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Holbrook v. Mazda Motor Corp.

United States District Court, E.D. Kentucky, Southern Division

March 30, 2018

ADAM HOLBROOK, et al., Plaintiffs,
v.
MAZDA MOTOR CORP., et al., Defendants.

          MEMORANDUM OPINION AND ORDER

          Danny C. Reeves United States District Judge

         This action arises out of an automobile accident in Harlan County, Kentucky, in which a 2006 Mazda5 collided head-on with a rock wall. [Record No. 1-1, ¶ 18] The driver of the vehicle, Adam Holbrook, was severely injured in the accident. The right front seat passenger, Joshua Holbrook, sustained fatal injuries. [Id. ¶¶ 21, 22] Adam Holbrook and the administrator of Joshua Holbrook's estate brought this products liability action against multiple Mazda entities and various corporations involved in the design and manufacture of the Mazda5's restraint system and airbags. Defendants Ashimori Industry Company, Ltd., Daciel Corporation, Daciel Safety Systems, Inc., and Mazda Motor Corp., have moved to dismiss the claims against them for lack of personal jurisdiction. [Record Nos. 25, 26, 27] The motions will be granted for the reasons that follow.

         I.

         The automobile at issue was designed, tested, and manufactured by Defendant Mazda Motor Corporation (“MMC”), a Japanese company headquartered in Japan. [Record No. 26-2, ¶ 4] Defendants Daciel Corporation (“DC”), Daciel Safety Systems, Inc. (“DSS”), and Ashimori Industry Company, Ltd. (“Ashimori”) designed and manufactured components of the vehicle's airbag and restraint systems. [Id. ¶ 5; Record No. 25-2, ¶ 9; Record No. 27-2, ¶ 6; Record No. 27-3, ¶ 6]

         DC is a Japanese corporation with its principal place of business in Japan. It designs airbag inflators and other pyrotechnic devices. [Record No. 27-3, ¶ 4] The airbag inflators and their parts are manufactured by DSS, which is also a Japanese corporation with its principal place of business in Japan. [Record No. 27-2, ¶ 3] After the airbag inflators are manufactured, DC buys them from DSS and sells them to third party manufacturers. [Id. ¶ 4] The third party manufacturers then incorporate the airbag inflators into airbag modules, which are eventually sold to automobile manufacturers for inclusion in their vehicles.[1] [Id.]

         An inspection revealed that the airbag inflators in the Mazda5's driver and passenger side airbag modules were manufactured by DSS and sold to DC. [Record No. 27-3, ¶ 6] DC then sold them to Ashimori, a Japanese company headquartered in Japan, which manufactured the airbag module and seat belt assemblies for the Mazda5. [Record No. 25-2, ¶¶ 4, 9-10] Ashimori sold the airbag module and seat belt assemblies to MMC and delivered them to MMC in Japan, where they were installed on the Mazda5. [Record No. 26-2, ¶ 4]

         After completing the manufacture and testing of the Mazda5, MMC sold it to Defendant Mazda Motor of America, Inc., d/b/a Mazda North American Operations (“MNAO”), in Japan. At that point, “MMC had no control over the subject vehicle, including where the subject vehicle was ultimately shipped, distributed, or sold to consumer.” [Id. ¶ 5] MNAO, a California corporation doing business in Kentucky, subsequently sold the vehicle to an independently owned and operated automobile dealer. [Id.; Record No. 1-1, ¶ 5] Bill Martin, the administrator of Joshua Holbrook's estate, eventually purchased the vehicle at the Alton Blakely dealership in Somerset, Kentucky. [Record No. 30');">30, p. 6');">p. 6]

         The vehicle later collided head-on with a rock incline wall, resulting in severe injuries to Adam Holbrook and the death of Joshua Holbrook. [Record No. 1-1, ¶¶ 18, 21-22] The plaintiffs claim that these injuries “occurred because the vehicle and its components were not reasonably crashworthy, and were not reasonably fit for unintended, but clearly foreseeable, accidents or collisions.” [Id.33] They assert strict liability, negligence, and breach of implied warranty claims against six defendants. [Id. ¶¶ 38-108] Four of the defendants- MMC, Ashimori, DSS, and DC-have moved to dismiss the claims against them for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). [Record Nos. 25, 26, 27]

         II.

         “The plaintiff bears the burden of establishing that jurisdiction exists.” Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir. 1991). Where, as here, the parties have not conducted jurisdictional discovery and the Court has not held an evidentiary hearing, “the plaintiff must make only a prima facie showing that personal jurisdiction exists in order to defeat dismissal.” Id. In this procedural posture, “the pleadings and affidavits . . . are received in a light most favorable to the plaintiff, ” and the Court “does not weigh the controverting assertions of the party seeking dismissal.” Id. at 1459. However, “the plaintiff may not stand on his pleadings but must, by affidavit or otherwise, set forth specific facts showing that the court has jurisdiction.” Id. at 1458. The amount of evidence necessary to avoid dismissal for lack of personal jurisdiction is similar to that required to avoid summary judgment. Id. at 1458-59; see also Weller v. Cromwell Oil Co., 504 F.2d 927, 929-30');">30 (6th Cir. 1974).

         The plaintiff's prima facie case must establish that: “(1) jurisdiction is proper under a long-arm statute or other jurisdictional rule of . . . the forum state; and (2) the Due Process Clause also allows for jurisdiction under the facts of the case.” Conn v. Zakharov, 667 F.3d 705, 711 (6th Cir. 2012). If either part of this test is not met, the analysis ends, and the Court may not exercise personal jurisdiction over the defendant. Id. at 711-12.

         III.

         Kentucky's long-arm statute lists nine specific circumstances under which a nonresident defendant may be subject to personal jurisdiction in Kentucky. Ky. Rev. Stat. § 454.210(2). This Court may only exercise personal jurisdiction over a nonresident defendant “if the cause of action arises from conduct or activity of the defendant that fits into one of the statute's enumerated categories.” Caesars Riverboat Casino, LLC v. Beach, 336 S.W.3d 51, 57 (Ky. 2011). A claim “arises from” certain conduct when there is a “reasonable and direct nexus” between the conduct causing injury and the defendant's activities in the state. Id. at 59.

         The categories relevant to this action are as follows:

(2)(a) A court may exercise personal jurisdiction over a person who acts directly or by an agent, as to a claim arising from the person's:
. . . .
2. Contracting to supply services or goods in this Commonwealth;
3. Causing tortious injury by an act or omission in this Commonwealth;
4. Causing tortious injury in this Commonwealth by an act or omission outside this Commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth, provided that the tortious injury occurring in this Commonwealth arises out of the doing or soliciting of business or a persistent course of conduct or derivation of substantial revenue within the Commonwealth;
5. Causing injury in this Commonwealth to any person by breach of warranty expressly or impliedly made in the sale of goods outside this Commonwealth when the seller knew such person would use, consume, or be affected by, the goods in this Commonwealth, if he also regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth[.]

Ky. Rev. Stat. § 454.210(2)(a)(2)-(5). The plaintiffs contend that their claims against each of the defendants fall into at least one of these categories. [See Record Nos. 30');">30, 31, 33]

         A. Ashimori

         Ashimori is a Japanese company that manufactures seat belt and airbag component parts for motor vehicles. [Record No. 25-2, ¶¶ 4-5] The plaintiffs contend that Ashimori is subject to personal jurisdiction under subsections (a)(4) and (a)(5) of Kentucky's long arm statute, both of which require that the defendant “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth.” [Record No. 31, pp. 5-7] The plaintiffs contend that this requirement is satisfied because Ashimori sells its components to MMC which, in turn, “sells a large portion of its manufactured products to MNAO.” [Id. at 6] “Because MMC does a large portion of its business through MNAO, ” the plaintiffs argue that “it is reasonable to conclude Ashimori receives a significant portion of its revenue from products that are sold in Kentucky.” [Id.]

         Other than this inference, the only evidence before the Court is a declaration from Atsushi Nomura, the Manager of Ashimori's General Administration Department, which states that “Ashimori does not solicit business, or engage in any persistent course of conduct, or derive substantial revenue from goods used or consumed or services rendered in Kentucky.” [Record No. 25-2, ¶ 25] Ashimori has never transacted any business in Kentucky and “has no involvement in the sale, delivery, or issuance of warranties, on any goods in Kentucky.” [Id. ¶¶ 21-22] The company does not directly supply goods or services in Kentucky and has “never contracted to supply services or goods in Kentucky.” [Id. ¶¶ 26, 28]

         None of Ashimori's revenue arises from the sales of vehicles in Kentucky. Further, it “has never received any payment from any public or private entity on the sale of any Ashimori component parts in Kentucky.” [Id. ¶¶ 23-24, 40] Next, Ashimori has never been licensed to transact business in Kentucky, owned any business in Kentucky, exercised any control over any person, firm, or corporation in Kentucky, or acted as the agent or representative of any person, firm, or corporation in connection with any business transaction, production, or activity in Kentucky. [Id. ¶¶ 37-39, 41] In short, the company has “never directed any activity toward Kentucky.” [Id. ¶ 34]

         Construing this evidence in the light most favorable to the plaintiffs, and without weighing the defendants' controverting assertions, Theunissen, 935 F.2d at 1459, the evidence that Ashimori does business with MMC, which in turn does business with MNAO, which in turn does business in Kentucky, is insufficient to demonstrate that Ashimori or its agent “regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this Commonwealth.” Ky. Rev. Stat. § 454.210(2)(a)(4)-(5). As a result, the plaintiffs have failed to make a prima facie showing that their claims against Ashimori “arise from” any conduct or activity that fits into one of the Kentucky long arm statute's enumerated categories, and this Court may not exercise personal jurisdiction over this defendant. See Caesars Riverboat Casino, 336 S.W.3d at 57.

         B. ...


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