WPI Electronics v. Super Vision

2000 DNH 023

• Court: District Court, D. New Hampshire
• Decided: January 27, 2000
• Docket: CV-99-426
• Status: Published

Opinion

WPI Electronics v. Super Vision CV-99-426 01/27/00

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

WPI Electronics, Inc.

v. Civil N o . C-99-426-B Opinion N o . 2000 DNH 023 Super Vision International, Inc.

MEMORANDUM AND ORDER

In this action, WPI Electronics, Inc. (“WPI”), sued its

customer, Super Vision International, Inc. (“Super Vision”) for

breach of contract and breach of the covenant of good faith and

fair dealing. Super Vision moved to dismiss WPI’s action for

lack of personal jurisdiction, claiming that it was a mere

“passive purchaser” of goods from WPI with no other contacts with

New Hampshire. Because the record would support a conclusion

that Super Vision had sufficient contacts with WPI in New

Hampshire to subject it to personal jurisdiction in this court, I

deny Super Vision’s motion. I . BACKGROUND

WPI is a New Hampshire corporation with its principal place

of business in Warner, New Hampshire. It manufactures power

conversion devices, including electronic ballasts for use in

lighting systems. WPI’s one production facility is located in

New Hampshire. Aff. of F. Marshall Mayer ¶ 2 [hereinafter Mayer

Aff.]. Super Vision is a Florida corporation with its principal

place of business in that state. Super Vision manufactures fiber

optic lighting products, which use ballasts as a component. Aff.

of Brett Kingston ¶ 2 , 4 [hereinafter Kingstone Aff.].

The parties first dealt with each other in 1996, when Super

Vision purchased 500 “SafeArc” ballasts from WPI for $177,500.

The ballasts were shipped in installments over a ten month period

beginning in March 1996 and ending in December 1996. Aff. of

Paul D. Iverson ¶ 2 [hereinafter Iverson Aff.]. In December

1996, Super Vision sent WPI a new purchase order for additional

shipments of “SafeArc” ballasts. From January 1997 until

February 1998, WPI shipped Super Vision 350 ballasts for a total

purchase price of $124,250. Id. ¶ 3 .

-2- In March 1998, Marshall Mayer, WPI’s Regional Sales Manger

for the Southern Region, learned that Super Vision was developing

a new lighting project and approached Super Vision about the

possibility of WPI supplying the ballasts for the project. Mayer

Aff. ¶ 3 . During the spring and summer of that year, Mayer and

others from WPI communicated regularly with Super Vision

regarding its project. See id. ¶¶ 3 , 4 , 5 .

On October 2 , 1998, WPI issued a price quotation in which it

offered to sell Super Vision various types and quantities of

ballasts and ignitors. WPI planned to ship the products in

installments over a period beginning in February 1999 and ending

in December 1999. Id. ¶ 6. During the following weeks, Super

Vision gave WPI more precise information regarding its ballast

and ignitor needs. Id. ¶ 7 . In response, WPI faxed a revised

price quotation for “FlexArc”1 ballasts and ignitors to Super

1 According to W P I , its “SafeArc” and “FlexArc” ballasts are similar. Both use a voltage doubler front end with a “buck converter” topology to convert the AC power from the wall socket to power than can drive an arc lamp. The two products use a similar circuit design, but the “FlexArc” design is more modern, cost effective, and compact than the “SafeArc” design. Iverson

-3- Vision’s Florida location. In this price quotation, WPI proposed

shipping the ballasts and ignitors in installments over a period

of approximately two years. Id.

After the two sides discussed changes to the price

quotation, Super Vision faxed a purchase order to WPI’s New

Hampshire facility for 11,060 ballasts with ignitors to be

delivered in installments over a period of approximately two

years. Deliveries were to begin in February 1999. The total

purchase price for the order was $1,772,000. Id. ¶ 1 1 . The

parties engaged in further negotiations regarding the terms of

Super Vision’s purchase order. As a result, Super Vision faxed a

revised purchase order to WPI’s New Hampshire facility on

November 2 5 , 1998. The revised purchase order altered the

quantity to be shipped during certain months, changed the

delivery dates, and expressly stated that the order was

contingent upon WPI’s acceptance of certain attached conditions,

including Super Vision’s acceptance of WPI’s new designs. See

Aff. ¶ 4.

-4- id. ¶ 1 2 , Ex. I .

Once the parties reached an agreement, Super Vision became

actively involved in WPI’s development of the ballasts and

ignitors. Representatives from both companies communicated

extensively about technical and cost aspects of the ballasts and

ignitors; these discussion in turn led to the final design of the

products. WPI also (1) made regular progress reports to Super

Vision regarding the performance of the products, (2) shipped

samples for Super Vision to test, and (3) met in person with a

Super Vision representative to discuss technical and cost aspects

of the project. Id. ¶ 1 3 . As a result of these continued

communications, the parties agreed to make further changes to

Super Vision’s revised purchase order. See id.

In late 1998, Super Vision began to report testing issues

with WPI’s ballasts. Id. ¶ 1 5 . The parties worked together to

resolve these perceived technical problems. In addition to

exchanging written and oral communications, primarily by email

and telephone, a Super Vision representative traveled to WPI’s

-5- production facility in New Hampshire. Id.

The parties’ relationship began to break down during the

summer of 1999. In a letter dated August 2 6 , 1999, Super Vision

informed WPI that it was terminating their contract and demanded

a full refund of monies it had paid to date. See id. ¶ 1 6 . On

September 1 0 , 1999, Super Vision, through its attorneys, renewed

its demand for full repayment. See id. WPI refused Super

Vision’s demand. Instead, it filed this action on September 1 3 ,

1999. On September 3 0 , 1999, Super Vision filed a multi-count

complaint against WPI in the United States District Court for the

Middle District of Florida. Kingstone Aff. ¶ 1 6 .

II. STANDARD OF REVIEW

When a defendant challenges a forum court’s exercise of

personal jurisdiction, the plaintiff bears the burden of

establishing that personal jurisdiction exists. See

Massachusetts Sch. of Law at Andover, Inc. v . American Bar Ass’n,

142 F.3d 2 6 , 34 (1 st Cir. 1998); Sawtelle v . Farrell, 70 F.3d

1381, 1387 (1 st Cir. 1995); Foster-Miller, Inc. v . Babcock &

-6- Wilcox Canada, 46 F.3d 138, 145 (1st Cir. 1995); United

Electrical, Radio and Machine Workers v . 163 Pleasant S t . Corp.,

960 F.2d 1080, 1090 (1 st Cir. 1992) [hereinafter Pleasant S t . I ] ,

appeal after remand, 987 F.2d 39 (1 st Cir. 1993). If no

evidentiary hearing is held on a motion to dismiss for lack of

personal jurisdiction, the plaintiff ordinarily must establish

the existence of personal jurisdiction according to a prima facie

standard. See Sawtelle, 70 F.3d at 1386 n . 1 .

Under this standard, I look to the facts alleged in the

pleadings and the parties’ supplemental filings, including

affidavits. Id. at 1385. I take facts affirmatively alleged by

the plaintiff as true and construe them in the light most

favorable to the plaintiff’s jurisdictional claim. See

Massachusetts Sch. of Law, 142 F.3d at 3 4 ; Sawtelle, 70 F.3d at

1385. I then consider uncontradicted facts presented by the

defendant. See Massachusetts Sch. of Law, 142 F.3d at 3 4 .

Although liberal, this standard does not require a court to

“credit conclusory allegations or draw farfetched inferences.”

-7- Ticketmaster-New York, Inc. v . Alioto, 26 F.3d 201, 203 (1st Cir.

1994); see also Massachusetts Sch. of Law, 142 F.3d at 3 4 .

III. DISCUSSION

A. Statutory and Constitutional Requirements

To be entitled to exercise personal jurisdiction over a

defendant, a court must find sufficient contacts between the

defendant and the forum to satisfy both the state’s long arm

statute and the due process clause of the Fourteenth Amendment.

See Sawtelle, 70 F.3d at 1387; Ticketmaster-New York, Inc., 26

F.3d at 204.

Section 293-A:15.10 of the New Hampshire Business

Corporation Act has been recognized as the long arm statute

applicable to foreign corporations. See N.H. Rev. Stat. Ann. §

293-A:15.10 (Supp. 1998); see also McClary v . Erie Engine & Mfg.

Co., 856 F. Supp. 5 2 , 55 (D.N.H. 1994). This long arm provision

has been interpreted to authorize jurisdiction over a foreign

corporation to the full extent permitted by the federal

constitution. See Sawtelle, 70 F.3d at 1388; McClary, 856 F.

-8- Supp. at 5 5 . Because New Hampshire’s long arm statute is

coextensive with the limits of due process, this two part inquiry

collapses into a single inquiry as to whether the due process

requirements have been met. See Sawtelle, 70 F.3d at 1388;

McClary, 856 F. Supp. at 5 5 .

B. General Principles of Personal Jurisdiction

The ultimate objective of the due process “minimum contacts”

standard is to ensure that the forum’s exercise of personal

jurisdiction over a nonresident defendant does not offend

“‘traditional notions of fair play and substantial justice.’”

Pleasant S t . I, 960 F.2d at 1087 (quoting International Shoe C o .

v . Washington, 326 U.S. 310, 316 (1945)). As long as a defendant

has at least one meaningful contact with the forum, the exercise

of personal jurisdiction is constitutionally proper. See Nowak

v . Tak How Invs., Ltd., 94 F.3d 708, 717 (1st Cir. 1996) (citing

McGee v . International Life Ins. Co., 355 U.S. 220, 223 (1957));

Pritzker v . Yari, 42 F.3d 5 3 , 61 (1st Cir. 1994).

There are two forms of personal jurisdiction. If a

defendant maintains continuous and systematic contacts with the

-9- forum state, then the forum court has general jurisdiction. See

Phillips Exeter Academy v . Howard Phillips Fund, Inc., 196 F.3d

284, 288 (1 st Cir. 1999). Specific jurisdiction exists if there

is “a demonstrable nexus between a plaintiff’s claims and a

defendant’s forum-based activities.” Massachusetts Sch. of Law,

142 F.3d at 3 4 . That i s , a forum court may exercise specific

jurisdiction if the plaintiff’s case “relates sufficiently t o , or

arises from, a significant subset of contacts between the

defendant and the forum.” Phillips Exeter Academy, 196 F.3d at

288; see also Pleasant S t . I , 960 F.2d at 1088-89. In this case,

WPI argues that the court has specific personal jurisdiction over

Super Vision.

The First Circuit has developed a three-prong test —

relatedness, purposeful availment, and reasonableness — for

assessing whether a forum may exercise specific jurisdiction.

See Pleasant S t . I , 960 F.2d at 1089 (announcing three part test

for specific jurisdiction).

The relatedness prong examines whether the plaintiff’s claim

-10- “directly relates to or arises out of the defendant’s contacts

with the forum.” Phillips Exeter Academy, 196 F.3d at 288. It

is intended to focus “the court’s attention on the nexus between

a plaintiff’s claim and the defendant’s contacts with the forum.”

Sawtelle, 70 F.3d at 1389 (internal quotation marks and citations

omitted). Relatedness is intended to be a flexible and relaxed

standard. See id.; Pritzker, 42 F.3d at 6 1 . 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.” Phillips Exeter Academy, 196 F.3d at 289; see

also Massachusetts Sch. of Law, 142 F.3d at 35 (formation of

contract).

Under the First Circuit’s tripartite test, I next examine

whether the defendant, by its contacts with the forum,

purposefully availed itself of the “benefits and protections

afforded by the forum’s laws.” Phillips Exeter Academy, 196 F.3d

at 288; see also Pleasant S t . I , 960 F.2d at 1089. The

purposeful availment requirement is intended to protect an out-

-11- of-state defendant from the forum’s exercise of personal

jurisdiction based upon the defendant’s “‘random, isolated, or

fortuitous’ contacts with the forum state.” Sawtelle, 70 F.3d at

1391 (quoting Keeton v . Hustler Magazine, Inc., 465 U.S. 770, 774

(1984)). Accordingly, the First Circuit requires that both

voluntariness and foreseeability be demonstrated to satisfy the

purposeful availment prong. See id.; Ticketmaster-New York,

Inc., 26 F.3d at 207.

For a defendant’s contacts with the forum to be deemed

voluntary, they must not be based upon “the unilateral actions of

another party or a third person.” Nowak, 94 F.3d at 716. In

addition, the defendant’s contacts must be such that the

defendant would “reasonably anticipate being haled into court

there.” Id. The forum’s exercise of personal jurisdiction is

deemed foreseeable if the out-of-state defendant establishes a

“continuing obligation between itself and the forum state.”

Sawtelle, 70 F.3d at 1393.

In a contract action, the mere existence of a contractual

-12- relationship between a forum plaintiff and an out-of-state

defendant is insufficient to establish purposeful availment.

See Phillips Exeter Academy, 196 F.3d at 290; Ganis Corp. v .

Jackson, 822 F.2d 194, 197 (1st Cir. 1987). Rather, using a

“contract-plus” analysis, see Ganis Corp., 822 F.2d at 1 9 7 , I

must consider additional factors, including: “(1) the prior

negotiations between the parties and the contemplated future

consequences of the [contract]; (2) the terms of [the contract];

and (3) the parties’ actual course of dealing.” U.S.S. Yachts,

Inc. v . Ocean Yachts, Inc., 894 F.2d 9, 12 (1st Cir. 1990); Ganis

Corp., 822 F.2d at 197-98.

The third prong of the specific jurisdiction analysis

focuses on the reasonableness of the forum’s exercise of

jurisdiction. In particular, reasonableness is assessed “in

light of a variety of pertinent factors that touch upon the

fundamental fairness of an exercise of jurisdiction.” Phillips

Exeter Academy, 196 F.3d at 288. The First Circuit identifies

five fairness considerations, which it has dubbed the “gestalt”

-13- factors: “(1) the defendant’s burden of appearing; (2) the forum

state’s interest in adjudicating the dispute; (3) the plaintiff’s

interest in obtaining convenient and effective relief; (4) the

judicial system’s interest in obtaining the most effective

resolution of the controversy; (5) and the common interests of

all sovereigns in promoting substantive social policies.”

Sawtelle, 70 F.3d at 1394; see also Pleasant S t . I , 960 F.2d at

1088.

C. Passive Purchaser Doctrine

Concerns about the propriety of exercising personal

jurisdiction over an out-of-state defendant are particularly

acute when a defendant has been sued because it is a purchaser of

goods produced in the forum state. Courts traditionally have

distinguished between out-of-state sellers and out-of-state

buyers. See In-Flight Devices Corp. v . Van Dusen Air, Inc., 466

F.2d 220, 232-33 (6th Cir. 1972) (noting courts have made this

distinction in applying long arm statute). This distinction has

been described as “short-hand” for differentiating out-of-state

defendants who were active parties to transactions with forum

-14- plaintiffs from those who were passive parties to such

transactions. See id. at 233. The First Circuit shares this

concern about protecting “‘wholly passive purchasers who do no

more than place an order with an out of state merchant and await

delivery.’” Howell Labs., Inc. v . Clear Channel Communications,

Inc., 751 F. Supp. 2 5 8 , 260 (D. M e . 1990) (quoting Bond Leather

Co. v . Q.T. Shoe Mfg. Co., 764 F.2d 928, 931-32 (1st Cir. 1985)).

In an action brought by a forum seller against an out-of-

state purchaser, I must determine whether the out-of-state

purchaser was sufficiently involved in the transaction to render

the forum’s exercise of personal jurisdiction constitutional.

See Bond Leather C o . v . Q.T. Shoe Mfg. Co., 764 F.2d 928, 933-34

(1 st Cir. 1985). If the out-of-state purchaser sufficiently

departed from the role of a passive purchaser, then the

unfairness usually associated with exercising personal

jurisdiction over such a defendant is eliminated. See In-Flight

Devices Corp., 466 F.2d at 233 (long arm statute).

Courts, either expressly or impliedly, have recognized

-15- several factors to distinguish a passive purchaser from an active

purchaser, including:

(1) which party, buyer or seller, initiated the transaction,

see Vetrotex Certainteed Corp. v . Consolidated Fiber Glass Prods.

Co., 75 F.2d 147, 149, 152 & n . 5 (3d Cir. 1996) (no personal

jurisdiction); Strick Corp. v . A.J.F. Warehouse Distribs., Inc.,

532 F. Supp. 951, 958, 959 (E.D. Pa. 1982) (personal jurisdiction

existed);

(2) the extent to which the purchaser negotiated the terms

of the transaction with the seller, see In-Flight Devices Corp.,

466 F.2d at 233 (personal jurisdiction existed);

(3) the location of the negotiations, see Vetrotex

Certainteed Corp., 75 F.2d at 149, 151, 152(no personal

jurisdiction); Sybaritic, Inc. v . Interport Int’l, Inc., 957 F.2d

522, 523, 525 (8 th Cir. 1992) (no personal jurisdiction); Strick

Corp., 532 F. Supp. at 958, 959 (personal jurisdiction existed);

(4) the terms of the contract, including provisions

identifying the governing law, the place of performance, and the

-16- place of payment, see Vetrotex Certainteed Corp., 75 F.2d at 149,

151 (no personal jurisdiction); Sybaritic, Inc., 957 F.2d at 525

(no personal jurisdiction); Strick Corp., 532 F. Supp. at 958,

959; c f . Ganis Corp., 822 F.2d at 198 (personal jurisdiction

(5) whether the parties had prior dealings, and the

proximity in time of those prior dealings to the disputed

transaction, see Vetrotex Certainteed Corp., 75 F.2d at 149, 153

(no personal jurisdiction); Howell Labs., Inc., 751 F. Supp. at

261 (personal jurisdiction existed);

(6) whether the seller conformed the goods to the buyer’s

specifications, see Whittaker Corp. v . United Aircraft Corp., 482

F.2d 1079, 1084 (1 st Cir. 1973) (personal jurisdiction existed

with respect to one defendant, but not others); Howell Labs.,

Inc., 751 F. Supp. at 261 (personal jurisdiction existed);

(7) the product’s degree of complexity, see Howell Labs.,

Inc., 751 F. Supp. at 261 n . 2 (personal jurisdiction existed);

Strick Corp., 532 F. Supp. at 958, 959 (personal jurisdiction

-17- existed).

(8) whether the buyer supervised or participated in the

seller’s performance, see Whittaker Corp., 482 F.2d at 1084

(personal jurisdiction existed with respect to one defendant, but

not others); and

(9) whether the parties, after the formation of the

contract, continued to communicate with each other, including

visits to the seller’s manufacturing site by the buyer, see

Vetrotex Certainteed Corp., 75 F.2d at 152-53 (no personal

jurisdiction); Whittaker Corp., 482 F.2d at 1084 (personal

jurisdiction existed with respect to one defendant, but not

others); In-Flight Devices Corp., 466 F.2d at 233 (personal

jurisdiction existed); Howell Labs., Inc., 751 F. Supp. at 261

personal jurisdiction existed).

In view of these considerations, I now turn to assessing

Super Vision’s contacts with New Hampshire.

D. Is Super Vision a Passive Purchaser?

WPI maintains that this court has specific jurisdiction

because Super Vision was an active participant in their

-18- transaction. Pl.’s Mem. of Law. in Opp’n. to the Mot. of Super

Vision International, Inc. to Dismiss for Lack of Personal

Jurisdiction at 5 n.2 (doc. n o . 8 ) . Super Vision counters that

its contacts with New Hampshire were so few that it is consti-

tutionally impermissible for this court to exercise even specific

jurisdiction. See [Def.’s] Mem. of Law in Supp. of Def.’s Mot.

to Dismiss for Lack of Jurisdiction at 14 (doc. n o . 5 ) . I

examine this dispute in light of the tripartite test for specific

personal jurisdiction.

1. Relatedness

In the present case, the relatedness prong of the specific

jurisdiction test is easily satisfied. As discussed below, Super

Vision participated in the formation of the sales contract

between it and WPI. Its participation included communications,

by telephone, fax, and mail, directed into New Hampshire. As a

result, WPI’s breach of contract and breach of the covenant of

good faith and fair dealing claims arise directly out o f , or are

related t o , Super Vision’s contacts with New Hampshire.

-19- 2. Purposeful Availment

To satisfy the purposeful availment prong of the specific

jurisdiction test, WPI must show that Super Vision’s

“participation in the economic life of [New Hampshire]” rose

above that of a passive purchaser “who simply place[d] an order

and [sat] by until the goods [were] delivered.” See Whittaker

Corp., 482 F.2d at 1084 (citing In-Flight Devices Corp., 466 F.2d

at 232-33). I conclude that WPI has alleged and provided

evidence of jurisdictional facts which, if true, demonstrate that

Super Vision’s contacts with New Hampshire (1) were voluntary, in

that they were not the product of WPI’s unilateral actions; and

(2) created an on-going relationship with a forum resident,

thereby making it foreseeable that Super Vision would be haled

into court in New Hampshire. In particular, Super Vision’s

active participation in the negotiation of the terms of the

contract and its supervision of WPI’s performance of the contract

demonstrate that it was not a passive purchaser.

The parties’ contract, which involved the sale of relatively

-20- complex products modified to fit the specific requirements of

Super Vision’s project, was the result of extensive negotiation.

While Super Vision was not physically present in New Hampshire

during the negotiation period, it did direct extensive

communications, by telephone, fax, and email, into the state.

These contacts are sufficient to establish jurisdiction. See

Sawtelle, 70 F.3d at 1389-90 (“The transmission of information

into [the forum] by way of telephone or mail is unquestionably a

contact for purposes of our analysis.”); see also Massachusetts

Sch. of Law, 142 F.3d at 3 6 ; Pleasant S t . I , 960 F.2d at 1090;

In-Flight Devices Corp., 466 F.2d at 235. But see Vetrotex

Certainteed Corp., 75 F.3d at 152.

In response to Super Vision’s communication of more precise

information regarding its ballast and ignitor needs, WPI updated

the price quotation it originally issued to Super Vision on

October 2 , 1998. See Mayer Aff. ¶¶ 6, 7 . On October 1 9 , 1998,

WPI faxed Super Vision this revised price quotation, which

extended the period over which monthly installments were to be

-21- shipped from approximately eleven months to approximately two

years. See id. Super Vision, however, did not accept WPI’s

terms of sale without alteration. See, e.g., id. Ex. F (“Thank

you for [Super Vision’s] letter and conversation regarding

[WPI’s] quotation and specifically notes-1 and 3-A.”). Instead,

it faxed a purchase order, dated November 6, 1998, to WPI’s New

Hampshire facility in which it increased the number of units to

be shipped during certain months. See id. Ex. G at 1 . The

purchase order also added several conditions which WPI was

required to accept in order for the deal to proceed. For

example, one condition provided that Super Vision’s order with

WPI was “contingent upon successful demonstration and acceptance

of new designs by Super Vision International.” See id. ¶ 1 1 , Ex.

G at 3 . Super Vision faxed to WPI’s New Hampshire facility a

revised purchase order, dated November 2 5 , 1998, with identical

conditions. See id. ¶ 1 2 , Ex. I . According to Super Vision,

this revised purchase order was intended to be “an offer to

-22- purchase on its own terms.”2 [Def.’s] Mem. of Law in Supp. of

Def.’s Mot. to Dismiss for Lack of Jurisdiction at 13 (doc. n o .

5). Even after these exchanges, the parties continued to

negotiate the terms regarding their respective performance under

the contract. See, e.g., Mayer Aff. Ex. J (letter confirming

results of telephone conference between Super Vision personnel

and WPI personnel located in New Hampshire).3

2 I make no findings regarding what constituted the operative offer, WPI’s price quotation or Super Vision’s purchase order. Rather, Super Vision’s characterization of its purchase order as “an offer to purchase on its own terms” is significant only to the extent that it belies Super Vision’s attempt to assume the mantle of the passive purchaser. By taking this position, Super Vision acknowledges that it was an active, not passive, player in the transaction. 3 This letter, dated December 8 , 1998, confirmed that the parties agreed to several conditions, including:

[1] WPI is authorized to proceed with fulfillment of the referenced order for ballasts . . . Approval by Osram [one of Super Vision’s lamp suppliers for the project] is no longer a prerequisite. . . .

[2] Super Vision will remove the ignition aid wire from each lamp before installation to facilitate hot restrike.

[3] If we determine later that this approach causes lamp problems in the field, WPI will work with Super Vision to

-23- Furthermore, the transaction the parties envisioned was not

an isolated, one-time sale of goods. Rather, the parties

recognized that they were establishing an on-going relationship

extending over several months, if not longer. For example, in

its October 2 0 , 1998 letter directed to WPI’s New Hampshire

offices, Super Vision informed WPI that it appeared that their

deal would proceed and discussed the possibility of the parties

entering into another business relationship. In closing, Super

Vision stated that it looked forward “to a close association

between [the] respective companies.” Id. ¶ 9, Ex. E .

As it turned out, the parties also communicated extensively

after they executed the contract. In particular, Super Vision

actively supervised WPI’s manufacture of the ballasts and

ignitors. For example, WPI made regular progress reports to

Super Vision regarding the performance of its products. See id.

¶ 1 3 . Representatives from Super Vision and WPI communicated

with each other, primarily by email and telephone, to resolve

develop an appropriate course of action going forward. Mayer Aff. Ex. J.

-24- what Super Vision alleged to be technical problems with WPI’s

products. See id. ¶ 1 5 ; Kingstone Aff. ¶ 1 4 , Ex. 5 . Sometime in

the Spring of 1999, a Super Vision employee traveled to WPI’s New

Hampshire facility for the purpose of working with WPI to resolve

these alleged technical problems. See Mayer Aff. ¶ 15 (June

1999); Kingstone Aff. ¶ 12 (March 1999). In its July 1 4 , 1998

letter directed to WPI’s New Hampshire facility, Super Vision, in

addition to informing WPI that it was placing a “hold” on certain

WPI products, referred to WPI’s “reworks” of other of its

products. See Kingstone Aff. ¶ 1 3 , Ex. 4 .

Super Vision’s pre- and post-contract contacts with WPI

demonstrate that it did not simply place an order with WPI and

wait for the goods to be delivered. Even though Super Vision’s

active participation in the negotiation and performance of the

contract is sufficient to satisfy the purposeful availment prong

of the specific jurisdiction test, I briefly address subsidiary

jurisdictional facts which reinforce the propriety of this court

-25- exercising personal jurisdiction over Super Vision.

The evidence regarding the parties’ prior dealings further

erodes Super Vision’s attempt to characterize itself as a passive

purchaser. To be relevant to the personal jurisdiction inquiry,

the parties’ dealings prior to the present, disputed contract

must be related to that contract. See Vetrotex Certainteed

Corp., 75 F.3d at 153 (finding that parties’ dealings in the

1980s were not related to the present dispute over their 1991 and

1992 contracts because there was no evidence to suggest that

parties understood these contracts to be continuations of their

prior dealings). The Seventh Circuit has adopted a similar view,

but recognizes that when parties engage in an on-going

relationship involving repeated transactions, the dividing line

between prior and present dealings “will not always be a bright

one.” RAR, Inc. v . Turner Diesel, Ltd., 107 F.3d 1272, 1278 (7th

Cir. 1997). Where such prior dealings involve a transaction

similar to the one the parties presently dispute, these past

contacts may be relevant if they either “bear on the substantive

-26- legal dispute between the parties or inform the court regarding

the economic substance of the contract.” Id.

-27- Here, WPI and Super Vision, on two prior occasions, entered

into installment sale contracts which (1) involved a product

similar to the one which is the subject of the contract presently

in dispute, (2) extended over a period of several months, and (3)

involved a total purchase price in excess of $100,000 each. See

Iverson Aff. ¶¶ 2 , 3 , 4 . WPI made its final shipment on the

second of these two contracts in February 1998. See id. ¶ 3 . In

view of the similarities, and close temporal proximity, between

these prior transactions and the present one, the parties’ prior

dealings are relevant to the personal jurisdiction inquiry. In

particular, these earlier transactions show that WPI and Super

Vision were engaged in an on-going relationship rather than an

isolated transaction. See, e.g., Gateway Press, Inc. v . LeeJay,

Inc., 993 F. Supp. 5 7 8 , 581 (W.D. Ky. 1997) (finding that

parties’ prior contacts on unrelated deal laid the “groundwork”

for their future dealings and showed that the parties’

relationship “more closely resembled an ‘ongoing relationship’

than an ‘isolated transaction’”). Moreover, that the parties had

-28- business dealings predating the present sale of ballasts and

ignitors means that only minimal significance can be attached to

WPI’s initiation of contact with Super Vision with respect to the

present transaction. That i s , WPI’s reaching out to Super Vision

to supply its needs on its new project cannot be viewed as a

random solicitation of a passive, unsuspecting buyer.

The terms of the parties’ contract also support this court’s

exercise of personal jurisdiction over Super Vision. The front

side of both price quotations that WPI faxed to Super Vision

included the term, “F.O.B. Warner, N.H.” See Mayer Aff. ¶ 8 , Ex.

C. The reverse side of the price quotations included a choice of

law clause which identified New Hampshire law as the governing

law and a delivery clause which indicated that delivery and title

passed at the “F.O.B. point of shipment.”4 See id. ¶ 8 , Ex. D.

4 There is some question as to whether Super Vision ever received the reverse side of the price quotation, and thus, notice of these conditions. WPI’s sales representative handling the Super Vision account cannot recall precisely whether he mailed an original of the price quotation to Super Vision. He asserts, however, that it is his practice to follow up a fax transmission of a price quotation with an original copy sent by mail. See Mayer Aff. ¶ 8 . In an affidavit in support of its

-29- The terms of the parties’ contract put Super Vision on notice

that it was dealing with a New Hampshire seller. Therefore, it

was foreseeable that Super Vision might be haled into New

Hampshire’s courts if its relationship with WPI broke down. See

Ganis Corp., 822 F.2d at 198 (“While not conclusive, a [choice of

law provision] further tips the scales in favor of [plaintiff]

since a contractual provision adopting a forum state’s laws

combined with the five-year duration of the relationship

‘reinforce[s] [the nonresident defendant’s] deliberate

affiliation with the forum State and the reasonable

foreseeability of possible litigation there.’”) (quoting Burger

motion to dismiss, Super Vision asserts that it received the front side of the price quotation via fax but that it never received the reverse side. See Kingstone Aff. ¶ 9. In contrast, Super Vision, in its memorandum of law in support of its motion to dismiss, states that it eventually agreed to place an order with WPI but that it “rejected the boilerplate terms and conditions contained on the reverse side of WPI’s quotation form . . .” [Def.’s] Mem. of Law in Supp. of Def.’s Mot. to Dismiss for Lack of Jurisdiction at 13 (doc. n o . 5) (emphasis added). Because I am required to view the evidence in the light most favorable to W P I , I assume that at some point Super Vision received, either by fax or by mail, a copy of the conditions printed on the reverse side of WPI’s price quotation sheet.

-30- King Corp. v . Rudzewicz, 471 U.S. 462, 482 (1985)) (alterations

in original). 5

3. Reasonableness

With respect to the reasonableness prong of the specific

jurisdiction test, Super Vision concedes that the first four

“gestalt” factors are in essence a “wash” and do not “point

strongly in favor of this Court exercising or declining

jurisdiction in this case.” [Def.’s] Mem. of Law in Supp. of

Def.’s Mot. to Dismiss for Lack of Jurisdiction at 12 (doc. n o .

5). In contrast, Super Vision argues that the fifth factor

strongly points in favor of this court declining jurisdiction.

5 A jurisdictionally significant fact about which WPI failed to provide evidence is the location to which Super Vision sent its payments. Although an important fact in the jurisdictional inquiry, its presence or absence is not dispositive. See Phillips Exeter Academy, 196 F.3d at 291 (“[C]ourts repeatedly have held that the location where payments are due under a contract is a meaningful datum for jurisdictional purposes. Even s o , that fact alone does not possess decretory significance.”) (internal citations omitted); Ganis Corp., 822 F.2d at 198 (“The location of where payments are to be sent has been recognized as a material contact in jurisdictional analysis.”).

-31- According to Super Vision, it would be unreasonable to require

i t , a passive and innocent nonresident party to the transaction,

to litigate this dispute in WPI’s home forum when WPI was the

initiating and blameworthy party to the transaction. Exercising

jurisdiction under these circumstances, so Super Vision argues,

would create a precedent allowing

a manufacturer of faulty goods to advertise, sell and ship these goods to “passive buyers” all over the country. Then, after the manufacturer is unsuccessful in remedying the defects despite having been given months to do so by the buyers, finally forcing the buyers to return the goods, demand a refund and state their intention to purse their legal remedies, the seller sues them in its distant home forum for damages allegedly caused by the buyer’s refusal to continue purchasing the faulty goods.

Id. at 14-15.

This argument might have some persuasive force in the

abstract. It i s , however, unavailing in this case. Contrary to

Super Vision’s argument, it was not a passive purchaser, and

therefore, does not warrant special protection. Because this

case implicates no significant public policy issue, the fifth

“gestalt” factor does not point strongly in either direction.

-32- On balance, the remaining “gestalt” factors point in favor

of this court exercising jurisdiction. First, although Super

Vision may be inconvenienced by litigating this case in New

Hampshire, it has not demonstrated that having to defend itself

here imposes a special or unusual burden on i t . See Pritzker, 42

F.3d at 6 4 .

Second, Super Vision erroneously compares the relative

interests of Florida and New Hampshire in this case. Instead, I

must determine whether New Hampshire has an interest in this

case, and if s o , the extent of that interest. I need not attempt

to compare New Hampshire’s interest to that of another potential

forum. See Foster-Miller, Inc., 46 F.3d at 151 (“The purpose of

the inquiry is not to compare the forum’s interest to that of

some other jurisdiction, but to determine the extent to which the

forum has an interest.”). I conclude that New Hampshire has an

interest in protecting a local business which contracts to

produce over one million dollars’ worth of goods in the forum and

which is not paid by its customer who orders those goods. See

-33- In-Flight Devices Corp., 466 F.2d at 232 (“[A] state has an

interest in resolving a suit brought by one of its residents.

That interest necessarily becomes more significant when, as here,

a contract calling for substantial production of goods is entered

into, with the production of goods and other performance under

the contract to take place entirely within the forum state.”)

(internal citations omitted).

Third, WPI has selected New Hampshire as the forum in which

to bring its action against Super Vision. With respect to

measuring WPI’s convenience, I must pay some deference to its

choice of forum. See Sawtelle, 70 F.3d at 1395 (“[A] plaintiff’s

choice of forum must be accorded a degree of deference with

respect to the issue of its own convenience.”).

-34- Finally, the judicial system’s interest in the efficient

resolution of this case also points in favor of this court

exercising jurisdiction. Because Super Vision, subsequent to

WPI’s filing of this action, has filed an action against WPI in

Florida, this case raises the specter of piecemeal litigation.

See Nowak, 94 F.3d at 718 (“This factor focuses on the judicial

system’s interest in obtaining the most effective resolution of

the controversy. Usually this factor is a wash but in one case

we held that preventing piecemeal litigation might favor one

jurisdiction over another.”) (internal citations omitted). The

most efficient and effective way to resolve the parties’ disputes

is for Super Vision to file counterclaims against WPI in this

action. Super Vision has not asserted that is it prevented from

doing s o .

Given the relatively strong showing with respect to

relatedness and purposeful availment, a correspondingly strong

showing of unreasonableness is required. No such showing has

been made. Therefore, I conclude that it is reasonable for this

-35- court to exercise personal jurisdiction over Super Vision.

-36- IV. CONCLUSION

For the foregoing reasons, I conclude that it is

constitutionally permissible for this court to exercise personal

jurisdiction over Super Vision. Therefore, I deny Super Vision’s

Motion to Dismiss for Lack of Personal Jurisdiction (doc. n o . 5 ) .

SO ORDERED.

Paul Barbadoro Chief Judge

January 2 7 , 2000

cc: Robert Upton, Esq. Thomas Donovan, Esq. David Jones, Esq.

-37-