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Olvera-Morales v. International Labor Management Corp.

April 10, 2006

MARCELA OLVERA-MORALES, ON BEHALF OF HERSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
INTERNATIONAL LABOR MANAGEMENT CORPORATION, INC.; NORTH CAROLINA GROWERS' ASSOCIATION, INC.; AND DEL-AL ASSOCIATES, INC., DEFENDANT.



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief Judge

MEMORANDUM-DECISION AND ORDER

BACKGROUND

By Memorandum-Decision and Order dated June 16, 2005 (Dkt. No. 92), this Court granted the motion of defendants International Labor Management Corporation, Inc. ("ILMC") and North Carolina Growers' Association, Inc. ("NCGA") (Dkt. No. 70), joined by defendant Del-Al Associates, Inc. ("Del-Al") (Dkt. No. 71), to transfer this action to the Middle District of North Carolina pursuant to 28 U.S.C. § 1404(a). Thereafter, plaintiff moved (Dkt. No. 95) for reconsideration of the June 16, 2005 Memorandum-Decision and Order, arguing for the first time that the Court must specifically address the issue of North Carolina's right to assert personal jurisdiction over Del-Al. In its Memorandum-Decision and Order dated November 17, 2005 (Dkt. No. 104), this Court afforded the parties an opportunity to conduct jurisdictional discovery regarding Del-Al and, thereafter, to submit further papers on the motion for reconsideration.

RECONSIDERATION

A court may grant reconsideration of a judgment or interlocutory order to afford such relief as justice requires, based on an intervening change in controlling law, the availability of previously unavailable evidence, or the need to correct a clear error of law or prevent manifest injustice. See Doe v. N.Y. City Dep't of Soc. Services, 709 F.2d 782, 789 (2d Cir. 1983); 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 4478, at 790 (1981).Local Rule 7.1 (g) implements this power.

Here, after jurisdictional discovery pursuant to the November 17, 2005 Memorandum-Decision and Order, the parties have submitted substantial material evidence on the issue of whether plaintiff could have obtained personal jurisdiction over Del-Al in North Carolina when the action commenced. Based on this evidence and under all of the circumstances, the Court finds that justice requires it to reconsider the question of transfer to the Middle District of North Carolina, limited to the issue of whether the action could have been brought there initially. As will be discussed below, upon reconsideration in light of the newly submitted evidence, the Court finds that personal jurisdiction could have been obtained over Del-Al in North Carolina in the first instance. Thus, the action could have been brought in North Carolina initially, and transfer is in all respects proper.

PERSONAL JURISDICTION OVER DEL-AL

Del-Al is not a resident of North Carolina; thus, the North Carolina long-arm statute must be invoked to assert personal jurisdiction over Del-Al. The relevant statute, according to both plaintiff and defendants, provides that a court may invoke jurisdiction over a defendant who "is engaged in substantial activity within this State, whether such activity is wholly interstate, intrastate, or otherwise." N.C. Gen. Stat. § 1-75.4(1)(d). The North Carolina Supreme Court has held that this statute extends jurisdiction to the limit permissible under due process. Dillon v. Numismatic Funding Corp., 231 S.E.2d 629, 630 (N.C. 1977) ("By the enactment of G.S. § 1-75.4(1)(d), it is apparent that the General Assembly intended to make available to the North Carolina courts the full jurisdictional powers permissible under federal due process."). Neither party disputes the applicability of this statute to Del-Al. This statute effectively collapses the personal jurisdiction inquiry to the question of whether an assertion of personal jurisdiction over Del-Al in North Carolina would comport with due process.

Due process is satisfied, and an assertion of personal jurisdiction via a long-arm statute is valid, if the defendant has sufficient minimum contacts with the forum state such that allowing the suit does not offend traditional notions of fair play and substantial justice. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). There are two types of personal jurisdiction, specific and general, each with a minimum contacts standard. The stricter test, requiring systematic and continuous contacts, applies to exercises of general jurisdiction, which is invoked when the claim is unrelated to the defendant's contacts with the forum state. Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 414--16 & n.9 (1984). Specific jurisdiction is properly exercised where the defendant "purposefully directed" activities at forum residents and the cause of action results from alleged injuries that relate to or arise out of the defendant's contacts with the forum. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citations omitted).

1. General Jurisdiction

Courts consider the totality of the circumstancesin analyzing whether a defendant has sufficient continuous and systematic contacts with a forum state: no individual factor is determinative. Stetser v. TAP Pharm. Products, Inc., 591 S.E.2d 572, 576 (N.C. App. 2004) (citations omitted). The time frame for assessing a defendant's contacts is a reasonable period prior to the filing of the complaint. Metropolitan Life Ins. Co. v. Robertson-Ceco Corp., 84 F.3d 560, 569 (2d Cir. 1996) (stating the determination of a reasonable period "should be left to the court's discretion"). The inquiry is inherently fact specific and must be tailored to the facts of each case. Id. at 570.

Two leading Supreme Court cases provide guidance as to what constitutes systematic and continuous business operations. In Perkins v. Benguet Consol. Mining Co., 342 U.S. 437 (1952), the Court found systematic and continuous contacts because the general manager and president of the company moved his office to the forum state and maintained records, held directors' meetings, and supervised the company's activities in the forum state. Perkins, 342 U.S. at 448. In contrast, in Helicopteros,the Court held that the defendant's general business contacts did not meet the standard although the defendant had purchased equipment in the forum state, sent personnel to the forum state for training, and sent a corporate officer to the forum for contract negotiations. 466 U.S. at 416. The defendant had never performed operations or solicited business within the state or sold any product that reached the forum state. Id. at 411.

A North Carolina court found sufficient systematic and continuous contacts where the defendant maintained a business relationship, including placing phone calls, with a North Carolina entity for several years, sent direct mail to at least fifty North Carolina residents, and advertised in journals circulated in North Carolina. Replacements, Ltd. v. MidweSterling, 515 S.E.2d 46, 51 (N.C. App. 1999). In another case, sufficient contacts were found where the defendant actively solicited North Carolina residents over twenty-one months, made sales to North Carolina citizens with a combined value of over $50,000, and visited North Carolina once.

Dillon, 231 S.E.2d at 632. Conversely, examples of cases in which contacts were found to be insufficient include Ash v. Burnham Corp., 343 S.E.2d 2, 3--4 (N.C. App. 1986) (holding manufacturer's use of independent contractors to solicit business, advertisement in magazines that reached North Carolina, and sales to North Carolina customers averaging 0.5% of total sales insufficient to constitute "continuous and systematic contacts") and Diamond Healthcare of Ohio, Inc. v. Humility of Mary Health Partners, 229 F.3d 448, 450--51 (4th Cir. 2000) ...


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