UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

JOSE R. PACAS; WILLIAM GOLDSTON;

GWENDA MOORE; MARIA ELENA

ORELLANA; BETTY JO CUMMING, all

of the foregoing for themselves and

all other persons similarly situated,

Plaintiffs-Appellants,

No. 95-1811

v.

SHOWELL FARMS, INCORPORATED,

d/b/a Mid-State Farms,

Incorporated,

Defendant-Appellee.

JOSE R. PACAS; WILLIAM GOLDSTON;

GWENDA MOORE; MARIA ELENA

ORELLANA; BETTY JO CUMMING, all

of the foregoing for themselves and

all other persons similarly situated,

Plaintiffs-Appellants,

No. 95-2784

v.

SHOWELL FARMS, INCORPORATED,

d/b/a Mid-State Farms,

Incorporated,

Defendant-Appellee.

Appeals from the United States District Court

for the Eastern District of North Carolina, at Raleigh.

Terrence W. Boyle, District Judge.

(CA-93-546-5-BO)

Argued: March 5, 1996
Decided: April 22, 1996

Before WILKINSON, Chief Judge, and LUTTIG and MICHAEL,

Circuit Judges.

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Affirmed by unpublished per curiam opinion. Judge Michael wrote a

dissenting opinion.

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COUNSEL

ARGUED: Robert James Willis, Raleigh, North Carolina, for Appellants. Arthur Mortimer Brewer, SHAWE & ROSENTHAL, Baltimore, Maryland, for Appellee. ON BRIEF: Carlene McNulty,

NORTH STATE LEGAL SERVICES, Hillsborough, North Carolina,

for Appellants Goldston, Moore & Cumming. Patrick M. Pilachowski, SHAWE & ROSENTHAL, Baltimore, Maryland; John H.

Culver, III, KENNEDY, COVINGTON, LOBDELL & HICKMAN,

L.L.P., Charlotte, North Carolina, for Appellee.

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Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

Appellants, Jose R. Pacas, William Goldston, Gwenda Moore,

Maria Elena Orellana, Betty Jo Cumming, and other similarly situated

persons, filed the instant action in the United States District Court for

the Eastern District of North Carolina against their employer, Showell

Farms, Inc. ("Showell"), alleging that Showell violated the Fair Labor

Standards Act and parallel state statutes by using a"master card system" to determine the number of hours appellants worked at Sho-

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well's Siler City plant located within the Middle District of North

Carolina. Showell filed a motion to dismiss for improper venue, arguing that it did not have sufficient minimum contacts with the Eastern

District to establish venue. Appellants responded that venue was

proper in the Eastern District, but also requested a transfer to the Middle District if the court determined that venue did not lie in the Eastern District. The district court dismissed the case on the grounds that

venue was improper, and rejected appellants' Rule 59(e) motion to

alter or amend judgment and Rule 60(b) motion for relief from judgment. Additionally, the district court awarded Showell costs in the

amount of $ 5,692.85 pursuant to Federal Rule of Civil Procedure

54(d)(1), which provides in relevant part that,"costs other than attorneys' fees shall be allowed as of course to the prevailing party unless

the court otherwise directs."

Appellants appeal the decision to award Showell costs, arguing that

the district court erred in determining that venue did not lie in the

Eastern District, abused its discretion in refusing to transfer the case

to the Middle District if venue was improper in the Eastern District,

and abused its discretion in awarding costs to Showell as the prevailing party. Finding no error, we now affirm.

I.

Appellants first argue that the district court erred in dismissing the

case for improper venue. Under 28 U.S.C. § 1391(b), a plaintiff can

bring a civil action in any judicial district where the defendant resides.

Section 1391(c) provides that, for venue purposes, a corporation

resides "in any judicial district in which it is subject to personal jurisdiction at the time the action is commenced," and that if a state has

more than one district, then a corporation resides within any district

in which the contacts were sufficient to establish personal jurisdiction

if that district were a separate state. Since the events giving rise to the

instant action took place at Showell's Siler City plant which is located

within the Middle District of North Carolina, the appropriate inquiry

in this case is whether Showell has sufficient contacts to establish

general personal jurisdiction in the Eastern District of North Carolina.

Before a court can exercise in personam jurisdiction over a defendant, that defendant must have "certain minimum contacts with [the

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district] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." International Shoe

Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation

marks omitted). To exercise general jurisdiction and satisfy the due

process clause, a defendant's contacts with the district must be "continuous and systematic." Helicopteros Nacionales de Colombia, S.A.

v. Hall, 466 U.S. 408, 416 (1984). However,"[e]ven `continuous

activity of some sorts [by a corporation] within a state is not enough

to support [general jurisdiction].'" Nichols v. G.D. Searle & Co., 991

F.2d 1195, 1199 (4th Cir. 1993) (quoting International Shoe, 326 U.S.

at 318).

Appellants have failed to make out a prima facie case that venue

was proper in the Eastern District of North Carolina, as Showell does

not have the requisite minimum contacts with the Eastern District.

The Showell plant at which the appellants worked, and where the conduct occurred that forms the basis for their complaint, is located

within the Middle District of North Carolina. Showell's main (and

possibly only) contact with the Eastern District is the sale of some

chicken processed in the Middle District to Hardee's Corporation,

which generally took possession of the chicken in the Middle District

and used its own trucks to transport the chicken to its two warehouses

in the Eastern District. Cf. Helicopteros Nacionales, 466 U.S. at 417-

18 (holding that mere purchases, even if at regular intervals, are insufficient to establish general jurisdiction and that sending personnel into

the state for training related to those purchases was of no added significance). While there is some dispute as to the exact percentage of

chicken sold to Hardee's, it represented an insignificant portion of

Showell's overall sales. Moreover, sales to other customers within the

Eastern District were minimal, if there were any, at the time this suit

was filed. In the absence of any sort of distribution network, sales

force, or other substantial presence within the Eastern District, sales

to a single customer who generally transports the product into the

Eastern District on its own trucks, along with occasional use of interstate highways within the Eastern District, does not constitute the requisite minimum contacts necessary to satisfy "fair play and substantial

justice" and to establish general jurisdiction for a suit not related to

the sale of that product. See, e.g., L.H. Carbide Corp. v. Piece Maker

Co., 852 F. Supp. 1425 (N.D.Ind. 1994) (finding venue improper

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despite regular visits to the forum by a representative and sales totaling 8% of revenue the previous year).

Perhaps recognizing their error, appellants contend that even if

venue is improper in the Eastern District, the district court abused its

discretion in refusing to transfer this action to the Middle District. See

28 U.S.C. § 1406(a) (allowing a court to transfer a case filed in the

wrong district "if it be in the interest of justice"). As appellants' counsel candidly conceded at oral argument, this action was filed in the

Eastern District because counsel has an office near the headquarters

of the Eastern District. Given that at the time this suit was filed,

appellants knew that venue was most assuredly proper in the Middle

District but at best questionable in the Eastern District, it cannot be

said that the district court abused its discretion in refusing to transfer

the case to the Middle District. See Nichols, 991 F.2d at 1200-02

(holding that it is not an abuse of discretion to deny a motion to transfer under section 1406(a) when the plaintiff's attorney could reasonably foresee that the forum in which the suit was originally filed was

improper).

II.

Finally, appellants argue that even if Showell properly prevailed on

the motion to dismiss for improper venue, the district court abused its

discretion in awarding fees to Showell under Rule 54(d)(1). Appellants' primary contention is that the district court failed to consider

the settlement of a related action in the Middle District of North Carolina which encompassed the plaintiffs in the Eastern District litigation

as well as the plaintiffs in the Middle District action.

Prior to the district court's ruling that Showell was entitled to

$ 5,692.85 in costs pursuant to Rule 54(d)(1) (but after the court had

granted Showell's motion to dismiss), 16 of the 53 appellants in the

instant action filed, and "full[y] and final[ly] settled," a similar (if not

identical) action against Showell in the Middle District of North Carolina. Under the Middle District settlement, plaintiffs in both the Middle and Eastern District actions obtained some recovery, with the

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parties agreeing to negotiate about attorneys' fees and costs. See

Appellee's Br. at 1; J.A. at 76-78.*

The district court did not abuse its discretion in failing to consider

the Middle District settlement agreement in its determination of prevailing party status and in its calculation of costs in the case sub

judice. Unlike in the cases cited by appellants in which courts have

jointly considered two separate actions in determining prevailing

 2502 28 1 party status and in calculating fees and costs, s

 ee, e.g., Plyer v. Evatt,

902 F.2d 273, 280-81 (4th Cir. 1990), the results of the instant litigation -- dismissal for improper venue -- did not advance the plaintiffs' ultimate goal (obtaining back wages) and this action did not, nor

could it, in any way seek "to preserve [the] fruits" of a prior judgment,

id. at 281, as it was dismissed prior to initiation of the Middle District

litigation. See Arvinger v. Mayor & City Council of Balt., 31 F.3d

196, 202 (4th Cir. 1994). To our knowledge, no court has ever held

that prevailing party status in a subsequent action can relate back to

a prior lawsuit dismissed on procedural grounds. Showell prevailed in

the instant litigation because it successfully obtained a favorable disposition of this case; any claim the appellants may have for recovery

of costs and/or fees in the Middle District action can be adequately

dealt with by the district court for the Middle District of North Carolina.

CONCLUSION

For the reasons stated herein, we affirm the judgment of the district

court.

AFFIRMED.

MICHAEL, Circuit Judge, dissenting:

The system has broken down in this case. Through court-approved

mediation, defendant Showell Farms, Inc. and the named and consent-

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*Pursuant to the Middle District settlement, the parties submitted a fee

petition to the district court for the Middle District of North Carolina.

That court stayed action on the fee petition pending the resolution of this

appeal.

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ing party plaintiffs reached a settlement of actions in the Eastern and

Middle Districts of North Carolina. Thirty-four consenting party

plaintiffs who were parties only to the Eastern District action recovered damages as a result of that settlement; they are, therefore, the

"prevailing party" in the Eastern District action, entitled to reasonable

attorneys' fees and costs. Yet, despite the settlement, costs were

assessed against the Eastern District plaintiffs, even though the Eastern District action was still pending as a result of a Rule 59(e) motion

to alter or amend an order of dismissal for lack of venue. Because the

settlement transformed the Eastern District plaintiffs from potential

losers to prevailing parties and because this court should be in the

business of encouraging and giving effect to mediated settlements, I

respectfully dissent.

I.

The Eastern District action was still pending at the time of the

global settlement on February 8, 1995. It was still pending because

the plaintiffs had filed a timely (and still undecided) Rule 59(e)

motion to alter or amend the order dismissing the action for improper

venue. See Fed. R. App. P. 4(a)(4)(C).

After the Middle District action was filed, the district court there

entered a pretrial order which allowed the parties to agree to early

mediation.1 The parties then agreed to mediate, and on February 8,

1995, a settlement was reached on all claims in both the Middle District action and the Eastern District action. As the settlement agreement provides:

Defendant will pay to the named Plaintiffs the total gross

sum of $8,500.00. The Defendant will pay to all consenting

party Plaintiffs in the Middle District Action (Molina et al.

v. Showell Farms, Inc.) and the Eastern District Action

(Pacas et al. v. Showell Farms, Inc.) the total gross sum of

$33,000.00. . . .

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1 Middle District of North Carolina Local Rule 205 provides that the

parties shall conduct a mediated settlement conference some time during

discovery. Pursuant to subsection (a), the parties may agree to early

mediation near the beginning of discovery.

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* * *

Plaintiffs' counsel will provide detailed time records and a

summary of their claim for costs and attorneys' fees. The

parties will then negotiate in good faith regarding reasonable

attorneys' fees and costs. If the parties are unable to agree,

Plaintiffs' counsel may seek an award of attorneys' fees in

the appropriate forum.

* * *

Dismissal with prejudice in the Eastern District case and in

the Middle District case will be filed after the attorneys' fees

issue is resolved by the court or by stipulation of the parties.

By February 15, 1995, the district court in the Eastern District had

been notified of the settlement. The district court there, however,

ignored the settlement and on March 8, 1995, held that Showell

Farms prevailed in the action before it, and awarded costs to Showell

Farms. The court also denied the plaintiffs' Rule 59(e) motion.

On April 3, 1995, the Eastern District plaintiffs filed a motion

under Rule 60(b) seeking relief from the March 8 order. The plaintiffs

argued that in light of the settlement agreement they were the "prevailing party" and sought to have the award of costs vacated. The district court disagreed and held that the plaintiffs were not the

prevailing party in the Eastern District action because the action had

been dismissed for improper venue. The district court also held that

the plaintiffs had yet to achieve prevailing party status in the Middle

District action because the proposed settlement was not yet final and

because "the proposed settlement, which leaves open the question of

fees and costs associated with [the Middle District action], does not

mandate a finding that plaintiffs are the `prevailing party' in [the Middle District action]."

The record establishes that the settlement agreement was not "proposed" when it was entered into on February 8, 1995, while the Eastern District action was still on the docket. Instead, the agreement was

binding from its inception, and it has been fully executed, except for

the issue of attorneys' fees and costs.

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II.

With all respect to the majority, it is clear that the district court in

Eastern District abused its discretion in refusing to give effect to the

parties' settlement agreement. The express terms of the agreement

settled both the Middle District action and the Eastern District action.

The agreement gave substantial monetary relief to plaintiffs who were

parties only to the Eastern District action. As a matter of law, the

plaintiffs are therefore the "prevailing party" in the Eastern District

action and are entitled to both reasonable attorneys' fees and costs.

Farrar v. Hobby, 113 S. Ct. 566, 573 (1992) (to qualify as a prevailing party, "[t]he plaintiff must obtain an enforceable judgment from

whom fees are sought, or comparable relief through a consent decree

or settlement") (emphasis added; citations omitted).

Moreover, the majority fails to offer any good reason for upholding

the district court's decision. Instead, it focuses on the irrelevant fact

that the dismissal order was entered in the Eastern District prior to the

time the settlement was reached and states that"no court has ever

held that prevailing party status in a subsequent action can relate back

to a prior law suit dismissed on procedural grounds." Ante at 6. What,

of course, the majority ignores is the fact that the parties entered into

the settlement agreement while the Eastern District action was still

pending by virtue of the plaintiffs' Rule 59(e) motion. Thus, even

though the district court had entered an order dismissing the action for

improper venue, the settlement does not "relate back to a prior law

suit"--rather, it disposes of a pending law suit. 2

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2 In addition, the majority is incorrect in saying that the Eastern District

action "did not advance the plaintiffs' ultimate goal (obtaining back

wages) . . . ." Id. For one thing, the Eastern District action did in fact

advance the ultimate goal of the plaintiffs who were parties to that

action. Pursuant to the settlement, they obtained back wages as consideration for dismissal of the Eastern District action with prejudice. Also,

discovery obtained in the Eastern District action was used by plaintiffs

in the Middle District action. The discovery obtained in the Eastern District therefore helped to achieve the mediated settlement, thus advancing

the ultimate goal of all the plaintiffs.

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Furthermore, the parties themselves acknowledged that the Eastern

District action had not yet concluded. The settlement agreement specifically states that it would put an end to the actions in both the Middle District and the Eastern District "after the attorneys' fees issue is

resolved by the court or by stipulation of the parties." Accordingly,

while I do not dispute that in the absence of the settlement agreement

Showell Farms would be the prevailing party in the Eastern District

action, Showell Farms gave away its prevailing party status when it

agreed to settle both the Middle District and the Eastern District

actions. It gave away its "win" so to speak. That was Showell Farm's

decision and, if it made a bad one, it is not for us to correct.

Finally, the Middle District of North Carolina has a commendable

mediation program designed to provide "an informal process conducted by a mediator with the objective of helping the parties reach

a mutually acceptable settlement of their dispute." M.D.N.C. Loc. R.

601.3 This program should be encouraged. Indeed, global settlements,

through mediation, of all actions involving the parties should be

encouraged. This is exactly what the mediator was able to achieve

here. Yet, the majority has chosen to override a good bit of what the

mediator accomplished. I do not see any basis for that result.

III.

In sum, I would reverse the judgment of the district court to the

extent that it recognizes Showell Farms as the prevailing party, and

I would hold that the plaintiffs achieved prevailing party status in the

Eastern District action as a result of the mediated settlement. Accordingly, I would also vacate the district court's award of costs to Showell Farms and remand the action to the district court for a

determination of reasonable attorneys' fees and costs to be awarded

to the plaintiffs.

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3 Practicing lawyers and law school faculty members agree to serve on

the panel of mediators. Id. at 603(a).

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