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Old United Casualty Co. v. Flowers Boatworks

United States District Court, D. Maine

May 3, 2016

OLD UNITED CASUALTY COMPANY, Plaintiff
v.
FLOWERS BOATWORKS and UNDERWATER LIGHTS USA LLC, Defendants

DECISION AND ORDER ON DEFENDANT’S MOTION TO DISMISS AND PLAINTIFF’S MOTION TO TRANSFER

D. Brock Hornby United States District Judge.

This case poses the question whether Maine has personal jurisdiction in a lawsuit against a Florida manufacturer of underwater lights for boats. The Florida manufacturer holds itself out on the internet and in magazines as a worldwide leader in boat accessories, but it sells its products, including the underwater light at issue in this case, through a Georgia distributor. A New York consumer commissioned a Maine boat-builder to build him a boat that incorporated the Florida manufacturer’s underwater lights. The boat ultimately sank in New York waters, allegedly because one of the underwater lights was defective. After oral argument held on April 20, 2016, I conclude, first, that this court lacks personal jurisdiction over the defective product claim against the manufacturer but, second, that I can transfer the claim to the Southern District of Florida.

Facts

Michael Bonner, a resident of New York (Exs. 1, 2 of Pl.’s Resp. (ECF No. 33)) decided to purchase a new boat. Bonner contracted with Flowers Boatworks in Walpole, Maine, to build a “downeast ‘lobster’ sportfish style vessel” that included the installation of underwater light fixtures. First Am. Compl. (Am. Compl.) at 2 (ECF No. 22). The underwater light fixtures were manufactured by the defendant Underwater Lights USA LLC (Underwater Lights). Id. at 2-3. Flowers Boatworks bought the underwater light fixtures from Maine-based retailer Hamilton Marine Supply and subsequently installed them in the boat. Id. Hamilton Marine had purchased the lights from Hella, Inc. (Hella), a distributor located in Georgia. Hella had purchased them from Underwater Lights. Id. at 1. Flowers Boatworks completed Bonner’s vessel in June of 2012, and about two months later Bonner sailed it to Hampton Bays, New York. Soon after, the boat sank as a result of a hole in the hull caused by corrosion of one of the underwater lights. Id. at 3.

Old United Casualty Company (Old United) is a Kansas-based property and casualty insurance company. Id. at 1. Old United insured Anthony Bonner’s boat, paid his claim for the loss, and is subrogated to his rights. Id. at 1-4. Old United filed this lawsuit in this court, seeking damages against Flowers Boatworks for negligence, breach of contract, and breach of warranty of workmanlike services, id. at 4-7; and against Underwater Lights for negligence, breach of warranty, and strict liability, id. at 7-11. Flowers Boatworks is a Maine-based corporation. Id. at 2. Underwater Lights is a Florida-based corporation. Am. Compl. at 2.

Underwater Lights manufactures various lighting products for boats at its Florida facility. Underwater Lights Dep. (UL Dep.) at 4-5 (ECF No. 35, Ex. 7).[1] It has approximately $3, 200, 000 in gross annual sales. MacDonald Aff. (Ex. B, ECF No. 20) at 4. It has no presence in Maine and does not regularly contract to supply services or products in Maine or derive substantial revenue from goods or services sold in Maine. Id. at 3-4. It has “a long standing business relationship” with Hella in Georgia. UL Answer to Second Int. (ECF No. 35, Ex. 9) at 3. Underwater Lights uses Hella to distribute its products nationally. Id. at 5-6. In addition to using Hella as a distributor, Underwater Lights has its own sales office in Fort Lauderdale, Florida, that sells to individual customers and retailers both nationally and internationally. UL Dep. at 14.

Before the sale of the light that ended up in Bonner’s boat, Underwater Lights carried out a multi-faceted marketing strategy. It did not limit itself to any specific region within the United States, and its Fort Lauderdale sales office was set up to handle all its domestic sales. Id. at 13, 16. To promote the sale of its products throughout the United States and internationally, Underwater Lights’s employees attended various regional and national boat shows. Id. at 7-10. Underwater Lights also advertised in national boating magazines IBI, Yachts International, and Yachting to showcase its products to boat owners and boat builders nationwide. Id. at 12, 15. (The plaintiff has not provided any evidence that the magazines have subscribers in Maine, or that any of the relevant actors in this case are subscribers or viewed any of these advertisements.) By 2009 Underwater Lights had developed a mailing list of customers so that the company could send out print advertisements for special sales. Id. at 28.

Like any twenty-first century sales company, Underwater Lights also advertised on its own internet website. UL Website. (ECF No 35, Ex. 8). Although customers could not place orders directly by credit card on the website, the site had a “Contact Us” page. UL Dep. at 17-19. The “Contact Us” page indicated that potential customers for “worldwide sales” could contact the company’s Ft. Lauderdale sales office or could reach out to an email address provided on the page. Id. at 18. The page allowed customers to supply information to the company by filling out a form with information such as the customer’s location, boat type, etc. Id. If customers desired, they could write a custom message at the end of the form to indicate any specific questions or desires to sales representatives. Id. The website provided depictions of Underwater Lights’s products in use in various locations such as Florida, New York, Massachusetts, Puerto Rico, The Bahamas, and others. UL Website at 5-8.

As a result of jurisdictional discovery, the plaintiff has uncovered the following two Maine-related transactions by Underwater Lights before the sale and installation of the lights on Bonner’s boat: first, an August 2010 delivery of six lamp bulbs to a Miami Florida resort for which Maine’s Hamilton Marine was billed $731.88 (there was no explanation for Hamilton Marine’s involvement in this Florida delivery), Hamilton Marine Invoice (ECF No. 37, Ex. 14) at 8; UL Dep. at 26-27; second, a March 2012 $300 direct sale of lighting cable to a Maine customer (Kramp Electronics, Inc., in Seal Cove), Kramp Emails and Invoice (ECF No. 35, Exs. 10, 11).[2]

Subject Matter Jurisdiction and Procedural History

Jurisdiction is based upon diversity of citizenship. 28 U.S.C. § 1332. Flowers Boatworks has defaulted on the claims against it, and default was entered on June 9, 2015. (ECF No. 11). Thereafter, Underwater Lights filed a motion to dismiss the claims against it for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2). Def’s Mot. (ECF No. 20) at 1. The parties conducted discovery directed to the personal jurisdiction issue.

Analysis

“Maine’s jurisdictional reach is coextensive with the due process clause of the United States Constitution.” Bickford v. Onslow Mem’l Hosp. Found., 2004 ME 111, ¶ 10, 855 A.2d 1150, 1155 (citing Murphy v. Keenan, 667 A.2d 591, 593 (Me. 1995)). Therefore, this case is controlled by the United States Constitution. The plaintiff claims only specific, not general personal jurisdiction.[3] Pl.’s Resp. at 8.

(1) Burden of Proof

The plaintiff has the burden of proof to demonstrate personal jurisdiction. Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50 (1st Cir. 2002); Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995). Like the parties, I apply the First Circuit-approved “prima facie” standard and have not conducted an evidentiary hearing. Foster-Miller, 46 F.3d at 145-147; United States v. Swiss Am. Bank, 274 F.3d 610, 618 (1st Cir. 2001). This method is the “most conventional.” Foster-Miller, 46 F.3d at 145. See also Boit v. Gar-Tec Prod., Inc., 967 F.2d 671, 675 (1st Cir. 1992).

When determining “whether the prima facie standard has been satisfied, ‘the district court is not acting as a factfinder; rather, it accepts properly supported proffers of evidence by a plaintiff as true and makes its ruling as a matter of law.’” Swiss Am. Bank, 274 F.3d at 619 (quoting United Elec. Radio and Mach. Workers of Am. v. 163 Pleasant St. Corp., 987 F.2d 39, 44 (1st Cir. 1993)). Nevertheless, the determination of a prima facie showing “must be based upon evidence of the specific facts set forth in the record, ” and it must “go beyond the pleadings and make affirmative proof.” Id. See also Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 203 (1st Cir. 1994) (Courts should “tak[e] facts affirmatively alleged by plaintiff as true and constru[e] disputed facts in the light most hospitable to plaintiff” but should “not credit conclusory allegations or draw farfetched inferences.”)

(2) Specific Personal Jurisdiction

In order for a court to exercise personal jurisdiction, due process demands that the 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.’” Copia Commc’ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016) (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

The First Circuit has spelled out a three-part test for plaintiffs seeking to show the minimum contacts to establish specific personal jurisdiction:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant’s forum-state activities. Second, the defendant’s in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state’s laws and making the defendant’s involuntary presence ...

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