Replica Auto Body Panels & Auto Sales Inc. v. Intech Trailers Inc.

454 F.Supp.3d 458

REPLICA AUTO BODY PANELS AND AUTO SALES INC., Plaintiff,

v.INTECH TRAILERS INC., Defendant.

No. 4:19-CV-02018

United States District Court, M.D. Pennsylvania.

Filed April 16, 2020

George A. Reihner, Wright & Reihner, PC, Scranton, PA, for Plaintiff.

John G. Dean, Elliott Greenleaf & Dean, Scranton, PA, John R. O'Rourke, McTighe, Weiss & O'Rourke, Norristown, PA, for Defendant.

MEMORANDUM OPINION

Matthew W. Brann, United States District Judge This case arises out of the sale of an allegedly defective stacker trailer and is premised on this Court's diversity jurisdiction. Defendant inTech Trailers Inc. moved to dismiss the complaint on December 6, 2019. That motion is now ripe for disposition.

I. BACKGROUND¹

Plaintiff Replica Auto Body Panels and Auto Sales Inc. is a Pennsylvania corporation based in Lackawanna County, Pennsylvania. inTech is an Indiana corporation headquartered in Nappanee, Indiana. inTech is not incorporated in Pennsylvania, but it is registered as a foreign corporation doing business within the Commonwealth.²

Replica's President, Paul Bochon, is also an amateur racecar driver who advertises Replica on his car.³ On May 2, 2018, Replica ordered a custom stacker trailer to transport Bochon's racecar to events across the country through one of inTech's dealerships located in Florida.⁴ Delivery was completed in Indiana.⁵

After eleven months of use, Bochon noticed parts of the stacker trailer became warped, and he discovered cracks in its frame.⁶ Concluding that the inTech stacker trailer was inoperable as a result of these defects, Bochon paid to lease a different trailer.⁷

On October 21, 2019, Replica filed suit against inTech in the Court of Common Pleas of Lycoming County, Pennsylvania.⁸ On November 22, 2019, inTech removed the action to this Court.⁹ On December 6, 2019, inTech moved to dismiss the complaint.¹⁰

II. LEGAL STANDARD

To survive a motion to dismiss, a plaintiff is required to provide "a short and plain statement of the claim showing that the pleader is entitled to relief."¹¹ A claimant must state a plausible claim for relief.¹²

"A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged."¹³ The plaintiff's factual allegations must rise above the speculative level, but the plaintiff "need only put forth allegations that raise a reasonable expectation that discovery will reveal evidence of the necessary element."¹⁴ A court ruling on a motion to dismiss must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief."¹⁵

III. DISCUSSION

InTech argues that Replica's complaint is both procedurally and substantively flawed. Procedurally, inTech objects that this action is improperly venued in the United States District Court for the Middle District of Pennsylvania, that the action should be transferred to the United States District Court for the Northern District of Indiana, and that this Court lacks personal jurisdiction over it. On the merits, inTech contends that Replica's allegations fail to state a claim.

A. Venue

InTech moves to dismiss the complaint on the basis that venue is improper in the Middle District of Pennsylvania under 28 U.S.C. § 1391(b). Section 1391(b) governs venue for diversity actions that are brought in federal court. However, this action was not "brought" in federal court—it was removed.¹⁶ Venue for removed diversity actions is instead governed by 28 U.S.C. § 1441(a), which provides that venue is proper in "the district court of the United States for the district and division embracing the place where such action is pending."¹⁷ This action is properly venued in this Court because this Court embraces the Court of Common Pleas of Lycoming County.

In the alternative to dismissal, inTech moves this Court to transfer the action to the Northern District of Indiana pursuant to 28 U.S.C. § 1404(a). That statute provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented." This rests the decision whether to transfer the action in the discretion of the district court.¹⁸ However, transfer is generally disfavored, and the burden of establishing the need for transfer rests with the movant.¹⁹

InTech has not identified any particular hardship that would result from litigating in the Middle District of Pennsylvania. The location of documents or witnesses in Indiana is noted, but inTech, a large corporation, should not face any significant obstacles to producing them in Pennsylvania, particularly in our era of electronic document production and filing. Furthermore, while not headquartered in this state, inTech conducts business in Pennsylvania. There is some convenience to litigating in Pennsylvania as well because both Replica and the trailer at issue are located here. In light of the modest inconvenience to inTech, I decline to transfer the action under § 1404(a).

B. Personal Jurisdiction

InTech further moves to dismiss this action for lack of personal jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(2). Replica does not ague that it has alleged sufficient minimum contacts to Pennsylvania to support the exercise of specific personal jurisdiction. Rather, it argues that, pursuant to 42 Pa. C.S.A. § 5301, inTech has consented to general personal jurisdiction by registering as a foreign corporation doing business in the state.

Section 5301(a)(2)(i) provides that registration as a foreign corporation conducting business in Pennsylvania "shall constitute a sufficient basis of jurisdiction to enable the tribunal of this Commonwealth to exercise general personal jurisdiction over such person ... and to enable such tribunals to render personal orders against such person or representative." While registration statutes in other states had until recently been interpreted as granting consent to general jurisdiction, Pennsylvania's statute is unusual, perhaps even unique, in its explicit statement to that effect.²⁰

In Bane v. Netlink, Inc. ,²¹ the United States Court of Appeals for the Third Circuit held that § 5301 comports with Due Process requirements imposed by the United States Constitution.²² Normally, this would end the discussion here. However, the United States Supreme Court's 2014 decision in Daimler AG v. Bauman²³ has raised questions about Bane ’s continuing validity. The majority of district courts assessing the question in the wake of Daimler have continued to follow Bane .²⁴ However, the Honorable Eduardo C. Robreno of the United States District Court for the Eastern District of Pennsylvania declined to follow Bane in a recent, thoughtful opinion in In re Asbestos Products Liability Litigation (No. VI) .²⁵ While I reach a different conclusion here, his analysis is persuasive in important respects.

Traditionally, general jurisdiction attaches only in the states where a corporation is incorporated and where its central decision-making apparatus is located.²⁶

Prior case law suggested that general jurisdiction could also arise in other states in which a corporation engaged in a "continuous and systematic" course of business.²⁷ Daimler did not completely eliminate the possibility of general jurisdiction arising out of "continuous and systematic" operations in a state; however, it required that such operations would need to be strong enough to render the corporation "at home" in the state.²⁸ Expressing reservations toward broader application of general jurisdiction, the Court observed that general jurisdiction arising out of "continuous and systematic" operations would be "an exceptional case."²⁹

The question now is whether the Due Process limitations raised in Daimler regarding general jurisdiction arising from "continuous and systematic" operations apply with equal force to general jurisdiction arising from consent. Courts in other jurisdictions have found Due Process violations in attempts to imply consent to general jurisdiction from more-ambiguous statutes.³⁰ When analyzing Pennsylvania's clear, direct statement that registration as a foreign corporation constitutes consent, however, the vast majority of cases have concluded that consent is an alternative basis for general jurisdiction not addressed by, and therefore not abrogated by, Daimler .³¹

Judge Robreno departed from this consensus in In re Asbestos . In doing so, he found that conditioning the right to do business in the state on the surrender to general jurisdiction ran afoul of the unconstitutional conditions doctrine, which prevents the government from conditioning a benefit on the forfeiture of a constitutional right.³² Of course, this begs the question whether a corporation possesses a constitutional right to avoid general jurisdiction by consent. Judge Robreno found that there was such a right grounded in Due Process.³³ This analysis seems to be in harmony with Daimler ’s reservations toward expanding general jurisdiction beyond states in which the corporation is "at home." After all, it would seem an odd result if states could circumvent Daimler —in theory opening the possibility of corporations being subject to general jurisdiction in all fifty states—through what essentially amount to magic words.

Were I deciding this issue on a blank slate, I would be inclined to follow Judge Robreno's decision in In re Asbestos . However, Bane remains controlling law in this Circuit. While Daimler provides strong reasons to believe that general jurisdiction by consent may be abrogated in the future, it neither addresses this question directly nor compels this outcome logically. For example, a finding that general...