Lomanco, Inc. v. Missouri Pacific R. Co.

• Decision Date: 01 July 1983
• Docket Number: No. LR-C-82-509.,LR-C-82-509.
• Citation: 566 F. Supp. 846
• Parties: LOMANCO, INC., Plaintiff, v. MISSOURI PACIFIC RAILROAD COMPANY, Dart Orient Services, Inc., and Carland Shipping, Ltd., Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

566 F. Supp. 846

LOMANCO, INC., Plaintiff, v. MISSOURI PACIFIC RAILROAD COMPANY, Dart Orient Services, Inc., and Carland Shipping, Ltd., Defendants.

No. LR-C-82-509.

United States District Court, E.D. Arkansas, W.D.

July 1, 1983.

James Moody and Brad Walker, Wright, Lindsey & Jennings, Little Rock, Ark., for plaintiff.

Michael Smith, Friday, Eldredge & Clark, Little Rock, Ark., for defendant Mo. Pac. R.R.

Beverly Rowlett, Laser, Sharp, Haley, Young & Huckabay, Little Rock, Ark., for defendants Dart Orient Serv. & Carland Shipping.

MEMORANDUM OPINION

ROY, District Judge.

The instant case involves a claim for damages by Lomanco, Inc., of Jacksonville, Arkansas, against the Missouri Pacific Railroad Company ("MoPac"), Dart Orient Services, Inc. ("Dart"), and Carland Shipping, Ltd. ("Carland"). As the pleadings reflect, on March 23, 1981, Lomanco ordered 360 ceiling fans from a manufacturing company located in Hong Kong (Fan Tat Manufacturing Company, which is not a party to this suit). The fans were loaded at Hong Kong upon the S.S. Oriental Exporter, a container ship owned by Carland which transported them to Seattle, Washington. From there the fans were taken to Kansas City, Missouri, by the Union Pacific Railroad Company, after which they were switched to MoPac cars and brought to their final destination in Jacksonville, Arkansas. Soon after its receipt of the fans, Lomanco discovered that most of the fans had been damaged. Notice of the damage was given to all defendants; thereafter the fans were sold for their salvage value. Lomanco then brought the instant action for the difference, namely, $8,314.19.

In addition to the primary complaint, defendants Dart and Carland have filed a cross-claim against their co-defendant MoPac for indemnity in the event that judgment should be entered against them (Dart and Carland). MoPac, in turn, has filed a counterclaim seeking indemnity against Dart and Carland, said counterclaim being contingent upon the entry of a judgment against MoPac.

Dart and Carland have moved to dismiss all claims against them alleging (1) that this Court lacks in personam jurisdiction over them; (2) that the statute of limitations has expired; and (3) that no claim for relief is stated against Dart. Due to the Court's finding that it lacks personal jurisdiction over these two defendants, discussion of the latter two issues is rendered unnecessary, and this opinion is thus limited to an analysis of the jurisdictional issue.

The complaint herein sets forth as its jurisdictional bases 49 U.S.C. § 11707 and 46 U.S.C. § 1300 et seq. The former statute deals with the liability of common carriers under receipts and bills of lading. The latter group of statutes comprises the Carriage of Goods by Sea Act of 1936 ("COGSA"). Although none of the statutes set forth in the complaint vests original jurisdiction in the United States District Courts, the Court finds that it does in fact have subject matter jurisdiction over the instant cause pursuant to 28 U.S.C. § 1337, which provides that,

"The district courts shall have original jurisdiction of any civil action or proceeding arising under any Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies"¹

Pursuant to this statute, the federal district courts have original jurisdiction of any civil action under any Congressional act which regulates commerce, where the remedy sought is inferable from the act or hinges upon an interpretation of it. Ashley, Drew & Northern Railway Co. v. United Transportation Union and Its Affiliated Local No. 1121, 625 F.2d 1357 (8th Cir.1980). COGSA has been held to undoubtedly be such an "act of Congress regulating commerce" within the meaning of 28 U.S.C. § 1337. Crispin Co. v. Lykes Bros. Steamship Co., 134 F.Supp. 704 (S.D.Tex.1955). So, likewise is 49 U.S.C. § 11707 such an act of Congress regulating commerce.

Thus the Court holds that it has subject matter jurisdiction over the plaintiff's claim against defendants Dart and Carland pursuant to 28 U.S.C. § 1337 via 46 U.S.C. § 1300 et seq. (COGSA). The Court finds, however, that personal jurisdiction over these defendants has not been shown to exist. It appears to be undisputed in the pleadings that Dart is a citizen of New York and Carland is a British corporation located in Hong Kong. Also apparently undisputed is the fact that Carland is the owner of the S.S. Oriental Exporter and that Dart performs some undefined steamship agency functions for the S.S. Oriental Exporter. However, affidavits show that neither of these parties have had any connection with the State of Arkansas and that neither party does business in Arkansas. Neither Dart nor Carland is a party to the bill of lading under which the fans were shipped to Lomanco. Neither party, according to the pleadings, has entered into any contract with the plaintiff.

Under Ark.Stat.Ann. §§ 27-2501 et seq. (the Arkansas enactment of the Uniform Interstate and International Procedure Act), personal jurisdiction may be had based upon an "enduring relationship" with this state or upon certain categories of conduct which are enumerated in § 27-2502(C). The Court finds that none of the relationships or types of conduct listed in the above statute exist in this case. Moreover, this Court's attempt to exercise in personam jurisdiction over Dart and Carland would violate their rights to due process of law protected by the Fourteenth Amendment.

Beginning with International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the former concepts of requiring a defendant's "presence" and "consent" were rejected in favor of the requisite of "certain minimum contacts" with the forum state such that maintenance of a suit does not offend "traditional notions of fair play and substantial justice." 326 U.S. at 316, 66 S.Ct. at 158. The Supreme Court noted that the demands of due process are met "by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there." Id. at 317, 66 S.Ct. at 158. This trend was continued in McGee v. International Life Ins. Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957), in which the Court found that only one contact, having a substantial connection with the state, was sufficient for due process purposes. Later, however, in Hanson v. Denckla, 357 U.S. 235, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958), the Court also noted that not all restrictions to the exercise of in personam jurisdiction over foreign corporations had been removed. The Hanson opinion reiterated that a minimal burden to establish jurisdiction is that "there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking benefits and protections of its laws." 357 U.S. at 253, 78 S.Ct. at 1239. See, also, World-Wide Volks-wagon Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 186, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); Hutson v. Fehr Bros., Inc., 584 F.2d 833 (8th Cir.1978); and Amstar Corp. v. S.S. Alexandros, 457 F.Supp. 717 (S.D.N.Y.1978) (a case involving a COGSA action in which, like the case at hand, plaintiff failed to demonstrate that the defendant had any substantial contacts whatsoever with the forum state whereby personal jurisdiction over the defendant could properly be had).

The party asserting federal court jurisdiction has the burden of proving it. Wallach v. Pagedale, 376 F.2d 671 (8th Cir. 1967). In the instant case, no allegations tending to show the existence of personal jurisdiction over Dart and Carland are stated in the complaint. Nor does anything in the plaintiff's response to the defendants' motion to dismiss show that sufficient contacts with Arkansas exist so as to render Dart and/or Carland amenable to suit here.

In its counterclaim, MoPac does make the general assertion that its co-defendants "possess sufficient minimal contacts with the State of Arkansas so as to satisfy the requirements of the Due Process Clause of the Fourteenth Amendment" (p. 1, MoPac's Answer to Cross-Claim and Counterclaim), but it fails, either in its counterclaim or in its response to Dart and Carland's motion to dismiss, to set forth in any more detail than the above-quoted language just what contacts with Arkansas the co-defendants have had.

Both the plaintiff and defendant MoPac argue that in personam jurisdiction exists over Dart and Carland for the sole reason that these defendants waived their objections to jurisdiction by including in their answer to the complaint a cross-claim against MoPac for indemnity. The nature of the cross-claim is wholly contingent, that is, Dart and Carland seek to recover from MoPac any sums which may eventually be recovered from them (Dart and Carland) by the plaintiff.

Lomanco and MoPac contend that when a party files a cross-claim (which, under F.R.C.P., Rule 13(g), is always permissive, Augustin v. Mughel, 521 F.2d 1215 (8th Cir.1975)), it thereby invokes the jurisdiction of the Court and thus cannot simultaneously maintain an argument that the Court does not have personal jurisdiction over it. The Court acknowledges that there is some authority for the contention that the filing of a cross-claim, a third-party complaint or a non-compulsory counterclaim constitutes a waiver of a party's objections to jurisdiction or venue.² It is the opinion of this Court, however, that the reasoning contained in the cases so holding is neither sound nor convincing, and that the better rule is that waiver of jurisdictional objections is not an automatic consequence of a party's filing a cross-claim, counterclaim or third-party complaint.

It is true that, unlike want of subject matter jurisdiction, lack of personal jurisdiction or venue may be waived by the consent...