Pittsburgh Logistics Systems, Inc. v. C.R. England, Inc.

• Decision Date: 09 November 2009
• Docket Number: Civil Action No. 09-1036.
• Parties: PITTSBURGH LOGISTICS SYSTEMS, INC., a Pennsylvania corporation, Plaintiff, v. C.R. ENGLAND, INC., a Utah corporation, d/b/a England Logistics, Inc., England Logistics Supply Chain Engineering, and Trans-Man Logistics, Inc., Defendant.
• Court: U.S. District Court — Western District of Pennsylvania

Page 613

669 F.Supp.2d 613

PITTSBURGH LOGISTICS SYSTEMS, INC., a Pennsylvania corporation, Plaintiff, v. C.R. ENGLAND, INC., a Utah corporation, d/b/a England Logistics, Inc., England Logistics Supply Chain Engineering, and Trans-Man Logistics, Inc., Defendant.

Civil Action No. 09-1036.

United States District Court, W.D. Pennsylvania.

November 9, 2009.

Stephen J. Del Sole, Del Sole Cavanaugh Stroyd LLC, Pittsburgh, PA, for Plaintiff.

James D. Miller, Paul R. Robinson, Meyer, Darragh, Buckler, Bebenek & Eck, P.L.L.C., Pittsburgh, PA, for Defendant.

MEMORANDUM OPINION

WILLIAM L. STANDISH, District Judge.

Pending before the Court are two motions filed by Defendant C.R. England, Inc. ("England.") The first, a motion to dismiss (Doc. No. 7, "Mot. Dis."), argues that the suit must be dismissed pursuant to the "first-filed" doctrine or, in the alternative, pursuant to Federal Rule of Civil Procedure 12(b)(7). In the second, a motion for change of venue, England argues that this case should be transferred pursuant to 28 U.S.C. § 1404(a) from this District to the Eastern District of Michigan. For the reasons discussed below, the motion to dismiss is denied in its entirety. However, the Court will stay the case (including a decision on the motion for change of venue) pending the outcome of a motion to dismiss filed by Pittsburgh Logistics Systems, Inc. ("PLS") in a related suit England has filed in the Eastern District of Michigan.

I. INTRODUCTION

A. Factual Background¹

Plaintiff Pittsburgh Logistics Systems, Inc., is a Pennsylvania corporation with its headquarters in Rochester, Pennsylvania. Its clients include several industries which require transportation of heavy freight. PLS arranges that transportation for its clients using a network of more than 5,000 independent carriers.

Defendant England is a Utah corporation with its headquarters in Salt Lake City, Utah. In November 2007, England or one of its wholly-owned subsidiaries² acquired a Michigan corporation known as Trans-Man Logistics, Inc. ("Trans-Man"), which was a registered freight broker. According to Plaintiff, a freight broker acts as liaison between shippers and licensed motor carriers, determines the shipper's needs, contacts an authorized carrier, and negotiates an acceptable price for shipping the products. Both freight brokers and motor carriers must be registered and licensed by the Federal Motor Carrier Safety Administration. Defendant England is also a registered freight broker.

Beginning in March 2008, England and PLS entered into a business relationship under which PLS would arrange shipping for certain customers of Trans-Man, now part of England. There was no written contract between the two parties, but pursuant to their course of dealing, PLS paid the independent carriers who shipped freight for England's customers, then invoiced England for the cost of the shipping plus a fee for its services. Between August 2008 and February 2009, England requested PLS to arrange shipping for four of its customers: Hawthorn Manufacturing Company ("Hawthorn"), Citation Corporation ("Citation"), Alliance Casting Co., LLC ("Alliance"), and Intermet Corporation ("Intermet.") PLS arranged shipping for all four customers and, as had been its practice, paid the carriers directly, then invoiced England. England never objected to the invoices submitted by PLS for those customers, but has failed to pay 40 invoices totaling more than $82,000.00.³

At some point between November 2007 and February 2009, Trans-Man was merged with another England subsidiary, England Logistics Supply Chain Engineering⁴ ("England LSCE.") (Plaintiff's Memorandum of Law in Opposition to Motion to Dismiss, Doc. No. 9, "Plf.'s Memo," Exh. A.) Sometime after February 2009, PLS unsuccessfully attempted to collect the overdue invoices from England LSCE, and by letter dated June 17, 2009, counsel for Plaintiff advised the England LSCE corporate counsel that it had "no choice but to proceed with legal action." The letter enclosed a copy of the draft complaint Plaintiff intended to file in the Court of Common Pleas of Beaver County, Pennsylvania, if there was no response by June 24, 2009. (Id.) On July 1, 2009, Plaintiff's counsel again wrote to Defendant's counsel, following up on discussions which had occurred in the interim and indicating that "unless England makes arrangement for payment by next Tuesday, July 7, 2009, we will proceed to file suit in the Court of Common Pleas of Beaver County, Pennsylvania to prosecute this action." (Plf.'s Memo, Exh. B.)

On Saturday, July 4, 2009, England filed suit against PLS and Hawthorn in the United States District Court for the Eastern District of Michigan ("the Michigan suit.") (Mot. Dis. ¶ 1.) In that suit, England asserted a claim for breach of contract against Hawthorn and requested a declaratory judgment against Hawthorn and PLS to determine the rights and liabilities between the parties with regard to the alleged contract between PLS and England. (Id., ¶ 2.) According to Plaintiff, at no point during their negotiations was PLS ever informed that England intended to file the Michigan suit and its counsel was only advised of that litigation on July 7, 2009. (Plf.'s Memo, Exh. D.)

B. Procedural Background

PLS filed suit in the Court of Common Pleas of Beaver County on July 9, 2009, alleging that England had breached a contract implied-in-fact between the parties. Defendant timely removed the suit to the Federal District Court for the Western District of Pennsylvania on August 7, 2009, pursuant to 28 U.S.C. §§ 1441 and 1446, based on complete diversity between the parties⁵ and an amount in controversy exceeding $75,000.00. Plaintiff did not object to the removal.

On August 14, 2009, Defendant filed the now-pending motion to dismiss or, in the alternative, for a change of venue. The parties have fully briefed the issues and the matter is ripe for decision.

II. JURISDICTION AND VENUE

As noted above, this Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332. Venue is appropriate in this Court since the events giving rise to this suit occurred in the Western District of Pennsylvania.

III. ANALYSIS

A. Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(7)

1. Defendant's Arguments: England argues this case should be dismissed because Plaintiff has failed to join Hawthorn, Citation, Alliance and Intermet (collectively, the "Absent Parties") as defendants. Because they are of diverse citizenship with PLS, subject matter jurisdiction would not be destroyed; moreover, each of the Absent Parties is subject to service of process. (Mot. Dis., ¶¶ 31-32.) As the contracting parties on the bills of lading, the only "contracts" in question, the Absent Parties are responsible for payment of PLS's claims and therefore must be joined as necessary parties under Fed. R.Civ.P. 19(a)(1). Defendant further argues that as the entities which contracted with PLS, the Absent Parties are "indispensable parties" as that term is understood under Fed.R.Civ.P. 19(b). (Mot. Dis., ¶¶ 33-37.)

2. Applicable Law: Consideration of a motion to dismiss brought under Fed. R.Civ.P. 12(b)(7) for failure to join a party actually begins with Rule 19 which specifies the circumstances in which joinder of a party is compulsory. General Refractories Co. v. First State Ins. Co., 500 F.3d 306 312 (3d Cir.2007). Under Rule 19(a), the court

first must determine whether the absent [parties] should be joined as "necessary" parties under Rule 19(a). If they should be joined, but their joinder is not feasible inasmuch as it would defeat diversity of citizenship . . . we next must determine whether the absent parties are "indispensable" under Rule 19(b). Should we answer this question in the affirmative, the action cannot go forward.

General Refractories, id.

"Required parties" under Rule 19(a) are those who are "subject to service of process and whose joinder will not deprive the court of subject-matter jurisdiction." Fed.R.Civ.P. 19(a)(1). In considering this clause, the court first determines whether "in that person's absence, the court cannot accord complete relief among existing parties." Fed.R.Civ.P. 19(a)(1)(A). At this step, the court limits its inquiry to whether it can "grant complete relief to persons already named as parties to the action; what effect a decision may have on absent parties is immaterial." General Refractories, 500 F.3d at 313 (emphasis in original); Huber v. Taylor, 532 F.3d 237, 248 (3d Cir.2008). Alternatively, the court should consider whether the absent party "claims an interest relating to the subject of the action and is so situated that disposing of the action in that person's absence may (i) as a practical matter impair or impede the person's ability to protect the interest; or (ii) leave an existing party subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations because of the interest." Fed.R.Civ.P. 19(a)(1)(B). If an absent party is deemed to be necessary under either of these two alternatives, it must be joined if feasible, i.e., it is subject to service of process and its joinder does not deprive the court of jurisdiction. General Refractories, 500 F.3d at 313; see also Janney Montgomery Scott, Inc. v. Shepard Niles, Inc., 11 F.3d 399, 405 (3d Cir. 1993).

If a party is not found to be necessary, the court's analysis stops at that point because a party cannot be "indispensable" if it is not "necessary." See Janney, 11 F.3d at 405 (the determination that joinder is compulsory under Rule 19(a) is a "necessary predicate" to determining that it is indispensable under Rule 19(b).) However, if joinder of a necessary absent party is not feasible, the court must then determine whether the absent party is "indispensable," applying the four factors set out in Fed.R.Civ.P. 19(b).⁶ See Liggon-Redding v. Am. Sec. Ins. Co., CA No. 06-227, 2009 WL 3101068, *3, 2009 U.S. Dist. LEXIS 87331, *10 (M.D.Pa. ...