WINEBOW, INC. v. RHODE ISLAND DISTRIBUTING CO., LLC
Filing
13
OPINION. Signed by Judge John Michael Vazquez on 4/3/2018. (ld, )
Not for Publication
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
WINEBOW, INC.,
Plaintiff
Civil Action No. 17-4833
V.
OPINION
RHODE ISLAND DISTRIBUTING CO., LLC,
Defendant.
John Michael Vazguez, U.S.D.J.
This matter comes before the Court on Defendant Rhode Island Distributing Co., LLC’s
(“Defendant” or “RIDC”) motion to dismiss the Complaint pursuant to Federal Rules of Civil
Procedure 12(b)(2) and 12(b)(3) or, in the alternative, to transfer this action pursuant to 2$ U.S.C.
§ 1404(a). D.E. 6. Plaintiff Winebow, Inc. (“Plaintiff’ or “Winebow”) filed a brief in opposition,
D.E. 10, to which Defendant replied. D.E. 12.’ The Court reviewed the submissions in support
and in opposition, and considered the motion without oral argument pursuant to Fed. R. Civ. P.
78(b) and L. Civ. R. 78.1(b). For the reasons stated below, Defendant’s motion is DENIED.
‘In this Opinion, Defendant’s motion to dismiss (D.E. 6) will be referred to as “Def.
Brf” Plaintiffs brief in opposition (D.E. 10) will be referred to as “P1. Opp.” Defendant’s reply
brief(D.E. 12) will be referred to as “Def. Rep.”
BACKGROUND
I.
A. Factual Background
The Parties & the Lawsuit
Plaintiff Winebow is a Delaware corporation whose principal place of business is in New
Jersey. Complaint (“Compl.”)
¶
1. Plaintiff imports and distributes wine. Id. Defendant RIDC
is a limited liability company whose principal place of business is in Rhode Island. Id.
¶
2.
Defendant is a wholesale distributor that purchases and resells a variety of alcoholic and non
alcoholic beverages in Rhode Island on behalf of its importers, including Plaintiff. Id.
In 2003, Winebow’s business office was located in Montvale, New Jersey, and its
warehouse was located in Pine Brook, New Jersey. P1.
Aff.”)
¶ 2;
Opp.,
Affidavit of Keith Renna (“Reima
D.E. 10-1. In 2016, Winebow consolidated its business office with its warehouse in
Pine Brook, New Jersey. Id.
RIDC is not registered or licensed to conduct business in New
Jersey. Def. Brf., Affidavit of Kenneth Mancini (“Mancini Aff.”) ¶ 4; D.E. 6-2. It has no offices,
employees, bank accounts, assets, or customers in New Jersey. Id.
¶ 5.
From May 200$ to 2017, Defendant acted as a wholesale distributor of Winebow’s wine
and spirit portfolio in Rhode Island. Cornpl.
¶ 7.
arose from an oral distributorship agreement. Id.
Plaintiff claims that this business relationship
¶ 8.
There was no written agreement between
the parties. Id. In 2017, Winebow terminated its agreement with RIDC and retained a new entity
to import and distribute its wines and spirits in Rhode Island. Id.
¶
11. RIDC claimed that the
Rhode Island Dealership Preservation and Preservation Act (the “Dealership Act”), R.I. Gen. Laws
§
6-54-1 et seq., prohibited Winebow from terminating their agreement and appointing a new
distributor. Id.
¶J
10, 13—14.
2
History of Business Relationship
In 200$, RIDC sought to acquire the assets of Slocum & Sons (“Slocum”), a Rhode Island
business that specialized in selling wines to Rhode Island retailers and restaurants. Id.
¶ 7.
From
RIDC’s perspective, Slocum’s exclusive distribution of Winebow’s portfolio “was the single most
valuable asset of the Slocum & Sons transaction.” Id.
¶ 8.
Thus, before finalizing the acquisition,
RIDC sought assurance that Winebow would transfer their exclusive distribution rights from
Slocum to RIDC. Def. Rep., Supplemental Affidavit of Kenneth Mancini (“Supp. Mancini Aff.”)
¶4;D.E. 12-2.
RIDC and Winebow then entered in negotiations over their distributorship relationship.
On April 24, 2008, RIDC met with Slocurn’s principal and Winebow’s principal outside of New
Jersey, apparently in New York City. Id.
acquisition closed. Id.
¶ 12.
¶J
5-8. On May 20, 2008, the RIDC and Slocum
RIDC and Winebow then finalized their distributorship relationship.
In June 2008, RIDC’s inventory purchasing administrator sent a letter to Winebow which included
trade references and banking contacts. Id.
¶ 14; see Renna Aff. ¶ 4 & Ex.
1; D.E. 10-2. Winebow
required the information to determine whether it would appoint RIDC to be an authorized
wholesaler. Renna Aff. ¶4. Shortly thereafter, RIDC also sent Winebow a credit application. Id.
¶ 5 & Ex. 2.
Again, Winebow required the credit application in evaluating RIDC as an authorized
distributor. Id.
¶ 5.
Winebow and RIDC’s agreement was verbal and contained no limitations on
termination.
Defendant believes that the majority of business meetings between the parties, over the
course of their dealings, took place in Rhode Island. RIDC management employees attended
Winebow wine tastings in New York City. Mancini Aff
¶
11. Further, meetings between RIDC
employees and Winebow representatives took place in Rhode Island. Id.
3
¶
12. RIDC indicates
that it “mostly” communicated with individuals located outside New Jersey regarding sales and
marketing. Id.
¶
13. finally, RIDC sent payment to Winebow via check to a post office box in
Massachusetts. Id.
¶
14.
Plaintiff does not dispute Defendant’s information regarding their dealings but, instead,
offers further details. As noted, on June 4, 2008, RIDC sent a letter to Winebow in New Jersey,
listing its trade references and banking accounts. Renna Aff.
¶4
& Ex. 1; D.E. 10-2. Six days
later, on June 10, 2008, RIDC sent the required credit application to Winebow’s office in
Montvale, New Jersey. Id.
¶ 5 & Ex. 2; D.E.
10-2; Supp. Mancini Aff.
¶ 17;
D.E. l22.2
In the normal course of business operations, RIDC emailed purchase orders to Winebow.
Renna Aff.
¶ 7.
Typically, Winebow’s customer service team in New Jersey received these emails.
Over the course of their business relationship, RIDC sent approximately 477 purchase orders to
Winebow, reflecting a total purchase amount of $4,900,000. Id.
¶
6 & see Ex. 3; D.E. 10-3.
Pursuant to those purchase orders, approximately $2,200,000 worth of Winebow’s goods was
transferred to Defendant from Winebow’s Pine Brook, New Jersey warehouse. Id.
¶8
& see Ex.
3; D.E. 10-3.
Upon receiving the purchase orders, Winebow’s customer service team in New Jersey sent
RIDC sales order confirmations. Id.
¶ 9.
The order confirmations instructed RIDC to schedule
pick-up of the Winebow goods from the warehouse in Pine Brook, New Jersey. Id.
4; D.E. 10-4. Winebow issued RIDC invoices from its Pine Brook office. Id.
D.E. 10-5. RIDC issued bill-back invoices to Winebow in New Jersey. Id.
2
¶ 12
¶
¶ 9 & see Ex.
11 & see Ex. 5;
& see Ex. 6; D.E.
For the most part, the parties only appear to disagree on one factual issue. As noted, RIDC
indicates that it first met with the head of Winebow outside of New Jersey, most likely in New
York. In comparison, Winebow believes that it had no relationship with RIDC prior to receiving
RIDC’s letter and credit application in June 2008. Renna Aff. ¶ 6. This factual dispute does not
impact the Court’s analysis.
4
10-6. Over the course of these dealings, Winebow claims that RIDC’s personnel contacts with
Winebow in New Jersey included Keith Renna, Josephine Pais, Glen DePew, Rose Savage, Gina
Lacroce, the Winebow National Service Group, and the Winebow bill-back group. Id.
¶ 13.
Plaintiff also provides additional details regarding the shipping of Winebow’s goods to
RIDC. Winebow’s national shipping supervisor and team prepared outbound orders for RIDC
from the Pine Brook, New Jersey warehouse. P1. Opp., Affidavit of Mariano Rivera (“Rivera
Aff.”)
¶ 2;
D.E. 10-7. This included loading the goods onto RIDC trucks or carriers that arrived
at the New Jersey warehouse. Id. Between 200$ through 2015, Winebow representatives in New
Jersey sent ernails to RIDC confirming the sales orders and infonriing RIDC how to schedule a
pick-up from the Pine Brook warehouse. Id. ¶4. RIDC then arranged for the scheduled pick-ups
from the warehouse.
Id.
¶
5. The bills of lading for these purchases identify Winebow as the
shipper, and include the address of the Pine Brook warehouse. RIDC is identified as the consignee.
Id.
¶7
& see Ex. 1; D.E. il.3 Further, from 200$ to the end of their business relationship, RIDC
scheduled and sent carriers to the Pine Brook warehouse 212 times, accounting for invoices of
approximately $2,200,000. Id.
¶ $.
On february 8, 2017, Winebow’s affiliate Winebow Rhode Island, Inc. (“WRI”) filed an
application for a Class B Alcoholic Beverage License with the Rhode Island Department of
Business Regulation. P1. Opp., Affidavit of Kimberly Hiliman (“Hillman Aff.”)
¶J 2-3;
D.E. 10-
10. The Alcoholic Beverage Wholesale Dealers of Rhode Island, a trade association that RIDC is
a member of, “vigorously opposed” WRI’s license application.
Id.
¶
4. four months later,
following an evidentiary hearing, the Department granted WRI the license. Id.
The exhibit can be found in the amended document at D.E. 11.
5
¶ 5.
Sometime between June 12th to June 14th, 2017, Winebow sent RIDC a letter, explaining
Winebow’s intent to tenriinate their distribution relationship effective July 14, 2017. Mancini Aff.
¶
16. In response, on June 14, 2017, RIDC’s counsel informed Winebow that their intended
termination violated the Dealership Act. Id.
¶
17; Hiliman Aff.
¶ 6.
On June 22, 2017, RIDC’s
counsel again told Winebow that it had violated the Dealership Act. Hillman Aff.
¶ 6.
B. Procedural History
On June 29, 2017, Winebow filed its Complaint against RIDC. D.E. 1. Winebow seeks a
declaratory judgment that it may terminate its distribution relationship with RIDC; that it has no
continuing obligations to RIDC; and that Winebow’s new distributor, WRI, may continue
distributing Winebow’s portfolio in Rhode Island. Compi.
¶
16. On July 21, 2017, RIDC sued
Winebow in Rhode Island Superior Court alleging violations of the Dealership Act. Def. Brf. at
6; D.E. 6. Winebow subsequently removed this matter to United States District for the District of
Rhode Island on August 11, 2017. Def. Rep. at 4 fn. 1; D.E. 12.
On August 1, 2017, RDIC filed the pending motion in this Court. D.E. 6. Plaintiff then
filed a brief in opposition, D.E. 10, to which Defendant replied, D.E. 12. As noted, Defendant
seeks a dismissal for want of personal jurisdiction, a dismissal for lack of venue, or, alternately, a
transfer.
II.
LEGAL ANALYSIS
Personal jurisdiction and venue, although closely related issues which determine where a suit
will be adjudicated, raise separate considerations. “The question of personal jurisdiction, which
goes to the court’s power to exercise control over the parties, is typically decided in advance of
venue, which is primarily a matter of choosing a convenient forum.
.
.
.“
Eason v. Linden Avionics,
706F. Supp. 311 (D.N.J. 1989)(citingLerovv. Great IVestern United Corp.,443 U.S. 173 (1979)).
6
A. Personal Jurisdiction
Federal Rule of Civil Procedure 1 2(b)(2) permits a motion to dismiss for lack of personal
jurisdiction. In such a motion, the plaintiff “bears the burden of demonstrating the facts that
establish personal jurisdiction.” Pinker
Roche Holdings Ltd., 292 F.3d 361, 368 (3d Cir. 2002).
Initially, a court “take[s] the allegations of the complaint as true.” DayhoffInc. v. H.i Heinz Co.,
$6 f.3d 1287, 1302 (3d Cir. 1996). However, once a defendant raises a jurisdictional defense, “a
plaintiff bears the burden of proving by affidavits or other competent evidence that jurisdiction is
proper.” Id.; see also Time Share Vacation Club v. Ad. Resorts, Ltd., 735 f.2d 61, 66 n.9 (3d Cir.
1984). Yet, in reviewing the evidence, a court must “accept all of the plaintiffs allegations as true
and construe disputed facts in favor of the plaintiff.” Carteret Say. Bank v. Shttshan, 954 f.2d
141, 142 n.1 (3d Cir. 1992); see also Metcalfe v. Renaissance Marine, Inc. 566 F.3d 324, 330 (3d
Cir. 2009) (“[I]t is well established that in deciding a motion to dismiss for lack of jurisdiction, a
court is required to accept the plaintiffs allegations as true, and is to construe disputed factors in
favor of the plaintiff’) (internal quotation marks omitted); Toys “R” Us, Inc. v. Step Two, S.A., 318
F.3d 446, 457 (3d Cir. 2003) (“[A] court is required to accept the plaintiffs allegations as true,
and is to construe disputed facts in favor of the plaintiff [when deciding a motion regarding
personal jurisdiction.]”). Therefore, in determining whether personal jurisdiction exists, the Court
looks beyond the pleadings to all relevant evidence and construes all disputed facts in favor of the
plaintiff.
“[A] federal district court may assert personal jurisdiction over a nonresident of the state
in which the court sits to the extent authorized by the law of that state” so long as the jurisdiction
comports with the Due Process Clause of the Fourteenth Amendment. Marten
V.
Godwin, 499
F.3d 290, 296 (3d Cir. 2007) (internal quotation marks omitted). The inquiry thtis involves a two
7
step process, first looking to the state requirements and then to the constitutional requirements.
IMO Inthts., Inc. v. Kick-art AG, 155 F.3d 254, 259 (3d Cir. 1998). New Jersey’s long-arm
jurisdiction law provides that courts may “exercise jurisdiction over a non-resident defendant to
the uttermost limits permitted by the United States Constitution.” Nicastro v. McIntyre Mach,
Am., Ltd., 201 N.J. 48,72 (2010) (internal quotation marks omitted), rev’d on other grounds sub
nom., I McIntyre Mach., Ltd. v. Nicastro. 564 U.S. 873 (2011). Accordingly, the two steps are
collapsed into one and
“we
ask whether, under the Due Process Clause, the defendant has certain
minimum contacts with [New Jersey] such that the maintenance of the suit does not offend
traditional notions of fair play and substantial justice.” O’Connor v. Sandy Lane Hotel Co., 496
F.3d 312, 316 (3d Cir. 2007) (internal quotation marks omitted). In other words, to establish
personal jurisdiction, the Due Process Clause requires (1) minimum contacts between the
defendant and the forum; and (2) that jurisdiction over the defendant comports with “fair play and
substantial justice.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Int’l
Shoe Co. v. Washington,326U.S. 310, 320 (1945)).
The “constitutional touchstone remains whether the defendant purposefully established
‘minimum’ contacts in the forum State.” Id. at 474 (citing Int’l Shoe Co., 326 U.S. at 316). A
defendant must have “fair warning” that its conduct will subject it to the jurisdiction of a foreign
court. Id. at 472. A defendant’s conduct and connection with the forum state must be such that
the defendant should reasonably anticipate being haled into court there. World-Wide Volksi’agen
Corp.
V.
Woodson, 444 U.S. 286, 297 (1980).
Once a plaintiff demonstrates a prima fade case of personal jurisdiction by establishing
minimum contacts, the burden shifis to the defendant. In fact, once minimum contacts have been
shown, jurisdiction is “presumptively constitutional.” 0 ‘Connor, 496 F.3d at 324. A defendant
8
“must present a compelling case that the presence of some other considerations would render
jurisdiction unreasonable.” Burger King, 471 U.S. at 477.
Personal jurisdiction may be established by means of general jurisdiction or specific
jurisdiction over a defendant. Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915,
919 (2011). If a company is subject to a forum’s general jurisdiction, it can be sued there on any
matter. Id. If, however, an entity is solely subject to specific jurisdiction, it may only face suit in
the forum if its activities concerning the forum are related to the claims in the suit. Id.
1. General Personal Jurisdiction
General jurisdiction, also called all-purpose jurisdiction, may be asserted over an out-ofstate corporation “when their affiliations with the State are so ‘continuous and systematic’ as to
render them essentially at home in the forum State.” Id. For an entity, its “place of incorporation
and principal place of business are paradigm bases for general jurisdiction[.]” Daimler AG v.
Baztman, 134 S. Ct. 746, 760 (2014) (internal quotation marks omitted). Once general jurisdiction
is established, a court may hear any and all claims against the corporation. Goodyear Dunlop
Tires Operations, S.A., 564 U.S. at 919.
Here, RDIC argues that the Court does not have general jurisdiction.
Def. Brf. at 8-9.
Defendant asserts that New Jersey is neither its place of incorporation nor its principal place of
business. Id. at 8. Further, while it is possible for general jurisdiction to nevertheless exist in
narrow circumstances, Plaintiff has not alleged facts showing continuous and systemic contacts
between RIDC and New Jersey. Id. at 9. Plaintiff does not claim that the Court has general
jurisdiction over RIDC. P1. Opp. at 8 fn. 1. However, Plaintiff indicates that it would like targeted
discovery on this issue. Id. In support of this discovery request, Plaintiff points to a RIDC website,
where RIDC describes itself as a business servicing New England and Upstate New York. Id.
9
In light of Daimler, the Court does not have general jurisdiction over RIDC. RIDC is
incorporated in New Jersey. Its principal place of business is not
in
not
New Jersey. Moreover,
Plaintiff has failed to make a sufficient showing that jurisdictional discovery is appropriate.
Plaintiff merely references RIDC’s website, which states that RIDC does business in New York,
not New Jersey. Plaintiff does not present facts contradicting Defendant’s claims that it has no
employees or presence in New Jersey. The Court finds that it does not have general personal
jurisdiction.
2. Specific Personal Jurisdiction
Specific jurisdiction requires that the defendant “purposefully directed his activities at
residents of the forum and the litigation results
from
alleged injuries that arise out of or relate to
those activities.” Burger King Corp., 471 U.S. at 472 (internal citations and quotation marks
omitted). The minimum contacts analysis depends upon “the relationship among the defendant,
the forum, and the litigation.” Shaffer v. Heitner, 433 U.S. 186, 204 (1977). However, actual
“[p]hysical presence within the forum is not required to establish personal jurisdiction over a
nonresident defendant.” IMOIndus., Inc., 155 F.3d at 259.
The Third Circuit has laid out a three-part test to determine whether specific jurisdiction
exists as to a particular defendant. O’Connor, 496 F.3d at 3 17. First, the defendant must have
“purposefully directed [its] activities at the forum.” Id. (internal quotation marks omitted).4
This factor has also been characterized as “purposeful availment.” Burger King, 471 U.S. at 475.
The factor focuses on contact that the defendant itself created with the forum State. Id. The
“purposefully directed” or “purposeful availment” requirement is designed to prevent a person
from being haled into a jurisdiction “solely as the result of random, fortuitous, or attenuated
contacts” or due to the “unilateral activity of another party or third person.” Id. (internal quotation
marks omitted) (citing Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 774 (1984)); World-Wide
Volkswagen Corp., 44 U.S. at 299; Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S.
408, 417 (1984)).
10
Second, the litigation must “arise out of or relate to at least one of those activities.” Id. (internal
quotation marks omitted). Third, if the first two requirements are met, the exercise ofjurisdiction
must “otherwise comport with fair play and substantial justice.” Id. (internal quotation marks
omitted).
A variation of the 0 ‘Connor test may apply depending on the nature of the action, for
example if a breach of contract or intentional tort is alleged. Here, although Plaintiff is seeking
declaratory relief, the matter is most akin to a contractual action. Plaintiff claims that it has the
right to terminate its business relationship with Defendant. Defendant, however, believes that such
termination violates the Dealership Act. In other words, Defendant claims that by operation of a
state statute, Plaintiff is in breach of the unwritten, verbal distributorship agreement between the
parties.
For a contract claim, a court analyzes the totality of circumstances surrounding the contract
to determine whether it may properly exercise jurisdiction over the defendant. Miller Yacht Sates,
Inc. v. Smith, 384 F.3d 93, 99 (3d Cir. 2004). This test is not “the equivalent of a requirement that
the defendants’ contacts with the forum be the proximate cause of the plaintiffs claims.”
Id.
Rather, a court must consider whether the defendant’s contacts with the forum were instrumental
in either the foniiation or the breach of the contract. Telcordia Tech Inc. v. Telkom SA Ltd., 458
F.3d 172, 177 (3d Cir. 2006); Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001)
(citation omitted); see also Vetrotex ‘ertainteed Corp. v. Consol. Fiber Glass Prod. Co., 75 F.3d
147, 151 (3d Cir. 1996) (“In determining whether specific jurisdiction exists, however, we consider
not only the contract but also ‘prior negotiations and contemplated future consequences, along
with the terms of the contract and the parties’ actual cottrse of dealing.” (emphasis added))
(quoting Burger King, 471 U.S. at 479)). Physical entrance into the jurisdiction is not required,
11
during negotiations or any other time, to find jurisdiction over a non-resident. Corigliano v.
Classic Motor, Inc., 611 F. App’X 77, 80 (3d Cir. 2015); Grand Entm’t Grp., Ltd. v. Star Media
Sales, Inc., 988 F.2d 476, 482 (3d Cir. 1993). Rather, telephone, wire, and other electronic
“communications can constitute contacts with the forum state.” Telcordia Tech Inc., 45$ F.3d at
177 (citing Burger King Corp., 471 U.S. at 476)); Gen. Elec. Co., 270 F.3d at 151.
a. Minimum Contacts/Purposeful Availment
Defendant largely relies on Vetrotex Certainteed Corp. v. Consol. fiber Glass Prod. Co.,
75 F.3d 147, 14$ (3d Cir. 1996), to support its assertion that specific jurisdiction does not exist.
Def. Brf. at 10-12. To that end, Defendant asserts that RIDC’s contacts with New Jersey were
“random” and “fortuitous.” Id. at 12. Plaintiff, however, argues that the facts in Vetrotex differ
significantly from the facts present here. P1. Opp. at 10. Plaintiff points to several cases where
specific jurisdiction was found to support its argument, including Bachmann Software & Servs. v.
Intoitch Grp., Inc., No. CIV.A.0$-2025, 2008 WL 2875680, at *1 (D.N.J. July 22, 2008).
In Vetrotex plaintiff Vetrotex CertainTeed Corporation5, a Pennsylvania corporation,
brought suit against defendant Consolidated Fiber Glass Products Company, a California
corporation. 75 F.3d at 147. On appeal, the Third Circuit addressed whether the district court had
properly dismissed the plaintiffs complaint for lack of personal jurisdiction. Id. The plaintiff
originally solicited the defendant to buy a fiberglass product. Between 1980 through 1989, the
parties had an ongoing business relationship. Id. at 149. The defendant had no offices, employees,
or representatives in Pennsylvania. Id. at 14$. The defendant also never sold any of its products
in, or through, Pennsylvania. Id.
For convenience, the Court only refers to “Vetrotex” as the plaintiff, although Vetrotex
functioned as both a wholly-owned subsidiary and parent corporation over the time at issue.
12
In 1991, the plaintiff again solicited defendant to buy its glass. Id. at 149. The plaintiff
flew to California to work out the terms of the new business relationship and soon afier the parties
entered into a new supply agreement. Id.
A year later, in 1992, the plaintiff again flew to
California to negotiate the renewal of the 1991 supply agreement. Id. Under the 1992 supply
agreement, the plaintiff agreed to ship its product from its plant in Texas to the defendant’s facility
in California. Id. The plaintiffs Southern California office sent the invoices to the defendant, and
the plaintiff received payment in California. Id.
In late 1993, the plaintiff decided it was no longer going to sell its fiberglass product to the
defendant. Id. As a result, the plaintiff terminated the agreement, via telephone, and ceased
making deliveries. Id. at 149-50. In response, the defendant withheld payments on outstanding
invoices. Id. at 150. In 1994, the plaintiff brought a diversity action against the defendant in the
Eastern District of Pennsylvania to recover the withheld payments. Id. Soon thereafier, the the
defendant sued plaintiff in California state court seeking to recover damages from the breach of
the 1992 agreement, and the plaintiff removed the case to federal court. Id.
On appeal, the Third Circuit affirmed the district court’s dismissal of Vetrotex’s complaint
for lack of personal jurisdiction. Id. at 153-54. The Third Circuit found that the defendant “was
merely a ‘passive buyer’ of Vetrotex’s product.” Id. at 152. Therefore, the defendant did not
purposeftilly avail itself of doing business in Pennsylvania. Id. The Vetrotex court specifically
noted the following:
{T]his is not a case where the defendant solicited the contract or
initiated the business relationship leading up to the contract. [n]or
is this a case where the defendant sent any payments to the plaintiff
or where the defendant engaged in post-sale
in the forum state
contact with the plaintiff in the forum state.
.
.
.
.
13
.
Id. at 152-53 (citations omitted). In affirming, the Circuit made clear that the parties’ course of
dealing is a relevant factor for personal jurisdiction purposes only if the dealings relate to the
disputed contract. Id. at 153. Thus, the court in Vetrotex found that dealings during the parties’
business relationship from 1980-1989 were not relevant to the personal jurisdiction analysis
regarding the 1992 agreement because that relationship had terminated in 1989. Id.
Comparatively, in Bach mann Software & Services, the plaintiff Bachrnann, a New Jersey
corporation with its principal place of business in New Jersey, brought suit against defendant
Intouch Group, Inc., a California Corporation with its principal place of business in California.
2008 WL 2875680, at *1 6 Glenn Bachrnann was plaintiffs primary developer and project liaison,
and he was a resident of New Jersey. The facts in large part relied on Mr. Bachrnairn’s direct
involvement with the defendant. In December 2006, Mr. Bachmann saw a message post in an
internet forum stating that the defendant was seeking software developers to work on its mobile
phone software application. Id. Mr. Bachrnann responded to the message and soon thereafter sent
a proposal of his work and a standard development agreement to the defendant. Id. Mr. Bachrnann
then flew to California to meet with the defendant. Id.
In March 2007, the parties signed an initial development agreement. Id. The agreement
stated that California law governed the tenns of the contract. Id. After some differences of opinion
in the ensuing months, Mr. Bachmann made several trips to California to renegotiate the terms of
the 2007 agreement. Id. at 2. In October 2007, the parties reached a new agreement. Mr.
Bachmann received a copy of the signed October 2007 agreement in New Jersey. Id. Over the
course of their business dealings, Mr. Bachmann traveled to the defendant’s California office seven
6
Judge Katharine Hayden of the New Jersey District Court referred defendant’s motions to then
Magistrate Judge Patty Shwartz for a Report and Recommendation. 2008 WL 2875680, at * 1.
The matter was then settled on September 10, 2008. Civil Docket Case, No. 08-2025; D.E. 30.
14
times for project planning and status meetings. Id. The parties exchanged over 5,000 emails, with
Mr. Bachmann receiving his emails in New Jersey. Id.
Pursuant to both the March and October 2007 agreements, the defendant made payments
to the plaintiff eleven times. For nine of those payments, the defendant mailed the payment to the
plaintiff in New Jersey. Id. Mr. Bachmann believed that defendant also owed him an additional
$59,000. Id. at 3. Therefore, in March 2008, the plaintiff ified a complaint in New Jersey Superior
Court alleging contract and tort claims. Id. The defendant then removed the matter to federal
court. Id.
As to the breach of contract claim, Judge Shwartz found that the District of New Jersey
had specific jurisdiction over the defendant. Id. at 12. Judge Shwartz pointed to multiple contacts
that the defendant had with the forum to support her finding. For example, Judge $hwartz noted,
the parties had exchanged more than 1,500 emails in connection with the October 2007 agreement
alone. Id. at 9. The defendant had also sent a copy of the newly executed October 2007 agreement
to Mr. Bachmann in New Jersey. Thus, Judge Shwartz found, the defendant should have known
that Mr. Bachmann would be performing the work in New Jersey. Id. Judge $hwartz added that
the defendant had sent payments to the plaintiff in New Jersey.
Mr. Bachmann had also
participated in telephone conferences with the defendant from New Jersey. Judge $hwartz further
observed that even the alleged breach of the contract itself arose from the defendant not sending
payments to the plaintiff in New Jersey. Id. Judge $hwartz found that the parties’ communications
reflected that the defendant had entered into negotiations “for an agreement that would have
created rights and obligations among the citizens of [New Jersey]
.
.
.
[and that the defendant]
deliberately and personally directed significant activities towards the state for the purpose of
obtaining a customized product.” Id. (citing Fiscus v. Combus Fin. AG, No. CIV.A.03-1328, 2006
15
WL 1722607, at *7 (D.N.J. June 20, 2006)) (internal quotations omitted).
Judge $hwartz,
therefore, concluded that the defendant had purposefully availed itself of doing business in New
Jersey.
Here, Defendant has sufficient minimum contacts with New Jersey to support specific
personal jurisdiction, and Defendant’s reliance on Vetrotex is misplaced.
Unlike Vetrotex,
Defendant was not a “passive buyer.” Defendant freely admits that when it sought to acquire the
assets of Slocurn, the key consideration in the deal was Slocum’s exclusive distribution rights for
Plaintiffs products. As a result, Defendant affirmatively sought assurances from Plaintiff that
Plaintiff would allow RIDC to continue as the exclusive distributor in Rhode Island. Defendant
clearly knew Plaintiff was a New Jersey company and considered the acquiring of Plaintiffs
business to be a, if not the, critical factor in deciding whether to purchase Slocum. By comparison,
Plaintiff did not seek out Defendant to enter into a business relationship.
Moreover, during the formation of the parties’ agreement, Defendant sent both a letter,
with RIDC trade references and banking contacts, and a credit application to Plaintiff in New
Jersey. Defendant attempts to downplay the significance of these documents by referring to the
letter as a “fonTi letter” and the credit application as “standard industry practice.” Supp. Mancini
Aff.
¶J 16-17; D.E. 12-2. However, notwithstanding the label Defendant attempts to assign these
documents, both were business documents directly related to Defendant’s securing of Plaintiffs
business. Defendant also argues that Plaintiff required these documents. Id. However, far from
supporting Defendant’s position, Plaintiffs insistence on receiving these documents only
underscores the importance of the infonTiation provided therein to the parties’ business
relationship.
16
Thereafter, during the parties’ course of dealings, Defendant sent numerous purchase
orders and bill-back invoices to Plaintiff in New Jersey. Overall, Defendant sent approximately
477 purchase orders to Plaintiff in New Jersey, reflecting approximately $4,900,000 in sales.
Defendant also arranged for the pick-up of approximately $2.2 million worth of products from
Plaintiff in New Jersey. To pick-up these goods Defendant made, or had carriers make,
approximately 212 trips to New Jersey. Thus, and unlike in Vetrotex, Defendant had extensive
post-agreement contacts with Plaintiff in New Jersey relating to their distributorship agreement.
Although Defendant attempts to characterize its contacts with New Jersey as “random” and
“fortuitous,” the Court disagrees. Defendant could make such an argument if, for example, one of
its emails was routed through Pennsylvania before reaching Plaintiff in New Jersey, and Plaintiff
brought suit in Pennsylvania. However, this is not the case. Defendant sent information to New
Jersey and picked up goods from New Jersey because that is where Plaintiff and its goods were
located. There is nothing random or fortuitous about such contacts.
Finally, as noted, Defendant did not have to physically enter New Jersey (although its
carriers certainly did, over 200 times, to pick-up Plaintiffs goods) for the Court to find specific
personal jurisdiction.
Defendant purposefully availed itself of the privilege of conducting
activities in New Jersey.
b. Fair Play and Substantial Justice
Once a plaintiff makes a showing of minimum contacts so that the first factor is met, a
defendant bears a “heavy burden” to show an absence of fairness or lack of substantial justice.
Grand Entm’t Grp., Ltd., 988 f.2d at 483. “The existence of minimum contacts makes jurisdiction
presumptively constitutional, and the defendant ‘must present a compelling case that the presence
of some other considerations would render jurisdiction unreasonable.” O’Connor, 496 F.3d at
17
324 (quoting
Burger
King, 471 U.S. at 477). A court considers several factors to deterniine
whether exercising jurisdiction would comply with traditional notions of fair play and substantial
justice, including “the burden on the defendant, the interests of the forum state, plaintiffs interest
in obtaining relief, the interstate judicial system’s interest in obtaining efficient resolution of
controversies, and, if relevant, the shared interest of the several states in furthering substantive
social policies.” XL Specialty Ins. Co.
v.
Westmoretand Coal Co., No. CIV. 06-1234, 2006 WL
1783962, at *10 (D.N.J. June 26, 2006) (citing Asahi Metal Indus. Co., Ltd. v. Superior Court of
Cal., Solano County, 480 U.S. 102, 113 (1987)).
Here, the Court’s exercise of jurisdiction over the Defendant accords with the notions of
fair play and substantial justice. Defendant, in a conclusory fashion, states that “litigating here
would place an unnecessary burden on RI Distributing.” Def. Brf. at 13. Such a conclusory
argument in no ways meets Defendant’s heavy burden of showing an absence of fairness or lack
of substantial justice. Moreover, a review of the supporting documents that Defendant submitted
to the Court fails to reveal any factual support for Defendant’s claim.
Defendant also indicates that this matter requires interpretation of the Dealership Act,
which, according to Defendant, no Rhode Island court has yet do. Def. Brf. at 13-14. Yet, the
Court does not find this argument compelling because the case in Rhode Island is now in federal
court. Thus, in either jurisdiction, a federal court will be interpreting Rhode Island state law.
Defendant has not made any compelling arguments as to why a federal court in Rhode Island is
better equipped to undergo this interpretation than a federal court in New Jersey. See generally
Liberty Mttt. Ins. Co. v. Treesdale, Inc.. 419 f.3d 216, 228 (3d Cir. 2005) (recognizing that a
federal court sitting in diversity always applies state substantive law); !ifcKenna v. Ortho Pharm.
Corp., 622 F.2d 657, 663 (3d Cir. 1980) (finding that a “federal court attempting to forecast state
18
law must consider relevant state precedents, analogous decisions, considered dicta, scholarly
works, and any other reliable data tending convincingly to show how the highest court in the state
would decide the issue at hand”).
Therefore, the Court has specific personal jurisdiction over Defendant.
B. Venue
In federal court, venue is governed by two statutes: 2$ U.S.C.
§ 1404(a) and 2$ U.S.C. §
1406. Kierstein v. Ostlitnd, No. CIV. 13-07513, 2014 WL 3731295, at *1 (D.N.J. July 2$, 2014).
Section 1404(a) provides that “[for the convenience of parties and witnesses, in the interest of
justice, a district court may transfer any civil action to any other district or division where it might
have been brought.” Jitmara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). Section
1406, in contrast, “comes into play where plaintiffs file suit in an improper forum.” Lafferty v. St.
Rid, 495 f.3d 72, 77 (3d Cir. 2007) (history and citation omitted). It provides that “[t]he district
court of a district in which is filed a case laying venue in the wrong division or district shall dismiss,
or if it be in the interest of justice, transfer such case to any district or division in which it could
have been brought.” 28 U.S.C.
§ 1406.
Here, Defendant argues that the Court should dismiss the Complaint pursuant to Section
1406. Def. Brf at 14. Plaintiff counters that venue is proper pursuant to 2$ U.S.C.
§ 1391(b)(2).
Section 139 1(b)(2) provides, in relevant part, that venue is proper in “a judicial district in which a
substantial part of the events or omissions giving rise to the claim occurred.” Plaintiff asserts that
the central event giving rise to this lawsuit was its written notice of termination, drafted in New
Jersey and, sent to Defendant on Winebow’s New Jersey letterhead. P1.
Opp.
at 18. Defendant,
however, contends that “nearly all of the parties’ conduct relating to the distributorship occurred
outside New Jersey” and so venue is not proper pursuant to Section 1391(b)(2).
19
The Court disagrees with both parties. As to Plaintiffs argument, the triggering event may
have been the termination letter, but the Court must also review the contractual relationship of the
parties, as discussed above. Similarly, as to Defendant’s assertion, the course of the parties’ entire
dealings appears relevant in light of Defendant’s claim that the Dealership Act applies. Thus, the
same facts that support a finding of specific personal jurisdiction also support a finding of proper
venue. Defendant solicited a business relationship with Plaintiff, a New Jersey corporation.
Defendant sent Plaintiff business documents in New Jersey, including the initial letter and a credit
application, to form a business relationship between the parties.
purchase orders and bill-back invoices to Plaintiff in New Jersey.
Defendant sent numerous
Overall, Defendant sent
approximately 477 purchase orders to Plaintiff in New Jersey, reflecting approximately $4,900,000
in sales. Defendant also arranged for the pick-up of approximately $2.2 million worth of products
from Plaintiff in New Jersey. Thus, the parties’ course of dealings shows that a substantial part of
the events giving rise to the underlying claim occurred in the District of New Jersey. The Court
denies Defendant’s motion to dismiss for improper venue but for reasons different than those
espoused by Plaintiff.
C. Transfer
As stated above, Section 1404(a) provides that a district court may transfer a civil matter
to another district for the convenience of the parties and witnesses or in the interest of justice.
Jumara, 55 F.3d at $79. A defendant bears the burden of establishing that transfer is warranted.
Id. This is not a light burden because “a plaintiffs choice of venue should not be lightly disturbed.”
Id. (quotation omitted). At outset, the Court notes that Plaintiff does not contest Defendant’s
submission that Plaintiff could have brought this action in Rhode Island (i.e. that venue would
20
have been proper there, and that Rhode Island could exercise personal jurisdiction over parties).
Shutte v. Armco Steel Corp., 431 F.2d 22, 24 (3d Cir. 1970).
In ruling on a motion to transfer, a court considers a variety of factors, but also decides the
motion on an “individualized, case-by-case consideration of convenience and fairness.” Stewart
Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Ditsen v. Barrack, 376 U.S. 612,
622 (1964)). Section 1404(a) provides three statutory factors for a court to consider: “convenience
of parties, convenience of witnesses, or interests ofjustice.” Id. The Third Circuit has also found
that a court should consider several private and public interests in determining whether transfer is
warranted. The private factors include the plaintiffs forum choice, the defendant’s preferred
forum choice, whether plaintiffs claim arose elsewhere, the convenience of the parties as indicated
by their relative physical and financial conditions, the convenience of the witnesses to the extent
they would not be available in one of the fora, and the location of the books and records to the
extent they would not be available in one of the fora. Id.
The public factors include the
enforceability of the judgment; practical considerations that could make a trial easier, less
expensive, or more efficient; the relative court congestion of the two fora; the local interest in
deciding the controversy at home; the public policies of the fora; and the familiarity of the trial
judge with the applicable state law in diversity cases. Id. at 879-80.
Here, Defendant’s primary argument is that Plaintiffs choice of forum is entitled to no
deference because Plaintiff filed for declaratory relief in anticipation of coercive litigation. Def.
Brf. at 16-17. Plaintiff counters that Defendant’s argument omits material facts that led it to file
in New Jersey. P1. Opp. at 20. Specifically, Plaintiff claims that it spent four months attempting
to get a license for its affiliate, WRI, because the trade association, the Alcoholic Beverage
Wholesale Dealers of Rhode Island
-
of which RIDC is a member
21
-
“vigorously opposed” the
license application. Then, after WRI finally received a license, Defendant “surprised” Plaintiff by
suddenly “threatening Winebow with liablity under the Dealership Act.”
Id.
In its reply,
Defendant does little to contest these facts other than saying that it is only one member of the trade
association. Def. Rep. at 15.
Generally, a Plaintiffs choice of forum is a “paramount consideration” in deciding a
motion to transfer. Shittte, 431 F.2d at 25; Aventis Pharma LA. v. Sandoz Inc., No. CIV.A. 063671MLC, 2007 WL 110122$, at *3 (D.N.J. Apr. 10, 2007). Given the licensing process that
preceded Plaintiffs decision to terminate its relationship with Defendant, the Court finds that
Plaintiffs decision to terminate the parties’ business relationship came as no surprise to Defendant.
However, even if Plaintiff s claim for declaratory relief should not be given the deference normally
accorded to a plaintiffs choice of forum, Defendant carries the burden of proving that transfer is
appropriate. In that regard, Defendant makes a perfunctory argument, consisting of less than a
page, to support its motion. Def Brf. at 17.
As to the private factors, and as already noted, the claim at issue here depends on the
parties’ entire course of dealings, in addition to the critical fact that the parties’ agreement was
verbal and did not restrict Plaintiff from terminating the agreement. Thus, the events in New Jersey
are important. As to the convenience of the parties, New Jersey is obviously the more convenient
forum for Plaintiff to litigate in and Defendant fails to allege concrete facts as to why it would be
financially difficult to litigate the matter in New Jersey. Similarly, Defendant presents no concrete
facts as to why it would be inconvenient for its witnesses to litigate the matter in New Jersey or,
more importantly, why certain witnesses would not be available if the matter is litigated in New
Jersey.
22
Further, as to the public factors, Defendant, again, reiterates that its case will turn on a
judicial interpretation of the Dealership Act. However, as the Court noted, whether the case is
litigated in New Jersey or Rhode Island, a federal court will be charged with interpreting the
statute. Finally, New Jersey has a local interest in permitting its corporate residents to litigate their
disputes in New Jersey. Defendant has made no arguments concerning the remaining factors, such
as enforceability of the judgment, so the Court does not consider them in determining whether
Defendant has carried its burden.
The Court finds that Defendant has not carried its burden to show that transfer is warranted.
Defendant’s motion to transfer is denied.
III.
CONCLUSION
Therefore, for the reasons discussed above, Defendant’s motion to dismiss pursuant to
Federal Rules of Civil Procedure 12(b)(2) and 12(b)(3) or, in the alternative, to transfer this action
pursuant to 28 U.S.C.
§ 1404(a), is DENIED. An appropriate Order accompanies this opinion.
Dated: April 3, 2018
(_\ 27r/
John fiIichael VazquI, ‘1J1..D.J.
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