Electronic Media Intern. v. Pioneer Communications of America, Inc.

• Decision Date: 27 February 1991
• Citation: 586 A.2d 1256
• Parties: ELECTRONIC MEDIA INTERNATIONAL v. PIONEER COMMUNICATIONS OF AMERICA, INC.
• Court: Maine Supreme Court

Page 1256

586 A.2d 1256

ELECTRONIC MEDIA INTERNATIONAL v. PIONEER COMMUNICATIONS OF AMERICA, INC.

Supreme Judicial Court of Maine.

Argued Jan. 2, 1991.

Decided Feb. 27, 1991.

Neal F. Pratt (orally), Bernstein, Shur, Sawyer & Nelson, Kennebunk, for plaintiff.

Ronald R. Coles, Robert E. Mongue (orally), Coles & Mongue, Kennebunk, for defendant.

Before McKUSICK, C.J., and ROBERTS, WATHEN, GLASSMAN, CLIFFORD and BRODY, JJ.

BRODY, Justice.

Electronic Media International (EMI) appeals from an order of the Superior Court (York County, Cole, J.) dismissing its complaint against Pioneer Communications of America, Inc. (Pioneer), for lack of personal jurisdiction. EMI contends that the court erred in concluding that it had failed to establish sufficient contacts by Pioneer with Maine to show that Pioneer had purposefully availed itself of the benefits of conducting business here. We agree and vacate the order.

On March 1, 1989, EMI, a small Maine corporation with a place of business in Kennebunkport, contacted Pioneer to solicit price quotations for 500 to 5,000 units of a specific type of laserdisc. Following a number of oral and written communications between EMI and Pioneer's offices in Los Angeles and Detroit, Pioneer sent EMI a letter with the requested quotations. The letter specified a price of three dollars each for up to 1,000 discs and two dollars each for discs in excess of 1,000, with no "mastering" charge for producing them. Pioneer assured EMI on at least two occasions that it "could provide the discs according to the requested specifications and at the price ... quoted."

In May of 1989, EMI ordered twenty-five sample discs which Pioneer supplied at three dollars each for a total of seventy-five dollars. In June, satisfied with the samples that it had demonstrated to one of its customers, EMI ordered 1,000 more discs at three dollars each. During late June and July, however, after several telephone conversations between EMI and Pioneer's offices in Los Angeles, Detroit, and Upper Saddle River, New Jersey, it became doubtful that Pioneer would honor its initial price quotation. Finally, on July 27, 1989, Pioneer wrote to EMI withdrawing its earlier quotation and quoting a new price of seven dollars per disc plus a "mastering" charge of $1,500.

On January 16, 1990, EMI initiated this action against Pioneer for breach of contract and negligent misrepresentation. Pioneer responded by filing a motion to dismiss EMI's complaint pursuant to M.R.Civ.P. 12(b)(2) for lack of personal jurisdiction. After a nontestimonial hearing, the court made the following factual findings on the basis of the pleadings and affidavits of the parties:

The defendant has no offices in Maine and its closest office to this jurisdiction is in New Jersey. The defendant's regional sales personnel for the New England area is located in Detroit, Michigan, and sales personnel have not been active in person in Maine. The defendant has no manufacturing, distribution or sales facilities in Maine and had not directed advertisements to be circulated in Maine.

The plaintiff is a relatively small corporation that initiated contact with defendant first at its California office and later at its Detroit office. Correspondence was through the mails and by telefax between the parties.

In July, 1989, defendant obtained a dealer for Maine and its total sales from July, 1989 to February, 1990 was $6,200.00 for laserdiscs. Another division of the defendant had made sales to two cable t.v. customers in Maine of $18,100.00 during the same period.

The court subsequently granted Pioneer's motion on the ground that EMI had "failed to establish sufficient contacts by [Pioneer] with the State to have purposefully availed itself of the benefits of conducting activities within the State." The court rested its decision on the authority of Architectural Woodcraft Co. v. Read, 464 A.2d 210, 213 (Me.1983), in which we held that "the existence of a single contract with a resident plaintiff coupled with the use of interstate communications does not establish a basis for asserting jurisdiction over a nonresident defendant." The court's complete reliance on Architectural Woodcraft is inapposite. The facts in that case reveal only a single isolated purchase by an out-of-state buyer.

The jurisdictional reach of Maine's long-arm statute, 14 M.R.S.A. § 704-A(1) (1980), is limited only by the due process clause of the fourteenth amendment. Harriman v. Demoulas Supermarkets, Inc., 518 A.2d 1035, 1036 (Me.1986). Due process in the exercise of jurisdiction over an out-of-state defendant requires the satisfaction of a three-prong test:

(1) does the forum state have a legitimate interest in the subject matter of the action; (2) should the defendant by his conduct reasonably have anticipated litigation in the forum state; and (3) would the exercise of jurisdiction comport with "traditional notions of fair play and substantial justice"?

Foreside Common Dev. Corp. v. Bleisch, 463 A.2d 767, 769 (Me.1983). The burden of establishing that jurisdiction is proper under the first two prongs falls on the plaintiff; once the plaintiff has met that burden, it is up to the defendant to show that jurisdiction is improper under the third prong. Caluri v. Rypkema, 570 A.2d 830, 831 n. 2 (Me.1990).

Generally, the plaintiff's showing of jurisdiction must be based on specific facts incorporated in the record, which should be construed in favor of the plaintiff. Id. at 831-32. Where, as here, however, the hearing is nontestimonial and the court proceeds only upon the pleadings and affidavits of the parties, the plaintiff " 'need only make a prima facie showing that jurisdiction exists,' " and the plaintiff's written allegations of jurisdictional facts should be construed in its favor. Id. at 832 (quoting Kowalski v. Doherty, Wallace, Pillsbury & Murphy, 787 F.2d 7, 8 (1st Cir.1986).

There is no question that EMI sustained its burden on the first prong of the test. Maine has a legitimate interest in the litigation. It has an interest in providing a means of redress against nonresidents who incur obligations to Maine citizens entitled to the state's protection. Harriman v. Demoulas Supermarkets, Inc., 518 A.2d at 1036; see also 14 M.R.S.A. § 704-A(1) (declaration of purpose of long-arm statute). It also has an interest in regulating and/or sanctioning "parties who 'reach out beyond one state and create continuing relationships and obligations with [Maine] citizens' ... for the consequences of their activities." Burger King v. Rudzewicz, 471 U.S. 462, 473, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985) (citations omitted).

EMI argues that it carried its burden on the second prong as well. In Harriman, we discussed at length the minimum contacts required to satisfy due process under that prong. For a foreign corporation to be subject to a forum state's jurisdiction, "due process demands that the corporation have sufficient contacts with that State to 'make it reasonable ... to require the corporation to defend the particular suit which is brought there.' " Harriman v. Demoulas Supermarkets, Inc., 518 A.2d at 1037 (quoting International Shoe Co. v. Washington, 326 U.S. 310, 317, 66 S.Ct. 154, 158,...