998 N.E.2d 1018
Mass. App. Ct.2013Background
- Diamond Group, a Massachusetts-based wholesale perfume distributor (principal in Newton), sued Selective Distribution, a New York-based purchaser/distributor, in Massachusetts Superior Court for unpaid invoices totaling $529,689.70 out of ~$995,692 invoiced over 21 months.
- Selective placed 79 orders by phone, fax, and e-mail to Diamond’s Newton office; Diamond issued invoices from Massachusetts and shipped goods FOB to New York/New Jersey; Selective paid some invoices but left 45 unpaid.
- Selective moved to dismiss under Mass. R. Civ. P. 12(b)(2) for lack of personal jurisdiction (and alternatively forum non conveniens); the Superior Court granted dismissal for lack of jurisdiction.
- On appeal the Massachusetts Supreme Judicial Court accepted the parties’ undisputed factual record and considered whether Massachusetts courts could assert personal jurisdiction under G. L. c. 223A § 3(a) and the Due Process Clause.
- The SJC reversed, holding Selective transacted business in Massachusetts via repeated electronic orders and payments and that exercising jurisdiction satisfied both the long‑arm statute and constitutional minimum‑contacts principles; the court remanded for further proceedings (forum non conveniens left open).
Issues
| Issue | Plaintiff's Argument (Diamond) | Defendant's Argument (Selective) | Held |
|---|---|---|---|
| Personal jurisdiction under G. L. c. 223A § 3(a) ("transacting any business") | Repeated electronic orders into Massachusetts and invoices from MA amount to transacting business; claim arises from those transactions | Selective does no business in MA; deliveries, performance, and receipt occurred in NY/NJ; no physical presence in MA | The court held § 3(a) satisfied — repeated, voluminous, purposeful ordering from MA supplier constitutes transacting business and claim arose from those transactions |
| Due process (minimum contacts / purposeful availment) | Purposeful availment: continuous purchases, electronic communications, and substantial payments into MA establish minimum contacts; jurisdiction is fair | Selective was a passive purchaser with contacts only incidental or unilateral (billing from Diamond); goods never entered MA; asserting jurisdiction would be unfair and burdensome | The court held minimum contacts and purposeful availment satisfied; exercise of jurisdiction comported with fair play and substantial justice |
| Vendor vs. purchaser distinction (policy concern of discouraging out‑of‑state purchasers) | Quantity, duration, and value of transactions distinguish this case from an archetypal passive purchaser; no categorical purchaser/vendor shield | As a purchaser, Selective risks being unfairly hauled into distant courts; policy disfavors imposing jurisdiction on passive purchasers | The court rejected a categorical rule; evaluation is circumstantial — here sustained, repetitive purchases overcame purchaser‑passive purchaser concerns |
| Forum non conveniens (alternative forum: SDNY action) | Not fully briefed on appeal; plaintiff prefers MA forum where it is located | Selective argued related federal litigation in SDNY would be more convenient and resolve issues | Court did not decide on appeal; left forum non conveniens available to the Superior Court on remand (declined to reach due to jurisdictional reversal) |
Key Cases Cited
- Good Hope Indus., Inc. v. Ryder Scott Co., 378 Mass. 1 (liberal construction of § 3(a); plaintiff bears burden to show jurisdiction) (Mass. 1979)
- Tatro v. Manor Care, Inc., 416 Mass. 763 (long‑arm requires transacting business and claim arising from that transaction) (Mass. 1993)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (purposeful availment and minimum contacts analysis under due process) (U.S. 1985)
- International Shoe Co. v. Washington, 326 U.S. 310 (foundational standard: minimum contacts and fair play) (U.S. 1945)
- Carlson Corp. v. University of Vt., 380 Mass. 102 (contract consummation in forum can suffice for jurisdiction) (Mass. 1980)
- Sonesta Intl. Hotels Corp. v. Central Fla. Invs., Inc., 47 Mass. App. Ct. 154 (repeated communications and payments into MA support jurisdiction) (Mass. App. Ct. 1999)
- "Automatic" Sprinkler Corp. of America v. Seneca Foods Corp., 361 Mass. 441 (contrast: isolated purchase insufficient for jurisdiction) (Mass. 1972)