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IN RE SKI TRAIN FIRE IN KAPRUN

April 21, 2003

IN RE SKI TRAIN FIRE IN KAPRUN, AUSTRIA ON NOVEMBER 11, 2000. THIS DOCUMENT RELATES TO: DEFENDANTS WAAGNER-BIRO BINDER AG, WAAGNER-BIRO BINDER BETEILINGUNGS AG, WB HOLDING AG, BINDER CO AG.


The opinion of the court was delivered by: Shira A. Scheindlin, United States District Judge.

OPINION AND ORDER

Plaintiffs, the parents and grandparents of six Americans who died in a ski train fire on November 11, 2000, in Kaprun, Austria, brought several individual actions against numerous defendant train and train part manufacturers, ski resort operators, and marketing companies alleging negligence and strict liability. The Judicial Panel on Multidistrict Litigation ("MDL Panel") consolidated these suits for pretrial purposes before this Court. To date, nine defendants have moved to dismiss on various grounds.*fn1 An additional four defendants — Waagner-Biro Binder AG in Abwicklung (as successor in interest to Waagner-Biro Binder Aktiengesellschaft and Waagner-Biro AG) (collectively, "WBB"), Waagner-Biro Binder Beterilingungs AG ("WBBB"), WB Holding AG ("WBH") and Binder Co AG ("Binder") (collectively, "the Waagner defendants") now move to dismiss on many of the same grounds: lack of subject matter jurisdiction, lack of standing, lack of personal jurisdiction, failure to state a cause of action, and forum non conveniens. For the reasons set forth below, the Waagner defendants' motion to dismiss is denied on all grounds except lack of personal jurisdiction, for which I find that transfer — rather than dismissal — is warranted.*fn2

I. BACKGROUND

A. The Moving Defendants

WBB is an Austrian corporation located in Linz, Austria with administrative headquarters in Vienna, Austria. See 10/02 Declaration of Dr. Christoph Nemeth, Director of the Legal Department of WBB ("Nemeth Dec."), Ex. G to 11/01/02 Declaration of Frederick W. Reif, counsel for Waagner defendants ("Reif Dec."), ¶ 3. Until 1999, WBB was active in the fields of structural steel fabrication and the manufacturing of machinery. See id. Plaintiffs allege that WBB designed, engineered, and manufactured major parts of the ski train at issue in this litigation.*fn3 See Plaintiffs' First Amended Waagner Complaint as to Waagner Defendants ("Waagner Compl."). Ex. 1 to 11/25/02 Declaration of Hilary Cohen, counsel for plaintiffs ("Cohen Dec."), ¶ 13.

WBBB is an Austrian corporation located in Vienna, Austria. See 10/24/02 Declaration of Magistrate Helmut Wurzinger, member of the Executive Board of WBBB ("Wurzinger Dec."), Ex. I to Reif Dec., ¶ 1. Founded on June 30, 2001, WBBB is a holding company that acquires majority interests in other companies; it conducts no active operations of any kind.*fn4 See id. ¶ 3.

WBH is also an Austrian holding company located in Vienna, Austria. See 10/28/02 Declaration of Magistrate Martin Mayerhoffer, Corporate Comptroller of WBH ("Mayerhoffer Dec."), Ex. H to Reif Dec., ¶¶ 1, 3. Although WBH's primary business is the ownership of majority interests in other companies, it also provides consulting services to its subsidiary companies. See id. ¶ 3.

Binder is an Austrian corporation located in Gleisdorf, Austria. See 10/26/02 Declaration of Magistrate Joerg Rosegger, Head of Sales and Marketing for Binder ("Rosegger Dec."), Ex. J to Reif Dec., ¶ 1. Binder was founded on September 28, 1999, and is in the business of developing and manufacturing environmental, reprocessing, and packaging technology. See id. ¶ 5. Binder is a 99.997% owned subsidiary of WBH. See id. ¶ 6.

B. Procedural History

In January 2001, WBB was named as a defendant in three lawsuits brought in the Southern District of New York regarding the November 20, 2000 ski train accident in Kaprun, Austria.*fn5 See Reif Dec. ¶ 3. WBB moved to dismiss these New York Actions based on improper service, forum non conveniens, and lack of personal jurisdiction. See id. ¶ 4. Shortly thereafter, plaintiffs voluntarily discontinued the New York Actions against WBB without prejudice. See id.

On or about June 27, 2001, plaintiffs filed a new complaint against WBB captioned Habblett et al. v. Waagner-Biro AG et al., No. 01 Civ. 5815, in the United States District Court for the Central District of California (the "California Action"). See Complaint in the California Action, Ex. A to Reif Dec. The California Court never issued a summons in this matter. See Civil Docket Sheet for California Action ("Dkt. Sheet"), Ex. B to Reif Dec.*fn6

On or about July 6, 2001, plaintiffs filed a motion with the MDL Panel seeking transfer of the California Action to this Court. See Reif Dec. ¶ 6. On November 19, 2001, the action was transferred. See MDL Panel's Transfer Order, Ex. C to Reif Dec. On or about December 21, 2001, plaintiffs filed a Consolidated and Amended Complaint ("Amended Complaint") against WBB and other defendants.

Plaintiffs attempted to serve WBB pursuant to letters rogatory but were unsuccessful. This Court thereafter authorized service on WBB and other Austrian entities by ordinary mail pursuant to Fed.R.Civ.P. 4(f). See Reif Dec. ¶ 9. On August 30, 2001, plaintiffs mailed to defendants a copy of a Summons issued by the United States District Court for the Southern. District of New York. See 11/30/01 Summons, Ex. D to Reif Dec.

With this Court's permission, plaintiffs further amended the Amended Complaint to name three additional Waagner entities as defendants. See Reif Dec. ¶ 10. Plaintiffs mailed a copy of the Waagner Complaint and an Amended Summons, see Ex. B to Reif Dec., to two of those entities. Although named in the Waagner Complaint, Binder never received a copy of the Amended Summons or Waagner Complaint. See Reif Dec. ¶ 10; Rosegger Dec. ¶ 21.

II. CHOICE OF LAW

The parties disagree on which state's law applies to the issues presented in this motion. The Waagner defendants argue that New York law applies, while plaintiffs assume that California law governs.

A district court sitting in diversity applies the law of the forum state. See In re Ski Train Fire in Kaprun, Austria on November 11, 2000 (Bosch Rexroth), 230 F. Supp.2d 392, 400 (S.D.N.Y. 2002) ("Kaprun Bosch Rexroth") (citing On Air Entm't Corp. v. National Indem. Co., 210 F.3d 146, 149 (3d Cir. 2000)); In re Sterling Foster & Co., Inc. Sec. Litig., 222 F. Supp.2d 289, 300 (E.D.N.Y. 2002) (citing Bensusan Rest. Corp. v. King, 126 F.3d 25, 27 (2d Cir. 1997)). In an MDL proceeding, "the forum state . . . is the district court where the action was originally filed, and therefore that state's law must be applied." Kaprun Bosch Rexroth, 230 F. Supp.2d at 400; see also Sterling Foster, 222 F. Supp.2d at 300 ("In a multi-district litigation, the transferee court must apply the law of the transferor forum in determining issues of personal jurisdiction.") (citing Van Dusen v. Barrack, 376 U.S. 612, 639-40 (1964)); In re MTBE Litig., 175 F. Supp.2d 593, 606 n. 20 (S.D.N.Y. 2001) ("When considering questions of state law the transferee court must apply the state law that would have applied to the individual cases had they not been transferred for consolidation."). Because this action was originally filed in the Central District of California, the Court looks to California law.

The Waagner defendants argue that this "well-established rule" does not apply here because the case was transferred to this Court before a summons was issued and therefore before the California court had jurisdiction over WBB. Memorandum of Law of Waagner Defendants in Support of Motion to Dismiss ("Waagner Mem.") at 3 (noting that Fed.R.Civ.P. 4 requires that a summons be issued for a court to obtain personal jurisdiction over a defendant). Defendants additionally argue that, because three of the Waagner defendants were first named in a complaint filed in the Southern District of New York, "plaintiffs have apparently abandoned the California action and this Court must apply New York law to the issues presented in this motion." Id. There is no support whatsoever for defendants' theory that amendments to add parties and the issuance of summonses after transfer by the MDL Panel affect the choice of law to be applied.

The California court is clearly the transferor court here even though a summons was never issued. The MDL permits the transfer of "pending" actions. See 28 U.S.C. § 1407 (1982) ("When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings.") (emphasis added). The fact that WBB may have had a colorable argument for dismissal on the basis of insufficiency of process has no bearing on whether the case was "pending" in California prior to transfer. Moreover, the issue of the court's jurisdiction need not be resolved prior to transfer.*fn7 See In re "Agent Orange" Prod. Liab. Litig., 818 F.2d 145, 163 (2d Cir. 1987) ("Transfers under Section 1407 are simply not encumbered by considerations of in personam jurisdiction and venue. . . .") (internal quotation marks and citations omitted); see also Maricopa County v. American Petrofina, Inc., 322 F. Supp. 467, 469 (N.D. Cal. 1971) (acknowledging that the multidistrict panel does not have to await a complete designation of parties or service upon them before transferring an action). Thus, whether or not a summons was issued prior to transfer is irrelevant to the choice-of-law analysis.

Likewise, the fact that the Complaint in this action was amended to name additional defendants after the case was transferred by the MDL Panel does not affect the choice of law to be applied. This Court has already decided, with respect to the Bosch defendants, that the law of the transferor court applies even where the complaint was amended and served on additional parties after the case was transferred. See Kaprun Bosch Rexroth, 230 F. Supp.2d at 396-97, 399 (applying Pennsylvania law even though the case was governed by the amended complaint filed in the MDL proceeding in the Southern District of New York — not the original complaint filed in the Eastern District of Pennsylvania). Moreover, a substantial body of case law requires that once transfer is effectuated, parties may only be added and served in the transferee forum. See, e.g., In re Four Seasons Sec. Laws Litig., 63 F.R.D. 115, 122 (D. Okla. 1974) (recognizing that once a case has been transferred by the MDL Panel, any amendments to the complaint, which may or may not add a new party, must be filed with the transferee court); In re Equity Funding Corp. of Am. Sec. Litig., 416 F. Supp. 161, 177 (C.D. Cal. 1976) (same); Asbestos Litig., 963 F. Supp. 247, 251 (S.D.N.Y. 1997) (acknowledging that the transferee court is empowered to conduct all pretrial proceedings, which includes amendment of a complaint to add parties or claims); In re Prudential Sec. Inc. Ltd. P'ships. Litig., 158 F.R.D. 562, 568-89 (S.D.N.Y. 1994) (same). It would be inconsistent — and unjust — to require parties that avail themselves of this rule to forfeit their right to have the law of the transferor court applied. See Menowitz v. Brown, 991 F.2d 36, 40 (2d Cir. 1993) (acknowledging that the choice-of-law rules further the policies of the Supreme Court enunciated in Erie v. Tompkins, 304 U.S. 64 (1938), by "insuring that a pre-trial transfer under Section 1407 does not lead to the application of a state substantive law that differs from the law applicable in the jurisdiction where the case was properly filed.")

III. SUBJECT MATTER ...


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