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Cintron Beverage Group, Llp v. Nemr Aoun D/B/A Garden Beverages


July 26, 2011


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


Plaintiff Cintron Beverage Group LLC ("Cintron") and movant Garden Food Distributor, Inc ("GFDI") entered into an oral distribution agreement under which GFDI would distribute beverages produced by Cintron. For approximately two years, Cintron sent beverage products to GFDI, and GFDI distributed those products in Michigan, Illinois and Ohio. GFDI remitted payment to Cintron's Philadelphia headquarters. When the Defendants failed to make payments owed, Cintron brought this action for breach of contract and unjust enrichment. Now before the Court is GFDI's Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), asserting lack of personal jurisdiction. *fn1 For the reasons below, the Court finds that GFDI is not subject to the jurisdiction of this Court.


Plaintiff Cintron is a Delaware limited liability company with its headquarters in Philadelphia, Pennsylvania. *fn2 Cintron manufactures and distributes various beverage products, including energy drinks, fruit drinks, and teas, through a world-wide network of independent distributors. *fn3 Defendant GFDI is a Michigan corporation, with its principal place of business in Dearborn, Michigan, engaged in the business of purchasing and distributing beverages in Michigan and Ohio. *fn4 GFDI has no real estate, personal property, assets, offices, employees, agents, bank accounts, business addresses or phone listings in Pennsylvania, nor does GFDI advertise, sell or distribute any product or render any services in Pennsylvania. *fn5

In 2007 or 2008, a Cintron representative contacted GFDI to inquire whether GFDI would be interested in distributing Cintron manufactured beverages in southwest Michigan and Toledo Ohio. *fn6 Cintron and GFDI entered into an oral distribution agreement, but did not reduce the contract to writing and had no agreement whereby GFDI consented to subject itself to the jurisdiction of any court in Pennsylvania. *fn7 For approximately two years, the parties maintained a business relationship in which GFDI ordered Cintron beverage products and Cintron delivered those products to GFDI in Dearborn, Michigan for resale in southeast Michigan and Toledo, Ohio. *fn8 GFDI did not request that the Cintron product it obtained come from any particular geographical location or source. *fn9

For each order delivered to GFDI, Cintron sent an invoice directing GFDI to submit payment to Cintron headquarters in Pennsylvania within 30 days of receipt. *fn10 Over two years, GFDI submitted payments to Cintron in Pennsylvania totaling approximately $303,332.24. *fn11

But, according to Cintron, GFDI ordered, received, accepted, and resold Cintron product totaling $206,650.20 without making payments, causing financial harm to Cintron in Pennsylvania. *fn12

Therefore, Cintron filed a breach of contract complaint in this Court on July 13, 2010.

On August 20, 2010, GFDI answered the complaint and asserted counterclaims, raising lack of personal jurisdiction as its first affirmative defense, and on October 18, 2010, GFDI filed a motion to dismiss for lack of in personam jurisdiction. *fn13 In support of that Motion, the president of GFDI attests that Cintron personnel and sales representatives visited the GFDI offices and sales representatives in Michigan on multiple occasions, but no employee or officer of GFDI has ever been to Pennsylvania to conduct business with Cintron. *fn14 Cintron disputes the latter averment, alleging that on July 14, 2008, GFDI sent an employee to Pennsylvania to "deliver a payment of $70,829.55, and to discuss the reconciliation of the outstanding invoices." *fn15 Cintron provides no other information about the alleged visit to Pennsylvania.


On a motion to dismiss for lack of personal jurisdiction, a court is required to accept a plaintiff's allegations as true and construe disputed facts in favor of the plaintiff. *fn16 Once a defendant raises a jurisdictional defense, the plaintiff has the burden of proving that jurisdiction is proper by affidavits or other competent evidence. *fn17 Plaintiff need only establish a prima facie case of personal jurisdiction, *fn18 and meets this burden by stating the bases for personal jurisdiction with reasonable particularity. *fn19 "Factual disputes created by the affidavits, documents, and depositions submitted for the court's consideration are resolved in favor of the non-moving party." *fn20 Federal courts sitting in diversity may exercise personal jurisdiction over nonresident defendants to the extent provided by the law of the state in which the federal court sits. *fn21

Pennsylvania's Long-Arm Statute allows personal jurisdiction over nonresident defendants to the constitutional limits of the due process clause of the Fourteenth Amendment. *fn22 Under this standard, nonresident defendants are required to have minimum contacts with Pennsylvania so as not to offend traditional notions of fair play and substantial justice. *fn23 There are two types of personal jurisdiction: general and specific. *fn24



There is no basis for general personal jurisdiction over GFDI in Pennsylvania. General jurisdiction exists when a defendant has systematic and continuous contacts with the forum state. *fn25 In the present case, Cintron did not allege that GFDI had any continuous or systematic contacts with Pennsylvania which could subject it to general personal jurisdiction here.


Specific jurisdiction exists when the claim arises from or relates to contacts purposefully directed at the forum state. *fn26 The Court may preside over a case "if it is satisfied that the relationship among the defendant, the cause of action, and the forum falls within the 'minimum contacts' framework first announced in International Shoe Co. v. Washington, and later refined by the abundant progeny of that landmark case." *fn27 To establish specific jurisdiction, a plaintiff must show that: (1) the defendant purposely directed activities at the forum; (2) the litigation arose out of or related to one or more of these activities; and (3) jurisdiction of the court comports with fair play and substantial justice. *fn28

A. Activities Directed at the Forum

To establish specific jurisdiction, the court must first determine whether the defendant purposely directed activities at the forum. *fn29 Specifically, the defendant must "purposefully avail[] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." *fn30 Merely entering into a contract with a resident of a forum is not sufficient to establish personal jurisdiction over the defendant. *fn31 When analyzing minimum contacts in a contract case, courts consider the totality of the circumstances, including which party initiated the business relationship, the location and character of the contract negotiations, the terms of the contract, the contemplated future consequences, and the parties' actual course of dealing. *fn32 Given modern commercial business arrangements, physical presence in the forum by a nonresident defendant is no longer required to establish minimum contacts. *fn33

Therefore, mail and wire communications sent by a nonresident defendant into the forum can constitute the purposeful contacts required to establish personal jurisdiction. *fn34 Generally, however, despite the fact that physical entrance is not required, courts in the Third Circuit often emphasize visits or some physical presence in the forum when finding specific personal jurisdiction. *fn35

Negotiation of the Contract. When examining specific jurisdiction over contract claims, courts consider whether the nonresident defendant solicited, negotiated, or executed the contract in the forum state. *fn36 The court also examines whether the contract contained a forum selection clause, *fn37 and whether the nonresident defendant knew or should have known that it was dealing with a company located in the forum state. *fn38

Here, GFDI did not solicit the distribution agreement with Cintron; instead, Cintron approached GFDI to solicit GFDI's distribution services in Michigan. According to the allegations before the Court, the parties entered into an oral agreement, which was finalized without GFDI sending any representative or agent to Pennsylvania. Furthermore, Cintron has not alleged or put forth any evidence suggesting that GFDI reached out to Cintron in Pennsylvania by phone, fax, e-mail or any other method to negotiate the terms of the agreement. *fn39 The oral agreement did not include an agreement on a forum in which disputes would be litigated.

Performance of the Contract . Payment into the forum state is one indicator of purposeful availment, *fn40 and Cintron alleges that on several occasions GFDI sent payment to Cintron in Pennsylvania, as Cintron's invoices directed. In Mellon Bank East (PSFS), Nat'l Ass'n v. Farino, *fn41 the Third Circuit found purposeful availment where the defendants were aware they were dealing with a Pennsylvania bank because they signed agreements representing that the plaintiff was a Pennsylvania entity and sent payments and correspondence to the plaintiff's Philadelphia address.

Here, each Cintron invoice directed GFDI to submit payment to Cintron headquarters in Pennsylvania, and GFDI is alleged to have made over $300,000 worth of payments to Cintron. Cintron argues that GFDI was aware that its failure to remit certain payments would cause harmful consequences to Cintron in Pennsylvania. However, Cintron unilaterally selected to receive payments in Pennsylvania, and does not allege that GFDI benefitted in any way from submitting payments to Pennsylvania rather than to another location. *fn42 The Court cannot find, particularly in the absence of a long-term written agreement, that merely remitting payment to a location unilaterally selected by Cintron in response to invoices is sufficient to confer jurisdiction. Purchasing goods simply is not enough to subject a buyer to jurisdiction in the state where the seller has its headquarters. The Court does not find that GFDI availed itself of the privileges of the forum simply by mailing payments to Pennsylvania in satisfaction of invoices.

GFDI's Visit to the Forum . As the Third Circuit made clear in Carteret Savings Bank v. Shushan, *fn43 a court can find sufficient minimum contacts to support personal jurisdiction over a nonresident defendant where the defendant makes a single visit to the forum. *fn44 The sworn affidavit of a Cintron representative asserts that in July 2008, GFDI sent an employee to Pennsylvania to deliver a payment to Cintron and discuss the reconciliation of outstanding invoices. Cintron argues that GFDI purposely directed activities at Pennsylvania by sending an employee to Cintron headquarters in Pennsylvania for this purpose. Although GFDI attests that this visit to Pennsylvania never occurred, factual disputes created by the affidavits submitted for the court's consideration are resolved in favor of the non-moving party, *fn45 thus this factual dispute is resolved in favor of Cintron.

However, even accepting Cintron's allegation as true, GFDI's single visit to Pennsylvania is not sufficient for jurisdiction in this case. Here, the alleged single visit to the forum occurred only after Cintron notified GFDI that GFDI was in breach of their payment agreement. Plaintiff alleges that GFDI sent a representative to Pennsylvania to make a partial payment and to discuss the remaining balance owed. In Devault of Delaware, Inc. v. Omaha Public Power Dist. *fn46 the court held that a defendant who visits the forum in an attempt to resolve a contractual dispute should not be penalized by a holding that such a contact is sufficient to confer jurisdiction, where absent such conduct aimed at resolving a dispute the defendant would not be subject to the jurisdiction of the forum. The Devault court considered the visit to resolve the dispute as one factor in the analysis, but considered it only an "attenuated affiliation" with the forum state. *fn47

B. Litigation Arose From or is Related to One or More Activities Directed to the Forum

The second part of the inquiry into whether specific jurisdiction exists is to determine whether the litigation arose out of or is related to one or more of the activities that the defendant purposely directed at the forum. *fn48 Cintron alleges that GFDI ordered, received, accepted, and resold Cintron products totaling $206,650.20 without making payment, causing financial harm to Cintron in Pennsylvania. Because the breach of a contractual obligation to remit payment occurs, and the claim arises, in the state where the obligor fails to remit payments and not in the state of non-receipt by the obligee, *fn49 the claim in the present case arose in Michigan where GFDI failed to remit payment to Cintron in Pennsylvania. Thus, the present litigation did not arise out of the activities GFDI directed toward Pennsylvania.

The Court next turns to the relatedness inquiry. The Third Circuit has not adopted a bright-line standard for approaching the relatedness requirement, *fn50 and indeed the Supreme Court has warned against such tests. *fn51 However in analyzing relatedness, the Third Circuit has articulated guiding standards. As a starting point, the Court must examine whether the claim would have arisen in the absence of the GFDI's contacts (but-for causation). *fn52 "In contract cases, courts should inquire whether the defendants's contacts with the forum were instrumental in either the formation of the contract or its breach." *fn53 If it finds but-for causation, the Court must examine whether GFDI received benefits and protection from the forum such that it could reasonably foresee litigation in this forum. *fn54

Here, the Court finds that neither the contract's formation nor its breach was related to any activities GFDI directed to Pennsylvania. The verbal contract was formed when Cintron reached out to GFDI in Michigan and proposed a distribution deal. The breach of contract occurred when GFDI received Plaintiff's products in Michigan and failed to remit payment for them from Michigan. No activities GFDI directed at the forum were a but-for cause of Cintron's claims. Accordingly, the Court does not find that the litigation arose out of or was related to the activities that GFDI directed at Pennsylvania.

C. "Fair Play and Substantial Justice"

Finally, the Court must examine whether jurisdiction of the Court would comport with fair play and substantial justice. The Supreme Court identified the following factors to consider in analyzing fairness: "the burden on the defendant, the forum State's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, the interstate judicial system's interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies." *fn55

GFDI has not argued that jurisdiction would violate substantial justice, having rested solely on allegations that there were not minimum contacts. Therefore, GFDI did not allege any undue burden it would suffer by litigating in Pennsylvania. Pennsylvania courts have a strong interest in providing a forum for a Pennsylvania resident who is injured in the Commonwealth and in having the responsible defendants accountable for their actions in Pennsylvania. *fn56 Cintron clearly would benefit from the convenience of litigating their claims in this forum. Because the maintenance of this suit would not offend Due Process under the Constitution , the Court finds that jurisdiction of the Court comports with fair play and substantial justice.


Although subjecting GFDI to the jurisdiction of this Court would comport with fair play and substantial justice, the Court cannot, on the record before it, find that GFDI purposely directed sufficient activities at the forum to have purposefully availed itself of the privilege of conducting activities within the forum. Furthermore, based on the law of this forum, the Court cannot find that the litigation arose out of or was related to one or more of the activities that the defendant purposely directed at the forum. Although this is a close case, the Court finds that Cintron has not satisfied its burden to establish a basis for specific personal jurisdiction over non-resident GFDI in this case. Accordingly, the Court will grant GFDI's Motion to Dismiss for Lack of In Personam Jurisdiction.

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