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Olympia Steel Building Systems Corp v. General Steel Domestic Sales

April 24, 2007

OLYMPIA STEEL BUILDING SYSTEMS CORP, ET AL. PLAINTIFFS,
v.
GENERAL STEEL DOMESTIC SALES, LLC D/B/A GENERAL STEEL ORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ambrose, Chief District Judge.

OPINION and ORDER of COURT SYNOPSIS

Competitors in the steel frame building market have been involved in litigation in at least one other jurisdiction. Here, competitors allege that the others have defamed them and competed unfairly. They have asserted a variety of claims. The Defendant competitors seek the dismissal of the action or, in the alternative, the transfer of the case. They contend that this Court lacks personal jurisdiction over them and that, in the alternative, venue in this jurisdiction is neither proper nor convenient. After careful consideration, and because I find no basis upon which to exercise personal jurisdiction over the Defendants, the Motion to Dismiss is granted.*fn1

OPINION

Plaintiffs Olympia Steel Building Systems Corp. ("Olympia") and Universal Steel Buildings Corporation ("Universal") are Pennsylvania corporations, with their principal places of business located in McKees Rocks, Pennsylvania. Olympia is the registrant, owner, licensee and original user of the federally registered OLYMPIA STEEL BUILDINGS trademark. Universal sells pre-engineered, rigid steel frame buildings, building systems and products. Universal currently uses, and is the sole licensee of, the OLYMPIA STEEL BUILDINGS trademark.

Olympia and Universal compete in the steel building market with Defendant General Steel Domestic Sales, LLC ("General Steel"). General Steel is a Colorado limited liability company. Defendant Jeffrey Knight, a Colorado resident, is the sole member of General Steel. Olympia and Universal allege that Knight is the alter ego of General Steel and they seek to pierce the corporate veil in this regard. Defendant Anthem Steel is also a competitor in the steel building market. It is a Delaware limited liability company whose principal place of business is located in Colorado.*fn2

Olympia and Universal contend that the Defendants have engaged in defamatory sales techniques, which disparaged Olympia during sales calls. They commenced this action in the Court of Common Pleas of Allegheny County, Pennsylvania. They request and / or have asserted claims of: defamation; commercial disparagement; interference with prospective contractual relations; a permanent injunction; a preliminary injunction; "enterprise liability / piercing the corporate veil"; and unfair competition and false advertising under the Lanham Act, 15 U.S.C. § 1125(a). The Defendants subsequently removed the action to this Court pursuant to 28 U.S.C. § 1331 and § 1332(a).

The Defendants then filed a Motion to Dismiss, Or, In the Alternative, To Transfer Venue. See Docket No. [5]. The Defendants seek dismissal for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2); for improper venue under Federal Rule of Civil Procedure 12(b)(3) and under 28 U.S.C. §1406(a); and under the doctrine of forum non conveniens. In the alternative, the Defendants request a transfer of this action to the U.S. District Court for the District of Colorado pursuant to 28 U.S.C. § 1404(a) and § 1406(a). At Olympia's and Universal's request, the parties have engaged in discovery on jurisdictional matters and the Motion is now ripe for disposition.

ANALYSIS

The Complaint raises both a federal and state law claims. The federal claim, asserted under the Lanham Act, does not provide for national service of process. Accordingly, personal jurisdiction for all claims is determined under Pennsylvania's long-arm statute. See Rubin v. The City of New York, Civ. No. 6-6524, 2007 WL 950088 at * 1 (S.D. N.Y. March 29, 2007). Pennsylvania's long-arm statute permits a district court sitting in Pennsylvania to exercise personal jurisdiction over non-resident defendants "to the fullest extent allowed under the Constitution of the United States." See 42 Pa. Cons. Stat. Ann. § 5322(b).

The Third Circuit Court of Appeals has explained that:

[t]he Due Process Clause of the Fourteenth Amendment guarantees in personam jurisdiction may only be asserted over a nonresident defendant corporation if that defendant has "certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." international Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (19450 (quotation omitted). In assessing personal jurisdiction, the court must resolve the question based on the circumstances the particular case presents. Burger King v. Rudzewicz, 471 U.S. 462, 485, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985).

A court may exercise personal jurisdiction over a defendant if the defendant has specific or general contacts with the forum. Specific jurisdiction is appropriate only if the cause of action is related to or arises out of the defendant's forum-related activities, so that it should reasonably expect to be haled into court. Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prod. Co., 75 F.3d 147, 151 (3d Cir. 1996); Helicopteros Nacionales de Columbia S.A. v. Hall, 466 U.S. 408, 414 n. 8, 104 S.Ct. 1868, 80 L.Ed.2d 404. The defendant must have "purposefully directed his activities at the residents of the forum" and the litigation must have resulted from the alleged injuries that "'arise out of or relate [] to those activities.'" BP Chem. Ltd. v. Formosa Chem. & Fibre Corp., 229 F.3d 254, 259 (3d Cir. 2000) (quoting Burger King, 471 U.S. at 472, 105 S.Ct. 2174). This determination is both claim-specific and defendant-specific. See Remick v. Manfredy, 238 F.3d 248, 255-56 (3d Cir. 2001); Rusk v. Savchuk, 444 U.S. 320, 332, 100 S.Ct. 571, 62 L.Ed.2d 516 (1980).

If the cause of action does not "arise out of" the defendant foreign corporation's activities, a court may assert general jurisdiction if the corporation has "continuous and systematic" contacts with the forum state. 466 U.S. at 414-15, 104 S.Ct. 1868. The standard for evaluating whether minimum contacts satisfy the test for general jurisdiction is more stringent than the test applied to questions of specific jurisdiction. See Noonan v. Winston Co., 135 F.3d 85, 93 (1st Cir. 1998).

See Saudi v. Acomarit Maritimes Services, S.A., 114 Fed. Appx. 449, 452-53 (3d Cir. 2004). Here, Olympia and Universal contend that both specific and general jurisdiction exist over the ...


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