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July 12, 1979

BORDEN, INC. v. MARINE BUILDERS, INC. and Activation, Inc. and James Ferguson.

The opinion of the court was delivered by: POLLAK

For the reasons set forth below, the motion to transfer the case to New Jersey will be granted.


 Biggers, a resident of New Jersey, alleges that he was injured while working on the high seas on a ship owned by Borden, a New Jersey corporation doing business in Pennsylvania. The complaint was brought under the Jones Act, 46 U.S.C. § 688. Borden impleaded Marine Builders, manufacturer of the vessel, alleging that the accident was caused by a defect which constituted a breach of Marine Builders' warranty.

 The affidavits before the court show that Marine Builders is an Alabama corporation which has never applied for or received a license to do business in Pennsylvania. It has never sold vessels to persons or firms based in Pennsylvania, nor has it sent direct mail solicitations to Commonwealth residents. It employs no agents in Pennsylvania, holds no property, and maintains no bank accounts here. It maintains no office or telephone number in Pennsylvania. It has entered into no contracts for the purchase or sale of merchandise in Pennsylvania in the past five years, nor has it shipped goods here on consignment during that period.

 The contract for the construction of the vessel involved in this case was negotiated by agents for Borden and Marine Builders at meetings in New Jersey, Virginia, and Alabama. The contract recited that Borden did business out of Old Orchard, Maine; that Marine Builders was based in Mobile, Alabama; that the vessel was to be built and delivered to Borden at Marine Builders' Mobile shipyards; and that Cape May, New Jersey, would be the vessel's home port. Plaintiff's complaint alleges that the vessel was sailing out of Cape May at the time of the accident.

 Marine Builders regularly advertised in two trade journals of national circulation, Fishing Gazette and The Fish Boat. (For purposes of these motions, it is assumed that Pennsylvania is one of the states in which these journals are in fact distributed).

 The modes of establishing federal jurisdiction over a person or entity "not an inhabitant of or found within" the forum state are set forth in Rule 4(e) of the Federal Rules of Civil Procedure which provides in relevant part that "whenever a statute or rule of court of the state in which the district court is held provides . . . for service of a summons, or of a notice, or of an order in lieu of summons upon a party not an inhabitant of or found within the state . . . service may . . . be made under the circumstances and in the manner prescribed in the statute or rule." Pennsylvania's long-arm jurisdiction statute, 42 Pa.C.S.A. § 8309 (Supp.1978), allows its courts to take jurisdiction over all foreign corporations which can be reached compatibly with the due process clause.

 In a triad of major decisions a generation ago International Shoe v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945); McGee v. International Life Insurance 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) the Supreme Court examined the due process norms of judicial jurisdiction over non-residents. The substance of the Court's holdings was that fundamental fairness requires a demonstration of certain significant connections "minimal contacts" but not trivial ones between the non-resident and the forum state.

 In Scheidt v. Young, 389 F.2d 58 (3d Cir. 1968), the Court of Appeals for this Circuit had occasion to consider the application of these holdings in a context comparable with that presented by the procedural facts of the case at bar. In Scheidt, plaintiff was a New Jersey resident who was injured at a Pennsylvania hotel operated by defendants. Defendants' only contacts with New Jersey were that they had advertised the hotel in a New York newspaper with a large New Jersey readership, and that defendants' agents had gone to New Jersey to negotiate with plaintiff about her claim. The Court of Appeals held that "Defendants' advertisement in an out-of-state newspaper circulated in New Jersey, plaintiffs' telephone conversation with them at the Pennsylvania number listed in the advertisements, defendants' receipt of a deposit sent from New Jersey and the visits to New Jersey by representatives of defendants regarding the accident are peripheral occurrences and do not constitute "some act by which the defendant purposely avails itself of the privilege of conducting activities within the forum State, thus involving the benefits and protections of its laws.' " 389 F.2d at 60. The Court of Appeals, therefore, concluded that the District Court for the District of New Jersey was without jurisdiction.

 The case for asserting jurisdiction is weaker here than in Scheidt. On this record, Marine Builders had no significant contact with Pennsylvania. It may be that some Pennsylvanians read Marine Builders' advertisements in Fishing Gazette and The Fish Boat. But the facts of record provide no basis for an inference (1) that anyone connected with Borden acted upon, or even read, any of these advertisements in Pennsylvania in a setting in some way relevant to this litigation; *fn1" or (2) that Marine Builders placed its advertising in these (non-Pennsylvania) magazines "for the obvious purpose of obtaining Pennsylvania customers . . ." and creating a steady stream of commerce between Marine Builders and Pennsylvania residents. *fn2"

 Borden also argues that an indemnity clause in the contract for construction of the vessel constitutes a waiver of objection to personal jurisdiction by Marine Builders:

9. Indemnification. BUILDER agrees to be responsible for and to indemnify, defend and save harmless OWNER from and against:
(c) Any loss, damage, claim, action or liability on account of any injury to or death of any person, or loss of or damage to property, including property of OWNER, and including tools and equipment rented, owned or used by BUILDER, arising out of, resulting from, or in any manner connected with BUILDER's work, or the work of BUILDER's Subcontractor, whether or not such injury, death, or damage is due, in whole or in part, directly or ...

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