Circuit Connect v. Preferred Transport

2011 DNH 130

• Court: District Court, D. New Hampshire
• Decided: August 22, 2011
• Docket: 10-CV-514-SM
• Status: Published

Opinion

Circuit Connect v . Preferred Transport 10-CV-514-SM 08/22/11 UNITED STATES DISTRICT COURT

DISTRICT OF NEW HAMPSHIRE

Circuit Connect, Inc., Plaintiff

v. Case N o . 10-cv-514-SM Opinion N o . 2011 DNH 130 Preferred Transport & Distribution, Inc. and Mecca, LLC, Defendants

Mecca, LLC,

Third Party Plaintiff

v.

Advanced Circuitry International and Two Brothers Trucking, Inc., Third Party Defendants

O R D E R

Plaintiff, Circuit Connect, Inc., a New Hampshire

corporation, brought this suit against Mecca, LLC, and Preferred

Transport and Distribution, Inc., claiming that the x-ray system

it purchased from Mecca arrived at Circuit Connect’s offices in

damaged condition. Mecca has named Advanced Circuitry,

International (“ACI”) and Two Brothers Trucking, Inc. as third-

party defendants. Mecca alleges that Two Brothers was negligent

in hiring Preferred Transport to ship the machine and that

Advanced Circuitry — from whom Mecca bought the machine

immediately prior to re-selling it to Circuit Connect — negligently loaded the machine onto Preferred Transport’s truck.

ACI’s motion to dismiss Mecca’s claim against it for lack of

personal jurisdiction (doc. n o . 22) is now before the court.

Background

The relevant jurisdictional facts are straightforward. ACI

is a Georgia corporation having its principal place of business

in Georgia. It does not sell any products in New Hampshire, has

no customers in New Hampshire, and does not do any direct

advertising in New Hampshire. Mecca, an Illinois corporation

having its principal place of business in Illinois, brokers the

sale of electronic equipment, or sometimes, purchases equipment

for resale. It operates a website which lists equipment for

sale. In 2009, an ACI representative requested that Mecca assist

ACI in selling an x-ray system owned by ACI. Mecca thereafter

advertised ACI’s x-ray machine on its website. There is no

evidence that ACI contracted for, paid for, or otherwise

controlled the advertising, or that Mecca was acting as a broker

for ACI.

At some point after Mecca listed the machine on its website,

a Circuit Connect representative contacted Mecca and expressed

interest in buying i t . Mecca, in turn, contacted ACI to obtain

additional information about the machine. The three parties,

2 ACI, Mecca, and Circuit Connect, eventually held a telephone

conference call to discuss the machine. A Circuit Connect

representative later viewed the machine at ACI’s warehouse in

Georgia.

Circuit Connect agreed to purchase the machine from Mecca

and Mecca agreed to buy the machine from ACI. Mecca took

ownership of the machine from ACI on November 5 , 2009, and resold

the machine to Circuit Connect on November 6. Under an agreement

with Mecca, Two Brothers (through subcontractor Preferred

Transport) shipped the machine on November 6 from ACI’s warehouse

in Georgia to Circuit Connect in New Hampshire. Under its

separate agreement with Mecca, ACI loaded the machine, which then

belonged to Mecca, onto Preferred’s truck. ACI billed Mecca, not

Circuit Connect, for its loading services.1 Given the bill of

lading presented to ACI on November 6, ACI knew that the machine

was headed for New Hampshire. When the machine arrived in New

Hampshire it was allegedly in damaged condition.

1 Mecca has not made a prima facie showing that ACI’s loading agreement was with Circuit Connect. Although Mecca’s Martin Lieberman states that ACI charged Circuit Connect $250 for loading the system onto the truck (doc. n o . 23-3, ¶ 1 1 ) , the invoice attached to Mr. Lieberman’s own affidavit contradicts his averment; it shows that ACI charged Mecca $250 for that service (doc. n o . 2 3 - 4 ) . See United States v . Swiss Am. Bank, Ltd., 274 F.3d 610, 619 (1st Cir. 2001) (only “properly supported proffers of evidence” are accepted as true in a prima facie inquiry into personal jurisdiction) (emphasis added).

3 Discussion

Mecca bears the burden of establishing that the court has

personal jurisdiction over Advanced Circuitry. See Sawtelle v .

Farrell, 70 F.3d 1381, 1387 (1st Cir. 1995). Because the court

is proceeding based upon the written submissions of the parties,

and without an evidentiary hearing, Mecca need only make a prima

facie showing that jurisdiction exists. See id. at 1386 & n.1.

To establish specific personal jurisdiction over a non-

resident defendant, Mecca must show: (1) its claim against

Advanced Circuitry directly arises out o f , or relates t o ,

Advanced Circuitry’s New Hampshire activities; (2) Advanced

Circuitry’s forum contacts represent a purposeful availment of

the privilege of conducting activities here, and (3) the exercise

of jurisdiction here is reasonable, in light of the “gestalt

factors.” United Elec., Radio & Mach. Workers of Am. v . 163

Pleasant S t . Corp., 960 F.2d 1080, 1089 (1st Cir. 1992).

1. ACI’s New Hampshire Contacts

The jurisdictional inquiry begins by identifying the alleged

contacts. Swiss Am. Bank, 274 F.3d at 621. Here, ACI’s

telephone conversation with a Circuit Connect representative

located in New Hampshire is a contact with this state. See Int’l

Paper Box Mach. C o . v . Paperboard U.S. Indus. Inc., N o . Civ. 99-

4 184-JD, 2000 WL 1480462, at *3 (D.N.H. Feb. 8 , 2000)

(“[C]ommunications to the forum state by telephone calls,

letters, and other means may constitute sufficient contacts to

confer jurisdiction”). No other activities Mecca has identified,

however, constitute forum contacts by ACI.

For example, ACI’s “soliciting [of] Mecca’s services in

selling the x-ray system through [Mecca’s] website (accessible

anywhere, including New Hampshire)” is not a contact by ACI with

New Hampshire. That “commercial activity conducted over the

Internet,” ICP Solar Techs v . TAB Consulting, Inc., 413 F. Supp.

2d 1 2 , 18 (D.N.H. 2006) (McAuliffe, J . ) , was Mecca’s, not ACI’s.

Mecca owned and operated the website, and there is no evidence

that ACI and Mecca were anything but “separate entit[ies].” Cf.

Knights Armament C o . v . Optical Sys. Tech., Inc., N o . 6:07-cv-

1323-Orl-22KRS, 2008 WL 2157108, at *6 (M.D. Fla. May 2 1 , 2008)

(for purposes of personal jurisdiction, parent company and

subsidiary were separate entities, even though subsidiary’s

products appeared on parent company’s website).

Also failing to qualify as New Hampshire contacts are the

following activities identified by Mecca: ACI’s “transferring of

the x-ray system to Mecca” in Georgia “in order to find a buyer”;

ACI’s “agreeing to load the sophisticated machinery for transport

5 [by others] to New Hampshire”; and Circuit Connect’s “inspection

[of] the x-ray system at ACI’s Georgia facility.” Document n o .

23-1, pg. 9-10. None of these activities amount to ACI contacts

with New Hampshire, because all occurred in Georgia and/or

involved ACI’s agreements with Mecca, not Circuit Connect.

Finally, ACI’s “benefitting from the ultimate sale of the x-ray

system to a New Hampshire company,” (doc. n o . 23-1, pg. 9 ) , does

not rise to the level of a forum contact.2

2. Relatedness

To meet the first prong, relatedness, Mecca must establish a

causal connection between Advanced Circuitry’s New Hampshire

contact (i.e., its telephone conversation with a Circuit Connect

2 Mecca invites the court to view ACI’s contacts through the lens of the stream-of-commerce theory of personal jurisdiction. See Document n o . 23-1, pg. 1 3 . Accordingly, it stresses the fact that ACI benefitted from the “ultimate” sale of the machine to a New Hampshire company and that ACI at some point prior to shipment knew the machine was headed for New Hampshire. See generally Asahi Metal Indus. C o . v . Super. C t . of Cal., 480 U.S. 102 (1987). This is not, however, a stream-of-commerce case, but rather, a negligent loading case. Accordingly, the public policies implicated in product liability cases are not implicated here. Moreover, even if the court were to apply the stream-of- commerce analysis, Mecca has only shown that ACI, at sometime prior to loading the machine onto the truck for shipment by others, knew that the machine was headed for New Hampshire. Mecca has not shown that ACI otherwise “targeted the forum.” J. McIntyre Mach., Ltd. v . Nicastro, ___ U.S. ___, 131 S . C t . 2780, 2788 (2011) (plurality opinion) (finding no personal jurisdiction in New Jersey over foreign defendant that did not target the state).

6 representative) and its alleged negligent loading of the machine.

The level of causation required lies “between a ‘but for’ and a

strict proximate cause test,” GT Solar Inc. v . Goi, N o . 08-cv-

249-JL, 2009 WL 3417587, at * 1 2 , n . 29 (D.N.H. Oct. 1 6 , 2009),

although the “proximate cause” standard will apply in most cases.

See Harlow v . Children’s Hosp., 432 F.3d 5 0 , 61 (1st Cir. 2005).

Regardless, however, of the precise degree of legal causation

required in any particular case, the touchstone of the inquiry is

whether the contact “form[s] an important, or [at least]

material, element of proof in the plaintiff's case.” Id. at 61

(quotation omitted) (alteration in original).

ACI’s telephone conversation with a Circuit Connect

representative in New Hampshire was not related in any way to

Mecca’s negligent loading claim against Advanced Circuitry. That

contact forms n o , let alone an “important,” element of proof that

Advanced Circuitry negligently loaded the machine onto the truck

after title passed to Mecca. To the extent that the telephone

call might be viewed as one part of a larger causal chain that

ultimately led to ACI’s loading of the machine for Mecca, that

connection is too “attenuated and indirect” for purposes of the

relatedness requirement. Id. (quotation omitted).

7 Because Mecca has failed to make a prima facie showing on

the relatedness prong, the remaining prongs of the three-part

test need not be addressed. However, is it worth noting that in

the absence of additional, and more substantial, contacts by ACI

with New Hampshire, it would be difficult to find that ACI

purposefully availed itself of the protections and benefits of

this state. See PMH Research Assoc., LLC v . Life Extension

Found. Buyer’s Club, Inc., N o . Civ. 04-251-PB, 2004 WL 2958671,

at *7 (D.N.H. Dec. 2 2 , 2004) (finding no purposeful availment

because defendant had “few contacts with the state, and next-to-

none that can be appropriately attributed to the cause of action

at issue.”). And, even if it is assumed that ACI’s loading of

the truck, with knowledge that it was headed for New Hampshire,

constituted a contact with New Hampshire, that contact would not

be enough to establish purposeful availment. While ACI’s

knowledge might be relevant had Mecca alleged intentionally

tortious conduct by ACI, the claim against ACI is for “mere

untargeted negligence.” Calder v . Jones, 465 U.S. 783, 789

(1984) (defendant, whose knowing and intentional conduct in one

forum causes injurious effects in another, may be subject to

personal jurisdiction). Moreover, ACI’s loading agreement was

with Mecca — an Illinois corporation — not Circuit Connect. And

Mecca, not ACI, directed where the machine was to be shipped.

8 ACI could not, therefore, reasonably anticipate being haled into

court in New Hampshire.

Conclusion

For these reasons, Advanced Circuitry’s motion to dismiss

Mecca’s third-party complaint (document n o . 22) is granted.

SO ORDERED.

August 2 2 , 2011

cc: Elizabeth M. Leonard, Esq. Wesley S . Chused, Esq. Mary K. Ganz, Esq. Donald L. Smith, Esq. Derek D. Lick, Esq.