Claremont Flock v. Rockland Indus.

District Court, D. New Hampshire·Decided January 7, 1999·No. CV-98-346-JD·Published

Opinion

Claremont Flock v. Rockland Indus. CV-98-346-JD 01/07/99 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Claremont Flock Corp.

v. Civil No. 98-346-JD Rockland Industries, Inc.

O R D E R

The plaintiff, Claremont Flock Corporation ("Claremont"), brings this action against the defendant, Rockland Industries, Inc. ("Rockland"), alleging that Rockland breached four contracts between the two parties for a total of $77,588.00 of flock. Before the court is Rockland's motion to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer the case to the Federal District Court for the District of Maryland (document no. 6).

Background1

Rockland, a Maryland corporation with its principal place of business in Baltimore, Maryland, and Claremont, a Delaware corporation with its principal place of business in Claremont,

1The facts related in the background section are taken from the complaint and the parties' submissions in support of and opposition to Rockland's present motion. The factual summary is provided for background purposes only, for resolution of the pending motion.

New Hampshire, have done business together over the past fourteen years. Their business relationship started in 1985 when Rockland contacted Claremont in New Hampshire regarding Claremont's products. Claremont produces cotton flock, a component of many of the textile products that Rockland manufactures.

Pursuant to the course of business that has evolved over the years, Rockland would initiate a purchase of flock by calling Claremont in New Hampshire, placing an order, and then sending a purchase order. The purchase orders and payments were sent to Claremont's post office box in Massachusetts. Claremont would fill the orders, shipping the flock to Rockland at its facilities in South Carolina and Maryland.

During the course of the business relationship between Rockland and Claremont, Rockland also contacted Claremont on numerous occasions to inguire about new products, product specifications, and other product related issues. On at least one occasion, an officer of Claremont visited Rockland in Maryland to discuss a type of flock for a purpose not directly related to this suit. Since at least 1994, Rockland has placed one or two orders per month with Claremont for flock.

On or around September 16 and 18, 1997, October 22, 1997, and November 6, 1997, Rockland placed orders with Claremont for flock totaling $77,588.00. Darlene Burns, an employee of

Rockland, placed the orders by telephone with Michelle Buckman, a Claremont Customer Service Representative responsible for filling customer orders. Rockland requested delivery of all four orders at the earliest possible delivery date, between two and six days after placing each order. Buckman understood that she was not to wait for Rockland's purchase orders before filling the orders. Claremont consequently did not wait for the purchase orders before it sent the flock. Once Claremont received Rockland's purchase orders it sent its invoices. Therefore, the sequence of events for the pertinent transactions was as follows: Rockland ordered the flock by telephone, Claremont sent the flock, Claremont received Rockland's purchase orders, and Claremont in response sent its invoices.2 Both the Rockland purchase orders and the Claremont invoices show that the orders were F.O.B. Claremont, New Hampshire. Each purchase order states that it is "confirming order to telephone 603/542-5151," which is Claremont's telephone number. See Supplemental Reply Mem. in Supp. of Rockland Industries, Inc.'s Mot. to Dismiss for Lack of Jurisdiction and Lack of Venue, or in the Alternative to Transfer, Ex. A ("Rockland Supp. Reply."). Printed on the back of each purchase order are "terms and

2A common carrier was used by Rockland to transport the flock from Claremont, New Hampshire, to Rockland's facilities in Maryland and South Carolina.

conditions of purchase" provisions, one of which is a clause providing that the contract shall be construed according to the laws of Maryland in a court located in Maryland. However, on the backside of each Claremont invoice is a "terms and conditions of sale" clause that provides:

None of the terms and conditions contained herein may be added to, modified, superseded or otherwise altered, regardless of anything contained in Buyer's purchase order form or otherwise, except to the extent such additions, modifications, or alterations or other terms are typed or handwritten in full (and not merely printed or incorporated by reference) in a document signed by an authorized officer of Seller.

Mem. in Supp. of Claremont's Obj. to Rockland's Mot. to Dismiss, Ex. 3. The same forms were used by Claremont and Rockland in each of the four transactions at issue, as well as in some of their prior dealings.

On May 29, 1998, Claremont filed this action in the United States District Court for the District of New Hampshire. Claremont alleges that Rockland has not paid for the flock Claremont sent pursuant to the orders of September 16 and 18, 1997, October 22, 1997, and November 6, 1997. Claremont seeks redress pursuant to 28 U.S.C.A. § 1332 diversity jurisdiction.

Rockland moves to dismiss this action for lack of personal jurisdiction, arguing that its contacts with New Hampshire are insufficient under the Due Process Clause. Rockland also asserts that this action should be dismissed for lack of venue because a

substantial part of the events or omissions giving rise to Claremont's claim did not occur in New Hampshire. In the alternative, Rockland seeks transfer to the United States District Court for the District of Maryland, based primarily on the presence of a forum selection clause on the backside of its purchase orders.

Discussion

A. Personal Jurisdiction 1. Standard of Review On a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears the burden of persuasion that jurisdiction exists. See McNutt v. General Motors Acceptance Corp., 298 U.S. 178, 189 (1936); see also, Massachusetts School of Law v. American Bar Ass'n , 142 F.3d 26, 34 (1st Cir. 1998). The court assesses the motion to dismiss under the prima facie standard because the facts relating to personal jurisdiction are essentially undisputed. See Nowak v. Tak How Investments, Ltd., 94 F.3d 708, 712 (1st Cir. 1996). Under this standard, the court treats facts affirmatively alleged by the plaintiff as true, construing them "in the light most congenial to the plaintiff[]," and "then add[s] to the mix [uncontradicted] facts put forth by the

defendant[]" in assessing the motion. Massachusetts School of Law, 142 F.3d at 34. The requirements of both the state's long- arm statute and the Due Process Clause of the Fourteenth Amendment must be satisfied if the plaintiff is to avoid dismissal.3

2. Minimum Contacts Analysis The Due Process Clause of the Fourteenth Amendment proscribes the exercise of personal jurisdiction over a party when it offends "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Jurisdictional inquiry under the Due Process Clause focuses upon the contacts of the party with the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 413-414 (1984). The defendant's conduct must bear a "substantial connection with the forum state" such that the defendant "should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 473-477 (1985) . The First Circuit uses a three-part test to assess whether a defendant has

3New Hampshire Revised Statutes Annotated (RSA) § 293-

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