Anderson v. Century Products Co.

Citation943 F.Supp. 137
Decision Date23 October 1996
Docket NumberCivil No. 95-349-SD.
CourtUnited States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of New Hampshire

Paul M. DeCarolis, Gottesman & Hollis, P.A., Nashua, NH, Eugene A. Feher, Weingarten, Schurgin, Gagnebin & Hayes, Boston, MA, for Dana Anderson.

Kevin C. Devine, Devine & Nyquist, Manchester, NH, W. Wright Danenbarger, Wiggin & Nourie, Manchester, NH, Michael E. Sobel, Graham & James, San Francisco, CA, for Century Products Company.


DEVINE, Senior District Judge.

This order addresses three motions now pending. Defendant Century Products Company moves for: (1) dismissal of the complaint on the basis that the court lacks personal jurisdiction over Century; (2) transfer of the action to the Northern District of Ohio pursuant to the change of venue provision of 28 U.S.C. § 1404(a); and (3) dismissal of the entire complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P., for failure to state a claim upon which relief can be granted.

Factual Background

The events leading up to this controversy began in 1990 when Dana Anderson, a New Hampshire resident, invented a foldable infant stroller having a detachable seat which could be easily transferred, without unstrapping the child, from the frame of the stroller to a car, where it functioned as a child safety car seat. In mid-year of 1990, Anderson sent inquiry to the Ohio offices of Century, who was in the business of manufacturing and selling both infant car seats and infant strollers, to ascertain interest in his invention. Century responded with a letter sent to Anderson's New Hampshire residence inviting him to submit for further consideration a description of his idea, along with materials, drawings, and/or samples, on condition, however, that he execute Century's Idea Submission Policy (ISP) form (Exhibit B attached to Motion to Dismiss). The ISP form purported to "control the conditions under which ideas are submitted to [Century]." In June of 1990, Anderson executed and returned the ISP form, along with drawings and a written description of his invention (Exhibit C).

One month later, Century sent word to Anderson that "after further consideration of your invention, it does not fit into our marketing plans at this time." Here is the rub of the factual dispute between the parties. Anderson alleges that, shortly after sending the rejection letter, Century began manufacturing and marketing an infant stroller substantially identical to Anderson's invention. According to Anderson, Century used his idea without his knowledge and authority to develop this new line of infant strollers. Century, however, denies using Anderson's idea, claiming independent development of similar products for more than a decade before learning of Anderson and his idea.

By way of an eight-count complaint, Anderson brings action against Century. The basic harm for which Anderson seeks redress is Century's unpermitted and uncompensated use of his idea for the detachable infant seat. Plaintiff seeks redress under eight legal theories: breach of contract and unjust enrichment (Counts I and V); fraud (Count III); breach of fiduciary duties and misappropriation of confidential information (Counts II and IV); conversion (Count VI); violation of New Hampshire's Uniform Trade Secret Act (Count VII); and, finally, violation of New Hampshire's Consumer Protection Laws (Count VIII). Century responds with various motions which are the subject of this order.

1. Jurisdiction

Defendant's first motion urges dismissal on the ground that exercise of personal jurisdiction over Century by this court violates Century's due process rights.

a. Standard of Review

When personal jurisdiction is contested, the plaintiff bears the burden of demonstrating that jurisdiction over the defendant is proper. Sawtelle v. Farrell, 70 F.3d 1381, 1387 (1st Cir.1995). To carry the burden when, as in this case, there has been no evidentiary hearing, the plaintiff must make a prima facie showing of personal jurisdiction by offering "evidence that, if credited, is enough to support findings of all facts essential to personal jurisdiction." Boit v. GarTec Products, Inc., 967 F.2d 671, 675 (1st Cir.1992). In meeting this standard, the plaintiff "ordinarily cannot rest upon the pleadings, but is obliged to adduce evidence of specific facts." Foster-Miller, Inc. v. Babcock & Wilcox Canada, 46 F.3d 138, 145 (1st Cir.1995); accord United Elec. Workers v. 163 Pleasant Street Corp., 987 F.2d 39, 44 (1st Cir.1993). However, the court "must accept the plaintiff's (properly documented) evidentiary proffers as true" and make its ruling as a matter of law. Foster-Miller, Inc., supra, 46 F.3d at 145. An evidentiary hearing is required only if the court determines that it would be unfair to the defendant to resolve the issue without requiring more of the plaintiff than a prima facie showing of jurisdiction. Id. at 146.

b. Analysis

When subject matter jurisdiction is premised on diversity, a federal court may assert personal jurisdiction over a nonresident defendant only if the plaintiff establishes both that: (1) the forum state's long-arm statute authorizes the exercise of jurisdiction over the defendant, and (2) the defendant has sufficient "minimum contacts" with the forum state such that the court's jurisdiction does not offend the defendant's due process rights. Sawtelle, supra, 70 F.3d at 1387; Kowalski v. Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir.1986).

c. New Hampshire's Long-Arm Statute

Because Century is a foreign corporation, incorporated for profit under the laws of Ohio, New Hampshire Revised Statutes Annotated (RSA) § 293-A:15.10 (Supp.1995) is the controlling long-arm statute. See McClary v. Erie Engine & Mfg. Co., 856 F.Supp. 52, 55 (D.N.H.1994). The New Hampshire corporate long-arm statute has been interpreted "to authorize jurisdiction over foreign corporations to the full extent allowed by federal law." Id. Therefore, the statutory authority requirement for assertion of jurisdiction collapses into the "minimum contacts" analysis, and satisfaction of the latter renders jurisdiction proper under the New Hampshire long-arm statute.

d. Constitutional Analysis: Due Process

When a court asserts personal jurisdiction over a defendant, it is exercising power which, like all government exercises of power, is subject to constitutional limits. See Foster-Miller, Inc., supra, 46 F.3d at 143. Here, those limits stem from the Due Process Clause of the Fourteenth Amendment. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 1871-72, 80 L.Ed.2d 404 (1984) (citing Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1877)). For the court to properly assert personal jurisdiction, the defendant must have had "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" Helicopteros, supra, 466 U.S. at 414, 104 S.Ct. at 1872 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945)); accord Burnham v. Superior Court of Cal., County of Marin, 495 U.S. 604, 618, 110 S.Ct. 2105, 2114-15, 109 L.Ed.2d 631 (1990). Minimum contacts analysis focuses on the expectations of the defendant requiring that his conduct bear such a "substantial connection with the forum [s]tate" that the defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473-75, 105 S.Ct. 2174, 2182-84, 85 L.Ed.2d 528 (1985) (internal quotations omitted).

In this case, plaintiff alleges multiple causes of action, some sounding in tort and others in contract. Personal jurisdiction over the defendant must be proper for each and every cause of action in the complaint. Nelson v. R. Greenspan & Co., 613 F.Supp. 342, 346 (E.D.Mo.1985); Debreceni v. Bru-Jell Leasing Corp., 710 F.Supp. 15, 19 (D.Mass.1989) ("Where one complaint contains two claims ... there must be an independent basis for the assertion of personal jurisdiction for each claim. Jurisdiction over one claim does not imply jurisdiction over another."). "For purposes of jurisdictional disputes, each count must be considered as though it constituted a separate complaint." Jack O'Donnell Chevrolet, Inc. v. Shankles, 276 F.Supp. 998, 1002 (N.D.Ill.1967). Jurisdiction for plaintiff's contract causes of action is more problematic, and the court will begin discussion there.

The First Circuit uses a three-part test to determine whether the defendant has had sufficient minimum contacts with the forum state to support personal jurisdiction:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's in-state contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

United Elec. Workers, supra, 960 F.2d at 1089; accord Sawtelle, supra, 70 F.3d at 1388.

The "relatedness" inquiry is whether plaintiff's claims arise out of, or relate to, defendant's New Hampshire activities. Ticketmaster-New York, Inc. v. Alioto, 26 F.3d 201, 206 (1st Cir.1994). This requirement focuses on the causal nexus between the defendant's forum-based contacts and the injury underlying plaintiff's cause of action. Century's only relevant contact is the mailing of its ISP form to plaintiff's New Hampshire residence. The First Circuit has observed that the "transmission of information into [the forum] by way of ... mail is unquestionably a contact for purposes of our analysis." Sawtelle, supra, 70 F.3d at 1381. But the issue is whether that...

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