EXPORTING COMMODITIES INTERNATIONAL, LLC v. SOUTHERN MINERALS PROCESSING, LLC
OPINION. Signed by Judge Noel L. Hillman on 11/17/2017. (rtm, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
SOUTHERN MINERALS PROCESSING,
JOSEPH B. SILVERSTEIN
GREEN, SILVERSTEIN & GROFF, LLC
215 SOUTH BROAD STREET
PHILADELPHIA, PA 19107
On behalf of Plaintiff
JOSEPH ABRAHAM BAHGAT
THE PRIVACY FIRM PC
1701 WALNUT ST. FL. 7
PHILADELPHIA, PA 19103-5220
On behalf of Defendant
HILLMAN, District Judge
This case concerns the sale of reclaimed coal at a defunct
Mississippi power plant.
Presently before the Court is the
motion of Plaintiff for default judgment and the motion of
Defendant to vacate default and dismiss Plaintiff’s complaint.
For the reasons expressed below, Defendant’s motion will be
granted, and Plaintiff’s motion will be denied.
Plaintiff, Exporting Commodities International, LLC
(“ECI”), filed a complaint 1 for breach of contract and other
related claims against Defendant, Southern Minerals Processing,
LLC (“SMP”), for SMP’s alleged breach of the parties’ agreement
that ECI purchase the remaining coal stockpile at a closed power
plant owned by Mississippi Power.
ECI is involved in the sale
and distribution of bituminous coal, and SMP is a seller of
According to ECI, SMP had an agreement with Mississippi
Power to sell the coal to a third party, and SMP would pay a
royalty to Mississippi Power based on that sale.
ECI claims that in “late 2015, ECI began discussing with
[SMP] the possibility of buying and then reselling reclaimed
coal from Mississippi Power,” with an estimated recoverable
quantity of 150,000 tons.
ECI and SMP “began exchanging
information including, but not limited to, project status and
the quality of the material in December 2015.”
In April 2016,
ECI began discussions with Uniper, a potential buyer for the
ECI claims that it received a formal bid from Uniper, and
ECI verbally communicated this bid to SMP.
The operative pleading is ECI’s second amended complaint,
Docket No. 24. The Court’s recitation of ECI’s claims comes
from that complaint.
Plaintiff’s second amended complaint avers that the members of
ECI are ECI Coal, Inc. and Uniper Global Commodities North
ECI claims, “After ECI and [SMP] engaged in negotiations
regarding the purchase of the reclaimed coal located at
Mississippi Power, on the morning of July 22, 2016 at 9:35 a.m.,
ECI sent an email to [SMP] confirming the material terms of the
agreement reached between the parties.”
The email ECI sent to
SMP provided, “We are pleased to confirm the following deal
between Exporting Commodities International, LLC (Buyer) and
Southern Minerals (Seller) as follows . . . . Sometime next
week, I will send a draft contract, which shall be this
confirmation plus terms and conditions.”
That same morning at 11:49 a.m., ECI claims that SMP
“confirmed via email that it accepted ECI’s proposal for the
purchase of the reclaimed coal (the “Contract”).”
sent from SMP to ECI provided, “Everything looks good from our
We accept you [sic] proposal and look forward to
doing business with you.”
That afternoon, ECI claims that after
SMP “had confirmed the Contract between the parties, ECI entered
into a contract with Uniper to purchase the reclaimed coal that
ECI was buying from [SMP].”
ECI claims that at 5:00 p.m. on that same day, Frank
Kolojeski, a representative of ECI, received a call from Brandon
Hodges, the owner of SMP, “claiming that a third party had
America, LLC. Thus, it appears that ECI intended to sell the
coal to one of the entities that form ECI.
approached [SMP] with an offer to buy the reclaimed coal at
Mississippi Power at a substantially higher price than the
Contract reached between ECI and [SMP].”
According to ECI,
Hodges told Kolojeski that he was in a “‘quandary’ as to what to
do because [SMP] wanted to take the higher price being offered
by the other third party.” 3
ECI claims that Kolojeski told
Hodges that “the parties had reached a deal for the sale/price
of the reclaimed coal and that ECI and [SMP] had a legal binding
agreement,” and that ECI had already entered into an agreement
to resell the coal to Uniper.
ECI claims that despite repeated
requests and demands, SMP has failed or refused to ship the coal
to ECI, and ECI is still obligated to ship the coal to Uniper.
As a result, ECI claims that SMP’s actions have breached
the parties’ contract, breached the covenant of good faith and
fair dealing, constitute unjust enrichment, and implicate the
doctrine of promissory estoppel.
ECI has filed a motion for default judgment against SMP,
while SMP has objected to the entry of default against it,
opposed ECI’s motion for default judgment, and lodged a motion
to dismiss ECI’s complaint, primarily on the basis that ECI’s
SMP refutes that it received a higher bid from another buyer,
and instead determined that it could not go through with the
project due to “unforeseen circumstances that would make the job
impossible to complete,” including channel depth and loading
time. (Docket No. 16-1 at 3.)
complaint should be dismissed for lack of personal jurisdiction.
Thus, the procedural history of this case is as relevant to the
pending motions as the claims in ECI’s complaint.
ECI filed its complaint on December 8, 2016, but due to an
improper signature, ECI was directed by the Clerk’s office to
resubmit the complaint.
ECI filed an amended complaint with a
proper signature on December 9, 2016. 4
On January 4, 2017, ECI filed an affidavit of service,
indicating that it served SMP with the summons and complaint on
December 24, 2016. 5
On that same day, counsel for SMP entered
On February 23, 2017, ECI filed a revised affidavit of
On March 6, 2017, ECI requested the entry of default,
which the Clerk granted on the same day.
Later that day, SMP
filed an objection the Clerk’s entry of default against it,
noticing its intent to file a motion to dismiss for lack of
personal jurisdiction and insufficient service of process, among
SMP also objected to the entry of default
As ECI notes in Docket No. 4, it erroneously filed an amended
complaint instead of filing the proper signature page as an
attachment to its original complaint. The Court only relates
these technical issues in order to explain how the operative
complaint is the second amended complaint.
SMP disputes that it was properly served.
because the record did not indicate that ECI had effectuated
On April 19, 2017, ECI filed its motion for default
Two days later on April 21, 2017, SMP filed a motion
to dismiss. 6
On May 1, 2017, SMP filed a motion to correct its
motion to dismiss, seeking to also set aside the Clerk’s entry
On May 10, 2017, the Court issued an order to show cause,
finding that ECI failed to properly allege the citizenship of
the parties, specifically as to pleading the citizenship of the
two limited liability companies.
The Court directed that ECI
file an amended complaint with the citizenship properly averred,
or the complaint would be dismissed for lack of subject matter
On June 2, 2017, ECI complied with the Court’s order, and
filed what is now its second amended complaint and the operative
pleading, which concretely establishes the complete diversity of
On June 7, 2017, the Court ordered that the
parties’ pending motions would be deemed filed as to ECI’s
second amended complaint.
The parties have opposed each other’s
That motion, Docket No. 13, was denied as moot by Court order
on June 7, 2017 due to the subsequent filing of the second
amended complaint and SMP’s amended motion to dismiss.
Subject Matter Jurisdiction
This Court may exercise subject matter jurisdiction over
the action pursuant to 28 U.S.C. § 1332 because there is
complete diversity of citizenship between the parties and the
amount in controversy exceeds $75,000.
ECI is a citizen of New
Jersey, Germany, and Spain; SMP is a citizen of Alabama.
ECI’s motion for default judgment
Federal Civil Procedure Rule 55 governs the entry of
default and default judgments.
“When a party against whom a
judgment for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or
otherwise, the Clerk must enter the party’s default.”
Civ. P. 55(a).
After the Clerk’s entry of default, a plaintiff
may seek default judgment, by either applying to the Clerk if
plaintiff’s claim is for a sum certain, or by applying to the
Fed. R. Civ. P. 55(b)(1), (2).
Rule 55(c) provides that
the Court may set aside an entry of default for good cause, and
it may set aside a final default judgment under Fed. R. Civ. P.
The same three factors govern whether a default judgment
should be entered, and whether a default or default judgment
should be set aside:
1. Whether the plaintiff will be
prejudiced; 2. Whether the defendant has a meritorious defense;
and 3. Whether culpable conduct of the defendant led to the
Feliciano v. Reliant Tooling Co., Ltd., 691 F.2d 653,
656 (3d Cir. 1982) (quoting Farnese v. Bagnasco, 687 F.2d 761
(3d Cir. 1982)) (explaining that the factors to be applied for
entering and vacating default and default judgment are the same,
but further explaining that “[l]ess substantial grounds may be
adequate for setting aside a default than would be required for
opening a judgment”).
It is the Court’s discretion to grant
default judgment or set aside default or default judgment, and
entries of default and default judgments are generally
disfavored in favor of allowing cases to be decided on their
United States v. $55,518.05 in U.S. Currency, 728 F.2d
192, 194 (3d Cir. 1984).
In considering the propriety of default and default
judgment, the Court “has an affirmative duty to look into its
jurisdiction both over the subject matter and the parties.”
HICA Educ. Loan Corp. v. Lepera, 2011 WL 3515911, at *2 (D.N.J.
2011) (quoting Ramada Worldwide, Inc. v. Benton Harbor Hari Ohm,
L.L.C., No. 08–3452, 2008 WL 2967067, at *9 (D.N.J. July 31,
2008)); see also Mark IV Transportation & Logistics v. Lightning
Logistics, Inc., --- F. App’x ---, 2017 WL 3668946, at *4 (3d
Cir. August 25, 2017) (quoting In re Tuli, 172 F.3d 707, 712
(9th Cir. 1999)) (“‘[W]hen a court is considering whether to
enter a default judgment, it may dismiss an action sua sponte
for lack of personal jurisdiction.’”).
“If a court lacks
personal jurisdiction over a defendant, the court does not have
jurisdiction to render a default judgment, and any such judgment
will be deemed void.”
Allaham v. Naddaf, 635 F. App’x 32, 36
(3d Cir. 2015) (citing Budget Blinds, Inc. v. White, 536 F.3d
244, 259 (3d Cir. 2008)) (other citations omitted).
Thus, in this case, the threshold issue in determining
whether default should be vacated or default judgment should be
entered, and whether Plaintiff’s case against Defendant is even
viable at all, is whether personal jurisdiction exists over the
Whether the Court has personal jurisdiction over
Because the issue of whether this Court may exercise
personal jurisdiction over SMP is dispositive to the viability
of the entire suit, that issue must be addressed first.
Federal Rule of Civil Procedure 12(b)(2) provides for dismissal
of an action when the Court does not have personal jurisdiction
over a defendant. 7
“Once challenged, the plaintiff bears the
Despite SMP’s argument that it was never properly served,
personal jurisdiction is the threshold issue because those
service issues are easily cured and the personal jurisdiction
issue would still remain after proper service is effected.
burden of establishing personal jurisdiction.”
Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3d Cir. 2007)
(citing Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir.
In deciding a motion to dismiss for lack of personal
jurisdiction, the Court must “accept all of the plaintiff’s
allegations as true and construe disputed facts in favor of the
Carteret Sav. Bank v. Shushan, 954 F.2d 141, 142
n.1 (3d Cir.), cert. denied, 506 U.S. 817 (1992) (citations
A defendant is subject to the jurisdiction of a United
States district court if the defendant “is subject to the
jurisdiction of a court of general jurisdiction in the state
where the district court is located[.]”
Fed. R. Civ. P.
“A federal court sitting in New Jersey has
There is a “significant procedural distinction” between a
motion pursuant to Rule 12(b)(2) and a motion pursuant to Rule
12(b)(6). Time Share Vacation Club v. Atlantic Resorts, Ltd.,
735 F.2d 61, 66 n.9 (3d Cir. 1984). “A Rule 12(b)(2) motion,
such as the motion made by the defendants here, is inherently a
matter which requires resolution of factual issues outside the
pleadings, i.e. whether in personam jurisdiction actually lies.
Once the defense has been raised, then the plaintiff must
sustain its burden of proof in establishing jurisdictional facts
through sworn affidavits or other competent evidence. . . . [A]t
no point may a plaintiff rely on the bare pleadings alone in
order to withstand a defendant's Rule 12(b)(2) motion to dismiss
for lack of in personam jurisdiction. Once the motion is made,
plaintiff must respond with actual proofs, not mere
allegations.” Id. (citation omitted).
jurisdiction over parties to the extent provided under New
Jersey state law.”
Miller Yacht Sales, Inc. v. Smith, 384 F.3d
93, 96 (3d Cir. 2004)(citations omitted).
The New Jersey long-
arm statute “permits the exercise of personal jurisdiction to
the fullest limits of due process.”
IMO Indus., Inc. v. Kiekert
AG, 155 F.3d 254, 259 (3d Cir. 1998) (citing DeJames v.
Magnificence Carriers, Inc., 654 F.2d 280, 284 (3d Cir. 1981)).
Under the Due Process clause, the exercise of personal
jurisdiction over a non-resident defendant is appropriate when
the defendant has “certain 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) (quoting
Milliken v. Meyer, 311 U.S. 457, 463 (1940)).
A defendant establishes minimum contacts by “‘purposefully
avail[ing] itself of the privilege of conducting activities
within the forum State,’” thereby invoking “‘the benefits and
protections of [the forum State’s] laws.’”
Asahi Metal Indus.
Co., Ltd. v. Sup. Ct. of California, 480 U.S. 102, 109 (1987)
(quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475
This “purposeful availment” requirement assures that
the defendant could reasonably anticipate being haled into court
in the forum and is not haled into a forum as a result of
“random,” “fortuitous” or “attenuated” contacts with the forum
See World-Wide Volkswagen Corp. v. Woodson, 444 U.S.
286, 297 (1980); see also Burger King Corp., 471 U.S. at 472,
475 (internal citations omitted).
In deciding whether a defendant’s contacts with a forum are
sufficient to confer personal jurisdiction over that party, the
Court must consider whether such contacts are related to or
arise out of the cause of action at issue in the case.
Court may exercise specific personal jurisdiction over a
defendant where the cause of action is related to or arises out
of activities by the defendant that took place within the forum
Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 414 n.8 (1984).
If the cause of action has no
relationship to a defendant’s contacts with a forum state, the
Court may nonetheless exercise general personal jurisdiction if
the defendant has conducted “continuous and systematic” business
activities in the forum state.
Id. at 416.
Once the Court determines that the defendant has minimum
contacts with the forum state, it must also consider whether the
assertion of personal jurisdiction over the defendant
“comport[s] with ‘fair play and substantial justice’” to satisfy
the due process test.
Burger King Corp., 471 U.S. at 476
(quoting Int’l Shoe, 326 U.S. at 320).
In this regard, it must
be reasonable to require the defendant to litigate the suit in
the forum state, and a court may consider the following factors
to determine reasonableness: the burden on the defendant, the
forum state’s interest in adjudicating the dispute, the
plaintiff’s interest in obtaining convenient and effective
relief, the interstate judicial system’s interest in obtaining
an efficient resolution of controversies, and the shared
interest of the several States in furthering fundamental
substantive social policies.
Id. at 477 (citing World Wide
Volkswagen, 444 U.S. at 292).
SMP argues that personal jurisdiction cannot be exercised
over it because the requirements for specific and general
jurisdiction are lacking.
SMP is an Alabama family business – consisting of only two
full-time employees plus its president, Brandon Hodges that processes minerals, such as coal, after reclaiming
them from abandoned surface mines, and other refuse
SMP primarily works in Birmingham, Alabama and its
Except for the neighboring state of Mississippi, SMP has
never performed any work outside of Alabama.
SMP has never performed any work or done business in New
Jersey, and has never marketed or advertised to New Jersey
or any other state in the Northeast.
SMP does not have a website.
Hodges was born and raised in Birmingham, Alabama, and has
only lived in that area.
Hodges has never been to the state of New Jersey.
SMP’s prior contact with ECI was in 2013, when ECI
purchased 18,000 tons of coal from SMP, which was at that
time being run by Hodges’s grandfather.
In the matter that is the subject of this suit, the parties
negotiated a deal through email and telephone, but never
entered into a contract.
SMP never accepted payment from ECI, and SMP never sent the
coal to ECI.
ECI is an international corporation with offices all over
SMP argues that negotiations over a proposal for the sale
of coal located in Mississippi through email and telephone calls
between an Alabama-based company and an out-of-state business
that does not result in a contract and the exchange of goods and
money, cannot confer personal jurisdiction over SMP without
violating due process.
In response, ECI relates that SMP reached out to ECI to
determine ECI’s interest in purchasing the Mississippi coal,
initially and through continued solicitations by email and
telephone to Kolojeski in ECI’s New Jersey office.
a valid contract was created through email, and that SMP’s
contract with a New Jersey company, along with its continued
communications to Kolojeski in New Jersey, readily establishes
that SMP purposefully availed itself of conducting business in
New Jersey, and the parties’ relationship arises out of SMP’s
contacts with New Jersey.
The “fact that a non-resident has contracted with a
resident of the forum state is not, by itself, sufficient to
justify personal jurisdiction over the nonresident.”
Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d
“A contract may provide a basis for the exercise of
personal jurisdiction that meets due process standards, but a
contract alone does not ‘automatically establish sufficient
minimum contacts in the other party’s home forum.’”
Entm't Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482
(3d Cir. 1993) (quoting Burger King, 471 U.S. at 478).
deciding whether to exercise personal jurisdiction in a breach
of contract dispute, a district court must consider “the
totality of the circumstances, including the location and
character of the contract negotiations, the terms of the
contract, and the parties’ actual course of dealing.”
Manfredy, 238 F.3d 248, 256 (3d Cir. 2001).
“‘[I]nformational communications in furtherance of [a
contract between a resident and a nonresident] does not
establish the purposeful activity necessary for a valid
assertion of personal jurisdiction over [the nonresident
Vetrotex Certainteed Corp. v. Consolidated Fiber
Glass Products Co., 75 F.3d 147, 152 (3d Cir. 1996) (quoting
Sunbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d 28, 32 (3d
Cir. 1993) (citing Stuart v. Spademan, 772 F.2d 1185, 1193 (5th
Cir. 1985) (stating that “an exchange of communications between
a resident and a nonresident in developing a contract is
insufficient of itself to be characterized as purposeful
activity invoking the benefits and protection of the forum
Personal jurisdiction may be found, however, in cases where
the defendant solicited the contract or initiated the business
relationship leading up to the contract, Mellon Bank, 960 F.2d
at 1223, where the defendant sent any payments to the plaintiff
in the forum state, North Penn Gas v. Corning Natural Gas, 897
F.2d 687, 690–91 (3d Cir. 1990), or where the defendant engaged
in extensive post-sale contacts with the plaintiff in the forum
state, Mesalic v. Fiberfloat Corp., 897 F.2d 696, 700 (3d Cir.
1990) (after selling a boat to New Jersey buyer, defendant sent
written correspondence to the buyer's New Jersey residence,
delivered the boat to New Jersey, and attempted to repair the
boat in New Jersey).
ECI relies heavily upon Grand Entm't Grp., Ltd. v. Star
Media Sales, Inc., 988 F.2d 476 (3d Cir. 1993) to support its
position that personal jurisdiction exists over SMP.
case, the plaintiff had endeavored to purchase the rights to 450
foreign films owned by the defendants, but the plaintiff claimed
that defendants breached their contract by failing to deliver
The district court ultimately entered default
judgment against two corporations, which were citizens of Spain
and located in Madrid, in favor of the plaintiff, which had an
office in Pennsylvania.
In entering default judgment, the
district court judge found that the plaintiff properly served
the defendants, and personal jurisdiction existed over
defendants in Pennsylvania.
On appeal, the Third Circuit affirmed the district court’s
finding that it could exercise personal jurisdiction over
The Third Circuit observed:
Sanz Perez, in his individual and corporate capacity,
directed at least twelve communications to the forum.
Perez also engaged in negotiations for an agreement that
would have created rights and obligations among citizens of
the forum and contemplated significant ties with the forum.
Thus, Sanz Perez deliberately and personally directed
significant activities toward the state. In addition, as
agent for Sanz Perez, Freifeld also initiated numerous
contacts with Wax over the telephone and through the mails.
Activities of a party's agent may count toward the minimum
contacts necessary to support jurisdiction.
Moreover, the instant dispute arises directly out of
the contacts at issue. Where the contacts evaluated are
those that give rise to the litigation, even one contact
with the forum may be enough to justify jurisdiction as
long as the other criteria are met. Sanz Perez's personal,
intentional communications gave rise to the underlying
suit. He voluntarily decided to negotiate with Wax and
cannot now be heard to complain about answering a suit
concerning the effect of negotiations in the jurisdiction
in which some of those negotiations occurred. . . .
In the instant case, a forum plaintiff seeks redress
for harm allegedly caused by or on behalf of the activities
of the Spanish defendants within the forum. Finally, there
is no evidence that another state or nation could better
preserve the rights of the litigants or has an interest
superior to that of Pennsylvania. The fact that some of
the negotiations for the proposed film distribution
contract took place in California is insufficient to deny
courts located in Pennsylvania the power to adjudicate
whatever rights and duties the Spanish defendants may have
as a result of their interest in the proposed contract.
This is not a situation where the non-forum resident
was unilaterally drawn into the forum by another. Instead,
the affirmative actions of Sanz Perez, his agents and his
corporations brought him in contact with Pennsylvania in
connection with ongoing contract negotiations with a forum
based entity that lasted at least four months. We
therefore conclude that the defendants have not shown that
defending themselves in a Pennsylvania forum would be so
unreasonable that it would deprive them of their right to
fair play and substantial justice.
Grand Entertainment, 988 F.2d at 482–84 (internal citations
Importantly, however, the Third Circuit continued its
analysis, and reversed the district court’s finding that the
plaintiff had effected proper service on the defendants.
lengthy and detailed analysis of service laws in Pennsylvania
and Spain, the Third Circuit vacated default judgment because
the plaintiff failed to serve the defendants in compliance with
either federal, Pennsylvania, or Spanish law, and the district
court therefore lacked jurisdiction to enter any judgment
Id. at 493.
Although the basic communications between the plaintiff and
defendants in Grand Entertainment are similar to those here, the
Court does not find the situation in that case analogous to the
situation in this case, particularly because that case involved
an undisputed contract, it arose before the common and regular
use of email and communication via the internet, involved a
foreign defendant, and the main focus of the Third Circuit was
not on the personal jurisdiction issue, but rather the proper
service of people and entities in Spain.
Although not binding on this Court as is Grand
Entertainment, Siegmeister v. Benford, 2017 WL 2399573, at *3–5
(D.N.J. June 1, 2017), is more similar to this case.
plaintiff, located in New Jersey, claimed to enter into a
transaction to purchase rough diamonds from defendant, who was
The plaintiff alleged that the defendants
described the diamonds for sale in a series of correspondence,
telephone calls, emails, and a contract of sale, and the parties
entered into a memorandum of understanding that required the
plaintiff to wire $50,000 to them in California.
claimed he traveled to California to complete the transaction,
but the diamonds were not at the storage facility and the
transaction never took place.
In resolving the plaintiff’s motion for default judgment
against the defendants, the court relied upon Vetrotex, where
the Third Circuit determined that there was no personal
jurisdiction when the plaintiff alleged that, aside from the
contract at issue, the defendant's only contacts with the forum
state consisted of “‘some telephone calls and letters written to
[the plaintiff] in [the forum state].’”
Siegmeister, 2017 WL
2399573 at *4 (quoting Vetrotex, 75 F.3d at 152).
Siegmeister court similarly found that the defendants’ only
contacts with New Jersey were the MOU, correspondence, telephone
calls, and emails, and these contacts, without more, were
insufficient to hale the defendants into court in New Jersey.
The court also noted that the plaintiff did not allege that
the defendants solicited the contract, sent money to the
plaintiff in New Jersey, or engaged in extensive post-sale
contacts with plaintiff in New Jersey.
The court further noted
that the plaintiff sent money to the defendants in California,
and the plaintiff traveled to California where the diamonds were
located and the transaction was to take place.
therefore concluded that it lacked personal jurisdiction over
Similarly, in Team First Consulting, LLC v. Hangliter, 2007
WL 1302440, at *5 (D.N.J. 2007), the court found that the facts
as alleged involved nothing more than informational
communications in furtherance of a contract, and therefore did
not confer personal jurisdiction over the non-resident
The court noted the plaintiff, Team First, alleged
with respect to the Contract, that: (1) between September 22,
2006 and September 24, 2006, Team First negotiated a contract
with Defendant; (2) on or about September 24, 2006, Defendant
orally agreed to the terms of a draft written contract and
demanded certain terms as to payment; (3) Between September 24,
2006 and September 25, 2006, Defendant booked his transportation
to the Project work site; (4) On September 25, 2006, Defendant
notified Team First that he was to arrive shortly in the
vicinity of the Project's work site; (5) on September 27, 2006,
Defendant sent an e-mail to Team First indicating his
satisfaction with the arrangements between the parties, and in
additional e-mails, acknowledged certain obligations under the
Contract and understood that Team First would reimburse him for
his airfare; (6) on September 30, 2006, Defendant e-mailed Team
First a statement of his hours worked, but did not provide an
invoice or other request for payment; (7) On October 4, 2006,
Defendant e-mailed Team First, insisting on one or more
amendments to the Contract and giving Team First an ultimatum
that Team First agree to the amendments; and (8) In an October
5, 2006 e-mail, Defendant advised Team First there was no
contract and that he would be working directly for SRA.
The court concluded that because the allegations by the
plaintiff only showed that the plaintiff and defendant engaged
in communications in furtherance of a contract, personal
jurisdiction was lacking over the defendant.
Consulting, 2007 WL 1302440, at *5.
Here, the communications between ECI and SMP also solely
relate to the consummation of a contract, and are similarly
insufficient, standing alone, to establish SMP’s requisite
contacts with New Jersey.
This Court recognizes that it appears
that either a principal of SMP or its agent initiated the
negotiations with ECI knowing it had an office in New Jersey and
in that way this case is more like Grand Entertainment than it
is like Vetrotex.
Nonetheless, in this day and age, those communications
could have been with someone physically located anywhere in the
That negotiations occurred between the parties via email
and telephone is not only not unusual but expected.
would it be reasonable to assume, as actually happened here,
that given the ubiquitous tools of the internet, negotiations
over a substantial proposal like his one would span a dozen or
more email exchanges and inspire a like number of telephone
calls with ease.
But these are communications not so much to
New Jersey as they are into the electronic ether.
And if this
is how contracts are negotiated and if those contacts are deemed
to satisfy the minimum contacts requirement, then every contract
negotiated by email and telephone would justify personal
jurisdiction over a non-forum defendant.
clearly not the law.
And yet that is
Vetrotex Certainteed Corp. v. Consolidated
Fiber Glass Products Co., 75 F.3d 147, 152 (3d Cir. 1996).
In short, the case law instructs this Court that there must
be more and here we find that “more” lacking.
following factors weigh against the finding of personal
jurisdiction over SMP in this Court: (1) it is not at all clear
that a contract was ever formed; (2) SMP never sent coal to New
Jersey, and it is questionable whether the coal – the subject of
the contract - was ever intended to be sent to New Jersey; (3)
the coal was being resold by ECI to another entity not located
in New Jersey; 9 (4) SMP never received payment from New Jersey;
(5) SMP only has a presence in Alabama and a small portion of
Mississippi; (6) the subject of the contract and the execution
of the contract was to take place in Mississippi; and (7) if a
contract had been formed, the formal contract document, though
ECI has a location in New Jersey, but it is also a citizen of
Spain and Germany. ECI does not relate that the coal would be
delivered to it in New Jersey, and indeed, ECI endeavored to
resell the coal to one of its member companies, Uniper, whose
sole member is a German entity.
never signed by SMP, indicates that New York law should apply to
any suit arising from the contract.
In short, there is scant evidence that SMP engaged in the
kind of purposeful activity necessary for a valid assertion of
personal jurisdiction over a nonresident defendant.
reiterate, if personal jurisdiction were established under these
circumstances, SMP could be haled into any court in the country
simply by virtue of the location of its contractual parties.
What is more important is that there is little indication that
New Jersey has any interest in this case, particularly when it
appears that the laws of Alabama or New York may only apply to
the dispute, and the performance of the contract was to occur in
places other than New Jersey.
Consequently, the Court finds that the exercise of personal
jurisdiction over SMP in this Court does not satisfy the
requirements of due process, since ECI has not established that
SMP has sufficient contacts to New Jersey, or that SMP’s
presence in this Court would comport with fair play and
Therefore, the action must be dismissed
for lack of personal jurisdiction over SMP. 10
ECI is not left without a domestic forum to litigate its
dispute with SMP, as SMP concedes that this action could be
commenced against it in Alabama.
For the reasons expressed above, the default entered
against SMP must be vacated, and EIC’s complaint against SMP
must be dismissed for lack of personal jurisdiction.
motion for default judgment must therefore be denied, and SMP’s
motion to vacate default and dismiss the complaint must be
An appropriate Order will be entered.
November 17, 2017
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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