Vishay Intertechnology, Inc. v. Delta Intern. Corp.

• Decision Date: 13 December 1982
• Docket Number: No. 82-1087,82-1087
• Citation: 696 F.2d 1062
• Parties: VISHAY INTERTECHNOLOGY, INC., A Delaware Corporation, Appellant, v. DELTA INTERNATIONAL CORPORATION, A California Corporation, Appellee.
• Court: U.S. Court of Appeals — Fourth Circuit

Page 1062

696 F.2d 1062

VISHAY INTERTECHNOLOGY, INC., A Delaware Corporation, Appellant, v. DELTA INTERNATIONAL CORPORATION, A California Corporation, Appellee.

No. 82-1087.

United States Court of Appeals Fourth Circuit.

Argued Oct. 7, 1982.

Decided Dec. 13, 1982.

Noel Lee Allen, Raleigh, N.C. (William D. Harazin, Barringer, Allen & Pinnix, Raleigh, N.C., on brief), for appellant.

H. Julian Philpott, Jr., Raleigh, N.C. (William S. Aldridge, Broughton, Wilkins & Crampton, P.A., Raleigh, N.C., on brief), for appellee.

Before WINTER, Chief Judge, ERVIN, Circuit Judge, and HAYNSWORTH, Senior Circuit Judge.

ERVIN, Circuit Judge:

This is an appeal by Vishay Intertechnology, Inc. ("Vishay") from the dismissal of its cause of action against Delta International Corporation ("Delta"). Vishay sought monetary damages from Delta for slander, unfair business practices, tortious interference with contract, and abuse of process. The district court dismissed Vishay's complaint for lack of personal jurisdiction. Because we find that the requirements of the North Carolina long-arm statute and due process are satisfied, we reverse.

I.

Vishay is a corporation organized under the laws of Delaware. Vishay, through its branch located in North Carolina, is in the business of manufacturing and selling measurement instruments. Delta is a California corporation that in North Carolina neither maintains a place of business nor transacts any business.

In 1980, an agency of the government of the Republic of Korea invited bids for sixty units of a measurement device manufactured by, among others, Vishay. Vishay's agent in Korea submitted a bid. That bid reflected Vishay's foreign list price for the measurement devices. Vishay charges two list prices for its measurement devices, one for domestic markets and the other for foreign markets. The foreign price is higher because the marketing of devices overseas involves substantially greater costs for sales commissions, promotions, service, warranty work, and technical assistance.

Vishay asserts that on May 9, 1980, Delta's vice president, Lester Mannos, contacted Vishay by telephone, and requested price information for one unit of the device in question. Mannos identified himself as a representative of "Delta Corporation," rather than as a representative of "Delta International." Vishay's order clerk, believing that the quotation was for a domestic sale, informed Mannos of the domestic price for one unit.

Mannos then requested that Vishay supply a written quote of that price. The order clerk stated that her supervisor would have to prepare the written quote. The supervisor, however, recognized Delta as an exporter and instructed the order clerk to contact Delta and inform it of the foreign list price.

The order clerk contacted Mannos, who denied that Delta was an exporter. The supervisor then contacted Mannos and explained the reason for the difference between the foreign and domestic price. Mannos continued to insist that the domestic price should apply to his solicitation. The supervisor informed him that his request could not be granted and that an order at the domestic price could not be filled without higher management authorization. On May 16, 1980, Vishay advised Delta that any quotations made by Vishay to Delta were withdrawn as of that date.

On May 27, 1980, Vishay received a purchase order from Delta requesting 60 units at the domestic price. That allegedly is the first time Delta expressed an intent to order more than one unit. Delta admits that the units were for resale to Korea. On May 29, 1980, Vishay rejected the purchase order on the basis of the May 16, 1980, quote withdrawal.

Vishay also asserts that Delta bid a price on the Korean contract based on Vishay's domestic price for the devices. Delta was the low bidder on the contract. Vishay's agent was the next lowest bidder. Vishay informed the Korean government that Delta's bid was deceptively obtained. The Korean government was unable to disqualify Delta's bid because of the government's bidding policy.

On five occasions between May and July of 1980, Delta either telephoned or wrote Vishay demanding that the instruments be supplied at the domestic price. On three occasions, Delta threatened Vishay with litigation if Vishay did not honor the domestic price. Vishay still refused to provide the instruments to Delta at the domestic price.

On August 25, 1980, Vishay was served with a summons and complaint in an action filed by Delta in the United States District Court for the Central District of California. In that action, Delta claimed, inter alia, that Vishay was guilty of breach of an oral contract for the delivery of the devices at the domestic price. Following a hearing, Delta's complaint was dismissed on the merits.

Delta eventually succeeded in selling comparable devices to the Korean government. Delta obtained those devices from a competitor of Vishay.

II.

To resolve a question of personal jurisdiction, the court must engage in a two step analysis. First, the court must determine if the applicable North Carolina law would allow the exercise of long-arm jurisdiction over Delta. If so, the court must determine if such an exercise of jurisdiction comports with due process. Bowman v. Curt G. Joa, Inc., 361 F.2d 706, 711 (4th Cir.1966).

A. NORTH CAROLINA LONG-ARM STATUTE

There is a clear mandate that the North Carolina long-arm statute be given a liberal construction, making available to the North Carolina courts "the full jurisdictional powers permissible under federal due process." Dillon v. Numismatic Funding Corp., 291 N.C. 674, 231 S.E.2d 629, 630 (1977); Mabry v. Fuller-Shuwayer [Schuwayer] Co., Ltd., 50 N.C.App. 245, 248, 273 S.E.2d 509, 511, review denied, 302 N.C. 398, 279 S.E.2d 352 (1981).

Vishay seeks personal jurisdiction over Delta under two provisions of the North Carolina long-arm statute, N.C.Gen.Stat. Sec. 55-145(a)(4) (tortious conduct within North Carolina), and Sec. 1-75.4(4)(a) (injury and solicitation within North Carolina).

The district court held that Sec. 55-145(a)(4) did not provide jurisdiction since "[n]o element of any alleged tort occurred in North Carolina ...." With respect to Sec. 1-75.4(4)(a), the district court stated that although "the court cannot conclude as a matter of law that the solicitations were insufficient to bring defendant within the ambit of the statute [,] ... it is unnecessary to definitively determine whether the statute is satisfied, as the court concludes that due process is not."

1. N.C.Gen.Stat. Sec. 55-145(a)(4).

When seeking to acquire personal jurisdiction under Sec. 55-145(a)(4), ¹ a plaintiff must show: (1) the cause of action arose in North Carolina; and (2) the defendant committed one or more acts within North Carolina that gave rise to the cause of action. Munchak Corp. v. Riko Enterprises, Inc., 368 F.Supp. 1366, 1370 (M.D.N.C.1973). The parties' arguments here focus on the second requirement. Since a cause of action is considered to arise where damage occurs, id. at 1370, Vishay's location in North Carolina establishes the first requirement. ²

Vishay argues on appeal that its claims against Delta for unfair business practices, interference with contractual relations, and abuse of process arise out of Delta's tortious conduct within North Carolina. Vishay alleges that (1) Delta's business conduct was unfair and deceptive in violation of N.C.Gen.Stat. Sec. 75-1.1 and that essential facts in that claim are the initial solicitation of price information in which Delta deceptively identified itself, thereby occasioning Vishay's release of a domestic price quotation, and Delta's subsequent telephone and written communications with Vishay; (2) Delta's communications with Vishay are similarly essential to the alleged tortious interference with contractual relations because Delta interfered with Vishay's contract with a third party through the use of the wrongfully obtained price quotation; and (3) the essential fact in the abuse of process claim is Delta's causing service of process on Vishay in North Carolina.

The first question raised by Vishay's arguments is whether telephone and written communications initiated by Delta from California constitute "tortious conduct" occurring within North Carolina. We hold that those communications are tortious conduct within North Carolina.

In Murphy v. Erwin-Wasey, Inc., 460 F.2d 661 (1st Cir.1972), which was decided under a comparable Massachusetts long-arm statute the First Circuit permitted personal jurisdiction over an out-of-state defendant whose only contacts with Massachusetts were a few phone calls and letters to the plaintiff. Those contacts were the heart of the plaintiff's fraud claim. The court concluded:

We would be closing our eyes to the realities of modern business practices were we to hold that a corporation subjects itself to the jurisdiction of another state by sending a personal messenger into that State bearing a fraudulent misrepresentation but not when it follows the more ordinary course of employing the United States Postal Service as its messenger .... Where a defendant knowingly sends into a state a false statement, intending that it should then be relied upon to the injury of a resident of that state, he has, for jurisdictional purposes, acted within that State. Id. at 664 (citations and footnote omitted).

Delta argues that Murphy is questionable authority, relying on Margoles v. Johns, 483 F.2d 1212 (D.C.Cir.1973). That reliance is not well placed. In Margoles, the court held that phone calls to the District of Columbia by a Wisconsin defendant were not acts in the District of Columbia within the meaning of the District of Columbia long-arm statute. Unlike the North Carolina statute, which predicates jurisdiction on "tortious conduct" within the state, the District of Columbia statute speaks of "acts" within the district. The Margoles court distinguished the two types of st...