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Berg Corp. v. C. Norris Manufacturing LLC

United States District Court, D. Maryland

November 11, 2019

BERG CORPORATION, Plaintiff,
v.
C. NORRIS MANUFACTURING, LLC, Defendant. C. NORRIS MANUFACTURING, LLC, Third-Party Plaintiff,
v.
POWERPURE, LLC, et al., Third-Party Defendants.

          MEMORANDUM

          JAMES K. BREDAR, CHIEF JUDGE

         This case arises out of a business transaction between the Berg Corporation ("Berg") and C. Norris Manufacturing, LLC ("C. Norris"). Berg, a Maryland demolition contractor, hired C. Norris, an Ohio manufacturer, to substantially modify a piece of heavy equipment. Berg alleges that C. Norris committed negligence in modifying the equipment. (Compl, ECF No. 1-2.) C. Norris has filed a counterclaim against Berg as well as a third-party complaint against several parties that assisted C. Norris in modifying the equipment: PowerPure, LLC ("PowerPure"), P.E. Alliance, IXC ("P.E. Alliance"), and Holmbury, Inc. and Holmbury Group (collectively, "Holmbury").[1] (Counterclaim, ECF No. 12; Third-Party Compl., ECF No. 15.)

         Before the Court are the third-party defendants' motions to dismiss the third-party complaint. Holmbury and PowerPure move to dismiss for lack of personal jurisdiction and for failure to state a claim. (Holmbury Mot. Dismiss, ECF No. 63; PowerPure Mot. Dismiss, ECF No. 90.) P.E. Alliance moves to dismiss for lack of personal jurisdiction and for C. Norris's failure to comply with Maryland's Certificate of Merit statute. (P.E. Alliance Mot. Dismiss, ECF No. 53; P.E. Alliance Supplemental Mot. Dismiss, ECF No. 89.) C. Norris contests each of these motions, but requests that if the Court concludes there is no personal jurisdiction over the third-party defendants, it transfer this entire action to the U.S. District Court for the Northern District of Ohio. (Opp'n Mem. P.E. Alliance Mot. Dismiss at 3, ECF No. 69; Opp'n Mem. Holmbury Mot. Dismiss at 3-4, ECF No. 77; Opp'n Mem. PowerPure Mot. Dismiss at 3, ECF No. 92.)

         For the reasons set forth below, the Court concludes there is no personal jurisdiction over the third-party defendants in the U.S. District Court for the District of Maryland. But in light of C. Norris's request to transfer the entire action, it will not yet act on the third-party defendants' motions. Instead, it will order Berg to respond to C. Norris' request to transfer the entire case to the Northern District of Ohio. If the Court ultimately concludes transfer of the entire action is warranted, it will so transfer; if it concludes transfer of the entire action is not warranted, it will sever the third-party complaint and transfer those claims to the Northern District of Ohio, [2] while continuing to adjudicate the suit between Berg and C. Norris.

         I. Jurisdictional Facts

         Transactions between Berg and C. Norris began in September 2016. At the time, Berg owned a Komatsu PC 800 LC-8 hydraulic excavator ("the Komatsu"). (Compl. ¶ 4.) Berg commissioned C. Norris to modify the Komatsu to include a 140-foot ultra-high demolition boom. (Id. ¶5.) C. Norris agreed, and delivered the refurbished Komatsu to Berg in April 2017. (Id. ¶6.)

         In November 2018, Berg sued C. Norris for negligently converting the Komatsu and causing over a million dollars in damage. (Id. ¶ 9.) In support of the negligence claim, Berg alleges that C. Norris irreparably damaged the Komatsu by installing defective couplers that damaged the hydraulic system and by adding too much counterweight. (Id. ¶ 7.)

         In response, C. Norris filed a counterclaim against Berg alleging breach of contract and unjust enrichment.[3] (Counterclaim, ECF No. 12.) C. Norris also brought a third-party complaint against the three entities that assisted C. Norris in modifying the Komatsu, seeking indemnity and contribution. (Third-Party Compl. ¶¶ 18-45, ECF No. 15.) In the third-party complaint, C. Norris alleges that P.E. Alliance was responsible for the engineering design that allegedly resulted in the additional counterweight (id. ¶¶ 37-45);[4] that PowerPure "selected, recommended, and distributed" the defective couplers (id ¶¶ 18-26); and that Holmbury "designed, engineered, manufactured, constructed, tested, inspected, packaged, labeled, marketed, distributed, sold and/or warranted" the defective couplers (id. ¶¶ 27-36).

         Relevant to personal jurisdiction, C. Norris alleges that its principal place of business is in Ohio. (Id. ¶ 1.) C. Norris alleges that the third-party defendants are also Ohio-based companies and that they regularly conduct business in Maryland, (Id. ¶¶ 3-7.) The third-party defendants deny that they maintain meaningful ties to Maryland; each has submitted an affidavit or declaration stating they do not regularly conduct business in the state and that they performed all work related to the Komatsu project in Ohio.[5] (P.E. Alliance Klusch Aff. ¶¶ 6-12, ECF No. 53-1; Holmbury Mulder Decl. ¶¶ 5-11, ECF No. 63-1; PowerPure Eppler Decl. ¶¶ 6-14, ECF No. 90-4.) C. Norris has produced no corresponding documentation to challenge these contentions.

         II. Personal Jurisdiction Over the Third-Party Defendants

         A. Legal Standard

         A court may exercise personal jurisdiction over a defendant if "(1) an applicable state long-arm statute confers jurisdiction and (2) the assertion of that jurisdiction is consistent with constitutional due process." Nichols v. G.D. Searle & Co., 991 F.2dll95, 1199 (4th Cir. 1993). The Maryland long-arm statute permits the exercise of personal jurisdiction over a defendant who performs one of the statute's enumerated acts. Md. Code Ann., Cts. & Jud. Proc. § 6-103(b).[6] The Maryland Court of Appeals "interprets] the long-arm statute to the limits permitted by the Due Process Clause." Mackey v. Compass Mktg., Inc., 892 A.2d 479, 493 n.6 (Md. 2006).

         To satisfy constitutional due process, a plaintiff must show that a defendant has sufficient minimum contacts with the forum state such that "the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945). In determining whether there are sufficient minimum contacts, a court must consider "(1) the extent to which the defendant purposely availed itself of the privilege of conducting activities in the State; (2) whether the plaintiff['s] claims arise out of those activities directed at the State; and (3) whether the exercise of personal jurisdiction would be constitutionally reasonable." Consulting Eng'rs Corp. v. Geometric Ltd., 561 F.3d 273, 278 (4th Cir. 2009).

         When a court evaluates whether there is personal jurisdiction over a defendant "on the basis only of motion papers, supporting legal memoranda and the relevant allegations of a complaint, the burden on the plaintiff is simply to make a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge." New Wellington Fin. Corp. v. Flagship Resort Dev. Corp., 416 F.3d 290, 294 (4th Cir. 2005). The court must construe the relevant allegations in the light most favorable to the plaintiff and draw "the most favorable inferences for the existence of jurisdiction." Combs v. Bakker,886 F.2d 673, 676 (4th Cir. 1989). In drawing its inferences, the court may look outside the plaintiffs proof, to the ...


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