Tracie Bensmiller, Gregg Bensmiller, Beatrice Boudreau, Brian Boudreau, Suzanne Pelletier, Deanna Merriman, Paul Merriman and Cynthia B. Diulio v. E.I. Dupont De Nemours & Company, State of Louisiana, Doing Business as Louisiana State Univ. Medical Center, Methodist Hospital
Docket: 94-7221
Court: Court of Appeals for the Second Circuit; February 7, 1995; Federal Appellate Court
Tracie Bensmiller and others (plaintiffs) appeal a January 27, 1994 judgment from the U.S. District Court for the District of Connecticut, which dismissed their complaint against Methodist Hospital (MH) for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2). The plaintiffs alleged tort claims against E.I. Dupont de Nemours, Louisiana State University Medical Center, and MH related to injuries from defective surgical implants manufactured by Vitek, Inc.
On appeal, plaintiffs contend that the district court had jurisdiction over MH under Connecticut's long-arm statute for non-stock corporations, despite acknowledging MH's lack of direct contacts with Connecticut. They argue that jurisdiction extends to MH due to its involvement in a joint venture with Dr. Charles A. Homsy, who directed the Prosthesis Research Laboratory at MH, and over whom the court has jurisdiction.
The court, however, rejected this argument, affirming the dismissal. Background details reveal that MH, a Texas non-stock corporation, funded Homsy's research on orthopedic prostheses, establishing financial agreements formalized in 1968 and 1970. Homsy subsequently formed Vitek in 1969 to market products developed from this research, including the Proplast Implant, which was distributed nationwide. The plaintiffs received these implants through procedures in Connecticut and allege they caused severe damage to their temporomandibular joints. Dupont, the supplier of Teflon used in the implants, removed the cases to federal court in November 1992.
MH moved to dismiss the plaintiffs' claims for lack of personal jurisdiction after the case was removed to federal court. The plaintiffs argued that Connecticut's long-arm statute, Conn. Gen. Stat. Sec. 33-519, permitted personal jurisdiction over MH, claiming that MH was involved in a joint venture with either Homsy or Vitek, both of whom were subject to the court's jurisdiction. The plaintiffs sought to attribute the forum contacts of one co-venturer to another, citing case law supporting this principle, although opposing authority exists.
The district court first determined which state's substantive law applied to the personal jurisdiction issue, concluding that Texas law governed the existence of a joint venture. Under Texas standards, the court found that neither Homsy nor Vitek were co-venturers of MH. Consequently, the court ruled that no joint venture existed, granting MH's motion to dismiss. The plaintiffs subsequently filed a notice of appeal.
On appeal, the plaintiffs reiterated their argument of a joint venture between MH and Homsy and contended that the forum contacts of one co-venturer should be attributed to the other under Connecticut law. They did not contest the district court's finding that a joint venture did not exist under Texas law but argued that Connecticut law should apply instead. The case presents the issue of personal jurisdiction over a foreign corporation in a diversity suit, with the determination of amenability to suit based on the law of the state in which the court is located. Connecticut's approach to personal jurisdiction involves a two-step analysis: first, assessing if the long-arm statute applies, and second, determining if exercising jurisdiction would violate due process.
MH is identified as a Texas non-stock corporation, and the relevant jurisdictional statute is Conn. Gen. Stat. Sec. 33-519(c), which allows suits against foreign corporations by Connecticut residents or those with a usual business place in the state for actions related to goods expected to be used in Connecticut, regardless of where the goods were produced or sold. Although it is acknowledged that MH did not produce, manufacture, or sell the allegedly defective implants, plaintiffs argue that MH is subject to jurisdiction due to a joint venture with Homsy. However, plaintiffs concede that this relationship does not constitute a joint venture under Texas law, where it is claimed to have originated.
The interpretation of Sec. 33-519(c) is a question of Connecticut law, necessitating a review of state case law, which reveals that this specific jurisdictional issue remains unresolved. Consequently, a prediction must be made on how the Connecticut Supreme Court would likely interpret the statute. It is posited that the court would require the relationship to qualify as a joint venture under Texas law, which plaintiffs admit it does not.
Sec. 33-519(c) does not expressly include joint venturers, although it provides jurisdiction over entities marketing goods through independent contractors or dealers. No existing Connecticut cases have defined such terms to encompass joint venture participants. Additionally, the legislative history of Sec. 33-519(c) does not clarify whether it applies to joint ventures or similar arrangements.
In considering the broader context of Connecticut law, the analysis must integrate the decision within the framework of state conflicts of law rules to determine the applicable substantive law.
Connecticut applies distinct choice of law rules based on the nature of the action. In tort cases, the lex loci delecti doctrine is employed, applying the law of the state where the injury occurred. For contract disputes, Connecticut typically adheres to the "place of contract" rule, looking to the laws of the state where the contract was formed or will take effect. However, in exceptional cases where applying the law of the injury's location results in unreasonable outcomes, courts may apply the law of the state with the most significant relationship to the parties and the cause of action.
Joint ventures, formed through explicit or implicit contracts, are generally governed by contract choice of law principles. In cases regarding joint ventures, Connecticut’s conflicts rules would typically dictate that the substantive law of the state where the joint venture was formed or had its operative effect should apply. Even in circumstances that might challenge the place of contract rule in favor of the most significant relationship test, Texas law would apply if the joint venture involved parties based in Texas, as all relevant activities occurred there, including research and development. Factors for determining the most significant relationship include the locations of contracting, negotiation, performance, and the parties' domiciles.
The case presents a jurisdictional question regarding whether Connecticut's Sec. 33-519(c) applies to MH, rather than a traditional contracts issue. Connecticut's principles for contracts conflicts highlight the necessity of determining if a joint venture exists under Texas law for jurisdictional purposes. This approach is consistent with Connecticut's established practice of referencing the law of the state where a joint venture is formed. The nature of the underlying cause of action being tort-related does not affect the jurisdictional analysis under Connecticut's long-arm statute, which is focused on jurisdiction rather than conflicts of law.
A Connecticut court is likely to interpret its long-arm statute as extending only to foreign corporations recognized as joint venturers in the state where the joint venture was created. Furthermore, plaintiffs' interpretation of Sec. 33-519(c) may violate the Due Process Clause of the Fourteenth Amendment, which requires that a nonresident defendant have sufficient minimum contacts with the forum state for personal jurisdiction to be valid. This minimum contacts requirement ensures that defendants have fair warning of potential legal actions against them, allowing them to structure their conduct with an understanding of where they may be held liable. Therefore, it must be assessed whether MH could reasonably anticipate being subject to Connecticut jurisdiction based on the claimed joint venture with Homsy in Texas.
No joint venture exists between Homsy and MH under Texas law, which is the only state where MH might have allegedly formed such a venture with Homsy. It is unreasonable to expect MH to anticipate being sued in Connecticut as a joint venturer when this relationship does not exist in Texas. MH's role is characterized more as a passive investor, akin to a stockholder in a corporation. Citing Justice Stevens in Shaffer, the document highlights that a stockholder cannot be expected to be subject to suit in a distant forum unrelated to their transaction. Allowing jurisdiction over MH in Connecticut might contravene established principles regarding personal jurisdiction. The Connecticut Supreme Court is unlikely to interpret Sec. 33-519(c) to include MH in this context. Consequently, the district court's dismissal of the complaint for lack of personal jurisdiction under Fed. R. Civ. P. 12(b)(2) is affirmed. The complaint against Dupont remains unaffected and is not part of this appeal. The district court assumed Connecticut had jurisdiction over Homsy and Vitek for the purpose of the motion to dismiss, despite defendants' claims to the contrary. The case is analyzed primarily in relation to Homsy due to the closer relationship with MH. Sec. 33-519(c) is similar to Connecticut's long-arm statute for stock corporations, and relevant case law on this statute informs the discussion. The plaintiffs' reference to Young v. Masci is deemed irrelevant, as that case does not address personal jurisdiction or Connecticut law.
