Talbot Tractor Co., Inc. v. Hinomoto Tractor Sales, USA, KANEMATSU-GOSHO

• Decision Date: 18 April 1983
• Docket Number: KANEMATSU-GOSHO,No. 82-3389,82-3389
• Citation: 703 F.2d 143
• Parties: TALBOT TRACTOR COMPANY, INC., Plaintiff, v. HINOMOTO TRACTOR SALES, USA and Southern Tractor Corporation, Defendants-Third- Party-Plaintiffs-Appellants, v., (U.S.A.) Inc., Third-Party-Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 143

703 F.2d 143

TALBOT TRACTOR COMPANY, INC., Plaintiff, v. HINOMOTO TRACTOR SALES, USA and Southern Tractor

Corporation, Defendants-Third- Party-Plaintiffs-Appellants, v. KANEMATSU-GOSHO, (U.S.A.) Inc., Third-Party-Defendant-Appellee.

No. 82-3389.

United States Court of Appeals Fifth Circuit.

April 18, 1983.

Jerry Saporito, Albert C. Miranda, Metairie, La., for Hinomoto Tractor Sales USA.

Hayes, Durio & Richard, Steven G. Durio, Lafayette, La., for Southern Tractor Corp.

Franklin, Moore & Walsh, R. Michael Caldwell, Baton Rouge, La., Richard K. Jeydel, New York City, for Kanematsu-Gosho, Ltd.

Appeals from the United States District Court for the Middle District of Louisiana.

Before TUTTLE ^*, POLITZ and GARWOOD, Circuit Judges.

TUTTLE, Circuit Judge:

This is an appeal from the dismissal by the trial court of a third-party action against Kanematsu-Gosho, (U.S.A.) Inc., for want of personal jurisdiction in the State of Louisiana.

I. STATEMENT OF FACTS AND PROCEEDINGS BELOW

The parties in this action are as follows:

1. Toyosha Company of Japan--a tractor manufacturer;

2. Kanematsu-Gosho, (U.S.A.) Inc., ("K-G")--an importer of products that receives Toyosha tractors at West Coast ports and delivers them to Hinomoto in Houston for national distribution;

3. Hinomoto USA, Inc.--national distributor of Toyosha tractors;

4. Southern Tractor and Talbot Tractor--competing tractor distributors in Louisiana.

Talbot Tractor filed an action against Southern Tractor and Hinomoto alleging that Hinomoto had breached its non-exclusive Louisiana dealership contract with Talbot and that Southern had wrongfully induced the breach. Hinomoto and Southern then filed third-party demands against Toyosha and K-G alleging that if there was a failure to meet their contractual obligations, Toyosha and K-G had caused the damages alleged by Talbot. K-G moved to dismiss the third-party complaint for lack of personal jurisdiction.

The facts are largely undisputed. In 1978, Toyosha and Hinomoto entered into a contract granting Hinomoto the right to distribute Toyosha products in the United States and Canada. As a corollary to this agreement, Hinomoto and K-G agreed that K-G would serve as importer of Toyosha products for Hinomoto and would deliver them anywhere in the United States specified by Hinomoto. Hinomoto and K-G also agreed that K-G would aid in the processing of warranty claims by consumers of Toyosha products.

It is undisputed that K-G does not conduct or solicit any business activity in Louisiana. Its contract with Hinomoto was not executed in Louisiana and called for no performance by K-G in that state (though, presumably, if Hinomoto requested the goods to be delivered to Louisiana, K-G would have to comply). K-G takes title to the goods at the West Coast and its relationship with them ceases in Houston. The record is not clear as to whether K-G delivers Toyosha tractors to Hinomoto in any place other than Houston. K-G had no role to play in picking dealers.

II. STATEMENT OF ISSUES

1. Does the district court have personal jurisdiction over K-G?

a) doing business?

b) minimum contracts?

c) fair and reasonable?

2. (Secondary Issue) If the Due Process Clause would not block the exercise of jurisdiction, does Sec. 3201(d) of the Louisiana Longarm Statute provide personal jurisdiction over an out-of-state contract breacher simply because a victim of the breach resides in-state?

Hinomoto's claim of personal jurisdiction is based on the Louisiana Longarm Statute, which provides:

A Court may exercise personal jurisdiction over a non-resident, who acts directly or by an agent, as to a cause of action arising from the non-resident's

(a) doing business in the state;

* * *

* * *

(d) causing injury or damage in this state by an offense or quasi-offense committed through an act or omission outside of the state if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered in this state.

La.Rev.Stat.Ann. Sec. 13:3201(d).

This Court has held: "This statute was intended to permit the full exercise of in personam jurisdiction allowable under due process standards in cases when the suit 'arises from' the non-resident's contacts with the forum." Standard Fittings Co. v. Sapag S/A, 625 F.2d 630, 638-40 (5th Cir.1980), cert. denied, 451 U.S. 910, 101 S.Ct. 1981, 68 L.Ed.2d 299, (1981). "Business activity which will satisfy the requirements of due process will thus necessarily satisfy the 'transacting business' requirement of the [Louisiana] Longarm Statute." Austin v. North American Forest, 656 F.2d 1076, 1089 (5th Cir.1981).

III. THE DISTRICT COURT OPINION

The district court relied on Worldwide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980) and Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir.1974) to reject the notion that K-G had sufficient minimum contacts with the state to be haled into court. The court found that K-G had not purposefully availed itself of the benefits of conducting business in the state, and its contacts with Louisiana were not "reasonably foreseeable." The court held that the mere knowledge by K-G that Hinomoto had a national distributorship was insufficient since K-G never shipped any goods to Louisiana or performed any warranty work in the state.

Without citing any cases, the district court also stated that courts were less willing to assert jurisdiction over a party alleged to have breached a contractual duty than over a party "standing in the shoes of" the manufacturer of an injury-causing product.

Finally, the court (again without citing cases) asserted that even if K-G was subject to jurisdiction under the Due Process analysis, Sec. 3201(d) only addresses tortious misconduct and that no portion of the Statute provides for jurisdiction over a "breaching" party with only attenuated contacts in the state.

IV. DISCUSSION OF ISSUES

The appellant bases its argument on the notion that K-G should reasonably have foreseen that some of the products handled by it would be sold or used in Louisiana. Appellant also urges that K-G "derives revenue" from the state since each tractor sold in Louisiana means an additional tractor shipped by K-G.

The appellant attempts to distinguish Volkswagen, the case relied on by the district court in which the Supreme Court refused to allow an Oklahoma state court to exercise jurisdiction over the sellers of an automobile in a products liability suit brought by persons who had purchased the automobile in New York as New York residents. The Court held that the mere fact that the accident occurred in Oklahoma was not enough and rejected the plaintiffs' contention that the "reasonably foreseeable" doctrine should subject the seller to suit in every state.

The appellant urges that the contacts in the present case were not "simply fortuitous" (as the Supreme Court labeled those in Volkswagen ) and cites Austin v. North America Forest Products, 656 F.2d 1076 (5th Cir.1981) where this Court stressed that jurisdiction may be exercised where contacts with the state are "purposeful and deliberate." The appellant urges that the present case bears no factual semblance to Volkswagen since K-G and Hinomoto were parties to an agreement specifying that Hinomoto was a distributor for an area including Louisiana.

Hinomoto also argues that notions of fairness and judicial economy compel the assertion of jurisdiction over K-G. Hinomoto notes that it was itself haled into court in Louisiana and urges that to require it to file a separate suit for indemnity in Texas would not create any inconvenience to K-G and would waste judicial resources.

The appellee K-G relies heavily on Volkswagen. As for the foreseeability of any product transported by K-G entering Louisiana, K-G quotes:

The foreseeability that is critical to due process analysis is not the mere likelihood that the product will find its way into the forum State. Rather, it is that the defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there.

Volkswagen, 444 U.S. at 297, 100 S.Ct. at 567. K-G urges that the foreseeability doctrine is especially inapplicable to it given that it is not a manufacturer and that Hinomoto's claim rests on a breach of contract rather than a tort. K-G stresses that the manufacturer, Toyosha, had a direct distribution agreement with Hinomoto and that K-G acted for Hinomoto to transfer the goods to Houston.

The appellee stresses that its revenues and its activities with regard to Toyosha products were not directly connected...