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United States District Court, S.D. New York

November 19, 2004.

In re Ski Train Fire in Kaprun, Austria on November 11, 2000. This Document Relates To: Defendant Beton-und Monierbau, G.m.b.H.

The opinion of the court was delivered by: SHIRA SCHEINDLIN, District Judge



  Plaintiffs, the relatives of Americans who died in a ski train fire on November 11, 2000, in Kaprun, Austria, brought this action against numerous defendants. The Judicial Panel on Multidistrict Litigation ("MDL Panel") consolidated all suits related to the Kaprun ski train fire for pretrial purposes before this Court.*fn1 Defendant Beton-und Monierbau, G.m.b.H. ("Beton") now moves to dismiss for lack of personal jurisdiction, insufficiency of process and/or insufficiency of service of process, and forum non conveniens.*fn2 For the reasons set forth below, Beton's motion to dismiss for lack of personal jurisdiction is granted.*fn3


  A. Moving Defendant

  Beton is an Austrian corporation specializing in underground construction and the New Austrian Tunnelling Method ("NATM"), with its principal place of business in Innsbruck, Austria.*fn4 Plaintiffs allege that Beton "designed, engineered and manufactured, constructed and/or maintained" the tunnel in which the Kaprun ski train fire took place.*fn5

  B. Procedural History

  Plaintiffs had previously filed suit against Beton in the District of Connecticut, and the MDL Panel transferred the Connecticut action to this Court.*fn6 On March 19, 2003 this Court dismissed the Connecticut action for lack of personal jurisdiction, and granted leave for the plaintiffs to refile in an appropriate jurisdiction.*fn7 On November 4, 2003, plaintiffs refiled their complaint against Beton in the District of Massachusetts.*fn8 The MDL panel subsequently transferred the case to this Court on February 6, 2004.*fn9

  C. Jurisdictional Allegations

  Plaintiffs allege that this Court has personal jurisdiction over Beton because Beton "is engaged in continuous and systematic business activities within the State of Massachusetts and [the District of Massachusetts]."*fn10 Specifically, plaintiffs argue that Beton "took significant steps to secure its role in a least two public contracts in Massachusetts since 1998," namely, the Central Artery Tunnel Project ("Big Dig") and the South Boston Piers Transitway Project ("Piers Project").*fn11 1. Big Dig

  Plaintiffs claim that Beton applied to be prequalified by Massachusetts as a contractor for the Big Dig project.*fn12 Plaintiffs argue that Beton's prequalification was "a necessary and substantial step in the bidding process" for the Big Dig, and required Beton to provide detailed information to Massachusetts about the company's finances, experience, and prior projects.*fn13 The Massachusetts Bay Transportation Authority subsequently prequalified Beton for the I-93 Leverett Circle/Storrow Drive Connectors, contract number C19E1, which was one aspect of the larger Big Dig project.*fn14

  Plaintiffs provided information alleging that after a contractor is prequalified, the subsequent Big Dig bidding process is "time-consuming and expensive."*fn15 Specifically, plaintiffs contend that the bidding process for contract C19E1 required attending a pre-bid conference and a site tour on March 16, 1998, a pre-bid meeting on May 13, 1998, and spending over six million dollars.*fn16 However, in the end, Beton was not awarded a contract to work on any aspect of the Big Dig project.*fn17 Additionally, the only evidence of Beton's participation in the bidding process beyond prequalification is the fact that Beton is included in a Purchase Distribution Bidders List for contract C12E1 of the Big Dig.*fn18

  2. Piers Project

  Plaintiffs contend that Beton participated in the Piers Project administered by the Massachusetts Bay Transportation Authority.*fn19 According to plaintiffs, Beton's initial involvement included prequalification as a subcontractor specializing in NATM and engaging in the bidding process with Modern Continental, the primary contractor.*fn20 Modern Continental was ultimately selected as the primary contractor, with Beton as the NATM subcontractor.*fn21

  As the NATM subcontractor, Beton was responsible for providing a Senior Tunnel Engineer and at least five Tunnel Superintendents.*fn22 Plaintiffs claim the project was valued at over twelve million Euro, of which Beton was to receive fifty percent.*fn23 Plaintiffs also note that while working on the Piers Project, Beton founded a wholly-owned subsidiary, Beton-und Monierbau USA Inc. ("Beton USA"), in Evansville, Illinois.*fn24 Although plaintiffs assert that Beton USA is the "agent" of Beton,*fn25 plaintiffs consistently state that jurisdiction should be premised on Beton's contacts in Massachusetts, not Beton USA's contacts in Massachusetts.*fn26 III. APPLICABLE LAW

  A. Legal Standard

  "Personal jurisdiction . . . `represents a restriction on judicial power . . . as a matter of individual liberty.'"*fn27 A court is obligated to dismiss an action against a defendant over which it has no personal jurisdiction.*fn28 Plaintiffs bear the ultimate burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the defendant.*fn29 However, "prior to discovery, a plaintiff challenged by a jurisdiction testing motion may defeat the motion by pleading in good faith . . . legally sufficient allegations of jurisdiction, i.e., by making a prima facie showing of jurisdiction."*fn30 Plaintiff "can make this showing through his own affidavits and supporting materials, containing an averment of facts that, if credited . . . would suffice to establish jurisdiction over the defendant."*fn31 Thus, a court may consider materials outside the pleadings, but must credit the plaintiff's averments of jurisdictional facts as true.*fn32

  In the determination of whether a federal court has personal jurisdiction over a defendant, plaintiffs must show both that jurisdiction is proper under the long-arm statute of the forum state and that the exercise of personal jurisdiction over the defendant is consistent with federal due process requirements.*fn33 In an MDL proceeding, the forum state is the district court where the action was originally filed.*fn34 Because this complaint was originally filed in the District of Massachusetts, Massachusetts law governs whether a Massachusetts court would have personal jurisdiction over Beton.*fn35 B. Personal Jurisdiction in Massachusetts

  Chapter 223, section 38 of the Massachusetts General Laws provides for service on a foreign corporation that "has a usual place of business in the commonwealth, or with or without such usual place of business, is engaged in or soliciting business in the commonwealth, permanently or temporarily."*fn36 Although this statute ostensibly addresses service of process, courts have construed it more broadly to confer jurisdiction over foreign corporations operating within the state.*fn37 Jurisdiction under this provision is extended when (1) "the corporation's activities affect the commerce of Massachusetts substantially so that the state has an interest in regulating the general conduct of those activities (`doing business')", or (2) "the corporation's activities in Massachusetts have so affected the particular transaction at issue that it is appropriate to hear the claim in a Massachusetts court."*fn38 The First Circuit has further defined "doing business" as activities that "closely approximat[e] the regular conduct of a domestic corporation."*fn39

  Although plaintiffs did not rely on chapter 223A, section 3, which commonly functions as the Massachusetts long-arm statute, I briefly note that the statute is inapplicable because plaintiffs' claim does not "aris[e] from" Beton's business or contracts in Massachusetts, nor did Beton "caus[e] tortious injury" in Massachusetts.*fn40

  C. Personal Jurisdiction and Due Process Requirements

  The Due Process Clause of the Fourteenth Amendment specifies that in order for a court to exercise personal jurisdiction over a nonresident corporate defendant, the defendant must have "certain minimum contacts with the forum such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice."*fn41 A court may exercise "specific jurisdiction" over a defendant who has "purposefully directed his activities" at the forum state, and the alleged injuries "arise out of or relate to those activities."*fn42 Alternately, when the defendant's activities within the forum state are "continuous and systematic," a court may exercise "general jurisdiction" even if the defendant's activities are unrelated to the litigation.*fn43 Although "minimum contacts" may suffice to establish specific jurisdiction over a defendant, where jurisdiction over a defendant is premised on general jurisdiction, courts will be "considerably more stringent" in evaluating the defendant's contacts within the forum state.*fn44 Factors that are considered when assessing a defendant's contacts within the forum state include, but are not limited to, the revenues the defendant obtained from the forum state,*fn45 if the defendant deploys employees in the forum and for how long,*fn46 and whether the defendant has an office, bank account, phone number, or any property within the forum state.*fn47


  A. Jurisdiction Under Massachusetts Law

  In Caso v. Lafayette Radio, the court held that jurisdiction can be obtained under chapter 223, section 38 of the Massachusetts General Laws when the defendant is either "doing business" within the forum state, or when the cause of action is related to the defendant corporation's activities within the forum state.*fn48 Because plaintiffs have made no allegations that the Kaprun ski train fire is related to Beton's activities within Massachusetts, the question is narrowed to whether Beton is "doing business" within Massachusetts so as to give Massachusetts an interest in regulating the corporation's activities.*fn49

  Courts have traditionally defined "doing business" as systematic, regular contacts by a corporation in the forum state. For example, in Walsh v. National Seating Co., the defendant corporation was "doing business" in Massachusetts for the purpose of sustaining general jurisdiction, because the corporation maintained a local telephone listing, permanently based a sales representative in Massachusetts, made sales to eleven Massachusetts companies, performed over three million dollars worth of business in the forum state during a three-year period, and the defendant's service personnel visited the state on a "regular, predetermined schedule."*fn50 Similarly, in Pharmachemie B.V. v. Pharmacia S.p.A, the court found the defendant to be "doing business" within Massachusetts, and hence that the exercise of general jurisdiction was proper, because the defendant corporation had generated sales of over thirty million dollars in Massachusetts during a five year period, stationed five permanent sales representatives in the state, and made "substantial annual payments" to Massachusetts hospitals that performed clinical studies using the defendant's products.*fn51 In contrast, the court in Guay v. Ozark Airlines found that the defendant corporation was not "doing business" within Massachusetts, despite the fact that the defendant flew thirty-seven charter flights out of a Massachusetts airport, and maintained a bank account in the state for over three years.*fn52 The Guay court based its decision on the fact that the charter flights "were isolated events and had minimal effect on Massachusetts commerce."*fn53

  As in Guay, Beton's contacts with Massachusetts are neither extensive nor regular enough to subject the corporation to general jurisdiction within the state. Beton is based in Innsbruck, Austria, and does not have an office, mailing address, telephone number, or bank account in Massachusetts.*fn54 In response to plaintiffs' allegations regarding Beton's work on the Big Dig, Beton contends that the extent of its involvement in the Big Dig was to prequalify as a bidder on contract number C19E1 of the project.*fn55 Beton did not ultimately bid on the contract C19E1, and attests that it took no further action on any aspect of the Big Dig project.*fn56 Plaintiffs have failed to provide any evidence to the contrary. Although plaintiffs note that Beton appeared on a bidders list for contract C19E1,*fn57 Beton clarifies that this document "is not a list of entities actually bidding on the [C19E1] project, but a listing of firms which, like [Beton], obtained a set of project documents."*fn58 Beton notes that the actual bidders list for contract C19E1 of the Big Dig project can be found online, and that Beton's name is not among the bidders.*fn59

  Beton did perform work on the Piers Project,*fn60 but this involvement fails to rise to the level of "doing business" within Massachusetts so as to subject Beton to general jurisdiction within the state. Beton worked on the Piers Project as a joint contractor with another company, Modern Continental.*fn61 No more than five Beton employees were in Massachusetts at any one time, and all of these employees obtained only temporary United States work visas.*fn62 Although neither party identified Beton's precise start date, Beton appears to have started work on the Piers Project sometime in 2001,*fn63 and the last Beton employee departed Massachusetts in June 2004.*fn64 The total value of the project was over twelve million Euro, of which Beton received fifty percent, coming to approximately seven and a half million dollars.*fn65 Although this is a substantial sum of money, it is clearly less than the thirty million dollars worth of business used to support general jurisdiction in Pharmachemie B.V., it represents a small portion of Beton's overall revenue,*fn66 and is not a large sum for a public construction project.*fn67 In sum, Beton's activities in Massachusetts do not comprise a "systematic pattern of in-state activity . . . closely approximating the regular conduct of a domestic corporation."*fn68 Rather, Beton made an isolated and discrete foray into Massachusetts commerce, which is not enough to sustain general jurisdiction over the corporation for an incident entirely unrelated to its Massachusetts activities.

  B. Federal Due Process Requirements

  Because Beton is not "doing business" within Massachusetts for the purpose of sustaining general jurisdiction under chapter 223, section 38, plaintiffs have not met the first prong of the Metropolitan Life test, and an analysis of federal due process requirements is not necessary.*fn69 However, for the same reasons that Beton's contacts within Massachusetts are not sufficient to sustain general jurisdiction under state law, Beton's contacts are not "continuous and systematic" enough to ensure that subjecting Beton to general jurisdiction in Massachusetts would comport with federal due process requirements.*fn70 The constitutional standard for the exercise of general jurisdiction is quite high,*fn71 and Beton's prequalification as a bidder on contract C19E1 of the Big Dig, plus its involvement in the now-completed Piers Project, does not meet this standard.


  For the foregoing reasons, Beton's motion to dismiss for lack of personal jurisdiction is granted. The Clerk of the Court is directed to close this motion [docket #6] and dismiss plaintiffs' suit against Beton. SO ORDERED.

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