Adamson Industries, Inc. v. FAPS, Inc.
Filing
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Judge Richard G. Stearns: ORDER entered granting 5 Motion to Dismiss (Zierk, Marsha)
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
CIVIL ACTION NO. 14-13612-RGS
ADAMSON INDUSTRIES, INC.
v.
FAPS, INC.
MEMORANDUM AND ORDER
ON DEFENDANT’S MOTION TO DISMISS
December 15, 2014
STEARNS, J.
Adamson Industries, Inc. (Adamson), bought a 1980 Hooper Rolls
Royce (Rolls) “from a private dealer located in Germany using RM Auctions
as an intermediary to negotiate the purchase price and handle the
transportation logistics.” Compl. ¶ 4. “Adamson and RM Auctions agreed
that RM Auctions would arrange for the [Rolls] to be shipped in a container
to Port Newark, New Jersey, and cleared through United States Customs.”
Id. ¶ 5.
Defendant FAPS, Inc., is a New Jersey corporation, with its
principal (and sole) place of business in Port Newark, New Jersey. See
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Vizzone Aff. ¶¶ 4-5. FAPS leases a marine terminal from the Port Authority
of New Jersey from which it operates an automobile import and export
business. Id. ¶ 5. Adamson hired FAPS (then an Adamson customer) to
take delivery of the Rolls after it cleared U.S. Customs and to store it at the
New Jersey terminal “until such time that the parties could coordinate the
delivery of the [Rolls] to Haverhill, Massachusetts.”1 Compl. ¶ 6.
During the ocean crossing, the Rolls sustained body damage. RM
Auctions hired FAPS to make the repairs and do some additional
refinishing work. Id. ¶ 8. On July 14, 2011, RM Auctions paid FAPS
$23,975 for the work. In October of 2012, while in storage at Port Newark
terminal, the Rolls was heavily damaged in the wake of Hurricane Sandy.
Steven Contarino, Treasurer, Secretary, and a Director of Adamson,
obtained an estimate of $117,489.36 from Palma Auto Repair in Audubon,
New Jersey, as the cost of restoring the Rolls to working order. (A copy of
the estimate dated January 7, 2014 is attached to the Complaint). Adamson
demanded that FAPS pay for the damage to the Rolls, and alleges that, to
date, “[FAPS] has failed, refused, or neglected to make payment.” Id. ¶ 11.
Between September of 2008 and October of 2009, FAPS “purchased
motor vehicle parts and accessories from Adamson.” Contarino Aff. ¶ 4.
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1
Adamson filed this Complaint against FAPS on September 11, 2014,
asserting claims for breach of contract (as an alleged third-party beneficiary
of the agreement between FAPS and RM Auction) and common-law
negligence. FAPS moves to dismiss for lack of personal jurisdiction,
improper venue and (in the alternative), forum non conveniens. Adamson
opposes dismissal on jurisdictional grounds citing the doctrine giving
preference to a plaintiff’s choice of forum and FAPS’ “undisputed admission
that it does business in Massachusetts.” In support of its claim that FAPS
does business in Massachusetts, Adamson relies on a letter written by FAPS
director Earl Vizzone to FAPS’ insurer requesting coverage for the
Hurricane Sandy damage to the Rolls.
Adamson is an upfitter for emergency vehicles and is used by
FAPS for parts and technical consultation when FAPS provides
quotations for vehicles that are being fitted for military, fire or
police use for the export markets we serve. Over the past 7
years [Adamson] has assisted FAPS in no less than 15 requests
for quotes for these services. We were successful in 2 bids for
Ford Motor Company for Export Vehicle’s and Adamson
provided the parts and installation consultations. In addition
they have provided FAPS the parts for our own security
vehicles, which include sirens, light bars, radios, and other
police equipment that we have used over the years.
Opp’n Mem. at 5. Alternatively, Adamson claims that “FAPS has caused
[Adamson] a tortious injury in the Commonwealth of Massachusetts by
failing to exercise due care in storing the [Rolls] and refusing to pay to
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repair damage sustained while the [Rolls] was in FAPS’ custody in New
Jersey.” Id.
DISCUSSION
The burden is on Adamson to show a prima facie case that this court
has personal jurisdiction over FAPS. U.S.S. Yachts, Inc. v. Ocean Yachts,
Inc., 894 F.2d 9, 11 (1st Cir. 1990). “The proper exercise of specific in
personam jurisdiction hinges on satisfaction of two requirements: first,
that the forum in which the federal district court sits has a long-arm statute
that purports to grant jurisdiction over the defendant; and second, that the
exercise of jurisdiction pursuant to that statute comports with the strictures
of the [Due Process Clause of the] Constitution.” Pritzker v. Yari, 42 F.3d
53, 60 (1st Cir. 1994); see also Burger King Corp v. Rudzewicz, 471 U.S.
462, 471-472 (1985) (due process constraints); Int’l Shoe Co. v.
Washington, 326 U.S. 310, 320 (1945) (“fair play and substantial justice”).
Adamson relies on sections (a) and (d) of the Massachusetts LongArm Statute, Mass. Gen. Laws ch. 223A, as the jurisdictional hooks over
FAPS.
Chapter 223A states that “[a] court may exercise personal
jurisdiction over a person, who acts directly or by agent, as to a cause of
action in law or equity arising from the person’s (a) transacting business in
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this commonwealth; . . . [or] (d) causing tortious injury in this
commonwealth by an act or omission outside this commonwealth 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 commonwealth.” See also Adelson v. Hananel,
510 F.3d 43, 49 (1st Cir. 2007) (noting that the “Massachusetts long-arm
statute is coextensive with the limits allowed by the Constitution.”). In
support of the section (a) prong, Adamson recites its furnishing of parts
and quotations to FAPS. It must be remembered that this lawsuit arises out
of property damage to the Rolls while in storage in New Jersey, and not
from FAPS’ transaction of business in Massachusetts. The alleged facts set
out in Adamson’s Complaint describe damage to the Rolls “after the Vehicle
cleared U.S. Customs [and] FAPS pick[ed] up the Vehicle and store[d] the
Vehicle at its place of business [in Port Newark, New Jersey] until such
time that the parties could coordinate the delivery of the Vehicle to
Haverhill, Massachusetts.” Compl. ¶ 6. There are no allegations that FAPS
sold goods or provided services in Massachusetts (or contracted to
personally deliver the Rolls to Adamson in Massachusetts).
Turning to the due process analysis, the constitutional focus “is not
the [parties’] relationship itself, but the content of the parties’ interactions
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that creates constitutionally significant contacts. Thus, ‘[t]he relatedness
requirement is not met merely because a plaintiff’s cause of action arose out
of the general relationship between the parties; rather, the action must
directly arise out of the specific contacts between the defendant and the
forum state.’” Phillips Exeter Acad. v. Howard Phillips Fund, 196 F.3d
284, 290 (1st Cir. 1999), quoting Sawtelle v. Farrell, 70 F.3d 1381, 1389 (1st
Cir. 1995).
To satisfy the “minimum contacts” requirement, the
relationship “must arise out contacts that the ‘defendant himself’ creates
with the forum State. . . . [T]he plaintiff cannot be the only link between the
defendant and the forum. Rather, it is the defendant’s conduct that must
form the necessary connection with the forum State that is the basis for its
jurisdiction over him.”
Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014)
(emphasis in original).
Adamson contends only that FAPS has purchased goods from
Adamson, a Massachusetts business, and that FAPS has a website that
advertises
its
auto
import/export
facility
that
is
accessible
in
Massachusetts. Adamson does not allege that the FAPS website served as
the basis of the parties’ interactions or as the vehicle through which FAPS
agreed to take delivery of the Rolls. See Telco Commc’ns, Inc. v. N.J. State
Firemen’s Mut. Benevolent Ass’n., 41 Mass. App. Ct. 225, 232-233 (1996)
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(noting reluctance to extend the Long Arm Statute to an out-of-state
purchaser of Massachusetts goods and services for fear of driving business
out of the state); New Hampshire Ins. Guar. Ass’n v. Markem Corp., 424
Mass. 344, 350 (1997) (same, purchaser of insurance from Massachusetts
company). In Cossaboon v. Maine Med. Ctr., 6oo F.3d 25, 35-36 (1st Cir.
2010), the First Circuit also addressed the question of whether an
interactive website, located outside the forum state and directed at the
residents of every state, may by itself fulfill the requirement of purposeful
availment. Id. at 35-36. The Court held that something “more” is required
to support the exercise of personal jurisdiction based on website activity, as
the proper focus is “on the extent to which the defendant has actually and
purposefully conducted commercial or other transactions with forum state
residents through its website.” Id. at 35. The Court found that personal
jurisdiction was lacking over the defendant because its website was
available to anyone with Internet access, did not target forum state
residents in particular, and any advertising on it was no more likely to
solicit business in the forum state than anywhere else. Id.
The same
analysis applies here.2
With regard to the second part (d) prong, it is evident that any
tortious injury to the Rolls occurred in New Jersey and not in the
Commonwealth of Massachusetts as the Long-Arm Statute requires.
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2
FAPS also challenges Adamson’s choice of venue. Pursuant to the
federal venue statute, 28 U.S.C. 1391,
[a] civil action may be brought in-(1) a judicial district in which any defendant resides, if all
defendants are residents of the State in which the district is
located;
(2) a judicial district in which a substantial part of the events or
omissions giving rise to the claim occurred, or a substantial part
of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be
brought as provided in this section, any judicial district in
which any defendant is subject to the court's personal
jurisdiction with respect to such action.
FAPS is a corporate resident of New Jersey. The events that give rise to this
action - damage to Adamson’s Rolls - occurred in New Jersey. New Jersey
is the obvious and proper venue for this action.
ORDER
For the foregoing reasons, FAPS’ motion to dismiss for lack of
personal jurisdiction and improper venue is ALLOWED. The Clerk will
enter a dismissal of the Complaint without prejudice, to be refiled, if
Adamson desires, in the state or federal court in New Jersey. The Clerk will
close the Massachusetts-filed case.
SO ORDERED.
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s/Richard G. Stearns___________
UNITED STATES DISTRICT JUDGE
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