United States District Court, D. New Jersey
MCNULTY. UNITED STATES DISTRICT JUDGE.
SPCK USA, Inc. ("SPCK USA") brings this action
against Defendant Precision Couplings, LLC
("Precision") for breach of contract, breach of the
New Jersey Uniform Commercial Code, account stated, unjust
enrichment, and breach of the implied covenant of good faith
and fair dealing. (DE 1). In response, Precision moves to
dismiss the complaint under Federal Rule of Civil Procedure
12(b)(2) for lack of personal jurisdiction, and under
Fed.R.Civ.P. 12(b)(3) for improper venue. (DE 9). In the
alternative, Precision moves under 28 U.S.C. §§
1404 and 1406 and the doctrine of forum non conveniens to
transfer venue of this action to the United States District
Court for the Southern District of Texas. (DE 9-3).
reasons explained in this opinion, I will DENY
Precision's motion to dismiss and GRANT Precision's
motion to transfer.
Precision is a limited liability company organized and
existing under the laws of the State of Texas with its
principal place of business in Houston, Texas. (DE 1 ¶
6; DE 9-5 ¶ 3).
SPCK Co. Ltd. ("SPCK Korea") is a manufacturer
incorporated under the laws of the Republic of Korea and it
mainly produces premium couplings and other products used in
the Oil Country Tubular Goods ("OCTG") marketplace.
(DE 12 ¶ 3). Although SPCK Korea is not a party to this
dispute, the complaint often fails to distinguish between
SPCK Korea and plaintiff SPCK USA. (DE 1; DE 12).
complaint defines "SPCK" as "Plaintiff SPCK
USA, INC." (DE 1, p. 1) It often refers to
"SPCK" without any further identifier, implying
that the entity referred to is SPCK USA. The parties'
affidavits, however, reveal that the complaint sometimes
incorrectly misidentifies SPCK Korea as "SPCK"
(impliedly, SPCK USA). In this opinion, I will attempt to
correct, or at least highlight, such discrepancies.
SPCK USA is a business incorporated under the laws of the
State of New Jersey with its principal place of business in
Fort Lee, New Jersey. (DE 1 ¶ 5). The complaint states
that "SPCK . . . [is] a manufacturer and seller of
commercial goods." (DE 1 ¶ 4). Precision, however,
avers that SPCK USA does not manufacture couplings or any
other products that were purchased by Precision. (DE 9-5
¶ 11). In its responding affidavit, SPCK USA does
not contest the assertion that SPCK USA is not the
manufacturer. (DE 12). Rather, SPK USA's affidavit
clarifies that SPCK Korea is a coupling manufacturer (DE 12
¶ 3), and that SPK Korea started business with Precision
before SPCK USA was formed. (DE 12 ¶ 4). In fact, SPCK
Korea formed SPCK USA to facilitate its preexisting business
relationship with Precision. (DE 12 ¶ 5). SPCK USA was
formed for two reasons: (1) to facilitate the purchase of
U.S. insurance coverage relating to the shipment of couplings
from SPCK Korea (in South Korea) to Precision (in Houston,
Texas) (DE 12 ¶ 5; DE 9-5 ¶ 17); and (2) to stand
as importer of record so that Precision would avoid
obligations it would incur when receiving the products in
Texas. (DE 12 ¶ 5).
USA's affidavit describes SPCK USA as a trading import
company, [see, e.g., DE 12 ¶ 19), which has facilitated
the shipments by arranging insurance, paying taxes, and
receiving payments from Precision. (DE 12 ¶ 16).
Business relationships and formation of SPCK USA
2016, SPCK Korea began doing business with Precision. (DE 12
¶ 4). Precision asserts that its business relationship
with SPCK Korea began in January 2016 when Precision began
purchasing couplings through SPCK Korea's sales
representative, Michael Shon. (E 9-5 ¶ 7). SPCK Korea
does not address the subject of Michael Shon in its affidavit
or briefs, and his name does not appear in the complaint. (DE
1; 12; 12-12).
early 2016, Jason Hubbard and Matthew Hubbard of Precision
visited Korea, where they met with Keon Chen, who is now the
president of SPCK USA. (DE 12 ¶¶ 1, 5). Precision
alleges that Keon Chen was and is the Chief Operating Officer
of SPCK Korea, which SPCK USA does not deny. (DE 9-5 ¶
11; DE 12). During that visit, Jason and Matthew Hubbard
requested that SPCK Korea create a United States-based
company for the two purposes discussed supra. (DE 12 ¶
5). SPCK Korea suggested that it could provide product
liability insurance from a reputable insurer in Korea, but
Precision insisted on a U.S. insurer and referred to a
specific insurance company in Texas. (DE 12 ¶¶ 6,
Chen acceded to Precision's request and established SPCK
USA in New Jersey. (DE 12 ¶ 16). At no time did
Precision object or take issue with respect to the location
of SPCK USA. (DE 12 ¶ 7). Precision agreed to conduct
business with SPCK USA going forward, knowing that SPCK USA
would be a New Jersey entity. (DE 12 ¶ 8).
complaint, SPCK USA alleges that on several occasions from
December 2016 to January 2017, engineers and representatives
of Precision visited the "manufacturing site of
SPCK." (DE 1 ¶ 8). In response, Precision clarifies
that the visits, as the complaint does not make clear, were
to "SPCK Korea's manufacturing site . . . located in
South Korea, not New Jersey." (DE 9-5 ¶ 23, n. 2)
(emphasis added). SPCK USA has not rebutted Precision's
version. (DE 12).
Exclusive Distributorship Agreement
August 1, 2017, Precision and SPCK USA entered into an
Exclusive Distributorship Agreement ("EDA"). (DE 11
9). In the EDA, Precision designated SPCK USA as the
"main point of contact to remediate all non-conforming
claims to include ... (3) any other legally available
remedy." (DE 12 ¶ 10). Also, under the terms of the
EDA, Precision was required to order a minimum No. of
couplings every month, with payment due 30 days from the date
on which the couplings arrived in the Houston Port. (DE 1
¶¶ 12, 14).
the terms of the EDA, Precision submitted no fewer than 20
purchase orders and made wire transfers to SPCK USA's
bank, the Shinhan Bank America, located in New York. (DE 12
¶¶ 11-12). Precision asserts that it sent the
purchase orders via e-mail directly to Michael Shon in South
Korea. (DE 13, 6 (citing DE 13-2 ¶¶ 3-13)). In the
exhibits supporting Precision's affidavit, Michael
Shon's responses to said purchase orders include a
signature line with his position at SPCK Korea, (see, e.g.,
DE 13-2, 27, 35). SPCK USA has not rebutted that the purchase
orders were sent, via e-mail, to Michael Shon, nor does it
rebut that Michael Shon engaged in such communications from
South Korea. I note, however, that the purchase orders
identify the vendor as SPCK USA and lists SPCK USA's New
Jersey address. (DE 12-2). It is unclear from the record
whether copies of the purchase orders may have been sent to
SPCK in New Jersey, in addition to Michael Shon in South
certain point, Precision placed seven purchase orders, which
SPCK USA allegedly arranged to fill by shipping the goods in
eight containers. (DE 1 ¶¶ 16-18). Precision
allegedly received the first three containers without
complaint. (DE 1 ¶17). However, on or about February 14,
2018, Precision raised a quality issue regarding the
couplings received in the fourth container. (DE 1 ¶ 18).
The parties agreed to quality-test a sample of 90 couplings
(DE 1 ¶ 20), but Precision allegedly reneged on that
agreement. (DE 1 ¶20).
an "SPCK" representative and inspector visited
Precision's Texas offices in an effort to investigate,
and possibly, resolve any problems with the couplings. (DE 1
¶ 1). Precision avers that the visiting representative
was an SPCK Korea representative. (DE 9-5 ¶ 34). Again,
SPCK USA has not rebutted Precision's version. (DE 12).
30, 2018, Precision sent a "Notice of Contract
Termination" (the "termination letter") to
SPCK USA alleging breach of the EDA. (DE 12 ¶ 17; DE
12-6). SPCK USA asserts that Precision sent the termination
letter to SPCK USA's address in New Jersey.
(Id.). Precision does not dispute that the
termination letter was sent to the New Jersey address, but
states that it was also sent to Keon Choe's e-mail
address. (DE 13, 7). Thus the parties agree, at least to the
extent that one copy of the letter was sent to SPCK USA.
USA's claims related to the EDA are based on the
parties' disagreement over the quality of the couplings,
Precision's failure to pay, and the ...