RELIANCE NATIONAL INS. v. B. VON PARIS SONS

J. FREDERICK MOTZ, United States District Judge.

Defendant/Third-Party Plaintiff B. von Paris Sons, Inc. ("von Paris") has filed a third-party complaint against three third-party defendants including Western Ports Transportation, Inc. ("Western Ports") under the Interstate Commerce Act, 49 U.S.C. § 14706, and for indemnification and negligence. Western Ports has filed a Fed.R.Civ.P. 12(b)(2) motion to dismiss for lack of personal jurisdiction. The motion will be denied.

Von Paris is a Maryland corporation engaged in the business of transporting commercial freight in interstate commerce as a common carrier. The National Air and Space Museum ("NASM") arranged for von Paris and North American Van Lines to ship original production models used in the STAR WARS film trilogy from Nicasio, California to the NASM warehouse in Suitland, Maryland to be used in an exhibit entitled "STAR WARS: The Magic of Myth." Western Ports is an intermodal transportation corporation located in Washington state. Apparently, a freight forwarder made arrangements with Western Ports to have Western Ports load the models, which were already in shipping crates, into railroad containers in Nicasio and deliver them to the Union Pacific Railroad terminal in Oakland. From there, the models were transported to Maryland. At some point during the shipment, two of the models were allegedly damaged. NASM's insurer, Reliance National, filed suit against von Paris and North American Van Lines to recover damages. In turn, von Paris filed a third-party complaint against three other companies involved in the shipment, including Western Ports.

Determining whether there is personal jurisdiction under Rule 12(b)(2) is a two-step analysis. First, the court must determine whether the forum's long-arm statute establishes jurisdiction over the defendant. Second, it must determine whether jurisdiction is appropriate under the Due Process Clause of the Fourteenth Amendment. However, the Fourth Circuit has noted that the limits of the long-arm statute in Maryland are "coterminous with the limits of the Due Process Clause, [so] the statutory inquiry necessarily merges with the constitutional inquiry, and the two inquiries become one." Stover v. O'Connell Assocs., 84 F.3d 132, 135-36 (4th Cir. 1996). Therefore in determining whether there is personal jurisdiction over Western Ports in Maryland I only need to examine the constitutional limits imposed by the Fourteenth Amendment.

Under the Due Process Clause a defendant may be subject to in personam jurisdiction only when there are "certain minimum contacts with [the forum] 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) (quoting Milliken v. Myer, 311 U.S. 457, 463 (1940)). The Supreme Court has drawn an important distinction between general and specific personal jurisdiction. The contacts necessary to create specific jurisdiction are less onerous than the "continuous and systematic" test applied for establishing general jurisdiction over a defendant. See Helicopteros, 466 U.S. at 415-16; Chung v. NANA Dev. Corp., 783 F.2d 1124, 1130 (4th Cir. 1986) (Ervin, J., dissenting). In this case, von Paris seeks to hold Western Ports liable for damages to the STAR WARS models during their shipment to Maryland. Accordingly, the specific jurisdiction standard is appropriate since von Paris' third-party complaint arises directly out of Western Ports' contacts with the forum state.

To find specific jurisdiction, Western Ports must have had "`fair warning that a particular activity may subject [it] to the jurisdiction of a foreign sovereign.'" Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (quoting Shaffer v. Heitner, 433 U.S. 186, 218 (1977) (Stevens, J., concurring)). A defendant has "fair warning" when it has "`purposefully directed' [its] activities at residents of the forum and the litigation results from alleged injuries that `arise out of or relate to' those activities." Burger King Corp., 471 U.S. at 472 (citations omitted). As I discussed above, von Paris' action clearly arises out of Western Ports' contacts with this forum, therefore, the only remaining issue concerns whether its activities satisfy the "purposefully directed" requirement.

Von Paris urges that Western Ports knew the shipment of STAR WARS models was being transported to Maryland. Von Paris has submitted the bill of lading which makes clear that the models were cosigned to NASM, that the carrier was von Paris, and that they were to be delivered to NASM's warehouse in Suitland, Maryland. From the bill of lading Western Ports knew or should have known the ultimate destination of the shipment. Western Ports does not deny that it knew the production models' destination. Instead, based on the precedent from Chung, Western Ports maintains that, standing alone, mere knowledge that its product would be delivered to a resident of a forum state is insufficient to establish a constitutional basis for personal jurisdiction in that forum.

Western Ports is correct that such foreseeability of the final destination, although significant, is not the touchstone for personal jurisdiction. In Chung, the court found that the defendant corporation was passive, only selling its product to direct purchasers in its home state. Merely knowing that its product would end up in a distant forum was inadequate to permit personal jurisdiction. However, this case is distinguishable from Chung. Although in both situations, the ultimate destination was foreseeable, Western Ports, unlike the defendant in Chung, was and is an active interstate common carrier. As a sophisticated intermodal transporter, Western Ports' entire enterprise comprises facilitating interstate commerce, and it should not be surprised that occasionally its activities may give rise to jurisdiction in a distant forum where goods arrive damaged. Even though Western Ports' conduct of moving the production models in railroad containers from Nicasio to Oakland occurred solely in California, it was on notice that the goods were proceeding to Maryland. Indeed, "it is only fair that a corporation seeking to create interstate business by its own endeavors be subject to suit wherever it extends its reach." Id. at 1128.

Still, Western Ports argues that finding jurisdiction in Maryland violates due process since it has such fleeting contacts with this forum. Western Ports has no warehouses, equipment, employees, or operations here and directs essentially no advertising to customers in Maryland. However, the Fourth Circuit itself has held that a single shipment into the forum state may form the basis for in personam jurisdiction. See Ajax Realty Corp. v. J.F. Zook, Inc., 493 F.2d 818, 822-23 (4th Cir. 1972). As here, the defendant in Ajax was a Pacific Northwest corporation with no employees, facilities, or equipment in the forum state. In addition, the defendant corporation did no advertising or solicitation in Virginia, the forum state. Nevertheless, Judge Winter found that "the day is long past when the `minimal contact' necessary to satisfy due process is to be equated with the traditional concept of doing business." Id. at 822. The court in Ajax held that a solitary and fleeting contact could give rise to personal jurisdiction where the defendant gained a sufficient financial benefit and had "a reasonable expectation that the frames would be used in Virginia." Id. The Supreme Court has stated that a "trend is clearly discernible toward expanding the permissible scope of state jurisdiction over foreign corporations. . . . In part this is attributable to the fundamental transformation of our national economy over the years. Today many commercial transactions touch two or more states and may involve parties separated by the full continent." McGee v. International Life Ins. Co., 355 U.S. 220, 222-23 (1957).

Of course, underlying much of this discussion over personal jurisdiction in a forum is whether it is "reasonable . . . to require the corporation to defend the particular suit which is brought there." International Shoe, 326 U.S. at 317. The Supreme Court has found that implicit in this understanding of reasonableness is "the interstate judicial system's interest in obtaining the most efficient resolution of controversies." World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). This final contextual determination also supports personal jurisdiction in Maryland. Von Paris' suit arises from and involves the same set of operative facts as Reliance National's complaint, and in turn the third-party claims against the other third-party defendants, Win Transport and GPS Transportation. Keeping these parties together in the present action will greatly conserve judicial resources and promote an efficient resolution.

For these reasons, defendant Western Ports' motion to dismiss for lack of personal jurisdiction is denied. A separate order to that effect is being entered herewith.

For the reasons stated in the memorandum entered herewith, it is, this 6th day of March, 2000, ORDERED that Third-Party Defendant Western Ports' motion to dismiss under Fed.R.Civ.P. 12(b)(2) for lack of personal jurisdiction is denied.