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Ge Mobile Water, Inc. v. Red Desert Reclamation, LLC

United States District Court, D. New Hampshire

March 7, 2014

GE Mobile Water, Inc.
v.
Red Desert Reclamation, LLC, et al. Opinion No. 2014 DNH 049

MEMORANDUM AND ORDER

PAUL BARBADORO, District Judge.

In February 2012, GE Mobile Water, Inc. entered into a contract with Red Desert Reclamation, LLC to lease water treatment equipment for use at Red Desert's Wyoming facility. After Red Desert failed to make payments required under the contract, GE Mobile sued it and two affiliated entities, Clean Runner, LLC and Cate Street Capital, Inc.

Red Desert has moved to dismiss the complaint for lack of personal jurisdiction.

I. BACKGROUND[1]

Red Desert is a Wyoming limited liability company. In 2012, it operated a facility in Rawlins, Wyoming for recycling water used in the hydraulic fracturing of natural gas reserves. Red Desert used water treatment technology for its Wyoming facility developed by Clean Runner, a Delaware limited liability company. Red Desert and Clean Runner are managed by Cate Street, a Delaware corporation with an office in Portsmouth, New Hampshire. Cate Street planned to use the Wyoming facility as a platform to showcase Clean Runner's technology, with the goal of operating similar hydraulic fracturing water treatment facilities throughout the country. Doc. Nos. 18-2, 18-4, 18-5, 18-6.

Beginning in September 2011, Steven Fischer, a GE Mobile employee, began working with Judson J. Cleveland on a proposed contract to lease water processing and treatment equipment for use at the Red Desert facility. At the time, Cleveland was a Managing Director of Cate Street, Chief Operating Officer of Red Desert, and President of Clean Runner. Barry Glichenhaus and Samuel Olson of Cate Street were also involved in negotiating and finalizing the contract. When Fischer contacted his counterparts regarding the contract, he did so either at offices they maintained in their homes or at Cate Street's Portsmouth, New Hampshire office.

Negotiations culminated in a Proposal from GE Mobile and a $3.264 million Purchase Order from Red Desert. The Purchase Order states that it was submitted by "Red Desert Reclamation, LLC, One Cate Street, Suite 100, Portsmouth, NH 03801 USA." The "ship to" section of the Purchase Order lists the same address. Cleveland signed the Purchase Order on behalf of Red Desert on February 28, 2012. Under his signature, Cleveland wrote, "President, Clean Runner." The following day, a representative of GE Mobile accepted the Purchase Order by signing it and the Proposal.

GE Mobile delivered equipment to the Wyoming facility in April 2012 and subsequently sent several invoices to Red Desert at the Portsmouth, New Hampshire address. In August 2012, Cleveland emailed Fischer a proposal to address Red Desert's failure to make any of the payments required under the contract. Cleveland's email identified him as "Judson C. Cleveland/President/CEO/Clean Runner, Inc., One Cate Street, Portsmouth, NH XXXXX-XXXX." Approximately one week later, GE Mobile received a check from Red Desert for $20, 000. The check was drawn on an account that listed the account holder as "Red Desert Reclamation, LLC/1 Cate Street, Suite 100, Portsmouth, NH 03801."

GE Mobile received no further payments, and the parties ultimately agreed to close the Wyoming facility. After giving notice, GE Mobile removed its equipment and technicians from the site in early October 2012.

On February 27, 2013, GE Mobile received a letter from Clean Runner on Red Desert letterhead. The letter listed Red Desert's address as One Cate Street, Portsmouth, New Hampshire, and stated that both Clean Runner and Red Desert were beginning the process of winding down operations. Doc. No. 18-11. The letter offered Clean Runner's and Red Desert's creditors a global settlement of $300, 000 on an acknowledged debt of $1.147 million.

II. PERSONAL JURISDICTION

A. Standard of Review

In objecting to a motion to dismiss for lack of personal jurisdiction, the plaintiff must establish that personal jurisdiction exists. Astro-Med, Inc. v. Nihon Kohden Am., Inc. , 591 F.3d 1, 8 (1st Cir. 2009). Because I have not held a hearing on the motion, GE Mobile must make a prima facie showing that this court has personal jurisdiction. See Cossaboon v. Me. Med. Ctr. , 600 F.3d. 25, 31 (1st Cir. 2010). A prima facie showing requires the plaintiff to "proffer[] evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction." Lechoslaw v. Bank of Am., N.A. , 618 F.3d 49, 54 (1st Cir. 2010) (internal quotation marks omitted); see also Phillips v. Prairie Eye Ctr. , 530 F.3d 22, 26 (1st Cir. 2008) (a plaintiff asserting jurisdiction cannot rest upon the pleadings but is "obliged to adduce evidence of specific facts"). I consider GE Mobile's assertions to the extent they are supported by the evidence of specific facts set forth in the record, and I consider the facts offered by Red Desert "to the extent that they are uncontradicted." See Cossaboon , 600 F.3d at 31 (internal quotation marks omitted). I construe the ...


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