GUERRERO v. PAPEN FARMS INC.

MIGUEL GUERRERO, ET AL., Plaintiffs,

v.PAPEN FARMS INC., Defendant.

CIVIL ACTION NO. B-09-149

UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

BROWNSVILLE DIVISION

Dated: March 31, 2011

MEMORANDUM OPINION AND ORDER

BE IT REMEMBERED, that on March 31, 2011, the Court considered Defendant Papen Farms, Inc.'s¹ Motion to Dismiss for Lack of Personal Jurisdiction, Dkt. No. 17; the response and replies thereto, Dkt. Nos. 20-21; the parties' supplemental memoranda of law, Dkt. Nos. 30-31, 45-46; and the sealed exhibits filed April 1, 2010, Dkt. No. 39. Because Plaintiffs have not made a prima facie showing of sufficient minimum contacts to exercise personal jurisdiction in Texas, the Court grants Defendant's motion to dismiss and transfers this case to the United States District Court for the District of Delaware. 28 U.S.C. § 1631 (2006).

I. Background

Plaintiffs are migrant farm workers and their families residing in South Texas. See generally Am. Compl. ¶¶ 8-37, Dkt. No. 15. They bring this action under the Migrant and Seasonal Agricultural Workers' Protection Act (AWPA), 29 U.S.C. § 216(b) and the Fair Labor Standards Act (FLSA), 29 U.S.C. § 1854(a). Id. ¶ 4. They also invoke this Court's supplemental jurisdiction under 28 U.S.C. § 1367 over breach-of-contract claims under Texas law. Id.

According to the First Amended Complaint, Defendant Papen Farms, Inc. (Papen Farms) is headquartered in Dover, Delaware, and "grows, harvests, packs, and sells vegetables, including cabbages, corn, cucumbers, and green beans for sale in interstate commerce." Id. ¶¶ 38-39. Plaintiffs allege that they can be divided into two categories: "working plaintiffs" who were employed by Papen Farms and minor children of working plaintiffs who were housed at Papen Farms.² The working plaintiffs aver that they were recruited to perform agricultural work for Papen Farms during various seasons from 1990 to 2007.³ They allege that during the 2007 season, their wages fell below the minimum wage and Papen Farms did not pay them overtime in violation of the FLSA, id. ¶¶ 84-89, and that Papen Farms did not comply with AWPA disclosure, record-keeping, and wage requirements. See id. ¶ 92; 29 U.S.C. §§ 1821-22. They also bring a breach-of-contract cause of action under Texas law. See Am. Compl. ¶¶ 95-100. All of the plaintiffs aver that Papen Farms failed to comply with AWPA posting requirements, 29 U.S.C. § 1821(c) and (g), and provided substandard housing in violation of the AWPA, 29 U.S.C. § 1823(a)-(b). See Am. Compl. ¶ 91.

On December 16, 2009, the then-Defendants filed a motion to dismiss for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2).⁴ Dkt. No. 17. This court exercised its discretion to permit the parties to conduct 60 days of discovery concerning personal jurisdiction. Ct. Order 2, Dec. 11, 2009, Dkt. No. 22. The parties timely supplemented the motion to dismiss, attaching numerous deposition excerpts, documents, and sealed telephone records. See generally Dkt. Nos. 30, 31 and 39. Four days after filing their supplemental response, Plaintiffs voluntarily dismissed John C. Papen and Richard G. Papen as defendants. See Dkt. No. 35 at 1.

II. Legal Standard

Federal Rule of Civil Procedure 12(b)(2) provides for dismissal of an action "for lack of personal jurisdiction." Plaintiffs "bear[| the burden of establishing personal jurisdiction over a non-resident defendant and that burden is met by making a prima facie showing." Clemens v. McNamee, 615 F.3d 374, 378 (5th Cir. 2010) (citing Kelly v. Syria Shell Petroleum Dev. B.V., 213 F.3d 841, 854 (5th Cir. 2000)). When a defendant disputes the factual basis for jurisdiction, "the court may receive interrogatories, depositions, or "any combination of the recognized methods of discovery" to help it resolve the jurisdictional issue." Walk Haydel & Assocs., Inc. v. Coastal Power Prod. Co., 517 F.3d 235, 241 (5th Cir. 2008) (citing Thompson v. Chrysler Motors Corp., 755 F.2d 1162, 1165 (5th Cir. 1985)).

Though a district court has discretion to determine the type and amount of discovery, "even if the court receives discovery materials, unless there is a full and fair hearing, it should not act as a fact finder and must construe all disputed facts in the plaintiffs favor and consider them along with the undisputed facts." Id. (citations of three cases omitted). Accordingly, in making a prima facie determination of personal jurisdiction, the court must accept "the plaintiffs uncontroverted allegations as true, and resolve in his favor all conflicts between the facts contained in the parties' affidavits and other documentation." Clemens, 615 F.3d at 378 (citing Reuell v. Lidov, 317 F.3d 467, 469 (5th Cir. 2002)).

III. Discussion

The Supreme Court has interpreted the Due Process Clause of the Fourteenth Amendment as requiring a two-part test in order for a federal court to exercise personal jurisdiction: "(1) the nonresident must have minimum contacts with the forum state, and (2) subjecting the nonresident to jurisdiction must be consistent with 'traditional notions of fair play and substantial justice.'"⁵Freudensprung v. Offshore Tech. Servs., Inc., 379 F.3d 327, 343 (5th Cir. 2004) (ultimately quoting International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). Minimum contacts may be "subdivided" into two types. Id. That is, personal "'[j]urisdiction may be general or specific,' depending on the nature of the defendant's forum-related contacts." Jackson v. Tanfoglio Giuseppe, S.R.L., 615 F.3d 579, 585 (5th Cir. 2010) (quoting Luv N' Care v. Insta-Mix, Inc., 438 F.3d 465, 469 (5th Cir. 2006)).

A. General Personal Jurisdiction

General personal jurisdiction is appropriate "[w]hen a cause of action does not arise out of a foreign defendant's purposeful contacts with the forum." Freudensprung, 379 F.3d at 343 (citing Nuovo Pignone, SpA v. STORMAN ASIA M/V, 310 F.3d 374, 378 (5th Cir. 2002)). "General [personal] jurisdiction may be found when the defendant's contacts with the forum state are substantial, continuous, and systematic." Jackson, 615 F.3d at 585 (citing Helicopteros Nacionales, 466 U.S. at 414-19). The systematic and continuous contacts test "is a difficult one to meet, requiring extensive contacts between a defendant and a forum," and "a defendant must have a business presence in the forum state." Id. (citing Johnston u. Multidata Sys. Int'l Corp., 523 F.3d 602, 609 (5th Cir. 2008) and Access Telecom, Inc. v. MCI Telecomm. Corp., 197 F.3d 694, 717 (5th Cir. 1999)). The Fifth Circuit has rejected a "stream-of-commerce" theory of general personal jurisdiction. See Alpine View Co. v. Atlas Copco AB, 205 F.3d 208, 216 (5th Cir. 2000). None of the following suffice to establish general personal jurisdiction: (1) "Injecting a product, even in substantial volume, into a forum's 'stream of commerce,' without more;" (2) "[a]dvertising and marketing through national media;" and (3) "isolated visits to a forum." Jackson, 615 F.3d at 585 (citing Bearryv. Beech Aircraft Corp., 818 F.2d 370, 375 (5th Cir. 1987); Johnston, 523 F.3d at 612; and Alpine View Co., 205 F.3d at 218).

Plaintiffs argue that Papen Farms has had continuous and systematic contacts with Texas for two reasons. First, they argue that Papen Farms has conducted sufficient business activities in Texas to confer general personal jurisdiction. Pls. Resp. to Mot. to Dismiss 18, Dkt. No. 20. Second, they contend that Papen Farms knowingly has employed a major part of its migrant farm worker labor force from Texas for the last twenty years. See Pls.' Supp. Reply to Resp. to Mot. to Dismiss 22-23, Dkt. No. 30.

1. Business Activities

Since at least 1996, Papen Farms has been listed in the Packer Red Book, which Plaintiffs describe as "a national agricultural merchant publication which includes distribution to produce buyers and stores in Texas." Pls.' Resp. to Mot. to Dismiss 17 (citing Decl. of Daniela Dwyer ¶ 8, Dkt. No. 20 Ex. 1-B); see also id. Ex. B (copies of advertisements from 1996-2009). Papen Farms appears on an alphabetical listing of vegetable suppliers; the listing states the dates during which corn, cabbage, and beans are available from Papen Farms. See id. at 3. Papen Farms's listings make no mention of Texas or any other state. See ibid. After reviewing this advertising and based on Plaintiffs' representations, the Court concludes that Papen Farms's listing in the Packer Red Book is at most "advertising in national media," and does not create sufficient contacts with Texas to support general personal jurisdiction. See id.; Jackson, 615 F.3d at 385; Alpine View Co., 205 F.3d at 218.

Plaintiffs aver that they sometimes observed trucks with Texas license plates or the names of Texas cities on their sides loading vegetables at Papen Farms. See, e.g., Decl. of N. Guerrero ¶ 12, Dkt. No. 20 Ex. 4; Decl. of M. Martinez ¶ 12, Dkt. No. 20 Ex. 7. They also point out that Papen Farms represents in the Packer Red Book that it handles its own transportation. Dwyer Decl. ¶ 7; id. Ex. B at 3. Defendants respond that nothing in the record after jurisdictional discovery supports the conclusion that Papen Farms has a business presence in Texas. Dkt. No. 31 at 25- 26. Papen Farms avers that it owns three trucks which perform deliveries within no more than 500 miles of Dover, Delaware. See Supp. Decl. of John Papen ¶¶ 5, 8, Dkt. No. 31 Ex. 21. According to Papen Farms, other buyers arrange their own shipping. E.g., R. Papen Dep. 36-37, Dkt. No. 31 Ex. 1; J. Papen Dep. 11, Dkt. No. 31 Ex. 2. Plaintiffs' observations of trucks with different license plates corroborates Papen Farms's claim that its customers provide transportation for its vegetables except within a few hundred miles of Delaware. Plaintiffs point to nothing in the record showing that Papen Farms has an office in Texas, conducts meetings in Texas, or that a Papen Farms employee has ever visited Texas. Plaint...