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finding personal jurisdiction over defendant in part because defendant had an employee that traveled to Indiana as part of defendant's course of dealing with plaintiff
Summary of this case from Wine & Canvas Development, LLC v. WeisserOpinion
CASE NO. 1:03-cv-1144-DFH
December 31, 2003
ENTRY ON DEFENDANT'S MOTION TO DISMISS OR TRANSFER
This diversity case presents a contract dispute between plaintiffs Laibe Corporation and Versa-Drill International, Inc. and defendant R. Cushman Associates. Defendant has filed a motion seeking dismissal for lack of personal jurisdiction or improper venue, or for transfer to the Eastern District of Michigan. As explained below, the court finds that personal jurisdiction and venue are proper here and that there is no compelling reason to transfer the action. Accordingly, the motion to dismiss or transfer is denied.
Background
Plaintiffs Laibe Corporation and Versa-Drill Corporation are both Indiana corporations with their principal place of business in Indiana. They filed this action for breach of contract in the Circuit Court for Marion County, Indiana, against R. Cushman and Associates, Inc., a Michigan corporation with its principal place of business in Livonia, Michigan. Plaintiffs allege that Cushman breached a contract for the sale of Model 333 Transfer Cases for installation in Laibe's Versa-Drill 2000 well-drilling rig ("V2000"). Cushman removed the case to this court based on diversity jurisdiction under 28 U.S.C. § 1332. Cushman then filed its motion to dismiss or transfer.
Discussion
I. The Forum Selection Clause
Cushman relies primarily on a provision in the fine print of its form contract that it uses to confirm customers' purchase orders:
Applicable Laws: This contract shall be interpreted in accordance with and governed by the laws of the State of Michigan. Buyer consents to personal jurisdiction and venue in state or federal court in Wayne or Oakland County, Michigan (at RCA's option) for purposes of resolving any disputes hereunder.
There was no similar provision in the purchase orders from Laibe, and the parties have briefed a "battle of the forms" under the Uniform Commercial Code as to whether Cushman's language is part of their contract. See Ind. Code § 26-1-2-207. The court finds that it need not resolve that debate, at least at this stage of the case, because the provision would amount to only permissive consent to jurisdiction and venue in Michigan. It is not exclusive or mandatory, so it would not bar plaintiffs from filing this action in Indiana. The reference to Cushman's "option" appears to refer only to the choice between Wayne and Oakland Counties in Michigan.
Cushman has cited only one case to support its interpretation of the provision as exclusive and mandatory, and the contract language from that case shows how different that case is from this one. In Andrews v. Heinold Commodities, Inc., 771 F.2d 184 (7th Cir. 1985), the contract stated in relevant part:
All actions or proceedings arising directly, indirectly or otherwise in connection with, out of, related to or from this Agreement or any transaction covered hereby shall be litigated `at the discretion and election of Heinold Commodities, Inc. ("Heinold"), only in courts whose situs is within the State of Illinois. The undersigned ("Customer") consents and submits to the jurisdiction of any state or federal court located within the State of Illinois. . . .771 F.2d at 185 (emphasis added). Forum selection clauses in commercial contracts are ordinarily enforced, e.g., The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 (1972), but they are enforced according to their terms. The terms drafted by Cushman do not provide for mandatory and exclusive jurisdiction in Michigan, so venue does not depend on whether Cushman won the battle of the forms.
II. Personal Jurisdiction
For this diversity case to proceed in the Southern District of Indiana, this court must have personal jurisdiction over defendant Cushman. See RAR, Inc., v. Turner Diesel, Ltd., 107 F.3d 1272, 1275 (7th Cir. 1997). A federal district court exercising diversity jurisdiction has personal jurisdiction over a non-resident defendant "only if a court of the state in which it sits would have such jurisdiction." Id. In Indiana, personal jurisdiction depends on whether the requirements of the state long-arm statute are met and whether federal due process is satisfied. Anthem Ins. Cos. v. Tenet Healthcare Corp., 730 N.E.2d 1227, 1232 (Ind. 2000).
Indiana Trial Rule 4.4(A) serves as Indiana's long-arm statute. The current version of the rule includes the following language: "a court of this state may exercise jurisdiction on any basis not inconsistent with the Constitutions of Indiana or the United States." This recently amended language has the effect of returning Indiana long-arm law to its status before Anthem. Once again, a showing that long-arm jurisdiction is constitutional is sufficient, without any need for parsing the eight categories of actions giving rise to long-arm jurisdiction. Cf. Anthem, 730 N.E.2d at 1232 (insisting on need for such analysis before amendment to rule). The parties have not argued that there is any difference between the federal and state constitutional standards, so the court applies the federal due process standards here. See, e.g., Burger King Corp. v. Rudzewicz, 471 U.S. 462, 471-73 (1985).
Due process requires that a non-resident defendant have "certain minimum contacts with [the forum state] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940). Personal jurisdiction under Indiana Trial Rule 4.4(A) may be either general or specific. Alpha Tau Omega v. Pure Country, Inc., 185 F. Supp.2d 951, 956 (S.D. Ind. 2002); see also Anthem, 730 N.E.2d at 1240 (finding one defendant's business contacts sufficient to establish general jurisdiction). General jurisdiction makes a non-resident defendant amenable to suit within a particular forum regardless of the subject matter of the suit based on the defendant's continuous and systematic contacts with the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-15 (1984). Specific jurisdiction makes a non-resident defendant amenable only to suits arising out of or related to its contacts with a particular forum. Id. at 414. Specific jurisdiction may be based on relatively modest contacts with the forum if they have a substantial connection to the plaintiff's action. See Burger King, 471 U.S. at 474-76; RAR, 107 F.3d at 1277; Anthem, 730 N.E.2d at 1235.
In the case of specific jurisdiction, due process requires that a non-resident defendant must have established its contacts with the forum state by purposefully availing itself of the privilege of conducting business there. Logan Productions, Inc. v. Optibase, Inc., 103 F.3d 49, 52 (7th Cir. 1996). "This `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts." Burger King, 471 U.S. at 475, quoting Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984). In other words, the defendant's conduct and connection with the forum state should be such that it reasonably anticipates being haled into court there. Burger King, 471 U.S. at 474.
Federal due process is satisfied in this run-of-the-mine interstate commercial contract dispute. Cushman had contacts with Indiana sufficient to support specific jurisdiction in this case. Laibe contracted with Cushman to produce products for use in Indiana. Cushman's contacts with Indiana were purposeful rather than random or fortuitous, and those contacts gave Cushman fair warning that it could be subject to suit in Indiana on disputes arising from those contacts. Since January 1998, Cushman manufactured goods for Laibe and shipped them to Indiana. Even without physical presence in Indiana, wire and mail communication can establish minimum contacts, especially in an interstate commercial contract. See Purdue Research v. Sanofi-Synthelabo, S.A., 338 F.3d 773, 781 (7th Cir. 2003) (citing Burger King, 471 U.S. at 476). The contracts were negotiated orally or through the exchange of documents between Michigan and Indiana. When Cushman created a contractual relationship with Laibe, an Indiana corporation, it purposefully availed itself of the privilege of conducting business in Indiana. Shipment of goods into a state, even when shipped F.O.B. from the seller's plant, can satisfy the minimum contacts required for jurisdiction in the buyer's state. Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik, 295 F.3d 59, 64 (1st Cir. 2002). Cushman could reasonably anticipate being sued in Indiana for issues related to the Laibe contract.
Once the court finds sufficient minimum contacts, a defendant escapes jurisdiction only by making a compelling case that forcing it to litigate in the forum state would violate traditional notions of fair play and substantial justice. Burger King, 471 U.S. at 477; Logan Productions, 103 F.3d at 53. Cushman has not submitted evidence demonstrating that forcing it to litigate in this judicial district would violate traditional notions of fair play and substantial justice. Though it is always somewhat burdensome to defend a lawsuit away from one's forum state, it is not a burden that violates due process in this instance. See Burger King, 471 U.S. at 474 (explaining that modern transportation and communications mean it is usually not unfair or too burdensome to require a party to defend itself in a state where it engages in economic activity); Logan Productions, 103 F.3d at 54; see also Board of Trustees, Sheet Metal Workers' Nat'l Pension Fund v. Elite Erectors, Inc., 212 F.3d 1031, 1037 (7th Cir. 2000) ("Easy air transportation, the rapid transmission of documents, and the abundance of law firms with nationwide practices, make it easy these days for cases to be litigated with little extra burden in any of the major metropolitan areas.").
The parties' submissions show that at least one Cushman employee traveled to Indiana as part of Cushman's course of dealing with Laibe. Def. Ex. D. Cushman would not suffer a significantly greater burden in defending this suit than it carries when it sends its employees to Laibe. Indiana has a legitimate interest in adjudicating a dispute related to contacts in the State, and the plaintiffs have an interest in obtaining convenient and effective relief. See Burger King, 471 U.S. at 482-83. In light of the substantial connection between Cushman's purposeful contacts with this forum and plaintiffs' damage claims, the exercise of personal jurisdiction over Cushman is proper in this judicial district.
III. Venue
Defendant Cushman has also moved to dismiss for improper venue pursuant to Federal Rule of Civil Procedure 12(b)(3). Venue in this diversity case is governed by 28 U.S.C. § 1391 (a), which provides that the action may be brought only in "(1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought."
For purposes of venue under § 1391(a), a corporation resides "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). As discussed above, this court has specific personal jurisdiction over Cushman because of its contacts with Indiana. Accordingly, venue in Indiana is proper under § 1391(a)(1).
Venue is also proper here under § 1391(a)(2) because "a substantial part of the events or omissions giving rise to the claim occurred" in the Southern District of Indiana. Through a series of purchase orders and acknowledgment agreements, Cushman shipped its allegedly defective products to Indiana. Cushman also sent a technician to Indiana to make repairs. Venue under § 1391(a)(2) can be proper in more than one judicial district. Enviroplan, Inc. v. Western Farmers Electric Cooperative, 900 F. Supp. 1055, 1062 (S.D. Ind. 1995); see also Hardee's Food Systems, Inc. v. Beardmore, 169 F.R.D. 311, 316 (E.D.N.C. 1996) (under the new "substantial part of the events or omissions" language in § 1391, venue may be proper in any of several districts).
Venue in Indiana is proper under § 1391(a)(2) even though venue would also be proper in Michigan. Venue under § 1391(a)(2) does not require that the majority of events giving rise to a claim occur in the forum district, but only that a substantial part of the events take place there. Pasulka v. Sykes, 131 F. Supp.2d 988, 994 (N.D. Ill. 2001); see also TruServ Corp, v. Neff, 6 F. Supp.2d 790, 792 (N.D. Ill. 1998) (venue in Illinois was proper for breach of contract to pay money in Illinois, even though contract was formed and majority of acts of performance occurred in another state).
IV. Transfer
Cushman also seeks transfer to Michigan under 28 U.S.C. § 1404(a) based on the convenience of that forum. Under § 1404(a), Cushman has the burden of showing that the Eastern District of Michigan is "clearly more convenient" than the Southern District of Indiana. Coffey v. Van Dorn Iron Works, 796 F.2d 217, 220 (7th Cir. 1986).
Cushman focuses on its own convenience in litigating this matter to demonstrate that transfer is warranted, arguing that relevant documents are maintained in Michigan and that its own employees who will testify reside there. These are not compelling reasons for transfer, since such a transfer would merely shift inconvenience from Cushman to Laibe. "[T]he effect of a transfer cannot be a mere shift of inconveniences from one party to another." Moore v. AT T Latin America Corp., 177 F. Supp.2d 785, 789 (N.D. Ill. 2001), citing Promatek Med. Sys., Inc. v. Ergometrics, Inc., 1990 WL 19491, *4 (N.D. Ill. 1990) (denying transfer where burden of inconvenience would merely be shifted between parties).
"As a practical matter, it is usually assumed that witnesses within the control of the parties will appear voluntarily. Therefore, more attention should be given to the location of the non-party witnesses and those witnesses not within the control of the parties." Friskit, Inc. v. Realnetworks, Inc., 2003 WL 22433106, at *2 (N.D. Ill. Oct. 24, 2003), citing Spherion Corp. v. Cincinnati Financial Corp., 183 F. Supp.2d 1052, 1058 (N.D. Ill. 2002); 17 Moore's Federal Practice § 111.13[1](f))iii) (3d ed. 2001) ("the location of the majority of non-party witnesses in one of the two districts generally will tip the balance in favor of that district . . ."). Cushman has not identified any non-party witnesses or other evidence that would be available in Michigan but not in Indiana.
Cushman also seeks transfer under 28 U.S.C. § 1406(a), which provides: "The 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." The court has already concluded that venue is proper in the Southern District of Indiana, so § 1406 does not apply.
Accordingly, defendant Cushman's motion to dismiss or transfer is denied.
So ordered.