Quantum Plating Inc v. Cent. Freight Lines Inc, Civil Action No. 09-166 Erie

• Decision Date: 17 February 2011
• Docket Number: Civil Action No. 09-166 Erie
• Parties: QUANTUM PLATING, INC.Plaintiff, v. CENTRAL FREIGHT LINES, INC., a Texas Corporation and BLUE SPRING CORPORATION, a Texas Corporation, Defendants.
• Court: U.S. District Court — Western District of Pennsylvania

QUANTUM PLATING, INC.Plaintiff, v. CENTRAL FREIGHT LINES, INC., a Texas Corporation and BLUE SPRING CORPORATION a Texas Corporation, Defendants.

Civil Action No. 09-166 Erie

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

Dated: February 17, 2011

MEMORANDUM OPINION

McLAUGHLIN, SEAN J., DISTRICT JUDGE.

Plaintiff, Quantum Plating, Inc. ("Quantum"), a Pennsylvania corporation, brought this action for breach of contract against Defendant, Blue Spring Corporation, ("Blue Spring"), a Texas corporation, arising out of its purchase of a waste water treatment system.¹ This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1332 and 1337.

Presently pending before the Court is Blue Spring's Renewed Motion to Dismiss for Lack of Jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) or, in the alternative Motion to Transfer Venue. For the reasons set forth below, both Motions will be denied.

I. Factual and Procedural Background

Quantum is a Pennsylvania corporation with its principle place of business in Erie, Pennsylvania. See ECF No. 1, Complaint ¶ 1. Blue Spring is a Texas corporation, with its principle place of business located in Port Lavaca, Texas. Id. at ¶ 3. Quantum alleges that Blue Spring "marketed" a waste water treatment system (the "System") for sale in several states, including Pennsylvania, and that on September 23, 2006, Quantum's President, Chris Busko ("Busko"), emailed Blue Spring requesting information regarding a system. ECF No. 1, Complaint at ¶ 7; ECF No. 24, Plaintiff's Response, Pl. Ex. 24-1. Busko subsequently spoke with a representative of Blue Spring by telephone on September 25, 2006 regarding the same. Pl. Ex. 24-2. On October 6, 2006, Blue Spring mailed Quantum a "PrecipRO DemoDVD" and offered to analyze Quantum's waste water. Pl. Ex. 24-3. Thereafter, Blue Spring prepared a price quotation for the manufacture of the System and Quantum ultimately agreed to purchase a "Blue Spring PrecipRO-1000 DP Rinse Water Recycler Module." ECF No. 23, Defendant's Brief, Def. Ex. 23-1, Desai Aff. ¶¶ 9-10. All contract negotiations for the purchase of the System occurred by telephone, facsimile, e-mail and the U.S. Mail. Id. at ¶ 11. On March 15, 2007, Blue Spring sent Quantum an invoice for the System, and in a letter dated April 2, 2007, acknowledged receiving payment in the amount of $107,600. Pl. Exs. 24-4; 24-5.

On May 14, 2007, Satish Desai ("Desai"), the president of Blue Spring, visited Quantum's facility in Erie, Pennsylvania preliminary to the shipment of the System. Pl. Ex. 246. As a follow up to his visit, Desai emailed information concerning additional components for the System to Quantum on May 24, 2007. Pl. Ex. 24-7. Thereafter, Blue Spring sent Quantum a quotation for these additional items and Quantum purchased them on June 28, 2007 for $21,020. Pl. Ex. 24-8.

By email dated December 19, 2007, Desai informed Quantum that the System had been successfully tested at its plant and offered various suggestions for its installation. Pl. Ex. 24-9. Blue Spring further informed Quantum that the System would be shipped by Central Freight. Pl. Ex. 24-9. Desai noted that he would be coming to Erie for the "commissioning service" and would "keep in touch." Pl. Ex. 24-9. The System arrived in Erie on December 24, 2007. ECF No. 1, Complaint ¶ 17. However, Quantum determined that it was damaged and consequently, it rejected delivery. ECF No. 1, Complaint ¶¶ 18-20. While in transit back to Blue Spring, the trailer transporting the System caught fire, causing substantial heat and smoke damage. Id. at ¶ 22. On February 4, 2008, Central Freight returned the System to Blue Spring. Pl. Ex. 24-12. On February 5, 2008, Desai emailed Quantum a damage report, wherein he indicated, inter alia, that it would take approximately 30 to 45 days to repair the System. Pl. Ex. 24-12.

Blue Spring contracted with Betz Freight ("Betz") to pick up the System at its Port Lavaca, Texas facility and deliver it to Erie, Pennsylvania. Pl. Ex. 24-16. Blue Spring informed Quantum on April 2, 2009 that the System had been loaded onto a truck for delivery. Pl. Exs. 24-17; 24-18. The System was delivered to Quantum on April 9, 2009. ECF No. 1, Complaint ¶ 26. Quantum contends that the System repeatedly failed and did not operate at or near full capacity. ECF No. 1, Complaint ¶¶ 26-28.

On May 12, 2009, Quantum contacted Blue Spring by email to report it was experiencing problems with the System and also requested a wiring diagram. Pl. Ex. 24-20. Throughout May 2009, Blue Spring remained in contact with Quantum in an attempt to provide guidance with respect to rendering the System operational. Pl. Exs. 24-19; 24-20; 24-22. Blue Spring also shipped replacement parts directly to Quantum's Erie facility or ordered replacement parts to be shipped to Quantum on at least five (5) separate occasions between April 22, 2009 and June 12, 2009. Pl. Exs. 24-21; 24-23; 24-24; 24-25.²

On May 22, 2009, Desai emailed Quantum stating that he would "be in [the] area" visiting another customer and wanted to "visit... sometime between [the] 9^th and 10^th of June" to see if he could "solve [the] remaining problems with [the] PrecipRo wastewater recycling system." Pl. Ex. 24-24. During this second visit, Desai utilized various diagnostic tools in an attempt to "determine why the [System] was not working as expected." Pl. Ex. 24-28 p. 6. On June 12, 2009, after Desai returned to Texas, Blue Spring informed Quantum that it would be "writing... a report on some of the recommended changes for your setup." Pl. Ex. 24-25.

On July 2, 2009, Quantum filed suit against Blue Spring and Central Freight. Blue Spring initially filed a motion to dismiss for lack of personal jurisdiction or, in the alternative, a motion to transfer venue on September 9, 2009. See ECF No. 17, Motion to Dismiss. This Court denied the motions without prejudice and granted the parties 90 days in which to conduct jurisdiction-related discovery. See Minute Entry dated February 3, 2010. Discovery was completed and the instant renewed motions were filed on May 24, 2010. See ECF. No. 22, Renewed Motion to Dismiss. The Court held argument on the motions on July 26, 2010, see ECF. No. 28, Hearing Tr., and the matter is now ripe for disposition.

II. Standard of Review

When a defendant challenges personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2), the plaintiff bears the burden of showing that personal jurisdiction exists. Marten v. Godwin, 499 F.3d 290, 295-96 (3^rd Cir. 2007). "In deciding a motion to dismiss for lack of personal jurisdiction, we take the allegations of the complaint as true. But once a defendant has raised a jurisdictional defense, a plaintiff bears the burden of proving by affidavits or other competent evidence that jurisdiction is proper." Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3^rd Cir. 1996) (internal citations omitted); see also Patterson by Patterson v. F.B.I., 893 F.2d 595, 604 (3^rd Cir.1990); D'Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 102 (3^rd Cir. 2009); O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3^rd Cir. 2007). In demonstrating that jurisdiction is proper, the plaintiff is required to establish facts with reasonable particularity. Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1223 (3^rd Cir. 1992). In addition, since personal jurisdiction is "inherently a matter which requires resolution of factual issues outside the pleadings, " a plaintiff may not rely entirely on general averments in the pleadings. Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 n.9 (3^rd Cir. 1984). Where a court does not hold an evidentiary hearing, the plaintiff need only establish a prima facie case of personal jurisdiction. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3^rd Cir. 2009). The court must consider the pleadings and affidavits in a light most favorable to the plaintiff and any discrepancies must be resolved in its favor. Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n.1 (3^rd Cir.), cert. denied, 506 U.S. 817 (1992). The burden then shifts to the defendant to establish that asserting jurisdiction is unreasonable. Id. at 150.

III. Discussion

A. Blue Spring's Jurisdictional Challenge

Federal district courts "may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." D'Jamoos, 566 F.3d at 102 (quoting Provident Nat'l Bank v. Cal. Fed. Sav. & Loan Ass'n, 819 F.2d 434, 436 (3^rd Cir. 1987). See also Marten, 499 F.3d at 296; O'Connor, 496 F.3d at 316. This involves a two-step inquiry whereby courts first determine whether the forum state's long-arm statute extends jurisdiction to the nonresident defendant, and then determine whether the exercise of that jurisdiction would comport with federal due process principles. See Pennzoil Products Co. v. Colelli & Assoc., Inc., 149 F.3d 197, 2002-03 (3^rd Cir. 1998). Pennsylvania's long-arm statute permits a court to exercise jurisdiction over non-resident defendants "to the fullest extent allowed under the Constitution of the United States and [jurisdiction] may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." 42 Pa.C.S.A. § 5322(b).³ Pennsylvania courts typically restrict their personal jurisdiction inquiry to the question whether the exercise of personal jurisdiction over the nonresident defendant would be constitutional, since Pennsylvania's Long-Arm statute authorizes jurisdiction to the fullest extent permissible under the U.S. Constitution. See 42 Pa. C.S.A. § 5322(b); Renner v. Lanard Toys Limited, 33 F.3d 277, 279 (3^rd Cir. 1994) ("[T]his court's inquiry is solely whether the exercise of personal jurisdiction over the defendant would be constitutional."); Pennzoil, 149 F.3d at 200 ("A district court's exercise of...