Products Liability Law Daily Dismissal of asbestos claims for lack of personal jurisdiction upheld for ship owners, manufacturers
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Thursday, September 14, 2017

Dismissal of asbestos claims for lack of personal jurisdiction upheld for ship owners, manufacturers

By Leah S. Poniatowski, J.D.

A group of ship owners, manufacturers, and suppliers allegedly liable for asbestos exposure did not waive or forfeit their personal jurisdiction defense when they filed answers—under protest—to preserve that defense in a forum to which they had no direct contacts, the U.S. Court of Appeals for the Sixth Circuit ruled in an unpublished opinion, affirming the lower court (Kalama v. Matson Navigation Co., Inc., September 13, 2017, Rogers, J.).

In the 1980’s, merchant marines began filing lawsuits against ship owners, manufacturers, and suppliers (collectively, the manufacturers) for alleged injuries arising from asbestos exposure. Many merchant marines filed in the federal court in the Northern District of Ohio against the various manufacturers, but several manufacturers challenged the propriety of jurisdiction over them and sought dismissal of the claims.

At a hearing in October 1989, it was determined that many of the manufacturers were not subject to personal jurisdiction for lack of specific contacts with Ohio. However, instead of granting the motions to dismiss, the judge announced that those cases should be transferred to where personal jurisdiction was proper. At a hearing in November 1989, the same judge indicated that a manufacturer not wishing to be transferred could waive the jurisdictional challenge by filing an answer with the court. Two subsequent orders made these rulings formal.

The first, Order No. 40, directed the merchant marines to report the forum choice of the cases subject to transfer and stated that parties that chose to remain in that jurisdiction after reconsidering their dismissal or transfer motions could do so by filing an answer to the complaint. The second, Order No. 41, transferred several cases on the basis of lack of personal jurisdiction, and stated that defendants not subject to the transfer order "shall file answers… in accordance with [Order no. 40]…." The transfers were never made.

When Order No. 41 was issued, the manufacturers moved the court to certify Order No. 40 for interlocutory review and filed two master answers that challenged the validity of the transfers in which they clearly preserved their personal jurisdiction defense. The interlocutory appeal motion was never ruled upon. The merchant marines, equally dissatisfied with the order to transfer, sought to have all defendants transferred to a single forum. That motion was denied.

A Judicial Panel on Multidistrict Litigation (JPML) brought all the asbestos cases to a federal district court in Pennsylvania in 1991. The multi-district action became inactive, but was reactivated in 2008. In 2013, that court issued an opinion granting over 400 motions to dismiss for lack of personal jurisdiction, holding that the Ohio court did not have jurisdiction over the manufacturers without specific contacts with Ohio. The MDL court rejected the argument that the manufacturers waived their personal jurisdiction defense when they filed answers in the Ohio court. The MDL transferee court also held that it could not transfer a case to another district court. The remaining cases were remanded to Ohio, which dismissed the cases naming the remaining manufacturers in March 2016.

On appeal, the Sixth Circuit clarified that it had appellate jurisdiction to review a partial dismissal issued by a court outside the appellate court’s territorial jurisdiction because, pursuant to case law, such jurisdiction is proper when a final judgment is entered by a court within the appellate court’s jurisdiction.

With respect to the ruling by the MDL court, the appellate court agreed that the manufacturers did not waive or forfeit their personal jurisdiction defense. The manufacturers were explicit that they were not waiving personal jurisdiction in their answers and they promptly filed an interlocutory appeal to the transfer order. The appellate court found the evidence upon which the merchant marines relied was unpersuasive. Additionally, the granting of the motions to dismiss were not in conflict with Order Nos. 40 and 41 because the judge issuing those orders had ruled that there was no personal jurisdiction over manufacturers without specific contacts to Ohio and that those cases lacking jurisdiction should be transferred—not dismissed. Because the MDL court’s ruling did not conflict with those orders, the law-of-the-case doctrine was inapplicable. Moreover, because the Supreme Court held that "self-transfer" by an MDL court was improper, the JPML court was correct that it lacked authority to transfer the claims to another court. Accordingly, the judgment was affirmed.

The case is No. 16-3408.

Attorneys: Alan Kellman (Jaques Admiralty Law Firm) for Henry Kalama. Harold Wayne Henderson (Thompson Hine LLP) for Matson Navigation Co., Inc.

Companies: Matson Navigation Co., Inc.

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