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Allstate Insurance Co. v. Electrolux Home Product

United States District Court, E.D. Pennsylvania

August 3, 2018

ALLSTATE INSURANCE COMPANY, Plaintiff,
v.
ELECTROLUX HOME PRODUCTS, Defendant.

          OPINION DEFENDANT'S MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO SEVER AND DISMISS, ECF NO. 9 - GRANTED IN PART

          JOSEPH F. LEESON, JR. UNITED STATES DISTRICT JUDGE

         I. Introduction

         In this action, Plaintiff Allstate Insurance Company has filed suit against Defendant Electrolux Home Products, alleging that Electrolux manufactured defective clothes dryers that- in eighty-six separate instances occurring across twenty-one states- caught fire and caused losses to Allstate's insureds. Electrolux has filed a motion to dismiss the entire action for lack of personal jurisdiction pursuant to Rule 12(b)(2) or, in the alternative, to sever the eighty-six separate claims in this action and, after severance, dismiss a number of those claims for failure to satisfy the amount in controversy required for diversity actions. For the reasons set forth below, the Court grants the second request, severing each of Allstate's eighty-six claims and dismissing the sixty-four claims over which the Court lacks subject matter jurisdiction. Further, of the twenty-two claims that remain, the Court transfers the nineteen claims that have no relation to the Eastern District of Pennsylvania to more appropriate districts, and the Court retains the three claims which originate from the Eastern District of Pennsylvania.

         II. Background

         According to the Complaint, Allstate is an insurance company incorporated in Illinois, with its principal place of business in the same state. Compl. ¶ 1, ECF No. 1. Electrolux is a manufacturer of home appliances that is incorporated in Delaware, with its principal place of business in North Carolina. Id. ¶ 5-6. Allstate issued insurance policies to all of the persons listed in Appendix A of the Complaint. Id. ¶ 2. Electrolux is the designer, manufacturer, distributor, and retailer of the ball-hitch style clothes dryers that allegedly caused fires in each of the eighty-six instances listed in Appendix A. Id. ¶ 12. As a result of these fires, the insureds suffered losses for which they were indemnified by Allstate. Id. ¶ 3. Electrolux's ball-hitch dryers are allegedly defective because they cause lint to accumulate and ignite behind the drum during normal use and because they use plastic, combustible internal components that allowed the fires to spread. Id. ¶ 13.

         Allstate asserts two claims in this action. The first is a products liability claim in which Allstate asserts that Electrolux is strictly liable for the damage caused by the alleged defective and unreasonably dangerous conditions created by the dryers. Id. ¶¶ 33-45. The second is a negligence claim in which Allstate alleges that Electrolux breached its duty by negligently, carelessly, and recklessly manufacturing the dryers, and that this breach was the legal and proximate cause of the damage to the properties in question. Id. ¶¶ 46-51.

         In response to Allstate's Complaint, Electrolux filed the present motion, seeking to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) or, in the alternative, to sever the claims pursuant to Federal Rule of Civil Procedure 21 and to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) those newly-severed claims which fail to meet the amount in controversy requirement. Id.

         III. Standard of Review - Rule 12(b)(2)

         The Rule 12(b)(2) motion to dismiss standard is as follows:

When reviewing a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), [the court] must accept the plaintiff's allegations as true and resolve disputed facts in favor of the plaintiff. Pinker v. Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002). However, once a defendant has raised a jurisdictional defense, the plaintiff must “prove by affidavits or other competent evidence that jurisdiction is proper.” See Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009). If an evidentiary hearing is not held, a plaintiff “need only establish a prima facie case of personal jurisdiction.” Id. A plaintiff meets this burden by “establishing with reasonable particularity sufficient contacts between the defendant and the forum state.” Provident Nat. Bank v. California Fed. Sav. & Loan Assoc., 819 F.2d 434 (3d Cir. 1987).

Campbell v. Fast Retailing USA, Inc., No. CV 14-6752, 2015 WL 9302847, at *2 (E.D. Pa. Dec. 22, 2015).

         A federal district court is permitted to exercise “personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of the state.” Arch v. Am. Tobacco Co., 984 F.Supp. 830, 834 (E.D. Pa. 1997) (quoting Provident Nat. Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987)). Under Pennsylvania law, a court may exercise personal jurisdiction to the fullest extent allowed by the United States Constitution. 42 Pa. Cons. Stat. Ann. §§ 5308, 5322(b). Thus, the statutory personal jurisdiction analysis is incorporated into the overarching question of “whether the court's assertion of jurisdiction complies with the constitutional requirement of due process as articulated in the personal jurisdiction context.” Arch, 984 F.Supp. at 835 (citing Clark v. Matsushita Elec. Indus. Co., 811 F.Supp. 1061, 1064 (M.D. Pa. 1993)). A nonresident defendant may be subject to jurisdiction in Pennsylvania under either general or specific personal jurisdiction. Brooks v. Bacardi Rum Corp., 943 F.Supp. 559, 561 (E.D. Pa. 1996). General jurisdiction allows suits to be brought against a non-resident corporation on causes of action arising from dealings distinct from its activities within the forum. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924 (2011). For a corporation, the “paradigm forum for the exercise of general jurisdiction is . . . one in which the corporation is fairly regarded as at home.” Id. Specific jurisdiction, on the other hand, exists when the defendant has “purposefully directed his activities at residents of the forum and the litigation results from alleged injuries that arise out of or relate to those activities.” Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).

         IV. Analysis

         A. This Court has jurisdiction over Electrolux.

         In its Complaint, Allstate alleges that this Court has general jurisdiction over Electrolux because Electrolux “purposefully availed itself of the benefit of the laws of this judicial district by regularly transacting and/or conducting business in the territorial jurisdiction of this United States District Court, which is located in the Commonwealth of Pennsylvania.” Compl. ¶ 9. Electrolux contends that this allegation is insufficient to establish general jurisdiction over it because Electrolux is incorporated in a state other than Pennsylvania (Delaware), has its principal place of business in a state other than Pennsylvania (North Carolina), and does not have contacts with Pennsylvania that are so “continuous and systematic” as to render it essentially at home in the state. Further, although Electrolux concedes that it is registered to do business in Pennsylvania, it contends that such registration is insufficient to establish general jurisdiction under the United States Supreme Court's decision in Daimler AG v. Bauman, 571 U.S. 117 (2014), which held that “the exercise of general jurisdiction in every State in which a corporation ‘engages in a substantial, continuous, and systematic course of business' . . . is unacceptably grasping, ” id. at 138.

         Allstate responds that under Pennsylvania's long-arm statute-42 Pa. Cons. Stat. § 5301-Electrolux consented to jurisdiction when it registered to do business in Pennsylvania, a result, Allstate contends, that is supported by the Court of Appeals for the Third Circuit's decision in Bane v. Netlink, Inc., 925 F.2d 637 (3d Cir. 1991). In reply to this argument, Electrolux contends that Bane is “no longer good law” in light of the Supreme Court's decision in Daimler and other recent precedent because Bane “rested on a reasonableness inquiry that the Supreme Court has since clarified does not apply in the general jurisdiction context.” Def.'s Reply Br. 4, ECF No. 11.

         In pertinent part, Pennsylvania's long-arm statute reads as follows:

a) General rule.--The existence of any of the following relationships between a person and this Commonwealth shall constitute a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over such person, or his personal representative in the case of an individual, and to enable such tribunals to render personal orders against such person or representative:
. . . .
(2) Corporations.--
(i) Incorporation under or qualification as a foreign corporation under the laws of this Commonwealth.
(ii) Consent, to the extent authorized by the consent.
(iii) The carrying on of a continuous and systematic part of its general business ...

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