International Technologies Consultants, Inc. v. Euroglas S.A.

• Decision Date: 20 February 1997
• Docket Number: No. 94-1200,94-1200
• Citation: 107 F.3d 386
• Parties: INTERNATIONAL TECHNOLOGIES CONSULTANTS, INC., Plaintiff-Appellant, v. EUROGLAS S.A., Glas Tr"sch Holding A.G., Heinz Tr"sch, and Georg Grimm, Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 386

107 F.3d 386

41 U.S.P.Q.2d 1820

INTERNATIONAL TECHNOLOGIES CONSULTANTS, INC., Plaintiff-Appellant, v. EUROGLAS S.A., Glas Tr"sch Holding A.G., Heinz Tr"sch, and Georg Grimm, Defendants-Appellees.

No. 94-1200.

United States Court of Appeals, Sixth Circuit.

Argued March 9, 1996.

Decided Feb. 20, 1997.

Robert C. Brandenburg (briefed), Ernie L. Brooks (argued and briefed), Timothy G. Newman, Brooks & Kushman, Southfield, MI, for Plaintiff-Appellant.

Richard J. O'Brien, Linda T. Ieleja (argued and briefed), Sidley & Austin, Chicago, IL, Kendall B. Williams, Gault, Davison, Bowers, Hill, Parker & McAra, Flint, MI, F. Robert Schmelzer, Flint, Mi, for Defendants-Appellees.

Before: KRUPANSKY, NELSON, and DAUGHTREY, Circuit Judges.

DAVID A. NELSON, Circuit Judge.

This is an appeal from the dismissal, for want of in personam jurisdiction, of an action arising from the alleged misappropriation of the design for a manufacturing plant in France. Development of the design was coordinated by the plaintiff, a Michigan consulting firm, pursuant to a letter agreement negotiated in Switzerland with a Swiss company that is one of two corporate defendants here. The agreement, which provided for joint ownership of the design, contained a provision stating that "[j]urisdiction for this contract is Berne, Switzerland, and it will be interpreted under Swiss law."

The United States District Court for the Eastern District of Michigan (Newblatt, J.) found that "the [Michigan] contacts of each defendant are sufficiently tenuous so that imposing this forum upon them would constitute a denial of their right to substantial justice." The district court continued as follows:

"The events in the commercial relationship took place primarily in Europe. Any tortious behavior that was committed occurred in France or Switzerland and not in the United States. The Court does not accept as a legal fiction that the situs of the tort is Michigan. Therefore, defendants lacked any reasonable expectation that their actions would subject them to suit in this forum."

As to three of the defendants (a French corporation and two individuals, one a resident of Switzerland and the other a resident of Austria), it seems very clear to us, upon de novo review, that the plaintiff failed to make a prima facie showing of personal jurisdiction. A closer case is presented as far as the Swiss company is concerned--but given the terms of the plaintiff's contract with that company, and given the Supreme Court's admonition to exercise restraint in extending our notions of personal jurisdiction into the international field, see Asahi Metal Indus. Co., Ltd. v. Superior Court of California, 480 U.S. 102, 115, 107 S.Ct. 1026, 1033-34, 94 L.Ed.2d 92 (1987), we conclude that the plaintiff has failed to sustain its burden with respect to the Swiss company as well. To allow the suit to be maintained against this company in Michigan, we are satisfied, would offend "traditional notions of fair play and substantial justice." See International Shoe Co. v. State of Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The judgment entered by the district court will be affirmed as to all four defendants.

I

The French facility was designed for manufacturing flat sheets of glass through the use of a flotation process. In this "float glass process," as it is often called, molten glass is floated on a bath of liquid tin, whence the glass is formed and drawn out in a continuous ribbon prior to being annealed and cut to size.

The technology for the float glass process was developed by a British company, Pilkington Brothers, P.L.C., in the late 1950s and early 1960s. Pilkington's patents, trade secrets and expertise enabled that company to dominate the world float glass market for many years. As of 1992, we are told, there were approximately 140 glass manufacturing plants world-wide that employed the float process, and 95 percent of them were owned, operated, or licensed by Pilkington.

With the expiration of some of Pilkington's patents, and the acquisition by others of some of the company's trade secrets and know-how, competitors found it feasible to enter the float glass field. The plaintiff in the case at bar, International Technologies Consultants, Inc., is an engineering consulting firm that appears to be a pioneer in the development of float glass designs competitive with, and independent of, the Pilkington design. International Technologies is a Michigan corporation with its principal place of business in Brighton, Michigan. It was founded in 1984 by a Michigan resident named Dean Wiley. Mr. Wiley, according to his affidavit, is Managing Director of the company.

In the latter part of 1988 Mr. Wiley attended a convention in Dusseldorf, Germany. There he approached Heinz Tr"sch, one of the defendants herein, about building a float glass plant in Ohio or Pennsylvania. Mr. Tr"sch, a resident of Switzerland, is Chairman of the Board of Glas Tr"sch Holding A.G., the Swiss company subsequently named as a defendant in this action. Glas Tr"sch has its principal place of business in Butzberg, a city in the Province of Berne, Switzerland. The company has long been engaged in the business of distributing glass products in Europe.

Mr. Tr"sch expressed interest in Mr. Wiley's project, and in the spring of 1989 Glas Tr"sch began paying International Technologies for professional services and expenses related to the development of plans for a float glass facility that, as we shall explain, was subsequently abandoned. A letter of intent regarding the project was signed in June of 1989, and Donora, Pennsylvania, was chosen as the site of the proposed plant.

International Technologies engaged a firm called Stewart Engineers & Associates to assist it on the Donora project. In November of 1989 Stewart was sued by Guardian Industries, Inc., a Pilkington licensee. Guardian claimed that Stewart had misappropriated trade secrets relating to float glass design. The Guardian lawsuit (to which International Technologies was subsequently made a party) created a substantial cloud over the Donora project, and Glas Tr"sch decided not to go forward with the venture. The record does not indicate that International Technologies ever gave Glas Tr"sch any of the trade secrets allegedly misappropriated by Stewart.

Dean Wiley made several trips to Europe in late 1989--early 1990, and in the course of these visits he negotiated a new letter of intent with Glas Tr"sch. It is this agreement that lies at the heart of the present controversy.

The new agreement, entered into as of 27 February 1990 between Glas Tr"sch and Dean Wiley/International Technologies, was signed by Tr"sch in Switzerland and by Wiley in Michigan. The agreement recited, among other things, that Glas Tr"sch intended to build a float glass plant in Europe; that Dean Wiley was to prepare the plant layout, site definition and equipment specifications, was to secure proposals from suppliers, and was to support the efforts of Georg Grimm to secure permits for the plant; ¹ that Wiley/International Technologies would "hand over to Glas Tr"sch complete plans and technical specifications and computer disks as well as all offers and proposals;" that Glas Tr"sch agreed to engage the services of Wiley/International Technologies through the end of 1991, with a possible extension through 1992, paying monthly compensation of $10,000 plus reimbursement of direct expenses; that when there was a final decision to go ahead with the European project, a project management contract would supersede this agreement and Wiley/International Technologies would receive $150,000 per year during the construction phase, which would be followed by a payment of $1.5 million; that this compensation "will be paid and services will be considered to be rendered in the USA for tax purposes;" and that "[j]urisdiction for this contract is Berne, Switzerland, and it will be interpreted under Swiss law."

International Technologies proceeded with the engineering and design work for the European project, retaining consultants in Michigan and other states to assist in this effort. ² The consultants attended meetings at the offices of International Technologies in Michigan, and although they worked on detailed drawings in their home states, their work was reviewed and incorporated into the final plans in Michigan. International Technologies also opened an office in Mulhouse, France.

In September of 1991 an amendment to the 1990 letter agreement was signed in Switzerland by Dean Wiley, acting for himself and International Technologies, and by Heinz Tr"sch, acting on behalf of Glas Tr"sch. The amendment recited, among other things, that as a result of information arising from the Guardian litigation, International Technologies "has been forced to develop a new Euroglas tin bath design;" that "[a]s previously foreseen in the contract the ownership of this design belongs to Glas Tr"sch Holding AG in Berne/Switzerland and also to I.T.C. [International Technologies] Inc.;" that International Technologies "guarantees that the new Euroglas tin bath design will be designed on the basis of public domain information and that it will work;" that the $1.5 million figure in the original contract was changed to $1 million; and that "[p]oint 14 and point 15 remain as in the original agreement." (Point 14 of the original agreement made Wiley and International Technologies jointly liable for their contractual obligations. It was point 15 that placed jurisdiction for the contract in Berne, Switzerland, and provided for interpretation under Swiss law.)

A second amendment--signed by both parties in Switzerland in June of 1992--extended the contract to 31 December 1992; reiterated that Glas Tr"sch and International Technologies "are both owners of the tin bath design and the related know how for the EUROGLAS plant in Hombourg (Hombourg design)" and that Glas Tr"sch "is entitled...