Opinion ID: 2973876
Heading Depth: 2
Heading Rank: 2

Heading: Arise out of Actions in Forum State

Text: The second consideration in the minimum contacts test is whether the cause of action arose out of the defendant’s activities in the forum state. Despite finding insufficient contacts with Ohio, the district court concluded that Fortis’s cause of action did arise out of actions in the forum state. It acknowledged that the event that caused the leak, the leak itself, and the damage to the steel coils all occurred at sea before reaching Toledo. Yet, according to the district court, “[w]hat [the defendants] again cannot escape is that this entire case is in this court only because their ship delivered cargo to Toledo. Therefore, this criterium is satisfied.” 2005 WL 646092, at . The Sixth Circuit establishes a “lenient” threshold for meeting this requirement. See Bird v. Parsons, 289 F.3d 865, 875 (6th Cir. 2002). In Bird, the court considered whether a plaintiff’s cause of action arose in Ohio when the pro se plaintiff alleged the defendants – all of whom were non-Ohio residents – misappropriated his domain name in violation of copyright and trademark laws. Defendant Dotster was a registrar of internet domain names. After the district court dismissed the case for lack of jurisdiction, plaintiff appealed, and the court of appeals reversed. It noted that the “only factual allegations that connect [the Dotster defendants] in any way to Ohio” are as follows: the Dotster defendants admit they have sold approximately 233,333 internet domain names to United States customers, which, when divided by 50, means that on average they sold about 4,666 domain names to each state, including Ohio. Id. at 872. The court concluded that this satisfied the purposeful availment test. The court then considered whether plaintiff’s claims arose out of the Dotster defendants’ contacts with Ohio. The court held that the “arising out of” factor “requires only ‘that the cause of action, of whatever type, have a substantial connection with the defendant’s in-state activities.’” Id. at 875 (quoting in part Third Nat’l Bank v. WEDGE Group, 882 F.2d 1087, 1091 (6th Cir. 1989)). The court concluded that the actions of the Dotster defendants in registering a third party’s domain name constituted sufficient connection with Ohio. The court held that “the operative facts are at least marginally related to the alleged contacts between the Dotster defendants and Ohio.” Id. The 10 The district court and defendants rely on the case of Mutualidad Seguros del Instituto Nacional de Industria v. M.V. Luber, 1998 WL 1108936 (S.D.N.Y. Sept. 25, 1998) to argue that defendants only owned the vessels and did not purposefully call on U.S. ports. That case held that a foreign owner of a shipping vessel cannot be subject to the jurisdiction of U.S. courts because it has no control over where the vessels sail. This holding is inconsistent with Sixth Circuit precedent. See, e.g., Mott, supra. It is also at odds with cases that have found jurisdiction over a foreign vessel owner that charters its boats to a third party. See United States v. Pierre Point Shipping and Inv. Co., 655 F. Supp. 1379 (E.D. Va. 1987); Mitsubishi Shoji Kaisha v. MS Galini, 323 F. Supp. 79 (S.D. Tex. 1971). No. 05-3792 Fortis Corp. Ins. v. Viken Ship Management, et al. Page 9 court reached this conclusion even though the only factual connection to Ohio related to plaintiff’s claim was that the plaintiff lived there and was harmed there. In this light, the factual allegations here are sufficient to establish that the claims arose out of activities in the forum state. The alleged harm ultimately suffered by plaintiff, and arguably the breach of bailment obligations, occurred in Ohio when defendants’ ship delivered rusted steel coils to Toledo. The facts in this case are sufficient under Bird and this Circuit’s “lenient” standard to meet the “arising under” test.