United States District Court, Western District of Pennsylvania
August 21, 1991
FRANK M. SOUPART, PLAINTIFF,
HOUEI KOGYO COMPANY, LTD., DEFENDANT.
The opinion of the court was delivered by: D. Brooks Smith, District Judge.
Before the Court at this time are plaintiff's motion to
strike defendant's petition for removal, and defendant's
motions to dismiss pursuant to Fed.R.Civ.P. 12(b)(2) and
12(b)(5), challenging this Court's personal jurisdiction over
the defendant and plaintiff's service of the complaint.
Plaintiff Frank M. Soupart sustained serious crushing
injuries to his left forearm at his place of employment on May
13, 1987, when his hand was caught in a mixing/chopping
machine. The machine was designed and manufactured by Houei
Kogyo Company, Ltd., a Japanese corporation, and was sold
through several intermediaries to TYK Refractories Company,
Soupart's employer. TYK Refractories and Houei Kogyo are both
subsidiaries of Tokyo Kogyo, a Japanese corporation which is
the defendant in the companion case to this one, Soupart v.
Tokyo Kogyo, C.A. No. 91-92J.
Plaintiff's attorney filed a praecipe for a writ of summons
in the Court of Common Pleas of Clearfield County on May 2,
1989, shortly before the statute of limitations expired.
Plaintiff mailed a copy of the writ of summons in English by
registered mail to Houei Kogyo's corporate offices in Gifu,
Japan. Current defense counsel entered an appearance in the
Clearfield County action, but no pleadings were filed until
March, 1991, when Soupart filed a complaint against Houei
Kogyo seeking in excess of $10,000 damages. Defendant,
averring through counsel that the amount in controversy
exceeded $50,000, removed the matter to this Court in April,
Plaintiff moves to strike the notice of removal for alleged
procedural irregularities. The motion to strike is meritless
and is denied.*fn1
Defendant moves to dismiss the complaint against it for lack
of personal jurisdiction. Plaintiff alleges that defendant's
product was shipped through a series of inter-subsidiary
transactions from one subsidiary of Tokyo Kogyo, defendant
Houei Kogyo, to another subsidiary, TYK Refractories.
Plaintiff claims that jurisdiction exists under Pennsylvania's
long-arm statute, 42 Pa. C.S. § 5322(b), which permits the
assertion of jurisdiction "to the fullest extent allowed under
the Constitution of the United States and may be based on the
most minimum contact with this Commonwealth allowed under the
Constitution of the United States."
Plaintiff Soupart acknowledges, as he must, that he bears
the burden of proving jurisdiction (or at this stage of
alleging facts which would tend to prove jurisdiction) over
the defendant. Motion to Dismiss, ¶ 8, and Plaintiff's Answer
to Defendant's Motion to Dismiss, ¶ 8. Plaintiff Soupart
alleges in his complaint only that Houei Kogyo placed the
mixer/chopper which injured Soupart "into the stream of
commerce." See e.g. Complaint, ¶ 16. Plaintiff Soupart in his
Answer to Defendant's Motion to Dismiss does not add any
allegations, but only denies on the basis of insufficient
information Houei Kogyo's allegations that it is entirely
located within Japan and does no business in Pennsylvania,
that it sold the mixer/chopper which injured Soupart to
another Japanese corporation in Japan, and that it has never
sold or shipped any products directly into Pennsylvania.
Plaintiff Soupart makes affirmative allegations only through
the argument in his memorandum in opposition to defendants'
motion to dismiss, which yields the following:
Tokyo Kogyo is the parent corporation of three subsidiaries:
Houei Kogyo, the defendant; Mizuno Refractory Company, a
nonparty to this matter; and TYK Refractories Company,
plaintiff Soupart's employer. Houei Kogyo designed and
manufactured the mixer/chopper, sold it at some point to
Mizuno, repurchased it after some time from Mizuno, and then
sold it to Tokyo Kogyo. Tokyo Kogyo thereafter sold the
machine to TYK Refractories. Houei Kogyo is in the business of
manufacturing mixer/chopper machines which are used to crush
and mix aggregates. TYK Refractories uses this kind of machine
in its business. Plaintiff's Memorandum, 1-2.
Defendant does not contest these allegations; in fact,
defendant's memorandum is the source for plaintiff's
information. Plaintiff further alleges
It is impossible to determine whether Houei Kogyo
and its sister-subsidiary, TYK, and its parent
company, Tokyo Kogyo, intentionally created the
corporate fabric to supply TYK with equipment and
hence avoid the jurisdiction of Pennsylvania or
whether it was unintentional.
Plaintiff's Memorandum, 6. Plaintiff does not allege that
Houei Kogyo sold the product at issue to Tokyo Kogyo intending
it to be resold to TYK Refractories in Pennsylvania, nor,
despite a disparaging reference to "a foreign corporate 'shell
game'", Id., 7, that Houei Kogyo sold the mixer/chopper by
means of a sham transaction with Tokyo Kogyo to TYK
Refractories. Plaintiff Soupart rests his entire argument on
the fact that TYK Refractory and defendant Houei Kogyo are
subsidiaries of the same parent, which he contends satisfies
the "foreseeability" test allegedly established by Kenny v.
Alexson Equipment Co., 495 Pa. 107, 432 A.2d 974 (1981).
Plaintiff's Memorandum, 7.
To determine whether personal jurisdiction exists where, as
here, the litigation involves plaintiff's injuries that are
alleged to arise out of the design and manufacture of the
mixing/chopping machine by Houei Kogyo,*fn2 the due process
clause of the Fourteenth Amendment is satisfied if Houei Kogyo
has "purposefully directed" its activities at residents within
Pennsylvania. See Burger King v. Rudzewicz, 471 U.S. 462,
472-73, 105 S.Ct. 2174, 2181-82, 85 L.Ed.2d 528 (1985). The
conduct of Houei Kogyo itself, not the action of Tokyo Kogyo in
selling the machine to TYK Refractories, must be looked to. See
id., 471 U.S. at 475, 105 S.Ct. at 2183 ("contacts proximately
result from actions by the defendant himself which create a
'substantial connection' with the forum state") (emphasis in
The mere placement of a product into the stream of commerce
does not constitute purposefully directing that product toward
a particular forum. Asahi Metal Co. v. Superior Court of
California, 480 U.S. 102, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987).
Plaintiff does not allege that Houei Kogyo knowingly and
purposefully transferred the mixing/chopping machine in
question through a series of sham transactions to TYK
Refractories. If, as defendant contends, Houei Kogyo merely
sold the device to Tokyo Kogyo without control over its
disposition or intent that it be shipped to TYK Refractories,
then there is no jurisdiction in this Court over Houei Kogyo.
World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 295-96,
100 S.Ct. 559, 566-67, 62 L.Ed.2d 490 (1980) (the mere
foreseeability that product will be present in forum is not
sufficient to support personal jurisdiction); see also Security
Pacific Int'l Bank v. National Bank of Western Pennsylvania,
C.A. No. 89-117J, slip opinion at 7-8 (W.D.Pa. March 21, 1991)
(jurisdiction over corporate parent cannot be based merely on
actions of corporate subsidiary).
Plaintiff's reliance on Kenny v. Alexson Equipment Co. is
misplaced. The Pennsylvania Supreme Court in Kenny, in the
course of dismissing an action for lack of personal
jurisdiction, stated by negative implication that a
corporation's "purposeful participation . . . in a continuous
distributive chain" might meet the minimum contacts requirement
of the due process clause. 432 A.2d at 984. However, as Kenny
recognized, and as the Third Circuit Court of Appeals held in
its analysis of the participation in the stream of commerce
theory of jurisdiction:
Such participation, however, cannot itself yield
jurisdiction in the absence of some indicia of
purposeful affiliation with the forum state.
Max Daetwyler Corp. v. R. Meyer Corp., 762 F.2d 290, 300 (3d
Because plaintiff makes no allegations that Houei Kogyo sold
the mixer/chopper with the purpose of transmitting it to
Pennsylvania, the assertion of personal jurisdiction under
Pennsylvania's long-arm statute, 42 Pa. C.S. § 5322(b), is
constitutionally impermissible. Cf. Snyder International, Inc.
v. Tap Equipment Co., 770 F. Supp. 279 (W.D.Pa. 1991). The
complaint is dismissed for lack of personal jurisdiction. The
Clerk shall mark this matter closed.*fn4