MURPHY SANCHEZ, PLLC SUCCESSFUL ON A MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION IN U.S.D.C.

The United States District Court for the District of Maryland (Southern Division) recently granted Defendant’s Motion to Dismiss in Mindy Toombs v. Lowe’s Home Centers, LLC, No. GLS-22-2244, a burn injury and products liability case, finding that there was no personal jurisdiction over the Defendant in the state of Maryland.

In July 2018, the Plaintiff was using a Bird Brain Ceramic Firepot and Fuel Gel, which she had purchased from a Lowe’s Home Center in Fernley, Nevada Lowe’s in March 2012. According to the Plaintiff’s complaint, the gel “expelled” fire and its gel substance onto the Plaintiff’s body, and she sustained damages that she sought to recover in suit, filing a Complaint against Defendant Lowe’s Home Centers, LLC on October 25,2021 in the Circuit Court for Prince George’s County. The Plaintiff’s complaint alleged three causes of action: strict liability, negligence, and negligent hiring and retention.

Defendant Lowe’s removed the case to the United States District Court for the District of Maryland (Southern Division) on September 7, 2022, and thereafter filed its Motion to Dismiss, which plaintiff opposed.

Lowe’s raised four grounds for dismissal in its Motion:  1) the Court lacked general personal jurisdiction because Lowe’s is a LLC formed in North Carolina under that state’s laws and also maintains its principal place of business in North Carolina; 2)  the Court lacked specific personal jurisdiction because plaintiff’s purchase and use of the product, and her alleged injuries, took place outside of Maryland and Lowe’s contacts with Maryland did not cause or relate to the Plaintiff’s injury; 3) Plaintiff’s claims were barred by res judicata as a result of the dismissal, with prejudice, of Plaintiff’s earlier Nevada state court lawsuit  arising out of the same alleged purchase, use and injuries; and 4) Plaintiff’s claims were time barred. For the first and second arguments, the Defendant moved for dismissal pursuant to Fed. R. Civ. P. 12(b)(2). For the third and fourth arguments, the Defendant sought dismissal pursuant to Fed. R. Civ. P. 12(b)(6).

The Plaintiff opposed Lowe’s motion, contending that: 1) the Court could exercise general personal jurisdiction over the Defendant because Lowe’s operates multiple stores throughout Maryland and has “members” that reside in Maryland, making Maryland its principal place of business (PPB); 2) specific personal jurisdiction also existed because Lowe’s derives substantial revenue from goods, services, and manufactured products in Maryland, and it marketed, distributed, and sold the Bird Brain Ceramic Firepot and Fuel Gel in its Maryland stores; 3) Plaintiff’s claims are not barred by res judicata because the Nevada Court neither determined findings of fact nor dismissed the case with prejudice; and 4) Plaintiff’s claims were not time barred.

The Court first considered Lowe’s personal jurisdiction arguments, noting the long-established standard for the proper exercise of personal jurisdiction, which holds that in federal court proceedings, a Court will find personal jurisdiction over a nonresident defendant when two conditions are present: an applicable state long arm statue confers jurisdiction and the assertion of that jurisdiction is consistent with constitutional due process. In Maryland, the statutory inquiry merges with the constitutional inquiry, and the two essentially become one.  The Court also recognized the law establishing that the exercise of general jurisdiction over a corporate defendant is proper where the defendant’s affiliations with the forum state are so “continuous and systematic” as to render it essentially “at home”.  A corporation is generally considered “at home,” and therefore subject to general personal jurisdiction, in its place of incorporation and its PPB. The PPB refers to the place where the corporation’s officers direct, control, and coordinate the corporation’s activities, also known as the “nerve center”, and it is usually the corporation’s main headquarters. For a limited liability company, a court may exercise general jurisdiction in the limited liability company’s state of formation or its PPB, and to determine a limited liability company’s PPB, a court will apply the same test that is applied to a corporation by examining where the entity’s officers direct, control, and coordinate the entity’s activities.

Because the Plaintiff bears the burden of establishing personal jurisdiction at every stage of litigation, the Court only analyzed the exhibits provided by the Plaintiff, taking “all disputed facts and reasonable inferences in favor of the Plaintiff.” In opposition to Defendant’s motion, the Plaintiff provided six exhibits in an attempt to establish that the exercise of personal jurisdiction was proper: (a) a screenshot of the Defendant’s website, which shows a directory of Defendant’s retail locations in Maryland; (b) a screenshot of “Maryland Judiciary Case Search Results,” which shows the various times that an entity named Lowe’s Home Centers, Inc. has participated in Maryland state court litigation; (c) a screenshot of a “Maryland.gov” webpage that describes the business details, e.g., whether the business is in “good standing,” related to Lowe’s Home Centers, Inc.; (d) a screenshot of a Circuit Court for Prince George’s County “case search” webpage related to a case where Plaintiff sued Lowe’s Companies, Inc. and Bird Brain, Inc.; (e) a copy of an October 13, 2021 order issued by Judge Deborah K. Chasanow related to a case where Plaintiff sued Lowe’s Companies, Inc.; and (f) a screenshot of a Circuit Court for Prince George’s County “case search” webpage related to a case where Plaintiff sued the Defendant.

The Court rejected Plaintiff’s arguments. First, the Court held the Plaintiff’s assertion that Defendant operates 26 stores in Maryland, even when taken as true, failed to plausibly demonstrate that the Defendant is “at home” in Maryland, since Defendant maintains 2,000 stores across the United States, which means that Defendant’s 26 stores in Maryland represent approximately 1% of its national operations. Based on those considerations, the Court could not find that the Defendant maintains sufficient business contacts with Maryland to render it “at home”. The Court also found the Plaintiff’s argument regarding the alleged presence of “members” of Defendant in Maryland was unavailing, as the exhibits Plaintiff provided did not in any way demonstrate that the Defendant had members that reside in the state of Maryland. Further, the Court noted that even if the Court assumed that Plaintiff had plausibly asserted this claim, such a fact is irrelevant to the question of general jurisdiction. Thus, the Plaintiff failed to allege any facts that demonstrated that Lowe’s has a PPB in Maryland or was formed in Maryland, and the Court found it lacked general personal jurisdiction over Lowe’s.

Turning to the issue of specific personal jurisdiction, the Court noted that the exercise of specific jurisdiction over a defendant is proper if the defendant has “minimum contacts” with the forum state such that the exercise of jurisdiction does not offend “traditional notions of fair play and substantial justice.” Specific jurisdiction is appropriate when a defendant “purposefully avails itself of the privilege of conducting activities within the forum State;” and the plaintiff’s claims, “arise out of or relate to the defendant’s contact with the forum;” and the exercise of personal jurisdiction would be “constitutionally reasonable.”

The Court noted Defendant’s core contention was that the actions that gave rise to the litigation took place outside of Maryland and that Plaintiff’s allegation that the Defendant operates stores and sells goods in Maryland was insufficient to establish specific jurisdiction. The Plaintiff countered that the Defendant engaged in activity that relates to the litigation because Lowe’s substantially advertised and sold, in Maryland, the same product that caused the Plaintiff’s injury.

The Court found that Plaintiff satisfied the first prong of the three-part specific jurisdiction test, as Lowe’s conceded that it operated multiple stores in Maryland, derives substantial revenue from the goods it sells in Maryland, and sold the same product in its Maryland stores. However, in looking at whether Plaintiff had adequately alleged that her injuries “arise out of or relate to” the Defendant’s in-state conduct, the Court found that the Plaintiff’s injury did not take place in Maryland. In her complaint, Plaintiff alleged that her injury occurred “outside of Maryland” but is silent as to where exactly it took place.  In an attempt to bring her case under the banner of specific jurisdiction despite that allegation, Plaintiff relied on Ford Motor Co. v. Montana Eight Judicial District Court, 141 S. Ct. 1017 (2021).  In that case, which included multiple cases joined for consideration, the plaintiffs were injured by vehicles manufactured by the defendant. The vehicles were produced in states other than the forum states, and The Supreme Court found that the forum states could still exercise specific jurisdiction because the respective injuries occurred in-state and the defendant had connections with the forum state that related to the injuries. Specifically, the Supreme Court held the defendant “had systematically served [the] market” with products similar to the one that caused the tortious injury by way of advertisements and sales.  Based on the Ford holding, Plaintiff Toombs argued that because Lowe’s sold the same product that had injured her outside of Maryland throughout its stores in Maryland and because Defendant derives substantial revenue from goods and services in Maryland, it “systematically served the market,” and the Defendant’s contacts with the forum state “relate” to Plaintiff’s injury so as to confer specific personal jurisdiction.    

The Court rejected Plaintiff’s reliance on Ford, finding that for the Ford analysis to apply, the injury at issue must have occurred in the forum state, and in this case, unlike Ford, the injury did not occur in Maryland. In reaching its decision, the Court relied on Wallace v. Yamaha Motors Corp., U.S.A., Civ. No. 19- 2459, 2022 WL 61430, at *4 (4th Cir. Jan. 6, 2022), where the plaintiff was a resident of South Carolina, and the defendant was a corporation with a PPB in California. There, plaintiff sustained injuries while riding defendant’s defective motorcycle, originally sold in Kansas, in Florida.  Ultimately, the court found that the plaintiff was injured outside of the forum state and none of defendant’s business activities in the forum state related to or caused the plaintiff’s injury, and specific jurisdiction did not exist. In the instant case, the Court found that even when viewing the facts in the light most favorable to the Plaintiff, the Court could not have specific jurisdiction over the dispute because the Plaintiff’s injury did not occur in Maryland, and she purchased the defective product that caused her injuries in Nevada, and further, Plaintiff’s injuries did not arise out of or relate to the Defendant’s in-state activities.

The Court entered summary judgment in Lowe’s favor and dismissed all of Plaintiff’s claims pursuant to Fed. R. Civ. P. 12(b)(2) for lack of personal jurisdiction and lacking personal jurisdiction, did not address Defendant’s Rule 12(b)(6) arguments based on res judicata and limitations.