In Re: Katrina Canal Breaches Litigation, No. 2:2005cv04182 - Document 19511 (E.D. La. 2009)
Court Description: LEVEE: ORDER AND OPINION granting 10696 MOTION to Dismiss Case filed by CSX Corporation. Signed by Judge Stanwood R. Duval, Jr on 12/22/09.(Reference: LEVEE)(blg)
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In Re: Katrina Canal Breaches Litigation Doc. 19511 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN RE: KATRINA CANAL BREACHES CONSOLIDATED LITIGATION CIVIL ACTION NO. 05-4182 PERTAINS TO LEVEE: SECTION “K”(2) MORIAL, No. 07-4551 WHITE, No. 07-4553 METROLAB INC. OF PITTSBURGH, No. 07-4557 SAVOY PLACE ASSOCIATES, LP No. 07-4558 MINTZ, No: 07-4559 HURWITZ MINTZ FINES FURNITURE STORE SOUTH, L.L.C. No. 07-4560 DOLEY, No. 07-4561 MORIAL, No. 07-4563 DILLARD UNIVERSITY, No. 07-4948 ST. AUGUSTINE HIGH SCHOOL, No. 07-4949 HARRISON, No. 07-4952 LIBERTY BANK & TRUST CO., No. 07-4953 GERDES, No. 07-4957 UNION LTD. PARTNERSHIP, No. 07-4959 HERTZ 909 POYDRAS, LLC, No. 07-4960 PRYTANIA MEDICAL COMPLEX, OWNERS, No. 07-4963 PRAT, No. 07-4964 BERENSON, No. 07-4966 ADLER, No. 07-4967 ABUNDANCE SQUARE ASSOCIATES, LP, No. 07-4869 REDEMPTORIST LTD PARTNERSHIP, No. 07-4970 OMEGA HOSPITAL LLC, No. 07-4971 DOLEY, No. 07-4972 WELLS, No. 07-4973 ROBERT, No. 07-4974 MILLER, No. 07-4975 ENTERCOM COMMUNICATION CORP, No. 07-4976 ADLER, No. 07-4977 SMYTH, No. 07-4978 WHITE III LLC, No. 07-4979 HAYDEL, No. 07-4980 Dockets.Justia.com PATTERSON, NO. 07-4981 TREASURE VILLAGE ASSOCIATES, No. 07-4982 DOMINION N.O. CENTRE LLC, No. 07-4984 BAGNERIS, No. 07-4985 MORIAL, No. 07-4988 LOUISIANA INDEPENDENT FEDERATION of ELECTORS, INC., No. 07-4989 TANNER, No. 07-4990 ADLER, No. 07-4991 SOUTHPOINT TECHNOLOGIES, No. 07-4992 ADLER’S SPECIAL ACCOUNT, No. 07-4993 BERENSON, No. 07-4994 CII CARBON LLC, No. 07-4995 TOURO INFIRMARY, No. 07-4996 IMPERIAL TRADING COMPANY, No. 07-4997 PHYSICIAN MANAGEMENT SERVICES OF LOUISIANA LLC, No. 07-4998 DOLEY, No. 07-5000 ROBERT, No. 07-5001 SHOPS AND GARAGE AT CANAL PLACE, No. 07-5002 GREYSTAR DEVELOPMENT & CONSTRUCTION LLC, No. 07-5003 CAMBRIDGE REALTY WEST LLC, No. 07-5004 MAJESTIC LIFE INSURANCE CO., No. 07-5005 WHITE, 07-5006 UNITED RESTAURANT ENTITIES LLC, No. 07-5008 DAVIS, No. 07-5009 WETCO RESTAURANT GROUP LLC, No. 07-5012 DOLEY, No. 07-5014 MAJESTIC MORTUARY SERVICE, INC. No. 07-5015 UNIVERSAL HEALTH SERVICES, INC. No. 07-5016 REID, No. 07-5018 XAVIER UNIVERSITY OF LOUISIANA, No. 07-5018 EMBRY, No. 07-5019 GREEN-JOHNSON, No. 07-5155 2 CURTIS, No. 07-5193 UNIVERSAL HEALTH SERVICES, INC. No. 07-5254 UNIVERSAL HEALTH SERVICES, No. 07-5286 DAVIS, No. 07-5314 OMEGA HOSPITAL LLC, No. 07-5315 GERDES, No. 07-5316 ABUNDANCE SQUARE ASSOCIATION LP, No. 07-5317 UNION LTD PARTNERSHIP, No. 07-5318 DOLEY, No. 07-5319 SHOPS AND GARAGE AT CANAL PLACE, No. 07-5321 WELLS, No. 07-5322 IMPERIAL TRADING COMPANY, No. 07-5323 PHYSICIAN MGT. SERVICES OF LA. No. 07-5324 BERENSON, NO. 07-5325 ST. AUGUSTINE HIGH SCHOOL, No. 07-5326 ADLER, No. 07-5329 PRYTANIA MEDICAL COMPLEX OWNERS ASSOCIATION, No. 07-5334 LOUISIANA INDEPENDENT FEDERATION OF ELECTORS, INC., 07-5338 WETCO RESTAURANT GROUP LLC, No. 07-5339 CAMBRIDGE REALTY WEST LLC, No. 07-5340 ROBERT, No. 07-5341 UNITED RESTAURANT ENTITIES LLC, No. 07-5342 ADLER’S SPECIAL ACCOUNT, No. 07-5345 MILLER, NO. 07-5346 LIBERTY BANK & TRUST CO., No. 07-5347 DOLEY, No. 07-5348 GREYSTAR DEVELOPMENT & CONSTRUCTION LP, No. 07-5349 UNIVERSAL HEALTH SERVICES, INC., No. 07-5350 TREASURE VILLAGE ASSOCIATES LP, No. 07-5351 TOURO INFIRMARY, No. 07-5352 EMBRY, No. 07-5353 3 REDEMPTORIST LTD PARTNERSHIP, No. 07-5354 CII CARBON, No. 07-5355 WHITE, No. 07-5356 DILLARD UNIVERSITY, No. 07-5359 WHITE, No. 07-5360 HERTZ 909 POYDRAS LLC, No. 07-5361 MORIAL, No. 07-5362 PRAT, No. 07-5363 DOMINION/NEW ORLEANS CENTRE LLC, No. 07-5364 BERENSON, No. 07-5365 XAVIER UNIVERSITY OF LOUISIANA, No. 07-5367 DOLEY, NO. 07-5368 ADLER, No. 07-5369 SOUTHPOINT TECHNOLOGIES LLC, No. 07-5371 GREEN-JOHNSON, No. 07-5373 HAYDEL, No. 07-5374 ENTERCOM COMMUNICATIONS CORP., No. 07-5375 ADLER, No. 07-5376 BAGNERIS, No. 07-5378 HARRISON, No. 07-5494 REID, No. 07-5495 SMYTHE, No. 07-5496 ORDER AND OPINION Before the Court in each of the captioned cases is a “Motion to Dismiss” filed on behalf of defendant CSX Corporation (“CSX”)1 contending that the Court lacks jurisdiction over the person of CSX and that plaintiffs lack sufficient service of process on CSX. Having reviewed the pleadings, memoranda, and relevant law, the Court, for the reasons assigned, GRANTS the motion. BACKGROUND 1 Doc. 10696. 4 The plaintiffs in the 116 captioned cases are individuals and business entities that sustained damage as a result of Hurricane Katrina and the failure of the levees which resulted in catastrophic flooding in the Greater New Orleans Metropolitan area. Plaintiffs filed suit against a number of defendants,2 including CSX Corporation (CSX) and CSX Transportation, Inc. CSX is the parent company of CSX Transportation, Inc. With respect to CSX, the complaints, which are virtually identical, allege that CSX, together with CSX Transportation, Inc., negligently designed and constructed a railroad crossing at or near the Industrial Canal’s flood protection structures which compromised the safety of the levee/floodwall system of the Industrial Canal. CSX filed a motion to dismiss plaintiffs’ claims for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2) and for insufficient service of process pursuant to Federal Rule of Civil Procedure 12(b)(5). LAW and ANALYSIS “When, as here, the district court did not conduct an evidentiary hearing on defendant’s motion to dismiss, the party seeking to assert jurisdiction is required only to present sufficient facts to make out a prima facie case supporting jurisdiction.” Central Freight Lines v. APA Transport Corp., 322 F.3d 376, 380 (5th Cir. 2003). In a diversity action such as this, a federal district court may exercise personal jurisdiction only to the extent permitted by the applicable law of the forum state. Fed. R. Civ. P. 4(e)(1), (h)(1), 2 Plaintiffs also named as defendants: United States of America, Board of Commissioners of the Orleans Levee District, Board of Commissioners of the East Jefferson Levee District, Sewerage and Water Board of New Orleans, St. Paul Fire & Marine Insurance Company, National Union Fire Insurance Company, National Union Fire Insurance Company of Pittsburgh, Board of Commissioners for the Port of New Orleans, and The Public Belt Railroad Commission for the City of New Orleans. 5 and k(1). The Louisiana long-arm statute extends personal jurisdiction to the maximum limits permitted by due process. La. Rev. Stat. 13: 3201(B); Guidry v. U.S. Tobacco Co., Inc., 188 F.3d 619, 624 (5th Cir. 1999). “The Due Process Clause of the Fourteenth Amendment protects an individual’s liberty interest in not being subject to the binding judgments of a forum with which he has established no meaningful ‘contacts, ties or relations.’” Central Freight Lines v. APA Transport Corp., 322 F.3d at 380, quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The exercise of personal jurisdiction over a foreign defendant comports with the Due Process Clause when “(1) the defendant purposefully availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts with the forum state, and (2) the exercise of personal jurisdiction does not offend traditional notices of ‘fair play and substantial justice.’” McFadin v. Gerber, F.3d , , 2009 WL 3722729 at * 3 (5th Cir. November 9, 2009), quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed.2d (1945). Sufficient minimum contacts will give rise to either specific or general jurisdiction. General jurisdiction exists when a defendant’s contacts with the forum state are unrelated to the cause of action but are continuous and systematic. Specific jurisdiction arises when the defendant’s contacts with the forum arise from, or are directly related to the cause of action. Revell v. Lidov, 317 F.3d 467, 470 (5th Cir. 2002) (internal quotations and citations omitted). It is undisputed that CSX does not operate as a railroad, has never operated as a railroad, and has been authorized by the Interstate Commerce Commission and the Surface Transportation Board,only to own and control common carrier railroads. The following facts are also undisputed: • • CSX has never been authorized to conduct business in Louisiana; CSX has never had an office in Louisiana; 6 • • • • CSX has never had an officer or other employee working in Louisiana; CSX has never had any assets in Louisiana; CSX does not have an agent for service of process in Louisiana; and CSX has an internet website which can be accessed in Louisiana. Plaintiffs contend that CSX’s internet presence in Louisiana as a result of its website satisfies the requirements for the exercise of personal jurisdiction. The Court disagrees. In analyzing whether a defendant’s website can support a finding of personal jurisdiction over that defendant, the Fifth Circuit has employed the “ sliding scale” analysis of Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119 (W.D. 1997) which provides: At the one end of the spectrum, there are situations where a defendant clearly does business over the Internet by entering into contracts with residents of other states which “involve the knowing and repeated transmission of computer files over the Internet . . . .” Zippo, 952 F.Supp. at 1124. In this situation, personal jurisdiction is proper. See id., (citing CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996)). At the other end of the spectrum, there are situations where a defendant merely establishes a passive website that does nothing more than advertise on the Internet. With passive websites, personal jurisdiction is not appropriate. See id. (citing Bensusan Restaurant Corp. v. King, 937 F.Supp. 295 (S.D. N.Y. 1996), aff’d, 126 F.3d 25 (2nd Cir. 1997). In the middle of the spectrum, there are situations where a defendant has a website that allows a user to exchange information with a host computer. In this middle ground, “the exercise of jurisdiction is determined by the level of interactivity and commercial nature of the exchange of information that occurs on the Website. Id. (citing Maritz, Inc. v. Cybergold, Inc., 947 F.Supp. 1328 (E.D. Mo. 1996)). Mink v. AAAA Development, LLC, 190 F.3d 333, 336 (5th Cir. 1999). With respect to satisfying the requirements for the exercise of general jurisdiction, the Fifth Circuit has acknowledged that “[w]hile we deployed [the] sliding scale in Mink v. AAAA Development LLC, it is not well adapted to the general jurisdiction inquiry, because even repeated contacts with forum residents by a foreign 7 defendant may not constitute the requisite substantial, continuous and systematic contacts required for a finding of general jurisdiction . . ..” Revell v. Lidov, 317 F.3d at 471. Plaintiffs urge that the CSX website is sufficiently interactive to support a finding of general jurisdiction based on the following activities which can be undertaken using the website: 1) potential customers can initiate shipments using CSX’s rail, intermodal, and rail-to-truck services; 2) individuals can apply for a job; 3) entities can become a supplier; and individuals can purchase items from the “company store.” Plaintiffs also cite the fact that the website “requires that [customers] use electronic tools to conduct shipping transactions” in support of their claim that through the website CSX has the requisite contacts with Louisiana to satisfy the constitutional requirements for this Court to exercise of personal jurisdiction over CSX. Opposition to CSX Corporation’s Motion to Dismiss, p.8 (Doc. 11195). No extensive analysis of the interactive nature of the CSX website is necessary. The website indicates on the “Corporate Structure” page provides in pertinent part that “[a]s used in this Internet site, ‘CSX,’ ‘CSXT,’ or ‘CSX Transportation’ refers to CSX Transportation, Inc., and that ‘CSX Corp.’ or ‘CSX Corporation’ refers to CSX Corporation.” Doc. 11288, Ex. It is clear that the interactive website functions identified by plaintiffs permit internet users to interact, not with CSX Corporation, but rather only with CSX Transportation, a wholly owned subsidiary of CSX Corporation. As to CSX Corporation, the defendant at issue herein, the website is passive and insufficient to serve as the foundation for the exercise of personal jurisdiction. Accordingly, the motion to dismiss pursuant to Rule 12(b)(2) is GRANTED. Having determined that personal jurisdiction over CSX Corporation is lacking, the Court need not determine whether plaintiffs properly served CSX Corporation. 8 New Orleans, Louisiana, this 22nd day of December, 2009. STANWOOD R. DUVAL, JR. UNITED STATES DISTRICT JUDGE 9
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