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New Jersey Regional Council of Carpenters v. D.R. Horton

March 31, 2011

NEW JERSEY REGIONAL COUNCIL OF CARPENTERS; BROOKSIDE CONSTRUCION CORPORATION OF SEWELL, NEW JERSEY; INDIVIDUALLY AND ON BEHALF OF A CLASS, PLAINTIFFS,
v.
D.R. HORTON, INC.; TOSA CONSTRUCTION, INC./N. PAONE CONSTRUCTION, INC., DEFENDANTS.



The opinion of the court was delivered by: Katharine S. Hayden, U.S.D.J.

NOT FOR PUBLICATION

OPINION

I. Introduction

This opinion revisits the issue of the Court's personal jurisdiction over D.R. Horton, Inc. ("Horton"), this time to determine whether the Court's order denying Horton's motion to dismiss for lack of personal jurisdiction [D.E. 83] should be amended to certify the issue for interlocutory appeal.

This case began in state court on March 19, 2008, when plaintiffs New Jersey Region Council of Carpenters ("NJRCC") and Brookside Construction Company, Inc. ("Brookside") filed a complaint alleging that defendants Horton, D.R. Horton-New Jersey ("Horton-N.J."), and Tosa Construction, Inc., had violated the federal and New Jersey RICO statutes and the New Jersey Construction Industry Independent Contractor Act. (Am. Compl.) [D.E. 57]. Plaintiffs claim that defendants participated in a scheme to knowingly hire undocumented workers for the purpose of depressing wages, decreasing costs, and avoiding the payment of employee benefits and payroll taxes. (Id.)

Defendants removed the case to this Court, and Horton moved to dismiss for lack of personal jurisdiction. [D.E. 20.] Magistrate Judge Michael Shipp issued a Report and Recommendation ("R&R") [D.E. 37] recommending that the Court deny the motion, and Horton subsequently filed objections to the R&R [D.E. 38]. The Court filed an order denying the motion to dismiss, stating its reasoning in an accompanying opinion. [D.E. 82, 83.] Horton then filed the current motion seeking to amend the order to certify the Court's personal jurisdiction determination for immediate appeal to the Third Circuit. [D.E. 85.]

II. Analysis

Typically, "an order finding personal jurisdiction is interlocutory and non-appealable." Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 149 (3d Cir. 2001). However, under 28 U.S.C. § 1292(b), a district court has the discretion, see Bachowski v. Usery,545 F.2d 363, 368 (3d Cir. 1976), to certify an interlocutory order for appeal where a movant points to: "(1) a controlling question of law, (2) about which there is substantial ground for difference of opinion, the immediate resolution of which by the appeals court will (3) materially advance the ultimate termination of the litigation." Kapossy v. McGraw-Hill, Inc., 942 F. Supp. 996, 1001 (D.N.J. 1996). District courts should use § 1292(b) sparingly. Milbert v. Bison Laboratories, Inc., 260 F.2d 431, 433 (3d Cir. 1958). "It is to be used only in exceptional cases where an intermediate appeal may avoid protracted and expensive litigation and is not intended to open the floodgates to a vast number of appeals from interlocutory orders in ordinary litigation." Id. A court should not grant a motion for certification "‗merely because a party disagrees with the ruling of the district judge.'" Kapossy, 942 F. Supp. at 1001 (quoting Max Daetwyler Corp. v. Meyer, 575 F.Supp. 280, 282 (E.D. Pa. 1983)).

A. Controlling Question of Law

A question of law is controlling where its incorrect disposition would constitute reversible error on appeal. Katz v. Carte Blanche Corp.,496 F.2d 747, 755 (3d Cir. 1974). A question of law may also be controlling where it is "‗serious to the conduct of the litigation either practically or legally.'" Fiscus v. Combus Fin. AG, 2006 WL 2845736, at *2 (D.N.J. Sept. 28, 2006) (quoting Pub. Interest Research Grp. of N.J., Inc. v. Hercules, Inc., 830 F. Supp. 1549, 1554 (D.N.J. 1993)). The order to be certified need not be "determinative of any plaintiff's claim on the merits . . . [n]or need a reversal of the order terminate the litigation." Katz, 496 F.2d at 755. However, "although a question appears to be a controlling question of law, questions about a district court's application of facts of the case to established legal standards are not controlling questions of law for purposes of Section 1292(b)." Fiscus, 2006 WL 2845736, at *2 (citing Kapossy, 942 F. Supp. at 1001).

Horton argues that "the Court's decision to pierce the corporate veil and determination of personal jurisdiction involves controlling issues of law." (Moving Br. at 5.) Its position is that if the Court erred in finding Horton subject to the Court's jurisdiction, the denial of Horton's motion to dismiss would have to be reversed. (Id.) Horton also asserts that if forced to litigate in New Jersey, it will have to expend significant time and money, which could be saved if it successfully appeals the Court's order. (Id. at 5--6.)

As an initial matter, the Court is not convinced that Horton's purported savings are sufficient to warrant certifying an interlocutory appeal. If Horton were dismissed, the litigation would continue in this District with Horton-N.J. and with Tosa Construction, and the plaintiffs would pursue litigation against Horton in Texas. Furthermore, rather than directing the Court's attention to a controlling issue of law, Horton merely cites a number of cases where courts-on facts Horton deems similar to those at bar-reached a conclusion different from this Court's. (Moving Br. at 8--11.) Horton tellingly states that "[t]he facts in the record here did not establish extensive and persuasive contacts by D.R. Horton, Inc. with New Jersey." (Moving Br. at 10.) This statement demonstrates that in reality, Horton harbors "questions about [the] district court's application of facts of the case to established legal standards," which "are not controlling questions of law for purposes of Section 1292(b)." Fiscus, 2006 WL 2845736, at *2 (citing Kapossy, 942 F. Supp. at 1001).

B. Substantial Ground for Difference of Opinion

A substantial ground for difference of opinion "must arise out of genuine doubt as to the correct legal standard." Kapossy, 942 F. Supp. at 1001. A movant must point to an "absence of controlling law on a particular issue" or "conflicting and contradictory opinions." N.J. Dep't of Treasury, Div. of Inv. v. Fuld, 2009 WL 2905432, 2 (D.N.J. Sept. 8, 2009) (citing Knipe v. Smithkline Beecham, 583 F. Supp. 2d 553, 600 (E.D. Pa. 2008)). Again, "mere disagreement with the district court's ruling does not ...


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