Opinion
No. X08 CV09-5012420S
September 22, 2010
Memorandum of Decision on Motion to Dismiss (No. 103.00)
Facing a complaint alleging individual tort liability stemming from their work at General Motors Corporation (GMC), fourteen nonresident present or former directors, officers or executives of GMC and/or its subsidiary Saturn Corporation have moved to dismiss the claims against them in this lawsuit for lack of personal jurisdiction. The product in question is a 1995 Saturn sedan, manufactured by Saturn Corporation and purchased new in Connecticut by plaintiffs Denise Cece-York and her husband from the defendant Saturn of Stamford, Inc., an authorized Saturn dealership. Ms. Cece-York was driving her Saturn when it was struck in the rear on July 14, 2007 by a vehicle driven by Tatiana Pieres, who is not a defendant in this suit. As a result of the collision plaintiff suffered serious personal injuries. She alleges that the front seat of the 1995 Saturn was defective and that defect was a substantial factor in causing her injuries. The single-count Amended Complaint alleges a cause of action under the Connecticut Product Liability Act encompassing claims of negligence, failure to warn, breach of express and implied warranty, misrepresentation, recklessness, and violations of Connecticut Agencies Regulations. (¶¶ 33-50.) The gravamen of the complaint, underlying each theory, is that the front seats of the 1995 Saturn were defectively designed such that they do not adequately protect front-seat passengers in rear-end collisions. According to plaintiff the "defect" is that the seats are "unreasonably unsafe in moderate and severe rear impact collisions because they are so weak that they deform and/or collapse rearward, allowing the occupant to slide or ramp up the seatback and suffer hyperextension of the spine over the top of the seat, or to be hurled into the rear seat area." (¶ 26). Plaintiff alleges that, for more than thirty years, GMC and other manufacturers have known the risk of injury associated with this alleged "failure of seatback stiffness" in rear-end collisions. (¶¶ 19-31.)
Mr. York is also a plaintiff for purposes of his loss of consortium claim. Since his claim is wholly derivative of Ms. Cece-York's products liability claim, I will refer to her in this memorandum as "plaintiff."
Conn. Gen. Stat. §§ 52-240a, 240b, 52-572m to 572q inclusive, and 52-577a.
Although the present defendants include the corporate seller of plaintiff's 1995 Saturn, Saturn of Stamford, Inc., and the corporate manufacturer of the front seat that went into that vehicle, Johnson Controls, Inc., the corporate designer and the corporate manufacturer of the vehicle, GMC and its subsidiary Saturn Corporation, respectively, have not been sued. Instead, the fourteen individual directors, officers, and management level executives of those corporations have been sued solely in their capacities as individuals. Plaintiff admits (3/30/10 Tr.47) that GMC and Saturn Corporation — and not the individuals — would have been sued were it not for the bankruptcy of GMC and the resulting asset sale free and clear of liens and claims to General Motors Company ["New GM"], a limited liability company, not a defendant herein.
By the fall of 2008 GMC was in a severe liquidity crisis, and its ability to continue operations was uncertain. With 235,000 employees worldwide, nearly 6,100 dealerships, and a network of approximately 11,500 suppliers, the consequences of a GMC collapse on the U.S. economy would have been stark. At that point the U.S. Government became actively engaged in in an effort to save GMC. On December 18, 2008 the government announced that it would make short-term emergency funding available to GMC (and Chrysler Corporation) through a secured credit facility. By February 17, 2009 GMC had drawn $13.4 billion against that facility. Thereafter GMC made a detailed proposal to transform its U.S. business so as to ensure long-term viability, but, on March 30, 2009 the new Obama administration rejected that plan (which included additional advances of government funds) and suggested that GMC instead consider a restructuring plan through use of the bankruptcy courts. On June 1, 2009 GMC filed for protection under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. As GMC's largest secured creditor the U.S. Treasury proposed a sale of substantially all of its assets to a purchaser sponsored by the Treasury on an expedited basis, pursuant to § 363 of the Bankruptcy Code. The purchaser would then create a "new GM" free of the bankruptcy process and free of any then-existing tort claims. Without any alternative other than liquidation, GMC moved immediately in the Bankruptcy Court pursuant to § 363 for approval of a sale of substantially all of its assets to Vehicle Acquisitions Holdings, LLC ("VAH") by a Master Sale and Purchasing Agreement ("MPA'). The U.S. Treasury sponsored VAH and the MPA was negotiated by and among GMC, the U.S. and Canadian Governments and the United Auto Workers union. The motion was also supported by the GMC Creditor's Committee and an Ad Hoc Committee representing the holders of $27 billion in unsecured GMC bonds. By order of July 5, 2009 (the "Sale Order") the Bankruptcy Court approved the sale of GMC's assets to General Motors Company, LLC ("New GM") as successor in interest to VAH. The Sale of GMC's assets to New GM closed on July 10, 2009. In Re General Motors Corp., 407 B.R. 463, 475-80 (Bankr. S.D.N.Y. July 5, 2009). The Sale Order (copy attached as Exhibit B to defendants' initial memorandum (No. 104) in support of this motion) forecloses any claims against New GM arising out of events or transactions prior to July 10, 2009. Specifically, the Sale order vests New GM with title "free and clear of liens, claims, encumbrances and other interests . . . based on any successor or transferee liability." (Sale Order ¶¶ AA, BB.) Except for certain "Assumed Liabilities" set forth in the MPA (not relevant here) New GM does not have "any liability for any claim that arose prior to the Closing Date" relating to vehicles produced prior to the Closing Date. ( Id. ¶ 46) Thus, holders of claims against GMC are "forever barred, estopped, and permanently enjoined . . . from asserting against [New GM]" any such claims. ( Id. ¶ 6). In approving the sale of GMC assets to New GM free and clear of liens and claims, the Bankruptcy Court specifically considered objections thereto by tort litigants, noting that "if they prevail in litigation and cannot look to New GM as an additional source of recovery [in addition to what may be recovered by filing a claim in bankruptcy against GMC] they may recover only modest amounts on any allowed claims — if, as is possible, they do not have other defendants who can also pay." In Re General Motors Corp, supra, 505. The plaintiffs Denise Cece-York and her husband have filed two $15 million claims against GMC in the bankruptcy proceeding in the Southern District of New York, claiming that their damages arise from a defective seat in a vehicle manufactured by GMC's Saturn subsidiary. There is no indication in the record submitted to this court that plaintiffs have moved in the Bankruptcy Court for relief from the automatic stay pursuant to § 362(d) of the Bankruptcy Code to sue GMC here in the Superior Court or make GMC a defendant in this case.
Per affidavits submitted to the court and not contradicted by any evidence, nine of these fourteen defendants have not had any business contact with the State of Connecticut in either a personal or professional capacity. Each of these defendants denies any involvement in the design of the allegedly faulty car seat and plaintiffs only claim that one, Robert Lange, worked in a related division subsequent to the design and manufacture of this car. They also have submitted with their Supplemental Memorandum a copy of Mr. Lange's CV obtained from the internet which lists among his publications and presentations "Occupant injury mechanisms in rollover collisions as recorded in dynamic vehicle testing. Consumer Reports, East Haddam, CT 2008." One defendant, G. Richard Wagoner, Jr. is a retired former Chairman and CEO of GMC who was a senior executive of GMC at the time plaintiff's vehicle was designed, manufactured and sold. GMC filed its 1994 annual report with the Secretary of State of Connecticut as a foreign corporation authorized to do business in Connecticut. That report lists Mr. Wagoner as "Executive Vice President and Chief Financial Officer." He is listed as the president of GMC in the 2006 GMC annual report, and as a director of GMC subsidiary Saturn Corporation in its 1996 report. Defendant Jill Lajdziak is listed as a vice president of Saturn Corporation in that corporation's annual report for 2006, more than a decade after Ms. York bought her car and defendant George M.C. Fischer is listed as a director of GMC in the 2006 report. The final individual defendant moving for dismissal is Karen Katen, who became an outside director at GMC after the vehicle was designed, manufactured and sold. She owns a vacation home in Connecticut.
Plaintiffs seek to hold these individuals accountable for "a massive conspiracy at the highest levels [of GMC] regarding a well known defect." They allege that GMC's car seats were unreasonably unsafe "because they are so weak they deform and/or collapse" when the vehicle is struck from behind and that each of the individual defendants had "access to all available information pertinent to the product . . . and the ability to influence policy" at GMC. Plaintiffs claim these individual officers, directors and employees must have acted with "conscious, willful disregard of public safety," resulting in a defect plaintiffs characterize as a "product of the entire corporate management and corporate policy." They make no claim here against the corporation, but rather claim that each of the individual defendants transacted millions of dollars of business in Connecticut using GMC as their agent.
When a defendant moves to dismiss for lack of personal jurisdiction "a two part inquiry is required. The trial court must first decide whether the applicable state long-arm statute authorizes the assertion of jurisdiction over the [defendant]. If the statutory requirements [are] met, its second obligation [is] then to decide whether the exercise of jurisdiction over the [defendant] would violate constitutional principles of due process." Knipple v. Viking Communications, 236 Conn. 602, 606 (1996). Due process is satisfied if there are no direct constitutional limitations and if requiring the defendant to appear in this Court does not violate "traditional notions of fair play and substantial justice" Int'l Shoe Co v. Washington, 326 US 310, 316 (1945).
"If the defendant challenges the court's jurisdiction based on constructive service on a foreign defendant it is then incumbent on the plaintiff to prove the facts establishing the requisite minimum contacts." Standard Tallow Corp. v. Jowdy, 190 Conn 48, 52-54 (1983). Additionally, "[i]n ruling upon whether a complaint survives a motion to dismiss, a court must take the facts to be those alleged in the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader." Lawrence Brunoli, Inc. v. Branford, 247 Conn. 407, 410-11 (1999). However, "[i]f complaint is supplemented by undisputed facts established by affidavits submitted in support of motion to dismiss, the trial court . . . may consider these supplementary undisputed facts and need not conclusively presume validity of allegations of complaint; rather, those allegations are tempered by light shed on them by supplementary undisputed facts, and if those affidavits or other evidence conclusively establish that jurisdiction is lacking, and plaintiff fails to undermine this conclusion with counter-affidavits or other evidence, trial court may dismiss action without further proceedings." Columbia Air Services, Inc. v. Department of Transp., 293 Conn. 342, 347-48 (2009). Thus, "In the absence of any disputed facts pertaining to jurisdiction, a court is not obligated to hold an evidentiary hearing before dismissing an action for lack of jurisdiction." Pinchbeck v. Dept. of Public Health, 65 Conn.App. 201, 209, cert. denied, 258 Conn. 928 (2001).
Long-Arm Statute
Plaintiffs seek to apply Connecticut's long arm statute, which states:
(a) As to a cause of action arising from any of the acts enumerated in this section, a court may exercise personal jurisdiction over any nonresident individual, foreign partnership or foreign voluntary association, or over the executor or administrator of such nonresident individual, foreign partnership or foreign voluntary association, who in person or through an agent: (1) Transacts any business within the state; (2) commits a tortuous act within the state, except as to a cause of action for defamation of character arising from the act; (3) commits a tortuous act outside the state causing injury to person or property within the state, except as to a cause of action for defamation of character arising from the act, if such person or agent (A) regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in the state, or (B) expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce; (4) owns, uses or possesses any real property situated within the state.
Conn. Gen Stat. § 52-59b
The plaintiffs claim for the first time in their Supplemental Memorandum in Objection to Motion to Dismiss that the individual defendants were transacting business and committed the tort of negligent failure to learn of and prevent the alleged seatback defect within Connecticut to the extent that they should be subjected to personal jurisdiction here under prongs (1) and (2) of the statute.
The phrase "transacts any business" has been construed by our Supreme Court to embrace a single purposeful business transaction. Zartolas v. Nisenfeld, 184 Conn. 471, 477 (1981). In determining whether the defendants' contacts constitute the "transaction of business" within this state the courts do not resort to a rigid formula, but balance considerations of public policy, common sense, and geography of the relevant factors. Id. 447. The incidental personal contacts that some of the defendants have had with Connecticut do not amount to the "transaction of business." Solano v. Caligari, 108 Conn.App. 731, cert. denied, 289 Conn. 943 (2008) (defendant's discussion of her defaulted loan and request that the plaintiff make that loan, in Connecticut, did not amount to a single purposeful business transaction.); Green v. Simmons, 100 Conn.App. 600, 608 (2007) (concluding that defendant's limited telephone and mail contacts with Connecticut resident did not constitute transacting business in the state); and Rosenblit v. Danaher, 206 Conn. 125 (1988) (presence at one meeting in Connecticut insufficient). Furthermore those contacts have nothing to do with plaintiffs' alleged cause of action and therefore cannot form the basis of in personam jurisdiction here. Ryan v. Cerullo, 282 Conn. 109, 121-22 (2007) (concluding that Conn. Gen. Stat. § 52 § 59(a)(l) requires both that the defendant conduct business in Connecticut and that plaintiff's cause of action arise from that business). Plaintiffs present no evidence that any of the individual directors regularly transacted business in their individual capacities within the state of Connecticut. Nor do they ask the court to hold these defendants individually liable for acts they committed within the State of Connecticut in a corporate capacity. Excepting a single speech given by Mr. Lange on an unrelated subject years after Ms. York's car was sold, the plaintiffs do not allege any defendant committed any commercial act, tortuous or otherwise, within the State. Excepting Ms. Katen's vacation property and limited personal visits unrelated to GMC or Saturn there is no evidence before the court any of personal dealings or tortuous conduct within the state by any of these defendants. The claim instead is premised on an agency theory, namely that when GMC and Saturn came into Connecticut and registered to do business here in the relevant years, and did engage here in the business of selling and maintaining General Motors automobiles, they were doing so as the "agents" of these individual defendants who are therefore deemed to have been the "principals" transacting "millions of dollars of business in Connecticut" through their corporate "agents." Although normally a corporate officer or employee acts as the agent of his or her employer as the principal, plaintiffs claim that the opposite relationship prevailed here. The only evidence cited relates back to the forgoing GMC and Saturn corporate filings with the Connecticut Secretary of State. Although none of these fourteen defendants, and in particular none of the three defendants named in those reports, actually signed those annual reports as filed by the corporations, and none of the annual reports use the term "principal," the Secretary of State's public "Concord" database which lists the information contained in corporate annual reports, uses the generic term "principals" as the heading for the listing of officers and directors. By transposing that single word across a wide gulf into the law of agency plaintiffs charge that Messrs. Wagoner and Fischer and Ms. Lajdziak as "principals" have been transacting business in Connecticut through their "agents," GMC and Saturn. The argument is seriously flawed. It rests entirely on the use of a single word inserted into an electronic summary of information filed by foreign corporations registered to do business in Connecticut without any indication who decided or why to use that word instead of the words "officers" and "directors" called for in the actual filed reports. "While the actions of a corporate officer may typically be attributed to the corporation under agency principles for purposes of determining jurisdiction over the corporation, the actions of the corporation (undertaken by other individuals) should not ordinarily be attributed to the individual corporate officer for purposes of determining whether jurisdiction exists over that individual." Grundberger Jewelers v. Leone, Docket No. CV.A. 303CV647CFD (U.S.D.C., D.Conn., Droney, J., June 18, 2004), 2004 WL 1393608, *3. Hollister v. Thomas, 110 Conn.App. 692, 706-07 (2008) (setting forth basic agency principles, including that the principal has complete control over all aspects of the task at issue, and noting that, "mere direction to perform a task does not imply control over performance of that task." Id. 707). See, Calder v. Jones, 465 U.S.783, 790 (1984) ("Petitioners are correct that their contacts with [the forum state] are not to be judged by their employer's activities there."). In fact this court believes that the word "principals" as used in the Concord database summary reflects the alternate meaning of the word, where, in certain contexts, such as this, it actually means "agents":
"Principal" (14c) One who authorizes another to act on his behalf or as an agent.
CF. AGENT (2)
Black's Law Dictionary, 9th ed. 2009.
Plaintiffs' citation of Gordon v. Marine Innovations, Inc., Docket No. CV08-5022561, Superior Court, Judicial District of New Haven (January 16, 2009, Thompson, J.), 2009 WL 415545, is unavailing. In that case the motion to dismiss filed by individual directors of the defendant corporation was denied, but the court found that they had detailed actual knowledge of the Connecticut transaction, had directed other employees to carry out the alleged wrongful conduct, and had direct contact in person and by telephone with the plaintiff's husband in Connecticut regarding the transaction. The case is clearly distinguishable. Thus, jurisdiction cannot be supported under Gen. Stat. §§ 52-59b(a)(1) or 52-59b(a)(2).
To support jurisdiction under Gen. Stat. § 52-59b (a), prong (3), plaintiffs must show that defendants committed a tort outside Connecticut with consequent injury inside the state and that the defendant or their agent had enough contact with the state that they should have expected a hale to court here. They can satisfy Gen. Stat. § 52-59b (a)(3)(A) by showing that the individual "regularly does or solicits business . . . in the state," or "derives substantial revenue from goods used or consumed or services rendered, in the state." Alternatively, they can allege facts supporting the conclusion that any individual "derives substantial revenue from interstate or international commerce." Gen. Stat. § 52-59b(a)(3)(B). Thus what "is required is sufficient contact to make it reasonable and just, according to traditional notions of fair play and substantial justice, to permit the state to enforce obligations incurred there." Wedig v. Brinster, 1 Conn.App. 123, 129 (1983). Were the requisite tortuous conduct outside the State of Connecticut proven, "the court would still have to find that [defendant] regularly does or solicits business or engages in other persistent conduct in Connecticut." Hagar v. Zaidman, 797 F.Sup. 132, 137 (D.Conn. 1992).
Plaintiffs here have provided no evidence to support a finding that any of the defendants' individual actions have had a "commercial impact" in Connecticut. The defendants' undisputed affidavits make clear the opposite proposition, that none of these individuals directly receives any "substantial revenue" from Connecticut commerce at all. Nor did any receive incentive income from GMC with regard to either the allegedly defective product or corporate performance in Connecticut.
Instead, plaintiffs argue that these individuals created a significant presence in the state by using GMC as "their agent" to transact millions of dollars of business in the State. Citing to a string of cases in which principals of small corporations have tried to evade individual liability for their direct actions inside the state, plaintiffs allege that GMC's undisputed presence in the State during the time of the alleged conspiracy is adequate to support personal jurisdiction over these officers, directors and managers individually because they are responsible in their individual capacity for the acts of GMC.
Throughout their memoranda in objection to this motion, plaintiffs consistently refer to "corporate malfeasance" and "corporate policy," but they ask this court to approve personal jurisdiction over these individuals on the basis of their role as directors and officers of that corporation and the "constructive knowledge" they must have acquired regarding the alleged dangerous design of the seatbacks of 1995 Saturn automobiles. To support the tortuous conduct requirement of Gen. Stat. § 52-59b(3), plaintiffs seek to establish individual liability here by showing that the defendants committed or participated in the allegedly tortuous conduct of GMC by failing to "influence the policy" of GMC or warn the plaintiffs of the danger they allegedly knew constructively as officers and directors of the corporation.
Connecticut follows the common law principle that "an officer of a corporation does not incur personal liability for its torts merely because of his official position." Scribner v. O'Brien, 169 Conn. 389, 404 (1975). However, as the Scribner court noted, when "an agent or officer commits or participates in the commission of a tort, whether or not he acts on behalf of his principal or corporation, he is liable to third persons injured thereby." Id. Thus, if plaintiffs can show direct individual participation in a corporate tort, liability may attach to the individual. There is a New York doctrine known as the "corporate shield" which recognizes that personal jurisdiction over a director or officer must be based on his or her own personal conduct rather than acts taken in the director or officer's official capacity. There is no Connecticut appellate authority adopting or rejecting the corporate shield doctrine, and Superior Court decisions reflect a split of authority with some applying the doctrine and other rejecting it, Compare, Under Par Associates, LLC v. Wash Depot A., Inc., 47 Conn.Sup. 319 [ 31 Conn. L. Rptr. 20] (December 11, 2001, Blue, J.) (". . . the `fiduciary shield doctrine' finds no place in the text or underlying policy of [Conn. Gen. Stat. Section] 52-59b") with Weiss v. Friedman, Docket No. CV88-0094242S, Superior Court, Judicial District of Stamford-Norwalk at Stamford, (May 22, 1990, Nigro, J.), 1990 WL 284330 ("The court agrees with the position of the plaintiffs that the fiduciary shield doctrine applies to an effort to secure in personam jurisdiction by means of long-arm service over an individual who was not manually served within the state.") This court agrees with those decisions holding that Connecticut law does not recognize the doctrine, especially since the Court of Appeals of New York, the state where the doctrine originated and whose long-arm statute was the model for § 52-59b, has rejected the doctrine in Kreutter v. McFadden Oil Corp., 71 NY 2d 460, 522 N.E.2d 40, (1988). But the inapplicability of the corporate shield doctrine is not fatal to the individual defendant's motion in this case because the undisputed facts fail to establish that the individual GMC defendants acted in either capacity so as to subject themselves to Connecticut jurisdiction under § 52-59b. As the Kruetter court confirmed, in rejecting the corporate shield doctrine, the individual must have been a "primary actor" in the matter giving rise to a plaintiffs claims Id. 522 N.E.2d at 45-46. See also Sterling Interiors Group, Inc. v. Haworth, Inc., No. 94 Civ. 9216 (CSH), 1996W1 426379 at *15 (S.D.N.Y., July 30, 1996) applying the New York long-arm statute post Kruetter and holding that vague allegations that an out-of-state officer "participated in," "was aware of," "consented to," and "directed" an alleged illegal scheme failed to describe the specific actions taken by the defendants and therefore could not provide a basis for personal jurisdiction.
Connecticut courts may look to judicial interpretations of New York's "identically worded long-arm statute" Ryan v. Cerullo, 282 Conn. 109, 124-25 (2007).
The cases cited do not support the plaintiffs' conclusion that these individuals are liable for the acts of GMC. In Ventres v. Goodspeed Airport, 275 Conn 105, the Court held that the sole member of a limited liability company may be held liable when he "commits or participates in the commission of a tort." In that case the sole member acknowledged that he was ultimately responsible for all work done by a subcontractor "under his authority." Id. at 141. In Gordon v. Marine Innovations, Inc., supra, the Superior Court in New Haven approved personal jurisdiction over two corporate principals of a Minnesota company, but only after finding that they had extensive individual contacts with the plaintiff in the State and that they were "concerned with . . . the effect his actions would have on . . . their own personal reputations." Id. at 5. Plaintiffs also cite to Oliva v. Bristol-Myers Squibb, 2005 WL 3455121 (D. Conn.), in which the United States District Court for Connecticut sought to resolve diversity issues. The court applied the "product seller" definition from the Connecticut Products Liability Act, Gen. Stat. § 52-572n, to a pharmaceutical company "detail person" who personally promoted its products to doctors and patients in Connecticut. Making particular note of the fact that the defendant's compensation was directly tied to the performance of the product in the State, the District Court based its jurisdictional determination on the nature of his individual acts and compensation, agreeing that he was properly joined because he personally "convinced Dr. Chao to prescribe [the defective product] to Oliva" and therefore might be liable. Id. at 5. Jurisdiction was not at issue.
In each of those cases, there was clear evidence before the court that certain acts had taken place in Connecticut and that the corporate principals had been directly involved in those cases. Under those circumstances, jurisdiction was found and/or liability could attach to the individual due to their direct involvement in the torts. Here, there are neither allegations of relevant acts in Connecticut nor evidence of direct involvement by the defendants in any corporate malfeasance. More appropriate precedent can be found in Reese v. Arrow Financial Services, LLC, 202 F.R.D. 83 (U.S.D.C., D.Conn. Arterton, J., June 14, 2001), a Federal Debt Collection Practices Act (FDCPA) case where the plaintiff alleged that the defendant Arrow had attempted to collect on a charged-off debt without advising the plaintiff that the statute of limitations had run on such debt. The individual out-of-state officers of Arrow were also sued.
The undisputed evidence against them was that they had generally ratified and approved collection letters knowing that some of the letters might be sent to debtors in Connecticut. The court held that the actual sending of letters into Connecticut by the officers would confer jurisdiction, but the "approval of a corporate policy in Illinois that eventually resulted in the corporation's mailing of a letter to Connecticut . . . would spread the concept of personal jurisdiction too far." Id. *90. Also persuasive is the recent ruling of an Alabama trial court dismissing all claims against three former nonresident officers and directors of old GMC (none of them being defendants in this case) in circumstances almost identical to those here. See Rainey v. General Motors Corporation et al., No. CV-2008 § 900205 (Ala.Civ. Court, March 30, 2010) (Copy of ruling and relevant pleadings attached to Defendants' Supplemental Memorandum in Support of Motion to Dismiss, No. 144). In the Rainey case, the plaintiffs, like plaintiffs here, sued the individual defendants after GMC had filed for bankruptcy, alleging that they "knew or should have known of alleged safety design defects in plaintiff's GM vehicle (including the seat design) "by virtue of lawsuits, judgments, settlements tests, crash tests, reports, studies, complaints, or otherwise." As in this case the Rainey plaintiffs alleged that the individual defendants, by virtue of their positions, "had affirmative official responsibility in the management and control" of GMC but did nothing to correct the defects, recall the vehicle, and warn plaintiffs. The individual defendants moved to dismiss for lack of personal jurisdiction and the court granted that motion and dismissed the case as to the individual nonresident defendants by summary written order.
The plaintiffs have failed to show a basis for the exercise of in personam jurisdiction against the individual defendants under prong (3) of § 52-59b.
Nor have the plaintiffs shown jurisdiction over the defendant Karen Katen under prong (4) of § 52-59b (ownership, use, or possession of real property in Connecticut). Although Ms. Katen admitted that she has a second home in Deep River, Connecticut which she uses periodically on weekends and for occasional vacations, there is not a scintilla of evidence that plaintiff's cause of action arose from her ownership, use, or possession of that property, which would be essential in order to subject her to jurisdiction on the ground of ownership or real property in this state. Ryan v. Cerullo, supra.
Jurisdictional Discovery
Plaintiffs ask the court to defer ruling on this motion and to approve extensive discovery aimed at establishing the merits of their case — "what did defendants know, when did they know it, and what did they do about it" — in the hopes that some jurisdictional nexus may arise. If jurisdiction is not found on the currently pled facts, plaintiffs claim that, under Standard Tallow, they should be permitted to do reasonable discovery prior to an evidentiary hearing in order to establish facts adequate to support personal jurisdiction of the court.
In Standard Tallow Corp. v. Jowdy, supra, the Court held that " when issues of fact are necessary to the determination of a court's jurisdiction, due process requires that a trial-like hearing be held, in which an opportunity is provided to present evidence and to cross-examine adverse witnesses." (Emphasis added.) Standard Tallow, at 56. In that case, the trial court refused to postpone a hearing on a motion to dismiss for lack of personal jurisdiction to permit pre-hearing discovery on acknowledged issues of jurisdiction fact. The Supreme Court ruled that, because the trial court had already recognized that a factual presentation was necessary, it was an abuse of discretion to deny the plaintiff any opportunity for discovery. Id. at 60.
Standard Tallow did not change the general rule that "[s]hould the court find the affidavits and supporting memoranda to be sufficient, the court need not conduct an evidentiary hearing . . ." Hagar, supra at 134, or the rule that "if affidavits and/or other evidence submitted in support of a defendant's motion to dismiss conclusively establish that jurisdiction is lacking and the plaintiff fails to undermine this conclusion with counter affidavits . . . or other evidence, the trial court may dismiss the action without further proceedings." Columbia Air services, supra, 293 Conn. at 348.
Plaintiffs in this case have not pled allegations that raise jurisdictional issues of fact and the evidence before the court is sufficient to determine whether the court has jurisdiction over each of the individual parties defendant to this Motion to Dismiss. Nine of the individual defendants filing the Motion to Dismiss have presented evidence showing that they have not had any sort of significant professional contact with the State of Connecticut that would allow § 52-59b to reach them. One, Karen Katen, admitted in her affidavit that she owned a second home in Connecticut, which the court has already addressed and found not to be sufficient to subject her to jurisdiction. Defendants have raised issues with regard to Messrs. Wagoner and Fischer and Ms. Lajdziak because they are listed on the Secretary of State's online database as "principals" of GMC or Saturn, and that also has been determined insufficient to confer jurisdiction. That leaves only Mr. Lange. Defendants have submitted a copy of his CV which seems to show that he made a presentation to Consumer Reports at East Haddam, Connecticut in 2008, more than a decade after plaintiff purchased her Saturn on the subject of rollover (not rear end) collisions. Assuming that fact to be true, without any affidavit or transcript or any evidence as what was said at that presentation, it fails to meet plaintiff's burden of proving jurisdiction. There may be an inconsistency between the curriculum vitae and Mr. Lange's affidavit statement that "I have never maintained an office or otherwise worked in the State of Connecticut" (¶ 7), "I have not . . . otherwise transacted business in Connecticut on my own behalf" (¶ 8) and/or, "[I] have not attended meetings in Connecticut" (¶ 10). But those inconsistencies would not raise an issue of jurisdictional fact because, assuming that Mr. Lange did make the presentation in person in Connecticut on that topic in 2008, it would not be sufficient transaction of business to subject him to jurisdiction. The other materials offered by defendants consisting of a 60 Minutes segment, Trial Magazine articles, memos and news reports discussing the seat-back design claims, and one verdict against GMC — to support the "constructive knowledge" argument that the seat-back issue must have been well known in GMC are first, inadmissible hearsay which may not be considered, and second, do not place at issue any statement made in the defendants' affidavits about their lack of involvement with the defect, Connecticut, or the plaintiffs. In summary, plaintiffs have not presented any evidence contradicting those affidavits. As a result, there is no "issue of fact" regarding their presence in Connecticut which would trigger the need for a Standard Tallow evidentiary hearing. The court has an adequate factual record before it on the matter of jurisdiction without authorizing additional discovery which plaintiffs acknowledge would be extensive and deeply tied to the merits of its case.
Since Mr. Lange left the employ of GMC in 2008 it is unknown if his 2008 presentation in Connecticut was made on behalf of GMC.
Due Process: Constitutional Limitations of International Shoe v. Washington
Having found that there is no in personam jurisdiction over the moving individual defendants under the long-arm statute, Conn. Gen. Stat. § 52-59b, it is not necessary to reach the issue whether the exercise of personal jurisdiction over the moving defendants would violate the constitutional principles of due process of law. Solano v. Calegari, supra, 108 Conn.App. at 736. "Only if we find the statute to be applicable do we reach the question whether it would offend due process to assert jurisdiction." Lombard Bros., Inc. v. General Asset Management Co., 190 Conn. 245, 250 (1983).
Order
For the foregoing reasons the Motion to Dismiss for Lack of Personal Jurisdiction is granted.