2004 | Cited 0 times | D. Maine | March 4, 2004


In this opinion I conclude that section 12 of the Clayton Act permitsworldwide service of process upon alien corporate defendants in antitrustcases, and that the Fifth Amendment measures the constitutional adequacyof contacts by such defendants according to their contacts with theUnited States as a whole.


New motor vehicle purchasers and lessees claim that American andCanadian car manufacturers, distributors, dealers (although not named asdefendants) and dealer associations conspired to prevent a discountdistribution channel from operating in the United States —specifically, that cheaper Canadian versions of various models wereprohibited entry into the American market. They maintain that theconspiracy violated section 1 of the Sherman Act, 15 U.S.C. § 1(1997), and that the resulting lack of competition kept American retailpricesPage 2excessively high. They seek class-wide damages1 and injunctiverelief under sections 4 and 16 of the Clayton Act, 15 U.S.C. § 15, 26(1997). The Multi-District Panel has transferred 26 such cases to thisDistrict for pretrial management. Parallel cases are pending in a numberof state courts.

Certain Canadian defendants — Toyota Canada, Inc. ("ToyotaCanada"); DaimlerChrysler Canada, Inc. ("Daimler Canada"); Mercedes-BenzCanada, Inc. ("Mercedes-Benz Canada"); Nissan Canada, Inc. ("NissanCanada"); BMW Canada, Inc. ("BMW Canada"); and the Canadian AutomobileDealers Association ("CADA") — move to dismiss for lack of personaljurisdiction under Fed.R.Civ.P. 12(b)(2).

After oral argument on January 5, 2004, it is my understanding that (1)the plaintiffs' Amended Consolidated Class Action Complaint supercedesall previous complaints in these consolidated actions; (2) nodefendants now seek dismissal for improper service of process; (3) theplaintiffs do not assert jurisdiction based on any state long-armstatute; and (4) the plaintiffs do not attempt to meet the FirstCircuit's requirement for asserting personal jurisdiction underFed.R.Civ.P. 4(k)(2). See United States v. Swiss Am. Bank, Ltd.,191 F.3d 30, 41-42 (1st Cir. 1999).

I DENY the 12(b)(2) motions of Daimler Canada and CADA. IGRANT the 12(b)(2) motions of Nissan Canada, BMW Canada andToyota Canada. I DEFERPage 3action on the motion of Mercedes-Benz Canada, while permittingjurisdictional discovery concerning Mercedes-Benz non-exportarrangements.


(A) Section 12 of the Clayton Act

Section 12 of the Clayton Act provides: Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.15 U.S.C. § 22 (1997).

The cases are unanimous that this single sentence has two topics. Theclause before the semi-colon is a venue provision (describing districts>where an antitrust lawsuit against a corporate defendant may be heard).See United States v. ScophonyCorp., 333 U.S. 795, 802 (1948);GTE New Medial Servs. v. BellSouth Corp., 199 F.3d 1343, 1350(D.C. Cir. 2000); In re Auto. Refmishing Paint AntitrustLitig., 2004 U.S. App. LEXIS 2432, *11 (3d Cir.). The clausefollowing the semi-colon is a jurisdiction/service of process provision(describing where a corporate defendant may be served with papers thatbring it before a particular court). See id. Thecases also agree that the second clause's final phrase, "wherever it maybe found," permits worldwide service of process upon a corporatedefendant if that corporate defendant is subject to section 12'slanguage. See Go-Video, Inc. v. Akai Elec. Co., Ltd.,885 F.2d 1406, 1413 (9th Cir. 1989); Auto.Page 4Refinishing Paint, 2004 U.S. App. LEXIS 2432, at *11;Amtrol, Inc. v. Vent-Rite Valve Corp., 646 F. Supp. 1168, 1171(D. Mass. 1986).

But courts have struggled for years with the meaning of the secondclause's limiting phrase "in such cases."2 Does "such cases" meanantitrust lawsuits against a corporate defendant? Or does it mean onlyantitrust cases against a corporate defendant that meet all the criteriaof the first clause, i.e., where venue is established on thecriteria set out there? The question is important because there is aseparate venue statute that is broader for alien defendants, permittingvenue over alien defendants in any district. See28 U.S.C. § 1391(d). If plaintiffs can use the alien venue statute incombination with section 12's service of process provision, they can suean alien corporate defendant in federal court anywhere in the UnitedStates, subject to constitutional limitations, and serve that defendantanywhere in the world. But if section 12's worldwide service provisionsare limited to cases where venue exists under section 12's first clause,plaintiffs will be far more limited in their choice of forum.

The parties agree that in this multi-district case I must apply FirstCircuit law to determine the answer. Unfortunately, the First Circuit hasnot spoken on the issue. Until last month, there was an even split of theother Circuits, the Ninth Circuit choosing the first (broader)interpretation and the D.C. CircuitPage 5choosing the second (narrower).3 Compare Go-Video,885 F.2d at 1413 with GTE, 199 F.3d at 1351. Part of the delayin issuing this opinion reflected my own effort to write an opiniondealing with the ambiguous language of the statute, the circuit anddistrict cases, the legislative history, and Supreme Court pronouncementsabout venue generally and about the section 12 language in particular.But now the Third Circuit has written a comprehensive opinion surveyingthe authorities, In re Auto. Refinishing Paint AntitrustLitig., 2004 U.S. App. LEXIS 2432. I see no reason as a trial courtjudge to repeat what it has done. Its reasoning is persuasive. I believethe First Circuit will follow it, if presented with the issue. Itherefore follow the Third Circuit (and the Ninth Circuit), concludingthat the second, worldwide service, clause of section 12 is available inantitrust cases generally against corporate defendants, and that aplaintiff can use it in conjunction with the alien venue statute.

(B) Nationwide Contacts

Finding that the statutes permit personal jurisdiction is the firststep in thePage 6analysis. But there is a second step: the exercise of jurisdictionmust also meet constitutional requirements. Because the personaljurisdiction asserted here derives from federal statutes, I do not applythe traditional Fourteenth Amendment due process analysis that deals withthe power of the individual states. Instead, the constitutional inquiryarises under the Fifth Amendment (dealing with the federal government)and the analysis is whether a particular defendant has sufficientcontacts with the United States as a whole to justify the assertion offederal court jurisdiction over it. The Supreme Court has not spoken tothis issue, but that is the teaching of First Circuit caselaw. InUnited States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 618 (1stCir. 2001), the court stated: The personal jurisdiction inquiry in federal question cases like this one differs from the inquiry in diversity cases. Here, "the constitutional limits of the court's personal jurisdiction are fixed . . . not by the fourteenth Amendment but by the Due Process Clause of the Fifth Amendment." This distinction matters because under the Fifth Amendment, a plaintiff need only show that the defendant has adequate contacts with the United States as a whole, rather than with a particular state.(internal citations omitted); accord United Elec., Radio &Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1085(1st Cir. 1992). Here, the plaintiffs assert both general and specificjurisdiction. I analyze the showing they have made under the primafacie standard Boit v. Gar-Tec Products, Inc.,967 F.2d 671, 675 (1st Cir. 1992). Thus I "consider only whether theplaintiff has proffered evidence that, if credited, is enough to supportfindings of all facts essential to personal jurisdiction." Id. I considerboth "general" jurisdiction (jurisdictionPage 7asserted in connection with suits not directly founded onforum-based conduct) and "specific" jurisdiction (jurisdiction assertedwhen a suit arises directly out of forum-based activities). SeeDonatelli v. National Hockey League, 893 F.2d 459, 462-63 (1st Cir.1990) (citations omitted). Because there is no Supreme Court caselaw onthe Fifth Amendment issue, I use the factors identified in its FourteenthAmendment jurisdictional cases, as they apply to nationwide contacts.

(1) General Jurisdiction

Assertion of general jurisdiction over a defendant requires a court toexamine a defendant's contacts with the forum "to determine whether theyconstitute the kind of continuous and systematic general businesscontacts" that will satisfy constitutional standards. HelicopterosNacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 416 (1984). Ifsufficient contacts do exist, the exercise of jurisdiction must also bereasonable. Swiss Am. Bank, 274 F.3d at 619 (citingDonatelli, 893 F.2d at 465). But if such contacts do not existin sufficient abundance, the general jurisdiction inquiry ends.Donatelli, 893 F.2d at 465. The constitutional parameters ofgeneral jurisdiction require the contacts to be "continuous" and"substantial" (single or isolated activities are insufficient), and at alevel "that a party who enjoys the benefits of conducting business in aparticular forum should be willing to bear the correlative burden ofsubmitting to the forum's courts." Id. at 463 (citingInt'l Shoe Co. v. State of Washington,Page 8326 U.S. 310, 317-19 (1945)). The Supreme Court has said that theseprinciples are designed to permit people or entities to structure theirconduct in such a manner as to gain some assurance that their conductwill not render them liable to suit in a particular jurisdiction.See Burger King v. Rudzewicz, 471 U.S. 461, 472 (1985) (citingWorld-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297(1980)).

In this case, the plaintiffs allege general factors in support ofgeneral jurisdiction: the defendants benefited from internationalagreements designed for the automotive industry such as NAFTA and AutoPact; substantial automotive trade goes on between the United States andCanada; and complex corporate structures camouflage the reality of UnitedStates trade. Pls.' Mem. in Opp'n at 3-7 (Docket Item #74). Thesecontextual allegations are insufficient to support general personaljurisdiction. A particular defendant itself must create theconnection with the forum. See Asahi Metal Indus. Co., Ltd, v. SuperCt. of California, Solano County, 480 U.S. 102, 109 (1987) (citingBurger King, 471 U.S. at 475).

The plaintiffs also point to various defendant activities as continuousand systematic contacts with the United States sufficient to supportgeneral jurisdiction: using United States-based advertising services;officers attending meetings and training in the United States; purchasingparts and vehicles from the United States; manufacturing and sellingvehicles in Canada that ultimately end up in the United States market;and being party to American lawsuits. Pls.'Page 9Mem. in Opp'n at 7-13. I conclude that separately and collectivelythese factors and activities do not meet the constitutional threshold forgeneral jurisdiction over the Canadian defendants.

First, taking advantage of American advertising services, attendinggeneral meetings in the United States or purchasing vehicle parts fromthe United States unrelated to the underlying cause of action, withoutmore, will not support general jurisdiction. See,e.g., Helicopteros, 466 U.S. at 416, 418 (purchasesof helicopters, equipment and training services, even if occurring atregular intervals, accepting into a bank account checks drawn on a banklocated in the forum and sending personnel and officers to the forum fortraining and contract negotiation sessions are not sufficient to warrantpersonal jurisdiction over a nonresident defendant corporation in a causeof action not related to those activities); Swiss Am. Bank, 274F.3d at 619-20 (citing United States v. Swiss Am. Bank, Ltd.,116 F. Supp.2d 217, 221-22 (D. Mass. 2000)) (foreign bank's advertisingin an American magazine, subscribing to an American credit card company,entering into a licensing agreement with an American company, being anappellant to a lawsuit in an American court, having relationships andaccounts with American banks and entering into contracts, joint venturesand loan agreements with American companies are insufficient contacts tomeet the standards of general jurisdiction); Noonan v. WinstonCo., 135 F.3d 85, 92-93 (1st Cir. 1998) (general jurisdiction didnot exist where foreign company solicitedPage 10business in the forum, and visited the forum to establish businessrelationships and negotiate orders); Cascade Steel Rolling Mills v.C. Itoh & Co., 499 F. Supp. 829, 841 (D. Or. 1980) (denyingjurisdiction over Japanese steel company whose employees made isolatedvisits to the U.S. on matters unrelated to the antitrust claim);accord Philip E. Areeda & Hebert Hovenkamp, IAAntitrust Law ¶ 271c, c2, at 340, 342 (2d ed. 2000)(citations omitted) (a few meetings, isolated visits, attendance at tradeassociation meetings (at least when not related to the litigation'ssubject matter), sponsorship of national advertising, and purchase ofAmerican parts by a foreign corporation are insufficient contacts forpersonal jurisdiction).

Second, the manufacturing of vehicles in Canada destined for eventualdistribution in the United States (through intermediate sales) does notadd enough to sustain general jurisdiction: the defendants' manufacturingoperations are not within the forum.

Finally, being a party to an American lawsuit unrelated to this lawsuitcannot be considered a continuous or systematic activity. SeeDonatelli, 893 F.2d at 463 (citations omitted) (single isolatedactivities insufficient); Swiss Am. Bank, 274 F.3d at 619 (evenin combination with other contacts, being an appellant in a lawsuit in anAmerican court insufficient to assert jurisdiction).Page 11

Because all the Canadian defendants lack the continuous and substantialcontacts with the forum necessary to assert general jurisdiction, I turnto specific jurisdiction.

(2) Specific Jurisdiction

In order to sustain specific jurisdiction over these Canadiandefendants, the plaintiffs must show first that (1) the defendants inquestion purposefully directed activities towards residents of the forum(here, the United States as a whole), and (2) the litigation results frominjuries that arise out of or relate to those activities. BurgerKing Corp., 471 U.S. at 472 (internal quotations and citationsomitted) (14th amendment case). Second, these contacts must constitute"purposeful availment" of the benefits and protections afforded by theforum's laws. Swiss Am. Bank, 274 F.3d at 621. The cornerstonesof purposeful availment are voluntariness and foreseeability of beinghaled into the forum's courts. Sawtelle v. Farrell,70 F.3d 1381, 1391 (1st Cir. 1995) (citing Ticketmaster-New York v.Alioto, 26 F.3d 201, 207 (1st Cir. 1994)). See also BurgerKing, 471 U.S. at 475 (jurisdiction may not rest on the "unilateralactivity of another party or third person"); World-WideVolkswagen, 444 U.S. at 297 (for a court to assert jurisdiction, adefendant's conduct and connection with the forum must be such that itshould reasonably anticipate being haled into court there).

Third, even where such contacts exist, I must examine reasonableness. Imust consider: (1) the defendant's burden of appearing; (2) the forum'sinterestPage 12in adjudicating the dispute; (3) the plaintiff's interest inobtaining convenient and effective relief; (4) the judicial system'sinterest in obtaining the most effective resolution of the controversy;and (5) the common interests of all sovereigns in promoting substantivesocial policies. See Asahi, 480 U.S. at 113-116 (citingWorld-Wide Volkswagen, 444 U.S. at 292). In addition, specialconcerns arise when dealing with foreign defendants who may face uniqueand serious burdens litigating in a foreign legal system. 113-116.

(a) CADA

The Canadian Automobile Dealers Association ("CADA") is anot-for-profit organization that represents, promotes and protects theinterests of franchised automobile dealers in Canada. Gauthier Decl.¶¶ 1-4 (Docket Item #67). CADA does not sell or lease vehicles in theUnited States or Canada. Id. ¶ 7. The consumers allege thatCADA issued an August 2002 report that describes a meeting with NADAwhere a "multi-faceted strategy was discussed" and "a consensus to worktogether" was reached to prevent new motor vehicle exports from Canada tothe United States. Amended Compl. ¶ 68. The consumers assert thatthis CADA report claims that American and Canadian dealers and NADA "willcooperate wherever possible in assisting CADA with initiatives addressingexport sales," and that representatives of the manufacturing defendantsare pursuing "a united campaign against the unauthorized exporting of newvehicles into the U.S.A." Id. ¶¶ 69, 71. Thus, theplaintiffs maintain that in its representative role,Page 13CADA supported certain activities and strategies designed to limitAmerican consumers' ability to purchase or lease exported Canadian motorvehicles.4 See Maier Aff., Exs. 10, 11; Gauthier Decl.¶ 6.

The specific contact with the forum is CADA's attendance at a New Yorkmeeting in March 2002. CADA met with the National Automobile DealersAssociation ("NADA") (representing American dealers) in New York on thatdate to discuss the "[e]xport sales issue," which it called "an issue ofgreat concern to both associations." Maier Aff., Ex. 10 at 2; GauthierDecl. ¶ 6. CADA documented its attendance and the topic of themeeting in both a newsletter and memorandum.5 Maier Aff., Exs. 10,11. CADA made this contact voluntarily and deliberately, not through athird party. CADA "deliberately `reach[ed] out beyond' [Canada] andnegotiated with [an American] corporation. . . ." Burger King,471 U.S. at 479. Although it was a single meeting in the United States onthis topic, the plaintiffs allege that CADA participated in theconspiracy to withhold Canadian vehicles from the American market throughprecisely this type of informational meeting, see AmendedCompl. ¶ 5, and that at this New York meeting CADA "made it clear tothe NADA representatives that CADA would in noPage 14way support known exporters. . . ." Maier Aff., CADA Newsletter,Ex. 10 at 2. Accepting this evidence as true solely for the purposes ofjurisdictional analysis, one can infer CADA's statement to be anagreement made in New York to help withhold Canadian vehiclesfrom the American market. That is sufficient to make a primafacie showing of personal jurisdiction. This was significantactivity in the United States that related to this litigation. Thislitigation results from alleged injuries that "arise out of or relate to"this activity. "[P]arties who `reach out beyond one state and createcontinuing relationships and obligations with citizens of another state'"are subject to jurisdiction. See Burger King, 471 U.S. at 473.Under Burger King, when contact with the forum is related tothe cause of action, as here, jurisdiction is more readily granted.Areeda & Hovenkamp, IA Antitrust Law ¶ 271c, at 340(citing Burger King).

In assessing the reasonableness factors (called the gestalt factors inthe First Circuit, Sawtelle, 70 F.2d at 1394), I conclude thatthe extent of the burden on CADA to litigate in the United States fallsshort of reaching constitutional significance. Although defending in aforeign jurisdiction always presents some measure of inconvenience,accord id. at 1395 (citing Pritzker v. Yari,42 F.3d 53, 64 (1st Cir. 1994)), CADA regularly participates in meetings,conventions and symposiums in the United States. See GauthierDecl. ¶ 6. American courts clearly have an interest in adjudicatingthe antitrust injury that the plaintiffs allege, and the plaintiffsshould be afforded deference in choosing to press theirPage 15claims in American courts, see Sawtelle, 70 F.3d at 1395(citations omitted). The United States has attempted to provide aconvenient forum for its residents to redress injuries of the foreigndefendants. The Multi-District Panel chose to transfer these cases toMaine because I have the time and experience to oversee this litigation,and because Maine is a convenient forum due to its proximity to Canada.Transfer Order at 2 (Docket Item #1). The interest of the judicial systemin the effective administration of justice does not appear to cut ineither direction here. See Ticketmaster, 26 F.3d at 211. Onesubstantive social policy to consider, see Asahi, 480 U.S. at115, might be the appropriateness of application of American antitrustlaws to foreign corporations, but that issue has not been raised by theparties in discussion of the jurisdictional calculus.

After considering the relatedness of CADA's activities for theunderlying claim, the deliberateness of its conduct and thereasonableness of the exercise of jurisdiction, I DENY CADA'smotion to dismiss for lack of personal jurisdiction.

(b) Canadian Manufacturers/Distributors

The manufacture, distribution and sale of a particular brand of motorvehicles on a worldwide basis typically involve many corporate entities.The plaintiffs assert that the enterprise is nevertheless integrated ineach brand and that a court should not be diverted in the personaljurisdiction analysis byPage 16limiting itself to the contacts of a singular corporatedefendant.6 They point to websites where various defendants boast ofthe worldwide nature of their operations and the integration of theiractivities.7Page 17

The plaintiffs also assert that at least some of these Canadiandefendants have purposefully engaged in a two-channel distribution systemby which vehicles they manufacture flow into the United States, throughtheir parent or related companies, at higher prices; while the samevehicles, distributed in Canada at lower prices, are forbidden export tothe United States.8 (This is the lost discount distribution channelthat is the basis of the plaintiffs' antitrust complaint.) This activity(sending higher priced vehicles while withholding lower priced vehicles),they say, is "purposefully directed" at American consumers, and theirlawsuit "arises out of or relates to" these arrangements. See BurgerKing, 471 U.S. at 472-73 (internal citations omitted). Thedefendants, on the other hand, argue that in a constitutional analysis acourt should respect the corporate formalities and look at only thecontacts of the particular corporate defendant sued, not concern itselfwith what corporate parents, subsidiaries or siblings may have done.

On this motion, I am dealing with Canadian corporate defendants who arenot themselves the parent companies.Page 18

(i) Daimler Canada

Daimler Canada manufactures motor vehicles in Canada and sells them toDaimlerChrysler Motors Co., LLC ("Daimler Motors"), its corporategrandparent9 Daimler Canada's Mot. to Dismiss, Fenn Aff. ¶ 8(Docket Item #52). Daimler Motors purchases and takes title to thosevehicles in Canada, and then imports them into the United States.Id. (These are the higher priced vehicles.) Daimler Canada'swebsite states that Daimler Canada manufactures vehicles for both theAmerican and Canadian markets, and in addition manufactures some vehiclessolely for United States distribution. Maier Aff., Ex. 3. Seealso id., Ex. 20.

In addition, the evidence shows that Canadian DaimlerChrysler dealersenter into non-export agreements with their consumers. Seeid., Ex. 14. Purchasers sign these non-export agreementswarranting that the vehicle they buy is for use in Canada and not forexport. Id. They must agree not to export the vehicle fromCanada or enter into an agreement whereby the vehicle is leased or soldfor use outside of Canada. Id. (These are the lower pricedvehicles.) On March 1, 2002, Daimler Motors sent a notice to dealers onboth sides of the border that vehicle distribution outside the "dealernetwork" was unacceptablePage 19and that Daimler Canada would not provide warranty coverage forvehicles exported from Canada to the United States. Id., Ex.15. See also id., Ex. 16.

This evidence of targeted distribution and non-export agreements toensure that only the higher priced version of the same product can besold to American consumers meets the standard for personal jurisdictiondescribed in World-Wide Volkswagen. There, the Supreme Courtheld that if the sale of a manufacturer's or distributor's product is notsimply an isolated occurrence, but arises from the efforts of themanufacturer or distributor to serve directly or indirectly a geographicmarket, it is not unreasonable to subject the manufacturer or distributorto suit if its merchandise has there been the source of alleged injury.See World-Wide Volkswagen, 444 U.S. at 297-98. Daimler Canadahas purposefully directed activities toward residents of the UnitedStates and this lawsuit arises from economic injuries that arise out ofor relate to those activities.

In addition, the gestalt factors align in favor of finding jurisdictionover Daimler Canada. Daimler Canada manufactures vehicles in Canada thatare eventually exported to the United States market, and its "center ofgravity" is not "located at an appreciable distance from the forum."Ticketmaster, 26 F.3d at 210. The forum's interest inadjudicating the dispute, the plaintiffs' interest in obtainingconvenient and effective relief, the judicial system's interest inobtaining the most effective resolution of the controversy, and thecommon interests of all sovereigns in promoting substantive socialpolicies are the same asPage 20those I discussed in the CADA analysis, or perhaps stronger infavor of jurisdiction.

Here, the evidence for prima facie jurisdictional purposes issufficient to show that Daimler Canada engaged in a two-fold distributionsystem directed at American consumers. This arrangement is more than mereproduct placement into the stream of commerce; this Canadian defendant,as evidenced by websites and sales, clearly anticipates that the vehiclesit manufactures will be sold in the United States, and it controls thedistribution system of Canadian manufactured vehicles so as to avoidcompeting with those American sales. See Asahi, 480 U.S. at112-13. I therefore DENY Daimler Canada's motion to dismiss forlack of personal jurisdiction.

(ii) Toyota Canada

Like Daimler Canada, Toyota Canada distributes vehicles in Canada thatare the subject of non-export agreements between Canadian dealers andtheir customers. Maier Aff., Ex. 13. But non-export agreements alone donot furnish a sufficient basis for specific jurisdiction; Canadiandistributors are allowed to put limits on their product placement so asto avoid suit in the United States. See Burger King, 471 472 (citing World-Wide Volkswagen, 444 U.S. at 297). Theplaintiffs also need to show that Toyota Canada purposefully directedactivities toward residents of the forum and purposefully availed itselfof the forum's benefits and protections. "[I]t is essential in each casethat there be somePage 21act by which the defendant purposefully avails itself of theprivilege of conducting activities within the forum state, thus invokingthe benefits and protections of its laws." Id. at 474-75(quoting Hanson v. Denckla, 357 U.S. 235, 253 (1953)). To thatend, the plaintiffs assert that Toyota Canada manufactures vehicles inCanada and exports them to the United States, see Maier Aff.,Exs. 2, 7. But they provide no competent evidence to support thatassertion. Toyota Canada does purchase vehicles from manufacturing plantsin the United States, but it does not manufacture vehicles or sellvehicles (directly or indirectly) for American distribution. ToyotaCanada's Mot. to Dismiss, Nichols Decl. ¶¶ 6, 8, 20 (Docket Item #50).The plaintiffs provide evidence that "Toyota" and "Toyota MotorManufacturing Canada" manufacture vehicles in Canada for export to theUnited States, Maier Aff., Exs. 2, 7, but they do not provide anyevidence that either of these two companies is actually Toyota Canada (orone of its divisions). Instead, Toyota Canada presents uncontradictedevidence that it does not manufacture vehicles in Canada or sell vehiclesfor distribution in the United States. Nichols Decl. ¶¶ 6, 8. In fact,Toyota Canada states that Toyota Motor Manufacturing Canada, Inc. is adistinct corporation from Toyota Canada and is not a party to thislitigation. Defs.' Joint Reply Mem. at 11 and n.15 (Docket Item #82)(citing In short, the plaintiffs havefailed to show on even a prima facie basis that Toyota Canadahas engaged in a two-fold distribution system purposefully directedtoward the AmericanPage 22market that would support personal jurisdiction. Unless personaljurisdiction can be substantiated on the basis of co-conspiratoractivity, which I address later, Toyota Canada should be dismissed.

(iii) Nissan Canada and BMW Canada

There is no evidence that Nissan Canada or BMW Canada manufacturesvehicles in Canada. They do obtain vehicles from manufacturing plants inthe United States (BMW Canada through its parent company) for soledistribution in Canada. Nissan Canada's Mot. to Dismiss, Higgins Decl.¶ 10 (Docket Item #54); BMW Canada's Mot. to Dismiss, Neville Aff.¶ 20 (Docket Item #58). But Nissan Canada and BMW Canada are notmanufacturers or sellers to the United States that can control thepricing and flow of vehicles in both the United States and Canada. Theplaintiffs provide no evidence that Nissan Canada requires its dealers touse non-export agreements. BMW Canada does distribute vehicles in Canadathat are subject to non-export agreements between dealers and theirconsumers. Maier Aff., Ex. 12. But as I said in the Toyota Canadaanalysis, distributing vehicles in Canada and even controlling thatdistribution through non-export agreements are alone insufficient to givedefendants "fair warning" that they might be sued in the United States.See Burger King, 471 U.S. at 472 (citing World-WideVolkswagen, 444 U.S. at 297) (noting that defendants can structureconduct with some minimum assurance as to where that conduct will andwill not render them liable to suit). Unless personal jurisdiction can bePage 23sustained on the basis of co-conspirator activity, addressed later,Nissan Canada's and BMW Canada's motions to dismiss for lack of personaljurisdiction should be granted.

(iv) Mercedes-Benz Canada

Like Toyota Canada, Nissan Canada and BMW Canada, Mercedes-Benz Canadadoes not manufacture vehicles in Canada. Instead, it obtains vehiclesfrom manufacturing plants in the United States (through its parentcompany) for sole distribution in Canada. Mercedes-Benz Canada's Mot. toDismiss, Leigh Aff. ¶ 9 (Docket Item #53). Mercedes-Benz Canada doesoccasionally sell vehicles in Canada to Mercedes-Benz USA, the exclusivedistributor of vehicles into the United States. Mercedes-Benz Canada'sMot. to Dismiss at 3 n.5; Leigh Aff. ¶ 2. These sales account forless than 0.5 percent of Mercedes-Benz Canada's yearly revenue.Id. Is this evidence of a dual distribution channel? Theplaintiffs have not provided evidence that Mercedes-Benz Canada requiresCanadian dealers to sign non-export agreements limiting the use ofvehicles outside of Canada; only that Mercedes-Benz of North America,Inc. signs non-export agreements with North American dealers prohibitinguse and export outside of North America. Maier Aff., Ex. 14 at 2. Iconclude that jurisdictional discovery is warranted, given the fact thatMercedes-Benz Canada does sell some vehicles for distribution in theUnited States. I therefore DEFER action on Mercedes-BenzCanada's 12(b)(2) motion to dismiss for lack of personal jurisdictionpending jurisdictional discoveryPage 24on the scope of sales of Mercedes-Benz Canada vehicles into theAmerican market (through Mercedes-Benz USA) and concerning the scope ofMercedes-Benz non-export agreements for Canadian vehicles.

(c) The Conspiracy Theory of Jurisdiction

The plaintiffs have provided no evidence to support their allegationthat Canadian defendants such as Nissan Canada, BMW Canada, Mercedes-BenzCanada and Toyota Canada were present at the March 2002 New York meetingthat discussed the export sales issue.10 Thus, the only remainingbasis for maintaining jurisdiction over Nissan Canada, BMW Canada,Mercedes-Benz Canada or Toyota Canada is the so-called conspiracy theoryof jurisdiction. Under this doctrine, the actions of one defendant areattributed to all the co-conspirators in assessing jurisdictionalcontacts. (Here, for example, CADA's involvement in the 2002 New Yorkmeeting would be attributable to all defendants.) However, the FirstCircuit has never recognized the conspiracy doctrine. Glaros v.Perse, 628 F.2d 679, 682 n.4 (1980) ("[W]e do not mean to imply thatwe would adopt [a] rather liberal approach to conspiracy pleading, or todecide that we would recognize a conspiracy theory of jurisdiction atall."). The Supreme Court has labeled the conspiracy doctrine in thevenue context as having "all the earmarks of a frivolous albeit ingeniousattempt to expand thePage 25statute." Bankers Life & Cas. Co. v. Holland,346 U.S. 379, 384 (1953). As one court has said, using conspiracy as a basisfor personal jurisdiction is "[t]hat much more frivolous." Kippermanv. McCone, 422 F. Supp. 860, 873 (N.D. Cal. 1976). Another has saidthat "[t]he conspiracy theory of personal jurisdiction is being rejectedby a growing number of courts." Group Health Plan v. Philip Morris,Inc., 1999 U.S. Dist. LEXIS 9640, *16 (D. Minn.). Additionally,scholars have been skeptical of the doctrine's conformance to notions ofconstitutional due process. See, e.g., Ann Althouse, TheUse of Conspiracy Theory to Establish in Personam Jurisdiction: A DueProcess Analysis, 52 Fordham L. Rev. 234 (1983). See alsoStuart M. Riback, Note, The Long Arm and Multiple Defendants: TheConspiracy Theory of In Personam Jurisdiction, 84 Colum. L. Rev.506, 533 (1984) (noting that courts have rejected the conspiracy theoryof venue virtually unanimously). For these reasons, I do not believe thatthe First Circuit would recognize a conspiracy theory of personaljurisdiction, whereby jurisdiction can be obtained over n onresidentdefendants based upon the jurisdictional contacts of co-conspirators.


The motions to dismiss for lack of personal jurisdiction of thedefendants Canadian Automobile Dealers Association and DaimlerChryslerCanada, Inc. arePage 26DENIED.

The motions to dismiss for lack of personal jurisdiction of defendantsNissan Canada, Inc.; BMW Canada, Inc.; and Toyota Canada, Inc. areGRANTED.

Action on Mercedes-Benz Canada's motion to dismiss for lack of personaljurisdiction is DEFERRED pending jurisdictional discovery.

The plaintiffs are allowed limited jurisdictional discovery todetermine the scope of sales of Mercedes-Benz Canada vehicles into theAmerican market through Mercedes-Benz USA, whether Mercedes-Benz Canada,Inc. has non-export arrangements with Canadian dealers, and whetherCanadian Mercedes-Benz dealers have non-export arrangements with theircustomers. The Magistrate Judge shall convene a conference of counsel toestablish a schedule for this discovery.


1. The request for class certification is not yet ripe.

2. See, e.g., Auto. Refinishing Paint, 2004 U.S. App.LEXIS 2432, at *12; GTE, 199 F.3d at 1351; Go-Video,885 F.2d at 1408; Goldlawr, Inc. v. Heiman, 288 F.2d 579, 581(2d Cir. 1961); General Elec. Co. v. Bucyrus-Erie Co.,550 F. Supp. 1037, 1041-42 (S.D.N.Y. 1982).

3. It is unclear how the Second Circuit currently views section 12of the Clayton Act. Compare Goldlawr, 288 F.2d at 581 ("[I]f acorporation is not an inhabitant of, is not found in, and does nottransact business in, the district, suit may not be so brought. . . .[T]he extraterritorial service privilege is given only when the otherrequirements are satisfied."), with Leasco Data Processing Equip.Corp. v. Maxwell, 468 F.2d 1326, 1341 8s n. 10 (2d Cir. 1972)(liberally construing the same phrase in the Securities Exchange Act asreferring only to service of process and having nothing to do with venue,and noting that the "ineptly worded provision" was modeled after section12 of the Clayton Act).

4. The industry refers to these export sales as "Grey Market Sales."See Maier Aff., Ex. 10 (Docket Item #75).

5. On January 16, 2002, a CADA representative also attended ameeting with the Resource Dealers Group in Chicago regarding Canadianautomobile warranties. Gauthier Decl. ¶ 6. The plaintiffs, however,have not proffered any evidence that the meeting's topic was grey marketwarranties in general or, specifically, the refusal to honor Canadianwarranties in the United States.

6. Despite the economic realities, I do not treat the corporateactivities of the intricate corporate structures present in this case asunified action by parents and subsidiaries. I also do not uphold generaljurisdiction on this basis over any Canadian defendant, each of them acorporate subsidiary, because a subsidiary does not achieve continuousand systematic contacts with the United States solely by having a parentcompany located in the United States. See Saraceno v. S.C. Johnsonand Son, Inc., 83 F.R.D. 65, 67 (S.D.N.Y. 1979) (citing CannonMfg. Co. v. Cudahy Packing Co., 267 U.S. 333 (1925)): Henry v.Offshore Drilling (W.A.) Pty., Ltd., 311 F. Supp. 340, 342 (E.D. La.1971). However, I am troubled by the fact that the corporate websites ofthese automobile manufacturers and distributors go out of their way todescribe the global nature and interconnectedness of the varioussubsidiaries, see n.7, infra. Unwittingly, they makea strong case for the recent conclusions by some commentators and courts,that continuing to observe the corporate forms for personal jurisdictionpurposes is blinking today's economic reality. See, e.g., In reTamoxifen Citrate Antitrust Litig., 262 F. Supp.2d 17, 22-23(E.D.N.Y. 2003) (citing Waldron v. British Petroleum Co., Ltd.,149 F. Supp. 830, 834-35 (S.D.N.Y. 1957)); Lea Brilmayer and KathleenPaisley, Personal Jurisdiction and Substantive Legal Relations:Corporations, Conspiracies, and Agency, 74 Calif. L. Rev. 1, 6(1986) (stating that courts are giving approving attention to theargument that substantive legal relationships with a party may beautomatically sufficient to establish jurisdiction). See alsoScophony, 333 U.S. at 808 (stating that "practical, businessconceptions" should be substituted for "hair-splitting legaltechnicalities"). The First Circuit's parsimonious view ofparent-subsidiary relationships, see, e.g., United Elec., 960F.2d at 1092-93 (requiring proof of lack of corporate independence,fraudulent intent and manifest injustice before the corporate unit willbe ignored), may be ripe for re-examination, particularly in light of theexpansive statements these defendants make about North American andglobal operations, which may indicate they should have fair notice ofsuit in the United States. Recognizing the close relationship betweenparents and their subsidiaries (especially in this case) forjurisdictional purposes would also be consistent with the liability rulethat, due to a complete unity of interest, the coordinated activity of aparent and its wholly owned subsidiary cannot be considered a conspiracyand must be viewed as that of a single enterprise. See CopperweldCorp. v. Independence Tube Corp., 467 U.S. 752, 771-72 (1984).

7. See, e.g., Maier Aff., Ex. 3 (website callingDaimlerChrysler AG "a new global transportation enterprise" and notingthat DaimlerChrysler's Canadian production facilities build vehicles forthe Canadian and United States markets), Ex. 7 (website noting thatToyota Motor Manufacturing Canada exports to the United States andMexico), Ex. 8 (website stating that the "many sides" of Nissan arereflected in "13 distinct affiliates in North America"), Ex. 19 (websiteindicating that DaimlerChrysler is "a truly global company" with a"global workforce, a global shareholder base, globally known brands, anda global outlook") and Ex. 20 (website stating that Daimler Canada makes"large-scale shipments to the United States" and "continues to supplyNorth America and the world with well-known products").

8. In most cases, personal jurisdiction attaches because items areput directly into forums' streams of commerce. In this case, the focus ofthe complaint is that items are withheld. Although companies can withholditems to avoid being subject to jurisdiction, cf. BurgerKing, 471 U.S. at 472 (citing World-Wide Volkswagen, 444U.S. at 297); Lerfald v. Gen. Motors Corp., Ct. File No. CT03-003327 (Minn. Dist. Ct. Nov. 7, 2003) (slip op.), at 13, withholdingsome while sending others may constitute activity directed toward a forumthat is sufficient to sustain specific jurisdiction.

9. DaimlerChrysler AG is the parent company of DaimlerChrysler NorthAmerica Holding Corporation. Daimler Motors is a subsidiary ofDaimlerChrysler North America Holding Corporation, and the parent companyof DaimlerChrysler Corporation who in turn is the parent company ofDaimler Canada. Mercedes-Benz Canada and Mercedes-Benz USA are alsosubsidiaries of DaimlerChrysler North America Holding Corporation. I amunclear where Mercedes-Benz of North America falls in the corporatestructure.

10. The plaintiffs allege that representatives of the manufacturingdefendants attended the 2002 New York Auto Show meeting to discuss theexport "problem." See Am. Compl. ¶ 66. However, there areno facts alleged with specificity that any of the Canadiandefendants' representatives (other than CADA) were at the New Yorkmeeting. See Maier Aff., Exs. 10, 11.

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