Strick Corp. v. AJF Warehouse Distrib., Inc.

• Decision Date: 25 February 1982
• Docket Number: Civ. A. No. 81-2486.
• Citation: 532 F. Supp. 951
• Parties: STRICK CORPORATION v. A. J. F. WAREHOUSE DISTRIBUTORS, INC.
• Court: U.S. District Court — Eastern District of Pennsylvania

532 F. Supp. 951

STRICK CORPORATION v. A. J. F. WAREHOUSE DISTRIBUTORS, INC.

Civ. A. No. 81-2486.

United States District Court, E. D. Pennsylvania.

February 25, 1982.

COPYRIGHT MATERIAL OMITTED

Robert A. Swift, Philadelphia, Pa., for plaintiff.

Daniel Segal, Philadelphia, Pa., for defendant.

OPINION

LOUIS H. POLLAK, District Judge.

This is a diversity action in which plaintiff, a Pennsylvania corporation, seeks to recover for an alleged breach of a contract for the sale of trailer-trucks. The defendant, A.J.F. Warehouse Distributors, Inc., has moved to dismiss for lack of personal jurisdiction or, in the alternative, for improper venue.

Service of process on A.J.F. was made pursuant to Federal Rules of Civil Procedure 4(e) which provides that a party may be served in the manner prescribed by the state in which the district court sits. Thus, A.J.F.'s motion to dismiss for lack of in personam jurisdiction must be tested against Pennsylvania's long-arm statute, 42 Pa.C.S.A. § 5301 et seq. See Spelling-Goldberg Prods. v. Bodek & Rhodes, 452 F.Supp. 452, 453 (E.D.Pa.1978). Cf. Selman v. Harvard Medical School, 494 F.Supp. 603, 610 (S.D.N.Y.), aff'd, 636 F.2d 1204 (2d Cir. 1980) (applying New York statute).

Once the court's in personam jurisdiction is challenged by the defendant, the plaintiff has the ultimate burden of proving that the non-resident defendant's activities in the forum state are sufficient to bring it within the reach of the court's jurisdiction. See Boysen v. Treadway Inn of Lake Harmony, Inc., 53 F.R.D. 96, 98 (E.D.Pa.1971), aff'd, 463 F.2d 247 (3d Cir. 1972). See also McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189, 56 S.Ct. 780, 785, 80 L.Ed. 1135 (1936); Gibbs v. Buck, 307 U.S. 66, 59 S.Ct. 725, 83 L.Ed. 1111 (1939). In general, a plaintiff must shoulder the burden of alleging facts sufficient to support a finding of jurisdiction and of supporting such allegations with appropriate affidavits or documents if jurisdiction is challenged. See Local 336, American Federation of Musicians v. Bonatz, 475 F.2d 433, 437 (3d Cir. 1973); Boysen v. Treadway Inn, supra, at 98; Selman v. Harvard Medical School, supra, at 610.

Following defendant's initial motion to dismiss, I ordered defendant to respond to plaintiff's interrogatories in order to provide Strick with the opportunity to prove its jurisdictional allegations. Since then the parties have submitted affidavits and discovery materials as well as extensively briefing the issues raised by A.J.F.'s motion. From a review of A.J.F.'s answers to plaintiff's interrogatories, the documentary exhibits submitted by both sides, and the affidavits of Larry A. Hoffman, Vice President and Controller of A.J.F., and Joseph Puchino, Strick's Vice President of Sales, the following facts are apparent.

Plaintiff Strick is a Pennsylvania corporation with its principal place of business in Fairless Hills, Pennsylvania. Its chief enterprise is the manufacture and sale of transportation equipment, including trailer trucks. Defendant A.J.F. is an Illinois corporation with its principal place of business in St. Louis, Missouri. It is principally engaged in leasing transportation equipment to various trucking firms and it also provides warehouse facilities and other shipping services. As part of its truck-leasing business, AJF maintains a number of offices in various states. While A.J.F. does not now maintain any agents or offices in Pennsylvania and is not registered to do business here, it did operate an office in Pennsylvania from 1972 to 1976. The company also continues to have some formal contacts with the Commonwealth: it currently leases thirty-three (33) trailers to U.P.S. offices located in Pennsylvania; records show that it has made over one hundred telephone calls into the state during 1981; and, it is a customer of J. & S. Distribution Specialists, a Philadelphia hauling company that takes shipments initially consolidated by A.J.F.'s Shippers Agent Division, and delivers them to their final destination.

In a series of transactions from 1973 to 1980, A.J.F. has purchased a large number of trailer trucks from Strick. As part of this continuing business relationship, in late 1978 or early 1979, A.J.F.'s Vice President and Controller, Larry Hoffman, visited Strick's Danville, Pennsylvania, plant on an information-gathering tour to inspect trailer trucks manufactured by Strick. During this visit he was accompanied by Strick's Vice President of Sales, Joseph Puchino, and Al Bauer, a Strick sales representative based in Dallas, Texas. Again as part of this continuing relationship, the parties entered two sales agreements in 1979 and 1980—the alleged breach of which forms the basis of this litigation.

Both the February 23, 1979 and December 12, 1980 agreements—which used Strick sales-order form contracts—were signed by Hoffman in St. Louis and were apparently countersigned by Bauer either in St. Louis or Dallas. The first contract recited that delivery would be made in Memphis, Tennessee and the second in Kansas City, Missouri. Both contracts contain hand-written specifications for the type and size of tires, and for various other fixtures such as lights and vents. The list of conditions set out on the form contract makes no reference to Pennsylvania; however, paragraph 10 states: "This agreement and the relationship of the parties shall be governed by and interpreted in accordance with the laws of the state in which the office of Strick Corporation responsible for its performance is located." The contract does not name such an office, nor does it indicate where the trailer trucks will be manufactured.

The two purchase orders signed by Hoffman were accepted by Puchino at Strick's headquarters in Pennsylvania. The invoices for these sales direct A.J.F. to make payment to Strick's office in Chicago. Although it is not clear from the contracts, according to Puchino's affidavit, major assembly of the trailer trucks purchased by A.J.F. was completed in New York, and the installation of the specified tires took place in Pennsylvania.

Despite this wealth of information which the parties have collected with commendable diligence, no obvious conclusions spring from these facts. Some details of the contractual relationship suggest that A.J.F.'s connection with Pennsylvania forms an adequate basis for an exercise of jurisdiction over it, while others imply a different result. Indeed, the jurisdictional significance of the facts appears to be in equipoise. Nevertheless, for the reasons that follow, I am persuaded that A.J.F. has sufficient minimum contacts with the Commonwealth so that requiring it to defend itself here would not offend due process.

I. Personal Jurisdiction

Generally speaking, a trial court seeking to determine whether it may constitutionally exercise in personam jurisdiction over a non-resident defendant can derive only limited help from previously decided cases, since the constitutional inquiry is so often shaped by particular facts that the conclusions drawn from one setting are rarely transferable to another. This seems especially true with respect to the mixed issues of law-and-fact which is the central question in this case—whether jurisdiction may be asserted over a non-resident corporation that has purchased goods from a resident plaintiff. But that central question is by no means unique to this case; to the contrary, as Justice White recently observed in dissenting from a denial of certiorari, it is a question which has "deeply divided the federal and State courts" and is one of "considerable importance to contractual dealings between purchasers and sellers located in different States." Lakeside Bridge & Steel Co. v. Mountain State Construction Co., 445 U.S. 907, 100 S.Ct. 1087, 63 L.Ed.2d 325 (1980).

The Pennsylvania long-arm statute contemplates that a court may exercise in personam jurisdiction on essentially two bases; this statutory framework tracks the two jurisdictional theories defined by the Court in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945). A finding of jurisdiction under the first—section 5301—turns on whether a particular defendant can be said to be "present" in the state either because it is a resident, has consented to be sued here, or, in the case of a corporation or partnership, maintains "a continuous and systematic part of its general business" in Pennsylvania. 42 Pa.C.S.A. § 5301(a)(2)(iii). Section 5301(b) further provides that when jurisdiction is based on that section, causes of action unrelated to defendant's forum activities may be asserted against it. This statutory provision simply follows the Supreme Court's description in International Shoe of the jurisdictional significance of a corporation's presence in the forum:

The terms "present" or "presence" are used merely to symbolize those activities of the corporation's agent within the state which courts will deem to be sufficient to satisfy the demands of due process.... "Presence" in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on.... In addition there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.

Id. at 316-18, 66 S.Ct. at 158-159 (citations omitted). See also Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 446-48, 72 S.Ct. 413, 418-419, 96 L.Ed. 485 (1952) (non-resident defendant's activities in forum sufficiently substantial and continuous to permit exercise of jurisdiction to adjudicate a cause of action not arising from those activities); Bork v. Mills, 458 Pa. 228, 232, 329 A.2d 247, 249 (1974). Thus, even though a cause of action arises from activities of a...