The opinion of the court was delivered by: VANASKIE
On October 1, 1996, plaintiff Santana Products, Inc. (Santana) instituted this antitrust action against defendants Bobrick Washroom Equipment, Bobrick Corporation, The Hornyak Group, Inc., Vogel Sales Company, Sylvester & Associates, Ltd., and Fred Sylvester, alleging that the defendants had conspired to interfere with Santana's business through the use of false advertising materials and statements. (Dkt. Entry 1.) On July 1, 1997, defendants Sylvester & Associates, Ltd. and Fred Sylvester (hereinafter collectively referred to as the Sylvesters) filed a motion for summary judgment, asserting that this Court lacked personal jurisdiction over them. (Dkt. Entry 57.)
Because Santana has failed to present sufficient evidence that the Sylvesters have the requisite minimum contacts with Pennsylvania such that maintenance of this suit against the Sylvesters in this District would not offend traditional notions of fair play and substantial justice, their motion to dismiss for lack of personal jurisdiction will be granted.
Santana is a Virginia corporation with its principal place of business in Scranton, Pennsylvania. (Complaint (Dkt. Entry 1) P 2.) Defendant Bobrick Corp. and defendant Bobrick Washroom Equipment, Inc. (collectively referred to as Bobrick) are both California corporations with their principal places of business in California. (Id. P 3.) Defendant Hornyak Group is a Delaware corporation with its principal place of business in Pennsylvania. (Id. P 4.) Defendant Hornyak Group is a Bobrick architectural representative for Pennsylvania. (Id.) Defendant Vogel Sales Corp. is a Pennsylvania corporation with its principal place of business in Pennsylvania. (Id. P 5.) Defendant Vogel Sales Corp. is a Bobrick architectural representative for Pennsylvania. Defendant Fred Sylvester is a resident of New York State. (Id. P 6.) Defendant Sylvester & Associates, Ltd. is a New York corporation with its principal place of business in New York. (Id.) Sylvester is designated as the a Bobrick architectural representative for New York and New Jersey. (Plf's Stat. of Facts (Dkt. Entry 68) PP 1-5.) Bobrick has over fifty architectural representatives throughout all fifty states. (Complaint (Dkt. Entry 1) P 31.)
Both Bobrick and Santana manufacture toilet partitions and other accessories that are used in the construction of large public restrooms. Santana contends that the defendants were part of a conspiracy to frighten Santana's potential consumers with false advertising information that portrayed Santana's products as flammable and dangerous. In particular, Santana contends that Bobrick used its architectural representatives to spread the "fire scare" through promotional videos, literature, and personal interaction with potential customers. (Id. P 32.) Santana's complaint makes no reference to any specific instances of disseminating false information in Pennsylvania. Moreover, there are no allegations of any meetings, conferences, educational sessions or any other activity in Pennsylvania. In fact, the only references to Pennsylvania in the complaint concern the location of Santana and defendants Hornyak Group and Vogel Sales Corp.
In response to the Sylvesters' personal jurisdiction challenge, Santana contends that Sylvester & Associates transacts business in Pennsylvania through its relationship with Bobrick. (Plf's Stat. of Facts (Dkt. Entry 68) PP 1-5.)
Santana notes that Bobrick has designated Sylvester & Associates as its architectural representative for New York and New Jersey in the Sweets Catalog, which has a national distribution. (Id.) Furthermore, Santana notes that the marketing agreement between Bobrick and its architectural representatives, including Sylvester & Associates, encouraged those representatives to generate business throughout the United States, not just the isolated region to which an individual representative was assigned. (Id.)
After engaging in more discovery on the personal jurisdiction issue, Santana presented the following additional facts to support personal jurisdiction in this District. First, Fred Sylvester admitted that he knew that Santana had its corporate headquarters in Pennsylvania. (Santana's Supp. Brf. (Dkt. Entry 133) at 2.) In addition, Fred Sylvester was a sales manager for METPAR, one of the alleged co-conspirators with Bobrick, from 1987 through 1989, and he allegedly was aware of the false advertising material at that time. (Id. at 3.) Santana contends that "it is clear that Mr. Sylvester was aware that the Formica videotape was used by Bobrick and its architectural representatives to target Santana's product, based on his admission that he had read the Bobrick Sales Bulletin A25E-90, distributed to Bobrick's architectural representatives on September 18, 1990, which specifically identifies various instances in which project architects had canceled specifications calling for Santana's product after being shown the Formica videotape." (Id. at 4.) Fred Sylvester also admitted to using the allegedly false promotional video in connection with his business transactions in New York. (Id.) Moreover, Fred Sylvester transacted business in Pennsylvania on one occasion when he attended a distributor meeting in Philadelphia as an employee of METPAR. (Id. at 4-5.) Finally, Sylvester & Associates has an advertisement on the world-wide web that contains information that would enable a person to contact it. (Id. at 7.)
Based upon all of these facts, Santana contends that this Court may properly maintain personal jurisdiction over the Sylvesters. On the other hand, the Sylvesters maintain that this evidence does not warrant the exercise of jurisdiction over them.
Because personal jurisdiction is a waivable defense under Federal Rule of Civil Procedure 12(h)(1), the defendant bears the initial burden of raising lack of personal jurisdiction. Clark v. Matsushita Elec. Indus. Co., 811 F. Supp. 1061, 1064 (M.D. Pa. 1993). Once the defense is raised, however, the burden shifts to the plaintiff to prove that exercise of jurisdiction is permissible. Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146 (3d Cir.), cert. denied, 506 U.S. 817, 121 L. Ed. 2d 29, 113 S. Ct. 61 (1992). On March 4, 1997, Sylvester filed an answer to Santana's complaint which asserted as an affirmative defense the lack of personal jurisdiction. (Answer (Dkt. Entry 19) at 18.) On March 6, 1997, after a case management conference at which the personal jurisdiction issue was discussed, a deadline of July 1, 1997 was set for the filing of a motion challenging personal jurisdiction. (Dkt. Entry 21.) The Sylvesters filed their motion asserting a lack of personal jurisdiction in a timely manner. Thus, the burden has shifted to Santana to demonstrate the existence of personal jurisdiction over the Sylvesters.
Federal Rule of Civil Procedure 4(e) permits a district court to assert personal jurisdiction over a nonresident to the extent allowed under the law of the state where the district court sits. Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 63 (3d Cir. 1984). Pennsylvania law extends jurisdiction "to the fullest extent allowed under the Constitution of the United States and may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States." 42 Pa.C.S.A. § 5322(b). Thus, the reach of jurisdiction under Pennsylvania law is coextensive with the Due Process Clause of the United States Constitution.
Due process requires that the defendant have "minimum contacts" with the forum state such that maintenance of the action does not offend "traditional notions of fair play and substantial justice." International Shoe Co. v. Washington, 326 U.S. 310, 316, 90 L. Ed. 95, 66 S. Ct. 154 (1945). In order to satisfy the minimum contacts requirement, the court must be able to point to "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state, thus, invoking the benefits and protections of its law." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 85 L. Ed. 2d 528, 105 S. Ct. 2174 (1985); Clark v. Matsushita Elec. Indus. Co., 811 F. Supp. 1061, 1065 (M.D. Pa. 1993).
There are two theories under which a defendant is subject to personal jurisdiction:
If the plaintiff's cause of action arises out of a defendant's forum-related activities, that defendant may be subject to the state's jurisdiction under 'specific jurisdiction' so long as jurisdiction is authorized by a 'long-arm' statute and the defendant has sufficient minimum contacts with the state as defined by International Shoe Co. v. Washington, 326 U.S. 310, 90 L. Ed. 95, 66 S. Ct. 154 (1945). If the claim is connected to a defendant's non-forum related activities, a defendant may be subject to the 'general' jurisdiction of the court so long as it has 'continuous and substantial' attachments with the forum state.
Allied Leather Corp. v. Altama Delta Corp., 785 F. Supp. 494, 497 (M.D. Pa. 1992) (citations omitted). Under each theory, the focus is upon the ...