Pesmel North America, LLC v. Caraustar Industries, Inc.
2010 U.S. Dist. LEXIS 124596
| D. Mass. | 2010Background
- Caraustar Mill Group, Inc. is a Georgia-Ohio corporation; Pesmel North America, LLC is a Massachusetts company and Pesmel OY’s subsidiary.
- Pesmel contracted to sell and install an automated roll handling system at Caraustar’s Austell, GA facility for $1,732,000.
- Caraustar paid 70% (first five payments) and sought to terminate or withhold remaining payments.
- Dispute arose over alleged nonperformance and ongoing spare-parts consignment arrangements.
- Pesmel filed in MA state court; Caraustar removed to federal court and moved to dismiss for lack of jurisdiction or transfer.
- Court must decide personal jurisdiction (general and specific), venue, and potential transfer to GA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has general personal jurisdiction over Caraustar. | Pesmel asserts broad Massachusetts contacts tied to contract. | Caraustar lacks continuous and systematic MA contacts. | No general jurisdiction; MA contacts are not continuous and systematic. |
| Whether the court has specific personal jurisdiction over Caraustar. | Contacts with MA related to contract establish minimum contacts. | Contacts directed to Pesmel OY or not sufficiently connected to MA. | Yes, specific jurisdiction established given relatedness and purposeful availment. |
| Whether Massachusetts is a proper venue. | Venue in MA supported by contract formation and communications. | Venue contested; argues insufficient basis. | Venue proper in Massachusetts. |
| Whether the case should be transferred to the Northern District of Georgia under 28 U.S.C. § 1404(a). | Forum in MA is appropriate; transfer would prejudice Pesmel. | Georgia more convenient for witnesses/equipment; GA governing law disputed. | Transfer denied; plaintiff’s forum weight strong; factors neutral. |
Key Cases Cited
- Astro-Med, Inc. v. Nihon Kohden Am., Inc., 591 F.3d 1 (1st Cir.2009) (long-arm reach and due process balance for jurisdiction)
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts and purposeful availment in contract disputes)
- Sawtelle v. Farrell, 70 F.3d 1381 (1st Cir.1995) (gestalt factors and reasonableness in territorial overreach)
- Pritzker v. Yari, 42 F.3d 53 (1st Cir.1994) (tripartite test for specific jurisdiction; reasonableness)
- EIQnetworks, Inc. v. BHI Advanced Internet Solutions, Inc., 726 F. Supp. 2d 26 (D.Mass.2010) (relatedness through in-state communications and contract negotiations)
- United States v. Swiss Am. Bank, Ltd., 274 F.3d 610 (1st Cir.2001) (agency/notice implications of forum-state correspondence)
- Scuderi Grp., LLC v. LGD Tech., LLC, 575 F. Supp. 2d 312 (D.Mass.2008) (utilizing remote means when viewing equipment may suffice)
- Good Hope Indus., Inc. v. Ryder Scott Co., 389 N.E.2d 76 (Mass. 1979) (expands long-arm reach to contractual contacts)