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FOLLANSBEE METALS CO. v. JOHN T. CLARK & SON OF NE

December 16, 1974

FOLLANSBEE METALS CO., INC., a corporation, Plaintiff,
v.
JOHN T. CLARK AND SON OF NEW HAMPSHIRE, INC., a corporation, Defendant


Snyder, District Judge.


The opinion of the court was delivered by: SNYDER

SNYDER, District Judge.

 The Defendant in this diversity contract action, a New Hampshire corporation, has filed a Motion to Quash Service and a Motion to Transfer Under 28 U.S.C. § 1404(a), asking transfer to the District of New Hampshire or to the District of Massachusetts. Both Motions will be denied.

 Plaintiff, Follansbee Metals Co., Inc. (Follansbee), is an Illinois corporation with its principal place of business at McKees Rocks, Pennsylvania. Defendant, John T. Clark and Son of New Hampshire, Inc. (Clark), is a New Hampshire corporation with its principal place of business at Portsmouth, New Hampshire, and is a wholly owned subsidiary of John T. Clark and Son of Boston, Inc. Following some rather extensive negotiations, arrangements were completed for the shipment of steel sold by Follansbee to Stahl-Eisen-Maschinen (SEM) of Hamburg, Germany. The steel was to be shipped through Portsmouth, New Hampshire, where Clark was to act as the stevedoring company and provide marine terminal servicing. This action by Follansbee asserts that Clark, during its handling pursuant to the stevedoring contract, damaged the steel.

 The records in this case contain Affidavits submitted by both parties in support of their respective positions, Plaintiff's Interrogatories which have been answered by the Defendant, Lists submitted by both parties of the contacts which the Defendant had with the Commonwealth of Pennsylvania, and a Stipulation entered into by the parties as to certain facts. From these we glean that in March of 1973, Follansbee contracted with International Metal Trading Co. of Madrid, Spain (IMT) to sell certain steel to IMT, f.o.b. Pittsburgh. IMT contracted with SEM to sell the steel to SEM, f.o.b. stowed on board a chartered vessel (the Arosia). IMT then contracted with Clark to provide the stevedoring and marine terminal services which were necessary to satisfy IMT's contract with SEM. It then developed, in late May of 1973, that IMT's contract with Follansbee was cancelled because of IMT's inability to honor a credit provision. Follansbee then contracted directly with SEM to sell the steel to SEM, f.o.b. stowed on board a chartered vessel, and Follansbee also contracted with Clark for the stevedoring and marine terminal services necessary to satisfy its contract with SEM.

 The steel was shipped from Follansbee to Clark during the period May 8th through May 17th, 1973, and was unloaded from railway cars by Clark during the latter part of May and early part of June, 1973. The steel was stored by Clark in Portsmouth, New Hampshire from early June until July 24, 1973. From July 24th through July 26th, 1973, Clark's stevedores loaded the steel on board the Arosia. When the steel was delivered by the ocean carrier to the purchaser in Antwerp, Belgium, it was in a damaged condition and Follansbee was required to give SEM substantial credit for which Follansbee now claims damages in excess of Ten Thousand Dollars from Clark.

 The first contact between the parties was a phone call from Timothy Keefe, President of Clark, to Arnold Nelson, President of Follansbee, and was made at the express direction of IMT. Subsequently, over the course of the next five months, Clark made some eighteen phone calls to Follansbee at McKees Rocks, Pennsylvania, and received sixty-two calls from Follansbee at McKees Rocks; Clark also sent two telegrams and nine letters to Follansbee. Three documents which have been presented concern themselves with finalizing and formulating the agreement between the parties: the letter of June 1, 1973 from Keefe to Nelson, the telegram of June 7, 1973 to Nelson from Keefe, and the telegram of July 19, 1973 to Keefe from Nelson.

 By Affidavit, Clark set forth that prior to its contract with the Plaintiff herein, the Defendant did not perform any contract for any citizen or any corporation of the Commonwealth of Pennsylvania, nor did it have any business dealings with Pennsylvania citizens or corporations. Clark also set forth that the initial contact with Follansbee came at the direction of IMT, who requested Clark to contact Follansbee for shipping instructions. From this point on, Clark had no further contact with IMT, but dealt solely with Follansbee. On the initial telephone conversation of March 28, 1973, Clark gave Follansbee specific shipping quotes in accordance with the directions of IMT. Clark claims that when the first shipment arrived in Portsmouth about May 8, 1973, Arnold Nelson (of Follansbee) was notified of the damaged condition of the steel, and he came to Portsmouth, at which time it became apparent that IMT was no longer to be involved and that Follansbee would have to work out terms and conditions under which Clark would perform its services for Follansbee and on Follansbee's account. During subsequent telephone conversations there appeared to be some underlying misunderstanding, and as a result, a letter memorandum of the terms, dated June 1, 1973, was sent to Arnold Nelson asking assent thereto in writing. The written assent was subsequently given and Follansbee sent a telegram to Clark on July 19, 1973, confirming the terms and conditions.

 I. MOTION TO QUASH SERVICE.

 We are required to interpret the "Long-Arm" Statute of the Common-wealth of Pennsylvania, known as the Act of November 15, 1972, P.L. , No. 271, §§ 8301 et seq., effective February 13, 1973, 42 Pa. S. § 8301 et seq. (Supp. 1974).

 As to foreign corporations, Pennsylvania's Legislature added the following pertinent provision (42 Pa. S. § 8309):

 
"(b) Exercise of full constitutional power over foreign corporations. -- In addition to the provisions of subsection (a) of this section the jurisdiction and venue of courts of the Commonwealth shall extend to all foreign corporations and the powers exercised by them to the fullest extent allowed under the Constitution of the United States."

 We need refer briefly only to the three landmark cases of International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), McGee v. International Life Ins. Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957), and Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958), to ...


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