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Bernard Haffen and Theodore v. Butler Specialties

March 3, 2011

BERNARD HAFFEN AND THEODORE E. HIGGINBOTHAM
PLAINTIFFS,
v.
BUTLER SPECIALTIES, INC.,BUTLERBUILT MOTOR SPORTS EQUIPMENT, BUTLERBUILT PROFESSIONAL SEATING SYSTEMS, AND BUTLER RACING PRODUCTS DEFENDANTS



The opinion of the court was delivered by: Hon. Dennis M. Cavanaugh

NOT FOR PUBLICATION

OPINION

DENNIS M. CAVANAUGH, U.S.D.J.:

This matter comes before this Court upon motion by Butler Specialties, Inc., et al ("Defendants") to dismiss the complaint by Bernard Haffen and Theodore E. Higginbotham ("Plaintiffs") pursuant to Fed. R. Civ. P. 12(b)(2)(3). Pursuant to Fed. R. Civ. P. 78, no oral argument was heard. After carefully considering the submissions of all parties, it is the decision of this Court that Defendants' motion is granted.

I. BACKGROUND

Plaintiffs aver that they invented a system for delivery of refrigerated air from a refrigerated box to the driver's seat of a race car vehicle ("the Haffen technology"), and filed an application for a patent on their system. Defendant is a manufacturer of automotive parts for race cars. In 2002, Plaintiff contacted Defendant in North Carolina to discuss the possibility of manufacturing and distributing the Haffen technology.The parties executed a confidentiality agreement.Plaintiff alleges that subsequent to that agreement, and unbeknownst to him, Defendants filed a provisional patent application which incorporated material aspects of the Haffen technology. Plaintiff made several trips to Defendant's location over the course of several months to assist in the development of a workable product with Defendant's technicians. In February, 2004 Defendant notified Plaintiff by letter that they were not interested in producing the Haffen technology. Nonetheless, the parties stayed in touch, and in April, 2004 they executed a provisional contract which provided for an initial sum and continuing royalties to be paid to Plaintiff in the event that Defendant were ever to make use of the Haffen technology. Plaintiff alleges that Defendant has continued attempts to secure its own patent for the proprietary Haffen technology, and that this breaches both the provisional contract and confidentiality agreement. Plaintiff filed a consumer complaint in North Carolina on a related matter, and now brings this cause of action alleging fraud, conversion, breach of an express contract, breach of a contract implied in law, appropriation of trade secrets, and a demand for accounting.

Defendant has raised a challenge to the personal jurisdiction of this Court pursuant to Fed. R. Civ. P. 12(b)(2)(3) which is the subject of the instant motion.

II. LEGAL STANDARD

Chief Judge Brown of this District recently summarizedthe parameters of personal jurisdiction inJAK Marketing, LLC v. Anoop Aggarwal L 666107, 1 -2 (D.N.J.,)2011,writing that"pursuant to Rule 4(e) of the Federal Rules of Civil Procedure, a federal district court has personal jurisdiction over a non-resident to the extent authorized by the law of the forum state in which the district court sits. A.V. Imps. v. Col de Fratta, S.p.A., 171 F.Supp.2d 369, 370 (D.N.J.2001). New Jersey's long-arm statute allows this Court to assert personal jurisdiction over a non-resident defendant to the fullest limits of due process. Decker v. Circus Circus Hotel, 49 F.Supp.2d 743, 745-46 (D.N.J.1999) (citing Carteret Sav. Bank, FA v. Shushan, 954 F.2d 141, 145 (3d Cir.1992)). The requirements of the Due Process Clause can only be satisfied by a showing that: (1) the defendant has certain minimum contacts with the forum such that; (2) the maintenance of the suit does not offend traditional notions of fair play and substantial justice. Verotex Certainteed Corp. v. Consol. Fiber Glass Prods. Co., 75 F.3d 147, 150-51 (3d Cir.1996) (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)). The plaintiff bears the burden of presenting a prima facie case for the court's exercise of personal jurisdiction by demonstrating 'with reasonable particularity sufficient contacts between the defendant and the forum state.' " Mellon Bank (East) PSFS, Nat'l Assoc. v. Farino, 960 F.2d 1217, 1223 (3d. Cir.1992) (quoting Provident Nat. Bank v. California Fed. Sav. & Loan Assoc., 819 F.2d 434 (3d Cir.1987); see also Carteret Sav., 954 F.2d at 145-46.

A court may exercise either general or specific personal jurisdiction. Specific jurisdiction is attained when the controversy is related to or "arises out of" a defendant's contacts with the forum. Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Otherwise, if the suit does not arise out of or relate to the defendant's contacts with the forum state, the Court may exercise general jurisdiction if such contacts with the forum constitute "continuous and systematic general business contacts." Id. at 415-16.

Minimum contacts exist then only if the "defendant's conduct and connection with the forum State are such that he should reasonably anticipate being haled into court there." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (citing World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)).

In providing evidence of minimum contacts for the purpose of establishing general jurisdiction, the plaintiff bears the rigorous burden of showing that the defendant has substantial, continuous and systematic contacts with the forum state which are central to the defendant's business. Osteotech, Inc. v. Gensci Regeneration Sci., Inc., 6 F.Supp.2d 349, 353 (D.N.J.1998) (citing Helicopteros, 466 U.S. at 414-16). Plaintiffs must show significantly more than bare minimum contacts with the forum state, and must establish general jurisdiction through an assertion of extensive and pervasive facts. Reliance Steel Prods. Co. v. Waston, Ess, Marshall & Enggas, 675 F.2d 587, 589 (3d Cir.1982). The court generally assesses "the nature and quality of business contacts the defendant has initiated with the forum: direct sales in the forum, maintenance of a sales force in the state, advertising targeted at the residents of the forum state, and the derivation of a significant slice of revenue from activity within the state." Allied Leather Corp. v. Altama Delta Corp., 785 F.Supp. 494, 498 (M.D.Pa.1992). The court also considers whether the defendant "owns any property within the forum state, is incorporated there, has a registered agent for service of process, owns stock or pays taxes in the forum state." Peek v. Golden Nugget Hotel & Casino, 806 F.Supp. 555, 558 (E.D.Pa.1992).

"Once challenged, a plaintiff bears the burden of establishing personal jurisdiction." Pro Sports Inc. v. West, 639 F.Supp.2d 475, 478 (D.N.J.2009) ( citing General Elec. Co. v. Deutz AG, 270 F.3d 144, 150 (3d Cir.2001) (finding the plaintiff must demonstrate "[a] nexus between defendant, the forum, and the litigation.")). "Once the plaintiff has shown minimum contacts, the burden shifts to the defendant, who must show that the assertion of jurisdiction would be unreasonable." Krishanthi v. Rajarantnam, No. 09-5395(DMC), 2010 WL 3429529 (D.N.J. Aug,. 26, 2010) (citations omitted) (quoting Ameripay, LLC v. Ameripay Payroll, Ltd., 334 F.Supp.2d 629, 633 (D.N.J.2004)). "However, when the court does not hold an evidentiary hearing on the motion to dismiss, the plaintiff need only establish a prima facie case of personal jurisdiction and the plaintiff is entitled to have its allegations taken as true and all factual disputes drawn in its favor." Miller Yacht Sales, Inc. v. Smith, 384 F.3d 93, 97 (3d Cir.2004); See also Carteret Say. Bank, FA v. Shushan, 954 F.2d 141, 142 n. 1 (3d Cir.1992). "If the ...


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