The opinion of the court was delivered by: Joyner, District Judge.
This is a commercial contract case brought by Plaintiffs United
Products Corporation ("UPC") and Joseph Egan ("Egan") against
Defendants Admiral Tool & Manufacturing Company ("Admiral"),
Ernie Levine ("Levine"), and William Dugan ("Dugan"). In their
Amended Complaint, Plaintiffs allege five counts, including:
violation of the Pennsylvania Commissioned Sales Representatives
Act ("CSRA"), 43 P.S. § 1471, et seq. (Count I); violation of
the Pennsylvania Wage Payment and Collection Law ("WPCL"), 43
P.S. § 260.1, et seq. (Count II); request for an accounting and
punitive damages (Count III); fraud (Count IV); and breach of
contract (Count V). Presently before the Court is Defendants'
Motion to Dismiss Counts I, II, and IV or Alternatively to
Transfer. For the reasons below, we will grant Defendants' Motion
in part and deny it in part.
Taken in the light most favorable to Plaintiffs, the relevant
facts are as follows. Admiral is an Illinois corporation that
manufactures, among other things, seating for the mass transit
industry. Levine and Dugan are the President and Vice-President
of Admiral respectively. UPC is a Pennsylvania corporation and is
principally owned by Egan. In January 1993, UPC and Admiral
entered into an Agreement of Representation ("the Agreement")
through which UPC and Egan became the exclusive sales
representatives for Admiral's products. The Agreement was for one
year and was to be automatically renewed for one year unless
canceled by either party with thirty-days written notice. Under
the Agreement, Admiral agreed to pay UPC a 5-percent commission
on each product order UPC obtained.
I. Claim Against Levine and Dugan
In Count II, Plaintiffs allege a violation of the WPCL.
Significantly, this is the only count that names Levine and Dugan
as individual Defendants. Defendants argue that the "fiduciary
shield" doctrine precludes this Court's exercise of personal
jurisdiction over Levine and Dugan. Further, Defendants assert
that if we dismiss the claim against Levine and Dugan, we should
then transfer the entire case to the Northern District of
Illinois. While we agree that the fiduciary shield precludes
jurisdiction over the individually named Defendants, we believe
that transfer of this entire action is premature at this time.
A. Personal Jurisdiction and the Fiduciary Shield
In general, a court does not have personal jurisdiction over an
individual defendant whose only contacts with the forum state
were taken in his or her corporate capacity. TJS Brokerage & Co.
v. Mahoney, 940 F. Supp. 784, 789 (E.D.Pa. 1996); National
Precast Crypt Co. v. DyCore, 785 F. Supp. 1186, 1191 (W.D.Pa.
1992); see also Andrews v. CompUSA, Inc., Civ. A. No. 99-3240,
2000 WL 623234, at *2 (E.D.Pa. May 15, 2000). This general rule,
however, does not apply when the corporate officer is charged
with (1) committing a tort in his corporate capacity or (2)
violating a statutory scheme that provides for personal, as well
as corporate, liability for corporate actions. See National
Precast Crypt, 785 F. Supp. at 1191. Likewise, a court may
disregard the fiduciary shield if the defendant "had a major role
in the corporate structure, the quality of his contacts with the
state were significant, and his participation in the tortious
conduct was extensive." TJS Brokerage, 940 F. Supp. at 789
In this case, the number and extent of Levine and Dugan's
contacts with Pennsylvania are undisputed.*fn1 In addition, it
is undisputed that all of the contacts by Levine and Dugan were
taken within their corporate capacities at Admiral. Plaintiffs do
not allege that Levine or Dugan committed a tortious act while
acting in their corporate capacities. Moreover, regardless of
whether Levine and Dugan may be liable under the WPCL, their
potential liability is not sufficient to subject them to personal
jurisdiction in Pennsylvania. E.g., Andrews, 2000 WL 623234, at
*2; Sneberger v. BTI Americas, Inc., No. Civ. A. 98-932, 1998
WL 826992, at *4 (E.D.Pa. Nov. 30, 1998); Schommer v. Eldridge,
Civ. A. No. 92-3372, 1992 WL 357557, at *2 (E.D.Pa. Nov. 30,
1992). Finally, while Levine and Dugan certainly have a major
role in Admiral's corporate structure, there is no indication
that the quality of their contacts was significant or that their
role in any tortious activity was extensive.
We find that all of Levine or Dugan's contacts with
Pennsylvania were made within their corporate capacities and
that, as a result, they are protected by the fiduciary shield
doctrine. As none of the exceptions to that doctrine apply in
this case, Levine and Dugan are not subject to the personal
jurisdiction of this Court.
Accordingly, we will dismiss Count II without prejudice as to
Levine and Dugan.
B. Appropriateness of Transfer
Having dismissed Count II with respect to Levine and Dugan for
lack of personal jurisdiction, the Court must next determine the
most just and efficient manner to proceed with the remainder of
the case. In this circumstance, we are left with two options: (1)
to transfer the entire case to another district where
jurisdiction may be exercised over all Defendants or (2) to sever
the claims, retaining jurisdiction over UPC and transferring the
case as to Levine and Dugan to a proper forum. See Cottman
Transmission Sys., Inc. v. Martino, 36 F.3d 291, 296 (3d Cir.
1994) (describing court's options when venue is proper for one
defendant but not for another). Guiding our choice of
alternatives is the United States Court of Appeals for the Third
Circuit's position "that [the court] should not sever if the
defendant over whom jurisdiction is retained is so involved in
the controversy to be transferred that partial transfer would
require the same issues to be litigated in two places." Id.
(quoting Sunbelt Corp. v. Noble, Denton & Assocs., Inc.,
5 F.3d 28, 33-34 (3d Cir. 1993).) The Third Circuit further explained
that "[w]hen the conduct of a co-defendant as to whom venue is
proper is central to the issues raised by the plaintiff against
those subject to transfer, the grant of a severance would not
ordinarily be consistent with the sound ...