Opinion
Civil Action No. 05-CV-02771.
July 10, 2007
ROBERT L. SACHS, JR., ESQUIRE, CHRISTOPHER A. BRADLEY, ESQUIRE, On behalf of Plaintiffs.
LAURENCE DAVID GRANITE, ESQUIRE, On behalf of Defendant.
ORDER
NOW, this 10th day of July, 2007, upon consideration of the Motion of Defendant, Tyler Place, Inc., to Dismiss Plaintiffs' Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(2) (3) or in the Alternative to Transfer Plaintiffs' Action to the United States District Court for the District of Vermont, Pursuant to 28 U.S.C. § 1406(a), which motion was filed July 15, 2005; upon consideration of Plaintiffs' Response to the Motion of Defendant, Tyler Place, Inc., to Dismiss Plaintiffs' Complaint, which response was filed July 29, 2005 upon consideration of the briefs of the parties; after hearing held November 15, 2005, 2005; after closing arguments held that same date; and for the reasons expressed in the accompanying Memorandum,
IT IS ORDERED that defendant's motion to dismiss is denied.IT IS FURTHER ORDERED that defendant's alternative motion to transfer is granted.
IT IS FURTHER ORDERED that this case shall be transferred to the United States District Court for the District of Vermont.
MEMORANDUM
This matter is before the court on the Motion of Defendant, Tyler Place, Inc., to Dismiss Plaintiffs' Complaint Pursuant to Federal Rules of Civil Procedure 12(b)(2) (3) or in the Alternative to Transfer Plaintiffs' Action to the United States District Court for the District of Vermont, Pursuant to 28 U.S.C. § 1406(a), which motion was filed July 15, 2005. Plaintiffs' Response to the Motion of Defendant, Tyler Place, Inc., to Dismiss Plaintiffs' Complaint was filed July 29, 2005. A hearing on defendant's motion was held on November 15, 2005. For the following reasons, we deny defendant's motion to dismiss but grant defendant's motion to transfer this matter to the United States District Court for the District of Vermont.
Specifically, I conclude that plaintiffs have not produced sufficient evidence to permit the exercise of personal jurisdiction over out-of-state defendant Tyler Place, Inc. pursuant to the Commonwealth of Pennsylvania's Long Arm statute. In addition, even though this court may not constitutionally assert personal jurisdiction over defendant, we exercise the discretion granted pursuant to 28 U.S.C. §§ 1406(a) and 1631 to transfer this matter to the District of Vermont.
JURISDICTION AND VENUE
Jurisdiction in this case is based upon diversity of citizenship pursuant to 28 U.S.C. § 1332. Venue is alleged to be proper pursuant to 28 U.S.C. § 1391 because the events giving rise to plaintiffs' claims allegedly occurred in Lancaster County, Pennsylvania, which is in this judicial district.
PROCEDURAL HISTORY
On June 10, 2005 plaintiffs Thomas Cody, a minor, by his parents Stephen W. Cody and Sharon Greenlish Cody, and Stephen Cody and Sharon Cody, individually, filed a one-count Complaint. Plaintiffs' Complaint alleges negligence on the part of defendant Tyler Place, Inc. Specifically, plaintiffs aver that from June 21 through 28, 2003 plaintiffs were paying guests at Tyler Place Resort. During their stay, minor plaintiff Thomas Cody, age four, was taken by the staff of Tyler Place Resort to a petting zoo owned, operated and controlled by defendant. Shortly after Thomas Cody and his family returned home to Lancaster, Pennsylvania, Thomas became seriously ill and was diagnosed with E-coli.
On July 15, 2005 defendant filed its within motion to dismiss, or in the alternative, for transfer of this action to the United States District Court for the District of Vermont. On July 29, 2005 plaintiffs filed their response to defendant's motion. In the brief in support of their response, plaintiffs requested that the court permit them to take discovery on the issue of personal jurisdiction. By my Order dated August 17, 2005 I granted plaintiffs' request for jurisdictional discovery, placed the case into civil suspense to permit the parties to conduct jurisdictional discovery and scheduled a hearing for November 15, 2005.
On November 15, 2005 a hearing was held before me. Neither party offered any witnesses. Plaintiffs introduced three exhibits. Defendants relied on three exhibits that were previously attached to its within motion. At the conclusion of the hearing I heard closing arguments from counsel for the parties and took the matter under advisement.
CONTENTIONS OF THE PARTIES Defendant's Contentions
Defendant Tyler Place, Inc., asserts that this court lacks personal jurisdiction over it and that the Eastern District of Pennsylvania is not a proper venue for this diversity action. Thus, defendant argues that I should dismiss plaintiffs' Complaint for lack of jurisdiction. In the alternative, defendant asserts that this case should be transferred to the United States District Court for the District of Vermont.
Defendant contends that it has not at any time pertinent to this matter done any of the following acts:
1. incorporate in Pennsylvania;
2. have any representatives visit Pennsylvania for purposes of presentations to attract business;
3. organize, sponsor or participate in any trade shows in Pennsylvania;
4. participate in any extensive, regular promotion or advertisement in Pennsylvania that specifically targets Pennsylvania residents;
5. distribute or direct any type of discount coupon to Pennsylvania residents;
6. solicit any business within Pennsylvania, with the exception of mailings to past guests or those who requested information;
7. participate in any broad based mailing campaigns in Pennsylvania;
8. maintain a toll free number;
9. own any shares of stock of any subsidiary doing business in Pennsylvania;
10. pay or file tax returns in Pennsylvania;
11. own or lease any property in Pennsylvania;
12. maintain an agent in Pennsylvania;
13. maintain an office in Pennsylvania; or
14. operate an office in Pennsylvania.
Defendant relies on a number of cases for the proposition that its failure to do any of the above-mentioned acts or activities should result in a finding that it does not have the constitutionally sufficient minimum contacts with the Commonwealth of Pennsylvania to be subject to personal jurisdiction. Specifically, defendant relies on the cases of Rose v. St. George's School of Medicine, Ltd., 773 F.2d 539 (3d Cir. 1985); O'Connor v. Sandy Lane Hotel Co., Ltd., 2005 U.S.Dist. LEXIS 7397 (E.D.Pa. April 28, 2005) (Joyner, J.); Zameska v. Seguros ING Commercial America, S.A. de C.V., 2005 U.S.Dist. LEXIS 3295 (E.D.Pa. March 3, 2005) (Bartle, J.); Peek v. Golden Nugget Hotel and Casino, 806 F.Supp. 555 (E.D.Pa. 1992) (Bartle, J.); Cresswell v. Walt Disney Productions, 677 F.Supp. 284 (W.D.Pa. 1987); and Busch v. Sea World of Ohio, 95 F.R.D. 336 (W.D.Pa. 1982).
The gist of defendants argument is that while defendant has conducted sporatic promotion and advertisement in the Commonwealth of Pennsylvania over the past ten years, defendant did not participate in any extensive advertisement and solicitation of Pennsylvania residents. Thus, defendant asserts that the court does not have personal jurisdiction in this matter.
Specifically, defendant contends that in 1996 and 2000 it placed ads for Tyler Place in the Philadelphia Inquirer and the New York Times as part of an advertising campaign initiated by the Vermont Board of Tourism.
Finally, with regard to plaintiffs' revenue argument, defendant contends that plaintiffs misstate the total revenue of defendant based upon Pennsylvania visitors to the resort and that the amount of revenue derived from Pennsylvania residents makes up only 2.41 percent, not 5 percent, (241 families in ten years, not 5 years as alleged by plaintiffs) out of an annual average of 1000 families per year who visit defendant's resort.
Plaintiffs' Contentions
Plaintiffs assert that they learned of Tyler Place Resort through advertisements purchased by defendant in "Family Fun" magazine, which plaintiffs allege they bought in their hometown of Lancaster, Pennsylvania. After seeing the advertisement, plaintiff Sharon Cody called Tyler Place for further information. In response to that inquiry, plaintiffs assert that they received material about the resort, including a list of Pennsylvania residents who had stayed there. Furthermore, plaintiffs assert that they were encouraged to contact these references.
Plaintiffs contend that defendant advertises in Pennsylvania newspapers and national publications and targets Pennsylvania residents in its advertising efforts. Specifically, plaintiff asserts that defendants have placed newspaper advertisements in the Philadelphia Inquirer and New York Times for the purpose of soliciting Pennsylvania residents to come to defendant's resort.
Moreover, plaintiffs aver these advertisements were deliberately chosen by defendant to solicit business from Pennsylvania residents. In addition, plaintiffs contend that approximately 5 percent of defendant's total revenue (241 families) comes from Pennsylvania residents over the past five years; and this amount represents a significant portion of defendant's total revenues, thus, making defendant subject to personal jurisdiction.
Plaintiffs rely on three decisions of this court in support of its position that advertising in the forum state may constitute sufficient minimum contacts to assert jurisdiction over defendant. See Hlavac v. DGG Properties, 2005 WL 839158 (E.D.Pa. Apr. 8, 2005) (Yohn, J.); Zubyk v. LPBOC Hotel, Ltd. Partnership, 2000 U.S.Dist. LEXIS 9671 (E.D.Pa. June 23, 2000) (Padova, J.); and Piccirillo v. Hoteles Camino Real, S.A., 1986 U.S.Dist. LEXIS 29812 (E.D.Pa. January 31, 1986) (Ludwig, J.).
STANDARD OF REVIEW
Rule 4(e) of the Federal Rules of Civil Procedure authorizes district courts to exercise personal jurisdiction over out-of-state defendants to the extent permitted by the long-arm statute of the forum state. O'Connor v. Sandy Lane Hotel Co., Ltd., No.Civ.A. 04-2436, 2005 U.S. Dist. LEXIS 7397 (E.D.Pa. April 28, 2005) (Joyner, J.).
In Pennsylvania, the applicable jurisdictional statute is 42 Pa.C.S.A. § 5322, which provides in subsection (b) that Pennsylvania shall exercise jurisdiction over non-residents "to the fullest extent allowed under the Constitution of the United States." The effect of this statute is to allow Pennsylvania to assert personal jurisdiction to the extent permissible under the Due Process Clause of the United States Constitution. Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984).
When a jurisdictional challenge has been raised by a defendant, plaintiffs bear the burden of producing sufficient facts to establish that the exercise of personal jurisdiction is proper.Mellon Bank (East) PSFS National Association v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). To decide whether plaintiffs have made a prima facie showing of personal jurisdiction, the court is required to accept plaintiffs' allegations as true, and construe disputed facts in their favor. Toys "R" Us, Inc. v. Step Two, S.A., 318 F.3d 446, 457 (3d Cir. 2003).
If plaintiffs succeed in making a prima facie case for jurisdiction by demonstrating the existence of minimum contacts, the burden shifts back to defendant to show that the exercise of jurisdiction is nonetheless unconstitutional. Mellon Bank, 960 F.2d at 1226. The United States Court of Appeals for the Third Circuit has stated that if defendant fails to carry its burden at this stage of the proceedings, the case will not be one in which it is appropriate for the court to further consider factors relating to "fair play and substantial justice." Mellon Bank, 960 F.2d at 1227.
DISCUSSION
There are two types of in personam jurisdiction, in the Commonwealth of Pennsylvania: general and specific jurisdiction. "General jurisdiction is founded upon a defendant's general activities within the forum which evidence continuous and systematic contacts with the state. Specific jurisdiction has a more narrow scope and is focused upon the particular acts of the defendant which gave rise to the underlying cause of action."Hall-Woodford Tank Company v. R.F. Kilns, 698 A.2d 80, 82, (Pa.Super. 1997) (Citations omitted.)
Originally, plaintiffs asserted jurisdiction based upon both general and specific jurisdiction. However, at oral argument, plaintiffs' counsel Robert L. Sachs, Esquire, abandoned plaintiffs' claim for general jurisdiction. Accordingly, I do not address in this Opinion whether plaintiffs have established general jurisdiction under Pennsylvania law.
See Transcript of Hearing conducted before me on January 30, 2006 at pages 23-26, 29.
Specific Jurisdiction
As stated above, Pennsylvania's long-arm statute allows for the exercise of jurisdiction to the extent permitted by the Due Process Clause of the United States Constitution. The United States Supreme Court has held that due process requires a non-resident defendant who is not present in the forum to "have certain minimum contacts with it such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95, 102 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 343, 85 L.Ed. 278, 283 (1940)).
The Supreme Court further defined the strictures of the Due Process Clause in holding that "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283, 1298 (1958).
The Third Circuit has described the due process analysis underInternational Shoe and its progeny as a two-pronged test: first, a court must determine whether there are minimum contacts; and second, whether the exercise of jurisdiction comports with "fair play and substantial justice". Mellon Bank, 960 F.2d at 1221-22.
Specific jurisdiction over a defendant can be found where the suit is related to, or "arises out of", the defendant's contacts with the forum. Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 413, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404, 411 (1984). In the case of specific jurisdiction, the court's jurisdiction is based on the "relationship among the defendant, the forum, and the litigation." Shaffer v. Heitner, 433 U.S. 186, 204, 97 S.Ct. 2569, 2580, 53 L.Ed.2d. 683, 698 (1977).
In this case, the contacts that plaintiffs rely on in support of personal jurisdiction are that defendant advertises in Pennsylvania newspapers and national publications and targets Pennsylvania residents in its advertising efforts. Specifically, plaintiff asserts that defendants have placed newspaper advertisements in the Philadelphia Inquirer and New York Times for the purpose of soliciting Pennsylvania residents to come to defendant's resort.
In addition, plaintiffs assert that approximately five percent of defendant's total revenue (240 families) has come from Pennsylvania residents over the past five years. Plaintiffs contend that is a significant portion of defendant's total revenues, thus making defendant subject to personal jurisdiction.
Finally, plaintiffs assert that they specifically became aware of Tyler Place through an advertisement in a national publication called Family Fun Magazine. Plaintiffs assert that all of the foregoing contacts support a finding of personal jurisdiction.
Defendant contests many of plaintiffs' factual assertions, including the number and type of advertisements, the amount of revenue received from Pennsylvania residents and the claim that Sharon Cody first learned about Tyler Place from Family Fun Magazine. However, accepting plaintiffs' allegations as true, and construing any disputed facts in plaintiffs' favor, as I am required to do, Toys "R" Us, 318 F.3d at 457, I find that plaintiffs fail to establish the minimum contacts necessary to establish personal jurisdiction.
Plaintiffs' reliance on the advertisements in this case to support specific personal jurisdiction are misplaced. "Typically, contractual or advertising contacts with the forum state will not give rise to specific personal jurisdiction over defendants charged with tortious injury occurring outside the state." O'Connor, 2005 U.S.Dist. LEXIS 7397 at *12; See also Wims v. Beach Terrace Motor Inn, Inc., 759 F.Supp. 264, 267 (E.D.Pa. 1991) (Van Artsdalen, J.).
Moreover, advertisements in national magazines or newspapers not directed to a particular forum are not enough to establish jurisdiction. Zameska v. Seguros ING Commercial America, S.A. DE C.V., 2005 U.S. Dist. LEXIS 3295 at *5 (E.D.Pa. Mar. 4, 2005) (Bartle, III, J.). Here, plaintiffs reliance on the advertisement in Family Fun Magazine, a national publication, is misplaced because there is no evidence that the it was directed to this particular forum, rather than to every state in which it is distributed.
The Philadelphia Inquirer is a newspaper published in Pennsylvania. However, defendant published an advertisement in this newspaper during two years, 1996 and 2000, neither of which was read by plaintiffs or relied upon as a contact with defendant. Thus, while this may have been a factor to consider in analyzing general jurisdiction, it has nothing to do with the analysis under specific jurisdiction.
The New York Times is a non-Pennsylvania newspaper with an international circulation, and advertising in it does not constitute a "continuous and substantial" contact with Pennsylvania for jurisdictional purposes. See Gehling v. St.George's School of Medicine, Ltd., 773 F.2d 539, 542 (3d Cir. 1985). Moreover, like the advertisement in the Philadelphia Inquirer, it was published only in 1996 and 2000 and was not relied upon by plaintiffs.
Finally, the amount of revenue generated by defendant from Pennsylvania residents is also a factor which would be analyzed under a claim of general jurisdiction. The amount of revenue generated by defendants from Pennsylvania residents has nothing to do with specific jurisdiction. Specific jurisdiction deals with the "relationship among the defendant, the forum, and the litigation." Shaffer, 433 U.S. at 204, 97 S.Ct. at 2580, 53 L.Ed.2d. at 698. Defendant's revenues have nothing to do with this litigation or the negligence claims asserted by plaintiffs.
Regarding the cases cited by plaintiffs in support of their assertion of personal jurisdiction, I find that they are either distinguishable from the facts of this case or unpersuasive.
Specifically, in Zubyk v. LPBOC Hotel, Ltd. Partnership, plaintiffs submitted an affidavit alleging that defendant advertised in their local newspaper every Sunday. 2000 U.S.Dist. LEXIS 9671 at *8. That is significantly different from the facts of this case where defendant's advertisements in the Philadelphia Inquirer and New York Times occurred on two occasions years earlier.
In Piccirillo v. Hoteles Camino Real, S.A., my colleague, now Senior United States District Judge Edmund V. Ludwig, states that he bases his decision to find personal jurisdiction on the "promotional activities and advertising" of defendant without specifying the nature of those matters. Without knowing the factual basis for Judge Ludwig's conclusion, I conclude that thePiccirillo case does not support plaintiffs' assertion of personal jurisdiction in this matter.
Finally, I conclude that plaintiffs' reliance on the decision of my colleague Senior Judge William H. Yohn, Jr., in Hlavac v. DGG Properties, supra, is similarly misplaced. Plaintiffs citeHlavac for the proposition that if the defendants in that case had directed advertisements into Pennsylvania, then Judge Yohn would have found personal jurisdiction. However, other caselaw in this district has held that "advertising contacts with the forum state will not give rise to specific personal jurisdiction over defendants charged with tortious injury occurring outside the state." O'Connor, 2005 U.S.Dist. LEXIS 7397 at *12; Wims, supra.
Each case where personal jurisdiction is an issue must be analyzed on the facts of the particular case. There is no one set of facts that guarantees any specific outcome. "Decisions in these long-arm cases are not easy, and there is a reason for the difficulty." Jacobs v. Lakewood Aircraft Service, Inc., 493 F.Supp. 46, 50 (E.D.Pa. 1980).
Accordingly, based upon the foregoing, I conclude that plaintiffs have not met their initial burden of establishing sufficient minimum contacts to support a finding of specific jurisdiction under the Pennsylvania Long Arm statute. In the event I am mistaken, I further conclude that neither the minuscule advertising, nor the 2.5 to 5 percent of business that defendant receives from Pennsylvania residents is a "sufficient connection between the defendant and the forum State as to make it fair to require defense of the action in the forum." Kulko v. California Superior Court, 436 U.S. 84, 91, 98 S.Ct. 1690, 1697, 65 L.Ed.2d 132, 141 (1978).
However, for the reasons expressed below, I decline to dismiss plaintiffs' Complaint. Rather, I transfer this matter to the United States District Court for the District of Vermont.
Transfer of Jurisdiction
In its motion to dismiss, defendant argues in the alternative that should the court not find personal jurisdiction over defendant and dismiss this case, the case should be transferred to the United States District Court for the District of Vermont pursuant to 28 U.S.C. § 1406(a). Plaintiff did not respond to this alternative remedy.
Section 1406(a) provides that "[t]he district court of a district in which is filed a case laying venue in the wrong division or district 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." 28 U.S.C. § 1406(a).
In addition, transfer to cure want of jurisdiction is also appropriate under Section 1631 which allows the court to transfer a case, "if it is in the interest of justice," to "any other such court in which the action or appeal could have been brought at the time it was filed or noticed." 28 U.S.C. § 1631. In this case, defendant acknowledges that transfer to the United States District Court for the District of Vermont would be appropriate. I agree.
Because this case involves harm to a minor child, I find that the interests of justice are better served by transferring this case to an appropriate court, rather than exercising my discretion to simply dismiss the action. The courts have a traditional role in protecting the rights of minors, and I conclude that this is an appropriate exercise of my discretion in support of that traditional role.
Accordingly, while I deny defendant's request to dismiss this action, I grant defendant's alternative remedy and transfer this matter to the United states District Court for the District of Vermont.