Snider v. Howard S. Slatkin, Inc.

• Decision Date: 13 July 2000
• Docket Number: No. Civ.A. 99-CV-5315.,Civ.A. 99-CV-5315.
• Citation: 105 F.Supp.2d 428
• Parties: Edward M. SNIDER, and Martha Snider v. HOWARD S. SLATKIN, INC., a New York Corporation
• Court: U.S. District Court — Eastern District of Pennsylvania

105 F.Supp.2d 428

Edward M. SNIDER, and Martha Snider v. HOWARD S. SLATKIN, INC., a New York Corporation

No. Civ.A. 99-CV-5315.

United States District Court, E.D. Pennsylvania.

July 13, 2000.

F. Warren Jacoby, Cozen & O'Connor, Philadelphia, PA, for plaintiffs.

Robert J. Sugarman, Sugerman & Associates, P.C., Philadelphia, PA, for defendant.

MEMORANDUM AND ORDER

JOYNER, District Judge.

Defendant Howard S. Slatkin, Inc., moves to dismiss this action for lack of in personam jurisdiction pursuant to Fed. R.Civ.P. 12(b)(2). Plaintiffs request that if the Court determines that it does not have personal jurisdiction over the Defendant that the Court, in the proper exercise of its discretion and in the interests of justice, transfer this action to a California District Court.

History of the Case

Plaintiffs, Edward M. Snider and Martha Snider, are residents of the Commonwealth of Pennsylvania. In June of 1995, Plaintiffs purchased property at 1627 East Valley Road, Montecito, Santa Barbara County, California. Soon after the purchase of the property, Plaintiff sought the professional services of the interior design firm, Defendant Howard S. Slatkin, Inc., a New York corporation with its principal place of business in New York City. On August 26, 1997, Plaintiffs entered into a contract with the Defendant for interior design services to be provided by the Defendant for the Plaintiffs' property in California. Under the terms of the "Letter of Agreement," Plaintiffs were required to pay the Defendant a $200,000 retainer. Plaintiffs signed the Letter of Agreement and paid the retainer. On October 16, 1997, Plaintiffs terminated the services of the Defendant alleging Defendant had breached its obligations under the Letter of Agreement, demonstrated bad faith, refused to form a reasonable budget, and was unable to cooperate with others involved with the project. A dispute soon arose between the Plaintiffs and the Defendant over the assessment of costs prior to termination of the contract and the return of the retainer.

By way of their motion to dismiss, Defendant asserts that it does not have the requisite minimum contacts with Pennsylvania such as to permit this Court to exercise jurisdiction over it. Plaintiffs, however, argue that there is a sufficient basis for jurisdiction in this forum given that the Defendant advertises in magazines that are circulated in Pennsylvania, a significant number of phone calls, faxes, and letters were sent by Defendant to the Plaintiffs in Pennsylvania relating to this specific matter, and that given the large amount of commonplace interstate commerce between New Jersey, New York, and Pennsylvania, Defendant should have reasonably anticipated being haled into court here.

Standards Applicable to 12(b)(2) Motions

Lack of personal jurisdiction is a waivable defense under Fed.R.Civ.P. 12(h)(1) and therefore the defendant must raise lack of personal jurisdiction by filing a motion to dismiss under Fed.R.Civ.P. 12(b)(2). See, Santana Products, Inc. v. Bobrick Washroom Equipment, 14 F.Supp.2d 710, 712-713 (M.D.Pa.1998). "Once the defense is raised, however, the burden shifts to the plaintiff to establish, by a preponderance of the evidence, sufficient facts demonstrating the court's jurisdiction." Carteret Savings Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir.1992), cert. denied, 506 U.S. 817, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992). To prove jurisdiction is proper, the plaintiff must present a prima facie case by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (East) PSFS, National Association v. Farino, 960 F.2d 1217, 1223 (3d Cir.1992), citing Provident Nat'l Bank, 819 F.2d 434, 437 (3d Cir.1987). A Rule 12(b)(2) motion "requires resolution of factual issues outside the pleadings, i.e., whether in personam jurisdiction actually lies." Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 (3d Cir. 1984). The plaintiff may not merely rely on the bare pleadings in order to withstand a defendant's 12(b)(2) motion to dismiss for lack of personal jurisdiction; in light of the motion, the plaintiff must respond with actual proofs not mere allegations. Clark v. Matsushita Electric Industrial Co., Ltd., 811 F.Supp. 1061, 1064 (M.D.Pa.1993).

Discussion

A. Jurisdiction

"Whether a federal court has personal jurisdiction over an out-of-state defendant depends upon the forum's long arm jurisdiction and due process considerations." Pennzoil Products Company v. Colelli & Associates, Inc., 149 F.3d 197, 200 (3d Cir.1998), citing Mellon Bank (East) PSFS, N.A., 960 F.2d at 1221. Rule 4(e) authorizes jurisdiction to be exercised over non-resident defendants to the fullest extent allowed under the law of the state where the district court sits. Mesalic v. Fiberfloat Corp., 897 F.2d 696, 698 (3rd Cir.1990). Pennsylvania's long arm statute extends personal jurisdiction to "the fullest extent allowed under the Constitution of the United States." 42 PA.C.S. 5322(b). The Court of Appeals explained the process of determining personal jurisdiction in IMO Industries, Inc. v. Kiekert AG, 155 F.3d 254, 259 (3d Cir. 1998): "a federal court sitting in diversity must undertake a two-step inquiry. First, the court must apply the relevant state long-arm statute to see if it permits the exercise of personal jurisdiction; then, the court must apply the precepts of the Due Process Clause of the Constitution. In [Pennsylvania], this inquiry is collapsed into a single step because the ... long-arm statute permits the exercise of personal jurisdiction to the fullest limits of due process."

Pursuant to the Fourteenth Amendment's Due Process Clause, personal jurisdiction exists where the plaintiff demonstrates that the defendant has purposely established `minimum contacts' in or purposely directed its activities toward residents of the forum state. Asahi Metal Industry Co., Ltd. v. Superior Court of California, 480 U.S. 102, 108, 107 S.Ct. 1026, 1030, 94 L.Ed.2d 92 (1987) quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985) and International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945). Pennsylvania's long arm statute includes both general and specific jurisdiction over out-of-state defendants. 42 Pa.C.S. 5301, 5322.

To assert general jurisdiction over a nonresident, a plaintiff must establish that a defendant's contacts with the forum state are so "continuous and substantial" with the forum state that the defendant should reasonably expect to be haled into court there on any cause of action. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414-16, 414 n. 9, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984); Provident Nat'l Bank v. California Fed. Sav. & Loan Ass'n, 819 F.2d 434, 437 (3d Cir.1987). For general jurisdiction to exist, the defendant must have purposely availed itself of the benefits and protections of the laws of the forum in which plaintiff seeks to establish personal jurisdiction. See Burger King Corp., 471 U.S. at 475, 105 S.Ct. 2174; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 299, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958). This Circuit has consistently held that, without more, advertising in national publications "does not constitute `continuous and substantial' contacts with the forum state." See Weber v. Jolly Hotels, 977 F.Supp. 327, 333 (D.N.J.1997), citing Gehling v. St. George's School of Medicine, 773 F.2d 539, 542 (3d Cir.1985) and Hearst Corp. v. Goldberger, 1997 WL 97097 at *10; see also Giangola v. Walt Disney World Co., 753 F.Supp. 148, 156 (D.N.J.1990).

Specific jurisdiction may arise when particular or infrequent contacts by the defendant with the forum state are related to plaintiff's claim. Pennzoil Products Co., 149 F.3d at 200. For specific jurisdiction to exist, "plaintiff must satisfy a two part test. First, the plaintiff must show that the defendant has constitutionally sufficient `minimum contacts' with the forum." IMO Industries, Inc., 155 F.3d at 259 quoting Burger King Corp. ., 471 U.S. at 474, 105 S.Ct. 2174. "Second, for jurisdiction to be exercised, the court must determine, in its discretion, that to do so would comport with traditional notions of `fair play and substantial justice.'" IMO Industries, Inc., 155 F.3d at 259, quoting Vetrotex Certainteed Corp. v. Consolidated Fiber Glass Products Co., 75 F.3d 147, 150-151 (3d Cir.1996). A defendant may be found to have purposefully established minimum contacts with a forum state by deliberately engaging in significant activities or by creating continuing obligations such that he has "availed himself of the privilege of conducting business there." Arch v. The American Tobacco Company, Inc., 984 F.Supp. 830, 835 (E.D.Pa.1997). The use of interstate facilities such as the telephone, mail, or fax is an ancillary factor and therefore does not provide the minimum contacts required by due process. Scullin Steel Co. v. National Railway Utilization Corp., 676 F.2d 309, 314 (8th Cir.1982). Among the factors that are considered are the burden on the defendant, the interests of the forum state, the plaintiff's interest in obtaining relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies and the shared interest of the several states in furthering fundamental substantive social policies. Asahi Metal Industry Co., 480 U.S. at 113, 107 S.Ct. 1026.

Plaintiffs in the case at bar contend that this Court has both general and specific jurisdiction over the Defendant. We disagree. Plaintiffs have not met their burden to establish general or specific jurisdiction over the Defendant.

The Defendant is not a resident of Pennsylvania and the Plaintiffs have not shown that the Defendant's contacts with Pennsylvania are so "continuous and...