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ADM Milling Co. v. Gold Crust Baking Co.

June 30, 2009


The opinion of the court was delivered by: Chief Judge Kane


On February 17, 2009, Plaintiff ADM Milling Company ("ADM") initially filed this action against Defendant Gold Crust Baking Company ("Gold Crust") in the Court of Common Pleas for Cumberland County, Pennsylvania, with service upon Defendant completed February 23. (Doc. No. 1.) Gold Crust then removed the action to this Court. (Id.) Gold Crust now moves to dismiss the case under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction, or in the alternative, to dismiss or to transfer the case for improper venue under 28 U.S.C. § 1406 or 28 U.S.C. § 1404. For the reasons that follow, the Court finds that the case shall be dismissed for lack of personal jurisdiction.


On or about February 28, 2008, Plaintiff ADM, a Minnesota corporation with its principal place of business in Illinois and an office in Camp Hill, Pennsylvania, and Defendant Gold Crust, incorporated and located in Virginia, entered into a contract for shipment of flour. (Reedus Aff. ¶ 2.) A Gold Crust representative initiated contract negotiations by contacting ADM's Illinois facility, and ADM responded to the solicitation by having Sales Manager Ray Viggiano, working out of offices in Camp Hill, Pennsylvania and Rumson, New Jersey, call and visit Gold Crust's Virginia office. (Reedus Aff. ¶¶ 3-5; Christou Aff. ¶ 3.) Under the contract, 38,000 cwts (centum weight)*fn1 of Dominator-blend flour was to be delivered during the months March through September F.O.B.*fn2 from ADM's Pennsylvania facility to Gold Crust's facility in Alexandria, Virginia. (Doc. Nos. 1-2 ¶ 3; 3-2 at 8-10.) Although the contract was prepared in ADM's Pennsylvania office and "all contracts, order confirmation, billings and all other accounting functions were generated from ADM's Camp Hill location," the contract utilized ADM's Illinois address, Gold Crust executed the contract in Virginia, and Gold Crust was instructed to remit payment on the contract to Atlanta, Georgia. (Doc. Nos. 6-3 ¶¶ 6, 8; 3-2 at 16.)

On March 19, 2008, ADM and Gold Crust modified the contract to allow for delivery of a lower-priced blend of flour, Top King, to be delivered to Gold Crust. (Doc. No. 1-2 ¶ 4.) Gold Crust cancelled the contract prior to completion of payments, and according to ADM, owes an outstanding balance of $631,257.97. (Doc. Nos. 1-2 ¶ 7; 3-2 at 13.) ADM brings suit, via Gold Crust's removal, in the Middle District of Pennsylvania to recover the balance outstanding on the contract. (Doc. No. 1.) In the motion currently before the Court, Gold Crust seeks dismissal of the suit for lack of personal jurisdiction and alternatively seeks dismissal or transfer on the basis of improper venue.


Federal Rule of Civil Procedure 12(b)(2) provides that a court shall dismiss a complaint for lack of in personam jurisdiction. Fed. R. Civ. P. 12(b)(2). Rule 4(e) of the Federal Rules of Civil Procedure authorizes a court to assert personal jurisdiction over non-state residents to the extent Pennsylvania law allows. Fed R. Civ. P. 4(e). Pennsylvania law, in turn, authorizes personal jurisdiction to the fullest extent the Constitution allows. 42 Pa. Con. Stat. Ann. § 5322(b). Personal jurisdiction may be established via general jurisdiction by showing substantial and continuous contact with the forum state or via specific jurisdiction by showing the existence of sufficient minimum contacts with the forum state from which the pending cause of action arises. The plaintiff has the burden of establishing the existence of personal jurisdiction, but need only make a prima facie case of jurisdiction at this point in the proceedings, which it can sustain through "sworn affidavits or other competent evidence." North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir. 1990); In re Chocolate Confectionary Antitrust Litigation, 602 F. Supp. 2d 538, 556 (M.D. Pa. 2009). Absent a hearing, all of the plaintiff's allegations are taken as true for purposes of the personal jurisdiction analysis, and all factual disputes are drawn in its favor. O'Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312 (3d Cir. 2007).


Gold Crust argues that this Court should dismiss the case because it does not have personal jurisdiction over it. ADM concedes that there is no general jurisdiction, but argues that Gold Crust purposefully availed itself of Pennsylvania's laws and resources, so as to establish specific jurisdiction. (Doc. No. 6 at 5.) In the alternative, Gold Crust argues that venue is improper in Pennsylvania, and the case should be transferred to the Eastern District of Virginia.

ADM contests this as well, arguing that a sufficient part of the transaction occurred in the Middle District of Pennsylvania to establish not only personal jurisdiction, but also venue. The Court begins, as it must, with the jurisdictional issue. Because the Court finds that personal jurisdiction over Gold Crust does not exist, the Court need not consider whether venue is proper.

To establish specific jurisdiction, a court must first determine whether the defendant has purposefully directed "minimum contacts with the state 'such that the defendant should reasonably anticipate being haled into court there.'" North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 690 (3d Cir. 1990) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)). Second, the plaintiff's cause of action must arise from these minimum contacts with the forum state. Marten v. Godwin, 499 F.3d 290 (3d Cir. 2007). Once the first two inquiries have been resolved in the affirmative, the court should ensure that exercising jurisdiction over the defendant "comport[s] with traditional notions of fair play and substantial justice." Vetrotex CertainTeed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 148, 150-51 (3d Cir. 1996).

In evaluating the minimum contacts necessary to establish jurisdiction in the case of a contract between a forum and non-forum resident, the contract itself is not dispositive. Moreover, whether the defendant is physically present in the forum state is not required, so long as the defendant "purposefully avails itself of the privilege of conducting activities within the forum state," thus invoking the benefits and protections of its laws. North Penn Gas Co., 897 F.2d at 690-91 (quoting Hanson v. Denckla, 357 U.S. 235, 253 (1958)).

Third Circuit Court of Appeals precedent dictates use of the following factors to determine whether Gold Crust has sufficient minimum contacts with the forum state to establish specific jurisdiction: 1) the location of the contract negotiations, 2) whether the non-resident solicited business from the forum state, 3) whether the non-resident invoked and received benefits under the laws of the forum state, 4) the contemplated future consequences of the contract, 5) the terms and provisions of the contract, 6) the parties' course of dealing, and 7) the type of goods sold. Remick v. Manfredy, 238 F.3d 248, 253-56 (3d Cir. 2001); Vetrotex, 75 F.3d at 151; Empire ...

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