Phillips v. Hooker Chemical Corporation

• Decision Date: 15 March 1967
• Docket Number: No. 23407.,23407.
• Parties: Jerome PHILLIPS, Appellant, v. HOOKER CHEMICAL CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

375 F.2d 189 (1967)

Jerome PHILLIPS, Appellant, v. HOOKER CHEMICAL CORPORATION, Appellee.

No. 23407.

United States Court of Appeals Fifth Circuit.

March 15, 1967.

Robert Orseck, Nichols, Gaither, Beckham, Colson, Spence & Hicks, Miami, Fla., for appellant.

W. C. Blake, Jr., Macfarlane, Ferguson, Allison, Kelly & Himes, Tampa, Fla., for appellee.

Before COLEMAN and DYER, Circuit Judges, and ESTES, District Judge.

DYER, Circuit Judge:

This is an appeal by the plaintiff Phillips, in a personal injury diversity of citizenship action, from a final order of the district court, which quashed service of process upon the defendant Hooker Chemical and dismissed the complaint upon the ground that the defendant was not "doing business" or engaged in a "business venture" in Florida, was not amenable to service of process through the Secretary of State, and was not subject to jurisdiction of the Florida courts, pursuant to Sections 47.16¹ and 47.30,² Florida Statutes, F.S.A.

The complaint, cast in negligence and breach of warranty counts, alleged that the defendant manufactured flake caustic soda and, although it was a nonresident, the defendant was doing business in Florida. Further, that plaintiff's employer, Snively Groves, Inc., had periodically purchased drums of the soda for use by its employees in cleaning the premises and equipment at its plant; that, while plaintiff was depositing some soda in a vat of warm water the flakes adhered together, causing a large amount of the mixture to fall into the water and violently explode, causing injury to the plaintiff.

Based upon the affidavit of defendant's group vice-president, the defendant's answers to interrogatories propounded by the plaintiff and the deposition of defendant's sales representative, the district court granted the defendant's motion to quash and dismiss.

The evidence on the jurisdictional issue is not in dispute. The defendant is a New York corporation with its principal place of business in New York City. It has never qualified to do business in Florida, nor has it designated any agent for the service of process within the state of Florida. It does not have any warehouse or office and owns no property, tangible or intangible, within the State of Florida.

The defendant's salesmen and other employees visit the State of Florida from time to time for the purpose of soliciting sales, but it maintains no sales staff in Florida. The defendant has sold its caustic soda to Florida purchasers for a number of years and Snively Groves, Inc. has purchased the defendant's product for some years through one of defendant's customers.

The defendant's salaried sales representative, a resident of Georgia, spends forty to fifty percent of his total working time in Florida to increase sales and purchases of defendant's products in Florida. He calls upon customers and prospective customers and attempts to secure their business. He answers any questions that the customers may have and tries to increase the penetration in an account. A major portion of his time is spent calling upon approximately thirty regular customers with whom he is familiar. If a customer makes a complaint about the product to the sales representative, he forwards the information to the company's technical service department in Niagara Falls, New York. While calling on customers to promote sales for defendant he occasionally uses promotional literature and forwards price quotations, but does not write up the order himself. The purchase order is sent directly by the customer to the defendant's home or sales office, and the product is shipped into Florida. After communicating with the sales manager the representative quotes prices. He furnishes customers chemical data sheets and handling guides on request.

The sales representative is on an expense account and plans his own itinerary subject to directions from the sales office in New Orleans.

The caustic soda here involved was probably part of a shipment delivered to Snively Groves, Inc. by Traylor Chemicals and Supply Company, a customer of Hooker.

On this factual background the sole question is whether or not defendant Hooker is amenable to service as a foreign corporation doing business within the State of Florida.

It is plaintiff Phillips' burden to show that the defendant Hooker, a foreign corporation, is doing business in Florida, and that the cause of action upon which the suit is brought arose out of the activities of Hooker within Florida. Zirin v. Charles Pfizer and Co., Inc., Fla.1961, 128 So.2d 594; Amphicar Corporation of America v. Gregstad Distrib. Corp., Fla.App.1962, 138 So.2d 383; Fawcett Publications Inc. v. Rand, Fla. App.1962, 144 So.2d 513; Young Spring and Wire Corp. v. Smith, Fla.1965, 176 So.2d 903.

Phillips contends that it met its burden on both counts by establishing that Hooker carried on activities in Florida which are systematic and continuous and have been throughout the years; that these activities resulted in a volume of interstate business in the course of which Hooker received the benefits and protection of the law of Florida; and that Phillips' injury resulted from the use of Hooker's product.

Hooker answers that this is a case of mere solicitation and that such activity is not sufficient to subject it, as a foreign corporation, to the jurisdiction of the Florida courts by substituted service under Section 47.16.

Each case is to be decided on its own bottom under the law of the forum state. Dooley v. Payne, 5 Cir. 1964, 326 F.2d 941; Mason v. Mason Products Company, Fla.1953, 67 So.2d 762. The Florida courts have given a liberal application in actual practice to Section 47.16. The Florida "doing business" statutes are construed as broadly as consistent with due process. Delray Beach Aviation Corporation v. Mooney Aircraft Co., Inc., 5 Cir. 1964, 332 F.2d 135.

Since the advent of International Shoe Co. v. State of Washington, 320 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95, which laid to rest the doctrines of "presence" and "consent" found in Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565, the principle of "minimum contacts" has been the applicable test in Florida. "It is the quality and nature of the activity rather than mechanical tests, that are controlling in determining whether the minimum contacts test of due process has been met * * *" Dooley v. Payne, supra.

McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223, followed International Shoe, and in reviewing the decisions on due process in this area, the court said: "Looking back over this long history of litigation, a trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations and other nonresidents."

Recognizing the inapplicability of the "mere solicitation" rule and the "solicitation plus" rule, the Supreme Court of Florida observed that these criteria are premised on the view that there has been no significant development in the law concerning substituted service since the earlier era of People's Tobacco Co. v. American Tobacco Co., 246 U.S. 79, 38 S.Ct. 233, 62 L.Ed. 587. Nothing that International Shoe...