Opinion
C.A. NO. 02-8867.
June 19, 2003.
MEMORANDUM OPINION AND ORDER
General Instrument Corporation d/b/a the Broadband Communications Sector of Motorola, Inc. ("Motorola BCS"), a Pennsylvania corporation, initiated this suit against Korea Thrunet Company, Ltd. ("Thrunet"), a Korean entity, on December 3, 2002, alleging breach of contract and anticipatory repudiation. Thrunet responded with a motion to dismiss for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). For the reasons which follow, the motion will be denied.
This court may exercise personal jurisdiction over non-resident defendants only so far as Pennsylvania law authorizes us to do so. Fed.R.Civ.P. 4(e). Pennsylvania's long-arm statute extends our jurisdiction over non-resident defendants "to the fullest extent allowed under the Constitution of the United States and [it] may be based on the minimum contact with this Commonwealth allowed under the Constitution of the United States." 42 Pa.Cons.Stat.Ann. § 5322(b) (Purdon 1981 Supp. 2003). The Constitution limits personal jurisdiction via the Due Process clause of the Fourteenth Amendment; thus we may exercise jurisdiction over Thrunet to the extent consistent with due process. Mellon Bank (East) PSFS v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992).
Motorola BCS bears the burden of proving Pennsylvania's jurisdiction over Thrunet.
When a defendant raises the defense of the court's lack of personal jurisdiction, the burden falls upon the plaintiff to come forward with sufficient facts to establish that jurisdiction is proper. . . . The plaintiff meets this burden and presents a prima facie case for the exercise of personal jurisdiction by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state."Id. at 1223 (citations omitted). In deciding this issue, we may consider facts outside the pleadings. Time Share Vacation Club v. Atlantic Resorts. Ltd., 735 F.2d 61, 67 n. 9 (3d Cir. 1984). Specifically, we may consider any pleadings, affidavits, and exhibits pertinent to the question of whether Thrunet is subject to jurisdiction in Pennsylvania. Id.
This suit arises from a contract of sale between Motorola BCS and Thrunet. Motorola BCS and Thrunet have occasionally entered into business contracts with each other since 1998. Certification of John Burke at ¶ 6. As of April 1, 2001, the parties entered into an agreement for the sale of cable modems.Id. at ¶ 1. The agreement explicitly incorporated as "Exhibit A," Motorola BCS's standard terms and conditions of purchase, which includes a forum selection clause, stipulating Pennsylvania jurisdiction. Specifically, the standard terms provide:
The agreement states at ¶ 6: "Except as modified herein, all Cable Modems purchased by Thrunet from Motorola BCS under this Agreement shall be pursuant to Motorola BCS' Standard Terms and Conditions of Purchase attached hereto as Exhibit A."
All actions, claims or legal proceedings in any way pertaining to this Order or such transactions shall be commenced and maintained in the courts of the Commonwealth of Pennsylvania or in a federal court of the United States physically situated in such Commonwealth and in no other court or tribunal whatsoever and Buyer agrees to submit itself to the exclusive jurisdiction of such courts.
Agreement, Exhibit A at ¶ 18. Charles Rim, Thrunet's Chief Financial Officer, executed the agreement, initialing each page of the agreement and "Exhibit A" at the lower-left corner, including the page which contains the forum selection clause.
The forum selection clause clearly stipulates that Thrunet, by entering into the agreement, submitted itself to the jurisdiction of Pennsylvania's state and federal courts. Parties may agree to submit to a particular state's jurisdiction. Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703-04 (1982) (quoting Nat'l Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1963) ("it is settled . . . that parties to a contract may agree in advance to submit to the jurisdiction of a given court.")); see also 42 Pa.Cons.Stat.Ann. § 5301(a)(3)(ii) (Purdon 1981 Supp. 2003). In addition, forum selection clauses are "prima facie valid and should be enforced unless enforcement is shown to be unreasonable." M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972) (admiralty jurisdiction). When parties include a forum selection clause "in an arm's-length negotiation by experienced and sophisticated businessmen," we must enforce that agreement "absent some compelling and countervailing reason." Id. at 12;Instrumentation Assocs. v. Madsen Electronics (Canada) Ltd., 859 F.2d 4, 7 (3d Cir. 1988) (diversity jurisdiction).
In fact, the parties contracted to bring suits only in Pennsylvania, and "in no other court or tribunal whatsoever," except that Motorola BCS retained the "right to maintain an action or to enforce any judgment in any jurisdiction in which Buyer or any assets of Buyer may be located." Id.
When construing a contract in Pennsylvania, we must "ascertain and give effect to the intention of the parties." Lower Frederick Tp. v. Clemmer, 543 A.2d 502, 510 (Pa. 1988). We must construe the language of both the contract and its attachment, because the attachment "illuminates the intent of the parties at the time of contracting." West Dev. Group. Ltd. v. Horizon Fin., F.A., 592 A.2d 72, 75 (Pa.Super. 1991). Mr. Rim's initials on each page of the contract and Exhibit A establish Thrunet's intent to incorporate the attachment into the contract, and to agree to its terms.
Because it agreed to the contract, including the forum selection clause, Thrunet may only contest jurisdiction by showing the clause is unreasonable. Thrunet argues that it faces several specific burdens as a result of litigation in Pennsylvania. First, it must transport foreign witnesses for trial testimony. Second, some of Thrunet's witnesses cannot speak English. Third, some relevant documents are in the Korean language. Defendant's Memorandum at 9-10. Although these burdens are not trifling, they do not constitute a "compelling or countervailing reason" so great as to outweigh Thrunet's own agreement to submit to Pennsylvania's jurisdiction.
Thrunet cites to four cases in support of its argument that Pennsylvania jurisdiction would be too burdensome. None of the four cases, however, involved a forum selection clause, and each was decided under the "traditional notions of fair play and substantial justice" test. See e.g., Asahi Metal Ind. Co. v. Superior Court, 480 U.S. 102, 113 (1987). That standard is less onerous than the "compelling or countervailing reason" required in the instant case to disregard the parties' own decision to submit to Pennsylvania's jurisdiction.
Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 113 (1987); Pennzoil Products Co. v. Colelli Assoc., Inc., 149 F.3d 197, 201 (3d Cir. 1998); Northeastern Power Co. v. Balcke-Durr, Inc., 49 F. Supp.2d 783,789 (E.D. Pa. 1999);Harbuck v. Aramco, Inc., 1999 WL 999431 *8 (E.D. Pa. Oct. 21, 1999)).
Further, each of the burdens cited by Thrunet would, (1) be equally significant in any other United States jurisdiction, (2) fall equally hard on Motorola BCS if the suit was moved to Korea, and (3) fall on both parties in any third international jurisdiction. We find these reasons insufficient to relieve Thrunet of the burdens of foreign litigation since the parties previously agreed that Thrunet would bear this burden in the event of a lawsuit. See The Bremen, 407 U.S. at 16 ("Of course, where it can be said with reasonable assurance that at the time they entered the contract, the parties to a freely negotiated private international commercial agreement contemplated the claimed inconvenience, it is difficult to see why any such claim of inconvenience should be heard to render the forum clause unenforceable.")
For the reasons stated, we conclude that Thrunet has agreed to submit to Pennsylvania jurisdiction and that this agreement is enforceable. We accordingly deny Thrunet's motion to dismiss for lack of personal jurisdiction.
ORDER
The motion of Korea Thrunet Company, Ltd. to dismiss plaintiff's complaint for lack of personal jurisdiction (#4) is DENIED.
IT IS SO ORDERED.