Court Opinion

ID: 9689807
Source: CourtListenerOpinion
Date Created: 2023-08-24 18:47:36.830977+00
Date Added: 2024-06-11T18:18:52.321519
License: Public Domain

N. PATRICK CROOKS, J.
¶ 49. (dissenting). I join the dissent of Justice DIANE S. SYKES, however, I write separately as to the majority's conclusion that the evidence here establishes minimum contacts. 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 op. at ¶ 37. The potential implication of the *433majority'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 has woven a justification for finding that L'Arciere is subject to this state's jurisdiction, notwithstanding the limits of due process. There is very little, if anything, to tie L'Arciere to Wisconsifi, certainly nothing that it "should reasonably anticipate being haled into court" here. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980).1
¶ 50. 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, a prima facie case into a presumption. The majority states that "[c]ompliance with the statute presumes that due process is met." 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 nonetheless, according to the majority. Lincoln stated that compliance with Wisconsin's long-arm statute, Wis. Stat. § 801.05, constitutes prima facie compliance with the requirements of due process. 104 Wis. 2d at 10. Lincoln, however, made an unsupported conclusion that the prima facie case somehow constituted a presumption. *434See id. This is a grievous error that should not be continued.
¶ 51. More importantly, if compliance with the Wisconsin's long-arm 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."
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 no limits and then, presumptively, abrogate due process. This cannot be.
¶ 52. Even if the majority's conclusion that Wisconsin's long-arm statute, Wis. Stat. § 801.05(4)(b), applies to L'Arciere's activity is correct, due process indeed limits the reach of personal jurisdiction. The limit of that reach is premised upon one of the most basic of due process rights — notice. 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 *435there, 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.
World-Wide Volkswagen, 444 U.S. at 297 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)). 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 472 (quoting Shaffer v. Heitner, 433 U.S. 186, 218 (1977) (Stevens, J., concurring)). The fair warning requirement is met where the defendant "purposefully directs" its activities towards forum residents. Burger King, 471 U.S. at 472, 473.
¶ 53. As the majority acknowledges, "purposeful availment" is the main cord of the minimum contacts analysis. See majority op. at ¶ 24. "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. It is on this component that a majority of the United States Supreme Court could not agree in Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987).2 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. Justice Brennan, speaking for a plurality of four other justices, disagreed. As the majority of this court *436noted (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 a surprise." Asahi, 480 U.S. at 117 (Brennan, J., concurring). The majority 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 authority on this issue." Id. at 947. Nonetheless, assuming, arguendo, that Justice 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,3 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. It has no office, employees, or property in Wisconsin. It does not advertise or otherwise solicit business in Wisconsin. It did not create or *437control 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.
¶ 55. The majority relies upon three factors that it concludes establishes L'Arciere's minimum contacts with Wisconsin and each fails to establish such. The first is L'Arciere's contract with Binda. See majority op. at ¶ 33.4 The United States Supreme Court stated clearly in Burger King that a contract alone does not establish minimum contacts. 471 U.S. at 478. 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, the majority relies upon the loading instructions which "identified the container's destination." Majority op. at ¶ 34. According to the majority, these instructions show that the paper products L'Arciere packed for Binda "were specifically intended to arrive in this forum." Id. The loading instructions prove no such thing. These one-page, *438handwritten instructions detail the calculations of the weight of the containers and sketch the placement of the containers. 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. Third, the majority relies upon evidence that at least 40 containers were loaded by L'Arciere for delivery to Wisconsin. Majority op. at ¶ 35. This evidence comes from damage reports CTI completed when it received the shipments from Binda. Id. at ¶ 35. These reports record damage that apparently occurred in shipment, noting where the containers were "scraped," or "dirty," or "corner gouged." However, these reports do not, and could not, establish, ex post facto, that L'Arciere was aware that those containers were headed for Wisconsin. 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, 480 U.S. at 105; see also id. at 117 (Brennan, J., concurring). 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 n.17 (quoting World-Wide Volkswagen, 444 U.S. at 297). Awareness exists, for example, where the defendant "delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the *439forum State." 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 knew specifically that some were destined for Wisconsin. 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 "Nee-nah," "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. World-Wide Volkswagen, 444 U.S. at 297. However, it is undisputed that L'Arciere's liability insurance coverage specifically excluded the United States and Canada. L'Arciere, since it appears to have been unaware of the risk, could not assess that risk.
¶ 60. To find the requisite awareness, the majority adopts Kopke's argument that L'Arciere had "constructive knowledge" that the paper was being *440shipped to Wisconsin. 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. See majority op. at ¶ 38. Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610 (8th Cir. 1994) and Oswalt v. Scripto, Inc., 616 F.2d 191 (5th Cir. 1980) both involve distribution contracts under which the defendants were reasonably aware, or even expected, that their product would reach the forum state. In Barone, the Eighth Circuit found that Nebraska could exercise personal jurisdiction over Hosoya Fireworks Co. of Tokyo, Japan, consistent with due process. 25 F.3d at 610-611. 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).5 Similarly, in Oswalt, the Fifth Circuit found that the *441defendant should have known 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. The cases wherein constructive knowledge established awareness, sufficient to establish personal jurisdiction, rest upon an entirely different relationship between the defendant and the forum state, than the one we have here.6 That distribution link between L'Arciere and *442Wisconsin 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. at ¶ 36. However, L'Arciere did not benefit economically from the fact that the paper it packed was delivered to Wisconsin. Binda did. L'Arciere economically benefited from packing the paper. 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 cargo. Indeed, L'Arciere failed to " 'purposefully derive [any] benefit'" from Wisconsin. Burger King, 471 U.S. at 473.
¶ 62. "[I]t is essential in each case 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) (emphasis added)). Another strand in the cord of "purposeful availment," in addi*443tion 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. That the majority is creating a minimum contacts test based 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 op. at ¶ 31, 33. The premise for the majority's reliance upon Kopke's allegation is that if L'Arciere negligently packed the paper, it was foreseeable that he would be injured in Wisconsin. This approach was plainly rejected by the United States Supreme Court in WorldWide Volkswagen. There, the Court held that jurisdiction in Oklahoma cannot be based upon "the fortuitous circumstance that a single Audi 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. WorldWide Volkswagen, 444 U.S. at 295. "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). Indeed, World-Wide Volkswagen stands for the proposition that neither injury nor causation establishes personal jurisdiction. An allegation regarding causation is not a jurisdictional fact, and I note that *444the majority fails to rely upon any cases in seeming to so hold that it is.
¶ 64. What remains as the contact between L'Arciere and Wisconsin is only the link created by Binda 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 jurisdiction over L'Arciere, and such an approach is dependent upon L'Arciere foreseeing, or, in the words of the majority, "expecting]" that the paper it packed "arrive" in Wisconsin. Majority op. at ¶ 32 (emphasis added). However, " 'foreseeability' alone has never been a sufficient benchmark for personal jurisdiction under the Due Process Clause." World-Wide Volkswagen, 444 U.S. at 295.
[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 ostensibly missing. There is very little, if anything, that would put L'Arciere on notice that it was handling a product that was intended for Wiscon*445sin. There was nothing that would have led to the prediction that their packing of containers headed for a "Neenah" or an "Appleton" would result in defending an action in Wisconsin, or even in the United States. 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. Id. at 299.
¶ 65. 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 potential plaintiffs and defendants in the present world economy. 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.

 In Zerbel v. H. L. Federman & Co., 48 Wis. 2d 54, 60, 179 N.W.2d 872 (1970), this Court recognized that, "[a]s to the limits imposed by due-process standards, federal decisions are controlling." I agree with the majority's conclusion that the five-factor test set forth in Zerbel has been subsumed into due process standards adopted by the United States Supreme Court. See majority op. at ¶ 23 n.9.

 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).

 The majority glosses over this point, summarily concluding that the due process analysis from cases which involve strict products 1liability 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.

 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.

 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 role as heads of a distribution network. 800 F.2d at 662, 667-668. 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.
*441[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.

 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.