March 29, 2018
In Rhode Island, Judge Gibney, a presiding asbestos Judge, issued a decision granting the defendant’s motion to dismiss the complaint against it for lack of personal jurisdiction in Murray v. 3M Co. (In re Asbestos Litig.), 2016 R.I. Super. LEXIS 119; this ruling is significant for nonresident defendant corporations. First, Judge Gibney concluded that no personal jurisdiction existed in Rhode Island over asbestos litigation involving a foreign limited liability company (LLC) and explained the reasons for reaching this conclusion. Secondly, Judge Gibney found a defendant’s limited participation in discovery did not constitute a forfeiture of its defense.
The issue in this case was whether personal jurisdiction existed in Rhode Island over asbestos litigation involving a foreign limited liability company (LLC). The Murray court concluded that it lacked both general and specific jurisdiction over the LLC and its predecessor corporation because the cause of action did not arise out of either the LLC’s or the predecessor corporation’s contacts with Rhode Island. Here, while the defendant’s predecessor company had two Rhode Island businesses on its historical customer list, the Court explained there was no indication that the present matter arose from interactions with those two historical customers. As such, there was no basis for specific jurisdiction over the defendant or its predecessor company.
Once the court found specific jurisdiction over the foreign defendant did not exist, its analysis then shifted to whether the defendant had specific contacts with Rhode Island that would deem it “at home,” citing Daimler AG v. Bauman, 134 S.Ct. 746 (2014). Here, the defendant was incorporated in Virginia, with its principal place of business in Ohio. Since its incorporation, its officers and executive employees have been located in Ohio. It had no offices or employees in Rhode Island. It owned or leased no property in Rhode Island, and it neither sold its products nor was registered or authorized to do business in Rhode Island; the same was true for its predecessor company. However, the defendant’s predecessor company had two Rhode Island customers, and Rhode Island, by State, accounted for less than one-tenth of one percent of the defendant’s total annual net sales. The court concluded that neither the defendant nor its predecessor company were virtually “at home” in Rhode Island and concluded that the Court lacked both general and specific jurisdiction over the defendant.
Secondly, the Murray court was not persuaded by the plaintiff’s argument that the defendant had waived its challenge to personal jurisdiction merely by attending four days of the plaintiff’s deposition. The court ruled that the LLC timely asserted its motion to dismiss for lack of personal jurisdiction.
The Murray decision is a significant Rhode Island decision for nonresident corporations, as Judge Gibney both provided an excellent analysis of the limits of personal jurisdiction and defined when a defendant’s right to challenge personal jurisdiction is not waived.