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LEHIGH COAL AND NAV. CO. v. GEKO-MAYO
July 8, 1999
LEHIGH COAL AND NAVIGATION COMPANY, PLAINTIFF,
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.
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.
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
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
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
In order to address the first inquiry, the court turns to Pennsylvania
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.
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 ...