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Schmidt v. Martec Industries Corp

September 3, 2009

KEVIN J. SCHMIDT AND EVELINE J. SCHMIDT PLAINTIFFS,
v.
MARTEC INDUSTRIES CORP AND LONGDA TECHNOLOGIES CO., LTD. DEFENDANTS.



The opinion of the court was delivered by: Hurley, Senior District Judge

MEMORANDUM & ORDER

Kevin Schmidt ("Plaintiff" or "Schmidt") and Eveline Schmidt (collectively "Plaintiffs") commenced this diversity action to recover monetary damages from Martec Industrial Corporation ("Martec") and Longda Technologies Corporation, Ltd., (collectively "Defendants"), for an injury suffered by Schmidt while he was riding a bicycle allegedly containing components negligently designed, manufactured, distributed, and sold by Defendants. Presently before the Court is Martec's motion pursuant to Fed. R. Civ. P. 12(b)(2) to dismiss the complaint for lack of personal jurisdiction and Plaintiffs' cross-motion for discovery on the issue of jurisdiction or, in the alternative, for a hearing on the issue of personal jurisdiction. For the reasons stated herein, Martec's motion is denied, and Plaintiffs' cross-motion for discovery is granted.

BACKGROUND

On December 4, 2007, Plaintiffs instituted this product liability action, alleging that Defendants were negligent in designing, manufacturing, selling, and/or distributing the component product which injured Schmidt. (Compl. ¶ 25.) According to the complaint, on or about June 10, 2006, Schmidt, a 52 year old triathlete, was severely injured while riding a bicycle in New York. The bicycle allegedly contained reinforced carbon aranid fiber forks designed, manufactured and/or sold by Martec, a Taiwanese company. (Compl. ¶ 3, 20-25.) It is claimed that fractures and cracks in the reinforced aranid carbon fiber front fork of the bicycle was responsible for its sudden stopping and the catastrophic injuries that Schmidt sustained. (Compl. at ¶¶ 24-27.)

The personal jurisdiction allegations which Plaintiffs set forth in their complaint against Martec may be summarized as follows: (1) Martec committed a tortuous act within the State of New York, (2) Martec regularly does, or solicits business in the State of New York, and (3) Martec received substantial revenue from goods used or consumed, or services rendered in the State of New York. (Compl. ¶¶ 5, 7, 9.)

In support of its motion, Martec submits the affidavit of Ivy Lin, the assistant to the Vice President of Martec. Lin's affidavit states in toto:

1. I am the Assistant to the Vice President of Martec Industrial Corp. and a shareholder of Martec Industrial Corp. ("Martec"). Martec is a privately owned corporation, that is not publicly traded.

Martec has five shareholders. Martec is the English name of the corporation. It has no offices in the United States. It does not distribute any of its products within the United States. It does not have any employees within the United States.

2. Martec is a corporation registered for correspondence in Taiwan. It has thirty-five employees in Taiwan. It sells products under the Martec name. Martec does not manufacture any bicycle forks or components. It does not advertise its products for sale within the United States.

3. Martec does not have any physical presence outside of Taiwan. Martec takes orders for bicycle components based upon design specifications provided by other entities including bicycle manufacturers. Martec utilizes forwarding companies in Hong Kong. These companies then ship these components to the entities that ordered them.

4. Long Da Technologies is a manufacturing entity located in China. It has approximately 1,000 employees in China. Long Da has no physical presence outside of China. Martec is the sole shareholder of Long Da. Long Da only ships products through Martec to Hong Kong. (Dkt. No. 32, at 5-6.)

In opposing the motion, Plaintiffs submit three documents. The first document purports to be an invoice in the amount of $5,250.00 for "bicycle parts" shipped from Martec to "Kestrel" in California. The second and third documents respectively are, according to Plaintiffs, "an internet printout evidencing shipment of Martec's products to New York ports" and "a printout from Import Genius, Inc. evidencing shipment of Martec's products to New York and other geographical areas within the Continental U.S.," (Pls.' Mem in Opp. to Martec's Motion and in Supp. of Cross-motion ("Pls.' Mem") at 7),*fn1 which show that Martec's shipments are routed from Hong Kong to New York, and that "Martec knew that its products were to be used in New York and other U.S. location." (Id.; Dkt. No. 32-1, Exhibits A-C.) These documents indicate shipments of Martec products originating in Hong Kong and Singapore to destinations throughout the United States, including New York, California, Washington, and Illinois, in addition to various distribution centers located within the United States. Also, Plaintiffs point out that Lin's affidavit fails to address other pertinent factors such as the regularity in which Martec takes and processes orders for bicycle components, with whom it contracts, where it negotiates such orders, and the level of solicitation Martec engages in, if any.

DISCUSSION

I. ...


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