Odriozola v. Superior Cosmetic Distributors

• Decision Date: 05 February 1982
• Docket Number: Civ. No. 79-2871.
• Citation: 531 F. Supp. 1070
• Parties: Jose R. ODRIOZOLA and Gaudencia P. Odriozola, Plaintiffs, v. SUPERIOR COSMETIC DISTRIBUTORS, INC.; and Germaine Monteil Cosmetic Corporation, Defendants.
• Court: U.S. District Court — District of Puerto Rico

531 F. Supp. 1070

Jose R. ODRIOZOLA and Gaudencia P. Odriozola, Plaintiffs, v. SUPERIOR COSMETIC DISTRIBUTORS, INC.; and Germaine Monteil Cosmetic Corporation, Defendants.

Civ. No. 79-2871.

United States District Court, D. Puerto Rico.

February 5, 1982.

Antonio Moreda Toledo, Moreda & Moreda Toledo & Rivera, San Juan, P. R., for plaintiffs.

Lidia González, McConnell Valdes Kelley Sifre, Griggs & Ruiz-Suria, San Juan, P. R., for defendants.

OPINION AND ORDER

CEREZO, District Judge.

This is an action brought against Germaine Monteil Cosmetic Corporation ("Germaine") and Superior Cosmetic Distributors, Inc. ("Superior") for an alleged violation of the Age Discrimination in Employment Act of 1967 ("ADEA"), 29 U.S.C. Secs. 621-634. Codefendant Germaine seeks dismissal for lack of personal jurisdiction. A hearing was held in which Germaine presented the testimony of its Senior Vice-President Mr. Thomas Gorman. At this hearing defendant did not present the testimony of David Balthrop, Michael Lord or Samuel Clemens, all officers and directors of both defendant corporations and subscribers of the affidavits accompanying the Motion to Dismiss. The sworn statements of the affiants who were not available as witnesses at the hearing have not been considered by the Court. The parties agreed to file legal memoranda ten days after receiving the transcript of the hearing. Defendant waived the right to present an additional legal memorandum in the context of what transcribed at the hearing. The answers to interrogatories subsequently filed have been examined together with the transcript of the hearing in order to determine the issues of fact.

The Court finds that the following material facts have been established as undisputed:¹

1. Superior is a domestic corporation duly registered and authorized to do business in Puerto Rico.

2. Germaine is a New York corporation.

3. Both corporations are subsidiaries of British American Tobacco Industries, Ltd. a United Kingdom Corporation (BATUS) which is not a party to this action.

4. Plaintiff was employed with Superior from 1964 as General Manager and later Vice-President of Superior and was in charge of Superior's "operations" in Puerto Rico.

5. Plaintiff was discharged from his employment on August 17, 1979 as appears from a letter signed by Mr. Bernhard Guenther.

6. Mr. Bernhard Guenther was an employee of Germaine at the time the letter was sent to Mr. Odriozola. Mr. Guenther was Area Director for the Caribbean and worked under the supervision of Germaine's Vice-President International Division, who at that time was Mr. David Balthrop. Mr. Guenther was not an employee of Superior nor a member of the board of directors or officer of Superior.

7. Mr. David Balthrop was Vice-President International Division of Germaine and Vice-President of Superior. Mr. Odriozola reported directly to Mr. Balthrop as his superior.

8. Mr. Guenther as well as his predecessors visited Puerto Rico several times a year according to the requirements of their positions as Area Managers.

9. The members of the Board of Directors of Superior are all either officers or members of the board of directors of Germaine. Superior also shares common officers with Germaine.

10. The pension plan and medical insurance that Superior pays its employees is financed by an affiliate of the BATUS group. Superior does not contribute to this plan although its employees are entitled to the benefits.

11. The facilities used by Superior are owned by an affiliate of the BATUS group. No rent is payed by Superior for these facilities.

12. Marketing strategies and programs, promotions and sales training are provided frequently by Germaine to Superior at no cost.

13. Mr. Thomas Gorman, defendant's witness at the hearing, admitted that although he was a member of the Board of Directors of Superior he had never attended any meeting of said Board nor had he ever received notice of a proposed meeting nor had he ever been in Puerto Rico. According to defendant's answers to interrogatories Mr. Gorman was also Vice-President of Superior. Mr. Gorman admitted that as member of the Board of Directors of Germaine he had attended every meeting.

14. Mr. Gorman admitted that Bernhard Guenther although not an employee of Superior could terminate employees of Superior. Mr. Gorman expressed that Mr. Guenther had this capacity when so directed by his superior at Germaine, Mr. David Balthrop.

15. Plaintiff presented at the hearing various letters determining his salary and bonus which were typed on Germaine's stationery and signed by Mr. David Batchelor. Under Batchelor's name there appeared the title "Vice-President International." On April 7, 1977 Mr. Mickey Braffet wrote a letter to plaintiff (also on the Germaine stationery) whereby cuts in Superior's personnel were requested as well as recommendations on the type of work some personnel had to perform. "Immediate action" was requested of Mr. Odriozola on these employment matters. Mr. Braffet signed the letter in his capacity as Director-Latin America for Germaine.

16. On October 4, 1978 Mr. Bently T. Braffet sent a letter to Mr. Odriozola confirming how Odriozola's 1978 salary was going to be determined. Mr. Braffet had no relationship with Superior whatsoever and signed the letter as Germaine's Area Director for Latin America.

17. The handwritten letter whereby Mr. Odriozola requested anticipated retirement² was directed to Mr. David Balthrop as Vice-President International Division, Germaine.

18. After plaintiff was discharged Mr. David Balthrop announced Mr. Odriozola's replacement to their general customers and signed again as Vice-President International.

Pursuant to these undisputed facts we shall examine the law that purportedly favors defendant as moving party.

Its jurisdictional argument requires that we determine whether Germaine's contacts with Puerto Rico are enough to permit this Court to exercise personal jurisdiction. A separate issue which has arisen is whether Germaine's relationship with Superior is sufficiently entangled as to consider Germaine an employer of Odriozola under ADEA's definition of employer. The latter issue is analyzed under the criteria of a motion for summary judgment. Rule 56 id. See: First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). In examining the argument of personal jurisdiction the test to apply is whether defendant has sufficient contacts with a particular forum so as to justify subjecting him to its court's jurisdiction. World-Wide Volkswagen Corporation v. Woodson, District Judge, 444 U.S. 286, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980). The analysis of a defendant's activities in a forum has to be infused with considerations of fair play and substantial justice because of the constitutional implications of a hastily applied personal jurisdiction. See: International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945). Since the ADEA does not provide an independent basis for personal jurisdiction we must look to the law of the state in which the action was brought. Rule 4(e) FRCP. Puerto Rico's long-arm statute provides a possible basis for jurisdiction in this case in Rule 4.7 which establishes that Puerto Rico shall have jurisdiction of a person not within its territorial boundaries if: "... the action or claim arises as a result of the following: (1) Such person or his agent carries out business transactions within Puerto Rico or ..." P.R. Laws Ann., Tit. 32, App. II, R. 4.7.

In A. H. Thomas Co. v. Superior Court, 98 PRR 864 (1970) the Supreme Court of Puerto Rico adopted the following three-pronged test to determine whether in personam jurisdiction may be asserted over a nonresident: (1) there must be an act done or consummated within the forum by the nonresident defendant (the act may be done by mail, physical presence is not necessary); (2) the cause of action must arise out of the defendant's action within the forum state and (3) the activity linking defendant, forum and cause of action must be substantial enough to meet due process requirements of fair play. The question of personal jurisdiction is one where a "practical concern for the facts" on a case by case analysis is always necessary in order to apply the often misinterpreted judicial formulas that deal with this matter. Vencedor Mfg. Co. v. Gougler Industries, 557 F.2d 886 (1st Cir. 1977). We find that in the record before us there are sufficient facts to fulfill the requirements of this test. Codefendant Germaine's Area Director for Puerto Rico visited the forum on various occasions during the year in his capacity as employee of Germaine. The purpose of the visits were to monitor the marketing of Germaine's products in Puerto Rico. This, coupled with the fact that Germaine sent and sold its products to Superior, a Puerto Rican corporation, is a sufficient voluntary association with the forum. Vencedor Mfg. Co., ante, at 890. The repeated visits by Germaine's Area Director to Puerto Rico throughout the years indicates a general pattern of voluntary business activities and a "purposeful availment" of the forum's legal protection. Id., at p. 893. The "rational nexus" between Germaine's act in the forum and the cause of action against defendant is clearly established since the letter that officially discharged Mr. Odriozola from his employment was signed by Mr. Bernhard Guenther, an employee of Germaine. Escude Cruz v. Ortho Pharmaceutical Corp., 619 F.2d 902, 904-906 (1st Cir. 1980). It is reasonable to state that a probable consequence of the act performed by Germaine's employee could be a judicial action against Germaine for illegal termination of employment. Escude Cruz v. Ortho, ante. The nexus and relationship of the act to plaintiff's cause of action is also evident in view of the fact that Germaine admitted that Mr. Guenther was authorized to dismiss Superior employees if...