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Lewis v. Dimeo Construction Co.

United States District Court, D. Massachusetts

May 27, 2015



INDIRA TALWANI, District Judge.

I. Introduction

This case presents the question of whether a foreign manufacturer who sells products to a U.S.-based corporate subsidiary operating nationwide may be held to have purposefully availed itself of the Massachusetts market despite not directly conducting sales therein. Plaintiffs James and Nicole Lewis bring claims against a foreign manufacturer, Hilti Corporation ("Hilti Corp.") for injuries suffered by James Lewis ("Lewis") when a tool manufactured by Hilti Corp. allegedly malfunctioned. Defendant Dimeo Construction Company also brings cross-claims against Hilti Corp. for contribution and indemnification. Citing its Liechtenstein citizenship and claiming a lack of contact with Massachusetts, Hilti Corp. argues that it cannot be haled into a Massachusetts court to defend against these claims.

As set forth below, travel by Hilti Corp.'s employees to Massachusetts for the purpose of promoting its products and providing training to employees of its U.S.-based subsidiary, as well as Hilti Corp.'s apparent control over that subsidiary, suffice to establish a prima facie case of personal jurisdiction. Accordingly, Hilti Corp.'s Motion to Dismiss [#38] is DENIED.

II. Discussion

A. Facts

This case involves claims that a Hilti DX460 powder-actuated tool operated by Lewis malfunctioned and caused injury to his hand. See State Court Record, 9-13 at ¶ 7 [#4] [hereinafter Compl.]. Hilti Corp. manufactured the subject tool outside of the United States. See Hilti Corp.'s Answers Pl.'s Jurisdictional Interrogatories, 1-2 [#39-3] [hereinafter Hilti Corp. Interrogatories]. Hilti Corp. sold the tool to Hilti, Inc. on March 16, 2012. See Hilti, Inc.'s Answers Pls.' Jurisdictional Interrogatories, 2 [#39-4] [hereinafter Hilti, Inc.'s Interrogatories]. Hilti, Inc. then sold the tool to Attaches Davestco, Inc.[1] on May 14, 2012. Id . The receipt for this sale shows a delivery address in Amherst, Massachusetts. See Aff. Alan L. Cantor, Ex. 1 [#42] [hereinafter Cantor Aff.]. James Lewis's injury occurred on approximately May 25, 2014, during the course of his employment on a construction jobsite in Amherst, Massachusetts. See Compl. ¶¶ 5-7.

Hilti Corp. is a Liechtenstein-based corporation. Id . ¶ 4. Hilti Corp. does not do business, own an office space or other real property, manufacture products, directly sell products, employ workers, or pay taxes in Massachusetts. See Aff. Hilti Corporation ¶¶ 5-6 [#39-1].

Hilti, Inc. is the sole distributor of Hilti powder-actuated tools in the United States. See Hilti Corp. Interrogatories at 3. Hilti Corp. sells its products to Hilti, Inc., which then offers those products for sale throughout the United States. Id. at 5. Hilti Corp.'s U.S. revenue comes from Hilti, Inc.; Hilti Corp. does not receive revenue from direct sales to end-users of its products in the United States. Id. at 6.

Hilti, Inc. is based in Tulsa, Oklahoma, but operates in Massachusetts and has filed a "Foreign Corporation Certificate" with the Secretary of the Commonwealth. See Cantor Aff. Exs. 3-4. Hilti, Inc. sells products to five authorized distributors in Massachusetts: Ribco, Ed Harrington, A.C.S., Carr Hardware, and The Home Depot. See Hilti, Inc.'s Interrogatories at 3. Hilti, Inc. also operates two "Hilti Centers" in Massachusetts where purchasers of Hilti products may receive customer service and repairs. See Cantor Aff. at Ex. 5.

A 2013 financial report explains that "The Hilti Group (the Group) comprises the Hilti Corporation and its domestic and foreign subsidiaries." See Cantor Aff., Ex. 2 at 5. Hilti Corp. is described as the "[p]arent company" of these subsidiaries. Id. at 8. Hilti Inc. is identified as a "100% owned consolidated Group compan[y]" and U.S.-based subsidiary. Id. at 8-10. The report further explains that

[s]ubsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.

Id. at 6 (emphasis added).

Although Hilti Corp. does not directly sell products within Massachusetts, it sends Hilti Corp. employees to the Commonwealth for a variety of work-related purposes. From 2004 until James Lewis's May 25, 2012 injury, [2] Hilti Corp. reports the following relevant employee travel to Massachusetts: (1) nine trips for training, (2) forty-three trips for market research and field testing of prototypes, (3) three trips to visit sub-suppliers or potential sub-suppliers, (4) four trips to visit suppliers or potential suppliers, (5) two trips to give speeches or attend professional conferences, (6) twenty-seven trips to attend Hilti, Inc. management meetings or sales meetings associated with the ...

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