Gorso v. Bell Equipment Corporation
| Decision Date | 02 March 1973 |
| Docket Number | No. 71-2035 to 71-2039.,71-2035 to 71-2039. |
| Citation | 476 F.2d 1216 |
| Parties | James A. GORSO v. BELL EQUIPMENT CORPORATION, a corporation, v. The MARLEY COMPANY, a corporation and Societe de Construction Mecaniques de Bugey and Tichauer et Cie. Appeal of SOCIETE DE CONSTRUCTION MECANIQUES DU BUGEY and Tichauer et Cie, in No. 71-2035, (five cases). Jack CHICONELLA v. BELL EQUIPMENT CORPORATION, a corporation, v. The MARLEY COMPANY, a corporation and Societe de Construction Mecaniques du Bugey and Tichauer et Cie. Clyde A. TEVIS v. BELL EQUIPMENT CORPORATION, a corporation, v. The MARLEY COMPANY, a corporation and Societe de Construction Mecaniques du Bugey and Tichauer et Cie. Harry J. PHILLIPS v. BELL EQUIPMENT CORPORATION, a corporation, v. The MARLEY COMPANY, a corporation and Societe de Construction Mecaniques du Bugey and Tichauer et Cie. Amedio VITALE v. BELL EQUIPMENT CORPORATION, a corporation, v. The MARLEY COMPANY, a corporation and Societe de Construction Mecaniques du Bugey, and Tichauer et Cie. |
| Court | U.S. Court of Appeals — Third Circuit |
Kim Darragh and Raymond H. Conaway, of Meyer, Darragh, Buckler, Bebenek & Eck, Pittsburgh, Pa., for appellant.
James E. Coyne, Lancaster, Mentzer, Coyne & Duffy, Pittsburgh, Pa., for appellee.
Before SEITZ, Chief Judge, and ALDISERT and ROSENN, Circuit Judges.
This appeal arises out of the denial by the district court, 330 F.Supp. 834, of a motion to dismiss two impleaded defendants for lack of personal jurisdiction. The district court certified the question for interlocutory appeal pursuant to 28 U.S.C. § 1292(b), and this court accepted the appeal. Pennsylvania law applies since federal jurisdiction here is predicated upon diversity of citizenship.
Appellants are two French companies, Societe de Construction du Bugey and Tichauer et Cie. The former manufactures a tower crane used in the construction industry; the latter is its exclusive world sales agent. These two companies were impleaded by the original defendant and present appellee, Bell Equipment Corporation. Bell is a New York corporation which previously represented appellants in the United States as their national sales agent. Bell has maintained an office in Pennsylvania at all times relevant to this suit.
Through Bell, one of appellants' tower cranes was sold in December, 1965 to the Marley Company, a Kansas corporation engaged in construction.1 It was delivered in February, 1966 to a Marley jobsite in Beverley, Ohio and was used on that site until its completion in early 1968. That February, it was moved to a new jobsite at Huff, Pennsylvania. Bell aided Marley in setting up the crane at both the Beverley and the Huff sites. In October, 1968, while being used at Huff, the crane collapsed and injured several workers, plaintiffs herein.2
The French companies are not registered to do business in the Commonwealth of Pennsylvania nor do they maintain an office in the state. At the time of the sale of the crane, they possessed a national sales agent, Bell; but apparently neither of the two cranes of appellant Societe's manufacture which Bell sold in the United States was sold or delivered in Pennsylvania. However, Bell maintained an office in Pennsylvania throughout this period.
By the summer of 1968, Bell had terminated its relationship with appellants. However, even though it had ceased to represent the two French firms, it continued to service in Pennsylvania the crane which it had sold to Marley.
While the crane was being used at Huff, individual delivery on six orders was made to the jobsite from the Societe factory in France by appellant Tichauer. Five of these orders had been placed by Marley on December 1, 1967, some three months prior to the removal of the crane to Pennsylvania; we believe these five orders constitute one transaction. A sixth order was also placed; however, on the record before us, it is impossible to determine when it was made. For purposes of our decision, we will assume it was made subsequent to the crane's removal to the Huff jobsite and represents a separate transaction. Marley was forced to order these parts directly from appellants in France because by that time, Bell had ceased to represent the two French firms. No solicitation by appellants was involved; rather, Bell had advised Marley to contact appellants directly since there was no domestic distributor of the parts These parts were ordered from, and invoiced to, Marley's central office in Kansas City, Missouri. They were dropshipped to the Pennsylvania construction site.
After a hearing, the district court concluded that sufficient contacts existed between Pennsylvania and appellants for personal jurisdiction to lie consistent with both constitutional and state statutory requirements.3 In reviewing this determination, two questions are posed: (1) whether state statutory requirements in fact have been met; and (2) if so, whether personal service can be made upon appellants consistent with due process requirements of the Fourteenth Amendment.
In 1968, Pennsylvania amended the terms of its "long-arm" statute as applied to foreign corporations so as to extend its reach. It presently states:
For the purposes of determining jurisdictions of courts within this Commonwealth, the doing by any corporation within this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object, or doing a single act in this Commonwealth for such purpose, with the intention of thereby initiating a series of such acts, shall constitute "doing business." For the purposes of this subsection, the shipping of merchandise directly or indirectly into or through this Commonwealth shall be considered the doing of such an act in this Commonwealth.
15 P.S. § 2011(C). This was the final step in a series of legislative responses to successive judicial interpretations of amendments to the "long-arm" statute. In each case, the state courts had construed the legislative purpose as not intending to extend jurisdiction over a foreign corporation in a specified instance even though it was constructively present within the state. Each time, the legislature thereafter had amended the statute so as to broaden its scope.
For our purposes, only the last two amendments of the statute need be examined. The first amendment in 1963 involved the companion statute to § 2011(C)—§ 2011(B) 15 P.S. § 2011(B) (1967). Previous to the amendment, the statute had read, in part:
Any foreign business corporation which shall have done any business in this Commonwealth, without procuring a certificate of authority to do so from the Department of State, shall be conclusively presumed to have designated the Secretary of the Commonwealth as its true and lawful attorney authorized to accept, on its behalf, service of process in any action arising out of acts or omissions of such corporation within this Commonwealth. . . .
Based upon this language, the Supreme Court of Pennsylvania had held that before jurisdiction over a foreign corporation would lie, the tortious activity sued upon must have arisen out of an act or omission by the foreign corporation while it was actually present within the state. Rufo v. Bastian-Blessing Co., 405 Pa. 12, 173 A.2d 123 (1961). The legislative response in 1963 was to amend § 2011(C) by striking out the requirement of "acts or omissions" within the Commonwealth—the language upon which the state supreme court had predicated its decision.
The second, and most recent, step came in response to judicial interpretations of the "doing business" and "entry" requirements found in the predecessor of § 2011(C). The Superior Court of Pennsylvania construed the statute as not extending jurisdiction over a foreign lamp manufacturer which dealt through independent contractors in Pennsylvania. Cecere v. Ohringer Furniture Co., 208 Pa.Super. 138, 220 A.2d 350 (1966). This decision was based upon the interpretation the Supreme Court of Pennsylvania had given these terms. See, e. g., Miller v. Kiamesha-Concord, Inc., 420 Pa. 604, 218 A.2d 309 (1966). The superior court concluded that although the Commonwealth had the constitutional power to reach the defendants, the legislative intent, as interpreted by the state supreme court, was not to extend state jurisdiction to those limits permissible under due process.
Two years later, in 1968, the legislature passed the current version of § 2011(C). It deleted the "entry" requirement and stipulated that "the shipping of merchandise directly or indirectly into or through this Commonwealth shall be considered `doing business.'" In so doing, the legislature eliminated the requirement of an actual corporate presence as a condition precedent to the exercise of jurisdiction over a foreign corporation. Rather, it made jurisdiction depend upon whether the corporation derived revenues from activity within the state; the distribution and marketing system which it set up for deriving those revenues was rendered immaterial for jurisdictional purposes.
An additional factor which has been seen as influencing the passage of the 1968 amendment was the adoption by the Supreme Court of Pennsylvania of the position of § 402A, Restatement of Torts 2d, on strict liability in tort for defective products. The supreme court thereby sought to provide better protection for state residents against defective products. Webb v. Zern, 422 Pa. 424, 220 A.2d 853 (1966). The passage of the amendment complemented these efforts by providing a local forum for suits against foreign manufacturers of such products.
Since its passage, the Supreme Court of Pennsylvania has not had occasion to consider the new amendment and to define conclusively its scope. However, the federal district courts and ...
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