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Isaac Pardo v. Mecum Auctions

September 17, 2012


The opinion of the court was delivered by: Gene E.K. Pratter, J.


To paraphrase the French writer and critic Roland Barthes in his Mythologies, "La Nouvelle Citroen," some 1960's era cars "are almost the exact equivalent of the great Gothic cathedrals," the "supreme creation of an era, conceived with passion . . . and consumed in image if not in usage by a whole population which appropriates them as a purely magical object." Such may be considered the Corvettes of the 1960's, though for Plaintiff Isaac Pardo some Corvettes are more magical than others.

Mr. Pardo filed suit against Mecum Auctions, Inc. ("Mecum"), National Corvette Restorers Society, Inc. ("NCRS"), and William and Jan Mullis, alleging that he purchased a 1964 Corvette at an auction in St. Charles, Illinois due to the misrepresentations of the defendants. In response, NCRS filed a Motion to Dismiss for Improper Venue and an alternative Motion to Transfer Venue to the Northern District of Illinois. Mecum subsequently filed a Motion to Dismiss for Lack of Personal Jurisdiction, Improper Venue, and Failure to State a Claim. For the following reasons, the Court finds that it lacks personal jurisdiction over Mecum and must grant its motion to dismiss. The Court further finds that venue is improper in the Eastern District of Pennsylvania and will transfer the case to the Northern District of Illinois with respect to the remaining parties.


Mr. Pardo alleges that he traveled from his residence in New York to St. Charles, Illinois, where he attended a Corvette auction organized and operated by Mecum. At the auction, Mr. Pardo placed the high bid and bought a car owned by William and Jan Mullis after viewing a certificate issued by NCRS that described the vehicle as a 1967 black Corvette. Mr. Pardo subsequently discovered that the car was actually a 1964 red Corvette. His complaint asserts that the defendants defrauded him and caused him to purchase the wrong vehicle. The complaint does not allege that any party resides in Pennsylvania, that any of the operative events occurred in Pennsylvania, or that any of the parties has a connection to Pennsylvania.

In responding to Mecum's motion, Mr. Pardo alleges that the company formerly held auctions in Pennsylvania and that he attended those auctions from 2004-2006 and thereby "forged a trust" with Mecum. He also alleges that Mecum advertises in Pennsylvania over the Internet and "most likely" by mail, that Mecum has auctioned motorcycles owned by Pennsylvanians, and that Mecum made a donation to the Flight 93 Memorial located in Pennsylvania. Mr. Pardo does not argue that any of these foregoing facts are connected to the events giving rise to his claims. With respect to NCRS, Mr. Pardo claims that the company has made "no statement that [it] does no business in Pennsylvania." By the same token, Mr. Pardo fails to allege any connection between NCRS and Pennsylvania.


Mecum has moved to dismiss the complaint for lack of personal jurisdiction, improper venue, and failure to state a claim. Federal district courts in Pennsylvania may exercise personal jurisdiction to the fullest extent permitted by the Constitution. See 42 Pa. Cons. Stat. § 5322(b); Marten v. Godwin, 499 F.3d 290, 296 (3d Cir. 2007). However, if a defendant moves to dismiss a complaint for lack of personal jurisdiction, "the plaintiff bears the burden of showing that personal jurisdiction exists." Id. at 295-96. The plaintiff "must sustain its burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence," and "at no point may a plaintiff rely on the bare pleadings alone in order to withstand a defendant's Rule 12(b)(2) motion to dismiss for lack of in personam jurisdiction. Once the motion is made, plaintiff must respond with actual proofs, not mere allegations." Patterson v. FBI, 893 F.2d 595, 603-04 (3d Cir. 1990) (quoting Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 67 n.9 (3d Cir.1984)).

A federal court may exercise either general or specific jurisdiction over a defendant. See GE v. Deutz AG, 270 F.3d 144, 150 (3d Cir. 2001). General jurisdiction requires the plaintiff to "show that the defendant has maintained 'continuous and systematic' contacts" with the forum state. Vetrotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 151 n.3 (3d Cir. 1995) (citation omitted); see also Molnlycke Health Care AB v. Dumex Med. Surgical Prods. Ltd., 64 F. Supp. 2d 448, 451 (E.D. Pa. 1999) ("The Third Circuit and its district courts have typically required a very high showing before exercising general jurisdiction[.]").

Here, Mr. Pardo appears to allege that Mecum has engaged in one type of continuous activity in Pennsylvania by marketing itself over the Internet. However, the Court cannot consider this bare allegation as a basis for exercising personal jurisdiction, because Mr. Pardo has not supported it "through sworn affidavits or other competent evidence." Patterson, 893 F.2d at 603-04. Moreover, a national marketing campaign will not create general jurisdiction in a state encompassed by its advertisements. See Wellness Publ'g v. Barefoot, 128 F. App'x 266, 269 (3d Cir. 2005). Finally, Mr. Pardo has presented no evidence that Mecum has initiated any business contacts in Pennsylvania since 2006, that it derives any revenue from the Commonwealth, that it conducts direct sales here, or that it specifically targets advertising to Pennsylvania's residents. See Weisz v. Farmers & Merchs. Trust Co., No. 11-3050, 2012 U.S. Dist. LEXIS 26258, at *8-9 (E.D. Pa. Feb. 29, 2012) (noting that courts consider these factors in assessing general jurisdiction). Therefore, the Court cannot exercise general jurisdiction over Mecum.

Specific jurisdiction exists if a defendant "purposefully direct[s] [its] activities" at the forum state and the plaintiff's claims "arise out of or relate to" at least one of those activities. See Marten, 499 F.3d at 296.*fn1 A plaintiff cannot meet this second requirement by merely claiming "but-for" causation and arguing that the "claim would not have arisen in the absence of the defendant's contacts" with the forum state. O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 319 (3d Cir. 2007). The Third Circuit has held that "specific jurisdiction requires a closer and more direct causal connection than that provided by the but-for test" because such a test "is vastly overinclusive." Id. at 322-23.

In this case, Mr. Pardo relies entirely on "but-for" causation in arguing that his claims relate to Mecum's activities in Pennsylvania. He alleges that he attended Mecum auctions in Pennsylvania from 2004-2006, that he began to trust Mecum at the auctions, and that the trust he developed contributed to his decision to attend the auction in Illinois five years later. Mr. Pardo provides no other reason regarding why his claims relate to Mecum's Pennsylvania activities. The Third Circuit Court of Appeals has held that plaintiffs cannot rely solely on "but for" causation to meet their burden of demonstrating that specific jurisdiction exists. Id. at 322; see also Rantnetwork, Inc. v. Underwood, No. 11-1283, 2012 U.S. Dist. LEXIS 40693, at *44-45 (M.D. Pa. Mar. 26, 2012) (applying Sandy Lane and refusing to base personal jurisdiction on butfor causation). Therefore, the Court lacks specific jurisdiction over Mecum and must grant its motion.


Venue in this matter is controlled by 28 U.S.C. § 1391. The application of that statute depends, in turn, on the basis (if any) for this Court's exercise of subject matter jurisdiction. If the subject matter jurisdiction of a court is "founded only on diversity of citizenship," then § 1391(a) applies; otherwise, § 1391(b) applies.*fn2 Here, Mr. Pardo's complaint only invokes diversity jurisdiction, id. ...

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