Reply Brief — Ratliff v. Cooper Laboratories, Inc.

r LISMA RY EB: j Supreme Court, U.S.

SUPR:., - CURT, U “Ss. FILED

Supreme Court of the United‘ Siates e

OCTOBER TERM, 197} © ®°?-'' ~~

No. 71-302

ANNIE NELL RATLIFF and HENRY RATLIFF,

PETITIONERS,

versus

COOPER LABORATORIES, INC., Respoxpext

ALICE W. NICHOLS, Petitioner,

versus

SS ERLING DRUG COMPANY, INC., a CorPoRATION,

RESPONDENT

RETURN TO A PETITION FOR A WRIT

OF CERTIORARI

JULIUS W. McKAY, of

McKAY, McKAY, BLACK,

SHERRILL, WALKER & WILKINS

1340 Bull Street,

Columbia, South Carolina 29201,

Attorneys for Respondent Cooper

Laboratories, Ine.

EDWARD W. LANEY, III, of

TURNER, PADGET, GRAHAM &

LANEY,

1531 Hampton Street, |

Columbia, South Cerolina 29201,

Attorneys for Respondent,

Sterling Drug Company, Ine.

The R. L. Bryan Company, Legal Printers, Columbia, S. C,

Reasons for Denying the WTit .............-000 cece 3

1. The decisions of the Court of Appeals is in accord

with the applicable decisions of this Court ....... 3

2. The issues settled by the opinion of the Court of

Appeals are not ones of important nationwide con-

cern which need to be settled by this Court ...... 5

EN Sa WrecG ese ae ek Cd PELE R Sue eUieeeeuake 8

(i)

ieee rama phi: pire ese

CITATIONS

Anderson v. Shiflett, 435 F. (2d) 1036 ..............

Bowman v. Curt G. Joa, 361 F. (2d) 706 .............

Curtis Publishing Company v. T. B. Birdsong, 360 F.

PP EE Nev sabe kas'ceak kee cetera 5,

Grantham v. Challenge-Cook Brothers, Inc. 420 F.

8 Oe RENE Pa ie, ON RS eas «ea a

Green v. Chicago, Burlington & Quincy Railroad Com-

es es I iets etc cee ee es

Hanson v. Denckla, 357 U. S. 235 .................. 4,

International Shoe v. State of Washington, 326 U. S.

ing EE ET LCE cc ANH cance WN 3, 4, 5, 6,

Jennings v. McCall Corporation, 320 F. (2d) 64 ....5,

L. D. Reeder Contractors of Arizona v. Higgins In-

dustries, Inc., 265 F. (2d) 768 .................0..

McGee v. International Life Insurance Company, 355

Wy Oe OE a scbk ac cncyenevaane ee 4,

McInnes v. Fontainbleau Hotel Corp., 257 F. (2d) 832

Minnesota Mining and Manufacturing Company v. In-

ternational Plastic Corporation, 159 F. (2d) 554 ...

Partin v. Michaels Art Bronze Company, Ine., 202 F.

We WE a naennsecineesied eve eeieneee <a 3,

Perkins v. Benquet Consolidated Mining Co., 342

We WOT x Kaw aca cc clewnaaeuciseaenl ison tote ces

Pulson v. Am. Rolling Mills, 170 F. (2d) 193 .........

Ratliff v. Cooper Laboratories, Inc., DEC. No. 14788

(unprinted)

Seymour v. Park Davis & Company, 423 F. (2d) 584 . .5,

Velandra v. Regie Nationale Des Usines Renault, 336

Os SS ME 6 cna n ieee etasekide cnet

ASTOR UP te ORE

— Eames

Oe een

7

Supreme Court of the United States:

OCTOBER TERM, 1971

No. 71-302

ANNIE NELL RATLIFF and HENRY RATLIFF,

PETITIONERS,

versus

COOPER LABORATORIES, INC., Resroxpent

ALICE W. NICHOLS, Petitioner,

versus

STERLING DRUG COMPANY, INC., a Corporation,

RESPONDENT

RETURN TO A PETITION FOR A WRIT

OF CERTIORARI

STATEMENT OF CASE

RATLIFF CASE

The Petitioners in June of 1963, while a resident of

Florida, consummed in Florida a drug manufactured by

Vitamix Pharmaceutical Company which was prescribed

for her by a Florida physician. It is the contention of the

Petitioners as a result of ingesting this product she re-

ceived personal injuries which entitled her to recover dam-

ages from this Defendant.

On February 29, 1968, Vitamix merged with the Re-

spondent Cooper Laboratories, Inc. This suit was insti-

tuted in the District Court of South Carolina against

Cooper Laboratories in May of 1969, five years and eleven

2 RATLIFF et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT

months after the Petitioners cause of action arose because

the Florida Statute of Limitations had expired.

The Petitioners have never resided in nor had any

contact whatssever with South Carolina.

The Petitioners’ attorney attempted to obtain juris-

diction over the Defendant Cooper Laboratories, Inc. by

service on the South Caroline Secretary of State since the

Respondent had no agents for service designated in South

Carolina. Claimed jurisdiction is based upon Cooper Lab-

oratories’ activity in South Carolina which include sales of

approxinately seven-tenths (7/10) of one percent (1%)

of its total sales in 1968 and five-tenths (5/10) of one per-

cent (1%) of its total sales in 1969. Since the South Caro-

lina six year statute ran on June 10, 1969, the sales figure

for 1969 should be limited to that date. This would sub-

stantially reduce the five-tenths (5/10) of one percent (1%).

These sales were made through mail directly to dealers or

wholesalers in South Carolina. The Respondent exercised

no control over these dealers and they in no way act on

behalf of the Respondent. Further, all goods are shipped

with title transferring at the shipping point in Mystic,

Connecticut. The only other activity that ean be attributed

to South Carolina is the mailing of literature and promo-

tional material to approximately six hundred fifty (650)

doctors who may be on the Respondent’s mailing list. This

Respondent owns no real or personal property in South

Carolina, maintains no bank accounts, and has no officers,

employees or salesmen living or soliciting business in

South Carolina, owns no warehouses, advertises in no di-

rectories, does not franchise nor license dealers and main-

tains no control or supervision ever the independent

wholesalers and retailers who purchase its products. The

Respondent does advertise in medical journals which un-

doubtedly have circulation in South Carolina, but does not

=

RATLIFF et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT 3

exhibit in any sort of displays at medical conventions in

South Carolina.

NICHOLS CASE

According to the Complaint the Petitioner on or about

November 22, 1965, and for a numbe: of years prior thereto

purchased and ingested a drug known as Aralen which

she alleges caused her certain injuries. Petitioner is and

at all tines was a resident of Indiana, the drug was taken

in Indiana, and the injuries alleged occurred in Indiana.

Respondent, a drug manufacturer, has its principal place

of business in New York. It owns no property and main-

tains no inventory in South Carolina. It does have five de-

tail men who live in South Carolna whose prime function

is the promotion of drugs manufactured by the Respon-

ent not the sale of them. It is qualified to do business in

South Carolina.

The District Court denied the Respondent motions to

dismiss the actions on the grounds that the Court lacked

jurisdiction. The Court of Appeals reversed the decision

of the District Court asserting since the Respondents were

not ‘‘amenable to in personam jurisdiction in South Caro-

lina, the motions to set aside service of process and to dis-

miss the complaint should have been granted.”

REASONS FOR DENYING THE WRIT

The decision of the Court of Appeals is in accord with

the applicable decisions of this Court.

Because South Carolina has extended its service of

process law to the maximum applicable limits allowed by

International Shoe v. State of Washington, 326 U. S. 310,

the question of jurisdiction becomes one of due process

which is solely a federal question not controlled by state

law. Pulson v. Am. Rolling Mills, 170 F. (2d) 193; Bowman

v. Curt G. Joa, 361 F. (2d) 706.

4 RatTuirr et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT

The Supreme Court in /nternational Shoe established .-

a flexible rule for determining jurisdiction.

**It is evident that the criteria by which we mark

the boundary line between those activities which justify

this objection of a corporation to suit and those which

do not cannot be simply mechanical or quantitative.

The test is not merely, as has sometimes been sug-

gested, whether the activity, which the corporation

has seen fit to procure through its agents in another

state, is a l‘ttle more or a little less . . . Whether

due process is satisfied must depend rather upon the

quality and nature of the activity in relation to the

fair and orderly administration of the laws of which

it was the purpose of the Due Process Clause to in-

sure. That clause does not contemplate that a state

may make a binding judgment in personam against

an individual or corporate defendant with which the

state has no contact, ties or relations.”

It was noted by this Court in McGee v. International

Life Insurance Company, 355 U. S. 220, 2 Law Ed. (2d)

223, a trend of expanding personal jurisdiction over a non-

resident. However in Hanson v. Denckla, 357 U. S. 235, 2

Law Fid. (2d) 1283, the Court still recognized there were

limits to this expansion:

“But it is a mistake to assume that this trend

heralds the eventual demise of all restrictions on per-

sonal jurisdictiun of a state court (cites). Those re-

strictions are more than a guaranty of immunity from

inconvenience of distant litigation. They are a conse-

quence of territorial limitation on the power of the

cespective states. However minimal the burden of de-

fending in a foreign tribunal, a defendant may not be

called upon to do so unless he has had the ‘minimal

contaci’ . . . 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 benefits and protection

of its laws.” ‘Emphasis ours.)

NOEL Oe OREN TEI oF Re pen - a

RATLIFF et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT 6

More contacts are required for the assumptior of

jurisdiction by the state than mere solicitation of sales.

Green v. Chicago, Burlington & Quincy Railroad Company,

205 U.S. 530, 27 S. Ct. 595, 51 L. Ed. 916.

All other circuits are in accord with the opinion of

the Fourth Circuit. Seymour v. Park Davis & Company,

423 F. (2d) 584 (First Cirevit 1970); McInnes v. Fontuin-

bleu Hotel Corp., 257 F. (2a) 832 (Second Circuit 1958) ;

Partin v. Michaels Art Bronze Company, Inc., 202 F. (2d)

941 (Third Circuit 1953); Curtis Publishing Company v.

I. B. Birdsong, 360 F. (2d) 344 (Fifth Circuit 1966); Vel-

andra v. Regie Nationale Des Usines Renault, 336 F. (2d)

292 (Sixth Circuit 1964); Minnesota Mining and Manu-

facturing Company v. International Plastic Corporation,

159 F. (2d) 554 (Seventh Cireuit 1947); Grantham v. Chai-

lenge-Cook Brothers, Inc., 420 F. (2d) 1182 (Seventh Cir-

cuit 1969); Jennings v. McCall Corporation, 320 F. (2d)

64 (Kighth Circuit 1963) ; L. D. Reeder Contractors of Ari-

zona v. Higgins Industries, Inc., 265 F. (2d) 768 (Ninth

Circuit 1959); Anderson v. Shiftlett, 435 F. (2d) 1036

(Tenth Cireuit 1971).

The opinion of the Court below is in accord with ap-

plicable decisions of this Supreme Court and the Courts

of Appeal. :

The issues settled by the opinion of the Court of

Appeals are not ones of important nationwide concern

which need to be settled by this Court.

The Petitioners contend the Court of Appeals expanded

the concept of International Shoe and Perkins v. Benquet

Consolidated Mining Co., 342 U. S. 437, 96 L. Ed. 485, by

making a distinction between Petitioners who are resi-

dents or citizens of the forum state and those who are

neither residents nor citizens on identical causes of action

against identical foreign corporations. Petitioners con-

Pe sc cscs eleven asetcn ememeennnasen . a

. a rene ce tae CREST ER STE Ro

6 RATLIFF et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT

tend the Court placed substantial reliance upon the lack of

attachment of the Petitioners to the forum.

This rule finds the acceptance of the Supreme Court in

International Shoe v. State of Washington, supra; Hanson

v. Denckla, supra, and in opinions of the Courts of Appeal

who have had this issue before them. Seymour v. Parke Da-

vis & Co., supra, Partin v. Michaels A:t Bronze Company,

supra, Curtis Publishing Co. v. T. B. Birdsong, supra, Jen-

nings v. McCall, supra. As said in International Shoe:

‘*. . . the activities of the corporation there have

not only been continuous and systematic but also give

rise to the liabilities sued on . . . conversely it has been

generally recognized that the casual presence of the

corporate agent or even his conduct of a single or iso-

lated item of activity in a state in the corporations’

behalf are not enough to subject it to suit on causes of

action unconnected with the activity there. ... To

require the corporation in such circumstances to de-

fend the suit away from its home or other jurisdiction

where it carries on more substantial activities has

been thought to lay too great and unreasonable a bur-

den on the corporation to comport with due process.”’

(Emphasis ours.)

In Hanson v. Denckla, supra:

‘*The cause of action in this case is not one that

arises out of an act done or a transaction consum-

mated in a foreign state. In that respect it varies

from McGee v. International Life Insurance Company,

309 U. S. 220, 2 L. Ed. (2d) 223 and the cases there

cited.”

The circumstances in Seymour v. Parke Lavis & Co.

(First Circuit 1970), supra, bears remarkable similarity

to these cases and there the Court concluded:

‘‘If the plaintiff hes some attachment to the

forum, or if the defendant has adopted the state as

one of its major places of business, we would have

RATLIFF et ai., PETITIONERS, v. COOPER LAB., INC., RESPONDENT 7

no question of the right of the state to subject the de-

fendant to suit for unconnected causes of action. Nor

would we even if the forum were not a major center

of defendant’s business but were nevertheless a com-

munity into whose business life the defendant had

significantly entered as determined by the quality,

substantiality, continuity, and systematic nature of

its activities . . . When, however, defendant’s only

activities consist of advertising and employing sales-

men to solicit orders, we think that fairness will not

permit a state to assume jurisdiction.”’

423 F. (2d) at 587. (Emphasis added.)

In 2 Moore’s Federal Practice, Para. 425 (5) we

find:

‘*Based as they are on notions of fairness and

reasonableness, the Supreme Court decisions do not

permit a single generalization of the rule pertaining

to in personam jurisdiction over foreign corporations.

If there are substantial contacts -vith the state, for

example, a substantial and continuing business, and if

the cause of ection arose out of business done in the

state, jurisdiction will be sustained. If there is sub-

stantial contact in the state but the cause of action

does not arise out of these contacts, jurisdiction may

be sustained. If there is a minimum contact and the

cause of action arises out of the contact, it will nor-

mally be fair and reasonable to sustain the jurisdiction.

If there is a minimum of contact and the cause of ac-

tion does not arise out of the contact, there will nor-

mally be no basis of jurisdiction since it is difficult to

establish the factors necessary to meet the fairness and

reasona le test.’’ (Emphasis ours.)

Finally to allow the Petitioners whose only interest in

South Carolina is its long statute of limitations (6 years)

and only contact with South Carolina is to bring their law-

suits for the sole purpose of availing themselves of the

statute, to maintain these actions against Respondents who

- have practically no contact with the forum clearly violates

a POE DS LINDL SEE GE LE LST BI LLL SLING ICING OE EI I AST SAN —

8 RATLIFF et al., PETITIONERS, v. COOPER LAB., INC., RESPONDENT

‘*the notions of fair play and justice” of International Shoe,

supra. The Respondents had every reason to believe that

when the statute of limitations had run in every jurisdic-

tion conceivably concerned with the issues in question,

they would not later be called upon to produce evidence

to rebut the Petitioners allegations.

CONCLUSIONS

For the reason set out herein this Court should refuse

to grant the Petitioners’ Writ of Certiorari.

Respectfully submitted,

JULIUS W. McKAY, of

McK AY, MeKAY, BLACK,

SHERRILL, WALKER & WILKINS,

1340 Bull Street,

Columbia, South Carolina,

Attorney for Respondent

Cooper Laboratories, Inc.

EDWARD W. LANEY, III, of

TURNER, PADGET, GRAHAM &

LANEY,

1531 Hampton Street,

Columbia, South Carolina,

Attorney for Respondent

Sterling Drug Company, Inc.