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RENOLD POWER TRANSMISSION CORP. v. CUNNINGHAM

December 3, 1985

Renold Power Transmission Corporation, Plaintiff
v.
Cunningham Bearing Company, Defendant


Richard P. Conaboy, United States District Judge.


The opinion of the court was delivered by: CONABOY

Richard P. Conaboy, United States District Judge

 We consider here Defendant's motion to dismiss this case for lack of in personam jurisdiction over it *fn1" or, in the alternative, to transfer this case to the Southern District of Texas. *fn2" This motion has been briefed and opposed in timely fashion and is now ripe for determination. We shall first decide the jurisdictional issue.

 I

 Whether this Defendant has the requisite "minimum contacts" *fn3" with the Commonwealth of Pennsylvania to justify this Court's assertion of jurisdiction here must be determined with reference to Pennsylvania's "long arm" statute -- 42 Pa. C.S.A. § 5301, et seq. This statute provides that Pennsylvania courts may extend their jurisdiction over non-residents ". . . to the fullest extent allowed under the Constitution of the United States . . . ." See 42 Pa. C.S.A. § 5322(b). The jurisdictional reach of a district court sitting in Pennsylvania is, of course, co-extensive with that of Pennsylvania state courts. See 28 U.S.C. § 1652.

 Decisional law which has delineated the Pennsylvania "long arm" has not been uniform. This is, perhaps, due to the fact that, depending upon which sub-section of that statute is focused upon, it incorporates different criteria. Under the statute a court may exercise in personam jurisdiction on two different theories. The first of these is found in 42 Pa. C.S.A. § 5301 which predicates jurisdiction on whether a particular defendant can be fairly said to be "present" in the state either because it is incorporated in Pennsylvania, has consented to be sued here, or on grounds that it conducts a "continuous and systematic part of its general business" in Pennsylvania. See § 5301(a)(2)(iii). The second potential basis for jurisdiction under the statute is found in 42 Pa. C.S.A. § 5322 which allows jurisdiction over a non-resident defendant to be based upon "the most minimum contacts with this Commonwealth allowed under the Constitution of the United States". See § 5322(b). We shall analyze whether Defendant can appropriately be brought to trial in this Court with reference to both potential bases of jurisdiction.

 A. Did Defendant Engage in Systematic and Continuous Business Activity in this Commonwealth?

 As the above question indicates, we find that it is obvious from the pleadings that Defendant has neither been incorporated in Pennsylvania nor formally consented to be sued here. However, this Court could still assert jurisdiction under § 5301(a)(2)(iii) if Plaintiff can show that Defendant conducted a "continuous and systematic part of its general business" in Pennsylvania. The most plausible explanation of how substantial a presence a nonresident corporate defendant must have to be brought under the jurisdiction of a district court sitting in Pennsylvania is found in Strick Corp. v. A. J. F. Warehouse Distributors, Inc., 532 F. Supp. 951, 956 (1982). Therein, Judge Louis H. Pollack writes:

 Judge Pollack then declared that another factor to be considered is whether a significant portion of the would-be Defendant's revenues derive from activity in this Commonwealth. Before applying these criteria to the facts of this case it must also be noted that the Plaintiff has the ultimate burden of proving that the non-resident Defendant's activities in the forum state are sufficient to bring it within reach of the Court's jurisdiction. See Boysen v. Treadway Inn of Lake Harmony, 53 F.R.D. 96, 98 (E.D. Pa. 1971), affirmed 463 F.2d 247 (3d Cir. 1972).

 Defendant's level of activity within Pennsylvania is certainly minimal enough to make this a very close question. Plaintiff seller asserts that it entered into a series of contracts with Defendant buyer for the sale of chain and couplings from late 1982 until July of 1983. Plaintiff further asserts that the sum of $31,817.16 is yet due and owing from Defendant. Plaintiff does admit that no representative of the Texas-based Defendant ever came to Pennsylvania to negotiate these contracts or inspect Plaintiff's facility and that on several occasions agents of the Plaintiff went to Texas in an effort to help Bob Bernstein, a commissioned agent of Plaintiff and other firms, cement the business relationship between the parties to this lawsuit. See Affidavit of Anthony J. Desiderio at pages 16, 19 and 22. Plaintiff states, however, that not all orders were placed by Defendant through Mr. Bernstein. Some were placed directly by telephone to Plaintiff in Pennsylvania. It is also asserted that these contracts were to be governed by Pennsylvania law. However, there is no evidence presented to indicate that this condition was negotiated by the parties. Indeed, it seems clear that Plaintiff unilaterally sought to impose Pennsylvania law upon the Defendant by attaching a copy of the "Renold Power Transmission Corporation Distribution Policy" to the contract goods at the time of shipment. Said document includes a "governing law" paragraph which states: "This agreement shall be subject to and construed in accordance with the laws of the State of Pennsylvania". *fn4"

 Applying the Strick criteria to the facts of this case, we find that this Court lacks jurisdiction over this Defendant under the "continuous and systematic" doing of business analysis. There has been no showing that this Defendant has advertised extensively in this Commonwealth so as to justify a conclusion that it has "targeted" the forum market. Similarly, Plaintiff has made no showing that a significant portion of this Defendant's revenues arise from its dealings within Pennsylvania. Finally, there is nothing in the record to indicate that this Defendant solicits business regularly in this Commonwealth. In fact, from the affidavits offered by Plaintiff Renold, it appears far more likely that Plaintiff itself did the soliciting in this case. In any event, Plaintiff has not carried its burden *fn5" of establishing that this Court enjoys jurisdiction over this dispute under "continuous and systematic" analysis pursuant to 42 Pa. C.S.A. § 5301(a)(2)(iii).

 "Minimum Contacts" Analysis

 This evaluation is made with reference to 42 Pa. C.S.A. § 5322(b) which allows Pennsylvania Courts and, hence, district courts sitting in Pennsylvania to exert jurisdiction over non-resident defendants to the maximum extent allowable under the Federal Constitution. Thus, we must here determine whether it would offend fundamental principles of due process to allow this lawsuit to be heard in the Middle District of Pennsylvania. In other words, we must determine whether, given the facts as Plaintiff states them, that the Defendant could ". . . ...


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