USCA1 Opinion
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
_________________________
No. 96-2170
ERNESTO ALERS RODRIGUEZ, ET AL.,
Plaintiffs, Appellees,
v.
FULLERTON TIRES CORP., ET AL.,
Defendants, Third-Party Plaintiffs, Appellants,
v.
CUSTOM METAL SPINNING CORPORATION, ET AL.,
Third-Party Defendants, Appellees.
________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge] ___________________
_________________________
Before
Selya, Circuit Judge, _____________
Coffin, Senior Circuit Judge, ____________________
and Lynch, Circuit Judge. _____________
_________________________
Jaime E. Morales Morales and Pinto-Lugo & Rivera on brief _________________________ ____________________
for appellant (third-party plaintiff).
Alfredo Fernandez Martinez and Martinez-Alvarez, Menendez ____________________________ __________________________
Cortada & LeFranc Romero, PSC on brief for appellees (third-party _____________________________
defendants).
_________________________
June 9, 1997
_________________________
SELYA, Circuit Judge. Defendant and third-party SELYA, Circuit Judge. ______________
plaintiff Fullerton Tires Corp. (Fullerton) appeals from a
district court order dismissing its third-party complaint against
Custom Metal Spinning Corporation (CMSC) for want of in personam __ ________
jurisdiction.1 Using the parlance of the trade, Fullerton is
spinning its wheels.
This case had its genesis in or before 1989 when
Ernesto Alers Rodriguez (Rodriguez), a resident of Puerto Rico,
purchased two sand track tires from a Puerto Rican dealer who had
seen the tires advertised in a pamphlet distributed by Fullerton
and had ordered a supply of them. Some five years later, one of
the purchased tires exploded while being inflated. The rim
snapped, severely injuring Rodriguez.
Invoking diversity jurisdiction, 28 U.S.C. 1332
(1994), Rodriguez sued Fullerton in Puerto Rico's federal
district court. Fullerton filed a third-party complaint against
CMSC (the manufacturer of the rim used in Fullerton's sand track
tires). In due course, CMSC moved to dismiss the claim, alleging
lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). ___
The court obliged. Rodriguez v. Fullerton Tires Corp., 937 F. _________ ______________________
Supp. 122 (D.P.R. 1996). After the court certified the judgment
____________________
1Fullerton Tires, Inc., an affiliated corporation, joined in
filing the third-party complaint. That pleading named CMSC; its
principals, Walter and Marianne Jenkins; and other individuals in
privity with them as third-party defendants. For simplicity's
sake, we treat the appeal as if only Fullerton and CMSC were
parties. Because the jurisdictional argument is weaker as to the
individuals, our decision disposes completely of the Fullerton
entities' attempts to sue CMSC and its privies in Puerto Rico.
2
in accordance with Fed. R. Civ. P. 54(b), this appeal ensued.
We need not linger. The district court's opinion
captures the essence of the case and applies the controlling
legal principles in an irreproachable manner. Hence, we affirm
the judgment primarily on the basis of the opinion below. We add
six comments.
First: Fullerton bemoans the district court's First: _____
treatment of CMSC's motion to dismiss as a motion for summary
judgment. We are unmoved by this jeremiad.
Motions to dismiss come under the aegis of Fed. R. Civ.
P. 12(b). The rule states that if "matters outside the pleading
are presented to and not excluded by the court, the [Rule 12]
motion shall be treated as one for summary judgment and disposed
of as provided in Rule 56." The proper approach to conversion
under this rule is functional rather than mechanical. See Vega- ___ _____
Rodriguez v. Puerto Rico Tel. Co., 110 F.3d 174, 177 (1st Cir. _________ ____________________
1997); Garita Hotel Ltd. Partnership v. Ponce Fed. Bank, 958 F.2d _____________________________ _______________
15, 18-19 (1st Cir. 1992). Here, CMSC attached to its motion
several declarations ostensibly made under penalties of perjury.
Given the specific language of Rule 12(b), the inclusion of these
materials with the motion put the nonmovant, Fullerton, squarely
on notice that the court had the option of treating the motion as
one for summary judgment.
Of course, a motion cannot be converted to one for
summary judgment unless the adverse party is given "reasonable
opportunity to present all material made pertinent to such a
3
motion by Rule 56." Fed. R. Civ. P. 12(b). Here, however, that
requirement was satisfied. CMSC filed its dispositive motion on
April 29, 1996. Fullerton did not file its opposition until July
10, 1996. During that interval Fullerton, had it chosen to do
so, could have served counter-affidavits, made other evidentiary
submissions, or sought leave to defer its response to the motion
until it had conducted jurisdictional discovery. It pursued none
of these alternatives. Instead, it filed an opposition which
tried to meet the motion head-on. The district court then
considered the declarations in its determination of the
jurisdictional issue. See Rodriguez, 937 F. Supp. at 124-25. ___ _________
Since Fullerton had ample opportunity to present pertinent
materials in opposition to CMSC's motion, as well as the
incentive to do so, we think that the court acted appropriately
in impliedly converting the motion to a motion for summary
judgment. See American Express Int'l, Inc. v. Mendez-Capellan, ___ _____________________________ _______________
889 F.2d 1175, 1178 (1st Cir. 1989) (finding that the district
court's conversion of a Rule 12(b)(2) motion to a Rule 56 motion
was proper); see also Vega-Rodriguez, 110 F.3d at 177 (explaining ___ ____ ______________
that when extrinsic materials are proffered and are actually
considered by the nisi prius court, conversion is proper).
To be sure, we can envision circumstances in which
fairness might require special notice of a court's intent to
exercise the conversion privilege. See, e.g., Ohio v. Peterson, ___ ____ ____ _________
Lowry, Rall, Barber & Ross, 585 F.2d 454, 455-57 (10th Cir. _____________________________
1978). But this is not such a situation. The district court
4
never indicated that it would eschew conversion or otherwise
refuse to consider the proffered exhibits. Moreover, the
district court continued to apply the prima facie standard, see ___
infra, not some more grueling standard indigenous to Rule 56. _____
Last, but not least, Fullerton to this day does not challenge
CMSC's account of the relevant circumstances, but, rather,
attacks the legal significance of certain facts without seeking
to contradict them. Consequently, the application of Rule 56
produced no perceptible unfairness here.
Second: It is the plaintiff's burden to establish that Second: ______
the forum court has jurisdiction over the person of the sued
defendant. See Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir. ___ ________ _______
1995); Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d ___________________ ________________________
138, 145 (1st Cir. 1995). There are several standards that a
court can use in determining whether the exercise of personal
jurisdiction is lawful. These include the prima facie standard,
the preponderance standard, and the likelihood standard. See ___
Boit v. Gar-Tec Prods., Inc., 967 F.2d 671, 675-78 (1st Cir. ____ _____________________
1992). We have no occasion today to delineate either the
differences among these approaches or the considerations that
influence a court's choice to use one standard rather than
another at a particular stage of the litigation.
For present purposes, it suffices to say that the least
taxing of these standards from a plaintiff's standpoint, and the
one most commonly employed in the early stages of litigation, is
the prima facie standard. Under it, a suitor, in order to stave
5
off defeat, "must make the showing as to every fact required to
satisfy both the forum's long-arm statute and the due process
clause of the Constitution." Id. at 675 (citation and internal ___
quotation marks omitted). When it employs the prima facie
standard, a district court does not act as a factfinder; to the
contrary, it ascertains only whether the facts duly proffered,
fully credited, support the exercise of personal jurisdiction.
See id. Because this is a quintessentially legal determination, ___ ___
appellate review is plenary. See Ticketmaster-N.Y., Inc. v. ___ _______________________
Alioto, 26 F.3d 201, 204 (1st Cir. 1994). ______
In the case at hand, the district court purposed to
apply the prima facie standard and made a determination that it
did not have in personam jurisdiction over CMSC. See Rodriguez, __ ________ ___ _________
937 F. Supp. at 124-25. Citing Foster-Miller, the appellant _____________
complains that the court erred because it failed to give advance
notice as to which of the three standards it would utilize in
resolving the jurisdictional issue.
This protest distorts the rationale of Foster-Miller. _____________
There, we vacated a dismissal when the trial court, having ______
advised counsel that it would apply the prima facie standard, ________________________________________________________________
shifted gears without warning and applied a more rigorous
standard. 46 F.3d at 143. We said in that context that a trial __ ____ _______
court should "alert the parties in advance to the level of
scrutiny that it will apply to the pending motion [to dismiss]."
Id. at 151. ___
But the instant case is at a considerable remove from
6
Foster-Miller. Here, the signals remained constant; the court _____________
steered a steady course and forthrightly applied the baseline
standard. We believe that all litigants effectively are on
notice that motions to dismiss for want of personal jurisdiction
will be adjudicated under the prima facie standard unless the ______
court informs them in advance that it will apply a more demanding
test. Thus, the court below was under no obligation to give the
appellant special notice that it would conduct business as usual,
any more than a court, before passing upon a motion for a
directed verdict, would have to give advance warning that it
intended to apply the customary complex of legal rules.
The appellant tries to avoid this conclusion by
insisting that the lower court, despite using the vocabulary
associated with prima facie showings, actually required it to
pass a higher level of scrutiny.2 Were the court guilty of such
tergiversation, the appellant would have a legitimate grievance.
See Foster-Miller, 46 F.3d at 150-51. ___ _____________
But the accusation here is merely bombast; we find no
support for it in the lower court's opinion or elsewhere in the
record. CMSC's assertions anent jurisdictional facts were
buttressed by declarations made on personal knowledge; Fullerton
____________________
2In Boit, we noted that "an opinion using the terminology of ____
`prima facie' showing may fairly be read as requiring a bit more
e.g., that the plaintiff present plausible evidence tending to ____
show that the court has jurisdiction." Boit, 967 F.2d at 675 n.2 ____
(citation and internal quotation marks omitted). To the extent
(if any) that Judge Casellas' opinion falls into this category,
we do not deem it to have deviated in any material way from the
prima facie standard.
7
did nothing to rebut or dispute these facts, despite abundant
time to do so; and the lower court therefore had the right,
consistent with the prima facie standard, to take these facts as
true. The court's opinion plainly indicates that it reviewed the
materials presented and passed upon them without essaying
credibility judgments, resolving evidentiary conflicts, or
otherwise making findings of fact. See, e.g., Rodriguez, 937 F. ___ ____ _________
Supp. at 124-25. In short, Fullerton's claim that the district
court surreptitiously applied a more stringent degree of
perscrutation than that typically associated with the prima facie
standard is totally unsubstantiated.
Third: Taking as true the specific averments of the Third: _____
third-party complaint, as supplemented by the declarations
attached to CMSC's motion, the factual scenario is not in serious
dispute. CMSC sold rims to Fullerton (presumably in California,
where both corporations maintained their headquarters), knowing
that Fullerton would incorporate them into tires and offer them
for sale in distant markets. Fullerton, in turn, sent brochures
to Puerto Rico among other places, advertised in national
publications which were disseminated in the Commonwealth, and
filled orders emanating from there. The record confirms,
however, that CMSC never conducted any business in Puerto Rico
(either directly or through agents), never applied for or
obtained authorization to do business there, and never owned,
leased, or otherwise used an office or other property in the
Commonwealth. Based on these facts, the district court found
8
that CMSC was not amenable to suit in Puerto Rico.3 See id. at ___ ___
128.
In this venue, Fullerton argues, as it did below, that
CMSC, by placing its product into the stream of interstate
commerce, transacted business in Puerto Rico sufficient to
satisfy the minimum contacts requirement. This argument will not
wash. In Asahi Metal Indus. Co. v. Superior Ct., 480 U.S. 102 _______________________ ____________
(1987), the Supreme Court held that the "placement of a product
into the stream of commerce, without more, is not an act of the
defendant purposefully directed toward the forum State," and,
thus, is insufficient to support a claim of personal
jurisdiction. Id. at 112 (plurality opinion). Even assuming ___
that CMSC had specific knowledge that the stream of commerce
would move its tire rims into Puerto Rico and there is neither
evidence nor allegation to that effect this awareness alone
would not be enough to constitute the purposeful availment which
is necessary for a showing of minimum contacts. See id. Asahi ___ ___ _____
is still good law, see Boit, 967 F.2d at 681-83, and Fullerton ___ ____
has failed to direct us to any persuasive authority supporting a
contrary view.
Fourth: The appellant's next argument deserves high Fourth: ______
____________________
3The lower court determined that the appellant had not made
the requisite jurisdictional showing under either the federal
Constitution, see Ticketmaster, 26 F.3d at 204-12 (describing ___ ____________
constitutional minima), or Puerto Rico's long-arm statute, P.R.
Laws Ann. tit. 32, App. III, Rule 4.7(a) (1989). See Rodriguez, ___ _________
937 F. Supp. at 124. Although we agree with both aspects of the
district court's holding, we couch our ensuing discussion in
terms of the constitutional requirement.
9
marks for ingenuity, but otherwise rates a failing grade. The
argument features a suggestion that the specific nature of CMSC's
product tire rims designed for use with sand track tires made
it foreseeable that CMSC could be amenable to suit in Puerto
Rico, an island ecosystem containing an abundance of sandy
beaches ideal for dune buggies and other sandworthy vehicles.
This argument proves too much.
Sand, a loose granular material that results from the
disintegration of rocks, consists of particles smaller than
gravel but larger than silt. The earth's land mass (excluding
the ice caps of Greenland and Antarctica) totals 32.1 billion
acres. See Richard Jackson & Lloyd Hudman, World Regional ___ _______________
Geography 50 (2d ed. 1986). This total includes 4.2 billion _________
acres of desert and 1.7 billion acres of soil comprised primarily
of sand. See id. at 51. Put another way, roughly 18% of the ___ ___
world's land surface is covered with sand.4
Subjecting a manufacturer to suit in Puerto Rico merely
because its product is designed for use in sand would offend the
constitutional principles that limit a state's authority to
exercise jurisdiction. Under such a regime, a manufacturer of
life preservers automatically would be subject to suit in every
jurisdiction whose boundaries included an ocean, a river, a
____________________
4This figure is not static as many of the world's regions
are experiencing desertification, a process commonly described as
the slow encroachment of fertile lands by arid soils. See David ___
Hastings, GIS Techniques Using NOAA Data Improve Monitoring of _______________________________________________________
Desertification (visited May 12, 1997) seg/globsys/gisdes.html>.
10
stream, a lake, a pond, or a swimming pool. By the same token, a
manufacturer of air conditioners would be subject to suit
worldwide. This surely is not the law. See Asahi, 480 U.S. at ___ _____
109-12 (imposing reasonableness requirement in respect to
foreseeability).
Fifth: Following the granting of CMSC's motion, Fifth: _____
Fullerton sought reconsideration, Fed. R. Civ. P. 59(e),
proffering a copy of a Dun and Bradstreet credit report. The
district court refused reconsideration, and Fullerton asks us to
reverse this ruling. This ground of appeal lacks force.
A district court's ruling on a motion to reconsider is
reviewable only for abuse of discretion. See Cotto v. United ___ _____ ______
States, 993 F.2d 274, 277 (1st Cir. 1993); Appeal of Sun Pipe ______ ___________________
Line Co., 831 F.2d 22, 25 (1st Cir. 1987). The "new" document ________
that Fullerton proffered the Dun and Bradstreet report hardly
qualifies as newly discovered evidence. More importantly, it
indicates only that CMSC serves a market comprising the "United
States, primarily California." That sort of broad generality
has very little bearing on whether a defendant's activities have
been directed to a particular place in a jurisdictionally
significant fashion.
In essence, then, the belatedly proffered report did no
more than confirm what the court already knew that CMSC placed
its product into the stream of interstate commerce. Under these
circumstances, the court's rejection of the motion did not
constitute an abuse of discretion.
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Sixth: The appellant's motion for reconsideration also Sixth: _____
requested that the lower court delay the entry of judgment and
permit discovery on the jurisdictional issue. This request,
which had not been made earlier, was untimely.5 See, e.g., ___ ____
Whittaker Corp. v. United Aircraft Corp., 482 F.2d 1079, 1086 ________________ ______________________
(1st Cir. 1973). Therefore, the district court did not err in
declining to honor it.
Affirmed. Affirmed. ________
____________________
5Fullerton entered its appearance in the district court on
March 27, 1995. It brought a third-party complaint against CMSC
on December 27, 1995. CMSC did not file its Rule 12(b)(2) motion
until April of 1996 and Fullerton did not respond until July. As
this timetable illustrates, the appellant had ample opportunity
to initiate discovery before the district court acted upon CMSC's
motion.
12