Messier v. Whitestown Packing Corp.

• Decision Date: 30 April 1982
• Docket Number: Civ. A. No. 81-351.
• Citation: 544 F. Supp. 8
• Court: U.S. District Court — District of Vermont
• Parties: Maurice MESSIER and Geraldine Messier v. WHITESTOWN PACKING CORPORATION.

544 F. Supp. 8

Maurice MESSIER and Geraldine Messier v. WHITESTOWN PACKING CORPORATION.

Civ. A. No. 81-351.

United States District Court, D. Vermont.

April 30, 1982.

L. Randolph Amis, James H. Wick Law Office, Burlington, Vt., for plaintiffs.

Thomas F. Heilmann, Burlington, Vt., for defendant.

OPINION AND ORDER

COFFRIN, District Judge.

In this diversity action, plaintiffs Maurice and Geraldine Messier, Vermont citizens, seek compensatory and punitive damages from defendant Whitestown Packing Corporation, a New York corporation. Plaintiffs allege that, by misweighing and mishandling 92 veal calves that plaintiffs sold to defendant for slaughter and processing, defendant caused plaintiffs to suffer loss in an amount exceeding $10,000. Jurisdiction is predicated on 28 U.S.C. § 1332.

Defendant moves to dismiss on the ground that this court lacks jurisdiction over the defendant. Alternatively, defendant requests a transfer of this action to a federal district court in New York on the ground that the District of Vermont is an inconvenient forum.

The affidavits of plaintiffs and defendant's president, Frank Gerace, establish the following facts. Maurice Messier phoned defendant's office in Utica, New York, and told Gerace that he had veal calves to sell. Gerace quoted a price for "red calves" and a higher price for "white calves." The parties reached an agreement that defendant would purchase the calves and pay commensurate with grade. Gerace then contacted Jim Stagner, an independent contractor who hauls livestock,¹ and instructed him to make arrangements to pick up plaintiffs' calves. Stagner subsequently transported the calves from plaintiffs' farm in Enosburg Falls to defendant's plant in Utica where defendant weighed, graded, and analyzed the calves. Although plaintiffs apparently anticipated a white grading, the calves were classified as red calves. Plaintiffs were paid accordingly.

In their complaint, plaintiffs allege that defendant negligently processed and weighed the calves, willfully and wantonly tampered with the weighing scales, and willfully and wantonly manipulated the calves. The gist of defendant's motion to dismiss is that, because each aspect of defendant's alleged misbehavior took place in New York, plaintiff may not employ the long arm of Vt.Stat.Ann. tit. 12, § 913, to enable this court to obtain personal jurisdiction over defendant.

Pursuant to Vt.R.Civ.P. 4(e),² plaintiff served a summons and complaint on defendant in Utica, New York. Rule 4(e) provides for personal service outside the state upon defendants having contacts with the state sufficient to sustain personal jurisdiction under one of Vermont's two long arm statutes, Vt.Stat.Ann. tit. 12, § 913(b).³ Section 913(b) provides:

Upon the service, and if it appears that the contact with the state by the party or the activity in the state by the party or the contact or activity imputable to him is sufficient to support a personal judgment against him, the same proceedings may be had for a personal judgment against him as if the process or pleading had been served on him in the state.

In determining whether we have personal jurisdiction over defendant by virtue of out of state service under section 913(b), we are bound by the state court construction of the long arm statute. Braman v. Mary Hitchcock Memorial Hospital, 631 F.2d 6, 8 (2d Cir. 1980). In Pasquale v. Genovese, 136 Vt. 417, 392 A.2d 395 (1978), the Vermont Supreme Court stated that Rule 4(e), which tracks the language of section 913(b), embodies the minimum contacts test outlined in International Shoe Co. v. State of Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), thereby raising the inference that the long arm statute permits service whenever due process requirements are met. The federal district courts in Vermont have adopted the position that "12 V.S.A. § 913(b) and Rule 4 of V.R.C.P. reflect a conscious purpose to extend jurisdiction over individual defendants to the extent permitted by the due process clause within the limits defined in International Shoe Co. v. Washington ... and McGee v. International Life Insurance Co. (1957), 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 ...." McKennis v. Collingwood, 55 F.R.D. 156, 159 (D.Vt.1972), followed in Dubree v. Myers, 464 F.Supp. 442 (D.Vt.1978). We concur with the author of the Reporter's Notes that accompanied Rule 4(e) when it was promulgated in 1971 that section 913(b) "reaches to the outer limits permitted by the due process clause." See Braman, 631 F.2d at 7-9.

Due process requires that an out of state defendant be subject to the personal jurisdiction of the court. In order for this court to have personal jurisdiction over the defendant, the defendant must have had certain minimum contacts with Vermont "such that the maintenance of the suit does not offend `traditional notions of fair play and substantial justice.'" International Shoe, 326 U.S. at 316, 66 S.Ct. at 158 (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)). On the one hand, mere "unilateral activity of those who claim some relationship with a nonresident defendant cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). On the other hand, "when a corporation `purposefully avails itself of the privilege of conducting activities within the forum State,' Hanson v. Denckla, 357 U.S. at 253, 78 S.Ct. at 1239, it has clear notice that it is subject to suit there ...." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980). In a less clear-cut case, a court must determine whether it is "reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there." International Shoe, 326 U.S. at 317, 66 S.Ct. at 158. In assessing the reasonableness of asserting jurisdiction, a court must consider any relevant factors, including the relationship between the defendant and the forum, the forum state's interest in adjudicating the dispute, the burden on the defendant, the plaintiff's interest in securing convenient and effective relief, judicial efficiency, and the dictates of interstate federalism. World-Wide Volkswagen, 444 U.S. at 292-94, 100 S.Ct. at 564-65.

The affidavits before the court disclose sufficient "affilitating circumstances," Hanson, 357 U.S. at 246, 78 S.Ct. at 1235, to enable this court to assume personal jurisdiction over defendant. The Gerace affidavit states: "Whitestown Packing Corporation does purchase calves which are grown in Vermont but in over ninety-nine percent (99%) of the cases, the farmers or other individuals who own the calves contact Whitestown rather than having Whitestown contact them." This statement indicates both that defendant's purchase of calves from plaintiff was not an isolated incidence of business with Vermont farmers, and that, occasionally at least, defendant solicits this business. Plaintiffs' affidavit confirms the implications we draw from defendant's affidavit by naming five Vermont veal growers or cattle dealers with whom plaintiffs knew defendant had done business.⁴ In addition to more or less regularly doing business with Vermont farmers, defendant took the overt step of contacting Jim Stagner, directing him to arrange with Mr. Messier a time to pick up the calves, and paying Stagner for transporting the calves from Vermont to New York.

Under these circumstances, it is reasonable for this court to assert jurisdiction over defendant. Most importantly, the defendant has established an ongoing business relationship with individuals in Vermont. Additionally, Vermont has a strong interest in protecting its farmers from the fraud and negligence of out of state concerns that purchase Vermont farm products. The burden on defendant of transporting its witnesses to neighboring Vermont is not severe.

We believe that the Vermont state courts would concur in our finding of jurisdiction. The Vermont Supreme Court has held that "active, planned participation in the Vermont market" is the key to personal jurisdiction. Pasquale, 136 Vt. at 421, 392 A.2d 395. This participation may be direct or indirect. O'Brien v. Comstock Foods, Inc., 123 Vt. 461, 464, 194 A.2d 568 (1963) (Holden, J.). "The vital factor ... is the intentional and affirmative action on the part of the non-resident defendant in pursuit of its corporate purposes within this jurisdiction." Id. (discussing Vt.Stat.Ann. tit. 12, § 855). The Gerace affidavit evidences defendant's significant participation in the Vermont livestock market.

Defendant's reliance on Robinson v. International Industries Limited, Inc., 139 Vt. 444, 430 A.2d 457 (1981); Bard Building Supply Co. v. United Foam Corp., 137 Vt. 125, 400 A.2d 1023 (1979); and Davis v. Saab Scania of America, Inc., 133 Vt. 317, 339 A.2d 456 (1975), is misplaced. In each of these cases, the issue facing the Vermont Supreme Court was whether the trial court had personal jurisdiction over a defendant who was served under the alternative long arm statute, Vt.Stat.Ann. tit. 12, § 855. Section 855 permits service upon the Secretary of State in lieu of out of state service on a foreign corporation with the limitation that process may be served only "in any action or proceedings against it arising or growing out of that contact or activity" which supports Vermont's assertion of jurisdiction. In the instant case, in which defendant's president was served in Utica, neither due...