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Crossroads Technologies, Inc. v. Achieve Services Holdings, LLC

United States District Court, E.D. Pennsylvania

November 7, 2019



          John M. Younge Judge.

         The above-captioned Defendants, the Achieve Entities, filed a Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(2) [Dkt. No. 5] in which they averred that this action should be dismissed for lack of personal jurisdiction. This Court did not hold an evidentiary hearing prior to deposing of the pending motion to dismiss. For the purpose of disposing of this motion, this Court accepted as true the allegations in the Plaintiff's Complaint coupled with the Declaration of Anthony Castorani and the evidence submitted in support of its opposition to the Defendants' motion to dismiss. The Plaintiff avers that the Defendants are alter egos of one another and refers to them collectively as “the Achieve Entities.” (Complaint ¶ 8). [Dkt. No. 1]. If the evidence developed during discovery does not support the Plaintiff's theory that the defendants acted collectively, this Court may, upon motion, revisit the conclusions reached herein. Based upon the evidence and the law, the motion to dismiss is denied.

         I. Facts:

         The Plaintiff, a Pennsylvania Corporation, brings this breach of contract action against the above-captioned Defendants. The Defendants are residents of the state of Georgia with their principal place of business in Georgia. (Complaint ¶ 3 - 5).

         In June of 2013 and again in January of 2016, the above-captioned Defendants contacted the Plaintiff in regard to the handling of information technology management through the installation of the Allscripts Application-a program for data storage and database networking. Following contractual negotiations, in February of 2016, the Defendants shipped fourteen (14) Apple IPads to the Plaintiff at its Pennsylvania location. In March of 2016, after installation of the Allscripts Application, the Plaintiff returned the Apple IPads to the Defendants. Declaration of Anthony Castorani ¶ 8. (3/27/19). The Defendants then used the IPads in connection with their healthcare business where they entered information and data including confidential patient records. The information and data entered by the Defendants was stored on servers that were maintained by the Plaintiffs and located in Pennsylvania. Declaration of Anthony Castorani ¶ 9 (3/27/19).

         The parties entered into two (2) written contracts in connection with the information and data management services provided by the Plaintiff; a Hosting Agreement, and an IT Management Services Agreement (Complaint Exhibit A & B). The Hosting Agreement and the IT Management Agreement contain a paragraph that can be found on the last page of both documents directly above the signature line that reads as follows:

Through the actions of acceptance of this proposal, you agree to all terms within this proposal as well as all subsequent terms which are defined in the Crossroads Technologies, Inc. Terms and Conditions for Managed Hosting, which may be downloaded from our website at Subsequent terms may also apply from other documents such as, but not limited to, service agreements, service level agreements, sales quotes, project quotes, or documents which are designated to represent a service or tangible goods sale from provider to client. Pricing is subject to change without notice. Acceptance is determined as the execution of this proposal in whole or in part by the client either through written or verbal execution or execution by acceptance with a signature from an authorized officer of the company.

(Complaint, Exhibits A & B).

         Both contracts contain the above-quoted clause that incorporates by reference a separate document entitled Terms and Conditions that could be found on the Plaintiff's website. The incorporation by reference clause contains a specific citation to the Plaintiff's website where the Terms and Conditions could be found and reviewed by the Defendants. The Terms and Conditions contain, in turn, a forum selection and waiver of personal jurisdiction clause that reads, “Venue of any action of suit shall be in any court in Pennsylvania and customer shall be subject to the personal jurisdiction of the Commonwealth of Pennsylvania.” (Complaint, Exhibit C, § 4 Governing Law).[1]

         II. Legal Standard:

         Federal Rule of Civil Procedure 4(k)(1)(A) reads in relevant part, “Serving a summons or filing a waiver of service 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.” see also Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330, 51 V.I. 1219 (3d Cir. 2009); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F.Supp. 1119, 1122 (W.D. Pa. 1997). In Pennsylvania, the applicable long-arm statute allows personal jurisdiction over non-resident defendants to be exercised to the extent permissible under the due process clause of the Fourteenth Amendment. See Pa. Cons. Stat. § 5322(b); see also Grand Entm't Grp., Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 481 (3d Cir. 1993). Due process “is satisfied when the defendant has (1) purposefully established minimum contacts with the forum state, (2) such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Schiavone v. Aveta, 41 A.3d 861, 869 (Pa. Super. 2012).

         A district court may exercise in personam 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, 66 S.Ct. 154, 90 L.Ed. 95 (1945). When a defendant calls into question the district court's lack of personal jurisdiction, the burden rests with the plaintiff to prove personal jurisdiction by a preponderance of the evidence. Control Screening LLC v. Tech. Application and Prod. Co., 687 F.3d 163, 167 (3d Cir. 2012). This burden is met when the plaintiff sets forth a prima facie case for the exercise of personal jurisdiction by "establishing with reasonable particularity sufficient contacts between the defendant and the forum state." Mellon Bank (East) PSFS, Nat'l Assoc. v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992) (quoting Provident Nat. Bank v. California Fed. Sav. & Loan Assoc., 819 F.2d 434 (3d Cir. 1987)).

         There are two types of personal jurisdiction: general and specific. Helicopteros Nacionales de Colombia S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). General jurisdiction requires only that the plaintiff's claim arises out of the non-resident defendant's "continuous and systematic" contacts with the forum state, and does not require that the cause of action be related to the defendant's activities in the forum state. Rocke v. Pebble Beach Co., No. 13-1149, 541 Fed.Appx. 208, 2013 U.S. App. LEXIS 20633, 2013 WL 5568727, at *2 (3d Cir. Oct. 10, 2013). On the other hand, in order for a district court to possess specific jurisdiction, the plaintiff's claim must arise out of the defendant's forum related activities such "that the defendant should reasonably anticipate being haled into court there." Vetrotex Certainteed Corp. v. Consl. Fiber Glass Prods. Co., 75 F.3d 147 (3d Cir. 1995) (quoting WorldWide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)).

         III. ...

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