Diving Services, Inc. v. BTM Machinery, Inc.

          MEMORANDUM AND ORDER

          William E. Smith Chief Judge

         Diving Services, Inc. (“Diving Services”) entered into a contract with BTM Machinery, Inc. (“BTM”) and has brought suit against BTM (as well as BTM's business partner, Crane U, Inc.) for several causes of action related to that contractual relationship. (Complaint, ECF No. 1.) BTM has moved to dismiss the lawsuit. (Def.'s Mot. to Dismiss, ECF No. 11.) For the reasons set forth below, the Motion to Dismiss is DENIED, and the case is transferred to the United States District Court for the District of South Carolina.

         I. Facts of the Case

         BTM is a South Carolina company that provides large machinery and related services to the global construction industry. Diving Services is a Rhode Island company that entered into a contract with BTM for the purchase of a construction crane. (See Pl.'s Opp'n Mem. Ex. A, ECF No. 12-1.). Under the terms of the contract, BTM agreed to make various repairs to the crane in exchange for Diving Services' payment of a $5, 000 deposit. (Id.) Diving Services would then “inspect[]” those repairs and pay the remaining $80, 000 balance before taking possession of the crane. (Id.) While neither party has offered evidence regarding the inspection process, both parties agree that Diving Services paid for, and took possession of the crane in South Carolina before transporting the crane to Pennsylvania. (Complaint ¶ 24, ECF No. 1; Pl.'s Opp'n. Mem. 3, ECF No. 12; Def.'s Reply 5, ECF No. 13.) Diving Services now alleges that the crane provided by BTM was not operational and has brought suit for various claims related to that transaction.

         BTM has moved to dismiss Diving Services' claim based on three grounds. First, BTM argues that this Court lacks personal jurisdiction over BTM because BTM “has almost no purposeful contacts with [Rhode Island].” (Def.'s Mot. to Dismiss 2, ECF No. 11-1.) Second, BTM argues that the contract between BTM and Diving Services has a valid forum selection clause that requires this claim to be litigated in South Carolina. (Id.) Third, BTM argues that Rhode Island is not the proper venue because “the alleged events giving rise to Diving Services' claim did not occur in Rhode Island.” (Id.) The Court first addresses the issue of personal jurisdiction.

         II. Personal Jurisdiction

         For this Court to have personal jurisdiction over BTM, Diving Services must show that (1) the Rhode Island long-arm statute grants jurisdiction over the claim; and (2) exercising jurisdiction does not violate the Due Process Clause of the Fourteenth Amendment. Daynard v. Ness, et al., 290 F.3d 42, 53 (1st Cir. 2002). Rhode Island's long-arm statute “extends up to the constitutional limitation.” Am. Sail Training Ass'n v. Litchfield, 705 F.Supp. 75, 78 (D.R.I. 1989) (quoting Conn. v. ITT Aetna Finance Co., 252 A.2d 184, 186 (R.I. 1969)). Therefore, this Court need only focus on the limitations of the Due Process Clause of the Fourteenth Amendment.

         Under the Due Process Clause, Diving Services has the burden of showing that BTM has had certain “minimum contacts” with Rhode Island such that this Court's hearing of the case would not offend “‘traditional notions of fair play and substantial justice.'” Phillips v. Prairie Eye Ctr., 530 F.3d 22, 26, 27 (1st Cir. 2008) (quoting Int'l Shoe Co. v. Washington, 326 U.S. 310, 319 (1945)). While Plaintiff can meet this standard by demonstrating either general or specific jurisdiction, Harlow v. Children's Hosp., 432 F.3d 50, 57 (1st Cir. 2005) (comparing general and specific jurisdiction), Diving Services argues only for specific jurisdiction. (Pl.'s Opp'n. Mem. 5, ECF No. 12.) For claims of specific jurisdiction, the Court employs a three-pronged analysis that requires a showing of “relatedness, purposeful availment, and reasonableness”:

First, the claim underlying the litigation must directly arise out of, or relate to, the defendant's forum-state activities. Second, the defendant's instate contacts must represent a purposeful availment of the privilege of conducting activities in the forum state, thereby invoking the benefits and protections of that state's laws and making the defendant's involuntary presence before the state's courts foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt factors, be reasonable.

Adelson v. Hananel, 510 F.3d 43, 49 (1st Cir. 2007) (emphasis added). Plaintiff has the burden of establishing all three prongs. Id. at 48.

         In this case, BTM concedes that selling a crane to a Rhode Island company satisfies the “relatedness” prong. (Def.'s Mot. to Dismiss 4, ECF No. 11-1.) Therefore, the question is whether Diving Services has provided sufficient evidence for the “purposeful availment” and “reasonableness” prongs. Diving Services' evidence on this issue is reviewed using the prima facie method:

Under [this] standard, the inquiry is whether the plaintiff has proffered evidence which, if credited, is sufficient to support findings of all facts essential to personal jurisdiction. In order to make a prima facie showing of jurisdiction, the plaintiff ordinarily cannot rest upon the pleadings but is obliged to adduce evidence of specific facts. The court must accept the plaintiff's (properly documented) evidentiary proffers as true for the purpose of determining the adequacy of the prima facie jurisdictional showing, and construe them in the light most congenial to the plaintiff's jurisdictional claim.

Phillips, 530 F.3d at 26 (internal citations and quotations ...