Torcup, Inc. v. Aztec Bolting Servs., Inc.
Torcup, Inc. v. Aztec Bolting Servs., Inc.
Opinion of the Court
I. INTRODUCTION
Currently before the Court is Defendant, Aztec Bolting Services, Inc.'s ("ABS"), Motion to Dismiss the Amended Complaint (ECF No. 18), Defendant, Christopher Earl High's ("High"), Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 19), Plaintiff's Response to Defendants' Motions (ECF No. 20), and ABS's Reply (ECF No. 22).
II. BACKGROUND
Plaintiff initiated the instant matter by way of a Complaint filed on April 11, 2019. On May 6, 2019, Plaintiff filed its Amended Complaint, which is the subject of the Defendants' Motions to Dismiss. According to Plaintiff's Amended Complaint, High was hired by Plaintiff on May 21, 2018 as a sales representative for its Houston, Texas region. ECF No. 14 at ¶ 51. On or around February 25, 2019, Plaintiff alleges that High left Plaintiff's employ and began working for ABS, a Texas corporation with its principle place of business in League City, Texas. ECF No. 14 at ¶¶ 2 and 75. ABS is both a competitor and customer of Plaintiff's. ECF No. 20 at 2-3. Plaintiff alleges that High misappropriated Plaintiff's entire customer list for the Houston, Texas area when he provided said customer list to ABS. ECF No. 14 at ¶¶ 68 and 74. Plaintiff's Amended Complaint alleges three Counts against Defendants: 1) interference with contractual relations; 2) violation of uniform trade secrets act; and 3) breach of contract (as to High, only). Id. at ¶¶ 79-94.
Plaintiff, in its Complaint, asserts this Court has diversity jurisdiction over the parties. Id. at ¶¶ 4-5. In support of its assertion that this Court has personal jurisdiction over the Defendants, and venue is appropriate in this District, Plaintiff's Complaint sets forth the following allegations:
1) "Plaintiff TorcUP designs, manufactures, and sells tools and accessories from its plant in Easton, Pennsylvania"; 2) "Defendant ABS is a regular customer of Plaintiff"; 3) "Defendant ABS has been a customer of [Plaintiff] for approximately twenty years"; 4) "Defendant ABS places approximately one order for tools or parts every week or two to Plaintiff TorcUP in Easton, Pennsylvania"; 5) "Defendant ABS sends regular e-mails to Plaintiff TorcUP in Easton, Pennsylvania, inquiring if it has tools or parts in stock and requesting quotations"; 6) "Defendant ABS receives quotations via e-mail from Plaintiff TorcUP in Easton, Pennsylvania"; 7) "Defendant ABS sends orders via e-mail to Plaintiff TorcUP in Easton, Pennsylvania"; 8) "Plaintiff TorcUP makes shipments of ordered parts and tools from its address in Easton, Pennsylvania, to Defendant ABS"; 9) "Defendant ABS sent payments to Plaintiff TorcUP in Easton, Pennsylvania, via check"; 10) "Defendant ABS currently sends payments *524to one of Plaintiff TorcUP's bank accounts in Pennsylvania via wire transfer"; 11) "Plaintiff TorcUP receives regular phones calls in its office in Easton, Pennsylvania, from Defendant ABS employees who have questions about Plaintiff TorcUP tools"; 12) "Defendant ABS has Plaintiff TorcUP tools in its rental fleet of tools"; 13) "Defendant ABS resells tools it purchased from Plaintiff TorcUP"; 14) "Defendant ABS owner or President, as well as various employees, have been to Plaintiff TorcUP's plant in Easton, Pennsylvania, for training"; 15) "Defendant High was trained by Plaintiff TorcUP in Easton, Pennsylvania"; 16) "Defendant High signed his Employee Confidentiality and Non-Competition Agreement in Easton, Pennsylvania"; 17) "Defendant High, while employed by Plaintiff TorcUP, reported to his sales managers in Easton, Pennsylvania, via phone and e-mail on a daily basis"; 18) "Defendant High, while employed by Plaintiff TorcUP, was selling Plaintiff TorcUP's tools and accessories which sales were processed and shipped from Plaintiff TorcUP's plant in Easton, Pennsylvania"; 19) "Plaintiff TorcUP's customer list is maintained in its offices in Easton, Pennsylvania"; 20) "Plaintiff TorcUP's sales information is maintained in its offices in Easton, Pennsylvania"; 21) "Plaintiff TorcUP's finances are based in Easton, Pennsylvania"; 22) "Plaintiff TorcUP's corporate headquarters is in Easton, Pennsylvania"; 23) "Plaintiff TorcUP is being harmed in Easton, Pennsylvania, by the conduct of Defendants in stealing its customer list"; 24) "Plaintiff TorcUP ships tools and accessories to customers from Easton, Pennsylvania"; 25) "Defendants were aware that their conduct would harm Plaintiff TorcUP in Easton, Pennsylvania"; 26) "Defendants' solicitation of and sales to Plaintiff TorcUP's customers harmed Plaintiff TorcUP in Pennsylvania"; 27) "Defendant ABS was aware that Defendant High was employed by Plaintiff TorcUP"; and 28) "Defendant ABS hired Defendant High because he has access to Plaintiff TorcUP's customer list which is maintained and updated in Pennsylvania." Id. at ¶¶ 6-35.
III. DISCUSSION
A. Personal Jurisdiction
Defendants' Motions to Dismiss argue that this Court lacks personal jurisdiction over the Defendants. Because this Court did not have an evidentiary hearing, to defeat Defendants' Motions to Dismiss for lack of personal jurisdiction, Plaintiff must show a prima facie case that personal jurisdiction exists. Miller Yacht Sales, Inc. v. Smith ,
Per Fed. R. Civ. P 4(k), a district court analyzes personal jurisdiction based on the law of the state where it sits.
1. Traditional Specific Jurisdiction
Courts apply a three-part test in the determination of specific jurisdiction.
Second, plaintiff's claims must "arise out of or relate to" defendant's purposefully targeted activities in the forum. See O'Connor ,
Finally, if sufficient minimum contacts exist, jurisdiction is "presumptively constitutional." Id . However, the court must determine whether the exercise of specific personal jurisdiction "comport[s] with 'fair play and substantial justice.' " Id . at 324 (citing Burger King ,
i. Specific Jurisdiction as to ABS
In the instant matter, the Court finds that it lacks specific personal jurisdiction over ABS. Plaintiff contends that ABS "plac[ed] orders, attend[ed] training and later obtain[ed] [a] customer list and trade secrets held at Plaintiff's ... Pennsylvania headquarters." These contacts with Pennsylvania, according to Plaintiff, are sufficient for this Court to establish personal jurisdiction over ABS. ECF No. 20 at 10-11. Assuming ABS purposefully took action directed at Pennsylvania, Plaintiff's claims do not arise out of or relate to the alleged targeted actions directed at Pennsylvania. Plaintiff's claims against ABS concern the alleged misappropriation of customers based in the Houston, Texas area. ABS is a Texas corporation and High's employment with ABS only concerns Texas-based customers. The alleged damages to Plaintiff's relationships with these Texas based customers arises out of ABS's contacts with Texas, not Pennsylvania. There is nothing in the record to suggest that ABS's alleged actions directed at Pennsylvania are related to Plaintiff's allegations that ABS misappropriated its Houston based customer list.
Moreover, the training ABS received from Plaintiff in Pennsylvania and the orders ABS placed with Plaintiff in Pennsylvania are unrelated to the alleged misappropriation of Plaintiff's Houston area customer list. ABS's activities related to it being Plaintiff's customer, and receiving training from Plaintiff in Pennsylvania are wholly separate and apart from the misappropriation of Plaintiff's customers. Simply put, the alleged misappropriation does not arise out of or relate to ABS's contacts in Pennsylvania. ABS's alleged inappropriate conduct is related only to its contacts in Texas and purposefully directed activities toward Texas.
Although Plaintiff alleges that the customer list was "maintained" in Pennsylvania, there is no causal link between the customer list being maintained in Pennsylvania and the alleged harm to Plaintiff in Texas, the location that was affected by the alleged misappropriation. If any damages occurred in this matter, they occurred in Texas, not Pennsylvania. The attenuated contacts that Plaintiff alleges do not show that ABS could have reasonably foresaw being called into court in Pennsylvania. Because ABS's contacts and activities within Pennsylvania afforded it little to no benefit of the Commonwealth's *527protections and laws, subjecting ABS to specific personal jurisdiction would violate the reciprocity principles that the Third Circuit abides by. In all, Plaintiff's claims do not arise out of or relate to ABS's alleged contacts with Pennsylvania, therefore, sufficient minimum contacts do not exist that allow this Court to exercise specific jurisdiction over ABS.
ii. Specific Jurisdiction as to High
The Court also finds that it lacks specific jurisdiction over High. First, High did not purposefully direct any activities at Pennsylvania. Despite High working for Plaintiff, a Pennsylvania corporation, and reporting to his managers in Pennsylvania via e-mail and telephone, his business activities for Plaintiff occurred in, and solely concerned, the Houston area. Further, there is no allegation that High resided in Pennsylvania during his employment with Plaintiff. While employed by Plaintiff, there is no allegation that High attempted to solicit clients in Pennsylvania. High received a four-day training session at Plaintiff's headquarters in Pennsylvania; that is too attenuated of a contact to establish personal jurisdiction. Moreover, Plaintiff has not shown that High's employment by a Pennsylvania corporation can, by itself, establish sufficient contacts with Pennsylvania that would allow this Court to exercise specific jurisdiction over High. Remotely working for a Pennsylvania corporation, brief check-ins with managers and human resource employees, and a four-day training in Pennsylvania are attenuated contacts that do not rise to the level of purposefully directed activities that enjoy the benefits and protections of Pennsylvania law.
Assuming High has sufficient contacts with Pennsylvania, Plaintiff's claims against him do not "arise out of or relate to" his Pennsylvania contacts. O'Connor ,
Plaintiff compared this Court's determination of personal jurisdiction in Lutz v. Rakuten, Inc. ,
*528For example, Rakuten Baseball purposefully availed itself of Pennsylvania by actively recruiting and continuously employing one of its residents.
2. Personal Jurisdiction Under the Calder Effects Test
When a defendant's contacts with a forum are insufficient under traditional specific jurisdiction, a court can exercise personal jurisdiction when an intentional tort is alleged under the test derived from Calder v. Jones ,
Although traditional specific jurisdiction and the Calder effects test are different, they are "cut from the same cloth." Id . Both require intentionality on the part of the defendant such that they would expect to be haled to court in a given forum because of their contacts and activities in a forum. Id . "Only if the expressly aimed element of the effects test is met need we consider the other two elements."
In the present case, there are no facts demonstrating that ABS or High expressly aimed their alleged tortious conduct at Pennsylvania. Plaintiff's assertion that Defendants' allegedly tortious activities in Texas harmed Plaintiff's operations in Pennsylvania is conclusory and without merit. Although the harm alleged by Plaintiff was felt by Plaintiff in Pennsylvania, the alleged conduct that led to the alleged harm was directed at Texas, not Pennsylvania. No alleged intentional tort by the Defendants was directed at Pennsylvania such that it can be said that Pennsylvania was the focal point of the harm. Further, Plaintiff's Pennsylvania customers, distributors, and operations were not affected by the alleged misappropriation of the Houston based customer list. In the two cases Plaintiff cites to support jurisdiction under the Calder effects test, all defendants either had sufficient contacts in the forum state or had caused significant harm in the forum state through their alleged tortious conduct. There is no allegation by Plaintiff that Pennsylvania suffered any harm from Defendants' alleged intentional torts. Accordingly, this Court cannot exercise jurisdiction under the Calder effects test.
*529B. Transfer of Action
This Court does not have personal jurisdiction over the Defendants; however, under
IV. CONCLUSION
For the reasons set forth above, this Court lacks personal jurisdiction over Defendants. However, in the interest of justice, this matter will be transferred to the United States District Court for the Southern District of Texas, because that Court has personal jurisdiction and venue is proper there. An appropriate Order to follow this Opinion.
ORDER
AND NOW , this 9th day of July 2019 , upon consideration of Defendant, Aztec Bolting Services, Inc.'s, Motion to Dismiss the Amended Complaint (ECF No. 18), Defendant, Christopher Earl High's, Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 19), Plaintiff's Response to Defendants' Motions to Dismiss (ECF No. 20), and Defendant, Aztec Bolting Services, Inc.'s Reply (ECF No. 22) and in conjunction with the Court's accompanying Opinion, it is hereby ORDERED as follows:
1. Pursuant to Fed. R. Civ. P. 12(b)(2), Defendant, Aztec Bolting Services, Inc.'s Motion to Dismiss the Amended Complaint (ECF No. 18) is GRANTED ;
2. Pursuant to Fed. R. Civ. P. 12(b)(2), Defendant, Christopher Earl High's, Motion to Dismiss Plaintiff's Amended Complaint (ECF No. 19) is GRANTED ;
3. Defendant, Christopher Earl High's, Motion for Extension of Time (ECF No. 23 and 24) is DENIED AS MOOT ;
4. The Clerk of Court is directed to TRANSFER this matter to the United *530States District Court for the Southern District of Texas and CLOSE this case.
Plaintiff, in its Response to Defendants' Motions to Dismiss, does not set forth any argument as to whether this Court has general jurisdiction over Defendants. Therefore, Plaintiff has conceded that general jurisdiction does not exist over Defendants.
Generally, courts are directed to evaluate specific jurisdiction on a claim-by-claim basis. O'Connor ,
O'Connor describes the "but-for test" in the following manner: "As the name indicates, this standard is satisfied when the plaintiff's claim would not have arisen in the absence of the defendant's contacts."
The choice-of-law provision in High's employment contract with Plaintiff, along with the other alleged contacts, was also considered by this Court when determining "whether [High] 'purposefully invoked the benefits and protections of [Pennsylvania's] laws' for jurisdictional purposes." Burger King ,
Reference
- Full Case Name
- TORCUP, INC. v. AZTEC BOLTING SERVICES, INC.
- Cited By
- 32 cases
- Status
- Published