Enviroplan, Inc. v. Western Farmers Elec. Co-op.

• Decision Date: 19 September 1995
• Docket Number: No. IP94-2061-C-B/S.,IP94-2061-C-B/S.
• Citation: 900 F. Supp. 1055
• Parties: ENVIROPLAN, INC., Plaintiff, v. WESTERN FARMERS ELECTRIC COOPERATIVE, Defendant.
• Court: U.S. District Court — Southern District of Indiana

900 F. Supp. 1055

ENVIROPLAN, INC., Plaintiff, v.WESTERN FARMERS ELECTRIC COOPERATIVE, Defendant.

No. IP94-2061-C-B/S.

United States District Court, S.D. Indiana, Indianapolis Division.

September 19, 1995.

COPYRIGHT MATERIAL OMITTED

Sue Figert Meyer, Rubin & Levin, P.C., Indianapolis, Indiana, for plaintiff.

Mark A. Palmer, Gretchen L. Doninger, Johnson Smith Pence Densborn Wright & Heath, Indianapolis, Indiana, Stephen G. Solomon, Tamara Beam Cain, Derryberry, Quigley, Parrish, Solomon & Blankenship, Oklahoma City, Oklahoma, for Defendant.

ENTRY

BARKER, Chief Judge.

Defendant Western Farmers Electric Cooperative ("Western Farmers") moves to dismiss this cause of action for lack of personal jurisdiction, improper venue, forum non conveniens, and failure to state a claim, or in the alternative to transfer the case to the Western District of Oklahoma.The Court denies Defendant's motion in its entirety.

I.FACTUAL BACKGROUND

This diversity action is for breach of contract.Western Farmers is an Oklahoma cooperative that generates and distributes electricity to cooperative members in Oklahoma.(Def.'s Mot. to Dismissat 1)PlaintiffEnviroplan, Inc.("Enviroplan"), is a New Jersey corporation with places of business in Roseland, New Jersey, and in Indianapolis, Indiana.(Complaint¶ 1)Western Farmers solicited bids for the design, manufacture, and installation of a so-called Continuous Emission Monitoring System ("CEMS") and a so-called Data Acquisition System ("DAS") at Western Farmers' headquarters in Anadarko, Oklahoma, and at its electrical generating plants in Mooreland and Hugo, Oklahoma.(Def.'s Replyat 5)The two systems would be designed to collect emission discharge from the stacks at Defendant's Oklahoma plants, to analyze the emissions, to log the data results, to transmit the data from the plants to Defendant's headquarters, and to generate an emissions data report for transmittal to the U.S. Environmental Protection Agency and the Oklahoma Department of Environmental Quality.(Def.'s Replyat 5)Western Farmers solicited a bid from Enviroplan and on May 24, 1993 entered into a contract with Enviroplan ("the Contract") under which the New Jersey corporation would design, manufacture, and install both systems.(Complaint¶¶ 4, 5)The contract price was $572,978.(Complaint, Exhibit Aat 8A)

Enviroplan now alleges that it has fully performed under the terms and conditions of the Contract by providing all goods and services required thereunder, and that Defendant has breached the Contract by having failed to pay an amount of $126,450.38 plus interest after Plaintiff demanded such payment.(Complaint¶¶ 4, 7, 10, 11)

II.PERSONAL JURISDICTION

A.Standard of Review

A federal district court sitting in diversity may exercise personal jurisdiction over a nonresident defendant only if a court of the state in which the district court sits would have such jurisdiction.Nucor v. Aceros Y Maquilas de Occidente, S.A. de C.V.,28 F.3d 572, 580(7th Cir.1994);Wilson v. Humphreys (Cayman) Ltd.,916 F.2d 1239, 1243(7th Cir.1990), cert. denied,499 U.S. 947, 111 S.Ct. 1415, 113 L.Ed.2d 468(1991);Fed. R.Civ.P. 4(e)(A federal court sitting in diversity can exercise personal jurisdiction only so far as allowed by the law of the state in which it sits).In the case of a defendant foreign corporation that is not generally doing business in Indiana, an Indiana court may exercise personal jurisdiction over the defendant where both of the following obtain: (1) Indiana's long-arm statute authorizes the exercise of such jurisdiction; and (2) exercise of such jurisdiction complies with the due process clause of the fourteenth amendment to the United States Constitution.Nucor,28 F.3d at 580;Wilson,916 F.2d at 1243.In the case of Indiana's long-arm statute, the twin inquiries collapse into a single due-process inquiry, because the scope of Indiana's long-arm statute, TrialRule 4.4(A), has been deemed to extend the State's personal jurisdiction to the constitutional limit.¹Wilson,916 F.2d at 1243;Oddi v. Mariner-Denver, Inc.,461 F.Supp. 306, 308(S.D.Ind.1978).See alsoBrokemond v. Marshall Field & Co.,612 N.E.2d 143, 145(Ind.App.1993).Thus, we analyze whether personal jurisdiction over Defendant is permissible solely with regard to the due process clause.

The due process clause protects a defendant from being subject to binding judgments of a forum with which the defendant has established no meaningful "contact, ties or relations."Burger King Corp. v. Rudzewicz,471 U.S. 462, 471-72, 105 S.Ct. 2174, 2181, 85 L.Ed.2d 528(1985)(quotingInternational Shoe Co. v. State of Washington,326 U.S. 310, 319, 66 S.Ct. 154, 160, 90 L.Ed. 95(1945)).The Supreme Court has construed the due process clause to entitle a person to "fair warning" as to what conduct will subject the person to a foreign jurisdiction.Shaffer v. Heitner,433 U.S. 186, 218, 97 S.Ct. 2569, 2587, 53 L.Ed.2d 683(1977)(Stevens, J. concurring in judgment).The Supreme Court has stated that a defendant receives such "fair warning" so as to be amenable to specific jurisdiction of a foreign court where the defendant engages in some purposeful or deliberate activity effecting the forum, and where the litigation results from injuries that "arise out of or relate to" those activities.²Burger King,471 U.S. at 472, 105 S.Ct. at 2182.The necessary contacts may not result solely from the unilateral activity of the plaintiff.Instead personal jurisdiction exists where the defendant"purposefully directs" his activities at residents of the forum, Keeton v. Hustler Magazine, Inc.,465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790(1984); where the defendant engages in "some act by which it purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its law,"Hanson v. Denckla,357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2 L.Ed.2d 1283(1958); and where the defendant"deliberately" engages in significant activities within the forum state that create a "substantial connection" with the forum, Burger King Corp. v. Rudzewicz,471 U.S. 462, 475-76, 105 S.Ct. 2174, 2183-84, 85 L.Ed.2d 528(1985).SeeNucor v. Aceros Y Maquilas de Occidente, S.A. de C.V.,28 F.3d 572, 580(7th Cir.1994)(using "purposeful availment" wording as standard test for specific jurisdiction).This requirement of some deliberate or purposeful conduct or availment on the defendant's part ensures that a defendant will not be hailed into a jurisdiction solely as a result of "random,""fortuitous," or "attenuated" contacts.Burger King,471 U.S. at 475, 105 S.Ct. at 2183(quoting respectively Hanson v. Denckla,357 U.S. 235, 253, 78 S.Ct. 1228, 1238, 2 L.Ed.2d 1283(1958);Keeton v. Hustler Magazine, Inc.,465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790(1984);andWorld-Wide Volkswagen Corp. v. Woodson,444 U.S. 286, 299, 100 S.Ct. 559, 568, 62 L.Ed.2d 490(1980)).In evaluating contract actions, the Supreme Court has rejected a rigid, mechanical test for determining personal jurisdiction.

Instead, we have emphasized the need for a "highly realistic" approach that recognizes that a "contract" is "ordinarily but an intermediate step serving to tie up prior business negotiations with future consequences which themselves are the real object of the business transaction."It is these factors — prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing — that must be evaluated in determining whether the defendant purposefully established minimum contacts within the forum.

Burger King Corp. v. Rudzewicz,471 U.S. 462, 479, 105 S.Ct. 2174, 2185, 85 L.Ed.2d 528(1985).

In determining what constitutes sufficient contact with a forum to allow a court to exercise personal jurisdiction, a court must examine the facts and circumstances on a case by case basis.SeeHoneywell, Inc. v. Metz Apparatewerke,509 F.2d 1137, 1143(7th Cir.1975).The court may consider affidavits and other documents outside the pleadings in reaching its decision on jurisdiction, seeNelson by Carson v. Park Indus., Inc.,717 F.2d 1120, 1123(7th Cir.1983), cert. denied,465 U.S. 1024, 104 S.Ct. 1278, 79 L.Ed.2d 682(1984), but must construe all facts concerning jurisdiction in favor of the non-movant, including disputed or contested facts.Deluxe Ice Cream Co. v. R.C.H. Tool Corp.,726 F.2d 1209, 1215(7th Cir.1984).

B.Analysis

Plaintiff asserts that this Court has personal jurisdiction over Defendant because Defendant has significant contacts with the Southern District of Indiana.Enviroplan manufactures CEMS equipment at its facility in Indianapolis, Indiana, by purchasing manufactured components and then by designing and manufacturing a finished product.(Affidavit of Christopher Farrellat 2)Plaintiff alleges that representatives of Western Farmers traveled to Indianapolis, which is located in this district, on matters related to the Contract on two occasions.First, Western Farmers manager Richard Bogers traveled to Enviroplan's Indianapolis facility in August 1993 to discuss Enviroplan's alleged failure to meet contract deadlines.(Plaint.'s Br. in Opp.at 1;Affidavit of Richard Bogers¶ 9)Bogers was a Western Farmers' environmental specialist who was responsible for the CEMS project management, bid selection, design, installation, certification, and operation.(Affidavit of Ray Walters, Attachment B)This first visit alone might not be a sufficient contact to support jurisdiction, because, arguably, this contact does not evince a deliberate or purposeful enough act to qualify as "fair warning" that Defendant would be subjecting itself to jurisdiction in Indiana.However, it is equally arguable that Defendant would clearly have foreseen delays in a project the size of the CEMS and the DAS, which would have necessitated the kind of...