New World Technologies v . Meller CV-00-228-JM 12/14/01 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
New World Technologies, Inc.
v. Civil N o . 01-228-JM Opinion N o . 2001 DNH 222
Adolf Meller Company
O R D E R
In this diversity action, plaintiff New World Technologies,
Inc. (“New World”) asserts breach of contract claims against
defendant Adolf Meller Company (“Meller”).1 Presently before the
court is Meller’s motion to dismiss for lack of personal
jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) (document n o .
4 ) , to which New World objects. For the reasons that follow, the
court denies the motion.
Standard of Review
“On a motion to dismiss for want of in personam
jurisdiction, Fed. R. Civ. P. 12(b)(2), the plaintiff ultimately
bears the burden of persuading the court that jurisdiction
exists.” Massachusetts Sch. of Law at Andover, Inc. v . Am. Bar
1 Although Meller is the named defendant, the allegations contained in the complaint concern a Division of Meller known as Advanced Laser Technologies. Ass’n, 142 F.3d 2 6 , 34 (1st Cir. 1998). See also Boit v . Gar-Tec
Prods., Inc., 967 F.2d 6 7 1 , 675 (1st Cir. 1992). Where, as here,
the court elects to dispose of a motion to dismiss for lack of
personal jurisdiction without holding an evidentiary hearing, the
court applies a prima facie standard of review. United Elec.
Radio & Machine Workers of Am. v . 163 Pleasant S t . Corp., 987
F.2d 3 9 , 43 (1st Cir. 1993)(“Pleasant S t . I I ” ) . Under this
standard, the court will look to the facts alleged in the
pleadings and the parties’ supplemental filings, including
affidavits. See Sawtelle v . Farrell, 70 F.3d 1381, 1385 (1st
Cir. 1995); Ticketmaster-New York, Inc. v . Alioto, 26 F.3d 2 0 1 ,
203 (1st Cir. 1994). The court will accept specific facts
affirmatively alleged by the plaintiff as true and construe them
in the light most favorable to the plaintiff. See Massachusetts
Sch. of Law, 142 F.3d at 3 4 ; Sawtelle, 70 F.3d at 1385. In doing
s o , however, the court will not “credit conclusory allegations or
draw farfetched inferences.” Ticketmaster-New York, 26 F.3d at
203.
Background
The relevant facts, set forth in the light most favorable to
the plaintiff’s jurisdictional claim, are as follows. New World
2 is a New Hampshire corporation that is in the business of
automated machinery and process control engineering. New World
conducts virtually all of its operations from its offices in
Hopkinton, New Hampshire.
In August 2000, New World entered into an agreement with
Advanced Laser Technologies (“Advanced”), a Division of defendant
Meller, which is in the business of incorporating laser guided
manufacturing systems into industrial equipment. Pursuant to the
agreement, Advanced agreed to purchase from New World a custom
made Laser Positioning System.2 The purchase price for the
system was $223,000. New World alleges that Advanced breached
the agreement by failing to complete payments due for the
project. New World also alleges that Advanced breached a second,
separate agreement by failing to pay the balance due for services
and materials furnished by New World in connection with the
repair of a Troyke table.3
Neither Meller, a Rhode Island corporation, nor Advanced,
2 Pursuant to the August 2000 agreement between New World and Advanced, both New World and a company known as Stanley Engineering Company were responsible for developing the Laser Positioning System. 3 New World provided no definition of a Troyke table.
3 which conducts its business in Stoneham, Massachusetts,4 has
operations in New Hampshire. Nevertheless, between November 1999
and January 2001, Advanced solicited business from New World on
at least seventeen occasions. As a result of these
solicitations, Advanced and New World entered into eleven
separate contracts, including the contracts that are the subject
of this lawsuit. Advanced issued purchase orders to New World
for the performance of the contracts by sending the purchase
orders to New World’s New Hampshire offices. On August 2 8 , 2000,
Advanced issued a purchase order to New World for the
development, shipping and handling of the Laser Positioning
System.5 Subsequently, New World commenced work on the project
at its premises in Hopkinton, New Hampshire.
During the course of the parties’ relationship, Advanced
employees communicated with New World by placing telephone calls
to plaintiff in New Hampshire and sending letters and e-mails to
plaintiff’s New Hampshire facility. Because New World’s
operations are located in New Hampshire, it can be inferred that
4 Stoneham, Massachusetts is located less than sixty miles from the New Hampshire border. 5 Along with the August 2 8 , 2000 purchase order, Advanced submitted to New World specifications for the Laser Positioning System. See Document N o . 6, Exhibit D.
4 many if not most of the communications between the parties with
respect to the contracts at issue in this lawsuit involved
contacts with the State of New Hampshire.6 In fact, much of the
negotiations and discussions concerning the Laser Positioning
System, as well as the development, design and implementation of
the project occurred in New Hampshire. Only the delivery,
programming and fine-tuning of the project took place outside New
Hampshire.
Although the Laser Positioning System involved in this
dispute is currently located in Massachusetts, a number of
potential witnesses reside in New Hampshire. These witnesses
include the plaintiff’s employees and a principal of Stanley
Engineering Company, which was involved in the project’s
development.
Discussion
A. Personal Jurisdiction Analysis
In order to exercise personal jurisdiction over a defendant,
the court must find sufficient contacts between the defendant and
the forum to satisfy both the state’s long-arm statute and the
6 New World has no operations in Massachusetts, leases no facilities or offices in Massachusetts, maintains no telephone lines there and employs no agents or other representatives there.
5 due process clause of the Fourteenth Amendment. See Sawtelle, 70
F.3d at 1387; Ticketmaster-New York, 26 F.3d at 204. New
Hampshire’s corporate long-arm statute, N.H. Rev. Stat. Ann. §
293-A:15.10, authorizes jurisdiction over foreign corporations to
the full extent permitted by the federal Constitution. See
Phillips Exeter Acad. v . Howard Phillips Fund, Inc., 196 F.3d
284, 287 (1st Cir. 1999); McClary v . Erie Engine & Mfg. Co., 856
F. Supp. 5 2 , 55 (D.N.H. 1994). Because New Hampshire’s long-arm
statute is coextensive with the limits of due process, the
traditional two-part personal jurisdiction inquiry collapses into
the single question of whether due process requirements have been
met. See Sawtelle, 70 F.3d at 1388; McClary, 856 F. Supp. at 5 5 .
Due process requires the court to determine whether the defendant
has maintained “certain minimum contacts” with the forum state
such that “the maintenance of the suit does not offend
‘traditional notions of fair play and substantial justice’.”
Int’l Shoe C o . v . Washington, 326 U.S. 3 1 0 , 316 (1945)(quoting
Milliken v . Meyer, 311 U.S. 4 5 7 , 463 (1940)). Accordingly, the
method of analysis for questions involving personal jurisdiction
concentrates on the quality and quantity of the defendant’s
contacts with the forum. See Phillips Exeter Acad., 196 F.3d at
6 288.
The court may exercise two types of jurisdiction – general
and specific. “General jurisdiction ‘exists when the litigation
is not directly founded on the defendant’s forum-based contacts,
but the defendant has nevertheless engaged in continuous and
systematic activity, unrelated to the suit, in the forum state’.”
Massachusetts Sch. of Law, 142 F.3d at 34 (quoting United Elec.,
Radio & Mach. Workers v . 163 Pleasant S t . Corp., 960 F.2d 1080,
1088 (1st Cir. 1992)(“Pleasant S t . I ” ) ) . “Specific jurisdiction
exists when there is a demonstrable nexus between a plaintiff’s
claims and a defendant’s forum-based activities, such as when the
litigation itself is founded directly on those activities.” Id.
Because the parties’ arguments concern specific jurisdiction,7
and because I find that this court has specific jurisdiction over
Meller, I decline to address whether the court may exercise
general jurisdiction over the defendant.
The First Circuit uses a three-part analysis to determine
whether there are sufficient contacts to exercise specific
personal jurisdiction over a defendant. See Sawtelle, 70 F.3d at
7 It is unclear from the plaintiff’s brief whether New World also intended to argue that the court has general jurisdiction over Meller.
7 1388-89. First, the court must decide whether the claim
underlying the litigation arises directly out of the defendant’s
activities within the forum. See Phillips Exeter Acad., 196 F.3d
at 288; Pritzker v . Yari, 42 F.3d 5 3 , 60 (1st Cir. 1994), cert.
denied, 514 U.S. 1108 (1995). This relatedness requirement
“focuses on the nexus between the defendant’s contacts and the
plaintiff’s cause of action.” Ticketmaster-New York, 26 F.3d at
206. See also Sawtelle, 70 F.3d at 1389. Thus, the requirement
ensures that the defendant will not be subject to specific
personal jurisdiction unless the defendant’s contacts with the
forum state caused the alleged harm. See Ticketmaster-New York,
26 F.3d at 207.
Second, the court must determine whether the defendant’s
contacts with the forum “‘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’.” Sawtelle, 70 F.3d at 1389 (quoting
Pleasant S t . I , 960 F.2d at 1089). One cornerstone of the
purposeful availment test is voluntariness. See id. at 1391.
Thus, personal jurisdiction over the defendant is proper where
8 the defendant deliberately has engaged in significant activities
within the forum, but not where the defendant’s contacts with the
forum result solely from “the ‘unilateral activity of another
party or a third person’.” Burger King Corp. v . Rudzewicz, 471
U.S. 4 6 2 , 475-76 (1985)(quoting Helicopteros Nacionales de
Colombia, S.A. v . Hall, 466 U.S. 4 0 8 , 417 (1984)). The other
cornerstone of the purposeful availment test is foreseeability.
See Ticketmaster-New York, 26 F.3d at 207. Accordingly, the
court must determine whether the defendant’s conduct and
connection with the forum state is such that the defendant should
reasonably anticipate being haled into court there. See
Sawtelle, 70 F.3d at 1393; Ticketmaster-New York, 26 F.3d at 207
(citing World-Wide Volkswagen Corp. v . Woodson, 444 U.S. 286, 297
(1980)).
Finally, if the first two parts of the test for specific
jurisdiction have been fulfilled, the court must decide whether
the exercise of personal jurisdiction is reasonable in light of
the “Gestalt” factors. See Sawtelle, 70 F.3d at 1394; Pleasant
S t . I I , 987 F.2d at 4 6 . “These Gestalt factors include: (1) the
defendant’s burden of appearing, (2) the forum state’s interest
in adjudicating the dispute, (3) the plaintiff’s interest in
9 obtaining convenient and effective relief, (4) the judicial
system’s interest in obtaining the most effective resolution of
the controversy, and (5) the common interests of all sovereigns
in promoting substantive social policies.” Pleasant S t . I I , 987
F.2d at 4 6 . Even when the suit arises out of the defendant’s
minimum contacts with the forum, therefore, the court may not
exercise personal jurisdiction if to do so would be unreasonable.
“[A]n especially strong showing of reasonableness may serve
to fortify a borderline showing of relatedness and
purposefulness.” Ticketmaster-New York, 26 F.3d at 210. On the
other hand, “the weaker the plaintiff’s showing on the first two
prongs (relatedness and purposeful availment), the less a
defendant need show in terms of unreasonableness to defeat
jurisdiction.” Id.
B. Jurisdiction Over the Defendant
1. Relatedness
“Questions of specific jurisdiction are always tied to the
particular claims asserted.” Phillips Exeter Acad., 196 F.3d at
289. In a contract case, relatedness is established if “the
defendant’s contacts with the forum were instrumental either in
the formation of the contract or in its breach.” Id. See also
10 Massachusetts Sch. of Law, 142 F.3d at 35 (formation of
contract). Although the facts alleged by New World lack detail,
they nevertheless are sufficient to show that the defendant’s New
Hampshire contacts were instrumental in the formation of the
contracts at issue in this case. Advanced actively solicited
business from New World, which resulted in the formation of the
contracts that have given rise to the plaintiff’s cause of
action. See Whittaker Corp. v . United Aircraft Corp., 482 F.2d
1079, 1083-84 (1st Cir. 1973)(soliciting business from a resident
of the forum state considered evidence of significant contacts).
Advanced also issued purchase orders to New World for the
performance of the contracts by sending the purchase orders to
New World’s New Hampshire offices. Along with the purchase order
for the Laser Positioning System, Advanced supplied the
specifications for the development of the project. See id. at
1084 (providing specifications and procedures governing
plaintiff’s performance constituted evidence of significant
contacts). Moreover, Advanced participated in the formation of
the agreement for the Laser Positioning System by taking part in
negotiations and discussions that occurred primarily in New
Hampshire. See Pleasant S t . I , 960 F.2d at 1089-90 (defendant’s
11 negotiation of a contract within the forum state can be thought
to give rise or relate to a subsequent claim asserting breach of
that contract). Based upon the facts asserted by the plaintiff,
the defendant’s alleged breach of contract arises out of and
relates to Advanced’s activities within New Hampshire.
2. Purposeful Availment
To satisfy the purposeful availment prong of the specific
jurisdiction test, New World must show that the defendant’s
“participation in the economic life of [New Hampshire]” rose
“above that of a purchaser who simply places an order and sits by
until the goods are delivered.” Whittaker Corp., 482 F.2d at
1084. I conclude that New World has alleged and provided
evidence of jurisdictional facts which, if true, demonstrate that
Advanced’s contacts with New Hampshire (1) were voluntary and not
the product of New World’s unilateral actions, and (2) created an
ongoing relationship with a resident of the forum, thereby making
it foreseeable that Advanced would be haled into court in New
Hampshire. In particular, Advanced’s active participation in the
contractual arrangements with New World demonstrates that it was
not a passive purchaser.
During a period of about fourteen months, Advanced actively
12 solicited business from New World. The solicitations resulted in
the contracts that are the subject of this litigation. Advanced
issued purchase orders to New World for the performance of the
contracts by sending the purchase orders to New World’s New
Hampshire offices. Advanced also negotiated the terms of the
contract for the Laser Positioning System in New Hampshire and
supplied New World with the specifications for the project by
sending the specifications as an attachment to the purchase
order. During the design, development and implementation of the
project, which occurred primarily in New Hampshire, Advanced
communicated with New World in New Hampshire. The evidence
shows, therefore, that Advanced reached out to the plaintiff’s
state of residence to establish a relationship with New World,
transmitted information to New World in New Hampshire and
communicated with New World at its New Hampshire facilities.
These contacts are sufficient to demonstrate that Advanced
deliberately engaged in significant activities within the forum.
See Phillips Exeter Acad., 196 F.3d at 292 (solicitations
directed at a resident of the forum constitute purposeful
activity related to the forum); Sawtelle, 70 F.3d 1389-90 (“The
transmission of information into New Hampshire by way of
13 telephone or mail is unquestionably a contact for purposes of our
analysis.”); Pleasant S t . I I , 987 F.2d at 45 (negotiation of a
contract in the forum deemed a significant contact).
Furthermore, it is significant that the contracts at issue
in this case were only two of eleven contracts that the parties
entered into over the course of about fourteen months as a result
of Advanced’s solicitations. Where, as here, the defendant
reaches out beyond one state and creates a continuing
relationship and obligations with a citizen of the forum state,
the defendant “manifestly has availed himself of the privilege of
conducting business there” and “it is presumptively not
unreasonable to require him to submit to the burdens of
litigation in that forum as well.” Burger King Corp., 471 U.S.
at 473, 476. Advanced’s deliberate activities within New
Hampshire make its involuntary presence before a New Hampshire
court a reasonably foreseeable event.
3. Reasonableness
The Gestalt factors weigh heavily in favor of this court’s
exercising jurisdiction. With respect to the first element,
considered the “primary concern” among the Gestalt factors, see
Ticketmaster-New York, 26 F.3d at 2 1 0 , I find that there is
14 little if any inconvenience to the defendant in being forced to
litigate the dispute in New Hampshire. Stoneham, Massachusetts,
the site of Advanced’s operations, is located less than sixty
miles from the New Hampshire border, and the time required to
drive from Stoneham to this court’s location in Concord, New
Hampshire is little more than one hour. It is fair to infer that
most if not all of the Advanced employees who were involved in
the contracts giving rise to this dispute work in Stoneham and
live in the surrounding area.8 Any burden on witnesses who are
required to travel to New Hampshire, where traffic is light and
inexpensive parking is abundant, is negligible.
The fact that Meller is based in Rhode Island is of no
significance. It is apparent from the evidence that the parties
submitted that Meller’s Rhode Island operations had little if any
connection to the circumstances that gave rise to this matter,
and that no important witnesses reside in Rhode Island.
Moreover, Meller has failed to demonstrate why it would be
unusually burdensome for Rhode Island residents to travel to New
Hampshire. Therefore, the possibility that the defendant may be
8 Based on the defendant’s own evidence, all of its employees who witnessed the work done under the Laser Positioning System contract are located in Massachusetts, as is an important third- party witness.
15 required to send representatives from its Rhode Island offices to
New Hampshire in connection with the litigation is insufficient
to reach constitutional significance. See Pritzker, 42 F.3d at
64 (the first Gestalt factor “is only meaningful where a party
can demonstrate some kind of special or unusual burden.”).
The second Gestalt factor, concerning the forum state’s
interest in adjudicating the dispute, also cuts in favor of
exercising jurisdiction. “A State generally has a ‘manifest
interest’ in providing its residents with a convenient forum for
redressing injuries inflicted by out-of-state actors.” Burger
King Corp., 471 U.S. at 473 (quoting McGee v . Int’l Life Ins.
Co., 355 U.S. 2 2 0 , 223 (1957)). See also Pritzker, 42 F.3d at 64
(one of a state’s greatest interests is in the conduct of forum-
based litigation). That interest is more significant when the
case concerns a contract having substantial value and involves
the production of goods within the forum. See In-Flight Devices
Corp. v . Van Dusen Air, Inc., 466 F.2d 2 2 0 , 232 (6th Cir.
1972)(the state’s interest in resolving a suit brought by one of
its residents is particularly significant where the contract
calls for the production of goods worth over $200,000, and for
performance of the contract within the forum state). Here,
16 Advanced agreed to pay New World $223,000 for the Laser
Positioning System. Moreover, the design, development and
implementation of the Laser Positioning System occurred almost
entirely in New Hampshire.
The third Gestalt factor to consider is the plaintiff’s
interest in obtaining convenient and effective relief. The First
Circuit has repeatedly observed that “a plaintiff’s choice of
forum must be accorded a degree of deference with respect to the
issue of its own convenience.” Sawtelle, 70 F.3d at 1395.
Certainly, it would be more convenient for the plaintiff to
litigate its breach of contract claims in the forum in which it
operates. This is particularly true where, as here, the
plaintiff’s potential witnesses reside in New Hampshire.
The remaining factors – the judicial system’s interest in
obtaining the most effective resolution of the controversy and
the common interests of all sovereigns in promoting substantive
social policies – have not been addressed by either party.
Nothing in the record suggests that either of these elements of
the jurisdictional analysis would favor one party over the other.
At the first stage of the due process inquiry, New World was
able to show that its cause of action arose from, or related t o ,
17 defendant’s contacts with New Hampshire. At the second stage of
the inquiry, New World succeeded in establishing the defendant’s
purposeful availment of the privilege of conducting activities in
New Hampshire. Although New World may have strengthened its
showing on these first two prongs of the tripartite test by
providing more detailed evidence regarding the specifics of its
contractual relationships with Advanced, consideration of the
Gestalt factors decisively tips the scale in favor of New World’s
jurisdictional arguments.
Conclusion
“The Due Process Clause protects an individual’s liberty
interest in not being subject to the binding judgments of a forum
in which he has established no meaningful ‘contacts, ties, or
relations’.” Burger King Corp., 471 U.S. at 471-72 (quoting
Int’l Shoe Co., 326 U.S. at 3 1 9 ) . Taking, as this court must,
the allegations in the complaint and the plaintiff’s supporting
affidavit as true, and construing them in a manner most favorable
to the plaintiff’s position, the court finds that the exercise of
personal jurisdiction over the defendant comports with the due
process protections of the Constitution. Accordingly, the
defendant’s motion to dismiss for lack of personal jurisdiction
18 (document n o . 4 ) is denied.
SO ORDERED.
James R. Muirhead United States Magistrate Judge
Date: December 1 4 , 2001
cc: Stephen R. Goldman, Esq. John A . Rachel, Esq.