Southern Copper, Inc v. Specialloy, Inc ( 2000 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
____________________
No. 00-50408
Summary Calendar
____________________
SOUTHERN COPPER, INC
Plaintiff - Appellant
v.
SPECIALLOY, INC
Defendant - Appellee
_________________________________________________________________
Appeal from the United States District Court
for the Western District of Texas
No. W-00-CV-49
_________________________________________________________________
December 22, 2000
Before KING, Chief Judge, and WIENER and DENNIS, Circuit Judges.
PER CURIAM:*
Plaintiff-Appellant Southern Copper, Inc. appeals from the
district court’s judgment granting Defendant-Appellee Specialloy,
Inc.’s Motion to Dismiss for Lack of Personal Jurisdiction. For
the following reasons, we AFFIRM.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIR. R.
47.5.4.
I. FACTUAL AND PROCEDURAL HISTORY
Southern Copper, Inc. (“Southern Copper”) is a Texas-based
corporation that manufactures copper tubing. On August 10, 1998,
representatives of Southern Copper contacted the President of
Specialloy, Inc. (“Specialloy”), an Illinois-based company,
seeking to purchase copper-nickel billets for the manufacture of
its tubing. On August 17, two of Southern Copper’s
representatives — the Chief Executive Officer and the Sales
Manager — traveled to Specialloy’s plant in Chicago, Illinois to
observe the plant and to discuss the products.
Three orders of copper-nickel billets arose from these
contacts. First, in August 1998, Southern Copper ordered a
sample shipment of the billets from Specialloy. Finding this
sample shipment to be satisfactory, Southern Copper placed two
additional orders of billets on October 8 and December 8, 1998.
In placing these orders, Southern Copper initiated contact,
telephoning or faxing its order to Specialloy. The only other
contact between the parties was the exchange of telephone calls
prior to the October and December orders.
Once Southern Copper placed its orders, Specialloy would
cast the billets in its Chicago plant. Then, Specialloy would
make the billets available to Southern Copper, F.O.B.
Specialloy’s Chicago Plant. Southern Copper paid for the
shipping and directed the independent freight carrier to
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transport the billets from Chicago, Illinois to its headquarters
in Texas.
On January 14, 2000, Southern Copper sued Specialloy in
Texas state court, claiming that the billets contained in the
second and third shipments were defective. Specialloy removed
the suit on February 28, 2000, based upon diversity and filed a
Motion to Dismiss for Lack of Personal Jurisdiction on March 6.
On March 29, 2000, the district court granted Specialloy’s
motion.
Southern Copper timely appealed.
II. SOUTHERN COPPER DID NOT ESTABLISH A PRIMA FACIE CASE
OF PERSONAL JURISDICTION OVER SPECIALLOY
On appeal, Southern Copper contends that the district court
erred in dismissing the suit against Specialloy for lack of
personal jurisdiction,1 claiming that Specialloy invoked the
1
Southern Copper also argues that the district court
abused its discretion in denying Southern Copper’s motion for an
extension of time to discover “potential jurisdictional facts.”
We disagree. Southern Copper’s motion for an extension merely
requested additional time to “take the deposition of Defendant’s
representative to determine additional facts to support those set
forth in this Response.” Most notably, the motion requested the
extension only if the district court “fe[lt] that additional
facts would be helpful in determining jurisdiction,” and only if
the court “fe[lt] it [was] necessary.”
The district court was well within its discretion in
deciding that “sufficient facts ha[d] been presented for the
Court to rule on Defendant’s motion.” See Alpine View Co. v.
Atlas Copco AB, 205 F.3d 208, 220-21 (5th Cir. 2000) (“We have
previously noted that a district court has ‘broad discretion in
all discovery matters,’ Wyatt v. Kaplan, 686 F.2d 276, 283 (5th
Cir. 1982), and that ‘such discretion will not be disturbed
3
jurisdiction of Texas courts by placing its goods into the stream
of commerce, and hence into Texas. Specialloy responds that
because it did not act to avail itself of the benefits and
protections of Texas, a Texas court “simply cannot exercise
personal jurisdiction over Specialloy within the bounds of Due
Process.”
We review de novo a dismissal for lack of personal
jurisdiction. See Alpine View Co. v. Atlas Copco AB, 205 F.3d
208, 214 (5th Cir. 2000); Jobe v. ATR Mktg., Inc., 87 F.3d 751,
753 (5th Cir. 1996). “When a court rules on a motion to dismiss
for lack of personal jurisdiction without holding an evidentiary
hearing, it must accept as true the uncontroverted allegations in
the complaint and resolve in favor of the plaintiff any factual
conflicts[.]” Latshaw v. Johnston, 167 F.3d 208, 211 (5th Cir.
1999); see also Bullion v. Gillespie, 895 F.2d 213, 217 (5th Cir.
1990). Therefore, the plaintiff need only present a prima facie
case of personal jurisdiction to satisfy its burden. See Alpine
View Co., 205 F.3d at 215.
Under the Federal Rules of Civil Procedure, a federal court
sitting in diversity may exercise jurisdiction over a nonresident
ordinarily unless there are unusual circumstances showing a clear
abuse.’”). Southern Copper requested time to adduce additional
facts to support those it had already presented to the district
court, without indicating the possible relevance of these
additional facts. The district court, as invited by Southern
Copper’s motion, denied Southern Copper’s request for additional
time for discovery of those additional facts. We decline to find
an abuse of discretion on the part of the district court.
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corporate defendant only if permitted by state law. See FED. R.
CIV. P. 4(e)(1), 4(h)(1), 4(k)(1); see also Alpine View Co., 205
F.3d at 214. We conduct a two-prong analysis to determine
whether personal jurisdiction is proper over a nonresident.
See Latshaw, 167 F.3d at 211; Jobe, 87 F.3d at 753. First, we
determine whether the long-arm statute of the forum state confers
personal jurisdiction over the defendant. See Latshaw, 167 F.3d
at 211. Second, we ask whether the “exercise of such
jurisdiction by the forum state is consistent with due process
under the United States Constitution.” Id. However, because the
Texas long-arm statute, see TEX. CIV. PRAC. & REM. CODE ANN. § 17.042
(Vernon 1997), confers personal jurisdiction over a nonresident
defendant to the full extent allowed by the federal Constitution,
our two-prong framework collapses into a single inquiry of
whether the exercise of personal jurisdiction over the
nonresident defendant is consistent with the Due Process Clause
of the Fourteenth Amendment. See Alpine View Co., 205 F.3d at
214.
Due process permits the exercise of personal jurisdiction
when two conditions are satisfied. First, the nonresident
defendant must have “purposefully availed [itself] of the
benefits and protections of the forum state by establishing
‘minimum contacts’ with the forum state.” Id. (internal
quotations omitted) (quoting Mink v. AAAA Dev. LLC, 190 F.3d 333,
336 (5th Cir. 1999)); see also Int’l Shoe Co. v. Washington, 326
5
U.S. 310, 316 (1945); Latshaw, 167 F.3d at 211. Second, “the
exercise of jurisdiction over that defendant [must] not offend
‘traditional notions of fair play and substantial justice.’”
Alpine View Co., 205 F.3d at 215 (quoting Mink, 190 F.3d at 336);
see also Int’l Shoe Co., 326 U.S. at 316.
The “minimum contacts” inquiry may be satisfied by contacts
sufficient for general jurisdiction or specific jurisdiction.
See Alpine View Co., 205 F.3d at 215. Because Southern Copper is
not alleging general jurisdiction over Specialloy, however, our
examination concentrates on specific jurisdiction.
The district court concluded that Specialloy’s contacts with
Texas did not justify the exercise of specific personal
jurisdiction. Mindful of Southern Copper’s low evidentiary
burden, and after taking as true its uncontroverted allegations
and resolving any factual conflicts in favor of Southern Copper,
we agree with the district court that Southern Copper failed to
adduce evidence sufficient for a prima facie case of personal
jurisdiction over Specialloy.
Regarding the first due process condition of minimum
contacts, when a suit relates to the defendant’s contact with the
forum, specific jurisdiction is proper if that contact “resulted
from the defendant’s purposeful conduct and not the unilateral
activity of the plaintiff.” Bearry v. Beech Aircraft Corp., 818
F.2d 370, 374 (5th Cir. 1987); see also Hanson v. Denckla, 357
U.S. 235, 253 (1958) (“The unilateral activity of those who claim
6
some relationship with a nonresident defendant cannot satisfy the
requirement of contact with the forum State.”). This restriction
on the minimum contacts inquiry ensures that the defendant
“purposefully availed” itself of the benefits of the forum state
such that it could “reasonably anticipate being haled into court
there.” Alpine View Co., 205 F.3d at 215 (internal quotations
omitted) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462,
474 (1985)); see also Bearry, 818 F.2d at 375.
We find that any connection that Specialloy has with the
State of Texas stems from the unilateral activity of Southern
Copper. Specialloy does not maintain an office, agent, or place
of business in Texas. Moreover, as the district court
recognized, Specialloy did not reach out to Southern Copper in
Texas in order to sell its billets; instead, Southern Copper
initiated contact with Specialloy and traveled to Specialloy’s
plant in Illinois to inspect its products. All orders were
placed by Southern Copper by telephone or facsimile, and Southern
Copper hired an independent carrier to pick up the billets in
Illinois, directing shipment to Texas.
The primary facts that Southern Copper offers to support the
exercise of personal jurisdiction over Specialloy are (1) the
telephone calls between the parties and (2) Specialloy’s Internet
website, which is available to residents of Texas. We recognize
that the telephone calls were initiated by both parties at the
time of the October and December orders and that these calls were
7
“necessary to discuss the quality of the sample shipment and to
verify the details of the two larger purchase orders.” However,
we have held that “an exchange of communications between a
resident and a nonresident in developing a contract is
insufficient of itself to be characterized as purposeful activity
invoking the benefits and protection of the forum state’s laws.”
Stuart v. Spademan, 772 F.2d 1185, 1193 (5th Cir. 1985). Because
it was Southern Copper that initiated the contact and the
subsequent orders, these telephone calls are not sufficient
additional evidence to support an exercise of jurisdiction over
Specialloy.
Nor does Specialloy’s Internet website strengthen Southern
Copper’s case for personal jurisdiction. “Courts addressing the
issue of whether personal jurisdiction can be constitutionally
exercised over a defendant look to the ‘nature and quality of
commercial activity that an entity conducts over the Internet.’”
Mink v. AAAA Dev. LLC, 190 F.3d 333, 336 (5th Cir. 1999) (quoting
Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1124
(W.D. Pa. 1997)). In Mink v. AAAA Development LLC, this court
recognized that a company may actively do business over its
Internet website by entering into contracts with residents of
other states. See 190 F.3d at 336. In such cases, personal
jurisdiction over that nonresident company may be appropriate.
See id. On the other hand, we also noted that “[a]t the other
end of the spectrum, there are situations where a defendant
8
merely establishes a passive website that does nothing more than
advertise on the Internet.” Id. In those cases, personal
jurisdiction is not proper. See id.This is a case of the latter type of website. There is no
evidence in the record which demonstrates that Specialloy entered
into contracts with customers over its website, and in contrast
to the website in Mink, Specialloy’s website did not provide an
order form for purchases. See id. The website described the
company and its products in general terms and was used merely for
advertisement, providing details by which a reader could contact
the company for more information. As this court has recognized,
“advertising in national publications is not in itself sufficient
to subject a defendant to personal jurisdiction.” See
Singletary v. B.R.X., Inc., 828 F.2d 1135, 1136 (5th Cir. 1987).
Moreover, as the district court noted, Southern Copper did not
demonstrate that the suit “arose out of or was related to”
Specialloy’s website. See id. Accordingly, we find the website
was not sufficient additional contact to support personal
jurisdiction over Specialloy.
In the face of this lack of activity within Texas on the
part of Specialloy, Southern Copper asserts that its conduct was
not unilateral because it was Specialloy that placed its products
into the stream of commerce with knowledge that the billets were
destined for Texas. As this court has recognized:
9
[W]hen a nonresident’s contact with the forum state
“stems from a product, sold or manufactured by the
foreign defendant, which has caused harm in the forum
state, the court has [specific] jurisdiction if it
finds that the defendant delivered the product into the
stream of commerce with the expectation that it would
be purchased by or used by consumers in the foreign
state.”
Alpine View Co., 205 F.3d at 216 (alteration in original)
(quoting Bearry, 818 F.2d at 374). However, as we noted above,
Specialloy shipped the billets F.O.B. Specialloy’s Chicago Plant,
with Southern Copper taking possession at that location. While
we recognize this fact, in itself, cannot preclude a finding of
personal jurisdiction over Specialloy, it certainly is a relevant
factor for us to consider. See Singletary, 828 F.2d at 1136(recognizing in a general jurisdiction analysis that minimum
contacts was “weakened even further by the fact that the sale was
initiated by the buyer and was shipped F.O.B. California, the
seller’s place of business”); Charia v. Cigarette Racing Team,
Inc., 583 F.2d 184, 188-89 (5th Cir. 1978).
“The suggested significance of the FOB shipment is that,
under a ‘stream of commerce’ rationale, [Specialloy] was
indirectly shipping its product into [Texas] and could reasonably
have foreseen that the sale would have effects in [Texas].”
Charia, 583 F.2d at 188. However, we find that Specialloy did
not purposefully avail itself of the benefits of the state by
placing the billets into the stream of commerce because Southern
Copper took possession of the billets in Illinois. Moreover,
10
Specialloy has no presence in Texas, and no Specialloy employee
has ever set foot in Texas. Therefore, Southern Copper’s already
fragile case is weakened further by the F.O.B. designation.2
In summary, after our review of the record, taking as true
Southern Copper’s uncontroverted allegations and resolving any
factual conflicts in favor of Southern Copper, we conclude that
Southern Copper failed to adduce evidence to meet its prima facie
burden to support the exercise of personal jurisdiction over
Specialloy. Because we find that the first due process condition
of minimum contacts was not satisfied, we need not address
whether the exercise of personal jurisdiction in this case would
offend traditional notions of fair play and substantial justice.
2
We recognize that in Ruston Gas Turbines, Inc. v.
Donaldson Co., 9 F.3d 415 (5th Cir. 1993), this court came to a
different conclusion regarding the F.O.B. designation. In that
case, this court held that the seller “intentionally placed its
products into the stream of commerce by delivering them to a
shipper destined for delivery in Texas.” Id. at 420. However,
that case is distinguishable on its facts because the seller had
“211 contacts” with the state of Texas through its business
dealings with the plaintiff and also had its own employees
situated in Texas to serve the plaintiff’s customers. See id.Those additional facts are not present in this case. Here, there
are three shipments initiated by Southern Copper, and Specialloy
has no other presence within the state. Although a single
contact with the forum state is sufficient to support personal
jurisdiction over a nonresident defendant, the quality of the
contacts in this case do not rise to the level of purposeful
availment. See Bearry, 818 F.2d at 374 (“If the contact resulted
from the defendant’s conduct and created a substantial connection
with the forum state, even a single act can support
jurisdiction.” (emphasis added)). Indeed, it appears that
Specialloy permissibly structured its dealings with Southern
Copper to avoid being haled into court in Texas. See Stuart v.
Spademan, 772 F.2d 1185, 1190 (5th Cir. 1985) (citing World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)).
11
See Asahi Metal Indus. Co. v. Superior Court, 480 U.S. 102, 113-
16 (1987); Felch v. Transportes Lar-Mex SA DE CV, 92 F.3d 320,
329 n.20 (5th Cir. 1996).
III. CONCLUSION
For the foregoing reasons, we AFFIRM the judgment of the
district court.
12