Opinion
CIVIL ACTION NO. 02-7771
JULY 15, 2003
MEMORANDUM ORDER
Plaintiff William M. Young Company ("Plaintiff") is suing Defendant Pulte Home Corporation ("Defendant") for various claims arising from Defendant's alleged failure to pay for building supplies. Presently before the Court is Defendant's Motion to Transfer (Docket No. 5), requesting that this Court transfer the case to the District of Delaware because of alleged improper venue and for the convenience of the parties. (Def. Motion ¶ 6). For the reasons that follow, we will treat Defendant's Motion to Transfer for improper venue pursuant to § 1406(a) as a Motion to Dismiss for improper venue pursuant to § 1406(a), and the Motion will be granted.
A. Factual Background
Plaintiff was incorporated in Delaware and buys and sells business supplies in Delaware and Pennsylvania. (Pl. Compl. ¶ 1, 2). Defendant is a Michigan corporation involved in the business of construction and development of real estate. (Pl. Compl. ¶ 3). Plaintiff filed a complaint in the Eastern District of Pennsylvania claiming that Defendant corporation failed to pay for building supplies that Plaintiff delivered to Defendant. (Pl. Compl.) Plaintiff's Complaint alleges that jurisdiction is in this Court based upon diversity of citizenship. (Pl. Compl. ¶ 4). Plaintiff's complaint alleges that venue is proper in this Court because Defendant regularly conducts business in the Eastern District of Pennsylvania and is subject to personal jurisdiction in Pennsylvania. (Pl. Compl. ¶ 4). Plaintiff also alleges that Defendant has a business address at 1100 Northbrook Drive, Trevose, Pennsylvania 19053, and that the summons was personally delivered to the office manager at the 1100 Northbrook Drive address. (Pl. Compl. ¶ 3; Copy of Summons, Pl. Response, Exhibit A).
Defendant states in its Motion to Dismiss that its principal place of business is in Michigan. However, even though Defendant filed an Affidavit in support of its Motion, this statement is not supported in the Affidavit or by any other evidence in this record. (Def. Motion ¶ 6).
Defendant alleges that the office at 1100 Northbrook Drive belongs to Pulte Home Corporation of the Delaware Valley, a subsidiary of Pulte Home Corporation, and that while the subsidiary has a presence in Pennsylvania, the parent company, Pulte Home Corporation, does not reside in, have any offices in, or conduct business in Pennsylvania. (Jim Rorison Affidavit). In its answer, Defendant denies that its address is 1100 Northbrook Drive, denies that the Eastern District of Pennsylvania is a proper venue, denies that it was subject to personal jurisdiction in the Eastern District of Pennsylvania, and asserts a fourth affirmative defense of inappropriate venue, or alternatively, inconvenient venue. (Def. Answer ¶ 3, 5, 57). Defendant also alleges that all pertinent transactions took place in Delaware, that the subject supplies were delivered to a site in Delaware, and that all parties and witnesses are within the state of Delaware. (Def. Answer ¶ 5) In addition, one of Plaintiff's claims has been brought pursuant to Delaware state law. (Pl. Compl. Count V).
B. Discussion
Under 28 U.S.C. § 1406(a), when a district court determines that venue is improper, the court "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." In the instant case, the determination of proper venue depends upon whether the Eastern District of Pennsylvania has personal jurisdiction over Pulte Home Corporation. See e.g. Zippo Manufacturing Company v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1128 (W.D. Pa. 1997) (indicating that its discussion of personal jurisdiction in the defendant's 12(b)(2) motion to dismiss is dispositive of the question of venue in the defendant's § 1406(a) claim). For a corporation to be subject to personal jurisdiction within a district, either the specific claims in the case must be connected to the district or the corporation must have such "continuous and systematic" contacts with the district that it would have some expectation of being called into court there. In determining whether a corporation has "continuous and systematic" contacts with a state, courts consider whether the foreign corporation was incorporated in the state, has its principal place of business in the state, owns property in the state, or is registered to do business in the state. Id. at 506.
Venue in the instant case is governed by 28 U.S.C. § 1391(a), which provides that in actions where jurisdiction is based on diversity of citizenship, venue is proper in "a jurisdiction where any defendant resides." The statute further provides that a corporate defendant is "deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c).
A state has personal jurisdiction over its residents and those non-residents who have sufficient contacts to the state. We must analyze personal jurisdiction claims under both constitutional and state statutory law. Walsh v. Alarm Security Group, Inc., 157 F. Supp.2d 501, 505 (E.D. Pa. 2001). However, since Pennsylvania law enables courts to exercise personal jurisdiction to the fullest extent permitted by the United States Constitution, we only need to apply the constitutional due process test.Id. (citing 42 Pa. Cons. Stat. Ann. § 5322(b) (1981)). "Due process requires that the defendant have `minimum contacts' with the forum state such that maintenance of the action does not offend `traditional notions of fair play and substantial justice.'" Clark v. Matsushita Electric Industrial Co., Ltd., 811 F. Supp. 1061, 1065 (M.D. Pa. 1993) (citing International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945)). The minimum contacts test requires that the "`defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its law.'" Id. (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183 (1985)).
Once a defendant raises an objection to jurisdiction, the burden shifts to the plaintiff to show that jurisdiction exists. Walsh v. Alarm Security Group, Inc., 157 F. Supp.2d 501, 504 (E.D. Pa. 2001) (citingMellon Bank (East) PSFS Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). "Although all allegations in the complaint are taken as true, a plaintiff may not solely rely on bare pleadings to satisfy his jurisdictional burden. Rather, the plaintiff must offer evidence that establishes with reasonable particularity sufficient contact between the defendant and the forum state to support jurisdiction." Id. (citingCarteret Savings Bank, F.A. v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). Courts generally require that plaintiffs provide sworn affidavits or other competent evidence to meet this burden. Comerota v. Vickers, 170 F. Supp.2d 484, 487 (M.D. Pa. 2001).
Plaintiff contends that Defendant waived its opportunity to object to jurisdiction because Defendant did not raise the objection until after it filed its answer. Walsh, 157 F. Supp.2d at 504 (if a defendant does not raise an objection to plaintiff's assertion of personal jurisdiction, that objection is waived). However, Defendant has not waived its objections because it has contested both venue and jurisdiction in Pennsylvania. In its answer, Defendant denied the presence of personal jurisdiction and stated an affirmative defense that objected to the venue as improper. Defendant also raised the lack of personal jurisdiction in its motion to transfer.
In the instant case, Plaintiff's arguments as to why Defendant is subject to personal jurisdiction are fatally flawed. Plaintiff has not provided this Court with any factual or legal support for its conclusions. Plaintiff contends that Defendant is a resident of Pennsylvania because Defendant has an office at 1100 Northbrook Drive in Trevose, Pennsylvania. Plaintiff's evidence to support the fact that the office at 1100 Northbrook Drive belongs to Defendant is that Plaintiff personally served an office manager at that address and Defendant's answer did not object to that service as improper.
Plaintiff's brief did not include any sworn affidavits or any legal citations on this issue.
Defendant has provided evidence by Affidavit that it does not reside in Pennsylvania, has no connection to the Pennsylvania office and does not do business in Pennsylvania. (Jim Rorison Affidavit). Defendant's affidavit indicates that the 1100 Northbrook Drive office is the office of Pulte Home Corporation of the Delaware Valley, a subsidiary of Defendant, Pulte Home Corporation.
Plaintiff's reliance upon this service implies that Plaintiff believes that Defendant has at least waived its right to object to residency in Pennsylvania because it did not object to service at this Pennsylvania office. However, if the Pennsylvania company is an independent subsidiary of Defendant, this service would be improper. While a comprehensive answer by Defendant would have objected to such service, Defendant has put Plaintiff on sufficient notice by objecting to personal jurisdiction and venue.
The Third Circuit has found that "`generally [a] foreign corporation is not subject to the jurisdiction of the forum state merely because of its ownership of the shares of stock of a subsidiary doing business in the state.'" Clark v. Matsushita Electric Industrial Company, Ltd., 811 F. Supp. 1061, 1067 (M.D. Pa. 1993) (quoting Lucas v. Gulf W. Indus., Inc., 666 F.2d 800, 805-06 (3d Cir. 1981)). Despite its burden, Plaintiff has not provided any evidence to show that service on the subsidiary company in Pennsylvania would constitute proper service on the Defendant parent company.
When determining whether to make a parent corporation subject to personal jurisdiction in the district where it has a subsidiary, courts consider such factors as whether the subsidiary was an alter ego or agent of the parent corporation or whether the subsidiary was involved in the transaction. Clark, 811 F. Supp. at 1067.
In the alternative, Plaintiff states that even if Defendant did not have an office in Pennsylvania, it would be subject to personal jurisdiction because it regularly conducts business in this district. Again, Plaintiff has provided no evidence to support this bald allegation. Since Plaintiff bears the burden of proof and has provided no proof, we must conclude that this Court does not have personal jurisdiction over Defendant. Since Defendant does not reside in this district and we do not have personal jurisdiction over Defendant venue in this Court is improper.
ii. Dismissal
Transfer of this case to the District of Delaware is impossible based upon the present state of the record. Plaintiff is a Delaware corporation. Defendant has provided no evidence as to its citizenship, only a bald allegation in its Motion to Transfer. Defendant has not established that the parties are citizens of different states, and therefore, eligible for diversity jurisdiction in Delaware. 28 U.S.C. § 1332(a)(1); Elbeco Inc. v. Estrella de Plato, Corp., 989 F. Supp. 669, 679 (E.D. Pa. 1997) (defendants bear the burden of proving that the transferee district is the proper district). We cannot transfer this case to a court in which it could not have been filed originally. Since we cannot determine from this record whether this case could have been filed in the District of Delaware we cannot transfer it to that Court. 28 U.S.C. § 1406(a) (original district court "shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought") (emphasis added). The plain language of 28 U.S.C. § 1406(a) requires that we dismiss this case: "The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss." . . . 28 U.S.C. § 1406(a) (emphasis added).
Defendant alleged that Michigan is both its state of incorporation and its principal place of business. We know that Defendant is doing business in Delaware. (Jim Rorison Affidavit ¶ 2). However, Defendant did not provide the Court with any corroborative evidence regarding the location of its principal place of business. Corroborative evidence is required to establish the elements necessary for transfer pursuant to § 1404(a). See Plum Tree, Inc. v. Stockment, 488 F.2d 754, 756-57 (3d Cir. 1973) (a district court cannot transfer a case when the defendant has not produced any evidence to establish the necessary elements for transfer under § 1404(a)). A similar evidence requirement would apply to § 1406(a) transfers in order to ensure that the new district is appropriate.
C. Conclusion
This claim is based on transactions that occurred in Delaware and is between two parties who have offices and conduct business in Delaware. Both parties agree that a Delaware statute controls one of the counts. Plaintiff has provided no evidence that Defendant has sufficient connections to the state of Pennsylvania to justify keeping this matter in this Court. Defendant has provided no support for its assertion that this claim could have properly been filed in the District of Delaware. Accordingly, we have no alternative but to dismiss this matter pursuant to § 1406(a).
An appropriate order follows.
ORDER
AND NOW, this 15th day of July 2003, upon consideration of Defendant Pulte Home Corporation's Motion to Transfer (Docket No. 5) and all papers filed in support thereof or in opposition thereto, it is ORDERED as follows:1. Defendant's Motion to Transfer for improper venue under 28 U.S.C. § 1406(a) will be treated as a motion to dismiss for improper venue under 28 U.S.C. § 1406(a), and
2. The Motion is Granted and Plaintiff's Complaint is DISMISSED for improper venue.
IT IS SO ORDERED.