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Taylor v. Smith & Nephew, Inc.

United States District Court, S.D. Mississippi, Northern Division

May 20, 2019

JOHN RANDOLPH TAYLOR PLAINTIFF
v.
SMITH & NEPHEW, INC., and SMITH & NEPHEW, PLC DEFENDANTS

          ORDER

          Daniel P. Jordan III CHIEF UNITED STATES DISTRICT JUDGE

         This products-liability action is before the Court on Defendant Smith & Nephew, PLC's (“PLC”) Motion to Dismiss [30] for lack of personal jurisdiction. Plaintiff John Randolph Taylor seeks jurisdictional discovery. Pl.'s Mot. [37]. For the following reasons, Taylor's motion is denied, and PLC's motion is granted.

         I. Background

         On November 7, 2011, Taylor underwent hip-replacement surgery, during which doctors implanted eight Smith & Nephew components. Unfortunately, complications followed, and a second surgery occurred on October 25, 2016, during which doctors replaced three of those components: the R3 Three Hole Hemispherical Stiktite Shell, the R3 XLPE Acetabular Liner, and the Oxinium Modular Femoral Head and Titanium Modular Head Sleeve. Pl.'s Third Am. Compl. [23] ¶ 9. Taylor now says the Smith & Nephew products were defective, causing permanent injuries. He therefore sued two Smith & Nephew companies-PLC and Smith & Nephew Inc. (“INC”)-asserting claims for strict products liability and breach of warranty. In response, PLC moved to dismiss for lack of personal jurisdiction. INC does not dispute personal jurisdiction.

         II. PLC's Motion to Dismiss for Lack of Personal Jurisdiction [30]

         A. Standard

         “When a nonresident defendant challenges personal jurisdiction, the plaintiff bears the burden of establishing the district court's jurisdiction over the defendant.” Mink v. AAAA Dev. LLC, 190 F.3d 333, 335 (5th Cir. 1999) (citation omitted). The district court, sitting in diversity, may assert jurisdiction if: (1) the forum state's long-arm statute confers personal jurisdiction, and (2) exercising jurisdiction does not exceed the boundaries of the Fourteenth Amendment's Due Process Clause. Allred v. Moore & Peterson, 117 F.3d 278, 281 (5th Cir. 1997). Where the district court rules on a motion to dismiss for lack of personal jurisdiction without an evidentiary hearing, the plaintiff need only make a prima facie case that jurisdiction is proper. Quick Techs., Inc. v. Sage Grp., PLC, 313 F.3d 338, 343 (5th Cir. 2002).

         “In making its determination, the district court may consider the contents of the record before the court at the time of the motion, including ‘affidavits . . . or any combination of the recognized methods of discovery.'” Id. at 344 (quoting Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)). In addition, the Court “must accept as true [the plaintiff's] uncontroverted allegations, and resolve in its favor all conflicts between the facts contained in the parties' affidavits and other documentation.” Alpine View Co. Ltd. v. Atlas Copco AB, 205 F.3d 208, 215 (5th Cir. 2000).

         B. Analysis

         The parties dispute whether specific jurisdiction exists under due-process analysis. The test for that issue includes three elements:

(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff's cause of action arises out of or results from the defendant's forum- related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.

Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 271 (5th Cir. 2006). Taylor says he can establish these elements because PLC placed the disputed components in the stream of commerce, or alternatively, because PLC is INC's alter ego. Pl.'s Mem. [36] at 10, 12, 18.

         1. Stream of Commerce

         Under the stream-of-commerce test, Taylor must show PLC's contact with Mississippi “stems from a product, sold or manufactured by [PLC], which has caused harm in [Mississippi]” and that PLC “delivered the product into the stream of commerce with the expectation that it would be purchased or used by consumers in [Mississippi].” Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir. 1987); see also Ainsworth v. Moffett Eng'g, Ltd., 716 F.3d 174, 177 (5th Cir. 2013) (holding this circuit continues to apply Justice Brennan's stream-of-commerce theory post-J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011)). The salient question is whether PLC itself-or one of its subsidiaries-delivered the products into the stream of commerce.

         PLC submits three sworn declarations to support its contention that the Court lacks specific jurisdiction over it. Significant to Taylor's stream-of-commerce argument, Susan Swabey, PLC's Company Secretary, avers that “PLC does not manufacture the product, nor did it have any role in its design, labeling, marketing, or sale.” Def.'s Mem. [31] at 8 (citing Swabey Decl. [30-1] at ¶¶ 9-11). Consistent with that, INC's Vice-President of Global Marketing, John Clausen, stated in his declaration that “Smith & Nephew, Inc. developed, designed, and manufactured the components [at issue] in the United States, with the exception [of one component] manufactured in Tuttlingen, Germany, by Smith & Nephew Orthopaedics Gmbh.” Clausen Decl. [30-2] ¶ 7 (emphasis added).

         Taylor, of course, disagrees. And to support his argument, he cites (1) the Smith & Nephew 2017 Annual Report; (2) the 2017 Strategic Report that was part of the Annual Report; (3) screenshots from the Smith & Nephew website; and (4) PLC's social-media accounts. According to Taylor, these exhibits contradict PLC's “self-serving Affidavits” for nine reasons. Pl.'s Mem. [36] at 14. The Court has considered each document and argument to determine whether they contradict PLC's declarations. Alpine View Co., 205 F.3d at 215 (stating court “must accept as true [Taylor's] uncontroverted allegations, and resolve in [his] favor all conflicts between the facts contained in the parties' affidavits and other documentation”).

         Taylor's first three arguments can be grouped together. First, Taylor says the Annual Report shows significant expenditures in Research and Development (“R&D”). Pl.'s Mem. [36] at 14 (citing Annual Report [35-1] at 14). Thus, according to him, “PLC confirms that it ‘pays for the development of products like the Device Components involved in [Taylor's] surgery.'” Id. (quoting Pl.'s Third Am. Compl. [21-2] ¶ 6 (emphasis added)). Second, Taylor says the Annual Report and website confirm PLC “make[s] or ‘has developed a range of primary hip systems,' including ‘the R3 Acetabular System.'” Pl.'s Mem. [36] at 11 (quoting Annual Report [35-1] at 19); see Id. at 15 (citing Website [35-2], [35-3], [35-4]). And third, Taylor asserts that according to ...


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