Pesmel North America, LLC v. Caraustar Industries, Inc.

754 F. Supp. 2d 168, 2010 U.S. Dist. LEXIS 124596, 2010 WL 4928034
CourtDistrict Court, D. Massachusetts
DecidedNovember 24, 2010
DocketCivil Action 10-10450-NMG
StatusPublished
Cited by8 cases

This text of 754 F. Supp. 2d 168 (Pesmel North America, LLC v. Caraustar Industries, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pesmel North America, LLC v. Caraustar Industries, Inc., 754 F. Supp. 2d 168, 2010 U.S. Dist. LEXIS 124596, 2010 WL 4928034 (D. Mass. 2010).

Opinion

MEMORANDUM & ORDER

GORTON, District Judge.

This case arises from an alleged breach of contract by defendant Caraustar Mill Group, Inc. (“Caraustar”). 1 Pending before this Court is the defendant’s motion to dismiss the case for lack of personal jurisdiction or, in the alternative, for transfer of venue to the United States District Court for the Northern District of Georgia.

I. Background

A. Factual Background

Caraustar manufactures recycled paperboard products and is an Ohio corporation with its corporate headquarters (and three of its seven facilities) located in Georgia. The plaintiff Pesmel North America, LLC (“Pesmel”) is a Massachusetts limited liability company with its usual place of business (and sole facility) in Massachusetts. Although Pesmel is a subsidiary of Pesmel OY, a Finnish corporation, they are distinct companies with separate facilities, finances, personnel and functions. Pesmel manufactures, delivers, installs and services material handling systems.

In 2007, Caraustar entered into an agreement to purchase from Pesmel an automated roll handling system (“the Agreement”) for installation at Caraustar’s Sweetwater Paperboard facility in Austell, Georgia. The total price was $1,732,000 to be paid in installments based on contractual milestones in the delivery, installation and completion of the system. Caraustar made the first five payments, amounting to 70% of the total price. The parties also agreed to an ongoing consignment pro *171 gram to supply spare parts for the installed system.

Pesmel alleges that, despite its successful installation of the equipment and achievement of the next milestone, Caraustar 1) refused to make the sixth scheduled payment, 2) tried to “terminate” its contract and 3) by so doing, retain the equipment, avoid making the remaining three payments and prevent Pesmel from remaining on site to resolve the technical issues that allegedly gave rise to its termination decision. Caraustar points to the plaintiffs alleged refusal to perform certain contracted-for services in a timely manner as the source of the disagreement.

B. Procedural History

In February, 2010, Pesmel filed a complaint against Caraustar in the Massachusetts Superior Court Department for Middlesex County alleging breach of contract, unjust enrichment and conversion. The following month, Caraustar removed the case to this Court pursuant to 28 U.S.C. §§ 1441 and 1446 and, shortly thereafter, filed the pending motion to dismiss for lack of personal jurisdiction over the defendant or, in the alternative, to transfer venue to the United States Court for the Northern District of Georgia. Caraustar argues that its contacts were directed toward Pesmel OY, not the plaintiff and that any contacts with Pesmel were insufficient to subject it to personal jurisdiction in Massachusetts.

II. Analysis

A. Personal Jurisdiction in Massachusetts

In the complaint, the plaintiff merely states: “This Court has personal jurisdiction over defendant pursuant to M.G.L. c. 223A, § 3.” The defendant argues that the plaintiff has failed to proffer any factual basis for the imposition of either general or specific personal jurisdiction over the defendant.

On a motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that jurisdiction is 1) statutorily authorized and 2) consistent with the Due Process Clause of the United States Constitution. Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1, 8 (1st Cir.2009). Because the Massachusetts long-arm statute, Mass. Gen. Laws ch. 223A, § 3, reaches to the full extent that the Constitution allows, the Court may proceed directly to the Constitutional analysis. See Tatro v. Manor Care, Inc., 416 Mass. 763, 625 N.E.2d 549, 553 (1994); Sawtelle v. Farrell, 70 F.3d 1381, 1388 (1st Cir.1995). Although the long-arm statute “asserts jurisdiction over the person to the constitutional limit only when some basis for jurisdiction enumerated in the statute has been established,” Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1, 389 N.E.2d 76, 80 (1979), the transacting business clause (which the defendant assumes the plaintiff would assert) is satisfied here. See BCCTC Assoc., Inc. v. Summerdale/AAHFI, L.P., 656 F.Supp.2d 208, 215 (D.Mass.2009) (clause may be satisfied by contacts relating to formation and operation of contract); Deyesso v. Kaizen Mgmt., LLC, 2008 WL 5101269, at *3 (D.Mass. Nov. 25, 2008) (clause satisfied by “most incidental of purposeful contacts”).

The Court may conduct a prima facie review of the jurisdictional facts to determine whether the plaintiff has met its burden of showing, by a preponderance of the evidence, that personal jurisdiction over the defendant exists. See Adams v. Adams, 601 F.3d 1, 4 (1st Cir.2010). The Court accepts properly supported proffers of evidence by the plaintiff as true and adds to the mix facts put forward by the defendant, to the extent they are uncontra *172 dieted. Newman v. European Aeronautic Defence & Space Co. Eads N.V., 700 F.Supp.2d 156,159 (D.Mass.2010).

As a threshold matter, there are two forms of personal jurisdiction: general and specific. Pritzker v. Yari, 42 F.3d 53, 59 (1st Cir.1994). General jurisdiction exists when the defendant has engaged in “continuous and systematic activity,” unrelated to the suit, in the forum state. Id. at 60. Specific jurisdiction is narrower and exists where the plaintiffs cause of action arises from or relates to the defendant’s contacts with the forum state. Id.

1. General Personal Jurisdiction

For general jurisdiction to exist, the defendant must engage in a “continuous and systematic” pursuit of general business activities in the forum state, such as marketing or shipping products, performing services or maintaining one or more offices. Cossaboon v. Me. Med. Ctr., 600 F.3d 25, 32 (1st Cir.2010). The Court considers “all of a defendant’s contacts with the forum state prior to the filing of the lawsuit.” Id. at 29 (citations omitted).

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Bluebook (online)
754 F. Supp. 2d 168, 2010 U.S. Dist. LEXIS 124596, 2010 WL 4928034, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pesmel-north-america-llc-v-caraustar-industries-inc-mad-2010.