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Newman's Own Organics-The Second Generation v. Fingerman

United States District Court, E.D. Pennsylvania

December 12, 2014

NEWMAN'S OWN ORGANICS -THE SECOND GENERATION, Plaintiff,
v.
DONALD FINGERMAN, Defendant and Third Party Plaintiff,
v.
GERALD LITWIN, Third Party Defendant.

MEMORANDUM OPINION

JEFFREY L. SCHMEHL, District Judge.

Before the Court is the Motion to Dismiss Pursuant to Fed.R.Civ. P. 12(b)(2) and 12(b)(6), or in the Alternative, for a More Definite Statement Pursuant to Fed.R.Civ.P. 12(e) filed by Third Party Defendant Gerald Litwin ("Litwin") (Docket No. 6). Donald Fingerman, Defendant and Third Party Plaintiff ("Fingerman"), has opposed the motion, and Litwin has filed a reply. Having read the parties' briefing, I will grant Litwin's Motion to Dismiss due to lack of personal jurisdiction. Accordingly, Litwin is dismissed from this action.

I. BACKGROUND

On February 20, 2014, Plaintiff filed the Complaint in this matter against Defendant Donald Fingerman in the Court of Common Pleas of Lehigh County, alleging breach of contract with respect to several promissory notes and a personal guarantee. (Docket No. 1). On April 30, 2014, a complaint to join Litwin as an additional defendant was filed by Fingerman in the Court of Common Pleas, alleging that Litwin was liable to Fingerman or liable over to Plaintiff for the promissory notes, which Litwin had advised Fingerman to sign. (Id.) On June 5, 2014, Litwin removed this matter to federal court, then filed this Motion to Dismiss on July 7, 2014.

Plaintiff is a California corporation engaged in the business of selling and distributing organic human and pet food. (Compl., ¶ 1.) Fingerman and Litwin were two of the officers, shareholders and directors of Chenango Valley Pet Foods, Inc., a New York corporation that packages and distributes pet food. (Compl. to Join Add'l Def., ¶¶ 3, 5.) The Complaint alleges that on September 19, 2011, Fingerman, on behalf of Chenango Valley, executed and delivered three Promissory Notes to Plaintiff that totaled a principal amount of $1, 522, 000. (Compl., ¶ 5.) Fingerman also executed a Personal Guaranty for the current and future obligations of Chenango Valley to Plaintiff. (Compl., ¶ 6.) In return, Plaintiff advanced $803, 098.00 to Chenango Valley. (Compl., ¶ 7.) Litwin, an attorney, reviewed the promissory notes and guarantee for Fingerman and advised Fingerman to sign the documents. (Compl. to Join Add'l Def., ¶¶ 8-9.)

Plaintiff claims that Fingerman has defaulted on the Notes and Guarantee by failing to make payments to Plaintiff, resulting in an amount due and owing to Plaintiff from Fingerman of $2, 325, 098.00. (Compl., ¶ 10-11.)

II. DISCUSSION

Litwin filed the instant Motion to Dismiss, alleging that, as a New Jersey resident, he does not have sufficient minimum contacts with Pennsylvania to allow him to be sued in this Court. For the reasons set forth below, I agree that Litwin lacks sufficient minimum contacts with Pennsylvania that he could anticipate being sued in this venue. Accordingly, I grant Litwin's Motion and dismiss him from this matter.

A. Jurisdiction

Rule 4(e) of the Federal Rules of Civil Procedure grants district courts personal jurisdiction over non-resident defendants to the extent permitted by the law of the state in which the district court sits. See Fed.R.Civ.P. 4(e). In Pennsylvania, the applicable long-arm statute authorizes personal jurisdiction over non-resident defendants to be exercised to the "fullest extent allowed under the Constitution of the United States." 42 Pa. C.S.A. § 5322(b). A district court has personal jurisdiction over a non-resident so long as the 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." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). Although a third-party defendant has the initial burden of raising the defense of lack of personal jurisdiction, once such a defense is raised, the burden shifts to the third-party plaintiff to demonstrate facts that suffice to support an exercise of personal jurisdiction. Brown & Brown, Inc. v. Cola, 745 F.Supp.2d 588, 602 (E.D. Pa. 2010), citing Provident Nat. Bank v. Cal. Fed. Sav. & Loan Ass'n., 819 F.2d 434, 437 (3d Cir.1987); Cumberland Truck Equip. Co. v. Detroit Diesel Corp., 401 F.Supp.2d 415, 418 (E.D.Pa.2005). A third-party plaintiff may meet this burden through affidavits or other competent evidence that show sufficient contacts with the forum state to establish personal jurisdiction. De Lage Landen Fin. Servs., Inc. v. Rasa Floors, LP, No. 08-0533, 2008 WL 4822033 (E.D.Pa. Nov. 4, 2008).

There are two types of personal jurisdiction: general and specific. Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414 (1984). General jurisdiction requires the defendant to have maintained "continuous and systematic" contacts with the forum state. Reliance Steel Products Co. v. Watson, Ess, Marshall & Enggas, 675 F.2d 587, 588 (3d Cir. 1982). In order for a district court to have specific jurisdiction over a defendant, the defendant's contacts with the forum state must be such that defendant "should reasonably anticipate being haled into court there." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980). In order for a district court to properly exercise specific jurisdiction, the plaintiff must satisfy a two-part test. First, the plaintiff must show that the defendant has constitutionally sufficient "minimum contacts" with the forum. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). Second, the court must determine whether the exercise of jurisdiction "would comport with traditional notions of fair play and substantial justice.'" See Vetrotex Certainteed Corp. v. Consolidated Fiber Glass Products Co., 75 F.3d 147, 150-51 (3d Cir. 1996) (citing International Shoe Co. v. Washington, 326 U.S. 310 (1945)). To satisfy the first prong of the test and show sufficient minimum contacts with the forum state, Plaintiff must show that Defendants have "purposefully directed [their] activities" at the forum. See Burger King, 471 U.S. at 472.

1. Fingerman's Failure to Provide Competent Evidence

As discussed above, once Litwin raised the defense of lack of personal jurisdiction, the burden then shifted to Fingerman to demonstrate facts to support an exercise of personal jurisdiction over Litwin. See Brown & Brown, Inc. v. Cola, 745 F.Supp.2d at 602. Fingerman may meet this burden through affidavits or other competent evidence that show sufficient contacts with the forum state to establish personal jurisdiction.

In the instant matter, Fingerman has failed to present the court with an affidavit or other competent evidence that sets forth details as to Litwin's contacts with Pennsylvania. The only evidence presented in this matter is an affidavit from Litwin, not Fingerman. Fingerman has provided this court with absolutely no evidence to prove that Litwin had sufficient contacts with Pennsylvania so as to establish personal jurisdiction over Litwin. Fingerman's brief in opposition to Litwin's Motion to Dismiss contains statements and assertions by Fingerman's counsel as to Litwin's contacts with this forum, but these representations are insufficient to meet Fingerman's burden to establish that Litwin had sufficient contacts with Pennsylvania that make it appropriate for ...


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