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Henning v. Suarez Corporation Industries

May 4, 2010

EARL HENNING, PLAINTIFF,
v.
SUAREZ CORPORATION INDUSTRIES, INC. (IMPROPERLY PLED AS BIOTEC RESEARCH) DEFENDANT.



The opinion of the court was delivered by: Slomsky, J.

OPINION AND ORDER

I. INTRODUCTION

Before the Court is Defendant's Motion to Dismiss the Complaint Due to Improper Venue or, in the Alternative, to Transfer Venue to the United States District Court for the Middle District of Pennsylvania. (Doc. No. 4). On August 21, 2009, Plaintiff commenced this action in the Philadelphia Court of Common Pleas, alleging product liability claims against Defendant for injuries sustained while using a portable heater purchased from Defendant. (Not. Of Removal, Doc. No. 1, Pl.Compl., Ex. A, at 3-4 (hereinafter "Doc. No. 1-A")). In the Complaint, Plaintiff alleges that his injuries were caused by Defendant's negligence and carelessness, and that Defendant's actions constitute a breach of warranty and a violation of the Restatement of Torts (Second) § 402A & B. (Id., at 4)

On September 19, 2009, Defendant removed this action to this Court on the basis of diversity of citizenship jurisdiction. (Doc. No. 1). On October 14, 2009, Defendant filed the instant Motion to Dismiss or Transfer, and a Brief in Support of the Motion (hereinafter "Doc. No. 4"). On October 27, 2009, Plaintiff filed a Brief Contra Defendant's Motion to Dismiss or in the Alternative to Transfer Venue (hereinafter "Doc. No. 6"). On November 3, 2009, Defendant filed a Reply Brief in Further Support of Motion (hereinafter "Doc. No. 7") with exhibits (Doc. No. 8 and 9).

On November 6, 2009, this Court entered an order permitting jurisdictional discovery. (Doc. No. 11). After four months of discovery, on March 1, 2010, Plaintiff filed a Supplemental Brief Contra Defendant Suarez Corporation's Motion to Dismiss/Transfer Venue (Doc. No. 19). On March 15, 2010, Defendant filed a Supplemental Brief in Further Support of Motion (Doc. No. 20) with exhibits (Doc. No. 21 & 22).

In the instant Motion, Defendant asserts that the Complaint should be dismissed pursuant to Fed. R. Civ. P. 12(b)(3) due to improper venue or, in the alternative, the case should be transferred pursuant to 28 U.S.C. § 1406(a) to the Middle District of Pennsylvania where venue would be proper. For the following reasons, the Court is persuaded that venue is not proper in the Eastern District of Pennsylvania (hereinafter "EDPA") and will transfer the action pursuant to 28 U.S.C. § 1406(a) to the Middle District of Pennsylvania.

II. SUMMARY OF THE FACTS

On January 29, 2009, Plaintiff was seated for several hours in a recliner chair in his home in White Haven, Pennsylvania, with his feet elevated near an EdenPURE Model 1000 Quartz Infrared Portable Heater. (Doc. No. 1-A, at 3-4). Plaintiff alleges that he suffered severe burns on his right foot and toes as a result of exposure to the heat generated by Defendant's defective heater. (Id.) Plaintiff purchased the heater from Defendant by telephone after viewing Defendant's internet advertising. (Id.; Doc. No. 6, at 2) Plaintiff had the heater shipped to his home in White Haven, which is located in Luzerne County, in the Middle District of Pennsylvania. (Doc. No. 1-A, at 3)

Defendant is an Ohio corporation with its principal place of business in Ohio. (Doc. No. 6, at 2). Defendant sells a variety of products through its websites and through authorized sales centers around the country. (Id. at 3). Consumers can also purchase Defendant's products by calling "800 numbers" listed in its television, radio, internet and print advertising. (Doc. No. 19, at 4). Defendant advertises its products on the internet, on television and radio and in the print media. (Id.)

In ruling on the instant Motion, the Court must examine Defendant's contacts with the EDPA, as revealed in the parties' jurisdictional discovery.*fn1 Defendant has shipped over $13 million worth of merchandise to customers within the EDPA over the past three years, which represents 1.7% of Defendant's total sales over that period. (Doc. No. 19, Ex. A, at 6 (hereinafter "Doc. No. 19-A")). Less than two tenths of one percent (0.19%) of these sales to customers in the EDPA were processed over the internet. (Id. at 10). Defendant ships products into the EDPA "daily or on an as needed basis." (Id. at 13). Defendant has authorized 66 independent distributors to sell its products in the EDPA, but does not have data on the gross dollar amount of sales generated by distributors in the EDPA. (Id. at 11-12). Defendant estimates that in the last three years it has received 56,321 telephone calls to its 800 numbers from phones located in the EDPA, and that it has experienced between 23,978 and 181,815 hits to its website(s) from computers located in the EDPA. (Id., at 8). Defendant has also mailed over 1.5 million advertising brochures to customers in the EDPA in the last three years. (Id. at 9).

Defendant has spent over $19 million advertising in national print media distributed in the EDPA, over $400,000 advertising in local newspapers distributed in the EDPA., and over $625,000 on national radio advertising which may have been broadcast over one or more radio stations whose signals could have been received within the EDPA. (Id., at 7, 22, 24). Defendant volunteered that it spent about $50,000 producing a 28.5 minute infomercial that aired on NBC affiliate WCAU in Philadelphia on November 8, 2009, but has not disclosed the amount spent on airing the infomercial. (Id. at 28-29). Plaintiff did not inquire whether the infomercial was made specifically for the EDPA market or whether it was made as part of a national advertising campaign targeting other markets.

Defendant estimates that 2.4% of its national print advertising dollars and 3.7% of its national television advertising dollars are spent in the EDPA, and that less than $750,000 was spent on television and print advertising in the EDPA over the last three years. (Id. at 16). Defendant's print and television advertising in the EDPA is intended to solicit business in the EDPA. (Doc. No. 19, Ex. B, at 6-7 (hereinafter "Doc. No. 19-B")). Defendant solicits business in the EDPA on a daily basis on the internet and on a monthly basis through television and print media advertising. (Id.)

III. MOTION TO DISMISS FOR IMPROPER VENUE STANDARD

Federal Rule of Civil Procedure 12(b)(3) provides that a motion to dismiss may be made on the basis of improper venue. In the Third Circuit, the burden of demonstrating improper venue is placed on the defendant. Manning v. Flannery, 2010 U.S. Dist. LEXIS 1091, *9 (E.D. Pa. 2010). In considering a motion to dismiss for improper venue, the court must generally accept as true the allegations in the pleadings, and must draw all reasonable inferences and resolve all factual conflicts in the plaintiff's favor. Id. at *9-10; see Myers v. Am. Dental Assoc., 695 F.2d 716, 724-25 (3d Cir. 1982) (establishing that the burden of proof of venue is on the defendant); Fellner ex. rel. Estate of Fellner v. Philadelpia Toboggan Coasters, Inc., 2005 U.S. Dist. LEXIS 23839, *4 (E.D. Pa. 2005) (citing Myers). The parties may submit affidavits in support of their positions, and may stipulate as to certain facts. Manning, 2010 U.S. Dist. LEXIS 1091, at *10 (citing Heft v. AAI Corp., 355 F. Supp. 2d 757, 762 (M.D. Pa. 2005)); Fellner, 2005 U.S. Dist. LEXIS 23839, at *4 ("The court may examine facts outside the complaint to determine proper venue.").*fn2 However, even when the court considers affidavits and other evidence outside the pleadings, "the plaintiff is entitled to rely on the allegations of the complaint absent evidentiary challenge," and the court must still resolve all factual conflicts and draw all reasonable inferences in the plaintiff's favor. Manning, 2010 U.S. Dist. LEXIS 1091, at *10 (citing Heft v. AAI Corp., 355 F. Supp. 2d at 762; ProModel Corp. v. Pierce Story, 2007 U.S. Dist. LEXIS 85567, *1 (E.D. Pa. 2007)).

IV. DISCUSSION

A. Venue

Title 28 U.S.C. § 1406(a) provides that, "[t]he district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss or, if it be in the interest of justice, transfer such case to any district, or division in which it could have been brought." To determine proper venue, the Court must look to the relevant venue statute. Because this case is premised on diversity jurisdiction, the relevant statute is 28 U.S.C. § 1391(a), which provides:

A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.

Plaintiff concedes that a substantial part of the events giving rise to the claim did not occur in the EDPA. (Doc. No. 6, at 5-6 (citing only to 28 U.S.C. § 1391(a)(1) as a basis for venue)). Rather, Plaintiff and Defendant agree that the events occurred in the Middle District of Pennsylvania. (Id.; Doc. No. 4, at 5). Accordingly, § 1391(a)(2) cannot serve as a basis for venue in the EDPA, but does serve as a basis for venue in the Middle District of Pennsylvania. Moreover, since there is a district in which the action may otherwise be brought, § 1391(a)(3) does not apply in this case.

Therefore, in order for the EDPA to be a proper venue, the Court must find that Defendant "resides" in this district as required by ยง 1391(a)(1). "Residence," for purposes of venue of a corporate ...


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