The opinion of the court was delivered by: J. Curtis Joyner, J.
Defendant, Fulton Bellows & Components, Inc. moves for dismissal of
this breach of contract action for lack of personal jurisdiction and
venue pursuant to Fed.R.Civ.P. 12(b)(2) and (3), and/or for abstention in
deference to the pending action between the parties in Tennessee. For the
reasons which follow, the motion shall be granted.
The instant lawsuit arose out of a "Recovery Services Agreement" which
Plaintiff entered into on November 1, 1995 with one of the defendant's
predecessors-in-interest, Robertshaw-Tennessee. Under this agreement, in
exchange for a monthly payment of $845.00 Plaintiff agreed to provide
data backup capabilities and other related services to Defendant's
facility in Knoxville, TN in the event of a "disaster".*fn1 Although the
term of the original contract was for five years, Plaintiff alleges that
this original term was extended twice by the parties*fn2 such that it
was effectively extended to run through August 31, 2004.
According to the complaint, by letter dated June 6, 2000, Defendant
informed Plaintiff that it was terminating the Recovery Services
Agreement effective September 6, 2000. Although Plaintiff responded via
letter of June 28, 2000 that it could not accept Defendant's request to
terminate, Defendant has not paid the monthly fees required under the
Agreement since July 25, 2000. Defendant commenced an action for
declaratory judgment, breach of contract and violation of the Tennessee
Consumer Protection Act on August 14, 2001 and service was effectuated on
Sungard's registered agent in Tennessee that same date. On August 27,
2001, Plaintiff brought this suit in the Court of Common Pleas of Chester
County seeking damages under the theories of breach of contract and
unjust enrichment. Service was effectuated via mail on September 4, 2001
and Defendant removed the case to this Court on October 3, 2001. As noted
above, Defendant now moves to dismiss this case pursuant to
Rules 12(b)(2) and (3).
Legal Principles Governing Motions under Rules 12(b)(2)and (3)
It has long been recognized that the initial burden of raising the
defense of lack of personal jurisdiction falls upon the defendant or else
it shall be deemed to have been waived. See, National Paintball Supply,
Inc. v. Cossio, 996 F. Supp. 459, 460 (E.D.Pa. 1998). Thereafter, once a
defendant has raised a jurisdictional defense, the burden falls upon the
plaintiff to come forward with sufficient facts to establish that
jurisdiction is proper. Mellon Bank (East) PSFS National Ass'n. v.
Farino, 960 F.2d 1217, 1223 (3d Cir. 1992). The plaintiff meets this
burden and presents a prima facie case for the exercise of personal
jurisdiction by establishing with reasonable particularity sufficient
contacts between the defendant and the forum state. Id.; Carteret Savings
Bank v. Shushan, 954 F.2d 141, 146 (3d Cir. 1992). This is because due
process requires that the defendant have "minimum contacts" in the forum
state and that the exercise of jurisdiction comport with traditional
notions of fair play and substantial justice. Remick v. Manfredy,
238 F.3d 248, 255 (3d Cir. 2001), quoting International Shoe Co. v.
Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). The
Supreme Court has further stated that minimum contacts must have a basis
in some act by which the defendant purposefully avails itself of the
privilege of conducting activities within the forum state, thus invoking
the benefits and protection of its laws. Id., quoting Asahi Metal Indus.
Co., Ltd. v. Superior Court of California, 480 U.S. 102, 109, 107 S.Ct.
1026, 94 L.Ed.2d 92 (1987).
Personal jurisdiction may be either general or specific. A defendant is
subject to general jurisdiction when it has continuous and systematic
contacts with the forum state. General Electric Co. v. Deutz AG,
270 F.3d 144, 150 (3d Cir. 2001), citing Helicopteros Nacionales de
Colombia, S.A. v. Hall, 466 U.S. 408, 414-416, 104 S.Ct. 1868, 80 L.Ed.2d
404 (1984). In contrast, specific jurisdiction is present only if the
plaintiff's cause of action arises out of a defendant's forum-related
activities, such that the defendant should "reasonably anticipate being
haled into court in that forum." Remick, supra, quoting World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d
490 (1980). In other words, specific jurisdiction is established when a
non-resident defendant has purposefully directed his activities at a
resident of the forum and the injury arises from or is related to those
activities. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct.
2174, 85 L.Ed.2d 528 (1985); General Electric, supra. In determining
jurisdiction over a breach of contract claim, the courts must consider
the totality of the circumstances, including the location and character
of the contract negotiations, the terms of the contract, and the parties
actual course of dealing. Remick, 238 F.3d at 256, citing Mellon Bank v.
Farino, 960 F.2d at 1223.
In this case, according to the affidavit of Linda Williams, Defendant's
Director of Information Systems, Defendant is a Delaware corporation with
its only place of business located in Knoxville, Tennessee. Defendant
does not have any offices, manufacturing plants, sales representatives or
any facilities or personnel in Pennsylvania nor is it qualified to do
business as a foreign corporation in Pennsylvania. All communications,
billings, notices and other contacts from Sungard to Defendant were to
its office in Knoxville, Tennessee. Defendant's contacts and
communications to Plaintiff were to its offices in Alphareta, Georgia,
which is the Sungard facility closest to Defendant's operations and where
the Recovery Services Agreement contemplated that the emergency services
contracted for would be provided to Defendant in the event of a
disaster. Given that the contract's terms were negotiated by its
predecessors-in-interest, Defendant has provided no details on the
location and character of the contract negotiations and Plaintiff has
likewise provided no such information.
Plaintiff, for its part, asserts in its brief in opposition to the
defendant's motion to dismiss that specific jurisdiction should be found
to exist here because (1) Defendant "was aware that if it encountered a
computer disaster it might have to use Sungard's disaster recovery
services located within Pennsylvania," (2) Defendant "agreed that the
Agreement would be governed by Pennsylvania law" (in Paragraph D.10), (3)
"pursuant to § D.7 of the Agreement, in the event of a disaster, Fulton
Bellows was to contact Sungard at 1285 Drummers Lane, Wayne,
Pennsylvania, 19087," and (4) "[a]s a direct and proximate result of
Fulton Bellows' failure to remit payments, Sungard incurred economic harm
within Pennsylvania . . . as a result of Fulton Bellows' action outside
this Commonwealth . . ."
While we agree with Plaintiff that there is no basis upon which to find
general jurisdiction, we find that its argument as to specific
jurisdiction is fatally flawed in that Plaintiff has adduced no evidence
to support its assertions.*fn3 This fact notwithstanding, however, we
further find that, even if proven, Plaintiff's assertions are not
sufficient to withstand the Defendant's motion. For one, there is a clear
distinction between a choice of law clause and one delineating a choice
of forum. While the defendant obviously agreed that the terms and
conditions of the Recovery Services Agreement were to be construed in
accordance with the laws of Pennsylvania and agreed that notification of
any computer "disaster" was to be made to Plaintiff's corporate
headquarters in Wayne, PA, we cannot see how such an agreement equates to
consenting to having any disputes which may arise thereunder litigated
within the territorial boundaries of Pennsylvania.
Finally, while Defendant may indeed have foreseen that its cancellation
of the Recovery Services Agreement would cause economic harm to the
plaintiff in Pennsylvania, we cannot find that this very minimal contact,
without more and despite Pennsylvania's strong interest in providing a
forum for their injured residents, is sufficient to justify the
imposition of in personam jurisdiction over this defendant. See, Elbeco,
Inc. v. Estrella de Plato Corp., 989 F. Supp. ...