Ex parte Edgetech I.G., Inc. n/k/a Quanex I.G. Systems, Inc.

REL: 07/25/2014
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334)
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before the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
SPECIAL TERM, 2014
_________________________
1121291
_________________________
Ex parte Edgetech I.G., Inc., n/k/a Quanex I.G. Systems,
Inc.
PETITION FOR WRIT OF MANDAMUS
(In re: Tiffin Motorhomes, Inc.
v.
Thompson I.G., LLC, et al.)
(Franklin Circuit Court, CV-13-900034)
WISE, Justice.
1121291
Tiffin Motorhomes, Inc. ("Tiffin"),1 sued Edgetech I.G.,
Inc., n/k/a Quanex I.G. Systems, Inc. ("Edgetech"); Quanex
Building Products Corporation ("Quanex Building Products");
Thompson I.G., LLC, and RDM Consulting, LLC (hereinafter
collectively referred to as "Thompson");2 and Wynne
Enterprises, Inc., in the Franklin Circuit Court. Edgetech
filed a motion to dismiss the claims against it for lack of
personal jurisdiction; the trial court denied the motion.
Edgetech then filed this petition for a writ of mandamus
requesting that this Court direct the trial court to vacate
its order denying the motion to dismiss and to enter an order
granting the motion and dismissing the case against it. We
grant the petition and issue the writ.
Factual Background and Procedural History
Edgetech manufactures a foam spacer product, "Super
Spacer," which is "sold in bulk and used by third-parties in
the manufacture of insulated glass window units." Thompson,
1
The materials before this Court refer to this entity as
"Tiffin Motorhomes, Inc." However, we note that, in other
cases, this entity has been referred to as "Tiffin Motor
Homes, Inc."
2
The amended complaint alleges that RDM was the successor
company to Thompson.
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a Michigan company, manufactures insulated-glass units for use
in residential-home construction, in motor homes, and in
recreational vehicles. Between 2005 and 2010, Thompson
purchased Super Spacer "E-class" or ethylene propylene diene
monomer ("EPDM") product from Edgetech and started using the
Super Spacer product in its insulated-glass units. Thompson
then sold insulated-glass units that contained the Super
Spacer product to Wynne Enterprises, an Alabama company that
manufactures windows. Wynne Enterprises then sold completed
window units that contained the Super Spacer product to
Tiffin, which manufactures motor homes in Red Bay. Tiffin
installed the window units containing the Super Spacer product
in its motor homes.
On February 15, 2013, Tiffin filed a complaint in the
Franklin Circuit Court, naming as defendants Thompson I.G.,
LLC, Edgetech I.G., Inc., and Wynne Enterprises.3 The
complaint alleged that, after fabrication and installation,
windows that had been manufactured using the Super Saver
product had clouded, fogged, and failed; that there were
3
Tiffin subsequently filed amended complaints adding RDM
Consulting, LLC, Quanex I.G. Systems, Inc., and Quanex
Building Products as defendants.
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issues with the adhesive used by Edgetech not adhering to the
Super Spacer products; that the defendants had failed to
remedy or to address the failure of the Super Spacer products;
that the failure of the Super Spacer products had resulted in
warranty claims against Tiffin; that the latent defect with
the Super Spacer products required full replacement and
installation of windows in motor homes using the Super Spacer
products; and that Super Spacer products continued to fail in
the field, causing Tiffin to continue to incur new warranty
claims and associated costs. Tiffin alleged claims of breach
of contract, breach of implied warranty, and breach of express
warranty against all the defendants. It also alleged claims
of fraud, suppression, and deceit against Edgetech, Thompson,
and Quanex Building Products.
On April 17, 2013, pursuant to Rule 12(b)(2), Ala. R.
Civ. P., Edgetech filed a motion to dismiss the claims against
it for lack of personal jurisdiction. It subsequently filed
a renewed motion to dismiss after Tiffin filed its first
amended complaint. In its motion to dismiss, Edgetech argued
that it did not have sufficient contacts with Alabama to
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establish that Alabama courts had either general or specific
personal jurisdiction over it.
On June 26, 2013, Tiffin filed its opposition to the
motion to dismiss and the renewed motion to dismiss. Tiffin
argued:
"General jurisdiction is proper as [Edgetech] has
systematic and continuous contacts with Alabama due
to its production facility in Decatur, Alabama;
"This Court has jurisdiction over Edgetech because
it knew its products were being shipped to customers
in Alabama;
"Edgetech purposely availed itself of the privilege
of doing business in Alabama because it markets
goods through a distributor who has agreed to serve
as its sales agent in Alabama."
Alternatively, Tiffin requested an order allowing discovery
directed to the issue of jurisdiction.
On July 10, 2013, the trial court entered an order
denying Edgetech's motion to dismiss. Edgetech then filed its
petition for a writ of mandamus with this Court.
Standard of Review
"As we stated in Ex parte Duck Boo
[International, Co., 985 So. 2d 900 (Ala. 2007)],
this Court recently addressed the standard of review
in a proceeding challenging the trial court's ruling
on a motion to dismiss for lack of personal
jurisdiction:
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"'"'The writ of mandamus is
a drastic and extraordinary writ,
to be "issued only when there is:
1) a clear legal right in the
petitioner to the order sought;
2) an imperative duty upon the
respondent to perform,
accompanied by a refusal to do
so; 3) the lack of another
adequate remedy; and 4) properly
invoked jurisdiction of the
court." Ex parte United Serv.
Stations, Inc., 628 So. 2d 501,
503 (Ala. 1993); see also Ex
parte Ziglar, 669 So. 2d 133, 134
(Ala. 1995).' Ex parte Carter,
[807 So. 2d 534,] 536 [(Ala.
2001)]."
"'Ex parte McWilliams, 812 So. 2d 318, 321
(Ala. 2001). "An appellate court considers
de novo a trial court's judgment on a
party's motion to dismiss for lack of
personal jurisdiction." Elliott v. Van
Kleef, 830 So. 2d 726, 729 (Ala. 2002).
"'"'"In considering
a Rule 12(b)(2), Ala.
R. Civ. P., motion to
dismiss for want of
personal jurisdiction,
a court must consider
as true the allegations
of the plaintiff's
complaint not
controverted by the
defendant's affidavits,
Robinson v. Giarmarco &
Bill, P.C., 74 F.3d 253(11th Cir. 1996), and
C a b l e / H o m e
Communication Corp. v.
6
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Network Productions,
Inc., 902 F.2d 829(11th Cir. 1990), and
'where the plaintiff's
complaint and the
defendant's affidavits
conflict, the ... court
must construe all
reasonable inferences
in favor of the
plaintiff.' Robinson,
74 F.3d at 255 (quoting
Madara v. Hall, 916
F.2d 1510, 1514 (11th
Cir. 1990))."'
"'"Wenger Tree Serv. v. Royal
Truck & Equip., Inc., 853 So. 2d
888, 894 (Ala. 2002) (quoting Ex
parte McInnis, 820 So. 2d 795,
798 (Ala. 2001)). However, if
the defendant makes a prima facie
evidentiary showing that the
Court has no personal
jurisdiction, 'the plaintiff is
then required to substantiate the
jurisdictional allegations in the
complaint by affidavits or other
competent proof, and he may not
merely reiterate the factual
allegations in the complaint.'
Mercantile Capital, LP v. Federal
Transtel, Inc., 193 F. Supp. 2d
1243, 1247 (N.D. Ala. 2002)
(citing Future Tech. Today, Inc.
v. OSF Healthcare Sys., 218 F.3d
1247, 1249 (11th Cir. 2000)).
See also Hansen v. Neumueller
GmbH, 163 F.R.D. 471, 474-75 (D.
Del. 1995) ('When a defendant
files a motion to dismiss
pursuant to Fed. R. Civ. P.
7
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12(b)(2), and supports that
motion with affidavits, plaintiff
is required to controvert those
affidavits with his own
affidavits or other competent
evidence in order to survive the
motion.') (citing Time Share
Vacation Club v. Atlantic
Resorts, Ltd., 735 F.2d 61, 63
(3d Cir. 1984))."
"'Ex parte Covington Pike Dodge, Inc., 904
So. 2d 226, 229-30 (Ala. 2004).'
"Ex parte Bufkin, 936 So. 2d 1042, 1044-45 (Ala.
2006)."
Ex parte DBI, Inc., 23 So. 3d 635, 642-43 (Ala. 2009).
Discussion
Edgetech argues that the trial court erroneously denied
its motion to dismiss because, it says, Tiffin did not satisfy
its burden of proving that the trial court had in personam
jurisdiction over Edgetech.
"'The extent of an Alabama court's
personal jurisdiction over a person or
corporation is governed by Rule 4.2, Ala.
R. Civ. P., Alabama's "long-arm rule,"
bounded by the limits of due process under
the federal and state constitutions.
Sieber v. Campbell, 810 So. 2d 641 (Ala.
2001). Rule 4.2(b), as amended in 2004,
states:
"'"(b) Basis for
Out-of-State Service. An
appropriate basis exists for
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service of process outside of
this state upon a person or
entity in any action in this
state when the person or entity
has such contacts with this state
that the prosecution of the
action against the person or
entity in this state is not
inconsistent with the
constitution of this state or the
Constitution of the United States
...."
"'In accordance with the plain
language of Rule 4.2, both before and after
the 2004 amendment, Alabama's long-arm rule
consistently has been interpreted by this
Court to extend the jurisdiction of Alabama
courts to the permissible limits of due
process. Duke v. Young, 496 So. 2d 37(Ala. 1986); DeSotacho, Inc. v. Valnit
Indus., Inc., 350 So. 2d 447 (Ala. 1977).
As this Court reiterated in Ex parte
McInnis, 820 So. 2d 795, 802 (Ala. 2001)
(quoting Sudduth v. Howard, 646 So. 2d 664,
667 (Ala. 1994)), and even more recently in
Hiller Investments Inc. v. Insultech Group,
Inc., 957 So. 2d 1111, 1115 (Ala. 2006):
"Rule 4.2, Ala. R. Civ. P., extends the
personal jurisdiction of the Alabama courts
to the limit of due process under the
federal and state constitutions." (Emphasis
added.)
"'This Court discussed the extent of
the personal jurisdiction of Alabama courts
in Elliott v. Van Kleef, 830 So. 2d 726,
730 (Ala. 2002):
" '" Th is Co u r t has
interpreted the due process
guaranteed under the Alabama
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Constitution to be coextensive
with the due process guaranteed
under the United States
Constitution. See Alabama
Waterproofing Co. v. Hanby, 431
So. 2d 141, 145 (Ala. 1983), and
DeSotacho, Inc. v. Valnit Indus.,
Inc., 350 So. 2d 447, 449 (Ala.
1977). See also Rule 4.2, Ala.
R. Civ. P., Committee Comments on
1977 Complete Revision following
Rule 4.4, under the heading 'ARCP
4.2.' ('Subparagraph (I) was
included by the Committee to
insure that a basis of
jurisdiction was included in
Alabama procedure that was
coextensive with the scope of the
federal due process
clause....'[4]).
"'"The Due Process Clause of
the Fourteenth Amendment permits
a forum state to subject a
nonresident defendant to its
courts only when that defendant
has sufficient 'minimum contacts'
with the forum state.
International Shoe Co. v.
Washington, 326 U.S. 310, 316, 66
S. Ct. 154, 90 L. Ed. 95 (1945).
The critical question with regard
to the nonresident defendant's
contacts is whether the contacts
are such that the nonresident
4
Rule 4.2 was amended effective August 1, 2004, to delete
the so-called "laundry list" of conduct that would subject an
out-of-state defendant to personal jurisdiction in Alabama.
See Committee Comments to Amendment to Rule 4.2 Effective
August 1, 2004.
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defendant '"should reasonably
anticipate being haled into
court"' in the forum state.
Burger King Corp. v. Rudzewicz,
471 U.S. 462, 473, 105 S. Ct.
2174, 85 L. Ed. 2d 528 (1985),
quoting World-Wide Volkswagen
Corp. v. Woodson, 444 U.S. 286,
295, 100 S. Ct. 559, 62 L. Ed. 2d
490 (1980)."'
"Ex parte DBI, Inc., 23 So. 3d 635, 643-44 (Ala.
2009)(footnote omitted).
"'Furthermore, this Court has explained:
"'"... The sufficiency of a
party's contacts are assessed as
follows:
"'"'Two types of
contacts can form a
basis for personal
jurisdiction: general
contacts and specific
contacts. General
contacts, which give
rise to general
personal jurisdiction,
consist of the
defendant's contacts
with the forum state
that are unrelated to
the cause of action and
that are both
"continuous and
s y s t e m a t i c . "
Helicopteros Nacionales
de Colombia, S.A. v.
Hall, 466 U.S. 408, 414
n. 9, 415, 104 S. Ct.
1868, 80 L. Ed. 2d 40411
1121291
(1984); [citations
omitted]. Specific
contacts, which give
rise to specific
jurisdiction, consist
of the defendant's
contacts with the forum
state that are related
to the cause of action.
Burger King Corp. v.
Rudzewicz, 471 U.S.
462, 472-75, 105 S. Ct.
2174, 85 L. Ed. 2d 528(1985). Although the
related contacts need
not be continuous and
systematic, they must
rise to such a level as
to cause the defendant
to anticipate being
haled into court in the
forum state. Id.'
"'"Ex parte Phase III Constr.,
Inc., 723 So. 2d 1263, 1266 (Ala.
1998) (Lyons, J., concurring in
the result). ...
"'"In the case of either
general in personam jurisdiction
or specific in personam
jurisdiction, '[t]he "substantial
connection" between the defendant
and the forum state necessary for
a finding of minimum contacts
must come about by an action of
the defendant purposefully
directed toward the forum State.'
Asahi Metal Indus. Co. v.
Superior Court of California, 480
U.S. 102, 112, 107 S. Ct. 1026,
94 L. Ed. 2d 92 (1987)."
12
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"'Elliott [v. Van Kleef], 830 So. 2d [726,]
730-31 [(Ala. 2002)] (emphasis added).'
"Sverdrup Tech., Inc. v. Robinson, 36 So. 3d 34, 42-
43 (Ala. 2009)."
Ex parte Excelsior Fin., Inc., 42 So. 3d 96, 100-02 (Ala.
2010).
Tiffin's second amended complaint alleged that Edgetech
"is an Ohio corporation doing business in the State of
Alabama" and that Quanex I.G. Systems, Inc., is an Ohio
corporation "which, upon information and belief is doing
business in the State of Alabama and [is] the successor
company of Edgetech I.G., Inc." It further alleged:
"Defendant Quanex Building Products Corporation is
a Delaware corporation, which, upon information and
belief is doing business in the State of Alabama
through its office located at 2001 Highway 20 West,
Decatur, Alabama 35601 and which acquired Edgetech
I.G., Inc., on or about April 1, 2011 and is the
successor corporation."
The second amended complaint further alleged:
"The Defendants transact and engage in business in
the State of Alabama, regularly do business in this
State, solicit business in this State, engage in a
persistent course of conduct in this State and
further derive substantial revenue from goods used
or consumed or services rendered in this State.
Defendants Thompson and Edgetech have purposefully
acted to obtain benefits and privileges in the State
of Alabama and have further purposely availed
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themselves of the privileges of conducting business
within the State of Alabama. That Defendants sell,
distribute and market their products through a
network of dealers throughout Alabama, the United
States, Canada and Europe. The Defendants further
provide promotional materials for purposes of
marketing and selling their products in the State of
Alabama."
However, in support of its motion to dismiss, Edgetech
submitted an affidavit from Larry Johnson, the vice president
of Sales, Insulating Glass Systems, for Quanex Building
Products, and the former executive president of Edgetech. In
his affidavit, Johnson stated, in pertinent part:
"4. As it relates to this case, Edgetech sold a
bulk amount of Super Spacer 'E-class' or 'EPDM,' to
Thompson I.G., LLC ('Thompson'), a Michigan limited
liability company that manufactures insulated glass
units for use in residential home construction as
well as in motorhomes and recreational vehicles.
"5. Once Edgetech delivers Super Spacer product
to Thompson, Edgetech's involvement in the
manufacture of insulated glass windows is complete.
Edgetech does not control and has no means of
controlling Thompson's manufacturing processes,
including its use of Super Spacer. Nor does
Edgetech control or have any means of controlling
the system of distribution which carried Thompson's
completed insulated glass units, which contain the
Super Spacer product as a component part, to
Alabama. In particular, Edgetech was not involved
in the selection of Alabama and/or Wynne
Enterprises, Inc. ('Wynne'), as the target market
for Thompson's insulated glass units or in any of
Thompson's decisions which led to the sale of
Thompson's units to Wynne. Rather, Thompson alone
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determined to sell its finished products, of which
the Super Spacer is only a small piece, into
Alabama.
"6. Specifically, Edgetech has no relationship
with Wynne, the window manufacturer to whom Thompson
sold its completed insulated glass window units.
Edgetech and Wynne do not directly communicate with
each other on a regular basis. Any communication
between Edgetech and Wynne was initiated by Wynne or
was made by Wynne at Thompson's request. Further,
Edgetech has never sold any Super Spacer directly to
Wynne.
"7. Nor does Edgetech have a relationship with
or directly communicate with the Plaintiff in this
case, Tiffin. Edgetech and Tiffin never
communicated with each other until just prior to the
initiation of this lawsuit, when Tiffin initiated
contact and demanded payment for allegedly faulty
window units. Further, Edgetech has never sold any
Super Spacer to Tiffin.
"....
"9. Edgetech does not sell or ship its E-class
(or EPDM) Super Spacer to any customer in Alabama.
"10. Edgetech has only two current customers in
Alabama, and neither receive E-class (or EPDM) Super
Spacer product. Sales to Edgetech's two Alabama
customers account for less than one one-hundredth of
a percent of Edgetech's overall sales.
"11. Edgetech's limited number of sales to these
two customers in Alabama was not initiated by
Edgetech, but was the work of an independent sales
agent based out of Georgia. This independent sales
agent is not employed by Edgetech, but is an
independent contractor who also sells products other
than Edgetech's Super Spacer on commission.
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"12. Edgetech does not extend warranties on its
E-Class (or EPDM) Super Spacer product to residents
of Alabama, as Edgetech's standard warranty extends
only to the original purchaser of its products.
"13. Edgetech does not directly target Alabama
with any advertisements or otherwise directly
solicit business in Alabama. While Edgetech employs
internet and electronic-mail advertising, Edgetech
does not target any Alabama entity with internet or
electronic-mail advertising. Further, Edgetech
advertises in industry or trade magazines, but it
does not specifically target Alabama-based
magazines.
"14. Beyond this sporadic and limited
involvement with two customers in Alabama, Edgetech
has no physical presence in Alabama, does not target
Alabama for sales or advertising, and has never
purposefully availed itself of Alabama law or the
benefits of doing business in Alabama."
Johnson went on to state that Edgetech was organized under the
laws of the State of Ohio and had its principal place of
business in Ohio. He further stated that Edgetech did not
regularly conduct business in Alabama; did not maintain a
place of business in Alabama; was not licensed to do business
in Alabama; was not registered as a business entity with the
Alabama Secretary of State; did not have a registered agent
for service of process in Alabama; did not have any office or
storefront locations in Alabama; did not employ any Alabama
residents; did not have its employees come to Alabama to
16
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solicit sales of Super Spacer or to market Edgetech's
products; did not employ any persons who otherwise work in
Alabama; did not own, rent, or lease any real estate in
Alabama; did not keep or store equipment or inventory in
Alabama; did not have a telephone, fax, or other contact
number in Alabama; did not have an Alabama mailing address;
did not have any checking, savings, or other financial
accounts based in Alabama; had never paid taxes to the Alabama
Department of Revenue; had never had an Alabama employer-
identification number; and had never sued or been sued in
Alabama before this lawsuit. Johnson then asserted:
"15. Based on the foregoing and as explained
below, Tiffin's allegations in the Complaint
pertaining to Edgetech's contacts with Alabama are
inaccurate.
"16. Edgetech does not regularly 'transact and
engage in business in the State of Alabama, ...
solicit business in [Alabama,] engage in a
persistent course of conduct in [Alabama, or]
further derive substantial revenue from goods used
or consumed or services rendered in [Alabama].'
"17. Edgetech has not purposefully acted to
obtain the benefits, or purposefully availed itself
of the privileges, of doing business in Alabama.
"18. Edgetech does not have a network of dealers
throughout Alabama, the United States of America,
Canada, and Europe, but instead sells its Super
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Spacer product directly to third-party insulated
glass manufacturers such as Thompson.
"19. While Edgetech does allow its customers to
use promotional materials carrying the Edgetech
brand, Edgetech has no control over its customer's
use of such materials and has never been involved in
the decision to use those materials to market Super
Spacer or otherwise solicit sales of Super Spacer in
Alabama."
A.
Edgetech argues that Tiffin did not establish that the
trial court had general jurisdiction over it. Edgetech
alleges that it conducts its business in Ohio; that it
manufactures its Super Spacer products in Ohio; that it sold
the Super Spacer product at issue in this case to a third
party in Michigan; that it delivered the product in question
to Michigan; and that the party in Michigan was the third-
party company that sold the glass units containing the Super
Spacer product to an Alabama company. It also submitted
evidence indicating that it does not maintain offices in
Alabama; that it does not own or lease any property in
Alabama; that it does not and has not ever had any employees
in Alabama; and that it does not have any officers, employees,
or directors living in Alabama. However, as Edgetech
concedes, "'[a] physical presence in Alabama is not a
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prerequisite to personal jurisdiction over a nonresident.'
Sieber v. Campbell, 810 So. 2d 641, 644 (Ala. 2001)." Ex
parte Reindel, 963 So. 2d 614, 617 (Ala. 2007). See also Ex
parte DBI, supra. Therefore, we must determine whether
Edgetech had such contacts with Alabama that it should have
reasonably anticipated being haled into court here. See
Reindel, supra.The United States Supreme Court addressed the
requirements for general jurisdiction in Goodyear Dunlop Tires
Operations, S.A. v. Brown, ___ U.S. ___, 131 S. Ct. 2846(2011), as follows:
"A court may assert general jurisdiction over
foreign (sister-state or foreign-country)
corporations to hear any and all claims against them
when their affiliations with the State are so
'continuous and systematic' as to render them
essentially at home in the forum State. See
International Shoe [Co. v. Washington], 326 U.S.
[310,] 317 [(1945)].
"....
"International Shoe distinguished from cases
that fit within the 'specific jurisdiction'
categories, 'instances in which the continuous
corporate operations within a state [are] so
substantial and of such a nature as to justify suit
against it on causes of action arising from dealings
entirely distinct from those activities.' 326 U.S.,
at 318. Adjudicatory authority so grounded is today
called 'general jurisdiction.' Helicopteros
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[Nacionales de Colombia, S.A. v. Hall], 466 U.S.
[408], 414, n. 9 [(1984)]. For an individual, the
paradigm forum for the exercise of general
jurisdiction is the individual's domicile; for a
corporation, it is an equivalent place, one in which
the corporation is fairly regarded as at home. See
Brilmayer[ et al., A General Look at General
Jurisdiction 6 Texas L. Rev. 721,] 728 [(1988)]
(identifying domicile, place of incorporation, and
principal place of business as 'paradig[m]' bases
for the exercise of general jurisdiction).
"....
"In only two decisions postdating International
Shoe, discussed infra, at ___, has this Court
considered whether an out-of-state corporate
defendant's in-state contacts were sufficiently
'continuous and systematic' to justify the exercise
of general jurisdiction over claims unrelated to
those contacts: Perkins v. Benguet Consol. Mining
Co., 342 U.S. 437 (1952) (general jurisdiction
appropriately exercised over Philippine corporation
sued in Ohio, where the company's affairs were
overseen during World War II); and Helicopteros, 466
U.S. 408 (helicopter owned by Colombian corporation
crashed in Peru; survivors of U.S. citizens who died
in the crash, the Court held, could not maintain
wrongful-death actions against the Colombian
corporation in Texas, for the corporation's
helicopter purchases and purchase-linked activity in
Texas were insufficient to subject it to Texas
court's general jurisdiction).
"....
"A corporation's 'continuous activity of some
sorts within a state,' International Shoe
instructed, 'is not enough to support the demand
that the corporation be amenable to suits unrelated
to that activity.' 326 U.S., at 318. Our 1952
decision in Perkins v. Benguet Consol. Mining Co.
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remains '[t]he textbook case of general jurisdiction
appropriately exercised over a foreign corporation
that has not consented to suit in the forum.'
Donahue v. Far Eastern Air Transport Corp., 652 F.2d
1032, 1037 (C.A.D.C. 1981).
"Sued in Ohio, the defendant in Perkins was a
Philippine mining corporation that had ceased
activities in the Philippines during World War II.
To the extent that the company was conducting any
business during and immediately after the Japanese
occupation of the Philippines, it was doing so in
Ohio: the corporation's president maintained his
office there, kept the company files in that office,
and supervised from the Ohio office 'the necessarily
limited wartime activities of the company.'
Perkins, 342 U.S., at 447–448. Although the
claim-in-suit did not arise in Ohio, this Court
ruled that it would not violate due process for Ohio
to adjudicate the controversy. Ibid.; see Keeton v.
Hustler Magazine, Inc., 465 U.S. 770, 779–780, n. 11
(1984) (Ohio's exercise of general jurisdiction was
permissible in Perkins because 'Ohio was the
corporation's principal, if temporary, place of
business').
"We next addressed the exercise of general
jurisdiction over an out-of-state corporation over
three decades later, in Helicopteros. In that case,
survivors of United States citizens who died in a
helicopter crash in Peru instituted wrongful-death
actions in a Texas state court against the owner and
operator of the helicopter, a Colombian corporation.
The Colombian corporation had no place of business
in Texas and was not licensed to do business there.
'Basically, [the company's] contacts with Texas
consisted of sending its chief executive officer to
Houston for a contract-negotiation session;
accepting into its New York bank account checks
drawn on a Houston bank; purchasing helicopters,
equipment, and training services from [a Texas
enterprise] for substantial sums; and sending
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personnel to [Texas] for training.' 466 U.S., at
416. These links to Texas, we determined, did not
'constitute the kind of continuous and systematic
general business contacts ... found to exist in
Perkins,' and were insufficient to support the
exercise of jurisdiction over a claim that neither
'ar[o]se out of ... no[r] related to' the
defendant's activities in Texas. Id., at 415–416
(internal quotation marks omitted).
"Helicopteros concluded that 'mere purchases
[made in the forum State], even if occurring at
regular intervals, are not enough to warrant a
State's assertion of [general] jurisdiction over a
nonresident corporation in a cause of action not
related to those purchase transactions.' Id., at
418."
___ U.S. at ___, 131 S. Ct. at 2851-57.
In its answer and brief, Tiffin does not specifically
argue that Edgetech had continuous and systematic contacts
that would subject it to the general jurisdiction of the trial
court. Rather, Tiffin appears to focus solely on its argument
that the trial court had specific jurisdiction over Edgetech.
However, in its answer and brief, Tiffin does rely on this
Court's decision in Ex parte Lagrone, 839 So. 2d 620 (Ala.
2002). In Lagrone, this Court relied upon the fact that the
defendant in that case had placed products in the stream of
commerce with the knowledge that some of those products had
been sold to customers in Alabama as a basis for finding
22
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general jurisdiction. However, in Goodyear, decided after
Lagrone, the United States Supreme Court specifically stated
that, although the stream-of-commerce test is relevant to
determining whether a defendant had sufficient contacts with
a State to justify the exercise of specific jurisdiction,
"ties serving to bolster the exercise of specific
jurisdiction do not warrant a determination that,
based on those ties, the forum has general
jurisdiction over a defendant. See, e.g.,
Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine
Distributors Pty. Ltd., 647 F.2d 200, 203, n.5
(C.A.D.C. 1981) (defendants' marketing arrangements,
although 'adequate to permit litigation of claims
relating to [their] introduction of ... wine into
the United States stream of commerce, ... would not
be adequate to support general, "all purpose"
adjudicatory authority')."
___ U.S. at ___, 131 S. Ct. at 2855-56. Therefore, Tiffin's
reliance on Lagrone is misplaced.
At most, the evidence before the trial court established
that Edgetech had two current customers in Alabama; that its
sales to those two Alabama customers account for less than one
one-hundredth of a percent of Edgetech's overall sales; that
those sales were not initiated by Edgetech, but were the work
of an independent sales agent based out of Georgia; that the
independent sales agent is not employed by Edgetech; and that
the sales agent is an independent contractor who also sells
23
1121291
products other than Edgetech's. These limited contacts are
not sufficient to establish the type of continuous and
systematic contacts that would support a finding of general
jurisdiction.5 But cf. International Shoe Co. v. Washington,
326 U.S. 310 (1945)(holding that the defendant's contacts with
the State of Washington were continuous and systematic where
they resulted in a large volume of interstate business from
which the defendant received the benefit and protection of the
laws of the State of Washington).
B.
Edgetech next argues that it likewise did not have
sufficient contacts with Alabama to subject it to the specific
jurisdiction of the trial court.
1.
5
In its answer and brief, Tiffin asserts that Edgetech
"targeted and served the Alabama market through its own
employees and sales agents." To support this assertion,
Tiffin relies upon printouts from the Quanex Building Products
Web site attached to its brief as Appendix C. However, we
will not consider Appendix C because it was not presented to
the trial court. See Ex parte East Alabama Med. Ctr., 109 So.
3d 1114, 1117 (Ala. 2012) (quoting Ex parte Cincinnati Ins.
Co., 51 So. 3d 298, 310 (Ala. 2010), for the proposition that,
"'in a mandamus proceeding, this Court will not consider
evidence not presented to the trial court'").
24
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Initially, Edgetech argues that this Court should
overrule the test for specific personal jurisdiction set forth
in Ex parte DBI, supra, based on the United States Supreme
Court's decision in J. McIntyre Machinery, Ltd. v. Nicastro,
___ U.S. ___, 131 S. Ct. 2780 (2011). In Ex parte DBI, this
Court stated:
"DBI repeatedly invokes the mantra of 'fifty
years of precedent,' asserting the necessity for
this Court to adhere to its previous decisions
addressing the issue of personal jurisdiction over
nonresident defendants. Our precedent, however, is
only the result of an attempt to apply the precedent
of the United States Supreme Court to the facts
before us. In so doing, we search for a definition
of the amorphous term 'due process' the Framers
applied as a limit on federal power in the Fifth
Amendment and the citizens extended to the States
upon ratification of the Fourteenth Amendment. We
have no recent guidance from the United States
Supreme Court. As previously noted, in the murky
aftermath of the plurality opinions in Asahi[ Metal
Industry Co. v. Superior Court of California, Solano
County, 480 U.S. 102 (1987)], the task has not been
made any easier. Until more definite direction is
given, we revert to the last expressions from the
United States Supreme Court in World–Wide
Volkswagen[ Corp. v. Woodson, 444 U.S. 286 (1980),]
and Burger King [Corp. v. Rudzewicz, 471 U.S. 462(1985),] that are not hampered by the lack of a
majority."
Ex parte DBI, 23 So. 3d at 649. This Court then went on to
address the issue of personal jurisdiction "[u]nder the
stream-of-commerce test, as articulated in World-Wide
25
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Volkswagen and Burger King." 23 So. 3d at 655. Edgetech
argues that the United States Supreme Court's decision in
McIntyre provides more definite direction regarding specific
personal jurisdiction and that, in McIntyre, the United States
Supreme Court expressly rejected the stream-of-commerce test
for personal jurisdiction.
The plurality opinion in McIntyre was authored by Justice
Kennedy and was joined by Chief Justice Roberts and Justices
Scalia and Thomas. Justice Breyer wrote an opinion
concurring in the judgment, which Justice Alito joined.
Finally, Justice Ginsburg wrote a dissenting opinion, which
Justices Sotomayor and Kagan joined.
The United States Court of Appeals for the Federal
Circuit addressed the effect of McIntyre as follows:
"The Supreme Court recently revisited the
stream-of-commerce theory in McIntyre Machinery,
Ltd. v. Nicastro, ___ U.S. ___, 131 S. Ct. 2780, 180
L. Ed. 2d 765 (2011). The Court, however, declined
to resolve its long-standing split on that theory.
"In McIntyre, the Court was asked to revisit
questions left open in Asahi Metal Industry Co. v.
Superior Court of California, Solano County, 480
U.S. 102, 107 S. Ct. 1026, 94 L. Ed. 2d 92 (1987).
In Asahi, the Court's members disagreed whether a
defendant could be subject to personal jurisdiction
in a forum merely because the defendant had placed
a product in the stream of commerce. Justice
26
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Brennan, writing for four Justices, evaluated
personal jurisdiction under the stream-of-commerce
theory by relying on considerations of
foreseeability. Justice Brennan wrote that
'jurisdiction premised on the placement of a product
into the stream of commerce is consistent with the
Due Process Clause,' for '[a]s long as a participant
in this process is aware that the final product is
being marketed in the forum State, the possibility
of a lawsuit there cannot come as a surprise.'
Asahi, 480 U.S. at 117, 107 S. Ct. 1026 (opinion
concurring in part and concurring in the judgment).
"Justice O'Connor and three other Justices
rejected Justice Brennan's approach. In their view,
mere foreseeability or awareness that 'the stream of
commerce may or will sweep the product into the
forum State' is insufficient. Id. at 112, 107 S.
Ct. 1026. Justice O'Connor wrote:
"'The substantial connection between the
defendant and the forum State necessary for
a finding of minimum contacts must come
about by an action of the defendant
purposefully directed toward the forum
State. 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.'
"Id. (citing Burger King, 471 U.S. at 476, 105 S.
Ct. 2174; Keeton v. Hustler Magazine, Inc., 465 U.S.
770, 774, 104 S. Ct. 1473, 79 L. Ed. 2d 790 (1984))
(internal quotation marks omitted).
"Because neither Justice Brennan's nor Justice
O'Connor's test garnered a majority of the votes in
Asahi, neither test prevailed as the applicable
precedent.
"The Court declined to resolve the Asahi split
in McIntyre. In a plurality opinion, Justice
27
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Kennedy acknowledged the imprecision of the metaphor
'stream of commerce,' stating that '[i]t refers to
the movement of goods from manufacturers through
distributors to consumers, yet beyond that
descriptive purpose its meaning is far from exact.'
McIntyre, 131 S. Ct. at 2788. The plurality sided
with Justice O'Connor's approach in Asahi,
concluding that the 'principal inquiry' is 'whether
the defendant's activities manifest an intention to
submit to the power of a sovereign. In other words,
the defendant must "purposefully avai[l] itself of
the privilege of conducting activities within the
forum State, thus invoking the benefits and
protections of its laws."' Id. (quoting Hanson v.
Denckla, 357 U.S. 235, 253, 78 S. Ct. 1228, 2 L. Ed.
2d 1283 (1958)). Justice Kennedy noted that '[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.' Id. He further reasoned that Justice
Brennan's approach was inconsistent with precedent,
holding that 'it is the defendant's actions, not his
expectations, that empower a State's courts to
subject him to judgment.' Id. at 2789. A court's
jurisdiction, in other words, is 'a question of
authority rather than fairness.' Id.
"Justice Breyer, joined by Justice Alito,
declined to join Justice Kennedy's plurality
opinion. Justice Breyer further declined to endorse
revising the jurisdictional standard at all. He
acknowledged that developments in commerce and
communication, such as globalization, have occurred
since the Court last considered the
stream-of-commerce theory. Id. at 2791. Such
'modern-day consequences' were not at issue in
McIntyre, however, and Justice Breyer deemed it
unwise to revise the jurisdictional standard in a
case that did not present those consequences. Id. He
wrote:
28
1121291
"'[O]n the record presented here, resolving
this case requires no more than adhering to
our precedents.... I would not go further.
Because the incident at issue in this case
does not implicate modern concerns, and
because the factual record leaves open many
questions, this is an unsuitable vehicle
for making broad pronouncements that
refashion basic jurisdictional rules.'
"Id. at 2792–93. Thus, 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.
Id.
"Because McIntyre did not produce a majority
opinion, we must follow the narrowest holding among
the plurality opinions in that case. Marks v. United
States, 430 U.S. 188, 193, 97 S. Ct. 990, 51 L. Ed.
2d 260 (1977). The narrowest holding is that which
can be distilled from Justice Breyer's concurrence
-- that the law remains the same after McIntyre."
AFTG-TG, LLC v. Nuvoton Tech. Corp., 689 F.3d 1358, 1362-63
(Fed. Cir. 2012). See also Simmons v. Big No. 1 Motor Sports,
Inc., 908 F. Supp. 2d 1224, 1228-29 (N.D. Ala. 2012);
Ainsworth v. Cargotec USA, Inc., (No. CV 2:10-CV-236-KS-MTP,
September 23, 2011) (S.D. Miss. 2011) (not reported in F.
Supp. 2d). But see, e.g., Smith v. Teledyne Continental
Motors, Inc., 840 F. Supp. 2d 927, 931 (D.S.C. 2012) (stating
29
1121291
that, in McIntyre, "six Justices agree that, at a minimum, the
limitations of Justice O'Connor's test should be applied" and
that the "'stream-of-commerce plus' test now commands a
majority of the Court"); Windsor v. Spinner Indus. Co., 825 F.
Supp. 2d 632, 638 (D. Md. 2011) (construing McIntyre "as
rejecting the foreseeability standard of personal
jurisdiction, but otherwise leaving the legal landscape
untouched").
Contrary to Edgetech's argument, the United States
Supreme Court's decision in McIntyre does not squarely
indicate that that Court has rejected the stream-of-commerce
test articulated in World-Wide Volkswagen Corp. v. Wilson, 444
U.S. 286 (1980), and Burger King Corp. v. Rudzewicz, 471 U.S.
462 (1985), or the test for personal jurisdiction adopted by
this Court in Ex parte DBI. Rather, courts in other
jurisdictions are divided as to the effect of McIntyre.
Additionally, Justice Breyer's concurring opinion makes it
clear that he was not enunciating a new rule of jurisdiction;
rather, he was strictly adhering to that Court's precedents.
In Ex parte DBI, based on the fractured opinion in Asahi, this
Court "revert[ed] to the last expression from the United
30
1121291
States Supreme Court in World-Wide Volkswagen and Burger
King." 23 So. 3d at 649. Thus, we decline Edgetech's request
to overrule Ex parte DBI based on the United States Supreme
Court's decision in McIntyre.
2.
Next, we must determine whether, under the test set forth
in Ex parte DBI, Edgetech had sufficient contacts to establish
specific jurisdiction in Alabama. In Ex parte DBI, Tonya
Leytham, as administratrix and personal representative of
Tiffany Stabler's estate and as Stabler's mother and next
friend, sued DBI, a manufacturer of seat belts; Kia Motors
America, Inc., and Kia Motors Corporation (hereinafter
collectively referred to as "Kia Motors"); and several other
defendants. The lawsuit arose from an automobile accident
that resulted in Stabler's death. At the time of the
accident, Stabler was driving an automobile that had been
manufactured by Kia Motors and that was equipped with a seat
belt that had been manufactured by DBI. Leytham alleged that
Stabler was wearing her seat belt at the time of the accident
and that the seat belt had malfunctioned and allowed Stabler
to be ejected from the vehicle.
31
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DBI was located in the Republic of Korea ("South Korea"),
and it alleged that it did not do any direct business with or
in the United States. However, DBI manufactured seat belts
for Kia Motors. Additionally,
"Leytham points out that DBI contracted with a New
Jersey company to test its seat belts to obtain a
label stating that the seat belts complied with the
FMVSS,[6] which rendered the seat belts marketable in
the United States. Furthermore, Leytham says, DBI
entered into a claims-indemnification contract with
Kia Motors; it maintains insurance coverage against
risks or losses occurring in the United States; and
it retains defense counsel here. Leytham argues
that because DBI designed its seat belts to comply
with the FMVSS and because it knew that Kia Motors
would incorporate its seat belts into automobiles
that would be sold nationally in the United States,
DBI should have known that some of those automobiles
would be sold in Alabama. Should any of those seat
belts prove defective, Leytham says, DBI should have
anticipated that it could be sued in Alabama."
23 So. 3d at 654.
DBI filed a motion to dismiss, arguing that the trial
court did not have personal jurisdiction over it. Ultimately,
the trial court denied DBI's motion to dismiss, and DBI filed
a petition for a writ of mandamus in this Court.
6
"FMVSS" is an acronym for Federal Motor Vehicle Safety
Standards.
32
1121291
This Court addressed the existing precedent of the United
States Supreme Court in light of the facts presented in that
case, as follows:
"In World-Wide Volkswagen, the plaintiffs, New
York residents, purchased an Audi automobile from a
New York dealership. The Audi was manufactured in
Germany and imported into the United States by
Volkswagen of America, Inc. World-Wide Volkswagen
Corporation, the regional distributor of the Audi,
served the states of New York, New Jersey, and
Connecticut. In the course of traveling from New
York to Arizona, the plaintiffs were involved in an
automobile accident in Oklahoma. They later brought
a products-liability action in Oklahoma, naming as
defendants the manufacturer, importer, regional
distributor, and dealership of the Audi. Both
World-Wide Volkswagen and the New York dealership
sought a writ prohibiting the trial judge from
exercising in personam jurisdiction over them. When
the Supreme Court of Oklahoma denied relief, they
sought certiorari review in the United States
Supreme Court. The Supreme Court reversed the
judgment of the Supreme Court of Oklahoma, holding
that the New York distributor and dealership did not
have sufficient minimum contacts with Oklahoma to
subject them to suit there. The Court stated:
"'As has long been settled, and as we
reaffirm today, a state court may exercise
personal jurisdiction over a nonresident
defendant only so long as there exist
"minimum contacts" between the defendant
and the forum State. The concept of
minimum contacts, in turn, can be seen to
perform two related, but distinguishable,
functions. It protects the defendant
against the burdens of litigating in a
distant or inconvenient forum. And it acts
to ensure that the States, through their
33
1121291
courts, do not reach out beyond the limits
imposed on them by their status as coequal
sovereigns in a federal system.
"'The protection against inconvenient
litigation is typically described in terms
of "reasonableness" or "fairness." We have
said that the defendant's contacts with the
forum State must be such that maintenance
of the suit "does not offend 'traditional
notions of fair play and substantial
justice.'" The relationship between the
defendant and the forum must be such that
it is "reasonable ... to require the
corporation to defend the particular suit
which is brought there." Implicit in this
emphasis on reasonableness is the
understanding that the burden on the
defendant, while always a primary concern,
will in an appropriate case be considered
in light of other relevant factors,
including the forum State's interest in
adjudicating the dispute; the plaintiff's
interest in obtaining convenient and
effective relief, at least when that
interest is not adequately protected by the
plaintiff's power to choose the forum; the
interstate judicial system's interest in
obtaining the most efficient resolution of
controversies; and the shared interest of
the several States in furthering
fundamental substantive social policies.
"'The limits imposed on state
jurisdiction by the Due Process Clause, in
its role as a guarantor against
inconvenient litigation, have been
substantially relaxed over the years. As
we noted in McGee v. International Life
Ins. Co., supra, 355 U.S. [220], at
222-223, 78 S. Ct. [199], at 201 [(1957)],
this trend is largely attributable to a
34
1121291
fundamental transformation in the American
economy:
"'"Today many commercial
transactions touch two or more
States and may involve parties
separated by the full continent.
With this increasing
nationalization of commerce has
come a great increase in the
amount of business conducted by
mail across state lines. At the
same time modern transportation
and communication have made it
much less burdensome for a party
sued to defend himself in a State
where he engages in economic
activity."
"'The historical developments noted in
McGee, of course, have only accelerated in
the generation since that case was
decided.'
"444 U.S. at 291-93, 100 S. Ct. 559 (citations
omitted).
"It is clear from World-Wide Volkswagen that
foreseeability alone is not the determining factor.
"'....
"'This is not to say, of course, that
foreseeability is wholly irrelevant. But
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. The Due Process Clause, by
35
1121291
ensuring the "orderly administration of the
laws," 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," it has clear notice that it is
subject to suit there, and can act to
alleviate the risk of burdensome litigation
by procuring insurance, passing the
expected costs on to customers, or, if the
risks are too great, severing its
connection with the State. Hence if the
sale of a product of a manufacturer or
distributor such as Audi or Volkswagen is
not simply an isolated occurrence, but
arises from the efforts of the manufacturer
or distributor to serve, directly or
indirectly, the market for its product in
other States, it is not unreasonable to
subject it to suit in one of those States
if its allegedly defective merchandise has
there been the source of injury to its
owner or to others. The forum State does
not exceed its powers under the Due Process
Clause if it asserts personal jurisdiction
over a corporation that delivers 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 295-98, 100 S. Ct. 559 (footnote
omitted) (citations omitted).
"The United States Supreme Court expanded on the
subject of personal jurisdiction in Burger King.
... The Court stated:
36
1121291
"'We have noted several reasons why a
forum legitimately may exercise personal
jurisdiction over a nonresident who
"purposefully directs" his activities
toward forum residents. A State generally
has a "manifest interest" in providing its
residents with a convenient forum for
redressing injuries inflicted by
out-of-state actors. Moreover, where
individuals "purposefully derive benefit"
from their interstate activities, it may
well be unfair to allow them to escape
having to account in other States for
consequences that arise proximately from
such activities; the Due Process Clause may
not readily be wielded as a territorial
shield to avoid interstate obligations that
have been voluntarily assumed. And because
"modern transportation and communications
have made it much less burdensome for a
party sued to defend himself in a State
where he engages in economic activity," it
usually will not be unfair to subject him
to the burdens of litigating in another
forum for disputes relating to such
activity.
"'Notwithstanding these
considerations, the constitutional
touchstone remains whether the defendant
purposefully established "minimum contacts"
in the forum State. Although it has been
argued that foreseeability of causing
injury in another State should be
sufficient to establish such contacts there
when policy considerations so require, the
Court has consistently held that this kind
of foreseeability is not a "sufficient
benchmark" for exercising personal
jurisdiction. Instead, "the foreseeability
that is critical to due process analysis
... is that the defendant's conduct and
37
1121291
connection with the forum State are such
that he should reasonably anticipate being
haled into court there." In defining when
it is that a potential defendant should
"reasonably anticipate" out-of-state
litigation, the Court frequently has drawn
from the reasoning of Hanson v. Denckla,
357 U.S. 235, 253 (1958):
"'"The unilateral activity of
those who claim some relationship
with a nonresident defendant
cannot satisfy the requirement of
contact with the forum State.
The application of that rule will
vary with the quality and nature
of the defendant's activity, but
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."
"'This "purposeful availment"
requirement ensures that a defendant will
not be haled into a jurisdiction solely as
a result of "random," "fortuitous," or
"attenuated" contacts, or of the
"unilateral activity of another party or a
third person." Jurisdiction is proper,
however, where the contacts proximately
result from actions by the defendant
himself that create a "substantial
connection" with the forum State. Thus
where the defendant "deliberately" has
engaged in significant activities within a
State, or has created "continuing
obligations" between himself and residents
of the forum, he manifestly has availed
38
1121291
himself of the privilege of conducting
business there, and because his activities
are shielded by "the benefits and
protections" of the forum's laws it is
presumptively not unreasonable to require
him to submit to the burdens of litigation
in that forum as well.
"'Jurisdiction in these circumstances
may not be avoided merely because the
defendant did not physically enter the
forum State. Although territorial presence
frequently will enhance a potential
defendant's affiliation with a State and
reinforce the reasonable foreseeability of
suit there, it is an inescapable fact of
modern commercial life that a substantial
amount of business is transacted solely by
mail and wire communications across state
lines, thus obviating the need for physical
presence within a State in which business
is conducted. So long as a commercial
actor's efforts are "purposefully directed"
toward residents of another State, we have
consistently rejected the notion that an
absence of physical contacts can defeat
personal jurisdiction there.'
"471 U.S. at 473-76, 105 S. Ct. 2174 (footnotes
omitted) (citations omitted). Significantly, the
Supreme Court in Burger King quoted from World-Wide
Volkswagen as follows:
"'Thus "[t]he forum State does not exceed
its powers under the Due Process Clause if
it asserts personal jurisdiction over a
corporation that delivers its products into
the stream of commerce with the expectation
that they will be purchased by consumers in
the forum State" and those products
subsequently injure forum consumers.'
39
1121291
"471 U.S. at 473, 105 S. Ct. 2174 (quoting World-
Wide Volkswagen, 444 U.S. at 297-98, 100 S. Ct.
559)."
23 So. 3d at 649-54.
Ultimately, this Court held that DBI had purposefully
availed itself of the privilege of doing business in Alabama
and that it would not offend the requirements of due process
for Alabama courts to exercise jurisdiction over DBI.
Specifically, this Court stated:
"Although DBI has never had a physical presence
in Alabama, being physically present in a state is
not required in order for a state court to have
personal jurisdiction over a defendant. Burger
King, 471 U.S. at 476, 105 S. Ct. 2174. DBI knew
that its seat belts were incorporated into
automobiles sold by Kia Motors in the United States.
It is not subject to reasonable dispute that it is
generally known that a product such as a mass-
produced automobile is marketed on a broad spectrum
and is not a boutique product fit for only a narrow
class of consumers. Likewise, an automobile
manufacturer is involved in the sales of its
products on a national as opposed to a regional
basis. Perhaps the supplier of a part to a snow-
plow manufacturer could reasonably say it did not
anticipate that its product would be sold in
Alabama, but, clearly, moderately priced, fuel-
efficient automobiles, such as those manufactured by
Kia Motors, are destined for sale in all 50 states
in this country. Kia Motors has nine dealerships in
Alabama. DBI, by choosing to enter into a
contractual relationship with Kia Motors pursuant to
which DBI would turn a profit by supplying an
essential component part vital to the safety of
passengers for such automobiles under the
circumstances here described, cannot reasonably
40
1121291
assert ignorance of these realities of the
marketplace.
"The facts presented here stand in stark
contrast to the facts in World-Wide Volkswagen in
which the Court found the absence of 'purposeful
availment' in the context of the confluence of a
random and unilateral event in the forum state. See
Burger King, 471 U.S. at 474, 105 S. Ct. 2174,
quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.
Ct. 1228, 2 L. Ed. 2d 1283 (1958) ('"The unilateral
activity of those who claim some relationship with
a nonresident defendant cannot satisfy the
requirement of contact with the forum State."') and
471 U.S. at 475, 105 S. Ct. 2174 ('This "purposeful
availment" requirement ensures that a defendant will
not be haled into a jurisdiction solely as a result
of "random," "fortuitous," or "attenuated" contacts,
or of the "unilateral activity of another party or
a third person."' (citations omitted)); World-Wide
Volkswagen, 444 U.S. at 299, 100 S. Ct. 559.
"Under the stream-of-commerce test, as
articulated in World-Wide Volkswagen and Burger
King, we conclude that the trial court correctly
held that an Alabama court can exercise personal
jurisdiction over DBI. As previously noted, the
United States Supreme Court stated in both World-
Wide Volkswagen and Burger King that '"[t]he forum
State does not exceed its powers under the Due
Process Clause if it asserts personal jurisdiction
over a corporation that delivers its products into
the stream of commerce with the expectation that
they will be purchased by consumers in the forum
State" and those products subsequently injure forum
consumers.' 471 U.S. at 473, 444 U.S. at 297-98.
"The automobile containing the seat belt that
Leytham alleges malfunctioned and contributed to
Stabler's death did not find its way to Alabama
randomly and fortuitously. To the contrary, a
dealer acting for a manufacturer with which DBI had
significant ties sold the vehicle in Alabama to an
41
1121291
Alabama resident who was driving on an Alabama
highway when she died as a result of the accident
that is the subject of this lawsuit. In this
respect, the circumstances here are totally
different from those in World-Wide Volkswagen, where
an automobile purchased in New York from a New York
dealer by New York residents happened to be involved
in an accident in Oklahoma.
"As the Supreme Court stated in World-Wide
Volkswagen, the foreseeability crucial to a due-
process analysis is not the 'mere likelihood' that
a product will find its way into the forum state but
that a defendant's conduct and its connection with
the forum state 'are such that he should reasonably
anticipate being haled into court there.' 444 U.S.
at 297, 100 S. Ct. 559. In selling seat belts
compliant with the FMVSS to Kia Motors, DBI should
have foreseen that a certain percentage of the
automobiles manufactured by Kia Motors would be
distributed to the Kia dealerships in Alabama and
sold in Alabama. Therefore, we hold that it would
have been reasonable for DBI to anticipate being
haled into court in Alabama. Indeed, DBI purchased
insurance to protect itself in such event."
23 So. 3d at 654-56 (emphasis added).
The facts in this case are distinguishable from those
presented in DBI. In DBI, there was evidence indicating that
DBI had had its seat belts tested and had obtained a label
stating that the seat belts complied with the Federal Motor
Vehicle Safety Standards, which compliance rendered the seat
belts marketable in the United States. In the "Declaration of
Larry E. Johnson" Tiffin submitted in support of its
opposition to Edgetech's motion to dismiss, Johnson stated
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that "EPDM Super Spacer has passed industry standard testing
involving weather cycling, high humidity, dew point, volatile
fog, compression and durability (P1 Chamber)." However,
Tiffin did not present any evidence indicating that meeting
such requirements was necessary for Edgetech to market its
Super Spacer product in the United States or in Alabama.
Additionally, in DBI, DBI knew that its seat belts were
being incorporated into automobiles that were being sold by
Kia Motors in the United States and that Kia Motors owned nine
dealerships in Alabama. This Court noted that a dealer acting
for Kia Motors, with whom DBI had significant ties, had sold
the vehicle at issue in that case in Alabama to an Alabama
resident. In this case, Edgetech manufactured its Super
Spacer products in Ohio, and it sold those products to
Thompson, a Michigan company. However, Tiffin did not present
evidence indicating that Edgetech knew that its Super Spacer
products were going to be incorporated into insulated-glass
units Thompson would sell in Alabama. Additionally, Tiffin
did not present any evidence indicating that Thompson had
distributors in Alabama or that a Thompson distributor in
Alabama sold the insulated-glass units to an Alabama company.
Further, as Johnson noted in his April 16, 2013,
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affidavit, once Edgetech delivered its Super Spacer product to
Thompson, its involvement in the manufacturing process was
complete. Also, Johnson asserted that Edgetech did not have
any control over Thompson's distribution of the completed
insulated-glass units containing the Super Spacer product and
was not involved in Thompson's decision to sell the insulated-
glass units to Wynne Enterprises. Further, Johnson asserted
that Edgetech did not have any relationship with Wynne
Enterprises and that it did not sell any Super Spacer product
directly to Wynne Enterprises. Johnson went on to state that
Edgetech and Wynne Enterprises did not communicate directly
"on a regular basis" and asserted that any communication
between the two "was initiated by Wynne [Enterprises] or was
made by Wynne [Enterprises] at Thompson's request." Finally,
the evidence before this Court indicates that Edgetech did not
have any relationship with Tiffin. Therefore, there is no
evidence before this Court indicating that Edgetech's actions
created substantial contacts between Edgetech and Alabama.
Rather, it appears that Tiffin seeks to hale Edgetech into an
Alabama court based on Thompson's unilateral activity of
selling to Wynne Enterprises insulated-glass units that
include the Super Spacer product. However, Tiffin has not
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established that, in selling its Super Spacer product to
Thompson, Edgetech should have foreseen that a certain
percentage of its Super Spacer products would be used in
insulated-glass units that would be distributed and sold in
Alabama.
Unlike the plaintiff in Ex parte DBI, Tiffin has not
presented evidence to establish that Edgetech purposefully
availed itself of the privilege of doing business in Alabama.
Although there was evidence indicating that Edgetech placed
the Super Spacer products into the stream of commerce, Tiffin
did not present any evidence indicating that Edgetech had done
so "'with the expectation'" that those products would be
purchased by consumers in Alabama. Ex parte DBI, 23 So. 3d at
655 (quoting World-Wide Volkswagen, 471 U.S. at 473, and
Burger King, 444 U.S. at 297-98). Accordingly, Edgetech's
conduct and its connection with Alabama were not "'such that
[it] should reasonably anticipate being haled into court'"
here. Id. Thus, under the tests set forth in World-Wide
Volkswagen, Burger King, and Ex parte DBI, we conclude that
the trial court erred when it held that an Alabama court can
exercise personal jurisdiction over Edgetech.
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Conclusion
For the above-stated reasons, we grant Edgetech's
petition and direct the Franklin Circuit Court to vacate its
order denying Edgetech's motion to dismiss and to enter an
order granting the motion on the ground of lack of personal
jurisdiction and dismissing the case against Edgetech.
PETITION GRANTED; WRIT ISSUED.
Stuart, Bolin, Murdock, and Bryan, JJ., concur.
Shaw and Main, JJ., concur in the result.
Moore, C.J., and Parker, J., dissent.
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