United States District Court, M.D. Pennsylvania
COLONY NATIONAL INSURANCE CO. and AMERICAN HOME ASSURANCE CO., Plaintiffs,
DeANGELO BROTHERS, INC. and UNION PACIFIC RAilROAD CO., Defendants.
ROBER D. MARIANI, District Judge.
Presently before the Court is a Renewed Motion to Dismiss for Lack of Personal Jurisdiction (Doc. 69), filed by Defendant Union Pacific Railroad Company in this declaratory judgment action. For the reasons discussed below, the Court will grant the Motion.
II. Factual Background and Procedural History
The alleged factual background of this case is laid out in detail in the Court's Memorandum Opinion denying Defendant DeAngelo Brothers' Motion to Dismiss or to Drop a Party ("the DeAngelo Opinion"). ( See Mem. Op., Mar. 21, 2014, Doc. 53, at 1-6.) That discussion is incorporated herein. By way of summary, the case stems from the settlement of a lawsuit arising out of a fatal accident in which a Union Pacific Railroad train struck a car containing several passengers at a Union Pacific grade crossing in Oklahoma ("the Oklahoma action"). Defendant DeAngelo Brothers allegedly contracted with Union Pacific to perform certain vegetation control services at the grade crossing in question and, as part of that contract, agreed to indemnify Union Pacific for liability arising out of injuries and deaths that DeAngelo (but not Union Pacific) caused. To this end, it procured commercial general liability insurance from Plaintiff American Home Assurance Company and commercial liability umbrella insurance from Plaintiff Colony National Insurance Company. After the accident, certain survivors filed the Oklahoma action against Union Pacific. Union Pacific ultimately settled this Oklahoma action, in connection with which it attempted to receive indemnification from Colony. Colony, however, refused, arguing that (1) Union Pacific and not DeAngelo was most at fault for the collision, and (2) Union Pacific did not properly cooperate with Colony in the investigation or settlement of the case. Colony therefore brought the instant declaratory judgment action against Union Pacific and DeAngelo in the Middle District of Pennsylvania ("the Pennsylvania action"), in order to specify the respective rights of the parties. American Home later intervened as a Plaintiff. A related case, involving the same four parties but initiated by Union Pacific against the other three as defendants, was filed shortly thereafter in the District of Nebraska ("the Nebraska action"). The District Court stayed the Nebraska action pending our resolution of the instant Motion.
DeAngelo Brothers and Union Pacific both filed Motions to Dismiss the Pennsylvania action. ( See Docs. 7 (DeAngelo); 15 (Union Pacific).) DeAngelo's Motion argued that it was not a proper party to this action, because the declaratory judgment action only implicates Colony and Union Pacific's contractual rights with respect to each other, and do not implicate DeAngelo's rights with respect to either. This Court nonetheless found that a justiciable controversy between DeAngelo and the Plaintiffs existed, because our construction of the terms of the insurance contract between Colony and Union Pacific would have a direct impact on DeAngelo's rights in the Nebraska action, which would resume against DeAngelo if the Court were to drop DeAngelo as a party from this case. ( See Doc. 53 at 12-17.) It therefore denied DeAngelo's Motion.
Union Pacific's Motion to Dismiss challenged personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2). As discussed in the Court's Opinion ("the Union Pacific Opinion" or "the original Opinion"), Union Pacific is incorporated in Delaware with a primary place of business in Nebraska. (Mem. Op., Mar. 28, 2014, Doc. 55, at 2.) Union Pacific's briefs further argued that it
has no offices in Pennsylvania. It does not run its trains through Pennsylvania. It does not pay corporate income or franchise tax to Pennsylvania. It does not advertise specifically to Pennsylvania citizens or corporations. It does not maintain an agent in Pennsylvania. In summary, Union Pacific Railroad does not "continuously and systematically" conduct any business in Pennsylvania.
( Id. (quoting Det's Br. in Supp. of Mot. to Dismiss, Doc. 33, at 9-10) (internal citations omitted).) In the same vein, the Court was also presented with an affidavit by DeAngelo Brothers' President Paul DeAngelo, which stated that Union Pacific signed its contract with DeAngelo outside of Pennsylvania and that all work under the contract was performed outside Pennsylvania. ( See id. at 3.) Mr. DeAngelo stated that his company entered into the contract with Union Pacific after Union Pacific opened an online bidding process to which DeAngelo Brothers submitted the winning bid. ( See id. at 2-3.) Thus, he averred, DeAngelo reached out to Union Pacific in Nebraska; Union Pacific did not approach DeAngelo in Pennsylvania. ( Id. at 3.)
The Court considered several other bases for personal jurisdiction, which it summarized as follows:
First, Union Pacific entered into a "five-year, multi-million dollar contract with" DeAngelo Brothers, a Pennsylvania corporation. (See PI. Colony Nat'l Ins. Co.'s Brief in Opp. to Union P. R.R. Co.'s Mot. to Dismiss, Doc. 37, at 9.) This contract, it is reasonable to assume, was signed by DeAngelo Brothers in Pennsylvania and would have required significant correspondence between Union Pacific's Nebraska offices and DeAngelo's Pennsylvania offices. ( See id. at 10-12.) Colony concludes that, through these acts, Union Pacific willing [ sic ] subjected itself to jurisdiction in Pennsylvania. ( See id. at 15.)
Second, Colony points to several documents which it believes "demonstrate unequivocally that Union Pacific engages in economic activity in, and has continuous and systematic contacts with, various states east of the Mississippi [River] including Pennsylvania." ( Id. at 17.) To this end, it provides a screenshot from Union Pacific's website, which advertises under the heading "Where Can I Ship?" that
Union Pacific operates 32, 000 miles of track covering 23 states in the western two-thirds of the country. And when we can't transport your products on our own tracks, we have relationships with nearly 200 shortline and other Class I railroads, as well as trucking companies, to make sure our customers are covered coast-to coast.... Factor in ocean carriers and you can use UP to ship to virtually any destination worldwide.
( Id., Ex. D, at 1.) Likewise, a Form 10-K report filed by Union Pacific with the Securities and Exchange Commission describes its railroad routes as "linking Pacific Coast and Gulf Coast ports with the Midwest and eastern U.S. gateways." ( Id., Ex. E, at 6). The report adds that Union Pacific "serve[s] the western two-thirds of the country and maintain[s] coordinated schedules with other rail carriers to move freight to and from the Atlantic Coast" and other regions across North America. ( Id. )
"With respect to Union Pacific's activities as a transporter of freight in states like Pennsylvania where it does not operate trains or own rails, " Colony also provides the Court with the case numbers of three actions in the federal district courts of Pennsylvania "where Union Pacific has filed suit... against a Pennsylvania corporation or limited liability company based on its alleged failure to pay Union Pacific's freight charges when due." ( Id. at 18.) Colony argues that "[b]ased solely on Union Pacific's own allegations in these lawsuits, this Court has a reasonable basis for concluding that Union Pacific routinely engages in commerce in the Commonwealth." ( Id. at 19.) As noted in American Home's brief, the purpose of disclosing these cases is not to argue that Union Pacific has waived jurisdictional objections; it is only to show, by Union Pacific's own previously sworn admissions, that Union Pacific continuously transacts business in Pennsylvania. ( See Am. Home Assurance Co.'s Brief in Opp. to Union P. RR Co.'s Mot. to Dismiss, Doc. 45, at 7.)
Finally, Colony argues that the fact that three Union Pacific employees live in Pennsylvania is likewise sufficient to establish contacts supporting jurisdiction. ( See Doc. 37 at 19-20.) In screenshots from the Union Pacific website, dated April 19, 2013, Union Pacific was soliciting job applications for two apparently additional positions located in Philadelphia, Pennsylvania: an administrative assistant and a contrOl-systems engineer. ( Id., Ex. K, at 5-8.) As of the date of this Opinion, a job seeker can still access the Union Pacific website to search for jobs in Pennsylvania (and, indeed, for jobs in all states except West Virginia), but there are no Pennsylvania openings posted. See UNION PACIFIC, Careers, https:/Iup.jobs/index.html (click "Search Jobs;" then choose "Pennsylvania - PA" from the dropdown menu entitled "State Only;" then click "Add").
(Doc. 55 at 4-6 (footnotes omitted).)
Ultimately, however, the Court found that these allegations were not enough to make out a prima facie case for either general or specific personal jurisdiction. As to general jurisdiction, it concluded that the alleged contacts, even if accurate, do not indicate that Union Pacific is "essentially at home" in Pennsylvania, as would be required under Supreme Court precedent. ( Id. at 10.) As to specific jurisdiction, the Court concluded that "one could plausibly argue that" Union Pacific purposefully availed itself of Pennsylvania law, but that even if that is so, specific jurisdiction would still fail because "[t]here is no evidence that the acts constituting the purposeful availment arise out of [or] relate to' the circumstances underlying this litigation, " i.e., a declaration of non-Pennsylvanians' rights under an insurance policy after the settlement of an Oklahoma tort action in an Oklahoma court. ( Id. at 13.)
But even though the Court concluded that it "does not now believe that personal jurisdiction exists based on the materials provided thus far, " it did not grant the Motion to Dismiss. Instead, in accordance with the Third Circuit's directive in Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 336 (3d Cir. 2009), it allowed the Plaintiffs the opportunity to conduct jurisdictional discovery "in order to aid [them] in discharging [their] burden" of demonstrating the existence of personal jurisdiction. ( See Doc. 55 at 15 (quoting Metcalfe, 566 F.3d at 336).) The Court then denied Union Pacific's Motion with leave to renew after the close of jurisdictional discovery. ( Id. )
Jurisdictional discovery is now closed and Union Pacific renewed its Motion. ( See Doc. 69.) In response, the Plaintiffs assert several newly discovered facts which they believe give rise to jurisdiction.
First, the Plaintiffs argue that Paul DeAngelo's representations as to the formation of the contract between DeAngelo Brothers and Union Pacific were inaccurate. ( See Colony Br. in Opp. to Mot. to Dismiss, Doc. 88, at 7.) Whereas DeAngelo originally represented that his company reached out to Union Pacific in Nebraska, Union Pacific representative Mark Sudeta testified during discovery that, in fact, it was Union Pacific that first "invited over a dozen companies, " including DeAngelo, to bid for the vegetation contract in 1999. (Mark Sudeta Dep., Doc. 88-4, at 86:4-9; see also Doc. 88-6 (listing thirteen contractors to whom bid invitations were sent).) Union Pacific chose which companies to target after conducting "market research" on various factors, ( id. at 90:10-21), and then sent each company a packet of materials relevant to the bid, ( id. at 87:3-21). Ultimately, Union Pacific accepted DeAngelo Brothers's bid, but Sudeta did not recall any further negotiations, given that "we had provided a sample form of ...