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Hannah International Foods, Inc. v. House of Thaller, Inc.

United States District Court, D. New Hampshire

August 8, 2018

Hannah International Foods, Inc.
v.
House of Thaller, Inc.

          Arnold Rosenblatt, Esq. Charles G. Taylor, III, Esq. Mark L. Mallory, Esq.

          MEMORANDUM ORDER

          ANDREA K. JOHNSTONE UNITED STATES MAGISTRATE JUDGE.

         In an action filed in state court, Hannah International Foods, Inc. alleges that House of Thaller, Inc. failed to satisfy the material terms of an agreement to produce certain food products. Invoking federal diversity jurisdiction under 28 U.S.C. § 1332, the defendant removed this action here. See doc. no. 1. Once removed, the case was assigned to the undersigned magistrate judge, to whose jurisdiction the parties consented. See doc. no. 8.

         The defendant now moves to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(2), contending that this court lacks personal jurisdiction over it. See doc. no. 5. On this same basis, but in the alternative, the defendant asks the court to transfer this matter to the United States District Court for the Eastern District of Tennessee. See id. The plaintiff objects. See doc. no. 9. Concluding that the plaintiff has not demonstrated that the defendant purposefully availed itself of the privilege of conducting activities in New Hampshire, the court grants the defendant's motion in part and transfers this matter to the Eastern District of Tennessee.

         I. APPLICABLE LAW

         The plaintiff bears the burden of demonstrating that personal jurisdiction exists. See A Corp v. All Am. Plumbing, Inc., 812 F.3d 54, 58 (1st Cir. 2016). "To establish personal jurisdiction in a diversity case, a plaintiff must satisfy both the forum state's long-arm statute and the Due Process Clause of the Fourteenth Amendment." C.W. Downer & Co. v. Bioriginal Food & Sci. Corp., 771 F.3d 59, 65 (1st Cir. 2014) . As New Hampshire's long-arm statute "reaches to the full extent that the Constitution allows," however, the court's sole inquiry is whether exercising personal jurisdiction would comport with due process. See Phillips Exeter Acad, v. Howard Phillips Fund, 196 F.3d 284, 287 (1st Cir. 1999). Due process requires that a defendant have sufficient "minimum contacts" with the forum state "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted).

         Though a federal court may exercise general or specific personal jurisdiction over a defendant, in this case the plaintiff only asserts specific personal jurisdiction, "i.e., jurisdiction over [this defendant] for the purpose of this specific lawsuit." Scottsdale Capital Advisors Corp. v. The Deal, LLC, 887 F.3d 17, 20 (1st Cir. 2018) (citations omitted). To establish specific personal jurisdiction, a plaintiff must demonstrate that (1) its claim "directly arises out of or relates to the defendant's forum-state activities"; (2) "the defendant's contacts with the forum state represent a purposeful availment of the privilege of conducting activities in that state, thus invoking the benefits and protections of that state's laws and rendering the defendant's involuntary presence in that state's courts foreseeable"; and (3) "the exercise of jurisdiction is ultimately reasonable." Id. (citation omitted). "Failure to make any one of these showings dooms any effort to establish personal jurisdiction." Id. (citation omitted).

         Though the court may evaluate personal jurisdiction under one of several standards, see A Corp, 812 F.3d at 58 & n. 5, the plaintiff seeks to meet its burden in this case under the prima facie standard. See doc. no. 9-1 at 4. This is the standard "most commonly employed in the early stages of litigation," see A Corp, 812 F.3d at 58 n. 5, and the defendant does not dispute its applicability here. Under the prima facie standard, the plaintiff may not "rely on unsupported allegations," but must rather "proffer evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction." See Scottsdale, 887 F.3d at 20 (brackets and citations omitted). "The court, in turn, must view this evidence, together with any evidence proffered by the defendant, in the light most favorable to the plaintiff and draw all reasonable inferences therefrom in the plaintiff's favor." Carreras v. PMG Collins, LLC, 660 F.3d 549, 552 (1st Cir. 2011) (citation omitted). The court "need not, however, credit bald allegations or unsupported conclusions." Id. (citation omitted).

         II. BACKGROUND

         Located in Seabrook, New Hampshire, the plaintiff manufactures and supplies dips, spreads, and salads. Doc. no. 9-2 ¶ 3. The defendant is a Tennessee manufacturer of food products for wholesale and retail sellers with facilities in Knox County, Tennessee. Doc. no. 5-1 ¶¶ 3, 4. In early 2016, the plaintiff sought to provide services to a new, "substantial" customer. Doc. no. 9-2 ¶¶ 4. In order to meet this customer's demand, representatives of the plaintiff visited the defendant in Tennessee and requested that the defendant manufacture food products for the plaintiff at the defendant's plant. Id. ¶ 5.

         The parties negotiated for several weeks. Id. ¶ 5. During this time, the parties exchanged "substantial communications" between Tennessee and New Hampshire. Id. In mid-April 2016, the plaintiff signed a Contract Manufacturing Agreement in New Hampshire. Id. ¶ 6. The plaintiff forwarded this agreement to the defendant, which signed it in Tennessee. Id.; doc. no. 5-1 ¶ 6.

         The contract specified that the defendant would manufacture and package product for the plaintiff at the defendant's facility in Knoxville, Tennessee. Doc. no. 9-3 at 4. Under the contract, no product could be manufactured, packaged, or tested at any location other than that facility without the plaintiff's consent. Id. The contract also required that the defendant receive the plaintiff's permission before storing product outside of the Knoxville facility. Id. The contract provided for a term of three years, and stated that it "shall be governed by, construed and enforced in accordance with the substantive internal law of the State of Tennessee, without regard to its conflict of law principles." Id. at 12, 15. The contract required that the defendant produce product consistent with the plaintiff's specifications and requirements and ship that product consistent with purchase orders received from the plaintiff's customer. Doc. no. 9-2 ¶ 7.

         The plaintiff represents that its customer "operated nationwide, and that it was common knowledge that the customer had multiple stores in New Hampshire, and, as a result that the product would be shipped to multiple stores in New Hampshire." Id. According to the plaintiff, these shipments "occurred regularly throughout the course of the relationship." Id. Though the defendant concedes that it shipped product to several different states, it does not believe that it sent shipments to New Hampshire. Doc. no. 5-1 ¶ 11.

         As the parties' relationship progressed, an increasing number of issues arose related to the defendant's performance under the contract. Doc. no. 9-2 ¶¶ 8, 9. The parties regularly communicated by telephone and email, and some of these communications were directed to or from New Hampshire. Id. ¶ 8. The plaintiff also sent personnel to the defendant's plant in Tennessee to monitor product. Doc. no. 5-1 ¶ 9. The plaintiff ultimately terminated the contract in July 2017, at which point the defendant returned certain packaging to the plaintiff. Id. ¶ 12; doc. no. 9-2 ¶ 10. No ...


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