OPINION OF THE COURT
A. LEON HIGGINBOTHAM, Jr., Chief Judge.
Appellant, James D. Mesalic (Mesalic), appeals from a final order of the United States District Court for the District of New Jersey dismissing this diversity complaint for lack of in personam jurisdiction over the appellees, Howard Harley (Harley) and Fiberfloat Corp., d/b/a Harley Boat Company (Fiberfloat). 708 F.Supp. 641.
Mesalic is a New Jersey citizen. The president of Fiberfloat, Howard Harley, is a citizen of the State of Florida. Fiberfloat, a Florida corporation with its principal place of business in Bartow, Florida, advertises its products for sale in Boating, a magazine aimed at a national audience. Boating is not directed specifically to New Jersey residents. However, at oral argument, appellees conceded that the magazine was distributed in New Jersey. Because Fiberfloat has no showrooms or distribution network in New Jersey, Mesalic went to its manufacturing facility in Bartow, Florida to purchase a boat. Harley quoted a price for Mesalic and the next day, he signed a contract to purchase a 42-foot custom built, luxury power boat. The purchase was conditioned upon Mesalic's satisfaction with a sea trial of the same model boat. The sales agreement was silent as to which state's law would govern interpretation of the contract. However, the warranty gives Fiberfloat the right to require the customer to deliver the vessel to Fiberfloat's facility in Florida for repairs.
After conducting a trial run, Mesalic made a down payment and Fiberfloat began construction of his boat. While the boat was under construction, Mesalic made several trips to Florida to inspect the construction and to make progress payments. At other times, however, the parties communicated by mail and by telephone. Fiberfloat wrote to Mesalic at his home in Flanders, New Jersey on January 27, March 2, April 1, and May 18, 1988. At all times Fiberfloat knew that the boat was to be used in New Jersey as Mesalic lived and had made docking arrangements there.
On or about March 5, 1988, Mesalic made final payment on the vessel in Florida and then tested the vessel for several days. Mesalic's affidavit indicates that the boat had hull leaks and problems relating to the steering mechanism, the fuel lines, the propellers, and the electrical system. Mesalic did not seek to reject or seek to revoke acceptance of the vessel at that time but instead instructed Fiberfloat to correct certain deficiencies and to add $2,000 worth of custom accessories. Mesalic also requested that a Fiberfloat mechanic transport the vessel to New Jersey and it was, in fact, delivered at the end of April, 1988.
While the vessel was en route to Florida, Mesalic informed Fiberfloat that he no longer wanted the boat. Mesalic brought suit for damages on October 18, 1988 in the District of New Jersey alleging, inter alia, breach of contract and seeking recision. Mesalic contends that the vessel contained major latent defects. Fiberfloat filed an answer and motion to dismiss alleging lack of in personam jurisdiction. On March 29, 1989 the district court granted Fiberfloat's motion and dismissed the case pursuant to Fed.R.Civ.P. 12(b)(2).
Subsequent to the district court's dismissal, Mesalic filed a notice of appeal and motions pursuant to Fed.R.Civ.P. 15 and 59, seeking to amend the complaint or to alter and amend the judgment. Mesalic moved in the alternative under Rule 60, for relief from final judgment. Fiberfloat filed a timely response and cross-motion for imposition of Rule 11 sanctions. The district court denied all motions.
The issue on appeal is whether the district court properly determined that Fiberfloat lacked the requisite minimum contacts with New Jersey to subject it to suit there. Because the district court dismissed the complaint for lack of personal jurisdiction, the court had no occasion to rule on the substantive validity of the plaintiff's claim. The personal jurisdiction question is the principal issue before us now.
Rule 4(e) of the Federal Rules of Civil Procedure authorizes a district court to assert personal jurisdiction over a non-resident to the extent permissible under the law of the state where the district court sits. New Jersey's long-arm rule, applicable in the instant case, states in relevant part:
N.J. Civil Practice Rule 4:4-4(c). New Jersey's long-arm rule has been interpreted as extending jurisdiction over non-residents "to the uttermost limits permitted by the United States Constitution." Charles Gendler Co. v. Telecom Equity Corp., 102 N.J. 460, 469, 508 A.2d 1127, 1131 (1986) (quoting Avdel Corp. v. Mecure, 58 N.J. 264, 268, 277 A.2d 207, 209 (1971)). Accordingly, this court can exercise jurisdiction over Fiberfloat only if Mesalic can demonstrate that Fiberfloat's contacts with New Jersey are sufficient to satisfy the Due Process Clause of the United States Constitution.
Dollar Savings Bank v. First Security Bank of Utah, 746 F.2d 208, 211 (3d Cir. 1984) (citations omitted). Fiberfloat correctly notes that specific jurisdiction is at issue in the present case.
The minimum contacts framework, as first set out in International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), provides the standard for determining specific jurisdiction. Recently, the Supreme Court described the standard as the "constitutional touchstone" for the due process analysis of personal jurisdiction. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 2183, 85 L.Ed.2d 528 (1985).
In Burger King, the Supreme Court held that a Florida district court's exercise of jurisdiction over a Michigan resident was constitutional where the Michigan resident had signed a long-term franchise contract which involved substantial connection to a Florida corporation. Id. at 479, 105 S.Ct. at 2185. The Court reasoned that the minimum contacts at issue must have a basis in "some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum state." Id. at 475, 105 S.Ct. at 2183 (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958)). Although the Court held that a single contract with a forum state resident may subject an out-of-state party to the jurisdiction of that state's courts in a dispute arising from that contract, the Court cautioned that a contract alone cannot "automatically establish sufficient minimum contacts in the other party's home forum...." Burger King, 471 U.S. at 478, 105 S.Ct. at 2185. Additionally, courts must evaluate "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing ... in determining whether the defendant purposefully established minimum contacts within the forum." Id. at 479, 105 S.Ct. at 2185.
This court considered the issue of minimum contacts, using the rationale in Burger King in an action where a New Jersey telephone company sued a California hotel seeking to recover amounts due for use of business phones or, alternatively, possession of the phone system.
The district court in the case at bar, found that Fiberfloat maintained no offices, production facilities or sales organization
In dismissing the contacts in New Jersey as insignificant, the district court was particularly swayed by the Fourth Circuit's policy argument in Chung v. NANA Development Corp., 783 F.2d 1124, 1129 (4th Cir.1986), cert. denied, 479 U.S. 948, 107 S.Ct. 431, 93 L.Ed.2d 381 (1986). In Chung,
In the present case the record is replete with evidence of Fiberfloat's purposeful connection to New Jersey, including: (1) written correspondence from Fiberfloat on January 27, March 2, April 1, and May 27, 1988 to Mesalic's New Jersey residence; (2) delivery of the vessel by a Fiberfloat employee to the appellant in New Jersey and this same employee's attempt to repair the boat in New Jersey; and (3) work performed by another Fiberfloat mechanic in New Jersey from May 7 through May 27, 1988.
While the contract between the parties may not have obligated Fiberfloat to deliver and repair the boat in New Jersey, nonetheless they did. This conduct — accommodating the buyer — is not surprising in view of today's commercial realities. Competitive business practices may make it advantageous for out-of-state manufacturers to
The contacts between Fiberfloat and New Jersey are, indeed, sufficient for that state to exercise personal jurisdiction over Fiberfloat. As the Court held in Burger King, "[j]urisdiction is proper ... where the contacts proximately result from actions by the defendant himself that create a `substantial connection' with the forum State." Burger King, 471 U.S. at 475, 105 S.Ct. at 2183 (emphasis in original) (citing McGee v. International Life Insurance Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957) and Kulko v. California Superior Court, 436 U.S. 84, 94, n. 7, 98 S.Ct. 1690, 1698, n. 7, 56 L.Ed.2d 132 (1978)). The contacts at issue here — mail and telephone communications between New Jersey and Florida, delivery of the boat in New Jersey and substantial repairs by Fiberfloat mechanics in New Jersey on two occasions — are not "insignificant contacts" as they were characterized by the district court. These contacts properly come under what the Supreme Court describes as contacts "that create a substantial connection with the forum state." Id. at 475-76, 105 S.Ct. at 2183-84. The connection was one in which Fiberfloat, through its mechanics, availed itself of the privilege of conducting activities in New Jersey. As the Court noted in International Shoe, "to the extent that a corporation exercises the privilege of conducting activities within a state, it enjoys the benefits and protection of the laws of the state." 326 U.S. at 319, 66 S.Ct. at 159.
Having determined that there were sufficient minimum contacts, we must determine whether the assertion of personal jurisdiction accords with the notions of "fair play and substantial justice." International Shoe Co., 326 U.S. at 316, 66 S.Ct. at 158 (citing Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)). This determination requires an evaluation of the following factors: "the burden on the defendant, the interests of the forum State, ... plaintiff's interest in obtaining relief[,] ... `the interstate judicial system's interest in obtaining the most efficient resolution of controversies; and the shared interest of the several States in furthering fundamental substantive social policies.'" Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102, 113, 107 S.Ct. 1026, 1034, 94 L.Ed.2d 92 (1987) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 564, 62 L.Ed.2d 490 (1980)).
Consideration of these factors in the present case makes clear that it is reasonable to assert jurisdiction over Fiberfloat. The burden on Fiberfloat to defend the action in New Jersey, is not severe by today's standards. This is not a case where the defendant is required to defend itself across national borders. See Asahi, 480 U.S. at 114, 107 S.Ct. at 1034 Fiberfloat has stressed the difficulty of litigating this case in New Jersey rather than in Florida, due to the expense of transporting documents and witnesses from Florida to New Jersey. While this is a valid consideration, we do not believe that litigation in New Jersey would impose an unfair burden on Fiberfloat. The proper means to resolve the competing forum preferences of the parties may be through a motion for change of venue. See 28 U.S.C. § 1404(a) (1982).
New Jersey has a valid interest in protecting its residents from out of state manufacturers. "We cannot conclude that [New Jersey] had no `legitimate interest in
Under World-Wide Volkswagen we must also consider the interests of the "several States" in the efficient judicial resolution of the dispute and the advancement of substantive policies. There is no evidence that the interests of Florida or New Jersey would be better served depending upon where the case is heard. Nor is there evidence that Fiberfloat's interests are outweighed by Mesalic's interests.
Applying the standards of Burger King and International Shoe asserting jurisdiction in the present case does not violate notions of "fair play and substantial justice." Fiberfloat purposefully entered the State of New Jersey to carry out activities in an effort to repair Mesalic's boat. These actions are sufficient to distinguish those cases where the court found the contacts insufficient to assert personal jurisdiction.
In Asahi, the Court found that under the stream of commerce analysis, the contacts were insufficient to assert personal jurisdiction that would comport with traditional notions of fair play and substantial justice.
For the foregoing reasons, the judgment of the district court will be reversed, and the case will be remanded for further proceedings consistent with this opinion.
We have no evidence of the extent of Fiberfloat's solicitation in Boating magazine nor do we know how much business the corporation derives from its national advertising. Therefore there is no basis to conclude that the advertisement was sufficient to establish minimum contacts in New Jersey. See Makopoulos v. Walt Disney World, 221 N.J.Super. 513, 535 A.2d 26 (1987). Regarding Fiberfloat's attendance at a regional boat show, Fiberfloat did not attend the boat show, which was in New York, until after this action was filed. Accordingly, this conduct is not sufficient to establish personal jurisdiction.