Sunbelt Corp. v. Noble, Denton & Associates, Inc.

• Decision Date: 14 September 1993
• Docket Number: No. 93-1345,93-1345
• Citation: 5 F.3d 28
• Parties: SUNBELT CORPORATION; Sunbelt Enterprises; Cemex, S.A.; and Eagle Cement, Inc., Petitioners, v. NOBLE, DENTON & ASSOCIATES, INC. and Phillyship, Inc., Respondents, Honorable Clarence C. Newcomer, United States District Judge for the Eastern District of Pennsylvania, Nominal Respondent.
• Court: U.S. Court of Appeals — Third Circuit

Page 28

5 F.3d 28

1994 A.M.C. 42

SUNBELT CORPORATION; Sunbelt Enterprises; Cemex, S.A. and Eagle Cement, Inc., Petitioners, v. NOBLE, DENTON & ASSOCIATES, INC. and Phillyship, Inc., Respondents Honorable Clarence C. Newcomer, United States District Judge for the Eastern District of Pennsylvania, Nominal Respondent.

No. 93-1345.

United States Court of Appeals Third Circuit.

Argued July 13, 1993.

Decided Sept. 14, 1993.

A. Robert Degen (argued), Krusen, Evans & Byrne, Philadelphia, PA, for petitioners.

Richard Q. Whelan (argued), Palmer, Biezup & Henderson, Philadelphia, PA, for respondent Phillyship, Inc.

Peter A. McLauchlan, Janet M. Williams (argued), Meyer, Orlando & Evans, P.C., Houston, TX, George N. Styliades, Styliades & Mamas, Cherry Hill, NJ, for respondent Noble, Denton & Associates, Inc.

BEFORE: SLOVITER, Chief Judge, NYGAARD and SEITZ, Circuit Judges.

OPINION OF THE COURT

SEITZ, Senior Circuit Judge.

Sunbelt Corporation, a Texas corporation; Sunbelt Enterprises, a Texas corporation; Cemex, S.A., a Mexican corporation; and Eagle Cement, Inc., a Delaware corporation, (collectively "petitioners") seek a writ of mandamus under 28 U.S.C. Sec. 1651 ordering the district court to vacate its order transferring their underlying action in the district court to the Southern District of Texas. Respondent Noble, Denton & Associates, Inc. ("Noble Denton"), a defendant, asks that we uphold the district court's transfer order and requests in the alternative that we instruct the district court to sever the action so that petitioners' claims against it can be transferred to the United States District Court for the Southern District of Texas.

I. BACKGROUND

Petitioners instituted the underlying breach of contract and negligence action against Noble Denton, a Texas corporation, and Phillyship, Inc. ("Phillyship"), a Pennsylvania corporation, seeking compensation for damages allegedly caused to their cargo (a modular ship and cement unloader) by, inter alia, Noble Denton's failure to design adequately a seafastening plan and Phillyship's failure to perform proper engineering and rigging services prior to the transportation of the cargo from Philadelphia to San Diego.

Petitioners' complaint alleged that "one or more of them" entered into a contract with Noble Denton under which Noble Denton was to develop a stability and seafastening plan for loading the cargo. ¹ Phillyship was not a party to this contract. Sunbelt entered into a separate contract with Phillyship whereby Phillyship would execute the plan to be developed by Noble Denton. This contract was sought by Sunbelt and negotiated and executed in Philadelphia. All work under this contract was performed under Noble Denton's supervision in Philadelphia.

After answering the complaint, Noble Denton moved to transfer the action under 28 U.S.C. Sec. 1404(a) to the Southern District of Texas, based primarily on a forum selection clause contained in the contract between Sunbelt and Noble Denton. ² The district court granted this motion and thereafter denied petitioners' and Phillyship's motions for reconsideration. Petitioners then filed this petition for a writ of mandamus. ³

II. JURISDICTION

The district court possessed admiralty and maritime jurisdiction of the underlying action under 28 U.S.C. Sec. 1333. Generally, "orders transferring venue are not immediately appealable." Carteret Sav. Bank, FA v. Shushan, 919 F.2d 225, 228 (3d Cir.1990); see McCreary Tire & Rubber Co. v. Ceat, S.p.A., 501 F.2d 1032, 1034 (3d Cir.1974) ("An order transferring an action pursuant to 28 U.S.C. Sec. 1404(a) ... is interlocutory and unappealable under Sec. 1291."). ⁴ Mandamus is therefore the appropriate mechanism for reviewing an allegedly improper transfer order. See Bloom v. Barry, 755 F.2d 356, 357 (3d Cir.1985); Hayman Cash Register Co. v. Sarokin, 669 F.2d 162, 168-69 (3d Cir.1982); Shutte v. Armco Steel Corp., 431 F.2d 22, 23 (3d Cir.1970), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971). We have plenary review of the legal determinations underlying the district court's transfer order. See In re School Asbestos Litig., 977 F.2d 764, 778 n. 15 (3d Cir.1992).

III. MANDAMUS

Our review of the district court's transfer order on a petition for a writ of mandamus is governed by familiar principles. A writ of mandamus is an extraordinary remedy, the issuance of which is generally committed to the sound discretion of the issuing court. Carteret, 919 F.2d at 232-33; In re School Asbestos Litig., 977 F.2d at 772. A writ will only issue when the party seeking the writ has no other adequate means of obtaining the relief sought. Carteret, 919 F.2d at 232-33. We have held that the possibility of an appeal in the transferee forum following a final judgment there is not an adequate alternative to obtain the relief sought. See Carteret, 919 F.2d at 233. Thus, petitioners have met this prerequisite to obtaining a writ of mandamus.

Generally, a writ will only issue if the district court did not have the power to enter the order, and then "only if the party seeking the writ meets its burden to demonstrate that its right to the writ is clear and indisputable." Id. at 232. Thus, we turn to whether or not the district court had the power to transfer this action.

Petitioners allege that mandamus is warranted here because (1) the district court erred in concluding that Phillyship is subject to personal jurisdiction in Texas; and (2) the district court abused its discretion in transferring the action on the basis of a forum selection clause contained in a contract to which Phillyship was not a party. As the parties concede, if we find that Phillyship is not amenable to process in the Southern District of Texas we will not need to reach the second issue.

A. Transfer Under 28 U.S.C. Sec. 1404(a)

Section 1404(a) provides that a district court "[f]or the convenience of parties and witnesses [and] in the interest of justice may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. Sec. 1404(a).

Petitioners assert that mandamus is warranted because Phillyship is not subject to personal jurisdiction in Texas, thus the Southern District of Texas is not a district in which the action "might have been brought." ⁵

The district court, in its order denying petitioners' and Phillyship's motions for reconsideration, stated that "third-party defendant Phillyship has sufficient minimum contacts with Texas for a Texas court to exercise personal jurisdiction over it." ⁶ We turn to the soundness of that ruling.

Under Rule 4(e) of the Federal Rules of Civil Procedure, district courts have personal jurisdiction over nonresident defendants to the extent authorized under the law of the forum state in which the district court sits. Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 481 (3d Cir.1993). Jurisdiction over a nonresident who does business in Texas is authorized under Texas' Long Arm Statute. See Tex. Civ.Prac. & Rem.Code Ann. Sec. 17.042 (Vernon 1986). The Texas Supreme Court has held that the statute's broad language allows the exercise of jurisdiction "to reach as far as the federal constitutional requirements of due process will allow." Guardian Royal Exch. Assur., Ltd. v. English China Clays, P.L.C., 815 S.W.2d 223, 226 (Tex.1991); U-Anchor Advertising, Inc. v. Burt, 553 S.W.2d 760, 762 (Tex.1977), cert. denied, 434 U.S. 1063, 98 S.Ct. 1235, 55 L.Ed.2d 763 (1978). Thus, the well-established minimum contacts analysis governs our resolution of this issue.

1. Specific Jurisdiction

Noble Denton primarily advances specific jurisdiction as the basis for finding that Phillyship is subject to personal jurisdiction in the Southern District of Texas.

The Supreme Court of Texas has adopted a formula to aid courts in determining whether the assertion of personal jurisdiction over a nonresident defendant is proper under the federal constitutional requirements. See Guardian Royal, 815 S.W.2d at 229-32; Schlobohm v. Schapiro, 784 S.W.2d 355, 358 (Tex.1990).

First, the nonresident defendant must have purposefully established "minimum contacts" with Texas. There must be a "substantial connection" between the nonresident defendant and Texas arising from action or conduct of the nonresident defendant purposefully directed toward Texas. When specific jurisdiction is asserted, the cause of action must arise out of or relate to the nonresident defendant's contacts with Texas....

Second, the assertion of personal jurisdiction must comport with fair play and substantial justice.

Guardian Royal, 815 S.W.2d at 230-31 (footnotes omitted).

The undisputed contacts relied upon by Noble Denton and apparently found sufficient by the district court were: (1) Phillyship's contract with Sunbelt, a Texas corporation; and (2) post-contract telephone and facsimile contacts by Phillyship with Noble Denton. ⁷

We must determine whether or not these contacts are sufficient to support the district court's conclusion that Phillyship "purposefully availed" itself of the privilege of doing business in Texas. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474-75, 105 S.Ct. 2174, 2183-84, 85 L.Ed.2d 528 (1985). We note at the outset that unilateral contacts by the party asserting the existence of personal jurisdiction are insufficient. Guardian Royal, 815 S.W.2d at 227. Under a specific jurisdiction analysis, in order for the exercise of personal jurisdiction to be proper the cause of action must arise from or be related to Phillyship's contacts with Texas. Id.; see Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 1872 n. 8, 80 L.Ed.2d 404 (1984).

Noble Denton's reliance on the contract between Phillyship and Sunbelt as a "purposeful contact" fails. Although Noble Denton was not a party to this contract, it, nevertheless, asserts that the cause of action arises out of this contract and that...