Opinion
Case No. C2-04-632.
March 29, 2007
OPINION AND ORDER
This matter is before the Court for consideration of the Objection to the Magistrate Judge's March 8, 2007 Report and Recommendation. Flying Cargo objects to the Magistrate Judge's recommendation that the Court reach the legal conclusion that the exercise of personal jurisdiction is reasonable. For the reasons that follow, the Objection is OVERRULED.
I.
On February 20, 2007, Magistrate Judge Kemp conducted an evidentiary hearing. The purpose of the hearing, as set forth in the Court's previous Order, was to resolve the disputed fact of whether Mast and Flying Cargo had on-going business relations or whether their commercial contacts were limited to a single contract for the shipment of goods that was stolen. The Magistrate Judge made extensive findings of fact, which the Court will not repeat, particularly when Defendant has not objected on the ground that the factual findings set forth in the Report and Recommendation are erroneous.II.
Federal Rule of Civil Procedure 72(a) provides the procedural mechanism through which a party may obtain review of orders issued by a magistrate judge on nondispositive matters. The Rule provides that, in considering objections to such orders, the district judge "shall modify or set aside any portion of the magistrate judge's order found to be clearly erroneous or contrary to law." Fed.R.Civ.P. 72(a); see also 28 U.S.C. § 636(b)(1)(A). The clearly erroneous standard "`mandates that the district court affirm the magistrate's decision unless, on the entire evidence, it is left with the definite and firm conviction that a mistake has been committed. In the absence of clear error, the magistrate's order must stand.'" Balalovski v. Lucent Technologies, Inc., 2003 WL 21011148, *4 (S.D. Ohio April 10, 2003) (quoting Farley v. Farley, 952 F. Supp. 1232, 1235 (M.D. Tenn. 1997) (internal citations omitted)). To establish that a magistrate judge's opinion is contrary to law, an aggrieved party must demonstrate that the conclusions ignore or contradict relevant precepts of law. Gandee v. Glaser, 785 F. Supp. 684, 686 (S.D. Ohio 1992).III.
Defendant, Flying Cargo, relies heavily on Calphalon v. Rowlette, 228 F.3d 718,721 (6th Cir. 2000), and asserts that the mere presence of a contract, even if it is a long-term agreement, is insufficient to create specific jurisdiction. In spite of numerous jurisdictional factors he considered, and the depth of the analysis in the Report and Recommendation, Flying Cargo insists that the Magistrate Judge rested his entire decision on the misguided notion that Flying Cargo had a single, long-term agreement with Mast.In Calphalon, the plaintiff, an Ohio corporation, and its manufacturing representative, Rowlette, a Minnesota entity, operated under a long-term letter agreement which centered on Rowlette's representation of the product in numerous states. Rowlette operated under the letter agreement for sixteen years and then executed two one-year manufacturing representative agreements in which Rowlette agreed to represent Calphalon in Minnesota, Iowa, South Dakota, North Dakota and Nebraska, but not Ohio. 228 F.3d at 723. Rowlette was not required to perform work or develop business in the State of Ohio. Rowlette's only contacts with the State were "completely fortuitous" in that they arose solely because Calphalon was headquartered in Ohio. Id. The court concluded that Rowlette had not created continuous and substantial consequences with the State of Ohio, and that the purposeful availment requirement prevented the exercise of personal jurisdiction.
By contrast, here, Flying Cargo acted as Mast's freight forwarder, an intermediary between the shipper and the ocean carrier. Flying Cargo was Mast's exclusive freight forwarder for products it purchased in Israel and arranged countless shipments for ocean transportation. The business relationship between Mast and Flying Cargo began as early as 1998 and lasted, without interruption, through at least some time in 2004. The shipment of stolen merchandise, which is the subject of this case, was part of a routine shipment of goods that Flying Cargo was contractually obligated to deliver to the State of Ohio. Under the terms of the parties' contractual agreements, Flying Cargo was responsible to transport goods from a manufacturer located in Israel to a distribution center in Columbus, Ohio. Although Flying Cargo insists that Cargo Connections was responsible for inland carriage of goods, the rates Flying Cargo charged Mast included ground transportation from port to final destination in Columbus. Over the course of performance, Flying Cargo or its agent invoiced Mast over $1 million annually for transporting goods from Israel, including inland transportation from New York to Columbus, Ohio. All of the bills of lading for shipments indicated that the final destination for the goods was Columbus, Ohio.
Flying Cargo suggests that the Court's previous Order dismissing Cargo Connections has something to do with whether the exercise of personal jurisdiction over it is reasonable. The Court, however, dismissed Cargo Connections on wholly unrelated grounds, namely that the Himalaya Clause, or the defenses and limitations extended in the Bills of Lading, extended to Cargo Connections as a downstream carrier. See Norfolk Southern Railway Co. v. Kirby, 543 U.S. 14, 33-36 (2004).
Flying Cargo asserts that it billed Mast for the in-land trucking services performed by Cargo Connections for accounting purposes only, and that the billings were merely "pass-throughs." Nonetheless, the fact remains that Flying Cargo charged Mast for the in-land carrier portion of the transportation performed by Cargo Connections, which is just one of many facts supporting jurisdiction.
Flying Cargo indicates that the Magistrate Judge incorrectly placed emphasis on the final destination, i.e., Columbus, listed on the bills of lading. It insists, without citation to authority or stated rationale, that the focus should be on the place of discharge. The point of the Magistrate Judge's Report and Recommendation in this regard, with which this Court agrees, is that Flying Cargo agreed with Mast to transport goods to their final destination, in Columbus, Ohio.
Even though Mast was a Massachusetts entity during the early years of their six-year contractual relationship, the Court concludes that Flying Cargo has created continuing obligations with a Limited Brands entity located in the State of Ohio. Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985). Further, Flying Cargo has not controverted the only evidence at hearing that it continued to engage in freight forwarding services under the same contractual arrangement and invoiced over $1 million for services rendered after Mast relocated its headquarters to Columbus.
IV.
The Court has considered the arguments made by counsel, the cases cited and the opinions and analysis of the Magistrate Judge in his thorough Report and Recommendation. The Court finds no evidence to demonstrate that a mistake has been committed and, consequently, Magistrate Judge Kemp's decision is neither clearly erroneous nor contrary to law. Rule 72(a); 28 U.S.C. § 636(b)(1)(A). For the foregoing reasons, Flying Cargo's Objection to the Magistrate's Report and Recommendations (Doc. #72) is OVERRULED. The Magistrate Judge's March 8, 2007 Report and Recommendation is AFFIRMED in all respects. Flying Cargo's Motion for Relief from Order (Doc. #62) is DENIED.