MCGRORY v. PARAGON SYSTEMS, LLC et al

Filing 9

MEMORANDUM SIGNED BY HONORABLE GERALD J. PAPPERT ON 9/26/17. 9/27/17 ENTERED AND COPIES E-MAILED. (va, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
STACY M. MCGRORY,
Plaintiff,

CIVIL ACTION
NO. 16-04062

v.
PARAGON SYSTEMS, LLC, et al.
Defendants.
PAPPERT, J.

September 26, 2017
MEMORANDUM

Plaintiff Stacy McGrory filed suit on July 28, 2016, alleging that Defendants, all
of whom are citizens and residents of Virginia, breached employment contracts,
violated wage laws and wrongfully discharged her. (ECF No. 1.) Defendants failed to
appear or otherwise defend the suit, the Clerk of Court entered default on February 16,
2017, and McGrory moved for default judgment on May 24, 2017. (ECF No. 6.) The
Court denied McGrory’s Motion because it was not clear from the Complaint or the
Motion for Default Judgment that venue was proper or whether the Court could
exercise personal jurisdiction over the three Virginia-based Defendants. (ECF No. 7.)
The Court allowed McGrory to refile her Motion to correct these deficiencies. (Id.)
McGrory subsequently filed an amended motion (ECF No. 8) which the Court denies.
I.
Before the Court can enter a default judgment, McGrory must present evidence
of: (1) the court’s basis of personal jurisdiction over defaulting defendants; (2) proper

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service of process upon defaulting defendants; (3) facts necessary to state a cause of
action; and (4) the amount claimed in damages. D’Onofrio v. II Mattino, 430 F. Supp.
2d 431, 436 (E.D. Pa. 2006). When the Court considers personal jurisdiction in the
posture of a default judgment, “although the plaintiffs retain the burden of proving
personal jurisdiction, they can satisfy that burden with a prima facie showing,” and
“may rest their argument on their pleadings, bolstered by such affidavits and other
written materials as they can otherwise obtain.” D’Onofrio, 430 F. Supp. 2d at 437
(quoting Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005)). A plaintiff makes a prima
facie case by “establishing with reasonable particularity sufficient contacts between the
defendant and the forum state.” Provident Nat. Bank v. California Fed. Sav. & Loan
Ass’n, 819 F.2d 434, 437 (3d Cir. 1987) (citing Gehling v. St. George’s School of
Medicine, Ltd., 773 F.2d 539, 542 (3d Cir. 1985)). If a defendant does not oppose the
Motion, the court must investigate potential personal jurisdiction issues. D’Onofrio,
430 F. Supp. 2d at 437–38.
II.
A.
McGrory asserts that the Court has general personal jurisdiction over the
Defendants. See Am. Mot. ¶ 13 (“This Court may exercise personal jurisdiction over
each foreign Defendant, as the Defendants maintained continuous and systematic
contacts with the Commonwealth of Pennsylvania and further, the events giving rise to
Plaintiff’s complaint occurred within the Commonwealth.”). For a court to maintain
general jurisdiction over a non-resident, “the defendant’s contacts with the forum state
[must be] so continuous and substantial that the defendant should reasonably expect to

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be haled into court there on any cause of action.” D’Onofrio, at 440 (citation omitted).
Continuous and systematic contacts refer to the contact with the forum state rather
than the defendant’s individual relationship with the resident plaintiff. Metallic
Ceramic Coatings, Inc. v. Precision Prod., Inc., 2001 WL 122227, at *3 (E.D. Pa. Feb. 13,
2001). The contacts must be “extensive and persuasive.” Reliance Steel Prods. Co. v.
Watson, Ess, Marshall & Enggas, 675 F.2d 587, 589 (3d Cir. 1982).
McGrory may satisfy the burden of proving personal jurisdiction in her
Complaint or by affidavits and other written materials. D’Onofrio, 430 F. Supp. 2d at
438. She has not done so. McGrory merely repeats the language of the general
jurisdiction standard in her Amended Motion; she does not provide any facts about the
three Virginia-based Defendants’ contacts with Pennsylvania in her Complaint or
either motion. See generally (ECF Nos. 1, 6, 8). McGrory has still not made a prima
facie showing that the Court has general personal jurisdiction over the Defendants.
B.
Since she has not alleged it anywhere, the Court is not required to address
whether or not specific jurisdiction exists with respect to the Defendants. See
AnnexTelecom Co. v. Brown, No. 13-4605, 2014 WL 5149101, at *4 (E.D. Pa. Oct. 14,
2014). Nonetheless, the Court will do so. A court has specific jurisdiction if a
“plaintiff’s cause of action arises out of a defendant’s forum-related activities, such that
the defendant should reasonably anticipate being haled into court in that forum.” Am.
Bd. of Internal Med. v. Oni, No. 10-CV-2679, 2010 WL 3860444, at *2 (E.D. Pa. Sept.
30, 2010) (citation omitted). The Third Circuit utilizes a three part inquiry: (1) whether
the defendant purposefully directed its activities at the forum; (2) whether the litigation

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arises out of or relates to at least one of those activities; and (3) whether exercising
jurisdiction comports with fair play and substantial justice. O'Connor v. Sandy Lane
Hotel Co., 496 F.3d 312, 317 (3d Cir. 2007) (citation omitted).
The existence of a contract between a non-resident defendant and a resident of
the forum state is not by itself enough to justify personal jurisdiction. Mellon Bank (E.)
PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). Instead, courts must
examine prior negotiations, contemplated future consequences, the terms of the
contract, and the parties’ course of dealing. Id. In Streamline Business Services, LLC
v. Vidible, Inc., 2014 WL 4209550, at *10 (E.D. Pa. Aug. 26, 2014), contract negotiations
between the plaintiff and non-resident defendant occurred while the plaintiff’s
chairman was in Pennsylvania and both parties maintained constant communication
via email and telephone during negotiations and in performance of the contract. Id.
Additionally, Vidible made payments into the plaintiff’s Pennsylvania bank account.
Id. Although Vidible’s principals never physically entered Pennsylvania, they knew
that the plaintiff was a Pennsylvania resident during contract negotiations and that the
plaintiff would conduct its services in Pennsylvania. Id. The court noted that the Third
Circuit has held that it does not matter which party initiates the contractual
communications. Id. (citing Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 150 (3d
Cir.1992)).
In the posture of a default judgment, a plaintiff can satisfy the burden of proving
personal jurisdiction through “their pleadings [and] bolstered by such affidavits and
other written materials as they can otherwise obtain.” D’Onofrio, 430 F. Supp. 2d at
438 (quoting Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005)). Here, McGrory

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claims in her Amended Motion that she was a resident of Pennsylvania while working
for the Defendants and the location of employment was also within the Eastern District
of Pennsylvania. (Am. Mot. ¶ 14.) McGrory failed to provide the Court with any other
details about her arrangement with Defendants such as the location of the contract
negotiations, where she was paid, her location while communicating with the
Defendants when performing services under the contract and whether the Defendants
knew this information. The Court’s basis for exercising personal jurisdiction over the
three Virginia-based Defendants is not clear from the pleadings or other submitted
materials and McGrory has not satisfied her burden. See generally (ECF Nos. 1, 6, 8).1
An appropriate order follows.
BY THE COURT:

/s/ Gerald J. Pappert
GERALD J. PAPPERT, J.

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Even if McGrory was entitled to default judgment, the Court would need to hold a hearing in
order to ascertain damages. McGrory has not provided the Court with the requisite proof of damages
such as her contract, employee handbook, and statements indicating the time periods she was
without insurance while money was being withheld from her paycheck.

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