Mesiti v. Microdot, Inc.

• Decision Date: 08 June 1990
• Docket Number: Civ. No. 89-321-D.
• Parties: Anthony MESITI v. MICRODOT, INC., d/b/a Microdot Manufacturing, Inc. and Central Screw Company.
• Court: U.S. District Court — District of New Hampshire

739 F. Supp. 57

Anthony MESITI v. MICRODOT, INC., d/b/a Microdot Manufacturing, Inc. and Central Screw Company.

Civ. No. 89-321-D.

United States District Court, D. New Hampshire.

June 8, 1990.

Claudia C. Damon, Manchester, N.H., for plaintiff.

Maureen D. Smith, Concord, N.H., John C. Berghoff, Jr., Chicago, Ill., for defendant.

ORDER

DEVINE, Chief Judge.

This Order addresses a motion seeking dismissal of Anthony Mesiti's action to recover costs related to removing hazardous waste from his Keene, New Hampshire, property. A brief summary of the relevant facts, drawn primarily from the complaint, follows.

In 1947 the Central Screw Company of Chicago, Illinois, began manufacturing metal screws and fasteners in Keene, New Hampshire. Central Screw generated and disposed of hazardous, oil-containing substances at the site. In 1975 defendant Microdot, a Delaware corporation, purchased the assets and property of Central Screw. Microdot "continued to conduct the same manufacturing process as Central Screw, with its attendant generating, disposal, and release of hazardous substances and of oil." Complaint at 8. In 1983 Microdot sold the property to Theodore W. Wiechers. On December 30, 1984, Wiechers sold the property to Anthony Mesiti.

Environmental investigations conducted in 1985 and 1986 revealed that the soil and water contained hazardous wastes, including cyanide and cadmium, that exceeded lawful concentrations. In 1987, pursuant to New Hampshire state law, plaintiff began removing the pollutants. In 1989 plaintiff filed this action against Microdot to recover damages for the cleanup expenses (approximately $430,000) and for costs related to the delay in selling the property ($95,000) caused by cleanup activities.

DISCUSSION

Microdot makes various arguments to support its motion to dismiss. The Court addresses each argument below.

1. Service of Process

Microdot contends that this action should be dismissed because plaintiff failed to properly serve process. See Rule 12(b)(5), Fed.R.Civ.P. (dismissal for insufficiency of service of process). Rule 4(e), Fed.R. Civ.P., governs service on out-of-state defendants. It requires that service be made according to the method specified in a federal statute upon which plaintiff's claim is predicated, or, if no method is specified, service must be made in accordance with state law. Omni Capital Int'l v. Rudolf Wolff & Co., 484 U.S. 97, 105, 108 S.Ct. 404, 410, 98 L.Ed.2d 415 (1987). Since the relevant federal statute, 42 U.S.C. § 9601, et seq., specifies no method for serving process, service must comply with New Hampshire law.

Pertinent here are three New Hampshire "long-arm" statutes: New Hampshire Revised Statutes Annotated ("RSA") 510:4 II and 293-A:119 II and 121. See Appendix A. These statutes permit service of process on the secretary of state when it is alleged that a nonresident has committed a tort in New Hampshire.

Plaintiff originally served Microdot by mailing a copy of the summons and complaint to Microdot's Chicago address. Such service on a corporation residing without the geographical boundaries of this district is inadequate. See Order re Mail Service, No. M. 84-49, slip op. (D.N.H. Oct. 16, 1984).¹

After Microdot moved to dismiss for improper service, plaintiff cured the defect by filing copies of the complaint, the amended complaint, and a summons with the New Hampshire Secretary of State. Gregory W. Swope's Affidavit of Compliance (Nov. 14, 1989). Since that method of service satisfies New Hampshire's longarm statute and Rule 4(e), Fed.R.Civ.P., service was proper, and Microdot's arguments in this regard are rejected as moot.

2. Personal Jurisdiction

Due process requires that a court obtain jurisdiction over a defendant as a prerequisite to the maintenance of an action. Kulko v. Superior Court of Cal., 436 U.S. 84, 91, 98 S.Ct. 1690, 1696, 56 L.Ed.2d 132 (1978). Microdot contends that this Court cannot assert jurisdiction over it because (1) it is not "doing business" in New Hampshire, and (2) it committed no tort in this state.

New Hampshire law governs the question whether Microdot is amenable to the jurisdiction of this court, see Bond Leather Co. v. Q.T. Shoe Mfg. Co., 764 F.2d 928, 931 (1st Cir.1985); Hahn v. Vermont Law School, 698 F.2d 48, 49 (1st Cir.1983), and the New Hampshire longarm statute permits this Court to assert jurisdiction over foreign corporations, such as Microdot, if they are "doing business" in New Hampshire. RSA 293-A:121 provides in pertinent part, "If a foreign corporation ... commits a tort in whole or in part in New Hampshire, the acts shall be deemed to be doing business in New Hampshire by the foreign corporation." See also Papafagos v. Fiat Auto, S.p.A., 568 F.Supp. 692, 693-94 (D.N.H.1983). Thus, if Microdot committed a tort in New Hampshire, it is considered to have been "doing business" in the state, and it is therefore subject to suit in this district.

In determining jurisdiction under a long-arm statute, "It is the law of this state that plaintiff's pleadings and all reasonable inferences that can be drawn from them are to be taken as true." Dustin v. Cruise Craft, Inc., 487 F.Supp. 67, 70 (D.N.H.1980) (citing Engineering Assoc. v. B & L Liquidating Corp., 115 N.H. 508, 511, 345 A.2d 900, 902 (1975)); Leeper v. Leeper, 114 N.H. 294, 297, 319 A.2d 626, 628 (1974)). In his amended complaint, plaintiff alleges that Microdot,

as successor-in-interest to Central Screw Company, assumed and is responsible for all liabilities incurred by Central Screw Company for generating and disposing of materials containing hazardous substances which were released into the environment at the Site; ... as successor-in-interest to Central Screw Company, assumed and is responsible for all liabilities incurred by Central Screw Company for generating and disposing of materials containing oil which were released into the environment at the Site. At all relevant times, Microdot and Central Screw Company were doing business in this district.

Microdot contends that it is not a successor-in-interest to Central Screw Company.²

Several courts have applied the rationale of successor liability to the problem of personal jurisdiction. See, e.g., Goffe v. Blake, 605 F.Supp. 1151, 1154 (D.Del.1985) (action and conduct of constituent corporation attributable to surviving corporation after merger for purposes of determining survivor's amenability to personal jurisdiction for liabilities of constituent). See also Cole v. Caterpillar Machinery Corp., 562 F.Supp. 179 (M.D.La.1983) (although successor has no contacts with Louisiana, jurisdiction proper since claim arose against constituent corporation which had significant Louisiana contacts). And this Court, like the court in Bowers v. NETI Technologies, Inc., 690 F.Supp. 349 (E.D.Pa.1988), is persuaded that unless successor corporations are subject to personal jurisdiction in such actions, "corporations will be encouraged to immunize themselves by fleeing the jurisdiction and formalistically changing their name." Id. at 361.

The Court finds that plaintiff has adequately demonstrated that Microdot may be responsible for a tort committed in this state; application of the New Hampshire long-arm statutes therefore permits this Court to exercise jurisdiction over Microdot.

Having met the requirements of the applicable state long-arm statute, the only remaining inquiry is whether plaintiff has shown that the "defendant's contacts with New Hampshire satisfy due process concerns mandated by the Fourteenth Amendment of the United States Constitution." Kowalski v. Doherty, 787 F.2d 7, 10 (1st Cir.1986).

A state's power to exercise personal jurisdiction over non-resident defendants is limited by the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Helicopteros Nacionales De Colombia v. Hall, 466 U.S. 408, 413-14, 104 S.Ct. 1868, 1871-72, 80 L.Ed.2d 404 (1984); Pennoyer v. Neff, 95 U.S. (5 Otto) 714, 24 L.Ed. 565 (1877). To assert jurisdiction over a foreign defendant, the court must be satisfied that defendant has "minimum contacts" with the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). The Supreme Court in International Shoe spotlighted the importance of distinguishing between "specific" jurisdiction and "general" jurisdiction as a source of determining whether minimum contacts exist between a defendant and the forum in order to establish personal jurisdiction. Donatelli v. National Hockey League, 893 F.2d 459 (1st Cir.1990) (citing International Shoe Co. v. Washington, 326 U.S. 310, 317-18, 66 S.Ct. 154, 158-59, 90 L.Ed. 95 (1945). "Specific" jurisdiction exists when "the cause of action arises out of or is related to the defendant's contacts with the forum state." Glater v. Eli Lilly & Co., 744 F.2d 213, 215 (1st Cir.1984); see also Ealing Corp., supra, 790 F.2d at 983.

In the present case, the cause of action arises from the defendant's contacts within the forum, making this a case of "specific" jurisdiction. Defendant allegedly leaked hazardous waste onto a site in which it was manufacturing metal screws and fasteners. Plaintiff purchased this site from an individual who had purchased the site from defendant. Plaintiff sues Microdot as a former owner, alleging that it was defendant's manufacturing process which caused hazardous pollutants to be leaked. Since the cause of action arises out of defendant's contacts with New Hampshire, the minimum contacts test is satisfied and jurisdiction over defendant is proper if it "does not offend traditional notions of fair play and substantial justice." International Shoe, supra, 326 U.S. at 316, 66 S.Ct. at 158.

Here, defendant "purposefully availed itself of the privilege of conducting business activities" within New Hampshire, "thus invoking the benefits and protections of its laws." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240, 2...