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Lehigh Gas Wholesale, LLC v. Lap Petroleum, LLC

United States District Court, Eastern District of Pennsylvania

March 23, 2015

LEHIGH GAS WHOLESALE, LLC, Plaintiff,
v.
LAP PETROLEUM, LLC, Defendant.

MEMORANDUM OPINION

Gerald Austin McHugh, United States District Court Judge

This is a commercial dispute that involves claims for breach of contract and tortious interference with contract. Plaintiff, a Pennsylvania corporation, brought suit in the Eastern District of Pennsylvania. Defendant, a Virginia corporation, has moved to dismiss this action for lack of personal jurisdiction, or, in the alternative, transfer to the Eastern District of Virginia. Because Plaintiff concedes that this Court lacks general jurisdiction over Defendant, and has failed to carry its burden to present competent evidence in support of specific jurisdiction, I will grant Defendant’s Motion and transfer this matter to the Eastern District of Virginia.

I. Factual Background

Plaintiff Lehigh Gas Wholesale, LLC (“LGW”) is a Delaware limited liability company with its principal place of business in Allentown, Pennsylvania. Compl. at ¶ 12. Although operating out of Pennsylvania, LGW “is engaged in the marketing and distribution of petroleum products in the Commonwealth of Virginia and certain other states.” Id. at ¶ 13. LGW sells Sunoco-branded products to subjobbers and service station retailers. Id.

Defendant LAP Petroleum, LLC (“LAPP”) is a Virginia limited liability company with its principal place of business in Virginia Beach, Virginia. Id. at ¶ 10. LAPP “is a branded motor fuels products jobber and subjobber in the business of selling, among other brands, Sunoco-branded motor fuel products to service station retail dealers in the Commonwealth of Virginia.” Id. at ¶ 11.

The underlying transaction that gives rise to this case was first entered into by two non-parties. On November 1, 2010, Manchester Marketing (“MM”) entered into a Sales Agreement with D&MRE, LLC (“DMRE”), both Virginia owned and operated entities. Id. at ¶¶ 6–9, 14. Under the Sales Agreement, DMRE agreed to purchase Sunoco-branded motor fuels from MM for resale at DMRE’s service stations for a period of ten years or until DMRE purchased at least 9, 000, 000 gallons of motor fuel from MM. Id. On March 5, 2013, MM assigned all rights under the Sales Agreement to Defendant LAPP. Id. at ¶ 17. On the same date, LAPP agreed to purchase 7, 700, 000 gallons of Sunoco-branded motor fuels from MM (“Subjobber Agreement”) over a period of ten years commencing on April 1, 2013. Id. at ¶ 18.

In a paragraph titled, “Governing Law, ” the Sales Agreement and Subjobber Agreement both state, “The parties hereto acknowledge and agree that this Agreement has been made within, and that this Agreement shall be construed and interpreted in accordance with the provisions of, the laws of the Commonwealth of Virginia.” Sales Agreement at ¶ 34; Subjobber Agreement at ¶ 35. Similarly, both agreements contain a paragraph titled “Venue, ” that reads, “The parties hereto consent to the jurisdiction of the Courts of the Commonwealth of Virginia, including specifically, the Circuit Court of the County of Chesterfield and waive all objections to actions brought in such courts based upon jurisdiction, preference, convenience or otherwise.” Sales Agreement at ¶ 35; Subjobber Agreement at ¶ 36. Defendant avers that “[t]he Subjobber Agreement was negotiated, executed and performed exclusively in Virginia.” Motion to Dismiss at ¶ 5; see also Affidavit of Sanjay Patel at ¶¶ 7–14. Plaintiff does not contest this factual assertion, as it was not an original party to the agreement, but notes that it has not had the opportunity to conduct discovery in order to test Defendant’s characterization of the facts.

On December 19, 2013, MM assigned all rights under the Subjobber Agreement to Plaintiff LGW. Compl. at ¶ 19. Defendant LAPP claims it was unaware of this assignment. Defendant’s Brief at 3; Affidavit of Atul Patel at ¶ 11. Defendant purchased 596, 369 gallons of product under the Subjobber Agreement and allegedly stopped purchasing product on January 16, 2014. Compl. at ¶ 21. Plaintiff characterizes the Subjobber Agreement as a subcontract, alleging that the primary agreement was a Jobber Agreement between MM and Sunoco. Plaintiff’s Opposition Brief at 4; Subjobber Agreement at ¶ 1.

Defendant avers that it conducts its business exclusively in Virginia. Affidavit of Sanjay Patel at ¶ 4. In addition, Defendant claims that it “has never operated in Pennsylvania; has never conducted any business or attempted to conduct any business in Pennsylvania; has never advertised in Pennsylvania; and has never initiated any business contacts in Pennsylvania.” Id. Plaintiff has not presented any alleged contradictory evidence regarding these representations other than the existence and terms of the contractual relationship between the parties.

LGW’s Complaint includes two causes of action: (1) breach of contract pursuant to the Subjobber Agreement; and (2) tortious interference with contract.

II. Legal Analysis

In the event of a jurisdictional challenge, Plaintiff carries the burden to prove personal jurisdiction using “affidavits or other competent evidence.” Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009); O’Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007). The “bare pleadings alone” are not enough to withstand a motion to dismiss for lack of personal jurisdiction, as Plaintiff must respond with “actual proofs, not mere allegations.” Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984). Because I am not holding an evidentiary hearing, Plaintiff only needs to establish a prima facie case of personal jurisdiction. Metcalfe, 566 F.3d at 330. In order to meet this burden, Plaintiff must demonstrate “with reasonable particularity sufficient contacts between the defendant and the forum state.” Mellon Bank (E.) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (internal quotations and citations omitted). At this early stage, I am required to accept Plaintiff’s allegations as true and construe all disputed facts in Plaintiff’s favor. Id.

a. Personal Jurisdiction

Plaintiff concedes that this District lacks general jurisdiction over Defendant. Plaintiff’s Opposition Brief at 3. Therefore, this Court must have specific personal jurisdiction over Defendant in order to preside over this action. Specific personal jurisdiction is a three-part inquiry in this Circuit. The Court must find that (1) the defendant “purposefully directed [its] activities at the forum”; (2) the litigation arose out of or related to one or more of these activities; and (3) ...


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