October 16,1998
Memorandum
To: Staff Attorneys
From: John Farago
Re: Thibodeaux Referral
A law school classmate of mine who practices with Vermont Legal Aid in its Northern Kingdom office (Jean Murray) has passed along to us a referral of a potential personal injury action. A family from Morgan in Orleans County was seriously injured as a result of a furnace explosion. With the client's permission, Jean has sent us her notes and a tape of her interview with the client.
Working in self-selected groups of four, I want you to prepare an interview protocol to do a full intake interview of this client (Marie Thibodeaux). She has agreed to drive down to our Bennington office one day next week. Two of us will meet with her to gather any additional information she may have and to answer any questions she may raise. After that, we will meet as a firm to discuss how to go about deciding whether to take the case.
If Jean is correct and there is a personal injury action here, it will reflect a substantial commitment of firm resources. The client certainly cannot afford to pay us an hourly fee and we will have to take the case on a contingency fee basis. Even a modest personal injury action that goes to trial can chew up 2-3 person-years of lawyering time. Complex issues can swallow far more, with no income until the case is over and, then, a return only if we prevail. The decision whether or not to take the case will therefore have to be made very carefully, and with a good deal of caution on our part. It should also be informed by an understanding of our obligations under the Code of Professional Responsibility, obligations that call on us to help ensure that the availability of legal representation to all.
Jean's notes are attached. We'll review the tape together on Wednesday and discuss next steps then.
The Northern Kingdom is a world unto itself. For those of you who have never been north of St. Johnsbury, you might want to find a map and/or look at some of the following websites:
http://www.farmandforest.com/index.html
http://www.vermonter.com/asr/5142.htm
http://www.travelthekingdom.com/
Memorandum
To: Staff Attorneys
From: John Farago
Re: Thibodeaux Jurisdiction Issues
Before we get back to this client, we will need to decide whether to take her family on as clients 3and, if so, on what terms. If not, what else we might suggest. I have dug around a bit and tried to unearth what else I could find out about the backdrop to her situation. In doing so I have come across a range of other cases involving possibly similar defects. Beyond the difficult factual questions in any major suit of this sort, that litigation raises one legal issue with which we already have some familiarity: none of the manufacturers of the furnace or its components is located in Vermont (indeed, the furnace itself is apparently largely manufactured outside the US). Here is a bit more detail.
I. Some further factual background.
After the interview that we all participated in, I asked Phyllis to conduct a NEXIS search to see whether Jackson's Feed was ever incorporated in Morgan Center. In fact, Jackson's Feed and Seed was incorporated in 1937 and was dissolved in late 1995. The dissolution documents seem to confirm that Mr. Jackson relocated to Saint Petersburg, Florida.
She then checked with the Department of State and learned that the corporation was licensed to sell, install, and repair gas furnaces. As a matter of State law, this means that they must have carried a liability insurance policy covering the corporation, its officers, and its employees for any liability arising out of their furnace sales, installations, or repairs, at a minimum policy amount of $1,000,000 per occurrence.
I called my own propane dealer and asked several questions about gas furnaces. According to them, there are no manufacturers of gas-fired furnaces in Vermont. For that matter, there are none in New Hampshire, Maine, or Massachusetts either. There is an importer operating out of Chicago who brings in a furnace manufactured in Germany and markets it in this country under the brand name Universal. My gas dealer said that roughly 2/3 of the gas furnaces in Vermont are probably this brand because that is the only gas furnace sold by the only furnace wholesaler in Vermont (a company called Green Mountain Plumbing Parts); all other furnaces come into the state via transactions with out-of-state wholesalers or manufacturers.
I did a Lexis search on Universal Furnace and discovered no fewer than seventeen pending lawsuits against them for furnace-related fires. I found a determination by the US District Court in Chicago refusing to certify a class action against them for products liability. The bulk of the remaining cases were filed in Illinois when the class action failed. Universal cross-claimed against a gas-burner manufacturer in New York in each of these cases. The furnace does not come from Germany with an integral gas burner because the type of gas and gas container varies from country to country (and in the US from locale to locale). Universal puchases burners appropriate to the particular locale in which the furnace is to be sold and installs them prior to shipping to its wholesalers. In three cases Universal asserted that the courts lacked jurisdiction over them because they did not do business in those states (two in Idaho, one in New Hampshire). They were successful in avoiding jurisdiction in New Hampshire (that case, too, was ultimately filed in Illinois). The Idaho cases are pending. None of these cases has gone to trial.
The gas burner manufacturer, Inner City Phoenix Furnace Parts, is a manufacturer in the South Bronx with a commitment to rebuilding the South Bronx as a commercial/industrial center. It hires previously unemployed and untrained workers and trains them to be skilled machinists. The burner that they manufacture is designed to work with the sort of propane gas and gas tanks used in roughly 35 states, and they have a market share of 15% of all the burners installed in the northeast (including all those installed as original equipment in Universal furnaces for the past four years).
We have received the report from the local fire department in Morgan Center. The chief had observed that the explosion apparently took place at the furnace and the volunteers collected whatever they could of the parts which were then sent off to the Bureau of Investigation in Montpelier for testing. The lab confirms that the explosion was caused by the furnace, specifically, by a defective switch housing in the gas burner. It is unclear from the report whether this is a design defect, a manufacturing defect, a quality control slip-up, or a result of wear or abuse.
So, in short, it appears that Mort Jackson is out of the state, and that his store had been incorporated (and insured) here prior to his leaving. He and the store were both covered by a substantial insurance policy, but the corporation has been dissolved. The likeliest source of the furnace Mort sold the Thibodeaux's was a wholesaler in Vermont who bought furnaces from a Chicago importer of German furnaces manufactured from parts that include a gas burner manufactured in New York. That burner, or a switch within it, seems to have caused the explosion. The furnace importer is presently being sued in a number of venues, and has asserted jurisdictional challenges whenever feasible.
II. What we need to know.
Vermont's longarm statute grants jurisdiction over any and all cases not inconsistent with the Due Process Clause of the 14th Amendment. As a result, we need to think through what the current state of constitutional law is with respect to the reach of longarm statutes such as ours, in particular with respect to Mort, Jackson's, Universal, and the burner switch company.
What I would like you to do is prepare a memo for the files analyzing the three cases we have discussed &endash;&endash;Worldwide VW, Burger King, and Asahi &endash;&endash; and describing what you think is the current standard the Supreme Court would use in assessing whether a court has specific personal jurisdiction over a non-resident defendant. I don't want just your opinion, or a bottom line, but rather a description of what our longarm statute means, in light of the current state of the caselaw, when it says that we can reach anyone who can be reached consistent with the 14th Amendment. the court is and where it seems to be heading. What test(s) would the court apply? What facts would we need to gather to address such a test?
While we know far too little to even have a view of who we might sue if we were to take on the Thibodeaux case, I also want you to consider what you think are the implications with respect to jurisdiction over the four possible defendants I just mentioned. Again, I'm not looking for certainty or a bottom line (unless one seems obvious to you); I'm trying to get a feel for the issues we would need to take into account.
Ultimately, we need to decide what to tell Ms Thibodeaux. When you have completed this memo, our next step will be to do research and extend its coverage beyond these three cases, while placing the jurisdiction question in the context of the broader question about whether we should take on the case. While we will decide whether to accept the case collectively at an office meeting, in the final memo I would appreciate getting a sense from you of what factors we should take into account and, if you have a strong view, what that view is and what it is based on. Again, we'll decide as a firm, so I'm not particularly focused on your bottom line, but this is a messy case unlike any we've considered before and we need to be sure that we have thought through as many of the questions as possible that bear on whether or not to represent this client.