HANES COMPANIES, INC. v. GALVIN BROS., INC
Filing
27
MEMORANDUM OPINION AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE signed by MAG/JUDGE L. PATRICK AULD on 2/15/2013; RECOMMENDING that GBI's Motion to Dismiss for Lack of Personal Jurisdiction pursuant to Federal Rule of Civil Procedure 12( b)(2) (Docket Entry 10 ) be denied. ORDERED that the Clerk shall set this case for an Initial Pretrial Conference before the undersigned Magistrate Judge on April 29, 2013. FURTHER that Hanes's Motion for Status Conference and Request to Begin Discovery (Docket Entry 22 ) is DENIED AS MOOT. (Sheets, Jamie)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
HANES COMPANIES, INC., d/b/a
HANES GEO COMPONENTS,
)
)
)
)
)
)
)
)
)
)
Plaintiff,
v.
GALVIN BROS., INC.,
Defendant.
1:09CV918
MEMORANDUM OPINION AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
This
case
comes
before
the
undersigned
United
States
Magistrate Judge for a recommendation on a Motion to Dismiss for
Lack of Personal Jurisdiction pursuant to Federal Rule of Civil
Procedure
12(b)(2)
filed
by
(“GBI”).
(Docket
Entry
Defendant
10.)
In
Galvin
addition,
Brothers,
Plaintiff
Inc.
Hanes
Companies, Inc. (“Hanes”) has filed a Motion for Status Conference
and Request to Begin Discovery.
(Docket Entry 22.)
For the
reasons that follow, GBI’s instant Motion to Dismiss should be
denied and the case will be set for an Initial Pretrial Conference.
I. BACKGROUND
The Complaint identifies Hanes as a North Carolina corporation
with its principal place of business in Winston-Salem, North
Carolina, and GBI as a New York corporation with its principal
place of business in Great Neck, New York.
2.)
(Docket Entry 2, ¶ 1,
Greg Hayes, GBI’s Chief Estimator and one of its three equity
partners (Docket Entry 10-3, ¶ 1), has averred that:
GBI has no offices, employees, agents or representatives
based in North Carolina, nor have any GBI employees,
agents or representatives traveled to North Carolina on
behalf of GBI. GBI does not advertise, solicit or bid
for projects located in North Carolina, nor does GBI have
a telephone listing in North Carolina. GBI has no bank
accounts, real estate or other property in North
Carolina. GBI has never performed any work or services
in North Carolina. It has never shipped any goods in
North Carolina. It has never derived any revenue from
North Carolina.
(Id., ¶ 16.)1
This
case
arises
from
a
contract
(valued
by
Hanes
at
approximately $2,000,000 (see Docket Entry 18, ¶¶ 21, 28-29)) under
which “Hanes was to supply, and [GBI] was to purchase, components
to be assembled into modular underground tanks for a construction
project for which [GBI] was the general contractor.” (Docket Entry
2, ¶ 3.)
According to Bobby Lee Starling, Jr., Hanes’s Vice
President of Engineered Products (Docket Entry 19, ¶ 1), “Hanes is
an authorized distributor of products made by EcoRain, Inc.,
including plates used for the construction of modular tanks used in
underground water systems.”
(Id., ¶ 2.)
Starling has averred
that, in early 2008, he learned the Town of Babylon, New York had
plans for an underground storm detention system (the “Project”) and
that he telephoned Babylon’s engineer “to ensure that the EcoRain
product would be designated as ‘approved’ in [the Project’s]
specifications.”
(Id.,
¶
6.)
The
Project’s
specifications
(attached to Starling’s affidavit) did list EcoRain’s plates under
the
heading
“Approved
Product,”
along
with
two
others
(the
“Atlantis Matrix D-Rain Tank” and “Invisible Structures, Inc.
1
Hanes did not dispute these claims in its response to GBI’s
instant Motion to Dismiss. (See Docket Entry 20.)
-2-
Rainstore3 Underground Stormwater Retention System”), as well as
(Docket Entry 19-2, § 2.01.B.)2
any “approved Equal.”
According to Hayes, “[i]n preparing to bid on the Project, GBI
contacted EcoRain regarding pricing . . . and EcoRain directed GBI
to contact Hanes, EcoRain’s distributor . . . .”
3,
¶
8.)
“contacted
Starling’s
affidavit
[Starling’s]
reflects
office
in
(Docket Entry 10-
that,
indeed, Hayes
Winston-Salem
to
obtain
information regarding the EcoRain product . . . [and that Hanes’s
Technical
Director
Keith]
Harris
responded
through
telephone
conversations from [Hanes’s] office in North Carolina.”
(Docket
Entry 19, ¶ 9.)
Hayes further has averred that, “in May 2008,
[he],
of
on
behalf
GBI,
requested
bids
from
all
‘approved’
manufacturers through their respective distributors [and] . . .
requested that the bids be submitted by telephone or facsimile. In
response, the distributors, including Hanes, submitted quotes to
GBI.”
(Docket Entry 10-3, ¶ 9.)
In other words, as Starling put
it, “Hayes called [Starling’s] office in Winston-Salem to solicit
a bid from Hanes . . . [and Hanes] responded by faxing a price
quote for [the] EcoRain plates from [Starling’s] Winston-Salem
office to [GBI] on May 21, 2008.”
2
(Docket Entry 19, ¶ 11.)
Starling’s affidavit asserts that the Rainstore3 product “is
distributed by A.H. Harris and Sons, Inc. . . . [which] lists its
headquarters as Newington, Connecticut, . . . [and which] has
twelve offices in New York . . . .” (Docket Entry 19, ¶ 5.) In
addition, it states that a “StormTank product, distributed by VariTech LLC, a New York company, would be acceptable under the
[P]roject[’s] specifications as an ‘equal’ to the Rainstore3
product and the EcoRain product.” (Id., ¶ 7.) GBI’s subsequentlyfiled reply does not contest these matters. (See Docket Entry 21.)
-3-
Hayes’s affidavit reflects that, “[o]n May 23, 2008, [he], on
behalf of GBI, submitted GBI’s bid on the Project . . . [and], at
the close of the bidding that day, . . . [GBI] was awarded the
contract . . . .”
(Docket Entry 10-3, ¶ 10.)
However, through the affidavits of Starling and George Swenson
(GBI’s manager for the Project (see Docket Entry 10-4, ¶ 2)), the
parties have agreed that Hanes and GBI did not finalize their
agreement until early October 2008. (See id., ¶¶ 2-5; Docket Entry
19, ¶¶ 12-13.)
According to Hayes, “between May and October 2008,
Hanes and GBI had . . . contacts regarding the possibility of GBI
purchasing plates from Hanes . . . consisting of roughly a dozen
phone calls, facsimiles and e-mails . . . [as well as an] in-person
contact [Hayes] had with . . . Harris . . . [at GBI’s] Great Neck,
New York office in June 2008.”
(Docket Entry 10-3, ¶ 11-12.)
Starling’s affidavit reflects that, during this period, the parties
had more communications than Hayes indicated,3 in that (apart from
telephone calls and facsimiles) Starling “found evidence of at
least a dozen e-mails between Hanes employees in North Carolina and
[GBI]
employees
while
the
contract
was
being
negotiated[.]”
(Docket Entry 19, ¶ 27; see also id., ¶¶ 10 (“[GBI] representatives
3
This difference may reflect a gap in GBI’s submissions,
rather than a direct conflict between the parties’ evidence, in
that, although Hayes purported to identify the total number of
contacts “between May and October 2008 [that] Hanes and GBI had”
(Docket Entry 10-3, ¶ 11), he also acknowledged that Swenson “took
over discussions with Hanes in or around September 2008, along with
Edward Galvin, President of GBI” (id., ¶ 15).
Moreover, other
evidence from GBI acknowledges further communications prior to
contract formation, but after Hayes’s involvement ended.
(See,
e.g., Docket Entry 10-4, ¶ 3.)
-4-
routinely contacted [Starling] in North Carolina via [his] direct
line at [his] Winston-Salem office, 336 area code, or [his] cell
phone, a 704 area code.”), 27 (“Furthermore, there were a large
number of phone calls made between [GBI] employees and [Starling]
or Mr. Harris in North Carolina.”).)
Starling further has averred
that, of those dozen or more e-mails exchanged between the parties
during the negotiation period, Swenson and Hayes “sent at least
seven . . . addressed to [Starling or Harris].”
(Id., ¶ 12.)
As to the substance of these communications, Starling has
averred that GBI “actively negotiated many aspects of the final
contract” (id., ¶ 12), such that it “and Hanes’ standard purchase
order are
significantly
different
.
.
.
[due
to]
negotiated
agreements which were integrated into the writing” (id., ¶ 16).
For example, according to Starling, GBI “negotiated the terms in
the final contract regarding assembly of the EcoRain plates . . .
[before] decid[ing] to hire its own contractor to assemble the
EcoRain plates into tanks . . . [resulting in the inclusion of] the
following term in the contract:
assembly or installation.’”
‘Hanes is not responsible for the
(Id., ¶ 17.)
Starling further has
sworn that GBI “requested, via e-mail sent to [him] at [his]
Winston-Salem office, more detail in the contract than [he] would
typically include in a standard purchase order.
As a result of
[GBI’s] request, the contract includes a detailed spreadsheet which
[he] would not include in a standard purchase order.”
(Id., ¶ 18.)
Starling’s affidavit also states that, during these negotiations,
GBI “requested technical information . . . so that [Swenson] could
-5-
determine which, and how many, EcoRain plates would be required”
(id., ¶ 14), as well as “information regarding Hanes’ testing
protocols with respect to shipments of EcoRain plates . . . [and]
information regarding shipping lead times” (id., ¶ 15).4
In addition, the parties (via affidavits by Starling and Bill
Chieco, GBI’s Chief Financial Officer (see Docket Entry 10-2, ¶
1)), have agreed that, as part of the negotiations, Hanes insisted
upon and GBI executed a credit agreement.
Entry 19, ¶ 21.)5
(See id., ¶¶ 3-4; Docket
Moreover, Hanes’s Complaint asserts that, in
this credit agreement, GBI “agreed that North Carolina law would
control the relationship of the parties.”
(Docket Entry 2, ¶ 5.)6
GBI has acknowledged (via sworn statements by Chieco and Swenson)
that, shortly after GBI executed the credit agreement in early
October 2008, Hanes began to ship EcoRain plates to GBI.
(Docket
4
GBI’s evidence does not materially conflict with Starling’s
above-quoted account. (See, e.g., Docket Entry 10-4, ¶¶ 2-5.)
5
According to Starling, “Hanes requires a Credit Agreement in
all commercial transactions because of the size of the contracts
. . . and the fact that commercial relationships normally do not
end upon the shipment of goods.” (Docket Entry 19, ¶ 21.)
6
Although the Complaint reports that “a copy of [the credit
agreement] is attached” (Docket Entry 2, ¶ 5), the versions of the
Complaint on the Docket contain no such exhibit (see Docket Entries
1-2 and 2). Hanes’s brief opposing GBI’s instant Motion to Dismiss
also declares that the “Credit Agreement . . . states that the
transactions . . . shall be governed by the laws of North
Carolina.”
(Docket Entry 20 at 4-5 (citing Docket Entry 19,
¶ 17).) However, neither the portion of Starling’s affidavit cited
as support for this assertion (nor any other part thereof) mentions
a choice of law provision. (See Docket Entry 19.) Nonetheless,
GBI has failed to dispute Hanes’s allegation in the Complaint that
the parties’ credit agreement provides “that North Carolina law
would control the relationship of the parties” (Docket Entry 2, ¶
5). (See Docket Entries 11 and 21.)
-6-
Entry 10-2, ¶ 4-5; Docket Entry 10-4, ¶ 5.)
According to Starling,
“Hanes sent [GBI] EcoRain plates almost daily, and certainly
weekly, over a span of five months . . . [and] [t]he first
containers [of plates] were shipped to [GBI] from Hanes’ WinstonSalem distribution facility.”
(Docket Entry 19, ¶¶ 22-23.)7
Starling also has averred that “Hanes employees in North
Carolina and [GBI] employees exchanged at least forty e-mails
during the performance of the contract[.]”
id.,
¶
22
(“There
are
multiple
(Id., ¶ 27; see also
e-mails
sent
from
[GBI]
representatives to [Starling] in Winston-Salem coordinating [the
EcoRain plate] shipments.”).)8
Swenson has attributed some of
those communications to the fact that he concluded “many of the
7
GBI’s reply as to its instant Motion to Dismiss states that,
“[t]hough Hanes contends the ‘first’ plates were shipped from North
Carolina, GBI must assume that is a misstatement by Hanes since
Hanes specifically represented to GBI that plates would be coming
to New York from Tennessee.”
(Docket Entry 21 at 7 n.2.)
As
support for this position, the reply cites Paragraph 12 of Hayes’s
affidavit (see id.), in which he averred that, in June 2008,
“Harris indicated to GBI that . . . the plates were manufactured
and shipped out of Tennessee” (Docket Entry 10-3, ¶ 12). The fact
that Harris may have “indicated” in June 2008 that EcoRain plates
“were shipped out of Tennessee” (id.) does not require one to
“assume” Hayes made a “misstatement” (Docket Entry 21 at 7 n.2)
when he swore that, in October 2008, the first containers of
EcoRain plates “were shipped to [GBI] from Hanes’ Winston-Salem
distribution facility” (Docket Entry 19, ¶ 23).
Circumstances
could have changed between June 2008 (before finalization of any
contract) and October 2008 (when shipments began pursuant to the
contract).
Moreover, Swenson has averred that, “[o]riginally,
Hanes’ representatives advised [him] . . . that all plates would be
. . . shipped from Tennessee or from some other domestic location
. . . .” (Docket Entry 10-4, ¶ 7 (emphasis added).)
8
Starling’s affidavit distinguishes the 40 e-mails exchanged
during the “performance” of the contract from “an additional thirty
e-mails [employees of Hanes and GBI exchanged] after the dispute in
New York began.” (Docket Entry 19, ¶ 27.)
-7-
plates
purchased
from
Hanes
did
not
conform
to
specified
measurements and/or were distorted. As a result of this, and other
logistical issues with the delivery of the ordered plates, [he] was
forced to contact Hanes’ representatives regularly via telephone to
remediate these problems, including by coordinating the return of
the defective plates.”
(Docket Entry 10-3, ¶ 6.)
Starling’s affidavit acknowledges that GBI “sent about six
skids of plates it rejected to Hanes in North Carolina.
Hanes
accepted th[o]se plates and shipped replacement plates back to
[GBI].”
(Docket Entry 19, ¶ 24.)
Accordingly, Starling has
asserted that “Hanes fully complied with its obligations under the
contract.
It shipped all requested pallets and containers of
EcoRain plates to [GBI].”
(declaring
that
“Hanes
(Id., ¶ 25; see also id., ¶¶ 19-20
was
merely
a
distributor”
whose
only
responsibility was to deliver the [EcoRain plates] to [GBI]”).)
Starling’s affidavit further states that “Hanes sent over forty
invoices to [GBI] from North Carolina between the period October 9,
2008 and January 13, 2009, which invoices were paid by [GBI] with
nine separate checks [totaling $1,445,720.06] . . . directed by
[GBI]
either
to
Hanes’
lockbox
account
at
Wachovia
Bank
in
Charlotte, North Carolina or to Hanes’ office in Conover, North
Carolina.”
(Id., ¶ 28.)9
It declares, however, that GBI “still
owes Hanes $427,195.78 plus interest . . . .”
9
(Id., ¶ 29.)
According to Chieco, “Hanes sent GBI approximately seventy
invoices . . . [and] GBI made all payments on th[o]se invoices by
checks mailed to Hanes in North Carolina. In total, GBI issued and
mailed seven checks to Hanes.” (Docket Entry 10-2, ¶ 6.)
-8-
Consistent with those contentions, Hanes filed this case in
North Carolina state court seeking damages for breach of contract
and a declaratory judgment of non-liability for alleged defects in
the EcoRain plates (Docket Entry 2), whereupon GBI removed the case
to this Court on diversity grounds (Docket Entry 1).
After filing
its instant Motion to Dismiss (Docket Entry 10), GBI filed a
complaint in New York state court against Babylon and Hanes, which
asserts that “following installation . . . [Babylon’s] tank system
collapsed . . . and [Babylon] withheld payments under the contract
[between Babylon and GBI] in an amount estimated to exceed $2.5
million.”
GBI
was
(Docket Entry 21-2, ¶ 4.)
not
at
fault,
defective. . . .
but
According to that complaint,
instead
“[Babylon’s]
design
was
The depth of the soil placed on top of the
assembled tank system, as required by the contract [between Babylon
and GBI], was two to three times the depth recommended by the tank
system manufacturer, resulting in unsustainable vertical forces and
the collapse.”
(Id., ¶ 5.)
GBI’s New York state court complaint
also alleges “that [EcoRain] plates supplied by Hanes contained
impurities that were inconsistent with Hanes’ express warranty to
[GBI] that the plates would be manufactured from 100% recycled
polypropylene.”
(Id., ¶ 42.)
As a result, it:
1) “requests a determination . . . of (i) the amount owed to
Hanes, if any, based on its delivery of [EcoRain] plates . . . and
whether those plates complied with [Hanes’s] express warranties
. . . and (ii) an award to [GBI] in an amount that [GBI] overpaid
-9-
Hanes for plates that were not in compliance with the requirements
and express warranties” (id., ¶ 74); and
2) “asks the [c]ourt to determine whether the [EcoRain] plates
provided by Hanes failed to comply with a relevant requirement of
the
Contract
Documents
and
whether
such
failure
caused
or
contributed to the collapse of the [tank system] and, upon such
determination, to make a corresponding award of damages to [GBI]”
(id., ¶ 77).10
II. DISCUSSION
A. LEGAL STANDARD
“When a court’s personal jurisdiction is properly challenged
by motion under Federal Rule of Civil Procedure 12(b)(2), the
jurisdictional question thereby raised is one for the judge, with
the burden
on
the
plaintiff ultimately to prove
jurisdiction by a preponderance of the evidence.”
grounds
for
Mylan Labs.,
Inc. v. Akzo, N.V., 2 F.3d 56, 59-60 (4th Cir. 1993).
“[If] the
district court decides a pretrial personal jurisdiction dismissal
motion without an evidentiary hearing, the plaintiff need prove
only a prima facie case of personal jurisdiction.
In deciding
whether the plaintiff has proved a prima facie case of personal
jurisdiction,
inferences
the
arising
district
from
the
court
proof,
10
must
and
draw
all
resolve
reasonable
all
factual
Babylon’s answer to GBI’s New York state court complaint
asserts cross-claims against Hanes that attribute any injury to GBI
to negligence by Hanes and that claim a right to indemnification by
Hanes, as well as counterclaims against GBI for breach of contract
and breach of warranty. (Docket Entry 21-3, ¶¶ 44-63.)
-10-
disputes, in the plaintiff’s favor.”
Id. at 60 (internal citation
omitted); see also Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.
1989) (“If the existence of jurisdiction turns on disputed factual
questions the court may resolve the challenge on the basis of a
separate evidentiary hearing, or may defer ruling pending receipt
at trial of evidence relevant to the jurisdictional question.”).
“[I]n order for a district court to validly assert personal
jurisdiction over a non-resident defendant, two conditions must be
satisfied.
First, the exercise of jurisdiction must be authorized
by the long-arm statute of the forum state, and, second, the
exercise of personal jurisdiction must also comport with Fourteenth
Amendment due process requirements.”
Christian Sci. Bd. of Dirs.
of the First Church of Christ, Scientist v. Nolan, 259 F.3d 209,
215 (4th Cir. 2001).
“[I]t is apparent that the [North Carolina]
General Assembly intended to make available to the North Carolina
courts the full jurisdictional powers permissible under federal due
process.”
231 S.E.2d
Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676,
629,
630
(1977).
“Thus, the
dual
jurisdictional
requirements collapse into a single inquiry as to whether the
defendant has such minimal contacts with the forum state that
maintenance of the suit does not offend traditional notions of fair
play and substantial justice.” Christian Sci. Bd., 259 F.3d at 215
(internal quotation marks omitted) (quoting Int’l Shoe Co. v.
Washington, 326 U.S. 310, 316 (1945)).
A court may have personal jurisdiction over a defendant
through either general or specific jurisdiction.
-11-
Helicopteros
Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 nn.8-9
(1984)).
“[I]f the defendant’s contacts with the State are not
also the basis for suit, then jurisdiction over the defendant must
arise from the defendant’s general, more persistent, but unrelated
contacts with the State.
To establish general jurisdiction over
the defendant, the defendant’s activities in the State must have
been continuous and systematic, a more demanding standard than is
necessary for establishing specific jurisdiction.”
ALS Scan, Inc.
v. Digital Serv. Consultants, Inc., 293 F.3d 707, 712 (4th Cir.
2002) (internal quotation marks omitted).
Specific jurisdiction
exists when the “suit aris[es] out of or is related to the
defendant’s contacts with the forum . . . .”
U.S.
at
414
n.8.
To
determine
the
Helicopteros, 466
existence
of
specific
jurisdiction, a court considers:
“(1) the extent to which the
defendant
itself
‘purposefully
availed’
of
the
privilege
of
conducting activities in the State; (2) whether the plaintiffs’
claims arise out of those activities directed at the State; and (3)
whether
the
exercise
of
personal
constitutionally ‘reasonable.’”
jurisdiction
would
be
ALS Scan, 293 F.3d at 712.
As to the first of those three prongs, the United States
Court of Appeals for the Fourth Circuit has identified eight
“nonexclusive factors” that it and the United States Supreme Court
have considered “to resolve whether a defendant has engaged in such
purposeful availment . . . [i]n the business context”:
[1] whether the defendant maintains offices or agents in
the forum state, see McGee v. Int’l Life Ins. Co., 355
U.S. 220, 221 (1957);
-12-
[2] whether the defendant owns property in the forum
state, see Base Metal Trading, Ltd. v. OJSC, 283 F.3d
208, 213 (4th Cir. 2002);
[3] whether the defendant reached into the forum state to
solicit or initiate business, see McGee, 355 U.S. at 221;
Burger King [Corp. v. Rudzewicz], 471 U.S. [462,] 475-76
[(1985)];
[4] whether the defendant deliberately engaged in
significant or long-term business activities in the forum
state, see Burger King, 471 U.S. at 475-76, 481;
[5] whether the parties contractually agreed that the law
of the forum state would govern disputes, see Burger
King, 471 U.S. at 481-82;
[6] whether the defendant made in-person contact with the
resident of the forum in the forum state regarding the
business relationship, see Hirschkop & Grad, P.C. v.
Robinson, 757 F.2d 1499, 1503 (4th Cir 1985);
[7] the nature, quality and extent of the parties’
communications about the business being transacted, see
English & Smith [v. Metzger], 901 F.2d [36,] 39 [(4th
Cir. 1990)]; and
[8] whether the performance of contractual duties was to
occur within the forum, see Peanut Corp. of Am. v.
Hollywood Brands, Inc., 696 F.2d 311, 314 (4th Cir.
1982).
Consulting Eng’rs Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th
Cir. 2009) (internal parallel citation omitted). “If, and only if,
[a court] find[s] that the plaintiff has satisfied this first prong
of the test for specific jurisdiction need [the court] move on to
a consideration of prongs two and three.”
Id.
The Fourth Circuit further has explained that the second prong
“requires that the defendant’s contacts with the forum state form
the basis of the suit.”
Id. at 278-79.
With respect to the third
prong, the Fourth Circuit has approved consideration of these
-13-
“additional factors to ensure the appropriateness of the forum
. . . : (1) the burden on the defendant of litigating in the forum;
(2) the interest of the forum state in adjudicating the dispute;
(3) the plaintiff’s interest in obtaining convenient and effective
relief;
(4)
the
shared
interest
of
the
states
in
obtaining
efficient resolution of disputes; and (5) the interests of the
states in furthering substantive social policies.”
Id. at 279.
B. ANALYSIS
GBI’s brief supporting its instant Motion to Dismiss denies
the existence of both general and specific jurisdiction.
Docket Entry 11 at 9-19.)
specific
jurisdiction
(See
Hanes’s response argues only that
exists.
(Docket
Entry
20
at
7-20.)
Accordingly, the discussion that follows applies the record facts
to the Fourth Circuit’s three-prong test for specific jurisdiction,
see Consulting Eng’rs, 561 F.3d at 278-79.
i. First Prong – Purposeful Availment
GBI’s brief supporting its instant Motion to Dismiss argues
that “GBI did not purposely avail itself of the laws of [North
Carolina].” (Docket Entry 11 at 10.) More specifically, according
to GBI, “the only contacts GBI generated with North Carolina were:
(1) entering into a contract with Hanes for the purchase of the
[EcoRain]
plates,
and
(2)
exchanging
a
handful
of
e-mails,
telephone calls and facsimiles with, and paying invoices submitted
by, Hanes, all related to that single contract.”
(Id.)
Hanes has
responded that GBI “chose to avail itself to the privilege of doing
business in North Carolina by purposely and consciously soliciting,
-14-
negotiating, entering, and continuing a business relationship with
Hanes, in North Carolina.” (Docket Entry 20 at 2.)
The discussion
which follows scrutinizes the parties’ arguments on these points by
reference to the eight factors set forth by the Fourth Circuit in
Consulting Eng’rs, 561 F.3d at 278.
a. Factors One, Two, and Six – Presence, Property, Personal Visit
Purposeful availment factors one, two, and six from Consulting
Eng’rs clearly weigh in GBI’s favor.
Specifically, the undisputed
record
I)
(as
documented
in
Section
shows
that,
during
the
pertinent period, GBI did not maintain offices or agents in North
Carolina, did not own property in North Carolina, and did not make
in-person contact with a North Carolina resident in North Carolina.
b. Factor Three – Initiation of Business Relationship
In assessing purposeful availment, “the Fourth Circuit ‘has
given great weight to the question of who initiated the contact
between the parties.’”
Pan-American Prods. & Holdings, LLC v.
R.T.G. Furniture Corp., 825 F. Supp. 2d 664, 682 (M.D.N.C. 2011)
(Schroeder, J.) (quoting Worldwide Ins. Network, Inc. v. Trustway
Ins.
Agencies,
LLC,
No.
1:04CV00906,
2006
WL
288422,
(M.D.N.C. Feb. 6, 2006) (unpublished) (Tilley, C.J.)
Diamond Healthcare
Partners,
229 F.3d
of
Ohio, Inc.
448,
451
v. Humility
(4th Cir.
of
2000)));
at
*5
(citing
Mary
Health
accord
Power
Beverage LLC v. Side Pocket Foods Co., C/A No. 06:12-931-TMC, 2013
WL 227875, at *5 (D.S.C. Jan. 22, 2013) (unpublished); Sloane v.
Laliberte, No. 1:08CV381, 2011 WL 2938117, at *8 (M.D.N.C. July 19,
2011) (unpublished) (Auld, M.J.), recommendation adopted, slip op.
-15-
(M.D.N.C.
Sept.
15,
2011)
(Eagles,
J.);
Waldron
v.
Atradius
Collections, Inc., No. 1:10CV551, 2010 WL 2367392, at *3 (D. Md.
June
9,
2010)
1:07CV965,
(unpublished);
2009
(unpublished)
WL
3756947,
(Dixon,
M.J.),
Fatboy
USA,
at
(M.D.N.C.
*5
recommendation
LLC
v.
Schat,
Nov.
adopted,
6,
No.
2009)
slip op.
(M.D.N.C. Mar. 2, 2010) (Beaty, C.J.); Corporate Fleet Servs. v.
West Van, Inc., No. 3:08-cv-00413-FDW, 2008 WL 4949129, at *3 n.1
(W.D.N.C.
Nov.
17,
2008)
(unpublished).
In
other
words,
“[p]ursuant to applicable precedent, [district courts in the Fourth
Circuit] are entitled to accord special weight to the fact that it
was [the defendant] that initiated contact with the [plaintiff] in
[the plaintiff’s home-state].” CFA Inst. v. Institute of Chartered
Fin. Analysts of India, 551 F.3d 285, 295 n.17 (4th Cir. 2009)
(citing Diamond Healthcare, 229 F.3d at 451).
That special weight
attaches in this case because (as documented in Section I above)
the undisputed record reflects that GBI initiated the business
relationship at issue here by telephoning Hanes at its office in
North Carolina,11 first to request information about EcoRain plates
and then to solicit a bid from Hanes as to the price it would
charge to provide GBI with EcoRain plates.
GBI’s reply as to its instant Motion to Dismiss contends that
Hanes “initiated the business relationship . . . [because], upon
learning
of
the
Project,
.
.
.
Starling
personally
called
[Babylon’s] engineer to ‘ensure’ that Hanes . . . would have the
11
GBI has not denied that it knew it was contacting Hanes in
North Carolina. (See Docket Entry 11 at 4-6, 14-16.)
-16-
opportunity to sell products for use at the Project.”
Entry 21 at 2-3.)
(Docket
This contention lacks merit because Starling’s
contact with Babylon’s engineer regarding whether EcoRain plates
would appear in the Project’s specifications as one of a number of
approved products neither constituted contact by Hanes with GBI,
nor initiated a relationship between Hanes and GBI.
Indeed, GBI
has conceded that it had no knowledge of Hanes’s contact with
Babylon’s engineer until after GBI contacted EcoRain to obtain
information in anticipation of bidding on the Project. (See id. at
3.)
GBI further asserts that EcoRain “directed GBI to contact
Hanes in North Carolina . . . [and such] plaintiff-generated
contact with North Carolina is precisely the same conduct this
Court previously found ‘mitigates against asserting jurisdiction
over’ an out of state defendant like GBI.”
(Id. (quoting Hanes
Co., Inc. v. Contractor’s Source, Inc., No. 1:08CV334, 2008 WL
4533989, at *11 (M.D.N.C. Oct. 6, 2008) (unpublished) (Sharp,
M.J.), recommendation adopted, slip op. (M.D.N.C. Dec. 15, 2008)
(Schroeder, J.)).)
This argument also fails.
In the case cited by GBI, Hanes brought suit in North Carolina
against a defendant-corporation with a principal place of business
in
Texas.
Hanes,
2008
WL
4533989,
at
*1.
The
defendant-
corporation “generally dealt with two . . . representatives of [a
wholly-owned Hanes subsidiary], who were based in Texas.”
*2.
The case involved non-payment claims by Hanes as to “five
invoices . . . which ha[d] a combined value of $92,435.20.”
*9.
Id. at
Id. at
“For three (3) of [the invoices, the defendant-corporation]
-17-
placed its orders [with Hanes’s wholly-owned subsidiary] in Texas
and took delivery of the products from [the] warehouse [of Hanes’s
wholly-owned subsidiary] in Houston, Texas.”
Id. at *3.
“The
order corresponding to the fourth [disputed] [i]nvoice was also
placed in Texas, and the product was shipped from [a company with
whom a Hanes-owned limited liability company had a distribution
agreement] in South Carolina.”
Id.
“Finally, the order which
ultimately resulted in the issuance of the [fifth] [i]nvoice was
originally generated in Houston, Texas, . . . [but] was sent to [a
Hanes-owned limited liability company] in North Carolina only after
Hanes’ local representatives . . . instructed [the defendantcorporation] to do so due to local inventory shortages.”
Id.
“Hanes d[id] not explicitly argue that the facts surrounding
the
[five]
disputed
invoices
[we]re
sufficient
to
establish
jurisdiction over [the defendant-corporation] when standing alone.
Instead, to
make
histories
that
liability
its case,
[its
company
Hanes
wholly-owned
it
owned]
had
pull[ed]
from
subsidiary
with
with
the
and
[the
the
combined
limited
defendant-
corporation] over a period that stretche[d] back almost two years
. . . .”
Id. at *6.
Moreover, “Hanes d[id] not dispute that [the
defendant-corporation]
generally
worked
with
only
two
representatives based out of Texas when it dealt with [Hanes’s
wholly-owned subsidiary].
Nor d[id] [Hanes] contest that all of
the orders corresponding to the [first four disputed invoices] were
placed in Texas.”
Id. at *9. Finally, although “Hanes ma[de] much
of the fact that the [order that resulted in the fifth disputed
-18-
invoice] . . . was sent by [the defendant-corporation] to [the
limited liability company owned by Hanes] in North Carolina . . .,
Hanes acquiesce[d] to [the defendant-corporation’s] averment that
[said order] was originally placed in Texas and sent to [the
limited liability company owned by Hanes] in North Carolina only
upon the instruction of [Hanes’s wholly-owned subsidiary’s] local
representatives [in Texas].”
Id. at *10.
Given those facts, Magistrate Judge Sharp was “not persuaded
that [the Court could] exercise personal jurisdiction over [the
defendant-corporation] based solely on the [order that resulted in
the fifth disputed invoice] . . . especially . . . in light of the
fact that [the defendant-corporation] was purchasing only a small
quantity of goods from North Carolina . . . .”
Id.
Magistrate
Judge Sharp then focused on “how [the defendant-corporation] came
to send the [order that resulted in the fifth invoice] to [the
limited liability company owned by Hanes] in North Carolina in the
first place.”
Id. at *11.
In so doing, Magistrate Judge Sharp
observed (consistently with the case law cited above) that “[t]he
Fourth Circuit has given great weight to the question of who has
initiated the contact between the parties . . . [and that] it [wa]s
undisputed that [the defendant-corporation] did not seek out [the
limited liability company owned by Hanes] on its own [before it
placed the order that led to the fifth disputed invoice] – it was
directed to [that limited liability company owned by Hanes] by
[Hanes’s
wholly-owned
subsidiary]
only
after
[the
defendant-
corporation] originally tried to place its order in Texas.”
-19-
Id.
Magistrate Judge Sharp concluded that, “[w]hile this fact alone
[wa]s
not
dispositive,
it
d[id]
mitigate
against
asserting
jurisdiction over the [defendant-corporation] . . . [because,] in
Diamond Healthcare, the Fourth Circuit held that this type of
unilateral
activity
by
the
plaintiff
jurisdiction over a defendant.”
cannot
create
personal
Id.
In the instant case, by contrast, New York-based GBI did not
have a history of dealing with representatives of Hanes in New
York.
Nor did GBI inquire about and then solicit a bid for
delivery of EcoRain plates from representatives employed by Hanes
in New York, only to have those representatives direct GBI to order
EcoRain plates from Hanes in North Carolina because an inventory
shortage had arisen at a Hanes facility in New York.
To the
contrary (as detailed in Section I):
1)
New
York-based
GBI
took
note
that
the
Project’s
specifications identified three approved products (including one
that the undisputed record shows was distributed by a company with
numerous offices in New York) and permitted any approved equal
(which the undisputed record indicates would have included another
product sold by a New York company);
2) New York-based GBI thereafter contacted the manufacturer of
EcoRain plates in California (which the record does not identify as
sharing any ownership-tie with Hanes) and thereby learned that
Hanes in North Carolina distributed the EcoRain plates; and
3) New York-based GBI then called Hanes in North Carolina
first to request information about the EcoRain plates and then to
-20-
solicit Hanes’s submission to GBI of a bid setting out the price
Hanes would charge GBI to supply the EcoRain plates for GBI to use
if GBI won the general contract for the Project.
Simply put, the foregoing circumstances do not establish
“plaintiff-generated contact with North Carolina” (Docket Entry 21
at 3), much less “precisely the same conduct this Court previously
found ‘mitigates against asserting jurisdiction over’ an out of
state defendant” (id. (quoting Hanes, 2008 WL 4533989, at *11)).12
Instead, the undisputed facts demonstrate that New York-based GBI
chose not to restrict its search for materials it could use to
fulfill
any
general
contract
it
secured
for
the
Project
to
available outlets in New York; rather, GBI decided to seek options
outside of New York and, in so doing, learned from a third-party
about Hanes, whereupon GBI took the initiative to contact Hanes in
North
Carolina
and
directly
invited
Hanes
to
enter
into
a
substantial commercial arrangement with GBI.
These considerations cause the weighty purposeful availment
factor concerning “whether the defendant reached into the forum to
solicit or initiate business,” Consulting Eng’rs, 561 F.3d at 278,
decidedly
to
favor
Hanes.
See,
e.g.,
Cortex
Surveillance
Automation, Inc. v. Security Integrators & Consultants, Inc., No.
1:05CV562,
2006
WL
994951,
at
*3
(M.D.N.C.
Apr.
12,
2006)
(unpublished) (Tilley, C.J.) (“In this case, [the Texas-based
12
They also unmistakably belie the assertion in GBI’s reply
as to its instant Motion to Dismiss that “all GBI did was bid on a
job in its home state of New York . . . .” (Docket Entry 21 at 4.)
-21-
defendant-corporation] initiated the contact with [the plaintiffcorporation] at its North Carolina location after being referred to
[it]
by
[the
Texas-based
defendant-corporation’s]
previous
provider. The initiation of contact by [the Texas-based defendantcorporation] weighs in favor of a finding of personal jurisdiction
in North Carolina.”); Cree, Inc. v. Exel N. Am. Logistics, Inc.,
No. 1:02CV319, 2004 WL 241508, at *3 (M.D.N.C. Feb. 6, 2004)
(unpublished) (Osteen, Sr., J.) (“[The California-based thirdparty-defendant-corporation’s] purposeful availment is most clearly
evidenced
by
its
solicitation
of
[the
North
Carolina-based
plaintiff-corporation’s] business during the summer of 2000.
California-based
initial
sales
corporation]
third-party-defendant-corporation]
call
after
to
[the
learning
North
of
Carolina-based
[its]
interest
made
[The
the
plaintiff
from
another
customer.”); Sheehan Pipe Line Constr. Co. v. Laney Directional
Drilling Co., 228 F. Supp. 2d 1271, 1274 (N.D. Okla. 2002) (“By
telephoning Plaintiff, an Oklahoma corporation, to solicit bids for
the Gulf Stream Project, [the Texas-based] Defendant’s conduct
evidences purposeful direction of activities toward an Oklahoma
resident. . . . [A] nexus exists between Defendant’s forum-related
contacts and Plaintiff’s cause of action for non-payment for
services
rendered.
Most
significantly,
Defendant
solicited
Plaintiff’s business by contacting Plaintiff for a subcontractor
bid.
Defendant has sufficient minimum contacts with Oklahoma to
subject it to specific personal jurisdiction in this Court.”
(emphasis in original)); Cardinal Indus., Inc. v. Grace Indus.,
-22-
Inc., Civ. A. 94-CV-344, 1994 WL 249770, at *1 (E.D. Pa. Jun. 1,
1994) (unpublished) (denying motion to dismiss for lack of personal
jurisdiction and citing in support, inter alia, the following
facts:
“In early 1993, the New York Port Authority awarded [the
New York-based] defendant a contract for runway paving work at La
Guardia Airport. . . .
[A] representative of defendant contacted
[the Pennsylvania-based] plaintiff twice by phone in early 1993 in
order to solicit a bid from plaintiff for [a subcontract].”).
c.
Factor Four – Significant or Long-term Business Activity
“[A]n
in-state
plaintiff’s
contract
with
an
out-of-state
defendant cannot alone automatically establish sufficient minimum
contacts to warrant jurisdiction.”
Pan-American Prods., 825 F.
Supp. 2d at 681 (citing Burger King, 471 U.S. at 478) (emphasis
added). However, in assessing purposeful availment, the Court must
consider whether GBI engaged in “significant or long-term business
activities in the forum state,” Consulting Eng’rs, 561 F.3d at 278
(emphasis added).
Accordingly, although the fact of a contract
does not “alone automatically establish sufficient minimum contacts
to warrant jurisdiction,” Pan-American Prods., 825 F. Supp. 2d at
681, “[t]he size of the contract is relevant in determining whether
[an
out-of-state
plaintiff’s
defendant’s]
home-state]
were
actions
sufficient
directed
to
toward
[the
establish personal
jurisdiction,” Cambata Aviation, Inc. v. Kansas City Aviation Ctr.,
Inc., No. 5:01CV00062, 2001 WL 1274426, at *3 (W.D. Va. Oct. 22,
2001) (unpublished); accord Gateway Press, Inc. v. Leejay, Inc.,
993 F. Supp. 578, 581 (W.D. Ky. 1997) (describing “size of the
-23-
contract” at issue as “highly relevant factor[]” in assessment of
“whether a defendant’s actions directed toward the forum were
sufficiently purposeful”).
As set forth in Section I, the parties’ contract had a value
of approximately $2,000,000 and necessitated numerous shipments
over a period of months.
Courts evaluating specific jurisdiction
in the breach-of-contract context have concluded that “[t]he fact
that the contract between [an out-of-state defendant-corporation]
and
[the
plaintiff-corporation]
involved
millions
of
dollars
demonstrates that [the out-of-state defendant-corporation] had a
substantial connection with [the plaintiff-corporation’s homestate] . . . .” Cambata Aviation, 2001 WL 1274426, at *3 (emphasis
added); accord English Boiler & Tube, Inc. v. Glex Inc., No.
3:12CV88DJN, 2012 WL 2131895, at *6 (E.D. Va. June 12, 2012)
(unpublished)
(citing,
as
support
for
finding
of
purposeful
availment, fact that “total cost of the contract [underlying
Virginia-based plaintiff’s claim against out-of-state defendant]
exceeded one million dollars — indicating a substantial deal”);
DSMC, Inc. v. Convera Corp., 273 F. Supp. 2d 14, 21 (D.D.C. 2002)
(“The contract [at issue] is worth millions of dollars.
[The
Virginia-based defendant] has availed itself of the protections and
privileges
of
the
District
[of
Columbia]
by
entering
into a
substantial contract with a business located here.”).
GBI nonetheless has insisted that its business connection to
North Carolina fails to qualify as significant because its contract
with Hanes provided for a “one-time purchase of goods” manufactured
-24-
outside North Carolina and shipped to New York.
at 12.)
(Docket Entry 11
To bolster this position, GBI’s brief in support of its
instant Motion to Dismiss again relies heavily on Magistrate Judge
Sharp’s opinion in Hanes, 2008 WL 4533989. (See Docket Entry 11 at
12-14.)
Again, that reliance lacks a sound foundation.
First, GBI’s brief in support of its instant Motion to Dismiss
cites “Hanes Companies, 2008 WL at [sic] *5-6,” for the proposition
that “[i]t is well-established, however, that the mere purchase of
goods in North Carolina by a nonresident defendant is not enough to
support the exercise of personal jurisdiction.”
at 12.)
(Docket Entry 11
Simply put, the cited pages of Magistrate Judge Sharp’s
opinion do not make such a broad declaration.
4533989, at *5-6.
See Hanes, 2008 WL
Instead, in that portion of his opinion,
Magistrate Judge Sharp:
1) set out the standard for specific
jurisdiction (drawn from his longer exegesis on that subject in the
opening paragraphs of the “Discussion” section of his opinion, see
id.
at
*3-4);
2)
outlined
Hanes’s
arguments
and
authority
supporting its view that specific jurisdiction existed in North
Carolina over the Texas-based defendant-corporation based not on
the circumstances of the orders that related to the five disputed
invoices, but rather a broader course of conduct between Hanesowned entities and the defendant-corporation; and 3) explained, by
reference
Circuits,
to
authority
why
Hanes’s
from
the
approach
Third,
Fourth,
represented
and
an
Seventh
improper
hybridization of the general and specific jurisdiction standards.
-25-
See id. at *5-6. Nothing about that discussion supports, much less
adopts, a general assertion of the sort ascribed to it by GBI.13
Second, GBI’s brief in support of its instant Motion to
Dismiss identifies “Hanes Companies, 2008 WL 4533989 at *10-11,” as
having endorsed the principle that “where, as here, the defendant
buys goods from a North Carolina corporation for shipment to
another state . . . [the] situation generally does not give rise to
personal jurisdiction.”
(Docket Entry 11 at 12.)
The cited pages
of Magistrate Judge Sharp’s opinion, however, contain no such
sweeping conclusion.
See Hanes, 2008 WL 4533989, at *10-11.
Rather, that citation to Magistrate Judge Sharp’s opinion
begins in the middle of his discussion of the fact that the first
four disputed invoices arose from orders placed by the Texas-based
defendant-corporation with representatives of Hanes’s wholly-owned
13
Nor has GBI simply cited the wrong pages of the opinion, as
the remainder of Magistrate Judge Sharp’s analysis also fails to
render any blanket judgment, as GBI suggested, that (in all or
virtually all cases) “well-established” law precludes the exercise
of personal jurisdiction over a non-resident, “mere purchase[r] of
goods” (Docket Entry 11 at 12). See Hanes, 2008 WL 4533989, at *715. To the contrary, in that remaining portion of his opinion,
Magistrate Judge Sharp concluded that specific jurisdiction was
lacking under the particular facts of that case, see id. at *15,
which he had found involved solely plaintiff-induced contact by the
defendant with North Carolina, i.e., the sending into North
Carolina of only one order (out of five at issue) for a total of
$4,130.94 in goods, after the Texas-based defendant first had
placed that order with Hanes’s representatives in Texas, see id. at
*9-11; see also id. at *12-14 & nn. 15, 17 & 18, as well as “a
limited number of calls and or [the] sen[ding] of an email to
representatives in North Carolina to remedy allege [sic] flaws in
the [goods delivered pursuant to the one order sent to North
Carolina],” id. at *11 (emphasis added); see also id. at *12, and
“the mere fact that one or more of the disputed invoices may have
been generated in North Carolina, and payment on said invoices may
have been due there,” id. at *11; see also id. at *12.
-26-
subsidiary in Texas and that the fifth disputed invoice arose from
an order the defendant-corporation “originally placed in Texas and
sent to [a limited liability company owned by Hanes] in North
Carolina
only
upon
the
instruction
of
[Hanes’s
subsidiary’s] local representatives [in Texas].”
wholly-owned
Id. at *10.
At
that point, Magistrate Judge Sharp concluded that Hanes, not the
defendant-corporation, induced the limited contact the defendantcorporation had with North Carolina (on which Hanes attempted to
predicate its argument in opposition to the defendant-corporation’s
motion to dismiss); as a result, Magistrate Judge Sharp “[wa]s not
persuaded that [the Court could] exercise personal jurisdiction
over [the defendant-corporation] based solely on the . . . [o]rder
[that led to the fifth disputed invoice].”
Id. (emphasis added).
The portion of Magistrate Judge Sharp’s opinion cited by GBI
next takes note of the “small quantity of goods” that the Texasbased defendant-corporation purchased in the one order sent to
North Carolina (at the behest of Hanes’s representatives in Texas)
and then discusses the Fourth Circuit’s emphasis on which party
initiated the relationship leading to the dispute. See id. at *1011.14
Given that context, in the remaining paragraphs of the pages
of his opinion cited by GBI, Magistrate Judge Sharp (relying
14
The fact that the case before Magistrate Judge Sharp
involved only a “small quantity of goods” and business activity in
North Carolina initiated solely by Hanes requires rejection of
GBI’s description of said case as “remarkably similar” to this one
(Docket Entry 11 at 13), given that this case involves a contract
for approximately $2,000,000 of goods that arose from GBI’s
telephone solicitation to Hanes’s office in North Carolina.
-27-
particularly on Eagle Paper Int’l, Inc. v. Expolink, Ltd., No.
2:07CV160, 2008 WL 170506 (E.D. Va. Jan. 17, 2008) (unpublished))
rejected the notion that specific jurisdiction could arise from “a
limited number of calls and/or . . . an email to [Hanes’s]
representatives in North Carolina to remedy allege [sic] flaws in
the products that [the defendant-corporation] had purchased [via
the one order sent to North Carolina] . . . [or] the mere fact that
one or more of the disputed invoices may have been generated in
North Carolina, and payment on said invoices may have been due
there . . . .”
Id. at *11 (emphasis added).
In sum, nothing in
the pages of Magistrate Judge Sharp’s opinion cited by GBI (or any
other parts of that opinion’s “Discussion,” see id. at *3-9, 12-15)
reflects the view, espoused by GBI, that “where, as here, the
defendant buys goods from a North Carolina corporation for shipment
to another state . . . [the] situation generally does not give rise
to personal jurisdiction” (Docket Entry 11 at 12).
Without the unwarranted legal conclusions it has drawn from
Hanes, 2008 WL 4533989,15 GBI cannot avoid the persuasive force of
15
Beyond Hanes, 2008 WL 4533989, the above-discussed pages of
GBI’s argument (Docket Entry 11 at 12-14) cite only two cases: 1)
Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 786 F.2d
1055, 1059 (11th Cir. 1986), for its statement that “a mere onetime purchaser of goods from a seller in the forum state cannot be
constitutionally subject to the exercise of personal jurisdiction”
(Docket Entry 11 at 12); and 2) Scullin Steel Co. v. Nat’l Ry.
Utilization Corp., 676 F.2d 309, 314 (8th Cir. 1982), for its
quotation of the statement in Aaron Ferer & Sons Co. v. Diversified
Metals Corp., 564 F.2d 1211, 1214 (8th Cir. 1977), that
characterized Electro-Craft Corp. v. Maxwell Elecs. Corp., 417 F.2d
365 (8th Cir. 1969), as holding that “solicitation by a nonresident
purchaser for delivery outside the forum is a more minimal contact
(continued...)
-28-
the reasoning in Cambata Aviation, English Boiler, and DSMC that
where, as here, a million-plus-dollar contract executed by an outof-state defendant-corporation with a North Carolina resident lies
at the heart of the litigation, the case for a finding of specific
jurisdiction gets stronger.
15
(...continued)
than that of a (nonresident) seller soliciting the right to ship
goods into the forum” (Docket Entry 11 at 12). In the latter of
GBI’s two cited cases, the Eighth Circuit explained that, in
Electro-Craft, it had voiced the view noted by GBI because it had
“applied a distinction between nonresident sellers and nonresident
buyers recognized in Minnesota law.” Scullin Steel, 676 F.2d at
314 (emphasis added). Moreover, to the extent Borg-Warner and/or
Scullin Steel adopted (for federal due process purposes) a per se
rule that a purchase of goods from outside a state (no matter what
size, no matter how initiated, and no matter what other
circumstances might exist) always fails to support specific
jurisdiction in the seller’s state, this Court should treat that
rule as incompatible with the Supreme Court’s rejection of “the
notion that personal jurisdiction might turn on ‘mechanical’
tests,” Burger King, 471 U.S. at 478.
Notably, the Eleventh
Circuit derived the principle promoted by GBI from precedent
(including Scullin Steel) pre-dating Burger King and without
citation to Burger King. See Borg-Warner, 786 F.2d at 1059-62.
Further, both the Eighth and Eleventh Circuits more recently have
sounded a less absolutist note than GBI ascribes to their prior
rulings. See Wells Dairy, Inc. v. Food Movers Int’l, Inc., 607
F.3d 515, 520 (8th Cir. 2010) (distinguishing Scullin Steel on
grounds, inter alia, that “the plaintiff [in Scullin Steel]
solicited [the out-of-state defendant’s] business,” whereas the
out-of-state defendant in Wells Dairy “solicited the plaintiff’s
business, knowing that [the plaintiff] was [incorporated in the
forum,] . . . and applied for credit from the [forum-based
plaintiff]”); Diamond Crystal Brands Inc. v. Food Movers Int’l,
Inc., 593 F.3d 1249, 1268-69 (11th Cir. 2010) (recognizing that,
notwithstanding Borg-Warner, “nonresident purchasers can still be
subject to jurisdiction in the seller’s forum” and citing as
examples situations in which out-of-state defendant “initiat[ed]
the contractual relationship” or “negotiat[ed] the contract via
telefaxes or calls with the plaintiff”). In other words, as GBI
stated in a portion of its reply as to its instant Motion to
Dismiss addressing another purposeful availment factor, “whether
jurisdiction is proper is based on the totality of the
circumstances” (Docket Entry 21 at 2 n.1).
-29-
d. Factor Five – Contractual Choice of Law
The Fourth Circuit also has indicated that district courts
should consider “whether the parties contractually agreed that the
law of the forum state would govern disputes[.]”
Eng’rs, 561 F.3d at 278.
Consulting
As set out in Section I, Hanes has
alleged in its Complaint (and GBI has not disputed) that the credit
agreement executed by the parties as an indispensable part of the
instant contract provides “that North Carolina law would control
the relationship of the parties” (Docket Entry 2, ¶ 5). “While not
constituting submission to jurisdiction in North Carolina, [such
an] agreement does manifest a purposeful availment of the laws of
North Carolina in the transaction taken as a whole.”
241508,
at
*3
(addressing
choice-of-law
Cree, 2004 WL
provision
in
“non-
disclosure agreement” executed by parties as part of contract
negotiations) (citing Burger King, 471 U.S. at 481-82, and Diamond
Healthcare, 229 F.3d at 452).
e. Factor Seven – Communications
Under Fourth Circuit precedent, “the nature, quality and
extent of the parties’ communications about the business being
transacted”
bears
upon
the
purposeful
Consulting Eng’rs, 561 F.3d at 278.
availment
inquiry.
Evidence submitted by Hanes
reflects that GBI “routinely contacted [Hanes] in North Carolina
via [telephone]” (Docket Entry 19, ¶ 10) and that “there were a
large number of calls made between [GBI] employees and [Hanes
officials] in North Carolina” (id., ¶ 27).
Additionally (as
detailed in Section I), Hanes has come forward with evidence of “at
-30-
least a dozen emails between Hanes employees in North Carolina and
GBI employees while the contract was being negotiated” (id., ¶ 27
(emphasis added)), with “at least seven” (id., ¶ 12) of the
negotiation-phase e-mails sent by GBI to Hanes in North Carolina,
as well as evidence that “Hanes employees in North Carolina and
[GBI]
employees
exchanged
at
least
forty
e-mails
during
the
performance of the contract” (id., ¶ 27 (emphasis added)).16
Further
(again,
as
documented
in
Section
I),
Hanes
has
presented evidence that the parties’ communications during the
months-long negotiation of the contract involved highly substantive
matters that, among other things, materially affected the contract
terms and led to execution of a credit agreement.
Moreover, even
GBI’s evidence establishes that the parties’ communications during
the life of the contract concerned not just problems with the goods
delivered, but also “other logistical issues . . . .”
Entry 10-3, ¶ 6.)
(Docket
Finally, according to evidence submitted by
Hanes, in response to invoices sent to GBI by Hanes from North
Carolina, GBI sent “nine separate checks [totaling $1,445,720.06]
. . . either to Hanes’ lockbox account at Wachovia Bank in
Charlotte, North Carolina or to Hanes’ office in Conover, North
Carolina.”
(Docket Entry 19, ¶ 28.)
Given the foregoing volume and character of the parties’
communications,
this
factor
favors
16
a
finding
of
purposeful
To the extent the parties’ accounts regarding the quantity
of their communications differ, at this stage, the Court must draw
all reasonable inferences arising from the proof, and resolve all
factual disputes, in [Hanes’s] favor.” Mylan Labs., 2 F.3d at 60.
-31-
availment. See, e.g., Gentry Tech. of S.C., Inc. v. Baptist Health
S. Fla., Inc., No. 1:11CV1232TLW, 2012 WL 847540, at *4 (D.S.C.
Mar. 13, 2012) (unpublished) (citing, as support for finding of
purposeful
availment,
fact
that
“contacts
include[d]
the
correspondence between [the defendant’s] attorneys in Florida and
[the
plaintiff’s]
attorneys
in
South
Carolina
during
the
negotiation that resulted in the parties reaching a formal, written
agreement . . . [, as well as that the defendant’s] representatives
regularly telephoned [the plaintiff] in South Carolina during the
course of their business relationship and [the defendant] sent a
large
volume
of
documents
related
to
the
agreement
to
[the
plaintiff’s] office in South Carolina”); Manley v. Air Canada, 753
F. Supp. 2d 551, 560 (E.D.N.C. 2010) (“[T]he frequent telephone
calls
and
correspondence
into
North
Carolina
(both
during
negotiation of the contract and the performance thereof) and the
mailing of checks to plaintiff’s home address in North Carolina to
pay invoices he submitted are sufficient ‘minimum contacts’ for
specific personal jurisdiction purposes.”); Message Sys., Inc. v.
Integrated Broadband Servs., LLC, Civil No. CCB-09-2122, 2010 WL
2891706, at
contacts
*5
(D.
supporting
Md.
July 20,
2010)
an
assertion
of
(unpublished)
jurisdiction
(“Other
over
[the
defendant] include . . . [the defendant’s] payment of licensing
fees to Maryland[] and [the defendant’s] use of Maryland phone
numbers to contact [the plaintiff].”); see also Consulting Eng’rs,
561 F.3d at 279-80 (appearing to treat evidence of “approximately
four telephone conversations and twenty-four emails, eight of which
-32-
were sent by [defendant]” as supporting finding of purposeful
availment where “substance of these communications, according to
[plaintiff], included the negotiation of [non-disclosure agreement]
and discussion of a proposal for [plaintiff’s] services,” but
concluding
establish
that
all
eight
factors
purposeful availment);
in
their
Plastic
totality
Fabricating,
did
not
Inc.
v.
Electrex Co., Inc., No. 7:12CV119, 2012 WL 1970237, at *3 (W.D. Va.
May 30, 2012) (unpublished) (“[The defendant] has engaged in
significant communication with [the plaintiff]. . . .
[T]he facts
of this case are not the same as an individual ordering something
via mail or internet from a retailer in another state.
Those
circumstances would consist of a single brief communication.”).17
17
GBI’s brief in support of its instant Motion to Dismiss
argues that the parties’ above-referenced communications “do[] not
support the exercise of personal jurisdiction over GBI in this
state.” (Docket Entry 11 at 15.) As authority for that argument,
it cites: 1) Hanes, 2008 WL 453989, at *11-13, for the proposition
that “placing a limited number of calls and/or sending e-mails to
North Carolina does not support the exercise of personal
jurisdiction over [an] out of state purchaser of goods” (Docket
Entry 11 at 15); and 2) three cases from the Eastern District of
Virginia, Eagle Paper, 2008 WL 170506, at *5, Superfos Inv., Ltd.
v. Firstmiss Fertilizer, Inc., 774 F. Supp. 393, 397-98 (E.D. Va.
1991), and Unidyne Corp. v. Aerolineas Argentinas, 590 F. Supp.
391, 396 (E.D. Va. 1984), all for the principle (quoted from Eagle
Paper and attributed to Superfos and Unidyne by the reference
“same”) that “‘it is well settled that mere telephone calls and
electronic communications in furtherance of a transaction are
insufficient to constitute purposeful activity’” (Docket Entry 11
at 15 (emphasis added)). The principle GBI draws from the Eastern
District of Virginia cases does not require this Court to discount
the communications that GBI had with Hanes for at least two
reasons. First, the record (as documented in Section I) reflects
that GBI directed communications into North Carolina not just
during the performance of (i.e., “in furtherance of”) the contract,
but also in connection with matters material to the formation of
the contract.
This distinction has significance.
See, e.g.,
(continued...)
-33-
f. Factor Eight – Performance
The final factor identified by the Fourth Circuit as relevant
to
the
purposeful
availment
inquiry
concerns
“whether
the
performance of contractual duties was to occur within the forum[.]”
Consulting Eng’rs, 561 F.3d at 278.
The Complaint alleges that,
“[p]ursuant to the [c]ontract, Hanes was to supply and [GBI] was to
purchase, [EcoRain plates] to be assembled into modular underground
17
(...continued)
Barker v. Daniel, Civil Action No. 2:10-3179-RMG-BM, 2011 WL
2581417, at *3 (D.S.C. June 2, 2011) (unpublished) (observing that
“email, telephone, and mail contacts into a forum can establish
personal jurisdiction under some circumstances; such circumstances
normally relate to more extensive types of contact or the forming
of contracts between parties” (internal citation omitted)),
recommendation adopted, 2011 WL 2600598 (D.S.C. June 29, 2011)
(unpublished). Second, the issue at this point is not whether the
parties’ communications “are sufficient” to establish purposeful
availment, but instead whether such communications weigh in favor
of or against a finding of purposeful availment. Given both the
quantity and nature of the communications described by Hanes,
although this factor may not alone compel a finding of purposeful
availment, it does weigh in favor of such a finding. Nor does
Magistrate Judge Sharp’s discussion of the communications factor in
Hanes, 2008 WL 4533989, at *11-13, dictate the discounting of the
communications factor here. In the case before Magistrate Judge
Sharp, the defendant-corporation only “placed a limited number of
calls and/or sent an email to representatives in North Carolina to
remedy allege [sic] flaws in the products that it had purchased
[from a Hanes-owned entity].” Id. at *11 (emphasis added). In
this case, however, Hanes (as set forth in Section I) has produced
evidence that GBI placed more than a “limited number” of telephone
calls and sent more than one e-mail to Hanes in North Carolina;
moreover, that evidence shows that GBI’s more extensive
communications occurred not just during the performance of the
contract, but also in connection with substantive negotiations over
contract formation. Further, even evidence from GBI establishes
that its communications with Hanes during the life of the contract
concerned more than problems with product quality. Simply put, the
foregoing distinctions regarding the scope of the communications
that occurred in this case and in the case before Magistrate Judge
Sharp renders Hanes, 2008 WL 4533989, at *11-13, irrelevant to the
Court’s consideration of the communications factor in this case.
-34-
tanks for a construction project . . . .”
(Docket Entry 2, ¶ 3.)
Further, the Complaint indicates (as one would expect) that the
parties’ contract obligated GBI to “pa[y] Hanes in full for the
EcoRain [plates] [GBI] received, accepted, and installed.”
¶ 8.)
(Id.,
The Complaint, however, does not state whether the parties’
contract addressed the place for performance either of Hanes’s
obligation to supply EcoRain plates or GBI’s obligation to make
payment.
(See id., ¶¶ 1-19.)18
In addition, although the lone
affidavit submitted by Hanes does show that it supplied some of the
EcoRain plates
from
its
“Winston-Salem
distribution
facility”
(Docket Entry 19, ¶ 23) and that GBI made payments to two different
locations in North Carolina (id., ¶ 28), that affidavit does not
assert that the contract contemplated performance of the parties’
obligations of supply and payment in such a fashion (see id., ¶¶ 129).
Finally, GBI’s evidentiary submissions include a declaration
that the parties’ contract provided that “the [EcoRain] plates
would be delivered directly to Babylon, New York” (Docket Entry 104, ¶ 4), but they do not otherwise discuss what, if anything, the
contract specified about the place of performance of the parties’
reciprocal obligations (see Docket Entries 10-2, 10-3, and 10-4).
Under these circumstances, the Court has no basis to conclude
that “the performance of contractual duties was to occur within
[North Carolina],” Consulting Eng’rs, 561 F.3d at 278.
18
Moreover, although the Complaint asserts that the contract
appears as an exhibit, the copies of the Complaint on the Docket do
not contain any such attachment. (See Docket Entries 1-2, 2.)
-35-
g. Summary and Weighing of Factors
The foregoing discussion demonstrates that, of the eight
factors
the
Fourth
Circuit
has
recognized
as
relevant
to
a
determination regarding the purposeful availment prong of the
specific jurisdiction test, four (i.e., factors three, four, five,
and seven) favor finding that GBI purposely availed itself of the
privilege of conducting business in North Carolina and four (i.e.,
factors one, two, six, and eight) weigh against such a finding.
More specifically, the record reflects that, in support of a
finding of purposeful availment, GBI “reached into [North Carolina]
to solicit or initiate business,” id., GBI “deliberately engaged in
significant
. . . business activities in [North Carolina],” id.,
“the parties contractually agreed that [North Carolina] law . . .
would govern disputes,” id., and “the parties’ communications about
the business being transacted” were highly substantive in “nature
[and] quality,” as well as “exten[sive],” id., but, against a
finding of purposeful availment, GBI did not “maintain[] offices or
agents . . .[,] own[] property . . .[,] or ma[k]e in-person contact
with [Hanes] in [North Carolina],” id., and no grounds exist to
find that “the performance of contractual duties was to occur
within [North Carolina],” id.
Given the parity in the number of factors on each side of the
balance, the analysis must turn to the relative significance of the
competing factors.
In that regard, the Supreme Court’s following
admonition becomes important:
-36-
Jurisdiction in these circumstances may not be avoided
merely because the defendant did not physically enter the
forum State. Although territorial presence frequently
will enhance a potential defendant’s affiliation with a
State and reinforce the reasonable foreseeability of suit
there, it is an inescapable fact of modern commercial
life that a substantial amount of business is transacted
solely by mail and wire communications across state
lines, thus obviating the need for physical presence
within a State in which business is conducted. So long
as a commercial actor’s efforts are “purposefully
directed” toward residents of another State, we have
consistently rejected the notion that an absence of
physical contacts can defeat personal jurisdiction there.
Burger King, 471 U.S. at 476 (emphasis added).
The three factors which focus on physical presence in North
Carolina
(and
which
favor
GBI’s
position)
thus
cannot
carry
dispositive significance, where, as here, other factors show GBI
“‘purposefully directed’” efforts toward Hanes in North Carolina.
See,
e.g.,
SEI,
LLC
v.
Take
Action
Media,
Inc.,
No.
1:12CV492(JCC/TRJ), 2012 WL 4105131, at *5 (E.D. Va. Sept. 17,
2012) (unpublished) (“Factors (1), (2), and (6) do not support a
finding that Defendants purposefully availed themselves of the
benefits and protections of Virginia’s laws because there are no
allegations regarding any physical presence (via offices, agents,
property,
or
in-person
contact)
in
Virginia
by
[Defendants].
Defendants’ lack of physical presence in Virginia, however, ‘is not
dispositive.’” (quoting English & Smith, 901 F.2d at 39, in turn
citing Burger King, 471 U.S. at 476)).
Moreover, as previously
observed, the Court is “entitled to accord special weight to the
fact that it was [GBI] that initiated contact with [Hanes] in
[North Carolina].”
CFA Inst., 551 F.3d at 295 n.17 (emphasis
-37-
added).
In light of the diminished significance of the three
physical-presence-related factors favoring GBI and with the special
weight of the initiation factor added to the other factors favoring
Hanes’s position (including the large size of the business deal,
the North Carolina choice-of-law clause in the parties’ credit
agreement, and the significant quantity of communications between
the parties about material matters), the particular circumstances
of this case, on balance, dictate a finding that GBI “‘purposefully
availed’ itself of the privilege of conducting activities in [North
Carolina],” ALS Scan, 293 F.3d at 712.
ii.
The
second
prong
Second Prong – Nexus
of
the
test
for
specific
jurisdiction
“requires that the defendant’s contacts with the forum state form
the basis of the suit.”
Consulting Eng’rs, 561 F.3d at 278-79.
That requirement has been met because GBI’s activities which
support a finding of purposeful availment concerned its contract
with Hanes and the Complaint makes clear that the performance of
that contract forms the basis of Hanes’s claims.19
iii.
“[W]here
a
Third Prong – Reasonableness
defendant
who
purposefully
has
directed
his
activities at forum residents seeks to defeat jurisdiction, he must
present
a
compelling
case
that
the
presence
of
some
considerations would render jurisdiction unreasonable.”
King, 471 U.S. at 477.
other
Burger
To assist district courts in assessing
19
GBI has not contested this issue.
7-19; Docket Entry 21 at 2-10.)
-38-
(See Docket Entry 11 at
whether a defendant has made such a compelling case, the Fourth
Circuit has identified these “additional factors [for a district
court to consider] to ensure the appropriateness of the forum once
it has determined that a defendant has purposefully availed itself
of the privilege of doing business there . . . :
(1) the burden on
the defendant of litigating in the forum; (2) the interest of the
forum state in adjudicating the dispute; (3) the plaintiff’s
interest in obtaining convenient and effective relief; (4) the
shared interest of the states in obtaining efficient resolution of
disputes;
and (5)
the
interests
substantive social policies.”
of
the
states
in furthering
Consulting Eng’rs, 561 F.3d at 279.
As to the first of these reasonableness factors, GBI will face
some burden in having to litigate in North Carolina, rather than in
its home-state of New York; however, more than a half-century ago,
the Supreme Court recognized that “progress in communications and
transportation has made the defense of a suit in a foreign tribunal
[i.e., a court in a state other than of the defendant’s residence]
less burdensome.” Hanson v. Denckla, 357 U.S. 235, 251 (1958); see
also
McGee,
355
U.S.
at
223
(“[M]odern
transportation
and
communication have made it much less burdensome for a party sued to
defend himself in a State where he engages in economic activity.”).
Further, GBI “has been able to secure counsel to represent its
interests, and its litigation burden is thus no more substantial
than that encountered by other entities that choose to transact
business in [North Carolina].
More simply, [GBI] is not shielded
-39-
from
civil
liability
in
[North
headquartered in [New York].”
Carolina]
because
it
is
CFA Inst., 551 F.3d at 296.
Accordingly, “while the Court’s exercise of jurisdiction will
geographically inconvenience and thereby burden [GBI] somewhat, the
distance and travel logistics are not great and are the mirror
image of the burden on [Hanes] of the converse, a consideration
reflected in the third [reasonableness] factor: [Hanes’s] interest
in obtaining convenient, effective relief in this forum, where
[Hanes] is located and elected to litigate.”
Panterra Eng’red
Plastics, Inc. v. Transportation Sys. Solutions, LLC, 455 F. Supp.
2d 104, 111 (D. Conn. 2006) (emphasis added) (addressing burden of
traveling between North Carolina and Connecticut); see also Tubular
Textile Mach. & Compax Corp. v. Formosa Dyeing & Finishing, Inc.,
No. 4:96CV00391, 1997 WL 33150812, at *5 (M.D.N.C. Jan. 29, 1997)
(unpublished) (Beaty, J.) (“Plaintiffs have a substantial interest
in obtaining relief in North Carolina the state in which they are
based,
and
would
suffer
similar
hardship
[to
that
faced
by
defendant] if [they are] forced to litigate in [defendant’s homestate].”).
The second reasonableness factor also supports the
exercise of personal jurisdiction in this case because “North
Carolina has a manifest interest in providing an effective means of
redress for its resident corporations who are not compensated for
their services.”
Tubular Textile, 1997 WL 33150812, at *5; accord
CFA Inst., 551 F.3d at 296 (“Virginia has a valid interest in the
resolution of the grievances of its citizens and businesses,
-40-
particularly when they potentially involve issues of Virginia
law.”).
In its briefing addressing the reasonableness prong of the
specific
jurisdiction
concerning
“the
analysis,
interests
of
GBI
the
has
offered
[parties’
no
argument
home-]states
in
furthering substantive social policies,” Consulting Eng’rs, 561
F.3d at 279.
10.)
(See Docket Entry 11 at 16-19; Docket Entry 21 at 8-
Accordingly,
the
only
remaining
reasonableness
factor
concerns “the shared interest of the [parties’ home-]states in
obtaining efficient resolution of disputes,” Consulting Eng’rs, 561
F.3d at 279.
On this point, GBI asserts that the New York state
court litigation it launched after Hanes commenced this action will
provide a more efficient forum for resolution of Hanes’s instant
claims.
(Docket Entry 11 at 18-19; Docket Entry 21 at 9-10.)
Hanes, however, has offered a plausible theory as to why the claims
it has raised in this case do not require resolution in the same
forum with the broader case in New York state court.
(See Docket
Entry 20 at 20 (“Hanes delivered the [EcoRain plates] to [GBI] in
accordance with the express terms of the contract.
Thus, under
North Carolina law – which governs the relationship between [GBI]
and Hanes – [GBI] has no defense to the present action.”); see also
Docket Entry 2 at ¶¶ 7, 8, 13-18 (setting forth factual allegations
showing that GBI accepted delivery of EcoRain plates from Hanes,
but did not pay for all such deliveries and explaining, with
detailed
references
both
to
the
parties’
contract
and
North
Carolina law, why Hanes, as a distributor who disclaimed any
-41-
warranties, could have no liability to GBI for any alleged defects
in the EcoRain plates Hanes delivered).)
Under these circumstances, GBI has not made a “compelling case
. . . [that] would render jurisdiction unreasonable,” Burger King,
471 U.S. at 477.
“[R]easonableness analysis is designed to ensure
that jurisdictional rules are not exploited in such a way as to
make litigation so gravely difficult and inconvenient that a party
unfairly
is
at
a
severe
disadvantage
in
comparison
to
his
opponent.” Christian Sci. Bd., 259 F.3d at 217 (internal quotation
marks omitted).
GBI has not shown that litigation in North
Carolina would expose it to any such fundamental unfairness.
III. CONCLUSION
Hanes
has
made
a
prima
facie
showing
jurisdiction exists in this Court as to GBI.
that
specific
First, the record
before the Court reflects that GBI purposefully availed itself of
the privilege of conducting business in North Carolina in that GBI
solicited a North Carolina-based corporation to enter into a
significant
commercial
relationship
(which
included
a
credit
agreement providing that North Carolina law would govern the
parties’
dealings)
substantial
regarding
volume
the
and
of
GBI
directed
communications
formation
and
into
of
fulfillment
a
North
Carolina
substantive
of
that
a
nature
commercial
relationship, as well as numerous payments on large invoices
submitted from North Carolina.
Second, Hanes’s claims for breach-
of-contract and declaratory judgment arise from GBI’s foregoing
contacts with North Carolina. Third, no other basis exists to find
-42-
that litigation in North Carolina would make this Court’s exercise
of personal jurisdiction over GBI unreasonable as a matter of law.
IT IS THEREFORE RECOMMENDED that GBI’s Motion to Dismiss for
Lack of Personal Jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(2) (Docket Entry 10) be denied.
IT IS ORDERED that the Clerk shall set this case for an
Initial Pretrial Conference before the undersigned Magistrate Judge
on April 29, 2013.
IT
IS
FURTHER
ORDERED
that
Hanes’s
Motion
for
Status
Conference and Request to Begin Discovery (Docket Entry 22) is
DENIED AS MOOT.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge
February 15, 2013
-43-
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