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TAMAQUA CABLE PRODS. CORP. v. DUNLAP ELECS.

January 4, 1982

TAMAQUA CABLE PRODUCTS CORP.
v.
DUNLAP ELECTRONICS, INC.



The opinion of the court was delivered by: HUYETT

MEMORANDUM

Defendant Dunlap Electronics, Inc. (Dunlap) has filed a motion to dismiss this action for lack of personal jurisdiction, pursuant to Fed.R.Civ.P. 12(b)(2). Dunlap contends that it lacks the requisite "minimum contacts" with Pennsylvania necessary to subject it to personal jurisdiction under the Pennsylvania long-arm statute, 42 Pa.C.S.A. § 5301 et seq.

 This action arises from a dispute between Tamaqua Cable Products Corp. (Tamaqua) and Dunlap concerning the manufacture of cable for use by Dunlap in fulfilling a contract with the United States Department of Interior. Dunlap was required to subcontract for cable products from a list of suppliers approved by the Department of Interior. (Affidavit of Robert J. MacDonald, P 2). The specifications for the cable product were mandated by the Department of Interior. (Id.) In connection with this project, Dunlap contacted several suppliers on the approved list, including Tamaqua. (Id.) None of the potential suppliers contacted by Dunlap except for Tamaqua, were Pennsylvania corporations or businesses with their principal places of business or manufacturing facilities in Pennsylvania. (Id. at P 4) Tamaqua provided the lowest quote of any of the suppliers contacted, and Dunlap therefore included Tamaqua's quote in the bid submitted to the Department of Interior, which bid was ultimately accepted by the Department. (Id. at P 2)

  Tamaqua is alleged in the complaint *fn1" to be a Pennsylvania corporation with its principal place of business in Schuylkill Haven, Pennsylvania (Complaint at P 1) Dunlap is a Delaware corporation, with its principal place of business in California, engaged in the business of electronic components distribution. (Affidavit of Robert J. MacDonald at P 5) Dunlap operates exclusively in the California and Nevada geographical areas. (Id.) Dunlap does no business in Pennsylvania. Dunlap has no agent located or operating in Pennsylvania, ships no merchandise into Pennsylvania, provides no services in Pennsylvania, has no interest in real or personal property in Pennsylvania, and has never made any application to any Pennsylvania governmental unit for any license, permit, registration or similar instrument or authorization. (Id. at PP 7 through 11)

 Dunlap's sole contact with Pennsylvania is the single act of contracting to purchase cable from Tamaqua, to be manufactured in accordance with government specifications, for use in fulfilling a contract with the United States Department of Interior. The contract between the parties did not call for performance in any specific location. While the contract may have implicitly contemplated that the cable would be manufactured at Tamaqua's Pennsylvania plant, the contract did not require Tamaqua to do this. Thus, the fact that the manufacturing process was undertaken in Pennsylvania was the decision of the plaintiff, not the defendant. The sole issue before me is whether or not this single contact is sufficient to support personal jurisdiction over Dunlap, consistent with the due process clause of the U.S. Constitution.

 Plaintiff seeks to obtain jurisdiction over Dunlap by long-arm statute. Federal Rule of Civil Procedure 4(d) provides, in effect, for service of process upon a non-resident defendant, not found in the forum state, in accordance with the long-arm statute of the forum, here 42 Pa.C.S.A. § 5301 et seq. Long-arm service will not suffice to confer personal jurisdiction, however, if the defendant lacks the "minimum contacts" with Pennsylvania necessary to make maintenance of the suit in this district consistent with "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95 (1945).

 Section 5322(b) of the Pennsylvania long-arm statute extends the exercise of long-arm jurisdiction to the fullest extent permitted under the due process clause of the Constitution of the United States. The Pennsylvania Superior Court has stated that "since this statute makes the exercise of jurisdiction over a non-resident coextensive with the permissible limits of due process, we need only decide whether it would be a denial of due process to hold appellee subject to suit in Pennsylvania." Koenig v. International Brotherhood of Boilermakers, 284 Pa.Super. 558, 426 A.2d 635 (1980).

 Thus, the sole issue before me is whether or not Dunlap's contacts with Pennsylvania are sufficiently weighty that to require it to submit to jurisdiction in Pennsylvania would be consistent with the due process clause. Given the nature of the single, isolated contact with Pennsylvania, jurisdiction over Dunlap is not sustainable.

 The Pennsylvania courts have employed a three-part test to determine if long-arm jurisdiction is consistent with due process:

 
First, the defendant must have purposefully availed itself of the privilege of acting within the forum state thus invoking the benefits and protections of its laws.... Secondly, the cause of action must arise from defendant's activities within the forum state .... Lastly, the acts of the defendant must have a substantial enough connection with the forum state to make the exercise of jurisdiction over it reasonable.

 Proctor & Schwartz, Inc. v. Cleveland Lumber Co., 228 Pa.Super.Ct. 12, 323 A.2d 11, 15 (1974) (citations omitted). Applying these three criteria, Dunlap's activities fall short of the requisite "minimum contacts."

 It is doubtful whether Dunlap's activities in agreeing to purchase cable products from Tamaqua can be said to constitute "purposeful availment" of the privilege of acting in Pennsylvania. See Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958). Dunlap at no time acted in Pennsylvania, nor did any of its employees enter Pennsylvania for any purpose connected with the contract. (Affidavit of Robert J. McDonald at P 2) The only contact with Pennsylvania was that Tamaqua evidently intended to perform its contractual obligations-to manufacture the cable product in accordance with the government specifications-in Pennsylvania. However, the contract between the parties did not require it to be manufactured in Pennsylvania.

 In Lakeside Bridge & Steel Co. v. Mountain State Construction Co., Inc., 597 F.2d 596 (7th Cir. 1979), the Court of Appeals for the Seventh Circuit concluded, on facts analogous to these, that a purchaser of goods had not purposefully availed itself of the privilege of conducting business in the state where the goods were to be manufactured. See also Jem Engineering & Mfg., Inc. v. Toomer Elec. Co., 413 F. Supp. 481 (N.D.Okla.1976). In Lakeside, the purchaser was a West Virginia corporation which contracted with a Wisconsin corporation to purchase structural assemblies for use in construction work on a dam and reservoir in Virginia. All contacts concerning the contract took place outside Wisconsin, or by mail or telephone; however, the goods were to be manufactured in Wisconsin. The court concluded that these contracts were not sufficient to support jurisdiction over the West Virginia purchaser in Wisconsin, stating:

 
Viewed realistically, the contacts with Wisconsin in this case consist solely of "(t)he unilateral activity of (one) who claim(s) some relationship with a nonresident defendant," and this "cannot satisfy the requirement of contact with the forum State." Hanson v. Denckla supra, 357 U.S. at 253, 78 S. Ct. at 1240. Although Mountain State in a sense caused the activity in Wisconsin by placing the order, the contract between the parties left Lakeside in absolute control over where it would conduct that activity, and it made this decision and conducted the activity unilaterally. Mountain State's belief, which we may assume existed, that Lakeside would choose to perform its contractual obligations in Wisconsin does not constitute an invocation of the benefits and ...

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