SANDSTROM ON BEHALF OF SANDSTROM v. Chemlawn Corp.

• Citation: 727 F. Supp. 676
• Decision Date: 06 December 1989
• Docket Number: Civ. No. 89-0182-P.
• Parties: Richard L. SANDSTROM, on Behalf of his son and legal ward, Richard C. SANDSTROM, Plaintiff, v. CHEMLAWN CORPORATION and Chemlawn Services Corporation, Defendants.
• Court: U.S. District Court — District of Maine

727 F. Supp. 676

Richard L. SANDSTROM, on Behalf of his son and legal ward, Richard C. SANDSTROM, Plaintiff, v. CHEMLAWN CORPORATION and Chemlawn Services Corporation, Defendants.

Civ. No. 89-0182-P.

United States District Court, Maine.

December 6, 1989.

Ronald R. Coles, Kennebunk, Me., Bertram M. Goldstein, Jeffrey S. Goldstein, Baltimore, Md., for plaintiff.

Robert F. Hanson, Christopher C. Taintor, Portland, Me., Michael K. Yarborough, Frost & Jacobs, Columbus, Ohio, for defendants.

GENE CARTER, Chief Judge.

MEMORANDUM OF DECISION AND ORDER GRANTING DEFENDANT'S MOTION TO DISMISS AND DENYING PLAINTIFF'S MOTION FOR RULE 11 SANCTIONS

Defendants filed a Motion to Dismiss this suit in its entirety, claiming that the Court lacks the in personam jurisdiction required by Maine law and the Due Process clause of United States Constitution. U.S.C.A. Const.Amend 14; 13-A M.R.S.A. § 1212(6) (Business Corporation Act); 14 M.R.S.A. § 704-A (long-arm statute). Defendants also maintain that in personam jurisdiction is lacking because of insufficiency of service of process.¹ Fed.R.Civ.P. 4(d)(3). The Court finds that the Maine business statute, 13-A M.R.S.A. § 1212(6), does not confer upon the Court in personam jurisdiction over Defendants and that Defendants' actions surrounding the filing of their Motion to Dismiss do not constitute grounds for Rule 11 sanctions. Therefore, Defendants' motion will be granted and Plaintiff's motion will be denied.

Plaintiff originally filed suit against Defendants as a named party in a class action on February 10th, 1988 in the United States District Court for the Eastern District of Pennsylvania. Plaintiff claimed that his son suffered toxic injuries as a result of exposure to pesticides applied by Defendants to an adjacent lawn. On June 17th, 1988, the Pennsylvania district court granted Defendants' motion to sever the class action and to transfer individual suits to districts where plaintiffs resided and/or their causes of action arose. That case was transferred to this Court on June 28th, 1988.

The suit proceeded in Maine, and the Court scheduled trial for July 17th, 1989. Plaintiff's counsel subsequently became aware of a scheduling conflict in their practice. After a request for an extension of time was denied, Plaintiff requested, and Defendant agreed, to file a written stipulation to voluntarily dismiss the case pursuant to Fed.R.Civ.P. 41(a)(1)(ii). The case was dismissed on June 14th, 1989. Plaintiff filed suit anew on July 17th, 1989.

Defendants move that the Court dismiss this suit for lack of in personam jurisdiction. Plaintiff argues that Defendants represented to the Pennsylvania district court that in personam jurisdiction existed in Maine and, therefore, that Defendants consented to in personam jurisdiction in this suit. Plaintiff also maintains that regardless of consent, the Court has in personam jurisdiction over the Defendants because Defendants have sufficient minimum contacts with the State of Maine. Finally, Plaintiff argues that circumstances concerning Defendants' Motion to Dismiss evidence bad faith and a violation of Fed.R. Civ.P. 11.

PRIOR CONSENT

Plaintiff maintains that Defendants' statements to the Pennsylvania district court regarding jurisdiction are judicial admissions that estop Defendants from objecting to in personam jurisdiction in this suit.² Defendants stated to the Pennsylvania district court in the "Law and Argument" section of their Motion to Sever and Change Venue that "venue is appropriate in the District of Maine" and "jurisdiction over the person of Chemlawn is also available in each of the judicial districts represented by the named plaintiffs." Defendants' Motion to Sever, at 23. Additionally, there is evidence from the Memorandum of Law Defendants provided to this Court that Defendants verbally consented to jurisdiction in discussions with Plaintiff's counsel.³ Regardless of whether Defendants' statements and conduct are characterized as judicial admissions or verbal promises to opposing counsel, the Defendants, at most, consented to in personam jurisdiction in Maine in the suit, "Sandstrom I," brought in Pennsylvania and transferred to Maine.⁴

This conclusion does not, as the Plaintiff believes, mean that Defendants' are bound by their consent to the exercise of in personam jurisdiction in this case. Defendants consented to jurisdiction only in "Sandstrom I." Defendants kept their word by not objecting to jurisdiction at any time when the transferred case was before this Court. That case was voluntarily dismissed on Plaintiff's initiative, without prejudice, pursuant to Fed.R.Civ.P. 41(a)(1)(ii) because Plaintiff's counsel had some scheduling difficulties.

The effect of a voluntary dismissal without prejudice is to "render the proceedings a nullity and leave the parties as if the action had never been brought." In Re Piper Aircraft Distribution System Anti-trust Litigation, 551 F.2d 213, 219 (8th Cir.1977). A complaint filed subsequent to a voluntary dismissal must be treated as if it were attempting to join the adverse party for the first time. Cabrera v. Municipality of Bayamon, 622 F.2d 4, 6 (1st Cir. 1980); C. Wright & A. Miller, Federal Practice and Procedure, § 2367. The Cabrera court held that neither the doctrine of res judicata nor the law of the case applies where a case is dismissed without prejudice. Cabrera, 622 F.2d at 6. Thus, Defendants are not bound by statements made in the prior case regardless of how this Court characterizes their representations. It would be manifestly unjust to require Defendants to be subject indefinitely to in personam jurisdiction solely based on statements made expressly in respect to a case that has been dismissed. Therefore, if the Court has in personam jurisdiction over the Defendants in this particular action, it must be because such jurisdiction exists independently of the agreement of the parties in "Sandstrom I."

IN PERSONAM JURISDICTION

Both parties agree that Chemlawn is licensed to do business in the State of Maine.⁵ Chemlawn, as a licensed business, appointed an agent for service of process pursuant to 13-A M.R.S.A. § 1212(6). Chemlawn has no other contacts with the State of Maine and has never, in fact, done any business here.⁶ Thus, the issue is whether 13-A M.R.S.A. § 1212(6) confers in personam jurisdiction, in and of itself, over defendant foreign corporations that are licensed to do business and, as required by statute, have appointed an agent for receipt of service of process, but do no business and have no contacts with the State of Maine. The Court finds that section 1212(6) does not confer in personam jurisdiction over defendants in such situations and, therefore, the Court lacks the requisite in personam jurisdiction over Defendant in this suit.⁷

The exercise of in personam jurisdiction must be authorized by state statute and must conform to federal due process. Jones v. North American Aerodynamics, Inc., 594 F.Supp. 657, 659 (D.Me. 1984). A state may restrict the availability of in personam jurisdiction although a state's jurisdictional statute must still comport with constitutional due process. See C. Wright & A. Miller, Federal Practice and Procedure, § 1069. The Court finds that 13-A M.R.S.A. § 1212(6), when interpreted in light of the entire Maine Business Corporations Act, does not subject a foreign corporation to in personam jurisdiction where that corporation's only contact with the state is to obtain authorization to do business and, as dictated by law, to appoint an agent for receipt of service of process.

There is no Maine judicial precedent for the proposition that 13-A M.R.S.A. § 1212(6) subjects a corporation with no other contacts with the state to in personam jurisdiction.⁸ The statute provides that a licensed corporation shall provide an agent for purposes of receiving service of all process permitted by law. The statute, however, neither equates receipt of process nor appointment of an agent with submission to in personam jurisdiction. The statute does not mention in personam jurisdiction at all and was not intended to confer such jurisdiction in and of itself.

In fact, 13-A M.R.S.A. § 1203, entitled "Effect of authorization to do business in State," codifies the legislative intent as to the consequences of qualifying to do business. The statute says simply that upon filing the application provided for in section 1202, the foreign corporation "shall be authorized to do business in this State" and defines the types of business so authorized.⁹ Nothing whatever is said about the exercise of jurisdiction over foreign corporations or about any submission of the foreign corporation to jurisdiction by qualifying to do business. A careful reading of Maine statutory law on the point renders it clear that it is the doing of business in Maine¹⁰ that submits a foreign corporation to the jurisdiction of Maine courts. If the foreign corporation is not authorized under Title 13-A to do business in Maine, then the act of doing business, by the express terms of 13-A M.R.S.A. § 1213, subjects it to the jurisdiction of Maine courts. If, on the other hand, it is qualified under Title 13-A, it is subject to jurisdiction of Maine courts pursuant to 14 M.R.S.A. § 704-A, Maine's "long-arm statute,"¹¹ under which the transaction of any business, inter alia, within the state by a non-resident constitutes submission to the jurisdiction of Maine courts.

The Maine Legislature, in enacting sections 1212(6) and 1213, separated and distinguished the issues of appointment of an agent for service of process and submission to jurisdiction. While both statutes involve the appointment of an agent for service of process, only section 1213 states when a corporation must submit to jurisdiction. 13-A M.R.S.A. § 1213. Under section 1213, an unauthorized corporation which does business in Maine is considered to have appointed the Secretary of State to receive service of...