Federal Court Dismisses Lawsuit, Rules that by ces12174

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									        Dinsmore Victory in Dismissing Lawsuit vs. European
                             Company:
  Federal Court Finds European Manufacturer’s Practices and Forms
                     Prevent Jurisdiction in Ohio
                      by Richard Porotsky, Esq. and Harvey Jay Cohen, Esq.
                                    Dinsmore & Shohl LLP

        Like many overseas companies, a German Client of Dinsmore & Shohl has always tried to
keep its operations and management within the borders of its home state. The German Client, who
makes tooling for the automobile industry, has also sought to avoid the hassle and expense of legal
proceedings in foreign venues.

       Recently, however, the German Client was sued in the United States District Court for the
Northern District of Ohio. Some of the client's tooling was being used in Ohio by an Ohio
manufacturer involved in the automobile industry. The Ohio manufacturer alleged that the tooling
was defective, claiming damages in excess of $5 million. With Dinsmore & Shohl assisting the
German Client in disputing jurisdiction, the client obtained a victory in February 2008 in its initial
motion to dismiss. The Court dismissed the claims for lack of personal jurisdiction.

         In its due process analysis, the Court concluded that the Plaintiff, the Ohio manufacturer,
“has failed to establish that [the German Client] purposely availed itself of the benefits and
protections of Ohio’s laws.” The Court instead cited the client's manufacture and delivery of the
tooling in Germany, with product acceptance by the Ohio manufacturer in Germany. “The mere
existence of a contract [between the German Client and an Ohio company] is insufficient to confer
personal jurisdiction,” stated the Court. Although the German Client sent correspondence and even
certain product samples to Ohio, this was “only in response to purchase orders [that the Ohio
manufacturer] sent,” and these contacts were deemed to be “random, fortuitous contacts” under the
law. Later visits to Ohio to address alleged problems were not relevant, as those visits did not
proximately cause the alleged defects, which were alleged to be present at the time of initial delivery
in Germany. There was ultimately no evidence and "no indication that [the German client] sought to
exploit Ohio markets." Rather, the German Client "sought to keep its disputes in Germany, as
illustrated by [the client's business] forms’ provisions selecting German law and forums to govern
this dispute."

       For further information, contact Richard Porotsky, Esq. (richard.porotsky@dinslaw.com),
who represented the German Client in this commercial litigation matter, or contract Harvey Cohen
(harvey.cohen@dinslaw.com), who leads the International Trade and Transactions Practice Group at
Dinsmore & Shohl.




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