Diving Services, Inc. v. BTM Machinery, Inc. et al
Filing
14
MEMORANDUM AND ORDER denying 11 Motion to Dismiss and transferring the matter to the United States District Court for the District of South Carolina. So Ordered by Chief Judge William E. Smith on 1/3/2017. (Jackson, Ryan)
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
___________________________________
)
)
)
Plaintiff,
)
)
v.
)
)
BTM MACHINERY, INC. and
)
CRANE U, INC.,
)
)
Defendants.
)
___________________________________)
DIVING SERVICES, INC.,
C.A. No. 16-112 S
MEMORANDUM AND ORDER
WILLIAM E. SMITH, Chief Judge.
Diving Services, Inc. (“Diving Services”) entered into a
contract with BTM Machinery, Inc. (“BTM”) and has brought suit
against BTM (as well as BTM’s business partner, Crane U, Inc.)
for
several
causes
of
action
related
to
that
contractual
relationship. (Complaint, ECF No. 1.) BTM has moved to dismiss
the
lawsuit.
(Def.’s
Mot.
to
Dismiss,
ECF
No.
11.)
For
the
reasons set forth below, the Motion to Dismiss is DENIED, and
the case is transferred to the United States District Court for
the District of South Carolina.
I. Facts of the Case
BTM
machinery
is
and
a
South
related
Carolina
services
company
to
the
that
provides
global
large
construction
industry. Diving Services is a Rhode Island company that entered
1
into a contract with BTM for the purchase of a construction
crane. (See Pl.’s Opp’n Mem. Ex. A, ECF No. 12-1.). Under the
terms of the contract, BTM agreed to make various repairs to the
crane
in
deposit.
repairs
exchange
(Id.)
and
for
Diving
pay
the
Diving
Services’
Services
would
remaining
payment
then
$80,000
of
a
“inspect[]”
balance
before
$5,000
those
taking
possession of the crane. (Id.) While neither party has offered
evidence regarding the inspection process, both parties agree
that Diving Services paid for, and took possession of the crane
in South Carolina before transporting the crane to Pennsylvania.
(Complaint ¶ 24, ECF No. 1; Pl.’s Opp’n. Mem. 3, ECF No. 12;
Def.’s Reply 5, ECF No. 13.) Diving Services now alleges that
the crane provided by BTM was not operational and has brought
suit for various claims related to that transaction.
BTM has moved to dismiss Diving Services’ claim based on
three grounds. First, BTM argues that this Court lacks personal
jurisdiction
over
BTM
because
BTM
“has
almost
no
purposeful
contacts with [Rhode Island].” (Def.’s Mot. to Dismiss 2, ECF
No. 11-1.) Second, BTM argues that the contract between BTM and
Diving Services has a valid forum selection clause that requires
this claim to be litigated in South Carolina. (Id.) Third, BTM
argues that Rhode Island is not the proper venue because “the
alleged events giving rise to Diving Services’ claim did not
2
occur in Rhode Island.”
(Id.)
The Court first addresses the
issue of personal jurisdiction.
II. Personal Jurisdiction
For
this
Court
to
have
personal
jurisdiction
over
BTM,
Diving Services must show that (1) the Rhode Island long-arm
statute grants jurisdiction over the claim; and (2) exercising
jurisdiction does not violate the Due Process Clause of the
Fourteenth Amendment. Daynard v. Ness, et al., 290 F.3d 42, 53
(1st Cir. 2002). Rhode Island’s long-arm statute “extends up to
the
constitutional
limitation.”
Am.
Sail
Training
Ass’n
v.
Litchfield, 705 F. Supp. 75, 78 (D.R.I. 1989) (quoting Conn. v.
ITT
Aetna
Finance
Co.,
252
A.2d
184,
186
(R.I.
1969)).
Therefore, this Court need only focus on the limitations of the
Due Process Clause of the Fourteenth Amendment.
Under
the
Due
Process
Clause,
Diving
Services
has
the
burden of showing that BTM has had certain “minimum contacts”
with Rhode Island such that this Court’s hearing of the case
would
not
offend
“‘traditional
notions
of
fair
play
and
substantial justice.’” Phillips v. Prairie Eye Ctr., 530 F.3d
22,
26,
27
(1st
Cir.
2008)
(quoting
Int’l
Shoe
Co.
v.
Washington, 326 U.S. 310, 319 (1945)). While Plaintiff can meet
this
standard
by
demonstrating
either
general
or
specific
jurisdiction, Harlow v. Children’s Hosp., 432 F.3d 50, 57 (1st
Cir. 2005) (comparing general and specific jurisdiction), Diving
3
Services argues only for specific jurisdiction. (Pl.’s Opp’n.
Mem. 5, ECF No. 12.) For claims of specific jurisdiction, the
Court employs a three-pronged analysis that requires a showing
of “relatedness, purposeful availment, and reasonableness”:
First, the claim underlying the litigation must
directly arise out of, or relate to, the defendant’s
forum-state activities. Second, the defendant’s instate contacts must represent a purposeful availment
of the privilege of conducting activities in the forum
state, thereby invoking the benefits and protections
of that state’s laws and making the defendant’s
involuntary
presence
before
the
state’s
courts
foreseeable. Third, the exercise of jurisdiction must,
in light of the Gestalt factors, be reasonable.
Adelson v. Hananel, 510 F.3d 43, 49 (1st Cir. 2007) (emphasis
added).
Plaintiff
has
the
burden
of
establishing
all
three
prongs. Id. at 48.
In this case, BTM concedes that selling a crane to a Rhode
Island company satisfies the “relatedness” prong. (Def.’s Mot.
to Dismiss 4, ECF No. 11-1.) Therefore, the question is whether
Diving
Services
“purposeful
has
availment”
provided
and
sufficient
evidence
“reasonableness”
prongs.
for
the
Diving
Services’ evidence on this issue is reviewed using the prima
facie method:
Under [this] standard, the inquiry is whether the
plaintiff has proffered evidence which, if credited,
is sufficient to support findings of all facts
essential to personal jurisdiction. In order to make a
prima facie showing of jurisdiction, the plaintiff
ordinarily cannot rest upon the pleadings but is
obliged to adduce evidence of specific facts. The
court
must
accept
the
plaintiff’s
(properly
4
documented) evidentiary proffers as true for the
purpose of determining the adequacy of the prima facie
jurisdictional showing, and construe them in the light
most congenial to the plaintiff’s jurisdictional
claim.
Phillips,
omitted).
530
F.3d
at
26
(internal
citations
and
quotations
a. Purposeful Availment
Diving Services has the burden of demonstrating that BTM
“purposefully
availed
itself
of
the
privilege
of
conducting
activities in [Rhode Island], thereby invoking the benefits and
protections
of
that
state’s
laws
and
making
the
defendant’s
involuntary presence before the state’s courts foreseeable.” Id.
at 28 (internal quotations omitted). There are two elements to
purposeful availment: voluntariness and foreseeability. United
States v. Swiss Am. Bank, Ltd., 274 F.3d 610, 624 (1st Cir.
2001)
(discussing
whether
defendant
“purposefully
and
voluntarily directs his activities toward the forum so that he
should
expect,
by
virtue
of
the
benefit
he
receives,
to
be
subject to the court’s jurisdiction based on these contacts”).
Voluntariness requires evidence that BTM’s contact with Rhode
Island
was
party,”
not
based
Adelson,
510
on
the
F.3d
“unilateral
at
50,
but
actions
of
instead
another
was
the
“proximate[] result” of BTM’s conduct. Phillips, 530 F.3d at 28
(quoting
Burger
King
Corp.
v.
Rudzewicz,
471
U.S.
462,
475
(1985)). Foreseeability requires that BTM’s contact with Rhode
5
Island was “such that [it] could ‘reasonably anticipate being
haled
into
court
World–Wide
there.’”
Volkswagen
Adelson,
Corp.
v.
510
Woodson,
F.3d
at
444
50
U.S.
(quoting
286,
297
(1980)).
As to the first element, BTM cannot argue that its business
interaction with Diving Services was somehow involuntary. BTM
voluntarily sold a crane to
Services
an
invoice
for
the
Diving
sale
Services and sent
to
Diving
Diving
Services’
Rhode
Island address. This sort of interaction between BTM and Diving
Services is far from the sort of “unilateral action[] of another
party” that will serve to defeat personal jurisdiction. Id.; see
also
Phillips,
defendant
530
knowingly
F.3d
at
mailed
28
(finding
voluntariness
an
employment
contract
where
to
the
plaintiff in plaintiff’s forum state). Therefore, the real issue
is
whether
it
was
foreseeable
that
BTM
could
be
forced
to
litigate this claim in Rhode Island.
Diving Services has provided only two pieces of evidence on
this
front.
The
first
is
several
pages
from
BTM’s
website.
(Pl.’s Opp’n. Mem. Ex. C, ECF No. 12-3.) The second is a copy of
the contract between Diving Services and BTM for the sale of the
crane. (Pl.’s Opp’n. Mem. Ex. A, ECF No. 12-1.)
With regards to BTM’s website, Plaintiff is correct that
BTM “advertises its machinery and equipment for sale . . . to
all fifty states and worldwide.” (Pl.’s Opp’n. Mem. 8, ECF No.
6
12.) However, this sort of advertising does not, without more,
establish
personal
jurisdiction
in
Rhode
Island.
The
First
Circuit has made clear that “[t]he mere existence of a website
does
not
show
that
a
defendant
is
directing
its
business
activities towards every forum where the website is visible.”
McBee v. Delica Co., Ltd., 417 F.3d 107, 124 (1st Cir. 2005).
Where, as here, a defendant has merely advertised its services
to
the
general
public,
“[s]omething
more
is
necessary”
to
establish personal jurisdiction. Id., 417 F.3d at 124; see also
Jagex Ltd. v. Impulse Software, 750 F. Supp. 2d 228, 233 (D.
Mass.
2010)
automatically
(holding
result
that
where
personal
“a
jurisdiction
defendant
has
does
simply
not
posted
information on a passive website that is accessible to users in
a foreign jurisdiction”).
In
this
case,
the
“something
more”
provided
by
Diving
Services is its contract with BTM for the sale of a crane.
(Pl.’s Opp’n. Mem. Ex. A, ECF No. 12-1.) But, here again, “the
mere
fact
that
a
plaintiff
entered
into
a
contract
with
a
defendant in the forum state is not in and of itself dispositive
of the personal jurisdiction question.” Platten v. HG Bermuda
Exempted Ltd., 437 F.3d 118, 136 (1st Cir. 2006); Burger King
Corp.,
471
individual’s
U.S.
at
contract
478
with
(“If
an
the
question
out-of-state
is
whether
an
party
alone
can
automatically establish sufficient minimum contacts in the other
7
party’s home forum, we believe the answer clearly is that it
cannot.”). As the First Circuit has explained,
[i]t stretches too far to say that [Defendant], by
mailing a contract with full terms to [the forum
state] for signature and following up with three emails
concerning
the
logistics
of
signing
the
contract, should have known that it was rendering
itself liable to suit in [the forum state].
Phillips, 530 F.3d at 29. Therefore, the fact that BTM emailed a
contract
to
Diving
Services
with
the
knowledge
that
Diving
Services was located in Rhode Island is not enough to establish
personal jurisdiction in Rhode Island.
Beyond
BTM’s
website
and
the
sales
contract,
Diving
Services has provided no evidence of BTM’s contact with Rhode
Island. For instance, Diving Services has not provided evidence
that BTM representatives ever physically entered Rhode Island.
See Walden v. Fiore, 134 S. Ct. 1115, 1122 (2014) (holding that
physical presence, while not a “prerequisite,” it is certainly
“relevant”).1 Nor has Diving Services provided evidence of an
ongoing business relationship with BTM. See C.W. Downer & Co. v.
Bioriginal
Food
&
Sci.
Corp.,
771
F.3d
59
(1st
Cir.
2014)
(finding personal jurisdiction where defendant “reached . . .
into [the forum state] by entering a contractual relationship
1
Both parties seemingly agree that Diving Services
retrieved
the
crane
from
South
Carolina
and
thereafter
transported it to a work site in Pennsylvania. (Pl.’s Opp’n Mem.
3, ECF No. 12; Def.’s Reply 5, ECF No. 13.)
8
[with
the
plaintiff]
that
envisioned
continuing
and
wide-
reaching contacts in the forum state”) (internal citations and
quotations omitted). Under these circumstances, the Court finds
that Diving Services has failed to provide sufficient evidence
of
BTM’s
contact
with
Rhode
Island
to
satisfy
personal
jurisdiction. See Adelson, 510 F.3d at 49.2
III. Venue
Having found that this Court lacks personal jurisdiction
over
Diving
Services’
claim,
the
Court
must
now
determine
whether the case should be dismissed or transferred. Under 28
U.S.C. § 1631,
[w]henever a civil action is filed in a court . . .
and that court finds that there is a want of
jurisdiction, the court shall, if it is in the
interest of justice, transfer such action . . . to any
other such court in which the action . . . could have
been brought at the time it was filed . . . .
The statute creates a “rebuttable presumption in favor of
transfer.” Fed. Home Loan Bank of Boston v. Moody's Corp., 821
F.3d 102, 119 (1st Cir.), cert. denied, 137 S. Ct. 304 (2016)
(citing Britell v. United States, 318 F.3d 70, 73 (1st Cir.
2003)). This presumption is rebutted only where the Court finds,
after consideration of the entire record, that the interests of
2
As Diving Services’ failed to provide sufficient evidence
with regards to “foreseeability,” the Court need not address the
“reasonableness” prong of the specific jurisdiction analysis.
See Adelson, 510 F.3d at 49.
9
justice favor dismissal. Britell, 318 F.3d at 74 (“Thus, even
though transfer is the option of choice, an inquiring court must
undertake
case-specific
scrutiny
to
ferret
out
instances
in
which the administration of justice would be better served by
dismissal.”). The Court should consider whether the “transfer
would
unfairly
benefit
the
proponent,
impose
an
unwarranted
hardship on an objector, or unduly burden the judicial system.”
Id.
(internal
inherently
citations
require
some
omitted).
review
of
These
whether
the
considerations
claimant
has
“acted in bad faith” or has brought a claim that “is fanciful or
frivolous.” Id. at 75.
Based on the facts before the Court, the only jurisdiction
in which it is evident that Diving Services’ claim “could have
been brought at the time it was filed,” 28 U.S.C. § 1631, is
South Carolina. Both sides agree that BTM is located in South
Carolina,
that
originated
in
the
South
crane
at
Carolina,
the
and
center
that
of
Diving
this
dispute
Services
took
possession of the crane in South Carolina. (Complaint ¶ 24, ECF
No. 1; Pl.’s Opp’n. Mem. 3, ECF No. 12; Def.’s Reply 5, ECF No.
13.) Therefore, the only question left for this Court is whether
transferring
the
case
to
South
Carolina
would
disrupt
the
interests of justice.3
3
BTM argues that the contract between BTM
Services
contains
a
choice
of
law
provision
10
and Diving
(requiring
Having reviewed the totality of the record, the Court finds
no factors that favor dismissal over transfer. For instance, the
Court
finds
no
evidence
in
the
record
to
suggest
that
the
claimant has “acted in bad faith” or has brought a claim that
“is fanciful or frivolous.” Britell, 318 F.3d at 75. Moreover,
the Court finds that transferring Diving Services’ claims, as
opposed to dismissing them, would not “unfairly benefit” BTM,
“impose an unwarranted hardship on” Diving Services, or “unduly
burden
the
transferring
judicial
this
system.”
claim
Id.
would
at
74.
“further[]
To
the
the
contrary,
salutary
policy
favoring the resolution of cases on the merits,” as was the
intent of 28 U.S.C. § 1631. Id.
IV. Conclusion
For
the
reasons
described
above,
Defendant’s
Motion
to
Dismiss (ECF No. 11) is DENIED and the case is transferred to
application of South Carolina law) and a forum selection clause
(requiring that South Carolina maintain jurisdiction over the
claim). (Def.’s Mot. to Dismiss 11-15, ECF No. 11-1.) In
response, Diving Services argues that the forum selection clause
is not mandatory, and that both the forum selection clause and
the choice of law provision are unenforceable. (Pl.’s Opp’n.
Mem. 12-18, ECF No. 12.) The Court need not resolve this
particular dispute. As Diving Services has not contested that
South Carolina is a jurisdiction “in which the action or appeal
could have been brought at the time it was filed,” 28 U.S.C. §
1631, and the Court is transferring this case pursuant to its
authority under 18 U.S.C. 1631, there is no need for the Court
to delve into the enforceability of the contract’s various
clauses.
11
the
United
States
District
Court
Carolina.
IT IS SO ORDERED.
William E. Smith
Chief Judge
Date: January 3, 2017
12
for
the
District
of
South
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