United States District Court, N.D. Indiana, South Bend Division
OPINION AND ORDER
Leroy Dreibelbeis (“Plaintiff”) filed this
product liability action alleging that his building was
damaged by a fire on January 5, 2015, when his water heater
(a Quietside DPW-120A S-Line Condensing Instantaneous
Tankless Water Heater) overheated [DE 4]. He claims that
damages are due from the following Defendants: Mernard, Inc.
(“Menard's”), who sold the water heater;
Challenger Supply Holdings, Inc. (“Challenger
Supply”), who distributed it; and Daesung Celtic
Enersys Co., Ltd. (“Daesung”), who manufactured
it. Challenger Supply has filed a cross-claim against Daesung
seeking indemnity in the event that Plaintiff prevails [DE 10
seeks dismissal of both claims pursuant to Rule 12(b)(2) for
lack of personal jurisdiction; or, in the alternative,
pursuant to Rule 12(b)(6) for failing to state a claim. For
the reasons stated below, the Court concludes that it lacks
jurisdiction over Daesung and declines to address the
sufficiency of the claims.
2011, Plaintiff purchased a Quietside water heater
manufactured by Daesung from a Menard's store located in
Mishawaka, Indiana [DE 42-1, Affidavit of Leroy Dreibelbeis].
Plaintiff had the water heater properly installed in a
building on his property located in New Carlisle, Indiana.
Id. On January 5, 2015, the water heater caught fire
which resulted in damage to Plaintiff's real and personal
property. Id. Plaintiff later learned that a recall
on the water heater had been issued in 2014,  due to reports
that the product could overheat and posed a fire hazard.
had the right to distribute Daesung's tankless water
heaters throughout the United States, Mexico, and Canada, and
as the exclusive distributer in the United States, Quietside
sent an undisclosed number of water heaters to Menard's
stores located in Indiana [DE 42-1 at 7-10; DE 54-1,
Affidavit of Challenger Supply's former director]. Given
the distribution agreement, Daesung also tasked Quietside
with organizing a sales service network throughout the United
States by designating dealers, advertising Daesung's
products, and displaying products at tradeshows [DE 54-1].
When Daesung initiated the voluntary recall of the water
heater in 2014, Daesung hired legal counsel and advisors in
the United States at its own expense to facilitate and
control the recall. Id. But Daesung had no knowledge
of Quietside's distribution networks, the forums targeted
for the sale of products, or the locations where the instant
product was actually sold [DE 43-1; DE 44-1, Affidavit from
the Head of Daesung's Overseas Business Team]; and so,
Quietside had to provide Daesung with “a confidential
list of all Quietside distributors and retailers of the
subject products.” [DE 54-1].
is a corporation existing under the laws of the Republic of
Korea, where its principal place of business is also located.
Id. Daesung affirms that aside from the above facts,
it has no contacts with Indiana outside of defending this
lawsuit [DE 34-2; DE 43-1; DE 44-1]. Daesung reiterates that
neither Plaintiff nor Challenger Supply have offered evidence
suggestive of Daesung's having additional contacts with
STANDARD OF REVIEW
Rule 12(b)(2) of the Federal Rules of Civil Procedure, a
party may move to dismiss for lack of personal jurisdiction.
Once a defendant moves to dismiss on that basis, “the
plaintiff bears the burden of demonstrating the existence of
jurisdiction.” Purdue Research Found. v.
Sanofi-Synthelabo, S.A., 338 F.3d 773, 782 (7th Cir.
2003). To that end, the parties may submit, and a court may
consider, materials outside of the pleadings. Id. In
ruling on such a motion, a court must first determine whether
the plaintiff has made out a prima facie case of
personal jurisdiction. Id.; Hyatt Int'l
Corp. v. Coco, 302 F.3d 707, 713 (7th Cir. 2002). At
that stage, a court must “take as true all well-pleaded
facts alleged in the complaint and resolve any factual
disputes in the affidavits in favor of the plaintiff.”
Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir.
2010); Purdue, 338 F.3d at 782. If the plaintiff
meets that initial burden but there are material factual
disputes, the Court must then hold an evidentiary hearing, at
which point the plaintiff must prove any facts supporting
jurisdiction by a preponderance of the evidence.
Hyatt, 302 F.3d at 713.
Court has personal jurisdiction over a defendant to the same
extent a state court in this forum could exercise personal
jurisdiction over that defendant. Advanced Tactical
Ordnance Sys., LLC v. Real Action Paintball, Inc., 751
F.3d 796, 800 (7th Cir. 2014). Here, Indiana's long-arm
statute permits its courts to exercise personal jurisdiction
to the full extent permitted under federal law. Id.;
LinkAmerica Corp. v. Cox, 857 N.E.2d 961, 967 (Ind.
2006) (“Indiana's long-arm provision now extends to
the limits of the Constitution.”). Therefore, to
determine whether it may exercise jurisdiction over Daesung,
the Court must decide “whether ‘the exercise of
jurisdiction comports with the limits imposed by federal due
process.'” Advanced Tactical, 751 F.3d at
800 (quoting Walden v. Fiore, 134 S.Ct. 1115, 1121
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.'” Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 471-72 (1985)
(quoting Int'l Shoe v. Washington, 326 U.S. 310,
319 (1945)). This requires that “individuals have
‘fair warning that a particular activity may subject
them to the jurisdiction of a foreign sovereign . . .
.'” Id. (quoting Shaffer v.
Heitner, 433 U.S. 186, 218 (1977)).
a forum seeks to assert specific jurisdiction over an
out-of-state defendant who has not consented to suit there,
this ‘fair warning' requirement is satisfied if the
defendant has ‘purposefully directed' his
activities at residents of the forum, Keeton v. Hustler
Magazine, Inc., 465 U.S. 770, 774 (1984), and the
litigation results from alleged injuries that ‘arise
out of or relate to' those activities, Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414
(1984).” Burger King, 471 U.S. at 472-73.
“The inquiry whether a forum State may assert specific
jurisdiction over a nonresident defendant ‘focuses on
the relationship among the defendant, the forum, and the
litigation.'” Walden, 134 S.Ct. at 1121
(quoting Keeton, 465 U.S. at 775). The
“constitutional touchstone” for specific
jurisdiction “remains whether the defendant
purposefully established ‘minimum contacts' in the
forum.” Burger King, 471 U.S. at 474.
Furthermore, the relation between the defendant and the forum
“must arise out of contacts that the ‘defendant
himself ' creates with the forum . . .”
Id. (quoting Burger King, 471 U.S. at 475).
Contacts between the plaintiff or other third parties and the
forum do not satisfy this requirement. Id.; see
Advanced Tactical, 751 F.3d at 801.
may also be subject to general jurisdiction, meaning
jurisdiction over matters unrelated to the party's
connection with the forum State, where the party's
“affiliations with the State are so ‘continuous
and systematic' as to render them essentially at home in
the forum State.” Daimler AG v. Bauman, 134
S.Ct. 746, 754 (2014) (quoting Goodyear Dunlop Ties
Operations, S.A. v. Brown, 131 S.Ct. 2846, 2851 (2011)).
Here, Plaintiff and Challenger Supply focus solely on
specific jurisdiction (and in fact, Plaintiff concedes that
general jurisdiction is lacking [DE 42 at 4]). Therefore,
they make no effort to establish that Daesung is subject to
general jurisdiction in Indiana. Instead, the opponents of
Daesung's motion to dismiss argue that the Court has
specific jurisdiction over Daesung through the stream of
commerce theory. See World-Wide Volkswagen Corp. v.