Today we report on Farson v. Coopersurgical, Inc., 2023 WL 5002818 (N.D. Ohio 2023), a product-liability decision that dismissed all claims against all defendants based on lack of personal jurisdiction, preemption, and Twombly.
Claiming that she was injured when an implantable medical device migrated in her body, the plaintiff brought suit in Ohio asserting claims for design defect, failure to warn, and manufacturing defect against four defendants: the device manufacturer, who is located in France; the manufacturer’s parent company; an entity whose role is not identified but appears to be the device’s seller; and that entity’s parent.
The court dismissed the claims against the foreign manufacturer, its parent, and the seller’s parent for lack of personal jurisdiction. (The apparent seller did not contest personal jurisdiction.)
As for the foreign manufacturer, the court held that the plaintiff had failed to produce any evidence that the manufacturer was subject to specific personal jurisdiction under Ohio’s long-arm statute. The plaintiff, said the court, presented no evidence that the manufacturer had transacted business in Ohio; had contracted to supply goods or services in Ohio; had caused tortious injury by an act or omission in Ohio; or had caused tortious injury by an act or omission outside Ohio while regularly doing business in Ohio. 2023 WL 5002818, at *3–4.
The plaintiff claimed that the manufacturer’s parent corporation and the parent corporation of the seller were subject to specific personal jurisdiction because they were alter egos of their respective subsidiaries and subject to jurisdiction on that basis.
Explaining that a parent corporation’s ownership of a subsidiary does not by itself make the subsidiary an alter ego of the parent even when the parent’s and subsidiary’s officers overlap, the court held that it did not have specific personal jurisdiction over the seller’s parent because the plaintiff offered no evidence that would have permitted piercing the subsidiary’s corporate veil. 2023 WL 5002818, at *4–5.
Whether the manufacturer was an alter ego of its parent corporation was, the court found, a slightly closer call given evidence that the parent had assumed some of the manufacturer’s debt upon acquiring it. Nevertheless, the court concluded that the plaintiff had failed to establish that the manufacturer was an alter ego of its parent given the plaintiff’s failure to present any evidence that parent controlled the subsidiary’s daily activities, that the two co-mingled funds, or that they ignored corporate formalities. In any event, said the court, it would not have derivative personal jurisdiction over the parent even if the manufacturer were its alter ego because it lacked personal jurisdiction over the manufacturer. 2023 WL 5002818, at *4–5.
Noting that Ohio has amended its long-arm statute in 2021 to allow the exercise of personal jurisdiction “on any basis consistent with” the U.S. and Ohio constitutions—a provision that has yet to be authoritatively interpreted by either the Ohio supreme court or the Sixth Circuit—the Farson court proceeded to consider whether exercising personal jurisdiction over the manufacturer, its parent, or the seller’s parent was consistent with constitutional due process. Explaining that merely placing a good in the stream of commerce is insufficient, the court held that exercising jurisdiction was not permissible because the plaintiff presented no evidence that the manufacturer or either parent corporation had purposefully availed itself of the privilege of acting in Ohio. 2023 WL 5002818, at *5–7.
All of this goes to show that there still are real limits to specific personal jurisdiction even after the Supreme Court relaxed those limits in Ford Motor Co. v. Montana Eighth Judicial District Court, 141 S. Ct. 1017 (2021), a decision we discussed here.
After concluding that it lacked personal jurisdiction over the manufacturer, the manufacturer’s parent, and the seller’s parent, the court had to decide whether the plaintiff had stated a cognizable claim against the seller, which, as already noted, did not contest jurisdiction. The court held that none of the plaintiff’s claims survived dismissal.
The plaintiff’s design-defect and failure-to-warn claims were preempted, said the court—expressly preempted by 21 U.S.C. § 360k(a) inasmuch as they would impose state-law design and warning requirements different from or in addition to those imposed by the FDA through the PMA process, and impliedly preempted by 21 U.S.C. § 337(a) insofar as they were premised on the manufacturer’s purported failure to supply the FDA accurate data during the PMA process.
As for the plaintiff’s manufacturing-defect claim, the court found that there was “not enough specificity” in the plaintiff’s complaint regarding the purported defect “to determine whether” the state-law duty she posited “paralleled” FDA regulatory requirements. In a holding that is both ironic and an invitation to deliberately vague complaints, the court determined that the very vagueness of plaintiff’s complaint, and the court’s consequent inability to compare the purported federal and state requirements, saved her manufacturing-defect claim from preemption. Nevertheless, the court dismissed the complaint for failure to state a claim, holding that plaintiff’s allegations that the manufacturer’s ill-defined regulatory violations caused her alleged injury “amount to no more than ‘a formulaic recitation of the elements of a cause of action,’” which is insufficient under Twombly. So there you have it. A three-for-three sweep by the defendants on jurisdictional, preemption, and pleading grounds.