Hannah International Foods, Inc. v. House of Thaller, Inc.

Filing 19

ORDER granting in part 5 MOTION to Dismiss or, in the Alternative, to Transfer Case. So Ordered by Magistrate Judge Andrea K. Johnstone.(kad)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE

Hannah International Foods, Inc.
v.

Case No. 18-cv-52-AJ
Opinion No. 2018 DNH 162

House of Thaller, Inc.

MEMORANDUM ORDER
In an action filed in state court, Hannah International
Foods, Inc. alleges that House of Thaller, Inc. failed to
satisfy the material terms of an agreement to produce certain
food products.

Invoking federal diversity jurisdiction under 28

U.S.C. § 1332, the defendant removed this action here.
no. 1.

See doc.

Once removed, the case was assigned to the undersigned

magistrate judge, to whose jurisdiction the parties consented.
See doc. no. 8.
The defendant now moves to dismiss pursuant to Federal Rule
of Civil Procedure 12(b)(2), contending that this court lacks
personal jurisdiction over it.

See doc. no. 5.

On this same

basis, but in the alternative, the defendant asks the court to
transfer this matter to the United States District Court for the
Eastern District of Tennessee.
See doc. no. 9.

See id.

The plaintiff objects.

Concluding that the plaintiff has not

demonstrated that the defendant purposefully availed itself of
the privilege of conducting activities in New Hampshire, the

court grants the defendant’s motion in part and transfers this
matter to the Eastern District of Tennessee.

I.

APPLICABLE LAW

The plaintiff bears the burden of demonstrating that
personal jurisdiction exists.

See A Corp v. All Am. Plumbing,

Inc., 812 F.3d 54, 58 (1st Cir. 2016).

“To establish personal

jurisdiction in a diversity case, a plaintiff must satisfy both
the forum state’s long-arm statute and the Due Process Clause of
the Fourteenth Amendment.”

C.W. Downer & Co. v. Bioriginal Food

& Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014).

As New

Hampshire’s long-arm statute “reaches to the full extent that
the Constitution allows,” however, the court’s sole inquiry is
whether exercising personal jurisdiction would comport with due
process.

See Phillips Exeter Acad. v. Howard Phillips Fund, 196

F.3d 284, 287 (1st Cir. 1999).

Due process requires that a

defendant have sufficient “minimum contacts” with the forum
state “such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.”
Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal
quotation marks omitted).
Though a federal court may exercise general or specific
personal jurisdiction over a defendant, in this case the
plaintiff only asserts specific personal jurisdiction, “i.e.,

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jurisdiction over [this defendant] for the purpose of this
specific lawsuit.”

Scottsdale Capital Advisors Corp. v. The

Deal, LLC, 887 F.3d 17, 20 (1st Cir. 2018) (citations omitted).
To establish specific personal jurisdiction, a plaintiff must
demonstrate that (1) its claim “directly arises out of or
relates to the defendant's forum-state activities”; (2) “the
defendant’s contacts with the forum state represent a purposeful
availment of the privilege of conducting activities in that
state, thus invoking the benefits and protections of that
state’s laws and rendering the defendant’s involuntary presence
in that state’s courts foreseeable”; and (3) “the exercise of
jurisdiction is ultimately reasonable.”

Id. (citation omitted).

“Failure to make any one of these showings dooms any effort to
establish personal jurisdiction.”

Id. (citation omitted).

Though the court may evaluate personal jurisdiction under
one of several standards, see A Corp, 812 F.3d at 58 & n. 5, the
plaintiff seeks to meet its burden in this case under the prima
facie standard.

See doc. no. 9-1 at 4.

This is the standard

“most commonly employed in the early stages of litigation,” see
A Corp, 812 F.3d at 58 n. 5, and the defendant does not dispute
its applicability here.

Under the prima facie standard, the

plaintiff may not “rely on unsupported allegations,” but must
rather “proffer evidence which, if credited, is sufficient to
support findings of all facts essential to personal

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jurisdiction.”

See Scottsdale, 887 F.3d at 20 (brackets and

citations omitted).

“The court, in turn, must view this

evidence, together with any evidence proffered by the defendant,
in the light most favorable to the plaintiff and draw all
reasonable inferences therefrom in the plaintiff’s favor.”
Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011)
(citation omitted).

The court “need not, however, credit bald

allegations or unsupported conclusions.”

Id. (citation

omitted).

II.

BACKGROUND

Located in Seabrook, New Hampshire, the plaintiff
manufactures and supplies dips, spreads, and salads.
9-2 ¶ 3.

Doc. no.

The defendant is a Tennessee manufacturer of food

products for wholesale and retail sellers with facilities in
Knox County, Tennessee.

Doc. no. 5-1 ¶¶ 3, 4.

In early 2016,

the plaintiff sought to provide services to a new, “substantial”
customer.

Doc. no. 9-2 ¶¶ 4.

In order to meet this customer’s

demand, representatives of the plaintiff visited the defendant
in Tennessee and requested that the defendant manufacture food
products for the plaintiff at the defendant’s plant.
The parties negotiated for several weeks.

Id. ¶ 5.

Id. ¶ 5.

During

this time, the parties exchanged “substantial communications”
between Tennessee and New Hampshire.

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Id.

In mid-April 2016,

the plaintiff signed a Contract Manufacturing Agreement in New
Id. ¶ 6.

Hampshire.

The plaintiff forwarded this agreement to

the defendant, which signed it in Tennessee.

Id.; doc. no. 5-1

¶ 6.
The contract specified that the defendant would manufacture
and package product for the plaintiff at the defendant’s
facility in Knoxville, Tennessee.

Doc. no. 9-3 at 4.

Under the

contract, no product could be manufactured, packaged, or tested
at any location other than that facility without the plaintiff’s
consent.

Id.

The contract also required that the defendant

receive the plaintiff’s permission before storing product
outside of the Knoxville facility.

Id.

The contract provided

for a term of three years, and stated that it “shall be governed
by, construed and enforced in accordance with the substantive
internal law of the State of Tennessee, without regard to its
conflict of law principles.”

Id. at 12, 15.

The contract

required that the defendant produce product consistent with the
plaintiff’s specifications and requirements and ship that
product consistent with purchase orders received from the
plaintiff’s customer.

Doc. no. 9-2 ¶ 7.

The plaintiff represents that its customer “operated
nationwide, and that it was common knowledge that the customer
had multiple stores in New Hampshire, and, as a result that the
product would be shipped to multiple stores in New Hampshire.”

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Id.

According to the plaintiff, these shipments “occurred

regularly throughout the course of the relationship.”

Id.

Though the defendant concedes that it shipped product to several
different states, it does not believe that it sent shipments to
New Hampshire.

Doc. no. 5-1 ¶ 11.

As the parties’ relationship progressed, an increasing
number of issues arose related to the defendant’s performance
under the contract.

Doc. no. 9-2 ¶¶ 8, 9.

The parties

regularly communicated by telephone and email, and some of these
communications were directed to or from New Hampshire.

Id. ¶ 8.

The plaintiff also sent personnel to the defendant’s plant in
Tennessee to monitor product.

Doc. no. 5-1 ¶ 9.

The plaintiff

ultimately terminated the contract in July 2017, at which point
the defendant returned certain packaging to the plaintiff.
¶ 12; doc. no. 9-2 ¶ 10.

Id.

No employee of the defendant visited

New Hampshire during the negotiation, execution, or performance
of the contract or after its termination.

Doc. no. 5-1 ¶ 13.

On December 20, 2017, the plaintiff filed suit against the
defendant in Rockingham County Superior Court, alleging counts
of breach of contract and breach of the covenant of good faith
and fair dealing.

See doc. no. 1-1 at 2-8.

The defendant

timely removed the action to this court before filing the
present motion.

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III. DISCUSSION
As discussed above, “the constitutional test for
determining specific jurisdiction . . . has three distinct
components, namely, relatedness, purposeful availment (sometimes
called ‘minimum contacts’), and reasonableness.”

Adelson v.

Hananel, 652 F.3d 75, 80-81 (1st Cir. 2011) (internal quotation
marks and citations omitted).

To establish jurisdiction, the

plaintiff must demonstrate that each of these components is
satisfied.

See Scottsdale, 887 F.3d at 20.

Because the

plaintiff has not met its burden with respect to purposeful
availment, the court limits its analysis to that inquiry.

Cf.

Copia Commc’ns, LLC v. AMResors, L.P., 812 F.3d 1, 4 (1st Cir.
2016).

A.

Purposeful Availment
“The purposeful availment prong represents a rough quid pro

quo: when a defendant deliberately targets its behavior toward
the society or economy of a particular forum, the forum should
have the power to subject the defendant to judgment regarding
that behavior.”

C.W. Downer, 771 F.3d at 66 (citation and

internal quotation marks omitted).

“The cornerstones of this

inquiry are voluntariness and foreseeability.”
omitted).

Id. (citation

“This places the emphasis on the defendant’s

intentions and prohibits jurisdiction based on random,

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fortuitous, or attenuated contacts.”
quotation marks omitted).

Id. (citation and internal

“The proper question is not where the

plaintiff experienced a particular injury or effect but whether
the defendant’s conduct connects [it] to the forum in a
meaningful way.”

A Corp, 812 F.3d at 60 (brackets, quotation

marks, and citation omitted).
Two somewhat recent First Circuit decisions inform the
court’s analysis.

The first, C.W. Downer & Company v.

Bioriginal Food & Science Corporation, involved a contract under
which a Massachusetts investment bank agreed to serve as the
exclusive financial adviser for the sale of a Canadian producer
of nutritional supplements.

See 771 F.3d at 63.

After the

Canadian company solicited the investment bank in Massachusetts,
the parties negotiated the contract remotely, communicating
primarily by email and telephone.

See id.

The contract

contemplated that the investment bank would provide services in
Massachusetts, and the investment bank did so, ultimately
identifying a potential buyer and hosting a conference call from
Boston.

See id. at 63-64.

That deal fell through, and the

investment bank subsequently learned that the Canadian company
had been sold to a private equity firm.

See id. at 64.

the Canadian company refused to pay the investment bank a
transaction fee and other amounts under the contract, the

8

When

investment bank brought suit in Massachusetts for breach of
contract and related claims.

See id.

The Canadian company moved to dismiss for lack of personal
jurisdiction.

See id.

The district court granted that motion,

but the First Circuit reversed, finding that the investment bank
had satisfied each of the components of specific personal
jurisdiction.

See id. at 65, 66-71.

As to purposeful

availment, the court emphasized that the Canadian company had
solicited the investment bank in Massachusetts, that the parties
had formed a long-term contractual relationship which
contemplated the investment bank performing services for the
Canadian company in Massachusetts, and that the investment bank
actually performed extensive services for the Canadian company
in Massachusetts pursuant to the contract.

See id. at 66-69.

The court held that these facts, when coupled with the number
and duration of the email and phone communications to and from
Massachusetts, demonstrated that the Canadian company had
purposefully availed itself of the privileges of conducting
activities within that state.

See id. at 66-69.

Contrast this with Copia Communications, LLC v. AMResorts,
L.P.

In Copia, the plaintiff was a Massachusetts company that

provided internet services to hotels in Jamaica, and the
defendants were a Jamaican resort operator and its Pennsylvania
alter ego.

See Copia, 812 F.3d at 2.

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The plaintiff sent the

defendants an offer to provide internet services for two planned
Jamaican resorts.

Id.

After several months of negotiations,

which occurred in person in Jamaica and through email
communications sent from or received in Massachusetts, the
parties entered into a contract, which was executed in Jamaica.
Id. at 2-3.

During the performance of the contract, the

plaintiff shipped equipment to Jamaica and installed and
maintained internet services in Jamaica.

Id. at 3.

No employee

of the defendants traveled to Massachusetts during the
negotiation, execution, or performance of the contract.
at 2-3.

See id.

The plaintiff did, however, receive some contract-

related phone and email communications in Massachusetts.
3.

Id. at

Nearly five years after the contract was executed, the

defendants informed the plaintiff that they were not renewing
its terms.

Id. at 3.

The plaintiff brought suit in

Massachusetts, challenging the timeliness of the notice of
nonrenewal.

Id.

On appeal, the First Circuit “easily” affirmed the district
court’s dismissal of the action for want of personal
jurisdiction, concluding that the defendants’ contacts with
Massachusetts did not “represent a purposeful availment of the
protections of Massachusetts’s laws.”

Id. at 2, 4.

Finding

that the email and phone communications in question were
insufficient on their own to satisfy the purposeful availment

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prong, see id. at 5, the court rejected the plaintiff’s argument
that shipments of equipment from Massachusetts and payments by
the defendants to Massachusetts constituted voluntary contact
between the defendants and the forum state, because there was
nothing beyond the plaintiff’s mere presence in Massachusetts
that tied these shipments and payments to that state.
at 5.

See id.

The court similarly held that the plaintiff’s reliance on

C.W. Downer was misplaced, concluding that C.W. Downer hinged on
three factors not present in the record: “the defendant’s inforum solicitation of the plaintiff’s services, the defendant’s
anticipation of the plaintiff’s in-forum services, and the
plaintiff’s actual performance of in-forum services.”

Id. at 6

(citing Cossart v. United Excel Corp., 804 F.3d 13, 21 (1st Cir.
2015)).

Thus, the court concluded that the defendants “did

nothing to invoke the benefits and protections of
Massachusetts’s laws beyond implicitly relying on the state’s
laws in the way that any party to a contract relies on the laws
of the jurisdiction in which his counter-party happens to
reside.”

Id. at 5.

The facts in this case, even when viewed in the light most
favorable to the plaintiff, bear more than a passing resemblance
to those in Copia.

As in Copia, the plaintiff here solicited

the defendant in the defendant’s home jurisdiction.

Similarly,

the contracts in both cases were negotiated either in the

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defendants’ home jurisdictions or remotely, with only calls and
emails going to and from the plaintiffs’ home jurisdictions.

In

both cases, the contracts contemplated performance occurring in
the defendants’ home jurisdictions, and in both cases that is
where performance actually occurred.

While representatives of

the plaintiffs visited the defendants’ home jurisdictions in
both cases, the defendants’ representatives did not visit the
plaintiffs’ home jurisdictions in either.

Finally, though the

Copia court did not focus on this fact, the contract here, like
the one in that case, stated that the laws of the defendant’s
home jurisdiction would govern.

Based on these similarities,

the court is hard-pressed to conclude that Copia does not
control.
Moreover, none of the factors central to the C.W. Downer
decision are present here.

In that case, the court emphasized

that the defendant solicited the plaintiff’s services in the
plaintiff’s home state.
case.

As noted, the opposite is true in this

Similarly, whereas the contract in C.W. Downer

contemplated that the plaintiff would perform substantial
services in its home state, the contract here largely
contemplated performance in Tennessee. 1

1

And where the plaintiff

Though the C.W. Downer court also noted, as part of the
second factor, that the parties had formed a long-term
contractual relationship, see 771 F.3d at 67, the Copia decision
calls the importance of that fact into question, both because
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in C.W. Downer actually did perform services under the contract
in its home state, performance in this case appears to have
almost exclusively occurred in Knoxville.

Thus, C.W. Downer is

readily distinguishable and provides little basis to find
purposeful availment here.
The plaintiff does point to facts, not present in either
Copia or C.W. Downer, that it believes support a finding of
purposeful availment in this case.

According to the plaintiff,

the defendant knew that the plaintiff’s end-customer had stores
in New Hampshire and, accordingly, that product the defendant
produced would be shipped to this forum.

And, according to the

plaintiff, the defendant did in fact ship product to stores in
New Hampshire pursuant to its agreement with the plaintiff.
This, in the plaintiff’s view, constitutes sufficient contact
with New Hampshire for this court to exercise jurisdiction over
the defendant.

For its part, the defendant disputes that it

ever shipped product to New Hampshire.

Even assuming such

shipments occurred, however, the court is not persuaded that
they constitute purposeful availment.

the contract Copia endured for longer than the contract in C.W.
Downer and because the Copia court did not list the duration of
the contract as one of the factors upon which the C.W. Downer
decision hinged. See Copia, 812 F.3d at 3, 6. In light of
this, and because the anticipated duration of contract here was
shorter than the actual durations in either C.W. Downer or
Copia, the court does not give this fact much weight.
13

As discussed, the purposeful availment component emphasizes
“the defendant’s intentions and prohibits jurisdiction based on
random, fortuitous, or attenuated contacts.”

C.W. Downer, 771

F.3d at 66 (citation and internal quotation marks omitted).
Based on the plaintiff’s own representations, the sole reason
the defendant may have sent shipments to New Hampshire in this
case is because the plaintiff’s end-customer “operated
nationwide, and it was common knowledge that the customer had
multiple stores in New Hampshire.”

Doc. no. 9-2 at 2.

In other

words, there is nothing about these shipments that demonstrates
that the defendant intended to target New Hampshire any more
than it did any other state to which it shipped product.

And

the Supreme Court has rejected the notion that the act of
passively placing an item in the stream of commerce with the
expectation it will reach a particular state subjects a
defendant to that state’s jurisdiction.

See, e.g., J. McIntyre

Mach., Ltd. v. Nicastro, 564 U.S. 873, 882 (2011) (plurality
opinion) (“The defendant's transmission of goods permits the
exercise of jurisdiction only where the defendant can be said to
have targeted the forum; as a general rule, it is not enough
that the defendant might have predicted that its goods will
reach the forum State.”); id. at 891 (Breyer, J., concurring in
the judgment) (“[T]his Court has rejected the notion that a
defendant’s amenability to suit travels with the chattel.”

14

(citation, brackets, and internal quotation marks omitted)).

In

short, there is nothing about the shipments at issue here that
moves them beyond the realm of random, fortuitous contacts with
New Hampshire.

They therefore provide insufficient basis to

exercise jurisdiction over the defendant. 2
In sum, the court finds that the plaintiff has not met its
burden of demonstrating that the defendant purposefully availed
itself of the privilege of conducting activities in New
Hampshire.

This court accordingly does not have personal

jurisdiction over the defendant.

B.

Transfer
Though the defendant primarily requests that the court

dismiss this action, it alternatively asks that the court
transfer the case to the United States District Court for the
Easter District of Tennessee.

Per 28 U.S.C. § 1631, “[w]henever

a civil action is filed in a court . . . and that court finds
that there is a want of jurisdiction, the court shall, if it his

2

The plaintiff also cites several district court decisions
that it believes support its position. See GT Solar
Incorporated v. Fabrizio GOI, 2009 DNH 156 (Laplante, J.); Trade
Wings, LLC v. Technetics, Inc., 2002 DNH 182 (Barbadoro, J.);
Macri v. Macri, 2002 DNH 089 (DiClerico, J.). These decisions
significantly predate C.W. Downer and Copia, however, and
therefore do not benefit from recent refinements to the
purposeful availment analysis. As the court finds the more
recent appellate decisions dispositive, it need not, and does
not, reach whether these older decisions suggest a contrary
result.
15

in the interest of justice, transfer such action . . . to any
other court in which the action . . . could have been brought at
the time it was filed . . . .”

The First Circuit has held that

this statute applies when a district court concludes it lacks
personal jurisdiction over a defendant and that it
“establish[es] a rebuttable presumption in favor of transfer”
that is only overcome “if an inquiring court determines that a
transfer is not in the interest of justice.”

Fed. Home Loan

Bank of Boston v. Moody's Corp., 821 F.3d 102, 111-20, 119 (1st
Cir.), abrogated on other grounds by Lightfoot v. Cendant Mortg.
Corp., 137 S. Ct. 553 (2017) (citations and internal quotation
marks omitted).
The court has little trouble concluding that it serves the
interests of justice to transfer this case to the Eastern
District of Tennessee.

This matter has been pending, either in

state court or here, for the better part of nine months.

This

court established a schedule for this case and the parties imply
that they have conducted at least some discovery.

Dismissing

this case now, only to have the parties start from scratch in
Tennessee, makes little sense.

The court therefore grants the

defendant’s alternative request for relief.

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IV.

CONCLUSION

The court concludes that it does not have personal
jurisdiction over the defendant, as the defendant never
purposefully availed itself of the privileges of conducting
activities in New Hampshire.

Rather than dismiss this case,

however, the court concludes that it is in the interests of
justice to transfer this matter to a forum with such
jurisdiction.

The court therefore directs the Clerk’s Office to

transfer this case to the United States District Court for the
Eastern District of Tennessee.

The defendant’s motion to

dismiss (doc. no. 5) is granted in part, consistent with this
outcome.
SO ORDERED.

__________________________
Andrea K. Johnstone
United States Magistrate Judge
August 8, 2018
cc:

Arnold Rosenblatt, Esq.
Charles G. Taylor, III, Esq.
Mark L. Mallory, Esq.

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