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Gullette v. Lancaster & Chester Co., Inc.

United States District Court, D. Oregon

July 23, 2014

KATY GULLETTE and FRED GULLETTE, Plaintiffs,
v.
THE LANCASTER & CHESTER CO., INC., a South Carolina Corporation; and GULF & OHIO RAILWAYS, INC., a Tennessee Corporation, Defendants.

Molly Jo Mullen Jamison R. McCune Bodyfelt Mount LLP Portland, OR, Attorneys for Plaintiffs

Stephen F. English Gabrielle D. Richards Perkins Coie, LLP Portland, OR, Attorneys for Defendant

OPINION & ORDER

MARCO A. HERNNDEZ, District Judge.

Plaintiffs Katy Gullette and Fred Gullette bring this action against Defendants the Lancaster & Chester Company, Inc. ("TLC") and Gulf & Ohio Railways, Inc. ("G&O"). Plaintiffs bring claims for breach of contract, breach of the covenant of good faith and fair dealing, and unfair trade practices under South Carolina law. Defendants move to dismiss for lack of personal jurisdiction. In the alternative, Defendants move to transfer this case to the United States District Court for the District of South Carolina. Because Plaintiffs fail to demonstrate that Defendants have sufficient minimum contacts with Oregon such that the Court may exercise specific jurisdiction over Defendants, I grant Defendants' motion to dismiss. I deny the alternative motion to transfer as moot.

BACKGROUND

Plaintiff Fred Gullette is a long-time Oregon resident. F. Gullette Decl. [17] ¶ 2. Plaintiff Katy Gullette is Mr. Gullette's daughter and business partner. K. Gullette Decl. [16] ¶¶ 4-5. She is a Utah resident. Id . at ¶ 3. Defendant TLC is a South Carolina corporation, with its shop located in Lancaster, South Carolina. Gedney Aff. [10] ¶ 5. Defendant G&O is a Tennessee corporation, and TLC's parent company. Claussen Aff. [9] ¶ 3 and ¶ 7. Plaintiffs entered into a contract with TLC for the renovation of their private railcar, the "Pacific Sunset." Pls.' First Am. Compl. [1-1] ¶ 4.

Plaintiffs have a membership in the American Association of Private Railroad Car Owners (AAPRCO). K. Gullette Decl. [16] ¶ 7; F. Gullette Decl. [17] ¶ 5. Their AAPRCO membership provided a subscription to Private Varnish, id., a quarterly publication about privately owned railroad passenger cars. M. Mullen Decl. [15], Ex. A. Private Varnish is published four times per year but the fourth issue is published as the Private Car Charter Guide. [1] AAPRCO prints and distributes both publications. Id . A copy of Private Varnish was delivered by mail to Mr. Gullette's residence in Portland, Oregon. F. Gullette Decl. [17] ¶ 8. Plaintiffs learned about TLC through its advertisement in Private Varnish. K. Gullette Decl. [16] ¶ 7; F. Gullette Decl. [17] ¶ 5.

Plaintiffs contacted TLC to perform renovations on the Pacific Sunset. K. Gullette Decl. [16] ¶¶ 12-14; F. Gullette Decl. [17] ¶¶ 10-11. TLC faxed a contract to Plaintiffs. K. Gullette Decl. [16] ¶ 13. Plaintiffs received the contract at Mr. Gullette's residence in Portland, Oregon. Id . Plaintiffs executed the contract in Oregon on December 23, 2010. F. Gullette Decl. [17] ¶ 11. Plaintiffs first faxed a copy of the signed contract back to TLC and subsequently mailed the original to TLC in South Carolina. Id . at ¶¶ 13-14. TLC executed the contract in South Carolina, and received the original signed contract by Plaintiffs in South Carolina. Gedney Aff. [10] ¶¶ 7-8. The contract provides for the application of South Carolina law. Id . at Ex. A, ¶ 9.

TLC received the Pacific Sunset in South Carolina, and all the renovation work was performed in South Carolina. Gedney Aff. [10] ¶ 10. TLC's employees, and former employees, who worked on the railcar reside in or near South Carolina. Claussen Aff. [9] ¶ 3 and ¶ 8. Throughout the Pacific Sunset's renovation process, Ms. Gullette communicated with TLC's staff by phone and email. K. Gullette Decl. [16] ¶ 19. Both Plaintiffs visited TLC's facilities in South Carolina on multiple occasions. Gedney Suppl. Decl. [25] ¶ 8. Once the renovations were finished, the Pacific Sunset was delivered to Plaintiffs in South Carolina. Gedney Aff. [10] ¶ 9.

STANDARD

Under Federal Rule of Civil Procedure 12(b)(2), a defendant may move for dismissal on the grounds that the court lacks personal jurisdiction. Plaintiff has the burden of showing personal jurisdiction. Boschetto v. Hansing , 539 F.3d 1011, 1015 (9th Cir. 2008).

If the district court decides the motion without an evidentiary hearing, which is the case here, then the plaintiff need only make a prima facie showing of the jurisdictional facts. Absent an evidentiary hearing this court only inquires into whether the plaintiff's pleadings and affidavits make a prima facie showing of personal jurisdiction. Uncontroverted allegations in the plaintiff's complaint must be taken as true. Conflicts between the parties over statements contained in affidavits must be resolved in the plaintiff's favor.

Id. (citations, internal quotation marks, and brackets omitted).

In diversity cases, the court looks to the law of the state in which it sits to determine whether it has personal jurisdiction over the non-resident defendant. W. Helicopters, Inc. v. Rogerson Aircraft Corp. , 715 F.Supp. 1486, 1489 (D. Or. 1989); see also Boschetto , 539 F.3d at 1015 ("When no federal statute governs personal jurisdiction, the district court applies the law of the forum state.").

Oregon Rule of Civil Procedure (ORCP) 4 governs personal jurisdiction issues in Oregon. Because Oregon's long-arm statute confers jurisdiction to the extent permitted by due process, Gray & Co. v. Firstenberg Mach. Co. , 913 F.2d 758, 760 (9th Cir. 1990) (citing ORCP 4L; Oregon ex rel. Hydraulic Servocontrols Corp. v. Dale , 294 Or. 381, 657 P.2d 211 (1982)), the court may proceed directly to the federal due process analysis. See Harris Rutsky & Co. Ins. Servs. v. Bell & Clements Ltd. , 328 F.3d 1122, 1129 (9th Cir. 2003) (when state long-arm statute reaches as far as the Due Process Clause, the court need only analyze whether the exercise of jurisdiction complies with due process); see also Millennium Enters., Inc. v. Millennium Music, LP , 33 F.Supp.2d 907, 909 (D. Or. 1999) (because Oregon's catch-all jurisdictional rule confers personal jurisdiction coextensive with due process, the analysis collapses into a single framework and the court proceeds under federal due process standards).

To comport with due process, "the non-resident generally must have certain minimum contacts [with the forum state so that the exercise of jurisdiction] does not offend traditional notions of fair play and substantial justice.'" Walden v. Fiore , 134 S.Ct. 1115, 1121 (2014) (quoting Int'l Shoe Co. v. Wash. , 326 U.S. 310, 316 (1945)). The forum state may exercise either general or specific jurisdiction over a non-resident defendant. Boschetto , 539 F.3d at 1016. In this case, Plaintiffs do not contend Oregon has general jurisdiction over Defendants. Therefore, I address only whether this Court has specific personal jurisdiction over Defendants.

DISCUSSION

Defendants raise three arguments against the exercise of specific personal jurisdiction: (1) They have not purposefully availed themselves of any benefits, privileges, or protections conferred by the State of Oregon; (2) Plaintiffs' claim against Defendants does not arise out Defendants' activities conducted ...


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