Cellutech, Inc. v. Centennial Cellular Corp., Civ. A. No. 94-1788 (PLF).

• Decision Date: 23 December 1994
• Docket Number: Civ. A. No. 94-1788 (PLF).
• Citation: 871 F. Supp. 46
• Parties: CELLUTECH, INC., Plaintiff, v. CENTENNIAL CELLULAR CORPORATION and Centennial Jackson Cellular Corporation, Defendants.
• Court: U.S. District Court — District of Columbia

871 F. Supp. 46

CELLUTECH, INC., Plaintiff, v. CENTENNIAL CELLULAR CORPORATION and Centennial Jackson Cellular Corporation, Defendants.

Civ. A. No. 94-1788 (PLF).

United States District Court, District of Columbia.

December 23, 1994.

Thomas Earl Patton, Washington, DC, for plaintiff.

R. Bruce Beckner, Washington, DC, for defendants.

MEMORANDUM OPINION

FRIEDMAN, District Judge.

This matter came before the Court for argument on defendants' motion to dismiss for lack of personal jurisdiction or for improper venue under Rules 12(b)(2) and 12(b)(3) of the Federal Rules of Civil Procedure.

Plaintiff, a corporation with its principal place of business in Illinois, brought suit on its own behalf and on behalf of Jackson Cellular Partnership, a general partnership formed under the laws of the District of Columbia, alleging that the defendants, both incorporated under the laws of Delaware with their principal place of business in Connecticut, breached a contract between the parties. The contract was for the sale of a cellular radio system located in Michigan. It was negotiated over the telephone and through the mails and interstate courier service between the non-resident defendants and plaintiff's transaction lawyer in the District of Columbia. Neither the parties nor their representatives ever had any face-to-face meetings in the District of Columbia or elsewhere in the course of negotiating the contract. Plaintiff alleges that the defendants breached the contract by failing to file a registration statement with the Securities and Exchange Commission in Washington, D.C., within the time required by the contract and by failing to pay the second of two installment payments to plaintiff under the contract. The first installment was paid by wire transfer to the Washington, D.C., bank of plaintiff's lawyer.

The question raised by this motion is whether the two non-resident defendants, whose only contact with the District of Columbia consisted of communicating by telephone and interstate courier service with the plaintiff's transaction lawyer in the District of Columbia, had sufficient contacts with the forum to support the personal jurisdiction of this Court under the transacting business provision of the District of Columbia long-arm statute. D.C.Code § 13-423. Defendants are not qualified to do business in the District of Columbia, have no registered agents for service of process here, have no offices or employees in the District, derive no revenues from sales or operations located in the District, do not advertise in publications or electronic media whose principal audience is in the District, have no listings in any telephone or business directories in the District, solicit no business in the District, receive no mail in the District and have no bank accounts in the District. Furthermore, the subject matter of the contract is located in Jackson, Michigan, and the contract specifically provided that Michigan law would govern its construction. A broker with offices in Colorado brought the two sides together. Defendants engaged New York counsel to prepare the SEC filings and Washington, D.C., counsel to prepare filings with the FCC required by the contract.

Under the District of Columbia long-arm statute, a plaintiff has the burden of establishing a factual basis for the exercise of personal jurisdiction over the defendant. First Chicago Int'l v. United Exchange Co., Ltd., 836 F.2d 1375, 1378 (D.C.Cir.1988); Crane v. New York Zoological Soc., 894 F.2d 454, 456 (D.C.Cir.1990); Dooley v. United Technologies Corp., 786 F.Supp. 65, 70 (D.D.C.1992); Mitchell Energy Corp. v. Mary Helen Coal Co. Inc., 524 F.Supp. 558, 561 (D.D.C.1981). To establish personal jurisdiction under the "transacting business" clause of the long-arm statute, plaintiff must prove that (1) the defendant transacted business in the District; (2) the claim arose from the business transacted in the District; and (3) the defendant had minimum contacts with the District such that the Court's exercise of personal jurisdiction would not offend "traditional notions of fair play and substantial justice." Dooley v. United Technologies Corp., 786 F.Supp. 65, 71 (D.D.C.1992). While the long-arm statute is interpreted broadly, plaintiff must allege some specific facts evidencing purposeful activity by defendants in the District of Columbia by which they invoked the benefits and protections of its laws and specific acts connecting the defendants with the forum. First Chicago Int'l v. United Exchange Co. Ltd., 836 F.2d at 1378-79; Meyers v. Smith, 460 F.Supp. 621, 622 (D.D.C.1978); Mitchell Energy Corp. v. Mary Helen Coal Co. Inc., 524 F.Supp. at 563. The Court must resolve personal jurisdiction issues "on a case-by-case basis, noting in each the particular activities relied upon by the resident plaintiff as providing the supposed basis for jurisdiction." Environmental Research Institute, Inc. v. Lockwood Greene Engineers, Inc., 355 A.2d 808, 811 (D.C.1976).

Plaintiff relies primarily on the Supreme Court's decision in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), for its argument that there is jurisdiction under the long-arm statute. It particularly relies on the Court's observation in Burger King that in today's commercial world business often is transacted solely by mail and wire communications across state lines and that jurisdiction therefore may exist in some circumstances even if a defendant "did not physically enter the forum State." 471 U.S. at 476, 105 S.Ct. at 2184. The question under Burger King, as always, was whether the commercial actors' efforts are purposefully directed towards the forum state and whether the defendants' conduct and connection with that state are such that "he should reasonably anticipate being haled into court there." Id. at 474, 105 S.Ct. at 2183 (quoting Worldwide Volkswagon Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980)). Burger King requires a court in assessing minimum contacts to examine "prior negotiations and contemplated further consequences, along with the terms of the contract and the parties' actual course of dealing ... in determining whether the defendant purposefully established minimum contacts within the forum." Burger King Corp. v. Rudzewicz, 471 U.S. at 479, 105 S.Ct. at 2185. A defendant must "purposefully avail" himself of the privilege of conducting business within the forum state, a requirement that ensures that the defendant will not be haled into court in a jurisdiction "solely as a result of `random,' `fortuitous,' or `attenuated' contacts ... or of the `unilateral activity of another party or a third person,' ..." Id. at 475, 105 S.Ct. at 2183 (citations omitted); see also Mouzavires v. Baxter, 434 A.2d 988, 995 (D.C.1981).

The problem with plaintiff's reliance on Burger King is that the facts and circumstances justifying a finding of long-arm jurisdiction in that case demonstrated much more extensive contacts with the State of Florida than are demonstrated with the District of Columbia here. Burger King, though a nation-wide organization, was a Florida corporation based primarily in Florida, "the contract documents themselves emphasize that Burger King's operations are conducted and supervised from the Miami headquarters, that all relevant notices and payments must be sent there, and that the agreements were made in and enforced from Miami.... Decision-making authority was vested in the Miami headquarters and ... the district office served largely as an intermediate link between the headquarters and the franchisees.... It was the Miami headquarters that made the key negotiating decisions out of which the instant litigation arose." Burger King Corp. v. Rudzewicz, 471 U.S. at 480-81, 105 S.Ct. at 2187. The contract contemplated "a carefully structured 20-year relationship that envisioned continuing and widereaching contacts with Burger King in Florida," and the franchisee voluntarily accepted "the long-term and exacting regulation of his business from Burger King's Miami headquarters." Burger King Corp. v. Rudzewicz, 471 U.S. at 480, 105 S.Ct. at 2186. As a result, the Supreme Court concluded that Rudzewicz purposefully availed himself of the privilege of conducting activities in Florida and "the `quality and nature' of his relationship to the company in Florida can in no sense be viewed as `random,' `fortuitous,' or `attenuated'." Id. He was subject to personal jurisdiction in Florida.

This case is very different. The contract was for the sale of a cellular radio system in Michigan and was governed by Michigan law. There was to be no long-term relationship between the parties after the sale was completed. While the negotiations took place in part by mail and wire into the District of Columbia, none of the principals were involved in negotiations here or were present in the District at any time. It is a mere fortuity, over which defendants had no control and from which defendants could derive no expectation of consequences, that plaintiff chose Washington counsel to conduct these negotiations. Defendants' minimal contacts with the forum do not manifest a deliberate and voluntary association with...