*1 Before WOLLMAN, Chief Judge, LAY and BRIGHT, Circuit Judges.
___________
LAY, Circuit Judge.
In February 1996, Joseph Clune was working at a construction site in Kansas City, Missouri, for his employer, J.E. Dunn, when he fell from a construction hoist through an unenclosed area on top of the work platform. [1] He died as a result of the fall. The hoist was manufactured by Linden-Alimak AB, a Swedish corporation that designed and manufactured construction hoists and other lifts. Industrivarden Service AB (“Industrivarden”) is one of two successor companies of Alimak AB. Industrivarden is a shell corporation that has no employees and does not manufacture or sеll equipment. For purposes of this suit, the company exists to handle the liabilities of Linden-Alimak AB/Alimak AB. Linden-Alimak AB sold the hoist F.O.B. Swedish port to Esco Corporation (“Esco”) in 1972. At the time, Esco maintained an office in Oregon and imported the hoist into the United States via Seattle, Washington.
Carol Clune, Paul Clune, and Kelly Clune (“the Clunes”), the wife and children of the decedent, brought a wrongful death suit against Industrivarden. The district court granted Industrivarden’s motion to dismiss for lack of personal jurisdiction. On appeal, the Clunes argue that the exercise of personal jurisdiction in this casе falls under the Missouri long-arm statute and comports with the Due Process Clause of the Fourteenth Amendment. The district court held that Industrivarden, a Swedish corporation, did not have sufficient minimum contacts with Missouri during the relevant time period to satisfy constitutional personal jurisdiction standards.
We reverse.
A.
During the years Linden-Alimak AB/Alimak AB [2] was in business, it used distributors within the United States to sell its products in the United States. From approximately 1960 to 1970, B.M. Heede (“Heede”), a Connecticut corporation, was the exclusive distributor for Linden-Alimak AB. From 1970 to 1974, the company used two distributors for its product: Oregon-based Esco sold the hoists in thirteen western states, while Heede sold the equipment in the rest of the country, including Missouri. Both distributors also sold other manufacturers’ products. [3]
When Linden-Alimak AB became Alimak AB in 1983, its American subsidiary followed suit and became Alimak, Inc. [4] Alimak, Inc. continued to be the exclusive *4 United States distributor for its Swedish parent. [5] As a result of its relationships with these distributors, approximately 700 of Linden-Alimak AB/Alimak AB’s construction hoists were sold in the United States by 1986. Between twenty and forty of those hoists were sold in Missouri.
The district court found that Industrivarden was not subject to personal jurisdiction in Missouri because the company’s activities were not sufficiently targeted to that state. First, the court denied jurisdiction on the stream of commerce theory, finding that Linden-Alimak AB/Alimak AB did not purposefully avail itself of the privilege of conducting business in Missouri. Second, the court failed to find jurisdiction over Linden-Alimak AB/Alimak AB based on the activities of its subsidiary, Alimak, Inc. Because it did not find sufficient minimum contacts, the district court did not consider whether exercising personal jurisdiction would comport with fair play and substantial justice under the Due Process Clause.
We review a dismissal for lack of personal jurisdiction de novo. See Stevens v.
Red Wing,
through its own payroll, provided its own policies, rules and regulations, and paid for its Swedish parent’s products when it purchased F.O.B. Swedish port. On the other hand, Linden-Alimak AB/Alimak AB relied solely on its subsidiary for sales in the United States and provided sales brochures with which to promote its products. Management of Alimak, Inc. went to Sweden to discuss with the parent company issues such as improvement, product support, and anticipаted sales. Alimak AB also sent Swedish employees to the United States to train Alimak, Inc. service technicians.
[5] From this point forward “Alimak, Inc.” includes its predecessor, Linden- Alimak, Inc., and refers to the company as it existed until 1988, when its assets and liabilities were sold to separate companies.
We apply a two-part test to the jurisdictional issue. First, whether the forum state’s long-arm statute is satisfied, and second, whether the exercise of jurisdiction comports with due process. See id.
B.
The Missouri long-arm statute confers jurisdiction over nonresidents who
сommit tortious acts within the state. See Mo. Rev. Stat. § 506.500.1(3) (2000 Supp.).
The Missouri Supreme Court has declared that when the Missouri legislature enacted
the long-arm statute, its “ultimate objective was to extend the jurisdiction of the courts
of this state over nonresident defendants to that extent permissible under the Due
Process Clause of the Fourteenth Amendment of the Constitution of the United States.”
State v. Pinnell,
The Due Process Clause establishes the parameters of a state’s power to assert
personal jurisdiction over a nonresident defendant. See Helicopteros Nacionales De
Columbia, S.A. v. Hall,
*6
the burden on the defendant, the interests of the forum state in
adjudicating the dispute, the plaintiff’s interest in obtaining convenient
and effective relief, the interstate judicial system’s interest in obtaining
the most efficient resolution of controversies, and the shared interest of
the several states in furthering fundamental substantive social policies.
Falkirk Mining Co. v. Japan Steel Works, Ltd.,
The baseline for minimum contacts is “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.” Burger King,
Id. In other words, personal jurisdiction may be exercised consonant with due process “over a corporation that delivers its products into the stream of commerce with the *7 expectation that they will be purchased by consumers in the forum State.” Id. at 297- 98.
In its most recent discourse on the stream of commerce theory, the Court in Asahi debated whether a foreign manufacturer that places a product in the stream of commerce purposefully avails itself of the privilege of conducting business in a state where the product ultimately is found. Although a majority of the Asahi Court agreed with Justice O’Connor that jurisdiction was not proper in that case, five Justices refused to adopt her articulation оf a stream of commerce “plus” theory. [6] See 480 U.S. at 116-22. See also Barone v. Rich Bros. Interstate Display Fireworks, Co., 25 F.3d 614 (“In short, Asahi stands for no more than that it is unreasonable to adjudicate third-party litigation between two foreign companies in this country absent consent by the nonresident defendant.”).
In the present case, Linden-Alimak AB/Alimak AB did more than simply set a
product adrift in the international stream of commerce. The record shows Linden-
Alimak AB/Alimak AB created the distribution system that brought the hoist to
Missouri. In Barone, we endorsed the idea that when a seller heads a distribution
network it realizes “the much greater economic benefit of multiple sales in distant
forums,” which in turn “may ‘satisfy the purposeful availment test.’”
Recently we applied the rule of Barone in Vandelune v. 4B Elevator
Components Unlimited,
*9
The facts alleged by the Clunes are similar to those in Vandelune. Linden-
Alimаk AB/Alimak AB designed its construction hoists for the United States market.
The company had exclusive distribution agreements with United States distributors.
[7]
The Swedish parent’s logo was displayed on products that were sold in the United
States. Linden-Alimak AB/Alimak AB also conducted training seminars in the United
States for technicians employed by Alimak, Inc. who serviced hoists that were sold by
the subsidiary. Of the 700 construction hoists that were sold in the United States by
the company’s distributors, between twenty and forty ended up in Missouri. This fact
alone makes it difficult for us to characterize the hoist’s location in Missouri as random,
attenuated or fortuitous. See Burger King,
The district court concluded that Industrivarden could not be subject to personal jurisdiction under Vandelune because Linden-Alimak AB/Alimak AB did not send its product “into a regional distributor with the expectation that the distributor [would] penetrate a discrete, multi-State trade area.” 148 F.3d at 948. Although we can imagine a case where a foreign manufacturer selects discrete regional distributors for the purpose of penetrating the markets in some states to the exclusion of others, that situation is not before us. The record shows that Linden-Alimak AB/Alimak AB did not seek to limit the statеs or regions where their construction hoists would be sold. Rather, it utilized distributors that had sales territories across the United States. A foreign manufacturer that successfully employs a number of regional distributors to cover the United States intends to reap the benefits of sales in every state where the distributors market. Similarly, a foreign manufacturer that successfully employs one or two distributors to cover the United States intends to reap the benefit of sales in every state where those distributors market. The difference is one of form, not function, and the practiсal effect is the same.
We are not persuaded by Industrivarden’s argument that it was unaware of what
happened to its products after they left Swedish port. “[S]uch ignorance defies reason
and could aptly be described as ‘willful.’” Barone,
Linden-Alimak AB/Alimak AB was “present” in Missouri from the time the crane entered Missouri until the time that product ceased to exist in that state. Because the crane must have been present at the time Joseph Clune fell from it, the timing of the contacts was proper for personal jurisdiction purposes.
The facts show that Linden-Alimak AB/Alimak AB purposefully directed its products to the United States through the distribution system it set up in this country. The company knew that by virtue of this system, its construction hoists entered the Missouri and other Midwest markets. Linden-Alimak AB/Alimak AB’s creаtion of the system that brought hoists to Missouri established sufficient minimum contacts with that forum to satisfy the due process standards set by the Supreme Court and followed by this circuit. [9]
With minimum contacts satisfied, we must next balance those contacts with the
burden on Industrivarden of defending itself in Missouri, the interest of Missouri in
adjudicating the dispute, the Clunes’ interest in obtaining the most efficient resolution
of this matter, the judicial system’s interest in obtaining the most efficient resolution of
this matter, and the shared interest of the several states in furthering fundamental
substantive social policies. See Falkirk,
The Supreme Court has noted that “[t]he unique burdens placed upon one who
must defend oneself in a foreign legal system should have significant weight in
assessing the reasonableness of stretching the long arm of personal jurisdiction over
national borders.” See Asahi,
It is readily apparent that Missouri has the strongest interest of any forum in adjudicating this dispute. The accident that gave rise to this case occurred in Missouri. Joseph Clune was an employee of the Missouri company, he worked and paid taxes in that state, and his death occurred there as a result оf a product sold in that forum. No other state has a more compelling connection to this case.
The Clunes’ interest in obtaining convenient and effective relief is best satisfied by adjudicating this dispute in Missouri. Although they are residents of Kansas, Kansas is not a viable venue for this case and Missouri is the closest choice. In any event, Missouri is abundantly more convenient for the Clunes than if this case were to be tried in Sweden. Our decision today in no way guarantees the Clunes success in this suit. However, it likely would be impossible for this family of three who has lost their husband and fаther to travel abroad to seek restitution for his death.
Trying this case in Missouri federal court also satisfies the judicial system’s interest in obtaining the most efficient resolution of this controversy. We exercise caution when subjecting a foreign corporation to jurisdiction in the United States, but are satisfied that Linden-Alimak AB/Alimak AB affirmatively took on the risk of liabilities here.
Finally, the adjudication of this dispute in Missouri ensures the fundamental social policy of safety in goods that enter our marketplace. As commercial borders are dismantled in the increasingly glоbal marketplace, more products are available to consumers in the United States. It is essential that our laws designed to protect the health and safety of human beings not be lost in this flurry of commerce.
The judgment of dismissal by the district court is vacated and the cause is remanded for further proceedings.
BRIGHT, Circuit Judge, concurring.
I concur in the result only.
I do not agree with the stream of commerce theory of the majority. Initially the Swedish manufacturer, Linden-Alimak AB, shipped the construction hoist F.O.B. Swedish port to the Pacific Northwest in the United States. The hoist apparently came into Missouri via a contractor. The application of the stream of commerce theory would subject a foreign entity to suit in any state of the Union where the product ended up, regardless of the original destination for the article or how the particular product happened to be in a particular place in any state.
I believe, however, that the defendant through its subsidiaries was subject to jurisdiction because those subsidiaries were doing business in Missouri. Its subsidiaries, Linden-Alimak Inc. and Alimak Inc., were incorporated in the State of Connecticut. They both held certificates of authority to conduct business in the State of Missouri. They employed sales representatives to cover multi-state territories. These sales representatives sold their companies' products in Missouri.
Courts in the Eighth Circuit have held that they can only assert personal
jurisdiction over a foreign parent corporation based on the activities of its resident
*15
subsidiary when the parent corporation dominates and controls the subsidiary to the
point that the two companies no longer maintain corporate formalities. See Lakota
Girl Scout Council, Inc. v. Havey Fund-Raising Mgmt., Inc.,
The district court ignored evidence that suggests that Industrivarden exercised
control over its subsidiaries' marketing and sales decisions. Industrivarden produced
sales brochures which were distributed to residents and consumers in Missouri by its
distributors and subsidiaries. At least three members of the subsidiary's board of
directors were also directors of the foreign manufacturer. Pursuant to Missouri law,
Mo. Rev. Stat. § 351.310 (1986), these directors of the subsidiary "controlled and
managed" the business of the subsidiary. These directors made no effort to exclude
Missouri from its United States sales. At least two of the directors of the subsidiary
were also officers of thе foreign manufacturer. Courts have found that to be an
important factor in determining whether there are sufficient minimum contacts. See
Hawes v. Honda Motor Co., Ltd.,
Because of the absence of evidence regarding the issue, I do not here hold that the foreign manufacturer and its subsidiaries are so tightly related that the subsidiaries are mere alter-egos of the parent. Rather, I simply refer to the relationship to support *16 our conclusion that without the existence of its subsidiaries, Industrivarden would not be able to distribute its product in the United States. This connection between the foreign manufacturer and the resident subsidiary represents more than simply placing a product into the stream of commerce.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
Notes
[1] A construction hoist is a temporary elevator-like structure used by workers during the construction of buildings.
[2] Herein, “Linden-Alimak AB/Alimak AB” refers to the сompany as it existed before it was sold in 1988. It does not include the “new” Alimak AB. Alimak AB originated in Sweden as a manufacturer of construction equipment. Through a corporate merger in 1968, the company became Linden-Alimak AB and took on business in crane manufacturing. Then in 1983, Linden-Alimak AB dropped its crane manufacturing business and the name “Linden,” and became Alimak AB once again. Five years later, the company was sold in two parts. The Alimak name and most of its assets were sold to a company, which continues to manufacture and sell under the Alimak name today. This “new” Alimak AB, as it is referred to by the parties, is not involved in this lawsuit. The liabilities and some of the assets of the “old” Alimak AB were sold to Alivator AB. In 1995, Alivator AB dissolved and merged into a Swedish company called Industrivarden Service AB.
[3] In 1974, Linden-Alimak AB terminated its relationship with Esco, bought a portion of Heede and made Heede its sole distributor in the United States. By 1978, Linden-Alimak AB owned all of Heede, and changed Heede’s name to Linden-Alimak, Inc.
[4] Linden-Alimak AB/Alimak AB and Alimak, Inc. were distinct, yet connected, companies. On one hand, Alimak, Inc. maintained its own books, paid еmployees
[6] Justice O’Connor opined 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.” Asahi,
[7] It is worth nothing that the only way a customer in the United States could acquire a Linden-Alimak AB/Alimak AB construction hoist was through the company’s exclusive United States distributor. If a customer directly contacted Linden-Alimak AB/Alimak AB, the parent would refer that customer to Alimak, Inc. in the United States.
[8] Industrivarden insists that any contacts its predecessor cоmpanies had with Missouri were outside of the time period that is material to the issue of personal jurisdiction. Industrivarden cites a string of cases to support its assertion that minimum contacts must occur at the time the cause of action arose, the time the suit is filed, or a reasonable period of time immediately prior to the filing of the lawsuit. See Brief for Appellee at 15-16. According to Industrivarden, the contacts alleged by the Clunes occurred before 1988, which is outside of the window of personal jurisdiction opportunity for the 1996 incident that gаve rise to this case. Although Industrivarden is correct in its statement of the chronological rule, its conclusion cannot stand.
[9] Industrivarden asserts that the present case comports with post-Asahi Eighth
Circuit decisions where we have denied jurisdiction over foreign defendants. We
disagree.
In Gould v. P.T. Krakatau Steel,
