By Jenna Marie Stupar on October 5, 2016

courtOn August 18, the Third Circuit reversed a ruling in the District Court of Pennsylvania that dismissed an asbestos suit against corporate defendants the Matson Navigation Company, Inc. (“Matson”) and American President Line, Ltd. (“American”) for lack of personal jurisdiction. In re: Asbestos Products Liability Litigation (No. VI), Nos. 15-1387, 15-1388 & 15-1389 (3d. Cir. 2016).

The case was originally filed with several others in the late 1980s in Ohio, and became consolidated in the Northern District of Ohio’s Maritime Docket. Several of the defendants in the case, including Matson, moved for dismissal on the grounds of lack of personal jurisdiction.  The judge agreed that the court lacked personal jurisdiction, but rather than dismiss the cases completely, he ruled that they should be transferred to appropriate venues that could exercise personal jurisdiction over the defendants.  The judge deferred issuing an order on the transfer.  Instead, the judge allowed plaintiffs to identify courts where personal jurisdiction was proper, and the defendants could decide whether they wanted to transfer, or to waive their personal jurisdiction defenses and litigate in the Northern District of Ohio.  The judge issued two orders memorializing this decision.

The second order stated that the court did not have personal jurisdiction over Matson as it related to three specific plaintiffs. Matson moved to certify the orders for interlocutory appeal in the Sixth Circuit, and to stay proceedings until the appeal was decided.  Matson then filed a “Master Answer” which included lack of personal jurisdiction as an affirmative defense.  American adopted the Master Answer as its own in relation to the three specific plaintiffs.

The consolidated cases were eventually grouped into “clusters” and even “sub-clusters.” The clusters and sub-clusters were to either be transferred to a district court in Michigan, or remain in Ohio.  During a hearing on this issue in 1991, the attorneys for Matson and American stated they objected to transfer one of the clusters to Michigan.  The parties agreed that they would proceed with “these cases” in Ohio instead.

A multi-district litigation for asbestos matters was developed in the Eastern District of Pennsylvania, and the matters were transferred there in 1991. Matson and American opposed the transfer, writing “If transfer is to take place, Shipowner-Defendants request that it be to the Northern District of Ohio.”  Nevertheless, the cases were transferred to the Eastern District of Pennsylvania and laid dormant until 2011 when they were reactivated for pre-trial administration.

In July 2014, the attorneys for Matson and American filed a motion to dismiss for lack of personal jurisdiction, which was granted. The Pennsylvania court reasoned that the defendants had not waived their personal jurisdiction defense because they had raised it initially, raised it again in their Master Answer, and raised it yet again in the hearing in 1991.

The most significant issue was which cases Matson and American had consented to litigate in Ohio at the 1991 hearing. If the plaintiffs’ claims were included in those that were intended to be transferred to Michigan, then the Defendants would not preserve their defense because they had stated at the hearing that they agreed to proceed with “these cases” in Ohio rather than Michigan.  The Pennsylvania court found that the plaintiffs’ claims were not included in the Michigan cluster, reasoning that “these cases” referred to a different cluster.  Thus, the Defendants did not waive their personal jurisdiction defense as it pertained to the three specific plaintiffs.  Therefore, the Eastern District of Pennsylvania dismissed the case for lack of personal jurisdiction.

On appeal, the Third Circuit rejected the reasoning of the district court. The Third Circuit found that the defendants did, in fact, waive their personal jurisdiction defenses as it pertained to the three specific plaintiffs in the 1991 hearing.  Examining the record of the hearing closely, the Circuit Court found that the consent to litigate in Ohio included plaintiffs’ claims and that “these cases” certainly referred to the cluster of cases that were going to be transferred to Michigan, which included plaintiffs. As such, Matson and American had waived their personal jurisdiction defenses as it pertained to these three plaintiffs.  The Third Circuit also pointed out that in their filings opposing transfer to Pennsylvania, the Defendants expressed a desire to have these cases transferred to the Northern District of Ohio, which was also a waiver of personal jurisdiction.  For these reasons, the Third Circuit determined that dismissal was improper, and reversed the decision, keeping plaintiffs’ claims against Matson and American alive.