IMO Industries, Inc. v. Kiekert AG

• Citation: 155 F.3d 254
• Decision Date: 03 September 1998
• Docket Number: No. 97-5356,97-5356
• Parties: IMO INDUSTRIES, INC., Appellant, v. KIEKERT AG, Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 254

155 F.3d 254

IMO INDUSTRIES, INC., Appellant, v. KIEKERT AG, Appellee.

No. 97-5356.

United States Court of Appeals Third Circuit.

Argued Jan. 22, 1998.

Decided Sept. 3, 1998.

Robert G. Sugarman (Argued), Gerald A. Stein, Weil, Gotshal & Manges LLP, New York City; Gerald Krovatin, Arseneault & Krovatin, Chatham, NJ, for Appellant IMO Industries.

Peter Barnes (Argued), Franz M. Oppenheimer, Barbara M. Tapscott, Swidler & Berlin, Chartered, Washington, DC; Douglas S. Eakeley, Neil P. Horne, Lowenstein, Sandler, Kohl, Fisher & Boylan, A Professional Corporation, Roseland, NJ, for Appellee Kiekert AG.

Before: BECKER, ^* STAPLETON, Circuit Judges, and POLLAK, District Judge. ^**

OPINION OF THE COURT

BECKER, Chief Judge.

This is a long arm service of process case which requires us, for the first time, to apply the Supreme Court's decision in Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984), to a business tort. It comes before us on the appeal of the plaintiff, Imo Industries Inc. ("Imo"), a multinational corporation with its principal place of business in New Jersey, from an order of the district court dismissing its action pursuant to Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction over defendant Kiekert AG ("Kiekert"), a German corporation. The complaint alleges that Kiekert tortiously interfered with Imo's attempt to sell its wholly-owned Italian subsidiary to a French corporation that was one of Kiekert's competitors. The asserted mechanism by which the tort was accomplished was a series of letters sent by Kiekert to the Italian subsidiary and to the New York investmentfirm of C.S. First Boston, Imo's representative in the sale, threatening that Kiekert would revoke the licensing agreement it had with the subsidiary if the deal went through. According to Imo, the sale was never consummated because of these threats, causing it considerable loss.

Imo contends that personal jurisdiction over Kiekert was proper based upon its contacts with Imo in New Jersey and upon Kiekert's claimed commission of an intentional tort, the effects of which were allegedly felt by Imo in New Jersey. Because we conclude that Kiekert's contacts with the forum would not otherwise satisfy the requirements of due process, the question whether personal jurisdiction can be exercised here depends upon the applicability to the facts of Calder, in which the Supreme Court found personal jurisdiction to be proper over nonresident defendants that committed an intentional tort outside the forum, the unique effects of which caused damage to the plaintiff within the forum. We believe that for Calder to apply, the plaintiff must allege facts sufficient to meet a three-prong test. First, the defendant must have committed an intentional tort. Second, the plaintiff must have felt the brunt of the harm caused by that tort in the forum, such that the forum can be said to be the focal point of the harm suffered by the plaintiff as a result of the tort. Third, the defendant must have expressly aimed his tortious conduct at the forum, such that the forum can be said to be the focal point of the tortious activity.

Applying this test to the present facts, we conclude that personal jurisdiction does not exist here since Imo has not pointed to sufficient facts demonstrating that Kiekert "expressly aimed" its tortious conduct at New Jersey. To the contrary, the focus of the dispute--i.e. the proposed sale of an Italian company to a French company and a claim of rights by a German company pursuant to a license agreement apparently governed by German law--and the alleged contacts by Kiekert (i.e., its correspondence) all appear to be focused outside the forum. The order of the district court will therefore be affirmed.

I. Facts and Procedural History

For purposes of this appeal, we accept the plaintiff's allegations as true. See Carteret Savings Bank, FA v. Shushan, 954 F.2d 141, 142 (3d Cir.1992) (holding that an appellate court reviewing an order of the district court dismissing a case for lack of personal jurisdiction "must accept all of the plaintiff's allegations as true and construe disputed facts in favor of plaintiff.") (citing In re Arthur Treacher's Franchisee Litigation, 92 F.R.D. 398, 409-10 (E.D.Pa.1981)). However, the plaintiff bears the burden of proving that personal jurisdiction is proper. Carteret Savings Bank, 954 F.2d at 146 (Once a defendant raises the defense of lack of personal jurisdiction, "the plaintiff bears the burden to prove, by a preponderance of evidence, facts sufficient to establish personal jurisdiction.") (citing Time Share Vacation v. Atlantic Resorts, Ltd., 735 F.2d 61, 65 (3d Cir.1984)).

Defendant Kiekert, a manufacturer of automobile door latch systems, is a corporation organized, existing under the laws of, and having its principal place of business in the Federal Republic of Germany. Kiekert sells its products world-wide, though only 2% of its sales derive from the United States market. ¹ According to Kiekert, it does not now engage, nor has it ever engaged in any of the following activities in New Jersey: "the manufacture of any products; any direct sales; solicitation or advertisement to sell its products; any shipment of merchandise directly into or through the state, or the supply of services there; the maintenance of an office, a mailing address, a telephone number, or a bank account; the ownership of any real or personal property; the employment of any employees or agents; or the requirement of or payment of taxes." Appellee's Br. at 4. Imo does not appear to dispute these claims.

Plaintiff Imo, a multinational corporation, is incorporated in Delaware with its principal place of business in Lawrenceville, New Jersey. Imo has 22 manufacturing facilities around the world, including plants in Germany, the United Kingdom, France and Australia. Approximately 90% of Imo's products are marketed outside of the United States, and approximately 34% of Imo's total net sales for 1995 were in these foreign markets. Most relevant to the present case is the fact that Imo owns all of the shares of an Italian company, Roltra Morse, S.p.A. ("Roltra"), which manufactures automobile door latches using technology licensed from Kiekert. The licensing agreement was negotiated in Germany and Italy in 1993 and it provides that the agreement shall be governed by German law. Imo was not a party to this licensing agreement and did not participate in the negotiation or execution thereof.

In December 1995, Imo decided to sell its shares in Roltra and retained the New York investment firm of C.S. First Boston Corporation ("First Boston") to act as its representative. On Imo's behalf, First Boston solicited bids from corporations interested in acquiring Imo's shares of Roltra. Valeo, S.A. ("Valeo"), a French corporation and one of Kiekert's competitors, submitted a bid of $72 million for the shares. Kiekert also submitted a bid, though for only $30 million. Imo and Valeo thereafter proceeded to prepare final agreements to close the sale of Roltra's stock for $69 million, and Kiekert was notified on or about June 12, 1996, that its bid was insufficient.

Shortly thereafter, and prior to closing, Kiekert sent a letter to First Boston in New York stating that, under its agreement with Roltra, Kiekert had the right to revoke its license for the door latch technology if Roltra's shares were sold to one of its competitors. More specifically, the letter to First Boston, dated June 17, 1996, stated in pertinent part that "Kiekert's license and patents ... cannot be transferred if [Roltra] is taken over by one of our competitors" and if this occurs, Kiekert "would have to retire [its] acceptance of production for these products immediately which are manufactured under our license." The import of such an action was clear--if the license was revoked, Roltra's value as a going concern would be severely impacted. In addition, Kiekert wrote to Roltra in Italy on July 8, 1996, similarly stating Kiekert's intent to terminate the licensing agreement if Roltra's shares were sold to a competitor.

First Boston forwarded the June 17 letter to Imo in New Jersey. Imo responded directly to Kiekert by letter dated July 9, 1996, stating its position that Kiekert was "not entitled by contract or law to rescind or otherwise terminate the License Agreement in the event of sale of the shares to any third party." Imo demanded "that [Kiekert] cease and desist from making such statements to any third party," and advised that if it "continue[s] to make such statements [it] ... will be held responsible for all damages that [Roltra] and/or its shareholders suffer from such representations." Roltra also forwarded the July 8 letter to Imo in New Jersey. Imo again responded directly to Kiekert by letter dated August 12, stating that its "tortious and illegal conduct is seriously jeopardizing [our] ability to close this transaction," and that "unless you immediately withdraw your threats of termination, we are prepared to file lawsuits in all appropriate jurisdictions, including the United States ..."

In addition to the mail contacts, Kiekert officials in Germany and Imo officials in New Jersey spoke twice by telephone during this time concerning the license agreement. The record reveals that representatives of Imo initiated these calls. See Appellant's Br. at 21. Finally, Imo requested meetings with Kiekert in an attempt to resolve the matter. One such meeting was held in Toronto on August 27, 1996, and two more were held on September 10 of that year in Germany. These discussions apparently failed to persuade Kiekert to change its position.

On October 28, 1996, Valeo advised Imo of its withdrawal from negotiations concerning the sale of Roltra's shares. By letter, it informed Imo that "[w]e have concluded that, irrespective of the likelihood that Kiekert's position would prevail, Kiekert's position regarding its license can be...