Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Hegna v. Smitty's Supply, Inc.

United States District Court, E.D. Pennsylvania

June 13, 2017

LINDSAY MORGAN HEGNA
v.
SMITTY'S SUPPLY, INC.

          MEMORANDUM

          John R. Padova, J.

         Plaintiff Lindsay Hegna has brought this action against her former employer, Smitty's Supply, Inc. ("Smitty's"), arising from Smitty's failure to pay her what she claims she is owed for her interest in Smitty's Phantom Stock and Stock Appreciation Rights Plans. Smitty's has moved to dismiss this action for lack of personal jurisdiction or, in the alternative, to transfer this action to the United States District Court for the Eastern District of Louisiana. For the reasons that follow, we deny Defendant's request that we dismiss this action and grant its alternative request that we transfer this action to the Eastern District of Louisiana.

         I. FACTUAL BACKGROUND

         The Amended Complaint alleges the following facts. Plaintiff is a resident of Pennsylvania. (Am. Compl. ¶ 1.) Smitty's is a Louisiana corporation with its principal place of business in Roseland, Louisiana. (Id. ¶ 2.) Edgar R. Smith is the sole owner and Chairman of Smitty's. (Id. ¶ 6.) In July 2014, Smith asked Hegna to become the Executive Vice President of Smitty's and offered her the following compensation package: salary of $200, 000.00 per year; life insurance; an incentive compensation plan; a 401K plan; a 5% interest in Smitty's Phantom Stock Plan, which would fully vest as of January 2014; and a 5% interest in Smitty's Stock Appreciation Rights ("SARs") Plan, which would also fully vest as of January 2014. (Id. ¶ 8.) Hegna accepted Smith's offer and worked as Executive Vice President of Smitty's until her employment was terminated on March 11, 2016. (Id. ¶¶ 9, 17.) Smitty's Board of Directors approved Hegna's deferred compensation plan during a December 2014 Board Meeting (the "December 2014 Board Meeting"). (Id., ¶ 15.)

         Since her termination, Hegna has repeatedly requested that Smitty's compensate her for her vested interest in its Phantom Stock and SARs Plans. (Id. ¶ 18.) The value of Hegna's vested interest in those Plans is approximately $27, 500, 000.00. (Id. ¶ 19.) Smitty's has refused to pay Hegna for her vested interest in the Plans and has also refused to provide her with an accounting of her interest's value. (Id. ¶ 20.)

         The Amended Complaint asserts three claims against Smitty's. Count I asserts a claim for breach of Hegna's oral employment contract with Smitty's based on Smitty's failure to pay Hegna the value of her vested interest in the company's Phantom Stock and SARs Plans. (Id. ¶¶ 23-27.) Count II asserts an alternative claim for fraudulent misrepresentation, alleging that Smith intentionally misrepresented that Hegna would be given a vested interest in the Phantom Stock and SARs Plans in order to induce her to become the Executive Vice President of Smitty's. (Id. ¶¶ 30-36.) Count III asserts a claim for negligent misrepresentation, alleging, in the alternative, that Smitty's misrepresented material facts to Hegna in order to entice her to accept the position as its Executive Vice President. (Id. ¶¶ 38-43.)

         II. LEGAL STANDARD

         Smitty's has moved to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). "Under Federal Rule of Civil Procedure 4(k), a District Court typically exercises personal jurisdiction according to the law of the state where it sits." O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (citing Fed.R.Civ.P. 4(k)(1)(A)); see also Fed.R.Civ.P. 4(k)(1) ("Serving a summons . . . establishes personal jurisdiction over a defendant . . . who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located . . . ."). "Pennsylvania's long-arm statute permits courts to exercise personal jurisdiction over nonresident defendants 'to the fullest extent allowed under the Constitution of the United States' and 'based on the most minimum contact with this Commonwealth allowed under the Constitution.'" Ackourey v. Sonellas Custom Tailors, 573 F.App'x 208, 211 (3d Cir. 2014) (quoting 42 Pa. Cons. Stat. Ann. § 5322(b)). "Accordingly, in determining whether personal jurisdiction exists, we ask whether, under the Due Process Clause, the defendant has 'certain minimum contacts with . . . [Pennsylvania] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" O'Connor, 496 F.3d at 316-17 (alterations in original) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)).

         '"[C]ourts reviewing a motion to dismiss a case for lack of in personam jurisdiction must accept all of the plaintiff's allegations as true and construe disputed facts in favor of the plaintiff.'" Bootav v. KBR, Inc.. 437 F.App'x 140, 143 (3d Cir. 2011) (alteration in original) (quoting Carteret Savs. Bank. FA v. Shushan, 954 F.2d 141, 142 n.l (3d Cir. 1992)). The plaintiff, however, '"bears the burden to prove, by a preponderance of the evidence, facts sufficient to establish personal jurisdiction, '" Control Screening LLC v. Tech. Application & Production Co., 687 F.3d 163, 167 (3d Cir. 2012) (quoting Carteret Savs. Bank, 954 F.2d at 146), and "may not rest solely on the pleadings to satisfy this burden." Gutierrez v. N. Am, Cerruti Corp., Civ. A. No. 13-3012, 2014 WL 6969579, at *2 (E.D. Pa. Dec. 9, 2014) (citing Simeone v. Bombardier-Rotax GmbH, 360 F.Supp.2d 665, 669 (E.D. Pa. 2005); and Carteret Savs. Bank, 954 F.2d at 146). "Once the defense has been raised, 'then the plaintiff must sustain [her] burden of proof in establishing jurisdictional facts through sworn affidavits or other competent evidence' and may not 'rely on the bare pleadings alone.'" Int'l Bhd. of Elec. Workers Local Union No. 126 Ret. Plan Tr. Fund v. Cablelinks. Inc., Civ. A. No. 15-1925, 2015 WL 8482831, at *1 (E.D. Pa. Dec. 10, 2015) (quoting Time Share Vacation Club v. Atl. Resorts, Ltd., 735 F.2d 61, 66 n.9 (3d Cir. 1984)).

         III. DISCUSSION

         There are two types of personal jurisdiction, general and specific. O'Connor, 496 F.3d at 317 (citing Helicopteros Nacionales de Colombia. S.A. v. Hall, 466 U.S. 408, 414-15 & n.9 (1984)). The Supreme Court has explained that "[a] court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so 'continuous and systematic' as to render them essentially at home in the forum State." Goodyear Dunlop Tires Operations. S.A. v. Brown, 564 U.S. 915, 919 (2011) (citing Int'l Shoe, 326 U.S. at 317). "Specific jurisdiction, on the other hand, depends on an affiliatio[n] between the forum and the underlying controversy, principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation." Id. (alteration in original) (quotation and citation omitted). "In contrast to general, all-purpose jurisdiction, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction." Id. (quotation omitted).

         A. General personal jurisdiction

         Smitty's argues that it is not subject to general personal jurisdiction in this District because it is a Louisiana corporation with its principal place of business in Louisiana. In Goodyear, the Supreme Court "made clear that only a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there." Daimler AG v. Bauman, __ U.S. __, 134 S.Ct. 746, 760 (2014). As the Supreme Court explained, '"[f]or an individual, the paradigm forum for the exercise of general jurisdiction is the individual's domicile; for a corporation, it is an equivalent place, one in which the corporation is fairly regarded as at home.'" Id. (quoting Goodyear, 564 U.S. at 924). Consequently, for a corporation, "the place of incorporation and principal place of business are paradig[m] . . . bases for general jurisdiction." Id. (alterations in original) (quotation and citation omitted). In addition, "in an exceptional case, a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State." Id. at 761 n.19 (citation omitted). However "[a] foreign corporation cannot be subject to general jurisdiction in a forum unless the corporation's activities in the forum closely approximate the activities that ordinarily characterize a corporation's place of incorporation or principal place of business." Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1205 (11th Cir. 2015). Thus, "[a] corporation's 'continuous activity of some sorts within a state ... is not enough to support the demand that the corporation be amenable to suits unrelated to that activity."' Goodyear, 564 U.S. at 927 (quoting Int' Shoe, 326 U.S. at 318).

         Smitty's maintains that, because it is incorporated in Louisiana and has its principal place of business in Louisiana, the "paradig[m] . . . bases" for general personal jurisdiction do not support the assertion of jurisdiction by courts in Pennsylvania. See Damlier. 134 S.Ct. at 760 (alterations in original) (quotation and citation omitted). Smitty's also argues that Hegna cannot establish by a preponderance of the evidence that its activities within this Commonwealth are "so substantial and of such a nature as to render [it] at home in" this Commonwealth so as to subject it to general personal jurisdiction here. Id. at 761 n.19. The evidence of record shows that Smitty's manufactures lubricants and related products and distributes its products to all 50 states and more than 50 countries. (Hegna Exs. 9, 10.) Smitty's "has never had an office in Pennsylvania [and] has never had a manufacturing site in Pennsylvania." (Smith Aff. ¶ 10.) During the twelve months preceding September 1, 2016, Smitty's sales in Pennsylvania amounted to less than 1% of its total sales. (Tate Aff. ¶ 2.) In addition, during the three years prior to November 2016, Smitty's had no more than two employees who worked in Pennsylvania. (Hegna Aff. ¶ 16.) Upon consideration of the facts of record, we conclude that we do not have general jurisdiction over Smitty's based on that corporation's place of incorporation, its ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.