Court Opinion

ID: 9468062
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:03:22.565518+00
Date Added: 2024-06-11T17:40:39.861241
License: Public Domain

GIBBONS, Circuit Judge,
dissenting in part:
My difference with the majority is narrow. I join in part VI of the opinion of the court holding that there is no personal jurisdiction over Chioyoda Fire & Marine Insurance Co., Ltd., Vesta (UK) Ltd., and L’Union Atlantique S.A. D’Assurances, Brussels. I also join in part VII, reversing the injunction against prosecution of the suit instituted by the excess insurers in the High Court of Justice, Queens Bench Division.
Moreover, I agree that under the controlling case law in this circuit a denial of a motion to dismiss on forum non conveniens grounds is not ordinarily immediately reviewable. I disagree with the conclusion in Part VII of the opinion of the court that that rule is controlling here, however, for several reasons. First, it seems clear that the forum non conveniens contention bears directly upon the propriety of the issuance of an injunction against prosecution of a parallel suit in London, and thus may properly be considered in connection with the disposition of the appeal from that injunction. We review the court’s decision to exercise in personam jurisdiction by virtue of 28 U.S.C. § 1292(a)(1). I see no distinction between reviewing that decision, otherwise interlocutory and unreviewable, and reviewing the decision refusing to dismiss on forum non conveniens grounds. The facts bearing upon a determination of adjudication competence for purposes of the due process clause and those bearing upon whether or not the chosen forum is excessively inconvenient may not be identical, but they certainly overlap to a large extent. Moreover both a decision to deny a Rule 12(b)(1) motion and a decision to deny a forum non conveniens motion would, if not reviewed at the outset, remain subject to review after final judgment. It makes no sense to me to leave this case in the posture in which one of two grounds which might after final hearing result in a dismissal is decided and the other left open. Even if this were an interstate rather than an international problem that result would be unsatisfactory, since it leaves open the possibility that a panel which later reviews the case may conclude that the trial should never have been held in Pennsylvania. In an international context the case for review now is even stronger, since even if a panel should later agree that Pennsylvania was a convenient forum, Great Britain need not afford that decision full faith and credit. Of course, had no injunction issued, neither ground for dismissal would be reviewed. But since 28 U.S.C. § 1292(a)(1) permits review, we should consider and decide any ground which could be asserted against the propriety of injunctive relief. Certainly an injunction prohibiting trial in a more convenient forum would be error. Since, however, the majority has declined to review the forum non conveniens decision, and the record after final hearing on that issue may not be identical, it seems appropriate that I, too, decline at this time to express an opinion of its merits.
In Parts IV and V, the opinion of the court takes as established the jurisdictional facts supporting in personam jurisdiction, by virtue of a sanction imposed under Fed. *889R-Civ.P. 37(b). I disagree with the majority’s conclusion that there was no abuse of discretion in imposing that sanction. The majority resorts to perjoratives such as “defense strategy” to characterize defendants’ offer to permit inspection of voluminous documents in London rather than in Pittsburgh, and finds fault with the timing of that offer. But that argument ignores the foreign excess insurers’ initial pleading that the Western District of Pennsylvania lacked personal jurisdiction to order them to do anything. Asserted from the outset, that position was never abandoned.
More significantly, the majority maintains the sanction was not an abuse of discretion because it “was carefully tailored to fit the situation; only the facts necessary to establish the minimum contacts needed to justify personal jurisdiction in this action were taken as established pursuant to the sanction.” At 886. See also, at 885. But the majority errs in characterizing the district court’s exercise of personal jurisdiction as an example of minimum contacts, or specific, jurisdiction. The majority has “confounded specific jurisdiction to adjudicate claims linked to activities occurring or having an impact in the forum state, and general, ‘all purpose’ adjudicatory authority to hear and decide claims totally unconnected with the forum.” Donahue v. Far Eastern Air Transport Corp., 652 F.2d 1032 at 1034 (D.C.Cir. 1981). The district court exercised not specific, but general jurisdiction over the excess insurers. See App. 666-68. Specific and general jurisdiction analyses are quite distinct. See generally Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv. L.Rev. 1121 (1966). The former inquires into minimum contacts; the latter mandates not minimal, but continuous and substantial forum affiliation.
As the Supreme Court enunciated in International Shoe Co. v. Washington, 326 U.S. 310, 316-19, 66 S.Ct. 154, 158-159, 90 L.Ed. 95 (1945), minimum contacts analysis applies to the “single or occasional acts” of a nonresident defendant within a state when the suit concerns those acts, but not when the suit concerns matters unrelated to the forum activities. Moreover, the Supreme Court has repeatedly emphasized that in order to sustain assertion of specific jurisdiction, the plaintiff must show that the nonresident defendant’s single or occasional acts within the forum state which gave rise to the claim manifest defendant’s “purposefully availing itself of the privilege of conducting activities within the forum state.” World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 286, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). Plaintiff’s unilateral act within the forum state is insufficient to confer personal jurisdiction over the nonresident defendant. Similarly, defendant’s fleeting or fortuitous forum connection lacks the requisite element of intentional invocation of the forum’s benefits. Examination of the relevant transactions in this case reveals that the only contact the excess insurers had with Pennsylvania concerning this claim is too attenuated to meet the requirements of Hanson v. Denckla and its progeny. That contact amounts to a phone call placed by CBG’s parent corporation’s broker from Pittsburgh to Bland, Welsch in London requesting the London firm to secure agreements with foreign insurers in London to cover an African risk.
As a general rule, mere placing of a phone call by defendant into the forum state does not constitute “purposeful availing.” See, e. g., Covington Industries Inc. v. Resintex, Inc., 629 F.2d 730 (2d Cir. 1980) (defendant’s telexes to Georgia from Switzerland concerning delivery of goods to Haiti do not constitute “transacting business” under the liberally interpreted Georgia long-arm statute); Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247 (9th Cir. 1980) (use of the telephone does not constitute purposeful activity under the fourteenth amendment due process clause); Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211 (8th Cir. 1977) (defendant’s phone call *890to Nebraska from Michigan concerning a Michigan contract does not constitute purposeful activity in Nebraska); North Eastern Timber Inc. v. Pines Trailer Corp., 501 F.Supp. 321 (E.D.Pa.1980) (defendant’s phone calls to Pennsylvania from Illinois do not constitute purposeful activity in Pennsylvania). It follows all the more forcefully that plaintiff’s or plaintiff’s agent’s phone call from the forum state concerning an out-of-state transaction does not draw defendant into invoking the forum state’s benefits. See, e. g., McBreen v. Beech Aircraft Co., 543 F.2d 26 (7th Cir. 1976) (out-of-state defendant’s remarks in interstate phone call placed by plaintiff from the forum state do not constitute purposeful activity by defendant in the forum state); Galaxy International, Inc. v. White Stores Inc., 88 F.R.D. 311 (W.D.Pa.1980) (Pennsylvania company’s phone call from Pennsylvania to defendant in Tennessee resulting in a contract to purchase beef from outside Pennsylvania is not purposeful activity in Pennsylvania).
Hence, given the undisputed facts bearing on specific jurisdiction, assertion of such jurisdiction based on the excess insurers’ alleged minimum contacts with Pennsylvania would have been inappropriate. International Shoe, however, delineated another category in which assertion of personal jurisdiction over a nonresident defendant may be permissible. This is the general, or “all purpose” jurisdiction classification. It applies to claims unrelated to the forum, when the nonresident’s contacts are “continuous” and “substantial.”
While it has been held . . . that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity ... there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.
326 U.S. at 318, 66 S.Ct. at 159 (citations omitted).1 Bork v. Mills, 458 Pa. 228, 231-32, 329 A.2d 247, 249 (1974); Whalen v. Walt Disney World,-Pa.Super. - — , 418 A.2d 389, 391—92 (1980). See also Restatement Second of Conflicts of Laws § 47(2).
In order to maintain personal jurisdiction over the excess insurers, then, CBG must show that all the foreign excess insurers engaged in continuous and substantial business in Pennsylvania. In imposing personal jurisdiction by Rule 37 sanction, the district court therefore took as established not isolated contacts supporting the exercise of specific jurisdiction, but major “continuous corporate operations” in Pennsylvania by each excess insurer. By their nature, the facts requisite to asserting general jurisdiction cannot be “carefully tailored”; they must be extensive and pervasive.2 The *891facts before the district court indicated that some of the excess insurers had entered into other contracts in which they agreed to be subject to suit in Pennsylvania or other United States jurisdictions. Standing alone, these contracts do not satisfy the continuous and substantial forum affiliation test.3 In order to assert general jurisdiction, the district court was obliged to assume that these contracts were but a small part of a persistent pattern of sizeable business dealings with Pennsylvania insureds, or covering Pennsylvania risks. The necessarily broad scope of the jurisdictional facts the district court assumed, over defendants’ denial, and without placing the burden of discovery on plaintiff, was an abuse of discretion.
I do not advance the proposition that a Rule 37 sanction may never be employed to facilitate discovery of facts bearing upon the exercise of personal jurisdiction. Nonetheless, the imposition of burdens of production in a distant place is one of the core elements of unfairness which the due process cases from International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), through World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980), address. It is small comfort to a defendant objecting to the imposition of that burden that it is being imposed only for the purpose of determining whether or not the court has authority to impose it. A proper accommodation between plaintiff's interest in a choice of a forum and defendants’ due process protection against imposition of unfair burdens of production, it seems to me, requires that once a foreign defendant makes a prima facie showing both of absence of minimum contacts relating to the claim, and of absence of continuous and substantial forum presence, the plaintiff should have to do the initial traveling. Cf. River Plate Corp. v. Forestal Land, Timber & Ry. Corp., 185 F.Supp. 832 (S.D.N.Y.1960) (court’s power to order compliance with discovery requests when it is unclear that the court has jurisdictional power over the defendant must be carefully circumscribed). Thus I would hold that the trial court abused its discretion in imposing the sanction of finding the jurisdictional facts against the defendant, at least until the court first ordered inspection of the relevant documents by the plaintiff at defendants’ home base.
Familia De Boom v. Arosa Mercantil, S. A., 629 F.2d 1134 (5th Cir. 1980), cert. denied, - U.S. -, 101 S.Ct. 2345, 68 L.Ed.2d 861 (1981), may possibly be read as prohibiting use of a Rule 37 sanction until such time as the plaintiff has fully met its burden of establishing personal jurisdiction. Were it so intended, I would not follow it that far. Defendant’s refusal to permit inspection of documents at its home base at *892plaintiff’s expense initially might support the imposition of the sanction imposed in this case. Such a refusal would effectively preclude the plaintiff from meeting its burden of establishing the jurisdictional facts. Cf. Lekkas v. Liberian M/V Caledonia, 443 F.2d 10 (4th Cir. 1971) (dictum).4 But it seems to me that an accommodation between the defendant’s due process interests and the plaintiff’s choice of a forum requires a more flexible interpretation of Rule 37 than the majority announces.5 That is particularly the case when, as here, the record discloses no basis for the exercise of specific jurisdiction based on purposeful Pennsylvania contacts with the transaction sued on, and the attempted discovery is aimed at establishing a general corporate presence in that state. The far reaching inquiry into the establishment of general jurisdiction could impose costs and burdens far in excess of whatever premiums defendants derived from their prior forum activities. The record in this case establishes that many thousands of files would have to be examined to satisfy the plaintiff’s inquiries. The burden of such an examination should have been placed initially on the plaintiff before sanctions were considered.6 I would hold, therefore, that the trial court abused its discretion in imposing the Rule 37 sanction of finding the jurisdictional facts against those defendants left in the case. . On the record, aside from the Rule 37 order, defendants maintain insufficient Pennsylvania connections to sustain either specific or general jurisdiction over them. I would reverse with a direction to grant their motion to dismiss.

. The Supreme Court has only once, since International Shoe, upheld the exercise of this category of personal jurisdiction. That decision, Perkins v. Benguet Consol. Mining Co., 342 U.S. 437, 72 S.Ct. 413, 96 L.Ed. 485 (1952), was something of an anomaly. The forum most connected with the defendant and with the disputed transaction was not Ohio, where plaintiff brought suit, but the Philippines, which at the time were under Japanese occupation. At the time, Ohio was the most related American forum. Perkins is arguably a jurisdiction by necessity decision. See Von Mehren & Trautman, supra, 79 Harv.L.Rev. at 1144 (“the Perkins decision should be regarded as a decision on exceptional facts, not as a significant reaffirmation of obsolescing notions of general jurisdiction”). Von Mehren and Traut-man argue that, “aside perhaps from the possibility of limited general jurisdiction based on the location of assets,” specific jurisdiction should wholly supplant general jurisdiction. Id. (Emphasis in original).

. Pennsylvania decisions elaborating the “continuous and substantial” standard indicate a very high threshold of business activity. See, e. g., Bork v. Mills, supra (uncontroverted allegation that defendant hauled freight within Pennsylvania insufficient to meet continuous and substantial test), compare Scanapico v. Richmond, Fredticksburg & Potomac R. Co., 439 F.2d 17 (2d Cir. 1970) (en banc) (freight solicitation in forum by two employees, sale of tickets, and daily presence in forum of defendant’s freight cars on trains operated by other carriers meets “doing business” test under New York service of process statute); Leb-kuecher v. Loquasto, 255 Pa.Super. 608, 389 A.2d 143 (1978) (possessing a license to practice medicine in Pennsylvania and maintaining *891a classified listing in a Pennsylvania telephone director do not constitute continuous and substantial business activities); Whalen v. Walt Disney World, supra (purchase of $1,551,725 in merchandise from a company located in Pennsylvania, and purchase of liability insurance from a company incorporated in Pennsylvania do not meet continuous and substantial test); Garfield v. Homowack Lodge, Inc., 249 Pa.Super. 392, 378 A.2d 351 (1977) (weekly advertising in Philadelphia newspaper over five year period at cost of $2,000 per year, toll-free phone number to enable Philadelphia residents to make reservations at New York resort, and payment of 10% referral fee to Philadelphia travel agents constitute continuous and substantial business activity).

. See cases cited supra note 2. Cf. Bernardi Bros. v. Pride Mfg. Co., 427 F.2d 297 (3d Cir. 1970) (when claim unrelated to New Jersey, and defendant’s sole contact with New Jersey was a nonexclusive agent residing in that forum, no basis for assertion of personal jurisdiction); DiCesare-Engler Productions, Inc. v. Mainman Ltd., 81 F.R.D. 703 (W.D.Pa.1979) (rock star’s occasional performances in Pennsylvania do not justify asserting personal jurisdiction over him in Pennsylvania when claim arose out of breach of contract to perform a concert in Ohio).

. Even this basis for assertion of personal jurisdiction via discovery sanction is problematic, however. In effect, the district court would, by relying on Rule 37, create personal jurisdiction. This use of Rule 37 may well be inconsistent with Rule 82, which provides that the Federal Rules of Civil Procedure “shall not be construed to extend ... the jurisdiction of the United Stated district courts ....” Exercise of personal jurisdiction pursuant to a state long-arm statute involves both a fairness and a power analysis. See, e. g., World-Wide Volkswagen, supra. It may not be unfair to subject the excess insurers to suit in Pennsylvania. They have certainly had notice and an opportunity to be heard. Fairness, however, is not all. The district court must also have some power over these defendants. On the facts available to the district court, it lacked that power. It is questionable whether a district court may concoct adjudicatory authority by virtue of defendant’s flaunting the court’s apparent lack of power. However frustrating defendant’s recalcitrance, it does not imply, any more than does these defendants’ partial compliance, that defendant in fact has maintained forum affiliations sufficient to justify assertion of either specific or general jurisdiction.

. The majority’s reliance on English v. 21st Phoenix Corp., 590 F.2d 723 (8th Cir.), cert. denied, 444 U.S. 832, 100 S.Ct. 61, 62 L.Ed.2d 41 (1979), is misplaced. Although the Eighth Circuit affirmed the district court’s assertion of personal jurisdiction as a Rule 37 sanction, the appellate court also observed that the nonresident corporation maintained sufficient forum affiliation to justify assertion of jurisdiction in any event. 590 F.2d at 728 n.6. Moreover, defendant’s conduct in that case involved refusal adequately to answer, at its home base, written interrogatories. There was no burden of production at a distant place.

. Although defendants initially indicated they would comply with the district court’s order to inspect and produce their documents in Pittsburgh, and subsequently and belatedly complied only partially, the district court entered the sanction to penalize not defendants’ delay, but their insufficient compliance.