Document bBnZoQXb3qz5GJ5LJYvoRvjvy

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA FLETCHER MCDANIEL, et al., Plaintiffs. v. ARMSTRONG WORLD INDUSTRIES, et al., * * * * * * Defendants * Civil Action NO. 83-3520 Judge Flannery FiLtD JAN J ]384 | PLAINTIFFS' BRIEF IN OPPOSITION TO DEFENDANT NICOLET, INC.'S MOTION TO DISMISS CL"K, U.3. DISTRICT COURT, DISTRICT OF COLUMBIA Defendant Nicolet, Inc.'s motion to dismiss is not well taken and should be overruled. As more fully appears below, defendant Nicolet, Inc., and its predecessor-in-interest Keasbey and Mattison Company (hereinafter K & M) have (1) transacted business in the District of Columbia within the meaning of D.C. Code 13-423(a)(1); (2) performed acts and omissions LAW OFFICES ASHCRAFT A GEREL SUITE 700 2000 L STREET. N. W. ASHINGTON. D. C. 20036 202-703.6400 SUITE 220 >660 KENMORE AVENUE -LEXANDRIA. VA. 22304 703-751-7400 SUITE 1002 ONE CENTRAL PLAZA I 1300 ROCKVILLE PIKE JOCKVILLE. MD. 20052 301-770-3737 SUITE 101 METRO 400 BUILDING LANDOVER. MD. 2O70S 301 *489-8400 SUITE 60S EAST BALTIMORE STREET BALTIMORE. MO. 21202 . 30J-B36-1122 causing tortious injury within the District of Columbia; (3) derived substantial revenue from goods used in the District within the meaning of 13-423(a)(4); and (4) acquired sufficient minimum contacts with the District of Columbia to staisfy constitutional due process standards. Therefore, plaintiffs submit that the exercise of personal jurisdiction over Nicolet, Inc. is proper. STATEMENT OF FACTS Plaintiff Fletcher McDaniel was employed from 1950 to 1982 as.4a plasterer's helper. During this period Mr. McDaniel was ; employed by Krafft-Murphy Company and National Asbestos Company, Inc. at many construction sites in the District of Columbia ! and was exposed to Sprayed Limpet Asbestos at these job locations i 1 See Affidavit of Fletcher McDaniel (attached as Exhibit to Plaintiffs' Brief In Opposition to Turner & Newall PLC1s Motion to Dismiss) . |! As more fully appears in Plaintiffs' Brief in Opposition to Turner & Newall PLC's Motion to Dismiss,--^Keasbey and Mattison i! Company (hereinafter K & M) was a manufacturer and distributor j! ii of asbestos and asbestos-containing products. From the late 1950's until 1962, K & M was the exclusive U.S. distributor of Sprayed Limpet Asbestos, manufactured by Defendant Turner & i Newall, PLC (hereinafter T & N).K & M established a nation-wide i system of ditribution for this product by entering into agree- ;! ments with local distributors to serve portions of K & M's territory. National Asbestos Company, Inc. (hereinafter LAW OFFICES SHCRAFT & GEREL SUITE 700 OOO L STREET. N. W. iHINGTON. D. C. 20036 National) was K & M's sublicensee for the Washington, D.C. area ; ! during this period. Plaintiffs submit that defendant Nicolet, 202*783-6400 SUITE 220 >60 KENMORE AVENUE EXANDRIA. VA. 22304 703*791-7400 SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE )CKVILLE. MD. 20852 301*7703737 i Inc., a manufacturer of asbestos and asbestos-containing i > I | i products, is the corporate successor to K & M and therefore the | jurisdictional contacts of K S M are properly imputed to I ! Defendant Nicolet, Inc. ARGUMENT SUITE fOI 1ETRO 400 BUILDING \ As this Court's jurisdiction has been challenged by ANDOVER. MD. 20785 Defendant Nicolet, the burden rests with the plaintiffs to 301-450-8400 SUITE 80S ] establish facts upon which jurisdiction can be based. | However, AST BALTIMORE STREET | LTIMORE. MD. 21202 301-530-1 !22 * -- Plaintiff hereby incorporates by reference its Brief in Opposition to Turner & Newall PLC's Motion to Dismiss filed in the instant case. _9_ this burden is met if the plaintiff makes a prima facie showing of personal jurisdiction. Lott v. Burning Tree Club, Inc. 516 F. Supp. 913, 915 (D.D.C. 1980). Moreover, in reviewing the ! ;i record, the Court should take as true the allegations of the : Complaint, except as controverted by the movant's affidavits. I! Additionally, the party asserting jurisdiction is entitled to jj the resolution in its favor of all disputes concerning relevant ji facts presented in the record. Brown v. Flowers, Inc. 688 F.2d ij 328, 332 (5th Cir. 1982). In their Complaint, Plaintiffs I; !; allege: "Nicolet, Inc. is the successor-in-interest to ji Keasbey and Mattison Company ..." Complaint at 1[5(H) (2). ji |j Defendant Nicolet has not attempted to controvert this allegation ji in its moving papers. Therefore, for purposes of this motion i| the Court must accept as true Plaintiffs' allegation that Nicolet !| is successor-in-interest to K & M. In diversity actions, such i1 as the instant case, a federal court enjoys jurisdiction over a LAW OFFICES 3HCRAFT a GEREL SUITE 700 300 L STREET. N. W. HINGTON. O. C. 20036 i; non-resident defendant to the extent permitted by the long-arm statute of the forum state. --2/ United States v. First 202*763.6400 SUITE 220 60 KENMORE AVENUE EXANDRIA. VA. 22904 703*751*7400 ' National City Bank, 379 U.S. 378 (1965). In addition, the i; ji assertion of jurisdiction over the non-resident defendant must | be consistent with the due process requirements of the Fourteenth SUITE 1002 >N CENTRAL PLAZA ; 300 ROCKVILLE PIKE CKVILLE. MD. 20852 |l Amendment, World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980). |! ;! Plaintiffs submit that the District of Columbia long-arm 301*770 3737 ; statute, D.C. Code 13-423, authorizes the exercise of personal* i SUITE 101 ETRO 400 BUILDING NDOVER. MD. 20785 301-459*8400 i SUITE 805 iST BALTIMORE STREET -TIMORE. MD. 21202 ;j ! 2/ * -- Additionally, Fed. R. Civ. P. 4(e) requires that if no federal statute provides for the manner of service, service is governed by the law of the state in which the district court sits. 301-599*1 122 3- - jurisdiction over Defendant Nicolet is consistent with constitu- i tional due process requirements. i i I. i; The District of Columbia Long-Arm Statute Authorizes The Exercise of Personal Jurisdiction Over Nicolet, Inc. Section 13-423 of the D.C. Code allows a District of Columbia Court to exercise personal jurisdiction over a non-resident defendant to the extent permitted by the due process clause of i; the Fourteenth Amendment. Environmental Research International, i j Inc, v. Lockwood Green Engineers, 355 A.2d 808 (D.C. App. 1976). LAW OFFICES SHCRAFT & GEREL SUITE 700 'OOO L STREET. N. W. SHINGTON. D. C. 20036 ------- 202*7836400 SUITE 220 660 KENMORE AVENUE -EXANDRIA. VA. 22304 703*781-7400 SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE OCKVILLE. MD. 20892 301-770.3737 SUITE lOt 4ETRO 400.BUILDING ANDOVER. MD. 20789 j The I j! j| i| ij I' , ! I , ii 1 j i | ! ' ! j I 1| ! j 1 ' i statute provides in pertinent part: (a) A District of Columbia court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a claim for relief arising from the person's - (1) transacting any business in the District of Columbia; (2) contracting to supply services in the District of Columbia; (3) causing tortious injury in the District of Columbia by an act or omission in the District of Columbia; (4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia; (5) having an interest in, using, or possessing real property in the District of Columbia; (6) contracting to insure or act as surety for or on any person property, or risk, contract, obligation, or agreement located, executed, or to be performed within the District of Columbia at the time of contracting, unless the partiesotherwise provide in writing; . . . 301-490.8400 SUITE 80S ;AST BALTIMORE STREET | \LTIMORE. MD. 21202 ---------------- i 30I.SS9-1 122 I * (b) When jurisdiction over a person is based solely upon this section, only a claim for relief arising from acts enumerated in this section may be asserted against him. 4- - Section 13-423(a) consists of six subsections, each of i, | which focuses on certain types of conduct that make non-resident i | defendants amenable to suit in the District of Columbia. i: Plaintiffs submit that Nicolet is subject to this Court's ;! jurisdiction under subsections (a) (1) and (a) (4) of the statute. A. This Court Has Jurisdiction Over Nicolet Under D.C. Code ; Section 13-423(a)(1) Since K & M Transacted Business - Within the District of Columbia By Shipping Asbesto~s- Containing Products To An Intermediary With The Expectation That The Intermediary Will Distribute The Goods In A Region That Includes The District Of Columbia Under D.C. Code 13-423(a)(1) to acquire jurisdiction over ! Nicolet, requires a showing that K & M transacted business in Ii!! I! the District of Columbia and as a result of that business the jj jj plaintiff was injured. In Stabiliserungsfonds Fur Wein v. Kaiser Stuhl Wine j! Distributers, 647 F.2d 200 (D.C. Cir. 1981), a trade mark ^ infringement action brought by German wine producers against an LAW OFFICES 5HCRAFT A GEREL SUITE 700 700 L STREET. N. W. jMINGTON. D. C. 20036 :: Australian wine producer that was distributing its wine in the 1 eastern half of the United States through an American subsidiary corporation based in New York, the Court of Appeals held that 202-783.6400 SUITE 220 60 KENMORE AVENUE CXANDRIA. VA. 22304 703-751 >7400 the Australian defendant was subject to personal jurisdiction in ; the District of Columbia pursuant to subsections (a)(1) and (a)(4) 1 of the District of Columbia long-arm statute. The court stated: SUITE 1002 )NE CENTRAL PLAZA : 300 ROCKVILLE PIKE CKVILLE. MD. 20852 301**770 3737 j SUITE 101 ETRO 400 BUILDING NDOVER. MD. 20765 301-459.0400 SUITE 805 'ST BALTIMORE STREET LTIMORE. MD. 21202 30U539.I 122 | * We are convinced that when the "transacting any business" language is read to extend to the limits of due process, it encompasses a case like the present one where a nonresident defendant ships goods to an intermediary with the expectation that the intermediary will distribute the goods in a region that includes the District of Columbia. While [the Australian wine producers] have not personally entered the District to conduct business, they have given one importer Peartree, the exclusive authority 5- - to sell their wine in this forum and have persistently delivered wine to that importer. They have never attempted to curtail Peartree's authority to distribute wine here, and Peartree has succeeded in selling cases of wine on several occasions over a span of years to at least one District of Columbia retailer. [The Australian wine producers] have thus chosen a course of conduct that renders sales of their wine not merely foreseeable, but affirmatively welcomed. Unquestionably, they have a stake in and expect to derive benefits from, a market for their goods in the District. (Emphasis added, footnote jj omitted) . 11 |! Id. at 204-205. j. The plaintiffs submit that this case is dispositive of the jj issue at bar. From the late 1950's until 1962, K & M had the exclusive jj right to use and distribute T & N's Sprayed Limpet Asbestos j: product and to use T & N ' s Limpet application machinery in LAW OFFICES jHCRAFT a GEREL SUITE 700 J00 L STREET. N. W. HINGTON. D. C. 20036 202*7 83*6400 SUITE 220 60 KENMORE AVENUE EXANDRIA. VA. 22304 ;i the United States. K & M entered into a sub-licensee agreement i, i; with National authorizing National to distribute and sell Limpet jj in the District of Columbia. As in Stabilserungsfond Fur Wein, while K & M did not r ii i; personally enter the District to conduct business, K & M gave its !j sublicensee. National authority to sell Limpet in this forum. 703-751-7400 SUITE 1002 j| Indeed, K & M encouraged the sale and use of this product in ! iNE CENTRAL PLAZA j 300 ROCKVILLE PIKE j j the District of Columbia by entering into the sublicense _____CKVILLE. MD. 20852 301-770 3737 SUITE 101 ETRO 400 BUILDING 1 i I agreement with National, a local spray insulation application II j ! contractor, thereby permitting this company to service the ' NDOVER. MD. 20785 | j District of Columbia market for Limpet. K & M thus assured 301-459*8400 SUITE 80S I the use of Limpet within the District of Columbia. j .ST BALTIMORE STREET | LTIMORE. MD. 21202 301-539*1 122 6- - Plaintiff Mr. McDaniel was exposed to K & M's Limpet asbestos product while employed in the District of Columbia. The plaintiff's injury subsequently manifested itself in the !i form of an asbestos-related pulmonary disease. Plaintiffs submit that as the record establishes, K & M l ! distributed Sprayed Limpet Asbestos to an intermediary with the ii expectation that the intermediary would distribute Limpet !i j! products in the District of Columbia, K & M has clearly "trans- ii || acted business" in the District of Columbia within the meaning i| : of D.C. Code Section 13-423(a)(1) and defendant Nicolet is j; therefore amenable to suit in the District on the claims of i: the plaintiffs arising from Mr. McDaniel's exposure to || ;; Sprayed Limpet Asbestos. LAW OFFICES SHCRAFT a GEREL SUITE 700 -OO0 L STREET. N. W. SHINGTON. O. C. 20036 B. This Court Has Jurisdiction Over Nicolet, Inc. Under D.C. Code Section 13-423(a)(4) Since the Plaintiff Sustained A Tortious Injury Within The District Of Columbia Caused By K & M Acts or Omissions Outside The District and K & M Derived Substantial Revenue From Limpet Used In The District Of Columbia.* 4 Additionally, defendant Nicolet is subject to the juris- 202-783*6400 ; diction of this court by virtue of 13-423 (a) (4) which provides SUITE 220 560 KENMORE AVENUE .EXANDRIA. VA. 22304 703-751-7400 SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE JCKVILLE. MD. 20852 301-770-3737 i; for jurisdiction over a non-resident defendant: (4) causing tortious injury in the District of Columbia by an act or omission outside the District of Columbia if he regularly does or solicits business, engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed, or services rendered, in the District of Columbia. SUITE 101 -1ETRO 400 BUILDING ANDOVER. MD. 20785 30 I -458-8400 This section sets forth three requirements which must be ' met: (1) tortious injury in the District; (2) act or omission SUITE 805 AST BALTIMORE STREET ! .LTIMORE. MD. 21202 by defendant outside the District; and (3) one of the following 301-539-1 122 7- - "minimum contacts" with the District -- regularly doing business, derivation of substantial revenue, or engaging in any other persistent course of conduct. i 1 It is well settled that where jurisdiction is based on !j ij 13 D.C. Code S423 (a) (4), plaintiffs "need not show that the ii |; injury in the District was directly related to the [defendant's] li actual business solicitation, course of conduct, or derivation of revenue." Gatewood v. Fiat, 617 F.2d 820 (D.C.Cir. 1980). Further, this section of the Code "does not require that the goods be sold in the District of Columbia." Id. at 827. Thus, the use of Nicolet's asbestos products in the District, even if the asbestos was supplied by an outside (non-D.C.) contractor, I ji is sufficient to satisfy the "minimum contacts" requirement. Id. II || The record establishes that the plaintiff was exposed to ji Sprayed Limpet Asbestos distributed by K & M while working in ji the District of Columbia. The plaintiff sustained tortious injuryi LAW OFFICES SHCRAFT ft GEREL SUITE 700 OOO L STREET. N. W. SHJNGTON. D. C. 20036 j- when he was exposed to Limpet ;; Insurance Company of America, asbestos 667 F.2d fibers. Keene Corp. v. 1034, 1046 (D.C. Cir. 202*783*6400 : 1981). The plaintiff's injury subsequently manifested itself j SUITE 220 >60 KENMORE AVENUE .EXANDRIA. VA. 22304 703*751*7400 j; in the form of an asbestos-related pulmonary disease. The plaintiff's injuries were caused by the tortious conduct of SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE 3CKVILLE. MD. 20652 301*770 3737 SUITE 101 1ETRO 400 BUILDING ANDOVER. MD. 20765 301 *459*8400 j; K & M outside the District of Columbia. K & M, located in Ambler,: j PA, distributed Limpet from outside of the District of Columbia, ii a-.product which was unreasonably dangerous and defective. I: ji K & M also failed to place a warning on the Limpet product, ij advising of of its potential harmful effects, before distributing : SUITE 805 I j the AST BALTIMORE STREET LTIMORE. MD. 21202 product in the District. In strict liability, a distributor 301-536*1 122 8- - of unreasonably dangerous and defective products is liable in the same manner as.is the manufacturer of the product. Barth v. B. F. Goodrich Tire Co., 265 Cal. App.2d 228, 71 Cal.Rptr. 306. I i.*1 Accordingly, the first two requirements of subsection (a) (4) - that j! the plaintiff suffered a tortious injury within the District II of Columbia caused by K & M's acts or omissions outside of the |i |i District are met in this case. i ij j The third requirement of 13-423(a) (4) is satisfied by !i 11 defendant Nicolet's (and/or K & M's) derivation of substantial |! revenue from the use of its products in the District of Columbia. j! || Plaintiff contends that the facts now in the record show the 'I defendant Nicolet has derived substantial revenue from serving !; the market for its products in the District of Columbia.--3 / ii li Nicolet has admitted selling its products directly into Ii the District of Columbia. See Musselman Affidavit. From 1971 to 1981 Nicolet's own calculations show revenue of $5,648.65 LAW OFFICES SHCRAFT ft GEREL SUITE 700 000 L STREET. N. W. SHINGTON, D. C. 20036 I; from direct sales into the District of Columbia. Id I The U.S. Court of Appeals has specifically rejected the 202*703.6400 ; percentage approach to determining substantial revenue. SUITE 220 60 KENMORE AVENUE EXANORIA. VA. 22304 703*751*7400 Ii Stabilisierungsfonds Fur Wein v. Kaiser Stuhl Wine Distributors j| Pty. Ltd. , 647 F.2d 200, 206 (D.C. Cir. 1981). The court SUITE 1002 j; concluded that the substantial revenue test may be satisfied ONE CENTRAL PLAZA 1 300 ROCKVILLE PIKE >CKVILLE. MD. 20852 --3/ Plaintiff contends that these facts are sufficient to 301-770.3737 establish Nicolet's requisite contact with the forum. However, SUITE 101 ;ETRO 400 BUILDING I if this court should find these contacts insufficient, plaintiff I respectfully requests that it be allowed to pursue further 'VNDOVER. MD. 207B5 i discovery to establish the necessary jurisdictional base. In 301*459*6400 ; situations where a defendant has made a motion to dismiss under : Fe3. R. Civ. Pro. 12(b), plaintiff should be allowed to take SUITE 005 AST BALTIMORE STREET LTIMORE. MD. 21202 301-539* 1122 additional discovery on the issues of fact raised by the motion. See H.L. Moore Drug Exch., Inc, vs. Smith, Kline & French Laboratories, 384 F.2d 97 (2d Cir. 1967); River Plate Corp. v. Forestal Land, Timber & Ry. Co., 185 F.Supp. 832 (S.N.Y. 1960). _O_ "even when the amount of locally derived revenue is small in absolute and percentage terms ..." Id. Accordingly the court found that even though the revenue the defendant obtained from sales of its product in the District of Columbia was insubstantial in absolute and percentage terms, it nevertheless was substantial because it exceeded the District of Columbia's ij !: per capita share of substantial nationally derived revenue. Id. ;i ! One crane out of an annual output of eighteen has been j held to be substantial revenue. Liberty Mutual Insurance Co. v. America Pecco Corporation, 334 F.Supp. 522 (D.D.C. 1971). In j construing a similar provision, a Massachusetts court concluded i| |j that $5,000 in revenue from sales into Massachusetts constituted || substantial revenue. Mark v. Obear & Sons, 313 F.Supp. 373 j (D.Mass. 1970). il ij While it is a necessarily imprecise standard, these cases [i i. provide sufficient guidance to determine that defendant Nicolet LAW OFFICES SHCRAFT a GEREL SUITE 700 2000 L STREET, N. W. SHINGTON, D. C. 20036 202-703-6400 |i has derived substantial revenue from direct sales into the II ij || District of Columbia. Its receipts of $5,648.65 fall clearly || within the guidelines of these cases. j| SUITE 220 660 KENMORE AVENUE -EXANDRIA. VA. 22304 703-751-7400 | Defendant Nicolet's method of calculating revenues derived j i from the use of its product in the District of Columbia has SUITE 1002 ONE CENTRAL PLAZA : 1300 ROCKVILLE PIKE OCKVILLE. MD. 20652 ------- 301-770-3737 SUITE 101 4ETRO 400. BUILDING ANDOVER. HD. 20765 301-456-6400 SUITE 805 j resulted in a serious under valuation of its revenues so derived. j | j See Defendant Nicolet, Inc.'s Motion to Dismiss. First, the ' ! i | figures cover only the years 1970 to the present. Most certainly II | ] j there were sales prior to 1970 from which Nicolet derived I i j revenue from the District of Columbia. These past sales would j lI I I be pertinent for establishing jurisdictional contacts during the AST BALTIMORE STREET | ALTIMORE. MD. 21202 ' [ 301-539-1122 j -10- ; period of plaintiff's asbestos exposure in the instant case. Additionally, Nicolet is ignoring its predecessor Keasbey & Mattison's contacts with and/or revenues from the District. i ;i As successor-in-interest, K & M's jurisdictional contacts are : properly imputed to Defendant Nicolet. These revenues are i: likewise relevant for determining jurisdictional contacts. Finally, in its motion and affidavit Nicolet considers j only direct sales into the District of Columbia. Whether the sales are direct or are indirect is irrelevant under the D.C. statute. Gatewood v. Fiat, 617 F.2d 820 (D.C. Cir. 1980). The i: j! plain language of the statute permits jurisdiction where the | defendant derives substantial revenue from goods used, not goods sold, in the District. Id. Calculation of the value of ! only those products sold directly into the District also results in serious undervaluing of the revenue derived from goods used in the District, especially given the unique geographical LAW OFFICES SHCRAFT & GEREL SUITE 700 000 L STREET. N. W. SHINGTON, D. C. 20036 | characteristics of the District of Columbia. Plaintiff contends that just the revenue from direct sales 202-783.6400 ! as enumerated by Nicolet constitutes substantial revenue under SUITE 220 560 KENMORE AVENUE .EXANDRIA. VA. 22304 703-791 -7400 : 13-423(a)(4). With further discovery the chain of distribution |ii ! j for Nicolet's products will become clear, and additional revenue SUITE 1002 ONE CENTRAL PLAZA | based on 1300 ROCKVILLE PIKE )CKVIL_L_E.__M_D_. _20_0_9_2___I products the actual revenue in the District of derived from the Columbia will be use of defendant's revealed. 301-770 3737 SUITE lOI | 1ETRO 400 BUILDING ANDOVER. MD. 20789 --------- j ! j 301*499-8400 SUITE 809 AST BALTIMORE STREET I !I j LTIMORE. MD. 21202 l II. The Exercise of Jurisdiction Over Nicolet, Inc. Comports With Constitutional Due Process Standards. The District of Columbia long-arm statute is to be interpreted so as to confer jurisdiction to the constitutional 30U939-1 122 -11- limit. Environmental Research International v. Lockwood Greene jj ' "" " j Engineers, 355 A.2d 808 (D.C. App. 1976). Thus, as Nicolet's conduct renders it amenable to suit under the District of Columbia long-arm statute, D.C. Code S13-423, plaintiffs submit that the exercise of jurisdiction over Nicolet is therefore constitutionally proper. Gatewood v. Fiat, supra at 825. Nicolet's reliance on World-Wide Volkswagen v. Woodson, 444 U.S. 286 (1980) is misplaced. Indeed an examination of the ;i:i i| facts of the instant case reveals that the exercise of ! jurisdiction over Nicolet is constitutionally proper. ij j The Supreme Court held in World-Wide Volkswagen that due |process requires "the defendant's conduct and connection with | ! the forum State be such that he should reasonably anticipate jj being hauled into court there." Id. at 291-92. I! of this point the Court observed: In explanation LAW OFFICES .SHCRAFTA GEREL SUITE 700 2000 L STREET. N. W. \SHINGTON, D. C. 20036 202*763*6400 SUITE 220 -660 KENMORE AVENUE LEXANDRIA. VA. 22304 703*751-7400 SUITE 1002 ONE CENTRAL PLAZA 1 1 300 ROCKVILLE PIKE OCKVILLE, MD. 20652 301*770.3737 SUITE 101 METRO 400 BUILDING ^ANDOVER. MD. 20768 301*489*6400 SUITE 608 CAST BALTIMORE STREET ALTIMORE. MO. 21202 301*839*1122 [I]f the sale of a product of a manufacturer or distributor ... is not simply an isolated occurrence, but arises from the efforts of the manufacturer or distributor to serve, directly or indirectly, the market for its product in other States, it is not unreasonable to subject it to suit in one of those States if its allegedly defective merchandise has there been the source of injury to its owner or to others. The forum State does not exceed its power under the Due Process Clause if it asserts personal jurisdiction over a corporation that delivers its products into the stream of commerce with the expectation that they will be purchased by consumers in the forum state. Cf. Gray v. American Radiator & Standard Sanitary Corp., 22 111.2d 432, 176 N.E.2d 761 (1961). Id. at 297-98. -12- As the Seventh Circuit Court of Appeals recently observed in Nelson v. Park Industries, 717 F.2d 1120, 1125-26 (7th Cir. 1983) the Supreme Court in World-Wide Volkswagen, recognized jl i| the distinction among the various entities that can compose il a distribution system of a product: 'j jl :| ! |! j; | | I n 'I | j| j! j: j; |j '| LAW OFFICES vSHCRAFT a GEREL SUITE 700 2000 L STREET. N. W. SHINGTON. D. C. 20036 The two defendants in World-Wide Volkswagen who were not amenable to Oklahoma jurisdiction were at the end of the automobile's distribution system. The scope of the foreseeable market served by those defendants and of the benefits those defendants derived from the sale of the product was narrow. In contrast, the relevant scope is generally broader with respect to manufacturers and primary distributors of products who are at the start of a distribution system and who thereby serve, directly or indirectly, and derive economic benefit from a wider market. Such manufacturers and distributors purposely conduct their activities to make their product available for purcahse in as many forums as possible. For this reason, a manufacturer or primary distributor may be subject to a particular forum's jurisdiction when a secondary distributor and retailer are not, because the manufacturer and primary distributor have intended to serve a broader market and they derive direct benefits from serving that market. (citations omitted). K & M distributed Sprayed Limpet Asbestos far from being 202-703*6400 i| a local retailer or secondary distributor with a narrow market, SUITE 220 660 KENMORE AVENUE LEXANDRIA. VA. 22304 703*751 *7400 SUITE 1002 ONE CENTRAL PLAZA 1 1300 ROCKVILLE PIKE OCKVILLE. MD. 20652 301-770 3737 SUITE 101 METRO 400 BUILDING -ANDOVER. MD. 20785 301 <*439*6400 ;! K & M attempted to serve, and derived benefit from serving, i; |j a nation-wide market for the Limpet product. Through its || agreements with local distributors, K & M knowingly maintained jj a distribution network which was designed and expected to serve !! ji t^ie market for Limpet in every State in the Union including the ji District of Columbia. In Stabilisierbingsford Fur Wein v. ; Kaiser the Court of Appeals observed that the exercise of i SUITE 605 ij jurisdiction over the Australian wine producers was constitutionally AST BALTIMORE STREET ALTIMORE. MD. 21202 30 1*539* 1122 -13- proper since: The Australian defendants thus have arranged for introduction of their wine into the United States stream of commerce with the expectation (or at least the intention and hope) that their products will be shelved and sold at numerous local outlets in diverse parts of the country. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S. Ct. 559, 567-568, 62 L.Ed.2d 490 (1980);0swalt v. Scripto, Inc., 616 F.2d 191, 199-200 (5th Cir. 1980). As defendants recognize, therefore, the links between the claims in suit and the Australian defendants' arrangements to develop and serve a market in the United States make the district court here a fair and reasonable forum, within due process constraints, for the actions plaintiffs have brought. (footnote omitted) ! Id. at 2 03. 11 !j The record in || jj predecessor K this case establishes & M introduced Limpet that into Defendant Nicolet's the stream of commerce li | with every reason to know and expect that its product would ! arrive, and in fact did arrive, in the District of Columbia. I! !j Therefore, the exercise of jurisdiction over Defendant Nicolet !j LAW OFFICES SHCRAFT A GEREL jj is consistent with the requirements of the due process clause SUITE 700 i :000 L STREET. N. W. jj of the Fourteenth Amendment. jiSHINGTON. D. C. 20036 202-703-6400 j Indeed the record in this case establishes that Defendant SUITE 220 660 KENMORE AVENUE -EXANDRIA. VA. 22304 703-751-7400 j Nicolet had actual knowledge that its Limpet product was being i! j used and distributed in the District of Columbia. It entered SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE OCKVILLE. MD. 20852 j into an agreement with National Asbestos Company for the express purpose of distributing Limpet in the District of Columbia. 301-770 3737 Thus, not only did K & M place Limpet into the stream of commerce SUITE 101 4ETRO 400 BUILDING with the expectation it would reach the District of Columbia, ANDOVER. MD. 20785 j 301-459-8400 Nicolet's predecessor knew to a certainty that it was serving SUITE 805 ! AST BALTIMORE STREET j ALTIMORE. MD. 21202 j the District of Columbia market for its Limpet product. 301-539-1122 -14- Clearly the exercise of jurisdiction over Defendant Nicolet comports with the due process requirements of the Fourteenth Amendment in this case. CONCLUSION For the foregoing reasons, Plaintiffs respectfully submit that defendant Nicolet's Motion to Dismiss should be denied. Respectfully submitted, ASHCRAFT & GEREL LAW OFFICES ASHCRAFT ft GEREL SUITE 700 2uOO L STREET. N. W. VASHINGTON. D. C. 20096 202-703-6400 SUITE 220 4660 KENMORE AVENUE ALEXANDRIA. VA. 22904 703-791*7400 SUITE 1002 ONE CENTRAL PLAZA I 1300 ROCKVILLE PIKE ROCKVILLE. MD. 20692 901*770-3797 SUITE 101 METRO 400 BUILDING LANDOVER. MD. 20769 901 *496*6400 SUITE BOB 0 EAST BALTIMORE STREET BALTIMORE. MD. 21202 301*990*1122 Suite 700 Washington, D.C. 20036 (202) 783-6400 Attorneys for Plaintiffs I -15- CERTIFICATE OF SERVICE I HEREBY CERTIFY that a copy of the foregoing was mailed, postage prepaid, this ^<3^i day of January, 1984 to: I t LAW OFFICES \SHCRAFT 6 GEREL SUITE 700 2000 L STREET, N. W. i; 11 !ij! j; | \SHINGTON. D. C. 20036 | 202*763*6400 SUITE 220 1660 KENMORE AVENUE .] j! LEXANDRIA. VA. 22304 -- 703*751 *7400 SUITE 1002 ONE CENTRAL PLAZA I I 300 ROCKVILLE PIKE iOCKVILLE. MD. 20052 i| ;| j| jj || Ij I | 301*770 3737 SUITE 101 | !] |j METRO 400 BUILDING jj HANDOVER. MD. 20785 [I _____________________ii 301 >450*8400 jl ii SUITE 805 I|j' EAST BALTIMORE STREET 1 lALTIMORE. MD. 21202 301*538*1 122 Michael P. Chervenak, Esquire FORD & O'NEILL 17 West Jefferson Street Rockville, Maryland 20850 Attorney for Armstrong World Industries, Inc. Kevin J. McCarthy, Esquire Charles E. Gallagher, Jr., Esquire O'MALLEY, MILES, FARRINGTON & MCCARTHY 99 Commerce Place Upper Marlboro, Maryland 20772 Attorneys for A. C. & S H. Patrick Donohue, Esquire DONAHUE, EHRMANTRAUT & MONTEDONICO, . CHARTERED 51 Monroe Street Suite 700 Rockville, Maryland 20850 Attorneys for Atlas Turner, Inc. and Bell Asbestos Mines, Ltd. H. Emslie Parks, Esquire Leland S. Van Koten, Esquire Suite 1012 409 Washington Avenue Towson, Maryland 21204 Attorneys for Celotex Corporation David P. Durbin, Esquire CARR, JORDAN, COYNE & SAVITS Suite 500 1030 15th Street, N.W. Washington, D.C. 20005 Attorney for Celotex Corporation J. W. Roberts, Ltd. c/o President Chorley New Road Horwich, Bolton, England LAW OFFICES SHCRAFT ft GEREL SUITE 700 !000 L STREET. N. W. SHINGTON. D. C. 20036 I!' | 202*763*6400 SUITE 220 660 KENMORE AVENUE -EXANDRIA. VA. 22304 703*751 >7400 SUITE 1002 ONE CENTRAL PLAZA 1300 ROCKVILLE PIKE OCKVILLE. MD. 208S2 301-7703737 SUITE 101 4ETRO 400 BUILDING ANDOVER. MD. 20765 301 *456*8400 SUITE 605 AST BALTIMORE STREET \LTIMORE. MD. 21202 301*536*1 122 Louis R. Moffa, Jr., Esquire SCHNADER, HARRISON, SEGAL & LEWIS 1111 - 19th Street, N.W. Washington, D.C. 20036 Attorney for National Gypsum Company R. G. Guziak, Esquire BRAULT, GRAHAM, SCOTT & BRAULT 1314 - 19th Street,. N.W. Washington, D.C. 20036 Attorney for Nicolet, Inc. Hopewell H. Darneiile, III, Esquire BOWMAN, CONNER TOUHEY & PETRILLO, P.C. 2828 Pennsylvania Avenue, N.W. Washington, D.C. 20007 Attorney for Turner & Newall PLC and Turner & Newall, Ltd. Brock R. Landry, Esquire Keck, Mahin & Cate 1333 New .Hampshire Avenue, Suite 1220 Washington, D.C. 20036 Attorney for United States N.W. Gypsum Co. Patrick J. Attridge MACLEAY, LYNCH, BERNHARD & GREGG 51 Monroe Street Suite 806 Rockville, Maryland 20850 Attorneys for United States Mineral Products Company Edward J. Lopata, Esquire CARR, JORDAN, COYNE & SAVITS 1030 Fifteenth Street, N.W. Suite 500