Opinion
Civil Action No. 01-12320-RWZ
January 23, 2003
MEMORANDUM OF DECISION
Plaintiff Jana Brands, Inc., a Delaware corporation with its principle place of business in Natick, Massachusetts, produces frozen fish products. Defendant NexiFM, Inc., a Texas corporation with its principle place of business in Texas, distributes frozen foods. In 2000, defendant sought to purchase frozen seafood and contacted a food broker in California who called Kevin McCarthy, Jana Brand's president, at the plaintiff's Seattle, Washington office. Negotiations for the sale continued via telephone while Mr. McCarthy was at the company's Massachusetts headquarters. During these discussions, the plaintiff requested that the broker send additional credit information for the defendant to its Washington office to be forwarded to the Massachusetts headquarters. After approval, the plaintiff's Massachusetts office faxed to defendant sales confirmations, import/export related documents and invoices.
A factual discrepancy exists between the plaintiff and the defendants as to the particular broker who contacted the plaintiff's Washington office. Where such discrepancy exists, the plaintiff's allegations will be presumed true. Here, the plaintiff has not specified the location of the broker, while the defendants have alleged that they contacted a broker in California.
In December 2000, defendant purchased three 35,200 pound containers of frozen seafood for $90,288 from the plaintiff. The seafood was shipped from Los Angeles, California. In January 2001, plaintiff's Massachusetts office received a payment of $30,976. Thereafter, defendant Gustavo Vela, NexiFM's president and sole owner, sent three payments to the plaintiff totaling $15,000. Two of the payments were sent directly to plaintiff's bank at an unidentified location. Mr. McCarthy collected the third payment at defendants' Texas office. Because defendant Vela orally agreed to pay the remaining balance by the end of 2001, the plaintiff agreed not to sue. Defendant Vela called plaintiff's Massachusetts office several times to discuss the matter but did not make additional payments.
The plaintiff filed suit on December 26, 2001, alleging breach of contract, unjust enrichment, quantum meruit, and unfair and deceptive trade acts and practices under Massachusetts law. Defendants have filed a Motion to Dismiss for lack of personal jurisdiction.
When a defendant contests personal jurisdiction, the plaintiff has the burden of proof to show that jurisdiction over the defendant is permitted. Landmark Bank v. Machera, 736 F. Supp. 375, 380 (D.Mass. 1990). In doing so, the plaintiff "must go beyond the pleadings and make affirmative proof." Chlebda v. H.E. Fortna Brother, Inc., 609 F.2d 1022, 1024 (1st Cir. 1979) (citations omitted.).
In a diversity case, personal jurisdiction over a nonresident defendant is restricted by: (1) the forum state's long-arm statute and (2) the Due Process Clause of the Fourteenth Amendment. Lyle Richards International, Ltd. v. Ashworth, 132 F.3d 111, 112 (1st Cir. 1997). The Massachusetts' long-arm statute states that "[a] court may exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action in law or equity arising from the person's (a) transacting any business in this commonwealth. . . ." Mass. Gen. Laws ch. 223A, § 3. Because jurisdiction under the statute is authorized to the limits permitted by the Constitution, the sole issue is whether Section 3(a) confers jurisdiction within its literal and constitutional boundaries. Good Hope Industries, Inc. v. Ryder Scott Co., 389 N.E.2d 76, 79-80 (Mass. 1979).
The literal requirement of the statute is easily met: a single "'isolated' transaction, or one with 'little impact on the commerce' of the commonwealth" suffices. Bond Leather Co., Inc. v. Q.T. Shoe Mfg. Co., 764 F.2d 928, 932 (1st Cir. 1985). Therefore, in the ordinary case, the inquiry focuses on the constitutional issue. Cambridge Literary Properties, Ltd. v. W. Goebel Porzellanfabrik, 295 F.3d 59, 63 (1st Cir. 2002). Then the question is whether the plaintiff's claims arise from or relate to the defendants' contacts with Massachusetts, Sigros v. Walt Disney World Co., 129 F. Supp.2d 56, 66 (D.Mass. 2001), "which resulted from an affirmative, intentional act of the defendant, such that it is fair and reasonable to require the defendant to come into the State to defend the action." Good Hope Industries, Inc., 389 N.E.2d at 79. See also Cambridge Literary Properties, Ltd., 295 F.3d at 63. "[I]t is essential in each case that there be 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." Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1240 (1958).
In the present case, the plaintiff has not carried its burden to establish the existence of personal jurisdiction over the defendants. By engaging in the instant transaction, defendants did not purposefully avail themselves of the privilege of "conducting activities within the forum State, thus invoking the benefits and protections of its laws." See Bond Leather Co., Inc., 764 F.2d at 933 (stating that "the fact that a nonresident enters into a single commercial contract with a resident of the forum state is not necessarily sufficient to meet the constitutional minimum for jurisdiction."). Defendants' contacts with Massachusetts were fortuitous. The telephone conversations defendants' agent had with plaintiff's president while the latter was in Massachusetts and defendant Vela's subsequent calls concerning payment cannot be construed as affirmative acts whereby defendants availed themselves of the privilege of conducting activities in Massachusetts. See Aub v. Technicolor Entertainment Services, 2002 WL 31269003 (stating that the "fact that there were long-distance communications between the parties by mail and telephone is not enough to justify the conclusion that [business was transacted] in Massachusetts."). Furthermore, although defendants' payments were ultimately received by the plaintiff, the facts indicate that only one was sent to Massachusetts, which is insufficient to confer jurisdiction. See 'Automatic' Sprinkler Corp. of America v. Seneca Foods Corp., 280 N.E.2d 423, 445 (Mass. 1972) (stating that "making payments through the mail" is not a significant contact.). The only other contacts defendants had with Massachusetts did not involve an affirmative or intentional act by them; they merely received faxes from the plaintiff.
All other relevant facts occurred outside of Massachusetts. Significantly, the defendants' broker or agent initially contacted the plaintiff's Washington office and began negotiations there. Plaintiff notably had defendants' broker send the credit information to the plaintiff's Washington office. Finally, the seafood sold under the contract was shipped from California. Given the minimal contacts defendants had with the state, they could not have reasonably anticipated being haled into a Massachusetts court.
Accordingly, the defendants' Motion to Dismiss is allowed. Judgment may be entered dismissing the Complaint without prejudice.