What happens when a plaintiff from Kentucky sues a New York company in Massachusetts? The case gets tossed for lack of personal jurisdiction. That is exactly what happened in Kingston v. Angiodynamics, Inc., 2021 WL 3022320 (D. Mass. Jul. 16, 2021). It is what should have happened in Hammons v. Ethicon, Inc., 240 A.3d 537 (Pa. 2020), but instead that case was No. 1 on our list of worst decisions in 2020. Fortunately, Massachusetts does not have the same open arms policy for litigation tourists that Pennsylvania does.
Plaintiff – who lives in Kentucky, had surgery in Kentucky, and who alleges to have suffered his injuries in Kentucky – sued the manufacturer of the catheter system implanted in him for the administration of chemotherapy medications. Kingston, at *2. The defendants are a parent and subsidiary company both of which are incorporated in Delaware. Id. at *3. The parent corporation is headquartered in New York where all executive level employees are located and all significant corporate decisions for both the parent and subsidiary are made. Further, the individuals who carry out work for the subsidiary in the United States are all employees of the parent company. Id.
Against this set of facts, the court was asked to decided plaintiff’s motion to remand based on her argument that defendants were forum defendants thereby defeating diversity jurisdiction and defendants’ motion to dismiss based on lack of personal jurisdiction. Plaintiff’s motion was denied and defendants’ was granted.
The question of diversity turned on whether or not defendants could be considered to have a principal place of business in Massachusetts making them citizens of the state. The court found it did not matter which test was used to determine where defendants’ principal place of business was – “nerve center test;” “center of corporate activity test;” or “locus of operations test.” The result was the same. Defendants’ principal place of business was New York. Id. As for the parent, plaintiff tried to argue that it had some employees in Massachusetts. They were not high-level executives or corporate officers, and merely having employees in a location is not enough to make that location a principal place of business. Id. at *4. For the subsidiary, plaintiff tried to argue that it at one time had a principal place of business in Massachusetts, but even if that were true, it is undisputed that the company was purchased by its current parent years before the device at issue was implanted in plaintiff. The subsidiary-defendant is wholly owned by the parent defendant and plaintiff offered no evidence to refute that the corporate decisions for the subsidiary are now made by the parent in New York. Id. Nor was it relevant to this issue that some FDA correspondence was addressed to the Massachusetts location or that defendants’ CEO owns a house there. Massachusetts is a lovely place to own property. Because defendant is not a citizen of Massachusetts, it had the right to remove the case to federal court and the motion to remand was denied.
Not surprisingly, most of the principal place of business discussion is directly relevant to the personal jurisdiction inquiry as well. The court first examined the Massachusetts long-arm statute which allows the state to exercise jurisdiction over an individual who “transacted business in Massachusetts” where the plaintiff’s claim arises from the transaction. Both factors must be satisfied. Id. at *5. The “arising from” requirement is essentially a “but for” causation test. Id. Again, plaintiff relied on the presence of some employees in the state, including some who work in research and development. But that is not enough to support an assertion that plaintiff’s injury would not have occurred “but for” defendant’s activities in Massachusetts. Corporate decisions were made in New York and the product was manufactured in New York. Id. at *6. Without an adequate nexus between plaintiff’s injuries and defendants’ in-state activities, she did not meet the requirements of the long-arm statute. Id.
The court then moved on to general jurisdiction – where a defendant’s contacts with the state are so “continuous and systematic” as to render them at home in the forum state. Id. For all the reasons previously discussed, defendants were not “at home” in Massachusetts and therefore, there is not general jurisdiction. Id.
Finally, plaintiff argued the court should exercise specific jurisdiction over defendants. Specific jurisdiction is only available “where the cause of action arises directly out of, or relates to, the defendant’s forum-based contacts.” Id. at *7. Plaintiff tried to rely on Ford Motor Co. v. Montana Eight Jud. Dist. Ct., ___ S. Ct. ___, 2021 WL 1132515, at *4 (U.S. March 25, 2021) but the court focused on the same distinction we focused on when we posted about that case. Plaintiffs in Ford sued in their home jurisdictions:
Unlike here, the plaintiffs there were residents of the forum states, used the allegedly defective products in the forum states and suffered injuries when those products malfunctioned in the forum states.
Id. In Kingston, plaintiff’s surgery took place in Kentucky during which a product manufactured in New York by a company headquartered in New York was implanted. Additional surgery and alleged complications also occurred in Kentucky. The fact that defendants had some research and development and regulatory affairs departments in Massachusetts is not sufficient to establish specific jurisdiction. Defendants’ alleged contact with Massachusetts is neither “an important or material element of proof.” Id. at *8. Because plaintiff could not demonstrate that defendant’s in-forum activities gave rise or related to her injury, she could not establish specific jurisdiction. Id.
Plaintiff asked for leave to conduct jurisdictional discovery, but the court found that her allegations, even if proven, were too attenuated to state a colorable claim and therefore discovery would be futile. Id. at *8-9. All claims dismissed.