Summary
finding lack of personal jurisdiction when bulk of negotiations and performance of contracts occurred outside forum state
Summary of this case from G.C. K.B. Investments, Inc. v. FiskOpinion
Civil Action No: 01-0993 Section: "R" (4)
August 23, 2001
ORDER AND REASONS
This case arises out of Drivecon Corp.'s alleged failure either to deliver or to perform services in accordance with its contracts with plaintiff Plant Mechanical Services, Inc. Defendant Drivecon moves to dismiss this case for lack of personal jurisdiction or to transfer venue. For the following reasons, defendant's 12(b)(2) motion is granted.
I. Background
Plaintiff, Plant Mechanical Services, Inc. is a Louisiana corporation that sells and repairs hoist and derrick equipment. Plant Mechanical maintains offices in Louisiana, North Carolina, Texas and Washington. Drivecon is an Illinois corporation with its principal place of business in Illinois. Plant Mechanical employed Drivecon as one of its principal suppliers of variable frequency controls, motor drives and motor drive equipment.
Plant Mechanical had contracts to provide hoist and crane equipment services to Duke Engineering Services ("Duke Power") in North Carolina, Simpson Tacoma Kraft Company in Washington, and Inland Paper Company in Kentucky. Plant Mechanical then hired Drivecon to supply and install equipment for those projects. Plant Mechanical alleges that Drivecon breached those contracts, failed to perform on time, delivered and installed defective equipment and breached its warranty, all of which resulted in Plant Mechanical's incurring additional costs and expenses. Plant Mechanical refused to pay Drivecon's invoices until Drivecon reimbursed Plant Mechanical for those costs incurred. The parties attempted to settle their differences at Plant Mechanical's Louisiana office on January 9, 2001 and discussed arbitration. Plant Mechanical filed this suit on January 31, 2001.
Drivecon now moves to dismiss plaintiff's claims against it for lack of personal jurisdiction, or in the alternative to transfer venue to the Northern District of Illinois, where Drivecon sued Plant Mechanical after this action was filed. The Illinois action has since been dismissed.
II. Discussion
A. Personal Jurisdiction
When, as here, a nonresident defendant moves to dismiss for lack of personal jurisdiction, the plaintiff shoulders the burden of establishing jurisdiction over that defendant. See Stuart v. Spademan, 772 F.2d 1185, 1192 (5th Cir. 1985). Because this Court will rule on the issue without a full evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdiction. See Wilson v. Belin, 20 F.3d 644, 648 (5th Cir. 1994) (citing Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)). In determining whether plaintiff has made a prima facie showing of jurisdiction, the Court must accept as true all uncontroverted allegations in plaintiff's complaint and resolve any factual disputes in its favor. See Latshaw v. Johnson, 167 F.3d 208, 211 (5th Cir. 1999); Wilson, 20 F.3d at 648.
A court has personal jurisdiction over a nonresident defendant if (1) the forum state's long-arm statute confers personal jurisdiction over that defendant; and (2) the forum state's exercise of such jurisdiction complies with the due process clause of the Fourteenth Amendment. See Latshaw, 167 F.3d at 211. Under the Louisiana long-arm statute, jurisdiction is proper if the cause of action arises out of "injury or damage by an offense or quasi offense committed through an act or omission in this state." LA. R.S. § 13:3201(A)(3) (West 2000) In addition, Louisiana's long-arm statute extends jurisdiction to the full limits of due process. Thus, the Court must determine whether the exercise of jurisdiction satisfies the due process clause. See LA. R.S. § 13:3201(B) (West 2000); Guidry v. United States Tobacco Co., 188 F.3d 619, 624 (5th Cir. 1999) (citing Petroleum Helicopters, Inc. v. Avco Corp., 513 So.2d 1188, 1192 (La. 1987)).
1. Due Process
The exercise of personal jurisdiction over a nonresident defendant satisfies due process when (1) the defendant has purposefully availed itself of the benefits and protections of the forum state by establishing "minimum contacts" with that state; and (2) exercising personal jurisdiction over the defendant does not offend "traditional notions of fair play and substantial justice." Latshaw, 167 F.3d at 211 (citing International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158 (1945)).
1. Mimmum contacts
The minimum contacts prong of the due process analysis may be satisfied if the contacts give rise to specific personal jurisdiction or give rise to general personal jurisdiction. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868 (1984); Wilson, 20 F.3d at 647.
(a) Specific Jurisdiction
A court may exercise specific jurisdiction over a nonresident defendant when the claim asserted against the defendant arises out of or relates to his contacts with the forum state. See Helicopteros, 466 U.S. at 414 n. 8, 104 S.Ct. at 1872 n. 8; Wilson, 20 F.3d at 647. To determine whether specific jurisdiction exists, courts must examine whether the defendant purposefully availed himself of the privileges of conducting activities in the forum state, and whether the cause of action arises out of or relates to those activities. See Guidry, 188 F.3d at 625; D.J. Investments, Inc. v. Metzeler Motorcycle Tire Agent Gregg, Inc., 754 F.2d 542, 547-48 (5th Cir. 1985). The defendant's connection with the forum state must be such that he "should reasonably anticipate being haled into court" there. Latshaw, 167 F.3d at 211 (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567 (1980)). A single act by the defendant directed at the forum state can be enough to confer in personam jurisdiction over him, if the cause of action arises out of that act. See Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th Cir. 1993). In order to determine whether defendant purposefully availed himself of the privilege of conducting activities within this forum, the Court must consider factors such as the quality, nature and extent of defendant's activities in this forum, and the relationship between the cause of action and the contacts. See D.J. Investments, 754 F.2d at 545 n. 1 (quoting Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1268 (5th Cir. 1981)).
Here, plaintiff claims that this dispute arose out of contracts negotiated between Drivecon and Plant Mechanical. Plant Mechanical submits a Declaration from David R. Cunningham testifying that Drivecon's president Richard Parat traveled to Plant Mechanical's Louisiana office to solicit Plant Mechanical's business on the Duke Power project. (Pl.'s Opp. to Mot. to Dismiss, Ex. E, Cunningham Declaration, ¶ 6.) He further asserts that Mr. Parat visited Louisiana on two other occasions to discuss the projects at issue in this dispute. Id. at ¶ 7. Mr. Cunningham states that Mr. Parat, along with Drivecon representatives, traveled to Louisiana in January 2001 to discuss the parties' dispute. Id. at ¶¶ 7, 13. In addition, Drivecon sent its invoices on the three projects to Louisiana, and they were paid for from Louisiana. Id. at ¶ 17.
Drivecon maintains that its dealings with Plant Mechanical on the projects at issue consisted of receiving information from Plant Mechanical's non-Louisiana branches, sending price quotes in response, receiving purchase orders from Drivecon's manufacturing branches in Illinois and shipping equipment to locations outside Louisiana. Drivecon does admit that a "very few" activities pertaining to the contracts did occur in Louisiana. (Def.'s Mot. to Dismiss, Parat Declaration, ¶ 16.) Drivecon sent invoices to Plant Mechanical's Louisiana offices for payment and conducted discussions of the contract dispute in Louisiana. Drivecon concedes that it also shipped only $2,243 worth of equipment to Plant Mechanical in Louisiana, which is apparently part of the dispute between the parties. Id. at ¶ 6. The Court notes that the total amount of invoices for equipment and services for these three projects amounted to more than $163,000. (Pl.'s Opp. to Mot. to Dismiss, at 5.)
For the purpose of this motion, the Court will accept as true plaintiff's assertion that Drivecon solicited the Duke Power contract in Louisiana. See Latshaw, 167 F.3d at 211 (holding that courts must resolve any factual disputes in plaintiff's favor); Wilson, 20 F.3d at 648. Thus, the issue is whether a sales call on one of three projects, $2,243 in deliveries, receipt of invoices, and discussions about the contract dispute in Louisiana are sufficient to establish specific jurisdiction over a nonresident when the bulk of the contacts between the parties concerning the negotiations and performance of the contracts on the three projects at issue occurred elsewhere. forum state. Id. at 338. The court there noted that the relationship between the parties had been structured so that once the repairs outside the forum state had taken place, and the plaintiff paid the defendant, all contact between the parties would cease. Id. at 338. The Court found that this type of contractual relationship created only limited contacts between the defendant and the forum state, which did not satisfy the minimum contacts analysis.
These cases support dismissing the case against Drivecon for lack of personal jurisdiction. The bulk of the negotiations and performance of the contracts at issue occurred outside the forum state. Indeed, only $2,243 of $163,000 worth of equipment at issue was delivered into Louisiana. The types of contacts that Plant Mechanical presents in support of jurisdiction are the kind that the Fifth Circuit has held to be insufficient to confer jurisdiction. See Patterson v. Dietze, Inc., 764 F.2d 1145, 1147 (5th Cir. 1985) (holding that the agreement to mail payment checks into a forum state does not weigh heavily into the calculus of contacts); Spademan, 772 F.2d at 1193 (finding that in breach of contract cases, shipping articles into a forum state is insufficient to justify the exercise of in personam jurisdiction over a non-resident shipper); Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026, 1029 (5th Cir. 1983) (holding that communications regarding the development or status of a contract was insufficient to confer jurisdiction). Considering the totality of the facts in this case, the Court finds that these limited contacts are not of the quality and nature necessary to support specific jurisdiction.
(b) General Jurisdiction
In the absence of an action arising out of the nonresident defendant's purposeful contacts with the forum, general jurisdiction will exist when the defendant engaged in "systematic and continuous" activities in the forum state. See Helicopteros, 466 U.S. at 414 n. 9, 104 S.Ct. at 1872 n. 9; Wilson, 20 F.3d at 647. Due process requires that "continuous and systematic" contacts exist between the state and the foreign corporation to exercise general personal jurisdiction because the forum state does not have an interest in the cause of action. See Helicopteros, 466 U.S. at 415-16, 104 S.Ct. at 1872-83.
In Helicopteros, the Supreme Court held that the numerous contacts defendant had with Texas were not "continuous and systematic." In that case, for seven years, Helicopteros purchased helicopters, spare parts, and accessories from Bell Helicopters in Texas; Helicopteros sent prospective pilots to Texas for training; and managers and maintenance personnel of Helicopteros visited Bell in Texas. 466 U.S. at 411, 104 S.Ct. at 1870. Nevertheless, the Supreme Court held that "[p]urchases and related trips, standing alone, are not a sufficient basis for a State's assertion of jurisdiction. Id. at 417, 104 S.Ct. at 1874. The Supreme Court, instead, emphasized that Helicopteras had never been authorized to do business in Texas, never had an agent for service of process in Texas, never solicited business in Texas, never signed a contract in Texas (although it did contract with residents with Texas several times), never had any employee based in Texas, never maintained an office in Texas, did not maintain any records in Texas, and did not have any shareholders in Texas. See id. at 411-12, 104 S.Ct. at 1870-71.
In this case, Plant Mechanical argues that Drivecon's contacts with the state of Louisiana are of the kind and quality to constitute "continuous and systematic" contacts necessary to constitute general jurisdiction. The Court disagrees. The contacts between Drivecon and Louisiana are less "continuous and systematic" than the ones that the Supreme Court found insufficient to confer general jurisdiction in Helicopteros. The only evidence that Plant Mechanical provides in support of general jurisdiction is an affidavit stating that Richard Parat traveled to Plant Mechanical's Louisiana offices at least six times for general business, twice regarding the projects at issue in this suit, and once for several days to conduct a presentation for Plant Mechanical's technicians. (Cunningham Declaration, ¶¶ 6-7.) In addition, while plaintiff asserts that Drivecon has provided some equipment to Plant Mechanical's Louisiana offices "on several occasions," it does not specify the number of occasions or the value of those shipments. These few trips made by Parat combined with Plant Mechanical's vague assertion that Drivecon supplied equipment into Louisiana are the types of minimal business contacts which have not been held to be systematic and continuous enough to confer general jurisdiction over an out-of-state defendant.
Further, Drivecon, an Illinois corporation, with its principal place of business in Gurnee, Illinois, has not purposely availed itself of the benefits and protections of the laws of Louisiana. Drivecon does not have any shareholders or employees in Louisiana, does not have any offices in Louisiana; conducts its business from Illinois; does not keep any records, bank accounts or assets in Louisiana; and is not authorized or licensed to do business in Louisiana. (Parat declaration, ¶¶ 35-40.) As such, this Court finds that Plant Mechanical has not established general jurisdiction over Drivecon, and therefore dismisses this claim for lack of personal jurisdiction.
Since the Court lacks jurisdiction over this case, it does not reach the venue question.
III. Conclusion
For the foregoing reasons, defendant's motion to dismiss is granted, dismissing plaintiff's claims without prejudice.