Kingsley and Keith (Canada) Ltd. v. Mercer Intern. Corp.

• Decision Date: 09 October 1981
• Citation: 291 Pa.Super. 96,435 A.2d 585
• Parties: KINGSLEY AND KEITH (CANADA) LIMITED and Kingsley and Keith Chemical Corporation. v. MERCER INTERNATIONAL CORPORATION and Interstate Chemical Corporation and H. M. Trimble & Sons, Limited. Appeal of H. M. TRIMBLE & SONS, LIMITED.
• Court: Pennsylvania Superior Court

Page 585

435 A.2d 585

291 Pa.Super. 96

KINGSLEY AND KEITH (CANADA) LIMITED and Kingsley and Keith Chemical Corporation. v. MERCER INTERNATIONAL CORPORATION and Interstate Chemical Corporation and H. M. Trimble & Sons, Limited Appeal of H. M. TRIMBLE & SONS, LIMITED.

Superior Court of Pennsylvania.

Argued Nov. 13, 1979.

Filed June 26, 1981.

Reargument Denied Oct. 9, 1981.

P. Raymond Bartholomew, Sharon, for appellant.

Thomas T. Frampton, Greenville, for Kingsley et al., appellees.

Milford L. McBride, Jr., Grove City, for Mercer et al., appellees.

Before SPAETH, HOFFMAN and VAN der VOORT, JJ.

SPAETH, Judge:

This case, one of a trilogy of long-arm jurisdiction cases, ¹ is an appeal from an order granting a petition by Kingsley and Keith (Canada), Limited, and Kingsley and Keith Chemical Corporation for leave to serve an amended complaint in assumpsit on H.M. Trimble and Sons, Limited, by registered mail to Trimble's headquarters in Canada. ²

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For the purposes of our inquiry, we shall accept as true the well-pleaded facts in the amended complaint. Cf. Frisch v. Alexson Equip. Corp., 423 Pa. 247, 224 A.2d 183 (1966). ³ So regarded, the amended complaint may be summarized as follows.

In 1974, one Canadian corporation, Celanese (Canada), Limited, ordered approximately 80,000 lbs. of methylene chloride from another Canadian corporation, Kingsley and Keith (Canada), Limited. Kingsley and Keith (Canada) ordered the methylene chloride from Kingsley and Keith Chemical Corporation, a New Jersey corporation, which in turn ordered two tanks of methylene chloride (approximately 40,000 lbs. each) from Mercer International Corporation, a Pennsylvania corporation. Kingsley and Keith (Canada) then arranged with H.M. Trimble and Sons, Limited, a Canadian corporation, to have the tanks transported to Canada. In October 1974, Interstate Chemical Corporation, a Pennsylvania corporation and an affiliate of Mercer International Corporation, sent one tank truck of the methylene chloride to Indianapolis, for transferral there to a Trimble tank truck. In November 1974, Interstate sent another tank truck of the methylene chloride to Mercer, Mercer County, Pennsylvania, for transferral there to a Trimble tank truck. Trimble delivered both tank loads to Celanese (Canada), but Celanese rejected them because the methylene chloride was contaminated. Kingsley and Keith (Canada) and Kingsley and Keith (New Jersey) thereupon brought the present action in Mercer County against Mercer International, Interstate, and Trimble. Generally stated, the allegation is that Mercer International, Interstate, and Trimble were obliged to deliver good methylene chloride to the two Kingsley and Keiths, so that the two Kingsley and Keiths could deliver it to Celanese, but instead, delivered contaminated methylene chloride.

While all this seems complicated, it really is not. Plainly, both Mercer International and Interstate, as Pennsylvania corporations, may be sued in Pennsylvania, and no one contends otherwise; the issue is whether Trimble, a Canadian corporation, may be. This issue may be stated as follows: When a Canadian common carrier (Trimble) contracts with another Canadian corporation (Kingsley and Keith (Canada) to pick up one load of methylene chloride in Indiana and another load in Pennsylvania, and delivers both loads in Canada to a third Canadian corporation, does it acquire sufficient minimum contacts with Pennsylvania to render it amenable to suit in Pennsylvania in an action in which breach of the contract of carriage is alleged and in which the Pennsylvania sellers of both loads of methylene chloride are also defendants?

Answers to interrogatories revealed the following. Trimble did not receive a bill of lading from Mercer International, although it should have been the delivery carrier designated on the bill of lading. Trimble did not have authority either from the Pennsylvania Public Utility Commission or the Interstate Commerce Commission to pick up or deliver goods in Pennsylvania; the authority under which the methylene chloride was picked up in Pennsylvania was a "trip-lease" between Coastal Tanklines Limited and Trimble. Prior to the transactions involved here, Mercer International and Interstate had not requested or paid for Trimble's services, nor had they had any business relationship with Trimble.

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Before a court in this state may exercise jurisdiction over Trimble, it must appear that Trimble's conduct was within the provisions of this state's long-arm statute, and that application of the statute to Trimble would not violate the due process clause of the Fourteenth Amendment of the United States Constitution. Monroeville Land Co., Inc. v. Sonnenblick-Goldman Corp. of Western Pa., 247 Pa.Super. 61, 371 A.2d 1326 (1977); Action Industries, Inc. v. Wiedeman, 236 Pa.Super. 447, 346 A.2d 798 (1975). The long-arm statute in effect at the time this action was instituted ⁴ provided in pertinent part:

Any foreign corporation which shall have done any business in this Commonwealth without procuring a certificate of authority to do so from the Department of State as required by statute, shall be conclusively presumed to have designated the Department of State as its true and lawful attorney authorized to accept, on its behalf, service of process in any action arising within this Commonwealth. Service of process shall be made in the manner provided by section 8307 of this title (relating to procedure for service of process).

(a) General rule. Any of the following shall constitute "doing business" for the purposes of this chapter:

(1) The doing by any person in this Commonwealth of a series of similar acts for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object.

(2) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefit or otherwise accomplishing an object with the intention of initiating a series of such acts.

(3) The shipping of merchandise directly or indirectly into or through this Commonwealth.

(4) The engaging in any business or profession within this Commonwealth, whether or not such business requires license or approval by the Commonwealth or any of its agencies.

(5) The ownership, use or possession of any real property situate within this Commonwealth.

(b) Exercise of full constitutional power over foreign corporations. In addition to the provisions of subsection (a) of this section the jurisdiction and venue of courts of the Commonwealth shall extend to all foreign corporations and the powers exercised by them to the fullest extent allowed under the Constitution of the United States.

Act of Nov. 15, 1972, P.L. 1063, No. 271, 42 Pa.C.S.A. §§ 8302(a), 8309 (Purdon's Supp.1976).

Since the statute makes this state's jurisdiction over a foreign corporation co-extensive with the permissible limits of jurisdiction under the due process clause of the federal constitution, a determination of the constitutional issue will be dispositive. Hart v. McCollum, 249 Pa.Super. 267, 271-72, 376 A.2d 644, 647 (1977).

The United States Supreme Court has stated that for a state to have jurisdiction over an out-of-state defendant, there must be "certain minimum contacts ... such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.' " International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (citations omitted). In Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958), the Court stated that "it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus invoking the benefits and protections of its laws." In World-Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), the Court described the concept of "minimum contacts" as "protect(ing) the defendant against the burdens of litigating in a distant or inconvenient forum. And it acts to ensure that the States, through their courts, do not reach beyond the limits imposed on them by their status as coequal sovereigns in a federal system." Id. at 292, 100 S.ct. at 564. The Court also commented on the concept of "reasonableness" or "fairness" embodied in the requirement that a state's jurisdiction "(must) not offend 'traditional notions of fair play and substantial justice," stating Implicit in this emphasis on reasonableness is the understanding that the burden on the defendant, while always a primary concern, will in an appropriate case be considered in light of other relevant factors, including the forum State's interest in adjudicating the dispute, see McGee v. International Life Ins. Co., 355 U.S. 220, 223 (78 S.Ct. 199, 201, 2 L.Ed.2d 223) (1957); the plaintiff's interest in obtaining convenient and effective relief, see Kulko v. Superior Court, (436 U.S. 84, 92 (98 S.Ct. 1690, 1697, 56 L.Ed.2d 132) (1978)), at least when that interest is not adequately protected by plaintiff's power to choose the forum, cf. Shaffer v. Heitner, 433 U.S. 186, 211 n. 37 (97 S.Ct. 2569, 2583, n. 37, 53 L.Ed.2d 683) (1977); the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several states in furthering fundamental substantive social policies, see Kulko v. Superior Court, supra, at 93, 98 (98 S.Ct., at 1697, 1700).

Id.

Finally, the Court stated:

When a corporation 'purposefully avails itself of the privilege of conducting activities within the forum State,' Hanson v. Denckla, supra at 253 (78 S.Ct., at 1239-1240), it has clear notice that it is subject to suit there, and can act to alleviate the risk of burdensome litigation by procuring insurance, passing the expected costs on to customers, or, if the risks are too great, severing its connection with the State.

Id....