LUGER

CARELLA, BYRNE, BAIN,

GILFILLAN, CECCHI

& STEWART

Attorneys for Respondent