Rose v. Ferrari N. Am.

1

JEFFREY ROSE, VAN CARLUCCI, ART BARTOSIK and SIXTYSIX CAPITAL, LLC, Individually and On Behalf of All Others Similarly Situated, Plaintiffs, v. FERRARI NORTH AMERICA, INC, FERRARI S.P.A., ROBERT BOSCH, LLC, and ROBERT BOSCH GMBH, Defendants.

Civil Action No. 21-20772(MEF)(CLW)

United States District Court, D. New Jersey

July 31, 2023

AMENDED OPINION AND ORDER

Michael E. Farbiarz, U.S.D.J.

The Plaintiffs sued various companies based on a brake defect. One of the companies has moved to dismiss, arguing the Court does not have jurisdiction.

The motion is denied.

I. Procedural History

This case was initiated during December of 2021, and the Plaintiffs filed an amended complaint in December of 2022.

One of the Defendants named in the amended complaint, Ferrari S.p.A. ("the Defendant"), has moved to dismiss, contending the Court does not have personal jurisdiction.

The Plaintiffs' response: the Court (a) has jurisdiction or (b) should order discovery as to jurisdiction.

II. Analysis

Jurisdictional discovery "should be allowed unless the plaintiff's [jurisdictional] claim is clearly frivolous." Mass. Sch. of L. at Andover, Inc. v. Am. Bar Ass'n, 107 F.3d 1026, 1042 (3d Cir. 1997) (cleaned up). This standard is met when jurisdictional claims "suggest with reasonable particularity the possible existence of the requisite contacts between [the defendant] and the forum state." Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 456 (3d Cir. 2003) (cleaned up).

Here, the Plaintiffs' "claim" is that the Court has "specific" jurisdiction over the Defendant. See Opposition to Motion to Dismiss at 2, 8 n.4.

Is this claim "clearly frivolous"? That is taken up below.

A federal court can exercise personal jurisdiction to the same extent as the state courts of the state where the federal court sits. See Fed.R.Civ.P. 4(k)(1)(A); Daimler AG v. Bauman, 571 U.S. 117, 125 (2014).

In New Jersey, jurisdiction over a defendant not in New Jersey, like the Defendant here, reaches as far as the United States Constitution allows. See N.J. Court Rule 4:4-4; Charles Gendler & Co. v. Telecom Equip. Corp., 102 N.J. 460, 469 (1986); see also Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 96 (3d Cir. 2004) .

Under the United States Constitution:

The [specific jurisdiction] inquiry . . . has three parts. First, the defendant must have purposefully directed [its] activities at the forum. Second, the litigation must arise out of or relate to at least one of those activities. And third, if the prior two requirements are met, a court may consider whether the exercise of jurisdiction otherwise comport[s] with fair play and substantial justice.

O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007) (cleaned up).

[1] Purposeful Availment

As to the first of the three prongs, the defendant must have "purposefully avail[ed] itself of the privilege of conducting activities within the forum state." Ford Motor Co. v. Montana Eighth Jud, Dist. Ct., 592 U.S. __, 141 S.Ct. 1017, 1024 (2021). This requires "deliberate targeting" of the forum. O'Connor, 496 F.3d at 317; see also Ford Motor Co., 141 S.Ct. at 1025.

Here, the "purposeful availment" bar is cleared by enough to allow discovery.

The Defendant makes cars outside of New Jersey. See Cecchi Decl., Ex. D. at P00050;^[1] Amended Complaint ¶¶ 45, 59; Galliera Decl. ¶ 4.^[2] The Defendant then supplies them to another entity, see Cecchi Decl., Ex. D at P00050, Galliera Decl. ¶ 7, Amended Complaint ¶¶ 46-47, 53, whose principal place of business is New Jersey. See Amended Complaint ¶ 46. The New Jersey entity is the "exclusive distributor" of the cars to American dealers (at least when the cars are new) . Id. ¶ 46; accord Galliera Decl. SI 8 (New Jersey entity is "the distributor"); see also Cecchi Decl., Ex. A at P00016-021. During recent years, thousands of the cars have been shipped by the Defendant to the New Jersey entity. See Amended Complaint ¶¶ 45, 53; Cecchi Decl., Ex. D at P00141-47. Most (or many) of the cars are shipped to the New Jersey entity through a New Jersey shipping port. See Cecchi Decl., Ex. D at P00141-47. Some of the cars shipped to the New Jersey entity are sold in New Jersey. See Amended Complaint ¶¶ 46; cf. Galliera Decl. ¶¶ 7-8.

These are purposeful and systematic interactions with New Jersey. Not "random, isolated, or fortuitous" ones. Ford Motor Co., 141 S.Ct. at 1025.

They suggest the "possible existence," Toys "R" Us, Inc., 318 F.3d at 456 (cleaned up), of contacts with New Jersey that add up to "purposeful availment," such that jurisdictional discovery "should be allowed." Mass. Sch. of L. at Andover, 107 F.3d at 1042.

The Court (through another Judge) has come to this conclusion in two recent cases.^[3] The cases are based on closely similar allegations to those at issue here. The cases are well-reasoned. And the cases are consistent with the weight of precedent.^[4] This Court will follow them.

[2] Arise Out Of or Relate to New Jersey Contacts

As to the second of the three specific jurisdiction prongs, a plaintiff can show the complained-of conduct "caus[ed]" the injury, 0'Connor, 496 F.3d at 323, or "relate[d] to" the plaintiff's claim. Ford Motor Co., 141 S.Ct. at 1026; see Hepp v. Facebook, 14 F.4th 204, 207 (3d Cir. 2021); Rickman, 538 F.Supp.3d at 441-42.

Here, only a "related to" theory is in play. See Opposition to Motion to Dismiss at 22-26.

The Court therefore "examines whether any of the defendant's contacts with the forum are relevant to the merits of the plaintiff's claim." O'Connor, 496 F.3d at 319; see also, e.g., id. at 323.

In the operative complaint, the Plaintiffs plead two categories of claims.

The first encompasses nationwide counts I, II, IV, V, VI, and VII, plus analogous state-specific claims. See Amended Complaint ¶¶ 190-206, 218-346. At their core, these claims are based on the allegation that people bought cars that were not as good as they had been led to believe, because the cars' brakes were bad.

As to this category of claims, what customers were told about a car is "relevant to the merits."^[5] O'Connor, 496 F.3d at 319.

And the Defendant is said to have worked with the above-referenced New Jersey entity on these sorts of customer-facing communications.

The Defendant and the New Jersey entity collaborated on "owner's manuals, supplements, warranty booklets, advertisements, and other promotional materials." Amended Complaint ¶ 47. These materials included brochures created by the Defendant and distributed by the New Jersey entity. See id. ¶ 136; see, e.g., Cecchi Decl. Ex. O. Some of the brochures sung the praises of ---------

the allegedly defective brakes. See Amended Complaint ¶¶ 47, 136; Cecchi Decl., Ex. O. And the brochures, along with the other marketing materials, were provided to domestic dealers by the New Jersey entity for the purpose of reaching potential car buyers. See Amended Complaint ¶ 4 7.^[6]

In addition, the Defendant and the New Jersey entity collected and shared consumer data with one another for marketing purposes. See Cecchi Decl., Ex. G at P00996-01004; Amended Complaint ¶ 53.

In short, the Defendant allegedly worked with the New Jersey entity on customer communications that "relate to," O'Connor, 496 F.3d at 317, the Plaintiffs' first set of claims.

The operative complaint also includes a second type of claim, a strict liability claim. See Amended Complaint ¶¶ 207-217. This claim is not, like the others based on an alleged gap between what customers thought would happen (I will get a good car) and what did happen (I got a bad car). Instead, this claim is based solely on what allegedly happened --- I got a bad car (because its brakes are bad).

As to the strict liability claim, defects in the performance of the cars (and their brakes) are "relevant to the merits."^[7]O'Connor, 496 F.3d at 319.

And the Defendant is said to have worked with the New Jersey entity on defects.

A manual for one of the car models at issue directed owners to notify the Defendant about defects. See Cecchi Decl Ex. N at P01361. The same manual said the Defendant, along with the New Jersey entity, could access certain "monitored information" (like crash information). Id. at P01362.

In addition, the Defendant sent personnel to the United States to interact with the New Jersey entity about the relevant brake defects. See Amended Complaint ¶ 53.

And when cars had problems, the New Jersey entity told car dealers to return some car parts directly to the Defendant. See Cecchi Decl., Ex. L at P01282-01297. The Defendant also conducted investigations into certain car problems, the results of which the New Jersey entity then told car owners about. See Cecchi Decl., Ex. B at P00043-44.

In sum, the Defendant allegedly worked with the New Jersey entity to assess and respond to car defects. This "relate[s] to," O'Connor, 496 F.3d at 317, the Plaintiffs' strict liability claim --- much as the Defendant's work with the New Jersey entity to communicate with customers, see above, "relate[s] to" the Plaintiffs' first set of claims.

Taken together, this adequately alleges the "possible existence," Toys "R" Us, Inc., 318 F.3d at 456, of "related to" contacts, such that jurisdictional discovery "should be allowed." Mass. Sch. of L. at Andover, 107 F.3d at 1042.

As before, the point does not need much elaboration --- the Court has recently come to this conclusion, on fairly similar allegations.^[8] [3] Fair Play And Substantial Justice

When the first two specific jurisdiction prongs are met, as here,^uthe defendant hnust present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.'" Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 150 (3d Cir. 1992) (quotin...