Jurisdictional Discovery Allowed Over Successor Entity in Take-Home Exposure Case

U.S. District Court for the Eastern District of Louisiana, March 31, 2021

In October 2019, plaintiff Stephen Legendre, filed a lawsuit alleging that he contracted mesothelioma in September 2019. He alleged that his mesothelioma was caused by take-home exposure to asbestos from his father who worked at Avondale from 1943 to 1945.

Avondale removed the case to federal court, and thereafter filed a third-party claim against Mestek, Inc, as the successor corporation to L.J. Wing Manufacturing Company, which had allegedly supplied forced draft blowers and turbines to Avondale during the relevant time period. In its Answer, Mestek, Inc., denied it had acquired liability for L.J. Wing’s products. Instead, Mestek averred that Tutco, LLC f/k/a Tutco, Inc. had acquired such assets and liabilities. Based upon the foregoing, Avondale filed a third-party Complaint adding Tutco as a third-party defendant.

Tutco filed a motion to dismiss for lack of personal jurisdiction asserting that it is a Pennsylvania corporation with its place of business in Tennessee. Tutco argued that Avondale failed to allege facts that would support either general or specific personal jurisdiction stating that it does no business in Louisiana and has no other contacts with Louisiana. Further, Tutco argued Avondale failed to establish a prima facie case that minimum contacts existed.

“When a non-resident defendant challenges personal jurisdiction in a motion to dismiss, the plaintiff bears the burden of proving that personal jurisdiction exists. The plaintiff need only make a prima facie showing of personal jurisdiction. In determining whether the plaintiff has made a prima facie showing of personal jurisdiction, the district court must take the allegations of the complaint as true, except as controverted by opposing affidavits, and all conflicts in the facts must be resolved in favor of the plaintiff.”

Further, a court may exercise specific jurisdiction over a non-resident defendant “in a suit arising out of or related to the defendant’s contacts with the forum.” The Fifth Circuit applied a three-step analysis for jurisdiction: ‘(1) whether the defendant has minimum contacts with the forum state, i.e., whether it purposely directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.’”

Avondale asserted that the minimum contacts of a predecessor corporation may be imputed to the successor corporation to support personal jurisdiction. Here, the Third-Party Complaint alleged that Tutco is the successor-in-interest to L.J. Wing. The 1994 Asset Purchase Agreement that Avondale provided allegedly showed that Tutco purchased certain assets and assumed the liabilities of Wing Draft Inducer Company, which Avondale asserted was the same company that provided the turbines and forced draft blowers to Avondale in 1943. Accordingly, Avondale argued jurisdiction could be established against Tutco.

Here, the court found that Avondale made a preliminary showing of personal jurisdiction by alleging with reasonable particularity the possible existence of the requisite contacts by virtue of the corporate successor doctrine. Accordingly, the court granted Avondale’s request to conduct jurisdictional discovery.

Read the full decision here.