Timоthy 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 LIQUIDAZIONE 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.
No. 99-3144
Supreme Court of Wisconsin
July 10, 2001
2001 WI 99 | 629 N.W.2d 662
Oral argument April 30, 2001.
For the defendant-third-party plaintiff-respondent 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.
¶ 1. WILLIAM A. BABLITCH, J. Societa’ Cooperativa L‘Arciere (L‘Arciere), an Italian cooperative, challenges the exercise of in personam jurisdiction over it. This challenge presents two inquiries: (1) Whether the facts presented satisfy Wisconsin‘s long-arm statute,
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
¶ 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. In 1995 Binda entered into a contract with L‘Arciere, an employee-owned Italian cooperative, to provide workers to load product into cargo containers. 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. Binda‘s setup department prepared loading plans for the containers. Binda produced loading plans for five of the shipments occurring between November 1996 and May 1997. At the top of these plans is written either “Cont. X CTI Appleton,” “Contenitore X CTI” or Contenitore X Neenah.” Kopke explains that “Contenitore,” or “cont.” as it is 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. In conformity with the loading plan, L‘Arciere workers moved the pallets into the cargo container. The L‘Arciere workers placed the pallets into the cargo container and secured it using boards,
¶ 7. After Kopke sustained his injury he brought a claim for damages against Binda, L‘Arciere, and others. L‘Arciere moved to dismiss for lack of personal jurisdiction. Brown County Circuit Court Judge William M. Atkinson denied this motion. Judge Atkinson ruled that L‘Arciere‘s acts of stаbilizing the products being shipped by surrounding the product with air bags, and installing bracing beams and boards into the cargo container, were acts that were part of a processing of a product. The circuit court judge was also satisfied that the minimum contacts requirement for due process purposes was met.2 L‘Arciere appealed. The court of appeals accepted L‘Arciere‘s appeal, and subsequently the court certified the appeal to this court pursuant to
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? Every personal jurisdiction issue requires a two-step inquiry. In re Liquidation of All-Star Ins. Corp., 110 Wis. 2d 72, 76, 327 N.W.2d 648 (1983) (discussing personal jurisdiction pursuant to
¶ 9.
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.
¶ 10. Application of
¶ 11. The dispute here is focused upon whether L‘Arciere engaged in conduct described in
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.
¶ 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. L‘Arciere had an exclusive contract with Binda to load product 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; 39 of which arrived between November 1996 and May 1997.3 He argues that L‘Arciere processed the product for shipment to Wisconsin when it loaded and secured the product in the cargo container. This loading was, in Kopke‘s view, a necessary function in 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
¶ 14. A narrow interpretation of the word “process” is also urged by third-party defendant-respondent Riunione Adriatica di Sicurta’ S.p.A.
¶ 15. The question presented is, therefore, whether the word “process” means to bring about a physical transformation upon the products, materials, or things themselves, as urged by L‘Arciere and RAS, or whether process is a broader 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).
¶ 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. Brauneis v. LIRC, 2000 WI 69, ¶ 21, 236 Wis. 2d 27, 612 N.W.2d 635. Wisconsin‘s long-arm statute was designed to satisfy the requirements of due process. 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 St. 1959,
¶ 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 from processing dead animals
¶ 19. Further, although L‘Arciere correctly points out that “process” appears with “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 thereof.’ ” Greenebaum v. Dep‘t of Taxation, 1 Wis. 2d 234, 238, 83 N.W.2d 682 (1957) (quoting State v. Columbian Nat. Life Ins. Co., 141 Wis. 557, 566, 124 N.W. 502 (1910)). Were we to conclude that “process” is merely a restatement of “manufacturing,” we would render “process” a 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
¶ 21. Despite the apparently similar language in the Florida statute and
¶ 22. Having concluded that L‘Arciere falls within reach of
¶ 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
¶ 24. We turn then to apply the first inquiry of our due process analysis to the facts of this case. Under the
¶ 25. As an additional component of analysis, the litigants in this 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 unrеasonable 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 that personal jurisdiction is established under the stream of commerce theory because (1) L‘Arciere routinely loaded cargo containers for shipment 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 relevance of the stream of commerce test in personal jurisdiction analysis is related to the issue of foreseeability. In World-Wide Volkswagen the Supreme Court found the concept of foreseeability insufficient to serve as a basis for personal jurisdiction under the
¶ 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. Cheng Shin manufactured tire tube and Asahi manufactured the tube‘s valve assembly. 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 as a defendant. The underlying tort action was settled and dismissed. Asahi sought to quash the indemnity action, arguing that exercise of personal jurisdiction violated due process.
¶ 28. The California Supreme Court held that personal jurisdiction did not offend due process because 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
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 regardlеss 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 for no more than that it is unreasonable to adjudicate third-party litigation between two foreign companies in this county absent consent by the nonresident defendant.” Barone v. Rich Bros. Interstate Display Fireworks Co., 25 F.3d 610, 614 (8th Cir. 1994).
¶ 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 concludе that the stream of commerce analysis should be applied here.12 Kopke‘s injuries arose out of commercial activities and the distribution of goods in the stream of commerce. 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 the pallet into the container that was shipped to this forum. 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).
¶ 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 reports from CTI which illustrate a not insignificant volume of business between CTI and 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 wоuld arrive in this forum.
¶ 33. First, we note L‘Arciere had a contract with Binda to supply workers for the purpose of loading cargo containers. L‘Arciere employees worked together in Italy with Binda employees to load the cargo containers. 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. Second, the loading instructions prepared by Binda and used by L‘Arciere identified the container‘s destination as “Neenah” or “CTI Appleton.” In other words, these products did not randomly or fortuitously appear in Wisconsin; they were specifically intended to arrive in this forum. The injury that 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 betwеen 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 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). 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. These business relationships benefited L‘Arciere, and L‘Arciere literally “played a hand” in the product arriving in this state. Under these
¶ 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. In its view, actual knowledge of a product‘s destination is essential for the exercise of personal jurisdiction and that L‘Arciere did not know where Neenah or Appleton are located. 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. Other court‘s have considered an analogous argument in personal 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.Ed. 2d 1283 (1958)], than a potential defendant who merely should have known.”
Barone, 25 F.3d at 613 n.4 (quoting Oswalt v. Scripto, Inc., 616 F.2d 191, 200 (5th Cir. 1980)). We find this reasoning applicable to L‘Arciere‘s argument concerning the distinction between “knowledge” and “actual knowledge” in this case; its argument raises a distinction that makes no difference.
¶ 39. Having concluded that Kopke has met his burden to establish minimum contacts for the exercise of 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 interest in obtaining convenient and effective relief; (3) the burden on the defendant; (4) the interstate judicial system‘s interest in obtaining the most efficient resolution of controversies; and, (5) the shared interest of the several States in furthering fundamental substantive social policies. Asahi, 480 U.S. at 113; World-Wide Volkswagen, 444 U.S. at 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
¶ 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 that the minimum contact requirement of personal jurisdiction analysis was not satisfied, 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 the exercise of personal jurisdiction under the “fair play and substantial justice” prong, and, therefore, these cases provide little assistance to our analysis. Nonetheless, we will
¶ 43. In American President Lines the defendant stevedore loaded and stowed cargo onto a vessel in California. The vessel, enroute to its destination of Bhavnagar, India, arrived in Seattle. While in Seattle a negligent stow required a lengthy layover for clean-up and restowage. The federal district court determined that the exercise of personal jurisdiction in Washington State would be impermissible. First, it determined that the loading of cargo in California “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 over defendant under Washington‘s long-arm statute.” Id. at 171. 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.” Id.
¶ 44. In Real Properties the Minnesota Supreme Court found no personal jurisdiction over a New Jersey company. The New Jersey company had been hired by a Minnesota firm, Barrett Moving & Storage (Barrett), to package Chinese art pieces for shipment. The Barrett drivers loaded the crates onto Barrett trucks and Barrett hauled the goods from New Jersey to Minneapolis, Minnesota. Upon arrival in Minneapolis it was discovered that many of the art pieces were broken. In the ensuing court action, the plaintiff argued that the
¶ 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. The goods were damaged at some point in this process. 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 Inter-American‘s storage of the goods once they reached Miami.” Id. at 675.
¶ 46. In the case at hand, the cargo container‘s arrival in Wisconsin was not “merely fortuitous” as was the passage of goods through Miami in Global Servicios or, 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 goods did not fortuitously, randomly, or even erringly appear here. In contrast to the events in Real Properties, this was not a one-time transaction. CTI had been purchasing Binda‘s products since 1991; L‘Arciеre was loading cargo containers under contract with Binda from 1996
¶ 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 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. Kopke is still a party, and very interested. Further, the facts of Asahi are substantially different from the present case. The Supreme Court found it unfair to exercise personal jurisdiction over a Japanese manufacturer of parts,
¶ 48. In sum, the defendant must make a “compelling case” that other consideration make the exercise of jurisdiction unreasonable. Burger King, 471 U.S. at 477. We conclude that L‘Arciere has not met this burden. As a result, we affirm the circuit court and conclude that personal jurisdiction over L‘Arciere is permissible under both the Wisconsin long-arm statute and the
By the Court.—The order of the circuit court is affirmed.
¶ 49. N. PATRICK CROOKS, J. (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
¶ 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,
¶ 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 bоrders 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,
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.
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 thе 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
noted (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.
Notes
¶ 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
¶ 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,
¶ 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 expeсtation that they will be purchased by consumers in the
¶ 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 “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. 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
¶ 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-
¶ 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 World-Wide 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. World-Wide 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
¶ 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, “expect[ing]” 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 еnsuring 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-
¶ 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 eсonomy. 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.
¶ 67. DIANE S. SYKES, J. (dissenting). I join Justice Crooks’ dissent. I agree that Wisconsin‘s long-arm statute,
¶ 69. Instead, I would conclude that the particularized packaging procedure carried out by L‘Arciere employees constituted “processing” as that term is commonly and ordinarily understood. “To process” is “to treat or рrepare by a special method.” 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 bags—prescribed by Binda‘s loading plans. This is a form of “processing.” As such, the long-arm statute has been satisfied, although the requirements of due process have not, for the reasons stated by Justice Crooks. Accordingly, I 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.
[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.