General Contracting & Trading Co., LLC v. Interpole, Inc.

• Decision Date: 03 June 1991
• Docket Number: No. 91-1203,91-1203
• Citation: 940 F.2d 20
• Parties: The GENERAL CONTRACTING & TRADING CO., LLC, Plaintiff, Appellee, v. INTERPOLE, INC., Defendant, Appellee, v. TRANSAMERICAN STEAMSHIP CORPORATION, Third-Party Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 20

940 F.2d 20

The GENERAL CONTRACTING & TRADING CO., LLC, Plaintiff, Appellee, v. INTERPOLE, INC., Defendant, Appellee, v. TRANSAMERICAN STEAMSHIP CORPORATION, Third-Party Defendant, Appellant.

No. 91-1203.

United States Court of Appeals,

First Circuit.

Heard June 3, 1991.

Decided July 31, 1991.

Edward C. Radzik with whom Richard E. Repetto, Donovan Parry Walsh & Repetto, New York City, Gary S. Lenehan, and Brennan Caron & Lenehan, P.A., were on brief, Manchester, N.H., for third-party defendant, appellant.

Warren C. Nighswander with whom Sulloway Hollis & Soden, was on brief, Concord, N.H., for defendant, appellee Interpole, Inc.

Before BREYER, Chief Judge, SELYA, Circuit Judge, and PETTINE, ^* Senior District Judge.

SELYA, Circuit Judge.

We revisit today a shopworn fracas involving the appellant, Transamerican Steamship Corporation (Trastco), and appellee Interpole, Inc. When the litigation first appeared in our venue, we rebuffed

Trastco's efforts to set aside a default judgment which had been entered against it in Interpole's favor, but remanded the cause for the sole purpose of determining whether the district court, at the time it entered the default judgment, had acquired jurisdiction over Trastco's corporate persona. General Contracting & Trading Co. v. Interpole, Inc., 899 F.2d 109 (1st Cir.1990) (Interpole I ). Following discovery and an evidentiary hearing, the United States District Court for the District of New Hampshire decided that it had jurisdiction and, therefore, refused to grant Trastco's Rule 60(b)(4) motion. ¹ Although we travel a different analytical route than the district court, we arrive at the same destination. Accordingly, we uphold the court's assertion of jurisdiction and reject Trastco's renewed appeal.

I. BACKGROUND

We eschew exegetic treatment of the historical antecedents of this litigation, referring those who may hunger for greater detail to our earlier opinion, Interpole I, 899 F.2d at 110-11. For present purposes, it suffices to remind the reader that, in 1980, General Contracting & Trading Co. (GCT) ordered 4,500 wooden utility poles from Interpole, a New Hampshire corporation. The poles were produced for Interpole in the southern United States and sent by the manufacturer to Mobile, Alabama for transshipment to GCT in Oman. Interpole contracted with Trastco to transport the poles by sea from Mobile to Mina Qaboos. The voyage was less than a smashing success.

In May 1985, GCT sued Interpole in New Hampshire's federal district court seeking damages associated with the delayed delivery of its order (Suit No. 1). Interpole filed a third-party complaint for indemnity against Trastco. Trastco failed to respond, a failure that led, eventually, to the entry of a default. When Trastco finally

bestirred itself and tried to set aside the default, the district court refused to grant the requested relief. Trastco then brought a separate suit against Interpole in the same federal district court, charging fraud and misrepresentation in connection with the same overall transaction (Suit No. 2).

To truncate the tale of the two suits, we note that, after Interpole had confessed to a judgment favoring GCT in Suit No. 1, the district court consolidated the two cases for a hearing on damages. Before this hearing was held, however, Interpole and Trastco settled Suit No. 2 for $30,000. The assessment-of-damages proceeding was, therefore, limited to the third-party complaint in Suit No. 1. The court fixed Interpole's damages at $43,276 and denied Trastco's motion to set off the $30,000 settlement in Suit No. 2 against the $43,276 default judgment in Suit No. 1.

In the previous appeal, we affirmed the entry of default, the assessment of damages, and the lower court's refusal to offset the two judgments. Interpole I, 899 F.2d at 111-14. At the same time, we remanded for a hearing on Trastco's claim that the absence of personal jurisdiction rendered the judgment against it in Suit No. 1 a nullity. Id. at 114-16. Trastco has now appealed the district court's refusal to find that the judgment was void. The dispute between GCT and Interpole has been resolved and is not before us.

II. DISCUSSION

The district court asserted personal jurisdiction over Trastco on the ground that Interpole's cause of action against it fell within the purview of New Hampshire's long arm statute and that exercising jurisdiction did not offend due process. We bypass this analysis, not because we have substantial reason to question its soundness, but because of our conclusion that Trastco submitted itself to the court's personal jurisdiction by instituting Suit No. 2, thus making a conventional long arm analysis irrelevant. ² See Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1198-99 (8th Cir.1990) (a court may exercise personal jurisdiction over an out-of-state defendant independently of a long arm statute).

It is settled beyond peradventure that the requirement of personal jurisdiction is intended to protect a defendant's liberty interests. Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702-03, 102 S.Ct. 2099, 2104, 72 L.Ed.2d 492 (1982). Because the defense is a personal right, it may be obviated by consent or otherwise waived. Id. at 703, 102 S.Ct. at 2104; Jardines Bacata, Ltd. v. Diaz-Marquez, 878 F.2d 1555, 1559 (1st Cir.1989). A defendant may manifest consent to a court's in personam jurisdiction in any number of ways, from failure seasonably to interpose a jurisdictional defense, to express acquiescence in the prosecution of a cause in a given forum, to submission implied from conduct. See Neirbo Co. v. Bethlehem Shipbuilding Corp., 308 U.S. 165, 168, 60 S.Ct. 153, 155, 84 L.Ed. 167 (1939); Marcial Ucin, S.A. v. SS Galicia, 723 F.2d 994, 996 (1st Cir.1983). By the same token, a party's consent to a court's jurisdiction may take place prior to the suit's institution, e.g., National Equipment Rental, Ltd. v. Szukhent, 375 U.S. 311, 314-15, 84 S.Ct. 411, 413-14, 11 L.Ed.2d 354 (1964) (contractual agreement to submit to jurisdiction in event of subsequent dispute); Holloway v. Wright & Morrissey, Inc., 739 F.2d 695, 699 (1st Cir.1984) (authorization of agent within forum state to receive service of process), or at the time suit is brought, e.g., Adam v. Saenger, 303 U.S. 59, 67-68, 58 S.Ct. 454, 458, 82 L.Ed. 649 (1938) (by suing, a plaintiff submits himself to the court's jurisdiction for purposes of the defendant's counterclaims), or after suit has started, e.g., Insurance Corp. of Ireland, 456 U.S. at 709, 102 S.Ct. at 2107 (jurisdiction imposed as a result of defendant's refusal to cooperate in discovery). And having objected to the absence of in personam jurisdiction, a defendant may rescind the objection, i.e., consent to the forum court's jurisdiction, at any stage of the proceedings. See Spann v. Colonial Village, Inc., 899 F.2d 24, 32-33 (D.C.Cir.), cert. denied, --- U.S. ---, ---, ---, 111 S.Ct. 508, 509, 751, 112 L.Ed.2d 521, 771 (1990).

In terms of submission to a court's jurisdiction, it is possible to attempt fine distinctions between "waiver" and "consent." It can be argued, for example, that the distinction turns on whether the manifesting conduct took place within, or outside of, the confines of the suit in question. In that formulation, "waiver" customarily occurs by virtue of the manner in which the objector manages its role qua litigant. See, e.g., Insurance Corp. of Ireland, 456 U.S. 694, 102 S.Ct. 2099 (waiver of jurisdictional defense by virtue of noncooperation in discovery); Fed.R.Civ.P. 12(h) (waiver by virtue of failure seasonably to plead defense). On the other hand, "consent" customarily occurs by virtue of some adscititious event, arising from an extrinsic act or omission of the objector, beyond the borders of the suit proper. See, e.g., National Equipment Rental, 375 U.S. 311, 84 S.Ct. 411 (contractual agreement to appoint agent for service of process); Pennsylvania Fire Ins. Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93, 37 S.Ct. 344, 61 L.Ed. 610 (1917) (foreign corporation's registration to do business constitutes consent to jurisdiction of state's courts on any cause of action). ³

We view such distinctions as artificial and unnecessary, at least for the purpose at hand. Whatever label one might place on Trastco's conduct, it seems pellucidly clear that, by bringing Suit No. 2, Trastco submitted itself to the district court's jurisdiction in Suit No. 1. Trastco elected to avail itself of the benefits of the New Hampshire courts as a plaintiff, starting a suit against Interpole. ⁴ By so doing, we think it is inevitable that Trastco surrendered any jurisdictional objections to claims that Interpole wished to assert against it in consequence of the same transaction or arising out of the same nucleus of operative facts. Indeed, given the common transactional core, Interpole's third-party complaint in Suit No. 1 stands in the same relation to Trastco's complaint in Suit No. 2 as would a counterclaim. And, the Supreme Court has long recognized the inequity that would result if a plaintiff could raise jurisdictional objections to counterclaims filed by a defendant:

The plaintiff having, by his voluntary act in demanding justice from the defendant, submitted himself to the jurisdiction of the court, there is nothing arbitrary or unreasonable in treating him as being there for all purposes for which justice to the defendant requires his presence. It is the price which the state may exact as the condition of opening its courts to the plaintiff.

Adam v. Saenger, 303 U.S. at 67-68, 58 S.Ct. at 458.

In the same vein, a ruling that Trastco did not submit to the court's jurisdiction in Suit No. 1 when it instituted Suit No. 2 would produce an unjust asymmetry, allowing a party (here, Trastco) to enjoy the full benefits of access to a state's courts qua plaintiff, while nonetheless retaining immunity from the courts' authority qua de...