Howard Industries, Inc. v. Ferguson Electric Construction Co., Inc.

Filing 14

ORDER granting Ferguson Electric Construction Co., Inc.'s 2 Motion to Dismiss for Lack of Jurisdiction. Plaintiff's claims against Ferguson are dismissed without prejudice. Signed by District Judge Keith Starrett on July 15, 2015 (dsl)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF MISSISSIPPI
EASTERN DIVISION
HOWARD INDUSTRIES, INC.
V.

PLAINTIFF
CAUSE NO. 2:15CV40-KS-MTP

FERGUSON ELECTRIC CONSTRUCTION CO., INC.

DEFENDANT

MEMORANDUM OPINION AND ORDER
For the reasons below, the Court grants Defendant’s Motion to Dismiss [ECF
No. 2].
I. BACKGROUND
Defendant Ferguson Electric Construction Co., Inc. (“Ferguson”), a New York
corporation, “sought to purchase electric transformers for a construction project in
Buffalo, New York.” Angelo Veanes Aff., ECF No. 2-2 Ex. B. “To that end, Ferguson
contacted HC Zang Agency, Inc., (“HC Zang”), a New York corporation.” Id. HC
Zang conducted negotiations with Plaintiff Howard Industries, Inc., (“Howard”), a
Mississippi corporation. See Id. Subsequent to those negotiations, Ferguson entered
into a contract for sale to purchase electric transformers from Howard. See Invoice,
ECF No. 1-2 Ex. A; Compl., ECF No. 1-2. Howard then delivered the transformers
to Ferguson in New York. See ECF No. 1-2. The remaining balance owed by
Ferguson is $72,928.00. See John Reid Aff., ECF No. 1-2 Ex. A. Howard demanded
payment from Ferguson, but Ferguson refused to pay. See Compl., ECF No. 1-2.
Howard filed this suit in the County Court of the First Judicial District of
Jones County, Mississippi. Id. Howard seeks the remaining balance owed on the
invoice, plus interest and fees. Id. On April 2, 2015, Ferguson removed the case to
this Court pursuant to 28 U.S.C. §§ 1332 and 1446. See Notice of Removal, ECF No.

1. Ferguson then filed its Motion to Dismiss pursuant to Rule 12(b)(2). See Mot. to
Dismiss, ECF No. 2.
II. DISCUSSION
“A federal court sitting in diversity may exercise personal jurisdiction only to
the extent permitted [in] a state court under state law.” Paz v. Brush Engineered

Materials, Inc., 445 F.3d 809, 812 (5th Cir. 2006) (citations omitted). “The court
may only exercise jurisdiction if: (1) the state’s long-arm statute applies, as
interpreted by the state’s courts, and (2) if due process is satisfied under the 14th
Amendment to the federal Constitution.” Id. (citing Alfred v. Moore & Peterson, 117
F.3d 278 (5th Cir. 1997)). “When a nonresident defendant moves to dismiss for lack
of personal jurisdiction, the plaintiff bears the burden of establishing the district
court’s jurisdiction over the nonresident . . . . A plaintiff satisfies this burden by
presenting a prima facie case for personal jurisdiction.” Unified Brands, Inc. v.

Teders, 866 F. Supp. 2d 572, 577 (S.D. Miss. 2012) (citations omitted). “The district
court is not obligated to consult only the assertions in the plaintiff’s complaint . . . .
Rather, the district court may consider the contents of the record at the time of the
motion, including affidavits . . . .” Paz, 445 F.3d at 812 (citations omitted). But
“uncontroverted allegations in the plaintiff’s complaint must be accepted as true,
and all disputed facts must be construed in the plaintiff’s favor.” Blacklidge

Emulsions, Inc. v. Blankenship, No. 1:13-CV-293, 2013 WL 6492876, at *1 (S.D.
Miss. Dec. 10, 2013) (citations omitted).
A. Long-Arm Statute

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“Mississippi’s long-arm statute provides the courts shall have jurisdiction
over a nonresident who: (1) makes a contract with a resident of this state to be
performed in whole or in part by any party in this state, (2) commits a tort in whole
or in part in this state against a resident or nonresident, or (3) does any business or
performs any character of work or service in this state.” Smith v. Antler Insanity,

LLC, 58 F. Supp. 3d 716, 720 (S.D. Miss. 2014) (citing Miss. Code Ann. § 13-3-57
(1991)) (punctuation omitted). Here, Ferguson admits “it was subject to the
“contract” prong of the [Mississippi] Long-Arm Statute because the contract at issue
was to be performed in part by a Mississippi resident in Mississippi.” Def.’s Reply,
ECF No. 13 (citing Mot. to Dismiss, ECF No. 2).
B. Due Process
Next, the Court considers
whether the exercise of such jurisdiction under state law would
comport with the dictates of the Fourteenth Amendment Due Process
Clause. This Clause permits the exercise of personal jurisdiction over a
nonresident defendant when (1) that defendant has purposefully
availed himself of the benefits and protections of the forum state by
establishing minimum contacts with the forum state; and (2) the
exercise of jurisdiction over that defendant does not offend traditional
notions of fair play and substantial justice.
Minimum contacts, for the purpose of satisfying due process, can be
established either through contacts sufficient to assert specific
jurisdiction, or contacts sufficient to assert general jurisdiction.

Unified, 868 F. Supp. 2d at 579 (citations omitted). Plaintiff argues specific
jurisdiction is proper here. To determine whether specific jurisdiction exists, the
Court applies a three-step analysis:
(1) whether the defendant has minimum contacts with the forum state,
i.e., whether it purposely directed its activities toward the forum state
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or purposefully availed itself of the privileges of conducting activities
there; (2) whether the plaintiff’s cause of action arises out of or results
from the defendant’s forum-related contacts; and (3) whether the
exercise of personal jurisdiction is fair and reasonable.

Blacklidge, 2013 WL 6492876 at *3 (quoting McFadin v. Gerber, 587 F.3d 753, 759
(5th Cir. 2009)).
Howard argues that Ferguson “purposefully availed itself of the duties and
protections of Mississippi law” by entering into a contract with a Mississippi
corporation. Pl.’s Mem. in Resp. to Def.’s Mot. to Dismiss, ECF No. 10. The Court
finds Howard’s argument unpersuasive. Ferguson is organized under the laws of
New York, located in New York, is not qualified or licensed to do business in
Mississippi, owns no property in Mississippi, and none of its officers, directors, or
employees reside in Mississippi. See Angelo Veanes Aff., ECF No. 2-2 Ex. B. “The
only connection [Ferguson] ha[s] with the state of Mississippi is that [it] entered
into a contract with a resident of this state and communicated with [it] regarding
the terms and performance of that contract.” Estate of Ainsworth v. Boutwell, 776
F. Supp. 2d 227, 231 (S.D. Miss. 2011). “It is clearly established that merely
contracting with a resident of the forum state does not establish minimum contacts
. . . . [Moreover,] communications relating to the performance of a contract
themselves are insufficient to establish minimum contacts.” McFadin v. Gerber, 587
F.3d 753, 760 (5th Cir. 2009) (citations omitted). Here, Ferguson executed a
purchase order and Howard accepted it. See Jeff Moss Aff., ECF No. 9-1 Ex. A.
Howard then delivered the transformers to Ferguson in New York. See ECF No. 2-2
Ex. B. Howard did not present any evidence or allege that Ferguson had additional
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contact with Mississippi. Accordingly, Ferguson’s communication with Howard is
insufficient to support a finding of specific jurisdiction.
Howard additionally argues Ferguson is subject to specific jurisdiction in
Mississippi because Ferguson “hired agent HC Zang to find transformers [for
Ferguson] to purchase” and “HC Zang, under its employment by Ferguson and on
behalf of Ferguson, sent solicitations . . .” to Mississippi. ECF No. 10. Howard cites

Oxford Mall Co. v. K & B Mississippi Corp., 737 F. Supp. 962, 964 (S.D. Miss. 1990)
to support this argument, but Howard incorrectly quoted and applied Oxford to this
case. Oxford held that “[g]eneral partners as well as partnership employees or
agents are agents for all other general partners.” Id. Here, the Court is not dealing
with general partners or partnerships, but instead corporations. Thus, Oxford is
inapplicable.
Although “actions of an agent may establish minimum contacts over a
principal[,]” Howard failed to provide sufficient evidence and/or factual allegations
that Ferguson purposely availed itself to Mississippi through the actions of HC
Zang. McFadin, 587 F.3d at 761 (citations omitted). Instead, Howard merely
provided conclusory statements that “Ferguson knowingly dispatched its agent HC
Zang to solicit business in Mississippi . . . .”1 ECF No. 10. However, Ferguson
provided evidence that its relationship with HC Zang was not for the solicitation of
business in Mississippi, but instead for the purpose of “purchas[ing] electric
transformers for a construction project in Buffalo, New York.” ECF No. 2-2 Ex. B. In
1

Panda Brandywine Corp. v. Potomac Elec. Power Co., 253 F.2d 865, 869 (5th Cir. 2001)
(finding the Court is not required to credit conclusory allegations, even if uncontroverted).

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other words, Ferguson hired HC Zang to find transformers to purchase, and HC
Zang unilaterally chose to purchase them from Howard.

Industrial & Crane Servs., Inc. v. Crane & Rig Servs., LLC, No. 1:14-CV-255,
2014 WL 6471474 (S.D. Miss. Nov. 18, 2014), had similar facts. There, Davis Motor
Crane Services, Inc. (“Davis”), a Texas corporation, hired Crane & Rig Services
(“Crane & Rig”), a Pennsylvania company, to perform repairs on a crane. Id. at *1.
Crane & Rig then entered into a subcontract with Industrial & Crane Services, Inc.
(“Industrial”), a Mississippi corporation, to perform the repairs on Davis’s crane. Id.
Crane & Rig transported Davis’s crane from Texas to Mississippi, where Industrial
performed the repairs. Id. After the repairs were completed, Crane & Rig
transported the crane back to Davis in Texas. Id. Davis “noted issues related to the
quality of work performed” and did not pay Crane & Rig, who subsequently did not
pay Industrial. Id. Industrial filed suit against both Crane & Rig and Davis in
Mississippi state court. Id. Davis removed the case to federal court and filed a
motion to dismiss for lack of personal jurisdiction. Id. at *1-*2. Industrial argued,
Davis Crane has sufficient minimum contacts with the State of
Mississippi because Davis Crane “chose” to have the [ ] [c]rane
repaired in Mississippi based on the price it was quoted by a
Mississippi company, and the work on the [ ] [c]rane was performed in
Mississippi.

Id. at *6. The court held that choosing a Mississippi company to repair the crane
was the unilateral activity of Crane & Rig, which was insufficient to confer “specific
personal jurisdiction over Davis Crane.” Id. (citations omitted). Even if Davis had

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made the decision, the contacts with Mississippi would have still been insufficient
to establish jurisdiction.2 Id.
Here, Ferguson hired HC Zang to find transformers for Ferguson to
purchase. HC Zang then unilaterally contacted Howard and “conducted all of the
negotiations regarding the transformers. Subsequent to those negotiations,
Ferguson executed a purchase order . . . and sent it to Howard, who delivered the
transformers to Ferguson in New York.” ECF No. 2-2 Ex. B.
No employee or representative of Ferguson ever entered Mississippi to
inspect the transformers or conduct any other business. Ferguson
never sent any product into Mississippi, nor did Ferguson take any
steps to purposefully avail itself of the benefits of doing business in
Mississippi. Ferguson performed all of its obligations under the
purchase order in New York.

Id. Because HC Zang’s unilateral activities3 and Ferguson’s communications
relating to the contract4 are insufficient to support specific jurisdiction, the Court
finds that it does not have specific jurisdiction in this case.
Finally, Howard argues “where a nonresident contracting party breaches a
contract, thereby causing damage through nonpayment of contractual amounts due
to a Mississippi company, such damage implicates state concerns, such that the due
process prong is met.” ECF No. 10. Howard like the plaintiffs in McFadin and
2

See McFadin, 587 F.3d at 760 (citations omitted) (holding “communications relating to the
performance of a contract themselves are insufficient to establish minimum contacts.”); See
Ainsworth, 776 F. Supp. 2d at 231-32 (finding that defendant lacked minimum contacts

sufficient to give rise to personal jurisdiction in the forum state where the defendant’s “only
connection . . . with the state . . . [was] that they had entered into a contract with the
resident of [the] state and communicated with him”).
3
See Ainsworth, 776 F. Supp. 2d at 230 (citations omitted) (finding “the defendant must not
be haled into a jurisdiction solely as a result of the unilateral activity of another party or
third persons.”)
4
See N. 2.

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Ainsworth, relies on Mississippi Interstate Express, Inc. v. Transpo, Inc., 681 F.2d
1003 (5th Cir. 1982). Transpo “addressed the context of interstate trucking, where
there was no clear local nexus with any particular jurisdiction.” McFadin, 587 F.3d
at 761 (citations omitted). “Therefore, the nonresident defendant’s telephone calls to
Mississippi—directing a Mississippi company to ship goods from one part of the
county

to

another,

using

trucks

housed

and

serviced

at

a

Mississippi

headquarters—were sufficient to establish Mississippi as the hub of the parties’
activities. Ainsworth, 776 F. Supp. 2d at 232 (citing Transpo, 681 F.2d at 1011).
Here, New York is the hub of the activities. Ferguson is a New York corporation,
the transformers were delivered to and installed in New York, and Howard sent
employees to New York to perform repairs. See ECF No. 1-2; ECF No. 2-2 Ex. B.
Ferguson has “no connection to Mississippi beyond the fact that they communicated
and contracted with a Mississippi [corporation], and that is insufficient to establish
personal jurisdiction.” Ainsworth, 776 F. Supp. 2d at 232.
III. CONCLUSION
For the reasons above, the Court finds Howard failed to show that Ferguson
has sufficient contacts with Mississippi to justify the exercise of personal
jurisdiction in this case. Accordingly, the Court grants Ferguson’s Motion to
Dismiss [ECF No. 2], and Howard’s claims are dismissed without prejudice.
SO ORDERED this, the 15th day of July, 2015.
s/Keith Starrett
UNITED STATES DISTRICT JUDGE

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