Standard Fittings Co. v. Sapag, S.A.

Decision Date11 September 1980
Docket NumberNo. 77-3486,77-3486
Citation625 F.2d 630
PartiesSTANDARD FITTINGS COMPANY, Plaintiff-Appellant, v. SAPAG, S.A., Defendant-Appellee.
CourtU.S. Court of Appeals — Fifth Circuit

Leslie J. Schiff, Opelousas, La., for plaintiff-appellant.

Phelps, Dunbar, Marks, Claverie & Sims, Rutledge C. Clement, Jr., New Orleans, La., for defendant-appellee.

Appeal from the United States District Court for the Western District of Louisiana.

Before GEE, TJOFLAT and ANDERSON, Circuit Judges.

R. LANIER ANDERSON, III, Circuit Judge:

Appellant Standard Fittings, a Delaware corporation, is engaged in the business of manufacture, purchase, sale and distribution of high-pressure fittings, valves, unions and other items. Its business is centered in Opelousas, Louisiana. Appellee Sapag, S.A. is a French manufacturer of high-pressure fittings. It has not qualified or been licensed to do business in Louisiana. Appellant brought suit in a Louisiana state court against appellee for alleged breach of an exclusive distributorship contract between the parties. The case was removed to federal district court pursuant to 28 U.S.C. § 1441 (1976). Subject matter jurisdiction is predicated on diversity of citizenship.

We are asked in this appeal to review the district court's dismissal of the case for lack of in personam jurisdiction over appellee Sapag. The district court held that Sapag was not amenable, under the Louisiana Long-Arm Statute and principles of constitutional due process, to the personal jurisdiction of a Louisiana court. Standard Fittings Co. v. Sapag, S.A., 448 F.Supp. 426 (W.D.La.1977). Because we conclude that both Louisiana law and the due process clause of the fourteenth amendment to the Constitution permit the exercise of in personam jurisdiction over Sapag, we reverse and remand to the district court for trial.

FACTS

Our inquiry into the applicability of the Louisiana Long-Arm Statute and the due process implications of the exercise of in personam jurisdiction over Sapag is a fact-sensitive one. The facts relevant to Sapag's motion to dismiss for lack of in personam jurisdiction derive from the pleadings, memoranda, affidavits, attachments and correspondence on file in the record.

It appears from the record that Sapag's first contact with the forum state, Louisiana, came with the visit 1 in the fall of 1973 of L. L. Frederick, 2 marketing consultant 2. That sometime during 1973, Mr. L. L. Frederick and Mr. G. LeLievre called upon Dixie Mill Supply Co., Inc. in New Orleans at its offices in New Orleans, Louisiana, for the purpose of soliciting business. That Frederick and LeLievre on behalf of Sapag asked affiant to take on the Sapag line as a distributor for the company in the Southern part of the United States.

for Sapag, and Georges LeLievre, sales manager of Sapag (R. 180) to the office of Dixie Supply Mill Company in New Orleans, Louisiana. While the visit itself is undisputed, its nature and purpose are described differently by the parties. LeLievre, in an affidavit filed in support of Sapag's motion to dismiss, swears that this visit was "a brief stop . . . to investigate any possibility of cooperation as a follow-up of a price inquiry for valves that Dixie Mill sent to Sapag; no agreement was reached. Following this abbreviated conference, affiant and consultant left the State of Louisiana the same day without further conferences with or visits to other fittings dealers in that state." (R. 180). Mike Cahn, president of Dixie Mill Supply Co., Inc., swears, in pertinent part, in his affidavit filed on behalf of Standard Fittings:

3. That affiant after the visit by Sapag representatives in his plant in New Orleans, Louisiana, informed Standard Fittings Company's president, Irwin H. Davlin, of the fact that Sapag was interested in a United States outlet for its products.

(R. 160). The affidavit of Jules Cahn, Vice-President of Dixie Mill Supply Co., Inc., is to the same effect (R. 151). The district court failed to acknowledge this Fall, 1973, contact between Sapag and the State of Louisiana. We find that omission significant because the Cahn affidavits swear that LeLievre and Frederick came to Louisiana soliciting business on behalf of Sapag. LeLievre's affidavit, while indicating that the visit was a follow-up to a price inquiry, does not deny that Sapag had asked the Cahns to take on the Sapag line as a distributor for the Southern part of the United States. A letter written by Frederick to Jules Cahn and filed subsequent to the filing of the Cahn affidavits referred to above supports the contention that Sapag was interested in importing its product to the United States, and specifically to New Orleans. 3 The Cahn affidavits are also uncontradicted in their suggestion that Standard Fittings learned about Sapag through the Cahns as a result of the 1973 visit by Sapag's Frederick and LeLievre. The affidavit of Irwin Davlin, President of Standard Fittings, supports this view. Davlin swears that "it was as a result of this trip into The relationship between Sapag and Standard Fittings began when Shelton Courville of Standard Fittings in Opelousas and L. L. Frederick on behalf of Sapag in New Jersey spoke over the telephone about Sapag's products. As a result of the conversation, Frederick arranged to have a catalog and additional information, including samples, sent to Standard Fittings. (See letter from Frederick to Courville of January 22, 1974, at R. 140).

Louisiana (the Fall, 1973, visit of LeLievre and Frederick) that Standard Fittings Company learned of the willingness of Sapag to sell its French made products in Louisiana . . . ." (R. 138).

In February, 1974, Irwin Davlin, president of Standard Fittings, went to France where he met and negotiated with L. R. Guillemin and R. Patteeuw of Sapag. These three signed an agreement dated February 19, 1974, which is the subject of this suit. 4 The agreement 5 contemplated a substantial volume of business. 6 It provided that Standard would order 27,500 unions for each month of 1974, beginning in May, and that if Standard purchased a certain average number of unions from Sapag in 1974, Sapag would give Standard an annually renewable exclusive distributorship for unions (in excess of 350,000 annually) and fittings (approximately 420,000) beginning in 1975. Sapag agreed to accept no further orders for unions or fittings from the USA or Canada for the balance of 1974 except for previous commitments. The agreement also contemplated the grant to Standard Fittings of an exclusive representation of Sapag valves in North America. The agreement provided for shipment by Sapag of its products CIF New York City or Houston, and it provided that "Standard may sell and Sapag on request will ship for Standard to any port of the world except Europe." It required that Standard Fittings obtain a bank letter of credit in favor of Sapag. 7 Finally, the agreement recited that its general purpose was "to develope (sic) a relationship whereby Standard or its assignee shall be exclusive North American distributor for Sapag." 8

Following the agreement in Paris, Frederick corresponded with Standard Fittings Co. by letter (R. 141; 72) and telex (R. 142; 73). Frederick arranged to visit Standard Fittings' plant and to meet with Mr. Davlin on the morning of May 10. 9 The scheduled meeting was apparently delayed, but Mr In September, 1974, Davlin again went to France and certain portions of the agreement between Standard Fittings and Sapag were amended. 11

Frederick did in fact visit the Standard Fittings plant in Opelousas in June, 1974, "(p) ursuant to his promotional endeavors relative to the North American market . . . ." (Affidavit of Jacques Oyer, president of Sapag, S.A., R. 110). 10

In February, 1975, Sapag's LeLievre and Patteeuw visited the Standard Fittings plant in Opelousas. LeLievre and Patteeuw arrived in Opelousas on the evening of February 6, 1975, and had dinner at Mr. Davlin's home. (Oyer affidavit, R. 110). The next day, February 7, they met with Davlin at the Standard Fittings plant. They left Louisiana later that day. Letters 12 written by LeLievre to Davlin subsequent to the visit of Patteeuw and LeLievre Finally, it appears that Sapag actually delivered some quantity of its product (valves) to Standard Fittings. 13

to Opelousas make it quite clear that the agreement between Standard Fittings and Sapag had been the subject of discussion and negotiation during the visit.

THE LEGAL STANDARDS

In determining whether Sapag is subject to in personam jurisdiction of the Louisiana courts and hence the federal court to which the action against it was removed, we follow a two-step analysis. Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d 1228 (5th Cir. 1973). We must determine, first, whether Sapag is amenable to service under the Louisiana Long-Arm Statute. Louisiana law controls this question. Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d at 1232; Barrett v. Browning Arms Co., 433 F.2d 141 (5th Cir. 1970). If the requirements of the Louisiana Long-Arm Statute are satisfied, we must next apply federal law "to determine whether assertion of jurisdiction over the defendant comports with

due process." Jetco Electronic Industries, Inc. v. Gardiner, 473 F.2d at 1232 (5th Cir. 1973).

1. Long Arm Statute

We inquire first whether Sapag is subject to in personam jurisdiction under the Louisiana Long-Arm Statute. That statute, La.Rev.Stat.Ann. § 13:3201 (West), provides in pertinent part: 14

Personal jurisdiction over nonresidents

A court may exercise personal jurisdiction over a nonresident, who acts directly or by an agent, as to a cause of action arising from the nonresident's

(a) transacting any business in this state

The question we must address is: what is "transacting any business" in Louisiana under Louisiana law? The district court judge found that under the principles of Benjamin v. Western Boat Building Corp., 472 F.2d 723 (5th Cir.), ...

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