United States District Court,

E.D. Louisiana.

B & S EQUIPMENT CO., INC.

v.

TRUCKLA SERVICES, INC., et al.

 

Civil Action Nos. 09–3862, 10–0832, 10–1168, 10–4592.

July 6, 2011.

 

Robert Seth Reich, Michael T. Wawrzycki, Reich, Album & Plunkett, LLC, Metairie, LA, for Plaintiff.

 

Kent B. Ryan, Andrew M. Stakelum, Stephen R. Remsberg, Lemle & Kelleher, LLP, Joseph E. Lee, III, John Christopher Getty, Preis & Roy, PLC, New Orleans, LA, Brad M. Boudreaux, Keith L. Richardson, Guglielmo, Marks, Schutte, Terhoeve & Love, Daniel R. Atkinson, Jr., Perry, Atkinson, Balhoff, Mengis & Burns, LLC, Baton Rouge, LA, Anthony John Staines, Ashley E. Boyd, Corey Patrick Parenton, Craig Wren Brewer, Staines & Eppling, Dennis J. Phayer, Burglass & Tankersley, L.L.C., Robert Seth Reich, Michael T. Wawrzycki, Reich, Album & Plunkett, LLC, Jon Daniel Picou, Mary Kerrigan Dennard, Larzelere, Picou, Wells, Simpson, Lonero, LLC, Metairie, LA, Frank Anthony Piccolo, Preis & Roy, PLC, Houston, TX, Steven Russell Cupp, Watkins, Ludlam, Winter & Stennis, PA, Gulfport, MS, Bradford C. Ray, Mark D. Herbert, Watkins, Ludlam, Winter & Stennis, PA, Jackson, MS, for Defendants.

 

ORDER

KAREN WELLS ROBY, United States Magistrate Judge.

Before the Court is a Motion to Compel Discovery Responses from Adams Towing Corporation and State National Insurance Company (R. Doc. 234) filed by the Plaintiff, B & S Equipment Company, Inc. (“B & S”) seeking an Order compelling the Defendants, Adams Towing Corporation and State National Insurance Company to respond to its discovery requests. The Plaintiff also seeks $500.00 in attorneys’ fees for having filed the subject motion. B & S opposes the motion. (R. Doc. 254.) The motion was heard with oral argument on Wednesday, May 25, 2011, and was thereafter taken under submission. After oral argument, B & S filed a supplemental memorandum in support of its motion to compel. (R. Doc. 266.) The Defendants filed a sur-reply. (R. Doc. 285.)

 

I. Background

The instant action diversity action concerns various contract and insurance coverage disputes arising out of damaged equipment and barges used in a federal floor control project. In March 2009, Truckla Services, Inc. (“Truckla”) was awarded a government contract to build a revetment along the banks of the Upper Mississippi River in Cairo, Illinois. Specifically, the United States Army Corps of Engineers contracted with Truckla to transfer rocks from barges onto the bank of the river in an effort to prevent erosion. Thereafter, Truckla entered into two contracts with B & S to rent equipment and barges. The first contract was an oral bareboat barge charter for the use of two spud barges, the Dove 4 and KS 417. The second contract was a written equipment lease for the use of two B & S excavators, a Caterpillar 375L and a Caterpillar 385CL.

 

The Dove 4 was owned by White Dove Marine, LLC, and the KS 417 was owned by McDonough Marine Service. B & S arranged the oral bareboat barge charter through a vessel broker, T.L.C. Marine Services, Inc.

 

Under the terms of the agreements between B & S and Truckla, Truckla was to pay for any damages to the excavators, return the excavators in good condition, and perform ordinary maintenance during the course of the lease. The lease was to continue on a month-to-month basis until Truckla gave B & S 30 days written notice or until B & S resumed possession of the equipment.

 

In order to fulfill its responsibility to transport the vessels and equipment from New Orleans to St. Louis, Truckla contracted with T & M Boat Rentals, LLC to bring the excavators up the Mississippi on the barges. T & M in turn made arrangements with Adams Towing Corporation for the Master Cad to move the Dove 4 and KS 417 to and from New Orleans. Truckla maintained two policies of insurance, including a commercial inland marine policy issued by Montgomery Insurance company and a commercial general liability policy from Canal Indemnity.

 

After one month, B & S and Truckla began to disagree as to the condition of the equipment and the barges. The barges and the equipment were subsequently returned to B & S. Truckla maintains that the Caterpillar 375 excavator was defective and unsound and that one of the barges required constant pumping and repair to stay afloat. B & S contends that their barges were seaworthy and fit for Truckla’s use and that the excavators were in good condition and working properly. B & S contends that Truckla negligently performed its work, failed to maintain the barges, and breached its contractual obligation to B & S.

 

On June 15, 2009, B & S sued Truckla contending that Truckla breached its obligations under the lease by failing to provide 30 days written notice of its intent to terminate the lease. It further complains that Truckla was negligent which resulted in the loss of equipment. In an amended complaint, B & S added Montgomery Insurance as a defendant, asserting that Montgomery issued a policy to Truckla that covered the damaged equipment. B & S filed a second a third amended complaint adding T & M Boat Rentals and Adams Towing asserting that as owner and operator or charterer of the towing barge, the M/V Master Cade, negligently transported the barges to and from the project causing damage. In a fourth amended complaint, B & S sued Canal Indemnity, as Truckla’s liability insurer. Various cross claims and counterclaims resulted.

 

B & S subsequently initiated another lawsuit against Travelers Casualty and Surety Company of America on April 22, 2010, pursuant to the Miller Act, 40 U.S.C. § 3131. B & S asserts that Travelers and Truckla executed a payment bond in which they bound themselves to secure prompt payment of all persons supplying labor and material to the Corps’ project such that Travelers, as Truckla’s surety, is responsible to pay B & S all monies due under the contract and for damage to the equipment and barges. The case was transferred and consolidated with the master case.

 

As to the instant motion, on July 10, 2010, the B & S served its discovery requests on the Defendants. At the time the motion was filed, on May 11, 2011, no responses had been received. B & S therefore filed the subject motion seeking to compel responses to its discovery requests. After the subject motion was filed, on May 17, 2011, the Defendants provided their responses. The Plaintiff found the responses deficient, insofar as the Defendants failed to produce certain investigatory statements. As such, oral argument ensued.

 

On the same date that oral argument was held, the Court heard another motion in the above captioned matter. (See R. Doc. 228.) In that motion, Travelers, another party, had propounded discovery requests on B & S. B & S failed to timely respond. Travelers sought an Order compelling B & S to respond to the discovery requests and deem all objections waived. B & S opposed the motion. The Court found that B & S had waived its objections by failing to timely respond and had otherwise failed to provide the Court with good cause to excuse their untimeliness. (See generally, R. Doc. 293.)

 

As a result of the Court’s ruling, during oral argument, B & S’s argument changed as to the instant motion. B & S argued that because the Defendants had failed to timely respond to the discovery requests, the Defendants had waived all of their objections. Therefore, it asked the Court to compel the Defendants to provide supplemental responses to its discovery requests which were received on May 17, 2011, without objections and specifically requested that the Court compel the production of the investigatory statements.

 

After oral argument, B & S submitted a supplemental memorandum outlining its new arguments. (R. Doc. 266.) The Defendants responded in opposition. (R. Doc. 285.)

 

II. Standard of Review

Rule 26(b)(1) provides that “[p]arties may obtain discovery regarding any non-privileged matter that is relevant to any party’s claim or defense.” Fed.R.Civ.P. 26(b)(1). The Rule specifies that “[r]elevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Fed.R.Civ.P. 26(b)(1). The discovery rules are accorded a broad and liberal treatment to achieve their purpose of adequately informing litigants in civil trials. Herbert v. Lando, 441 U.S. 153, 176 (1979). Nevertheless, discovery does have “ultimate and necessary boundaries.” Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978) (quoting Hickman v. Taylor, 329 U.S. 495, 507 (1947)). Furthermore, “it is well established that the scope of discovery is within the sound discretion of the trial court.” Coleman v. American Red Cross, 23 F.3d 1091, 1096 (6th Cir.1994).

 

Under Rule 26(b)(2)(c), discovery may be limited if: (1) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from another, more convenient, less burdensome, or less expensive source; (2) the party seeking discovery has had ample opportunity to obtain the information sought; or (3) the burden or expense of the proposed discovery outweighs its likely benefit. Fed .R.Civ.P. 26(b)(2)(c). In assessing whether the burden of the discovery and outweighs the benefit, a court must account for: (1) the needs of the case; (2) the amount in controversy; (3) the parties’ resources; (4) the importance of the issues at stake in the litigation; and (5) the importance of the proposed discovery in resolving the issues. Id.

 

III. Analysis

Because the parties concede that the issue contained in the initial submissions, namely the fact that the Defendants had failed to respond, at all, to the Plaintiff’s discovery has been resolved, the Court will only address whether the Defendants’ failure to timely respond results in a waiver of all objections.

 

B & S contends that, consistent with this Court’s ruling on Traveler’s motion, the Defendant’s failure to respond to its discovery requests results in a waiver pursuant to Rule 34(b)(2). B & S therefore contends that the Defendants should be compelled to resubmit its responses to its discovery requests without objections.

 

Furthermore, B & S contends that the Defendants’ failure to produce the statements in response to Request for Production 5 on the basis of work product privilege is unwarranted because the attorney client privilege has been waived. Request for Production 5 states, “Please produce any and all documents responsive to Interrogatories No. 7–11.” (R. Doc. 266–1, p. 7.) The Defendants objected to producing the statements identified in Interrogatory No. 9  pursuant to the attorney work product privilege. The Defendants further noted that they engaged Tidelands Adjustment Services to locate witnesses and obtain statements after the matter was filed. (R. Doc. 266–1, p. 7.) Interrogatory 9 specifically addresses the statements withheld. Interrogatory 9 states,

 

The Court notes that the Defendants’ response actually indicates that it objects to producing statements in response to Interrogatory 7. However, Interrogatory 7 does not relate to witness statements. Instead, Interrogatory 9 addresses witness statements. The Court construes the Defendants’ reference to Interrogatory 7 as a typo, and will address the objection as if it were properly made to Interrogatory 9.

 

Did you obtain statements, written or recorded, from any individuals concerning the subject matter of this lawsuit? If so, please state the names, addresses, and telephone numbers of all individuals who have been statementized [sic]; identify whether the statement was recorded, typed, and/or handwritten; the date the statement was obtained; and the person who obtained the statement.

(R. Doc. 266–1, p. 4.) In response, the Defendants identified Joey Wiggins, Faron Adams, and Tom Renfro and provided contact information for each individual. Id.

 

B & S contends that the Defendants, by failing to respond until 275 days past the deadline, have waived the attorney-client privilege. Therefore, it should be compelled to produce the documentation.

 

In response, the Defendants contend that Federal Rule of Civil Procedure 33, which provides that objections not made within 30 days are waived, applies only to interrogatories. It contends that Rule 34, which applies to requests for production of documents, does not similarly have a waiver provision. Therefore, its objection based on attorney client privilege has not been waived.

 

The Defendants contend that the statements at issue were clearly taken in anticipation of litigation and clearly constitute attorney work product. Further, the Defendants contend that they have provided the names and contact information of the witnesses who gave statements to Adams Towing to B & S. Therefore, B & S has an alternative method of obtaining the information contained in the statements. The Defendants contend that B & S has not demonstrated any undue hardship or a substantial need as required to overcome the attorney work product doctrine and therefore should not be compelled to produce the statements. The Defendants provided the Court with the documents for an in camera review to verify that the attorney work product privilege is applicable.

 

As a preliminary matter, the Court notes that the Defendants do not contest that their failure to timely respond results in a waiver of their objections to their interrogatory requests. Therefore, to the extent that the Defendants have failed to fully respond to interrogatory requests based off of objections due to relevancy, over breadth, unduly burdensomeness, or any other objection unrelated to privilege, the Court finds these objections have been waived and the Defendants are accordingly ordered to supplement their responses.

 

The Court further notes that on May 25, 2011, the Defendants provided the Court with statements provided by James Joseph Anslem, Tony Joseph Vidos, Jr., and Ricky Nate Barnes for an in camera inspection. The Defendants also provided a letter from its investigatory file which summarized the witness statements. On June 13, 2011, the Defendants supplemented their in camera disclosures with statements by Joey Peter Wiggins, Faron Joshua Adams, and Tom Renfro. These statements were apparently inadvertently misfiled. The Defendants also supplemented their interrogatory responses to identify these three individuals and provide B & S with their contact information.

 

The Court has reviewed these documents in camera and finds that they are clearly privileged under both the attorney/client privilege and the work product privilege. Therefore, the only remaining issue before the Court is whether the Defendants’ failure to timely respond to the discovery requests results in a waiver of these privileges.

 

Under Rule 34(b)(2)(A), if served with a request for production of documents, a party “must respond in writing within 30 days after being served. A shorter or longer time may be stipulated to under Rule 29 or be ordered by the Court.” Furthermore, “[f]or each item …, the response must either state that inspection and related activities will be permitted as requested or state an objection to the request, including the reasons.” Fed.R.Civ.P. 34(b)(2)(B). “An objection to part of a request must specify the part and permit inspection of the rest.” Fed.R.Civ.P. 34(b)(2)(C).

 

Unlike Rule 33, which addresses interrogatories, Rule 34 does not expressly state that responses and objections must be stated with specificity and be timely or they are waived unless excused by the court for good cause. However, courts, including the Fifth Circuit, have found that the waiver provision applies to both Rules 33 and 34. See In re United States, 864 F.2d 1153, 1156 (5th Cir.1989)(“[A]s a general rule, when a party fails to object timely to interrogatories, production requests, or other discovery efforts, objections thereto are waived.”); see also 8A Charles Alan Wright, Arthur R. Miller, and Richard L. Marcus, Federal Practice & Proc. Civ.2d § 2204 (2d ed.1994)(“the discovery rules constitute an integrated mechanism and they must be read in pari materia.”); McLeod, Alexander, Powel and Apffel v. Quarles, 894 F.2d 1482, 1485 (5th Cir.1990)(With respect to required specificity, “We see no reason to distinguish the standards governing responses to interrogatories from those that govern responses to production requests.”);   Hall v. Sullivan, 231 F.R.D. 468, 473–74 (D.Md.2005)(holding that “implicit within Rule 34 is the requirement that objections to document production requests must be stated with particularity in a timely answer, and that failure to do so may constitute waiver of grounds not properly raised, including privilege or work product immunity unless the court excuses this failure for good cause shown.”); Drexel Heritage, 200 F.R.D. at 258(“although the plain language of Rule 34 does not expressly provide for waiver when objections are not stated, Rule 34, like Rule 33(b)(4), requires the reasons for objections to be explicitly stated. Therefore the Court finds the waiver to be an implicit one.”). Therefore, the failure to respond to discovery requests, whether the be interrogatories or requests for production, generally result in a waiver of objections.

 

However, courts have found that, pursuant to Rule 26(b)(5) which concerns withholding information on the basis of privilege, the failure to timely object on the basis of privilege does not result in an automatic waiver. See, e.g., Applied Systems, Inc. v. Northern Ins. Co. of New York, No. 97 C 1565, 1997 WL 639235, at(N.D.Ill. Oct. 7, 1997). “Rather, a waiver of privilege is a serious sanction reserved for cases of unjustified delay, inexcusable conduct, bad faith, or other flagrant violations. Id. Thus, a party’s failure to assert privilege will not necessarily short circuit his or her efforts to preserve the confidentiality of a privileged document. Therefore, the circumstances surrounding the objections must be weighed in order to determine whether the documents should be produced or kept outside of the scope of discovery.

 

Here, B & S has made no allegations that the Defendants failure to timely respond was due to unjustified delay, inexcusable conduct, bad faith, or other flagrant violations. Instead, B & S merely shifted its argument to waiver after having lost a different motion. Although B & S, in that motion, vehemently disagreed with the Court as to the application of waiver, it here seeks not only a finding of waiver for untimely responses to discovery requests, but further seeks the serious sanction of waiver of attorney-client privilege. This, the Court will not do. B & S has provided the Court, and the Court has no basis otherwise, any reasons to find that the Defendants’ actions were in bad faith or flagrant. The sanction of finding a waiver of the attorney-client privilege and/or work product privilege is unwarranted in this matter.

 

Further, this finding is consistent with the Court’s ruling on the motion between Traveler’s and B & S. In Traveler’s motion, it sought a waiver of all objections and specifically contested B & S’s responses to Interrogatories 5, 11, and 13 and Requests for Production of Documents 4 and 7. None of B & S’s responses to these requests invoked the attorney-client privilege.

 

Accordingly, the Court finds that the Defendants have waived all objections to B & S’s discovery requests based on relevance, unduly burdensome, over broad, or any other objection not grounded on the attorney client or the work product privilege. Therefore, the Defendants are ordered to provide supplemental responses to these requests. However, the Court finds that the objections based on attorney-client privilege or the work product doctrine have not been waived. As such, the Court declines to compel the production of statements taken by the Defendant’s investigatory agent in this matter.

 

As to B & S’s request for sanctions, in the form of attorneys’ fees totaling $500.00, the request is denied. Under Rule 37(a)(5), sanctions are not warranted where “the opposing party’s nondisclosure, response, or objection was substantially justified.” Fed.R.Civ.P. 37(a)(5)(A)(ii). Because the Court sustains the Defendants’ objection to producing the witness statements under the attorney-client privilege, the Court finds that sanctions are not appropriate.

 

IV. Conclusion

Accordingly,

 

IT IS ORDERED that B & S Equipment Company, Inc.’s Motion to Compel Discovery from Adams Towing Corporation and State National Insurance Company (R. Doc. 234) is hereby GRANTED IN PART and DENIED IN PART:

 

• IT IS GRANTED insofar as the Court finds that the Defendants’ failure to timely respond to the Plaintiff’s discovery requests results in a waiver of any objection unrelated to privilege. As such, the Defendants’ must provide supplemental responses to any objected-to discovery requests on grounds unrelated to privilege no later than seven (7) days from the signing of this Order.

 

• IT IS DENIED insofar as the Court finds that the Defendants did not waive the attorney-client privilege by their failure to respond timely to the discovery requests. As such, B & S’s request to compel the statements taken by the Defendants’ investigatory agent is DENIED.

 

• B & S’s request for sanctions, in form of $500.00 in attorneys’ fees, is hereby DENIED.

 

IT IS FURTHER ORDERED that within five (5) days of the signing of this Order, counsel for the Defendants’ shall retrieve the subject statements which were submitted to the Court for in camera review. If the Defendants fail to retrieve these documents within five (5) days, the Court will destroy the subject documents.

United States District Court,

S.D. Texas,

Houston Division.

HB PLUS BANDAMATIC, INC., Plaintiff,

v.

MTC SOUTH, INC., et al., Defendants.

 

Civil Action No. H–11–00610.

July 7, 2011.

 

Wilka Varela Toppins, The Toppins Law Firm PC, Houston, TX, for Plaintiff.

 

Mark E. Callender, Serpe Jones Andrews Callender & Bell PLLC, Houston, TX, for Defendants.

 

ORDER

GRAY H. MILLER, District Judge.

Pending before the court is defendant MTC South Inc.’s and James W. Purvis III’s motion to dismiss for lack of personal jurisdiction. Dkt. 8. After considering the motion, relevant filings, and applicable law, the court finds that it does not have personal jurisdiction over the defendants. Thus, plaintiffs HB Plus Bandamatic, Inc.’s claims are DISMISSED WITHOUT PREJUDICE.

 

I. BACKGROUND

Plaintiff, HB Plus Bandamatic, Inc. (“HB”), a Texas corporation, is seeking damages against MTC South, Inc. (“MTC”), a Florida corporation, and its president James W. Purvis III (“Purvis) (collectively, “Defendants”), a resident of Florida, for the breach of 22 contracts, amounting to $135,357.32. Dkt. 6, Exh. A. HB also seeks damages under the doctrine of quantum meruit and promissory estoppel. Id. In response, MTC filed a 12(b)(2) motion to dismiss for lack of personal jurisdiction. Dkt. 2.

 

HB sells pre-cured rubber tire treading products and other materials (“Materials”) throughout the United States and Canada. Dkt. 6, Exh. B. MTC is in the business of recapping, retreading, and repairing tires. Dkt. 2, Exh. A. HB contacted MTC by making a sales call to MTC’s Florida office in January 2010, and this contact resulted in an oral agreement under which MTC would purchase Materials from HB. Dkt. 2 at 2. Since then, MTC has ordered Materials from HB via facsimile, phone, and email. Dkt. 6–2, Exh. B. The Materials are delivered F.O.B. to MTC’s factory in Madison, Florida. Dkt. 2, Exh. A. To date, MTC has made 158 purchase orders, which amounts to $756,950.89. Dkt. 6 at 2. From April 2010 to July 2010, the last 22 purchase orders made by MTC were delivered to its factory. Dkt. 2 at 2, Dkt. 6 at 2. MTC accepted most of the Materials, but did not pay $135,357.32 of the amount due because MTC believed the Materials lacked quality. Dkt. 2 at 2, Dkt. 6 at 3. HB filed a lawsuit against MTC in the 61st Judicial District of Harris County, Texas on December 23, 2010. Dkt. 6–1, Exh. A.

 

On February 21, 2011, MTC removed the case to this court and then filed a motion to dismiss for lack of personal jurisdiction. Dkt 1. HB claims that this court has jurisdiction over MTC and Purvis because of the contacts between the two companies over a period of 2 years, including 158 purchase orders made by MTC for HB Materials (22 of those 158 purchase orders are the subject of this dispute). MTC, on the other hand, claims this court lacks jurisdiction over it and Purvis because its principal place of business and corporate headquarters are in Florida and, other than the plaintiff, MTC does not maintain any other business relations or contacts in Texas. Dkt 2–1, Exh. A. MTC also does not maintain a phone number, address, agent, or bank account in Texas. Id. Additionally, MTC has no employees in Texas and it does not direct its advertising to Texas. Id. Nor did MTC’s employees or president travel to Texas for business purposes. Id. Moreover, HB initiated the contact between itself and MTC by traveling to Florida for its initial meeting with MTC, and HB shipped more than one-third of MTC’s orders to Madison, Florida, from a warehouse in Miami, Florida. Id.

 

II. LEGAL STANDARD

In a diversity action, a federal court may exercise personal jurisdiction over a nonresident defendant if: (1) the long-arm statute of the forum state allows the exercise of personal jurisdiction over that defendant; and (2) the exercise of personal jurisdiction over that defendant is consistent with due process under the U.S. Constitution. Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir.2009). The two-step personal jurisdiction inquiry collapses into one federal due process analysis because the Texas long-arm statute extends to the limits of federal due process. Johnston v. Multidata Sys. Int’l Corp., 523 F.3d 602, 609 (5th Cir.2008). “To satisfy the requirements of due process, the plaintiff must demonstrate: (1) that the non-resident purposely availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts’ with the state; and (2) that the exercise of jurisdiction does not offend ‘traditional notions of fair play and substantial justice.’ ” Mullins, 564 F.3d at 398 (internal quotations omitted).

 

“Jurisdiction may be general or specific.” Stroman Realty, Inc. v. Wercinski, 513 F.3d 476, 484 (5th Cir.2008). General jurisdiction exists when a defendant’s contacts with the forum state are “continuous and systematic.”   Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 415–16, 104 S.Ct. 1868, 80 L.Ed.2d 404 (1984). Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d 415, 419 (5th Cir.1993). The “continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum.” Submersible Sys., Inc. v. Perforadora Cent., S.A., 249 F.3d 413, 419 (5th Cir.2001) (citation omitted). The Fifth Circuit imposes a high standard when ruling on general jurisdiction issues. Johnston, 523 F.3d at 611 (illustrating the difficulty of proving general jurisdiction).

 

A forum state may exercise specific jurisdiction over a nonresident defendant “when the nonresident defendant’s contacts with the forum state arise from, or are directly related to, the cause of action.” Allred v. Moore & Peterson, 117 F.3d 278, 286 (5th Cir.1997). The court considers whether the defendant has purposefully availed himself or herself of the laws of the forum state and could reasonably anticipate being sued there. Burger King v. Rudzewicz, 471 U.S. 462, 481–82, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985). A single act by the defendant directed at the forum state can be enough to confer personal jurisdiction if that act gives rise to the claim being asserted. Ruston, 9 F.3d at 419.

 

III. ANALYSIS

A. General Jurisdiction

The court does not have general jurisdiction over MTC or Purvis because their contacts with Texas are not continuous and systematic. The level of contacts needed to reach the lofty standard of general jurisdiction is “a difficult one to meet, requiring extensive contacts between a defendant and a forum.”   Submersible Sys., Inc. . 249 F.3d. at 419. In the Helicopteros case, the defendant’s contacts with Texas were far more extensive than in the instant case. Helicopteros Nacionales de Colombia, S.A.’s (“Helicopteros”) contacts with Texas included sending its chief executive officer to Houston to negotiate the contract in question, accepting checks drawn from a Texas bank, purchasing helicopters and equipment from Texas, utilizing training services from a Texas manufacturer, and sending personnel to the manufacturer’s facilities in Texas for training. Id. at 410–12. The Supreme Court deemed the contacts insufficient to confer general jurisdiction over Helicopteros. Id . at 418–419. Contrary to the nonresident defendant in Helicopteros, MTC had no contacts with Texas other than the purchase orders, subsequent correspondence, and payments it sent to HB.

 

HB claims that the sheer number of contacts performed by MTC through the 158 purchase orders and the associated correspondence are sufficient to subject MTC to general jurisdiction in Texas. However, numerous Fifth Circuit authorities state that “the number of contacts with the forum state is not, by itself, determinative. What is more significant is whether the contacts suggest that the nonresident defendant purposefully availed himself of the benefits of the forum state.” Brown v. Flowers Indus., Inc., 688 F.2d 328, 333 (5th Cir.Miss.1982). Thus, the number of contacts does not provide a sufficient basis for this court to assert jurisdiction over MTC.

 

Both parties cite to Central Freight Lines v. APA Transport Corp., 322 F.3d 376 (5th Cir.2003), in support of their positions. In Central Freight Lines, a New Jersey defendant entered into an agreement with Central Freight Lines, a Texas company, for freight delivery services. Central Freight Lines, 322 F.3d at 379. Central Freight Lines (“CFL”) and APA Transport Corp. (“APA”) began an ongoing relation in September 2000, and the relationship ended a year and a half later. See id. at 379. CFL claimed that APA breached the agreement by demanding prices above the negotiated rate, and APA claimed that CFL failed to pay it $430,254 for freight charges. See id. In Central Freight, the exact number of contacts between CFL and APA was not stated. See id. The Fifth Circuit found no general jurisdiction over APA:

 

APA has never registered to do business in the state, has never maintained any kind of business office or records in the state, and has never paid franchise taxes in the state. Likewise, even though APA routinely arranges and receives interline shipments to and from Texas and apparently sends sales people to the state on a regular basis to develop business, negotiate contracts, and service national accounts, APA has never actually operated any trucks or picked up or delivered any freight in Texas. Even if APA’s contacts with the state of Texas have been, in some sense, “continuous and systematic,” APA’s activities, in toto, are clearly not substantial enough to justify subjecting APA to suit in the Western District of Texas based on a theory of general personal jurisdiction.

 

Id. at 381 (emphasis added).

 

Just like APA, MTC is also not registered to do business in Texas and does not have offices or records in Texas. Also similar to APA, MTC “routinely arranges and receives … shipments … from Texas.” However, unlike APA, no MTC employees have traveled to Texas for business purposes. Overall, APA’s contacts with Texas extended further than MTC’s, even to the point of being “in some sense, ‘continuous and systematic,’ ” yet APA’s contacts with Texas still fell short of the high standard required to subject it to suit under general jurisdiction in Texas. Id. Therefore, in toto, MTC’s activities, which are less substantial than APA’s, do not justify subjecting MTC to general jurisdiction in the Southern District of Texas.

 

B. Specific Jurisdiction

This court also cannot exercise specific jurisdiction over the Defendents. In the Fifth Circuit, courts analyze the following factors to determine whether specific jurisdiction exists: “(1) whether the defendant has minimum contacts with the forum state, i.e ., whether it purposefully directed its activities toward the forum state or purposefully availed itself of the privileges of conducting activities there; (2) whether the plaintiff’s cause of action arises out of or results from the defendant’s forum-related contacts; and (3) whether the exercise of personal jurisdiction is fair and reasonable.”   McFadin v. Gerber, 587 F.3d 753, 759 (5th Cir.2009) (quoting Seiferth v. Helicopteros Atunteros, Inc., 472 F.3d 266, 271 (5th Cir.2006)) (internal quotation omitted). These requirements “ensure[ ] that a defendant will not be haled into a jurisdiction solely as a result of ‘random,’ ‘fortuitous,’ or ‘attenuated’ contacts.” Burger King, 471 U.S. at 475–76.

 

In the instant case, MTC did not actively or “purposefully avail” itself of Texas laws and regulations. HB intially sought out MTC, the Materials were shipped F.O.B. to Madison, Florida, and MTC never sent any employees into Texas. MTC’s only contacts with Texas were sending payments and purchase order forms to HB’s office in Texas. And because HB sought out MTC in the creation of the original oral agreement, it can be inferred that MTC did not specifically chose to contract with HB because it is from Texas. MTC most likely would have accepted a similar offer from a company located elsewhere. Accordingly, MTC did not actively reach out to any Texas entities, or seek to benefit from the state’s resources.

 

HB cites Southwest Offset, Inc. v. Hudco Publishing Co., Inc., in support of its argument that the court may exercise specific jurisdiction over MTC. 622 F.2d 149 (5th Cir.1980). In Southwest Offset, the Fifth Circuit held it had specific jurisdiction over Hudco Publishing Co., Inc. (“Hudco”), an Alabama publisher, which established a series of contracts with Southwest Offset, Inc. (“Offset”), in Texas to print phone directories. Id. at 150. Similar to Southwest Offset, MTC established purchase orders with a Texas company (HB) and sent payments to that Texas company. Additionally, similar to MTC, no Hudco employees ever traveled to Texas. However, in Southwest Offset, Hudco, the non-resident company, initiated contact with Offset, whereas in the instant case, HB, the Texas company, initiated contact with MTC. Hudco and Southwest’s interactions were also extensive, due to the volume of correspondence incurred as prints and proofs were repeatedly mailed between parties. Unlike Southwest Ofset, the correspondence between HB and MTC was relatively reserved and passive, involving purchase orders that did not require extensive detail or analysis, and MTC exercised no control over HB’s response to its purchase orders. Hudco clearly and purposefully directed activity towards this state; MTC did not.

 

Additionally, HB contends that the long-term relationship between itself and MTC confers specific jurisdiction over MTC. Dkt. 6 at 9 (citing Lansing Trade Grp., LLC v. 3B Biofuels GmBH & Co., 612 F .Supp.2d 813, 822 (S.D.Tex.2009) (stating that certain types of contacts that are insufficient to confer specific jurisdiction may become sufficient when a contract contemplates a long-term relationship between a nonresident defendant and a forum resident)) (emphasis added). MTC argues that no long-term contract existed between itself and HB. The court agrees with MTC. First, Lansing merely suggests that the length of a contract could have an impact on the specific jurisdiction analysis without providing any guidance as to what would constitute a “long-term” contract. MTC’s business relationship with HB lasted two years at most. In Stuart v. Spademen, a dispute over a failed contract involving a patented ski binding, the parties began their relationship in 1975, entered into a patent agreement in 1977, and ended their relationship in 1982. 772 F.2d 1185, 1188 (S.D.Tex.1985). Even though the parties’ relationship lasted a total of seven years, the Fifth Circuit found that parties “did not contemplate a long-term relationship with the kinds of continuing obligations and wide-reaching contacts envisioned by the Burger King contract.” Id. at 1194. In Burger King, the U.S. Supreme Court found that a 20 year business relationship between Burger King and its franchise company was a long-term relationship. 471 U.S. at 482. The two year contract in this case was not long-term, and a long-term relationship was not “contemplated” because either party could have ended the relationship at any time. Neither party maintains that the original oral agreement was for a certain amount of time. Third, HB itself maintains that there was not one long-term contract that has been breached, but rather 158 contracts (purchase orders), 22 of which were allegedly breached, each representing a distinct contract with MTC. Thus each purchase order is a contract in itself and the life span of each contract is better described as short-term, not long-term. Therefore, HB’s argument that there was a long-term contractual relationship, or that a long-term contractual relationship was contemplated between itself and MTC, thereby conferring specific jurisdiction, is not persuasive.

 

HB contends that negotiations between itself and MTC started in October 2008. Dkt 6–2 at 2. However, the trip taken by HB’s representative to MTC in Madison, Florida, during which the oral agreement was made, occurred in January 2010. Dkt 2–1 at 2. The unpaid invoices dispute arose during the period of April 2010 to July 2010. Dkt 6–2 at 2.

 

Place of performance and place of contracting are also important factors to consider in subjecting a defendant to specific jurisdiction. Jones v. Petty–Ray Geophysical, Geosource, Inc., 954 F.2d 1061, 1069. It is undisputed that the original oral agreement arose in Florida, not Texas. However, MTC and HB differ in their opinion about where the contract was principally performed. The case of Holt Oil & Gas Corp. v. Harvey, 801 F.2d 773 (5th Cir.1986), offers some insight. In Holt Oil & Gas, the non-resident defendant’s contacts with Texas were (1) entering into a contract with a Texas corporation; (2) sending a final revised joint agreement from Oklahoma to Texas; (3) sending three checks from Oklahoma to Texas in partial performance of the contractual obligations; and (4) engaging in extensive telephonic and written communications with the Texas corporation. Id. at 777–778. The court in Holt Oil & Gas found it significant that the material performance of the contract—as opposed to the transfer of funds—was centered in Oklahoma, not Texas. Id. at 778. The communications between Texas and Oklahoma and the payment of checks to Texas, standing alone, were insufficient to demonstrate that the defendant purposefully availed himself of the benefit and protections of Texas law. Id.; see also Freudenspring v. Offshore Tech. Servs., Inc., 379 F.3d 327, 344 (5th Cir.2004) (establishing that merely contracting with a resident of the forum state is insufficient to subject the nonresident to the forum’s jurisdiction).

 

Like Holt Oil & Gas, the performance of the contract or contracts between HB & MTC were centered around a state other than Texas. HB initially traveled to Florida with the purpose of soliciting business. MTC sent purchase orders into Texas, to HB, exercising minimal interaction or control. The agreements stipulate that the Materials be sent F.O.B. to Madison, Florida, so HB retained title and risk of loss for the Materials until they reached Florida  Additionally, one-third of the Materials were shipped to MTC from a Miami, Florida warehouse rather than from Texas. Thus, while the court cannot conclude that performance took place entirely within a different state, a significant portion of the performance occurred outside of Texas, and the oral agreement was entered into in Florida at the initiation of HB. And while the contacts from MTC to HB were relatively more frequent than the contacts between Holt Oil & Gas and Texas, the place of performance of the contract or contracts supports the court’s conclusion that the exercise of specific jurisdiction over MTC is inappropriate in this case. There is simply no indiction that MTC purposefully availed itself of the benefits and protection of Texas laws. This court thus cannot exercise specific jurisdiction over MTC. Therefore, this case is DISMISSED WITHOUT PREJUDICE.

 

Dynegy Midstream Servs. v. Apache Corp., 294 S.W.3d 164, 168 (Texas, 2009), a breach of contract case involving the sale of gas, defined F.O.B. by stating: “the Uniform Commercial Code recognizes that when parties specify ‘F.O.B. the place of destination,’ the risk of loss during transport is on the seller.” While this fact supports the court’s conclusion that it does not have personal jurisdiction over the non-resident defendant, the court does not base its conclusion solely on the fact that Materials were sent F.O.B. to Madison, Florida. This is in accordance with the precedent set in Luv n’ Care, Ltd. v. Insta–Mix, Inc., in which a manufacturer of baby bottles attempted to avoid jurisdiction by manipulating the location of their title transfer. 438 F.3d 465, 468 (5th Cir.2006). The Fifth Circuit held that “the F.O.B. term by itself [does] not prevent the exercise of jurisdiction where other factors suggest that jurisdiction is proper.” Id. at 468, 471–472.

 

III. CONCLUSION

Considering the law and evidence presented, this case is DISMISSED WITHOUT PREJUDICE due to a lack of personal jurisdiction over the Defendants.

 

It is so ORDERED.