526 F.2d 724 (3rd Cir. 1975), 75-1362, Columbia Metal Culvert Co., Inc. v. Kaiser Industries Corp.

Docket Nº:75-1362.
Citation:526 F.2d 724
Case Date:November 03, 1975
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

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526 F.2d 724 (3rd Cir. 1975)




No. 75-1362.

United States Court of Appeals, Third Circuit.

Nov. 3, 1975

Argued Sept. 19, 1975.

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Henry T. Reath, Duane, Morris & Heckscher, Philadelphia, Pa., for appellant.

Jeanne Ward Ryan, C. Clark Hodgson, Jr., Stradley, Ronon, Stevens & Young, Philadelphia, Pa., for appellee Robert A. Kennedy.

Before SEITZ, Chief Judge, and ROSENN and GARTH, Circuit Judges.


ROSENN, Circuit Judge

The reach of Pennsylvania's 'longarm' statute has been expanded by successive amendments since 1968. 1 The last amendment in 1972, 42 P.S. s 8309(b) (Supp.1975), enlarged jurisdiction over foreign corporations to the broadest extent permissible under the United States Constitution. The case before us requires an interpretation of the law in its present form as it pertains to personal jurisdiction over non-resident individuals. 2

Columbia Metal Culvert Company, Inc., ('Columbia'), a New Jersey corporation, instituted an antitrust suit in the United States District Court for the Eastern District of Pennsylvania 3 against Kaiser Industries Corporation, 4 a Nevada corporation, and several of its affiliated corporations (collectively referred to as 'Kaiser'), Kennedy Culvert and Supply Company ('Kennedy Company'), a New Jersey corporation, and Robert A. Kennedy individually, a New Jersey resident.

Columbia alleged in its complaint that Kaiser conspired with Kennedy 'to leave Columbia's employ, without notice, and to begin immediately thereafter, selling, in competition with Columbia, Kaiser Aluminum's products.' Columbia asserted that Kennedy was transacting business in Pennsylvania and invoked Pennsylvania long-arm jurisdiction over Kennedy pursuant to Fed.R.Civ.P. 4(d) (7) 5 and 42 P.S. s 8301 et seq. (Supp.1975). Substituted service was made by mail on the Secretary of the Commonwealth of Pennsylvania pursuant to 42 P.S. ss 8304 and 8307 (Supp.1975).

Kennedy moved to dismiss the action for lack of jurisdiction and for lack of venue. The district court dismissed the action against Kennedy for lack of jurisdiction, concluding that there were insufficient activities by him within Pennsylvania to meet the requirements of the long-arm statute. Columbia timely filed a motion for reconsideration alleging that facts revealed in Kennedy's deposition in discovery proceedings, the transcript of which had become available only after the district court's order dismissing the action against Kennedy, established jurisdiction. The court denied the motion. Columbia appeals from both that order and the prior order of

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dismissal. 6 We reverse the district court's judgment in favor of Kennedy.

Although the district court did not discuss venue in its memorandum decision dismissing Kennedy for lack of jurisdiction, Columbia raised the matter of venue on appeal. We believe that it is for the district court in the first instance to determine the propriety of venue in the Eastern District of Pennsylvania and thus do not reach this issue here.


In our search to ascertain whether the district court acquired jurisdiction over Kennedy, we must determine whether service was effectively made under Pennsylvania's most recent amendment to its long-arm statute, 42 P.S. s 8304 (Supp.1975). That statute permits substituted service on any nonresident individual who was doing business in Pennsylvania on or after August 30, 1970, 'at the time the cause of action accrued or the harm or financial loss occurred.' 42 P.S. s 8304 (Supp.1975). The pertinent provisions of 42 P.S. s 8309 (Supp.1975) define 'doing business' as follows:

(a) Any of the following shall constitute 'doing business' for the purposes of this chapter:

(1) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.

(2) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.

(3) The shipping of merchandise directly or indirectly into or through this Commonwealth.

(4) The engaging in any business or profession within this Commonwealth, whether or not such business requires license or approval by the Commonwealth or any of its agencies.

The record reveals that Kennedy resigned from Columbia on March 23, 1973. Several months before his separation from Columbia, in late 1972, Kennedy in New Jersey telephoned Phil Buchy, Kaiser's district manager in Pennsylvania, and attended a meeting in Pennsylvania with Buchy and Van Newhyzen, Kaiser's credit manager, to explore the possibility of Kennedy's becoming a distributor for Kaiser. The conclusion of all participants in the meeting was that, in view of the transportation costs from Kaiser's plant in Baltimore, Maryland, it was not feasible for Kennedy to act as a distributor in Pennsylvania and New Jersey.

In January 1973 Kennedy was again in touch with Buchy in Pennsylvania by telephone to discuss possible employment with Kaiser and to arrange a meeting in New Jersey in early February. There Kennedy learned that Kaiser was opening a plant in New Castle, Delaware, and that the reduced transportation costs would allow him to be competitive as a distributor of Kaiser products in Pennsylvania and New Jersey. In late February, Kennedy made another telephone call to Buchy in Pennsylvania to set up a second meeting in New Jersey, which meeting he followed up during late February and early March by one or two telephone calls to Buchy, again in Pennsylvania.

During the first week in March, Kennedy met once more with Kaiser representatives in Pennsylvania and tentatively agreed to become a distributor. They also discussed territorial allocation, and Kennedy stated he was 'interested in southern New Jersey and eastern Pennsylvania.' Subsequently, Kennedy discussed credit arrangements on the telephone with Buchy in Pennsylvania, and on March 23, he telephoned Buchy in

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Pennsylvania to tell him that he had resigned from Columbia. The written distributorship agreement between Kaiser and Kennedy Company, identified as a New Jersey corporation, was signed in Pennsylvania on March 28, 1973. Kennedy signed his name under the legend...

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