Institutional Food Marketing Associates, Ltd. v. Golden State Strawberries, Inc.

• Decision Date: 30 October 1984
• Docket Number: No. 84-1013,84-1013
• Citation: 747 F.2d 448
• Parties: INSTITUTIONAL FOOD MARKETING ASSOCIATES, LTD., & Food Service Systems, Inc., Plaintiffs-Appellants, v. GOLDEN STATE STRAWBERRIES, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 448

747 F.2d 448

INSTITUTIONAL FOOD MARKETING ASSOCIATES, LTD., & Food

Service Systems, Inc., Plaintiffs-Appellants, v. GOLDEN STATE STRAWBERRIES, INC., Defendant-Appellee.

No. 84-1013.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 12, 1984.

Decided Oct. 30, 1984.

Mark D. Mittleman, Clayton, Mo., for plaintiffs-appellants.

Theodore J. MacDonald, Jr., St. Louis, Mo., for defendant-appellee.

Before LAY, Chief Judge, FLOYD R. GIBSON, Senior Circuit Judge, and McMILLIAN, Circuit Judge.

FLOYD R. GIBSON, Senior Circuit Judge.

The plaintiffs, Institutional Food Marketing Associates, Ltd. (FMA), and Food Service Systems, Inc. (FSS), appeal from the district court's ¹, 587 F.Supp. 1105, grant of the defendant's, Golden State Strawberries, Inc. (GSS), motion to dismiss for lack of personal jurisdiction. We affirm.

I. Facts

FMA and FSS have been contracting with each other for the sale and purchase of strawberries for a number of years. FMA is a Missouri corporation with its principal place of business in Missouri, and FSS is a Minnesota corporation also with its principal place of business in Missouri. FMA acquired strawberries for FSS through Coastal Marketing Associates, Inc. (Coastal), a California corporation with its principal place of business in California. In turn, Coastal acquired its strawberries, in this case, from Golden State Strawberries (GSS/Consolidated), a California packer owned in part by Consolidated Processors of California. GSS/Consolidated paid Coastal's commission.

The usual procedure for acquiring strawberries was as follows. FMA and FSS would enter into a contract that called for FMA to deliver and FSS to buy a certain amount of strawberries for the upcoming year. Then FMA would contact Coastal and ask it to obtain the strawberries needed to fulfill the FMA/FSS contract. Coastal sent the invoices for the strawberries it obtained directly to FSS. FSS then would pay Coastal an amount that included the packer's price, Coastal's commission, and FMA's commission. After deducting the packer's price to (GSS/Consolidated) and its own commission, Coastal would send the balance to FMA.

For the 19 82/83 year, FMA and FSS entered into a contract. The contract stipulated the amount of strawberries to be purchased, the purchase price, carrying charges, specifications for shipping, and storage specifications. The contract also contained a clause which protected FSS against a drop in the market price of strawberries after August 30, 1982. ²

Following general practice, FMA called upon Coastal to get the strawberries needed to fulfill the FMA/FSS contract. Coastal, in turn, contacted the packer, GSS/Consolidated. Coastal and GSS/Consolidated exchanged documents dated June 11, 1982. Coastal's document, sales memo no. 8588, listed GSS as the seller and FSS as the buyer. Coastal's document also contained a "price protection clause," in accordance with the FMA/FSS contract, which would have protected FSS against a drop in the market price of strawberries. GSS/Consolidated's June 11 memo, sales memo no. 3719, agreed with Coastal's document in all respects except that memo no. 3719 did not contain a price protection clause. On June 21, GSS/Consolidated brought this discrepancy to Coastal's attention. ³ On August 13, 1982, Coastal notified FMA that GSS/Consolidated was not honoring the protection clause. ⁴

Nonetheless, during June, July, and August of 1982, Coastal procured for shipment to FSS nine truckloads of strawberries from GSS/Consolidated at the contract price. After August, the list price of strawberries fell below the contract price. Coastal and GSS/Consolidated had several discussions about the price at which GSS/Consolidated would continue to sell strawberries to FSS. GSS/Consolidated maintained that it would sell fruit to FSS only at the original contract price, plus the storage charges incurred after August of 1982. This position was unacceptable to FMA, as it was required by contract to protect FSS from price falls. In March of 1983, GSS/Consolidated and FMA had a discussion which failed to produce a solution acceptable to both parties to the price dispute. As a result, FMA informed GSS/Consolidated that it would obtain strawberries from a different source, and proceeded to do so.

On March 17, 1983, GSS/Consolidated sent a mailgram to FSS which stated as follows:

We were advised orally that you are not going to perform under our contract Number 3719 for frozen strawberries. We are hereby giving you notice that we expect performance and ask that you respond directly to me at Golden State Strawberries within 5 days whether or not you intend to perform.

FSS responded, telling GSS/Consolidated that there was no contract between them. FSS also called upon FMA to take action to protect FSS against a GSS/Consolidated claim. FMA then retained an attorney who notified GSS/Consolidated that there was no contract between GSS/Consolidated and FMA, FSS or Coastal. Nevertheless, GSS/Consolidated continued to contact FSS, and finally notified FSS that it intended to perform in full and would transfer any unshipped fruit into storage under FSS' name. GSS/Consolidated did transfer the remaining shipments into storage, and charged FSS at the contract price for them. FSS received via Coastal two bills for storage charges, which were forwarded to FMA.

In May of 1983, FMA and FSS filed this lawsuit for declaratory, injunctive and damages relief in the state Circuit Court in St. Louis County, Missouri. GSS/Consolidated, pursuant to 28 U.S.C. Sec. 1441(a) (1982), removed this action to the federal district court in Missouri. In count one of their complaint FMA and FSS sought from the district court a declaration that there was no contract between either of them and GSS/Consolidated. In counts two and three of the complaint FMA and FSS alleged that GSS/Consolidated had intentionally and tortiously interfered with their contractual relationship, and sought an injunction against future interference, plus actual and punitive damages. In all counts, FMA and FSS alleged that Coastal was the agent of GSS/Consolidated. The district court granted GSS/Consolidated's motion to dismiss for lack of personal jurisdiction.

II. Discussion

The district court dismissed the FMA/FSS tort claim because, in effect, they failed to establish jurisdiction under Missouri's long arm statute. The district court dismissed the FMA/FSS contract claims because it determined that GSS/Consolidated's contacts with Missouri were not sufficient to satisfy due process standards for personal jurisdiction. FMA and FSS assert that these rulings were incorrect. We disagree.

Initially, our inquiry consists of two parts. First we must decide whether the facts presented satisfy the requirements of Missouri's long arm statute. Sales Serv., Inc. v. Daewoo Int'l (Am.) Corp., 719 F.2d 971, 972 (8th Cir.1983); Scullin Steel Co. v. National Ry. Utilization Corp., 676 F.2d 309, 312 (8th Cir.1982). Once jurisdiction has been controverted or denied the plaintiff has the burden of proving that jurisdiction does exist, and the burden may not be shifted to the party challenging the motion. Scullin Steel, 676 F.2d at 311; Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211, 1215 (8th Cir.1977); Block Indus. v. DHJ Indus., Inc., 495 F.2d 256, 259 (8th Cir.1974).

A federal court sitting in a diversity action may assume jurisdiction over a nonresident defendant to the extent permitted by the long arm statute of the forum state. Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir.1982), quoting, Prejean v. Sonatrach, Inc., 652 F.2d 1260, 1264 n. 2 (5th Cir.1981). Subject to the limitations of the due process clause, we give the same construction to a state long arm statute that the courts of that state have given to it. Pioneer Ins. Co. v. Gelt, 558 F.2d 1303, 1309 (8th Cir.1977). Missouri's long arm statute provides, in pertinent part, as follows:

1. Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, [his/her] personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any such acts:

(1) The transaction of any business within this state;

(2) The making of any contract within this state;

(3) The commission of a tortious act within this state * * *.

2. Only causes of action arising from acts enumerated in this section may be asserted against a defendant in an action in which jurisdiction * * * is based upon this section.

Mo.Rev.Stat. Sec. 506.500 (1978).

The Missouri Supreme Court has held the state long-arm statute "to extend the jurisdiction of the courts of this state over nonresidents to the extent permissible under the Due Process Clause." State ex rel. Deere & Co. v. Pinnell, 454 S.W.2d 889, 892 (Mo.1970) (en banc).

A. The tort claim

Missouri case law construes the phrase "commission of a tortious act within the state" to include extraterritorial acts that produce actionable consequences in Missouri. Fulton v. Chicago R.I. & P. R.R. Co., 481 F.2d 326, 331 (8th Cir.), cert. denied sub nom. Soo Line R.R. Co. v. Fulton, 414 U.S. 1040, 94 S.Ct. 540, 38 L.Ed.2d 330 (1973) (citing Missouri case law). A single tortious act may be sufficient to justify a Missouri court's exercise of personal jurisdiction over a nonresident defendant. State ex rel. Caine v. Richardson, 600 S.W.2d 82, 84 (Mo.Ct.App.1980).

FMA and FSS argue first that the district court erred in holding that, in order to establish jurisdiction, they were required to establish a prima facie case of tortious interference with their contract. Second, they argue that even if the district court was correct in so holding, it was error to dismiss their claim because they established a prima...