Carbonite Filter Corp. v. C. Overaa & Co.

353 F.Supp.3d 332

CARBONITE FILTER CORPORATION, Plaintiff

v.C. OVERAA & CO., Defendant

CIVIL ACTION NO. 3:18-1238

United States District Court, M.D. Pennsylvania.

Signed November 7, 2018

Lloyd R. Hampton, Hampton and Hampton, Ashland, PA, for Plaintiff.

Steven M. Williams, Cohen Seglias Pallas Greenhall & Furman PC, Harrisburg, PA, for Defendant.

MEMORANDUM

MALACHY E. MANNION, United States District Judge

Presently before the court is a motion to dismiss filed by the defendant C. Overaa & Co. ("Overaa") made pursuant to Fed.R.Civ.Pro. 12(b)(2) and 12(b)(6). (Doc. 12). The motion argues that the complaint, which plaintiff Carbonite Filter Corporation ("Carbonite") filed, should be dismissed for lack of general and specific personal jurisdiction over Overaa, a California company. The motion also argues that plaintiff's complaint fails to state any cognizable claims against Overaa. Because the court does not have general or specific personal jurisdiction over Overaa, the motion will be GRANTED under Rule 12(b)(2), and Carbon's complaint against Overaa will be DISMISSED .

I. BACKGROUND¹

Carbonite is a Pennsylvania company which is located in Schuylkill County, and it processes, packages and sells Pennsylvania anthracite coal for use as filter media in water treatment plants. Overaa is a California construction company which uses coal in water treatment plant construction projects. The City of Sacramento, California, owned a water treatment plant and it contracted Overaa to rehabilitate the plant by installing filters to wash and clean the water for the City, i.e., the Sacramento water treatment plant construction project (the "Project"). Carbonfilt, LLC, ("Carbonfilt"), is a Florida company that Overaa used to supply anthracite coal for the Project. Carbonite alleges that even though Carbonfilt was not an acceptable supplier for the anthracite coal according to the specifications for the Project, Overaa decided to use Carbonfilt to obtain 629 tons of anthracite coal for the Project.

On June 16, 2015, Carbonite was directed by Carbonfilt to provide a sample of its manufactured filter anthracite coal to Overaa to determine if it was acceptable for use in the Project. Carbonite then sent the sample to Overaa and Overaa advised that the sample was acceptable. On July 29, 2015, Carbonite sent another anthracite coal sample (Lot 2) for Overaa to test, and subsequently, Overaa advised Carbonfilt that the Lot 2 sample met the filter media requirements for the Project.

In August of 2015, Sacramento retained Kleinfelder, a media testing company, to test the bulk filter media sand and anthracite coal that Carbonite had supplied. Carbonite alleges that Kleinfelder was not a credentialed testing laboratory and that it used improper testing protocols to test the sand and anthracite. Kleinfelder determined that the sand and anthracite filter media products contained deviations from the Project's specifications. Thereafter, the products were tested by six other testing laboratories which yielded inconsistent results.

Carbonfilt then advised Overaa that it was turning over the quality issues to the media manufactures, including Carbonite. Overaa then began communicating with Carbonite, either directly or via carbon copy, regarding its anthracite coal and the Project's requirements. It was finally decided that Carbonite's anthracite coal was in compliance with the Project's requirements and Overaa accepted and used all 629 tons of Carbonite's coal and, installed the coal in the water treatment plant filter system.

On June 19, 2018, Carbonite filed a complaint, (Doc. 1), which essentially alleged that it had performed work as a sub-contractor for the construction of the water treatment facility in Sacramento, i.e., the Project, for which Overaa was the general contractor. Carbonite alleges that Overaa owes it money for the anthracite coal it supplied and was used for the Project.

On August 24, 2018, Overaa filed its motion to dismiss for lack of jurisdiction and for failure to state a claim upon which relief can be granted. (Doc. 12). Overaa's motion has been fully briefed and exhibits were filed.

II. STANDARD²

Rule 12(b)(2) provides for the dismissal of a complaint if the plaintiff fails to establish that the court has personal jurisdiction over a party. Fed.R. Civ.P.12(b)(2). Rule 12(b)(3) in conjunction with 28 U.S.C. § 1391, requires the court to dismiss the case if the plaintiff fails to show that the district in which the suit is brought is the proper venue. Fed.R.Civ.P. 12(b)(3).

Rule 12(b)(2) requires the court to accept the truth of factual allegations in the complaint relating to jurisdiction and the reasonable inferences that flow therefrom unless the moving party produces evidence tending to contradict the existence of jurisdiction. In re Chocolate Confectionary Antitrust Litigation, 674 F.Supp.2d 580, 595 (M.D.Pa. 2009). In other words, a party may rely entirely on allegations unless and until the moving party presents the court with actual evidence to the contrary. Id. ; Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir. 2004) ("when the court does not hold an evidentiary hearing on the motion to dismiss,...the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor."); but see , e.g., Rodi v. S. New Eng. Sch. of Law, 255 F.Supp.2d 346, 348 (D.N.J. 2003) ("the plaintiff may not rely on the pleadings, but rather must introduce sworn affidavits or other competent evidence.").

If the moving party does submit competent evidence refuting jurisdiction, the non-moving party shoulders the burden of establishing, by a preponderance of the evidence, that the court has jurisdiction over the matter. In re Chocolate Confectionary Antitrust Litigation, 674 F.Supp.2d at 595 ("Once these allegations are contradicted by an opposing affidavit, however, plaintiffs must present similar evidence in support of personal jurisdiction."). At this point, the plaintiff may not rely on bare pleadings but must support those pleadings with "actual proofs, not mere allegations." Id. (quoting Patterson by Patterson v. FBI, 893 F.2d 595, 603-04 (3d Cir. 1990) ). As such, "although the burden of persuasion always lies with the non-moving party, the burden of production rests initially with the party moving for dismissal under Rule 12(b)(2)." Id. at 595, n. 21.

Additionally, "[a] motion under Federal Rule of Civil Procedure 12(b)(2) ‘is inherently a matter which requires resolution of factual issues outside the pleadings, i.e., whether in personam jurisdiction actually lies.’ " Farber v. Tennant Truck Lines, Inc., 84 F.Supp.3d 421, 426 (E.D.Pa. 2015) (citation omitted).

III. DISCUSSION

Since jurisdiction is a threshold issue, the court will first address Overaa's contention that Carbonite's complaint should be dismissed under Fed.R.Civ.Pro. 12(b)(2) because Overaa is not subject to the court's jurisdiction. Both Overaa and Carbonite have submitted evidence regarding the issue of whether the court has personal jurisdiction over Overaa. Thus, Carbonite cannot simply rely on bare pleadings in its complaint to establish that the court has personal jurisdiction over Overaa.

"A federal district court may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state." Farber, 84 F.Supp.3d at 426 (citation omitted). "The Pennsylvania [long-arm] statute [ 42 Pa.Cons.Stat. § 5322(b) ] permits the courts of that state to exercise personal jurisdiction over nonresident defendants to the constitutional limits of the Due Process Clause of the Fourteenth Amendment." Mellon Bank (East) PSFS, Nat. Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir. 1992). "The Due Process Clause of the Fourteenth Amendment to the Constitution permits personal jurisdiction so long as the nonresident defendant has certain minimum contacts with the forum such that maintenance of the suit does not offend " ‘traditional notions of fair play and substantial justice.’ " Farber, 84 F.Supp.3d at 426 (citations omitted).

"There are two types of personal jurisdiction: general jurisdiction and specific jurisdiction."

Plumbers' Local Union No. 690 Health Plan v. Apotex Corp., 2017 WL 3129147, *4 (E.D.Pa. July 24, 2017) (citation omitted). "A Plaintiff may demonstrate that a court's exercise of personal jurisdiction is proper, by establishing that a court has either general jurisdiction or specific jurisdiction over the defendant, or by establishing that the defendant has consented to jurisdiction." Id. (citation omitted). There is no claim in this case that Overaa has consented to the jurisdiction of this court. Rather, Overaa contends that neither general nor specific personal jurisdiction exists over it.

1. General Jurisdiction

As in the case of Farber, 84 F.Supp.3d at 423, "[t]his case concerns the impact of two recent United States Supreme Court decisions, Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 131 S.Ct. 2846, 180 L.Ed.2d 796 (2011), and Daimler AG v. Bauman, 571 U.S. 117, 134 S.Ct. 746, 187 L.Ed.2d 624 (2014), on a federal court's authority to exercise general jurisdiction over a nonresident corporate defendant, consistent with the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution."

As the court in Plumbers' Local Union, 2017 WL 3129147, *4, explained:

"[O]nly a limited set of affiliations with a forum will render a defendant amenable to all-purpose jurisdiction there." Daimler, 134 S.Ct. at 760. "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, 564 U.S. at 919, 131 S.Ct. 2846. The paradigm forums, in which a corporation is reasonably regarded as at home, are the place of incorporation and the principal place of

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