United States District Court,

W.D. Pennsylvania.

QUANTUM PLATING, INC., Plaintiff,

v.

CENTRAL FREIGHT LINES, INC., a Texas Corporation and Blue Spring Corporation, a Texas Corporation, Defendants.

 

Civil Action No. 09-166 Erie.

Feb. 17, 2011.

 

MEMORANDUM OPINION

McLAUGHLIN, SEAN J., District Judge.

Plaintiff, Quantum Plating, Inc. (“Quantum”), a Pennsylvania corporation, brought this action for breach of contract against Defendant, Blue Spring Corporation, (“Blue Spring”), a Texas corporation, arising out of its purchase of a waste water treatment system. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331, 1332 and 1337.

 

Quantum also filed suit against Central Freight Lines, Inc., (“Central Freight”), a Texas corporation, for negligence under the Carmack Amendment, 49 U.S.C. § 14706.

 

Presently pending before the Court is Blue Spring’s Renewed Motion to Dismiss for Lack of Jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) or, in the alternative Motion to Transfer Venue. For the reasons set forth below, both Motions will be denied.

 

I. FACTUAL AND PROCEDURAL BACKGROUND

Quantum is a Pennsylvania corporation with its principle place of business in Erie, Pennsylvania. See ECF No. 1, Complaint ¶ 1. Blue Spring is a Texas corporation, with its principle place of business located in Port Lavaca, Texas. Id. at ¶ 3. Quantum alleges that Blue Spring “marketed” a waste water treatment system (the “System”) for sale in several states, including Pennsylvania, and that on September 23, 2006, Quantum’s President, Chris Busko (“Busko”), emailed Blue Spring requesting information regarding a system. ECF No. 1, Complaint at ¶ 7; ECF No. 24, Plaintiff’s Response, Pl.Ex. 24-1. Busko subsequently spoke with a representative of Blue Spring by telephone on September 25, 2006 regarding the same. Pl.Ex. 24-2. On October 6, 2006, Blue Spring mailed Quantum a “PrecipRO DemoDVD” and offered to analyze Quantum’s waste water. Pl.Ex. 24-3. Thereafter, Blue Spring prepared a price quotation for the manufacture of the System and Quantum ultimately agreed to purchase a “Blue Spring PrecipRO-1000 DP Rinse Water Recycler Module.” ECF No. 23, Defendant’s Brief, Def. Ex. 23-1, Desai Aff. ¶¶ 9-10. All contract negotiations for the purchase of the System occurred by telephone, facsimile, e-mail and the U.S. Mail. Id. at ¶ 11. On March 15, 2007, Blue Spring sent Quantum an invoice for the System, and in a letter dated April 2, 2007, acknowledged receiving payment in the amount of $107,600. Pl. Exs. 24-4; 24-5.

 

On May 14, 2007, Satish Desai (“Desai”), the president of Blue Spring, visited Quantum’s facility in Erie, Pennsylvania preliminary to the shipment of the System. Pl.Ex. 24-6. As a follow up to his visit, Desai emailed information concerning additional components for the System to Quantum on May 24, 2007. Pl.Ex. 24-7. Thereafter, Blue Spring sent Quantum a quotation for these additional items and Quantum purchased them on June 28, 2007 for $21,020. Pl.Ex. 24-8.

 

By email dated December 19, 2007, Desai informed Quantum that the System had been successfully tested at its plant and offered various suggestions for its installation. Pl.Ex. 24-9. Blue Spring further informed Quantum that the System would be shipped by Central Freight. Pl.Ex. 24-9. Desai noted that he would be coming to Erie for the “commissioning service” and would “keep in touch.” Pl.Ex. 24-9. The System arrived in Erie on December 24, 2007. ECF No. 1, Complaint ¶ 17. However, Quantum determined that it was damaged and consequently, it rejected delivery. ECF No. 1, Complaint ¶¶ 18-20. While in transit back to Blue Spring, the trailer transporting the System caught fire, causing substantial heat and smoke damage. Id. at ¶ 22. On February 4, 2008, Central Freight returned the System to Blue Spring. Pl.Ex. 24-12. On February 5, 2008, Desai emailed Quantum a damage report, wherein he indicated, inter alia, that it would take approximately 30 to 45 days to repair the System. Pl.Ex. 24-12.

 

Blue Spring contracted with Betz Freight (“Betz”) to pick up the System at its Port Lavaca, Texas facility and deliver it to Erie, Pennsylvania. Pl.Ex. 24-16. Blue Spring informed Quantum on April 2, 2009 that the System had been loaded onto a truck for delivery. Pl. Exs. 24-17; 24-18. The System was delivered to Quantum on April 9, 2009. ECF No. 1, Complaint ¶ 26. Quantum contends that the System repeatedly failed and did not operate at or near full capacity. ECF No. 1, Complaint ¶¶ 26-28.

 

On May 12, 2009, Quantum contacted Blue Spring by email to report it was experiencing problems with the System and also requested a wiring diagram. Pl.Ex. 24-20. Throughout May 2009, Blue Spring remained in contact with Quantum in an attempt to provide guidance with respect to rendering the System operational. Pl. Exs. 24-19; 24-20; 24-22. Blue Spring also shipped replacement parts directly to Quantum’s Erie facility or ordered replacement parts to be shipped to Quantum on at least five (5) separate occasions between April 22, 2009 and June 12, 2009. Pl. Exs. 24-21; 24-23; 24-24; 24-25.

 

These shipments included:

 

1. On April 22, 2009 Blue Spring shipped Quantum several PVC pipes and assorted elbows.

 

2. On May 8, 2009, Blue Spring sent Quantum a pump head.

 

3. On or about May 13, 2009, Blue Spring ordered two sets of valve assemblies to be delivered directly to Quantum.

 

4. On or about May 15, 2009, Blue Spring sent Quantum suction and discharge valves for a pump head.

 

5. On May 22, 2009, Blue Spring sent Quantum a 10 Amp Circuit breaker.

 

6. On June 12, 2009, Blue Spring sent Quantum a package containing a fuse, a PVC filling, a 15 A circuit breaker and some labels.

 

See Pl. Exs. 24-21; 24-23; 24-24; 24-25.

 

On May 22, 2009, Desai emailed Quantum stating that he would “be in [the] area” visiting another customer and wanted to “visit … sometime between [the] 9th and 10th of June” to see if he could “solve [the] remaining problems with [the] PrecipRo wastewater recycling system.” Pl.Ex. 24-24. During this second visit, Desai utilized various diagnostic tools in an attempt to “determine why the [System] was not working as expected.” Pl.Ex. 24-28 p. 6. On June 12, 2009, after Desai returned to Texas, Blue Spring informed Quantum that it would be “writing … a report on some of the recommended changes for your setup.” Pl.Ex. 24-25.

 

On July 2, 2009, Quantum filed suit against Blue Spring and Central Freight. Blue Spring initially filed a motion to dismiss for lack of personal jurisdiction or, in the alternative, a motion to transfer venue on September 9, 2009. See ECF No. 17, Motion to Dismiss. This Court denied the motions without prejudice and granted the parties 90 days in which to conduct jurisdiction-related discovery. See Minute Entry dated February 3, 2010. Discovery was completed and the instant renewed motions were filed on May 24, 2010. See ECF. No. 22, Renewed Motion to Dismiss. The Court held argument on the motions on July 26, 2010, see ECF. No. 28, Hearing Tr., and the matter is now ripe for disposition.

 

II. STANDARD OF REVIEW

When a defendant challenges personal jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2), the plaintiff bears the burden of showing that personal jurisdiction exists. Marten v. Godwin, 499 F.3d 290, 295-96 (3rd Cir.2007). “In deciding a motion to dismiss for lack of personal jurisdiction, we take the allegations of the complaint as true. But once a defendant has raised a jurisdictional defense, a plaintiff bears the burden of proving by affidavits or other competent evidence that jurisdiction is proper.” Dayhoff Inc. v. H.J. Heinz Co., 86 F.3d 1287, 1302 (3rd Cir.1996) (internal citations omitted); see also Patterson by Patterson v. F .B.I., 893 F.2d 595, 604 (3rd Cir.1990); D’Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94,102 (3rd Cir.2009); O’Connor v. Sandy Lane Hotel Co., Ltd., 496 F.3d 312, 316 (3rd Cir.2007). In demonstrating that jurisdiction is proper, the plaintiff is required to establish facts with reasonable particularity. Mellon Bank (East) PSFS, Nat’l Ass’n v. Farino, 960 F.2d 1217, 1223 (3rd Cir.1992). In addition, since personal jurisdiction is “inherently a matter which requires resolution of factual issues outside the pleadings,” a plaintiff may not rely entirely on general averments in the pleadings. Time Share Vacation Club v. Atlantic Resorts, Ltd., 735 F.2d 61, 66 n. 9 (3rd Cir.1984). Where a court does not hold an evidentiary hearing, the plaintiff need only establish a prima facie case of personal jurisdiction. Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3rd Cir.2009). The court must consider the pleadings and affidavits in a light most favorable to the plaintiff and any discrepancies must be resolved in its favor. Carteret Sav. Bank, F.A. v. Shushan, 954 F.2d 141, 142 n. 1 (3rd Cir.), cert. denied, 506 U.S. 817, 113 S.Ct. 61, 121 L.Ed.2d 29 (1992). The burden then shifts to the defendant to establish that asserting jurisdiction is unreasonable. Id. at 150.

 

III. DISCUSSION

A. Blue Spring’s Jurisdictional Challenge

Federal district courts “may assert personal jurisdiction over a nonresident of the state in which the court sits to the extent authorized by the law of that state.” D’Jamoos, 566 F.3d at 102 (quoting Provident Nat’l Bank v. Cal. Fed. Sav. & Loan Ass’n, 819 F.2d 434, 436 (3rd Cir.1987). See also Marten, 499 F.3d at 296; O’Connor, 496 F.3d at 316. This involves a two-step inquiry whereby courts first determine whether the forum state’s long-arm statute extends jurisdiction to the nonresident defendant, and then determine whether the exercise of that jurisdiction would comport with federal due process principles. See Pennzoil Products Co. v. Colelli & Assoc., Inc., 149 F.3d 197, 2002-03 (3rd Cir.1998). Pennsylvania’s long-arm statute permits a court to exercise jurisdiction over non-resident defendants “to the fullest extent allowed under the Constitution of the United States and [jurisdiction] may be based on the most minimum contact with this Commonwealth allowed under the Constitution of the United States.” 42 Pa.C.S.A. § 5322(b). Pennsylvania courts typically restrict their personal jurisdiction inquiry to the question whether the exercise of personal jurisdiction over the nonresident defendant would be constitutional, since Pennsylvania’s Long-Arm statute authorizes jurisdiction to the fullest extent permissible under the U.S. Constitution. See 42 Pa.C.S.A. § 5322(b); Renner v. Lanard Toys Limited, 33 F.3d 277, 279 (3rd Cir.1994) (“[T]his court’s inquiry is solely whether the exercise of personal jurisdiction over the defendant would be constitutional.”); Pennzoil, 149 F.3d at 200 (“A district court’s exercise of personal jurisdiction pursuant to Pennsylvania’s long-arm statute is therefore valid as long as it is constitutional.”). A district court may assert either general or specific jurisdiction over a non-resident defendant consistent with these due process principles. Kehm Oil Co. v. Texaco, Inc., 537 F.3d 290, 300 (3rd Cir.2008); O’Connor, 496 F.3d at 317.

 

Quantum relies on the following provisions of the Pennsylvania Long-Arm statute, which describes “transacting business” in this Commonwealth as:

 

(ii) The doing of a single act in this Commonwealth for the purpose of thereby realizing pecuniary benefits or otherwise accomplishing an object with the intention of initiating a series of such acts.

 

(iii) The shipping of merchandise directly or indirectly into or through this Commonwealth.

 

42 Pa.C.S.A. § 5322(a)(1)(ii) and (iii).

 

General and specific jurisdiction are “analytically distinct categories, not two points on a sliding scale.” O’Connor, 496 F.3d at 321. General jurisdiction is the broader of the two, and exists where the defendant has maintained “systematic and continuous” contacts with the forum state. Kehm Oil, 537 F.3d at 300; Marten, 499 F.3d at 296. The contacts need not be related to the particular claim proceeding in court. Specific jurisdiction, which is narrower, allows for the exercise of personal jurisdiction over a non-resident defendant when the claim at issue “arises from or relates to conduct purposely directed at the forum state.” Kehm Oil, 537 F.3d at 300 (citing Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414-15, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984)); see also Mellon Bank, 960 F.2d at 1221. Here, Quantum relies exclusively on specific jurisdiction.

 

In determining whether specific jurisdiction exists it is necessary to undertake a three-part inquiry described by our Circuit Court of Appeals in the following manner:

 

First, the defendant must have “purposefully directed [its] activities” at the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 105 S.Ct. 2174, 2182, 85 L.Ed.2d 528 (1985) (internal quotation marks omitted). Second, the litigation must “arise out of or relate to” at least one of those activities. [ Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 414, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984) ]; O’Connor, 496 F.3d at 317. And third, if the first two requirements have been met, a court may consider whether the exercise of jurisdiction otherwise “comport[s] with ‘fair play and substantial justice.’ ” Burger King, 471 U.S. at 476, 105 S.Ct. At 2184 (quoting Int’l Shoe, 326 U.S. at 320, 66 S.Ct. At 160).

 

D’Jamoos, 566 F.3d at 102.

 

The first two inquiries are concerned with determining whether the defendant has the requisite minimum contacts with the forum. Id. “The threshold requirement is that the defendant must have “purposefully avail[ed] itself of the privilege of conducting activities within the forum State.” Id. (quoting Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 2 L.Ed.2d 1283 (1958)). See O’Connor, 496 F.3d at 317. It is not necessary, for purposes of this requirement, to show that the defendant physically entered the forum state. D’Jamoos, 566 F.3d at 103; O’Connor, 496 F.3d at 317. Nevertheless, the defendant’s contacts must amount to “a deliberate targeting of the forum.” D’Jamoos, 566 F.3d at 103 (quoting O’Connor, 496 F.3d at 317).

 

Assuming the defendant can be shown to have purposefully directed its activities at the forum state, then it must next be shown that the litigation “arises out of or relate[s] to” at least one of those contacts. O’Connor, 496 F.3d at 318. The Third Circuit has made clear that “but-for causation” is a “useful starting point for the relatedness inquiry,” but it is not the end of the inquiry, id. at 322, for “specific jurisdiction requires a closer and more direct causal connection than that provided by the but-for test.” Id. at 323. However, the required causal connection is looser than the tort concept of proximate causation. Id. The appropriate analysis is “necessarily fact-sensitive,” focusing on the “reciprocity principle upon which specific jurisdiction rests”-whether the defendant received the benefits and protections of a state’s laws to the extent it should, and as a quid pro quo, submit to the burden of litigation. Id.

 

Assuming that the record reflects sufficient minimum contacts between the non-resident defendant and the forum state, courts will then determine whether the exercise of jurisdiction would otherwise comport with “traditional notions of fair play and substantial justice.” O’Connor, 496 F.3d at 324 (quoting Int’l Shoe, 326 U.S. at 316). Because the existence of minimum contacts makes jurisdiction presumptively constitutional, the defendant at step three of the specific-jurisdiction-inquiry process “must present a compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Id. (quoting Burger King, 471 U.S. at 477). The burden upon the defendant at this stage of the inquiry is considerable. See Pennzoil, 149 F.3d at 207 (noting that if minimum contacts are present, then jurisdiction will be unreasonable only in “rare cases”). Factors relevant to this inquiry include: “the burden on the defendant, the forum State’s interest in adjudicating the dispute, the plaintiff’s interest in obtaining convenient and effective relief, the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and the shared interest of the several States in furthering fundamental substantive social policies.”   Burger King, 471 U.S. at 477 (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980)). In Telcordia Tech Inc. v. Telkom SA Ltd., 458 F.3d 172,177 (3rd Cir.2006), cert. denied, 549 U.S. 1206 (2007), the Third Circuit had the occasion to address the appropriate jurisdictional analysis in the context of a breach of contract dispute:

 

… In determining jurisdiction for a breach of contract, the district court must consider the totality of the circumstances. Remick v. Manfredy, 238 F.3d 248, 256 (3rd Cir.2001).

 

Traveling to the forum to consult with the other party can constitute purposeful availment, regardless of who solicited the contract. Carteret, 954 F.2d at 150. Moreover, physical presence in the forum is no longer determinative in light of modern commercial business arrangements; rather, mail and wire communications can constitute purposeful contacts when sent into the forum. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 476, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985)…. Finally, “[i]n contract cases, courts should inquire whether the defendant’s contacts with the forum were instrumental in either the formation of the contract or its breach.” Id. at 150 (emphasis added).

 

Telcordia Tech, 458 F.3d at 177.

 

Here, contrary to Blue Spring’s attempts to characterize its contacts with Pennsylvania as “random,” “fortuitous” or “attenuated,” I find that there is substantial evidence to support the conclusion that Blue Spring “purposely directed its activities” at this forum. As set forth more fully above, there were numerous contacts by Blue Spring with this forum by telephone, email and fax in conjunction with the finalization of the contract for the sale and shipment of the System. Telcordia Tech makes clear that such contacts can “constitute purposeful availment” for purposes of the jurisdictional analysis.   General Electric Co. v. Deutz, 270 F.3d 144, 150-51 (3rd Cir.2001); see also Grand Entertainment, 988 F.2d at 482 (“contract negotiations with forum residents can empower a court to exercise jurisdiction”).

 

Post contract, Blue Spring also had repeated contact with Quantum in furtherance of an ongoing attempt to resolve problems with the System. In addition to emails, faxes and telephone contact, Desai spent several days in Erie attempting to isolate the cause or causes of the System’s deficient performance. For the forgoing reasons, I conclude that Blue Spring “purposely directed its activities” at this forum.

 

The second requirement that the litigation “arises out of” at least one of the contacts is easily satisfied here. The focus of this lawsuit is an allegedly defective system designed and sold by Blue Spring. All pre and post contract contacts related to the System’s performance and/or methods to improve it.

 

I also find that the exercise of personal jurisdiction over Blue Spring would not offend traditional notions of fair play and substantial justice. As previously stated, at this stage of the inquiry, Blue Spring bears a heavy burden, for the existence of minimum contacts makes jurisdiction presumptively constitutional. O’Connor, 496 F.3d at 324; Pennzoil, 149 F.3d at 207; Grand Entertainment, 988 F.2d at 483. Blue Spring must present a “compelling case that the presence of some other considerations would render jurisdiction unreasonable.” Grand Entertainment, 988 F.2d at 483 (quoting Carteret, 954 F.2d at 150). Here however, Blue Spring has failed to present any case, compelling or otherwise, that it would be unreasonable to subject it to jurisdiction in this forum. The burden of litigating this case in Pennsylvania “does not rise to the level of unconstitutional hardship.” Reassure America Life Ins. Co. v. Midwest Resources, Ltd., 721 F.Supp.2d 346, 357 (E.D.Pa.2010). Pennsylvania has a strong interest in adjudicating this dispute since Quantum is a citizen of Pennsylvania. Burger King, 471 U.S. at 473 (“A State generally has a ‘manifest interest’ in providing its residents with a convenient forum for redressing injuries inflicted by out-of-state actors.”);   Philadelphia Professional Collections, LLC, v. Young, 2010 WL 5257651 at(E.D.Pa.2010) (“Pennsylvania has an interest in providing redress for a contractual breach inflicted on its citizen[s].”) (quoting Specialty Ring Prods., Inc. v. MHF, Inc., 2001 WL 1466152 at(E.D.Pa.2001).

 

For the reasons set forth above, Blue Spring’s motion to dismiss for lack of jurisdiction will be denied.

 

B. Motion to transfer

Alternatively, Blue Spring requests that this Court transfer this matter to the United States District Court for the Southern District of Texas. This Court has the discretionary authority to transfer this action to a different venue pursuant to 28 U.S.C. § 1404(a), which provides, that “[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.” 28 U.S.C. § 1404(a). The purpose of § 1404(a) is to “prevent the waste of ‘time, energy and money’ and ‘to protect litigants, witnesses and the public against unnecessary inconvenience and expense ….’ ” Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (quoting Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 27, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960)). While § 1404 gives the court discretion to decide a motion to transfer based on an individualized, case-by-case consideration of convenience and fairness, such motions are not to be liberally granted. Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 29, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988); Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3rd Cir.), cert. denied, 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1970). The party seeking the transfer bears the burden of proving that the transfer is proper. Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3rd Cir.1995).

 

Quantum does not dispute that the Southern District of Texas would be a proper venue. See Jumara v. State Farm Ins. Co., 55 f.3d 873, 879 (3rd Cir.1995) (stating that moving party has the burden of showing the appropriateness of the transfer).

 

The Court of Appeals in Jumara outlined the private and public factors for the Court to consider in exercising its discretion. Id. The relevant private factors to consider include: (1) each party’s forum preference; (2) where the claim arose; (3) the convenience of the parties as indicated by their relative physical and financial conditions; (4) the convenience of the witnesses; and (5) the locations of books and records. Jumara, 55 F.3d at 879, see also In re Amendt, 169 Fed. Appx. 93, 96 (3rd Cir.2006) (same). The Court considers a number of public factors, including: (1) enforceability of the judgment; (2) practical considerations that could make the trial easy, expeditious, or inexpensive; (3) the relative administrative difficulty in the two fora resulting from court congestion; (4) the local interest in deciding local controversies at home; (5) the public policies of the fora; and (6) the familiarity of the trial judge with the applicable state law in diversity cases. Jumara, 555 F.3d at 879; see also In re Amendt, 169 Fed. Appx. at 96 (same).

 

Courts have uniformly held that the plaintiff’s choice of forum is entitled to substantial deference and should not be lightly disturbed. Stewart Organization, 487 U.S. at 29; Jumara, 55 F.3d at 879; Nat’l Asset, 2010 WL 3338343 at *3. This factor favors Quantum as it brought suit in this district and resides here as well.

 

The second factor under Jumara analyzes “whether the claim arose elsewhere.” Jumara, 55 F.3d at 879. The focus of this inquiry is “where the activities relevant to the claims at issue took place.” National Asset Management, LLC v. Coleman, 2010 WL 3338343 at(W.D.Pa.2010). Here, many of the activities relevant to the claim occurred in this district. The System, which is the subject of this lawsuit, was delivered to this district and presumably remains here. Quantum allegedly experienced difficulties with its operation while situated at its plant. Blue Spring’s president, Desai, visited Quantum on two occasions to provide technical assistance. In addition, a significant amount of electronic correspondence was exchanged between Quantum and Blue Spring. On balance, I find this factor favors Quantum.

 

This record does not support the conclusion that one party would be more significantly inconvenienced than the other if required to litigate outside its own district. Certainly, both parties would likely find it more convenient to litigate in its own district. There is nothing of record however, to support the conclusion that either party would be significantly financially burdened if required to litigate elsewhere. This factor favors Quantum.

 

Whether witnesses would be inconvenienced is only relevant “to the extent that the witnesses [would] actually be unavailable for trial in one of the fora.”   Jumara, 55 F.3d at 879. Here, Blue Spring has failed to identify any non-party witnesses that are either unable or unwilling to travel to Pennsylvania for trial. Connors v. R & S Parts & Services, Inc., 248 F.Supp.2d 394, 396 (E.D.Pa.2003) (convenience of witnesses is relevant only if they might be unavailable for trial; no claim that witnesses would be unable to testify); Miller v. Consolidated Rail Corp., 196 F.R.D. 22, 26 (E.D.Pa.2000) (defendant advanced no evidence to support assertion that any witness would have to be compelled to testify by subpoena). Given the fact that Blue Spring bears the burden of demonstrating that witness inconvenience would render non-party witnesses unavailable for trial, and given its failure to do so, I find this factor weighs in favor of Quantum.

 

At oral argument, Blue Spring’s counsel conceded that all the relevant documents had been exchanged between the parties. ECF No. 28, Hearing Tr. p. 14. Consequently, “the locations of books and records” is not meaningfully at issue and this factor weighs in favor of Quantum as well.

 

Blue Spring does not contend that any of the public factors favor transfer of this case to Texas.

 

In light of the above, Blue Spring’s motion to transfer venue will be denied.

 

IV. CONCLUSION

An appropriate Order follows.

 

ORDER

AND NOW, to wit, this 17th day of February, 2011, and for the reasons set forth in the accompanying Memorandum Opinion,

 

IT IS HEREBY ORDERED that Defendant Blue Spring Corporation’s Renewed Motion to Dismiss for Lack of Jurisdiction pursuant to Fed.R.Civ.P. 12(b)(2) or, in the alternative Motion to Transfer Venue pursuant to 28 U.S.C. §§ 1631, 1404(a) and/or 1406(a) [ECF No.22] is DENIED.

United States District Court,

S.D. New York.

AMERICAN HOME ASSURANCE CO. a/s/o Crown Equipment Corporation, Plaintiff,

v.

PANALPINA, INC. and A.P. Moller-Maersk A/S d/b/a Maersk Sealand and/or Maersk L, Defendant.

A.P. Moller-Maersk A/S, Third-Party Plaintiff,

v.

BNSF Railway Company, Third-Party Defendant.

 

No. 07 CV 10947(BSJ).

Feb. 16, 2011.

 

MEMORANDUM and ORDER

BARBARA S. JONES, District Judge.

This case involves the international intermodal carriage of three containers of forklifts and forklift parts from the Midwest United States to Australia. While en route to its destination, the train transporting the containers derailed on December 22, 2006 at Newberry Springs, California. The contents of the containers were allegedly damaged as a result.

 

Plaintiff American Home Assurance Company, as the subrogee of Crown Equipment Corporation (“Crown” or “Plaintiff”), filed, suit against Defendant A.P. Moller-Maersk A/S (“Maersk”) to recover for damage to the cargo. Maersk impleaded BNSF Railway Company (“BNSF”) who was contracted by Maersk to transport the containers by rail from Elwood, Illinois to Los Angeles, California where they were to be loaded onboard ocean going vessels to Australia. Plaintiff seeks recovery for damage to the cargo as a result of the derailment.

 

On November 13, 2009, Maersk moved for partial summary judgment and declaratory judgment. Maersk seeks a determination that it is entitled to (1) declaratory judgment finding that to the extent that Maersk has any liability, Maersk is entitled to indemnity for all such liability from BNSF; (2) partial summary judgment that in the event liability is found against Maersk, such liability is subject to limitation based upon the applicable contracts and governing law; (3) judgment declaring that any limitation on liability applicable to Plaintiff’s claim against Maersk will be at least as favorable to Maersk as the limitation of liability BNSF is entitled to maintain; and (4) a judgment declaring that Maersk is entitled to indemnification from BNSF for its attorneys’ fees and expenses incurred in defending the claim of Plaintiff in this action.

 

On November 13, 2009, Third-party Defendant BNSF moved for Partial Summary Judgment. BNSF seeks a determination that its liability is limited to the Carriage of Goods by Sea Act (“COGSA”) $500 per package limitation of liability as incorporated by the International Transportation Agreement between BNSF and Maersk, BNSF’s Intermodal Rules & Policies Guide, and Maersk’s Multimodal Transport Bill of Lading.

 

BNSF’s motion is denied. The Court finds that in this case the Carmack Amendment and the Staggers Rail Act apply to the domestic rail portion of a continuous intermodal shipment originating in the United States. Maersk’s motion is premature and is denied as there has been no determination of liability in this action.

 

Background

 

The following uncontested facts are drawn from the parties’ Rule 56.1 statements.

 

Crown Equipment is in the business of manufacturing, marketing, and selling forklift machinery and mechanical parts. In or about December, 2006, Crown booked the shipment of three individual containers containing forklifts and forklift parts under three separate Booking Notes with Panalpina, its freight forwarder. The containers were to be shipped from Crown facilities in the Midwest United States to three locations in Australia.

 

The parties disagree about whether there was a single shipment of three containers or three separate shipments of individual containers. BNSF Rule 56.1 Stmt. ¶ 1; Pl.’s Rule 56.1 Stmt. ¶ 1. For the purposes of resolving these motions, the Court need not determine whether there is a single subject shipment or three separate shipments at issue in the case.

 

Panalpina engaged the services of John Cheesman Trucking & BTT to transport the three containers by tractor trailer from Crown facilities in Greencastle, Indiana and New Breman, Ohio to the BNSF Logistic Park in Elwood, Illinois. Crown loaded and secured the shipments into their respective containers at its facilities in Indiana and Ohio.

 

Panalpina contracted with A.P. Moller-Maersk A/S to arrange transport from Illinois to California and then on to Australia. Maersk, the ocean carrier, contracted with BNSF Railway Company, the overland carrier, to transport the containers by rail from Illinois to California. The rail transportation was booked under the terms of an existing International Transportation Agreement between BNSF and Maersk. The Maersk/BNSF Agreement incorporates the terms and conditions of the BNSF Intermodal Rules & Policies Guide. There was no shipping document issued by BNSF to Crown.

 

While en route from Illinois to California, BNSF’s train derailed causing damage to several containers including the three containers containing Crown Equipment forklifts and forklift parts. As of the date of this Order there has been no determination of liability as to the cause of the derailment. Following the derailment, Panalpina filed a cargo claim against Maersk on behalf of Crown Equipment. The claim amounted to $372,329.92 based upon loss and damage to 13 forklifts and 24 boxes of forklift parts.

 

LEGAL STANDARD

To prevail on a motion for summary judgment, a party must establish that there is no genuine issue of material fact in dispute such that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The Court must view all evidence in the light most favorable to the non-moving party and resolve all ambiguities and draw all permissible factual inferences in the nonmovant’s favor. Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir.2003).

 

Uncertainty regarding the true state of any material fact is enough to defeat a motion for summary judgment. United States v. One Tintoretto Painting, 691 F.2d 603, 606 (2d Cir.1982). However, “the mere existence of some alleged factual dispute between the parties,” without more, will not defeat a properly supported motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). There must be enough evidence in support of the non-moving party’s case such that “a reasonable jury could return a verdict” in its favor. Id. at 248 (internal citation omitted).

 

A party seeking summary judgment bears the burden of establishing that no genuine issue of material fact exists. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Segal v. City of New York, 459 F.3d 207, 211 (2d Cir.2006). Once the movant has sustained its initial production burden, “the burden shifts to the nonmovant to point to record evidence creating a genuine issue of material fact.” Salahuddin v. Goord, 467 F.3d 263, 273 (2d Cir.2006). “[T]he nonmovant cannot rest on allegations in the pleadings and must point to specific evidence in the record to carry its burden on summary judgment.” Id.

 

DISCUSSION

This case concerns a through bill of lading covering cargo for the entire course of an intermodal shipment beginning at an inland location in the United States and continuing to three locations in Australia. In the two pending motions before the Court, the first issue is whether and to what extent BNSF may limit its liability to COGSA’s $500 per package maximum limitation or whether the Carmack Amendment governs BNSF’s liability in this case and, if so, whether the intermodal through bill meets the Staggers Rail Act prerequisite for limiting a rail carrier’s Carmack liability. The second issue is whether Maersk may seek indemnification from BNSF and whether and to what extent it may limit its liability.

 

A bill of lading is defined as a “document acknowledging the receipt of goods by a carrier or by the shipper’s agent and the contract for the transportation of those goods.” (Black’s Law Dictionary 9th ed.2009). “Through” bills of lading specifically cover both oceanic and inland legs of a journey in a single document. See Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 25-26 (2004). “Intermodal” or “multimodal” refers to the use of more than one method of transport during a single shipment. See id. at 25.

 

I. BNSF’s Motion for Partial Summary Judgment

 

A. The Applicability of the Carmack Amendment

 

Congress added the Carmack Amendment to the Interstate Commerce Act in 1906. 49 U.S.C. § 11706 et seq. Carmack governs the terms of bills of lading issued by domestic rail carriers. Its purpose was to create a national scheme of interstate carrier liability for property loss. See Shao v. Link Cargo (Taiwan) Ltd., 986 F.2d 700, 704 (4th Cir.1993). Congress ultimately vested regulatory responsibility for this in the Surface Transportation Board (“STB”). See ICC Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803. The Carmack Amendment provides, in relevant part:

 

“(a) A rail carrier providing transportation or service subject to the jurisdiction of the [STB] under this part shall issue a receipt or bill of lading for property it receives for transportation under this part. That rail carrier and any other carrier that delivers the property and is providing transportation or service subject to the jurisdiction of the [STB] under this part are liable to the person entitled to recover under the receipt or bill of lading. The liability imposed under this subsection is for the actual loss or injury to the property caused by-

 

“(1) the receiving rail carrier;

 

“(2) the delivering rail carrier; or

 

“(3) another rail carrier over whose line or route the property is transported in the United States or from a place in the United States to a place in an adjacent foreign country when transported under a through bill of lading.

 

“Failure to issue a receipt or bill of lading does not affect the liability of a rail carrier.”

 

49 U.S.C. § 11706.

 

BNSF argues that Carmack is inapplicable here. Rather, BNSF claims that the COGSA limitation of liability in the Maersk through bill of lading applies to inland cargo damage where COGSA would apply to the ocean leg of the journey and a proper Himalaya Clause exists to extend the benefits of COGSA to BNSF as the overland carrier.

 

As an initial matter, COGSA applies to “[e]very bill of lading or similar document of title which is evidence of a contract for the carriage by sea to or from ports of the United States, in foreign trade.” 46 U.S.C. § 1300. The limitation of liability provision of COGSA is applicable to damage which occurs “from the time when the goods are loaded on to the time when they are discharged from the ship.” Norfolk S. Ry. Co. v. Kirby, 543 U.S. 14, 29 (2004), (quoting 46 U.S.C. app. § 1301(e)) (internal quotation marks omitted).

 

This is not where the damage occurred in this case. However, a carrier and a shipper can extend the scope of COGSA to cover “the custody and care and handling of goods prior to the loading on and subsequent to the discharge from the ship on which the goods are carried by sea.” 46 U.S.C. § 1307; Hartford Fire Ins. Co. v. Orient Overseas Containers Lines, Ltd., 230 F.3d 549, 557 (2d Cir.2000). In other words, the parties to a bill of lading, in this case Crown and Maersk, may contractually expand COGSA coverage, including maritime liability to a third party, here BNSF, with the inclusion of a so called “Himalaya Clause,” so long as the third party is clearly identified.   Kirby, 543 U.S. at 20. “A Himalaya Clause extends contractual protections that would otherwise apply only to the entity issuing the bill of lading to the subcontractors of the issuing entity as well.” Royal & Sun Alliance Ins., PLC v. Ocean World Lines, Inc., 612 F.3d 138, 142 (2d Cir.2010). BSNF argues that this occurred when Maersk, the ocean shipping company, issued a through bill of lading that extended COGSA’s terms to the inland segment and the property was damaged during the inland portion. (BNSF’s Reply Mem. at 4).

 

The interplay of COGSA and Carmack was recently addressed by the Supreme Court in Kawasaki Kisen Kaisha Ltd., et al. v. Regal-Beloit Corp et al., 130 S.Ct. 2433 (2010). In Regal-Beloit, the rail carrier performed under a general contract with the ocean carrier, not under its own bill of lading. The issue before the Court was only “whether the terms of a through bill of lading issued abroad by an ocean carrier can apply to the domestic part of the import’s journey by a rail carrier, despite prohibitions or limitations in [ Carmack].”   Id. at 2439.

 

The Supreme Court held that the Carmack Amendment “does not apply to a shipment originating overseas under a single through bill of lading.” Id. at 2442. The Court reasoned, “[i]f Carmack’s bill of lading requirement did not refer to the initial carrier, but rather to any rail carrier that in the colloquial sense ‘received’ the property from another carrier, then every carrier during the shipment would have to issue its own separate bill,” which would be contrary to the purpose of Carmack. Id. at 2443. Instead, the Carmack Amendment only applies “to transport of property for which Carmack requires a receiving carrier to issue a bill of lading, regardless of whether that carrier erroneously fails to issue such a bill.” Id. at 2444. In Regal-Beloit, the Court determined that Union Pacific served as the “delivering” carrier, not the receiving carrier, and was thus not required by Carmack to issue a bill of lading. Id. at 2444-45.

 

As the Second Circuit explained in Royal & Sun, the Supreme Court crafted a two-part test to determine whether a Carmack bill of lading must be issued:

 

First, the rail carrier must “provid[e] transportation or service subject to the jurisdiction of the [STB].” Second, that carrier must “receiv[e]” the property “for transportation under this part,” where “this part” is the STB’s jurisdiction over domestic rail transport. Carmack thus requires the receiving rail carrier-but not the delivering or connecting rail carrier-to issue a bill of lading.

 

Royal & Sun, 612 F.3d at 144.

 

Thus, under Regal-Beloit, “the pertinent question is whether the carrier functioned as a receiving rail carrier.” Mitsui Sumitomo Ins. Co., Ltd. v. Evergreen Marine Corp., 621 F.3d 215, 219 n. 4 (2d Cir.2010); see KITO Group, Ltd., v. RF Int’l, Ltd., No. 09 Civ. 1371, 2010 WL 2712138, at(D.Conn. July 6, 2010) (noting Carmack Amendment governs bills of lading issued by receiving carriers inside the United States). The Supreme Court defined “receiving rail carrier” as “the initial carrier, which ‘receives’ the property for domestic rail transportation at the journey’s point of origin.” Regal-Beloit, 130 S.Ct. at 2443. When making this determination, “ascertaining the shipment’s point of origin is critical to deciding whether the shipment includes a receiving rail carrier.” Id.

 

The plain language of the statute makes clear that Carmack applies when the first rail carrier in the chain of transportation accepted the cargo at the shipment’s point of origin. It is also clear that BNSF “received” the cargo at the BNSF Logistic Park in Elwood, Illinois for domestic transportation to California. It is immaterial whether BNSF actually issued a “bill of lading” or just a “movement waybill” upon receipt of the cargo. Regal-Beloit, 130 S.Ct. at 2443-44. Carmack provides the default legal regime governing the inland leg of a multimodal shipment originating within the United States and traveling on a through bill of lading. Thus, BNSF is subject to Carmack because BNSF “ ‘receiv[ed]’ the property ‘for transportation under this part,’ where ‘this part’ is the STB’s jurisdiction over domestic rail transport.” Id. at 2442-43 (quoting 49 U.S.C. § 11706(a)).

 

There is no question that BNSF is a “rail carrier” that is “subject to the jurisdiction of the Board.” § 11706(a).

 

B. Contracting for Alternative Terms Under Carmack

BNSF argues that even if the Carmack amendment applies, BNSF may still limit its liability to $500 per package because Maersk’s Terms and Conditions in the Bill of Lading afforded Crown the opportunity to receive full Carmack liability coverage before accepting alternative liability terms. (BNSF’s Reply Mem. at 4-5). The contractual extension of COGSA to the inland leg cannot, however, supersede the requirements imposed by the Carmack Amendment unless the parties properly agree to opt out of Carmack.

 

Under Carmack, rail carriers are liable “for the actual loss or injury to the property.” Section 11706(c)(1) provides that:

 

A rail carrier may not limit or be exempt from liability imposed under subsection (a) of this section except as provided in this subsection. A limitation of liability or of the amount of recovery or representation or agreement in a receipt, bill of lading, contract, or rule in violation of this section is void.

 

However, the Staggers Rail Act of 1980, Pub.L. No. 96-448, 94 Stat. 1895 (codified at 49 U.S.C. § 11706), authorized the ICC “to exempt transportation that is provided by a rail carrier as part of a continuous intermodal movement.” 49 U.S.C. § 10502(f). Pursuant to this authority, the ICC exempted from regulation rail carriers, like BNSF, that operate one leg of a continuous intermodal movement. See 49 C.F.R. § 1090.2. Staggers further provides that: “Nothing in this subsection or section 11706 of this title shall prevent rail carriers from offering alternative terms.” 49 U.S.C. § 10502(e).

 

The combined effect of § 10502(e) and § 11706(a) is that exempt rail carriers may limit their liability under Carmack by negotiating “alternative terms.” However, in order for a rail carrier to limit its liability, the ocean bill of lading must give the shipper independent notice of the applicability of Carmack and the option of selecting full Carmack liability as well as the option of selecting alternative liability terms and lower shipping rates.   Sompo Japan Ins. Co. v. Norfolk S. Ry. Co., 540 F.Supp.2d 486, 493-501 (S.D.N.Y.2008). This burden to offer full Carmack liability is on the rail carrier. See Tokio Marine and Fire Ins. Co., Ltd. v. Amato Motors, Inc., 996 F.2d 874, 879 (7th Cir.1993). As a result, a shipper and a carrier may bargain for alternative terms, but only if the shipper is first presented with the option of receiving Carmack coverage. Tamini Trasformatori S.R.L. v. Union Pac. R.R., No. 02 Civ. 129, 2003 WL 135722, at(S.D.N.Y. Jan. 17, 2003); see also Sompo Japan Ins. Co. of Am. v. Union Pac. R.R. Co., 456 F.3d 54, 59-60 (2d Cir.2006) (collecting cases), abrogated by Regal-Beloit, 130 S.Ct. 2433.

 

BNSF argues that Maersk’s Terms and Conditions of the Bill of lading afford Crown the opportunity to receive full Carmack liability coverage. (BNSF Reply Mem. at 5.) Maersk’s Terms and Conditions of the Bill of Lading provide:

 

7. COMPENSATION AND LIABILITY PROVISIONS

 

7.3 The Merchant agrees and acknowledges that the Carrier has no knowledge of the value of the Goods and higher compensation than that provided for in this bill of lading may be claimed only when, with the consent of the Carrier, the value of the Goods declared by the Shipper upon delivery to the Carrier has been stated in the box marked “Declared Value” on the reverse of this bill of lading and extra freight paid. In that case, the amount of the declared value shall be substituted for the limits laid down in this bill of lading. Any partial loss or damage shall be adjusted pro rata on the basis of such declared value.

 

(Joseph Dec. Ex 11.)

 

BNSF’s argument that full Carmack coverage was offered is without merit. Though Paragraph 7.3 provided the option of coverage under COGSA, it did not give Crown independent notice of Carmack applicability and did not give Crown the choice to retain or opt out of Carmack coverage as required by Staggers. Crown was never offered full Carmack liability by either Maersk or BNSF. Thus, BNSF, as the receiving rail carrier, has not contracted out of Carmack and may not limit its liability to COGSA’s $500 per package maximum limitation provision. As a result, Carmack applies and BNSF’s motion for summary judgment is DENIED.

 

II. Maersk’s Motion for Partial Summary Judgment and Declaratory Judgment

In its moving papers, Defendant Maersk seeks declaratory judgment requiring BNSF to indemnify Maersk for all liability it may have to the Plaintiff in this action. Maersk seeks a determination that it is entitled to (1) declaratory judgment finding that to the extent that Maersk has any liability, Maersk is entitled to indemnity for all such liability from BNSF; (2) partial summary judgment that in the event liability is found against Maersk, such liability is subject to limitation based upon the applicable contracts and governing law; (3) judgment declaring that any limitation on liability applicable to Plaintiff’s claim against Maersk will be at least as favorable to Maersk as the limitation of liability BNSF is entitled to maintain; and (4) a judgment declaring that Maersk is entitled to indemnification from BNSF for its attorneys’ fees and expenses incurred in defending the claim of Plaintiff in this action.

 

Maersk argues that

 

“BNSF admitted that this not a force majeure event and that stowage and securing of goods within the containers on the train had nothing to do with the derailment. BNSF conceded that none of the defenses listed in the “Loss of Damage” section of the BNSF Rules applied to this derailment and, in essence, concede that it was not contesting liability for the loss, but rather the issue of which limitation of liability would apply.

 

(Maersk Mem. at 5)

 

In opposition, BNSF counters that Maersk’s motion for partial summary Judgment and Declaratory Judgment for indemnification and attorneys’ fees and expenses is premature because there has been no liability determination.

 

BNSF claims that the improper stowage and securing of the goods within the containers contributed to the damage sustained in the crash. Maersk argues that this claim is entirely speculative and that there is overwhelming evidence that the damage to the Crown equipment is solely a result of the derailment in California.

 

In reply, Maersk admits that “BNSF is certainly correct when it states that no liability determination has yet been made in this case.” And, for the first time asks the Court to “render summary judgment on liability against BNSF.” (Maersk Reply Mem. at 7)

 

It is well established that where a claim is first raised in a reply brief the court need not consider it. Cantor Fitzgerald v. Lutnick, 313 F.3d 704, 711 n. 3 (2d Cir.2002). In its Motion for Summary Judgment and Declaratory Judgment, Maersk did not seek a determination of liability. Thus, Maersk has not properly submitted a motion for summary judgment on liability.

 

As there has been no determination of liability, any determination regarding indemnification owed by BNSF to Maersk must await the outcome of trial. See Starkey v. Capstone Enterprises of Portchester, No. 06-CV-1196, 2008 WL 4452366, at (S.D.N.Y. Sept. 30, 2008) (collecting cases); Altman v. Bayliss, No. No. 95-CV-0734, 1997 WL 436711, at(S.D.N.Y. July 22, 1997) (“Inasmuch as there has been no liability determination, [co-defendant’s] motion is premature and must be denied without prejudice.”). Thus, Maersk’s motion for indemnification, legal fees and other expenses is premature and is DENIED without prejudice.

 

CONCLUSION

For the reasons set forth above, BNSF’s Motion for Partial Summary Judgment is DENIED. Maersk’s Motion for Partial Summary Judgment and Declaratory Judgment is DENIED without prejudice.

 

SO ORDERED: