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HARRY RICH CORP. v. CURTISS-WRIGHT CORP.

September 25, 1969

HARRY RICH CORPORATION, Florida Carpet Corporation, Carpet Service Corporation, Plaintiffs,
v.
CURTISS-WRIGHT CORPORATION, Defendant


Lasker, District Judge.


The opinion of the court was delivered by: LASKER

LASKER, District Judge.

This is a motion under Section 1404(a) of Title 28, U.S.C., for a transfer to the Southern District of Florida. Jurisdiction of this court is predicated on diversity of citizenship. In a complaint filed on March 13, 1964, plaintiffs allege that defendant breached express and implied warranties resulting in alleged damage to the plaintiffs in the sum of $10,300,000.

 The three corporate plaintiffs are Florida corporations and are primarily owned and directed by one Harry Rich. Plaintiff Harry Rich Corporation (hereinafter the "Corporation") is a large retail carpet store located in Miami, selling primarily to residents of Dade County. Plaintiff Florida Carpet Corporation was organized in 1956 to act as a wholesaler of carpets and related products. Plaintiff Carpet Service Corporation is a corporation primarily engaged in the installation of carpeting sold by the other two plaintiffs.

 The three corporations purchased $376,516.04 of Curon from defendant in the period from February 28, 1956 to November 9, 1960. The Curon, a synthetic plastic substance used as carpet underlay or padding, was shipped by Curtiss-Wright to Miami from its plant in Quehanna, Pennsylvania, F.O.B. Quehanna. Plaintiffs allege that the Curon manufactured by Curtiss-Wright was defective, and that in the years after its installation it turned "gummy and crumbly" and damaged both the underside of carpets and the floors to which it was applied. Plaintiffs seek compensation for damages to their business reputations and decreased sales allegedly stemming from their active association with Curon.

 28 U.S.C. § 1404(a), provides:

 
"For 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."

 This section thus raises two basic issues for consideration: first, whether the Southern District of Florida is a district where the action "might have been brought"; and second, whether the convenience of parties and witnesses and the interest of justice would best be served by a transfer.

 I. WHERE THE ACTION MIGHT HAVE BEEN BROUGHT

 The phrase "where it might have been brought" refers to the situation at the time that the suit is brought - in the instant case March 1964. Hoffman v. Blaski, 363 U.S. 335, 80 S. Ct. 1084, 4 L. Ed. 2d 1254 (1960); Twentieth Century-Fox Film Corp. v. Taylor, 239 F. Supp. 913 (S.D.N.Y., 1965). The plaintiff must have had an unqualified right to bring the action in the proposed transferee district independent of the consent of the defendant, and accordingly the court should make an independent appraisal of the issue. Rosen v. Savant Instruments, Inc., 264 F. Supp. 232 (E.D.N.Y., 1967).

 An action "might have been brought" within the meaning of the statute only in a district where (1) venue would have been proper and (2) the defendant would have been amenable to process. Foster-Milburn Co. v. Knight, 181 F.2d 949 (2 Cir., 1950); Jordan v. U.S. Lines, Inc., 291 F. Supp. 600, 601 (S.D.N.Y., 1968). As to the latter criteria, the court in Jaffe v. Dolan, 264 F. Supp. 845, 847 (E.D.N.Y.1967), stated:

 
"In diversity actions, a federal district court can assert personal jurisdiction over a defendant only if the state court, under constitutionally valid state legislation in the state where the federal court sits, could have exercised such jurisdiction. Arrowsmith v. United Press Int'l, 320 F.2d 219, 6 A.L.R.3d 1072 (2d Cir. 1963)."

 Accordingly, we must examine Florida law to determine whether at the time the suit was commenced (March 1964) the defendant would have been amenable to Florida process.

 The relevant Florida statutes are Sections 47.16 and 47.17, Florida Statutes Annotated. Section 47.16 states:

 
"(1) The acceptance by any * * * foreign [corporations] * * * of the privilege extended by law to nonresidents and others to operate, conduct, engage in, or carry on a business or business venture in the state, or to have an office or agency in the state, shall be deemed equivalent to an appointment by such * * * foreign corporations of the secretary of state of the state as the agent of such * * * foreign corporation upon whom may be served all lawful process in any action, suit or proceeding against them, or either of them, arising out of any transaction or operation connected with or incidental to such business or business venture * * *."

 The facts of record clearly demonstrate that Curtiss-Wright was transacting business, or at least carrying on a "business venture" within the meaning of the Florida statute, in connection with its sale of Curon to the three plaintiffs before the court. Curtiss-Wright did more than merely ship Curon to the three plaintiffs. It supplemented these shipments by sending various employees to Florida to conduct promotional activities, including a series of "safaris," i.e., cocktail parties for retail carpet dealers to introduce their new product to them. Curtiss-Wright sent out the invitations to these parties, and their staff members attended them regularly. Defendant further took an active part in the conduct of a newspaper advertisement campaign pushing its product and provided a large quantity of brochures and other promotional material. Apparently much of this was distributed by plaintiff Florida Carpet Corporation, the latter being the exclusive distributor of Curon in the southeastern part of the United States. These activities without question measured up to the "minimum contacts" which the Florida courts have held necessary to subject an out-of-state defendant to the jurisdiction of the Florida courts. See Phillips v. Hooker Chemical Corp., 375 F.2d 189, 192 (5th Cir., 1967). The Florida rule is that the statutory standards for "carrying on a business venture" require a lesser degree of activity than is required for "doing business." State ex rel. Weber v. Register, Fla., 67 So.2d 619 (1963); Lake v. Lucayan Beach Hotel Co., Fla.App., 172 So.2d 260 (1965); Lomas & Nettleton Financial Corp. v. All Coverage Underwriters, Inc., Fla.App., 200 So.2d 564, 565 (1967); Continental Copper & Steel Indus. v. E.C. "Red" Cornelius, Inc., Fla.App., 104 So.2d 40 (1958).

 The court in State ex rel. Weber v. Register, supra, stated 67 So.2d at 620:

 
"There is a vast difference between the words 'a business' and the words 'business venture' as used in Section 47.16, supra. One may engage in a 'business venture' without operating, conducting, engaging in or carrying on 'a business.'"

 While we believe that the promotional activities of defendant constituted "doing business" within the State of Florida, they unquestionably constituted a "business venture" within that state. It goes without saying that the cause of action presently before the court arose out of the transactions of which defendant's activities in Florida were an integral part. See H. Bell & Assoc. Inc. v. Keasbey & Mattison Co., Fla.App., 140 So.2d 125 (1962). The fact that defendant's activities in Florida ceased prior to March of 1964 should not alter its ...


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