JF Pritchard & Co. v. Dow Chemical of Canada, Ltd.

• Decision Date: 27 August 1971
• Docket Number: No. 17922-4.,17922-4.
• Citation: 331 F. Supp. 1215
• Court: U.S. District Court — Western District of Missouri
• Parties: J. F. PRITCHARD & COMPANY, Plaintiff, v. DOW CHEMICAL OF CANADA, LIMITED, Defendant.

331 F. Supp. 1215

J. F. PRITCHARD & COMPANY, Plaintiff, v. DOW CHEMICAL OF CANADA, LIMITED, Defendant.

No. 17922-4.

United States District Court, W. D. Missouri, W. D.

August 27, 1971.

Allan L. Bioff, James F. Duncan, Watson, Ess, Marshall & Enggas, Kansas City, Mo., for plaintiff; Thomas R. McDade, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, Tex., of counsel.

John C. Thurlo, Swanson, Midgley, Jones, Eager & Gangwere, Kansas City, Mo., for defendant.

MEMORANDUM AND ORDER DISMISSING CAUSE WITHOUT PREJUDICE

ELMO B. HUNTER, District Judge.

This matter is presently before the Court upon the motion of the defendant, Dow Chemical of Canada, Limited (Dow), pursuant to Rule 12, F.R.Civ.P., to quash service of process and to dismiss this cause for lack of personal jurisdiction. Alternatively, defendant Dow seeks a dismissal based upon the doctrine of forum non conveniens. Both parties have submitted to the Court voluminous suggestions and counter-suggestions, along with numerous exhibits and affidavits supporting their respective positions. On July 22, 1970, a hearing was held in the matter, and subsequently, both sides have been given a substantial period of discovery with regard to defendant's pending motion to dismiss. The Court now deems the matter as fully submitted.

Background

This is an action brought by J. F. Pritchard & Company, as assignee of its Canadian subsidiary, Pritchard Canadian Limited, to recover $339,000.00 allegedly owing the subsidiary as the result of work performed under a contract between the subsidiary and defendant Dow. Under that contract, Pritchard Canadian Limited agreed to design, engineer, and completely construct an anhydrous ammonia plant for defendant Dow at a location in Sarnia, Ontario, Canada. This work was originally scheduled to have been completed on June 1, 1965. However, some disagreement arose between defendant Dow on the one hand, and Pritchard Canadian Limited, J. F. Pritchard & Company, and certain major equipment suppliers on the other, over plant operational deficiences claimed by defendant Dow. As a result, formal notice of acceptance of the plan was not given by Dow until July 18, 1969.

During the interim, and for a subsequent period of time, representatives of Pritchard Canadian Limited and its parent company, J. F. Pritchard & Company, met with Dow representatives in an attempt to resolve the claimed design and construction deficiencies. Although sometime during that period Dow advised Pritchard Canadian Limited that it intended to commence legal action over the claimed deficiencies, at the request of Pritchard Canadian Limited, the parties proceeded with further meetings and discussions aimed at a settlement of the contract differences. The parties continued to meet extensively through December of 1969 until, on December 18, 1969, representatives of defendant Dow were advised that J. F. Pritchard & Company, as assignee of the contract from the Canadian subsidiary, had commenced suit in this Court. Immediately thereafter, on December 19, 1969, defendant Dow initiated suit in the Supreme Court of Ontario, Canada against the original contracting party, Pritchard Canadian Limited; its parent corporation, J. F. Pritchard & Company; certain equipment suppliers, Joy Manufacturing Company and Ingersoll-Rand Corporation; and two individuals, R. M. Harris and Walter W. Deschner.¹ Thus, within a two-day period, suits involving similar, if not identical issues were filed in this Court and in the Supreme Court of Ontario, Canada.

Shortly after the filing of this action, defendant Dow filed its motion to dismiss based upon the following grounds: (1) that this Court lacked personal jurisdiction over the defendant; (2) that the assignment from Pritchard Canadian Limited to its parent corporation was collusive within the meaning of the statutory provisions of 28 U.S.C. § 1359; and (3) that any jurisdiction this Court might have should be declined under the doctrine of forum non conveniens.

Personal Jurisdiction

In its complaint, plaintiff alleges that "defendant is subject to the jurisdiction of this Court pursuant to R.S.Mo. § 506.500, V.A.M.S., and process can be served upon defendant at Sarnia, Ontario, Canada, pursuant to R.S.Mo. § 506.510, V.A.M.S." Missouri Revised Statute § 506.500 (1967) reads, in pertinent part as follows:

"Any * * * corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such * * * corporation * * * to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any such acts:

(1) The transaction of any business within this state."

As grounds in opposition to the assumption of personal jurisdiction by this Court over the defendant under Section 506.500, defendant presents the following contentions: (a) that defendant did not transact business within the State of Missouri within the meaning of Section 506.500 subsequent to its enactment; (b) that plaintiff has failed to plead sufficient facts to show that this Court has personal jurisdiction over the defendant; and (c) that the assumption of personal jurisdiction by this Court would offend defendant's constitutionally-protected right to due process of law in that the requisite "minimum contacts" are lacking in this cause.

As to contention (a), defendant claims that the "transacting business" language of Section 506.500 carries no broader meaning than the earlier "doing business" concept which existed in Missouri law prior to the enactment of Section 506.500. Defendant contends that this is the only possible interpretation of the statute which would allow retrospective application of it. It is defendant's further contention that, under prior Missouri authority, it clearly was not "doing business" within the State of Missouri before the enactment of Section 506.500.

The decisions of this Court and of the courts of Missouri which have followed the enactment of Section 506.500 are directly contrary to defendant's position as outlined above. These statutory sections have been found to be remedial and procedural, and, therefore, retrospective. Adams Dairy Company v. National Dairy Products Corp., 293 F.Supp. 1135 (W.D. Mo.1968); Scheidegger v. Greene, 451 S.W.2d 135 (Mo.1970); State ex rel. Nichols v. Fuller, 449 S.W.2d 11 (St.L. Ct.App.1969). As recently stated by the Missouri Supreme Court in Scheidegger v. Greene, supra, 451 S.W.2d at page 138:

"The sections in question §§ 506.500, 506.510, and 506.520 are remedial and procedural. They do not grant substantive rights. They create no new cause of action. They merely provide a new procedural method of obtaining jurisdiction over a person, firm or corporation outside this state as to any cause of action arising from the commission of a tortious act within this state. They relate to the service of process, the purpose of which is to confer jurisdiction over the person of the defendant. They are remedial, and a statute is not retrospective if it but provides a new remedy." (Citations omitted)

Furthermore, although Section 506.500 has been held to be remedial and procedural, for the purposes of obtaining personal jurisdiction, it has significantly broadened the former "doing business" concept of Missouri law to expressly include "the transaction of any business within the state." (emphasis added). See: American Hoechst Corp. v. Bandy Laboratories, Inc., Civil Case No. 17,352-2, (W.D.Mo.1970) (unreported) and cases cited therein; State ex rel. Deere and Company v. Pinnell, 454 S.W.2d 889 (Mo.1970); Senate Majority Leader William B. Waters, State Legislative Developments, 20 J.Mo.B. 452, 455 (October, 1967).

In determining whether defendant has made sufficient "minimum contacts" with the forum to obtain personal jurisdiction over it, five factors must be considered: (1) the nature and quality of the contacts with Missouri; (2) the quantity of those contacts; (3) the relationship of the cause of action to those contacts; (4) the interest of Missouri in providing a forum for its residents; and (5) the convenience or inconvenience to the parties. Thompson v. Ecological Science Corporation, 421 F. 2d 467, 469 (8th Cir. 1970); Electo-Craft Corporation v. Maxwell Electronics Corp., 417 F.2d 365 (8th Cir. 1969); Aftanase v. Economy Baler Co., 343 F.2d 187 (8th Cir. 1965). And, from the facts adduced at the hearing and revealed by the record, it is clear that defendant Dow made sufficient contacts with the State of Missouri to satisfy at least the first four elements mentioned above. The record in this case, including the evidentiary material adduced at the hearing, reveals that during the years 1964 to 1966, several conferences were held in Kansas City, Missouri, between representatives of defendant Dow and personnel of plaintiff J. F. Pritchard & Company concerning the design, engineering and construction of the anhydrous ammonia plant in Sarnia, Ontario, Canada. Some of those meetings occurred prior to the final agreement between Pritchard Canadian Limited and Dow Chemical of Canada. Furthermore, frequent telephone conferences were held between Dow representatives in Canada and J. F. Pritchard representatives in Missouri. Also, some of the work required by the contract was performed by J. F. Pritchard & Company personnel in Kansas City, Missouri. Under these circumstances, although the number of actual separate physical contacts with Missouri were not numerous, the meetings between Dow representatives and J. F. Pritchard & Company representatives contributed to the consummation and execution of the contract in question. Thus, these contacts were sufficient in quality and quantity to satisfy the due process requirements. Compare: Thompson v. Ecological Science Corp., supra; American Hoechst Corp. v. Bandy Laboratories, Inc., supra. Because J. F. Pritchard & Company is a Missouri corporation which performed certain functions under the contract in...