977 F.2d 978 (6th Cir. 1992), 91-3918, Conti v. Pneumatic Products Corp.

Docket Nº:91-3918.
Citation:977 F.2d 978
Party Name:James T. CONTI, Plaintiff-Appellant, v. PNEUMATIC PRODUCTS CORPORATION and H. Michael McCurry, Defendants-Appellees.
Case Date:October 06, 1992
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
FREE EXCERPT

Page 978

977 F.2d 978 (6th Cir. 1992)

James T. CONTI, Plaintiff-Appellant,

v.

PNEUMATIC PRODUCTS CORPORATION and H. Michael McCurry,

Defendants-Appellees.

No. 91-3918.

United States Court of Appeals, Sixth Circuit

October 6, 1992

Argued May 7, 1992.

Page 979

William H. Blessing (argued and briefed), Cincinnati, Ohio, for plaintiff-appellant.

Peter E. Tamborski, Thompson, Hine & Flory, Cincinnati, Ohio, Guy O. Farmer, II (argued and briefed), Foley & Lardner, Jacksonville, Fla., for defendants-appellees.

Before: GUY and BOGGS, Circuit Judges; and RONEY, Senior Circuit Judge [*].

RONEY, Senior Circuit Judge.

This is an appeal from an order dismissing a diversity jurisdiction complaint, in which the plaintiff asserted long arm jurisdiction, because of lack of personal jurisdiction over the defendants. Agreeing that the defendants had insufficient contacts with the plaintiff in Ohio to subject them to the court's jurisdiction in this case, we affirm.

The suit involves allegations of false representation by Defendants in connection with the recruitment of Plaintiff, a Ohio resident, for a high-level administrative position at the company's office in Florida.

The recitation of facts is taken largely from the district court's opinion. See James T. Conti v. Pneumatic Products Corp., No. C-1-91-081 (S.D.Ohio, Aug. 27, 1991). Defendant Pneumatic Products (Pneumatic) is a Delaware corporation, a manufacturer and seller of pneumatic air drying systems, with its principal place of business in Ocala, Florida. Defendant H. Michael McCurry, the president and chief executive officer of Pneumatic during 1990, is a resident of Florida. Plaintiff James T. Conti is a resident of Ohio.

In late 1989 or early 1990, Conti, while in Ohio, responded to a Wall Street Journal advertisement for a directory of executive recruiting firms. The directory included a listing for Management Recruiters of Lake County, Inc. (Management Recruiters), an executive recruiting firm headquartered in Mount Dora, Florida. In early March 1990, Conti mailed a letter and resume to Management Recruiters, which were placed in a file maintained for unsolicited resumes.

Page 980

Late in March 1990, McCurry asked Management Recruiters to perform an executive search for the position of vice-president of engineering at Pneumatic's facility in Ocala, Florida. Management Recruiters contacted Conti and later forwarded his resume to Pneumatic. Acting on behalf of Pneumatic, Management Recruiters made several phone calls to Conti in Ohio and sent Pneumatic literature to him in Ohio. Conti alleges that during these telephone conversations Management Recruiters acted as agent for Pneumatic and made fraudulent misrepresentations regarding Pneumatic's financial condition.

Management Recruiters arranged for Conti to travel to Florida to meet with McCurry and other Pneumatic officials on two occasions. Shortly following Conti's second trip to Florida, Pneumatic offered him the position, and he accepted in May 1990.

Although Pneumatic apparently did not want Conti to start work before mid-June, Conti asked to be placed on the payroll in May because he was unemployed. Thus his employment with Pneumatic began May 21, 1990, and for the first month he was in Ohio doing work preparatory to his move to Florida. Pneumatic paid Conti a salary for that month. Conti began work in Pneumatic's facility in Ocala, Florida, on June 18, 1990. On October 5, 1990, the position of vice-president of engineering was eliminated and Conti was terminated.

Conti filed a complaint in Ohio against Pneumatic and McCurry for fraudulent misrepresentation, promissory estoppel, breach of fiduciary duty, and breach of contract. He alleged that the defendants made fraudulent misrepresentations to him regarding Pneumatic's financial condition, both directly during his visits to Florida and indirectly during telephone calls to him in Ohio by Pneumatic's agent, Management Recruiters. He asserted that he detrimentally relied on these misrepresentations in deciding to accept Pneumatic's offer, leave his employment in Ohio, and reject another job offer.

In response to Defendants' motion to dismiss for lack of personal jurisdiction, the district court allowed the parties to conduct some discovery, but did not conduct an evidentiary hearing. In a detailed order granting Defendants' motion to dismiss, the district court stated that Ohio's long arm statute, Ohio Rev.Code § 2307.382(A)(4) and (A)(6), provides for personal jurisdiction over both Pneumatic and McCurry, but determined that the exercise of personal jurisdiction over the defendants would offend the traditional concepts of fair play and substantial justice embodied in the due process clause of the Fourteenth Amendment.

Conti appeals, urging that the Ohio court's exercise of personal jurisdiction over Defendants is constitutional. We need not resolve the initial dispute of the parties over the burden Conti must carry to establish jurisdiction. Conti urges that he bears only the burden of demonstrating facts which support a prima facie case for jurisdiction, because there was no evidentiary hearing. See American Greetings Corp. v. Cohn, 839 F.2d 1164, 1168-69 (6th Cir.1988). Defendants argue that Conti must demonstrate Ohio's jurisdiction by a preponderance of the evidence rather than by simply making a prima facie showing, because the district court permitted discovery and did not rely solely on affidavits. See Market/Media Research v. Union Tribune Pub., 951 F.2d 102, 104 (6th Cir.1991), cert. denied, --- U.S. ----, 113 S.Ct. 79, 121 L.Ed.2d 43 (1992); Theunissen v. Matthews, 935 F.2d 1454, 1458 (6th Cir.1991); Serras v. First Tennessee Bank, N.A., 875 F.2d 1212, 1214 (6th Cir.1989).

Even under the lesser prima facie showing, however, considering the evidence in the light most favorable to the plaintiff, Conti has not demonstrated facts supporting jurisdiction. The essential facts are not really disputed. The only real dispute is in the significance of these facts. Therefore, the district court did not err in deciding the jurisdiction issue relatively early in this case without conducting an evidentiary hearing. See Market/Media, 951 F.2d at 106.

We need not determine the correctness of the district court's statutory decision.

Page 981

The controlling issue on this appeal is the constitutional standard. To subject a defendant to the personal jurisdiction of a court, the defendant must "have certain minimum contacts with [the forum] such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342-43, 85 L.Ed. 278 (1940)). "In analyzing the due process limits of personal jurisdiction, a distinction is made between 'general' jurisdiction and 'specific' jurisdiction." Third Nat'l. Bank in Nashville v. WEDGE Group, Inc., 882 F.2d 1087, 1089 (6th Cir.1989) (citations omitted), cert. denied, 493 U.S. 1058, 110 S.Ct. 870, 107 L.Ed.2d 953 (1990).

A proper exercise of general jurisdiction requires the "defendant's contacts with the forum state [to be] of such a 'continuous and systematic' nature that the state may exercise personal jurisdiction over the defendant even if the action is unrelated to the defendant's contacts with the state." Third Nat'l. Bank, 882 F.2d at 1087. Plaintiff does not even argue for general jurisdiction over McCurry. Although Plaintiff argues that the district court had general jurisdiction over Pneumatic, the facts do not support the argument.

Pneumatic is not licensed to do business in Ohio, does not maintain an office or employees in Ohio, and does not own any property in Ohio. Pneumatic sells its products all over the United States. Sales are made either to distributors for resale or directly by Pneumatic to the end user. Pneumatic sells its products in Ohio through two distributors. These distributors act as Pneumatic's agents in connection with Pneumatic's direct sales to end users; and, they regularly purchase Pneumatic products for resale in Ohio. The annual sales of one of these distributors to Ohio customers total approximately $900,000. The distributors themselves usually service the products they sell. On occasion, they are visited and telephoned by Pneumatic employees for technical support. Conti has not established a prima facie case that Pneumatic's contacts with Ohio are of a "continuous and systematic" nature such that Ohio could constitutionally maintain general jurisdiction over Pneumatic or McCurry in an action unrelated to its Ohio contacts. Cf. Third Nat'l. Bank, 882 F.2d at 1088-89. But cf. Michigan Nat'l. Bank v. Quality Dinette, Inc., 888 F.2d 462, 465-67 (6th Cir.1989).

Specific jurisdiction is exercised over a defendant in a suit arising out of or related to the defendant's contacts with the forum. See Third Nat'l. Bank, 882 F.2d at 1089. The district court correctly focused on specific jurisdiction, rather than general jurisdiction.

The Sixth Circuit has utilized a three part test for determining whether specific jurisdiction may be exercised in compliance with the requirements of due process.

First, the defendant must purposefully avail himself of the privilege of acting in the forum state or causing a consequence in the forum state.

Second, the cause of action must arise from the defendant's activities there.

Third, the acts of the defendant or consequences caused by the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over the defendant reasonable.

See Southern Machine Co. v. Mohasco Industries, Inc., 401 F.2d 374, 381 (6th Cir.1968).

The district court found that Defendants do not meet the first part of this test. Conti alleges that Management Recruiters had...

To continue reading

FREE SIGN UP