BARRY, District Judge.
This matter comes before the court on the motion of defendants Maslym Holding Company ("Maslym") and Heinemann Electric (Europe) S.A. ("Heinemann Europe") for dismissal of the complaint for lack of in personam jurisdiction or, in the alternative, on the basis of forum non conveniens. The court has reviewed the submissions of the parties without oral argument pursuant to Fed. R.Civ.P. 78.
I. STATEMENT OF THE CASE
Plaintiff Eaton Corporation seeks a declaratory judgment regarding the parties' rights under a Trademark License Agreement ("Trademark Agreement") and a Patent and Know-How Agreement ("Patent Agreement") (collectively, the "Agreements") entered into in December, 1989.
Plaintiff is an Ohio corporation with its principal place of business in Cleveland, Ohio. Complaint, ¶ 1. On July 31, 1992, plaintiff purchased the assets of Heinemann Electric Company ("Heinemann Electric"), which was a party to the Patent Agreement. Id. at ¶ 43; Aff. of Olivier Bourgeois ("Bourgeois Aff."), ¶ 8. At the time the Agreements were executed, Heinemann Electric had a wholly-owned subsidiary, Heinemann, Inc., which was a party to the Trademark Agreement.
In 1989, Heinemann Electric was a New Jersey corporation with its principal place of business in Lawrenceville, New Jersey, and Heinemann, Inc. was a Delaware corporation. Bourgeois Aff., ¶¶ 4, 8. By mid-1993, approximately one year after Heinemann Electric was purchased by plaintiff, Heinemann Electric's operations were moved from New Jersey to Salsbury, Maryland. Id. at ¶ 17; Aff. of Amanda F. Shechter, ¶ 2, 6.
Defendant Heinemann Europe is a corporation established under the laws of Switzerland with its principal place of business in Le Lieu, Switzerland. Id. at ¶ 2. It contracted with Heinemann Electric and Heinemann, Inc. under the Agreements. Aff. of Michael J.E. Frye ("Frye Aff."), ¶¶ 2-3. In 1989, defendant Maslym purchased all of the shares of defendant Heinemann Europe. Id. at ¶ 3. Defendant Maslym is also a Swiss corporation whose principal place of business is in Zug, Switzerland. Id.
Defendants' Contacts With New Jersey
Both plaintiff and defendant Heinemann Europe manufacture and sell hydraulic magnetic circuit breakers.
Neither defendant Heinemann Europe nor defendant Maslym has an office, bank account, telephone, or telephone listing in New Jersey or anywhere else in the United States. Frye Aff., ¶ 5. Neither owns any real property or has any employees, representatives or agents in New Jersey or anywhere in the United States, nor do they advertise or pay taxes in this country. Id. In addition, neither defendant has an agent
The Agreements which are the subject of this action were executed on December 3, 1987 in Lausanne, Switzerland, and what little negotiation there was did not take place in New Jersey. Bourgeois Aff., ¶¶ 8, 13. The Agreements do not contain choice of forum clauses, but the Patent Agreement designates that it shall be construed in accordance with the laws of the State of Delaware.
The Agreements created long-term commitments between defendant Heinemann Europe, Heinemann Electric, and Heinemann, Inc; they were effective for ten years beginning on January 1, 1988 unless terminated sooner. Complaint, Ex. A, ¶ 7; Ex. B, ¶¶ 1, 12. Thus, from 1988 to mid-1993—when Heinemann Electric moved to Maryland — the Agreements were performed by Heinemann Electric and Heinemann, Inc. in New Jersey. This performance included developing technology and sharing it—at defendant Heinemann Europe's request—with defendant Heinemann Europe.
Because the Agreements outlined the terms whereby Heinemann Electric and Heinemann, Inc. shared its trademarks, patents, and know-how with defendant Heinemann Europe, there was considerable written communication generated by all parties to the Agreements. See Aff. of Steven Burack ("Burack Aff."), Ex. B; Aff. of Edward Delaney ("Delaney Aff."), Ex. B; Aff. of Ewhen Duma ("Duma Aff."); Aff. of James Urie ("Urie Aff.").
Several representatives of defendant Heinemann Europe travelled to New Jersey on six occasions between January 1990 and April 1992 to discuss matters related to the Agreements. See Burack Aff., Ex. A; Delaney Aff., Ex. A. The subjects discussed included product development and improvement, licensing requests, marketing issues, product costs, and the relationship between defendant Heinemann Europe, Heinemann Electric, and plaintiff. Burack Aff., ¶¶ 5-8; Delaney Aff., ¶¶ 4-6.
Finally, pursuant to the Agreements, Heinemann Europe purchased parts from Heinemann Electric's plant in New Jersey and made royalty payments under the Agreements to Heinemann Electric and Heinemann, Inc. in New Jersey. Complaint, ¶¶ 75, 83. Defendant Heinemann Europe has also shipped sample products to Heinemann Electric in New Jersey, but these were sent for the purpose of quality approval; they did not enter the stream of commerce in the United States. Complaint, ¶ 76; Frye Aff., ¶ 9.
There is no dispute that defendants' contacts with New Jersey ceased when Heinemann Electric moved from New Jersey to Maryland in 1993.
A district court sitting in diversity applies the law of the forum state in determining whether personal jurisdiction is proper. Fed.R.Civ.P. 4(e); North Penn Gas Co. v. Corning Natural Gas Corp., 897 F.2d 687, 689 (3d Cir.1990). New Jersey's long arm jurisdiction permits the assertion of in personam jurisdiction as far as is constitutionally permissible under the Fourteenth Amendment. N.J. Court Rule, 4:4-4; Apollo Technologies Corp. v. Centrosphere Indus. Corp., 805 F.Supp. 1157, 1181 (D.N.J.1992). Thus, the court must look to the limits of due process to determine whether there is personal jurisdiction over the defendants. Personal jurisdiction can be found where there exists general or specific jurisdiction over a defendant or defendants.
If a party is subject to the general jurisdiction of a state, he or she can be called to answer any claim against him or her, regardless of whether the subject matter of the cause of action has any connection to the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414 n. 9, 104 S.Ct. 1868, 1872 n. 9, 80 L.Ed.2d 404 (1984); Mellon Bank (East) PSFS, Nat'l Ass'n v. Farino, 960 F.2d 1217, 1221 (3d Cir.1992). To establish general jurisdiction, a plaintiff must demonstrate that the defendant has systematic and continuous contacts with the forum state. See Helicopteros, 466 U.S. at 414 & n. 9, 104 S.Ct. at 1872 n. 9 (1984); International Shoe Co. v. Washington, 326 U.S. 310, 320, 66 S.Ct. 154, 160, 90 L.Ed. 95 (1945).
Plaintiff does not seriously argue that systematic and continuous contacts are present in the case at bar, and the court finds that they are not. Defendants are not incorporated in New Jersey, they maintain no offices here, and they do not conduct their business in or through New Jersey. See Helicopteros, 466 U.S. at 415-16, 104 S.Ct. at 1872-73. The contacts that do exist—namely, correspondence directed to Heinemann Electric and Heinemann, Inc., a few visits by defendants' representatives, and payments made to plaintiff in New Jersey — are not systematic or continuous enough to sustain general jurisdiction over defendants. The court, therefore, must continue to the next inquiry and determine whether specific jurisdiction exists over defendants.
Where a forum seeks to assert specific jurisdiction over an out-of-state defendant who has not consented to suit, the litigation must "arise out of or relate to" the defendant's forum contacts. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985); Sunbelt Corp. v. Noble, Denton & Assoc., Inc., 5 F.3d 28, 32 (3d Cir.1993). In addition, due process requirements are satisfied only where the defendant has "`certain minimum contacts with [the forum] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.'" Helicopteros, 466 U.S. at 414, 104 S.Ct. at 1872 (quoting International Shoe, 326 U.S. at 316, 66 S.Ct. at 158). This principle has given rise to a two-prong test: first, the defendant must have had constitutionally sufficient "minimum contacts" with the forum and, second, if minimum contacts are shown, jurisdiction may be found where the court determines, in its discretion, that to do so would comport with "traditional notions of fair play and substantial justice." Vetrotex Certainteed Corp. v. Consolidated Fiber Glass Prods. Co., 75 F.3d 147, 150-51 (3d Cir.1996).
Minimum contacts, purposefully established by defendants in the forum state, are the "constitutional touchstone" for determining whether the exercise of personal jurisdiction comports with due process. Asahi Metal Indus. Co., Ltd. v. Superior Court of Cal., Solano County, 480 U.S. 102, 108-09, 107 S.Ct. 1026, 1030, 94 L.Ed.2d 92 (1987); Burger King, 471 U.S. at 474, 105 S.Ct. at 2183. Minimum contacts exist if the defendant "`purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections
In evaluating defendants' contacts with New Jersey, the court first notes that defendant Heinemann Europe entered into the Agreements with Heinemann Electric and Heinemann, Inc., both of whom were located in New Jersey at the time. Although in some contexts, a single contact may be enough to permit a finding of jurisdiction, standing alone, a contract with an out-of-state party does not automatically establish minimum contacts. Burger King, 471 U.S. at 478, 105 S.Ct. at 2185; Sunbelt, 5 F.3d at 32. Rather, the court must examine "prior negotiations and contemplated future consequences, along with the terms of the contract and the parties' actual course of dealing" to determine whether the defendant purposefully established minimum contacts with the forum. Burger King, 471 U.S. at 479, 105 S.Ct. at 2185; Vetrotex, 75 F.3d at 151; Grand Entertainment Group, Ltd. v. Star Media Sales, Inc., 988 F.2d 476, 482 (3d Cir.1993).
Regarding the "prior negotiations" which led to the Agreements, it is undisputed that the Agreements were executed in Switzerland, and what little negotiation there was did not take place in New Jersey. Bourgeois Aff., ¶¶ 8, 13. Clearly, nothing here supports the exercise of personal jurisdiction over defendants.
The "future consequences" of the contract along with "the parties' actual course of dealing" tell a somewhat different story, however, and they lead the court to find that minimum contacts are present. First, long-term commitments with state residents contribute to establishing minimum contacts with the forum, as they create "continuing obligations" among the parties. Burger King, 471 U.S. at 476, 105 S.Ct. at 2184 (citing Travelers Health Ass'n v. Virginia, 339 U.S. 643, 648, 70 S.Ct. 927, 929-30, 94 L.Ed. 1154 (1950)); Associated Business Telephone Sys. Corp. v. Greater Capital Corp., 861 F.2d 793, 797 (3d Cir.1988). The Agreements created a commitment whereby Heinemann Electric and Heinemann, Inc. would share their trademarks, patents, and know-how with defendant Heinemann Europe over a ten-year period. Complaint, Ex. A, ¶ 7; Ex. B, ¶¶ 1, 12. Having established such a relationship, defendants should have anticipated being haled into court here. Apollo Technologies, 805 F.Supp. 1157, 1185 (D.N.J.1992).
Moreover, courts have found that communications directed into New Jersey go a long way toward establishing minimum contacts.
In the case sub judice, one or both defendants directed weekly communications—by mail, telefax, and otherwise—into New Jersey over at least a three-year period and, most likely, since the inception of the Agreements. See Burack Aff., Ex. B; Delaney Aff., Ex. B; Duma Aff.; Urie Aff. This correspondence included requests for know-how and other inquiries made in furtherance of the Agreements.
This conclusion is further supported by the fact that several representatives of defendant Heinemann Europe travelled to New Jersey on six occasions to discuss matters directly related to the Agreements. See Burack Aff., Ex. A; Delaney Aff., Ex. A. In addition, pursuant to the Agreements, Heinemann Europe purchased parts from Heinemann Electric's plant in New Jersey and made royalty payments under the Agreements to Heinemann Electric and Heinemann, Inc. in New Jersey. Complaint, ¶¶ 75, 83. The existence of an agreement whereby an entity makes consecutive payments into the forum indicates sufficient minimum contacts for purposes of personal jurisdiction. North Penn Gas, 897 F.2d at 690. In sum, the long-term contractual relationship, continuous communications into New Jersey, several visits by defendants' representatives, and payments made into New Jersey are minimum contacts sufficient to permit a finding of personal jurisdiction over defendants.
The inquiry does not end here, however. Even where minimum contacts are present, the strictures of the Due Process Clause forbid the exercise of personal jurisdiction under circumstances that would offend "`traditional notions of fair play and substantial justice.'" Asahi, 480 U.S. at 113-14, 107 S.Ct. at 1033 (quoting International Shoe, 326 U.S. at 316, 66 S.Ct. at 158).
Fair Play and Substantial Justice
Once the plaintiff has made out a prima facie case of minimum contacts, the defendant must present a "compelling case that the presence of some other considerations would render jurisdiction unreasonable." Burger King, 471 U.S. at 477, 105 S.Ct. at 2185; Grand Entertainment, 988 F.2d at 483. In determining whether the assertion of jurisdiction violates traditional notions of fair play and substantial justice, the court must consider several 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 efficient resolution of controversies, and, if relevant, the shared interest of the several states in furthering substantive social policies. Asahi, 480 U.S. at 113, 107 S.Ct. at 1032-33; Burger King, 471 U.S. at 476-77, 105 S.Ct. at 2184; World-Wide Volkswagen, 444 U.S. at 292, 100 S.Ct. at 564-65. The court finds that, on balance, these factors weigh heavily against exercising jurisdiction. See D'Almeida v. Stork Brabant B.V., 71 F.3d 50 (1st Cir.1995), cert. denied, ___ U.S. ___, 116 S.Ct. 1570, 134 L.Ed.2d 668 (1996) (even if minimum contacts were present, jurisdiction improper for reasons of fair play and substantial justice).
In evaluating the burden on defendants, the court is mindful of the Supreme Court's admonition that "[t]he unique burdens
Next, the court must consider the interest of New Jersey in adjudicating the dispute. This case is unusual in that the forum's interest in this litigation is minimal to nonexistent. None of the parties is a citizen of New Jersey, and by mid-1993, approximately three years ago, Heinemann Electric and Heinemann, Inc. moved out of New Jersey into Maryland, never to return. Bourgeois Aff., ¶¶ 4, 8. Although plaintiff maintains three facilities in New Jersey, they are operated by divisions which have nothing to do with Heinemann Electric, Heinemann, Inc. or any aspect of this action. Aff. of Earl R. Franklin, ¶ 3. In short, there is no one left in this forum who has any interest in this case. Likewise, neither does New Jersey.
Most striking is the utter inefficiency which would result were the interstate judicial system to become involved in adjudicating this controversy. Defendants submit undisputed expert testimony
Of course, the court must also consider plaintiff's interest in obtaining relief in this forum — relief, the court notes, which apparently would be worth nothing. Plaintiff argues that litigating in Switzerland would be exceedingly time-consuming, lasting more than five years, and possibly eight.
While these concerns would weigh heavily in favor of exercising jurisdiction in the typical case, this is anything but the typical case. The unusual confluence of circumstances presented here — a foreign defendant, New Jersey's minimal or nonexistent interest in this matter, and, most importantly, the unenforceability of the court's judgment — make plaintiff's difficulties seem slight in comparison. Notwithstanding plaintiff's litigation concerns,
For the foregoing reasons, the court finds that there is no personal jurisdiction over defendants, and the case is dismissed.