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Henry Heide Inc. v. WRH Products Co.

decided: June 27, 1985.

HENRY HEIDE, INC. APPELLANT
v.
WRH PRODUCTS CO., INC., CROSS-APPELLANT STERILITE CORPORATION AND THE DOW CHEMICAL COMPANY APPELLEES AND CROSS-APPELLEES



Appeal from the United States District Court for the District of New Jersey, D.C. No. 75-2036.

Seitz and Higginbotham, Circuit Judges, and Giles, District Judge.*fn*

Author: Seitz

Opinion OF THE COURT

SEITZ, Circuit Judge.

The Plaintiff, Henry Heide, Inc. ("Heide"), appeals from an order of the district court granting a summary judgment dismissing its claims against defendants Sterilite Corporation ("Sterilite") and Dow Chemical Company ("Dow"). This order was made final pursuant to Federal Rule of Civil Procedure 54(b). Another defendant, WRH Products Co., Inc. ("WRH"), appeals from an order of the district court granting a summary judgment dismissing its cross-claims against Sterilite and Dow. This order was also made final pursuant to Rule 54(b). This court has appellate jurisdiction under 28 U.S.C. ยง 1291 (1982).

I.

The following facts are stipulated or undisputed. In 1973, Heide bought some 23,000 plastic trays from WRH. WRH designed the trays, but had contracted their manufacture to Sterilite. Sterilite purchased the plastic used in the trays from Dow.

Heide, a New Jersey candy manufacturer, used the trays in its manufacturing process which included drying the candy on the trays at relatively high heat. Prior to contracting to purchase the trays, Heide received from WRH at different times two sets of sample trays which it tested. The first set warped, possibly from the heat in the drying stage. Approximately one month later, WRH delivered a second set of samples. Heide tested this set and found them acceptable. Heide then contracted with WRH to purchase some 23,000 trays. Within two to four weeks following the initial use of the trays, Heide noticed that the trays were warping. Eventually, the trays proved unusable for Heide's process and were taken out of service.

After negotiations failed, Heide commenced this action against WRH, Sterilite and Dow alleging claims based on breach of warranty, negligence, and strict liability. WRH cross-claimed against Sterilite and Dow for indemnity and contribution. After extensive discovery, the case reached the summary judgment stage. The district court dismissed all of Heide's claims except for a single claim against WRH for breach of warranty by sample. The district court later dismissed all of WRH's cross-claims against Sterilite and Dow. These appeals then followed.

On a review of a summary judgment, we do as the district court was required to do: we determine whether the record as it stands reveals any disputed issue of material fact, assume the resolution of any such issue in favor of the non-movant, and then determine whether the movant is then entitled to judgment as a matter of law. First Jersey National Bank v. Dome Petroleum Limited, 723 F.2d 335, 338 (1983). It is uncontested that New Jersey law applies to this diversity action.

II. Personal Jurisdiction Over Sterilite

As a preliminary matter, Sterilite claims, as it did in the district court, that the district court lacked in personam jurisdiction over it. Assuming that Sterilite may advance this issue on this appeal without cross-appealing, we hold that the district correctly determined that jurisdiction existed.

Under Rule 4(e) of the Federal Rules of Civil Procedure, the district court had jurisdiction over Sterilite if a New Jersey state court would have had jurisdiction. In New Jersey, the state courts have jurisdiction over all foreign corporations to the extent consistent with due process of law. N.J. Civ. Prac. R. 4:4-4.

Due process requirements are satisfied if Sterilite has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 85 L. Ed. 278, 61 S. Ct. 339 (1940)). When the controversy is specifically related to a defendant's contacts with a forum, there is sufficient due process contact if "the defendant has 'purposefully directed' his activities at residents of the forum and the litigation results from alleged injuries that 'arise out of or relate to' those activities." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S. Ct. 2174, 85 L. Ed. 2d 528 (1985) (citations omitted).

In this case, the litigation is specifically related to Sterilite's contacts with New Jersey. Sterilite knew that Heide was the ultimate purchaser of the trays. It shipped the trays directly from its factory in Massachusetts to Heide's plant in New Jersey. Sterilite's president and chief engineer traveled to New Jersey and met with Heide's representatives in connection with this sale, and was aware of the problems that Heide had with the trays. It was clearly foreseeable that if there was litigation over the trays, it would occur in New Jersey. Sterilite's "conduct and connection with the forum State are such that [it] should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 62 L. Ed. 2d 490, 100 S. Ct. 559 (1980). Insofar as this litigation is ...


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