Hyundai Merch. Marine Co. v. Conglobal Indus., LLC
| Decision Date | 21 April 2016 |
| Docket Number | CIVIL ACTION NO. 3:15-CV-3576-G |
| Parties | HYUNDAI MERCHANT MARINE CO., LTD., Plaintiff, v. CONGLOBAL INDUSTRIES, LLC f/k/a CONGLOBAL INDUSTRIES, INC., ET AL., Defendants. |
| Court | U.S. District Court — Northern District of Texas |
Before the court is the motion of the defendant, Drayage Express LLC ("Drayage"), to dismiss the plaintiff's claims against it, or in the alternative to transfer the plaintiff's claims against it back to the United States District Court for the District of South Carolina (docket entry 54). For the reasons stated below, Drayage's motion to dismiss is denied, but Drayage's alternative motion to transfer the plaintiff's claims against it to the United States District Court for the District of South Carolina is granted. The plaintiff's claims against Drayage are severed from its claims against the defendants Conglobal Industries, LLC and Conglobal Industries, Inc. (together "CGI"), and the plaintiff's claims against Drayage are transferred to the United States District Court for the District of South Carolina.
On May 1, 2009, the plaintiff, Hyundai Merchant Marine Co., Ltd. ("HMM") and CGI entered into a Container Yard and Depot Agreement ("CGI agreement"). Hyundai Merchant Marine Co., Ltd. v. ConGlobal Industries, LLC, No. 3:15-CV-3576-G, 2016 WL 695649, at *1 (N.D. Tex. Feb. 22, 2016) (Fish, J.). Under the CGI agreement, CGI agreed to provide services at its facilities to HMM, including monitoring the refrigerated containers and checking the temperature of the equipment. Id. CGI agreed to indemnify HMM against losses arising out of or in connection with CGI's services. Id. The CGI agreement contained a clause entitled "Governing Law and Venue", which CGI contended was a binding arbitration clause. Id. at *3. This court concluded that the CGI agreement does not contain a binding arbitration clause. Id. at *4. The clause requires any dispute between CGI and HMM to be governed by the law of the State of Texas and resolved in Dallas County, Texas. Id. at *1.
On or about July 13, 2010, HMM's cargo and equipment were discharged to CGI in Charleston, South Carolina. Plaintiff's Complaint ("Complaint") ¶ 19 (docket entry 1). On July 23, 2010, the cargo and equipment were interchanged toDrayage for transport by truck to Forest Park, Georgia. Id. ¶ 20. HMM alleges that the equipment sustained damage while in the custody of CGI and/or Drayage as a result of exposing the cargo to elevated temperatures. Id. ¶ 21.
In April 2015, HMM filed this suit against CGI and Drayage in the District of South Carolina. See Complaint. In its complaint, HMM asserted claims against both defendants for breach of implied warranty, negligence, and duty of indemnity. Id. ¶¶ 32, 35, 39. In June 2015, CGI filed a motion to dismiss HMM's complaint pursuant to FED. R. CIV. P. 12(b)(3) (docket entry 5). In November 2015, Judge David C. Norton of the District of South Carolina denied CGI's motion to dismiss and sua sponte transferred the whole case to the Northern District of Texas. Order of November 4, 2015 at 1 (docket entry 27). Drayage did not file a response to CGI's motion to dismiss. After the suit was transferred to this court, CGI filed a motion to dismiss HMM's complaint, or alternatively to compel arbitration and to stay the case (docket entry 34). In February 2016, this court denied CGI's motion to dismiss and alternative motion to compel arbitration. Hyundai Merchant Marine Co., 2016 WL 695649, at *4.
On March 7, 2016, Drayage filed the instant motion to dismiss or in the alternative to transfer (docket entry 54). HMM (docket entry 60) and CGI (docketentry 61), respectively, filed timely responses. Drayage did not file a reply. The motion is now ripe for consideration.
Drayage contends that it is entitled to an order, pursuant to FED. R. CIV. P. 12(b)(2) and 12(b)(3), dismissing HMM's claims against it on the grounds that this court lacks personal jurisdiction over Drayage and it is an improper venue. Memorandum in Support of Drayage's Motion to Dismiss, or in the Alternative to Transfer ("Memorandum") at 1 (docket entry 55). Before it went out of business, Drayage was a corporation organized and existing under the laws of Pennsylvania with its principal place of business in Holland, Pennsylvania. Id. at 2. Drayage does not have any contacts, let alone sufficient minimum contacts, with Texas. See id. at 10-11. Drayage is not a party to the CGI agreement that contains the forum selection clause requiring litigation in Dallas County, Texas. The dispute between HMM and CGI and Drayage arises out of events occurring in South Carolina and Georgia. Complaint ¶¶ 19-20.
CGI does not oppose Drayage's request to dismiss or transfer HMM's claims against Drayage, but opposes Drayage's motion to the extent that it requests or requires the court to transfer HMM's claims against it. CGI's Response in Opposition to Drayage's Motion to Dismiss or in the Alternative to Transfer ("CGI's Response") at 1 (docket entry 61). HMM does not dispute that this court lackspersonal jurisdiction over Drayage. See generally HMM's Response in Opposition to Drayage's Motion to Dismiss or in the Alternative to Transfer ("HMM's Response") (docket entry 60). Instead, HMM contends that Drayage waived its right to assert the defense of lack of personal jurisdiction. HMM maintains that Drayage waived the defense of lack of personal jurisdiction by (1) Drayage's inaction before the District of South Carolina through not objecting to the transfer to this court, and/or by (2) Drayage's action before this court through filing a general appearance. Id. at 4-5. Since it is clear and undisputed that this court lacks personal jurisdiction over Drayage, see Burger King Corporation v. Rudzewicz, 471 U.S. 462, 474-75 (1985), the court need only determine whether Drayage has waived its right to assert the defense of lack of personal jurisdiction.
HMM contends that Drayage waived its right to assert the lack of personal jurisdiction defense through its inaction before the District of South Carolina seeking to "benefit from the terms" of the CGI agreement. HMM's Response at 4. There is no question that the defense of lack of personal jurisdiction can be waived by the actions or inactions of a defendant. See General Design Sign Company, Inc. v. American General Design, Inc., No. 3:02-CV-2298-H, 2003 WL 251931, at *1 (N.D. Tex. Jan. 31, 2003) (Sanders, J.) (citing 5A CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1391 (2d ed. 2002)). Waiver of a personaljurisdiction defense most commonly arises when a defendant fails to raise the issue in either a responsive pleading or a Rule 12 motion. See FED. R. CIV. P. 12(h)(1). When Drayage filed its answer (docket entry 8), the case was before the District of South Carolina and that court had personal jurisdiction over Drayage. The lack of personal jurisdiction defense was thus unavailable at that time. See Glater v. Eli Lilly & Co., 712 F.2d 735, 738-39 (1st Cir. 1983) (); Flock v. Scripto-Tokai Corporation, No. CIV. A. H-00-3794, 2001 WL 34111630, at *3 (S.D. Tex. July 23, 2001) (same).
Personal jurisdiction may also be waived implicitly. See Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 703-05 (1982). When determining whether a defendant waived its right to assert the defense, courts have generally analyzed (1) the length of time between service of process and the defendant's pursuit of the personal jurisdiction defense and (2) the extent of the objecting defendant's involvement in the suit. The District of South Carolina transferred this case to this court in November 2015. Drayage did not file its motion to dismiss to until March 2016, roughly four months after this case was transferred to this court. While four months is not an insignificant amount of time, CGI has not cited any case -- nor has the court found any case -- where a court concluded that a defendant's failure to assert the defense within a similar time period constituted awaiver. See e.g., Brokerwood Products International (U.S.), Inc. v. Cuisine Crotone, Inc., 104 Fed. App'x 376, 380-81 (5th Cir. 2004) (); Schwartz v. M/V GULF SUPPLIER, 116 F. Supp. 2d 831, 835 (S.D. Tex. 2000) (). The four month delay here is insufficient to waive personal jurisdiction.
The more actively a defendant has litigated, the more likely it is that the court will find the defendant waived defects in personal jurisdiction. PaineWebber Inc. v. Chase Manhattan Private Bank (Switzerland), 260 F.3d 453, 459 (5th Cir. 2001) (). Drayage has principally been a passive player in this suit from the time of its first appearance until filing its motion to dismiss. Drayage only submitted required pre- and post-transfer filings (docket entries 8, 9, 40, 48). Drayage's answer while the case was pending before the District of South Carolina was filed to avoid default judgment (docket entry 8), and Drayage's Notice of Appearance before this court (docket entry 48) was filed pursuant to Northern District of Texas Local Rule 83.10(a) (docket entry 40).Drayage did not respond to either of CGI's motions to dismiss. This level of participation falls well below the level...
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