Bank. Like Provident, the percentage of Johnson & Quin's business in Pennsylvania is small and the activity conducted in Pennsylvania is the "bread and butter" of the defendant's business. Johnson & Quin's sales of its goods and services, like California Federal's borrowing and lending of money in Provident National Bank, was the principle purpose of its business. But the court in Provident did not find that these activities by themselves created general jurisdiction. The Provident court found that the defendant's maintenance and daily use of a bank account in Pennsylvania was the critical contact for establishing general jurisdiction. Provident National Bank, 819 F.2d at 438. Johnson & Quin has no such daily or regular contact with Pennsylvania that is central to the functioning of its business. Just as the number of Pennsylvania loans in Provident would not have been sufficient by themselves to form a basis for general jurisdiction, so too Johnson & Quin's Pennsylvania sales are insufficient by themselves to support a finding of continuous and systematic business.
Other courts have dealt with different factual patterns in determining whether a defendant has engaged in continuous and systematic business with a forum state and used a slightly different approach. In Strick Corp. v. A.J.F. Warehouse Distribs., Inc., 532 F. Supp. 951 (E.D.Pa. 1982), the court found that it did not have general jurisdiction over the defendant because the defendant's contacts with Pennsylvania were not "continuous and systematic." Id. at 956. Among the contacts that the defendant had with Pennsylvania were the following: it entered into leases with Pennsylvania companies, it maintained offices in Pennsylvania from 1972 to 1976 (three years before the cause of action arose), it had the right to repossess trucks in Pennsylvania that it had sold, and it placed ads in a national trade journal that circulated in Pennsylvania. Id. In concluding that the defendant was not subject to the court's general jurisdiction, the court stated that general jurisdiction is usually found "where a non-resident defendant makes a substantial number of direct sales in the forum, solicits business regularly and advertises in a way specifically targeted at the forum market." Id. (citing Schwilm v. Holbrook, 661 F.2d 12, 14 (3d Cir. 1981); Galaxy Int'l, Inc. v. White Stores, Inc., 88 F.R.D. 311, 324-25 (W.D.Pa. 1980); Garfield v. Homowack Lodge, 249 Pa. Super. 392, 378 A.2d 351, 354-55 (Pa. Super. 1977)).
Applying this general rule to the present case, yields the conclusion that Johnson & Quin's Pennsylvania contacts were not continuous and systematic. The defendant's $ 230,000 in direct sales to Pennsylvania (less than .5% of its total sales) cannot be described as "substantial" in light of the amount of sales which other courts have found to be not substantial. See Allied Leather Corp. v. Altama Delta Corp., 785 F. Supp. 494 (M.D.Pa. 1992) (defendant's sale of 1% of its products in Pennsylvania was not "substantial"); Derman v. Wilair Servs., Inc., 404 Pa. Super. 136, 590 A.2d 317 (Pa. Super.), appeal denied 600 A.2d 537 (Pa. 1991) (finding no substantial and continuous business even though defendant did 1.5% of its business with Pennsylvania residents). Johnson & Quin did not regularly solicit business in Pennsylvania. Although some of its salespersons solicited business in Pennsylvania, they did not do so on a regular basis. In fact, there is evidence that many of the Pennsylvania sales were unsolicited telephone orders. Henkel Deposition at 48-50. There has been no evidence submitted that Johnson & Quin advertised in a way specifically targeted at Pennsylvania. Under the general rule set forth in Strick, Johnson & Quin has not conducted continuous and systematic business in Pennsylvania.
Another case that demonstrates the activities needed to substantiate a finding of continuous and systematic business is Gulentz v. Fosdick, 320 Pa. Super. 38, 466 A.2d 1049 (Pa. Super. 1983). In Gulentz, the defendant was a trucking company whose trucks drove a total of 2.5 million miles in Pennsylvania in 1980. The defendant purchased 500,000 gallons of fuel in Pennsylvania and had gross receipts totalling $ 750,000 from business conducted in Pennsylvania, which amounted to 3.7% of its total gross receipts. The court found that the defendant's extensive use of Pennsylvania highways in order to further its business interests indicated that the defendant purposely availed itself of the privilege of conducting business in Pennsylvania. Id. at 1053 (citing Kenny v. Alexson Equip. Co., 495 Pa. 107, 432 A.2d 974 (Pa. 1981). The court also noted that although the defendant's gross receipts from Pennsylvania were only 3.7% of its total gross receipts, this is to be expected because the defendant operated in all 48 states of the continental U.S. Comparing these facts to the present case, the court finds that Johnson & Quin's contacts with Pennsylvania are less substantial. Johnson & Quin has not made an extensive use of any Pennsylvania resource such as the highway system. Also, there is no evidence that Johnson & Quin conducts business equally in a large number of states. This makes its percentage of Pennsylvania sales (less than .5%) even less substantial in comparison to the 3.7% found in Gulentz.
A case with facts similar to those of the present case is Derman v. Wilair Servs., Inc., 404 Pa. Super. 136, 590 A.2d 317 (Pa. Super. 1991). In Derman, the court found that the defendant did not engage in continuous and systematic business with Pennsylvania. Id. at 324. The defendant's Pennsylvania contacts consisted of the following: it advertised in national publications that circulated in Pennsylvania, 1.5% of its business was with Pennsylvania residents and it bought .3% of its parts from Pennsylvania vendors. Id. The court found that the small amount of Pennsylvania business was not "continuous and substantial." Id. In comparison, Johnson & Quin did even less of its business with Pennsylvania residents and there is no evidence that it bought anything from Pennsylvania vendors.
The court finds that Johnson & Quin did not carry on a "continuous and systematic part of its business" within Pennsylvania. Therefore, the defendant may not be subject to the general jurisdiction of this court.
The defendant also claims that venue is improper. Under 28 U.S.C. § 1391(b), venue is proper if the action is brought in:
"(1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant may be found, if there is no district in which the action may otherwise be brought."
28 U.S.C. § 1391(b). For purposes of venue, a corporation is "deemed to reside in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced." 28 U.S.C. § 1391(c). The court has determined that the defendant is not subject to personal jurisdiction within this district. The defendant, therefore, cannot be deemed to reside in this judicial district. The events that gave rise to this action did not occur in Pennsylvania. If they had, the plaintiff would have urged the court to find specific jurisdiction over the defendant. The third basis for venue is inapplicable because the action could have been brought in the Northern District of Illinois, the district in which the defendant resides. See Declaration of Henkel at P 3. Because none of the bases for venue exist in this case, venue within this judicial district is improper under section 1391(b).
The issue that remains is whether to dismiss the claim or transfer it to a judicial district that would have personal jurisdiction over the parties. Section 1406(a) states that "the district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a).
Oftentimes, plaintiff makes a motion to transfer as an alternative to complete dismissal if the court fails to find jurisdiction over the defendant. In this case, however, the defendant has brought the motion to transfer. In its brief, the plaintiff opposes the transfer of the case to any district, arguing that it would inconvenience the plaintiff and its witnesses. Plaintiff's Memorandum at 19-21. In Carteret Sav. Bank, F.A. v. Shushan, 919 F.2d 225 (3d Cir. 1990), cert. denied, 113 S. Ct. 61, 121 L. Ed. 2d 29 (1992), the Court of Appeals for the Third Circuit held that a district court erred in transferring, pursuant to § 1406(a), a claim over the objections of the plaintiff. Id. at 230-32. The court in Carteret viewed a transfer under § 1406 as a means of protecting the plaintiff from the harsh result of dismissal of its case based solely on the fact that it was brought in the wrong district. If a plaintiff opposes such a transfer, the court has no purpose in forcing the plaintiff to litigate its claim in another court. Id.
If the motion to transfer had been made by the plaintiff, the court would have granted it so that the plaintiff would not lose its day in court simply because it filed the claim in the wrong district. The plaintiff, however, opposes transfer of the action and the court will honor the plaintiff's choice of forum or, in this case, rejection of forum.
For the reasons set forth above, the court will grant defendant's motion to dismiss for lack of personal jurisdiction and improper venue. The court will deny the defendant's motion to transfer venue. An appropriate order follows.
AND NOW, this 10th day of February 1994, upon consideration of defendant Johnson & Quin's motion to dismiss and motion to transfer venue and plaintiff's response thereto, IT IS HEREBY ORDERED THAT defendant's motion to dismiss is GRANTED and defendant's motion to transfer venue is DENIED.
The Clerk is directed to mark the case closed.
William H. Yohn, Jr., Judge