The opinion of the court was delivered by: STERN
This is a diversity action wherein plaintiff, a New Jersey resident, sues a West German corporation. Plaintiff, a former employee of the Davey Corporation of Jersey City, New Jersey, allegedly mangled while working near a machine called a "press table", sues the German corporation which, allegedly, negligently designed and manufactured the "press table" in Germany, and thereafter shipped the defective machine from its plant in Germany to Jersey City, with the knowledge that it would there be operated at the Davey Corporation facility.
Pursuant to Rule 4(e) of the Federal Rules of Civil Procedure, service was effected by the use of New Jersey Rule 4:4-4(c) (1),
the New Jersey "long arm" statute, which permits service by registered or certified mail.
The defendant makes substantial objection to the service herein. It claims that Rule 4:4-4(c) (1) does not allow, and indeed the due process clause of the United States Constitution prohibits jurisdiction, as here, where the defendant is a corporation which maintains no facilities, agents, or property within this State has never done business within this State, and whose sole State contacts are three contracts which, it claims, it made in Germany and thereafter fully performed upon in Germany. These claims will be more fully examined herein.
Rule 4(e) of the Federal Rules of Civil Procedure permits service of process and the obtaining of "in personam" jurisdiction in any manner permitted by state rule or statute, and it is well settled that a United States Court, deciding the validity of that service, must test validity first by determining whether the state courts would hold it valid under state law, and, if they would, whether as a matter of federal law the scope of permissible service under state law is within the parameters of fundamental fairness as defined by the due process clause of the United States Constitution. Partin v. Michaels Art Bronze Co., 202 F.2d 541, 542 (3rd Cir. 1953); Pulson v. American Rolling Mill Co., 170 F.2d 193, 194 (1st Cir. 1948); Keckler v. Brookwood Country Club, 248 F. Supp. 645, 646 (N.D. Ill. 1965); and Elkhart Engineering Corp. v. Dornier Werke, 343 F.2d 861, 863 (5th Cir. 1965). For the converse see: Benjamin v. Western Boat Building Corp., 472 F.2d 723, 725 (5th Cir. 1973).
The issue to decide, then is whether under the circumstances of this case this defendant may be required to defend this suit in New Jersey, consistent with the application of the concepts of fundamental fairness, reasonableness and justice mandated by the United States Constitution. Bernardi Bros. Inc., v. Pride Manufacturing, Inc., 427 F.2d 297, 298 (3rd Cir. 1970); W. A. Kraft Corp. v. Terrace On the Park, Inc., 337 F. Supp. 206, 207 (D.N.J. 1972); In- Flight Devices Corp. v. Van Dusen Air, Inc., 466 F.2d 220, 225 (6th Cir. 1972); Ratliff v. Cooper Laboratories, Inc., 444 F.2d 745, 747 (4th Cir. 1971).
Viewing the history of "in personam" jurisdiction, a trend is clearly discernible towards expanding the permissible scope of state jurisdiction. The Supreme Court has outlined the parameter of "in personam" jurisdiction as limited by due process in two major decisions: International Shoe Co. v. Washington, 326 U.S. 310, 66 S. Ct. 154, 90 L. Ed. 95 (1945), and McGee v. International Life Insurance Co., 355 U.S. 220, 78 S. Ct. 199, 2 L. Ed. 2d 223 (1957).
"Historically the jurisdiction of courts to render judgment in personam is grounded on their de facto power over the defendant's person. Hence his presence within the territorial jurisdiction of a court was prerequisite to its rendition of a judgment personally binding him. Pennoyer v. Neff, 95 U.S. 714, 733, 24 L. Ed. 565. But now that the capias ad respondendeum has given way to personal service of summons or other form of notice, due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice. ' Milliken v. Meyer, 311 U.S. 457, 463, 61 S. Ct. 339, 343, 85 L. Ed. 278. See Holmes, J., in McDonald v. Mabee, 243 U.S. 90, 91, 37 S. Ct. 343, 61 L. Ed. 608. Compare Hoopeston Canning Co. v. Cullen, 318 U.S. 313, 316, 319, 63 S. Ct. 602, 604, 606, 87 L. Ed. 777. See Blackmer v. United States, 284 U.S. 421, 52 S. Ct. 252, 76 L. Ed. 375; Hess v. Pawloski, 274 U.S. 352, 47 S. Ct. 632, 71 L. Ed. 1091; Young v. Masci, 289 U.S. 253, 53 S. Ct. 599, 77 L. Ed. 1158."
International Shoe Co. v. Washington, supra, at 316, 78 S. Ct. at 157.
Under this test it is not necessary that a corporation be actually present in the forum state, through offices or agents, at the time suit is commenced. It suffices if the corporation has enough regular business contact with the forum state so that it cannot be deemed unfair to require it to be accountable to that forum's courts as a matter of course.
The Supreme Court has recognized that the presence of a corporation for the determination of satisfaction of due process demands, which would justify the subjection of a corporation to suit in a state for all purposes, cannot be catalogued by a mechanical or quantitative test. The analysis of the extent of the activities of a corporation must establish sufficient contacts or ties with the state of the forum to permit a finding that the corporation has availed itself of the benefits and protection of the laws of that state, whether or not it maintains a permanent office there. If this test is met, then under our traditional concepts of fair play and substantial justice, it may be sued in that forum, for all purposes, to the full extent that it may be sued in the state of its incorporation or the state of its principal place of business. Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 72 S. Ct. 413, 96 L. Ed. 485 (1952).
A third type of situation arises when an attempt is made to sue a corporation which is neither actually then present in the forum state ( Pennoyer v. Neff, supra), but where, instead, the suit is itself predicated on an alleged wrong done to the plaintiff within the forum state arising out of a single or isolated act done by the defendant within the forum. This is precisely the case of McGee v. International Life Insurance Co., supra.
In McGee, a non-resident insurance company mailed a reinsurance certificate to petitioner's son, a California resident, and offered to continue his insurance. The California resident accepted the offer and paid the premiums by mail from his California home to the respondent in Texas. Petitioner, beneficiary and mother of the insured, thereafter sent proofs of her son's death to the respondent, but the insurance company refused to pay the claim. A unanimous Supreme Court held, upon these facts, that the suit in California to collect the insurance proceeds was "based on a contract which had substantial connection with that state." Although the insurance company was not actually then present in California, and had no contacts with California other than this one contract, the Supreme Court held that due process was not offended by making the insurance company amenable to California "in personam" jurisdiction, and requiring it either to appear in the forum state or default. McGee, supra, 355 U.S. at 224, 78 S. Ct. at 201.
McGee noted that "a fundamental transformation of our national economy over the years" has been a dominant cause in the necessity of expanding the scope of state jurisdiction over foreign corporations and other non-residents. Many current commercial transactions "touch two or more states and may involve parties separated by the full continent." At the same time modern advances in transportation and communication have alleviated the burden for a party sued to defend himself in a jurisdiction where he engages in economic activity. (355 U.S. 220 at 222, 78 S. Ct. 199 at 201, 2 L. Ed. 2d 223).
McGee has not extinguished all restrictions on the personal jurisdiction of state courts. Hanson v. Denckla, 357 U.S. 235, 78 S. Ct. 1228, 2 L. Ed. 2d 1283 (1958), decided shortly after McGee, reaffirmed that the requisite "minimal contacts" enunciated in International Shoe Co. v. Washington, supra, must be present before a defendant may be called to defend in a ...