COMPAGNIE DES BAUXITES DE GUINEA v. INSURANCE COMPANY OF NORTH AMERICA, et al.
No. 80-2416.
United States Court of Appeals, Third Circuit.
Argued April 21, 1981. Decided June 10, 1981. As Amended June 16, 1981. Rehearing and Rehearing In Banc Denied July 7, 1981.
651 F.2d 877
ALDISERT, Circuit Judge.
IV.
In consideration of this matter, we believe it is important to note what is really at issue. The EPA‘s attorney candidly admitted at argument that even if this court were to approve the Administrator‘s action in disapproving the DCO, it was not seeking to close Bethlehem‘s steel mill. We are not, therefore, dealing with a situation where the administrative agency to which Congress has delegated authority in this area believes that the emissions in question are so dangerous to the health and safety of the persons affected that immediate action is necessary to stop the emissions. If the DCO disapproval is upheld, the agency will be in a position to proceed with an enforcement action which would subject Bethlehem to fines which could be assessed up to $25,000 a day depending on the seriousness of the violations for each day for which it is found to have been in violation.
Underlying the EPA‘s various technical objections to the DCO which we have discussed, we discern two principal threads in its position. First, the EPA views a delayed compliance order for new means technology to be an exception to the general mandate of the Clean Air Act which must be narrowly construed. Second, it asserts that it has made a reasonable decision in an area delegated to its expertise, and we are therefore obliged to sustain its action. We believe neither of these contentions is persuasive. Congress has not indicated that a new means exception should be narrowly construed. In this case, for example, there was no technology which Bethlehem believed to be available to cure the serious problem of fugitive emissions from cast houses, and it proceeded upon a program of experimentation to develop technology designed to solve this particular problem. This is precisely the type of situation which appears to merit treatment as a new means. Secondly, the statute specifies the prerequisites for a new means DCO. We do not believe the EPA has the discretion to add to or alter those prerequisites, or to construe them in a manner which would frustrate congressional intentions.
In summary, we conclude that the bases used by the EPA to disapprove the DCO were in some instances based on an erroneous interpretation of the statute and in other instances were arbitrary and capricious. Therefore, we will grant Bethlehem‘s petition for review, and remand this matter to the EPA for further proceedings in conformance with this opinion.
Cloyd R. Mellott, Dale Hershey (Argued), Robert W. Doty, Jordan S. Weltman, Eckert, Seamans, Cherin & Mellott, Pittsburgh, counsel for appellee, Compagnie des Bauxites de Guinee.
Before SEITZ, Chief Judge, and ALDISERT and GIBBONS, Circuit Judges.
OPINION OF THE COURT
ALDISERT, Circuit Judge.
The question presented for review is whether the district court erred in enjoining the defendants from pursuing an action in England‘s High Court of Justice, Queens Bench Division, which sought to rescind excess insurance contracts covering business interruptions of a Delaware corporation doing business in an African country. A threshold inquiry requires us to decide if the district court had jurisdiction over the defendants. We conclude that the court properly exercised personal jurisdiction over eighteen of twenty-one insurance companies and reverse the grant of the injunction.
I.
This is an unfortunate case filed in the district court in 1975 which still admits of no resolution on the merits but bears the scars of over five years of pre-trial skirmishing.1 The appellee, Compagnie des
Acting as an agent for CBG, Halco obtained insurance coverage through the Pittsburgh office of Marsh & McLennan, an insurance brokerage firm. The coverage insured against losses up to $20,000,000 from business interruptions caused by breakdowns at CBG‘s processing plant in Guinea. The Insurance Company of North America, not a party to this appeal, insured the first $10,000,000 of loss; the appellants, a group of twenty-one foreign insurance companies, provided excess coverage of $10,000,000 on contracts issued through a London broker.
As is customary in London, the lead underwriter circulated a “placing slip” among representatives of interested insurance companies indicating the risks to be covered and the total coverage requested. The representatives then initialed the placing slip, indicating the percentage of risk their companies were willing to assume. After the coverage was fully subscribed the London broker prepared a “cover note” listing briefly the details of the risk and the premium. An actual policy is seldom issued at this stage and none was issued here. Instead, the excess insurers adopted the form of the INA policy “as far as applicable.” App. at 136a.
Because of damage to its bauxite crushing plant, CBG presented a claim on its insurance coverage and the insurers refused to pay. CBG filed a complaint in December, 1975, in the Western District of Pennsylvania against all the insurance companies, asserting jurisdiction based on diversity of citizenship.
II.
A district court must have personal jurisdiction over a party before it can enjoin its actions. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 112, 89 S.Ct. 1562, 1570, 23 L.Ed.2d 129 (1969). The lack of jurisdiction is the initial question raised by the excess insurers.2 The district court found personal jurisdiction under two independent theories. First, it held that the appellants’ activities placed them within reach of the Pennsylvania long-arm statute.
A defendant‘s challenge to the court‘s in personam jurisdiction imposes on the plaintiff the burden of “com[ing] forward with facts, by affidavit or otherwise, in support of personal jurisdiction.” DiCesare-Engler Productions, Inc. v. Mainman Ltd., 81 F.R.D. 703, 705 (W.D.Pa.1979); see
The long-arm statute sets forth two independent tests for the assertion of in personam jurisdiction over foreign corporations. A court may exercise jurisdiction over a foreign corporation found to be doing business in Pennsylvania as the statute defines doing business. Alternatively, the assertion of jurisdiction over a foreign corporation is permitted so long as that assertion does not contravene the due process clause prohibition against assertions of jurisdiction that “offend ‘traditional notions of fair play and substantial justice.‘” International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 158, 90 L.Ed. 95 (1945) (quoting Milliken v. Meyer, 311 U.S. 457, 463, 61 S.Ct. 339, 342, 85 L.Ed. 278 (1940)); see generally World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980). Only minimal contacts with the forum state are required to satisfy due process. See McGee v. International Life Insurance Co., 355 U.S. 220, 222-23, 78 S.Ct. 199, 200-201, 2 L.Ed.2d 223 (1957); Aldens, Inc. v. Packel, 524 F.2d 38, 42-44 (3d Cir. 1975), cert. denied, 425 U.S. 943, 96 S.Ct. 1684, 48 L.Ed.2d 187 (1976).
III.
CBG sought by means of discovery to obtain evidence to meet its burden of proving either that the insurers were doing business in Pennsylvania or that there were sufficient contacts to satisfy due process. On August 9, 1976, it began what was to become a three-year discovery odyssey by serving a request on each defendant for copies of all business interruption insurance policies issued between January 1, 1972 and December 31, 1975, as well as all documents related in any way to the claim being made here. App. at 66a-69a. The carriers objected to the discovery request on January 24, 1977, claiming that compliance “would be extremely expensive and burdensome.” Id. at 72a. CBG responded on May 12, 1977, by filing a motion to compel production. Id. at 74a. Over a year passed before the district court ruled on CBG‘s motion and ordered the excess insurers to produce the relevant documents. Id. at 515a-16a. During the interim, the insurance companies pressed their claim that the court did not have personal jurisdiction but did not relate that claim to the discovery order.
On May 20, 1977, seventeen of the twenty-one excess insurers filed a motion for summary judgment, contending that the complaint should be dismissed because the district court lacked personal jurisdiction over them. Id. at 78a-86a. According to the allegations of the motion and the supporting affidavits, none of these insurance companies was organized, licensed, or authorized to do business under the laws of Pennsylvania.3 The excess insurers therefore concluded that the exercise of personal jurisdiction over them would constitute “a clear-cut violation of due process.” Id. at 81a.
In an affidavit opposing the motion for summary judgment, CBG claimed that between 1971 and 1975, various excess insurers had participated in at least ten insurance contracts connected with CBG‘s operations in Guinea wherein the insurers agreed to be subject to suit in the United States. Id. at 172a-73a. A second affidavit contains a more general list of the contracts involving CBG and each of the excess insurance companies in which the Pittsburgh office of Marsh & McLennan acted as CBG‘s agent. Id. at 177a.
On July 27, 1978, the district court attempted to resolve the motions for production of documents by ordering the insurance companies to “furnish the names of the policies and the numbers and sort of a general outline of the policies, not in detail, of all the [Pennsylvania related] policies they [had] written from 1971 to date.” Id. at 516a; see
The insurers never questioned the district court‘s power to order production of their records. They recognized that the court had jurisdiction to determine whether it could properly exercise personal jurisdiction over them and therefore that it could compel discovery to aid in the resolution of that issue. See English v. 21st Phoenix Corp., 590 F.2d 723, 728 n.5 (8th Cir.), cert. denied, 444 U.S. 832, 100 S.Ct. 61, 62 L.Ed.2d 41 (1979); In Re Uranium Antitrust Litigation, 480 F.Supp. 1138, 1151 (N.D.Ill.1979).
By October 25, 1978, the insurance companies were in violation of the order and asked for an additional thirty days to comply, representing to the court that “[c]ounsel has sought to secure the information necessary to answer plaintiff‘s interrogatories and will probably be able to complete the answers within thirty days from this date.”4 App. at 309a. (emphasis added). The court again granted their request. Although the excess insurers still had not produced any of the requested documents, the district court granted a final extension on December 21, 1978, giving the carriers until February 21, 1979, to comply with the discovery order. When granting the extension, the court warned the excess insurers that failure to produce the requested documents within this additional sixty days would result in the imposition of a sanction under
At the close of the sixty day period, the excess insurers had produced only a few of the documents requested. The record indicates that no request that the English brokers forward the relevant policies was made until January 1979. Id. at 337a. This modest attempt to comply with the court order was not begun until long after the ninety day period the excess insurers requested in July 1978, and at least two months after their counsel represented to the court in Pittsburgh that the material would be forthcoming within thirty days. These facts make it difficult to conclude that the excess carriers made a good faith effort to comply with the court‘s orders of July 27, 1978 and November 8, 1978. It is one thing not to produce discovery material on time;
On April 19, 1979, the district court “impose[d] a sanction consisting of a finding that the Excess Insurers are subject to the in personam jurisdiction of this Court because of their business contacts in Pennsylvania.” Id. at 667a; see
One month earlier, the excess insurers had filed suit in the High Court of Justice in London seeking to rescind the underlying insurance contract with CBG, contending that CBG had misrepresented material facts concerning the subject matter of the coverage. CBG then moved that the district court enjoin the insurers from pursuing the English action, claiming that it involved the same issues as the present case and was filed merely to harass CBG. App. at 342a-45a. Concluding that the English suit was duplicative, the district court granted CBG‘s motion for a preliminary injunction, App. at 674a, and on August 5, 1980, permanently enjoined the insurers from pursuing the English action during the pendency of the present case. Id. at 476a-77a.
IV.
The insurers attempt to justify their failure to produce the requested documents, arguing that they complied with the discovery order of the district court by offering to make the documents available for inspection by CBG at their home offices in London and Brussels. We are not persuaded by this argument.
As a general principle, a trial court has discretion to order one party to produce its records for another party during discovery.
Moreover, the excess insurers’ offer to permit home office inspection was made quite late in the proceedings. They did not make the offer of home office inspection when they replied to the original request for the documents that was made on August 9, 1976, or during the July 27, 1978 hearing at which they requested an additional ninety days to comply, or when they asked for a thirty day extension on October
Thus, in our view this is not the garden variety geographic conflict about whether the mountain should come to Mahomet or vice versa.6 Rather, we perceive the appellants’ offer to provide home office inspection as a defense strategy that simply comes too late in these unduly protracted pre-trial proceedings to be of major significance in reviewing the imposition of sanctions by the district court.
V.
We will reverse a sanction imposed pursuant to
The Federal Rules of Civil Procedure offer some guidance regarding the limits on the district court‘s power to impose sanctions. Rule 37(b) specifies two limitations. It states that the district court “may make such orders in regard to the failure [to obey an order compelling discovery] as are just,” and it lists specific sanctions that, “among others,” are contemplated by the rule. The order before us here easily satisfies both limits of discretion specified by the rule. Case law instructs that the district court‘s decision must be rationally related to the reasons given and the requirements of the rule. National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. at 642, 96 S.Ct. at 2780. We are aided here by the trial court‘s explanation of the factors that led to its decision.8 An appellate court is not free to
On the record before us, we are persuaded that the trial court did not exceed appropriate limits of its authority. The excess insurers negligently or deliberately flouted the district court‘s order compelling discovery. For over six months after the order was first issued, the insurers represented to the court that they were attempting to comply with the order. But the insurers did not even attempt to implement the court‘s order until January 1979, several weeks after being warned that failure to comply would force the court to impose sanctions. The English brokers were given less than a month to gather the documents, and later indicated that given sufficient time they could have complied with the discovery order. App. at 1303a, 1308a-10a, 1330a. In addition, the insurers produced none of their own records consisting of indexes and placing slips. The district court imposed the sanction in response to the excess insurers’ dilatory conduct in dealing with the court throughout the discovery proceedings. See National Hockey League v. Metropolitan Hockey Club, Inc., 427 U.S. at 640, 643, 96 S.Ct. at 2779-2781; Mangano v. American Radiator & Standard Sanitary Corp., 438 F.2d 1187 (3d Cir. 1971) (per curiam).
The excess insurers argue, however, that the district court could only enter the sanction of denying the motion to dismiss for lack of jurisdiction, but could not “[take] as established for the purposes of the action” that appellants had sufficient contacts with the forum state to justify its exercise of in personam jurisdiction. We reject this argument. The purpose and scope of the ordered discovery were directly related to the issue of jurisdiction and the rule 37 sanction was tailored to establish as admitted those jurisdictional facts that, because of the insurers’ failure to comply with discovery orders, CBG was unable to adduce through discovery. This was an appropriate exercise of the district court‘s discretion. See English v. 21st Phoenix Corp., 590 F.2d 723, 728 (8th Cir.), cert. denied, 444 U.S. 832, 100 S.Ct. 61, 62 L.Ed.2d 41 (1979).
We recognize that in Familia de Boom v. Arosa Mercantil, S. A., 629 F.2d 1134 (5th Cir. 1980), cert. denied, 451 U.S. 1008, 101 S.Ct. 2345, 68 L.Ed.2d 861 (1981), the Fifth Circuit‘s position appears to be to the contrary, but we find ourselves in disagreement with that case. As long as discovery orders are permissible in aid of the jurisdictional determination, we think it fairly follows that a district court may respond to noncompliance by the party resisting a finding of jurisdiction with an appropriate
Having concluded that the court did not abuse its discretion under the rule, the only remaining limitation on imposition of sanctions is the due process clause of the Constitution. The sanction did not violate the fifth amendment due process rights of the excess insurers. As this court has observed, “[o]nly where the sanction invoked is more stern than reasonably necessary does a denial of due process result.” DiGregorio v. First Rediscount Corp., 506 F.2d at 789; see generally Societe Internationale v. Rogers, 357 U.S. 197, 209-11, 78 S.Ct. 1087, 1094-1095, 2 L.Ed.2d 1255 (1958). Here, the sanction was carefully tailored to fit the situation; only the facts necessary to establish the minimum contacts needed to justify personal jurisdiction in this action were taken as established pursuant to the sanction.
Accordingly, we will not disturb the discretion exercised by the district court in determining that the excess insurers were subject to the personal jurisdiction of the court because their business contacts in Pennsylvania were deemed established as a sanction for failure to make discovery.9
VI.
Three of the excess insurers, Chiyoda Fire & Marine Insurance Co., Ltd., Vesta (UK) Ltd., and L‘Union Atlantique S. A. D‘Assurances, Brussels, complied with the discovery order by filing affidavits stating that they had issued no policies covering risks located in Pennsylvania or associated with either CBG or the Pittsburgh office of Marsh & McLennan. App. at 236a, 493a, 323a. The sanction imposed by the district court because of the other insurers’ failure to produce the requested documents should not apply to these three companies. In addition, their contacts with Pennsylvania are simply inadequate to justify the exercise of personal jurisdiction pursuant to the Pennsylvania long-arm statute. The record discloses no evidence that these companies deliberately availed themselves of the privilege of doing business within the state, or indeed that they had any contacts that would justify a reasonable expectation of being haled into court there. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297, 100 S.Ct. 559, 567, 62 L.Ed.2d 490 (1980).
We therefore will reverse the district court‘s determination that it had personal jurisdiction over Chiyoda Fire & Marine Insurance Co., Ltd., Vesta (UK) Ltd., and L‘Union Atlantique S. A. D‘Assurances, Brussels and direct dismissal of the complaint with respect to them.
We now turn to the order enjoining the excess insurers from maintaining the action commenced by them in London. The general principle established “[e]arly in our history,” is that one court will not interfere with or try to restrain proceedings in another in an ordinary action in personam. Donovan v. City of Dallas, 377 U.S. 408, 412, 84 S.Ct. 1579, 1582, 12 L.Ed.2d 409 (1964).10 “[W]here the judgment sought is strictly in personam, both the state court and the federal court, having concurrent jurisdiction, may proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other.” Princess Lida v. Thompson, 305 U.S. 456, 466, 59 S.Ct. 275, 280, 83 L.Ed. 285 (1939). This principle has often been applied in cases similar to the present case where one of the actions is in a foreign jurisdiction. See Canadian Filters (Harwich) Ltd. v. Lear-Siegler, Inc., 412 F.2d 577 (1st Cir. 1969).
In Donovan, the Supreme Court applied this general principle notwithstanding the lower court finding that the second action was harassing and vexatious. See 377 U.S. at 415, 84 S.Ct. at 1583, 1584 (Harlan, J. dissenting). Thus, the district court‘s finding that the action instituted in the English courts was duplicative, and therefore harassing and vexatious, does not affect our decision. Likewise, there is no difference between addressing an injunction to the parties and addressing it to the foreign court itself. Peck v. Jenness, 48 U.S. (7 How.) 612, 625, 12 L.Ed. 841 (1849); see also O‘Hare International Bank v. Lambert, 459 F.2d 328, 331 (10th Cir. 1972). Enjoining the parties necessarily affects the court and compromises “the comity which the federal courts owe to courts of other jurisdictions.” Canadian Filters (Harwich) Limited v. Lear-Siegler, Inc., 412 F.2d at 578.
We do not determine that the district court lacks the power to enjoin parties from pursuing an action in another jurisdiction in every case. It is sufficient here to hold that the district court abused its discretion when it enjoined an action seeking a declaratory judgment in the courts of another sovereign. In the present case, duplication of issues and the insurers’ delay in filing the London action were the sole bases for the district court‘s injunction, and we hold that these factors alone did not justify the breach of comity among the courts of separate sovereignties.
Accordingly, we will reverse the order granting a permanent injunction restraining the insurers from further prosecution of the suit instituted by them in England in the High Court of Justice, Queen‘s Bench Division.
VIII.
Finally we address the order denying appellants’ motion to dismiss on the basis of forum non conveniens. “[D]enial of a motion to dismiss, even when the motion is based on jurisdictional grounds, is not immediately reviewable.” Catlin v. United States, 324 U.S. 229, 236, 65 S.Ct. 631, 635, 89 L.Ed. 911 (1945). See Fleming v. Berardi, 441 F.2d 732 (3d Cir. 1971); Commonwealth v. Brown, 373 F.2d 771, 776 (3d Cir. 1967). Agreeing with Judge Maris,
IX.
For the reasons heretofore set forth, we will reverse the judgment of the district court issuing the injunction on August 5, 1980, and remand the cause for further proceedings in accordance with the foregoing.
GIBBONS, Circuit Judge, dissenting in part:
My difference with the majority is narrow. I join in part VI of the opinion of the court holding that there is no personal jurisdiction over Chioyoda Fire & Marine Insurance Co., Ltd., Vesta (UK) Ltd., and L‘Union Atlantique S.A. D‘Assurances, Brussels. I also join in part VII, reversing the injunction against prosecution of the suit instituted by the excess insurers in the High Court of Justice, Queens Bench Division.
Moreover, I agree that under the controlling case law in this circuit a denial of a motion to dismiss on forum non conveniens grounds is not ordinarily immediately reviewable. I disagree with the conclusion in Part VII of the opinion of the court that that rule is controlling here, however, for several reasons. First, it seems clear that the forum non conveniens contention bears directly upon the propriety of the issuance of an injunction against prosecution of a parallel suit in London, and thus may properly be considered in connection with the disposition of the appeal from that injunction. We review the court‘s decision to exercise in personam jurisdiction by virtue of
In Parts IV and V, the opinion of the court takes as established the jurisdictional facts supporting in personam jurisdiction, by virtue of a sanction imposed under
More significantly, the majority maintains the sanction was not an abuse of discretion because it “was carefully tailored to fit the situation; only the facts necessary to establish the minimum contacts needed to justify personal jurisdiction in this action were taken as established pursuant to the sanction.” At 886. See also, at 885. But the majority errs in characterizing the district court‘s exercise of personal jurisdiction as an example of minimum contacts, or specific, jurisdiction. The majority has “confounded specific jurisdiction to adjudicate claims linked to activities occurring or having an impact in the forum state, and general, ‘all purpose’ adjudicatory authority to hear and decide claims totally unconnected with the forum.” Donahue v. Far Eastern Air Transport Corp., 652 F.2d 1032 at 1034 (D.C.Cir. 1981). The district court exercised not specific, but general jurisdiction over the excess insurers. See App. 666-68. Specific and general jurisdiction analyses are quite distinct. See generally Von Mehren & Trautman, Jurisdiction to Adjudicate: A Suggested Analysis, 79 Harv.L.Rev. 1121 (1966). The former inquires into minimum contacts; the latter mandates not minimal, but continuous and substantial forum affiliation.
As the Supreme Court enunciated in International Shoe Co. v. Washington, 326 U.S. 310, 316-19, 66 S.Ct. 154, 158-159, 90 L.Ed. 95 (1945), minimum contacts analysis applies to the “single or occasional acts” of a nonresident defendant within a state when the suit concerns those acts, but not when the suit concerns matters unrelated to the forum activities. Moreover, the Supreme Court has repeatedly emphasized that in order to sustain assertion of specific jurisdiction, the plaintiff must show that the nonresident defendant‘s single or occasional acts within the forum state which gave rise to the claim manifest defendant‘s “purposefully availing itself of the privilege of conducting activities within the forum state.” World-Wide Volkswagen v. Woodson, 444 U.S. 286, 100 S.Ct. 559, 62 L.Ed.2d 490 (1980); Shaffer v. Heitner, 433 U.S. 286, 97 S.Ct. 2569, 53 L.Ed.2d 683 (1977); Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239, 2 L.Ed.2d 1283 (1958). Plaintiff‘s unilateral act within the forum state is insufficient to confer personal jurisdiction over the nonresident defendant. Similarly, defendant‘s fleeting or fortuitous forum connection lacks the requisite element of intentional invocation of the forum‘s benefits. Examination of the relevant transactions in this case reveals that the only contact the excess insurers had with Pennsylvania concerning this claim is too attenuated to meet the requirements of Hanson v. Denckla and its progeny. That contact amounts to a phone call placed by CBG‘s parent corporation‘s broker from Pittsburgh to Bland, Welsch in London requesting the London firm to secure agreements with foreign insurers in London to cover an African risk.
As a general rule, mere placing of a phone call by defendant into the forum state does not constitute “purposeful availing.” See, e. g., Covington Industries Inc. v. Resintex, Inc., 629 F.2d 730 (2d Cir. 1980) (defendant‘s telexes to Georgia from Switzerland concerning delivery of goods to Haiti do not constitute “transacting business” under the liberally interpreted Georgia long-arm statute); Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion de Costa Rica, 614 F.2d 1247 (9th Cir. 1980) (use of the telephone does not constitute purposeful activity under the fourteenth amendment due process clause); Aaron Ferer & Sons Co. v. Diversified Metals Corp., 564 F.2d 1211 (8th Cir. 1977) (defendant‘s phone call
Hence, given the undisputed facts bearing on specific jurisdiction, assertion of such jurisdiction based on the excess insurers’ alleged minimum contacts with Pennsylvania would have been inappropriate. International Shoe, however, delineated another category in which assertion of personal jurisdiction over a nonresident defendant may be permissible. This is the general, or “all purpose” jurisdiction classification. It applies to claims unrelated to the forum, when the nonresident‘s contacts are “continuous” and “substantial.”
While it has been held . . . that continuous activity of some sorts within a state is not enough to support the demand that the corporation be amenable to suits unrelated to that activity . . . there have been instances in which the continuous corporate operations within a state were thought so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.
326 U.S. at 318, 66 S.Ct. at 159 (citations omitted).1 Bork v. Mills, 458 Pa. 228, 231-32, 329 A.2d 247, 249 (1974); Whalen v. Walt Disney World, 274 Pa. Super. 246, 250, 418 A.2d 389, 391-92 (1980). See also Restatement Second of Conflicts of Laws § 47(2).
In order to maintain personal jurisdiction over the excess insurers, then, CBG must show that all the foreign excess insurers engaged in continuous and substantial business in Pennsylvania. In imposing personal jurisdiction by Rule 37 sanction, the district court therefore took as established not isolated contacts supporting the exercise of specific jurisdiction, but major “continuous corporate operations” in Pennsylvania by each excess insurer. By their nature, the facts requisite to asserting general jurisdiction cannot be “carefully tailored“; they must be extensive and pervasive.2 The
I do not advance the proposition that a Rule 37 sanction may never be employed to facilitate discovery of facts bearing upon the exercise of personal jurisdiction. Nonetheless, the imposition of burdens of production in a distant place is one of the core elements of unfairness which the due process cases from International Shoe Co. v. Washington, through World-Wide Volkswagen Corp. v. Woodson, address. It is small comfort to a defendant objecting to the imposition of that burden that it is being imposed only for the purpose of determining whether or not the court has authority to impose it. A proper accommodation between plaintiff‘s interest in a choice of a forum and defendants’ due process protection against imposition of unfair burdens of production, it seems to me, requires that once a foreign defendant makes a prima facie showing both of absence of minimum contacts relating to the claim, and of absence of continuous and substantial forum presence, the plaintiff should have to do the initial traveling. Cf. River Plate Corp. v. Forestal Land, Timber & Ry. Corp., 185 F.Supp. 832 (S.D.N.Y.1960) (court‘s power to order compliance with discovery requests when it is unclear that the court has jurisdictional power over the defendant must be carefully circumscribed). Thus I would hold that the trial court abused its discretion in imposing the sanction of finding the jurisdictional facts against the defendant, at least until the court first ordered inspection of the relevant documents by the plaintiff at defendants’ home base.
Familia De Boom v. Arosa Mercantil, S. A., 629 F.2d 1134 (5th Cir. 1980), cert. denied, 451 U.S. 1008, 101 S.Ct. 2345, 68 L.Ed.2d 861 (1981), may possibly be read as prohibiting use of a Rule 37 sanction until such time as the plaintiff has fully met its burden of establishing personal jurisdiction. Were it so intended, I would not follow it that far. Defendant‘s refusal to permit inspection of documents at its home base at
I would hold, therefore, that the trial court abused its discretion in imposing the Rule 37 sanction of finding the jurisdictional facts against those defendants left in the case. On the record, aside from the Rule 37 order, defendants maintain insufficient Pennsylvania connections to sustain either specific or general jurisdiction over them. I would reverse with a direction to grant their motion to dismiss.
RUGGERO J. ALDISERT
UNITED STATES CIRCUIT JUDGE