The opinion of the court was delivered by: TROUTMAN
This case presents a rather unusual issue with respect to the Court's ability to exercise in personam jurisdiction over nonresident defendants. We are required to determine whether nonresident corporate officers who, by Pennsylvania statute, (Pennsylvania Wage Payment and Collection Law (WPCL), Pa. Con. Stat. Ann. § 260.9(a) and (b)), are personally liable for unpaid corporate wages, are subject to personal jurisdiction in Pennsylvania by virtue of their alleged violation of that statute. Plaintiffs, Central Pennsylvania Teamsters Pension Fund and Central Pennsylvania Teamsters Health and Welfare Fund, are labor organizations to which wages are payable and which may, therefore, institute actions against corporate officers pursuant to the WPCL. The term "wages" includes fringe benefits and wage supplements, which, in turn, include payments to provide benefits under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. See, 43 Pa. Con. Stat. Ann. § 260.2a.
Defendants contend that they lack the requisite minimum contacts for this Court to assert jurisdiction over them. Defendant Glenn Burten also contends that he was never an officer of Branch Motor Express, Inc., the corporation with which plaintiffs had a contract obligating Branch to make payments to the Pension Fund and to the Health and Welfare Fund.
Plaintiffs originally sought to recover the allegedly unpaid benefits from Branch Motor Express, Inc. pursuant to ERISA. That action included a pendent state claim against Branch under the WPCL. Before that case had progressed to trial, Branch filed an appropriate application for protection from its creditors under the Bankruptcy Act, 11 U.S.C. § 1101, et seq. Consequently, the automatic stay provisions of the Bankruptcy Act required that the suit be stayed during the pendency of the Chapter 11 proceedings. Plaintiffs now seek from the defendants the funds otherwise allegedly due from Branch.
Plaintiffs admit that if personal jurisdiction may not properly be based upon defendants' alleged violation of the WPCL, then this Court does not have jurisdiction over these defendants. Thus, plaintiffs do not dispute defendants' affidavits asserting that none of the defendants has had any contacts with the Commonwealth of Pennsylvania. This is evident from plaintiffs' argument that they do not seek to base in personam jurisdiction upon defendants' minimum contacts with Pennsylvania. This argument indicates a fundamental misunderstanding of Pennsylvania's long-arm statute, 42 Pa. Con. Stat. Ann. § 5322, and the analysis required when non-resident defendants challenge a federal court's jurisdiction. Thus, we begin our consideration of the issues presented by this case with an overview of the required analysis.
The fundamental principle which guides the Court is that the assertion of personal jurisdiction must not "offend 'traditional notions of fair play and substantial justice'". International Shoe Co. v. Washington, 326 U.S. 310, 319, 66 S. Ct. 154, 90 L. Ed. 95, 104 (1945). In other words, asserting personal jurisdiction must comport with due process. The standard is usually expressed in terms of assessing the nature of the defendant's contacts with the forum state. When the defendant conducts substantial activities within the forum state on a regular basis, the courts there have "general" jurisdiction over that defendant. If, on the other hand, the defendant is not usually found within the state but the cause of action arose from the defendant's forum-related activities, personal jurisdiction over that defendant is termed "specific". VanBuskirk v. Carey Canadian Mines, Ltd., 760 F.2d 481 (3d Cir. 1985).
Applying the foregoing analysis,
we must be satisfied that not only do the facts of this case satisfy the literal terms of the Pennsylvania statute, but also that sufficient affiliating circumstances, [defendants'] contacts with the forum, exist to meet the demands of due process. Max Daetwyler Corp. v. R. Meyer, 762 F.2d 290, 298 (3d Cir. 1985).
More specifically, we must determine whether the WPCL, which defendants are alleged to have violated, is a sufficient basis for this Court's assertion of personal jurisdiction over the defendants.
Under the circumstances presented by this case, we are required to engage in a four-part due process analysis. We must determine: 1. Whether the WPCL contemplates personal liability for corporate unpaid wages as to corporate officers and employees in defendants' positions with the debtor company; 2. Whether 42 Pa. Con. Stat. Ann. § 5322(a)(10),
plaintiffs' sole basis for personal jurisdiction over these defendants, contemplates jurisdiction over persons who acted solely in their corporate capacities; 3. Whether defendants' alleged violations of the WPCL may be deemed to have occurred in Pennsylvania; and 4. Whether, even if the answers to all the foregoing questions are in the affirmative, the alleged violations constitute contacts sufficient to properly and legally subject the defendants to the jurisdiction of Pennsylvania courts. The first three parts of the analysis relate to whether the literal, specific terms of the statute upon which plaintiffs rely are satisfied. Daetwyler, supra. Obviously, if any one of them is not, and this provision is the only basis for jurisdiction, the case must be dismissed. The fourth part is simply a return to the fundamental question, which is always final and dispositive, i.e., are we affording the defendants substantial justice if we require them to defend the action in this Court?
We begin by examining the status of the instant defendants within the corporate structure of Branch Motor Express, Inc. Without touching upon the ultimate questions of liability, it is evident that if Pennsylvania courts have narrowed the scope of persons liable under the WPCL and these defendants are not at least arguably among those who may be so liable, they may not be subjected to the jurisdiction of the Court on the basis of an alleged violation of that statute. Thus, we look to the allegations of the complaint and the jurisdictional facts adduced to aid the Court in resolving this motion,
and compare the description of the defendants found therein with case law construing the WPCL.
Plaintiffs allege that all defendants are officers or agents of Branch Motor Express, Inc., and thus fall within the literal terms of the WPCL which purports to hold all such employees personally liable for unpaid wages. Plaintiffs have also submitted copies of documents from Branch's pending bankruptcy case which identify defendant Marvin F. Burten as President of Branch and defendant Richard A. Burten as its Senior Vice President for Operations. The documents also indicate that Glenn Burten, the third defendant, is or was a salaried employee ...