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Willyoung v. Colorado Custom Hardware

September 30, 2009

MICHAEL WILLYOUNG, PLAINTIFF,
v.
COLORADO CUSTOM HARDWARE, INC., ET AL., DEFENDANT.



The opinion of the court was delivered by: McLAUGHLIN, Sean J. District J.

MEMORANDUM OPINION

Plaintiff Michael Willyoung was seriously injured after sustaining a fall while rock climbing in the Red River Gorge in Slade, Kentucky. In this products liability action, Plaintiff, a citizen of Pennsylvania, alleges that the anchor he was using -- referred to a an "alien cam" -- was defective, unreasonably dangerous and the proximate cause of his injury. He has sued Colorado Custom Hardware, Inc. ("CCH"), a Wyoming corporation which manufactured the subject Alien cam and The Bent Gate, Inc. t/d/b/a Bent Gate Mountaineering ("BGM"), a Colorado corporation from which the Alien cam was purchased. His two-count complaint alleges claims against each Defendant respectively under theories of negligence, strict liability and breach of express and/or implied warranties. This Court has subject matter jurisdiction over the instant action pursuant to 28 U.S.C. § 1332, as the parties' citizenship is diverse and the amount in controversy exceeds $75,000 exclusive of interest and costs.

Presently pending before the Court are the Defendants' motions to dismiss the instant action for lack of personal jurisdiction. For the reasons that follow, CCH's motion to dismiss will be granted and BGM's motion will be denied.

I. STANDARD OF REVIEW

When a defendant challenges personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), the plaintiff has the burden of proof to establish "jurisdictional facts through sworn affidavits or other competent evidence." Patterson by Patterson v. F.B.I., 893 F.2d 595, 604 (3d Cir.1990) (quotation omitted). See also D'Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3d Cir. 2009); Marten v. Godwin, 499 F.3d 290, 295-96 (3d Cir. 2007); O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007). In reviewing a motion to dismiss for lack of in personam jurisdiction, we accept all of the plaintiff's allegations as true and construe disputed facts in his favor. See D'Jamoos, 566 F.3d at 102; Marten, 499 F.3d at 295 n. 2; Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n. 1 (3d Cir.1992).

II. FACTUAL AND PROCEDURAL BACKGROUND

Defendant CCH is a Wyoming corporation with its principle place of business in Laramie, Wyoming. Defendant BGM is a Colorado corporation with its principle place of business in Golden, Colorado. Plaintiff alleges that, at all times relevant to his claims, the Defendants were engaged in the business of designing, manufacturing, supplying, selling and/or distributing mountain climbing products and, in particular, a product commonly known as camming anchors or alien cams.

Plaintiff purchased the subject alien cam directly from BGM on or about March 2, 2007 and had it shipped to him in Pennsylvania. It is unclear whether the unit that was shipped to Plaintiff was actually purchased by him personally, since the order was entered on behalf of "Samra Boukadida," with a New York billing address. The Plaintiff did not directly purchase this product from CCH or deal with any salesperson from CCH. The unit was received by the Plaintiff in Pennsylvania, where he resides, and later utilized by him in Kentucky, where he was injured while rock climbing.

CCH does not own any real estate in the Commonwealth of Pennsylvania and has no dealers or retail outlets within the Commonwealth. It does not engage in any direct advertising or sales of its products to consumers in the Commonwealth of Pennsylvania or in any other states, as it is a wholesaler which sells and supplies its products to various distributors and retailers throughout the country. CCH does not pay business or other taxes in the Commonwealth of Pennsylvania and has not been previously sued in the Commonwealth or consented to its jurisdiction. It has not advertised in Pennsylvania, has no agents or representatives in Pennsylvania, and has not participated in any shows, exhibits, or competitions in Pennsylvania.

Presently CCH has no active retailers in Pennsylvania and did not sell any of its products through Pennsylvania retailers in 2008. However, between 2000 and 2007, CCH sold approximately 47 cams to a retail store known as "Excursion," located in Monroeville, Pennsylvania. During this same time period, CCH produced and sold between 12,000 and 15,000 cams per year or between 96,000 and 120,000 cams in total. Thus, the percentage of products sole to Excursion, CCH's only Pennsylvania retailer, during the years 2000 to 2007 comprised only about .04% - .05% of CCH's total products sold. During the years 2005, 2006 and 2007, respectively, CCH's sales to Excursion comprised at most .02%, .01% and .005% of its total products sold.

Apart from these sales to Excursion during 2000-2007, CCH professes no specific awareness of sales to Pennsylvania retailers. CCH acknowledges that it sells its products to various retailers throughout the country, some of which maintain business locations within the Commonwealth of Pennsylvania, but CCH contends that it does not know whether those retailers specifically sell CCH products in the facilities that are located within the Commonwealth. However, CCH asserts that, to the extent its products are sold by various other retailers located within the Commonwealth, those sales are at best minimal.

BGM is a Colorado corporation with its principal place of business in Golden, Colorado. It does not own any real estate in Pennsylvania, nor does it pay business or other taxes in the Commonwealth. BGM has not previously been sued in the Commonwealth, nor has it consented to jurisdiction here. It has no dealers, agents or retail outlets in Pennsylvania and does not engage in direct advertising or sales of its products to Pennsylvania consumers. BGM does not operate a mail order business and all orders for its products are received either through direct contact with in-store customers, on-line, or by telephone.

While BGM does sell and supply its products to consumers who may reside in the Commonwealth, these sales are conducted through its website and, according to BGM, are minimal. BGM represents that, for the year 2006, Pennsylvania sales accounted for only $18,572.66 -- or .07% -- of its total web sales revenue. For the year 2007, Pennsylvania sales accounted for some $22,993.39 -- or .08% -- of its total web sales revenue.

As its data pertains more specifically to alien cams, BGM reports that, between January 1, 2006 and December 31, 2007, it received 216 online or telephone orders for CCH alien cams and, of these 216 orders, only two were shipped to Pennsylvania. Of these two orders, one was the Plaintiff's; as is noted above, the product which was shipped to Plaintiff was actually purchased by "Samra Boukadida," with a New York billing address. The other order was purchased by a Pennsylvania addressee but the item was shipped to Florida. Accordingly, of the 216 orders taken in that two-year period, only two -- or .013% of the orders -- had a connection to Pennsylvania. Moreover, for that 2-year period, BGM sold a total of $328.92 worth of CCH products that were shipped to Pennsylvania.

Based on the foregoing facts, the Defendants initially filed motions to dismiss for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) in April and May of 2008. This Court subsequently denied the motions without prejudice and granted the Plaintiff 120 days in which to conduct jurisdiction-related discovery. Discovery was completed and the instant motions were filed. The matter is now ripe for disposition.

III. DISCUSSION

Federal district courts "may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." D'Jamoos, 566 F.3d at 102 (quoting Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987). See also Marten, 499 F.3d at 296; O'Connor, 496 F.3d at 316. This technically involves a two-step inquiry whereby courts first determine whether the forum state's long-arm statute extends jurisdiction to the nonresident defendant, and then determine whether the exercise of that jurisdiction would comport with federal due process principles. See Pennzoil Products Co. v. Colelli & Associates, Inc., 149 F.3d 197, 202-03 (3d Cir. 1998).

Here, Pennsylvania's Long-Arm Statute, 42 Pa. C.S.A. § 5322, allows for specific personal jurisdiction to be exercised over non-residents pursuant to two separate provisions. Subsection (a) provides, in relevant part:

(a) General rule.--A tribunal of this Commonwealth may exercise personal jurisdiction over a person (or the personal representative of a deceased individual who would be subject to jurisdiction under this subsection if not deceased) who acts directly or by an agent, as to a cause of action or other matter arising from such person:

(1) Transacting any business in this Commonwealth. Without excluding other acts which may constitute transacting business in this Commonwealth, any of the following shall constitute transacting business for the purpose of this paragraph:

(i) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.

(ii) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.

(iii) The shipping of merchandise directly or indirectly into or through this Commonwealth.

(iv) The engaging in any business or profession within this Commonwealth, whether or not such business requires license or approval by any ...


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