Mann v. Equitable Gas Company

• Decision Date: 30 August 1962
• Docket Number: Civ. A. No. 681-F.
• Citation: 209 F. Supp. 571
• Court: U.S. District Court — Northern District of West Virginia
• Parties: Roy W. MANN, Plaintiff, v. EQUITABLE GAS COMPANY, a Corporation, and Peerless Manufacturing Company, a Corporation, Defendants.

209 F. Supp. 571

Roy W. MANN, Plaintiff, v. EQUITABLE GAS COMPANY, a Corporation, and Peerless Manufacturing Company, a Corporation, Defendants.

Civ. A. No. 681-F.

United States District Court N. D. of West Virginia, at Fairmont.

August 30, 1962.

W. C. Weaver, Charleston, W. Va., for plaintiff.

Russell B. Goodwin, Wheeling, W. Va., for Equitable Gas Company.

Willis O. Shay, Clarksburg, W. Va., for Peerless Manufacturing Company.

HARRY E. WATKINS, Chief Judge.

The defendant, Equitable Gas Company has been dismissed out of this diversity of citizenship action because there is no diversity as to it, leaving only Peerless as a defendant. Peerless has moved to dismiss because (1) the Court lacks jurisdiction in personam as to it, because at the time the alleged cause of action arose, Peerless was not incorporated under the laws of the State of West Virginia, was not licensed to do, nor was it doing business in West Virginia, and was not subject to service of process through acceptance of service by the Auditor of West Virginia, as the summons and complaint were attempted to be served; and (2) the attempted service of summons and complaint upon Peerless was not sufficient for this Court, under the facts of this case, to obtain jurisdiction of it because Ch. 31, Art. 1, Sec. 71, of the official Code of West Virginia, as amended, Sec. 3083 (Michie's 1955, as amended) violates this defendant's right to due process of law under the 14th Amendment of the Constitution of the United States of America.

West Virginia Code, Ch. 31, Art. 1, Sec. 71, provides as follows:

"For the purposes of this section, a foreign corporation not authorized to do business in this State pursuant to the provisions of section seventy-nine (§ 3091) of this article shall nevertheless be deemed to be doing business herein if such corporation makes a contract to be performed, in whole or in part, by any party thereto, in this State, or if such corporation commits a tort in whole or in part in this State. The making of such contract or the committing of such tort shall be deemed to be the agreement of such corporation that any notice or process served upon, or accepted by, the auditor pursuant to the next preceding paragraph of this section in any action or proceeding against such corporation arising from, or growing out of, such contract or such tort shall be of the same legal force and validity as process duly served on such corporation in this State." (Emphasis supplied.)

The Peerless motion to dismiss was set down for final hearing by letter from the Judge, in which all parties were asked to "exhaust all discovery remedies in the meantime, and be prepared to introduce such evidence as you may wish on the jurisdictional issue, in order that the facts and law may be fully submitted on the question of jurisdiction." At the hearing, the Court stated:

"The mere fact that we have a West Virginia statute saying this or that, does not necessarily satisfy the due process provision, as our own 4th Circuit Court of Appeals has held in Erlanger Mills when they had a much broader North Carolina statute that said you could sue most anyone in the State of North Carolina if you sold any goods that was ever going to be used in that state, and get service through the Auditor. Our 4th Circuit held that was a violation of due process under the facts of that case."

The Judge then explained the minimal contacts rule laid down in International Shoe (with which both counsel were familiar) and stated:

"Now I will hear any proof or evidence that you have on the matter of minimal contact. You must show what Peerless has done in West Virginia to establish minimal contacts and that is what proof is required."

Counsel for the plaintiff stated that plaintiff did not desire to offer any evidence; that plaintiff relied only upon that provision of the statute which provides that a corporation shall be deemed to be doing business in West Virginia if such corporation commits a tort in whole or in part in West Virginia, and accordingly the issue on the motion to dismiss was limited to the issue as to whether the mere commission of the tort alleged in the complaint constituted the "minimal contacts" required in International Shoe Co. v. Washington (1945), 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, 161 A.L.R. 1057. This is substantiated by a reading of the complaint and a statement on page 5 of plaintiff's brief, which was filed in opposition to the motion to dismiss, which statement restricts the inquiry as to whether the mere commission of the tort alleged in the complaint constitutes doing business such as to satisfy the federal constitutional requirements of due process.

At the hearing no evidence was offered by plaintiff to show that Peerless was incorporated under the laws of West Virginia, or that it was ever licensed to do, or ever did business in West Virginia, or that it ever made a contract to be performed in whole or in part by any party thereto in West Virginia. Indeed, the complaint does not claim such. Likewise, at the hearing no evidence was offered by plaintiff to show what, if anything, Peerless, or its agents, had done in West Virginia, which constituted the commission of a tort, in whole or in part, in West Virginia, or what it had done in connection with such alleged tort to satisfy the minimal contacts rule. It is significant that the complaint does not allege any tortious act done by the defendant or its agents in West Virginia, or any such minimal contacts other than the mere allegations that the defendant, Peerless, is a corporation created and existing under the laws of Texas and is a citizen thereof; that it manufactured gas pipe which it sold throughout the country, and negligently manufactured the particular segment of pipe which it sold to Equitable, and which exploded and injured plaintiff while being used by defendant, Equitable, in the construction of a gas line.

I find that the facts before me, including the allegations of the complaint, do not establish the necessary minimal contacts required for due process, and that this Court has not acquired jurisdiction to render a personal judgment against Peerless by such substituted service, for two reasons: First, Peerless did not commit a tort, in whole or in part, in West Virginia; Second, if, under the place of effect theory of choice of law, the negligent manufacturer of the segment of pipe in Texas and its use in West Virginia by a purchaser constitutes the commission of a tort in West Virginia by the manufacturer, there would still be lacking the minimal contacts to constitute due process of law.

There is no showing that this Texas corporation ever did any business in West Virginia, or had any agents there. Whatever it did, or failed to do, was in Texas. The Supreme Court of West Virginia has not construed this part of the statute. I would construe the West Virginia statute to mean that the commission of a tortious act within the State means that the alleged tort-feasor, or his agents were in West Virginia at the time of his act, which is alleged to have resulted in the tort. I am not unmindful that the place of effect theory of choice of law is the majority view as to the law governing torts, but to apply such theory to a statute like this is unsound, and results in an extra-territorial application of law in derogation of due process. See the splendid article in the August, 1962, issue of American Bar Journal, entitled "Omnibus Statutes Designed to Secure Jurisdiction Over...