Regency Oldsmobile, Inc. v. General Motors Corp.

• Citation: 685 F. Supp. 91
• Decision Date: 02 May 1988
• Docket Number: Civ. A. No. 87-314 (AMW).
• Parties: REGENCY OLDSMOBILE, INC., a New Jersey Corporation, Plaintiff, v. GENERAL MOTORS CORPORATION, Moore-Hudson Oldsmobile GMC, Inc., Lyons Motors, Inc., Childress Buick, John Does 4-50 and John Does 51-100, Defendants, and GENERAL MOTORS CORPORATION, Defendant/Counterclaimant, v. REGENCY OLDSMOBILE, INC., Defendant on Counterclaim, and Kenneth Hagen and David West, Additional Defendants on Counterclaim.
• Court: U.S. District Court — District of New Jersey

685 F. Supp. 91

REGENCY OLDSMOBILE, INC., a New Jersey Corporation, Plaintiff, v. GENERAL MOTORS CORPORATION, Moore-Hudson Oldsmobile GMC, Inc., Lyons Motors, Inc., Childress Buick, John Does 4-50 and John Does 51-100, Defendants, and GENERAL MOTORS CORPORATION, Defendant/Counterclaimant, v. REGENCY OLDSMOBILE, INC., Defendant on Counterclaim, and Kenneth Hagen and David West, Additional Defendants on Counterclaim.

Civ. A. No. 87-314 (AMW).

United States District Court, D. New Jersey.

May 2, 1988.

Mark C. Perlberg, Margolis, Chase, Kosicki, Aboyoun & Hartman, P.A., Verona, N.J., for plaintiff, Regency Oldsmobile, Inc. and defendants on the counterclaim, Kenneth Hagen and David West Michael S. Waters, Carpenter, Bennett & Morrissey, Newark, N.J., for defendant General Motors Corp.

Frederic S. Kessler, Clapp & Eisenberg, Newark, N.J., for defendants Moore-Hudson Oldsmobile GMC, Inc., Lyons Motors, Inc. and Childress Buick.

OPINION

WOLIN, District Judge.

The defendants, Moore-Hudson Oldsmobile GMC, Inc. ("Moore-Hudson"), Lyons Motors, Inc. ("Lyons") and Childress Buick ("Childress"), renew their application to dismiss the amended complaint as it pertains to them on the grounds that the court lacks in personam jurisdiction and that the District of New Jersey is the improper venue.¹ For the reasons set forth herein the motion as to lack of personal jurisdiction is granted as to all defendants, thereby mooting the issue of improper venue.

I. BACKGROUND

Regency Oldsmobile, Inc. ("Regency") was an automobile dealership located in Lakewood, New Jersey. In 1985, with the tacit approval of General Motors Corporation ("GM"), Regency became involved in the nationwide marketing of GM's Protection Plan (the "Plan"), a service contract in the nature of an extended warranty for newly purchased GM vehicles. Difficulties arose between Regency and GM, and Regency ultimately ceased its nationwide sales program and in fact sold the assets of its agency in April, 1987. Regency thereafter instituted this action against GM. In the amended complaint Regency asserted violations of federal antitrust statutes, as well as violations of state law against GM and certain designated dealer defendants.²

It is undisputed that during Regency's sales program the dealer defendants wrote to GM objecting to sales of the Plan in each of the dealers' geographic areas. It is further undisputed that none of these dealers transact business, solicit or advertise in New Jersey. Each maintain a principal place of business in a foreign state. By virtue of dealer letter-complaints,³ Regency submits that personal jurisdiction is proper in the District of New Jersey.

With this factual overview in mind, an examination of the leading authorities clearly demonstrates that personal jurisdiction over these defendants in the District of New Jersey is unwarranted.

II. THE DEFENDANTS

There is no question that all dealers who wrote letters to GM (collectively, the "defendants") were deeply concerned about extra-geographical competition and the embarrassment factor associated with a discount offer by another dealer when their customer had paid the full suggested Plan price. Some of them had ceased selling other types of warranty plans in acceding to the profit lure GM forecasted in its 1985 model year advance literature and subsequently continued in GM's Administrative Guide. Understandably, they contacted GM for an explanation. Albeit some dealers phrased their inquiry more strongly than others, none of them suggested that GM take any action against Regency in New Jersey. Their primary concern was the elimination of the reduced price dealing within their respective geographical areas.

Moore-Hudson Oldsmobile GMC, Inc.

Moore-Hudson was incorporated in South Carolina. It had no business contact with the State of New Jersey. On February 10, 1986, James E. Hudson, President, wrote a letter to Pat Hayes, Zone Manager of the Oldsmobile Division, confirming a prior telephone conversation and outlining problems associated with the sale of the Plan by out-of-state dealerships. In the letter, Hudson solicited GM's assistance in restricting sale of the Plan to those dealers within the marketing area of the customer. He closed by noting that if GM was unable to restrict sales by April 1, 1986, he would have no other alternative but to begin writing General Warranty Policies. Answers to interrogatories indicated that no response to the letter was received and that this defendant had no contact with any other entity pertaining to Regency's business or with Regency itself.

Lyons Motors, Inc.

Lyons was incorporated and authorized to conduct business only in the State of Montana. It had no business relationships with any entity conducting business in the State of New Jersey. Lyons addressed two letters to representatives of GM relating to concerns it had regarding interference with its business relationships with its customers. It had no oral communication with GM. The first letter, dated August 17, 1985, may be fairly characterized as an angry letter of inquiry. The second letter, dated February 26, 1986, commented on customer relations as a result of Regency's sales program and suggested that GM make inquiry of other dealers as to whether their customers were also "harassed by this `Regency Oldsmobile.'" The second letter concluded that if GM wanted Lyons to sell the Plan, GM should "curb `this other dealer' from calling on our customers and let us do our job."⁴ At no time did GM respond to either of these letters. Lyons also had no direct contact with Regency.

Childress

Childress is an Arizona corporation authorized to do business in that state. It, too, had no business relationships with any other entities conducting business in the State of New Jersey. Many of its customers who had purchased the Plan subsequently received solicitations from Regency and notified Childress of these solicitations. Based upon their customers' concern, Childress wrote a letter of inquiry to GM Protection Plan Supervision. This letter expressed concern that GM was leaking its customers' names to "this dealership in New Jersey or Pennsylvania." It closed with a request that GM protect their customers' names from falling into the hands of their competitors.⁵ As a result of a GM reply, Childress learned that Regency was purchasing lists of customers' names from R.L. Polk Registration Lists. Childress sent another letter to A.J. Thomas, GM Protection Plan Manager, which restated its concerns and voiced an opinion as to how GM should resolve the problem of extra-geographical Plan solicitation.⁶

III. DISCUSSION

Any discussion pertaining to personal jurisdiction commences with an understanding that the Due Process Clause rejects forum amenability without meaningful contacts, ties or relations to the forum state. International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945). Individuals are entitled to "fair warning" that a particular activity may subject them to a foreign sovereign's jurisdiction. Shaffer v. Heitner, 433 U.S. 186, 218, 97 S.Ct. 2569, 2587, 53 L.Ed.2d 683 (1977). However, this "fair warning" requirement is satisfied when a defendant "purposefully directs" his activities to residents of a foreign forum, Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774, 104 S.Ct. 1473, 1478, 79 L.Ed.2d 790 (1984), and the ensuing litigation results from alleged injuries that "arise out of or relate to" those activities. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 1872, 80 L.Ed.2d 404 (1984). Under such circumstances a forum may assert specific jurisdiction over an outof-state defendant who has not consented to suit there. See Keeton, 465 U.S. at 774, 104 S.Ct. at 1478 (persons engaged in distribution of magazines may be held accountable in a foreign forum for damages resulting there from an allegedly defamatory story); Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 97 L.Ed.2d 804 (1984) (persons engaged in the editorial preparation of magazines held accountable in a foreign forum for damages resulting there from an allegedly defamatory story). This policy evolves from a state's "manifest interest" in providing its residents with a convenient forum for redressing injuries inflicted by a non-resident actor. McGee v. International Life Insurance Co., 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223 (1957).

In Burger King Corporation v. Rudzewicz, 471 U.S. 462, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985), Justice Brennan, after a systematic and expansive review of existing authorities, concluded that "the constitutional touchstone remains whether the defendant purposefully established `minimum contacts' in the forum state." 471 U.S. at 474, 105 S.Ct. at 2182 (citing International Shoe Co. v. Washington, supra, 326 U.S. at 316, 66 S.Ct. at 158). After rejecting the theory of foreseeability of causing injury in another state as a "sufficient benchmark" for exercising personal jurisdiction, Justice Brennan cited to the language of World-wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980), reminding that "the foreseeability that is critical to due process analysis is ... that the defendant's conduct and connection with the forum state are such that he should reasonably anticipate being haled into court there." Burger King, 471 U.S. at 474, 105 S.Ct. at 2183 (1985). Accordingly, when a defendant deliberately engages in tortious conduct within a state from beyond its geographical boundaries, that defendant purposely avails itself of the privilege of conducting activities within the forum state and cannot be heard to complain that jurisdiction was predicated on "random, fortuitous, or attenuated" contacts. Keeton, 465 U.S. at 774, 104 S.Ct. at 1478. Thus, as stated in Burger King, 471 U.S. at 476, 105 S.Ct. at 2184, "... because his activities are shielded by the `benefits and protections'...