Opinion
C/A No. 3:19-cv-03245-SAL
2020-04-16
Lisa MASENG, Plaintiff, v. LENOX CORPORATION; Tuesday Morning, Inc.; and Continuum Sales & Marketing Corp., Defendants.
Bradley D. Hewett, Mike Kelly Law Group LLC, Columbia, SC, for Plaintiff. Cordes Baxter Kennedy, E Raymond Moore, III, Murphy and Grantland PA, Columbia, SC, for Defendants.
Bradley D. Hewett, Mike Kelly Law Group LLC, Columbia, SC, for Plaintiff.
Cordes Baxter Kennedy, E Raymond Moore, III, Murphy and Grantland PA, Columbia, SC, for Defendants.
OPINION & ORDER
Sherri A. Lydon, United States District Judge
This matter is before the court on two motions: (1) Defendant Lenox Corporation's ("Lenox") motion to dismiss pursuant to Rule 12(b)(2) of the Federal Rules of Civil Procedure and (2) Lenox's motion to stay. For the reasons outlined herein, the court grants the motion to dismiss, which thereby moots the request for a stay of the litigation.
BACKGROUND
This products liability action arises from a Lenox Profile 2.5 quart Stainless Steel Whistling Tea Kettle ("Tea Kettle") allegedly exploding and subjecting Plaintiff Lisa Maseng ("Plaintiff") to burn injuries. [ECF No. 1-1, Compl. at ¶¶ 6–8.] Plaintiff filed this action against Lenox, Defendant Tuesday Morning, Inc. ("Tuesday Morning"), and Defendant Continuum Sales & Marketing Corp. ("Continuum") in the Court of Common Pleas for Richland County. Plaintiff alleges that the "Tea Kettle was designed, manufactured, marketed, tested, inspected, imported, packaged, sold and distributed by Defendants" and asserts three causes of action: (1) strict liability for defective product, S.C. Code Ann. § 15-73-10 et seq. ; (2) negligence; and (3) breach of warranty. Id. at ¶¶ 9–22.
Tuesday Morning, with the consent of Lenox and Continuum, removed the action to this court on the basis of diversity jurisdiction, 28 U.S.C. § 1332. Thereafter, Lenox filed its motion to dismiss based on lack of personal jurisdiction, ECF No. 11, and motion to stay, ECF No. 13. Plaintiff filed responses in opposition to both motions. [ECF Nos. 16, 17.] Lenox filed its replies. [ECF Nos. 29, 32.] Accordingly, this matter is ripe for review by this court.
STANDARD
Upon a defendant's motion to dismiss for lack of personal jurisdiction, the plaintiff has the burden of showing that jurisdiction exists. See In re Celotex Corp., 124 F.3d 619, 628 (4th Cir. 1997) ; Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). Generally, when a district court decides a pre-trial motion to dismiss for lack of personal jurisdiction without holding an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction. The court is to construe the pleadings, affidavits, and other supporting documents presented to the court in the light most favorable to plaintiff by assuming credibility and drawing all inferences and resolving all factual disputes in the plaintiff's favor. See Masselli & Lane, PC v. Miller & Schuh, PA, 215 F.3d 1320 (4th Cir. 2000) (table opinion); Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993) ; Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989). In doing so, however, the court need not " ‘credit conclusory allegations or draw farfetched inferences.’ " Masselli, 215 F.3d at *1 (quoting Ticketmaster–New York, Inc. v. Alioto , 26 F.3d 201, 203 (1st Cir. 1994) ).
I. Minimum Contacts.
In determining whether personal jurisdiction exists over a non-resident defendant, the court must perform a two-step analysis. The court must first determine whether the South Carolina (forum state) long-arm statute provides a basis for asserting jurisdiction over the defendant. See Young v. FDIC, 103 F.3d 1180, 1191 (4th Cir. 1997). Then, the court must determine that the exercise of personal jurisdiction does not violate the Due Process Clause of the Fourteenth Amendment of the United States Constitution. Anita's New Mexico Style Mexican Food, Inc. v. Anita's Mexican Foods Corp., 201 F.3d 314, 317 (4th Cir. 2000). South Carolina's long-arm statute has been construed to extend to the outer limits allowed by the Due Process Clause. Foster v. Arletty 3 Sarl, 278 F.3d 409, 414 (4th Cir. 2002). Thus, the dual jurisdictional requirements collapse into a single inquiry as to whether the defendant has "certain minimum contacts" with the forum, such that "maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’ " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945) (internal citations omitted).
The analytical framework for determining whether minimum contacts exist differs according to which type of personal jurisdiction—general or specific—is alleged. See generally ESAB Grp. v. Centricut, 126 F.3d 617, 623–24 (4th Cir. 1997). When a cause of action arises out of a defendant's contacts with the forum, a court may seek to exercise specific jurisdiction over that defendant if it purposefully directs activities toward the forum state and the litigation results from alleged injuries that arise out of or relate to those activities. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). When the cause of action does not arise out of the defendant's contacts with the forum, however, general jurisdiction may be exercised upon a showing that the defendant's contacts are of a "continuous and systematic" nature. Id. at 415–16, 104 S.Ct. 1868. "Whether general or specific jurisdiction is sought, a defendant's ‘contacts’ with a forum state are measured as of the time the claim arose." Cape v. von Maur, 932 F. Supp. 124, 127 (D. Md. 1996) ; see also Rossman v. State Farm Mut. Auto. Ins. Co., 832 F.2d 282, 287, n. 2 (4th Cir. 1987) ("We do not base our holding on the fact that Consolidated expanded its connection with Virginia after the accident.").
A. Specific Jurisdiction.
If a cause of action arises out of or relates to a defendant's contacts with the forum state, the court can exercise specific jurisdiction. A defendant has minimum contacts with a jurisdiction sufficient to subject it to specific jurisdiction in the forum state if "the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." World–Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Under this standard, "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). Further, "[i]t is well established that a single act can support jurisdiction if that act has a ‘substantial connection’ with the forum and gives rise to, or figures prominently in, the cause of action under consideration." Campbell v. Johnson & Towers, Inc., 123 F. Supp. 2d 329, 335 (D.S.C. 1999) ; see also Chung v. NANA Development Corp., 783 F.2d 1124, 1131 (4th Cir. 1986).
B. General Jurisdiction.
"[A] court may exercise personal jurisdiction under the theory of general jurisdiction, which requires a more demanding showing of ‘continuous and systematic’ activities in the forum state" than what is required to establish specific jurisdiction. Tire Engineering and Distribution, LLC v. Shandong Linglong Rubber Co., Ltd., 682 F.3d 292, 301 (4th Cir. 2012). The corporate operations within the state must be so substantial and of such an extensive nature as to justify suit against it on all causes of action dealing with matters entirely distinct from the instant litigation. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 924, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011) (citing International Shoe, 326 U.S. at 318, 66 S.Ct. 154 ). "For an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home," i.e. , its principal place of business or place of incorporation. Id. ; see also Daimler AG v. Bauman , 571 U.S. 117, 138, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014) (holding request to extend general jurisdiction to include every state in which a corporation "engages in a substantial, continuous, and systematic course of business" "unacceptably grasping").
II. Fair Play and Substantial Justice.
After addressing the defendant's contacts as set forth above, the court is to then consider whether the exercise of jurisdiction "would comport with ‘fair play and substantial justice.’ " Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citing International Shoe , 326 U.S. at 320, 66 S.Ct. 154 ). In determining whether the exercise of jurisdiction comports with fair play and substantial justice, the court evaluates the following factors: (1) the burden on the defendant; (2) the forum State's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several States in furthering fundamental substantive social policies. Christian Science Bd. of Dirs. Of the First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 217 (4th Cir. 2001) (quoting Burger King, 471 U.S. at 477, 105 S.Ct. 2174 ). "More generally, [the Fourth Circuit's] reasonableness analysis is designed to ensure that jurisdictional rules are not exploited in such a way as to make litigation so gravely difficult and inconvenient that a party unfairly is at a severe disadvantage in comparison to his opponent." Id. (quotations and citations omitted).
DISCUSSION AND ANALYSIS
In the motion to dismiss, Lenox argues that the court lacks both specific and general jurisdiction over it. More specifically, Lenox argues that it is a Delaware corporation with its principal place of business in Pennsylvania and, therefore, general jurisdiction is lacking in South Carolina. [ECF No. 11-2, Aff. of Karen Wolf at ¶ 3.] Lenox further contends that while it develops, markets, sources, distributes, and sells tableware products, giftware, and home décor in other retail outlets in South Carolina and operates a retail store in Myrtle Beach, South Carolina, its only connection to the Tea Kettle at issue in this case is through a licensing agreement with Continuum. Id. at ¶¶ 4, 6, 11. The licensing agreement permitted Continuum to use the Lenox trademark on various cookware products, including certain tea kettles. Id. at ¶ 6; [see also ECF No. 16-3, License Agreement.] According to Lenox, it played no role in the manufacture, import, distribution, marketing or location of the Tea Kettle. Aff. of Karen Wolf at ¶ 8. Moreover, Lenox notes that the Tea Kettle at issue was not sold in its Myrtle Beach, South Carolina retail store. Id. at ¶¶ 12–13. Based on the foregoing, Lenox argues that Plaintiff has not met her burden of establishing that Lenox is "at home" in South Carolina sufficient to give rise to general jurisdiction, nor has it established a connection between Lenox's contacts in South Carolina and Plaintiff's claims sufficient to give rise to specific jurisdiction.
In response, Plaintiff argues Lenox consented to jurisdiction when it obtained a certificate of authority to transact business in South Carolina and appointed a registered agent in South Carolina for service of process. [ECF No. 16 at pp.4–11; ECF No. 16-2, Certificate of Authority.] Further, Plaintiff argues that general jurisdiction otherwise exists over Lenox because Lenox has continuous and systematic connections to South Carolina, and the injuries at issue actually occurred in South Carolina. As to specific jurisdiction, Plaintiff argues it also exists because of Lenox's involvement with marketing of the licensed products, as evidenced by the licensing agreement. Each issue is addressed, in turn.
Plaintiff also contends that to "fully evaluate" the issue of general jurisdiction, the parties must conduct jurisdiction discovery. As outlined infra , the court disagrees that discovery is necessary to decide whether it has general jurisdiction over Lenox.
I. Consent to Jurisdiction.
Because the personal jurisdiction requirement "recognizes and protects an individual liberty interest," Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee , 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982), it may be waived by "express or implied consent" to the jurisdiction of the court. Id. at 703, 102 S.Ct. 2099. Here, Plaintiff argues Lenox waived any objection to personal jurisdiction when it obtained authorization to conduct business in South Carolina and identified a registered agent for service of process in South Carolina. This exact argument was recently considered and rejected by the Fourth Circuit Court of Appeals. Fidrych v. Marriott Int'l, Inc. , 952 F.3d 124 (4th Cir. 2020).
In Fidrych , the Fourth Circuit noted that "South Carolina requires all foreign corporations to obtain a certificate of authority before conducting business in the state." Id. at 134 (referencing S.C. Code Ann. § 33-15-101(a) ). Here, much like the defendant in Fidrych , Lenox obtained a certificate of authority before it conducted business in South Carolina. [ECF No. 16-2.] And, just as the plaintiff argued in Fidrych , Plaintiff here argues that by choosing to "obtain a certificate of authority in South Carolina," a defendant "consent[s] to general jurisdiction in South Carolina." 952 F.3d at 135.
Examining two United States Supreme Court cases pre-dating the "development of the minimum-contacts-focused approach expressed" in International Shoe, Pennsylvania Fire Ins. Co. of Phil. v. Gold Issue Mining & Milling Co. , 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610 (1917) and Robert Mitchell Furniture Co. v. Selden Breck Constr. Co. , 257 U.S. 213, 42 S.Ct. 84, 66 L.Ed. 201 (1921), the Fourth Circuit suggested the decisions may have been "implicitly ... superseded by International Shoe ’s minimum-contacts approach to personal jurisdiction." Id. Further, the Fourth Circuit went on to discuss the impact of the more recent Supreme Court decision— Daimler . It ultimately concluded that even if it assumed neither International Shoe nor Daimler had any impact on the old consent-to-general jurisdiction rule outlined in Pennsylvania Fire and Robert Mitchell Furniture , "under the rules set out in those cases, Marriott did not consent to general jurisdiction by complying with South Carolina's domestication statute." Fidrych , 952 F.3d at 137. This court finds that the same analysis, resulting in the same conclusion, applies to Plaintiff's argument in this case.
Under Pennsylvania Fire and Robert Mitchell Furniture , "obtaining the necessary certificate to conduct business in a given state amounts to consent to general jurisdiction in that state only if that condition is explicit in the statute or the state courts have interpreted the statute as imposing that condition." Id. The Fourth Circuit concluded that South Carolina law "make[s] clear that a certificate of authority does not automatically subject a foreign corporation to jurisdiction in South Carolina courts and that jurisdiction instead depends on sufficient South Carolina contacts by the foreign corporation." Id. (referencing S.C. Code Ann. § 33-15-101, S.C. Reporters’ Comments § 2; Builders Mart of Am., Inc. v. First Union Corp. , 349 S.C. 500, 563 S.E.2d 352 (S.C. Ct. App. 2002), overruled in part on other grounds by Farmer v. Monsanto Corp. , 353 S.C. 553, 579 S.E.2d 325 (2003) ); see also id. at n.3 (concluding that the commentary to the statutory requirement that a foreign corporation maintain a registered agent in South Carolina "does not affect [the court's] conclusion that under South Carolina law, a foreign corporation does not consent to general jurisdiction by obtaining a certificate of authority to transact business in the state"). Thus, just as the defendant in Fidrych did not consent to personal jurisdiction, this court finds that Lenox did not consent to personal jurisdiction in this case. The court will, accordingly, turn to whether Plaintiff has set forth a prima facie case of general jurisdiction.
II. General Jurisdiction.
Plaintiff does not dispute that Lenox is incorporated in Delaware, with its principal place of business in Pennsylvania. Thus, the only issue to address with respect to general jurisdiction is whether Plaintiff has set forth a prima facie case that Lenox is otherwise "at home" in South Carolina. Plaintiff has not met her burden.
The "at home" language has its genesis in the Supreme Court's decision in Goodyear . There, the Court addressed the stream-of-commerce theory, finding that the "[f]low of a manufacturer's products into the forum ... may bolster an affiliation germane to specific jurisdiction," Goodyear , 564 U.S. at 927, 131 S.Ct. 2846, but concluded that "general jurisdiction over foreign ... corporations" is limited to cases where "their affiliations with the State are so continuous and systematic as to render them essentially at home in the forum State. " Id. at 919, 131 S.Ct. 2846 (emphasis added). Later, in Daimler , the Supreme Court provided further insights into the general jurisdiction analysis, emphasizing that only a "limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there"—place of incorporation and principal place of business. 571 U.S. at 137, 134 S.Ct. 746. As recently recognized by the Fourth Circuit in Fidrych , the Daimler Court "made it clear that only in the ‘exceptional case’ could the contacts with another forum be ‘so substantial and of such a nature as to render the corporation at home in that State.’ " 952 F.3d at 133 (citing Daimler , 571 U.S. at 139, 134 S.Ct. 746 ). Thus, in Daimler the Supreme Court rejected the assertion that "general jurisdiction could be exercised ‘in every State in which a corporation engages in a substantial, continuous, and systematic course of business." 571 U.S. at 138, 134 S.Ct. 746.
The argument raised by the plaintiff in Daimler is the same argument raised by Plaintiff here. And given the principles set out in Goodyear and Daimler , which were also echoed by the Fourth Circuit in Fidrych , this court has no hesitation in rejecting Plaintiff's argument and concluding that Lenox's contacts with South Carolina are insufficient to make it "at home" here. Lenox's contacts with South Carolina are limited to one retail store in Myrtle Beach, South Carolina and the marketing, distribution, and sale of its own products in various retail stores in South Carolina. The Myrtle Beach retail store is one of the 20 retail stores that Lenox operates in 12 states. [ECF No. 11-2, Aff. of Karen Wolf at ¶ 11.] Thus, while this contact is certainly systematic and continuous, it is not substantial enough to render Lenox "at home" in South Carolina. "Because there is nothing that would distinguish [Lenox's] relationship with South Carolina from its relationship with any of the other [12] states where it does business but where it is not incorporated or headquartered, this is not the exceptional case for general jurisdiction contemplated by the Daimler Court." Fidrych , 952 F.3d at 134 ; see also Daimler , 571 U.S. at 139 n.20, 134 S.Ct. 746 ("A corporation that operates in many places can scarcely be deemed at home in all of them."); id. at 132, 134 S.Ct. 746 (noting the Supreme Court has "declined to stretch general jurisdiction beyond limits traditionally recognized"); Nichols v. G.D. Searle & Co. , 991 F.2d 1195, 1200 (4th Cir. 1993) ("[B]road constructions of general jurisdiction should be generally disfavored.").
Plaintiff attempts to distinguish Daimler and Goodyear , arguing that in those cases the purported injurious conduct took place outside of the state in which the suits were instituted. While this court agrees that the distinction exists, it disagrees with the Plaintiff on the distinction's relevance to the general jurisdiction analysis. [ECF No. 16 at pp.13–15 (arguing Daimler and Goodyear concerned "causes of action arising outside of the United States").] "General jurisdiction permits the court to hear any and all claims against the defendant, regardless of where the claims arose or the plaintiff's citizenship." Fidrych , 952 F.3d at 132 (emphasis added). It is "all-purpose," Daimler , 571 U.S. at 122, 134 S.Ct. 746, or "dispute-blind," BNSF Ry. Co. v. Tyrrell , ––– U.S. ––––, 137 S. Ct. 1549, 1559 n.4, 198 L.Ed.2d 36 (2017). Whether the alleged injury occurs within the forum state or outside of the forum state, a court has general jurisdiction over a corporate defendant only in its place of incorporation, its principal place of business, or—in the "exceptional case"—another location where the foreign corporate defendant is "at home." Fidrych , 952 F.3d at 139. Consequently, the fact that Plaintiff's injury occurred in South Carolina and Plaintiff brought suit in South Carolina does not change the relevance of the general jurisdiction analysis set forth in Daimler or Goodyear .
In specific jurisdiction analysis, "an injury is jurisdictionally relevant only insofar as it shows that the defendant has formed a contact with the forum state." Walden v. Fiore , 571 U.S. 277, 290, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). And, even then, the "proper question is not where the plaintiff experienced a particular way." Id.
As the Supreme Court recently recognized in Daimler , "It is one thing to hold a corporation answerable for operations in the forum State ..., quite another to expose it to suit on claims having no connection whatever to the forum State." 571 U.S. at 139 n.19, 134 S.Ct. 746.
For the foregoing reasons, the court finds that Lenox's contacts with South Carolina are insufficient to render it "at home" here and, accordingly, this court lacks general personal jurisdiction over Lenox.
III. Specific Jurisdiction.
The court turns now to the issue of specific jurisdiction. Specific jurisdiction is "represented by International Shoe itself, a case in which the in-state activities of the corporate defendant ‘ha[d] not only been so continuous and systematic, but also g[a]ve rise to the liabilities sued on." Daimler , 571 U.S. at 127, 134 S.Ct. 746 (citing International Shoe , 326 U.S. at 317, 66 S.Ct. 154 ); see also id. ("Adjudicatory authority of this order, in which the suit arises out of or relates to the defendant's conduct with the forum, is today called specific jurisdiction." (citations and alterations omitted)). It is "conduct-injury or effect but whether the defendant's conduct connects him to the forum in a meaningful linked," id. at 122, 134 S.Ct. 746, and "confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Bristol-Myers Squibb Co. v. Superior Court of Cal. , ––– U.S. ––––, 137 S. Ct. 1773, 1780, 198 L.Ed.2d 395 (2017). "For a court to have specific personal jurisdiction over a defendant, the defendant must have ‘purposefully established minimum contacts in the forum State’ such ‘that [it] should reasonably anticipate being haled into court there.’ " Perdue Foods LLC v. BRF S.A. , 814 F.3d 185, 189 (4th Cir. 2016) (citing Burger King , 471 U.S. at 474, 105 S.Ct. 2174 ). "[C]ontacts that would not constitutionally justify an exercise of general jurisdiction might support an exercise of specific jurisdiction." ESAB Group , 34 F. Supp. 2d at 329.
The Fourth Circuit employs a three-part test to determine whether specific jurisdiction exists: "(1) the extent to which the defendant purposefully availed itself of the privilege of conducting activities in the State; (2) whether the plaintiff's claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable." Id. (citing ALS Scan, Inc. v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir. 2002) ). "The plaintiff must prevail on each prong." Id. (citing Consulting Engineers Corp. v. Geometric Ltd. , 561 F.3d 273, 278 (4th Cir. 2009) ); see also Consulting Engineers , 561 F.3d at 278 ("If, and only if, we find that the plaintiff has satisfied this first prong of the test for specific jurisdiction need we move on to a consideration of prongs two and three.").
The first prong is easily met in this case. Lenox leases retail space in Myrtle Beach, South Carolina, it sells products through its retail store, it sells Lenox-manufactured items in other retail stores in South Carolina, and it has a certificate of authority to conduct business in this State. Therefore, the court finds that Lenox has "purposefully availed itself of the privilege of conducting activities in the State." See Wallace v. Yamaha Motors Corp., U.S.A. , No. 9:19-cv-0730, 2019 WL 6170419, at *3 (D.S.C. Nov. 20, 2019) ("To be sure, the court is more than convinced that Yamaha's extensive activities in South Carolina satisfy the first and third prongs of the test for specific jurisdiction. However, the court's inquiry does not end there."). Having found the first prong satisfied, the court moves to consideration of the second prong.
ECF No. 11-2, Aff. of Karen Wolf at ¶¶ 4 ("Lenox is licensed to do business in South Carolina and Lenox maintains a registered agent for service of process in South Carolina."); 11 ("Lenox leases real property in South Carolina and operates a retail store in Myrtle Beach, South Carolina, which is one of 20 retail stores operated in 12 states."); 13 (outlining products sold at Myrtle Beach store); 15 ("Lenox's activities in, or directed toward, South Carolina concern marketing, distribution and sale of products that Lenox manufactures or offers for sale.").
"The first prong articulates the minimum contacts requirement of constitutional due process that the defendant purposefully avail himself of the privilege of conducting business under the laws of the forum state." Consulting Engineers , 561 F.3d at 278. A non-exclusive list of relevant factors for this analysis include "whether the defendant maintains offices or agents in the forum state;" "whether the defendant owns property in the forum state;" "whether the defendant reached into the forum state to solicit or initiate business;" "whether the defendant deliberately engaged in significant or long-term business activities in the forum state;" "whether the parties contractually agreed that the law of the forum state would govern disputes; "whether the defendant made in-person contact with the resident of the forum in the forum state regarding the business relationship;" "the nature, quality and extent of the parties’ communications about the business being transacted;" "whether the performance of contractual duties was to occur within the forum." Id. (citations omitted).
The second prong asks whether the plaintiff's claims "arise out of" forum-related activities. This is the more difficult question. "The Supreme Court has made clear that the second prong of the test for specific jurisdiction—the ‘arises out of’ requirement—is a necessary element, not a factor that leaves room for discretion: ‘In order for a state court to exercise specific jurisdiction, the suit must aris[e] out of or relat[e] to the defendant's contacts with the forum.’ " Wallace , 2019 WL 6170419, at *3 (citing Bristol-Myers , 137 S.Ct. at 1780 (citations omitted; emphasis added in Wallace )). Plaintiff "must show that her claims arise out of or relate to some specific, purposefully availing activity that [Lenox] conducts in South Carolina." Id. When there is no connection between the plaintiff's claims and the defendant's contacts with the forum, "specific jurisdiction is lacking regardless of the extent of a defendant's unconnected activities in the State." Bristol-Myers , 137 S. Ct. at 1781.
The United States Supreme Court recently granted certiorari to address the following question: "Whether the ‘arise out of or relate to’ requirement is met when none of the defendant's forum contacts caused the plaintiff's claims, such that the plaintiff's claims would be the same even if the defendant had no forum contacts." Ford Motor Co. v. Montana Eighth District Court , ––– U.S. ––––, 140 S. Ct. 917, –––, 205 L.Ed.2d 519 (2020), consolidated with Ford Motor Co. v. Bandemer , ––– U.S. ––––, 140 S. Ct. 916, 205 L.Ed.2d 519 (2020). This is arguably the issue presented here. Lenox's only connection to the suit is through the licensing agreement, which it executed in Pennsylvania. Lenox contends, and this contention is discussed in additional detail below, that it did not ultimately manufacture, distribute, or sell the product at issue in this products liability case. Thus, Lenox's contacts with South Carolina through the sale of its own items in South Carolina retail establishments and its own retail store are unrelated to the Plaintiff's claims. Plaintiff's claims would be the same whether Lenox sold its own products in South Carolina or not.
In this case, there appears to be no question that the Tea Kettle was sold at a Tuesday Morning store—not by Lenox in its retail store in Myrtle Beach, South Carolina. Logically then, there is no question that the suit does not "arise out of" or "relate to" Lenox's contact with South Carolina through its Myrtle Beach, South Carolina retail store. Further, there does not appear to be any dispute that Lenox's only connection with the Tea Kettle at issue here is through the licensing agreement. In fact, Plaintiff contends that it is the licensing agreement that "serves to establish personal jurisdiction over the company." [ECF No. 16 at p.18.] As a result, this court must determine whether Plaintiff's suit "arises out of" or "relates to" Lenox's participation in the licensing agreement.
Lenox does not dispute that it has contacts "with South Carolina through its Myrtle Beach retail store and the sale of products Lenox actually manufactures in other retail stores throughout the state," such that "specific jurisdiction would exist if Plaintiff's claims arose from a product that Lenox manufactured or sold." [ECF No. 11-1 at p.8; see also ECF No. 32 at p.3]
Plaintiff's argument that the claim does "arise out of" or "relate to" the licensing agreement relates to the amount of control and/or rights that Lenox retained through the license agreement. Specifically, Plaintiff notes that Lenox retained the rights to approve sample products already manufactured by Continuum, to approve a marketing plan and schedule, to offer design direction for licensed products, and to inspect where the products were sold, to name a few. Id. at pp.19–20. Plaintiff further emphasizes that Lenox retained the ability to approve the retailers to which Continuum could distribute the licensed products. Id. at p.20. Thus, according to Plaintiff, the "available evidence warrants the inference that Lenox, in exercising such control under the licensing agreement, intended for the products produced thereunder to enter the South Carolina market," thereby purposefully availing itself of South Carolina as a forum for litigation. Id. at p.21. Essentially, the argument is akin to what has become known as the "stream of commerce plus" test. See Wallace , 2019 WL 6170419, at *5 ("Under the ‘stream-of-commerce plus’ test ... a non-resident defendant may be subject to specific jurisdiction in a given forum where it places a product in the stream of commerce, that product reaches the forum state ‘through the stream of commerce,’ and the defendant engaged in some additional conduct that showed an intent to serve the market in the forum state.").
Plaintiff's argument, however, fails on at least one crucial point that the Fourth Circuit noted in Fidrych : there is no evidence in the record that Lenox "purposefully directed [its] activities [under the licensing agreement] at residents of the forum." 952 F.3d at 140 (citing Burger King , 471 U.S. at 472, 105 S.Ct. 2174 ); see also id. at 142 (noting the "key issue in a specific jurisdiction case [is] whether ‘the defendant has purposefully directed [its] activities at residents of the forum" (citation omitted; emphasis added in Fidrych )); Hamburg Sudamerikanische Dampfschiffahrts Kg, Texport, Inc. , 954 F. Supp. 2d 415, 424 (D.S.C. 2013) ("Plaintiff has not shown that Textile Waste directed the materials there or had anything more than fortuitous involvement in the materials getting to South Carolina. Even if it was foreseeable that the materials might make their way to South Carolina, Textile Waste engaged in no conduct to purposefully avail itself of South Carolina markets as it relates to this controversy. " (emphasis added)). Plaintiff argues that the territory covered by the licensing agreement consists of "the United States of America, its territories and possessions and Canada" and therefore evidences that Lenox's activities are directed at all states, including South Carolina. [ECF No. 16 at p.21.] Looking to the terms of the licensing agreement, the court is constrained to disagree.
The licensing agreement states that the "LICENSEE wishes to design, market, manufacture, distribute and sell in the Territory various cookware products under the Trademarks." [ECF No. 16-3, License Agreement, "WHEREAS" ¶ 3.] Related to sales, Lenox did not mandate the sale of licensed products in specific states or even specific stores. Rather, it included a list for "illustrative purposes only," of "entities that would be considered Department/Specialty Outlets and those that would not, id. "TERMS AND DEFINITIONS" ¶ 1.2; see also Schedule V (noting "LICENSEE may distribute market, and sell ... in any Department/Specialty Outlet in which LICENSOR distributes, markets and sells its LENOX-branded tableware products" (emphasis added)), and gave Continuum, as licensee, the authority to "promote and extend the sale of the Licensed Products throughout the Territory to Department/Specialty Outlets, id. at "SALES" ¶ 9.1. There is no evidence in the record, or inference from the plain terms of the licensing agreement, that Lenox directed Continuum to sell the licensed products in all Tuesday Morning stores or in stores in South Carolina. Further, while Lenox is authorized to approve Continuum's marketing plan, the actual amount and direction of advertising and promotion is left to Continuum. See id. at "ADVERTISING AND PROMOTION" ¶ 12.2.
This court finds that under these facts, Lenox identifying Tuesday Morning as a store that Continuum may distribute to is even more attenuated than if Lenox placed the item into the stream of commerce, assuming it may ultimately end up in a given state. See Dash v. Mayweather , No. 3:10-cv-1036, 2010 WL 3420226, at *6 (D.S.C. Aug. 25, 2010) ("The fact that an item or good is sold in a forum, and that it was foreseeable that such sale would occur, is not and has never been a sufficient benchmark for personal jurisdiction."); Companion Prop. & Cas. Ins. Co. v. U.S. Bank Nat'l Ass'n , No. 3:15-cv-1300, 2016 WL 6781057, at *10 (D.S.C. Nov. 16, 2016) ("[F]ocus on a defendant's knowledge regarding a third party's contacts allows the third party's contacts, rather than contacts created by the defendant, to control jurisdiction."); Holliday v. Nissan Motor Co., Ltd. , No. 2:18-cv-1503, 2019 WL 2612771, at *3 (D.S.C. June 26, 2019) ("Importantly any ‘marketing’ at issue [in consideration of the "plus"] must be directed at South Carolina, not at the United States generally"). The court is unable to conclude that the licensing agreement serves as a contact between Lenox and the forum state, South Carolina. See Walden v. Fiore , 571 U.S. 277, 284, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) ("For a State to exercise jurisdiction constituent with due process, the defendant's suit-related conduct must create a substantial connection with the forum State."); Wallace , 2019 WL 6170419, at *6 ("The Supreme Court, however, has made the distinction clear and has cautioned against perverting specific jurisdiction into ‘a loose and spurious form of general jurisdiction.’ " (citing Bristol-Myers , 137 S. Ct. at 1776 ))
In any event, this court is also persuaded by the Fourth Circuit's note in Fidrych that it did not have to "definitely resolve" the second prong question because the forum contact at issue, a website accessible in South Carolina, was "insufficient to satisfy the minimum-contacts requirement of the personal-jurisdiction inquiry." 952 F.3d at 140. In reaching this conclusion, the Fourth Circuit noted that while the defendant had extensive contacts with South Carolina, and was even qualified to do business in the State, the court could not consider those contacts in the jurisdictional analysis because they had no relationship to the claims asserted by the Plaintiff in the case. See id. This court can, and must, reach the same conclusion as to the licensing agreement. See ESAB Group , 126 F.3d at 625 ("With respect to specific jurisdiction, the touchstone remains that an out-of-state person have engaged in some activity purposefully directed toward the forum state. The contacts related to the cause of action must create a substantial connection with the forum state ...."). The question here is whether the licensing agreement "amounts to activity purposefully directed at South Carolina residents." Id. at 141.
The licensing agreement allows Continuum to use Lenox's trademark on certain products that are ultimately manufactured, marketed, and distributed by Continuum. Aff. of Karen Wolf at ¶¶ 6–10. The decisions carved out for Lenox in the licensing agreement "do[ ] not target South Carolina residents ... any more than they target[ ] any other state." Fidrych , 952 F.3d at 141 ; see also ESAB Group , 126 F.3d at 625 (declining specific jurisdiction where defendant did not direct activities at South Carolina, but instead "focused its activities more generally on consumers located throughout the United States and Canada without focusing on and targeting South Carolina"). This court therefore concludes that Lenox's "case-related contact[ ] with South Carolina [is] too tenuous and too insubstantial to constitutionally permit the exercise of specific jurisdiction." Fidrych , 952 F.3d at 143.
Plaintiff objects to consideration of the Karen Wolfe affidavit's sworn statement that Lenox did not design, manufacture, or distribute the Tea Kettle. Plaintiff argues that in deciding the Rule 12(b)(2) motion, this court must accept as true her allegation that the Tea Kettle was "designed, manufactured, tested, packaged, tested, imported, inspected, promoted, sold and/or distributed by Defendants." Compl. at ¶ 10. The court disagrees. "To determine whether a plaintiff has satisfied her burden, the court may consider both defendant's and plaintiff's pleadings, affidavits , and other supporting documents presented to the court." Burrows v. General Motors Co. , No. 4:12-cv-02823, 2013 WL 3967115, at *4 (D.S.C. July 31, 2013) (finding no specific jurisdiction where defendant submitted a declaration stating that the defendant "had no role in the design, manufacture, sale, distribution, or servicing" of the vehicle at issue). The court is only required "to construe ‘all relevant pleading allegations in the light most favorable to the plaintiff, assume credibility, and draw the most reasonable inferences for the existence of jurisdiction.’ " Id. (citing Combs v. Bakker , 886 F.2d 673, 676 (4th Cir. 1989) (emphasis added)). While Plaintiff alleges that Lenox "designed, manufactured, tested, packaged, tested, imported, inspected, promoted, sold and/or distributed" the Tea Kettle, the court cannot construe it to be true in the face of an affidavit that it is freely allowed to consider. And, in any event, Plaintiff does not challenge the fact that Lenox did not manufacture, distribute, or sell the Tea Kettle. Instead, Plaintiff claims that the licensing agreement evidences that Lenox had more control over its licensed products than is outlined in the affidavit. Looking to the licensing agreement—which Plaintiff submitted for the court's consideration—the court finds that the plain terms of the licensing agreement evidence that Lenox did not design, manufacture, distribute, or sell the Tea Kettle at issue.
In sum, "[d]ue process limits on the State's adjudicative authority principally protect the liberty of the nonresident defendant—not the convenience of the plaintiffs or third parties." Walden , 571 U.S. at 284, 134 S.Ct. 1115. While it seems clear that Plaintiff's alleged injury occurred in South Carolina and that Lenox has some connections to South Carolina, Plaintiff has not established that any actions by Lenox pursuant to the licensing agreement were directed at residents of South Carolina. The court cannot exercise specific jurisdiction over Lenox and, therefore, the motion to dismiss must be granted.
IV. Jurisdictional Discovery.
If the court is inclined to grant the motion to dismiss, Plaintiff asks for jurisdictional discovery "in light of the disputed issues of fact raised by Defendant's affidavit and license agreement." [ECF No. 16 at p.24.] According to Plaintiff, "information concerning any communications, plans, certifications, written approvals, or similar exchanges between Lenox and Continuum pertaining to the marketing and distribution of the Tea Kettle" may aid the court in deciding the personal jurisdiction question. Id. at p.25. The court disagrees. Plaintiff has not come forward with anything beyond "speculation" or "conclusory assertions" about the contents of the affidavit. See Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc. , 334 F.3d 390, 403 (4th Cir. 2003) ("When a plaintiff offers only speculation and conclusory assertions about contacts with a forum state, a court is within its discretion in denying jurisdictional discovery."). There is nothing in the licensing agreement to even suggest that Lenox distributed the Tea Kettle or mandated state-specific advertising of the Tea Kettle (or other licensed products). Moreover, there is no indication here of "fraud or intentional misconduct" on the part of Lenox in the submission of its jurisdiction affidavit and, therefore, this court has no reason to believe that additional information is either needed or warranted. Id.
CONCLUSION
For the reasons outlined herein, Defendant Lenox Corporation's motion to dismiss, ECF No. 11, is GRANTED , and the motion to stay, ECF No. 13, is DENIED as moot.