Opinion
Civil Action No. 99-2505 (NHP)
March 1, 2000
Peter John Frazza, Esq., BUDD, LARNER, GROSS, ROSENBAUM, GREENBERG SADE, for Plaintiff, Jazz Photo Corp.
William R. Stoeri, Esq., William A. Dossett, Esq., Thomas L. Nuss, Esq. DORSEY WHITNEY, LLP, Thaddeus J. Hubert, III, Esq., HOAGLAND, LONGO, MORAN, Dunst DOUKAS, for Defendants, Imation Corp. and Imation, S.p.A.
THE ORIGINAL OF THIS LETTER OPINION IS ON FILE WITH THE CLERK OF THE COURT
Dear Counsel:
This matter comes before the Court on the motion by defendant/fourth-party defendant Imation, S.p.A. to dismiss the Complaint of plaintiff Jazz Photo Corp. and the Fourth-Party Complaint of third-party defendant/fourth-party plaintiff Jazz Photo Hong Kong Limited for lack of jurisdiction. This Court heard oral argument on February 10, 2000. For the reasons stated herein, the motion by defendant/fourth-party defendant Imation, S.p.A. to dismiss the Complaint of plaintiff Jazz Photo Corp. and the Fourth-Party Complaint of third-party defendant/fourth-party plaintiff Jazz Photo Hong Kong Limited for lack of jurisdiction is DENIED.
STATEMENT OF FACTS PROCEDURAL HISTORY
Plaintiff Jazz Photo Corporation (hereinafter "plaintiff") filed a Complaint in the Superior Court, Law Division, in Middlesex County naming Imation Corporation and Imation, S.p.A. as defendants therein. Plaintiff alleged claims of: (1) breach of contract; (2) breach of express and implied warranty; (3) agency, instrumentality and alter ego liability; (4) apparent manufacturer; (5) estoppel; (6) fraud; (7) New Jersey Consumer Fraud Act; (8) New Jersey RICO; and (9) New Jersey RICO Conspiracy. See Complaint. Shortly thereafter, Imation Corporation and Imation S.p.A. filed a Notice of Removal to the United States District Court for the District of New Jersey.
A series of claims and counterclaims followed: Imation Corp. filed a counterclaim against plaintiff. Imation Corp. then filed a third-party Complaint against Jazz Photo Hong Kong Limited. Third-Party Defendant Jazz Photo Hong Kong Limited then filed a third-party counterclaim against Imation Corp. and Imation Hong Kong Limited as well as filing a Fourth-Party Complaint against Imation S.p.A.
Defendant/Third-Party Plaintiff Imation Corp. (hereinafter "Imation Corp.") is a Delaware corporation with its headquarters near St. Paul, Minnesota. Imation S.p.A. (Hereinafter "Imation, S.p.A.") is a wholly-owned Italian subsidiary of Imation Finanziaria S.p.A., an Italian corporation headquartered in Milan. Imation Finanziaria S.p.A. is a wholly-owned subsidiary of Imation B.V., a Dutch corporation with its headquarters in Rotterdam. Imation B.V. is a wholly-owned subsidiary of Imation Corp.
Imation S.p.A. filed the subject motion to dismiss for lack of personal jurisdiction.
The Court did not use any of the alleged "confidential" documents in arriving at its decision.
DISCUSSION
The Supreme Court has expressly mandated that a plaintiff must establish certain procedural prerequisites before a federal court can exercise personal jurisdiction. See Omni Capital Intern. v. Rudolf Wolff Co., Ltd., 484 U.S. 97, 104 (1987). Once the procedural prerequisites have been met, the next question, then, is whether the district court may exercise in personam jurisdiction over the particular defendant.A district court may exercise jurisdiction over a nonresident of the state in which that court sits only to "the extent authorized by the laws of that state." Provident Nat'l Bank v. California Fed. Sav. Loan Ass'n, 819 F.2d 434, 436 (3d Cir. 1987). New Jersey's long-arm statute permits courts to exercise jurisdiction to the fullest extent under the Constitution. See Advel Corp. v. McCure, 58 N.J. 264, 268 (1971); N.J. Ct. R. 4:4-4. Accordingly, this Court's analysis must focus on whether an exercise of jurisdiction comports with the requirements of the Due Process Clause of the Fourteenth Amendment.
The constitutional touchstone of this analysis is whether the "defendant purposefully established `minimum contacts' in the forum State." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985) (quotingInternational Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). The minimum contacts must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Rudzewicz, 471 U.S. at 475. "The `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of `random,' `fortuitous,' or `attenuated' contacts, Keeton v. Hustler Magazine, Inc., 465 U.S. at 774, 104 S.Ct. at 1478; World-Wide Volkswagen Corp. v. Woodson, 444 U.S. at 299, 100 S.Ct. at 568, or of the "unilateral activity of another party or third person," Helicopteros Nacionales de Columbia, S.A. v. Hall, supra, 466 U.S. at 417, 104 S.Ct. at 1873." "Jurisdiction is proper . . . where the contacts proximately result from actions by the defendanthimself that create a `substantial connection' with the forum State."Id. (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223 (1957)). Once minimal contacts are established, the court must ensure that the maintenance of the lawsuit does not offend "traditional notions of fair play and substantial justice." International Shoe, 326 U.S. at 316.
In Helicopteros Nacionales de Colombia v. Hall, the Supreme Court distinguished the exercise of specific jurisdiction from general jurisdiction. 466 U.S. 408, 414-15 (1984). When the litigation is related to or arises out of a defendant's contacts with the forum, the jurisdictional analysis focuses on the "relationship among the defendant, the forum and the litigation." Id. at 414 (citing Shaffer v. Heitner, 433 U.S. 186, 204 (1977)). This requirement is satisfied provided that the contacts resulted from the defendant's purposeful conduct and not the plaintiff's unilateral activities. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98 (1980). The courts have referred to this principle as "specific jurisdiction." Provident, 819 F.2d at 437.
Alternatively, when the cause of action does not relate to or arise out of the defendant's forum-related contacts, jurisdiction may be properly asserted without offending due process if the defendant has sufficient "continuous and systemic" contacts with the forum. The threshold for exercising this "general jurisdiction" is, consequently, significantly greater than the exercise of specific jurisdiction. Id. at 437 (citingDollar Sav. Bank v. First Sec. Bank of Utah, 746 F.2d 208, 212 (3d Cir. 1984)).
Once a defendant raises the issue of personal jurisdiction, the plaintiff then bears the burden to demonstrate, by a preponderance of the evidence, that the defendant indeed had contacts sufficient to give the district court jurisdiction. See Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 146-47 (3d Cir.), cert. denied, 506 U.S. 817 (1992) (citingTime Share Vacation v. Atlantic Resorts, Ltd., 735 F.2d 61, 65 (3d Cir. 1984)). Moreover, the plaintiff is required to sustain its burden through sworn affidavits or other competent evidence; at no point may a plaintiff rely on the pleadings alone in order to withstand an in personam jurisdictional attack. See Stranahan Gear Co., Inc. v. NL Indus., 800 F.2d 53, 58 (3d Cir. 1986); Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 67 n. 9 (3d Cir 1984).
In this matter, the factual record reveals that Imation S.p.A.'s contacts with New Jersey are sufficient to support an exercise of personal jurisdiction.
With respect to specific jurisdiction, plaintiff argues that this Court has specific personal jurisdiction over Imation, S.p.A. because: (1) it manufactured the alleged defective film; (2) its personnel negotiated the terms and conditions of its sale to plaintiff by telephone; (3) written confirmation of the terms of the sale were forward by its personnel via electronic message, facsimile, and letter; (4) its personnel gave technical advise to plaintiff in New Jersey when problems arose with the quality of the prints developed from the alleged defective film; and (5) subsequent to an inspection of the factories where the film was assembled into single-use cameras, its personnel discussed its findings and recommendations by telephone with plaintiff's personnel in New Jersey and also forwarded those findings and recommendation via electronic message, letter and facsimile.
Significantly, however, plaintiff also contends that Imation, S.p.A. made many misrepresentations during the course of these conversations that give rise to plaintiff's fraud and New Jersey state RICO claims. Specifically, plaintiff alleges that Imation, S.p.A. has engaged in interstate telephone and written communications with citizens of New Jersey, namely plaintiff's personnel, during which they falsely represented to them that no other Imation customer had encountered the magenta and discoloration problems that led Wal-Mart and other customers to reject single-use cameras loaded with its film. Plaintiff also contends that Imation, S.p.A. misrepresented to plaintiff that "the films supplied to [plaintiff] have the required quality to produce good photographic results." See Affidavit of Roger Lorenzini, Exhibit 11. These misrepresentations, plaintiff asserts, were made in late 1998 and were meant to induce the purchase of an additional 3 million rolls of film in 1999.
The United States Supreme Court has opined, . . . it is an inescapable fact of modern commercial life, that a substantial amount of business is transacted solely by mail and wire communications across state lines, thus obviating the need for physical presence within a State in which business is conducted. So long as a commercial actor's efforts are "purposefully directed" toward residents of another State, we have consistently rejected the notion that an absence of physical contacts can defeat personal jurisdiction there.
Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476 (1985) (citingKeeton v. Hustler Magazine, Inc., 465 U.S. at 774-75).
Accordingly, the mere fact that Imation S.p.A. was never physically present in New Jersey does not preclude a finding that there is personal jurisdiction.
The "mere transmittal of letters and messages by mail or telephone within a state is not the critical factor [in determining whether there exists personal jurisdiction], it is the nature of the contact." Lebel v. Everglades Marina, Inc., 115 N.J. 317, 325 (1989) (citing Baron Co. v. Bank of N.J., 497 F. Supp. 534 (E.D.Pa. 1980)) (emphasis added);see also Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir. 1993) (acknowledging that "[m]ail and telephone communications sent by [a] defendant into the forum may count toward the minimum contacts that support jurisdiction."). Courts have been more willing to confer jurisdiction in a factual situation where a defendant knowingly sends a false statement into the forum state. See Lebel v. Everglades Marina, Inc., 115 N.J. 317, 326 (1989) (citingVishay Intertechnology, Inc. v. Delta Int'l Corp., 696 F.2d 1062, 1066 (4th Cir. 1982) (quoting Murphy v. Erwin-Wasey, Inc., 460 F.2d 661, 664 (1st Cir. 1972) (citations omitted))).
In this matter, Imation, S.p.A. had submitted affidavits wherein it is acknowledged that there was communication, via facsimile and telephone, between the personnel employed by both plaintiff and Imation, S.p.A. This communication involved pricing and delivery matters as well as concerns involving the discoloration problem with the film. See Affidavit of Riccardo Genta, ¶¶ 10,13; Affidavit of Walter Fontani. See also Affidavit of Roger Lorenzini, Exhibits 4,5,6,8,9,11,12,14. Although Imation, S.p.A. argues that it did not solicit any business during these conversations, plaintiff asserts that these alleged misrepresentations were made in order to induce the purchase of an additional 3 million rolls of film in 1999, despite its knowledge that other customers encountered similar problems.
Since it is the actual content of the communications which admittedly were made to New Jersey that form, at least in part, the basis of this lawsuit this Court finds that it is proper to exercise specific personal jurisdiction over defendants. See Lebel v. Everglades Marina, Inc., 115 N.J. 317, 326 (1989) (holding that defendant's alleged telephone calls and use of the mails to solicit a contract satisfied minimum contacts, in part, because plaintiff alleged that defendant's representations contained therein were fraudulent); see also Ketcham v. Charles R. Lister International, Inc., 167 N.J. Super. 5, 9 (N.J.Super.Ct. A.D. 197 9), cert. denied, 81 N.J. 339 (1979) (quoting Amercoat Corp. v. Reagernt Chem. Research, Inc., 108 N.J. Super. 331, 340 (N.J.Super.Ct. A.D. 1970) (courts have found "sufficient contacts for personal jurisdiction where virtually any form of economic entry into the state was evident . . . solicitation [of business], in and of itself, may be sufficient `contact' to comport with the requirements of due process.")).
Finally, this Court concludes that traditional notions of fair play and substantial justice would not be offended by having defendants submit to personal jurisdiction in New Jersey. See International Shoe, 326 U.S. at 316. The factors include: "(1) the burden on the defendant; (2) the forum state's interest in adjudicating the dispute; (3) the plaintiff's interest in obtaining convenient and effective relief; (4) the judicial system's interest in obtaining the most efficient resolution of controversies; and (5) the shared interest of the several states in furthering fundamental substantive social policies." Telesis Mergers Acquisitions, Inc. v. Atlis Federal SVCS, Inc., 918 F. Supp. 823 (D.N.J. 1996) (citing Burger King, 471 U.S. at 477). Although defendants may be inconvenienced by having to come to New Jersey to defend their position, the Court finds that the obligation upon Imation, S.p.A. is not unduly burdensome and that New Jersey has a strong interest in adjudicating the dispute.
CONCLUSION
Based upon the foregoing analysis, this Court concludes that the motion by defendant/fourth-party defendant Imation, S.p.A. to dismiss the Complaint of plaintiff Jazz Photo Corp. and the Fourth-Party Complaint of third-party defendant/fourth-party plaintiff Jazz Photo Hong Kong Limited for lack of jurisdiction is DENIED.
An appropriate Order accompanies this Letter Opinion.