The opinion of the court was delivered by: RAMBO
In accordance with the accompanying memorandum, IT IS HEREBY ORDERED THAT:
1) The motion of Canada Development Corporation to dismiss for lack of personal jurisdiction is granted;
2) Canada Development Corporation is dismissed as a counter-defendant from the captioned action;
3) In accordance with the court's order of October 20, 1986, all discovery shall be completed within 120 days of the date of this order;
4) Pretrial motions, if any, and supporting briefs shall be filed no later than September 25, 1987;
5) A pretrial conference will be held on Tuesday, December 1, 1987 at 9:00 a.m. in Chambers of Courtroom No. 2;
6) The parties shall submit pretrial memoranda in conformity with the local rules on or before November 25, 1987; and
7) This case is placed on the January, 1988 trial list. Jury selection for cases on the January list will be held at 10:00 a.m. on Monday, January 4, 1987 in Courtroom No. 2, Ninth Floor, Federal Building, Third and Walnut Streets, Harrisburg, Pennsylvania. Trials will commence at 9:30 a.m. on Tuesday, January 5, 1987.
Sylvia H. Rambo, United States District Judge.
Before the court is the motion of Canada Development Corporation to dismiss the counterclaim of Heritage Copy Products, Inc. for lack of personal jurisdiction. The motion has been fully briefed and is ripe for disposition.
The captioned action began on March 28, 1984, with the filing of a complaint by Savin Corporation (Savin) against Heritage Copy Products, Inc. (Heritage) and two individual defendants. Generally, the complaint alleges that Heritage and its guarantors owed Savin several hundred thousand dollars pursuant to dealer agreements which the parties had entered. The next pleading which is pertinent to the instant motion is the second amended counterclaim (hereinafter referred to as the counterclaim), filed by Heritage on June 30, 1986. In the counterclaim Heritage alleges that Savin has made misrepresentations to Heritage, breached express and implied warranties, violated the Racketeer Influenced and Corrupt Organizations Act (RICO),
and engaged in price-fixing in violation of the Sherman Anti-Trust Act.
Each of these theories of liability was also asserted against Canada Development Corporation (CDC) on the grounds that Savin was the alter ego, instrumentality or agency of CDC.
CDC is a Canadian corporation, established pursuant to the laws of that country. Created as a holding company, CDC has made investments in companies which encompass a variety of industry sectors. Among the companies in which CDC has invested is Savin. In 1982 CDC purchased fifty-seven percent of Savin's common shares. CDC's percentage of ownership rose to sixty-eight percent in 1984 and then decreased to sixty-two percent in 1986, where it remained at the time the instant motion was made.
On the basis of facts which will be more fully developed below, Heritage argues that CDC is vicariously liable for the actions of Savin because of its control of Savin. It is Heritage's position that this vicarious liability subjects CDC to personal jurisdiction in Pennsylvania.
Heritage also claims that CDC is subject to personal jurisdiction in Pennsylvania due to CDC's knowledge of Savin's misrepresentations and under the nationwide venue provisions of RICO and the antitrust act.
CDC's motion and the arguments contained in the parties' briefs raise four issues for the court to address. First, the court must consider whether the rule of Cannon Manufacturing Co. v. Cudahy Co., 267 U.S. 333, 45 S. Ct. 250, 39 L. Ed. 634 (1925) should be applied in this case. The second issue is whether the facts as they are set forth in the affidavits and answers to depositions which are part of the record show that Savin is the alter ego, instrumentality, or agent of CDC such that CDC is subject to personal jurisdiction in Pennsylvania. Thirdly, the court must decide whether it should assert jurisdiction over CDC on the basis of the venue provisions of the RICO and anti-trust acts. The final issue is whether CDC's alleged knowledge of Savin's misrepresentations subjects CDC to the jurisdiction of this court.
Before addressing the specific issues mentioned above, it is important to outline the general standards by which the court is guided in addressing a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction. In Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61 (3d Cir. 1984), the Third Circuit Court of Appeals distinguished between the standards to be applied to Rule 12(b)(6) and Rule 12(b)(2) motions. Id. at 66, n.9. Whereas a court must accept as true the allegations of the non-moving party when considering a Rule 12(b)(6) motion, the disposition of a Rule 12(b)(2) motion ". . . requires resolution of factual issues, outside the pleadings, i.e. whether in personam jurisdiction actually lies." Id. The burdens of the parties in the context of such a motion was established as follows:
Once the defense has been raised, then the plaintiff must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence. Contrary to the dissent's suggestion, therefore, at no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction. [citation omitted]. Once the motion is made, plaintiff must respond with actual proofs, not mere allegations.
Id. CDC's motion will be considered in light of ...