Superior Court of New Jersey, Law Division, Bergen
ARSHAD SULTAN, Individually and as Executor of the Estate of SUMAIRA KHAN and Trustee of THE SUMAIRA KHAN REVOCABLE LIVING TRUST, and on behalf of all beneficiaries, Plaintiff,
KARL STORZ ENDOSCOPY-AMERICA, INC., KARL STORZ ENDOVISION, INC., KARL STORZ GMBH & CO. KG, HOWARD H. JONES, M.D., NOAH A. GOLDMAN, M.D., THE VALLEY HOSPITAL, INC., and JOHN DOES (1-10) and XYZ CORP (1-10) (such names and corporations being fictitious), Defendant.
Argued: January 5, 2018
McNabb, Esq., appearing for the Plaintiff, Karl Storz, (from
the law offices of Lieff Cabraser Heimann & Bernstein).
Duffy, Esq., appearing for the Defendants, Karl Storz SE
& Co., KG, (from the law offices of Wilson Elser).
C. Wilson, J.S.C.
MATTER arises from a products liability and medical
malpractice claim brought against Defendants Karl Storz SE
& Co. KG ("KST") and Karl Storz
Endoscopy-America, Inc ("KSEA"), Drs. Jones and
Goldman, Valley Physician Services, Inc., The Valley
Hospital, Valley Health System, and Director of Risk
Management. Defendant KST filed the instant motion to dismiss
for lack of personal jurisdiction pursuant to R. 4:6-2(b),
seeking dismissal of claims brought specifically against KST.
Having considered the submissions of the parties and oral
argument, and for the reasons below, the Defendant's
motion is hereby GRANTED.
Arshad Sultan, Administrator of the Estate of Sumaira Khan,
alleges that a defectively designed and fraudulently marketed
laparoscopic power morcellator was used during a surgical
procedure to remove a uterine fibroid from Mrs. Khan on
November 22, 2013. The procedure was performed at the Valley
Hospital in Ridgewood, New Jersey. Subsequent to the
procedure being performed, pathology reports showed that Mrs.
Khan had and aggressive form of uterine cancer called
leiomyosarcoma. Plaintffs allege that the use of the Storz
brand morcellator resulted in this upstaged form of cancer in
Mrs. Khan, requiring painful cancer treatment at Memorial
Sloan Kettering in December of 2013. Mrs. Khan's battle
with cancer led to her eventual death on June 5, 2016 at the
age of forty-five.
KST designed, developed, and manufactured the morcellator
device used during the surgical procedure performed on Mrs.
Khan. KST is a German entity, and sold, marketed, and
distributed the morcellator device through Defendant KSEA,
which is a wholly owned subsidiary of KST incorporated in the
State of California. KSEA markets and sells this morcellator,
and other KST surgical instruments in the United States. KSEA
operates as part of Karl Storz North America, an
unincorporated grouping of KST subsidiaries formed for the
North American market. KST itself is incorporated in Germany
and has its principle place of business in Tuttlingen,
Germany. KST is not incorporated in New Jersey, and has no
place of business, employees, or bank accounts in New Jersey.
Despite having developed the morcellator, KST did not design,
manufacture, or distribute this product in the United States
or New Jersey itself, but relied on KSEA.
engaged in advertising, employing sales representatives, and
distributing KST surgical products, including the morcellator
in the instant case, throughout the State of New Jersey. Of
KSEA's total sales, ninety-three percent are KST
products, while seven percent are third party products. In
fact, KSEA maintains a distribution facility in Flanders, New
Jersey. Despite this relationship, there are no written
agreements between KSEA and KST.
KST and KSEA share the same brand marketing and KST supplied
"Brand Identity Guidelines." Additionally, KST
drafts and approves all marketing, training, and sales
materials for the marketing of morcellators in the United
States, which are then reviewed by KSEA to ensure regulatory
compliance. Further, KST purchases global insurance policies
which cover KSEA, and trains KSEA employees in Germany. KSEA
executives travel to Germany twice a year to discuss business
operations. These include, product pipeline, focus, revenue
objectives, and marketing strategies.
structures of both KST and KSEA show a clear
parent-subsidiary relationship. KSEA's Vice President of
Global Quality Management & Regulatory Affiars was Mr.
Serkan Sezer, who held the same position at KST. Dr. Sybil
Storz, has at all times been the sole managing director of
KST. She was also the President of KSEA from 1996 to 2005,
and CEO of KSEA until 2007, when, as acting Chairman of the
Board of KSEA she did not reappoint herself. During the
relevant time period, KSEA had a three member board. Dr.
Sybil Storz held one seat, her son held a second, while the
third was vacant.
KST now moves this Court to dismiss the claims against it,
arguing pursuant to K 4:6-2(b), that this Court lacks
personal jurisdiction over the German entity which is not
"at home" in New Jersey and does not maintain the
requisite minimum contacts with this state. Further, KST
argues that KST and KSEA are separate corporate entities and
that therefore personal jurisdiction cannot be exercised over
KST through its subsidiary KSEA.
TO DISMISS STANDARD
motion to dismiss pursuant to K 4:6-2(e), the Court must
treat all factual allegations as true and must carefully
examine those allegations "to ascertain whether the
fundament of a cause of action may be gleaned even from an
obscure statement of claim. . . ." Printing
Mart-Morristown v. Sharp Elec. Corp., 116 N.J. 739, 746
(1989). After a thorough examination, should the Court
determine that such ...