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LEHIGH COAL AND NAV. CO. v. GEKO-MAYO

July 8, 1999

LEHIGH COAL AND NAVIGATION COMPANY, PLAINTIFF,
v.
GEKO-MAYO, GMBH ET AL., DEFENDANTS V. TECHNISCHE WERKE KAISERSLAUTERN, A.G. THIRD-PARTY DEFENDANTS.



The opinion of the court was delivered by: Eduardo C. Robreno, District Judge.

    MEMORANDUM

I. INTRODUCTION

This is a contract case which requires the court, as a threshold matter, to determine whether a federal court sitting in Pennsylvania, may exercise personal jurisdiction over a German corporation who is a party to a contract with another German corporation for work to be performed in Germany. Third-party defendant, Technische Werke Kaiserslautern, A.G. ("TWK"), a corporation formed under the laws of the German Federal Republic and with its principal place of business located in Kaiserslautern, Germany, has moved to dismiss the third-party complaint filed by defendant, Geko-Mayo, GmbH ("Geko-Mayo"), another German corporation with its principal place of business in Germany. Pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2), TWK moves to dismiss Geko-Mayo's third-party complaint on the basis of this court's lack of subject matter and personal jurisdiction over TWK. In addition, TWK moves to dismiss this action based on improper venue, pursuant to Federal Rule of Civil Procedure 12(b)(3). For the reasons set forth below, this court will grant TWK's motion to dismiss based on a lack of both specific and general personal jurisdiction. Accordingly, this court will not address the issues of subject matter jurisdiction, see Ruhrgas AG v. Marathon Oil Co., ___ U.S. ___, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999) (rejecting the contention that a federal district court is barred in all circumstances, from dismissing case because of a lack of personal jurisdiction without first deciding the issue of subject matter jurisdiction), or improper venue.

II. BACKGROUND

The following facts are uncontested. On June 26, 1995, Geko-Mayo and TWK entered into a contract which required Geko-Mayo to operate TWK's Kaiserslautern heating facility plant and deliver steam to TWK's customers. See Ex. 2 of Geko-Mayo's Third-Party Complaint (hereinafter "Contract to Supply Steam").*fn1 The contract also provided for the delivery of the coal that was to be burned in TWK's heating facility. The contract specifically required Geko-Mayo to use "anthracite coal of American origin" in generating the steam in the facility. This clause in the contract was included to fulfill TWK's obligations under a contract with the United States Air Force in Europe. Id. ¶¶ 15.1-15.3.*fn2 In an effort to obtain the coal required by TWK, Geko-Mayo and ESP-Geko, GmbH ("ESP")*fn3, Geko-Mayo's subcontractor, allegedly entered into contracts with Lehigh Coal and Navigation Company ("Lehigh") to provide the required coal.

On February 17, 1998, Lehigh filed a complaint in this court against Geko-Mayo and ESP alleging, inter alia, that Geko-Mayo and ESP failed to pay on invoices for the coal Lehigh delivered to Geko-Mayo and ESP. Pursuant to these contracts Lehigh had supplied and delivered to Geko-Mayo and ESP, anthracite coal in an amount in excess of $310,000. Neither Geko-Mayo nor ESP has paid for any of the coal delivered by Lehigh.

Prior to answering Lehigh's complaint, however, on March 3, 1998, Geko-Mayo filed a third-party complaint against TWK, as a third-party defendant, claiming that because TWK has allegedly failed to pay Geko-Mayo for the coal delivered by Lehigh and used to generate steam in TWK's facility in Kaiserslautern, Geko-Mayo has been unable to pay the monies it owes to Lehigh. See Geko-Mayo's Third-Party Compl. ¶¶ 12-13, 15 and 18. Geko-Mayo further alleges in its third-party complaint. that TWK breached the Contract to Supply Steam by failing to pay Geko-Mayo for the delivery of the coal and steam.

TWK filed the instant motion to dismiss, arguing that this court lacks both specific and general personal jurisdiction. TWK asserts that the court lacks specific personal jurisdiction over TWK because it undertook no acts in and maintained no contacts with Pennsylvania, and thus Geko-Mayo's cause of action does not arise out of any contacts that TWK had with the forum state. In addition, since TWK has maintained no contact with the forum state, TWK argues that the court lacks general jurisdiction because Geko-Mayo cannot show that TWK maintained continuous and systematic contacts with the forum state.*fn4

Geko-Mayo counters that this court has both specific and general personal jurisdiction because TWK has a history of dealing with United States coal companies. specifically companies located in Pennsylvania. Geko-Mayo maintains that: 1) TWK's efforts to lobby Pennsylvania Congressional representatives and representatives of Pennsylvania coal companies in order to influence the United States to enter into a contract with TWK; and 2) the actual contract signed between the parties which required TWK to procure U.S. anthracite coal are sufficient for this court to establish both specific and general personal jurisdiction over TWK in this third-party action.*fn5

III. LEGAL STANDARD

Under the Federal Rules of Civil Procedure, personal jurisdiction over a non-resident defendant may be exercised to the extent permitted under state law. Fed.R.Civ.P. 4(e). Pennsylvania authorizes the exercise of long-arm jurisdiction to the extent permitted under the Due Process Clause.*fn6 Thus, in order to determine whether the court may properly exercise personal jurisdiction over a defendant, the court must undertake two separate and distinct inquiries: (1) is personal jurisdiction properly exercised under the forum's long-arm statute? and (2) does the exercise of personal jurisdiction over the defendant comport with due process under the United States Constitution? See IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 258-59 (3d Cir. 1998). Whether the exercise of long-arm statute jurisdiction is proper is a matter of state law. See Mann v. Tom James Co., 802 F. Supp. 1293, 1295 (E.D.Pa. 1992) (citing Kubic v. Letteri, 532 Pa. 10, 614 A.2d 1110, 1112 (Pa. 1992)). On the other hand, whether the exercise of jurisdiction comports with due process is a matter of federal law. Id. (citing Nolt & Nolt, Inc. v. Rio Grande, Inc., 738 F. Supp. 163, 165 (E.D.Pa. 1990)) (citing Empire Abrasive Equipment Corp. v. H.H. Watson, Inc., 567 F.2d 554, 556 n. 1 (3d Cir. 1977)).*fn7

In order to address the first inquiry, the court turns to Pennsylvania law, the law of the forum in this case. The Pennsylvania long-arm statute provides for the exercise of general jurisdiction, see 42 Pa. Cons.Stat. Ann. § 5301 (West 1981)*fn8 and specific jurisdiction, see 42 Pa. Cons. Stat. Ann. § 5322 (West Supp. 1998),*fn9 over non-resident defendants. General jurisdiction over a corporate defendant is proper where the corporation carries on "a continuous and systematic part of its general business within [Pennsylvania]." See 42 Pa. Cons.Stat. Ann. § 5301(a)(2)(iii) (West 1981). Specific jurisdiction arises when the plaintiff's "claim is related to or arises out of the defendant's contacts with the forum." Mellon Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992) (quoting Dollar Sav. Bank v. First Sec. Bank, 746 F.2d 208, 211 (3d Cir. 1984)). In this case, Geko-Mayo contends that under the Pennsylvania long-arm statute, the court is conferred both general and specific personal jurisdiction over TWK. In response, TWK asserts that the exercise of either specific or general jurisdiction in this case would offend due process.

Once a defendant raises a jurisdictional defense, the plaintiff bears the burden of establishing, with reasonable particularity, sufficient contacts between the defendant and the forum state to support jurisdiction. See Provident Nat'l Bank v. California Fed. Sav. & Loan Assoc., 819 F.2d 434, 437 (3d Cir. 1987) (citing Gehling v. St. George's School of Medicine, Ltd., 773 F.2d 539, 542 (3d Cir. 1985)). "To meet this burden, the plaintiff must establish either that the particular cause of action sued upon arose from the defendant's activities within the forum state ("specific jurisdiction") or that the defendant has `continuous and systematic' contacts with the forum state ("general jurisdiction")." Provident Nat'l Bank, 819 F.2d at 437 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 416, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)) (further citations omitted). "[The Plaintiff] may not rely upon the conclusory averments of the pleadings, but must come forward with competent evidence that establishes the Court's jurisdiction. `Once the motion is made, plaintiff must respond with actual proofs, not mere allegations.'" PECO Energy Co. v. PECO, Inc., No. 94-1750, 1995 WL 27144, at *3 (E.D.Pa. Jan. 18, 1995) (quoting Patterson by Patterson v. FBI, 893 F.2d 595, 604 (3d Cir.), cert. denied, 498 U.S. 812, 111 S.Ct. 48, 112 L.Ed.2d 24 (1990)).

Following the filing of TWK's motion to dismiss, the court permitted the parties to take discovery, limited to the issues of subject matter jurisdiction, personal jurisdiction, and forum non conveniens. Thereafter, both parties filed submissions in support of their contention on jurisdiction. Therefore, TWK's motion to dismiss for lack of personal jurisdiction is ripe for adjudication.

IV. DISCUSSION

A. Personal Jurisdiction.

TWK has failed to challenge the existence of a cognizable basis for specific*fn10 or general jurisdiction under the Pennsylvania long-arm statute. However, TWK does contend that the exercise of either specific or general jurisdiction offends due process. Thus, the analysis is reduced to the question of whether the exercise of specific or ...


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