Whitmire Research Laboratories, Inc. v. P.C.O. Supply, Inc.

752 F. Supp. 309, 1990 U.S. Dist. LEXIS 17262, 1990 WL 209237
CourtDistrict Court, E.D. Missouri
DecidedDecember 17, 1990
DocketNo. 90-0816C(6)
StatusPublished

This text of 752 F. Supp. 309 (Whitmire Research Laboratories, Inc. v. P.C.O. Supply, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Whitmire Research Laboratories, Inc. v. P.C.O. Supply, Inc., 752 F. Supp. 309, 1990 U.S. Dist. LEXIS 17262, 1990 WL 209237 (E.D. Mo. 1990).

Opinion

MEMORANDUM AND ORDER

GUNN, District Judge.

This matter is before the Court on the defendants’ motions to dismiss, or in the alternative to transfer this action, and to stay discovery, and on the plaintiff’s motion to compel discovery.

This case is a declaratory judgment action in which plaintiff seeks a determination respecting the contractual rights of the parties, and of an alleged violation by it of the antitrust regulations. According to the complaint, the facts which led to this controversy are as follows. Plaintiff entered into an agreement in March 1989, whereby defendant Northeastern became a distributor for plaintiff’s products for a term ending December 31, 1989. In September 1989, plaintiff was advised that defendants Northeastern and P.C.O. were merging, and would become known as P.C.O. Supply. Pursuant to that merger agreement, William Hahn, the sole shareholder of Northeastern, would receive a bonus of $37,500 if plaintiff would enter into another distribution agreement with P.C.O. Supply, or the entity resulting from the merger.

P.C.O. Supply has attempted, on several occasions, to obtain a distributorship from plaintiff. After the merger, plaintiff continued to supply defendant Northeastern with its products but notified it on January 15, 1990 that plaintiff would not renew the distributorship agreement. Plaintiff claims in this complaint that the purchase of the shares of Northeastern by P.C.O. represents an attempt to acquire the distributorship by assignment without the prior, required consent of the plaintiff.

About the same time that plaintiff filed this complaint, defendants Northeastern and P.C.O., and Bill Cappadona, president of P.C.O., filed a complaint against York Chemical Company, Whitmire, and five un[311]*311known defendants, in the United States District Court, Eastern District of New York. In that complaint, the plaintiffs allege breach of contract (the same at issue here), restraint of trade, and defamation.

MOTION TO DISMISS/TRANSFER

In this motion, defendants contend that plaintiffs complaint should be dismissed because this Court lacks personal jurisdiction over them, or in the alternative, that the complaint should be transferred to the eastern district of New York where the other action is pending. In support of the motion, defendants state that the principal place of business and sole office of P.C.O. is located in New York, and that P.C.O. Supply does have an office in New Jersey. In addition, defendant Northeastern’s principal place of business is in New Jersey, and its operations are limited to New Jersey and New York. Plaintiff Whitmire, on the other hand, is a Missouri corporation which markets its products nationwide and employs regional agents to assist in conducting its business activities.

Defendants argue that all their contacts with plaintiff were made outside of the state of Missouri, either by telephone or mail, or through plaintiffs regional agent in the New York area. The original distributorship agreement was signed by plaintiff in Missouri and by defendant Northeastern in New Jersey, and all orders for products were placed by mail or telephone. Therefore, defendants claim that there were not sufficient contacts with the state of Missouri in order to support this Court’s exercise of jurisdiction over them.

In response, plaintiff states that although many of the contacts did occur by mail or telephone, that defendant P.C.O. advertises its products in national magazines which are circulated in Missouri, solicits orders by nationwide mailings, and offers a toll-free “800” telephone number for such purposes. Furthermore, the original distributorship agreement between plaintiff and Northeastern contained a choice of law provision that it was governed by the laws of Missouri. The invoices which accompanied each shipment of plaintiff’s products also provide, on the back, that Missouri law governs those transactions. Finally, it appears that Mr. Cappadona visited St. Louis in 1989 for the sole purpose of discussing the dispute with attorneys here in St. Louis. See affidavits of Stuart Zimbalist and Gary Curl, submitted by plaintiffs.1

When considering a motion to dismiss for lack of personal jurisdiction over a non-resident defendant, the court is required to engage in a two-step inquiry: first, to determine whether the defendant committed one of the acts enumerated in the forum state’s long-arm statute, and second, to determine whether the defendant maintained sufficient contacts with the forum state related to the cause of action, such that maintenance of the suit does not offend the Fourteenth Amendment’s due process clause. CPC-Rexcell, Inc. v. La Corona Foods, 912 F.2d 241 (8th Cir.1990).

With respect to the first determination, plaintiff asserts that this Court has jurisdiction over defendants pursuant to Mo. Rev.Stat. § 506.500(1), (2), which provides,

Any person or firm, whether or not a citizen or resident of this state, or any corporation, who in person or through an agent does any of the acts enumerated in this section, thereby submits such person, firm, or corporation, and, if an individual, his personal representative, to the jurisdiction of the courts of this state as to any cause of action arising from the doing of any of such acts: (1) the transaction of any business within this state; (2) the making of any contract within this state.

A case involving facts very similar to this action is Scullin Steel v. National Railway Utilization Corp., 676 F.2d 309 [312]*312(8th Cir.1982). In that case, the nonresident defendant contracted with the resident plaintiff to purchase certain items. All negotiations and contacts were made outside of the state of Missouri, or by mail or telephone. Payments were made by the defendant to St. Louis, and the product was shipped to the defendant from St. Louis. In determining whether the activities constituted the “transaction of any business”, the court held that the activities were insufficient within the meaning of the Missouri long-arm statute and declined to assert jurisdiction.

The facts of that case are virtually identical to this case, with one exception. In Scullin Steel, none of the defendant’s personnel ever visited Missouri in connection with the agreement at dispute in the action. However, in this particular case, it is undisputed that the president of P.C.O. Supply visited Missouri for the sole purpose of discussing the dispute with attorneys, and possibly with representatives of plaintiff. This Court must now determine whether that single visit was sufficient to establish jurisdiction.

In American Hoechst Corp. v. Bandy Laboratories, Inc., 332 F.Supp. 241 (W.D.Mo.1970), the court held that a single business conference conducted in Missouri at the inception of the business dealings between the parties was sufficient to establish jurisdiction as the “transaction of any business.” Furthermore, in Watlow Electric Manufacturing Co. v. Sam Dick Industries, Inc., 734 S.W.2d 295

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Cite This Page — Counsel Stack

Bluebook (online)
752 F. Supp. 309, 1990 U.S. Dist. LEXIS 17262, 1990 WL 209237, Counsel Stack Legal Research, https://law.counselstack.com/opinion/whitmire-research-laboratories-inc-v-pco-supply-inc-moed-1990.