Timothy J. Kopke v. A. Hartrodt S.R.L.
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2001 WI 99 SUPREME COURT OF WISCONSIN Case No.: 99-3144 Complete Title of Case: Timothy J. Kopke, Plaintiff-Respondent, United States Fidelity & Guaranty Company, a foreign insurance corporation and Leicht Transfer and Storage Co., a Wisconsin corporation, Subrogated-Plaintiffs-Respondents, v. A. Hartrodt S.R.L., a foreign corporation, Defendant, Cartiere Binda in Liquidazoine S.p.A., a foreign corporation, Defendant-Third-Party Plaintiff-Respondent, Societa' Cooperativa L'Arciere, a foreign corporation, Defendant-Appellant, v. Riunione Adriatica Di Sicurta S.p.A., a foreign corporation, Third-Party Defendant-Respondent. ON CERTIFICATION FROM THE COURT OF APPEALS Opinion Filed: Submitted on Briefs: Oral Argument: Source of APPEAL COURT: COUNTY: JUDGE: JUSTICES: Concurred: Dissented: Not Participating: July 10, 2001 April 30, 2001 Circuit Brown William M. Atkinson CROOKS, J., dissents (opinion filed). WILCOX and SYKES, J.J., join dissent. SYKES, J., dissents (opinion filed). WILCOX and CROOKS, J.J., join dissent. ATTORNEYS: For the defendant-appellant there were briefs by W.H. Levit Jr., Winston A. Ostrow, Michael B. Apfeld and Godfrey & Kahn, S.C., Milwaukee, and oral argument by Michael B. Apfeld. For the plaintiff-respondent there was a brief (in the court of appeals) by Lee J. Geronime, David A. Krutz, Leslie C. Mastey and Michael Best & Friedrich LLP, Milwaukee, and oral argument by Chris J. Trebatoski. For the defendant-third-party plaintiffrespondent there was a brief (in the court of appeals) by Trevor J. Will, Eric J. Massen and Foley & Lardner, Milwaukee, and oral argument by R. George Burnett. For the third party-defendant-respondent there was a brief by Frank J. Daily, Daniel J. La Fave and Quarles & Brady LLP, Milwaukee, and oral argument by Daniel J. LaFave. 2 2001 WI 99 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 99-3144 STATE OF WISCONSIN : IN SUPREME COURT Timothy J. Kopke, Plaintiff-Respondent, United States Fidelity & Guaranty Company, a foreign insurance corporation and Leicht Transfer and Storage Co., a Wisconsin corporation, Subrogated-PlaintiffsRespondents, v. A. Hartrodt S.R.L., a foreign corporation, Defendant, Cartiere Binda in Liquidazoine S.p.A., a foreign corporation, Defendant-Third-Party PlaintiffRespondent, Societa' Cooperativa L'Arciere, a foreign corporation, Defendant-Appellant, v. Riunione Adriatica Di Sicurta S.p.A., a foreign corporation, Third-Party DefendantRespondent. FILED JUL 10, 2001 Cornelia G. Clark Clerk of Supreme Court Madison, WI No. 99-3144 APPEAL from an order of the Circuit Court for Brown County, William M. Atkinson, Circuit Court Judge. ¶1 L'Arciere WILLIAM A. BABLITCH, (L'Arciere), an J. Italian Affirmed. Societa' cooperative, exercise of in personam jurisdiction over it. presents two inquiries: Cooperativa challenges the This challenge (1) Whether the facts presented satisfy Wisconsin's long-arm statute, Wis. Stat. § 801.05(4) (1997-98)1; and (2) Whether L'Arciere has "minimum contacts" with this State such that the court's exercise of jurisdiction would be fair and in accordance requirements. personal with the Fourteenth Amendment's due process We conclude that the requisite tests to establish jurisdiction over L'Arciere are satisfied. Accordingly, we affirm the ruling of the circuit court. FACTS ¶2 In May of 1997 Timothy J. Kopke (Kopke), a truck driver, was seriously injured when he opened a cargo container in Neenah, Wisconsin. The injury occurred when a pallet loaded with paper fell out of the cargo container and onto Kopke. The paper had been shipped to Neenah from Crusinello, Italy, by its manufacturer, Cartiere Binda in Liquidazione, S.p.A. (Binda). The paper had been purchased from the Binda's Crusinello mill by CTI Paper USA, Inc. (CTI). CTI had been purchasing paper product from the Crusinello mill since 1991. 1 All subsequent statutory references are to the 1997-98 volume, unless otherwise indicated. 2 No. 99-3144 ¶3 CTI is not a party to this action, although it supplied damage reports on cargo containers received from Binda. Forty-four damage reports were issued between August 1996 and September 1997. ¶4 an In 1995 Binda entered into a contract with L'Arciere, employee-owned Italian cooperative, load product into cargo containers. to provide workers to L'Arciere workers and Binda employees each played a role in the loading of product into cargo containers. ¶5 Binda employees would place the paper to be shipped on pallets and cover it with shrink-wrap. prepared loading November loading plans for plans for five 1996 and May of the containers. the 1997. Binda's setup department shipments At the top Binda produced occurring of these between plans is written either "Cont. X CTI Appleton," "Contenitore X CTI" or Contenitore X Neenah." "cont." as it is Kopke explains that "Contenitore," or abbreviated, is an Italian word meaning "container" and "X" is an abbreviation for "per," meaning "to." "Contenitore X CTI Appleton" identifies a container as being loaded for shipment to CTI in Appleton. ¶6 moved the In conformity with the loading plan, L'Arciere workers pallets into the cargo container. The L'Arciere workers placed the pallets into the cargo container and secured it using boards, bracing beams, and inflated air bags to fill side spaces. ¶7 Binda supplied these packing materials. After Kopke sustained his injury he brought a claim for damages against Binda, L'Arciere, and others. 3 L'Arciere No. 99-3144 moved to County dismiss Circuit motion. Court Judge stabilizing for lack Judge Atkinson the of personal William jurisdiction. M. Atkinson ruled being products that shipped Brown denied L'Arciere's this of surrounding by acts the product with air bags, and installing bracing beams and boards into the cargo processing of a container, were product. The acts that circuit were court part judge of was a also satisfied that the minimum contacts requirement for due process purposes was met.2 accepted L'Arciere appealed. L'Arciere's appeal, and The court of appeals subsequently the court certified the appeal to this court pursuant to Wis. Stat. (Rule) § 809.61. ANALYSIS ¶8 One issue is presented: Did the circuit court err by denying a motion to dismiss for lack of personal jurisdiction over L'Arciere? two-step inquiry. Wis. 2d 72, 76, Every personal jurisdiction issue requires a In re Liquidation of All-Star Ins. Corp., 110 327 N.W.2d 648 (1983) (discussing personal jurisdiction pursuant to Wis. Stat. § 645.04(5)(a)); Lincoln v. Seawright, 104 Wis. 2d 4, 10-11, 310 N.W.2d 596 (1981). first be determined whether defendants are jurisdiction under Wisconsin's long-arm statute. 104 Wis. 2d at 10. then the court It must subject to See Lincoln, If the statutory requirements are satisfied, must consider 2 whether the exercise of Judge Atkinson also denied L'Arciere's motion for summary judgment. This decision on summary judgment is not presented for review here. 4 No. 99-3144 jurisdiction comports "[P]laintiff has facie threshold the with minimal showing process burden that of requirements. establishing constitutional assumption of personal and a Id. prima statutory requirements for satisfied." Ammon v. Kaplow, 468 F. Supp. 1304, 1309 (D. Kan. 1979). the due jurisdiction are In this review, we may consider documentary evidence and weigh affidavits in reaching a determination as to whether this burden has been met. favor of the Id. plaintiff." "Factual doubts are to be resolved in Id. We begin our analysis with consideration of Wisconsin's long-arm statute. ¶9 Wisconsin Stat. § 801.05(4) authorizes the exercise of personal jurisdiction over nonresidents whose act or omission committed outside of Wisconsin gives rise to an injury within the state. All the participants to this appeal agree that if the courts have personal jurisdiction over L'Arciere, it arises under § 801.05(4)(b), set forth below: A court of this state having jurisdiction of the subject matter has jurisdiction over a person served in an action pursuant to s. 801.11 under any of the following circumstances: . . . (4) Local injury; foreign act. In any action claiming injury to person or property within this state arising out of an act or omission outside this state by the defendant, provided in addition that at the time of the injury, either: . . . (b) Products, materials or things processed, serviced or manufactured by the defendant were used or consumed within this state in the ordinary course of trade. 5 No. 99-3144 ¶10 of this Application of Wis. Stat. § 801.05(4)(b) to the facts case independently. presents a question of law, which we review Marsh v. Farm Bureau Mut. Ins. Co., 179 Wis. 2d 42, 52, 505 N.W.2d 162 (Ct. App. 1993). Wisconsin's long-arm statute is liberally construed in favor of jurisdiction. (citing Lincoln, 104 Wis. 2d at 9). Id. The plaintiff must carry the burden of establishing jurisdiction. Lincoln, 104 Wis. 2d at 9. ¶11 engaged Kopke The in dispute conduct asserts that here is focused described in L'Arciere engaged upon Wis. whether Stat. in L'Arciere § 801.05(4)(b). "processing." In support of his position, Kopke relies upon Nelson by Carson v. Park Industries, Nelson, the Seventh § 801.05(4)(b) 'processed' purchase Inc., sale be of F.2d Circuit (1981-82) should and 717 1120 Court and of concluded interpreted goods (7th in distribution of those goods." to the Cir. Appeals that include normal Id. at 1124. 1983). a examined "the word distributor's course of the The court then further defined "to process" as follows: The verb "to process" certainly may refer to the narrower concept of preparing something in the sense of manufacturing it. However, it also has the broader definitions of subjecting something to a particular system of handling to effect a particular result and preparing something for market or other commercial use by subjecting it to a process. See Webster's Third New International Dictionary of the English Language (1963). We think these broader definitions include the actions of a distributor such as [the defendant], i.e., purchasing and selling goods in the ordinary course of trade in a distribution system. 6 In No. 99-3144 Id. at 1124 n.5 ¶12 Kopke asserts that the activities performed by L'Arciere at the Binda mill with respect to the paper product falls directly within the definition of "process" set forth in Nelson. product L'Arciere had an exclusive contract with Binda to load at the mill. Kopke points out that damage reports produced by CTI show that L'Arciere loaded at least 45 cargo containers for shipment to Wisconsin; between November 1996 and May 1997.3 39 of which arrived He argues that L'Arciere processed the product for shipment to Wisconsin when it loaded and secured the product in the cargo container. was, in Kopke's view, a necessary function in This loading preparing the product for market, for the product would not have arrived in Neenah, Wisconsin, without the loading performed by L'Arciere. ¶13 In rebuttal, L'Arciere asserts that the ordinary understanding of the word "process" as it is used in Wis. Stat. § 801.05(4)(b) means an action directed transformation of the object being processed. this meaning placement of is the supported word by "process" dictionary between toward the It contends that definitions, the "manufactured" and "serviced" in the statute, and by examining how the legislature used the word "process" elsewhere in the Wisconsin statutes. 3 These numbers represent only the number of containers shipped to Wisconsin in which cargo had been damaged. A receiving damage report was faxed to Binda for each cargo container that had damaged goods. Containers that did not have damaged cargo were not reported in CTI's documents. 7 No. 99-3144 ¶14 A narrow interpretation of the word "process" is also urged by third-party defendant-respondent Riunione Adriatica di Sicurta' S.p.A. (RAS). RAS, issued a policy to Binda. an Italian insurance company, RAS asserts, however, that even under L'Arciere's more narrow interpretation its activities constitute processing of materials under Wis. Stat. § 801.05(4)(b). ¶15 The question presented is, therefore, whether the word "process" means to bring about a physical transformation upon the products, L'Arciere and materials, RAS, or or things whether themselves, process is a as broader urged by term as suggested by the Seventh Circuit in Nelson, and by Kopke and Binda. We agree with Kopke and Binda. ¶16 "The fundamental rule of construction of a statute is to ascertain and give effect to the intention of the legislature as expressed in the statute." Zarnott v. Timken-Detroit Axle Co., 244 Wis. 596, 599-600, 13 N.W.2d 53 (1944). Stat. § 801.05 does not define the word Wisconsin "process." The legislature has set forth as a general rule that "words and phrases shall be usage . . . ." construed Wis. according Stat. to § 990.01(1). common "The and approved common and approved usage of words can be established by the definition of a recognized dictionary." Labor and Human Relations N.W.2d 118 (1977). Milwaukee County v. Dep't of Indus., Comm'n, 80 Wis. 2d 445, 450, 259 L'Arciere cites the definition of "process" from Random House Webster's Unabridged Dictionary 1542 (2d ed. 1998), defining process as "' v.t. 10. to treat or prepare by some particular process, as in manufacturing.'" 8 The analysis No. 99-3144 adopted in Nelson, urged by Kopke, relied upon Webster's Third New International Dictionary of the English Language (1963) for its determination that "to process" may refer to "the broader definitions of subjecting something to a particular system of handling to effect a particular result and preparing something for market process." or other commercial use by subjecting Nelson, 717 F.2d at 1124 n.5. it to a The dictionary, therefore, does not resolve the question of whether a broad or narrow meaning should be applied to the word "process." ¶17 When reasonable minds could differ as to the meaning of a statute, the court examines the scope, history, context, subject matter and purpose of the statute in question. v. LIRC, 2000 Wisconsin's WI 69, long-arm ¶21, 236 statute requirements of due process. Wis. 2d was 27, designed 612 Brauneis 635. satisfy to N.W.2d the Schmitz v. Hunter Mach. Co., 89 Wis. 2d 388, 403, 279 N.W.2d 172 (1979). The 1959 revision notes state that the statute incorporates grounds that expand the exercise of personal jurisdiction in cases having substantial contacts with this state. Revision Notes 1959 by G.W. Foster, Jr. for § 801.05 (West 1977).4 to expand personal St. 1959, § 262.05, Wis. Stat. Ann. Because the objective of the statute was jurisdiction we conclude that the broad definition of "process" suggested by Nelson, 717 F.2d at 1124 n.5, properly reflects the legislative intent in adopting this 4 The Wisconsin Rules of Civil Procedure were renumbered by Supreme Court Order, 67 Wis. 2d 595, 592-96 (1975) (eff. January 1, 1976). 9 No. 99-3144 statute. Further, this definition is in keeping with this court's consistent statement that "statutes regulating long-arm jurisdiction are . . . to be given a liberal favor of the exercise of jurisdiction." that L'Arciere engaged in in Schroeder v. Raich, 89 Wis. 2d 588, 593, 278 N.W.2d 871 (1979). that broad definition here. construction Accordingly, we adopt As a result, we agree with Kopke processing pursuant to Wis. Stat. § 801.05(4) and affirm this conclusion by the circuit court. ¶18 L'Arciere presents several additional arguments against this conclusion, which we find unpersuasive. L'Arciere points out that the word "processed" appears in numerous other statutes, ranging § 95.72(1)(c)3 from processing to processing § 961.571(1)(a). dead controlled animals substances Wis. Stat. Wis. Stat. L'Arciere does not argue that these statutes are in any way cross-referenced or linked together with Wis. Stat. § 801.05, other than that in its view these statutes use "process" as a related concepts. concept distinct from packing, packaging, or There are limits as to how much and what kind of statutory context is relevant to the analysis of a particular word in an individual statutory section. "The risk of misunderstanding as a result of allowing irrelevant portions of a text to influence the meaning attributed to the segment of text being construed is probably just as risky as taking any statement out of context." Statutory Construction 2A Norman J. Singer, Statutes and § 47:02, at 211 (6th ed. 2000). We conclude that this attempt to determine the meaning of "process" in subsection (4)(b) by examining the word as it appears in 10 No. 99-3144 other sections throughout the statutory code distorts, rather than clarifies, legislative intent in creating § 801.05. Without something more, such as one statute being incorporated into another, or two statutes addressing closely related subjects that consideration of one would logically bring the other to mind, "[e]very statute is an independent communication, for which either the intended or the understood meaning may be different." 2A id. § 45.14, at 110. Accordingly, we do not concur with this statutory analysis argument. ¶19 Further, although L'Arciere correctly points out that "process" appears between "manufactured" and "serviced" it does not necessarily follow that "process" is to be interpreted as meaning "a transformation as occurs in manufacturing." "'It is an elementary rule for the construction of statutes that effect must be given, if possible, to every word, clause, and sentence Greenebaum v. Dep't of Taxation, 1 Wis. 2d 234, 238, thereof.'" 83 N.W.2d 682 (1957) (quoting State v. Columbian Nat. Life Ins. Co., 141 conclude Wis. 557, 566, that "manufacturing," 124 N.W. 502 "process" is we render would merely (1910)). a "process" Were we restatement a to of redundancy. However, by adopting the broader meaning of the word, it is properly given effect in the statute. ¶20 Finally, L'Arciere cites to a decision by the Fifth Circuit interpreting Florida's long-arm statute which apparently contains language similar to Wis. Stat. § 801.05(4). In Mallard v. Aluminum Co. of Canada, 634 F.2d 236 (5th Cir. 1981), a longshoreman was severely injured 11 in Florida while unloading No. 99-3144 cargo from a corporation vessel. and corporation. The vessel time-chartered to was owned Bathurst, by a Ltd., a Finnish Canadian Bathurst hired the Aluminum Company of Canada, Ltd. (ALCAN) as stevedore for the loading operations in Canada. The injured longshoreman brought a claim of negligence against ALCAN and other defendants. for lack of granted. personal The ALCAN brought a motion to dismiss jurisdiction, Fifth Circuit which affirmed, the district concluding Florida long-arm statute could not reach ALCAN. court that the The court wrote that the relevant Florida statute "exerts jurisdiction over any nonresident who causes injury to persons or property in Florida by act or omission nonresident in processed, another serviced state, or products manufactured during use or consumption in Florida." ¶21 if that cause the injury Id. at 241. Despite the apparently similar language in the Florida statute and Wis. Stat. § 801.05(4), the jurisdictions differ on two critical rules of statutory interpretation that formed the basis of the decision in Mallard. statute is strictly construed. First, Florida's long-arm Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 627 (11th Cir. 1996). In contrast, Wisconsin's long-arm statute is liberally construed in favor of the exercise of jurisdiction. that "the sustain statute personal Constitution." court has requires of more jurisdiction activities than that due § 801.05 process. was contacts we by to the In contrast, this designed Therefore, 12 or demanded Mallard, 634 F.2d at 241. stated requirements Second, Florida courts have held to do satisfy not find the the No. 99-3144 analysis in Mallard persuasive for the purposes of interpreting Wisconsin's long-arm statute. We conclude, therefore, L'Arciere falls within the grasp of Wis. Stat. § 801.05(4).5 ¶22 Wis. Having concluded that L'Arciere falls within reach of Stat. § 801.05(4), constitutional inquiry. we turn The now Due to Process consider Clause of the the Fourteenth Amendment limits the exercise of jurisdiction by a state over a nonconsenting nonresident. been interpreted requirements.6 as a codification Section 801.05(4) has of federal due process Compliance with the statute presumes that due process is met, subject to the objecting defendant's opportunity to rebut. Lincoln, 104 Wis. 2d at 10. Thus, when jurisdiction is found pursuant to the statutory analysis, the defendant may dispute the presumption of compliance with requirements articulated by the Supreme Court. due process See Hasley v. Black, Sivalls & Bryson, Inc., 70 Wis. 2d 562, 577, 235 N.W.2d 446 (1975) ("The burden is not on the defendant to prove lack of contact with this state . . . even though the motion to dismiss is produced by the defense; the defendant may dispute the contacts alleged or attack the demonstrated statutory compliance 5 Kopke and Binda also argue that L'Arciere "serviced" the paper within the meaning of Wis. Stat. § 801.05(4)(b). Having resolved this issue on the basis of the statute's use of the word "processed," we need not address this argument. 6 Lincoln v. Seawright, 104 Wis. 2d 4, 10, 310 N.W.2d 596 (1981). 13 No. 99-3144 on due process grounds.").7 The limits of due process are, of course, established by the rules set forth in the decisions of the United States Supreme Court. Zerbel v. H.L. Federman & Co., 48 Wis. 2d 54, 60, 179 N.W.2d 872 (1970). ¶23 Due process analysis presents two inquiries. The first inquiry is whether the defendant "purposefully established minimum contacts in the forum State." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). On this question, the plaintiff carries the burden. Id. If this inquiry is answered affirmatively, then the defendant's forum-state contacts "may be considered in light of other factors to determine whether the assertion of personal jurisdiction would comport with 'fair play and substantial justice.'" Id. at 476 (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 320 (1945)). the burden on this question.8 ("[W]here a defendant who The defendant carries Burger King, 471 U.S. at 477 purposefully has directed his activities at forum residents seeks to defeat jurisdiction, he 7 We disagree with the statement in Marsh v. Farm Bureau Mutual Insurance Co., 179 Wis. 2d 42, 53, 505 N.W.2d 162 (Ct. App. 1993) that the burden switches to the defendant to show that jurisdiction fails to comport with due process requirements of the Fourteenth Amendment. 8 Although in the United States Supreme Court's most recent decision involving personal jurisdiction a majority of the Justices agreed upon only the "fair play and substantial justice" standard, the opinion did employ the two-part inquiry articulated in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). See Asahi Metal Indus. Co. v. Superior Court of Cal., 480 U.S. 102 (1987). 14 No. 99-3144 must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable."). ¶24 9 We turn then to apply the first inquiry of our due process analysis to the facts of this case. Under the Due Process a Clause, defendant is personal proper when jurisdiction the defendant over has nonresident "certain minimum contacts with [the State] such that the maintenance of the suit does not offend 'traditional substantial justice.'" notions of fair play and Int'l Shoe Co., 326 U.S. at 316 (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). Minimum contacts requires that "'the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there."' World-Wide (1980)). Volkswagen Burger King, 471 U.S. at 474 (quoting Corp. v. Woodson, 444 U.S. 286, 297 Essential to each case is "'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." Id. at 475 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 9 The "purposeful In Zerbel v. H.L. Federman & Co., 48 Wis. 2d 54, 64-65, 179 N.W.2d 872 (1970), this court adopted a five-factor test for due process. These factors are: "the quantity of contacts with the state, the nature and quality of the contacts, the source of the cause of action, the interest of Wisconsin in the action, and convenience." Lincoln, 104 Wis. 2d at 11. We conclude that these factors are encompassed within the framework set forth by the United States Supreme Court in personal jurisdiction cases decided subsequent to our decision in Zerbel. Accordingly, we set aside the Zerbel factors and apply Supreme Court precedent here. 15 No. 99-3144 availment" requirement has become the "baseline," the primary focus, of the minimum contacts analysis. 233 F.3d 538, 542 (8th Cir. 2000). Clune v. Alimak AB, "This 'purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of 'random,' 'fortuitous,' or 'attenuated' contacts, or of the 'unilateral activity of another party or a third person.'" (citations omitted). Burger King, 471 U.S. at 475 A defendant's contact with the forum state must be such that it "should reasonably anticipate being haled into court there." ¶25 in this World-Wide Volkswagen, 444 U.S. at 287. As an additional component of analysis, the litigants case assert that the stream of commerce theory of personal jurisdiction articulated in World-Wide Volkswagen and in subsequent Supreme Court cases applies here. In World-Wide Volkswagen and Burger King the Court explained: "[I]f the sale of a product of a manufacturer or distributor . . . is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its powers under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum State." Cf. Gray v. American Radiator & Standard Sanitary Corp., 22 Ill. 2d 432, 176 N.E.2d 761 (1961). World-Wide Volkswagen, 444 U.S. at 297-98; see also Burger King, 471 U.S. 473. Kopke asserts 16 that personal jurisdiction is No. 99-3144 established L'Arciere under the routinely stream loaded of commerce cargo theory containers because shipment for (1) to Wisconsin; (2) this destination was indicated on the plans used by L'Arciere in loading pallets of paper into the containers; and, (3) that these facts establish conduct and connection with this forum such that L'Arciere could reasonably anticipate being brought into court here when Kopke unloaded the container in Wisconsin and a pallet fell out and caused injury. ¶26 The personal relevance jurisdiction forseeability. of the stream analysis is of commerce related to the test in issue of In World-Wide Volkswagen the Supreme Court found the concept of forseeability insufficient to serve as a basis for personal jurisdiction under the Due Process Clause. Metal Indus. (1987). Wide v. Superior Court of Cal., 480 U.S. Asahi 102, 109 Yet, as noted by Justice O'Connor in Asahi, in World- Volkswagen 'forseeability "[t]he is jurisdiction . . . ," Court disclaimed . . . the wholly and irrelevant' determined that idea to the that personal exercise of personal jurisdiction does not offend the Due Process Clause when a product is introduced into the stream of commerce with the expectation that it will be purchased in the forum State. Id. (quoting World-Wide Volkswagen, 444 U.S. at 297-98). ¶27 In Asahi, the Supreme Court divided over the correct application of the stream of commerce theory. Asahi concerned an indemnity action by a Taiwanese manufacturer, Cheng Shin, against Asahi, a Japanese business. tire tube and Asahi manufactured 17 the Cheng Shin manufactured tube's valve assembly. No. 99-3144 These products were incorporated into motorcycle tires. While the motorcycle was operated in California, the tire exploded, severely injuring the driver and killing the passenger. A product liability suit was filed in that state, and Cheng Shin was named settled as a defendant. and dismissed. The Asahi underlying sought to tort quash action the was indemnity action, arguing that exercise of personal jurisdiction violated due process. ¶28 The jurisdiction California did not Supreme offend due Court process held that because personal of Asahi's placement of its product in the stream of commerce by delivering them to Cheng Shin in Taiwan, combined with Asahi's awareness that some of Cheng Shin's tires would reach California. The United States Supreme Court reversed. ¶29 In analyzing Asahi, four members of the Court, Justice O'Connor, joined by Chief Justice Rehnquist, Justice Powell and Justice Scalia, concluded that "[t]he placement of a product into the stream of commerce, without more, is not an act of the defendant purposefully directed toward the forum State." Under this view, the "'stream-of-commerce-plus' theory,"10 there must be "additional conduct" by the defendant to meet the burden of establishing personal jurisdiction. Asahi, 480 U.S. at 112. However, Justice Brennan, joined by Justices White, Marshall, 10 Ruston Gas Turbines, Inc., v. Donaldson Co., 9 F.3d 415, 420 (5th Cir. 1993). 18 No. 99-3144 and Blackmun, stated that this showing of "additional conduct" was not needed.11 According to Justice Brennan: The stream of commerce refers not to unpredictable currents or eddies, but to the regular and anticipated flow of products from manufacturer to distribution to retail sale. As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise. Nor will the litigation present a burden for which there is no corresponding benefit. A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State's laws that regulate and facilitate commercial activity. These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State. Accordingly, most courts and commentators have found that jurisdiction premised on the placement of a product into the stream of commerce is consistent with the Due Process Clause, and have not required a showing of additional conduct. Id. at 117 (Brennan, J. concurring). Ultimately, a majority in Asahi concluded that the exercise of personal jurisdiction would not be reasonable or fair and accordingly violated due process. In total, "Asahi stands unreasonable to adjudicate foreign companies in nonresident defendant." for no more third-party this county than litigation absent that it is between two consent by the Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 614 (8th Cir. 1994). 11 Justice Stevens concluded that an examination of minimum contacts was unnecessary. In his view exercise of jurisdiction over Asahi would be "unreasonable and unfair" even if the defendant had engaged in purposeful activities in the forum State. Asahi, 480 U.S. at 121. 19 No. 99-3144 ¶30 We believe the stream of commerce theory as set forth by Justice Brennan is the correct analysis to apply to the case at hand. First, as the Seventh Circuit has noted, a majority of the Court has not rejected the stream of commerce analysis of Burger King and World-Wide Volkswagen, and it is thus binding upon the lower courts. Dehmlow v. Austin Fireworks, 963 F.2d 941, 947 (7th Cir. 1992); see also Ham v. La Cienega Music Co., 4 F.3d 413, 416 n.11 (5th Cir. 1993) ("Absent rejection by a majority on the Supreme Court, we have continued to apply the stream of commerce analysis found in our pre-Asahi cases."). ¶31 Second, although Kopke is not asserting a strict product liability claim, but is instead alleging negligence, we nevertheless should be commercial conclude applied the here.12 activities stream of commerce. that and stream Kopke's the of commerce injuries distribution analysis arose out of goods in the of Specifically, Kopke was injured in Neenah, Wisconsin, when he opened an ocean-going cargo container and a pallet loaded with paper fell out; Kopke asserts that L'Arciere workers in Italy negligently loaded container that was shipped to this forum. the pallet into the Further, the facts of this case present a "regular course of dealing that results in deliveries" of multiple units of the product into this forum over a period of years. See Asahi, 480 U.S. at 122 (Stevens, J. concurring in part and concurring in the judgment). 12 A discussion of the distinction between a claim grounded upon strict product liability and a claim grounded upon negligence is set forth in Fuchsgruber v. Custom Assessories, Inc., 2001 WI 81, ___ Wis. 2d ___, ___ N.W.2d ____. 20 No. 99-3144 ¶32 Applying that test to the present case, we conclude based upon the nature of the contractual relationship between L'Arciere and Binda, the identification in the loading plans of the cargo's destination as "Appleton" and "CTI Neenah," as well as the damage insignificant reports volume of from CTI business which between illustrate CTI and a not Binda, the exercise of personal jurisdiction complies with the limits of due process because the cargo was introduced into the stream of commerce with the expectation that it would arrive in this forum. ¶33 supply First, we note L'Arciere had a contract with Binda to workers L'Arciere for the employees purpose worked of loading together employees to load the cargo containers. in cargo containers. Italy with Binda This is not a case like Asahi where a manufacturer operating in one international forum shipped parts to a second manufacturer in a different international forum, who incorporated these parts into a product that is shipped to yet a third international forum. In the present case, Kopke asserts that L'Arciere was negligent in the manner in which it loaded the cargo container in Italy, and that this negligence caused or contributed to causing his injuries when the cargo container was opened here in Wisconsin. ¶34 used by Second, the loading instructions prepared by Binda and L'Arciere identified "Neenah" or "CTI Appleton." not randomly or the container's destination as In other words, these products did fortuitously appear in Wisconsin; specifically intended to arrive in this forum. 21 they were The injury that No. 99-3144 Kopke suffered occurred in the forum to which the cargo containers were directed to arrive. ¶35 Third, the damage reports prepared by CTI on cargo containers received from Binda between November 8, 1996, and May 20, 1997, demonstrate that at least 40 containers were loaded by L'Arciere workers for delivery in this forum. ¶36 We also note that L'Arciere, by virtue of its business relationship with Binda, benefited Binda products to this forum. from the distribution of "A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from commercial the State's activity." concurring). laws Asahi, that 480 regulate U.S. at and 117 facilitate (Brennan, J. We recognize that this economic benefit arose because L'Arciere contracted with Binda to perform a service, the loading of cargo containers. In providing this service L'Arciere interacted with Binda employees and handled the final product that was being shipped to this forum. L'Arciere's handling of the final product is the alleged act of negligence that may have caused Kopke's injuries. The product was shipped here as a result of the sale agreement between Binda and CTI. As a result of this sales agreement, the cargo container arrived in Wisconsin and Kopke was subsequently injured here. business relationships benefited L'Arciere, and These L'Arciere literally "played a hand" in the product arriving in this state. Under these circumstances, we think it reasonable to conclude that the purposeful availment 22 requirement is met and that No. 99-3144 L'Arciere has sufficient minimum contacts with this forum to be held accountable here if any negligence on its part in loading the cargo containers has resulted in damages. ¶37 In attacking this conclusion L'Arciere's principal argument is that the defendant must be aware that the product will end up in the forum state. of a product's destination personal jurisdiction and is In its view, actual knowledge essential that L'Arciere Neenah or Appleton are located. for did the exercise not know of where For his part, Kopke asserts that L'Arciere had actual or at least constructive knowledge of the products' destination, which is sufficient for the purposes of minimum contacts. ¶38 personal Other court's have considered an analogous argument in jurisdiction cases where an argument is presented distinguishing between "know" and "should have known:" "The traditional equivalence between "know" and "should have known" in our jurisprudence suggests that, for purposes relevant to this case, it is a distinction that makes no difference. The ultimate test of in personam jurisdiction is "reasonableness" and "fairness" and "traditional notions of fair play and substantial justice [International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)]. In applying such a test, it is a matter of common sense that there should be no distinction between "know" and "should have known." We cannot say that a potential defendant who actually knows his products will ultimately reach the forum state any more "purposefully avails itself of the privilege of conducting activities [there]," Hanson v. Denckla, 357 U.S. [235, 253, 78 S.Ct. 1228, 1240, 2 L.Wed. 2d 1283 (1958)], than a potential defendant who merely should have known." 23 No. 99-3144 Barone, 25 F.3d at 613 n.4 (quoting Oswalt v. Scripto, Inc., 616 F.2d 191, 200 (5th Cir. 1980)). applicable to L'Arciere's argument We find this concerning the reasoning distinction between "knowledge" and "actual knowledge" in this case; its argument raises a distinction that makes no difference. ¶39 Having establish concluded minimum that contacts Kopke for has the met his exercise burden of to personal jurisdiction over L'Arciere, we turn next to a consideration of the second inquiry for personal jurisdiction, application of the standard of fair play and substantial justice. The Supreme Court has identified the following factors as relevant to the analysis of whether personal jurisdiction is reasonable: (1) the forum state's interest in adjudicating the dispute; (2) the plaintiff's relief; interest in (3) the burden judicial system's obtaining convenient on the defendant; interest in obtaining the effective the interstate most (4) and efficient resolution of controversies; and, (5) the shared interest of the several policies. States U.S. at in furthering fundamental substantive social Asahi, 480 U.S. at 113; World-Wide Volkswagen, 444 477. The first three factors are relevant to our analysis of this case. ¶40 As to the first factor, the State of Wisconsin has an unquestionable interest in providing its citizenry with a forum to adjudicate claims arising here. ¶41 As to the second factor, Kopke, who suffered a spinal cord injury causing permanent quadriplegia, has an undeniable interest in obtaining convenient relief. 24 We also believe Kopke No. 99-3144 has a right to effective relief. This point brings us to consideration of an argument presented by RAS, who asserts that basic consideration of fairness weigh in favor of dismissing L'Arciere. According to RAS, the sole reason Kopke wants L'Arciere to remain in this action is not because he believes it has any liability, but because of his concern that Binda will attempt to use L'Arciere's "empty chair" to deflect blame at trial. We are not persuaded. A strategic decision on the part of plaintiff's or defense counsel does not weigh in as a factor in our due process analysis. ¶42 The third factor which we will consider is the burden on the defendant. L'Arciere contends that it would be unfair and unjust to exercise personal jurisdiction over a party that merely packs or loads goods onto a truck or vessel. In its view, subjecting L'Arciere to jurisdiction in this forum would subject all packing and portage companies, stevedores, and longshoremen to nationwide, even worldwide, jurisdiction. In support of this position, L'Arciere cites three cases in which a court determined personal that jurisdiction the minimum analysis was contact not requirement satisfied, of American President Lines, Ltd. v. Metropolitan Stevedore Services, 567 F.Supp. 169 (W.D. Wash. 1983); Real Properties, Inc. v. Mission Insurance Co., 427 N.W.2d 665 (Minn. 1988); and Global Servicios, S.A. v. Toplis & Harding, Inc., 561 So.2d 674 (Fla. Ct. App. 1990). Because in each of these cases the minimum contacts inquiry was not satisfied we do not have the benefit of the court's consideration of 25 the exercise of personal No. 99-3144 jurisdiction under the "fair play and substantial justice" prong, and, therefore, these cases provide little assistance to our analysis. Nonetheless, we will briefly examine each of the three cases cited by L'Arciere. ¶43 loaded In American President and stowed cargo onto Lines a the vessel defendant in stevedore California. The vessel, enroute to its destination of Bhavnagar, India, arrived in Seattle. While lengthy layover district court in for Seattle clean-up determined a and that negligent stow restowage. the required The exercise of jurisdiction in Washington State would be impermissible. it determined that the loading of cargo in California a federal personal First, "not of such a nature that it can be said to put defendant on notice that it might be called to defend such actions at any port at which the vessel may call." Id. at 170-71. Second, the court found that "[t]he circumstance that the vessel's owner elected to dock in Seattle is insufficient to support the assertion of jurisdiction statute." over defendant Id. at 171. under Washington's long-arm Third, the court rejected application of the stream of commerce theory because the stevedore "did not utilize the owner of the vessel it loaded as a distributor of its 'products' and thus did not take advantage of an indirect marketing scheme and received no economic benefit, either direct or indirect, from the residents of Washington." ¶44 Id. In Real Properties the Minnesota Supreme Court found no personal jurisdiction over a New Jersey company. The New Jersey Barrett company had been hired 26 by a Minnesota firm, No. 99-3144 Moving & Storage (Barrett), to package Chinese art pieces for shipment. trucks The Barrett drivers loaded the crates onto Barrett and Barrett Minneapolis, hauled Minnesota. the Upon goods arrival from in New Jersey Minneapolis discovered that many of the art pieces were broken. it to was In the ensuing court action, the plaintiff argued that the New Jersey firm's negligence in packing caused the breakage. The question decided by the Minnesota Supreme Court was whether or not the New Jersey company had sufficient contacts with the forum state to permit it to exercise personal Properties, 427 N.W.2d at 667. jurisdiction. Real The court did not find the minimum contacts inquiry satisfied and did not analyze the "fair play and substantial justice issue." ¶45 Finally, in Global Servicios a Columbian corporation, working in Columbia, packed household goods and forwarded for shipment. "The goods were packed in Columbia by Global, flown to Miami by Lineas Aereas del Caribe (LAC), stored in Miami by Inter-American, and trucked to New Jersey by Pride Movers, Inc." Id. at 674. process. The goods were damaged at some point in this The federal district court concluded that Global did not have sufficient minimum contacts with Florida to subject it to jurisdiction in that state. The court noted that Miami is the port of entry for air cargo from Columbia. It concluded that Global's contact with Florida was "merely fortuitous and was made yet more tenuous by LAC's air transport of the goods from Bogota to Miami and by goods once they reached Miami." Inter-American's Id. at 675. 27 storage of the No. 99-3144 ¶46 In the case at hand, the cargo container s arrival in Wisconsin goods was not "merely through Miami in fortuitous" Global as was Servicios the or, passage of arguably, the docking of a vessel in Seattle in American President Lines. The goods were purchased by CTI and intended for delivery in this forum; the erringly goods appear did here. not In fortuitously, contrast to randomly, the events Properties, this was not a one-time transaction. or even in Real CTI had been purchasing Binda's products since 1991; L'Arciere was loading cargo containers under contract with Binda from 1996 through May of 1998. During this period, numerous cargo containers were packed by L'Arciere, destined for Wisconsin. Thus, we conclude that L'Arciere was not an anonymous entity packing goods for shipment somewhere in the global marketplace. As a result, we conclude that the mere fact that the activity L'Arciere engaged in was packing cargo containers does not automatically make the exercise of personal jurisdiction unfair. The larger question, and what we believe L'Arciere is attempting to argue, is whether a nonresident, unconsenting business entity engaged in loading or stowing goods will always avoid personal jurisdiction because it is unfair or unreasonable. We decline to adopt the "per se" analysis offered by L'Arciere. ¶47 In considering the burden on the defendant, we of course recognize that like the defendant in Asahi, the defendant here is located beyond our national boundaries and will have to defend itself in a foreign nation's judicial system. L'Arciere also contends that, as in Asahi, the real dispute is between two 28 No. 99-3144 nonresidents, Binda and L'Arciere. The contract between Binda and L'Arciere contains a choice of forum provision and L'Arciere contends that determination of this dispute in this forum would violate that agreement. We find, however, that the feature that distinguishes Asahi from the case at hand is that in Asahi, the injured plaintiff, a California resident, was no longer a part of the action, having reached a settlement agreement. Therefore, we do not view this case as merely one between two nonresident parties. interested. Kopke Further, the is still facts of different from the present case. unfair to exercise manufacturer of personal parts, who a party, are Asahi and very substantially The Supreme Court found it jurisdiction sold its over product to a Japanese a Taiwanese manufacture, who subsequently incorporated those parts into a product that was sold in California. The present case does not present an analogous sale of goods scenario. Accordingly, we conclude that the unfairness found by the Court in Asahi is not present here. ¶48 that In sum, the defendant must make a "compelling case" other consideration unreasonable. make the Burger King, 471 U.S. at 477. L'Arciere has not met this burden. circuit court L'Arciere is exercise and conclude permissible that under of jurisdiction We conclude that As a result, we affirm the personal both the jurisdiction Wisconsin over long-arm statute and the Due Process Clause of the Fourteenth Amendment. The case is remanded to the circuit proceedings consistent with this opinion. 29 court for further No. 99-3144 By the Court. The order of the circuit court is affirmed. 30 No. ¶49 N. PATRICK CROOKS, J. (dissenting). 99-3144.npc I join the dissent of Justice DIANE S. SYKES, however, I write separately as to the majority's conclusion establishes minimum contacts. that the evidence here If what the majority concludes qualifies as minimum contacts is indeed sufficient, then there is, in effect, nothing left of the doctrine of minimum contacts, which would limit the reach of a state court's jurisdiction. According to the majority, a foreign company or organization need only provide a service to establish minimum contacts, even though the evidence presented fails to establish that that foreign company or organization had any knowledge that it was processing a product for arrival in a particular forum. See majority the op. at ¶37. The potential implication of majority's decision today on foreign trade is significant and cannot be ignored. Indeed, the United States Supreme Court may need to settle finally the scope of the stream of commerce test. The majority L'Arciere has is woven notwithstanding subject the limits a justification to this of due for state's process. finding that jurisdiction, There is very little, if anything, to tie L'Arciere to Wisconsin, certainly nothing that it "should reasonably anticipate being haled into court" here. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).13 13 In Zerbel v. H. L. Federman & Co., 48 Wis. 2d 54, 60, N.W.2d 872 (1970), this Court recognized that, "[a]s to limits imposed by due-process standards, federal decisions controlling." I agree with the majority's conclusion that five-factor test set forth in Zerbel has been subsumed into 1 179 the are the due No. ¶50 99-3144.npc I respectfully disagree with the majority's conclusion that Kopke met his burden of establishing the requisite minimum contacts between Wisconsin and L'Arciere. Id. at 291. I take issue, particularly, with the majority's transformation of what is, at best, majority a states prima case into a "[c]ompliance that facie with the that due process is met." presumption. statute The presumes Majority op. at ¶22 (citing Lincoln v. Seawright, 104 Wis. 2d 4, 10, 310 N.W.2d 596 (1981)). Even if the defendant can rebut that presumption, it is a presumption Lincoln stated that nonetheless, according to the majority. compliance with § 801.05, constitutes requirements of Wisconsin's due long-arm statute, facie compliance prima process. 104 Wis. 2d at Wis. Stat. with 10. the Lincoln, however, made an unsupported conclusion that the prima facie case somehow constituted a presumption. See id. This is a grievous error that should not be continued. ¶51 long-arm More importantly, if compliance with the Wisconsin's statute presumably established due process, such a presumption, in and of itself, would offend due process. The Due Process Clause 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." Although this protection operates to restrict state power, it "must be seen as ultimately a function of the individual liberty interest preserved by the Due Process Clause" rather than as a function "of federalism concerns." process standards adopted by the United States Supreme Court. See majority op. at ¶23 n.9. 2 No. 99-3144.npc Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 & n.13 (1985) (internal citations omitted). Due process limits a state's power to reach beyond its borders and take jurisdiction of those from outside of its borders. Taking the majority's presumption to its logical end, the legislature could enact a long-arm statute with abrogate due process. ¶52 Even long-arm if no and then, presumptively, This cannot be. the statute, limits majority s Wis. Stat. conclusion § that 801.05(4)(b), Wisconsin s applies to L'Arciere's activity is correct, due process indeed limits the reach of personal jurisdiction. premised upon rightsnotice. one of The limit of that reach is the most basic of due process Not notice of the impending suit, but notice that one could even be subject to a suit in the forum state. When a corporation "purposefully avails itself of the privilege of conducting activities within the forum State," it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State. Id. at 297 (1958)). (quoting Hanson v. Denckla, 357 U.S. 235, 253 Potential defendants must have "fair warning that a particular activity may subject [them] to the jurisdiction of a foreign sovereign." Burger King, 471 U.S. at Shaffer 433 v. Heitner, concurring)). defendant residents. U.S. 186, 218 (1977) 472 (quoting (Stevens, J., The fair warning requirement is met where the "purposefully directs" its activities Burger King, 471 U.S. at 472, 473. 3 towards forum No. ¶53 99-3144.npc As the majority acknowledges, "purposeful availment" is the main cord of the minimum contacts analysis. op. at ¶24. See majority "Purposeful availment" is comprised of a number of interwoven components, one of which is whether the defendant has "purposefully directed" its activities at the forum. this component that a majority of the United It is on States Supreme Court could not agree in Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987).14 In short, Justice O'Connor, speaking for a plurality of four justices, advocated a more restrictive test, by requiring specific acts by which a defendant purposefully directed its activities toward the forum state, in addition to the defendant's awareness and placement of a product into the stream of commerce. Id. at 112. Brennan, four speaking disagreed. As for the a plurality majority of of this court other noted Justice justices, (at ¶29), Justice Brennan concluded that so long as there is "regular and anticipated flow of products from manufacturer to distribution to retail sale," and the defendant "is aware that the final product is being marketed in the forum State," the defendant benefits "from the State's laws that regulate and facilitate commercial activity," including the sale of the product, "the possibility of a lawsuit there cannot come as Asahi, 480 U.S. at 117 (Brennan, J., concurring). 14 a surprise." The majority The United States Supreme Court has not extensively analyzed the "purposefully directed" component of the due process minimum contacts test since Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987). 4 No. 99-3144.npc here adopts Justice Brennan's approach, relying upon Dehmlow v. Austin Fireworks, 963 F.2d 941 (7th Cir. 1992), even though Dehmlow also examined whether the jurisdictional facts satisfied Justice O'Connor's test "in recognition of the recent split of Supreme Court Nonetheless, authority assuming, on this arguendo, issue." that Id. Justice at 947. Brennan's approach, which pertains to the sales and distribution of goods, rather than providing a service (see Asahi, 480 U.S. at 117 (Brennan, J., concurring)), applies here,15 the exercise of personal jurisdiction in this case would violate due process. ¶54 Here, there is nothing that suggests that L'Arciere purposefully directed any activity toward Wisconsin which would establish minimum contacts. It is undisputed that L'Arciere has not, and does not, do business in Wisconsin. employees, or property in Wisconsin. It has no office, It does not advertise or otherwise solicit business in Wisconsin. It did not create or control Binda's distribution system that brought the paper to Wisconsin. Nor is there evidence that L'Arciere processed the paper for its sale in Wisconsin. Binda paid L'Arciere for labor regardless of when, where, or even if the paper was delivered. 15 The majority glosses over this point, summarily concluding that the due process analysis from cases which involve strict products liability claims applies here because "Kopke's injuries arose out of commercial activities." Majority op. at ¶31. I am not persuaded. Even under the majority's test, which presumably is the one most favorable to its conclusion, exercising personal jurisdiction over L'Arciere runs afoul of due process. 5 No. ¶55 The concludes Wisconsin majority establishes and each relies upon three L'Arciere's fails to minimum establish L'Arciere's contract with Binda. factors 99-3144.npc that contacts such. The with first See majority op. at ¶33.16 it is The United States Supreme Court stated clearly in Burger King that a contract alone does not establish minimum contacts. 478. 471 U.S. at Moreover, the contract was between two Italian companies. There is no evidence that L'Arciere, at any time, contracted with a Wisconsin company. The fact that L'Arciere employees worked with Binda employees does not establish the requisite awareness that L'Arciere was purposefully making contact with this forum. See majority op. at ¶33. There certainly does not appear to be any "purposeful availment." ¶56 Second, instructions Majority op. which at the majority "identified ¶34. relies the According upon the container's to the loading destination." majority, these instructions show that the paper products L'Arciere packed for Binda "were specifically intended to arrive in this forum." The loading instructions prove no such thing. Id. These one-page, handwritten instructions detail the calculations of the weight of the containers and sketch the placement of the containers. 16 Also, the majority contends (id. ¶33), this case is not like Asahi. I agree. We do not have before us a manufacturer as the defendant, which shipped the allegedly defective part to another international forum, which, in turn, was incorporated into the product that was shipped into the forum state. Asahi, 480 U.S. at 105-107. This distinction, however, is immaterial to L'Arciere's contract with Binda, which hardly establishes a contact with this state. 6 No. 99-3144.npc They also state, "x [to] CTI," "x [to] Appleton," and "x [to] Neenah." Nowhere is there any indication that CTI, Appleton, or Neenah are located in the United States, let alone in Wisconsin. ¶57 40 Third, the majority relies upon evidence that at least containers Wisconsin. were Majority loaded by op. ¶35. at L'Arciere This for delivery evidence comes to from damage reports CTI completed when it received the shipments from Binda. Id. at ¶35. occurred in "scraped," These reports record damage that apparently shipment, or "dirty," noting or where "corner the containers were gouged." However, these reports do not, and could not, establish, ex post facto, that L'Arciere was Wisconsin. aware that those containers were headed for It is this thread, L'Arciere's supposed awareness, which, when pulled, unravels the majority's conclusion. ¶58 Under either Justice O'Connor's or Justice Brennan's test for whether a defendant has purposefully directed its acts towards the forum state, the defendant must be aware, at a minimum, that its product could reach the forum state. See Asahi, J., 480 U.S. concurring). at 105; see also id. at 117 (Brennan, This relates back to the due process requirement that the defendant must have "'clear notice that it is subject to suit' in the forum," and that it is thus afforded an "opportunity to 'alleviate the risk of burdensome litigation.'" Burger King, 471 U.S. at 476 Volkswagen, 444 U.S. at 297). n.17 (quoting World-Wide Awareness exists, for example, where the defendant "delivers its products into the stream of commerce with the expectation that they will be purchased by 7 No. consumers in the forum State." 99-3144.npc World-Wide Volkswagen, 444 U.S. at 298 (emphasis added). ¶59 Based on the information presented, it is reasonable to conclude that L'Arciere had neither the awareness nor the expectation that the paper products it packed would be shipped to Wisconsin. There is no indication that L'Arciere specifically that some were destined for Wisconsin. knew None of the loading plans produced by Binda contained the words "Wisconsin" or "U.S.". Other plans refer only to "Neenah," "Appleton," or only to "CTI." As L'Arciere pointed out in its brief before this court: There are no less than three Neenahs in the United States (one apiece in Alabama, Virginia, and Wisconsin); two dozen Appletons within and without the United States; and literally hundreds of locations around the world where one may find corporations in whose name the letters "CTI" play a prominent part. Br. of Def.-Appellant at 27. These references to "Neenah," "Appleton," and "CTI" cannot establish minimum contacts. Also, presumably, had L'Arciere been aware that its packing of paper might "create a 'substantial connection' with" Wisconsin (Burger King, 471 U.S. at 475 (citation omitted)), L'Arciere might have procured insurance to alleviate the risk of litigation. Wide Volkswagen, 444 U.S. at 297. that L'Arciere s excluded the liability United States World- However, it is undisputed insurance and Canada. coverage specifically L'Arciere, since it appears to have been unaware of the risk, could not assess that risk. 8 No. ¶60 Kopke's 99-3144.npc To find the requisite awareness, the majority adopts argument that L'Arciere had "constructive that the paper was being shipped to Wisconsin. knowledge" We should be wary of an attempt to reach beyond the limits of due process based upon such a contention. First, Kopke points to no evidence which would establish that L'Arciere should have known the containers were headed here. Second, and more importantly, the purportedly "analogous" cases are wholly inapposite. majority op. at ¶38. Fireworks Co., Scripto, Inc., distribution 25 Barone v. Rich Bros. Interstate Display F.3d 616 See 610 F.2d contracts (8th 191 Cir. (5th under 1994) Cir. which and 1980) the Oswalt both v. involve defendants were reasonably aware, or even expected, that their product would reach the forum state. Nebraska could In Barone, the Eighth Circuit found that exercise personal jurisdiction over Hosoya Fireworks Co. of Tokyo, Japan, consistent with due process. F.3d at 610-611. 25 This was due to the distribution agreement Hosoya had with Rich Bros. "Hosoya certainly benefited from the distribution efforts of Rich Bros., and although Hosoya claims to have had no actual knowledge that Rich Bros. distributed fireworks into Nebraska, such ignorance defies reason and could aptly be labeled 'willful'" Id. at 613 (footnote quoted by the majority at ¶38 omitted).17 Similarly, in Oswalt, the Fifth 17 It is noteworthy that Barone referred to Giotis v. Apollo of the Ozarks, Inc., 800 F.2d 660 (7th Cir. 1986), "that appears to be on all fours with the case before" the Barone court. Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 612 (8th Cir. 1994). Giotis determined that a Wisconsin court would have jurisdiction over Missouri defendants in their 9 No. Circuit found that the defendant should have known 99-3144.npc that its products would be marketed and sold in the forum state, Texas, based upon the defendant's exclusive distribution arrangement. 616 F.2d at 199-200. "[T]he record shows that [the defendant] had every reason to believe its product would be sold to a nation-wide market, that is, in any or all states." Id. at 200. To the contrary here, there is nothing in the record which would have given L'Arciere reason to believe that, due to a distribution agreement it had with a distributor in the United States, the paper it packed would end up in Wisconsin. cases wherein constructive knowledge established The awareness, role as heads of a distribution network. 800 F.2d at 662, 667668. Giotis explained the economic context of a distribution network, which would give rise to finding that a manufacturer, or seller, should be aware that its product might reach, and thus establish a contact with, any number of states. [T]he seller-defendant, particularly if at the head of a distribution network, realizes the much greater economic benefit of multiple sales in distant forums, of which the purchase by the particular buyer who has brought suit is merely one example. A seller, since it realizes this greater economic benefit, may more easily satisfy the purposeful availment test and be sued by a buyer in the buyer's forum than a buyer may be sued by the seller in the seller's forum. This is especially true where the seller is at the head of a distribution network and thus even more clearly has "purposefully availed" itself of the economic benefits of selling to buyers in distant forums. Id. at 667 (footnote and citations omitted). Clearly, we do not have this same economic framework here, making the "should have known" test for awareness inapplicable. L'Arciere is not a seller-defendant, and certainly is not at the head of a distribution network. 10 No. sufficient to establish personal jurisdiction, 99-3144.npc rest upon an entirely different relationship between the defendant and the forum state, than the one we have here.18 That distribution link between L'Arciere and Wisconsin does not exist here. In fact, no meaningful link exists between the two. ¶61 The majority attempts to create a link, however, a link through Binda's contacts with Wisconsin. According to the majority, L'Arciere, by virtue of its business relationship with Binda, benefited from the distribution of Binda products to this forum. "A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State's laws that regulate and facilitate commercial activity." Asahi, 480 U.S. at 117 (Brennan, J., concurring). Majority op. economically delivered to at from ¶36. the Wisconsin. However, fact that Binda L'Arciere the did. benefited from packing the paper. paper did it L'Arciere not benefit packed was economically L'Arciere did not, in any way, depend upon Wisconsin for any economic benefit. It would have been paid to pack the paper, whether that paper was sent to Wisconsin or to Paris, France, or Paris, Texas. Such is evident from L'Arciere's contract with Binda, which did not specify that its work, or payment, was dependent upon the destination of the 18 Visibly missing from the cases relied upon by the majority is a truly analogous case where personal jurisdiction has been exercised over a non-resident defendant, based solely upon that defendant's preparation of goods to be shipped by another to the forum State. 11 No. cargo. Indeed, L'Arciere failed to "'purposefully derive [any] benefit'" from Wisconsin. ¶62 by 99-3144.npc Burger King, 471 U.S. at 473. "[I]t is essential in each case that there be some act 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." Id. at 475 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958) (emphasis added)). Another strand in the cord of "purposeful availment," in addition to the defendant's awareness, is the defendant's conduct that indicates that the defendant is availing itself of the benefit of the forum state, so that it would reasonably anticipate litigation there. Burger King, 471 U.S. at 474. Here, however, there is admittedly no such conduct by L'Arciere, and the majority refers only to the contract between Binda and L'Arciere, the loading instructions, and the damage reports. See majority op. at ¶¶33-35. ¶63 based That the majority is creating a minimum contacts test upon foreseeability is evident from its reliance upon Kopke's allegation that L'Arciere negligently loaded the pallet containing the paper, which injured Kopke when he opened it. Majority reliance op. at upon ¶31, Kopke's 33. The premise allegation the majority's that is for if L'Arciere negligently packed the paper, it was foreseeable that he would be injured in Wisconsin. the United States This approach was plainly rejected by Supreme Court in World-Wide Volkswagen. There, the Court held that jurisdiction in Oklahoma cannot be based upon "the fortuitous circumstance 12 that a single Audi No. 99-3144.npc automobile, sold in New York to New York residents, happened to suffer an accident while passing through Oklahoma," even though it had been argued that the injury in Oklahoma was foreseeable because the Audi was mobile. 295. World-Wide Volkswagen, 444 U.S. at "If foreseeability were the criterion . . . a Wisconsin seller of a defective automobile jack could be haled before a distant court for damage caused in New Jersey . . . ." Id. at 296 (citation omitted). for the Indeed, World-Wide Volkswagen stands proposition establishes personal that neither jurisdiction. injury An nor causation allegation regarding causation is not a jurisdictional fact, and I note that the majority fails to rely upon any cases in seeming to so hold that it is. ¶64 Wisconsin What is remains only as the the contact link between created by L Arciere Binda and and CTI, specifically that "not insignificant volume of business between CTI and Binda." Majority op. at ¶32. The amount of business between two third-parties has never been the basis of a court's exercise of personal jurisdiction. Again, the majority is relying upon a foreseeability minimum contacts test, in order to assert Wisconsin's approach is jurisdiction dependent upon over L Arciere L'Arciere, and foreseeing, or, such an in the words of the majority, "expect[ing]" that the paper it packed "arrive" in Wisconsin. However, benchmark Clause." Majority op. at ¶32 (emphasis added). "'foreseeability' for personal alone has jurisdiction never under been the World-Wide Volkswagen, 444 U.S. at 295. 13 a sufficient Due Process No. 99-3144.npc [T]he foreseeability that is critical to due process analysis is not the mere likelihood that a product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there. The Due Process Clause, by ensuring the "orderly administration of the laws," gives a degree of predictability to the legal system that allows potential defendants to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit. Id. at 297 (citations omitted). Here, the requisite foreseeability, inextricably linked to the notice element of due process, is anything, ostensibly that would missing. put There L Arciere on is very notice little, that handling a product that was intended for Wisconsin. it if was There was nothing that would have led to the prediction that their packing of containers result in headed defending United States. for an a "Neenah" action in or an Wisconsin, "Appleton" or even would in the L'Arciere would have had to have known that Appleton and Neenah were located in Wisconsin. The contact, established only through Binda, "is far too attenuated a contact to justify [this] State's exercise of in personam jurisdiction over" L Arciere. ¶65 Id. at 299. Even under Justice Brennan's less restrictive stream of commerce test in Asahi, the necessary minimum contacts are not found here. The majority, in finding to the contrary, rents the fabric of due process. If, as the majority concludes, the jurisdictional facts in this case establish minimum contacts, little predictability remains for 14 potential plaintiffs and No. defendants in the present world economy. 99-3144.npc Perhaps, it is time for the United States Supreme Court again to provide guidance as to the scope of due process as related to minimum contacts. For the reasons stated herein, I respectfully dissent. ¶66 I am authorized to state that Justice JON P. WILCOX and Justice DIANE S. SYKES join this dissent. 15 No. ¶67 DIANE S. Crooks' dissent. Wis. Stat. SYKES, J. I (dissenting). 99-3144.dss join Justice I agree that Wisconsin's long-arm statute, § 801.05(4)(b), has been satisfied, but that due process precludes the assertion of personal jurisdiction over L'Arciere. I write separately because I disagree with the majority's adoption of the Seventh Circuit's interpretation of the statute in Nelson v. Park Industries, Inc., 717 F.2d 1120 (7th Cir. 1983). ¶68 reference In Nelson, the Seventh Circuit held that the statute's to "products . . . processed . . . by the defendant [and] used or consumed within this state" included the actions of a foreign resell goods. transactional distributor who Id. at 1124. act of did nothing more than buy and I am not fully convinced that the buying and reselling a product in the ordinary course of trade constitutes "processing" for purposes of our long-arm statute. But that issue need not be decided here, and so I would not adopt Nelson's interpretation of the statute. ¶69 Instead, packaging I procedure would conclude carried out that by the particularized L'Arciere employees constituted "processing" as that term is commonly and ordinarily understood. method." "To process" is "to treat or prepare by a special Funk & Wagnalls New International Dictionary of the English Language 1005 (Comprehensive Millennium Ed. 2000). ¶70 L'Arciere employees packaged and secured the paper pallets for shipment in cargo containers according to a detailed method complete with bracing beams, boards, and inflated air 1 No. bags prescribed by Binda's loading plans. "processing." 99-3144.dss This is a form of As such, the long-arm statute has been satisfied, although the requirements reasons stated by Justice of due Crooks. process have not, Accordingly, I for the join his opinion, and respectfully dissent. ¶71 I am authorized to state that Justices JON P. WILCOX and N. PATRICK CROOKS join this dissenting opinion. 2
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