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Xia Zhao and David Ehrmann v. Skinner Engine Company; Francis Shaw & Co.

November 8, 2012

XIA ZHAO AND DAVID EHRMANN, PLAINTIFFS,
v.
SKINNER ENGINE COMPANY; FRANCIS SHAW & CO., LTD.; FRANCIS SHAW & CO. (MANCHESTER) LTD.; FRANCIS
SHAW CABLE MACHINERY; BARWELL POLYMER MACHINERY CO.; POLYMER MACHINERY CO.; FARRELL CORPORATION A/K/A HF MIXING GROUP; HF RUBBER MACHINERY, INC.; AND SHAR SYSTEMS, INC. DEFENDANTS.



The opinion of the court was delivered by: Yohn, J.

MEMORANDUM

Plaintiffs Xia Zhao and David Ehrmann bring suit against several defendants alleging negligence, strict liability, breach of warranty, and loss of consortium after Ms. Zhao severed three fingers in a machinery accident. Currently before me is a motion to dismiss by Francis Shaw & Co., Ltd. ("Shaw Ltd."), Francis Shaw & Co. (Manchester) Ltd. ("Shaw Manchester"), and Francis Shaw Cable Machinery ("Shaw Cable"), collectively "the Francis Shaw defendants," pursuant to Federal Rules of Civil Procedure 12(b)(2) and 12(b)(6). For the reasons below, the motion to dismiss is granted with respect to Shaw Ltd. and Shaw Cable for lack of personal jurisdiction; however, the dismissal is without prejudice to plaintiffs' right to conduct discovery on the jurisdictional issue for a period of sixty days from the date of this order, and submit a supplemental memorandum if plaintiff decides to pursue these two defendants. The claim of a breach of an express warranty against the Shaw defendants is dismissed with prejudice. The balance of the motion to dismiss is denied.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

According to the amended complaint, on April 7, 2010, Zhao was operating a rubber extrusion machine known as the KO Intermix MK3 ("the machine"). (Am. Compl. ¶ 39.) Zhao alleges that while operating the machine for its intended purpose she suffered severe injuries, most notably the amputation of three fingers on her dominant right hand. (Id. ¶¶ 39, 40, 46.) She claims that her injuries are a result of the negligent design, manufacture, and distribution of the machine. (Id. ¶¶ 37-38.)

The machine is owned by Zhao's employer, the West Company ("West"), located in Phoenixville, Chester County, Pennsylvania. (Id. ¶ 8.) Zhao alleges that on June 28, 1984, West purchased the machine from Skinner Engine Company ("Skinner"), a domestic corporation located in Erie, Pennsylvania, that specializes in the distribution of large machinery. (Id. ¶¶ 4, 8.) On August 23, 1984, Skinner submitted a purchase request for the machine to Shaw Manchester, a London-based manufacturer that specializes in providing machinery to the rubber and plastic industries. (Id. ¶ 7; id. Ex. A.) Zhao claims that the machine was defectively designed, manufactured, and distributed by Shaw Ltd., Shaw Manchester, and Shaw Cable (id. ¶¶ 12, 15, 18) and was "not equipped with every element necessary to make it safe for its intended use." (Id. ¶ 41.) She claims these design defects were the direct cause of her injuries. (Id. ¶ 47.)

Zhao initiated this action in the Court of Common Pleas of Philadelphia County on March 9, 2011. On April 12, 2011, two defendants not party to this motion filed a notice of removal to federal court prior to the Francis Shaw defendants being served with the complaint.

Zhao then filed a motion to remand, which I granted because the removal lacked the consent of all of the other defendants who had been served. On December 7, 2011, after having been served with the complaint, the Francis Shaw defendants filed a notice of removal for this case. Again, the plaintiffs filed a motion to remand. On May 16, 2012, I denied this motion to remand and granted the Francis Shaw defendants leave to amend their notice of removal to cure technical defects in the original notice's jurisdictional allegations. The Francis Shaw defendants cured the defects and filed an amended notice of removal on May 25, 2012, which I granted.

Zhao filed an amended complaint with the court on March 27, 2012. Zhao agreed to allow the Francis Shaw defendants additional time to respond to the amended complaint, which I approved. On June 11, 2012, the Francis Shaw defendants timely filed this motion to dismiss pursuant to Rules 12(b)(2) and 12(b)(6).

II. STANDARD OF REVIEW

A. Motion to Dismiss Under 12(b)(2)

When a defendant challenges a court's exercise of personal jurisdiction, the plaintiff bears the burden of "prov[ing], by a preponderance of the evidence, facts sufficient to establish personal jurisdiction." Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). But where, as here, the court has not held an evidentiary hearing on the issue, "the plaintiff need only establish a prima facie case of personal jurisdiction" to survive dismissal. Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004). Under this standard, the court must accept the plaintiff's allegations as true and resolve any factual disputes in the plaintiff's favor. See id. But even under this standard, the plaintiff may not "rely on the bare pleadings alone in order to withstand [dismissal]"; the plaintiff must respond to the motion to dismiss with "actual proofs"-such as "sworn affidavits or other competent evidence"-not "mere allegations." Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984).

A district court may generally assert personal jurisdiction over a defendant to the extent permitted under the law of the state in which the court sits. See Fed. R. Civ. P. 4(k). Because this court sits in Pennsylvania, the scope of its personal jurisdiction over a nonresident defendant is defined by Pennsylvania's long-arm statute, which provides that a Pennsylvania court may exercise jurisdiction over a person "to the fullest extent allowed under the Constitution of the United States." 42 Pa. Cons. Stat. § 5322(b) (discussing scope of specific jurisdiction); see also § 5301(a) (discussing scope of general jurisdiction). Hence, the court may exercise personal jurisdiction over a defendant as long as it does not violate due process. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14 (1984).

Due process requires that a defendant have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted). The Supreme Court has explained that these "minimum contacts must have a basis in 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." Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102, 109 (1987) (internal quotation marks omitted). And "[t]he nature of these contacts must be such that the defendant should be reasonably able to anticipate being haled into court in the forum state." Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir. 1987).

To determine whether a court may exercise personal jurisdiction over a foreign defendant, it is necessary for a court to examine the defendant's contacts with the forum in relation to the nature of the claims. See Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). If the cause of action arises from or is related to the defendant's contacts with the forum state, the courts of that state have specific jurisdiction over the defendant, provided those contacts are substantial enough so as to not offend due process. See Helicopteros, 466 U.S. at 414 & n.8. Alternatively, if the defendant maintains "continuous and systematic" contacts with the forum state, the courts of that state have general jurisdiction over the defendant and may entertain suits against the defendant on any claim. See id. at 414--16 & n.9.

It is not clear from the amended complaint exactly what type of personal jurisdiction Zhao invokes. The defendants, however, object to both. Accordingly, I will address both theories.

B. Motion to Dismiss Under 12(b)(6)

In deciding a motion to dismiss under Rule 12(b)(6), courts must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation marks and citation omitted). The pleading standard of Rule 8 "demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements" will not suffice. Id. at678 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint must contain sufficient factual matter to be plausible on its face. See id. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged"; a sheer possibility that a defendant acted unlawfully is not sufficient. Id. To avoid dismissal, plaintiffs "must allege facts to 'nudge [their] claims across the line from conceivable to plausible.'" Mann v. Brenner, 375 F. App'x 232, 235 (3d Cir. 2010) (quoting Twombly, 550 U.S. at 570).

III. DISCUSSION

A. Personal Jurisdiction

In their motion to dismiss, the Francis Shaw defendants state that Zhao's complaint should be dismissed due to a lack of personal jurisdiction for two reasons: (1) Zhao names two entities (Shaw Ltd. and Shaw Cable) as defendants that did not exist at the time the machine was sold, and (2) Shaw Manchester lacks the requisite minimum ...


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