X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

MEMORANDUM DECISION AND ORDER I. INTRODUCTION   Currently before the Court is a renewed motion for default judgment under Rule 55(b) of the Federal Rules of Civil Procedure and Rule 55.2 of the Local Rules of Practice for the United States District Court for the Northern District of New York brought by Plaintiffs Meghan Hunter, individually and as parent and natural guardian of M.H., and M.H. (collectively, “Plaintiffs”) against Defendants Shanghai Huangzhou Electrical Appliance Manufacturing Co., Ltd. (“Shanghai Huangzhou Electrical”) and Shanghai Huangzhou Industry Co., Ltd. (“Shanghai Huangzhou Industry,” and together with Shanghai Huangzhou Electrical, the “Shanghai Huangzhou Defendants”) (Dkt. No. 151). The Home Depot and Quality Craft Defendants have filed partial oppositions to Plaintiffs’ renewed motion. (Dkt. Nos. 156-59). For the reasons set forth below, Plaintiffs’ motion is denied without prejudice. II. RELEVANT PROCEDURAL BACKGROUND1 On December 20, 2019, after obtaining a clerk’s entry of default against the Shanghai Huangzhou Defendants for their “failure to appear, plead or otherwise defend” the action, Plaintiffs moved for default judgment against the Shanghai Huangzhou Defendants pursuant to Federal Rule 55(b) and Local Rule 55.2. (Dkt. No. 121). After reviewing Plaintiffs’ motion, the Court found that the Shanghai Huangzhou Defendants had been properly served with the Amended Complaint and had failed to timely answer or otherwise respond, and that Plaintiffs otherwise met the procedural requirements to obtain a default judgment. Hunter, 2020 WL 5258313, at *4, 2020 U.S. Dist. LEXIS 161142, at *9-11. However, the Court nonetheless denied the motion “for the fundamental reason that the Amended Complaint fails to allege facts sufficient for this Court to determine that it may exercise personal jurisdiction over the Shanghai Huangzhou Defendants.” Id. at *5-9, 2020 U.S. Dist. LEXIS 161142, at *11-29 (analyzing personal jurisdiction over the Shanghai Huangzhou Defendants under New York’s long-arm statute and federal due process standards, and finding that the Amended Complaint failed to allege any basis for personal jurisdiction over these Defendants). The Court also expressed concern about whether the Amended Complaint sufficiently stated a claim against the Shanghai Huangzhou Defendants as required for a default judgment, observing that: [A]s with its jurisdictional allegations, the Amended Complaint’s substantive allegations simply refer to “Defendants” as a group, without specifying any actions or omissions by the Shanghai Huangzhou Defendants, including their role in the allegedly tortious design, manufacture, assembly, marketing and sale of the Heater. (Dkt. No. 11, at 6-12). This failure to allege particularized facts regarding the Shanghai Huangzhou Defendants’ conduct would likely render it difficult for the Court to find that Plaintiffs have pled facts sufficient to state a claim against the Shanghai Huangzhou Defendants, were the Court to reach that question. Id. at *10, 2020 U.S. Dist. LEXIS 161142, at *29. Finally, the Court noted that “Plaintiffs have not specified the amount of damages they seek, nor have they submitted affidavits or other documentary evidence from which the Court could determine an appropriate damages award.” Id., 2020 U.S. Dist. LEXIS 161142, at *30. Observing that the “Court may consider evidence outside of the Complaint” in assessing whether it may exercise personal jurisdiction over the Shanghai Huangzhou Defendants, the Court offered Plaintiffs the opportunity to “renew their motion for default judgment by filing, within thirty days, evidence and briefing in support of this Court’s personal jurisdiction over the Shanghai Huangzhou Defendants.” Id. at *9, 2020 U.S. Dist. LEXIS 161142, at *28-29. The Court further instructed that, if they chose to renew their motion, Plaintiffs’ briefing should also “address which cause of action or causes of action in the Amended Complaint are sufficiently pled to state a claim against the Shanghai Huangzhou Defendants,” as well as “the issue of damages.” Id. at *10, 2020 U.S. Dist. LEXIS 161142, at *30. On October 1, 2020, pursuant to the Court’s instructions, Plaintiffs renewed their motion for default judgment by submitting a memorandum of law arguing that the Court may exercise personal jurisdiction over the Shanghai Huangzhou Defendants, along with supporting evidence. (Dkt. No. 151). Plaintiffs’ submission, however, did not include argument regarding the sufficiency of the amended complaint or Plaintiffs’ position regarding damages.2 On November 9, 2020, after reviewing Plaintiffs’ renewed motion, the Court issued a text order stating that, based on Plaintiff’s proffered evidence, “the Court cannot determine the basis of personal jurisdiction, or the basis of liability, as to each individual defendant”3 and ordering that “Plaintiffs may supplement their motion with a letter brief and evidence by November 30, 2020.” (Dkt. No. 162). On November 30, 2020, Plaintiffs submitted a supplemental attorney declaration with additional evidence responsive to the Court’s text order. (Dkt. No. 163). III. DISCUSSION A. Personal Jurisdiction In their renewed motion, Plaintiffs argue that the Court may exercise specific personal jurisdiction over the Shanghai Huangzhou Defendants. (Dkt. No. 151). “Specific [personal] jurisdiction exists when ‘a [forum] exercises personal jurisdiction over a defendant in a suit arising out of or related to the defendant’s contacts with the forum.’” O’Neill v. Asat Trust Reg. (In re Terrorist Attacks on September 11, 2001), 714 F.3d 659, 673-74 (2d Cir. 2013) (quoting Metro. Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 567-68 (2d Cir. 1996) (internal quotation omitted)). To evaluate whether it may exercise specific personal jurisdiction over a defendant, the Court first looks to whether it has a “statutory basis” for such jurisdiction under New York’s long-arm statute, Troma Ent., Inc. v. Centennial Pictures Inc., 729 F.3d 215, 218 (2d Cir. 2013), and then, “[i]f the long-arm statute permits personal jurisdiction, the second step is to analyze whether personal jurisdiction comports with the Due Process Clause of the United States Constitution.” Chloe v. Queen Bee of Beverly Hills, LLC, 616 F.3d 158, 163 (2d Cir. 2010). In evaluating whether it has personal jurisdiction over the Shanghai Huangzhou Defendants, the Court may consider evidence outside of the complaint. See Vasquez v. Hong Kong & Shanghai Banking Corp., Ltd., No. 18-cv-1876, 2020 WL 4586729, at *1 n.1, 2020 U.S. Dist. LEXIS 142607, at *2 n.1 (S.D.N.Y. Aug. 10, 2020). Plaintiffs assert that N.Y. C.P.L.R. §302(a)(3)(ii) gives the Court a statutory basis for specific personal jurisdiction over the Shanghai Huangzhou Defendants. (Dkt. No. 151, at 2). N.Y. C.P.L.R. §302(a)(3)(ii) provides that a court “may exercise personal jurisdiction over any non-domicilary…who in person or through an agent…commits a tortious act without the state causing injury to person or property within the state…if he…expects or should reasonably expect the act to have consequences in the state and derives substantial revenue from interstate or international commerce.” With their initial renewed motion, Plaintiffs provided the following evidence in support of their argument: (1) an affirmation from Joanne Devost, Defendant Quality Craft, Ltd.’s Vice President of Operations, stating that, in 2010, the heater at issue in this litigation (the “Heater”) was manufactured by “Shanghai Huangzhou Electrical,” imported by Defendant Quality Craft Home Décor, Inc., and re-sold to the Home Depot Defendants, (Dkt. No. 151-1, at 3-18); (2) a sales history detail report from Defendant Quality Craft Home Décor, Inc. reflecting that, in 2010, Defendant Quality Craft Home Décor, Inc. sold more than 50,000 SOQC111-MBK heater units to the Home Depot Defendants, earning a total sales revenue of $1,783,094.53, (id. at 19-23); (3) an executive summary of one of Plaintiffs’ expert reports, which identifies specific alleged design and manufacturing defects with the Heater, (id. at 24-27); (4) purchase orders and associated shipping documents regarding 5 shipments of 730 SOQC111-MBK units (or 3,650 units total) from the Shanghai Huangzhou Defendants4 to a Home Depot distribution center in Montgomery, New York between August and October of 2010, (id. at 28-50); and (5) a page from the website of Shanghai Huangzhou Industry, which notes, among other things, that Shanghai Huangzhou Industry manufactures electric heaters and exports its products “all over the world,” including to customers like “Home Depot, Menards, Sam’s Club, Wal-mart, Target, etc.,” and that it has “CSA and cSAus approval for all [its]products for USA, Canada.” (Id. at 51-52). With their supplemental declaration submitted in response to the Court’s November 9 text order, Plaintiffs provided the following additional evidence: (1) excerpts of a transcript from Ms. Devost’s deposition, in which she identifies “Shanghai Huangzhou Electrical” as the manufacturer of the Heater, (Dkt. No. 163, at 4-11); and (2) the Quality Craft Defendants’ responses to Plaintiffs’ interrogatories, which identify “Shanghai Huangzhou Electrical Appliance Manufacturing Co. Ltd.” as the entity responsible for designing, manufacturing, assembling and packaging the Heater, (id. at 24-25). Plaintiffs also re-submitted the Devost affirmation that they had submitted with their renewed motion, (id. at 12-18), and shipping records similar to those submitted with their renewed motion, (id. at 32-95). The evidence Plaintiffs submit establishes that the Court may exercise personal jurisdiction over both Shanghai Huangzhou Defendants. The Devost affirmation and deposition transcript identify “Shanghai Huangzhou Electrical” as the manufacturer of the Heater, and the Quality Craft Defendants’ interrogatory responses confirm that that phrase is meant to refer to the same Shanghai Huangzhou Electrical that is a Defendant in this litigation. (Dkt. No. 151-1, at 5; Dkt. No. 163, at 8-11, 14, 24-25). Additionally, the shipping documents Plaintiffs rely on demonstrate that, in 2010, Shanghai Huangzhou Industry shipped large quantities of SOQC111-MBK heater units to New York for re-sale by the Quality Craft Defendants, and the Devost affirmation confirms that the Heater itself was one of those units. (Dkt. No. 151-1, at 5, 28-50; Dkt. No. 163, at 14, 32-95). Plaintiffs’ Amended Complaint alleges that the Heater was defective and that those defects caused M.H.’s injuries. (Dkt. No. 11). Thus, the Amended Complaint and documentary evidence together establish that both Shanghai Huangzhou Defendants “commit[ed] a tortious act without the state causing injury to person or property within the state,” N.Y. C.P.L.R. §302(a)(3)(ii) — Shanghai Huangzhou Electrical by manufacturing an allegedly defective Heater, and Shanghai Huangzhou Industry by arranging for that Heater to be shipped to New York, where it allegedly caused Plaintiffs’ injuries. The evidence also establishes that both Shanghai Huangzhou Defendants “expect[ed] or should reasonably [have] expect[ed] [any defects in the Heater] to have consequences in” New York. N.Y. C.P.L.R. §302(a)(3). The shipping documents Plaintiffs rely on make clear that Shanghai Huangzhou Industry purposefully shipped the Heater, and thousands of units like it, directly to New York for sale, establishing its awareness that any defects in those products could have consequences there. (Dkt. No. 151-1, at 28-50; Dkt. No. 163, at 14, 32-95). Furthermore, the fact that Shanghai Huangzhou Electrical gave thousands of units of heaters to its distributor for shipment directly into New York gives the Court a strong basis to infer that Shanghai Huangzhou Electrical reasonably should have expected the consequences of any manufacturing defects in the Heater to touch New York. See, e.g., Kernan v. Kurz-Hastings, Inc., 175 F.3d 236, 238 (2d Cir. 1999) (finding jurisdiction under N.Y. C.P.L.R. §302(a)(3) over Japanese manufacturer of an injury-causing machine was proper where the manufacturer’s distributor in Pennsylvania sold the machine to the plaintiff’s employer in New York, as the manufacturer “did indeed attempt to serve the New York market, even if it did so indirectly”); Darrow v. Hetronic Deutschland, 119 A.D.3d 1142, 1144 (3d Dep’t 2014) (concluding that the court could exercise personal jurisdiction where “[t]he record reflects that the defendant maintained an exclusive agreement with [its distributor],” which “affected distribution to certain states…through a network of regional distributors, one of which was designated to serve the New York market” and there was evidence of “defendant’s awareness of this network”); Halas v. Dick’s Sporting Goods, 105 A.D.3d 1411, 1412 (4th Dep’t 2013) (concluding that “defendant should have reasonably expected that its negligence would have consequences in individual states, including New York, because its [exclusive] distributor targets the nationwide market” and has retail locations “in 36 states including New York”). As to the “substantial revenue” requirement of N.Y. C.P.L.R. §302(a)(3), the sales history report Plaintiffs rely on reflects that, during the year in which the Heater was manufactured, Defendant Quality Craft Home Décor, Inc. re-sold to Home Depot more than 50,000 SOQC111-MBK heater units after receiving them from Shanghai Huangzhou Industry, earning total sales revenue of $1,783,094.53. (Dkt. No. 151-1, at 19-23). The shipping documents Plaintiffs submit further establish that, for each sale of approximately $26,000 that the Quality Craft Defendants made to the Home Depot Defendants, approximately $21,000 was ultimately paid to the “supplier” of the SOQC111-MBK units. (Id. at 28-50). The record does not specify whether the “supplier” refers to one or both of the Shanghai Huangzhou Defendants, nor does it specifically establish the total revenue either Defendant earned from sales of SOQC111-MBK heater units in 2010. However, it is reasonable to infer that the “supplier cost” reflects revenue shared in some way among both Shanghai Huangzhou Electrical (as the manufacturer) and Shanghai Huangzhou Industry (as the distributor) and drawing that inference, the evidence demonstrates that the Shanghai Huangzhou Defendants derived a significant amount of revenue from international sales of a single product to a single client in a single year. Beyond these particular sales, Shanghai Huangzhou Industry’s website states that it exports its products “all over the world,” including to large companies based outside of China like “Home Depot, Menards, Sam’s Club, Wal-mart, Target, etc.,” and that it has “CSA and cSAus approval for all [its]products for USA, Canada.” (Id. at 52). The “substantial revenue” requirement “is intended to exclude non-domicilaries whose business operations are of a local character.” Bensusan Rest. Corp. v. King, 126 F.3d 25, 29 (2d Cir. 1997) (citing Report of the Administrative Board of the Judicial Conference of the State of New York for the Judicial Year July 1, 1965 through June 30, 1966, Legislative Document (1967) No. 90). Therefore, Shanghai Huangzhou Industry’s own representations that it derives revenue by conducting business “all over the world,” including with large multinational clients, allow the Court to infer that it derives substantial revenue from international commerce. See, e.g., Rx USA Intern., Inc. v. Superior Pharm. Co., No. 04-cv-5074, 2005 WL 3333843, at *5-6, 2005 U.S. Dist. LEXIS 34255, at *15-16 (E.D.N.Y. Dec. 7, 2005) (concluding that representations on the defendants’ websites stating that the defendants conducted business with multinational and out-of-state clients were sufficient to establish “substantial revenue” requirement); Local 875 I.B.T. Pension Fund v. Pollack, 992 F. Supp. 545, 557 (E.D.N.Y. 1998) (explaining that the defendant’s brochure describing its “participation in major financial markets across the globe” established substantial revenue requirement); Marine Midland Bank v. Keplinger & Assocs., Inc., 488 F. Supp. 699, 703-04 (S.D.N.Y. 1980) (concluding that the defendant’s brochure “boast[ing] of national and international prominence in the geological area” and “numerous corporate clients throughout the United States and the world,” combined with evidence reflecting that defendant earned over $300,000 in revenue from Plaintiff alone, made “apparent that [defendant] derives substantial revenues from interstate and international commerce”). Furthermore, while the website refers to Shanghai Huangzhou Industry as the “manufacturer” of the products it exports, (Dkt. No. 151-1, at 52), when that website is read together with the other record evidence demonstrating that Shanghai Huangzhou Industry was actually a distributor for heater products manufactured by Shanghai Huangzhou Electrical, it is reasonable to infer that both Shanghai Huangzhou Defendants conduct international commerce together as a cohesive enterprise, and thus that both derive significant revenue from the international transactions inherent to their business. Viewed collectively, then, evidence of the significant revenue the Shanghai Huangzhou Defendants earned from sales of SOQC111-MBK heater units to the Quality Craft Defendants alone, combined with evidence of the international nature of the Shanghai Huangzhou Defendants’ business more generally, meets the “substantial revenue” requirement of N.Y. C.P.L.R. §302(a)(3). Therefore, the Court finds that all the elements necessary to exercise personal jurisdiction over the Shanghai Huangzhou Defendants under N.Y. C.P.L.R. §302(a)(3)(ii) are met here. Furthermore, based on the evidence Plaintiffs present, the exercise of personal jurisdiction over the Shanghai Huangzhou Defendants is consistent with federal due process standards. As explained in this Court’s previous decision denying Plaintiffs’ motion for a default judgment, “Due process permits a court to exercise personal jurisdiction over a non-resident where the maintenance of the suit would not ‘offend traditional notions of fair play and substantial justice.’” Hunter, 2020 WL 5258313, at *8, 2020 U.S. Dist. LEXIS 161142, at *24 (quoting Porina v. Marward Shipping Co., 521 F.3d 122, 127 (2d Cir. 2008)). Here, as discussed, the evidence Plaintiffs have put forth shows that, in 2010, the Shanghai Huangzhou Defendants shipped thousands of SOQC111-MBK heater units, including the Heater itself, directly into New York. (Dkt. No. 151-1, at 5, 28-50). This pattern of sales goes well beyond “a single sale of a product in a State” and shows the precise type of purposeful “State-specific targeting, regular in-State sales, or planned market exposure to New York State” that the Supreme Court has held justifies the exercise of personal jurisdiction. See Bacon v. Fabio Perini S.p.A., No. 16-cv-1218, 2017 WL 4861489, at *10, 2017 U.S. Dist. LEXIS 221602, at *28 (N.D.N.Y. July 7, 2017). Furthermore, given this significant and purposeful targeting of the New York market, and in the absence of any argument by the Shanghai Huangzhou Defendants, the Court perceives no reason why exercising personal jurisdiction over the Shanghai Huangzhou Defendants would be unreasonable under the circumstances of this case. Therefore, the Court finds that it may properly exercise personal jurisdiction over the Shanghai Huangzhou Defendants. B. Liability Having determined that it may exercise personal jurisdiction over the Shanghai Huangzhou Defendants, the Court turns to the question of whether the Court should enter a default judgment. By failing to appear in this action or respond to Plaintiffs’ Amended Complaint, the Shanghai Huangzhou Defendants are deemed to have admitted the factual allegations in the Amended Complaint with respect to liability (as distinct from damages). Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (“[A] party’s default is deemed to constitute a concession of all well pleaded allegations of liability.”). However, the ultimate decision as to whether to grant a default judgment is “left to the sound discretion of [the] district court.” See Shah v. New York State Dep’t of Civil Serv., 168 F.3d 610, 615 (2d Cir. 1999) (citing Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993)). Even where a defendant has admitted all well-pleaded facts in the complaint by virtue of default, a District Court “need not agree that the alleged facts constitute a valid cause of action,” and may decline to enter a default judgment on that ground. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (quoting Au Bon Pain Corp v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). Indeed, the Second Circuit has “suggested that, prior to entering default judgment, a district court is ‘required to determine whether the [plaintiff's] allegations establish [the defendant's] liability as a matter of law.’” Id. (quoting Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009)). Furthermore, Fed. R. Civ. P. 55(b)(2), the rule governing default judgments, provides that “[t]he court may conduct hearings…when, to enter or effectuate judgment, it needs to…establish the truth of any allegation by evidence.” See also 10A Wright, Miller & Kane, Federal Practice & Procedure §2684, at 28 (“The court has discretion to decide whether to enter a judgment by default…and Rule 55(b)(2) empowers the district judge to hold hearings or ‘order such references as it deems necessary and proper’ to aid its execution of this discretion.”). As the Court noted in its opinion denying Plaintiffs’ original motion for default judgment, “the Amended Complaint’s substantive allegations simply refer to ‘Defendants’ as a group, without specifying any actions or omissions by the Shanghai Huangzhou Defendants, including their role in the allegedly tortious design, manufacture, assembly, marketing and sale of the Heater.” Hunter, 2020 WL 5258313, at *10, 2020 U.S. Dist. LEXIS 161142, at *29. However, this is not necessarily a fatal flaw. “[N]othing in Rule 8 prohibits collectively referring to multiple defendants where the claim alerts [the] defendants that identical claims are asserted against each defendant,” so long as the allegations “provide[] enough information to put [each defendant] on notice of its alleged role” in the misconduct at issue. Tardibuono-Quigley v. HSBC Mortg. Corp. (USA), No. 15-cv-6940, 2017 WL 1216925, at *8, 2017 U.S. Dist. LEXIS 47982, at *22-23 (S.D.N.Y. March 30, 2017) (citations omitted). As this Court has observed, the question is whether the allegations, even if they “refer to ‘Defendants’ collectively without distinguishing each Defendant’s particular role,” “simply ‘give the defendant fair notice of what the plaintiff’s claim is and the grounds upon which it rests,’” with “fair notice” defined as “that which will enable the adverse party to answer and prepare for trial, allow the application of res judicata, and identify the nature of the case so that it may be assigned the proper form of trial.” Richards v. Johnson & Johnson, Inc., No. 17-cv-00178, 2018 WL 2976002, at *2, 2018 U.S. Dist. LEXIS 97899, at *4-5 (N.D.N.Y. June 12, 2018) (citations omitted); see also LaForgia v. Vergano, No. 15-cv-8589, 2017 WL 3034347, at *5, 2017 U.S. Dist. LEXIS 109691, at *14-15 (S.D.N.Y. July 14, 2017) (explaining that “[w]hile there may be circumstances in which allegations made collectively against several defendants are insufficiently specific to put the defendants on notice of their alleged conduct,” that is not the case where “Plaintiffs have alleged that all Individual Defendants, which includes [a specific defendant], took part in the decision to condemn the Property and caused Plaintiffs to be evicted from their home”). Furthermore, the Court may consider the documentary evidence submitted with Plaintiffs’ renewed motion for default judgment in determining whether they have stated a claim against the Shanghai Huangzhou Defendants. The Second Circuit has observed that a motion for default judgment may be granted based on “the factual allegations in the complaint, combined with uncontroverted documentary evidence submitted by plaintiffs” with their motion. Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Contr., LLC, 779 F.3d 182, 189 (2d Cir. 2015); see also, e.g., Cabrera v. 1560 Chirp Corp., No. 15-cv-8194, 2017 WL 1289349, at *11, 2017 U.S. Dist. LEXIS 33380, at *28-29 (S.D.N.Y. March 6, 2017) (applying Bricklayers and its progeny and relying on affidavit outside the complaint to find that Plaintiff met elements of a FLSA claim on a motion for default judgment), report & recommendation adopted, 2017 WL 1314123, 2017 U.S. Dist. LEXIS 53368 (S.D.N.Y. Apr. 6, 2017); Zurita v. Bergen Pizza Inc., No. 12-cv-3874, 2016 U.S. Dist. LEXIS 28170,5 at *8-10 (March 1, 2016) (same), report & recommendation adopted, 2016 WL 1089262, 2016 U.S. Dist. LEXIS 35938 (E.D.N.Y. March 21, 2016).6 This approach is also consistent with Fed. R. Civ. P. 55(b)(2), which establishes that “[t]o the extent that the plaintiff’s allegations are inadequate, ‘a district court has discretion…to require proof of necessary facts’ to satisfy itself that there is ‘a valid cause of action[.].’” Cent. Produce Corp. v. 32-18 M&M Corp., No. 17-cv-3841, 2018 WL 4327923, at *2, 2018 U.S. Dist. LEXIS 114731, at *5 (E.D.N.Y. July 9, 2018) (quoting Au Bon Pain, 653 F.2d at 65), report & recommendation adopted 2018 WL 4326925, 2018 U.S. Dist. LEXIS 154092 (E.D.N.Y. Sept. 10, 2018); see also Fed. R. Civ. P. 55(b)(2) (providing that “[t]he court may conduct hearings…when, to enter or effectuate judgment, it needs to…establish the truth of any allegation by evidence”).7 Therefore, in determining whether Plaintiffs have sufficiently stated a claim against the Shanghai Huangzhou Defendants, the Court will look to the well-pled allegations in the Amended Complaint, as well as the documentary evidence submitted by Plaintiffs in support of their renewed motion for default judgment.8 1. Strict Products Liability Claims9 “A strict products liability claim arises against a manufacturer, a retailer, or a commercial lessor of a product if (1) the product is defective, and (2) the defect caused plaintiff’s injury.” Lewis v. Abbott Labs., No. 08-cv-7480, 2009 WL 2231701, at *4, 2009 U.S. Dist. LEXIS 131328, at *8 (S.D.N.Y. June 18, 2009), report & recommendation adopted 2009 WL 2231701, 2009 U.S. Dist. LEXIS 64831 (S.D.N.Y. July 24, 2009). Under New York law, strict liability is not limited to manufacturers of a particular product, but extends to retailers and distributors that sell the product in the normal course of their business. See Eberhart v. Amazon.com, Inc., 325 F. Supp. 3d 393, 397-98 (S.D.N.Y. 2018); see also Godoy v. Abamaster of Miami, Inc., 754 N.Y.S.2d 301, 305 (N.Y. App. Div. 2d Dep’t 2003) (“Distributors and retailers may be held strictly liable to injured parties, even though they may be innocent conduits in the sale of the product, because liability rests not upon traditional considerations of fault and active negligence, but rather upon policy considerations which dictate that those in the best ‘position to exert pressure for the improved safety of products’ bear the risk of loss resulting from the use of the products.” (citation omitted)). There are three types of product defects that are actionable under New York law: “(1) a manufacturing defect, which results when a mistake in manufacturing renders a product that is ordinarily safe dangerous so that it causes harm; (2) a warning defect, which occurs when the inadequacy or failure to warn of a reasonably foreseeable risk accompanying a product causes harm; and (3) a design defect, which results when the product as designed is unreasonably dangerous for its intended use.” McCarthy v. Olin Corp., 119 F.3d 148, 154-55 (2d Cir. 1997) (citations omitted). Plaintiffs bring claims for strict products liability under all three theories. (Dkt. No. 11, at

33-52). a. Design Defect A “defectively designed product is one which, at the time it leaves the seller’s hands, is in a condition not reasonably contemplated by the ultimate consumer and is unreasonably dangerous for its intended use; that is one whose utility does not outweigh the danger inherent in its introduction into the stream of commerce.” Voss v. Black & Decker Mfg. Co., 59 N.Y.2d 102, 107 (1983) (quoting Robinson v. Reed-Prentice Div. of Package Mach. Co., 49 N.Y.2d 471, 479 (1980)). This standard, which balances a product design’s social and individual utility against the risk of harm associated with such design, taking into account the availability and feasibility of safer designs, is known as the “risk-utility” test. See Maxwell v. Howmedica Osteonics Corp., 713 F. Supp. 2d 84, 91 (N.D.N.Y. 2010); Robinson, 49 N.Y.2d at 479 (“Since no product may be completely accident proof, the ultimate question in determining whether an article is defectively designed involves a balancing of the likelihood of harm against the burden of taking precaution against that harm.”). Ultimately, to prevail on a design defect claim, Plaintiff must show that: “(1) the product, as designed, posed a substantial likelihood of harm; (2) it was feasible to design the product in a safer manner; and (3) the defective design was a substantial factor in causing plaintiff’s injury.” Maxwell, 713 F. Supp. 2d at 90. Here, Plaintiffs allege that the Heater was designed in a way that caused it to “generate[] an unsafe and dangerous level of heat,” that this defective design caused M.H.’s body temperature to rise to 108 degrees when it was used to heat her bedroom, and that “[t]here was no other heat source in the bedroom other than the Heater that would explain M.H.’s body temperature being 108 degrees.” (Dkt. No. 11, at

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now
Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now
Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now
September 05, 2024
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.


Learn More
April 25, 2024
Dubai

Law firms & in-house legal departments with a presence in the middle east celebrate outstanding achievement within the profession.


Learn More
April 29, 2024 - May 01, 2024
Aurora, CO

The premier educational and networking event for employee benefits brokers and agents.


Learn More

A large and well-established Tampa company is seeking a contracts administrator to support the company's in-house attorney and manage a wide...


Apply Now ›

We are seeking an attorney to join our commercial finance practice in either our Stamford, Hartford or New Haven offices. Candidates should ...


Apply Now ›

We are seeking an attorney to join our corporate and transactional practice. Candidates should have a minimum of 8 years of general corporat...


Apply Now ›
04/15/2024
Connecticut Law Tribune

MELICK & PORTER, LLP PROMOTES CONNECTICUT PARTNERS HOLLY ROGERS, STEVEN BANKS, and ALEXANDER AHRENS


View Announcement ›
04/11/2024
New Jersey Law Journal

Professional Announcement


View Announcement ›
04/08/2024
Daily Report

Daily Report 1/2 Page Professional Announcement 60 Days


View Announcement ›