Southern Iowa Manufacturing Co. v. Whittaker Corp., Civ. No. 74-292-2.

• Decision Date: 24 November 1975
• Docket Number: Civ. No. 74-292-2.
• Citation: 404 F. Supp. 630
• Parties: SOUTHERN IOWA MANUFACTURING CO., an Iowa Corporation, Plaintiff, v. WHITTAKER CORPORATION, d/b/a Whittaker Metals, a division of Whittaker Corporation, a California Corporation, Defendant. WHITTAKER CORPORATION, d/b/a Whittaker Metals, a division of Whittaker Corporation, a California Corporation, Third-Party Plaintiff, v. TRIEM STEEL & PROCESSING CO. and Chicago Steel & Pickling Co., Third-Party Defendants.
• Court: U.S. District Court — Southern District of Iowa

404 F. Supp. 630

SOUTHERN IOWA MANUFACTURING CO., an Iowa Corporation, Plaintiff, v. WHITTAKER CORPORATION, d/b/a Whittaker Metals, a division of Whittaker Corporation, a California Corporation, Defendant.

WHITTAKER CORPORATION, d/b/a Whittaker Metals, a division of Whittaker Corporation, a California Corporation, Third-Party Plaintiff, v. TRIEM STEEL & PROCESSING CO. and Chicago Steel & Pickling Co., Third-Party Defendants.

Civ. No. 74-292-2.

United States District Court, S. D. Iowa, C. D.

November 24, 1975.

E. Ralph Walker, of Thoma, Schoenthal, Davis, Hockenberg & Wine, Des Moines, Iowa, for plaintiff.

Jerry E. Williams, of Nyemaster, Goode, McLaughlin, Emery & O'Brien, Des Moines, Iowa, Walter Shapero, Southfield, Mich., for defendant and third-party plaintiff, Whittaker Corporation, d/b/a Whittaker Metals, a Division of Whittaker Corporation, a California corporation.

Dwight W. James, Addison M. Parker, of Dickinson, Throckmorton, Parker, Mannheimer & Raife, Des Moines, Iowa for third-party defendant Triem Steel & Processing Co.

B. A. Webster of Gamble, Riepe, Burt, Webster & Fletcher, Des Moines, Iowa, Katten, Muchin, Gitles, Zavis, Pearl & Galler, Chicago, Ill., for third-party defendant Chicago Steel & Pickling Co.

ORDER

HANSON, Chief Judge.

The Court addresses this Order to a motion to dismiss on personal jurisdiction grounds, filed on September 2, 1975 by third-party defendant Chicago Steel & Pickling Co. (Chicago Steel).

This cause of action was commenced against the Whittaker Corporation (Whittaker) by Southern Iowa Manufacturing Co. (SIMCO) on November 15, 1974. SIMCO asserts both contract and tort theories against the defendant, based upon the purchase of certain steel which was ordered by the plaintiff in 1974, and allegedly supplied by Whittaker in an inadequate or defective condition.

Whittaker is a California corporation maintaining a place of business in Broadview, Illinois. SIMCO's contacts with Whittaker were in relation to its Illinois plant. On February 4, 1975, Whittaker filed a "motion to quash service of process and dismiss," asserting, inter alia, a lack of the minimum contacts with Iowa needed to establish this Court's personal jurisdiction over Whittaker.

In an Order filed on May 8, 1975, Whittaker's motion was overruled. This Court ruled that SIMCO had sufficiently alleged the commission of a tort "in whole or in part" in Iowa, in satisfaction of the Iowa long-arm statute, § 617.3, Code of Iowa (1975). Further, the Court ruled that Whittaker's contacts with Iowa were adequate to satisfy the Due Process Clause. As stated in the Order, "Whittaker entered into a transaction having an impact on the commerce of Iowa and could reasonably have anticipated that its acts would have consequences in Iowa." Order of May 8, 1975, at 5.

Within a month of this Court's ruling on its motion to dismiss, Whittaker answered plaintiff's complaint. Shortly thereafter, Whittaker, as a third-party plaintiff, filed a third-party complaint against Triem Steel & Processing Co. (Triem) and Chicago Steel & Pickling Co. (Chicago Steel). In said complaint, Whittaker asserts that all of the steel ordered from it by SIMCO was delivered by Whittaker to Triem and Chicago Steel for processing. The complaint asserts that "if said steel was deficient or defective or put in an unreasonably dangerous condition in any of the respects alleged (by SIMCO), said defects, deficiencies or unreasonably dangerous condition were caused by acts of (Triem and Chicago Steel) in processing said steel."

The impleading of Chicago Steel has precipitated the pending motion to dismiss.¹ Chicago Steel seeks to dismiss the third-party complaint against it on two primary grounds: (1) that Whittaker, being a non-resident of Iowa, is ineligible to use the Iowa long-arm statute to implead Chicago Steel, and (2) that Chicago Steel lacks the minimum contacts with Iowa necessary to satisfy the Due Process Clause. The Court will address the constitutional argument first.

I.

Chicago Steel premises its minimum contacts argument on the assertion that the Court cannot look beyond its contacts with Whittaker to find an Iowa nexus. The Court rejects this contention, and deems that the proper inquiry must consider Chicago Steel's Iowa contacts in terms of the pending cause of action, i. e., Chicago Steel's contacts with SIMCO, as well as with Whittaker. Indeed, Whittaker has impleaded Chicago Steel, asserting that if found liable to SIMCO on the main cause of action, Chicago Steel is liable to it. For purposes of this motion, a full picture of Chicago Steel's involvement (both as to SIMCO and Whittaker) is justified.

As explained in the filed affidavit of K. Rajkumar, general manager of Chicago Steel, Whittaker's Illinois plant sold certain coils of steel to SIMCO, and delivered them by truck to Chicago Steel for processing. Chicago Steel had no contractual relationship with Whittaker, "all arrangements with respect (to the steel) having been made between Chicago Steel and Simco." Once it had received the steel, "Chicago Steel was unable to perform all that was required of it pursuant to Simco's purchase orders," and thus arranged for Feralloy, its next door neighbor, to complete the job. This being done, Feralloy shipped the steel to SIMCO. Rajkumar Affidavit, filed as Exhibit A to Chicago Steel's Motion to Dismiss.

From this factual picture, it is apparent that Chicago Steel, at least to some extent, "entered into a transaction having an impact on the commerce of Iowa and could reasonably have anticipated that its acts would have consequences in Iowa." Cf. Order of May 8, 1975, overruling Whittaker's Motion to Dismiss. It is true, as asserted by Chicago Steel, that its overall business contacts with Iowa are much less significant than Whittaker's. In terms of the pending cause of action, however, Chicago Steel did more than simply accommodate an in-state steel supplier. As Mr. Rajkumar noted, Chicago Steel had direct dealings with SIMCO regarding the steel's processing. While the degree of Chicago Steel's involvement as far as the actual processing work is concerned may be slight, the company's degree of participation is a matter going to the merits of the lawsuit, rather than the motion to dismiss.

The Court is confident that had SIMCO chosen to sue Chicago Steel directly as a defendant, it could have done so pursuant to § 617.3. This being true, no substantial problems of fairness or an inconvenient forum are raised by Whittaker's decision to implead Chicago Steel as a third-party defendant. Given Chicago Steel's contacts with SIMCO and participation in the processing of the product which lies at the heart of this lawsuit, the Court concludes that the legal authorities cited in its May 8, 1975 Order are pertinent to the minimum contacts issue here, and that the same result must follow. Chicago Steel has sufficient minimum contacts with SIMCO and Iowa to be impleaded by Whittaker.

II.

Chicago Steel further urges that even if the requisite minimum contacts exist, service of process cannot be effectuated because Whittaker is not a "resident" of Iowa.

Section 617.3 of the Iowa Code reads, in part as follows:

If a foreign corporation makes

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