2004 | Cited 0 times | S.D. New York | November 19, 2004



Plaintiffs, the relatives of Americans who died in a ski trainfire on November 11, 2000, in Kaprun, Austria, brought thisaction against numerous defendants. The Judicial Panel onMultidistrict Litigation ("MDL Panel") consolidated all suitsrelated to the Kaprun ski train fire for pretrial purposes beforethis Court.1 Defendant Beton-und Monierbau, G.m.b.H.("Beton") now moves to dismiss for lack of personal jurisdiction,insufficiency of process and/or insufficiency of service of process, and forum nonconveniens.2 For the reasons set forth below, Beton'smotion to dismiss for lack of personal jurisdiction isgranted.3


A. Moving Defendant

Beton is an Austrian corporation specializing in undergroundconstruction and the New Austrian Tunnelling Method ("NATM"),with its principal place of business in Innsbruck,Austria.4 Plaintiffs allege that Beton "designed,engineered and manufactured, constructed and/or maintained" thetunnel in which the Kaprun ski train fire took place.5

B. Procedural History

Plaintiffs had previously filed suit against Beton in theDistrict of Connecticut, and the MDL Panel transferred theConnecticut action to this Court.6 On March 19, 2003 this Court dismissed the Connecticut action forlack of personal jurisdiction, and granted leave for theplaintiffs to refile in an appropriate jurisdiction.7 OnNovember 4, 2003, plaintiffs refiled their complaint againstBeton in the District of Massachusetts.8 The MDL panelsubsequently transferred the case to this Court on February 6,2004.9

C. Jurisdictional Allegations

Plaintiffs allege that this Court has personal jurisdictionover Beton because Beton "is engaged in continuous and systematicbusiness activities within the State of Massachusetts and [theDistrict of Massachusetts]."10 Specifically, plaintiffsargue that Beton "took significant steps to secure its role in aleast two public contracts in Massachusetts since 1998," namely,the Central Artery Tunnel Project ("Big Dig") and the SouthBoston Piers Transitway Project ("Piers Project").11 1. Big Dig

Plaintiffs claim that Beton applied to be prequalified byMassachusetts as a contractor for the Big Dig project.12Plaintiffs argue that Beton's prequalification was "a necessaryand substantial step in the bidding process" for the Big Dig, andrequired Beton to provide detailed information to Massachusettsabout the company's finances, experience, and priorprojects.13 The Massachusetts Bay TransportationAuthority subsequently prequalified Beton for the I-93 LeverettCircle/Storrow Drive Connectors, contract number C19E1, which wasone aspect of the larger Big Dig project.14

Plaintiffs provided information alleging that after acontractor is prequalified, the subsequent Big Dig biddingprocess is "time-consuming and expensive."15Specifically, plaintiffs contend that the bidding process forcontract C19E1 required attending a pre-bid conference and a sitetour on March 16, 1998, a pre-bid meeting on May 13, 1998, and spending over six milliondollars.16 However, in the end, Beton was not awarded acontract to work on any aspect of the Big Dig project.17Additionally, the only evidence of Beton's participation in thebidding process beyond prequalification is the fact that Beton isincluded in a Purchase Distribution Bidders List for contractC12E1 of the Big Dig.18

2. Piers Project

Plaintiffs contend that Beton participated in the Piers Projectadministered by the Massachusetts Bay TransportationAuthority.19 According to plaintiffs, Beton's initialinvolvement included prequalification as a subcontractorspecializing in NATM and engaging in the bidding process withModern Continental, the primary contractor.20 ModernContinental was ultimately selected as the primary contractor, with Beton as the NATMsubcontractor.21

As the NATM subcontractor, Beton was responsible for providinga Senior Tunnel Engineer and at least five TunnelSuperintendents.22 Plaintiffs claim the project wasvalued at over twelve million Euro, of which Beton was to receivefifty percent.23 Plaintiffs also note that while workingon the Piers Project, Beton founded a wholly-owned subsidiary,Beton-und Monierbau USA Inc. ("Beton USA"), in Evansville,Illinois.24 Although plaintiffs assert that Beton USA isthe "agent" of Beton,25 plaintiffs consistently statethat jurisdiction should be premised on Beton's contacts inMassachusetts, not Beton USA's contacts inMassachusetts.26 III. APPLICABLE LAW

A. Legal Standard

"Personal jurisdiction . . . `represents a restriction onjudicial power . . . as a matter of individualliberty.'"27 A court is obligated to dismiss an actionagainst a defendant over which it has no personaljurisdiction.28 Plaintiffs bear the ultimate burden ofestablishing, by a preponderance of the evidence, that the courthas jurisdiction over the defendant.29 However, "prior todiscovery, a plaintiff challenged by a jurisdiction testingmotion may defeat the motion by pleading in good faith . . .legally sufficient allegations of jurisdiction, i.e., by making aprima facie showing of jurisdiction."30 Plaintiff "canmake this showing through his own affidavits and supportingmaterials, containing an averment of facts that, if credited . . . would suffice to establish jurisdiction over thedefendant."31 Thus, a court may consider materialsoutside the pleadings, but must credit the plaintiff's avermentsof jurisdictional facts as true.32

In the determination of whether a federal court has personaljurisdiction over a defendant, plaintiffs must show both thatjurisdiction is proper under the long-arm statute of the forumstate and that the exercise of personal jurisdiction over thedefendant is consistent with federal due processrequirements.33 In an MDL proceeding, the forum state isthe district court where the action was originallyfiled.34 Because this complaint was originally filed inthe District of Massachusetts, Massachusetts law governs whethera Massachusetts court would have personal jurisdiction overBeton.35 B. Personal Jurisdiction in Massachusetts

Chapter 223, section 38 of the Massachusetts General Lawsprovides for service on a foreign corporation that "has a usualplace of business in the commonwealth, or with or without suchusual place of business, is engaged in or soliciting business inthe commonwealth, permanently or temporarily."36 Althoughthis statute ostensibly addresses service of process, courts haveconstrued it more broadly to confer jurisdiction over foreigncorporations operating within the state.37 Jurisdictionunder this provision is extended when (1) "the corporation'sactivities affect the commerce of Massachusetts substantially sothat the state has an interest in regulating the general conductof those activities (`doing business')", or (2) "the corporation's activities in Massachusetts have so affected theparticular transaction at issue that it is appropriate to hearthe claim in a Massachusetts court."38 The First Circuithas further defined "doing business" as activities that "closelyapproximat[e] the regular conduct of a domesticcorporation."39

Although plaintiffs did not rely on chapter 223A, section 3,which commonly functions as the Massachusetts long-arm statute, Ibriefly note that the statute is inapplicable because plaintiffs'claim does not "aris[e] from" Beton's business or contracts inMassachusetts, nor did Beton "caus[e] tortious injury" inMassachusetts.40

C. Personal Jurisdiction and Due Process Requirements

The Due Process Clause of the Fourteenth Amendment specifiesthat in order for a court to exercise personal jurisdiction overa nonresident corporate defendant, the defendant must have"certain minimum contacts with the forum such that the maintenance of the suit does not offend traditionalnotions of fair play and substantial justice."41 A courtmay exercise "specific jurisdiction" over a defendant who has"purposefully directed his activities" at the forum state, andthe alleged injuries "arise out of or relate to thoseactivities."42 Alternately, when the defendant'sactivities within the forum state are "continuous andsystematic," a court may exercise "general jurisdiction" even ifthe defendant's activities are unrelated to thelitigation.43 Although "minimum contacts" may suffice toestablish specific jurisdiction over a defendant, wherejurisdiction over a defendant is premised on generaljurisdiction, courts will be "considerably more stringent" inevaluating the defendant's contacts within the forumstate.44 Factors that are considered when assessing adefendant's contacts within the forum state include, but are not limited to, the revenues the defendant obtained fromthe forum state,45 if the defendant deploys employees inthe forum and for how long,46 and whether the defendanthas an office, bank account, phone number, or any property withinthe forum state.47


A. Jurisdiction Under Massachusetts Law

In Caso v. Lafayette Radio, the court held that jurisdictioncan be obtained under chapter 223, section 38 of theMassachusetts General Laws when the defendant is either "doingbusiness" within the forum state, or when the cause of action isrelated to the defendant corporation's activities within theforum state.48 Because plaintiffs have made noallegations that the Kaprun ski train fire is related to Beton'sactivities within Massachusetts, the question is narrowed towhether Beton is "doing business" within Massachusetts so as togive Massachusetts an interest in regulating the corporation's activities.49

Courts have traditionally defined "doing business" assystematic, regular contacts by a corporation in the forum state.For example, in Walsh v. National Seating Co., the defendantcorporation was "doing business" in Massachusetts for the purposeof sustaining general jurisdiction, because the corporationmaintained a local telephone listing, permanently based a salesrepresentative in Massachusetts, made sales to elevenMassachusetts companies, performed over three million dollarsworth of business in the forum state during a three-year period,and the defendant's service personnel visited the state on a"regular, predetermined schedule."50 Similarly, inPharmachemie B.V. v. Pharmacia S.p.A, the court found thedefendant to be "doing business" within Massachusetts, and hencethat the exercise of general jurisdiction was proper, because thedefendant corporation had generated sales of over thirty milliondollars in Massachusetts during a five year period, stationedfive permanent sales representatives in the state, and made"substantial annual payments" to Massachusetts hospitals thatperformed clinical studies using the defendant's products.51 In contrast, the court in Guay v. OzarkAirlines found that the defendant corporation was not "doingbusiness" within Massachusetts, despite the fact that thedefendant flew thirty-seven charter flights out of aMassachusetts airport, and maintained a bank account in the statefor over three years.52 The Guay court based itsdecision on the fact that the charter flights "were isolatedevents and had minimal effect on Massachusettscommerce."53

As in Guay, Beton's contacts with Massachusetts are neitherextensive nor regular enough to subject the corporation togeneral jurisdiction within the state. Beton is based inInnsbruck, Austria, and does not have an office, mailing address,telephone number, or bank account in Massachusetts.54 Inresponse to plaintiffs' allegations regarding Beton's work on theBig Dig, Beton contends that the extent of its involvement in theBig Dig was to prequalify as a bidder on contract number C19E1 ofthe project.55 Beton did not ultimately bid on the contract C19E1, and attests that it took no further action on anyaspect of the Big Dig project.56 Plaintiffs have failedto provide any evidence to the contrary. Although plaintiffs notethat Beton appeared on a bidders list for contractC19E1,57 Beton clarifies that this document "is not alist of entities actually bidding on the [C19E1] project, but alisting of firms which, like [Beton], obtained a set of projectdocuments."58 Beton notes that the actual bidders listfor contract C19E1 of the Big Dig project can be found online,and that Beton's name is not among the bidders.59

Beton did perform work on the Piers Project,60 but thisinvolvement fails to rise to the level of "doing business" withinMassachusetts so as to subject Beton to general jurisdictionwithin the state. Beton worked on the Piers Project as a joint contractor with another company, ModernContinental.61 No more than five Beton employees were inMassachusetts at any one time, and all of these employeesobtained only temporary United States work visas.62Although neither party identified Beton's precise start date,Beton appears to have started work on the Piers Project sometimein 2001,63 and the last Beton employee departedMassachusetts in June 2004.64 The total value of theproject was over twelve million Euro, of which Beton receivedfifty percent, coming to approximately seven and a half milliondollars.65 Although this is a substantial sum of money,it is clearly less than the thirty million dollars worth ofbusiness used to support general jurisdiction in PharmachemieB.V., it represents a small portion of Beton's overall revenue,66 and is not a large sum for a publicconstruction project.67 In sum, Beton's activities inMassachusetts do not comprise a "systematic pattern of in-stateactivity . . . closely approximating the regular conduct of adomestic corporation."68 Rather, Beton made an isolatedand discrete foray into Massachusetts commerce, which is notenough to sustain general jurisdiction over the corporation foran incident entirely unrelated to its Massachusetts activities.

B. Federal Due Process Requirements

Because Beton is not "doing business" within Massachusetts forthe purpose of sustaining general jurisdiction under chapter 223,section 38, plaintiffs have not met the first prong of theMetropolitan Life test, and an analysis of federal due processrequirements is not necessary.69 However, for the samereasons that Beton's contacts within Massachusetts are notsufficient to sustain general jurisdiction under state law,Beton's contacts are not "continuous and systematic" enough toensure that subjecting Beton to general jurisdiction inMassachusetts would comport with federal due process requirements.70The constitutional standard for the exercise of generaljurisdiction is quite high,71 and Beton'sprequalification as a bidder on contract C19E1 of the Big Dig,plus its involvement in the now-completed Piers Project, does notmeet this standard.


For the foregoing reasons, Beton's motion to dismiss for lackof personal jurisdiction is granted. The Clerk of the Court isdirected to close this motion [docket #6] and dismiss plaintiffs'suit against Beton. SO ORDERED.

1. See In re Ski Train Fire in Kaprun, Austria on November11, 2000, 175 F. Supp. 2d 1379 (S.D.N.Y. 2001). This action,which was filed after the original civil actions wereconsolidated, was transferred to this Court as a "tag-alongaction" in February of 2004. See Conditional Transfer OrderRegarding Habblett v. Beton-und Monierbau, No. 03 Civ. 12171 (D.Mass.) ("Transfer Order").

2. See 5/11/04 Beton's Notice of Motion to Dismiss ("MTDNotice").

3. Because the motion to dismiss based on lack of personaljurisdiction is granted, I do not address the other two claims.

4. See 11/4/03 Complaint in the District of Massachusetts("MA Complaint"), ¶ 11.

5. Id.

6. See In re Ski Train Fire in Kaprun, Austria on November11, 2000, 257 F. Supp. 2d 648 (S.D.N.Y. 2003).

7. See id. at 651.

8. See MA Complaint.

9. See Transfer Order.

10. MA Complaint ¶ 3.

11. 8/27/04 Plaintiffs' Brief in Opposition to Beton's Motionto Dismiss ("Pl. Opp.") at 6. See also MA Complaint ¶¶ 14-15.

12. See Pl. Opp. at 7.

13. Id.

14. See id.; 6/5/98 Letter from Beton to Massachusetts BayTransportation Authority, Ex. 4(a) to Pl. Opp., at 1.

15. Pl. Opp. at 9.

16. See id.

17. See id. at 7 n. 2.

18. See id. at 8-9; 12/7/99 Central Artery Tunnel ProjectPurchase Distribution System Bidders List for Contract C19E1("Bidders List"), Ex. 5 to Pl. Opp., at 1.

19. See Pl. Opp. at 10.

20. See id. at 10-11.

21. See id. at 11. See also Printout from Beton's Website,, Ex. 7 to Pl. Opp., at 1 (describing Beton'srole as a partner to Modern Continental in the Piers Project).

22. See Pl. Opp. at 11; 6/6/98 Beton's ContractorPrequalification Statement, Ex. 4(a) to Pl. Opp., at 6-7.

23. See Pl. Opp. at 13.

24. See id. at 18.

25. See id. at 19.

26. See, e.g., id. at 15 (stating that "[r]egardless ofdefendant's characterization of its `agreement' with [Beton USA],the facts of Beton's engagement plainly support this Court'sconclusion that Beton is conducting sufficient business inMassachusetts to support general jurisdiction").

27. Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 584 (1999)(quoting Insurance Corp. of Ir. v. Compagnie des Bauxites deGuinee, 456 U.S. 694, 702 (1982)).

28. See Fed.R. Civ. P. 12(b)(2). See also In re Ski TrainFire in Kaprun, Austria on November 11, 2000 (Siemens Austria),230 F. Supp. 2d 403, 406 (S.D.N.Y. 2002).

29. See Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 240 (2dCir. 1999).

30. Jazini v. Nissan Motor Co., 148 F.3d 181, 184 (2d Cir.1998) (quotations and citation omitted); see also Koehler v.Bank of Berm., Ltd., 101 F.3d 863, 865 (2d Cir. 1996).

31. Whitaker v. American Telecasting Inc., 261 F.3d 196, 208(2d Cir. 2001) (quotations and citations omitted).

32. See Metropolitan Life Ins. Co. v. Robertson-Ceco Corp.,84 F.3d 560, 567 (2d Cir. 1996); Hsin Ten Enter. USA, Inc. v.Clark Enter., 138 F. Supp. 2d 449, 452 (S.D.N.Y. 2000).

33. See Metropolitan Life, 84 F.3d at 567.

34. See In re Ski Train Fire in Kaprun, Austria on November11, 2000, 230 F. Supp. 2d 392, 399 (S.D.N.Y. 2002).

35. See In re Ski Train Fire, No. MDL No. 1428, 2004 WL515534, at *3 (S.D.N.Y. Mar. 15, 2004) (noting that "[a]transferee court can exercise personal jurisdiction only to thesame extent as the transferor court could") (citing In reSterling Foster & Co. Sec. Litig., 222 F. Supp. 2d 289, 300(E.D.N.Y. 2002)).

36. Mass. Gen. Laws Ann. ch. 223, § 38 (West 2004). Whereforeign corporations fall under section 38, the rules for serviceupon domestic corporations, as found in chapter 223, section 37,govern.

37. See, e.g., Howse v. Zimmer Manufacturing Co.,757 F.2d 448 (1st Cir. 1985) (finding jurisdiction over a foreigncorporation under chapter 223, section 38, because thecorporation was "doing business" within Massachusetts);Pharmachemie B.V. v. Pharmacia S.p.A., 934 F. Supp. 484, 490(D. Mass. 1996) (noting that chapter 223, section 38 "providesthat jurisdiction may be exercised over a foreign corporation aslong as . . . the foreign corporation is engaged in or solicitingbusiness in the commonwealth") (quotations and citationsomitted); Campbell v. Frontier Fishing & Hunting, Ltd.,10 Mass. App. Ct. 53, 55 (1980) (holding that chapter 223, section38 is "independently viable and has not been supplanted by" theMassachusetts long-arm statute found in chapter 223A, section3).

38. Caso v. Lafayette Radio Elecs. Corp., 370 F.2d 707, 712(1st Cir. 1966).

39. Howse, 757 F.2d at 451.

40. Mass. Gen. Laws Ann. ch. 223A, § 3 (West 2000).Specifically, plaintiffs have made no claim that the Kaprun skitrain fire was in any way connected to Beton's activities inMassachusetts. Additionally, none of the named plaintiffs ortheir decedents are from Massachusetts. See MA Complaint ¶¶5-10 (identifying the plaintiffs and their decedents as residentsof Florida, Alabama, and New York).

41. Helicopteros Nacionales de Colombia, S.A. v. Hall,466 U.S. 408, 414 (1984) (quoting International Shoe Co. v.Washington, 326 U.S. 310, 316 (1945)).

42. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)(quotations and citations omitted).

43. Helicopteros Nacionales de Columbia, 466 U.S. at 415-16.See also Massachusetts Sch. of Law v. ABA, 142 F.3d 26, 34 (1stCir. 1998) ("General jurisdiction exists when the litigation isnot directly founded on the defendant's forum-based contacts, butthe defendant has nevertheless engaged in continuous andsystematic activity, unrelated to the suit, in the forum state.")(quotations and citations omitted).

44. Glater v. Eli Lilly & Co., 744 F.2d 213, 216 (1st Cir.1984).

45. See Noonan v. Winston Co., 135 F.3d 85, 93 (1st Cir.1998).

46. See Helicopteros, 466 U.S. at 416.

47. See Wiwa v. Royal Dutch Petroleum Co., 226 F.3d 88, 98(2d Cir. 2000).

48. 370 F.2d at 712.

49. See Howse, 757 F.2d at 451.

50. 411 F. Supp. 564, 572-73 (D. Mass. 1976).

51. 934 F. Supp. at 490-91.

52. 450 F. Supp. 1106, 1108-09 (D. Mass. 1978).

53. Id. at 1112.

54. See 5/11/04 Declaration of Manfred Krapf, GeneralCounsel to Beton ("Krapf Dec."), Attachment to MTD Notice, ¶¶ 3,11, 13-15.

55. See 8/15/04 Beton's Reply Memorandum of Points andAuthorities ("Reply Mem."), at 3.

56. See id. at 4-6.

57. See Pl. Opp. at 8-9; Bidders List at 1.

58. Reply Mem. at 4; Krapf Dec. ¶ 6.

59. See Reply Mem. at 3; Plaintiffsshould be aware of the correct bidders list, as their counselreferenced it as an exhibit when motions were first submitted inthis case. See 7/24/04 Declaration of Hilary Cohen, Counsel forPlaintiffs, Attachment to Reply Mem., ¶ 11.

60. See Reply Mem. at 6.

61. See Pl. Opp. at 11; Reply Mem. at 6; 9/15/04 Declarationof Norbert Fügenschuh, Senior Engineer for Beton, Attachment toReply Mem., ¶ 3.

62. See Krapf Dec. ¶¶ 29, 31.

63. See Beton's List of References for UndergroundConstructions/Tunnelling, Ex. 7 to Pl. Opp., at 5.

64. See Reply Mem. at 6.

65. See Pl. Opp. at 13; Reply Mem. at 14; 9/13/04Declaration of Christian Neumann, Project Manager for Beton,Attachment to Reply Mem., ¶ 2.

66. See Beton's 2003 Annual Report, Ex. 9B to Pl. Opp., at 1(stating that Beton's total revenue between fiscal year 2002 and2003 was over 93,000 Euro).

67. See News Article on the Big Dig, Ex. 3 to MA Complaint(noting that the Big Dig project cost Massachusetts over $14.6billion).

68. Howse, 757 F.2d at 453 (quotations and citationsomitted).

69. See Metropolitan Life, 84 F.3d at 567.

70. See Helicopteros, 466 U.S. at 416.

71. See, e.g., id. (determining that the Due Process Clauseprevented the defendant corporation, which sent its chiefexecutive officer to negotiate contracts in Texas, sentadditional personnel to Texas for training, and bought equipmentand services from Texas, from being subjected to generaljurisdiction within the state); Donatelli v. National HockeyLeague, 893 F.2d 459 (1st Cir. 1990) (holding that generaljurisdiction did not meet federal due process requirements,despite the fact that defendant sports league provided leagueofficials to hockey games in the forum state for over ten years,regularly broadcast games into the forum state, and continuouslysold products within the forum state).

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