Court Opinion

ID: 9488871
Source: CourtListenerOpinion
Date Created: 2023-08-05 12:57:52.492367+00
Date Added: 2024-06-11T17:53:09.253102
License: Public Domain

ROTH, Circuit Judge,
Dissenting:
As I read the Supreme Court’s decision in Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2181, 85 L.Ed.2d 528 (1985), a court determining whether specific personal jurisdiction lies must consider prior business dealings between the parties. The majority opinion in this case, however, plays down the importance of a long business relationship established between Conglas and CertainTeed/Vetrotex during the 1980s. The majority focuses only on the final 1992 Supply Contract, see Majority Op. at 152, despite the fact that the 1992 contract grew out of and was founded upon a thirteen-year-old working relationship.
I believe that the majority’s narrow focus on the 1992 contract misinterprets the Supreme Court’s rule in Burger King by refusing to consider the entire “course of dealings” between the relevant parties. The negotiations and dealings during the 1980s are, in my opinion, both relevant and related to the present cause of action. Because I would find that Conglas purposefully availed itself of the privilege of conducting business within Pennsylvania by virtue of its longstanding business relationship with Vetrotex, I write in dissent.
I.
In its discussion of the facts, the majority opinion emphasizes the 1991 and 1992 Supply Contracts and minimizes a significant course of dealings that occurred between the parties ■ during the 1980s. These dealings affected the negotiation of the 1992 Supply Agreement and should not have been dismissed by the court as irrelevant. The omitted facts demonstrate that Conglas initiated and pursued a contractual relationship with Certain-Teed' at its Pennsylvania office and made sufficient voluntary contacts with Pennsylvania such that it should have “reasonably anticipate[d] being haled into court there.” World-Wide Volkswagen Corps. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).
On April 30, 1980, Conglas sent Certain-Teed a new product announcement for Con-mat-90, a fiber glass roofing mat, expressly soliciting orders for the new product. In-July 1981, Conglas representative Tom Pessel followed up on Conglas’s April 1980 solicitation letter by visiting CertainTeed’s Blue Bell, Pennsylvania office to discuss Certain-Teed’s requirements for fiber glass mat and Conglas’s ability to satisfy those requirements. Following additional correspondence between Conglas and CertainTeed’s Pennsylvania offices, CertainTeed placed an order for Conglas mats in November 1981.
In early 1982, Conglas and CertainTeed negotiated a formal agreement pursuant to which Conglas agreed to sell fiber glass mat to CertainTeed for the twelve-month period from February 1, 1982 through January 31, 1983. After the execution of the 1982 agreement, Conglas and CertainTeed began a collaborative effort to resolve quality control issues raised by CertainTeed’s testing of Conglas’s fiber glass mats. This process resulted in regular communication between Conglas and CertainTeed personnel located in Pennsylvania, as well as a number of visits by Conglas representatives to the Certain-Teed facility located in Blue Bell, Pennsylvania.
Conglas and CertainTeed entered into sales agreements similar to the 1982 agreement in February 1983 and May 1984. Despite these successive agreements, the Conglas mats failed to qualify for use in CertainTeed’s roofing shingles. For this reason, CertainTeed terminated the 1984 agreement. Conglas later . contacted CertainTeed in 1986 and 1989 regarding the sale to CertainTeed of fiber glass mats, but no further agreements were reached.
In addition to this business relationship involving the sale of Conglas fiber glass mats to CertainTeed, the parties also entered into a business relationship in which CertainTeed sold chopped fiber glass strands to Conglas. *155Although the record is devoid of any written agreements documenting sales of chopped strands to Conglas during the 1980s, Certain-Teed did produce correspondence between the parties pertaining to such activities. Correspondence in the record indicates that in 1987 and 1988 CertainTeed provided Conglas with a certain volume of chopped strands each month. On December 8, 1987, representatives of Conglas visited Certain-Teed in Valley Forge, Pennsylvania. Among the topics discussed was CertainTeed’s supply to Conglas of chopped strands.
CertainTeed’s sale of chopped strands to Conglas was interrupted, apparently at the end of 1989, when CertainTeed was unable to meet Conglas’s needs due to supply shortages. In February 1991, however, Certain-Teed again found itself with chopped strands to sell. CertainTeed and Conglas entered into negotiations regarding the terms of a sales agreement. David Sharpe, a Vice President at CertainTeed, participated in these negotiations from his office in Valley Forge, Pennsylvania, and he forwarded a letter agreement (the “1991 Supply Contract”) to Conglas in California from Pennsylvania. The 1991 Supply Contract is on CertainTeed letterhead with its Pennsylvania headquarters address prominently displayed. Upon receiving the 1991 Supply Contract, a Conglas representative executed the agreement and returned it to CertainTeed’s Pennsylvania headquarters.
On March 13, 1992, in anticipation of the expiration of the 1991 Supply Contract, the parties entered into another agreement (the “1992 Supply Contract”). By this time CertainTeed’s subsidiary, Vetrotex, had been incorporated. Pursuant to the 1992 Supply Contract, Vetrotex agreed to continue selling chopped fiber glass strands to Conglas. As noted in the majority opinion, Dick Sharpe received several telephone calls from Conglas at his Valley Forge, Pennsylvania, office in negotiating the terms of the 1992 Supply Contract. Like the 1991 Supply Contract, the 1992 Supply Contract is printed on Vetrotex/CertainTeed letterhead, displaying the company’s Pennsylvania address.
II.
A.
Because this case involves a contract between interstate parties, the Supreme Court’s opinion in Burger King is the analytical keystone. See Mellon Bank (East) PSFS, N.A. v. Farino, 960 F.2d 1217, 1222 (3d Cir.1992). In upholding the district court’s exercise of specific personal jurisdiction in Burger King, the Supreme Court noted that the minimum contacts inquiry is a “fair warning” requirement of due process, which is satisfied “if the defendant has ‘purposefully directed’ his activities at residents of the forum, and litigation results from alleged injuries that ‘arise out of or relate to’ those activities.” Burger King, 471 U.S. at 472, 105 S.Ct. at 2182 (citations omitted). The Court explained:
[Wjith respect to interstate contractual obligations, we have emphasized that parties who “reach out beyond one state and create continuing obligations with citizens of another state” are subject to regulation and sanctions in the other State for the consequences of their activities____ [Wjhere individuals “purposely derive benefit” from their interstate activities, it may well be unfair to allow them to escape having to account in other States for consequences that arise proximately from' such activities____
Id. at 473-74, 105 S.Ct. at 2182-83 (citations omitted). Thus, under Burger King, parties taking the affirmative step of negotiating and entering into interstate contractual obligations will likely subject themselves to specific personal jurisdiction in the other state. The Court warned, however, that “an individual’s contract with an out-of-staté party alone [cannot] automatically establish sufficient minimum contacts in the other party’s home forum.” Id. at 478, 105 S.Ct. at 2185 (emphasis in original). Such a mechanical test has been explicitly rejected.
Instead, when deciding the question of specific personal jurisdiction, the Supreme Court favors a “highly realistic” approach that takes into account factors such as “prior negotiations and contemplated future consequences,” and “the terms of the contract and *156the parties’ actual course of dealing.” Id. at 479, 105 S.Ct. at 2185. The reality of the situation in this case is that CertainTeed/Vetrotex and Conglas were involved in a business relationship spanning more than ten years. Over those years, Conglas affirmatively solicited business with CertainTeed, repeatedly made phone calls to Pennsylvania, sent employees to visit GertainTeed’s facilities in Pennsylvania, and mailed contracts to Pennsylvania to be signed. Additionally, Conglas deliberately involved itself in several contractual obligations with Certain-Teed/Vetrotex, fully aware that these corporations were headquartered in Pennsylvania. Thus, the facts in the instant case reveal that Conglas is not being brought into Pennsylvania solely as a result of “random,” “fortuitous,” or “attenuated” contacts, nor as a result of the “unilateral activity of another party or third person.” Id. at 475, 105 S.Ct. at 2183 (citations omitted). Rather, Conglas has knowingly and deliberately engaged in a pattern of contacts with Pennsylvania such that Conglas should have expected that it could be subject to litigation there.
III.
Until now, the question whether two parties’ prior business relationships should be taken into account in determining the existence of specific personal jurisdiction has not been addressed by this court. As in all issues of personal jurisdiction, however, this question cannot be answered mechanically. Instead, each case must be individually evaluated in full to determine whether the parties’ “actual course of dealing” is such that the nonresident party was effectively on notice that it might be haled into court in the other party’s home forum. In the instant case, it is clear that Conglas, through its long history of dealing with CertainTeed and its subsidiary Vetrotex, engaged in repeated contacts with representatives and facilities located in Pennsylvania. By virtue of these extensive contacts, Conglas was on notice that it could be subject to litigation in Pennsylvania. Thus, the longstanding relationship between these parties is relevant and should have been taken into account in determining whether Conglas established sufficient minimum contacts in Pennsylvania. See, e.g., Reynolds Metals Co. v. FMALI, Inc., 862 F.Supp. 1496, 1498-99 (E.D.Va. 1994) (taking parties’ continuing relationship into consideration in finding that specific personal jurisdiction was proper).
Accordingly, I dissent. I believe that, based on the entire course of dealings between the parties, Conglas had minimum contacts in Pennsylvania sufficient to allow the district court to exercise personal jurisdiction over Conglas. I would therefore reverse the district court’s order dismissing Yetrotex’s complaint and remand this case to the district court for further proceedings.