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Knox v. Metalforming Inc.

United States District Court, D. Massachusetts

April 2, 2018

STEPHEN D. KNOX AND JEAN KNOX, Plaintiffs,
v.
METALFORMING, INC., and SCHECHTL MASCHINENBAU GMBH, Defendants, and METALFORMING, INC., Third-Party Plaintiff,
v.
SCHECHTL MASCHINENBAU GMBH, Third-Party Defendant.

          OPINION AND ORDER

          GEORGE A. O'TOOLE, JR. UNITED STATES DISTRICT JUDGE

         The plaintiff, Stephen D. Knox, injured his hand when his foot inadvertently activated a switch on an allegedly defective metal folding machine. The machine was manufactured by the defendant, Schechtl Maschinenbau GmbH, and distributed by co-defendant MetalForming, Inc. Knox and his wife Jean assert claims against both defendants for negligence, breach of warranty, loss of consortium, and violation of Massachusetts General Laws Chapter 93A. MetalForming filed crossclaims against Schechtl for indemnification, contribution, and breach of contract. Pending before the Court is Schechtl's motion under Federal Rule of Civil Procedure 12(b)(2) to dismiss the claims against it for lack of personal jurisdiction. Both Knox and MetalForming have opposed Schechtl's motion to dismiss.

         I. Legal Standard

         The plaintiff bears the burden of establishing that a court has personal jurisdiction over a defendant. See, e.g., Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d 26, 34 (1st Cir. 1998) (citations omitted). Under the commonly applied prima facie standard of review, a court takes the plaintiff's “properly documented evidentiary proffers as true and construe[s] them in the light most favorable to [the plaintiff's] jurisdictional claim.” A Corp. v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016). A court may also consider any uncontradicted facts presented by the defendant. Mass. Sch. of Law, 142 F.3d at 34.

         II. Facts Considered

         MetalForming, a Georgia-based company, and Schechtl, a German company, entered into a Distributor Agreement in May 1998. (Mem. of Law in Supp. of Def. Schechtl Maschinenbau GMBH's Mot. to Dismiss, Ex. A ¶ 5 (dkt. no. 22-1); see id. Ex. 1 [hereinafter “Distrib. Agreement”] (dkt. no. 22-2).) Schechtl manufactures heavy industrial equipment for folding and cutting metal parts used in construction projects. The Agreement granted MetalForming the right to function as the exclusive independent distributor of Schechtl's products in the territory comprising Canada, the United States, and Mexico (designated the “Contract Territory”). (Distrib. Agreement at 2.) The Agreement stipulated that MetalForming would “distribute the Products as an independent distributor in its own name and on its own account.” (Id. at 1.) During the term of the Agreement, Schechtl was excluded from directly selling its products within the Contract Territory without MetalForming's consent. (Id. at 2.)

         The procedure the parties followed with respect to the sale of any machinery was outlined in the Agreement. After locating a prospective purchaser of a Schechtl product, MetalForming would send a purchase order to Schechtl in Germany. If Schechtl accepted the order, it would issue a written order confirmation. Under the Agreement, MetalForming would take ownership of the machine in Germany. (Id. at 3.) MetalForming was responsible for the installation of the machine at the purchaser's site, as well as the training of the purchaser's personnel in the proper use of the machine. MetalForming also agreed to maintain “a spare part service” for the machine. (Id. at 6.) MetalForming further undertook “to provide any and all warranty services for the Products at its expense.” (Id. at 5.)

         MetalForming was responsible for marketing and promoting the sale of Schechtl products in the Contract Territory, and to facilitate those activities it received ongoing information “concerning products, markets, competition, [and] prices” from Schechtl. (Id. at 2.) Some sample marketing materials submitted by MetalForming appear to have been prepared by Schechtl. In the sample provided both companies' logos are displayed on various pages, but the contact information provided is for MetalForming. (See Opp'n of Def. MetalForming, Inc. to Co-Def. Schechtl Maschinenbau GMBH's Mot. to Dismiss, Ex. 8 at 1-61 (dkt. no. 30-3).)

         Between 2000 and September 2017, MetalForming sold 2, 639 Schechtl sheet metal machines throughout the United States at a value of just over $97 million. In Massachusetts specifically, MetalForming sold 45 Schechtl machines and 234 Schechtl parts at a value of nearly $1.5 million between July 2001 and September 2017. (Id. Ex. 6 ¶¶ 16-17 (dkt. no. 30-1).)

         Schechtl sold the particular machine at issue to MetalForming pursuant to a purchase order dated April 20, 2001. In August 2001, MetalForming sold and delivered the machine to Cape Cod Copper, Knox's employer in Massachusetts. (Id. ¶ 15.) The respective purchase orders are in the record. They indicate that MetalForming purchased the machine from Schechtl for $25, 830, (id. Ex. 9 (dkt. no. 30-3)), and sold it to Cape Cod Copper for $38, 950, (Opp'n of Pls., Stephen D. Knox and Jean Knox, to Def., Schechtl Maschinenbau GMBH's Mot. to Dismiss, Ex. 4 (dkt. no. 29-1)).

         Schechtl has never owned or leased real or personal property in the Commonwealth. As noted above, Schechtl does not itself directly solicit business from customers in Massachusetts. It has never employed any agents or representatives in Massachusetts, and has never maintained offices, telephone listings, or bank accounts in Massachusetts. (See Schechtl's Mem. of Law, Ex. A.)

         III. Discussion

         Personal jurisdiction over a defendant may be exercised if the forum State has a long-arm statute that purports to grant jurisdiction over the defendant and if the exercise of jurisdiction pursuant to that statute does not violate the Due Process Clause of the Fourteenth Amendment. See, e.g., Cossart v. United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015); see also SCVNGR, Inc. v. Punchh, Inc., 85 N.E.3d 50, 52 (Mass. 2017) (“Because the long-arm statute imposes specific constraints on the exercise of personal jurisdiction that are not coextensive with the parameters of due process, and in order to avoid unnecessary consideration of constitutional questions, a determination under the long-arm statute is to precede consideration of the constitutional question.” (citations omitted)).

         A. Massachusetts ...


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