Case: 12-60155 Document: 00512236573 Page: 1 Date Filed: 05/09/2013
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 9, 2013
No. 12-60155
Lyle W. Cayce
Clerk
MARY P. AINSWORTH, Widow and Personal Representative of James T.
Ainsworth, Deceased, Individually and on Behalf of All Wrongful Death
Beneficiaries, including the Minor Children, S.A., D.A., and M.A., Mary P.
Ainsworth is Mother and Next Friend,
Plaintiff - Appellee
v.
MOFFETT ENGINEERING, LTD.,
Defendant - Appellant
Appeal from the United States District Court
for the Southern District of Mississippi
Before HIGGINBOTHAM, SMITH, and ELROD, Circuit Judges.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
The outcome of this appeal turns on our interpretation of the Supreme
Court’s recent decision in J. McIntyre Machinery, Ltd. v. Nicastro1—specifically
whether that decision renders our stream-of-commerce approach to personal
jurisdiction improper. Finding that application of the stream-of-commerce
approach in this case does not run afoul of McIntyre’s narrow holding, we affirm
the district court’s interlocutory order finding personal jurisdiction and denying
dismissal.
1
131 S. Ct. 2780 (2011).
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No. 12-60155
I.
On September 29, 2010, Mary P. Ainsworth (“Ms. Ainsworth”),
individually and on behalf of all wrongful death beneficiaries, filed a product
liability and wrongful death action against Cargotec USA, Inc. (“Cargotec”) and
Moffett Engineering, Ltd. (“Moffett”) in the Southern District of Mississippi. Her
husband, James T. Ainsworth (“Mr. Ainsworth”), had been run over and killed
by an allegedly defective forklift while he was working at Wayne Farms in Ovett,
Mississippi. The forklift was designed and manufactured by Moffett, an Irish
corporation with its principal place of business in Ireland, but pursuant to an
exclusive sales and distribution agreement between Moffett and Cargotec it was
sold to Wayne Farms by Cargotec, a Delaware corporation with its principal
place of business in Ohio.2 Moffett filed a motion to dismiss for lack of personal
jurisdiction, which the district court denied. The Supreme Court subsequently
issued its opinion in McIntyre. Moffett then asked the district court to
reconsider its ruling in light of McIntyre. The district court denied that motion,
finding that McIntyre’s fractured opinion limited its applicability, and that the
present case fell outside of McIntyre’s narrow holding. We granted Moffett leave
to appeal the district court’s interlocutory order.
II.
“Whether the district court can properly exercise personal jurisdiction over
the defendant is an issue of law we review de novo.”3 The burden of establishing
personal jurisdiction over a non-resident defendant lies with the plaintiff.4 In
2
Moffett and Cargotec are both wholly-owned subsidiaries of Cargotec Oyj, a Finnish
corporation. However, it is undisputed that they are separate companies that do not share any
common officers or directors and are separated in the company hierarchy by several layers of
distinct subsidiaries.
3
Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010).
4
Id.
2
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evaluating whether the plaintiff has met that burden at this preliminary stage,
“the court must accept as true all uncontroverted allegations in the complaint
and must resolve any factual disputes in favor of the plaintiff.”5
III.
The framework for evaluating a motion to dismiss for lack of personal
jurisdiction is well-settled. “A federal district court sitting in diversity may
exercise personal jurisdiction over a nonresident defendant if (1) the long-arm
statute of the forum state confers personal jurisdiction over that defendant; and
(2) exercise of such jurisdiction by the forum state is consistent with due process
under the United States Constitution.”6 The parties agree that this appeal turns
on the limits of due process. “Where the plaintiff alleges specific jurisdiction, as
here, due process requires (1) minimum contacts by the defendant purposefully
directed at the forum state, (2) a nexus between the defendant’s contacts and the
plaintiff’s claims, and (3) that the exercise of jurisdiction over the defendant be
fair and reasonable.”7 The district court found the second and third
requirements met in this case; the only issue presented on interlocutory appeal
is whether Moffett had “minimum contacts . . . purposefully directed at the
forum state.”8
In cases involving a product sold or manufactured by a foreign defendant,
this Circuit has consistently followed a “stream-of-commerce” approach to
personal jurisdiction, under which the minimum contacts requirement is met so
long as the court “finds that the defendant delivered the product into the stream
of commerce with the expectation that it would be purchased by or used by
5
ITL Int’l, Inc. v. Constenla, S.A., 669 F.3d 493, 496 (5th Cir. 2012).
6
Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir. 1999).
7
ITL Int’l, 669 F.3d at 498.
8
Id.
3
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consumers in the forum state.”9 Under that test, “mere foreseeability or
awareness [is] a constitutionally sufficient basis for personal jurisdiction if the
defendant’s product made its way into the forum state while still in the stream
of commerce,”10 but “[t]he defendant’s contacts must be more than ‘random,
fortuitous, or attenuated, or of the unilateral activity of another party or third
person.’”11
The district court concluded that Moffett is subject to personal jurisdiction
in Mississippi because it was foreseeable to Moffett that its products would be
purchased by consumers in Mississippi. The district court based its conclusion
on the exclusive sales and distribution agreement between Moffett, the
manufacturer of the forklift, and Cargotec, its seller to Mr. Ainsworth’s
employer. Pursuant to that agreement, Cargotec is the exclusive marketer and
distributor of Moffett’s forklifts throughout the United States. Cargotec is
Moffett’s only customer in the United States; Moffett does not sell forklifts
directly to other customers in the United States. The district court reasoned
that Moffett was subject to personal jurisdiction in Mississippi under the stream-
of-commerce approach because “(1) it had entered into a sales and distribution
agreement which specifically defined Cargotec’s sales territory as the entire
United States, (2) it was aware that Cargotec marketed its product throughout
the entire United States, and (3) it made no attempt to limit the scope of
Cargotec’s marketing efforts.” On interlocutory appeal, Moffett argues that
application of the Fifth Circuit’s stream-of-commerce approach is no longer
proper after the Supreme Court’s decision in McIntyre.
9
Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir. 1987).
10
Luv N’ care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470 (5th Cir. 2006) (quoting Ruston
Gas Turbines v. Donaldson Co., 9 F.3d 415, 419 (5th Cir. 1993)) (alterations in original).
11
INT Int’l, 669 F.3d at 498 (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
(1985)).
4
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We disagree and find that application of the stream-of-commerce approach
in this case does not run afoul of McIntyre’s narrow holding. The facts of
McIntyre are straightforward. Robert Nicastro injured his hand in New Jersey
while using a machine manufactured by J. McIntyre Machinery (“McIntyre”).
The machine had been manufactured in England, where McIntyre was
incorporated and operated, then sold to a U.S. distributor, which in turn sold
and shipped the machine to New Jersey. McIntyre did not market, sell, or ship
machines to New Jersey, and the U.S. distributor had only sold one of McIntyre’s
machines in New Jersey—the machine that caused Mr. Nicastro’s injury. Mr.
Nicastro sued McIntyre in New Jersey, and the New Jersey Supreme Court held
personal jurisdiction was proper.
The Supreme Court reversed but did not produce a majority opinion.
Justice Kennedy authored a plurality opinion, joined by Chief Justice Roberts,
Justice Scalia, and Justice Thomas. Under the plurality’s approach to personal
jurisdiction, “[t]he defendant’s transmission of goods permits the exercise of
jurisdiction only where the defendant can be said to have targeted the forum; as
a general rule, it is not enough that the defendant might have predicted that its
goods will reach the forum State.”12 Our stream-of-commerce test, in not
requiring that the defendant target the forum, is in tension with the plurality
opinion, under which Moffett would likely not be subject to personal jurisdiction
in Mississippi. But that does not answer the question before us. The reasoning
of a Supreme Court opinion that does not command a majority vote is not
binding precedent.13 Instead, “[w]hen a fragmented Court decides a case and no
single rationale explaining the result enjoys the assent of five Justices, ‘the
holding of the Court may be viewed as that position taken by those Members
12
131 S. Ct. at 2788.
13
CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 81 (1987).
5
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who concurred in the judgments on the narrowest grounds.’”14 In McIntyre,
Justice Breyer’s concurring opinion, joined by Justice Alito, furnished the
narrowest grounds for the decision and controls here.
Justice Breyer made clear that his view that “resolving [the] case
require[d] no more than adhering to [the Supreme Court’s] precedents” and that
his decision was “based on the facts,” which involved only a single sale in New
Jersey.15 He explained that under any of the Court’s precedents “a single
isolated sale” is not an adequate basis for personal jurisdiction.16 Here, from
2000 through September 2010, Cargotec sold 203 Moffett forklifts to customers
in Mississippi—a far cry from the single sale in McIntyre.
Justice Breyer did criticize New Jersey’s test, which would subject a
foreign defendant to jurisdiction so long as it “knows or reasonably should know
that its products are distributed through a nationwide distribution system that
might lead to those products being sold in any of the fifty states.”17 He thought
that it could be read too broadly—it would “rest jurisdiction . . . upon no more
than the occurrence of a product-based accident in the forum State” and “permit
every State to assert jurisdiction in a products-liability suit against any domestic
manufacturer who sells its products (made anywhere in the United States) to a
national distributor, no matter how large or small the manufacturer, no matter
how distant the forum, and no matter how few the number of items that end up
in the particular forum at issue.”18
14
Marks v. United States, 430 U.S. 188, 193 (1977) (quoting Gregg v. Georgia, 428 U.S.
153, 169 n.15 (1976) (opinion of Stewart, Powell, and Stevens, JJ)).
15
McIntyre, 131 S. Ct. at 2791–92 (Breyer, J., concurring).
16
Id. at 2792.
17
Id. at 2793 (emphasis in original).
18
Id.
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We are not persuaded that Mississippi’s exercise of jurisdiction must call
upon such a broad power. To the contrary, Justice Breyer’s concurrence was
explicitly based on Supreme Court precedent and on McIntyre’s specific facts, we
find that this case falls outside its limited scope. This is not a case of a single,
or even a few, isolated sales in Mississippi. The facts in the record establish that
Moffett could have “reasonably anticipated” being haled into court in
Mississippi. Cargotec sells or markets Moffett products in all fifty states, and
Moffett makes no attempt to limit the territory in which Cargotec sells its
products. From 2000 through September 2010, Moffett sold 13,073 forklifts to
Cargotec, worth approximately €254,000,000. Cargotec sold 203 of those
forklifts, worth approximately €3,950,000, to customers in Mississippi. Those
Mississippi sales accounted for approximately 1.55% of Moffett’s United States
sales during that period. Moreover, the record indicates that Moffett designed
and manufactures a forklift for poultry-related uses. Thus, even though Moffett
did not have specific knowledge of sales by Cargotec in Mississippi, it reasonably
could have expected that such sales would be made, given the fact that
Mississippi is the fourth largest poultry-producing state in the United States.
The only other circuit court to squarely address McIntyre’s narrowest
holding reached a similar conclusion. In AFTG-TG, LLC v. Nuvoton Tech. Corp.,
the Federal Circuit explained that “the crux of Justice Breyer’s concurrence was
that the Supreme Court’s framework applying the stream-of-commerce
theory—including the conflicting articulations of that theory in Asahi—had not
changed, and that the defendant’s activities in McIntyre failed to establish
personal jurisdiction under any articulation of that theory.”19 It found that “[t]he
narrowest holding is that which can be distilled from Justice Breyer’s
concurrence—that the law remains the same after McIntyre.”20 Because it
19
689 F.3d 1358, 1363 (Fed. Cir. 2012).
20
Id.
7
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concluded “that McIntyre did not change the Supreme Court’s jurisdictional
framework,” the Federal Circuit went on to “apply [its] precedent that interprets
the Supreme Court’s existing stream-of-commerce precedents.”21
IV.
For the reasons set forth above, we AFFIRM the district court’s
interlocutory order finding personal jurisdiction and denying dismissal.
21
Id.
8