Case: 09-30870 Document: 00511211752 Page: 1 Date Filed: 08/23/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
August 23, 2010
No. 09-30870
Lyle W. Cayce
Clerk
LINDA JACKSON; BRIAN JACKSON,
Plaintiffs-Appellants
v.
TANFOGLIO GIUSEPPE S.R.L.; GIUSEPPE TANFOGLIO S.P.A.; FRATELLI
TANFOGLIO DI TANFOGLIO BORTOLO & C.S.n.c., formerly known as Pacific
Capital Partners of Oregon Inc.,
Defendants-Appellees
Appeals from the United States District Court
for the Eastern District of Louisiana
Before KING, HIGGINBOTHAM, and GARZA, Circuit Judges.
EMILIO M. GARZA:
This is an appeal from the district court’s order granting Fratelli
Tanfoglio, S.n.c.’s (“Fratelli”) Rule 60(b)(4) motion to vacate a default judgment
against it. The district court held that it lacked personal jurisdiction—both
general and specific—over Fratelli. The plaintiffs appeal. For the reasons set
forth below, we AFFIRM.
I
This is the third time this court has been asked to review whether the
district court has personal jurisdiction in this case. In May 1992, Arnold
Jackson (“Jackson”) was injured by the unexpected discharge of a Titan .25
Case: 09-30870 Document: 00511211752 Page: 2 Date Filed: 08/23/2010
No. 09-30870
caliber semi-automatic pistol (the “pistol”). Jackson was rendered a quadriplegic
and eventually died from his injuries. Plaintiffs-Appellants Linda Jackson,
Jackson’s wife, and their son Brian (collectively, “Plaintiffs”) filed suit in May
1993 against a number of defendants involved in the manufacture and sale of
the pistol.1 Among the defendants were three Italian companies: Fratelli
Tanfoglio, S.n.c. (“Fratelli”); Giuseppe Tanfoglio, S.p.a. (“Giuseppe S.p.a.”); and
Tanfoglio Giuseppe, S.r.l. (“Giuseppe S.r.l.”) (collectively, the “Tanfoglio
entities”).2 None of these firms made an appearance in the case and the
Plaintiffs obtained a default judgment of approximately $11 million against
them in December 1998. In entering the judgment, the district court ruled that
the Tanfoglio entities manufactured the pistol, which had a firing pin that was
too long, making the pistol discharge too easily. The district court entered a
final judgment against the Tanfoglio entities and closed the case.
Nearly two years later, Fratelli filed a Federal Rule of Civil Procedure
60(b)(4) motion to vacate the default judgment on the basis that the judgment
was void because the district court lacked personal jurisdiction over it.3 In
support of its claim, Fratelli asserted that it did not make the pistol that injured
Jackson, and that there was nothing connecting Fratelli with Louisiana. The
district court denied the motion, holding that the jurisdictional facts—that
Fratelli had made the pistol))had been conclusively established by the default
judgment. On appeal, this court reversed and remanded the case for further
adversarial proceedings on the issue of personal jurisdiction. See Jackson v. FIE
Corp., 302 F.3d 515, 531 (5th Cir. 2002) (Tanfoglio I).
1
The frame of the pistol was manufactured by Southern Die Cast Company and the
pistol itself was assembled by Firearms Import and Export Corporation (“FIE”) in Florida,
likely between 1970 and 1973.
2
Over the years, all of the other defendants have been dismissed from the case.
3
Only Fratelli appeared in the case and moved to vacate the default judgment. The
default judgment is still in effect as to Giuseppe S.r.l. and Giuseppe S.p.a.
2
Case: 09-30870 Document: 00511211752 Page: 3 Date Filed: 08/23/2010
No. 09-30870
On remand, the parties engaged in considerable discovery. Plaintiffs
argued that the court had specific personal jurisdiction because the Tanfoglio
entities manufactured the pistol or the firing pin, and that there was general
jurisdiction arising from the Tanfoglio entities’ continuous and systematic
contacts with the forum state. In its April 2007 order, the district court found
that there was insufficient evidence to establish that: (1) Fratelli shipped any
finished products or component parts to Louisiana or made the defective firing
pin; (2) the actions of other Tanfoglio entities should be imputed to Fratelli; and
(3) Fratelli was subject to general jurisdiction in Louisiana. Jackson v. F.I.E.
Corp., No. 95-2389, 2007 WL 1259216, at *3–7 (E.D. La. Apr. 30, 2007).
Plaintiffs appealed and we vacated and remanded because the district court
incorrectly found that Plaintiffs had not presented sufficient evidence to
establish jurisdiction when it should have determined “whether there was
sufficient evidence to prove that Fratelli Tanfoglio was not subject to the court’s
jurisdiction.” Jackson v. Fratelli Tanfoglio di Tanfoglio Bortolo & C.S.n.c., 310
F. App’x 629, 631 (2009) (per curiam) (Tanfoglio II).
On remand, the district court found that Fratelli met its burden of proving
the lack of both specific and general personal jurisdiction, and again granted the
motion to vacate the default judgment. Once again, the Plaintiffs appeal.
A brief discussion of the Tanfoglio entities is necessary for purposes of
considering personal jurisdiction. Giuseppe Tanfoglio owned and operated a
company in Italy which manufactured the Titan .25 caliber pistol and other
firearms. In 1969, Giuseppe’s brother, Bortolo, incorporated Fratelli; Giuseppe’s
daughter, Maria Celsa, was one of Fratelli’s directors. In 1978, Giuseppe and his
son, Massimo, incorporated Giuseppe S.r.l. which eventually took over the
operations of Giuseppe’s original company. From approximately 1969 to 1990,
Giuseppe S.r.l. and Giuseppe S.r.a. sold components to FIE in Florida for use in
the assembly of the Titan .25 caliber pistol. Information obtained in discovery
indicates that the majority of the Tanfoglio entities’ products were distributed
3
Case: 09-30870 Document: 00511211752 Page: 4 Date Filed: 08/23/2010
No. 09-30870
to FIE and another Florida-based company. In 1991, after FIE went out of
business resulting in large losses for Giuseppe S.r.l., Giuseppe S.r.l. was
liquidated under Italian law. Maria Celsa was appointed as Giuseppe S.r.l.’s
liquidator and relinquished her position as a director of Fratelli. During the
liquidation, Fratelli, who was Giuseppe S.r.l.’s largest creditor because of debts
incurred in the operation of the businesses, remitted debts owed by Giuseppe
S.r.l. to avoid bankruptcy in favor of liquidation to pay off all creditors. Fratelli
also purchased some of Giuseppe S.r.l.’s assets and liabilities. Giuseppe S.r.l.’s
final liquidation and dissolution of the entity was completed in 1996, two years
before the Jacksons’ default judgment against the Tanfoglio entities.
II
This court reviews a district court’s determination of personal jurisdiction
de novo. McFadin v. Gerber, 587 F.3d 753, 758 (5th Cir. 2009); see also Tanfoglio
II, 310 F. App’x at 630; Tanfoglio I, 302 F.3d at 521 (stating that the de novo
standard applies to challenges to personal jurisdiction brought under Rule
60(b)(4)). It is the law of the case that Fratelli bears the burden of proof to
demonstrate the court lacks jurisdiction. Tanfoglio II, 310 F. App’x at 630–31;
see also Tanfoglio I, 302 F.3d at 520–21 & n.6.
The limits of the Louisiana long-arm statute are coextensive with
constitutional due process limits. Walk Haydel & Assocs. v. Coastal Power Prod.
Co., 517 F.3d 235, 242–43 (5th Cir. 2008) (citing A&L Energy, Inc v. Pegasus
Grp., 791 So.2d 1266, 1270 (La. 2001)). Therefore, the inquiry is whether
jurisdiction comports with federal constitutional guarantees. See id. at 243. A
federal district court in Louisiana sitting in diversity may exercise personal
jurisdiction over a non-resident defendant if (1) the defendant has purposefully
availed himself of the protections and benefits of Louisiana by establishing
“minimum contacts” in the state, and (2) the exercise of the jurisdiction complies
with traditional notions of “fair play and substantial justice.” Id.
4
Case: 09-30870 Document: 00511211752 Page: 5 Date Filed: 08/23/2010
No. 09-30870
“Jurisdiction may be general or specific,” depending on the nature of the
defendant’s forum-related contacts. Luv N’care v. Insta-Mix, Inc., 438 F.3d 465,
469 (5th Cir. 2006). “Where a defendant ‘has continuous and systematic general
business contacts’ with the forum state, the court may exercise general
jurisdiction over any action brought against the defendant. Where contacts are
less pervasive, the court may still exercise ‘specific’ jurisdiction ‘in a suit arising
out of or related to the defendant’s contacts with the forum.’” Id. (citing
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415 (1984)).
A
We dispose of any argument that general jurisdiction over Fratelli exists.
General jurisdiction may be found when the defendant’s contacts with the forum
state are substantial, continuous, and systematic. Helicopteros Nacionales, 466
U.S. at 414–19. The “continuous and systematic contacts test is a difficult one
to meet, requiring extensive contacts between a defendant and a forum.”
Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir. 2008). To
confer general jurisdiction, a defendant must have a business presence in the
forum state. Access Telecom, Inc. v. MCI Telecomm. Corp., 197 F.3d 694, 717
(5th Cir. 1999). Injecting a product, even in substantial volume, into a forum’s
“stream of commerce,” without more, does not support general jurisdiction.
Bearry v. Beech Aircraft Corp., 818 F.2d 370, 375 (5th Cir. 1987); accord Alpine
View Co. v. Atlas Copco AB, 205 F.3d 208, 216 (5th Cir. 2000) (noting that this
circuit has rejected reliance on a stream-of-commerce theory to support general
jurisdiction). Advertising and marketing through national media is insufficient,
as are isolated visits to a forum. See Johnston, 523 F.3d at 612; Alpine View Co.,
205 F.3d at 218; Bearry, 818 F.2d at 376.
Fratelli must have substantial contacts with Louisiana for the court to
have general jurisdiction over it. Fratelli’s representatives testified that Fratelli
has never had an office, bank accounts, employees, or even a postal address in
Louisiana, nor owned or leased any property there. Nor has Fratelli ever been
5
Case: 09-30870 Document: 00511211752 Page: 6 Date Filed: 08/23/2010
No. 09-30870
registered to do business in Louisiana or paid taxes in Louisiana. Fratelli did
not directly sell any products in Louisiana. Fratelli’s only contacts are: (1)
supplying parts or components for the assembly of handguns in Florida, which
were then sold throughout the United States by other companies;4 (2) attendance
at two trade shows in New Orleans; and (3) advertising and marketing in
nationwide media that reached Louisiana but was not directed to Louisiana.
These contacts are neither systematic, continuous, nor substantial enough to
support general jurisdiction. See Johnston, 523 F.3d at 610–12.
B
Plaintiffs contend that absent general jurisdiction, the district court has
specific jurisdiction over Fratelli based on (1) Fratelli’s minimum contacts
stemming from its delivery of the Titan .25 caliber pistol into the stream of
commerce, and (2) under a theory of imputed contacts.
1
This court applies a three-step analysis to determine specific jurisdiction:
(1) whether the defendant has minimum contacts with the forum state; (2)
whether the plaintiff’s cause of action arises out of or results from the
defendant’s forum-related contacts; and (3) whether the exercise of personal
jurisdiction is fair and reasonable. Seiferth v. Helicopteros Atuneros, Inc., 472
F.3d 266, 271 (5th Cir. 2006). We have applied a stream-of-commerce principle
to permit the assertion of specific jurisdiction over nonresident defendants that
send a defective product into a forum. Nuovo Pignone, SpA v. STORMAN ASIA
M/V, 310 F.3d 374, 380 (5th Cir. 2002).
Where a nonresident’s contact with the forum state “stems from a
product, sold or manufactured by the foreign defendant, which has
caused harm in the forum state, the court has [specific] jurisdiction
if it finds that the defendant delivered the product into the stream
4
Fratelli did not supply parts or components or manufacture the 0.25 caliber pistol
until after the injury at issue in this case.
6
Case: 09-30870 Document: 00511211752 Page: 7 Date Filed: 08/23/2010
No. 09-30870
of commerce with the expectation that it would be purchased or
used by consumers in the forum state.”
Id. (quoting Bearry, 818 F.2d at 374) (alteration in original). Under this
“relatively expansive” theory, only “mere foreseeability” that a defendant might
be haled into court because it purposely availed itself of the benefits of the forum
state is required. Id. at n.8. A defendant need not have “purposely direct[ed]”
its activities to the forum. Ruston Gas Turbines v. Donaldson, Co., 9 F.3d 415,
419 (5th Cir. 1993).
Plaintiffs contend that Fratelli manufactured, sold or distributed
completed products or component parts in Louisiana and specifically targeted
Louisiana such that the district court has specific jurisdiction. Although
Plaintiffs contend that Fratelli, by itself, has sufficient contacts for specific
jurisdiction, their argument—repeatedly referring to “the Tanfoglios” and the
“Tanfoglio enterprise”—in fact, conflates Giuseppe S.r.l, Giuseppe S.p.a., and
Fratelli and treats the contacts of one entity as applicable to all.5 There is no
challenge to the district court’s jurisdiction over Giuseppe S.r.l. and Giuseppe
S.p.a. Only Fratelli moved to vacate the default judgment on the grounds of lack
of personal jurisdiction. Thus, the question before the court is confined to
whether there is personal jurisdiction over Fratelli.
Having reviewed the evidence regarding Fratelli’s contacts with Louisiana,
we agree with the district court that Fratelli has met its burden. The evidence
shows that Fratelli did not manufacture any Titan .25 caliber pistols until 1993,
after Jackson was injured, and long after the weapon that caused the injury was
5
For instance, Plaintiffs contend that Fratelli collaborated with Giuseppe S.p.a. and
Giuseppe S.r.l. by leasing and selling equipment to one another and advertising, marketing,
and shipping firearms together. Plaintiffs further contend that Tanfoglio employees and
engineers directed the production of the pistol and were involved in the testing and inspection
of the pistol, including providing proper assembly instructions to FIE employees.
7
Case: 09-30870 Document: 00511211752 Page: 8 Date Filed: 08/23/2010
No. 09-30870
produced and sold sometime in the 1970s.6 The pistol involved in this case was
assembled and/or manufactured in Florida by FIE and was sold under the FIE
logo. Further, although Fratelli purchased the equipment to bore .25 caliber
barrels in 1972 or 1973, there is no evidence that Fratelli was actually boring
barrels at that time. Plaintiffs rely only on surmise and conjecture to conclude
that because Fratelli possessed the bores it must actually have been making the
barrels for .25 caliber pistols. There is also no evidence that Fratelli
manufactured the .25 caliber firing pin, the pistol’s defective component.7 In
short, there is no evidence that Fratelli, as distinct from other Tanfoglio entities,
sold or manufactured the pistol, or otherwise “delivered the product into the
stream of commerce with the expectation that it would be purchased or used by
consumers in the forum state.” Nuovo Pignone, 310 F.3d at 380. Accordingly,
there can be no specific personal jurisdiction.
2
Plaintiffs also contend that specific jurisdiction exists through a theory of
imputed contacts or alter egos. In other words, they argue that Fratelli is an
alter ego of the other Tanfoglio entities and thus, the contacts of those entities
can be imputed to Fratelli to satisfy personal jurisdiction.8
6
The record includes information about firearms licenses obtained in Brescia, Italy by
the other Tanfoglio entities that were necessary for their business activities. There is no
license for Fratelli for a .25 caliber pistol.
7
Massimo Tanfoglio initially testified that Tanfoglio never manufactured the .25 caliber
firing pin. He later admitted that the firing pin “could have” been made by Giuseppe S.r.l. but
“there would be no way to prove” whether Giuseppe S.r.l. or some other entity, including third-
party suppliers or FIE, actually manufactured the pin. At best, this evidence might raise a
question whether Giuseppe S.r.l. manufactured the faulty firing pin. But it certainly does not
suggest that Fratelli did so. And indeed, the Tanfoglios testimony was consistent in denying
that Fratelli made the firing pin.
8
The district court assumed arguendo that it had specific jurisdiction over the now-
liquidated Giuseppe S.r.l. because it manufactured parts for the Titan .25 caliber pistol that
injured Jackson, and delivered the product into the stream of commerce with the expectation
that it would be purchased or used by consumers in Louisiana. We adopt the same
assumption in considering whether the contacts of one entity can be imputed to another.
8
Case: 09-30870 Document: 00511211752 Page: 9 Date Filed: 08/23/2010
No. 09-30870
“[A] court which has jurisdiction over a corporation has jurisdiction over
its alter egos.” Minn. Mining & Mfg. Co. v. Eco Chem, Inc., 757 F.2d 1256, 1265
(5th Cir. 1985); see also Hargrave v. Fibreboard Corp., 710 F.3d 1154, 1159 (5th
Cir. 1983). “[F]ederal courts have consistently acknowledged that it is
compatible with due process . . . to exercise personal jurisdiction over an
individual or a corporation that would not ordinarily be subject to personal
jurisdiction in that court when the individual or corporation is an alter ego or
successor of a corporation that would be subject to personal jurisdiction in that
court.” Patin v. Thoroughbred Power Boats, Inc., 294 F.3d 640, 653 (5th Cir.
2002). “The theory . . . is that, because the two corporations (or the corporation
and its individual alter ego) are the same entity, the jurisdictional contacts of
one are the jurisdictional contacts of the other for the purposes of the . . . due
process analysis.” Id.
The district court analyzed the question whether Fratelli is an alter ego
of Giuseppe S.p.a. or Giuseppe S.r.l. under Italian law. Plaintiffs contend that
this was error because the choice of law for alter ego analysis for personal
jurisdiction purposes is different than for liability. Thus, while it may be
appropriate to use Italian law to determine alter ego liability, Plaintiffs argue
that Louisiana law must be applied to the personal jurisdiction analysis.
Although this complicated choice of law question is an open issue, we need
not resolve it here. Even applying the more flexible standard for which Plaintiffs
argue, the other Tanfoglio entities’ contacts with Louisiana cannot be imputed
to Fratelli. Under Louisiana law, the factors to be considered to determine
whether one entity is an alter ego of another or whether two entities are a
“single business enterprise” are similar. Green v. Champion Ins. Co., 577 So. 2d
249, 257–58 (La. Ct. App. 1991). They include, but are not limited to, common
ownership, directors and officers, employees, and offices; unified control;
inadequate capitalization; noncompliance with corporate formalities; centralized
accounting; unclear allocation of profits and losses between corporations; one
9
Case: 09-30870 Document: 00511211752 Page: 10 Date Filed: 08/23/2010
No. 09-30870
corporation paying the salaries, expenses, or losses of another corporation; and
undocumented transfers of funds between entities. See Hollowell v. Orleans
Reg’l Hosp. LLC, 217 F.3d 379, 385–89 (5th Cir. 2000); Green, 577 So. 2d at 258.
No one factor is dispositive. Green, 577 So. 2d at 258.
Some of the factors weigh in favor of imputing jurisdiction. For instance,
the Tanfoglio entities appear to have been operated in a way that their brands
and products appear identical and their business relationships are deeply
intertwined. The Tanfoglio entities shared office space, phone numbers, and the
Tanfoglio siblings were officers and directors of each of the Tanfoglio entities.
Further, despite the significant business relationship between the Tanfoglio
entities and FIE, FIE employees testified that they could not distinguish
between each of the Tanfoglio companies and viewed them as one company. As
well, the Tanfoglio entities were indebted to one another through a variety of
business transactions such that Fratelli was Giuseppe’s largest creditor when
Giuseppe was liquidated.
On the other hand, there is no evidence of undocumented transfers of
funds between the various entities. Indeed, Fratelli produced documentation
showing that Giuseppe S.r.l.’s debts to Fratelli were on the books. There was
also no evidence of unclear allocation of profits and losses between corporations.
Nor was there evidence that one of the Tanfoglio entities paid the salaries of the
other entities’ employees. Further, there was clear and undisputed evidence
that the Tanfoglio companies did not abuse the corporate form, and indeed,
followed all of the Italian corporate legalities necessary to maintain distinct
entities.9 The companies maintained separate books, had separate tax
9
To be clear, we consider whether Fratelli complied with corporate formalities because
that is one factor to be considered under Louisiana law. See Hollowell, 217 F.3d at 385–89;
Green, 577 So. 2d at 258. However, in considering whether Fratelli abused the corporate form,
we must look to the law governing Fratelli’s corporate form—that is, Italian law. It would
make no sense to consider whether Fratelli complied with Louisiana corporate formalities
because Fratelli was not incorporated in Louisiana and was not subject to the rules and
regulations governing corporate structures in that State.
10
Case: 09-30870 Document: 00511211752 Page: 11 Date Filed: 08/23/2010
No. 09-30870
identification numbers, held separate shareholder meetings, and followed Italian
statutory formalities in both the formation of the entities and in the liquidation
sale of the Giuseppe entity. The Tanfoglios’ former statutory auditor and
accountant attended shareholder and director meetings as required by Italian
law and prepared and filed reports reflecting those proceedings as required. The
statutory auditor repeatedly testified that the Giuseppe S.r.l. and Fratelli’s
meetings were not held jointly. Further, the accountant testified that while the
Fratelli and Giuseppe entities shared office space, the office space of each entity
was separate within the buildings. Thus, there is absolutely nothing to suggest
that the corporate formalities were not observed at all times.
There is also no support for the argument that the liquidation of Giuseppe
S.r.l. resulted in a merger with Fratelli or created successor liability. Under
Italian law, the sale of assets from one entity to another does not automatically
make the purchaser a universal successor of the vendor. Rather, the sale is of
specific, identifiable set of goods. The record does not show that any of Giuseppe
S.r.l.’s liability related to this lawsuit was transferred to or assumed by Fratelli.
Although Plaintiffs allege that the liquidation and sale of Giuseppe was a
“sham,” both Fratelli’s expert and its former accountant/auditor testified that
the liquidation and sale were proper under Italian law. The statutory auditor
testified that Giuseppe S.r.l. initially tried to remain a going concern by seeking
permission from the Italian courts to incorporate under a different corporate
form. However, the Italian court denied that request and ordered a “forced”
liquidation. Notably, when Maria Celsa was appointed as Giuseppe S.r.l.’s
liquidator, she relinquished her directorship with Fratelli so that she was not
involved in both entities’ activities during the liquidation. The fact that Fratelli
acquired certain assets and liabilities from Giuseppe S.r.l. and forgave a
substantial portion of its debts so that Giuseppe S.r.l. could pay other creditors
does not point to any impropriety. To the contrary, Fratelli’s Italian law expert
testified that such debt forgiveness is “definitely legal” and an “accepted and
11
Case: 09-30870 Document: 00511211752 Page: 12 Date Filed: 08/23/2010
No. 09-30870
recognized way of payment.” Further, according to Fratelli’s Italian law expert,
a sale of assets or assumption of debts, by itself, could never be a merger because
a merger is a distinct, formal legal act, for which specific procedures must be
followed under Italian law. The Italian merger procedures did not occur in the
liquidation of Giuseppe S.r.l.
Here, there are some factors in favor of imputing contacts and some factors
against. Even where some factors suggest that one entity is the alter ego of
another, the maintenance of corporate formalities tips in favor of finding that the
entities are not alter egos. Dalton v. R & W Marine, Inc., 897 F.2d 1359, 1363
(5th Cir. 1990) (declining to find an alter ego even though one entity owned 100%
of its subsidiaries, was responsible for corporate policy, funneled revenues into
centralized accounts, and filed consolidated tax returns because those factors
were “outweighed, albeit modestly” by observation of corporate formalities). The
evidence shows that Fratelli strictly maintained its corporate form, distinct from
Giuseppe S.r.l., and thus, the entities cannot be considered alter egos for
jurisdictional purposes.
III
For the foregoing reasons, we AFFIRM the judgment of the district court.
12