New World Technologies v . Meller CV-00-228-JM 12/14/01 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

New World Technologies, Inc.

v. Civil N o . 01-228-JM Opinion N o .

Adolf Meller Company

O R D E R

In this diversity action, plaintiff New World Technologies,

Inc. (“New World”) asserts breach of contract claims against

defendant Adolf Meller Company (“Meller”).1 Presently before the

court is Meller’s motion to dismiss for lack of personal

jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2) (document n o .

4 ) , to which New World objects. For the reasons that follow, the

court denies the motion.

Standard of Review

“On a motion to dismiss for want of in personam

jurisdiction, Fed. R. Civ. P. 12(b)(2), the plaintiff ultimately

bears the burden of persuading the court that jurisdiction

exists.” Massachusetts Sch. of Law at Andover, Inc. v . Am. Bar

1 Although Meller is the named defendant, the allegations contained in the complaint concern a Division of Meller known as Advanced Laser Technologies. Ass’n,

6 , 34 (1st Cir. 1998). See also Boit v . Gar-Tec

Prods., Inc.,

7 1 , 675 (1st Cir. 1992). Where, as here,

the court elects to dispose of a motion to dismiss for lack of

personal jurisdiction without holding an evidentiary hearing, the

court applies a prima facie standard of review. United Elec.

Radio & Machine Workers of Am. v . 163 Pleasant S t . Corp.,

9 , 43 (1st Cir. 1993)(“Pleasant S t . I I ” ) . Under this

standard, the court will look to the facts alleged in the

pleadings and the parties’ supplemental filings, including

affidavits. See Sawtelle v . Farrell,

(1st

Cir. 1995); Ticketmaster-New York, Inc. v . Alioto,

0 1 ,

203 (1st Cir. 1994). The court will accept specific facts

affirmatively alleged by the plaintiff as true and construe them

in the light most favorable to the plaintiff. See Massachusetts

Sch. of Law,

4 ; Sawtelle,

. In doing

s o , however, the court will not “credit conclusory allegations or

draw farfetched inferences.” Ticketmaster-New York, 26 F.3d at

203.

Background

The relevant facts, set forth in the light most favorable to

the plaintiff’s jurisdictional claim, are as follows. New World

2 is a New Hampshire corporation that is in the business of

automated machinery and process control engineering. New World

conducts virtually all of its operations from its offices in

Hopkinton, New Hampshire.

In August 2000, New World entered into an agreement with

Advanced Laser Technologies (“Advanced”), a Division of defendant

Meller, which is in the business of incorporating laser guided

manufacturing systems into industrial equipment. Pursuant to the

agreement, Advanced agreed to purchase from New World a custom

made Laser Positioning System.2 The purchase price for the

system was $223,000. New World alleges that Advanced breached

the agreement by failing to complete payments due for the

project. New World also alleges that Advanced breached a second,

separate agreement by failing to pay the balance due for services

and materials furnished by New World in connection with the

repair of a Troyke table.3

Neither Meller, a Rhode Island corporation, nor Advanced,

2 Pursuant to the August 2000 agreement between New World and Advanced, both New World and a company known as Stanley Engineering Company were responsible for developing the Laser Positioning System. 3 New World provided no definition of a Troyke table.

3 which conducts its business in Stoneham, Massachusetts,4 has

operations in New Hampshire. Nevertheless, between November 1999

and January 2001, Advanced solicited business from New World on

at least seventeen occasions. As a result of these

solicitations, Advanced and New World entered into eleven

separate contracts, including the contracts that are the subject

of this lawsuit. Advanced issued purchase orders to New World

for the performance of the contracts by sending the purchase

orders to New World’s New Hampshire offices. On August 2 8 , 2000,

Advanced issued a purchase order to New World for the

development, shipping and handling of the Laser Positioning

System.5 Subsequently, New World commenced work on the project

at its premises in Hopkinton, New Hampshire.

During the course of the parties’ relationship, Advanced

employees communicated with New World by placing telephone calls

to plaintiff in New Hampshire and sending letters and e-mails to

plaintiff’s New Hampshire facility. Because New World’s

operations are located in New Hampshire, it can be inferred that

4 Stoneham, Massachusetts is located less than sixty miles from the New Hampshire border. 5 Along with the August 2 8 , 2000 purchase order, Advanced submitted to New World specifications for the Laser Positioning System. See Document N o . 6, Exhibit D.

4 many if not most of the communications between the parties with

respect to the contracts at issue in this lawsuit involved

contacts with the State of New Hampshire.6 In fact, much of the

negotiations and discussions concerning the Laser Positioning

System, as well as the development, design and implementation of

the project occurred in New Hampshire. Only the delivery,

programming and fine-tuning of the project took place outside New

Hampshire.

Although the Laser Positioning System involved in this

dispute is currently located in Massachusetts, a number of

potential witnesses reside in New Hampshire. These witnesses

include the plaintiff’s employees and a principal of Stanley

Engineering Company, which was involved in the project’s

development.

Discussion

A. Personal Jurisdiction Analysis

In order to exercise personal jurisdiction over a defendant,

the court must find sufficient contacts between the defendant and

the forum to satisfy both the state’s long-arm statute and the

6 New World has no operations in Massachusetts, leases no facilities or offices in Massachusetts, maintains no telephone lines there and employs no agents or other representatives there.

5 due process clause of the Fourteenth Amendment. See Sawtelle,

; Ticketmaster-New York, 26 F.3d at 204. New

Hampshire’s corporate long-arm statute,

-A:15.10, authorizes jurisdiction over foreign corporations to

the full extent permitted by the federal Constitution. See

Phillips Exeter Acad. v . Howard Phillips Fund, Inc.,

(1st Cir. 1999); McClary v . Erie Engine & Mfg. Co.,

2 , 55 (D.N.H. 1994). Because New Hampshire’s long-arm

statute is coextensive with the limits of due process, the

traditional two-part personal jurisdiction inquiry collapses into

the single question of whether due process requirements have been

met. See Sawtelle,

; McClary,

5 .

Due process requires the court to determine whether the defendant

has maintained “certain minimum contacts” with the forum state

such that “the maintenance of the suit does not offend

‘traditional notions of fair play and substantial justice’.”

Int’l Shoe C o . v . Washington,

1 0 , 316 (1945)(quoting

Milliken v . Meyer,

5 7 , 463 (1940)). Accordingly, the

method of analysis for questions involving personal jurisdiction

concentrates on the quality and quantity of the defendant’s

contacts with the forum. See Phillips Exeter Acad.,

6 288.

The court may exercise two types of jurisdiction – general

and specific. “General jurisdiction ‘exists when the litigation

is not directly founded on the defendant’s forum-based contacts,

but the defendant has nevertheless engaged in continuous and

systematic activity, unrelated to the suit, in the forum state’.”

Massachusetts Sch. of Law,

(quoting United Elec.,

Radio & Mach. Workers v . 163 Pleasant S t . Corp.,

,

1088 (1st Cir. 1992)(“Pleasant S t . I ” ) ) . “Specific jurisdiction

exists when there is a demonstrable nexus between a plaintiff’s

claims and a defendant’s forum-based activities, such as when the

litigation itself is founded directly on those activities.” Id.

Because the parties’ arguments concern specific jurisdiction,7

and because I find that this court has specific jurisdiction over

Meller, I decline to address whether the court may exercise

general jurisdiction over the defendant.

The First Circuit uses a three-part analysis to determine

whether there are sufficient contacts to exercise specific

personal jurisdiction over a defendant. See Sawtelle,

It is unclear from the plaintiff’s brief whether New World also intended to argue that the court has general jurisdiction over Meller.

7 1388-89. First, the court must decide whether the claim

underlying the litigation arises directly out of the defendant’s

activities within the forum. See Phillips Exeter Acad.,

; Pritzker v . Yari,

3 , 60 (1st Cir. 1994), cert.

denied,

(1995). This relatedness requirement

“focuses on the nexus between the defendant’s contacts and the

plaintiff’s cause of action.” Ticketmaster-New York, 26 F.3d at

206. See also Sawtelle,

. Thus, the requirement

ensures that the defendant will not be subject to specific

personal jurisdiction unless the defendant’s contacts with the

forum state caused the alleged harm. See Ticketmaster-New York,

26 F.3d at 207.

Second, the court must determine whether the defendant’s

contacts with the forum “‘represent a purposeful availment of the

privilege of conducting activities in the forum state, thereby

invoking the benefits and protections of that state’s laws and

making the defendant’s involuntary presence before the state’s

courts foreseeable’.” Sawtelle,

(quoting

Pleasant S t . I , 960 F.2d at 1089). One cornerstone of the

purposeful availment test is voluntariness. See id. at 1391.

Thus, personal jurisdiction over the defendant is proper where

8 the defendant deliberately has engaged in significant activities

within the forum, but not where the defendant’s contacts with the

forum result solely from “the ‘unilateral activity of another

party or a third person’.” Burger King Corp. v . Rudzewicz,

6 2 , 475-76 (1985)(quoting Helicopteros Nacionales de

Colombia, S.A. v . Hall,

0 8 , 417 (1984)). The other

cornerstone of the purposeful availment test is foreseeability.

See Ticketmaster-New York, 26 F.3d at 207. Accordingly, the

court must determine whether the defendant’s conduct and

connection with the forum state is such that the defendant should

reasonably anticipate being haled into court there. See

Sawtelle,

; Ticketmaster-New York, 26 F.3d at 207

(citing World-Wide Volkswagen Corp. v . Woodson,

(1980)).

Finally, if the first two parts of the test for specific

jurisdiction have been fulfilled, the court must decide whether

the exercise of personal jurisdiction is reasonable in light of

the “Gestalt” factors. See Sawtelle,

; Pleasant

S t . I I , 987 F.2d at 4 6 . “These Gestalt factors include: (1) the

defendant’s burden of appearing, (2) the forum state’s interest

in adjudicating the dispute, (3) the plaintiff’s interest in

9 obtaining convenient and effective relief, (4) the judicial

system’s interest in obtaining the most effective resolution of

the controversy, and (5) the common interests of all sovereigns

in promoting substantive social policies.” Pleasant S t . I I , 987

F.2d at 4 6 . Even when the suit arises out of the defendant’s

minimum contacts with the forum, therefore, the court may not

exercise personal jurisdiction if to do so would be unreasonable.

“[A]n especially strong showing of reasonableness may serve

to fortify a borderline showing of relatedness and

purposefulness.” Ticketmaster-New York, 26 F.3d at 210. On the

other hand, “the weaker the plaintiff’s showing on the first two

prongs (relatedness and purposeful availment), the less a

defendant need show in terms of unreasonableness to defeat

jurisdiction.” Id.

B. Jurisdiction Over the Defendant

1. Relatedness

“Questions of specific jurisdiction are always tied to the

particular claims asserted.” Phillips Exeter Acad.,

. In a contract case, relatedness is established if “the

defendant’s contacts with the forum were instrumental either in

the formation of the contract or in its breach.”

See also

10 Massachusetts Sch. of Law,

(formation of

contract). Although the facts alleged by New World lack detail,

they nevertheless are sufficient to show that the defendant’s New

Hampshire contacts were instrumental in the formation of the

contracts at issue in this case. Advanced actively solicited

business from New World, which resulted in the formation of the

contracts that have given rise to the plaintiff’s cause of

action. See Whittaker Corp. v . United Aircraft Corp.,

(1st Cir. 1973)(soliciting business from a resident

of the forum state considered evidence of significant contacts).

Advanced also issued purchase orders to New World for the

performance of the contracts by sending the purchase orders to

New World’s New Hampshire offices. Along with the purchase order

for the Laser Positioning System, Advanced supplied the

specifications for the development of the project. See

(providing specifications and procedures governing

plaintiff’s performance constituted evidence of significant

contacts). Moreover, Advanced participated in the formation of

the agreement for the Laser Positioning System by taking part in

negotiations and discussions that occurred primarily in New

Hampshire. See Pleasant S t . I , 960 F.2d at 1089-90 (defendant’s

11 negotiation of a contract within the forum state can be thought

to give rise or relate to a subsequent claim asserting breach of

that contract). Based upon the facts asserted by the plaintiff,

the defendant’s alleged breach of contract arises out of and

relates to Advanced’s activities within New Hampshire.

2. Purposeful Availment

To satisfy the purposeful availment prong of the specific

jurisdiction test, New World must show that the defendant’s

“participation in the economic life of [New Hampshire]” rose

“above that of a purchaser who simply places an order and sits by

until the goods are delivered.” Whittaker Corp.,

. I conclude that New World has alleged and provided

evidence of jurisdictional facts which, if true, demonstrate that

Advanced’s contacts with New Hampshire (1) were voluntary and not

the product of New World’s unilateral actions, and (2) created an

ongoing relationship with a resident of the forum, thereby making

it foreseeable that Advanced would be haled into court in New

Hampshire. In particular, Advanced’s active participation in the

contractual arrangements with New World demonstrates that it was

not a passive purchaser.

During a period of about fourteen months, Advanced actively

12 solicited business from New World. The solicitations resulted in

the contracts that are the subject of this litigation. Advanced

issued purchase orders to New World for the performance of the

contracts by sending the purchase orders to New World’s New

Hampshire offices. Advanced also negotiated the terms of the

contract for the Laser Positioning System in New Hampshire and

supplied New World with the specifications for the project by

sending the specifications as an attachment to the purchase

order. During the design, development and implementation of the

project, which occurred primarily in New Hampshire, Advanced

communicated with New World in New Hampshire. The evidence

shows, therefore, that Advanced reached out to the plaintiff’s

state of residence to establish a relationship with New World,

transmitted information to New World in New Hampshire and

communicated with New World at its New Hampshire facilities.

These contacts are sufficient to demonstrate that Advanced

deliberately engaged in significant activities within the forum.

See Phillips Exeter Acad.,

(solicitations

directed at a resident of the forum constitute purposeful

activity related to the forum); Sawtelle,

-90 (“The

transmission of information into New Hampshire by way of

13 telephone or mail is unquestionably a contact for purposes of our

analysis.”); Pleasant S t . I I , 987 F.2d at 45 (negotiation of a

contract in the forum deemed a significant contact).

Furthermore, it is significant that the contracts at issue

in this case were only two of eleven contracts that the parties

entered into over the course of about fourteen months as a result

of Advanced’s solicitations. Where, as here, the defendant

reaches out beyond one state and creates a continuing

relationship and obligations with a citizen of the forum state,

the defendant “manifestly has availed himself of the privilege of

conducting business there” and “it is presumptively not

unreasonable to require him to submit to the burdens of

litigation in that forum as well.” Burger King Corp., 471 U.S.

at 473, 476. Advanced’s deliberate activities within New

Hampshire make its involuntary presence before a New Hampshire

court a reasonably foreseeable event.

3. Reasonableness

The Gestalt factors weigh heavily in favor of this court’s

exercising jurisdiction. With respect to the first element,

considered the “primary concern” among the Gestalt factors, see

Ticketmaster-New York, 26 F.3d at 2 1 0 , I find that there is

14 little if any inconvenience to the defendant in being forced to

litigate the dispute in New Hampshire. Stoneham, Massachusetts,

the site of Advanced’s operations, is located less than sixty

miles from the New Hampshire border, and the time required to

drive from Stoneham to this court’s location in Concord, New

Hampshire is little more than one hour. It is fair to infer that

most if not all of the Advanced employees who were involved in

the contracts giving rise to this dispute work in Stoneham and

live in the surrounding area.8 Any burden on witnesses who are

required to travel to New Hampshire, where traffic is light and

inexpensive parking is abundant, is negligible.

The fact that Meller is based in Rhode Island is of no

significance. It is apparent from the evidence that the parties

submitted that Meller’s Rhode Island operations had little if any

connection to the circumstances that gave rise to this matter,

and that no important witnesses reside in Rhode Island.

Moreover, Meller has failed to demonstrate why it would be

unusually burdensome for Rhode Island residents to travel to New

Hampshire. Therefore, the possibility that the defendant may be

8 Based on the defendant’s own evidence, all of its employees who witnessed the work done under the Laser Positioning System contract are located in Massachusetts, as is an important third- party witness.

15 required to send representatives from its Rhode Island offices to

New Hampshire in connection with the litigation is insufficient

to reach constitutional significance. See Pritzker,

(the first Gestalt factor “is only meaningful where a party

can demonstrate some kind of special or unusual burden.”).

The second Gestalt factor, concerning the forum state’s

interest in adjudicating the dispute, also cuts in favor of

exercising jurisdiction. “A State generally has a ‘manifest

interest’ in providing its residents with a convenient forum for

redressing injuries inflicted by out-of-state actors.” Burger

King Corp., 471 U.S. at 473 (quoting McGee v . Int’l Life Ins.

Co.,

2 0 , 223 (1957)). See also Pritzker,

(one of a state’s greatest interests is in the conduct of forum-

based litigation). That interest is more significant when the

case concerns a contract having substantial value and involves

the production of goods within the forum. See In-Flight Devices

Corp. v . Van Dusen Air, Inc.,

2 0 , 232 (6th Cir.

1972)(the state’s interest in resolving a suit brought by one of

its residents is particularly significant where the contract

calls for the production of goods worth over $200,000, and for

performance of the contract within the forum state). Here,

16 Advanced agreed to pay New World $223,000 for the Laser

Positioning System. Moreover, the design, development and

implementation of the Laser Positioning System occurred almost

entirely in New Hampshire.

The third Gestalt factor to consider is the plaintiff’s

interest in obtaining convenient and effective relief. The First

Circuit has repeatedly observed that “a plaintiff’s choice of

forum must be accorded a degree of deference with respect to the

issue of its own convenience.” Sawtelle,

.

Certainly, it would be more convenient for the plaintiff to

litigate its breach of contract claims in the forum in which it

operates. This is particularly true where, as here, the

plaintiff’s potential witnesses reside in New Hampshire.

The remaining factors – the judicial system’s interest in

obtaining the most effective resolution of the controversy and

the common interests of all sovereigns in promoting substantive

social policies – have not been addressed by either party.

Nothing in the record suggests that either of these elements of

the jurisdictional analysis would favor one party over the other.

At the first stage of the due process inquiry, New World was

able to show that its cause of action arose from, or related t o ,

17 defendant’s contacts with New Hampshire. At the second stage of

the inquiry, New World succeeded in establishing the defendant’s

purposeful availment of the privilege of conducting activities in

New Hampshire. Although New World may have strengthened its

showing on these first two prongs of the tripartite test by

providing more detailed evidence regarding the specifics of its

contractual relationships with Advanced, consideration of the

Gestalt factors decisively tips the scale in favor of New World’s

jurisdictional arguments.

Conclusion

“The Due Process Clause protects an individual’s liberty

interest in not being subject to the binding judgments of a forum

in which he has established no meaningful ‘contacts, ties, or

relations’.” Burger King Corp., 471 U.S. at 471-72 (quoting

Int’l Shoe Co.,

1 9 ) . Taking, as this court must,

the allegations in the complaint and the plaintiff’s supporting

affidavit as true, and construing them in a manner most favorable

to the plaintiff’s position, the court finds that the exercise of

personal jurisdiction over the defendant comports with the due

process protections of the Constitution. Accordingly, the

defendant’s motion to dismiss for lack of personal jurisdiction

18 (document n o . 4 ) is denied.

SO ORDERED.

James R. Muirhead United States Magistrate Judge

Date: December 1 4 , 2001

cc: Stephen R. Goldman, Esq. John A . Rachel, Esq.

19