Action Mfg. Co., Inc. v. Simon Wrecking Co.

• Decision Date: 20 June 2005
• Docket Number: No. Civ.A.02-CV-8964.,Civ.A.02-CV-8964.
• Citation: 375 F.Supp.2d 411
• Parties: ACTION MANUFACTURING CO., INC., et al., Plaintiffs, v. SIMON WRECKING CO., et al., Defendants
• Court: U.S. District Court — Eastern District of Pennsylvania

375 F.Supp.2d 411

ACTION MANUFACTURING CO., INC., et al., Plaintiffs, v.SIMON WRECKING CO., et al., Defendants

No. Civ.A.02-CV-8964.

United States District Court, E.D. Pennsylvania.

June 20, 2005.

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David E. Romine, Larry D. Silver, Langsam Stevens & Silver LLP, Jeannette M. Brian, Leigh W. Marquardt, Howard Klein, Sarah Elise Pontoskise, Conrad O'Brien Gellman & Rohn, PC, Philadelphia, PA, Sandra G. Gibbs, Manko Gold Katcher & Fox, Bala Cynwyd, PA, for Plaintiffs.

Kimberly Stuart Kluchnick, Mattleman Weinroth & Miller, PC, Philip L. Hinerman, Fox Rothschild LLP, J. Robert Stoltzfus, Robert L. Collings, Schnader Harrison Segal & Lewis LLP, Andrew S. Levine, Stradley Ronon Stevens and Young LLP, Philadelphia, PA, Sharon Oras Morgan, Fox Rothschild, LLP, Wilmington, DE, George J. Ozorowski, Hughes Kalkrenner & Adshead LLP, Plymouth Meeting, PA, C. Shawn Dryer, Kevin K. Douglass, Matthew C. Landreth, Robert W. Thomson, Steven F. Baicker-Mckee, Babst Calland Clements & Zomnir P.C, Pittsburgh, PA, Joseph D. Picciotti, Harris Beach LLP, Pittsford, NY, David J. Staudt, Rees A. Griffiths, Barley Snyder Senft and Cohen L.L.C., York, PA, Matthew H. Haverstick, Barley Snyder, Lancaster, PA, Madelaine R. Berg, Stroock, Stroock & Lavan LLP, New York, NY, for Defendants.

MEMORANDUM AND ORDER

ANITA B. BRODY, District Judge.

I.INTRODUCTION

Plaintiffs¹(collectively referred to as "Action Manufacturing") brought this action against defendants² pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.("CERCLA"), and Pennsylvania's Hazardous Site Cleanup Act, 35 P.S.A. § 6020.101 et seq.("HSCA"), for contribution and cost recovery of past and future response costs incurred in the environmental cleanup of a site located in Malvern, Pennsylvania (the "Malvern Superfund Site").Plaintiffs also seek declaratory judgment.Jurisdiction is appropriate under 28 U.S.C. §§ 1331 & 1367.Currently before me is defendantWorld Fuel Services Corporation's ("World Fuel Corp." or "Corp.")motion to dismiss for lack of personal jurisdiction under Fed.R.Civ.P. 12(b)(2).Plaintiffs responded by asserting personal jurisdiction over Corp. based upon general, rather than specific, jurisdiction.For the reasons set forth below, World Fuel Corp.'s motion to dismiss is granted.

II.PROCEDURAL BACKGROUND

Action Manufacturing filed a Second Amended Complaint on October 26, 2004.(Doc. # 314.)In its complaint, Action Manufacturing alleged that defendantResource Technology Services, Inc.("RTS"), transported "hazardous substances" as defined under CERCLA to the Malvern Superfund Site. (2nd Am.Compl.¶¶ 55-57.)RTS allegedly sold its assets to defendantResource Recovery Atlantic, Inc.("Atlantic").(Id.¶ 59.)The complaint alleged that this asset sale constituted a de facto merger, that Atlantic is a mere continuation of defendant RTS, and that Atlantic is an alter ego of, a successor in interest to, or otherwise liable for the liabilities of RTS.(Id.¶¶ 60-62.)Action Manufacturing also alleged that World Fuel Corp. was the "ultimate corporate parent" of Atlantic when Atlantic bought the assets of RTS, that World Fuel Corp. dominated Atlantic to such a degree that Atlantic was a mere instrumentality of Corp., and that Corp. is an alter ego of, a successor in interest to, or otherwise liable for the liabilities of RTS and Atlantic.(Id.¶¶ 63-67.)The Second Amended Complaint was the first time World Fuel Corp. was named as a defendant in this action.³

On November 22, 2004, Corp. filed a motion to dismiss for lack of personal jurisdiction.(Doc. # 323; hereinafter "Def.'s Mot.")In response, on December 6 2004, Action Manufacturing requested an extension of time to respond so that it could conduct discovery on the issue of personal jurisdiction.(Doc. # 325.)On December 13, 2004, I granted this motion.(Doc. # 330.)On December 30, 2004, Action Manufacturing filed a motion to compel discovery.(Doc. # 343.)On February 2, 2005, I granted in part and denied in part Action Manufacturing's motion to compel.(Doc. # 403.)My February 2, 2005 Order specifically stated that

[Corp.] must answer any discovery requests regarding its own contacts with Pennsylvania. [Corp.] must also answer any discovery requests regarding the relationship between [Corp.] and each of the following entities: International Recovery Corp., Resource Recovery of America, Inc., Resource Recovery Atlantic, Inc., and Resource Technology Services, Inc.

(Id.)On February 28, 2005, Corp. filed a motion to quash Action Manufacturing's subpoena issued to World Fuel Services, Inc., on the grounds that it went beyond the scope of discovery allowed in my February 2, 2005 order.(Doc. # 416.)I denied the motion to quash on March 14, 2005 and ordered Corp. to "answer any discovery requests regarding the relationship between WFSC [Corp.] and each of the following entities: International Recovery Corp., Resource Recovery of America, Inc., Resource Recovery Atlantic, Inc., Resource Technology Services, Inc., and World Fuel Services, Inc."(Doc. # 437.)

On May 2, 2005, Action Manufacturing filed a memorandum of law in opposition to Corp.'s motion to dismiss for lack of personal jurisdiction.(Doc. # 481; hereinafter "Pl.'s Resp.")Action Manufacturing's response included excerpts of deposition transcripts as well as other documentary exhibits.On May 6, 2005, Corp. filed a reply in support of its motion.(Doc. # 483; hereinafter "Def.'s Reply.")On May 10, 2005, Action Manufacturing filed a rebuttal memorandum in opposition to Corp.'s motion.(Doc. # 486; hereinafter "Pl.'s Sur-reply.")⁴

III.FACTUAL BACKGROUND

A.The Relevant Parties

DefendantWorld Fuel Corp. is incorporated under the laws of Florida and has its principal place of business in Florida.(2nd Am. Compl. ¶ 63;Def.'s Replyat 1.)Corp. is not registered to do business in Pennsylvania.Parties agree that Corp. is a holding company that has no customers and sells no goods or services.(Pl.'s Resp. at 1;Def.'s Replyat 1.)According to Robert Tocci, the executive vice-president of Corp., Corp. "doesn't engage in business.The operating subsidiaries of [Corp.] actually engage in business."(Tocci Dep.at 11.)

World Fuel Services, Inc.("World Fuel Inc." or "Inc.") is a wholly-owned subsidiary of Corp., purchased by Corp. in 1994.(Def.'s Reply Ex. B.)Inc. consented to jurisdiction in Pennsylvania by registering with the Pennsylvania Department of State to do business in Pennsylvania.(Tocci Dep.at 11;RomineDecl. Ex. 4.)⁵Inc. provides aviation fuel and related services under the trade name "World Fuel."(Tocci Dep.at 17.)The activities of World Fuel Inc. are unrelated to the pollution claims in this case.

B.The Leadership of Inc.

Inc. is registered to do business in Pennsylvania.(RomineDecl. Ex. 4.)Michael Clementi("Clementi") serves as Inc.'s sole director as well as its president and chief operating officer.(RomineDecl. Ex. 10.)⁶As the sole director of Inc., Clementi chooses the individuals who serve as officers of Inc. (Clementi Dep.at 96;RomineDecl. Ex. 10.)Because Clementi is the sole director of Inc., Inc. does not hold meetings of the board of directors.(Clementi Dep.at 55.)However, when Inc. had more than one director, the directors held meetings.(Id. at 56.)There is no overlap between the boards of directors of Corp. and Inc.(CompareRomine Decl. Ex. 4 & 10 with Ex. 7⁷at 385.)As president of Inc., Clementi "runs the company" and is "responsible for the bottom line, sales, marketing, collections, profitability, the whole thing."(Clementi Dep.at 5-6.)

Clementi negotiated the terms of his own employment agreement with Paul Stebbins, who is the chairman and chief executive officer of Corp., the Florida holding company.(Clementi Dep.at 44.)The board of directors of Corp. has the power to decide whether Clementi remains in his position at Inc. (Id. at 39-40;Romine Decl. Ex. 7at 385.)However, Clementi is not an executive officer of Corp. nor is he an employee of Corp. (Clementi Dep.at 4.)Clementi's salary and bonuses are paid by Inc. (Clementi Dep.at 5, 7, 43.)Part of Clementi's compensation consists of options to purchase shares of Corp. stock.(Id. at 40.)Corp. allocates the costs of these options back to Inc. (Id. at 106.)

Clementi is also an officer and director of six other Corp. subsidiaries.(Clementi Dep.at 6.)Clementi's employment agreement with Inc. requires him to perform those duties.(Id. at 28.)These other Corp. subsidiaries do not give Clementi any cash compensation for the work that he does for them.(Id. at 27-28.)However, the other subsidiaries do reimburse Inc. for Clementi's time.(Id. at 102-03.)Corp. plays no role in this reimbursement.(Id. at 103-04.)

The 2003 Annual Report of "World Fuel Services"⁸ reported the activities of Corp. and its subsidiaries and collectively referred to Corp. and its subsidiaries as "we,""our," and "us."(Def.'s Reply Ex. C;⁹Tocci Dep.at 15-16.)In this report, Clementi is listed as an executive officer of Corp. with the title of president and chief operating officer of "Aviation Fuel Services."(Romine Decl. Ex. 7at 385.)According to Tocci, Clementi is shown in Corp.'s annual report as an executive officer of Corp. because he is in a "policy-making position of a principal subsidiary of the company" and Securities and Exchange Commission(SEC) rules require that Corp. lists such individuals as executive officers of the parent company.(Tocci Dep.at 70.)Corp.'s SEC proxy statement to the SEC included information on the executive officers of Corp. and "its principal subsidiaries" and characterized Clementi as "President of the Company's Aviation and Fuel Services Segment."(Romine Decl. Ex. 11¹⁰at 15.)

C.Shared Services Between Inc. and Corp.

Corp. and Inc. share the same Florida office space,...